Exhibit 10(aq)
LICENSE EXCHANGE AGREEMENT
THIS AGREEMENT made as of this 27th day of September, 2000, by and between
XXXXXXX ROAD LLC, a limited liability company organized under the laws of the
Cayman Islands ("Investor"), and DMC NEW YORK, INC., a Delaware corporation
("DMC-NY" or the "Company").
The following terms shall have the specified definitions, unless the
context otherwise requires:
"Common Stock" shall mean the Common Stock of DMC-NY, $.01 par value,
issuable upon the conversion of the Licenses.
"Licenses" shall mean those certain licenses annexed hereto as Exhibit A-1
through A-16, purchased by the Investor or Investor's Assignors.
"NCT Group, Inc." shall mean NCT Group, Inc., a Delaware corporation.
"Per Share Value" shall mean an amount equal to One Thousand Dollars
($1,000.00).
R E C I T A L S
A. The Investor is the owner of good and marketable title to the Licenses,
free and clear of all liens and encumbrances.
B. DMC-NY is a newly formed corporation which intends to exploit the
technology represented by the Licenses. No shares of Common Stock, and no
options, warrants, convertible securities, preemptive or subscription rights, or
other instruments that may be exercised, exchange for or convertible into Common
Stock, are currently issued and outstanding.
C. DMC-NY wishes to acquire the Licenses and the Investor has agreed to
transfer the Licenses.
D. DMC-NY wishes to sell to the Investor, and the Investor is willing to
buy from the Company, subject to the terms and conditions set forth herein,
Common Stock of the Company in exchange for the Licenses.
NOW, THEREFORE, for and in consideration of the premises and the mutual
agreement contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Simultaneous with the execution of this agreement, DMC-NY agrees to
purchase from the Investor, the Licenses for a purchase price of Sixteen Million
Dollars ($16,000,000).
2. In consideration therefore, DMC agrees to issue to the Investor, Sixteen
Thousand (16,000) shares of Common Stock, which shall represent One Hundred
Percent (100%) of the issued and outstanding Common Stock of DMC-NY, after the
purchase of all of the Licenses.
3. Other than for the purchase of the Licenses, DMC-NY agrees that it shall
not, for a period of eighteen (18) months after the purchase of the Licenses,
issue any Common Stock to any other person, corporation, individual, or entity.
4. MUTUAL DELIVERIES. (a) Upon the delivery by the Investor of the
Licenses, DMC shall deliver to the Investor sixteen (16) certificates in
denominations of one thousand (1,000) shares each of Common Stock (the
"Shares"), bearing substantially the following legend:
THE SECURITIES REPRESENTED HEREBY (THE "SECURITIES") HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE
SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES OR AN OPINION OF COUNSEL OR OTHER
EVIDENCE ACCEPTABLE TO THE CORPORATION THAT SUCH REGISTRATION IS NOT
REQUIRED.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to the Investor that:
(a) The Company has the corporate power and authority to enter into this
Agreement, and to perform its obligations hereunder. The execution and delivery
by the Company of this Agreement and the consummation by the Company of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Company. This Purchase Agreement has been
duly executed and delivered by the Company and constitute valid and binding
obligations of the Company enforceable against it in accordance with their
respective terms, subject to the effects of any applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally and to the application of equitable principles in any
proceeding (legal or equitable).
(b) The execution, delivery and performance by the Company of this Purchase
Agreement, and the consummation of the transactions contemplated hereby, do not
and will not breach or constitute a default under any applicable law or
regulation or of any agreement, judgment, order, decree or other instrument
binding on the Company which breach or default could reasonably by expected to
have a material adverse effect on the Company taken as a whole.
(c) There is no pending, or to the knowledge of the Company, threatened,
judicial, administrative or arbitral action, claim, suit, proceeding or
investigation which might affect the validity or enforceability of this Purchase
Agreement or which involves the Company and which if adversely determined, could
reasonably be expected to have a material adverse effect on the Company.
(d) No consent or approval of, or exemption by, or filing with, any party
or governmental or public body or authority is required in connection with the
execution, delivery and performance under this Purchase Agreement or the taking
of any action contemplated hereunder or thereunder.
(e) CAPITALIZATION. As of the date of this Agreement, the authorized
capital stock of the Company consisted of 10,000,000 shares of Common Stock, of
which no shares were issued and outstanding, and 1,000,000 shares of Preferred
stock, of which no shares were issued and outstanding. There are no options,
warrants, or rights to subscribe to, securities, rights or obligations
convertible into or exchangeable for or giving any right to subscribe for any
shares of capital stock of the Company. All of the outstanding shares of Common
Stock of the Company have been duly and validly authorized and issued and are
fully paid and non assessable.
(f) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation.
(g) The execution, delivery and performance of this Agreement by the
Company, and the consummation of the transactions contemplated hereby, will not
(i) violate any provision of the Company's Certificate of Incorporation or
By-laws, (ii) violate, conflict with or result in the breach of any of the terms
of, result in a material modification of the effect of, otherwise, give any
other contracting party the right to terminate, or constitute (or with notice or
lapse of time or both constitute) a default under, any contract or other
agreement to which the Company is a party or by or to which the Company or any
of the Company's assets or properties may be bound or subject, (iii) violate any
order, judgment, injunction, award or decree of any court, arbitrator or
governmental or regulatory body by which the Company, or the assets or
properties of the Company are bound, (iv) to the Company's knowledge, violate
any statute, law or regulation.
6. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR. The Investor hereby
represents and warrants to the Company that:
(a) The Investor has the corporate power and authority to enter into this
Purchase Agreement and to perform its obligations hereunder. The execution and
delivery by the Investor of this Purchase Agreement, and the consummation by the
Investor of the transactions contemplated hereby, have been duly authorized by
all necessary corporate action on the part of the Investor. This Purchase
Agreement has been duly executed and delivered by the Investor and constitute
valid and binding obligations of the Investor, enforceable against it in
accordance with their respective terms, subject to the effects of any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally and to the application of equitable principles in
any proceeding (legal or equitable).
(b) The execution, delivery and performance by the Investor of this
Purchase Agreement, and the consummation of the transactions contemplated
hereby, do not and will not breach or constitute a default under any applicable
law or regulation or of any agreement, judgment, order, decree or other
instrument binding on the Investor.
(c) Investor is a sophisticated investor (as described in Rule
506(b)(2)(ii) of Regulation D) and an accredited investor (as defined in Rule
501 of Regulation D), and Investor has such experience in business and financial
matters that it is capable of evaluating the merits and risks of an investment
in Common Stock. Investor acknowledges that an investment in the Common Stock is
speculative and involves a high degree of risk.
(d) Investor has received all documents, records, books and other
information pertaining to Investor's investment in the Company that have been
requested by Investor. Investor has reviewed or received copies of the SEC
Documents.
(e) At no time was Investor presented with or solicited by or through any
leaflet, public promotional meeting, television advertisement or any other form
of general solicitation or advertising.
(f) Investor presently has the financial capacity and the necessary capital
to perform its obligations hereunder and shall and has provided to the Company
such financial and other information that the Company has requested to
demonstrate such capacity.
7. Nothing contained herein shall in any way limit Investor's right to sell
or transfer the shares of DMC-NY to be issued to Investor.
8. NOTICES. Any notice required or permitted hereunder shall be given in
writing (unless otherwise specified herein) and shall be deemed effectively
given upon personal delivery or seven business days after deposit in the United
States Postal Service, by (a) advance copy by fax, and (b) mailing by express
courier or registered or certified mail with postage and fees prepaid, addressed
to each of the other parties thereunto entitled at the following addresses, or
at such other addresses as a party may designate by ten days advance written
notice to each of the other parties hereto.
COMPANY: DMC New York, Inc.
c/o NCT Group, Inc.
00 Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
ATT: Chief Financial Officer
Tel: (000) 000-0000
Fax: (000) 000-0000
INVESTOR: Xxxxxxx Road LLC
Corporate Center
West Bay Road
Grand Cayman
Telephone No.:
Telecopier No.: (000) 000-0000
with a copy to: Xxxxxxx & Prager, LLP
00 Xxxxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
9. SEVERABILITY. If a court of competent jurisdiction determines that any
provision of this Agreement is invalid, unenforceable or illegal for any reason,
such determination shall not affect or impair the validity, legality and
enforceability of the other provisions of this Purchase Agreement. If any such
invalidity, unenforceability or illegality of a provision of this Purchase
Agreement becomes known or apparent to any of the parties hereto, the parties
shall negotiate promptly and in good faith in an attempt to make appropriate
changes and adjustments to such provision specifically and this Purchase
Agreement generally to achieve as closely as possible, consistent with
applicable law, the intent and spirit of such provision specifically and this
Purchase Agreement generally.
10. COUNTERPARTS. This Agreement may be executed in multiple counterparts,
each of which may be executed by less than all of the Company and shall be
deemed to be an original instrument which shall be enforceable against the
parties actually executing such counterparts and all of which together shall
constitute one and the same instrument. This Agreement, once executed by a
party, may be delivered to the other parties hereto by facsimile transmission of
a copy of this Agreement bearing the signature of the parties so delivering this
Agreement.
11. FURTHER ASSURANCES. Each party shall do and perform or cause to be done
and perform, all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as the other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.
12. GOVERNING LAW. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Delaware.
IN WITNESS WHEREOF, the parties have executed this Exchange Agreement as of
the date first written above.
DMC NEW YORK, INC.
By: /s/XX X. XXXXXXX
Name: Xx X. Xxxxxxx
Title: Senior Vice President & Treasurer
XXXXXXX ROAD LLC
By: /s/ XXXXXXXX XXXXXXXXX
Name: Xxxxxxxx Xxxxxxxxx
Title: Director
Navigatore Management Ltc.
By: /s/ XXXXXX XXXXXXXX
Name: Xxxxxxx Xxxxxxxx
Title: Director
Navigatore Management Ltc.
