Replies to post #6631 on SaviCorp (fka SVMI)

[bly03]

AnthonyBP:

I'm not sure that your statement that if the SEC doesn't accept the registration statement, then that voids the agreement, is correct. After all, Savi has already received $2.47 million of the total of $2.97 million that the agreement with Cornell was for. They can't just walk away from this committment.

In addition, the agreement specifically addresses the issue of what happens if the registration is not declared effective by the SEC:

In connection with the securities purchase agreement dated July 10, 2006, as amended, we granted the investor registration rights. We are obligated to use our best efforts to cause the registration statement to be declared effective no later than December 7, 2006 and to insure that the registration statement remains in effect until the earlier of (i) all of the shares of common stock issuable upon conversion of the Debentures have been sold or (ii) July 10, 2008. In the event of a default of our obligations under the registration rights agreement, including our agreement to file the Registration Statement with the Securities and Exchange Commission no later than September 8, 2006, or if the Registration Statement is not declared effective by December 7, 2006, we are required pay to Cornell, as liquidated damages, for each month that the registration statement has not been filed or declared effective, as the case may be, either a cash amount or shares of our common stock equal to 2% of the liquidated value of the secured convertible debentures.


In connection with the securities purchase agreement dated July 10, 2006, we executed a security agreement in favor of the investor granting them a first priority security interest in all of our goods, inventory, contractual rights and general intangibles, receivables, documents, instruments, chattel paper, and intellectual property. The security agreement states that if an event of default occurs under the secured convertible debentures or security agreement, the investors have the right to take possession of the collateral, to operate our business using the collateral, and have the right to assign, sell, lease or otherwise dispose of and deliver all or any part of the collateral, at public or private sale or otherwise to satisfy our obligations under these agreements.

So it's not like we can simply walk away from Cornell if the SEC does not approve the SB-2. We simply must find a way to pay off Cornell (hopefully Greg, with some help from our friend DFW, will take care of this).

[flsunchaser]

Yes. Anthony and I'm sure SaVi would be ready to sue if they dared to try to flood converted warrants. I doubt the OTC BB would let them do that though because the OTC BB would be liable if litigation decided the warrants are invalid. I also wonder as Dec 21st approaches, if negotiations aren't underway now between SaVi and Cornell to settle this. If not, SaVi's legal talent may decide SaVi won't to file the 10-Q, putting SaVi in pinky land and creating the default, that would be litigated.

Settlement, sounds better to me than expensive court time. We'll see.

FlSun