Exhibit 10.01
TERMINATION AND REDEMPTION AGREEMENT
THIS TERMINATION AND REDEMPTION AGREEMENT (this "Agreement") is entered
into as of the 20th day of October, 2000, by and between EQUINOX INVESTORS, LLC
("Equinox") and NANOPIERCE TECHNOLOGIES, INC. ("Nanopierce").
WITNESSETH:
WHEREAS, Equinox and Nanopierce have previously entered into a Securities
Purchase Agreement, dated as of January 11, 2000 (the "Securities Purchase
Agreement") pursuant to which Equinox purchased on January 11, 2000 (the
"Initial Closing Date"), for $1,500,000, (a) $1,500,000 principal amount of
Nanopierce's 6% convertible debentures (the "Initial Debentures"); and (b)
warrants to purchase 150,000 shares (the "Initial Warrants") of Nanopierce's
common stock, par value $.0001 per share ("Common Stock");
WHEREAS, as of the Initial Closing Date, pursuant to the Securities
Purchase Agreement, Equinox purchased, for $100, a conditional warrant (the
"Conditional Warrant") to purchase (a) up to an additional $2,500,000 principal
amount of Nanopierce's 6% convertible debentures (the "Additional Debentures"
and together with the Initial Debentures, the "Debentures"); and (ii) warrants
to purchase up to an additional 250,000 shares of Nanopierce's Common Stock
("Additional Warrants");
WHEREAS, as of March 16, 2000, pursuant to the Securities Purchase
Agreement, a portion of the Conditional Warrant was exercised, and Equinox
purchased, for $1,500,000, (a) $1,500,000 principal amount of Additional
Debentures; and (b) Additional Warrants to purchase 150,000 shares of
Nanopierce's Common Stock;
WHEREAS, as of March 16, 2000, in connection with the partial exercise of
the Conditional Warrant, the Conditional Warrant was reissued to reflect the
reduction of the amount of Additional Debentures available for purchase to
$1,000,000 and the amount of Additional Warrants available for purchase to
100,000 shares of Nanopierce's Common Stock;
WHEREAS, as of March 23, 2000 the remaining balance of the Conditional
Warrant was exercised for Additional Debentures in the amount of $1,000,000 and
Additional Warrants to purchase up to 100,000 shares of Nanopierce's Common
Stock.
WHEREAS, as a result of recent conversions of $300,000, $150,000, $250,000,
$250,000, $500,000, $250,000, $200,000, $100,000 and $150,000.00 in principal
amounts of the Debentures on April 25, 2000, May 11, 2000, June 5, 2000, July 5,
2000, July 11, 2000, August 11, 2000, September 12, 2000 and September 27, 2000
and October 16, 2000, $1,850,000 principal amount in Debentures remains
outstanding as of the date hereof;
WHEREAS, pursuant to the Registration Rights Agreement, dated as of January
11, 2000 (the "Registration Rights Agreement"), by and between Nanopierce and
Equinox, Nanopierce filed and has maintained a registration statement on Form
S-3 that was declared effective by the Securities and Exchange Commission on
March 16, 2000 (Registration No. 333-31118) (the
"Registration Statement") to cover resales of securities initially sold to
Equinox pursuant to the Securities Purchase Agreement; and
WHEREAS, Nanopierce and Equinox desire to have the outstanding Debentures
redeemed and to terminate the Securities Purchase Agreement in accordance with
the provisions in this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
SECTION 1. Termination of the Securities Purchase Agreement. On the date
of this Agreement (the "Termination Date"), the respective rights, obligations
and responsibilities of Nanopierce and Equinox created under the Securities
Purchase Agreement, including all of the terms and provisions of the Securities
Purchase Agreement, shall terminate and shall have no further effect or
consequence, except as expressly provided herein.
SECTION 2. Redemption of Debentures and Issuance of Warrants. As of
October 19, 2000 (the "Redemption Date"), Nanopierce shall redeem all of the
outstanding Debentures held by Equinox, in principal amount of $1,850,000, in
exchange for (a) the payment of (i) if payment is made on the Redemption Date,
$2,372,378.16 in same day funds by wire transfer to the account of Equinox based
on written instructions provided by Equinox or (ii) if payment is made on the
day following the Redemption Date, $2,372,378.16 plus accrued interest thereon
at the rate of 6.00% per annum from the Redemption Date, by wire transfer to the
account of Equinox based on written instructions provided by Equinox and (b)
warrants to purchase 50,000 shares of Nanopierce's Common Stock (the "Redemption
Warrants"), which shall be issued by Nanopierce to Equinox in substantially the
form attached hereto as Exhibit A.
The Debentures to be redeemed by Nanopierce shall be delivered by or on
behalf of Equinox, against payment by Nanopierce as provided above, on or before
11:00 a.m., Denver time no later than the Redemption Date, at the offices of
Xxxxx Xxxx LLP, 000 00xx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000, or at such
other time, place and date as Nanopierce and Equinox may agree in writing.
The Redemption Warrants shall be delivered by or on behalf of Nanopierce
for the account of Equinox in definitive form, and registered in such names as
Equinox or its representative, if any, may request upon notice to the Company,
against receipt of the Debentures by Nanopierce, on or before 11:00 a.m., Denver
time on the Redemption Date, at the offices of Xxxxx Xxxx LLP as specified in
the preceding paragraph or at such other time, place and date as Nanopierce and
Equinox may agree in writing.
SECTION 3. Registration Requirements for Redemption Warrants. Nanopierce
will take such steps as are necessary to include the Redemption Warrants and the
shares of Nanopierce Common Stock issued upon the exercise of the Redemption
Warrants in the Registration Statement, in accordance with the terms of the
Registration Rights Agreement.
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SECTION 4. Transfer Agent Instructions. The transfer agent instructions
provided in Section 5 of the Securities Purchase Agreement remain in full force
and effect pursuant to this Agreement.
SECTION 5. Indemnification. The indemnification provisions in Section 12
of the Securities Purchase Agreement remain in full force and effect pursuant to
this Agreement.
SECTION 6. Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed to be an original and all
of which taken together shall constitute but one and the same instrument.
SECTION 7. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 8. Headings. Section headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose.
SECTION 9. Entire Agreement. This Agreement represents our entire
understanding with regard to the matters specified herein. No other agreements,
covenants, representations, or warranties, express or implied, oral or written,
have been made by any party to any other party concerning the subject matter of
this Agreement.
[Signature Page Follows]
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IN WITNESS WHEREOF, this Termination and Redemption Agreement has been duly
executed by each of the undersigned as of the date on the first page hereof.
NANOPIERCE TECHNOLOGIES, INC.
By:________________________________
Xxxx X. Xxxxxxxxx, President and
CEO
EQUINOX INVESTORS LLC
By: WEC Asset Management LLC,
Manager
By:________________________________
Name:______________________________
Title:_____________________________
