EXHIBIT 10.3
FIRST AMENDMENT TO FACILITY AGREEMENT
THIS FIRST AMENDMENT TO FACILITY AGREEMENT (this "Amendment") is made
and entered into as of October 5, 2005 (the "Effective Date) by and among
OWLSTONE NANOTECH INC, a Delaware corporation ("Borrower") and ADVANCE NANOTECH,
INC., a Colorado corporation ("Lender"), and is made with reference to the
following:
A. Owlstone Limited and Advance Nanotech Limited have entered
into that certain Facility Agreement, dated as of May 28, 2004, (as the same may
hereafter be amended, modified, extended and/or restated from time to time, the
"Facility Agreement"). Pursuant to the Facility Agreement, Advance Nanotech
Limited has made certain advances to Owlstone Limited. Owlstone Limited and
Advance Nanotech Limited, through respective share transfer agreements with
their parent companies, wish to amend the Facility Agreement to reflect the
respective parent company as Borrower and Lender.
B. Borrower has requested that Lender increase its commitment
from Two Million Dollars ($2,000,000) to Three Million Dollars ($3,000,000), to
be advanced under the same terms and conditions of the Facility Agreement.
C. Lender has agreed to provide the additional financing
requested by Borrower, provided that Borrower agrees to (1) amend certain
provisions of the Facility Agreement and (2) issue to Lender common stock of
Borrower as more particularly set forth below and in connection with the
execution and delivery of this Agreement.
NOW, THEREFORE, in consideration of the premises and the agreements,
conditions and covenants contained herein and other good and valuable
consideration the receipt and sufficiency of which is hereby acknowledged, the
parties hereto hereby agree as follows:
1. TERMS DEFINED IN FACILITY AGREEMENT. All capitalized terms
used in this Amendment and not otherwise defined herein shall have the meanings
assigned to them in the Facility Agreement.
2. For purposes hereof, "Effective Date" means October 5, 2005.
3. Effective as of the Effective Date, the following terms are
added to SECTION 1 of the Facility Agreement in their proper alphabetical
sequence:
"OWLSTONE COMMON SHARES" means the common stock of
Owlstone Nanotech Inc, a Delaware corporation.
"FIRST AMENDMENT" means this First Amendment to
Facility Agreement dated as of this date by and among Borrower
and Lender.
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3. Effective as of the Effective Date, SECTION 2 of the Facility
Agreement is hereby deleted in its entirety and the following
is inserted in lieu thereof:
"THE AMENDED FACILITY." Subject to the terms and
conditions of this Agreement, Lender hereby, severally and not
jointly, agrees to make loans to Borrower (collectively, the
"Loans") totaling Three Million Dollars ($3,000,000), over a
mutually agreed time which amounts may be repaid at any time
prior to the Maturity Date without premium or penalty but
which amounts shall not be advanced further by Lender. All
Loans as of the Effective Date under the Facility Agreement
shall be included within The Amended Facility.
4. Effective as of the Effective Date, SECTION 8 of the Facility
Agreement is hereby deleted in its entirety and the following is inserted in
lieu thereof:
8.1 Subject to any requirement to make early
repayment in accordance with Clause 8.2 or 18.1, the Loan
shall be repayable by Borrower on the Repayment Date.
8.2 "MANDATORY REPAYMENT." Upon receipt of a minimum
of Five Million Dollars or greater of equity, convertible
debt, or similar type financing by Borrower, Borrower shall
immediately repay the Loan in its entirety.
5. Effective as of the Effective Date, SECTION 17.3 of the
Facility Agreement is hereby added:
17.3 Lender shall prepare and file with the
Securities and Exchange Commission (the "Commission") a
Registration Statement under the Securities Act of 1933, as
amended, (the "Act") covering the 6,000,000 shares given as
consideration pursuant to this Amendment. Lender shall use
commercially reasonable efforts to cause such Registration
Statement to become effective as promptly thereafter as is
commercially reasonable and to keep the Registration Statement
continuously effective until the distribution of the shares
thereunder is complete. The proposed Registration Statement
and all amendments thereto will be submitted to Lender and its
counsel prior to filing with the Commission. The Registration
Statement and all amendments and supplements thereto will be
in a form reasonably satisfactory to Lender and its counsel
and will contain such other information as may be required by
the Act and the rules and regulations of the Commission
thereunder.
6. FIRST AMENDMENT LENDER FEES. As consideration for this First
Amendment, Borrower shall issue to Lender, or its designees, Owlstone Common
Shares equal to 6,000,000 shares of Borrower.
7. CONDITIONS PRECEDENT. The satisfaction of the following shall
be conditions precedent to the effectiveness of this Amendment:
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7.1 AMENDMENT. Lender shall have received this Amendment,
duly executed by Borrower.
8. GENERAL AMENDMENT. Effective as of the Effective Date, the
Facility Agreement, is hereby amended to the further extent required to give
effect to the terms and conditions of the amendments to the Facility Agreement
effected hereunder.
9. FULL FORCE AND EFFECT. Except as amended hereby, the Credit
Agreement and the other Loan Documents shall remain unaltered and in full force
and effect. 10. COUNTERPARTS. This Amendment may be executed in multiple
counterparts, each of which shall constitute an original and all of which, taken
together, shall constitute but one and the same instrument. 11. GOVERNING LAW.
This Amendment shall be governed by, and construed in accordance with, the laws
of the State of New York.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment by
their respective duly authorized officers as of the date first above written.
"BORROWER"
OWLSTONE NANOTECH INC, a Delaware corporation
By: /s/ Xxxx Xxxxx
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Name: Xxxx Xxxxx
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Its: President, Operations
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"LENDER"
ADVANCE NANOTECH, INC., a Colorado corporation
By: /s/ Xxxxxx X. Xxxx
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Name: Xxxxxx X. Xxxx
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Its: CFO
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