Exhibit 10.11- Acquisition Agreement - DHA Nutrition
An AGREEMENT dated this 31st day of July, 1998, by and between: BIOPROGRESS
TECHNOLOGY INTERNATIONAL, INC., (BTII), a publicly-held and traded Nevada
corporation, having offices situate at 0000 Xxxxxxxxx Xxxxx, Xxxxxxx, XX 00000;
and, GRAHAM HIND, an individual residing at Silver Lodge, 00 Xxxxxxxxxxx Xxxx,
Xxxxxxxxx, Xxx, Xxxxxxxxxxxxxx XX0 0XX; and, BIG SIX LIMITED, a company
registered in the United Kingdom, having offices situate at Number One, Xxxxx
Xxxx Industrial Estate, Xxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxxxxx XX00 0XX; and, XXXX
XXXXXXX, an individual residing at Xxxxxxxxxx Xxxxx, Xxxxxxxxx, Xxx,
Xxxxxxxxxxxxxx XX0 0XX, and, XXXX XXXXXX, an individual residing at Killanully,
Ballygarvan, County Cork, Republic of Ireland, (hereinafter collectively
referred to as the Vendors).
WHEREAS:
The Vendors collectively own the entire issued share capital of DHA Nutrition
Limited (DNL), a company registered in the United Kingdom, and individually own
the number of shares (DNL Shares) set forth next to their names in Schedule 1
attached hereto.
BTII wishes to buy and the Vendors wish to sell all DNL Shares owned by them,
individually and collectively, upon the terms and conditions set forth in this
agreement (the Agreement).
It is AGREED as follows:
1 Consideration:
1.1 In consideration of the Vendors transferring to BTII absolute and beneficial
ownership of the DNL Shares, and upon receipt thereof, BTII shall forthwith
issue to the Vendors a total of FOUR HUNDRED THOUSAND (400,000) ordinary shares
of common stock in BioProgress Technology International, Inc., (the BTII
Shares); and,
1.1.1 if DNL's cumulative gross revenues in respect of Feed Supply sales exceed
L1,500,000 (STERLING) in the period to September 30, 1999, and exceed L5,000,000
(STERLING) in the period October 1, 1999 to September 30, 2000, then BTII shall
forthwith issue to the Vendors additional BTII Shares of TWO HUNDRED THOUSAND
(200,000) and FOUR HUNDRED THOUSAND (400,000) for the respective periods; and,
1.1.2 if DNL's cumulative gross revenues in respect of Food Supply sales exceed
L150,000 (STERLING) in the period to September 30, 1999, and exceed L500,000
(STERLING) in the period October 1, 1999 to September 30, 2000, then BTII shall
forthwith issue to the Vendors additional BTII Shares of ONE HUNDRED THOUSAND
(100,000) and TWO HUNDRED THOUSAND (200,000) for the respective periods.
1.2 Unless previously registered with the Securities and Exchange Commission of
the United States of America (such registration to be at the sole discretion of
BTII), the BTII Shares shall be restricted from sale, assignment or disposal for
a period of EIGHTEEN (18) months from the date of this Agreement and each share
certificate shall bear a legend stating the same.
1.3 The transfer and issue of the DNL Shares and the BTII Shares respectively
contemplated herein shall be the only consideration in respect of this
Agreement.
2 Representations, Warranties and Covenants of BTII:
2.1 All necessary steps have been taken to make this Agreement a legal, valid
and binding obligation of BTII enforceable in accordance with its terms and
conditions.
2.2 The execution and delivery of this Agreement and the performance by BTII of
its obligations hereunder will not result in any material breach or violation of
or material default under any material agreement, indenture, lease, license,
mortgage, instrument, or understanding, nor result in any violation of any law,
rule, regulation, statute, order or decree of any kind, to which BTII or any of
its subsidiaries is a party or by which they or any their property is or may be
or become subject, nor in the violation of the articles or bylaws governing the
conduct of BTII.
2.3 BTII has delivered to the Vendors its annual report on Form 10-KSB (and the
amendment thereto on Form 10-KSB/A) for the year ended December 31, 1997, and
its quarterly reports on Form 10-QSB for the fiscal quarters ended March 31,
1998, and June 30, 1998, all of which were true and correct as of the date of
filing and remain true and correct in all material respects as of the date
hereof. Also, BTII has provided the Vendors full access to any and all
information they desired concerning the business and operations of BTII, and
BTII has made available to the Vendors such personnel as has been requested to
answer any and all questions which the Vendors may have had concerning their
investment in BTII. Further, BTII is current in all of its required reports
under the Securities Exchange Act of 1934, as amended.
2.4 The BTII Shares have each been validly issued and are fully paid and
non-assessable.
3 Representations, Warranties and Covenants of the Vendors:
3.1 All necessary steps have been taken to make this Agreement a legal, valid
and binding obligation of the Vendors enforceable in accordance with its terms
and conditions.
3.2 The execution and delivery of this Agreement and the performance by the
Vendors of their obligations hereunder will not result in any material breach or
violation of or material default under any material agreement, indenture, lease,
license, mortgage, instrument, or understanding, nor result in any violation of
any law, rule, regulation, statute, order or decree of any kind, to which the
Vendors are a party or by which they or any their property is or may be or
become subject, nor in the violation of the articles or bylaws governing the
conduct of DNL.
3.3 The DNL Shares have each been validly issued and are fully paid and
non-assessable.
3.4 The DNL Shares are not, and shall not become subject to any lien,
encumbrance, security interest or financing statement whatsoever. Further, the
DNL Shares are not the subject of any other agreement in regards thereof.
3.5 The DNL Shares represent ONE HUNDRED PERCENT (100%) of the outstanding
proprietary interest of DNL, and there are no outstanding commitments (direct or
indirect) which would cause the issuance or transfer out of treasury of any
additional proprietary interest of DNL, whether common shares, preferred shares
or debt.
3.6 The sole asset of DNL is the Agreement with Martek Biosciences Corporation,
a company incorporated in the United States of America, which shall include any
and all relationships, agreements, understandings and undertakings arising from
or relative thereto, and DNL has no other assets or liabilities of any kind,
save for audit fees accrued at the date hereof.
3.7 The Vendors have provided BTII full access to any and all information it
desired concerning the business and operations of DNL, and the Vendors have made
available to BTII such personnel as has been requested to answer any and all
questions which BTII may have had concerning its investment in DNL.
4 Understandings of BTII:
4.1 The Vendors make no warranties (expressed or implied) regarding the value or
potential value of the DNL Shares, or of the value or potential value of the
Agreement with Martek Biosciences Corporation.
4.2 In order to maximise the benefit, if any, of the Agreement with Martek
Biosciences Corporation, additional and substantial funds may be required, all
of which is the responsibility of BTII.
5 Understandings of the Vendors:
5.1 The certificate(s) representing the BTII Shares will bear a legend
restricting its or their transfer under Rule 144 of the Securities Act of 19933,
as amended, and will be issued solely in the names of the Vendors.
5.2 The BTII Shares have not been registered under the Securities Act of 19933,
as amended, or any applicable state law (collectively, the "Securities Act");
further, the BTII Shares may not be sold, offered for sale, transferred,
pledged, hypothecated or otherwise disposed of except in compliance with the
Securities Act; further, BTII has no obligation, and does not intend, to cause
the BTII Shares to be registered under the Securities Act, or to comply with any
exemption under the Securities Act that would permit a sale or sales or all or
any portion of the BTII Shares; further, the legal consequences of the foregoing
mean that the Vendors must bear the economic risk of the investment in the BTII
Shares for an indefinite period of time; and, further, if the Vendors desire to
sell or transfer all or any part of the BTII Shares within the restricted
period, BTII may require the Vendors' counsel to provide legal opinion that the
transfer may be made without registration under the Securities Act.
5.3 No federal or state agency has made any findings or determination as to the
fairness of an investment in BTII, or any recommendation or endorsement of this
investment.
5.4 There is presently only a limited market for the BTII Shares and no market
may exist in the future for any sale or sales of all or any part thereof.
5.5 Their commitment to investments that are not readily marketable is not
disproportionate to their net worth, and their investment in the BTII Shares
will not cause such overall commitment to become excessive.
5.6 They have the financial ability to bear the economic risks of their
investment, have adequate means of providing for their current needs, and have
no need for liquidity in this investment.
5.7 They have evaluated the high risks of investing in the BTII Shares and have
such knowledge and experience in financial and business matters in general and
in particular with respect to this type of investment that they are capable of
evaluating the merits and risks of an investment in the BTII Shares.
5.8 They have been given the opportunity to ask questions and receive answers
from BTII concerning the terms and conditions of this investment, and to obtain
additional information necessary to verify the accuracy of the information they
desired in order to evaluate their investment, and in evaluating the suitability
of an investment in the BTII Shares have not relied upon any representations or
other information (whether oral or written) other than that furnished to it by
BTII or the representatives of BTII.
5.9 They have had the opportunity to discuss with their professional, legal, tax
and financial advisers the suitability of an investment in the BTII Shares for
their particular tax and financial situation and all information that they have
provided to BTII concerning DNL and its financial position is correct and
complete at the date hereof.
5.10 In making the decision to purchase the BTII Shares they have relied solely
upon independent investigations made by them or on their behalf.
5.11 They are acquiring the BTII Shares solely for their own account, for
investment purposes only, and are not purchasing with a view to, or for, the
resale, distribution, subdivision or fractionalisation thereof.
6 Miscellaneous:
6.1 This Agreement sets forth and constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof, and supersedes any and
all prior agreements, understandings, promises, warranties, covenants and
representations made by any party to any other party concerning the subject
matter hereof and the terms applicable hereto. This Agreement may not be
released, discharged, amended or modified in any manner except by an instrument
in writing signed by duly authorised representatives of the parties hereto.
6.2 The invalidity or unenforceability of one or more provisions of this
Agreement shall not affect the validity or enforceability of any of the other
provisions hereof, and this Agreement shall be construed in all respects as if
such invalid or unenforceable provisions are omitted.
6.3 This Agreement shall be deemed to have been entered into and shall be
construed and enforced in accordance with the laws of the State of Nevada.
6.4 The failure of any party hereto to insist, in any one or more instances,
upon the performance of any of the terms, covenants or conditions of this
Agreement or to otherwise exercise any right hereunder, shall not be construed
as a waiver or relinquishment of the future performance of any such term,
covenant or condition or the future exercise of such right, but the obligations
of the party with respect to such future performance shall continue in full
force and effect.
6.5 The headings in this Agreement are included for convenience only and are not
to be used in construing or interpreting this Agreement.
6.6 All notices, demands, or requests hereunder shall be in writing and served
either personally, by certified mail, return receipt requested, by Federal
Express or other reputable overnight courier, or by facsimile, as follows; If to
BTII: BioProgress Technology International, Inc., 0000 Xxxxxxxxx Xxxxx, Xxxxxxx,
XX 00000; Fax: (000) 000 0000; If to the Vendors: Graham Hind, Silver Lodge, 00
Xxxxxxxxxxx Xxxx, Xxxxxxxxx, Xxx, Xxxxxxxxxxxxxx XX0 0XX (x00) 0000 000000
6.7 This Agreement, and each and every provision thereof, shall be binding upon
and shall inure to the benefit of the parties, their successors,
successors-in-title, heirs and assigns, and each and every successor-in-interest
to any party, whether such successor acquires such interest by way of gift,
purchase, foreclosure, or by any other legal method, who shall hold such
interest subject to all the terms and conditions of this Agreement.
6.8 This Agreement may be executed in any number of counterparts; each of which
shall be an original, but such counterparts shall together constitute one and
the same instrument.
6.9 In the event of any dispute with respect to this Agreement, the prevailing
party shall be entitled to its reasonable attorneys' fees and other costs and
expenses incurred in resolving such dispute.
6.10 Each party shall pay the expenses incurred by them under or in connection
with this Agreement, including counsel fees and expenses of their respective
representatives.
6.11 The representations, warranties and covenants of BTII and the Vendors
contained in this Agreement shall survive the execution hereof, and shall be
unaffected by any investigation made by any party at any time.
6.12 At any time and from time to time after the date of this Agreement, each
party shall execute such additional instruments and take such other further
action as may be reasonably requested by any other party or otherwise to fulfil
the intent and purpose of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and
delivered the date first above written.
By: Xxxxx X. Xxxxxxxxx
President and Chief Executive Officer
For and on behalf of BioProgress Technology International, Incorporated.
By: Graham Hind
By: Xxxx Xxxxxxx
Managing Director
For and on behalf of Big Six Limited
By: Xxxx Xxxxxxx
By: Xxxx Xxxxxx
SCHEDULE 1
Name Number of DNL Shares
---- --------------------
Graham Hind 80
Big Six Limited 5
Xxxx Xxxxxxx 5
Xxxx Xxxxxx 10
Total Shares Issued and Outstanding: 100
