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EXHIBIT 10.4
ADDITIONAL SECURED LOAN AGREEMENT
This AGREEMENT entered into this day of March, 1996 by and between
NutraGenics, Inc. a Nevada corporation, having its principle offices at 0000
Xxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000 (hereinafter referred to as
"NutraGenics") and Xxxxxx Xxxx, residing at 000 Xxxxxxxx Xxxx, Xxx, Xxx Xxxx
00000 (hereinafter referred to as the "Xxxx").
WITNESSETH:
WHEREAS, NutraGenics is a public company that has acquired a licensing
agreement which permits the exclusive manufacture, marketing and sale of a
vitamin E-like complex ("TRF(25)") that has been shown to be effective in
reducing cholesterol and critical events associated with coronary heart disease
and stroke; NutraGenics has applied for a United States trademark for the
vitamin E-like complex (TRF(25)) under the name "Vitenol-ETM"; and NutraGenics
is in the business of manufacturing, marketing and selling the aforementioned
vitamin E-like complex (TRF(25)) under the name "Vitenol-E(TM)";
WHEREAS, Xxxx is a biochemist and has been in the nutrition, health and
vitamin industry for 60 years, has owned a company that manufactured, marketed
and distributed vitamins and pharmaceuticals, currently owns a vitamin mail
order business and has extensive knowledge in the nutrition, health and vitamin
industry;
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WHEREAS, pursuant to an Agreement dated October 5, 1995, Xxxx and
Xxxx'x Children purchased Two Hundred and Fifty Thousand (250,000) shares of
common stock of NutraGenics $.001 par value and among other financial advances
Xxxx advances Two Hundred and Fifty Thousand ($250,000) Dollars to NutraGenics
as a secured loan for a period of two (2) years in order to finance the creation
of the manufacturing process and to create the proper labeling for Vitenol-E as
a nutritional vitamin E supplement that reduces cholesterol and to manufacture
Vitenol-E for sale to the public; and
WHEREAS, NutraGenics has represented to Xxxx that it has almost
completed the creation of the commercial manufacturing process for Vitenol-E(TM)
for encapsulization in a normal sized capsule form for sale to the pubic as a
nutritional vitamin E supplement; and
WHEREAS, Xxxxxx Xxxx, Esq., an attorney who specializes in Federal Drug
Administration (FDA) matters, and who has been engaged by NutraGenics to approve
the words and the tenor of the words to be used on the commercial label of the
bottle containing Vitenol-E for sale to the public so that those words convey
the message to the public that Vitenol-E is effective in reducing cholesterol;
and
WHEREAS, Xxxxxx Xxxx, Esq., has reviewed all the material concerning
Vitenol-E supplied to him by NutraGenics and has requested NutraGenics to obtain
from a person with the proper credentials a scientific review of the actions
taken, the tests conducted including, where appropriate, the procedures and
protocol
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used in such tests and the relative medical journal reports and other related
articles relied upon by NutraGenics in supporting its position that
Vitenol-E(TM) is effective in reducing cholesterol as additional support for
those claims before Xxxxxx Xxxx, Esq., can finally pass upon the words to be
used on the label of the Vitenol-E(TM) bottles to convey the message to the
public that Vitenol-E(TM) reduces cholesterol; and
WHEREAS, NutraGenics presented to Xxxx a budget in the approximate sum
of Three Hundred and Fifty-Nine Thousand Seven Hundred ($359,700) Dollars for
the period March 1996 through June 1996 to further develop the commercial
manufacturing process for Vitenol-E(TM) which will result in the commercial
production of approximately 30,000 bottles of Vitenol-E(TM) and to complete the
report requested by Xxxxxx Xxxx, Esq. so that he can pass upon the words to be
used on the label of the Vitenol-E(TM) bottle to convey the message to the
public that Vitenol-E(TM) is effective in reducing cholesterol; and
WHEREAS, Xxxx has agreed to advance the sum of Three Hundred and Fifty
Thousand ($350,000) Dollars to NutraGenics in order to further develop the
commercial manufacturing process for and produce approximately 30,000 bottles of
Vitenol-E(TM) and complete the report necessary to support the words to be used
on the label of the bottle to convey the message to the public that
Vitenol-E(TM) as a vitamin E supplement is effective in reducing cholesterol,
upon terms and conditions as hereinafter set forth;
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NOW THEREFORE, in consideration of the mutual covenants and provisions
herein contained, the parties intending to be legally bound, agree as follows:
FIRST: FIRST SECURED LOAN TO NUTRAGENICS
FOR THREE HUNDRED AND FIFTY THOUSAND
($350,000) DOLLARS
In reliance on the representations and warranties contained herein,
Xxxx will loan to NutraGenics the sum of Three Hundred and Fifty Thousand
($350,000) Dollars pursuant to the following terms and conditions:
(a) The loan of Three Hundred and Fifty Thousand ($350,000.00) Dollars
(hereinafter referred to as the "Additional Secured Loan") shall be secured by
NutraGenics' accounts receivables, inventory, patents, trademarks, machinery,
equipment, licenses and contracts, including but not limited to, the exclusive
license agreement to manufacture, market and sell the vitamin E-like complex
(TRF(25)) known as Vitenol-E(TM), pursuant to the terms and conditions of an
Equipment Security Agreement - Chattel Mortgage as amended by this Agreement; a
Security Agreement - Chattel Mortgage dated October 5, 1995; an Inventory
Security Agreement dated October 5, 1995; and Form UCC-1 Financing Statements
filed with the appropriate local and state agencies as previously executed by
the parties as part of Xxxx'x initial loan to NutraGenics in the sum of Two
Hundred and Fifty Thousand ($250,000) Dollars as more particularly set forth in
the Agreement between Xxxx and NutraGenics dated October 5, 1995. It being
understood and agreed between the parties that the first secured interest
granted to Xxxx
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by NutraGenics in the October 5th, 1995 Agreement is hereby extended to include
the present additional secured loan of Three Hundred and Fifty Thousand
($350,000) Dollars ("Additional Secured Loan") so that Xxxx will hold a first
secured interest of Six Hundred Thousand ($600,000) Dollars in all of the
present and future acquired assets of NutraGenics.
(b) The Additional Secured Loan to NutraGenics will be advanced to
NutraGenics by Xxxx pursuant to the following schedule:
(i) the sum of One Hundred Thousand ($100,000) Dollars on March
1, 1996;
(ii) the sum of One Hundred Thousand ($100,000) Dollars on April
1, 1996;
(iii) the sum of One Hundred Thousand ($100,000) Dollars on May 1,
1996; and
(iv) the sum of Fifty Thousand ($50,000) Dollars on June 1, 1996.
(c) NutraGenics shall execute four (4) Promissory Notes dated
consecutively March 1, 1996; April 1, 1996; May 1, 1996; and June 1, 1996. The
first three (3) notes will each be in the amount of the sum of One Hundred
Thousand ($100,000) Dollars; and the fourth note will be in the amount of the
sum of Fifty Thousand ($50,000) Dollars.
(d) Each Promissory Note will be signed by NutraGenics and held in
escrow by Xxxxxx X. Xxxxxxxxx, Esq., until Xxxxxx X. Xxxxxxxxx, Esq., is
notified by the partes that NutraGenics has received the appropriate sum of
money represented by the Promissory
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Note at which time Xxxxxx X. Xxxxxxxxx, Esq., shall release such originally
executed Promissory Note to Xxxx.
(e) The term of each note shall be for a period of two (2) years with a
variable interest rate based upon the six-month London Interbank Offered Rate
("Libor") plus the spread of 1 1/2 points above Libor (which includes the
facility fee of 3/4 of a point charged by Xxxxxxx Xxxxx), and said variable
interest on the Additional Secured Loan shall be paid by NutraGenics quarter
annually directly to Xxxxxx Xxxx, it being understood between the .parties that
although the Additional Secured loan was intended to be for a term of two years,
because the advances of each loan is staggered, the maturity date for each
advance is similarly staggered so that each advance is due two years from the
date of each advance.
(f) The proceeds of the Additional Secured Loan shall be used in
accordance with the terms and conditions hereinafter set forth in paragraph
"SECOND".
(g) Pursuant to the terms and conditions hereinafter set forth in
paragraph "THIRD", Xxxx, in his sole option, may elect to receive all or part of
the repayment of this Additional Secured Loan by the issuance to him of
restricted common stock of NutraGenics as repayment of said Additional Secured
Loan, at a purchase price of One Dollar and Fifty Cents ($1.50) per share of
unregistered common stock of NutraGenics.
(h) Pursuant to the terms and conditions hereinafter set forth in
paragraph "FOURTH", Xxxx in his sole discretion, may elect
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to receive payment in full of the principal balance of all loans outstanding and
advanced by Xxxx to NutraGenics together with all interest accrued thereon at
any time within ninety days after NutraGenics has obtained at least Five Million
($5,000,000) Dollars of financing from sources other than Xxxx.
SECOND: INVESTORS POSITION - USE OF PROCEEDS
(a) The aforesaid proceeds of the Additional Secured Loan shall be used
by NutraGenics primarily for the completion of the creation of the commercial
manufacturing process for Vitenol-E for encapsulization in a 7 1/2 oval or other
size capsule appropriate for sale to the public, for completion of the
scientific review of the report requested by Xxxxxx Xxxx, Esq., in order to help
support the claims to be used on the commercial label of the bottle containing
Vitenol-E(TM) for sale to the public and for the manufacture, marketing and sale
of the product Vitenol-E(TM) and as more particularly set forth in NutraGenics'
administration budget for the period March, 1996, through June, 1996, a copy of
which is annexed hereto and called Exhibit A. The proceeds of the Additional
Secured Loan shall not be used for the repayment of any debt of NutraGenics nor
for the payment of any royalties to LipoGenics, Inc., the corporation that
developed and owns the vitamin E-like complex .(TRF(25)) referred to herein and
known as vitenol-E(TM).
(b) NutraGenics shall maintain complete and accurate financial books
and records reflecting NutraGenics, use of
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aforesaid proceeds of the Additional Secured Loan. Xxxx, or any representative
of Xxxx, shall have the right; upon three (3) working days written notice, to
examine and copy said books and records of NutraGenics at any time during the
normal business hours of NutraGenics, and NutraGenics at its own expense shall
be obligated and bound to make said books and records available for review and
copying by Xxxx, or any representative of Xxxx, at NutraGenics office in
Phoenix, Arizona.
(c) Until such time as the Additional Secured Loan of Three Hundred and
Fifty Thousand ($350,000) Dollars made has been paid in full, Xxxx shall be
entitled to receive upon his request copies of all filings with the United
States Securities and Exchange commission, press releases, sales literature,
material contracts and financial and accounting reports, financial statements
and tax returns prepared by, for or on behalf Of NutraGenics.
(d) The within "Use of Proceeds" provision is a material provision and
of the essence of this Agreement, any material breach of the use of proceeds as
outlined in paragraph "SECOND (a)" shall result in the following:
(i) The balance of the principal and interest of the Secured Loan
made on October 5, 1995, and the balance of the principal and
interest of the Additional Secured Loan made in March, 1996,
shall become immediately due and payable by NutraGenics to
Xxxx pursuant to the terms and conditions of the Promissory
Notes executed by NutraGenics
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representing the Secured Loan made on October 5, 1995 and the
Additional Secured Loan made in march, 1996; and in addition
(ii) Xxxx shall have the right and option to sell his equity
ownership in NutraGenics, or any portion thereof, to
NutraGenics at a price equal to $2.00 per share or the then
fair market value per share whichever is greater. Xxxx shall
elect such option by notifying NutraGenics in writing by
certified or registered mail. NutraGenics, within thirty (30)
days of receipt of such notice, shall purchase said stock.
The closing shall be held within thirty (30) days of such
notice, at which time 100% of the purchase price shall be
paid in cash or by certified check and the stock certificates
sold shall at closing be properly endorsed and delivered to
NutraGenics by Xxxx.
THIRD: OPTION TO CONVERT ADDITIONAL SECURED LOAN
INTO UNREGISTERED COMMON STOCK OF NUTRAGENICS
At any time during the term of each of the Promissory Notes made
pursuant to this Agreement, Xxxx, at his sole option, may elect to receive
unregistered common stock of NutraGenics as repayment of all or any portion of
the Promissory Notes made between Xxxx and NutraGenics, at a purchase price of
One Dollar and Fifty Cents ($1.50) per share of unregistered common stock of
NutraGenics. Xxxx shall notify Nutragenics in writing by certified
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or registered mail of his election to receive unregistered common stock of
NutraGenics as repayment of all or any portion of the Promissory Notes being
made pursuant to this Agreement. The closing and the issuance to Xxxx of the
unregistered common stock of NutraGenics shall be held within thirty (30) days
of Xxxx'x notification (the "Closing Date").
In the event that, during the period between the date hereof and the
date when Xxxx exercises his option to convert the Promissory Notes into the
unregistered common stock of NutraGenics (the "Option Period"), any
reclassification, reorganization, stock split, stock dividend, merger
consolidation, combination, exchange of securities, or other similar change in
respect of the capitalization of NutraGenics shall occur, then appropriate
adjustment shall be made in the number of shares of common stock of NutraGenics
and/or kind of securities to be issued in the event Xxxx exercises his option to
accept repayment of part or all of his Promissory Notes in restricted common
stock of NutraGenics (the "Option Shares") and appropriate adjustment shall be
made to the exercise price, if necessary, so that the Option Shares shall be
that number of shares of common stock and/or other securities that Xxxx would
have held after such reclassification, reorganization, stock split, stock
dividend, merger, consolidation, combination, exchange of securities, or other
similar change as if the purchase had occurred immediately prior to such
reclassification, reorganization, stock split, stock dividend, liquidation,
spin-off or similar other change and all references herein to the option
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Shares shall be deemed to refer to such adjusted number and/or kind of
securities.
In the event that, during the Option Period there is a partial or
complete liquidation or spin-off of any assets owned by NutraGenics, NutraGenics
will give Xxxx at least thirty (30) days prior written notice of such event so
that Xxxx may exercise any part of all of the option prior to such liquidation
or spin-off.
At any time during the Option Period Xxxx shall have the right to
purchase from NutraGenics in round numbered size allotments of blocks of at
least ten thousand (10,000) shares, up to that number of Option Shares then
subject to the Option, at the Exercise Price in effect at the time of such
exercise. Xxxx shall sign an investment letter for all stock issued pursuant to
the option in form and substance as executed hereunder as part of this
Agreement.
In the event of the demise of Xxxx at any time during the Option
Period, Xxxx'x estate shall have the right to exercise the Option for a period
which is the lesser of one year or the balance of the Option Period.
FOURTH: OPTION TO RECEIVE REPAYMENT OF SECURED LOANS
MADE ON OCTOBER 5, 1995 AND ADDITIONAL SECURED
LOAN MADE PURSUANT TO THIS AGREEMENT
At any time during the term of any of the four Promissory Notes made
pursuant to this Agreement, Xxxx, at his sole option, may elect to receive
repayment in cash or by good certified check of all or any portion of all unpaid
principal loans made by him and Xxxx'x children together with all unpaid
interest accrued thereon (the "Loans") in the event that NutraGenics obtains
financing of
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Five Million ($5,000,000) Dollars or more from sources other than Xxxx
("Financing"). Xxxx'x option to elect to receive such repayment shall extend for
a period of thirty (30) days from the date that NutraGenics receives and
notifies Xxxx of all or any portion of said Financing. Xxxx shall notify
Nutragenics in writing by certified or registered mail of his election to
receive repayment of all or any portion of the Loans. The closing and the
payment to Xxxx and/or Xxxx'x Children of the Loans shall be held within thirty
(30) days of Xxxx'x notification (the "Closing Date").
FIFTH: NUTRAGENICS RIGHT TO PREPAY LOANS
NutraGenics shall have the right to prepay at any time without penalty
the Loans made pursuant to this Agreement, and in that event, NutraGenics shall
notify Xxxx of its intention to prepay said loans by certified or registered
mail. Upon receipt of such notice, Xxxx shall have the option to elect to
receive unregistered common stock of NutraGenics at One Dollar and Fifty Cents
($1.50) per share in lieu of a cash repayment of all or part of said Loans, Xxxx
shall notify NutraGenics of such an election in writing by certified or
registered mail within thirty (30) days of receipt of NutraGenics' notice to
prepay said loans. In the event Xxxx does not elect to receive NutraGenics'
stock in repayment of all of his loans he shall be paid the balance due in cash
or good certified check. The closing and the payment in cash or good certified
check and/or the issuance to Xxxx of the unregistered common stock of
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NutraGenics shall be held within thirty (30) days of Xxxx'x notification.
SIXTH: "PIGGY BACK" RIGHTS OF REGISTRATION
In the event NutraGenics shall at any time after the date hereof, seek
to further register or qualify any of its capital stock or the securities
holdings of any of its controlling shareholders, on each such occasion it shall
furnish Xxxx with at least thirty (30) days prior written notice thereof, and
Xxxx shall have the option without cost or expense to Xxxx, to include his
Stock, or any portion thereof, in such registration or qualification with the
consent of the underwriter, who may also require appropriate and reasonable
limitations on the sale of such Stock after their registration. Xxxx shall
exercise his "piggy-back rights" of registration by giving written notice to
NutraGenics and the underwriter within twenty (20) days of receipt of written
notice from NutraGenics. All expenses in connection with preparing and filing
the registration statement (and any registration or qualification under the
securities or "Blue Sky" laws of states in which the offering will be made under
such registration statement) shall be borne in full by NutraGenics (including up
to a maximum of five (5) states in which NutraGenics would not otherwise sell
shares registered under such registration statement in which the shares are also
registered). This piggy-back right of registration shall apply to the shares of
NutraGenics' common stock issued to Xxxx if Xxxx elects to receive
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part or full payment of his Promissory Notes through the issuance of the
NutraGenics restricted common stock and limited in dollar amount to 125% of the
cost of the NutraGenics' common stock purchased by Xxxx through conversion of
his Promissory Notes into common stock of NutraGenics. This piggy-back right of
registration may be assigned and transferred by Xxxx to any third party who may
receive the Promissory Notes or NutraGenics stock issued to Xxxx pursuant to
this Agreement.
SEVENTH: INDEMNIFICATION
NutraGenics agrees to indemnify and hold harmless Xxxx and each person,
if any, who is a representative of Xxxx and each person to whom Xxxx assigns his
NutraGenics' common stock, from and against any losses, claims, damages,
liabilities (which shall include, but not be limited to, all reasonable costs of
defense and investigation and all reasonable attorneys' fees), to which Xxxx,
such representative or assignee, may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or an alleged
untrue statement of any material fact contained in (A) the Registration
Statement, any Preliminary Prospectus, the Prospectus, or any amendment thereof
or supplement thereto, (B) any blue sky application or other document executed
by NutraGenics specifically for that purpose or based upon written information
furnished by NutraGenics filed in any state or other jurisdiction in order to
qualify any or all of the NutraGenics Shares of common stock under the
securities laws
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thereof (any such application, document being hereinafter called a "Blue Sky
Application"), or arise out of or are based upon the omission or alleged
omission to state in the Registration Statement, any supplement thereto, or in
any Blue Sky Application, a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided, however, that
NutraGenics will not be liable in any such case to the extent, but only to the
extent, that any such loss, claim, damage, or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in reliance upon and in conformity with written
information furnished to NutraGenics through Xxxx or on behalf of Xxxx or Xxxx'x
assigns specifically for use in the preparation of the Registration Statement or
any such amendment of supplement thereof or any such Blue Sky Application or any
such Preliminary Prospectus or the Prospectus or any such amendment or
supplement thereto. This indemnity will be in addition to any liability which
Xxxx or any of Xxxx'x representatives or assigns may otherwise have.
The terms and conditions of this paragraph shall survive the
termination or expiration of this Agreement.
EIGHTH: XXXX'X INVESTMENT REPRESENTATIONS
Xxxx represents that the NutraGenics unregistered common stock (the
"Shares") he may acquire as a result of conversion of all or any part of this
Additional Secured Loan will be acquired by him for investment for his own
account with no present intention of
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reselling or otherwise distributing the same. Xxxx has been advised that the
Shares so acquired will not have been registered under the Securities Act of
1933, as amended, (the "Act") on the basis that the sale to Xxxx is exempt from
registration under Section 4(2) of the Act as not involving any public offering
and that NutraGenics' reliance on such exemption is predicated in part on Xxxx'x
aforesaid representation. Xxxx has been advised that while he has the right to
dispose of his own property when and as he sees fit, he realizes that, in the
view of the Securities and Exchange Commission, the statutory basis for
exemption would not be present if, notwithstanding Xxxx'x said representation,
Xxxx had in mind merely acquiring the Shares for resale upon the occurrence or
nonoccurrence of some predetermined event. At present Xxxx knows of no
circumstance in the foreseeable future which would require the sale or
hypothecation of the Shares. Xxxx represents that he has such knowledge and
experience in financial matters to evaluate the merits and risks of an
investment in the Shares, and that he can bear the economic risk of an
investment in the Shares.
Xxxx further represents that he has had the opportunity to seek outside
legal advice with respect to acquiring the Shares. Xxxx understands that the
Shares are characterized as "restricted securities" under federal securities
laws, since the Shares are being acquired in a transaction not involving a
public offering and that under such laws and applicable regulations, such
securities may be resold without registration under the Act only in certain
limited circumstances. Xxxx hereby represents that he understands
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the resale limitations imposed by the act and is generally familiar with and
understands the existing resale limitations imposed by the Act and the rules and
regulations promulgated thereunder.
NINTH: ENDORSEMENT OF STOCK CERTIFICATE
Xxxx agrees that in the event he converts any part or all of this
Additional Secured Loan into the common stock of NutraGenics there will be
placed on the certificates for the Shares, or any substitutions therefor, a
legend stating in substance as follows:
The shares represented by this certificate have not been
registered under the Securities Act of 1933, have been acquired for
investment and may not be sold transferred or assigned in the absence
of an effective registration statement for these shares under the
Securities Act of 1933 or an opinion of Company's counsel that
registration is not required under said Act.
TENTH: DESCRIPTION OF AUTHORIZED CAPITAL STOCK AND
WARRANTS
The total number of authorized shares of NutraGenics' common stock is
Fifty Million (50,000,000) par value $.001.
The total number of issued and outstanding shares of NutraGenics common
stock is Ten Million Seven Hundred and Fifty-Six Thousand Two Hundred and
Sixty-Nine (10,756,269) Shares. Except for the options created for C. Xxxxxxx
Xxxx to purchase One Hundred and Eighty Thousand (180,000) shares of
NutraGenics' common stock, and the option granted to Xxxx to convert his Loans
into the common stock of NutraGenics, there are no warrants or options to
purchase shares of NutraGenics common stock.
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ELEVENTH: LOAN TO NUTRAGENICS FOR THE PAYMENT OF THE
LEGAL FEES FOR XXXXXX X. XXXX, ESQ. AS
PROVIDED IN THE AGREEMENT DATED OCTOBER 5, 1996
The parties acknowledge and agree that pursuant to the terms and
conditions of the Agreement dated October 5, 1995, paragraph FIFTH thereof,
Xxxxxx X. Xxxx, Esq., has issued invoices to NutraGenics totalling approximately
$11,500 to date which invoices will be paid by Xxxx on behalf of NutraGenics
pursuant to said Agreement.
TWELFTH: INCORPORATION OF SECURED LENDING PROVISIONS
OF AGREEMENT DATED OCTOBER 5, 1995
The parties acknowledge and agree that except as otherwise modified by
this Agreement, all the terms and conditions of the Security Agreement - Chattel
Mortgage, Equipment Security Agreement - Chattel Mortgage, Inventory Security
Agreement, and Form UCC-1 Financing Statements executed with the Agreement dated
October 5, 1995 are hereby incorporated by reference herein and made a part
hereof as though fully set forth at length herein so that Xxxx will have a
continuing first security interest in all of the assets of NutraGenics to secure
the payment of this Additional Secured Loan.
The parties specifically acknowledge and agree that the existing
executed Security Agreement -Chattel Mortgage executed with the October 5, 1995
Agreement provides for such continuing security interest at page 1, second
paragraph, where it is stated, "As security to the Lender for the payment of all
previously made or granted financing, all presently made or granted financing
and all financing that my be made or granted by lender or borrower in
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the future and all other obligations that may be owed by the Borrower to the
Lender...."
The parties further specifically acknowledge and agree that the
Inventory Security Agreement executed with the Agreement dated October 5, 1995,
provides at page 2, paragraph THIRD, that "The inventory shall be security for
the advancement of credit and loans previously made, presently made, made in the
future and all other obligations of Borrower to Lender."
THIRTEENTH: NUTRAGENICS' REPRESENTATIONS AND WARRANTIES
(a) NutraGenics represents and warrants that in the event Xxxx converts
any or all of this Additional Secured Loan into the common stock of NutraGenics,
such common stock of NutraGenics when issued pursuant to the terms and
conditions of this Agreement, will have been duly authorized, validly issued,
fully paid and nonassessable.
(b) NutraGenics represents and warrants that it will pay any and all
taxes required to be paid and arising out of the issuance and sale of the
NutraGenics common stock to Xxxx.
(c) NutraGenics agrees to sign any and all other documents reasonably
required to be signed in order to effectuate the issuance of the NutraGenics
common stock that may be issued herein by NutraGenics.
(d) NutraGenics agrees that this Additional Secured Loan shall be a
first secured loan against all the present and future acquired assets of
NutraGenics.
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(e) NutraGenics represents and warrants that there is no claim,
litigation, proceeding or investigation pending or to the knowledge of
NutraGenics threatened in which NutraGenics is a party or a defendant that may
in any way effect the value of the vitamin E-like complex (TRF(25)) known as
Vitenol-E(TM) including any applications, renewal applications, or amendments to
any existing registration, submitted to the United States Food and Drug
Administration or the United States Patent and Trademark Office.
(f) NutraGenics represents and warrants that it has complied in all
material respects with all applicable laws, regulations, orders and ordinances
of the United States, and all state and local governments and agencies thereof,
which could adversely effect the vitamin E-like complex (TRF(25)) known as
Vitenol-E(TM).
(g) NutraGenics represents and warrants that it is the sole and
undisputed holder of the world wide exclusive license from LipoGenics, Inc. to
the industrial proprietary rights, including pending United States and foreign
applications relating to tocotrienols and tocotrienol-like compounds and their
preparation and use, and the technology, including trade secret formulas and
processes, and know-how, relating to such tocotrienols and tocotrienol-like
compounds and their preparation and use (such Industrial Property Rights,
technology, trade secrets and know-how being hereinafter referred to as
"LipoGenics technology"). That the nutritional supplement technology based on a
vitamin E-like complex (TRF(25)) has been shown to be effective in reducing
cholesterol and in reducing critical events associated with
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coronary heart disease and stroke as well as having antioxidant and
anticoagulant properties.
(h) NutraGenics represents and warrants that the above-described
exclusive license for the vitamin E-like complex (TRF(25)) is, and will be at
the time of execution of this agreement, validly existing and in full force and
effect; NutraGenics represents and warrants that it has not violated, nor is in
breach or default of, any of the conditions and terms of such license agreement.
NutraGenics further represents and warrants that said license agreement is free
and clear of all pledges, mortgages, charges, encumbrances and liens. A true
copy of such fully executed License Agreement is annexed hereto.
(i) NutraGenics represents and warrants that LipoGenics has patent
applications pending on the following four basic elements: 1) a method of
manufacturing Vitenol-E(TM) dietary supplements ("Processing" claims); 2)
Vitenol-E(TM) products derived via the proprietary methods ("Products by
Process" claims); 3) chemical composition of key compounds in Vitenol-E(TM)
("Composition of Structure" claims); and 4) the use of the proprietary
Vitenol-E(TM) product and its compounds ("Utility" claims). As of the date of
the execution of this Agreement, the following patent applications have been
submitted and prosecuted by LipoGenics:
Applications # Inventors Title
-------------- --------- -----
1. WO 9117985 X. Xxxxxxx, X. Xxxxxx Process for recovering
X. Xxxxx, X. Xxxx tocotrienols, tocopherols
and tocotrienol-like
compounds
2. WO 930977 X. Xxxx X. Xxxxxxx Tocotrienols and
X. Xxxxxx tocotrienol-like compounds
and methods for their use
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NutraGenics further represents and warrants that there have been no issues
raised by the United States Patent and Trademark Office that NutraGenics
believes will prevent the issuance of the patents for the above-described patent
applications.
FOURTEENTH: APPROVAL OF BOARD OF DIRECTORS
This Agreement and the terms and conditions herein is subject to the
prior approval of the Board of Directors of NutraGenics through the adoption and
execution of formal executed resolutions of the Board of Directors of
NutraGenics. A copy of such executed resolutions shall be delivered to Xxxx at
closing.
FIFTEENTH: NON-WAIVER
All representations and warranties made by the parties to this
Agreement shall survive the closing. No action or omission by the parties hereto
shall constitute a waiver of any covenants, warranties or representations,
unless such waiver shall be executed in writing by the party for whose benefit
such covenant, warranty or representation is designed.
SIXTEENTH: ARBITRATION OF DISPUTES
Any and all disputes of whatsoever kind or nature arising out of or
concerning this Agreement, its interpretation or effect, shall be determined by
the exclusive means of Arbitration before the American Arbitration Association
of the City of New York, located in the City of New York in accordance with its
rules and regulations then in effect, and the decision upon such Arbitration
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shall be final and binding upon all of the parties of this Agreement. The costs
and expense of Arbitration, including the reasonable attorney's fees, shall be
paid by the party against whom the Arbiters render a decision, unless the
decision of the Arbiters specifically provides otherwise for good cause, and
judgment upon such award may be entered in the Supreme Court of the State of New
York or any other State in which any party to this Agreement is a resident. Such
determination shall be made by a panel of at least three (3) Arbiters.
SEVENTEENTH: LAWS TO GOVERN
This Agreement shall be construed and enforced in accordance with the
laws of the State of New York without giving effect to the conflict of laws and
principles thereof and the parties consent to the exclusive jurisdiction of the
state and federal courts of the State of New York.
EIGHTEENTH: NOTICES
All necessary notices, demands, and requests required or permitted to
be given under the provisions of this Agreement shall be deemed duly given five
(5) days after being mailed by certified mail, return receipt requested, postage
prepaid and addressed as follows:
A. If to be given to NutraGenics at
0000 Xxxxx Xxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
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B. If to be given to Xxxxxx Xxxx at
000 Xxxxxxxx Xxxx
Xxx, Xxx Xxxx 00000
NINETEENTH: ENTIRE AGREEMENT
This Agreement contains all of the terms and conditions agreed upon by
the parties hereto with reference to the subject matter hereof. No other
agreements, oral or otherwise, shall be deemed to exist or to bind any of the
parties hereto, and all prior agreements and understandings are superseded
hereby. This Agreement cannot be modified or changed except by written
instrument signed by all of the parties hereto.
TWENTIETH: HEADINGS
The headings of the paragraphs of this Agreement are for the
convenience of reference only and do not form a part thereof and in no way
modify, interpret or construe the meanings of the parties.
TWENTY-FIRST: COUNTERPARTS
To facilitate execution, this Agreement may be executed in as many
counterparts as may be required and its shall not be necessary that the
signatures of, or on behalf of, each party, or that the signatures of all
persons required to bind any party, appear on each counterpart; but it shall be
sufficient that the signature of, or on behalf of, each party, or that the
signatures of the persons required to bind any party, appear on one or more of
the counterparts. All counterparts shall collectively constitute a
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single agreement. It shall not be necessary in making proof of this Agreement to
produce or account for more than a number of counterparts containing the
respective signatures of, or on behalf of, all of the parties hereto. Signatures
by facsimile transmission shall be deemed acceptable and binding upon the
parties.
TWENTY-SECOND: SEVERANCE OF AGREEMENT
Should any provision or portion of any provision of this Agreement be
invalid for any reason the validity of the remaining provisions, or of the other
portions of the provision in question, shall not be effected thereby.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their duly authorized officers, and their corporate seals to be
affixed hereto.
NUTRAGENICS, INC.
/s/Xxxxxx X. Xxxx
-------------------------------
By: XXXXXX X. XXXX
CHIEF EXECUTIVE OFFICER
/s/Xxxxxx Xxxx
-------------------------------
XXXXXX XXXX
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