INVESTMENT AGREEMENT
EXYPNOTECH GMBH
dated December 11, 2003
by and among
1. TagStar Systems GmbH
Hochlandstrass 6
83623 Dietramszell
- hereinafter referred to as "TAGSTAR"-
2. NanoPierce Technologies, Inc.
000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
XXX
- hereinafter referred to as "NANOPIERCE"-
The parties referred to in nos. 1 - 2 hereinafter individually/collectively
referred to as the "Party / Parties".
3. ExypnoTech GmbH
Xxxx.-Xxxxxxx-Xxxxx-Xxxxxxx 0
00000 Xxxxxxxxxx
- hereinafter also referred to as "EYXPNOTECH" or "COMPANY"-
PREAMBLE
ExypnoTech GmbH is registered with the Commercial Register at the local
court of Xxxx under HRB 9208.
The nominal share capital of the Company amounts to EUR 50,000. The single
share in said amount is currently held by NanoPierce.
The Company seeks growth financing amounting to a total of US$ 98,000
invested by TagStar. TagStar intends to invest in the course of the Closing
by subscribing for new shares in the Company with a total nominal value of
EUR 52,000 and a total Investment of US$ 98,000 under the terms of this
Investment Agreement (hereinafter also referred to as "Agreement").
NOW THEREFORE, the Parties agree as follows:
Holme Xxxxxxx & Xxxx
Rechtsanwalte - Attorneys at Law
-2/8-
SEC. 1
SUBSCRIPTION OF SHARES, CHANGE OF ARTICLES
1. In order to grant new shares to TagStar and to admit TagStar as a new
shareholder of the Company, NanoPierce as the sole shareholder in the
Company shall immediately upon signature of this Agreement convene an
extraordinary shareholders' meeting of the Company and vote in favor of the
following resolutions:
a) The Company's registered capital shall be increased from EUR 50,000 by
EUR 52,000 to EUR 102,000 by issuance of a new share in the nominal
amount of EUR 52,000 for subscription by TagStar. NanoPierce shall
waive its subscription right ("Ausschluss des Bezugsrechts"). The new
share shall be issued at par value.
b) The Company's articles of association ("Gesellschaftsvertrag") shall
be revised with respect to the capital increase.
2. TagStar shall subscribe for the new share as set forth in Para. 1 above and
shall pay the respective nominal value to the Company immediately upon
subscription.
3. The new share shall have the right to participate in profits as from
January 1, 2003.
SEC. 2
ADDITIONAL PAYMENTS BY TAGSTAR
1. In addition to the nominal value set forth in Sec. 1, TagStar hereby
undertakes vis-a-vis NanoPierce, not, however, vis-a-vis the Company to
make an additional payment into the Company's additional paid in capital
(Kapitalrucklage i.S.v. Sec. 272 Abs. 2 Nr. 4 HGB) in the total amount of
EUR 29,163.60 (in words: Euro twentyninethousand onehundredandsixtythree,
sixty cent).
2. Payment into the capital reserves of the Company under this Sec 2 shall
become due within five bank working days in Frankfurt/Main, Germany upon
request of the Company's management to the Company's account with
Commerzbank Bank M nchen, Filiale Ottobrunn, Bank M nchen, account no. 588
007 500, bank sorting code 700 400 41.
Holme Xxxxxxx & Xxxx
Rechtsanwalte - Attorneys at Law
-3/8-
SEC. 3
FURTHER RESOLUTIONS
1. In the course of the extraordinary shareholders' meeting to be held
according to Sec. 1 NanoPierce as the sole shareholder in the Company shall
pass the following further resolutions:
a) The Company's articles of association shall be revised to the extent
that pre-emptive rights are granted to the shareholders.
b) Xxxxxxx Xxxxx shall be appointed new managing director of the Company
with immediate effect.
c) Xxxx Xxxxxxxxx shall be recalled as managing director with effect as
of February 28, 2004.
2. The Parties shall treat the articles of association as resolved according
to Para. 1 lit a) as binding even before the registration of the
resolutions with the commercial register.
SEC. 4
ASSETS OF NANOPIERCE CARD TECHNOLOGIES GMBH
TagStar shall use its best efforts to immediately upon signature of this
Agreement enter into an asset purchase agreement with NanoPierce Card
Technologies GmbH i.L. regarding the assets of NanoPierce Card Technologies
GmbH i.L., similar to the draft as set forth in APPENDIX A to this
Agreement, to be formally approved by Prof. Xx. Xxxxxxx, the official
receiver of the landlord.
SEC. 5
INTELLECTUAL PROPERTY
1. NanoPierce hereby assigns the US Provisional Application for Ultrasonic
Bonding of Electronic Devices, filed with the US Patent and Trademark
Office under Serial No. 60/437,866 on January 3, 2003 to ExypnoTech. The
Parties as well as ExypnoTech shall use its best efforts to effectuate the
transfer under the applicable Laws of the United States of America and
other jurisdictions where applications have been filed.
2. NanoPierce hereby assigns the trade xxxx Application "SmartPaper" filed
with the United States Patent and Trademark office under Serial No. 76/241
281 to ExypnoTech. The Parties as well as ExypnoTech shall use their best
efforts to effectuate the transfer under the applicable Laws of the United
States of America and other jurisdictions where applications have been
filed.
Holme Xxxxxxx & Xxxx
Rechtsanwalte - Attorneys at Law
-4/8-
3. ExypnoTech accepts both assignments set forth under Para. 1 and Para. 2
above.
4. Any reasonable costs related to the execution of said transfers, in
particular registration costs, shall be borne by the Company.
SEC. 6
TAGSTAR OBLIGATIONS
1. TagStar hereby irrevocably undertakes vis-a-vis NanoPierce to release
NanoPierce from all liabilities resulting from subsidies granted by the
state of Thuringia and immediately upon signature of this Agreement enter
into negotiations with LEG Thuringia (TAB and IGZ) about a possible
continuation of the existing contracts.
2. As long as NanoPierce shall remain a shareholder of the Company, TagStar
shall arrange for ExypnoTech's financial statements to be timely prepared
according to US GAAP to enable NanoPierce to comply with all statutory
duties as a reporting company in the United States of America.
SEC. 7
BUSINESS DEVELOPMENT OF EXYPNOTECH
1. It is hereby understood between the parties that unless otherwise stated in
this Agreement, all intellectual property rights of ExypnoTech remain with
the Company, this shall apply in particular with regard to any rights
related to the name "ExypnoTech". TagStar shall have the duty to administer
the Company's internet website.
2. The Parties as well as ExypnoTech agree that the Delvotec production
machine remains the property of ExypnoTech. To ensure proper maintenance of
the machine, TagStar shall have the right to move the machine to TagStar's
production facility and to service and operate the machine, at its costs,
on behalf of the Company. Additional extensions to the machine remain the
property of TagStar.
3. TagStar will use its best efforts, in cooperation with NanoPierce, to sell
the ultrasonic technology as set forth in Sec. 5 above to other non RFID
applications. In addition, TagStar will provide additional technical
support to ExypnoTech in the prosecution of the patent application relating
to the ultrasonic method of attachment.
Holme Xxxxxxx & Xxxx
Rechtsanwalte - Attorneys at Law
-5/8-
SEC. 8
FURTHER CAPITAL INCREASES
1. It is hereby understood between the Parties that further increases of the
Company's nominal share capital require a 75 % vote of the shareholders'
meeting. The Parties hereby undertake vis-a-vis each other to exercise
their voting rights in future shareholders' meeting to the extent that each
shareholder shall be entitled to exercise its statutory subscription
rights.
2. It is hereby understood between the Parties that future dividends arising
from future profits shall be distributed annually according to the
respective percentage of shareholding in the Company. Such distributions
shall be made within 120 days after the fiscal year end of the Company.
SEC. 9
REPRESENTATIONS AND WARRANTIES
1. NanoPierce and TagStar each represent and warrant to the other as follows:
a) The execution, delivery and performance by it of this Agreement have
been duly authorized by all necessary corporate action.
b) This Agreement is a legal, valid and binding obligation enforceable
against it in accordance with its terms and conditions.
2. With the exception of Warranties explicitly included in this Agreement, any
further warranty by the parties shall be excluded.
SEC. 10
TRANSACTION COSTS
The external costs in connection with the financing laid down in this
Investment Agreement shall be borne by the Company as costs for the
provision of further capital. These costs to be borne by the Company
include in particular:
a) the external costs of Holme, Xxxxxxx & Xxxx for the preparation of the
appropriate legal documentation for the financing;
b) notary and court costs, any transaction taxes.
Holme Xxxxxxx & Xxxx
Rechtsanwalte - Attorneys at Law
-6/8-
SEC. 11
CONFIDENTIALITY
1. The Parties shall keep the existence and the content of this agreement as
well as all circumstances related hereto vis-a-vis third parties
confidential unless a disclosure to third parties is required by law or the
provisions of a stock exchange or in the framework of adequate information
of the employees of the companies and their elected representatives or the
information is destined for disclosure or is (or has become) generally
known.
2. Any press release relating to this agreement shall be approved by both
parties in written form.
3. This obligation shall remain in force upon the execution of this agreement.
SEC. 12
TERM
This Agreement shall become effective at the date of signature. The capital
increase described under Sec. 1 will become effective with its registration
with the Company's commercial register.
SEC. 13
FINAL PROVISIONS
1. All amendments and additions to this Agreement must be made in writing.
This also applies to a waiver of the written form requirement.
2. In the event that individual or a number of provisions set forth herein are
or prove to be invalid or unenforceable, the validity of the remaining
provisions shall not be affected thereby. Moreover, the invalid or
unenforceable provision shall be deemed replaced by a provision which
reaches the original content and purpose of the invalid provision to the
closest possible and legally permissible extent. The aforesaid shall also
apply with regard to provisions that prove to be missing.
3. This document and the Appendices referred to herein contain all agreements
among the parties in regard of the subject matter hereof. No side or other
agreements have been entered into among parties with regard to the subject
matter of this agreement except than explicitly stated otherwise in this
agreement. Any and all prior agreements by and among parties in respect of
the subject matter of this agreement shall be superseded and become invalid
upon signature of this Agreement
Holme Xxxxxxx & Xxxx
Rechtsanwalte - Attorneys at Law
-7/8-
4. This Investment Agreement shall be governed by the law of the Federal
Republic of Germany with the exemption of the UN Convention on the Sales of
Goods. To the extent that such an agreement is legally valid, the courts of
Munich shall have non-exclusive jurisdiction over this Investment
Agreement.
Munich, this December 11, 2003
_____________________________ __________________________
NanoPierce Technologies, Inc. Tag Star Systems GmbH
_____________________________
ExypnoTech GmbH
Holme Xxxxxxx & Xxxx
Rechtsanwalte - Attorneys at Law
-8/8-
APPENDICES:
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APPENDIX A - ASSET PURCHASE AGREEMENT
