RESEARCH AND DEVELOPMENT AGREEMENT
This
Research and Development Agreement (this “Agreement”) is made and entered into
as of the 11th day of August, 2006 by and among BioLargo Life Technologies,
Inc., a corporation organized under the laws of the State of California, having
its principal offices at 0000 Xxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxxxx
92614(“BLTI”), NuWay Medical, Inc., a corporation organized under the laws of
the State of Delaware, having its principal offices at 0000 Xxxx Xxxxxx, Xxxxx
0000, Xxxxxx, Xxxxxxxxxx 00000 (“NuWay”), IOWC Technologies Inc., a corporation
organized under the laws of Canada, having its principal address for service
at
00000-000 Xxxxxx, Xxxxxxxx XX X0X 0X0 (“IOWC”) and Xxxxxxx X. Code, whose
address is #4, 0000 Xxxxxxxxxxx Xxxxxxxxx X.X., Xxxxxxxx, Xxxxxxx TST 6P9
(“Code”). BLTI, IOWC, NuWay and Code are sometimes referred to herein
collectively as the “Parties” and individually as a “Party”.
RECITALS
A. BLTI
is a
party to a Marketing and Licensing Agreement (the “M&L Agreement’) pursuant
to which, among other things, BLTI has the right to develop, market, sell and
distribute certain industrial, commercial and consumer products and materials
of
trade which are incorporated mainly within air-laid, non-woven fabrics to
produce disposable absorbent products (the “Products”).
B. BLTI
desires to develop and bring to market the Products and to protect the
intellectual property embodied in the Products.
C. IOWC
has
certain knowledge and expertise in research, development, registration and
commercialization of disposable absorbent products. IOWC is interested in
providing its expertise and research and development services to BLTI in order
to facilitate BLTI’s achievement of BLTI’s business goals.
D. BLTI
desires to engage IOWC to provide to BLTI research and development services
on
the terms and subject to the conditions set forth in this
Agreement.
E.
NuWay is
the sole shareholder of BLTI. Code is the President and principal shareholder
of
IOWC.
F. Code
and
NuWay are parties to a certain Consulting Agreement dated as of January 1,
2006
(the “Consulting Agreement”), pursuant to which Code has agreed, among other
things, to provide to NuWay substantially all of Code’s commercial business time
and attention.
G. NuWay
and
Code have agreed that NuWay shall permit Code to provide his service to IOWC
in
order to assist IOWC in fulfilling its obligations pursuant to this Agreement,
and other Agreements which accrue to the overall benefit of the Parties.
In
consideration of the premises and for other good and valuable consideration,
the
receipt and adequacy of which is hereby acknowledged, the parties hereto do
hereby agree as follows:
AGREEMENT
1. Engagement
1.1 BLTI
hereby engages IOWC to provide the research and development work, including
the
work described on Schedule “A” attached hereto as may be directed from time to
time by BLTI (the “Work”) and IOWC hereby accepts the engagement and agrees to
perform the Work in accordance with the terms of this Agreement and as further
may be otherwise agreed among the parties from time to time.
1.2 The
Parties shall collaborate on the design and execution of a series of projects
which shall be designed to advance the Work (each, a “Project”). Each Project
shall be intended to develop the Products, the technologies embodied therein
and
other similar technologies. Each
Project shall be described in a mutually agreed upon description (each, a
“Project Description”) defining the scope of work to be undertaken for such
Project and defining any specific duties and responsibilities of the Parties
with respect thereto in addition to the duties and responsibilities set forth
in
this Agreement. Each Project Description shall be subject to and deemed a part
of this Agreement when affixed with the signatures of approval of the authorized
parties. Promptly upon execution of each Project Description, the Parties shall
proceed with the work specified in the Project Description, and, if agreed,
meet
any specific requirements contained therein.
| 2. |
Compensation
and Funding
|
All
Work
shall proceed and be funded in accordance with the Project Description
applicable to the series of tasks described in such Project Description.
Further,
(a) A
fee of
US $5,500 per month in arrears shall be paid by BLTI to IOWC for each month
during which no Work is being performed by IOWC, where no Project is underway
which would otherwise contain offset for laboratory and/or office and IOWC
employee expenses;
(b) If
a
Project or Projects are halted or delayed for cause or causes not attributable
to IOWC or its employees, or when funding by BLTI is delayed and IOWC incurs
costs that would have been funded in accordance with the Project Description
applicable to the halted or delayed Project or Projects but for such halt or
delay, IOWC and BLTI shall consult with each other and, to the extent reasonably
practicable, seek to minimize such costs;
(c) Each
of
Code and IOWC may independently fund Projects from any combination of
institutional grants or arrangements with third parties; provided, however,
that
no such independent funding shall relieve either Code or IOWC of its duties
and
obligations pursuant to this Agreement; and provided, further, that in no event
shall any of such funding sources acquire any right, title or interest in or
to
any of the Developments, any portion thereof or any intellectual property
embodied therein, including without limitation any rights to exploit or license
others to exploit the same commercially, excepting only such Moral Rights to
be
known as an author of such Developments. Any such independent funding received
by IOWC or Code as contemplated in the preceding sentence shall reduce, in
equal
amount, the obligations of BLTI to provide funding in accordance with the
Project Descriptions for the Project or Projects which are the subject of such
grants;
2
(d) With
the
prior written consent of BLTI, which consent shall not be unreasonably withheld,
IOWC may reorganize at any time in either Canada or the United States in order
to facilitate IOWC and Code’s efforts to attract and obtain research grants to
fund portions of the Work, from sources other than any of the Parties; provided,
however, that no such reorganization shall relieve either Code or IOWC of its
duties and obligations pursuant to this Agreement; and provided, further, that
in no event shall any of such funding sources acquire any right, title or
interest in or to any of the Developments, any portion thereof or any
intellectual property embodied therein, including without limitation any rights
to exploit or license others to exploit the same commercially, excepting only
such Moral Rights to be known as an author of such Developments . Any such
grants or other funding received by IOWC or Code as contemplated in the
preceding sentence shall reduce, in equal amount, the obligations of BLTI to
provide funding in accordance with the Project Descriptions for the Project
or
Projects which are the subject of such grants; and
(e) If
IOWC
or Code should receive any credits, subsidies, rebates or other similar benefits
(the “Benefits”)`from any governmental or quasi-governmental entity in respect
of any of the Work, the obligations of BLTI to fund Projects hereunder shall
be
reduced in an amount equal to the amount of such Benefits or, if BLTI shall
have
theretofor fully funded such Projects, IOWC shall make payments to BLTI in
an
amount equal the portion of such Benefits BLTI has not previously
recouped.
| 3. |
Intellectual
Property Matters
|
3.1
For
the
purposes of this Agreement, “Development” or “Developments” includes,
without limitation all:
| (a) |
enhancements,
modifications, additions or other improvements to the intellectual
property or assets owned, licensed, sold, marketed or used by BLTI
or any
affiliates of BLTI in connection with the business of BLTI, and of
any of
their subsidiaries or affiliates;
|
| (b) |
patents,
copyrights, trade-marks, trade names, business names, logos, design
marks
and other proprietary marks; and
|
| (c) |
inventions,
devices, discoveries, concepts, ideas, formulae, know how, processes,
techniques, systems, methods and any and all improvements, enhancements
and modifications thereto, whether patented or not,
|
developed,
created, generated, contributed to or reduced by practice by Code, by IOWC
or
its employees, agents or contractors, alone or jointly with others while IOWC
is
providing the Work to BLTI pursuant to this Agreement.
3.2 Each
of
Code and IOWC agrees to make full disclosure to BLTI of each Development,
promptly upon its creation. Code and IOWC will disclose in writing on a regular,
but no less than semi-annual basis in a log book or such other form reasonably
requested by BLTI, the details of all Developments that Code or IOWC is involved
with or responsible for. Each of Code and IOWC hereby irrevocably assigns and
transfers to BLTI and agrees that BLTI will be the exclusive owner of all of
their respective right title and interest in and to each Development, including
all trade secret, patent, copyright, trade-xxxx, industrial design, and all
other intellectual property rights of any kind therein, excepting Moral Rights
as may not be alienable under applicable law. Notwithstanding the retention
by
Code and IOWC of such Moral Rights, it is the express intention of the Parties
that BLTI shall have the sole and exclusive right to commercially exploit each
Development. Each of Code and IOWC agrees to co-operate fully at all times
during and subsequent to the term of this Agreement with respect to the
execution of all further documents and the carrying out of all such acts and
things as are reasonably
requested by BLTI (at BLTI’s expense) to confirm the transfer of and/or
establish the ownership of all rights, including all intellectual property
rights, effective at or after the time the Development is created and to apply
for and obtain patent, copyright, industrial design, trademark and other
intellectual property registrations covering the Developments. BLTI will be
exclusively entitled to make applications for registration of all such rights,
in BLTI’s sole discretion, in any jurisdictions that BLTI deems necessary and
each of Code and IOWC does hereby appoint BLTI, its officers and agents as
their
respective true and lawful attorney-in-fact to execute, deliver and prosecute,
as BLTI shall deem necessary or desirable, in BLTI’s sole and absolute
discretion, to confirm and protect such assignment and to protect all
proprietary information and intellectual property covered thereby.
3
3.3 Neither
IOWC nor Code shall disclose any information, documents, or Developments which
are developed by IOWC or to which IOWC may have access by virtue of its
performance of the services to any person not expressly authorized by BLTI
to
receive such information. IOWC shall comply, and shall cause its agents and
employees to comply, with such directions as BLTI shall make to ensure the
safeguarding or confidentiality of all such information, documents and
Developments. BLTI may require the same of any agent or employee regarding
the
confidentiality of any of BLTI’s information, documents and
Developments.
.
Concurrently
with the parties’ execution of this Agreement, Code shall execute and deliver to
the Company the Non-Disclosure and Confidentiality Agreement attached hereto
as
Annex
A (the
“Confidentiality
Agreement”), the
provisions of which are incorporated herein by this reference.
3.4
Each of
IOWC and Code agrees that they will not, except with the prior specific consent
of BLTI, during the term of this Agreement and thereafter, except for the
benefit of BLTI or its subsidiaries or its affiliates, carry on or engage in
any
business which directly competes with any aspect of the business of BLTI or
its
subsidiaries or affiliates or offer their services as a consultant to, or become
employed with, accept payment from, invest in or participate in any way with
any
company, partnership or other business organization which competes with any
aspect of the business of BLTI or any of its subsidiaries or affiliates. The
restraint set out in this paragraph 3.4 will remain in force for the duration
of
this Agreement, and if this Agreement is terminated for any reason, for a period
of one year following the termination of this Agreement.
| 4. |
Term
and Termination
|
4.1 This
Agreement will be for an initial term of commencing on the date hereof and
continuing to and including December 31, 2006 and may be renewed for successive
periods of one year each upon the written agreement of the Parties.
4
4.2 This
Agreement may be terminated by NuWay and BLTI if:
(a) IOWC
or
Code files a voluntary petition in bankruptcy, or is adjudicated as bankrupt
or
insolvent, or files any petition or answer seeking any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under any present or future statue or law relating to bankruptcy,
insolvency or other relief for debtors, or seeks, consents to, or acquiesces
in
the appointment of any trustee, receiver or liquidator of either of them, or
of
all or any substantial part of either of their properties, and the same remains
unvacated and unstayed for an aggregate of sixty (60) days from the date of
entry thereof; or any trustee, receiver, or liquidator of either of them or
of
all or any substantial part of their properties is appointed without their
consent or acquiescence and such appointment remains unvacated and unstayed
for
an aggregate of sixty (60) days; or
(b) IOWC
fails to perform any of its services in the manner or within the time required
herein or commits or permits a breach of or default in any of its duties,
liabilities or obligations hereunder and fails to fully cure or remedy such
failure, breach or default within ten (10) days after written notice by BLTI
to
IOWC specifying the nature of such failure, breach or default, or if such breach
or default cannot reasonably be cured within ten (10) days, fails to commence
such cure or remedy within the said 10 day period or at any time thereafter
fails to diligently prosecute such cure or remedy to completion.
4.3 This
Agreement may be terminated by IOWC and Code if:
(a) NuWay
or
BLTI files a voluntary petition in bankruptcy, or is adjudicated as bankrupt
or
insolvent, or files any petition or answer seeking any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under any present or future statue or law relating to bankruptcy,
insolvency or other relief for debtors, or seeks, consents to, or acquiesces
in
the appointment of any trustee, receiver or liquidator of either of them, or
of
all or any substantial part of their properties, and the same remains unvacated
and unstayed for an aggregate of sixty (60) days from the date of entry thereof;
or any trustee, receiver, or liquidator of either of them or of all or any
substantial part of its properties is appointed without the consent of or
acquiescence of either of them and such appointment remains unvacated and
unstayed for an aggregate of sixty (60) days; or
(b) BLTI
fails to perform any of its services in the manner or within the time required
herein or commits or permits a breach of or default in any of its duties,
liabilities or obligations hereunder and fails to fully cure or remedy such
failure, breach or default within ten (10) days after written notice by IOWC
to
BLTI specifying the nature of such failure, breach or default, or if such breach
or default cannot reasonably be cured within ten (10) days, fails to commence
such cure or remedy within the said 10 day period or at any time thereafter
fails to diligently prosecute such cure or remedy to completion.
4.4 This
Agreement shall terminate concurrently with the termination of the M&L
Agreement. In the event of such termination, the Parties shall each restore
the
other to the conditions they would have held had this Agreement been void from
its inception.
5
| 5. |
Representations,
Warranties and Covenants
|
5.1
NuWay
and
BLTI each represent and warrant to IOWC and Code that:
| (a) |
each
has full corporate power and authority to enter into this
Agreement;
|
| (b) |
it
is a valid and subsisting corporation in good standing under the
laws of
its jurisdiction of organization;
and
|
| (c) |
neither
the execution and delivery of this Agreement nor the consummation
of the
transactions contemplated by this Agreement will conflict with, result
in
a breach of or accelerate the performance required by any agreement
to
which either of them is a party;
|
5.2
IOWC
and
Code, jointly and severally, represent and warrant to BLTI and NuWay
that:
| (a) |
each
has full power and authority to enter into this
Agreement;
|
| (b) |
IOWC
is a valid and subsisting corporation in good standing under the
laws of
its jurisdiction of organization;
and
|
| (c) |
that
neither the execution and delivery of this Agreement, nor the consummation
of the transactions contemplated by the Agreement, will conflict
with,
result in the breach of or accelerate the performance required by
any
agreement to which IOWC and/or Code is a party, except the Consulting
Agreement, as to which Nuway and BLTI waive any
conflict.
|
| 6. |
Miscellaneous
|
6.1
No
amendment, modification, supplement, termination, or waiver of any provision
in
this Agreement, and no consent to any departure therefrom, shall be effective
unless in writing and signed by the Parties and then only in the specific
instance and for the specific purpose given.
6.2 Any
notices required or permitted to be given in writing will be deemed received
when personally delivered or, if earlier, ten (10) days after mailing by
registered or certified United States mail, postage prepaid, and return receipt
requested. Each Party may change its address only by notice given to the other
Parties in the manner set forth herein.
6.3 This
Agreement may be executed in two or more counterparts, and the counterparts,
taken together, shall constitute one original. Executed copies of this Agreement
and any amendments or modifications thereto may be delivered by facsimile
transmission in lieu of an original.
6.4 This
Agreement shall be binding upon and inure to the benefit of the Parties and
their respective permitted successors and assigns. This Agreement, including
the
rights and obligations hereunder, shall not be assigned, delegated or
transferred by IOWC or Code without the prior written consent of BLTI.
6
6.5 This
Agreement (together with the appendices thereof) shall comprise the complete
and
integrated agreement of the Parties with respect to the subject matter hereof
and shall supersede all prior agreements, written or oral, on the subject matter
hereof. Neither party hereto shall have a provision construed against it by
reason of such party having drafted the same.
6.6 The
rights and obligations provided in Article 3 hereof shall survive
termination of this Agreement.
6.7 This
Agreement shall be governed by, and construed and enforced in accordance with,
the laws of the State of California, without regard to the body of law known
as
conflict of laws.
6.8 Any
provision in this Agreement that is held to be inoperative, unenforceable,
or
invalid in any jurisdiction shall be, as to that jurisdiction only, inoperative,
unenforceable, or invalid without affecting the remaining provisions in that
jurisdiction or the operation, enforceability, or validity of those provisions
in any other jurisdiction, and to this end the provisions of this Agreement
shall be severable.
6.9 Headings
of this Agreement are included for convenience only and shall not be considered
a part of this Agreement for any other purpose.
6.10 In
the
event of any litigation or other dispute arising as a result of or by reason
of
this Agreement, the prevailing party in any such litigation or other dispute
shall be entitled to, in addition to any other damages assessed, its reasonable
attorneys’ fees, and all other costs and expenses incurred in connection with
settling or resolving such dispute. The attorneys’ fees which the prevailing
party is entitled to recover shall include fees for prosecuting or defending
any
appeal and shall be awarded for any supplemental proceedings until the final
judgment is satisfied in full. In addition to the foregoing award of attorneys’
fees to the prevailing party, the prevailing party in any lawsuit on this
Agreement shall be entitled to its reasonable attorneys’ fees incurred in any
post judgment proceedings to collect or enforce the judgment This attorneys’
fees provision is separate and several and shall survive the merger of this
Agreement into any judgment.
6.11 No
Party’s to exercise any right under this Agreement shall constitute a waiver of
any other term or condition of this Agreement with respect to any other
preceding, concurrent, or subsequent breach, nor shall it constitute a waiver
by
such Party of its rights at any time
thereafter
to require exact and strict compliance with any of the terms of this Agreement.
The rights and remedies set forth in this Agreement shall be in addition to
any
other rights or remedies which may be granted by law.
7. Stock
Issuance.
7.1 As
further consideration to Code to enter into this Agreement and in reliance
on
the representations and warranties of Code set forth in the Subscription
Agreement described in paragraph 7.2 below, NuWay shall issue to Code 15,515,913
shares of NuWay’s Common Stock (the “Code
Stock”),
which
will amount to 19.9% of the Common Stock of NuWay issued and outstanding
immediately following the issuance of the Code Stock. Upon issuance, the Code
Stock will be duly authorized, validly issued, fully paid and nonassessable.
Certificates representing shares of the Code Stock shall bear a legend in the
following form:
7
THE
SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR QUALIFIED FOR SALE UNDER ANY STATE
SECURITIES LAWS (COLLECTIVELY, “SECURITIES LAWS”) AND MAY NOT BE OFFERED, SOLD
OR OTHERWISE TRANSFERRED UNLESS REGISTERED OR QUALIFIED FOR SALE UNDER ALL
APPLICABLE SECURITIES LAWS OR UNLESS, IN THE OPINION OF COUNSEL SATISFACTORY
TO
THE ISSUER, IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER, ANY SUCH OFFER,
SALE OR OTHER TRANSFER IS EXEMPT FROM THE REGISTRATION OR QUALIFICATION
REQUIREMENTS OF SUCH SECURITIES LAWS.
7.2 Code
shall execute and deliver to NuWay a subscription agreement in the form of
Annex
B
attached
hereto (the “Subscription
Agreement”)
the
provisions of which are incorporated herein by this reference.
IN
WITNESS WHEREOF, the Parties hereto have executed this Agreement effective
as of
the date first set forth above.
BIOLARGO
LIFE TECHNOLOGIES, INC.
By: /s/
Xxxxxx Xxxxxxx
Title:
President
NUWAY
MEDICAL, INC.
By:
/s/
Xxxxxx Xxxxxxx
Title:
President
IOWC
TECHNOLOGIES INC.
By:
/s/
Xxxxxxx X. Code
Title:
President
/s/
Xxxxxxx X. Code
XXXXXXX
X. CODE
8
SCHEDULE
“A”
[Description
of the Work]
| 1. |
The
ongoing research and development of industrial, commercial and consumer
products and materials of trade which are incorporated mainly within
air-laid, non-woven fabrics to produce disposable products that are
lightweight, super-absorbent, yield a safe yet disinfecting dose
of
iodine, are biodegradable, and can be disposed of as normal household
waste.
|
| 2. |
Such
other Work that IOWC, Code and BLTI mutually
agree.
|
| a. |
Current
Projects
|
| i. |
Technical
absorbents to include for iodine generation, and other dangerous
goods
management by use of strategic
absorption
|
| ii. |
Technical
absorbents in an insulation role, to include for heat capacitance
additions, microencapsulation of phase changing materials, and package
designs
|
| iii. |
Technical
absorbents in a food safety role
|
| iv. |
Temperature
compensating hygiene products
|
| v. |
Bi-phase
change and disinfectant delivery by phase change
materials
|
| vi. |
Technical
absorbents in an oil absorption role to include for in situ
bioremediation
|
| b. |
Electrodeposition
of iodine
|
| c. |
Installation
and maintenance of an internet wide area
network.
|
9
Annex
A
Form
of
Confidentiality Agreement
CONFIDENTIALITY
AND NON-DISCLOSURE AGREEMENT
AGREEMENT
(this “Agreement”)
made
and entered into as of this 20th day of June, 2006, by and between NUWAY
MEDICAL, INC., a Delaware corporation (the “Company”)
and
the undersigned (“Recipient”).
WHEREAS,
Recipient is an stockholder or potential investor of the Company and has asked
management of the Company to provide Recipient certain information which may
be
material to the Company and which has not been made public by the Company;
and
WHEREAS,
the Company and Recipient are familiar with Regulation F-D promulgated by the
Securities and Exchange Commission (the “Commission”)
regarding disclosure of material non-public information and the parties wish
to
comply with said Regulation;
NOW,
THEREFORE, the Company and Recipient hereby agree as follows:
1. Confidentiality.
(a) Recipient hereby acknowledges that Recipient will have access to, receive
and learn confidential information (collectively, the “Confidential
Information”)
relating to the Company and/or any of its affiliates, including without
limitation the Company’s financial condition, securities and certain regulatory
matters, that is not generally known, or been disclosed, to the public. All
Confidential Information is and shall remain the sole property of the Company.
Recipient shall make no use of Confidential Information, other than as provided
for herein, and shall not disclose Confidential Information to any third party,
except as disclosure shall be necessary as required by law.
(b)
Confidential Information shall mean and include, without limitation, all
information considered proprietary by the Company and to which Recipient has
access to, receives, or learns from the Company. Confidential Information may
be
written, recorded, or otherwise fixed in or on any medium, electronically
communicated, or orally or visually communicated to Recipient. Confidential
Information specifically includes, but is not limited to, any documents, records
or information concerning the business, customers, clients, suppliers,
consultants or affairs (financial, securities, regulatory or otherwise) of
the
Company and/or any of its affiliates. Confidential Information also includes,
without limitation, software (in various stages of development), content (in
various stages of development), designs, drawings, specifications, models,
source code, object code, documentation, diagrams, flow charts, marketing and
development plans, business plans, methods of doing business, financial
information, customer lists, patent applications, studies and other similar
information that is proprietary and/or confidential to the Company. Recipient
shall not use or disclose such Confidential Information, except to the extent
authorized representatives of the Company.
(c)
Notwithstanding anything contained herein to the contrary, Confidential
Information shall not include information which: (i) is or becomes generally
available to the public other than through any act or omission on Recipient’s
part at or after the time of disclosure by the Company to Recipient; (ii)
Recipient receives from a third party that is free to disclose such information
without breach of any legal obligation to the Company or any third party; or
(iii) is required to be disclosed pursuant to any statute, regulation, order,
subpoena or document discovery request, provided that prior written notice
of
such disclosure is furnished by Recipient to the Company as soon as practicable
in order to afford the Company an opportunity to seek a protective order (it
being agreed that if the Company is unable to obtain or does not seek a
protective order and Recipient is legally compelled to disclose such
information, disclosure of such information may be made without
liability).
(d)
Recipient recognizes and acknowledges that the Confidential Information is
a
valuable, special and unique asset of the Company and, moreover, that the
Company has special obligations and responsibilities with respect to the
Confidential Information as required by the Rules and Regulations of the
Commission. Recipient further recognizes and acknowledges that any breach of
this Agreement will cause irreparable harm to the Company, and Recipient hereby
consents to the Company’s entitlement to a temporary and/or permanent injunction
in addition to any other remedies available to the Company as a result of a
breach by Recipient. The Company shall be entitled to such injunctive relief
without the necessity of posting a bond or other security.
10
2. Governing
Law.
This
Agreement shall be subject to, and be governed by, the laws of the State of
California without regard to conflict of law principles thereof.
3. Severability.
If any
provision of this Agreement as applied to either party or to any circumstances
shall be adjudged by a court of competent jurisdiction to be void or
unenforceable, the same shall in no way affect any other provision of this
Agreement or the validity or enforceability of the rest of this
Agreement.
4. Waiver.
Waiver
by either party of a breach of any provision of this Agreement shall not operate
or be construed as a waiver of any subsequent breach of such provision or a
waiver of any other provision of this Agreement.
5. Headings.
The
headings set forth herein are included solely for the purpose of identification
and shall not be used for the purpose bf construing the meaning of the
provisions of this Agreement.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day
and year first above written.
|
NUWAY
MEDICAL, INC.
a
Delaware corporation
By:
/s/ Xxxxxx Xxxxxxx
Name:
Xxxxxx Xxxxxxx
Title:
President
|
RECIPIENT:
________________________
By:
/s/Xxxxxxx X. Code
Name:
Xxxxxxx Xxxx Code
Title:
___________________
|
11
Annex
B
NUWAY
MEDICAL, INC.
FORM
OF
SUBSCRIPTION AGREEMENT
The
undersigned hereby proposes to acquire shares of common stock (the “Shares”) of
NuWay Medical, Inc., a Delaware corporation (the “Company”).
The
undersigned understands that the Securities are being offered and sold without
registration under the Securities Act of 1933, as amended (the “Act”), in
reliance upon either: (i) FOR
U.S. INVESTORS ONLY:
the
exemption contained in Sections 4(2) of the Act and Regulation D promulgated
thereunder; or (ii) FOR
NON-U.S. PERSONS ONLY:
the
exemption contained in Regulation S promulgated under the Act, and, in either
case, that such reliance is based on the undersigned’s representations set forth
below.
To
induce
the Company to accept this subscription and issue and deliver the Shares, the
undersigned represents and warrants as follows:
1. The
undersigned is acquiring the Shares for investment for his or her own account,
and not with a view toward distribution thereof, and with no present intention
of dividing his or her interest with others or reselling or otherwise disposing
of all or any portion of the Shares. The undersigned has not offered or sold
a
participation in this purchase of the Shares, and will not offer or sell any
of
the Shares or interest therein or otherwise, in violation of the Act. The
undersigned further acknowledges that he or she does not have in mind any sale
of the Shares currently or after the passage of a fixed or determinable period
of time or upon the occurrence or non-occurrence of any predetermined events
or
consequence; and that he or she has no present or contemplated agreement,
undertaking, arrangement, obligation, indebtedness or commitment providing
for
or which is likely to compel a disposition of the Shares and is not aware of
any
circumstances presently in existence that are likely in the future to prompt
a
disposition of the Shares.
2. The
undersigned acknowledges that the Shares have been offered to him or her in
direct communication between himself or herself and the Company or through
registered broker-dealers and not through any general solicitation or
advertisement of any kind.
3. The
undersigned acknowledges that he or she has read or has had access to all of
the
Company’s filings with the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as amended, and that the offer and sale of
the
Securities to the undersigned was based on the representations and warranties
of
the undersigned in this Subscription Agreement, and acknowledges that he or
she
has been encouraged to seek his or her own legal, tax and financial counsel
to
assist him or her in evaluating this investment. The undersigned acknowledges
that the Company has given him or her and all of his or her counselors access
to
all information relating to the Company’s business that they or any one of them
has requested. The undersigned acknowledges that he or she has sufficient
knowledge, financial and business experience concerning the affairs and
conditions of the Company so that he or she can make a reasoned decision as
to
this investment in the Company and is capable of evaluating the merits and
risks
of this investment. Based on the foregoing, the undersigned hereby agrees to
indemnify the Company thereof and to hold each of such persons and entities,
and
the officers, directors and employees thereof harmless against all liability,
costs or expenses (including reasonable attorneys’ fees) arising by reason of or
in connection with any misrepresentation or any breach of such warranties of
the
undersigned, or arising as a result of the sale or distribution of the Shares
by
the undersigned in violation of the Act, the Securities Exchange Act of 1934,
as
amended, or any other applicable law, either federal or state. This subscription
and the representations and warranties contained herein shall be binding upon
the heirs, legal representatives, successors and assigns of the undersigned.
12
4.
(a) The
undersigned is aware of the restrictions of transferability of the Shares and
further understands and acknowledges that any certificates evidencing the Shares
will bear a legend substantially in the following form, to which such interests
will be subject:
THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR QUALIFIED FOR SALE UNDER ANY STATE SECURITIES LAWS (COLLECTIVELY,
“SECURITIES LAWS”) AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS
REGISTERED OR QUALIFIED FOR SALE UNDER ALL APPLICABLE SECURITIES LAWS OR UNLESS,
IN THE OPINION OF COUNSEL SATISFACTORY TO THE ISSUER, IN FORM AND SUBSTANCE
SATISFACTORY TO THE ISSUER, ANY SUCH OFFER, SALE OR OTHER TRANSFER IS EXEMPT
FROM THE REGISTRATION OR QUALIFICATION REQUIREMENTS OF SUCH SECURITIES
LAWS.
(b) The
undersigned understands that following the purchase of the Shares may only
be
disposed of pursuant to either (i) an effective registration statement under
the
Act, or (ii) an exemption from the registration requirements of the Securities
Act of 1933.
(c)
The
Company has neither filed such a registration statement with the SEC or any
state authorities nor agreed to do so, nor contemplates doing so in the future
with respect to the the Shares, and in the absence of such a registration
statement or exemption, the undersigned may have to hold the Shares indefinitely
and may be unable to liquidate them in case of an emergency.
(d)
The
undersigned acknowledges that the Company is not obligated and does not propose
to furnish the undersigned with information necessary to enable it to be able
to
make sales under Rule 144 of the Securities Act of 1933.
5.
The
undersigned represents that he or she is either:
___X____ FOR
NON-U.S. PERSONS ONLY:
not a
“U.S. person” as defined in Rule 902 of Regulation S, a copy of which definition
the investor acknowledges receiving and reviewing, and a citizen of the country
of Canada and a resident of the country of Canada,
and,
in
either case, makes the following further representation:
I,
THE
UNDERSIGNED, REPRESENT THAT I HAVE A PRE-EXISTING PERSONAL OR BUSINESS
RELATIONSHIP WITH THE COMPANY, ANY OFFICER, DIRECTOR OR CONTROLLING PERSON
THEREOF OR HAVE, THROUGH MYSELF OR THROUGH MY UNAFFILIATED PROFESSIONAL ADVISER,
THE BUSINESS OR FINANCIAL EXPERIENCE TO PROTECT MY INTERESTS IN CONNECTION
WITH
MY SUBSCRIPTION HERETO.
FURTHER,
I AM PURCHASING THE SECURITIES OFFERED HEREBY FOR INVESTMENT AND NOT WITH A
VIEW
TOWARD DISTRIBUTION THEREOF.
6.
The
undersigned acknowledges that he or she has received and read and has reviewed
the most recent and current public filings of the Company, as of August 11,
2006.
7.
This
Subscription Agreement has been delivered in, and shall be construed in
accordance with the laws of the State of California. Any action in connection
with this Subscription Agreement and the securities being offered shall be
brought in the appropriate state or federal court in and for the County of
Orange, State of California, which shall have exclusive jurisdiction over such
action.
13
8.
Based
on the foregoing, the undersigned hereby irrevocably subscribes to receive
15,515,913 shares of its Common Stock to be issued by the Company pursuant
to
the Research and Development Agreement among the Company, the undersigned
subscriber and others, of even date with this Subscription
Agreement.
| Executed this 11th day of August, 2006 | ||
| |
|
|
| By: | /s/ Xxxxxxx X. Code | |
| Signature of Subscriber | ||
| Xxxxxxx Xxxx Code | ||
The
above
and foregoing Subscription accepted this 11th
day of
August, 2006.
| NUWAY MEDICAL, INC. | ||
| |
|
|
| By: | /s/ Xxxxxx Xxxxxxx | |
| Xxxxxx Xxxxxxx, President | ||
14
