Exhibit 10.1
STOCK PURCHASE AMENDMENT AGREEMENT
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THIS STOCK PURCHASE AMENDMENT AGREEMENT, dated as of July 12, 2005,
between BIOWELL TECHNOLOGY INC., a Taiwan corporation, located at 00X, Xx. 000,
Xxxxx Xxxxx Xxxx, Xxxxxxx Xxxx, Xxxxxx Xxxxxx, Xxxxxx 235, ROC (the "Company")
and APPLIED DNA SCIENCES, INC., a Nevada corporation, located at 0000 Xxxx
Xxxxxx Xxxxxxxxx, Xxxxx 000, Xxx Xxxxxxx, Xxxxxxxxxx, 00000 ("APDN"). Either one
or both is referred to as Party or Parties.
RECITALS
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A. The Company and APDN are parties to a Stock Purchase Agreement,
dated as of January 28, 2005 (the "Purchase Agreement"), providing for, among
other things, the acquisition by APDN of all of the Company's intellectual
property used in, useful to or relating to the Business; such acquisition to be
completed through (i) a sale or other transfer of such intellectual property
from the Company to a British Virgin Island (BVI) company (the "BVI Sub") and
(ii) an acquisition of the stock of the BVI Sub by a wholly-owned BVI subsidiary
to be formed by APDN (the "APDN Sub" and together with APDN, the "Buyers") on
the terms and subject to the conditions set forth in the Purchase Agreement.
Capitalized terms used in this Agreement but not otherwise defined shall have
the respective meanings set forth in the Purchase Agreement.
B. Pursuant to that certain Asset Purchase Agreement, dated as of
December 22, 2004, (the "Asset Purchase Agreement") the Company transferred
certain of its assets and liabilities to Rixflex Holdings Limited, a corporation
formed under the laws of the British Virgin Islands ("Rixflex").
C. It has been determined by the Company and APDN, that the
acquisition of the Purchased Assets contemplated by the Purchase Agreement will
be accomplished by a merger of Rixflex with and into APDN Sub (hereinafter
referred to as "APDN BVI") (the "Merger").
D. The parties wish to amend the Purchase Agreement to more
accurately reflect the Merger and amend certain other portions of the Purchase
Agreement including, but not limited to, the definition of Purchased Assets as
hereinafter provided.
NOW, THEREFORE, in consideration of the premises and the mutual
promises herein contained, the parties agree as follows:
1. The following amendments are made to Section 1.1:
(a) The following definition is inserted into Section 1.1:
"Confidential Information" means all information treated as
confidential, non-public information by the Company or Rixflex regarding or
pertaining to the Intellectual Property, the Company's methods of doing
business, its contemplated methods of doing business in the future, its past and
present, and future research and development, test information, product
information and service information, as well as customer and sales information."
(b) The definition of "Know-how" is hereby amended by inserting
(i) the words "equipment arrangements," after the words "trade secrets," and
(ii) the words "provided, however, that except as set forth above with respect
to equipment arrangements," before the words "Know-how shall not include. . ."
2. Section 2.1 of the Purchase Agreement is amended and restated to read in
its entirety as follows:
"Section 2.1 (a) At the Closing and subject to and upon the terms and
conditions of this Agreement, the Articles of Merger required to be filed to
effect the Merger shall be filed with the Registrar of Companies of the British
Virgin Islands pursuant to the applicable provisions of The International
Business Companies Act of the British Virgin Islands ("BVI Law"), and Rixflex
shall be merged with and into APDN BVI and the separate corporate existence of
Rixflex shall cease and APDN BVI shall continue as the surviving corporation
(the "Effective Time"). APDN BVI as the surviving corporation after the Merger
is hereinafter sometimes referred to as the "Surviving Corporation."
(b) At the Effective Time, the effect of the Merger shall be as provided in
this Agreement and the applicable provisions of BVI Law. Without limiting the
generality of the foregoing, and subject thereto, at the Effective Time, all the
property, rights, privileges, powers and franchises of Rixflex and APDN BVI
shall vest in the Surviving Corporation, and all debts, liabilities and duties
of Rixflex and APDN BVI shall become the debts, liabilities and duties of the
Surviving Corporation. Notwithstanding anything contained herein to the
contrary, in exchange for the Merger Consideration (as such term is defined in
Section 2.1(e)(i) below) the property, rights, privileges, powers and franchises
of Rixflex shall be free and clear of all Encumbrances (except for Permitted
Encumbrances). Without limiting the effect of the foregoing, the Parties hereto
acknowledge and agree that prior to the Closing all rights, title and interest
of either of the Sellers in, to and under all of the following items of the
Company (the "Purchased Assets") shall have been sold or otherwise transferred
to Rixflex from the Company and shall remain the property of Rixflex immediately
prior to the Effective Time:
(i) the Assumed Agreements;
(ii) To the extent consented to by the other Party or Parties to such
agreements, if such consent is required by the governing law, all
confidentiality, non-compete or nondisclosure agreements executed by vendors,
suppliers or employees of the Company or other third Parties, in each case,
relating to the Purchased Assets;
(iii) originals or copies of the Company's operating, safety and
maintenance manuals, engineering design plans, blueprints and as-built plans,
specifications, procedures and similar items primarily relating to the Purchased
Assets; and upon request, all supplier lists relating solely to the Purchased
Assets; and
(iv) all Intellectual Property and Intellectual Property Rights owned
by, or licensed to, the Company related to the Business, together with the right
to xxx and recover for past infringements or misappropriations thereof, any and
all corresponding rights that, now or hereafter, may be secured throughout the
world and all copies and tangible embodiments of any such Intellectual Property.
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(c) At the Effective Time, the Memorandum and Articles of Association of
APDN BVI as in effect immediately prior to the Effective Time shall be the
Memorandum and Articles of Association of the Surviving Corporation.
(d) At the Effective Time, the directors and officers of APDN BVI shall
be the Directors and Officers of the Surviving Corporation.
(e) At the Effective Time, by virtue of the Merger and without any
action on the part of Rixflex, APDN BVI or the holders of the following
securities:
(i) Each share of Rixflex issued and outstanding
immediately prior to the Effective Time shall be cancelled and
extinguished and converted and exchanged, without any action on
the part of the holders thereof, into the number of validly
issued, fully paid and nonassessable shares of the common stock
of APDN ("APDN Stock") which equal the amount obtained by
dividing thirty-six million (36,000,000) by the number of shares
of Rixflex issued and outstanding immediately prior to the
Effective Time ("Exchange Ratio"). The APDN Stock is sometimes
referred to herein as the "Merger Consideration." Subject to any
restrictions on the APDN Stock under the United States
Securities laws, such Merger Consideration shall be free and
clear of all Encumbrances.
(ii) The APDN Stock to be issued pursuant to this
Section 2.1 shall not have been registered and shall be
characterized as "restricted securities" under the United States
federal securities laws, and under such laws such shares may be
resold without registration under the Securities Act of 1933, as
amended (the "Securities Act"), only in certain limited
circumstances. Each certificate evidencing APDN Stock to be
issued pursuant to this Section 2.1 shall bear the following
legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED AND
MAY NOT BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF (I) AN EFFECTIVE REGISTRATION
STATEMENT FOR SUCH SECURITIES UNDER SAID ACT OR (II) AN OPINION
OF COMPANY COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.
THESE SECURITIES WERE ISSUED IN AN OFFSHORE TRANSACTION
TO PERSONS WHO ARE NOT U.S. PERSONS (AS DEFINED IN REGULATION S
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT")) PURSUANT TO REGULATION S UNDER THE SECURITIES ACT.
ACCORDINGLY, NONE OF THE SECURITIES TO WHICH THIS CERTIFICATE
RELATES HAVE BEEN REGISTERED UNDER THE SECURITIES ACT, OR ANY
U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE MAY
BE OFFERED OR SOLD IN THE UNITED STATES OR, DIRECTLY OR
INDIRECTLY, TO U.S. PERSONS (AS DEFINED IN REGULATION S UNDER
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THE SECURITIES ACT) EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT OR PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS. IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE
SECURITIES MAY NOT BE CONDUCTED UNLESS IN ACCORDANCE WITH THE
1933 ACT.
(iii) Following the Closing, the Surviving Corporation
shall, within sixty (60) days, deliver to each person, who prior
to the Merger was the record and beneficial owner of shares of
Rixflex, in substitution and exchange for such shares, one or
more certificates evidencing the number of shares of APDN Stock
that such person is entitled to receive in accordance with the
terms of this Agreement."
3. Section 4.2(f) and 4.3(g) of the Purchase Agreement are deleted
in their entirety.
4. Section 5.11 of the Purchase Agreement is amended and restated
to read in its entirety as follows:
"Section 5.11. Intellectual Property. "Intellectual Property
Rights" means all Patents, trademarks, trademark applications, trade names,
service marks, service xxxx applications, copyrights (both registered and
unregistered, the "Copyrights"), copyright applications and trade secrets of
Rixflex assigned to it by the Company pursuant to the Asset Purchase Agreement
with respect to Intellectual Property (as defined below). All intellectual
property (other than with respect to "off-the-shelf" or other third party
software which is generally commercially available) of Rixflex which has been
assigned to it by the Company pursuant to the Asset Purchase Agreement and is
used in the conduct of the Business as presently conducted or as presently
proposed to be conducted, including, computer programs and other computer
software (including, without limitation, all source and object code, algorithms,
architecture, structure, display screens, layouts and development tools),
inventions, patents, patent applications, designs, samples, specifications,
schematics, Know-how, Confidential Information, trade secrets, proprietary
processes and formulae, and development tools, promotional materials, databases,
supplier lists and marketing research, and all documentation and media
constituting, describing or relating to the foregoing, including, without
limitation, processes, devices and facilities for manufacturing (including
sequencing, imprinting and incorporating DNA), stabilizing DNA, encapsulating
DNA, immobilizing DNA, purifying DNA, extracting DNA, detecting the presence of
DNA and any DNA sequence, or fragment thereof, the subject of any experiment,
test, work, or investigation undertaken by the Company, and any DNA sequence
corresponding to a sample of DNA, isolated or otherwise, at any time stored,
secured or employed by the Company, and all validation and testing procedures
related thereto all collectively constitute the "Intellectual Property" for
purposes of this Agreement."
5. Sub-section 5.11(i) is hereby amended by inserting the following
sentence at the end of such sub-section:
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"The Intellectual Property and the Intellectual Property Rights
constitute all of the Intellectual Property and Intellectual Property Rights of
the Sellers and/or Rixflex existing as of the Closing, and used in the conduct
of the Business as presently or as presently conducted proposed to be conducted
whether fully developed or in the process of development."
6. Sub-section 5.11(l) is hereby amended to be Section 5.11(k), and
a new sub-section, Section 5.11(l) is hereby inserted and shall read in its
entirety as follows:
"(l) Biological Materials. The Sellers have not, at any time,
made any deposit of any biological materials related to the Business in any
depository of any type, or transferred biological materials related to the
Business to any third party outside of a material transfer agreement that
rigidly precludes further transfer of the same."
7. The following is added as subsection (b) under Section 7.2 of the
Purchase Agreement and the current Section 7.2(b) is amended to be 7.2(c):
"Each of the Buyers agree to defend, indemnify and hold harmless
each of the Sellers, and their respective, managers, members, partners,
directors, officers, employees and agents of each of the foregoing and each
person who controls any of them (Such persons, if receiving the benefit of the
indemnification agreement herein shall also collectively be referred to as
"Indemnified Parties" and individually as an "Indemnified Party") from and
against any Loss or Losses, without regard to any investigation by any of the
Indemnified Parties, based upon, arising out of, by reason of or otherwise in
respect of or in connection with(i) any material breach of any representation,
warranty, covenant or agreement made by either of the Buyers in this Agreement
or any agreement or instrument executed by either of the Buyers pursuant to this
Agreement, or (ii) any Seller Third Party claim as defined in Section 7.4.
8. Section 7.4 of the Purchase Agreement shall be made by adding the
words to the end of the current Section 7.4, "If any third party shall notify
any of the Sellers with respect to any matters alleging facts that, if true,
would mean that either of the Buyers has breached any of its respective
representations, warranties or covenants in this Agreement (a "Seller Third
Party Claim"), then the Company shall promptly notify APDN thereof in writing in
accordance with Section 7.5.
9. Section 9.3 of the Purchase Agreement is hereby amended and
restated to read in its entirety as follows:
"(d) it is a condition to the Closing that the Board of Directors
of APDN shall be reconstituted in a manner satisfactory to the Company and in
connection therewith, the Company shall have the right to approve four (4)
members of the initial seven (7) members of the board of directors that will be
in place immediately following the Closing;"
10. Section 11.6 of the Purchase Agreement is hereby amended by
deleting the words "provided, however, each of the Buyers shall be permitted to
assign the Agreement to an affiliate without the consent of the Sellers."
11. Section 7.3 is deleted in its entirety.
12. Section 11.10 of the Purchase Agreement is hereby amended by
deleting the words "Den Xxxx, Holland" and inserting "Honolulu, Hawaii, United
States" in their place.
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13. The Parties acknowledge and agree that the references in the
Purchase Agreement to the Employment Agreements shall be deemed to be references
to a Consulting Agreement to be entered into between the Company and APDN.
14. The Parties acknowledge and agree that as a result of the
modification to the method in which the Purchased Assets will be acquired by
APDN BVI (as more fully described in Section 2.1 above), (a) upon the delivery
of all documentation entered into between the Company and Rixflex pursuant to
the Asset Purchase Agreement, (b) the satisfactory determination by the Buyers
and their counsel that the transactions contemplated by the Asset Purchase
Agreement were duly authorized and are sufficient to sell, assign and transfer
the Purchased Assets to Rixflex and (c) the receipt by APDN BVI and APDN of a
representation from each of Rixflex and the Company that such documents remain
in effect and that neither the documents nor the transactions contemplated
thereby have been amended or modified in any way, then the delivery of certain
documents required be delivered to APDN BVI and/or APDN by the Company and/or
Rixflex at the Closing to evidence the transfer of the Purchased Assets to APDN
BVI, including the Intellectual Property Assignment, the Patent Assignment and
the Trademark Assignment, shall be waived by APDN and APDN BVI.
15. The foregoing amendments shall not affect any other term or
provision of the Purchase Agreement each of which, as amended hereby, shall
continue in full force and effect and is hereby ratified, confirmed and approved
by the Parties.
16. This Amendment Agreement shall be construed and enforced in the
manner set forth in the Purchase Agreement. This Amendment Agreement may be
executed and delivered (including by facsimile transmission) in two or more
counterparts, and by the different Parties hereto in separate counterparts, each
of which, when executed and delivered, shall be deemed to be an original but all
of which taken together shall constitute one and the same agreement.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Parties have executed this Amendment
Agreement as of the day and year first above written.
BIOWELL TECHNOLOGY INC.
By: /s/ JUN-XXX XXXX
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Name: Jun-Xxx Xxxx, Ph. D.
Title: Chairman & CEO
APPLIED DNA SCIENCES, INC.
By: /s/ XXX XXXXXXXXX
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Name: Xxx Xxxxxxxxx
Title: Chairman and CEO
By: /s/ XXXXX XXXXXXXXXX
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Name: Xxxxx Xxxxxxxxxx
Title: President
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