Exhibit 10
TRANSACTION RESTRUCTURE AGREEMENT
This Transaction Restructure Agreement (the "Agreement") is made and
entered into as of September 30, 2001 by and between Nurescell Inc.
("Nurescell"), Advanced Technology Industries, Inc. ("ATI") and ATI Nuklear AG
("AG") (formerly named "Nurescell AG"), with respect to the following facts and
circumstances:
A. Nurescell and AG have previously entered into a "License Agreement"
dated as of August 15, 2000 (the "License Agreement") and an "Investment
Agreement" dated as of August 17, 2000 (the "Investment Agreement").
B. Subsequently, Nurescell, ATI and/or AG entered into additional
agreements, including an "Agreement," a second "License Agreement," a
"Convertible Promissory Note" and a "Security Agreement" (collectively, the
"Subsequent Agreements") which, among other things, purported to cancel the
License Agreement and the Investment Agreement.
C. For good and valuable consideration, the receipt and adequacy of
which is hereby acknowledged, ATI, Nurescell and AG now desire to restructure
their relationships in the following respects.
1. CANCELLATION OF THE SUBSEQUENT AGREEMENTS. The Subsequent
Agreements are hereby canceled in their entirety and are of no further force or
effect. As a result of such cancellation, the License Agreement and Investment
Agreement are hereby reinstated, subject to the modifications described below.
2. AMENDMENT OF THE INVESTMENT AGREEMENT. The parties hereby
agree that the Investment Agreement is amended as follows:
(a) All references to "Nurescell AG" therein shall be changed
to refer to "ATI Nuklear AG."
(b) Sections 1, 4, 5, 6 and 7 of the Investment Agreement are
hereby deleted in their entirety, as a result of which the sole purpose of the
Investment Agreement is to provide for AG's call option and matters related
thereto.
Except as expressly set forth above, all of the terms and
provisions of the Investment Agreement shall remain in full force and effect.
3. AMENDMENT OF THE LICENSE AGREEMENT. The parties hereby
agree that the License Agreement is amended as follows:
(a) All references to "Nurescell AG" therein shall be changed
to refer to "ATI Nuklear AG."
(b) Section 4 of the License Agreement is hereby amended to
add the following Section 4.3 at the end thereof:
" 4.3 (a) In addition to the payments under Section 4.1 above,
Licensee or ATI shall pay Licensor a royalty for the utilization of the
Technology in the amount of eight percent (8%) of the Net Sales of the
Technology by Licensee and/or ATI. "Net Sales" is hereby defined as gross sales,
less discounts, rebates, credits, returns and freight. In the event that the
Technology is incorporated in a product, the royalty shall be computed on the
entire price of the product, as well as the coating or application of the
product on another substance or substances. In the case of sub-licenses, the
royalty shall be computed on the gross amount received by Licensee or ATI from
the sub-licensee. In the event that any contract or agreement provides for
services or products in addition to the Technology or products incorporating the
Technology, the royalty shall be computed only upon that portion of the contract
price attributable to the Technology or any product incorporating the Technology
and the application or coating thereof on another substance or substances. In
the event of any disagreement as to the manner in which the royalty is
determined pursuant to this Section 4.3, the parties shall select a mutually
agreeable certified public accountant licensed to practice in the State of
California who shall determine the amount of the royalty in accordance with the
provisions of this Section and said determination shall be binding upon the
parties. The cost of said accountant shall be borne equally by the parties.
(b) The above royalty shall be remitted to Licensor for each
calendar month no later than the tenth (10th) day of the following calendar
month together with a report specifying the name and address of the customer
purchasing the Technology or any product in which it is incorporated, the Net
Sales amount, and the amount of the royalty. In the event the Technology or any
product in which it is incorporated is included in any agreement or contract
which provides for the furnishing of other services or products, the allocation
of the Net Sales amount attributable to the Technology shall be set forth in
reasonable detail together with the method of allocation of the total contract
price. In the case of sub-licensees, the sub-license agreement shall be provided
to Licensor upon execution and the amount of sub-royalties received from the
sub-licensees shall be set forth in each monthly report.
(c) Licensor shall have the right, upon reasonable notice to
ATI and/or Licensee, to inspect all books and records of ATI and/or Licensee
relevant to the determination of the foregoing royalty; provided, however, that
said inspection shall not be conducted more than once in any twelve (12) month
period. In the event that said inspection reveals that ATI and/or Licensee has
underpaid the royalty, ATI or Licensee shall remit to Licensor the additional
royalty which is due. In the event that any underpayment is more than five (5%)
percent of the total royalties paid by ATI and/or Licensee within the prior
twelve (12) month period, ATI or Licensee shall pay all costs and expenses of
Licensor in conducting said inspection, including, but not limited to, the fees
of independent auditors or accountants retained by Licensor to conduct such
investigation. In addition, interest at the rate of ten percent (10%) per annum
shall be paid by ATI or Licensee to Licensor on all underpayments from the date
that such payments were due to the date such underpayment is paid."
(c) In paragraph (b) of Section 6.3 of the License Agreement,
the reference to "paragraph 4.1" is hereby changed to "Section 4."
(d) The description of geographic area in Exhibit B to the
License Agreement is hereby deleted in its entirety and replaced with the
following:
"The geographic area subject to the License Agreement shall
consist of the European Union, the British Isles, the Russian Federation,
Uzbekistan, Kyrgyzstan, Afghanistan, Pakistan, Kazakhstan, Iran, Turkey,
Ukraine, The Baltic Republics, Georgia, Poland, Hungary, Czech, Slovakia,
Slovenia, Egypt, South Africa, Israel, Algeria, Libya, the UAE, Iraq, Lebanon,
Saudi Arabia, and Kuwait."
Except as expressly set forth above, all of the terms and
provisions of the License Agreement shall remain in full force and effect.
4. OTHER MATTERS BEING AGREED UPON. In addition to the foregoing,
the following agreements are hereby entered into:
(a) In consideration of ATI's agreements in paragraphs (b) and (e)
below, Nurescell hereby transfers, conveys and assigns to ATI all of Nurescell's
right, title and interest in and to AG. Nurescell shall properly assign to ATI
any documents indicating ownership in AG, including, but not limited to, stock
certificates. Nurescell shall also execute and cause to be filed with the German
Handelsregistry and any other German agency any documents necessary to reflect
the transfer of its interest in AG to ATI.
(b) In consideration of Nurescell's transfer of its interest in AG,
ATI agrees that Nurescell is hereby released from any and all past, present and
future obligations, whether past due or otherwise, with respect to the funding
of AG.
(c) In consideration of AG's agreement in paragraph (d) below,
Nurescell hereby agrees that all payments required of AG pursuant to Section 4.1
of the License Agreement are deemed paid in full.
(d) In consideration of Nurescell's agreement in paragraph (c)
above, AG agrees that Nurescell is hereby released from any and all past,
present and future obligations, whether past due or otherwise, with respect to
the funding of AG.
(e) In consideration of Nurescell's transfer of its interest in AG,
ATI agrees that commencing on the date of this Agreement and continuing to
December 31, 2001, ATI agrees to advance to Nurescell the sum of $6,000 per
month, which Nurescell shall utilize to pay necessary business expenses,
including rent, director and officer insurance, product liability insurance,
liability insurance, and such other insurance as Nurescell presently has in
place (except medical insurance, disability insurance, or life insurance upon
any officer or employee of Nurescell); provided, however, that none of such
funds shall be used for the payment of any salary or benefits to any officer or
employee of Nurescell (although such funds may be used to reimburse such persons
for reasonable business expenses approved by Nurescell's Board of Directors).
Nothing herein shall prevent Nurescell's Board of Directors from approving
payment to any consultant or other third party retained by Nurescell for the
purposes of testing, marketing, selling, or manufacturing any product of
Nurescell. ATI may, in its sole discretion, advance additional sums to Nurescell
to be utilized in paying its operating expenses.
(f) In further consideration of the amendment to the License
Agreement described in Section 3(b) above, Nurescell agrees to pay AG $1
million, as evidenced by a secured promissory note in the form of the attached
Exhibit "A."
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.
Nurescell Inc.
By:
Title:
Advanced Technology Industries, Inc..
By:
Title:
ATI Nuklear AG
By:
Title:
