Exhibit 10.2
AMENDED AND RESTATED
STOCK PURCHASE AGREEMENT
Among
NANOSCIENCE TECHNOLOGIES INC.
a Nevada corporation,
New York University
a New York Education corporation
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November 11, 2003
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS 2
ARTICLE II SALE AND TRANSFER OF SHARES; CLOSING 6
2.1 Sale and Purchase 6
ARTICLE III THE CLOSING 6
3.1 Location, Date 6
3.2 Deliveries 6
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLER 6
4.1 Corporate 6
4.2 Authorization 6
4.3 Validity of Contemplated Transactions 7
4.4 Capitalization and Stock Ownership 7
4.5 Listing 7
4.6 Seller SEC Reports; Financial Statements 7
4.7 No Undisclosed Liabilities 8
4.8 Taxes 8
4.9 Title to Assets and Related Matters 9
4.10 Real Property 9
4.11 Subsidiaries 9
4.12 Legal Proceedings; Compliance With Law; Governmental Permits 9
4.13 Employee Relations 9
4.14 ERISA 9
4.15 Patents, Trademarks, Etc. 10
4.16 Absence of Certain Changes 11
4.17 Corporate Records 12
4.18 Finder's Fees 12
ARTICLE V REPRESENTATIONS AND WARRANTIES OF NYU 12
5.1 Corporate 12
5.2 Authorization 12
5.3 Validity of Contemplated Transactions 12
5.4 Finder's Fees 12
5.5 Investment Representations 12
ARTICLE VI COVENANTS OF THE PARTIES 13
6.1 Lock-Up 13
ARTICLE VII POST CLOSING FINANCING 13
7.1 Dilution Protection to Buyers 13
7.2 Cancellation If Financing Not Successful 13
ARTICLE IX GENERAL MATTERS 13
8.1 Contents of Agreement 14
8.2 Amendment, Parties in Interest, Assignment, Etc. 14
8.3 Interpretation 14
8.4 Notices 14
8.5 Governing Law and Venue 15
8.6 Counterparts 15
8.7 Waivers 15
8.8 Modification 15
8.9 Enforcement of Agreement 15
8.10 Severability 15
EXHIBITS
Exhibit A
AMENDED AND RESTATED STOCK PURCHASE AGREEMENT
THIS AMENDED AND RESTATED STOCK PURCHASE AGREEMENT (the "Agreement") is
made as of November , 2003 by and among Nanoscience Technologies Inc., a
Nevada corporation ("Seller"), and New York University, a New York Education
corporation ("NYU"), under which the Seller shall issue to NYU an aggregate
of four million eight hundred twelve thousand, three hundred and seventy
seven (4,812,377) shares of its authorized and unissued common stock (the
"NYU Shares") and NYU will enter into and deliver the Amended and Restated
Research and License Agreement (the "License Agreement") incorporated herein
and annexed hereto as Exhibit A in exchange therefore. Each of NYU and
Seller is individually referred to as a "Party" and collectively referred to
herein as the "Parties". Certain other terms are used herein as defined below
in Article I or elsewhere in this Agreement.
BACKGROUND
This Agreement sets forth the terms and conditions under which NYU will
acquire shares of common stock of Seller for and in consideration of the
grant to Seller of the rights set forth in the License Agreement.
WHEREAS, NYU and CORPORATION have previously entered into a stock
purchase agreement dated as of October 24, 2002;
WHEREAS, NYU and CORPORATION have previously entered into an amended and
restated stock purchase agreement dated as of September 12, 2003; under this
amended and restated stock purchase agreement Seller was to issue to certain
inventors shares of common stock in CORPORATION which, as of the date hereof,
have not been delivered;
WHEREAS, NYU and CORPORATION desire to amend and restate the Stock
Purchase Agreement in its entirety as of the date hereof;
NOW, THEREFORE, NYU and CORPORATION mutually covenant and agree that the
terms of the Stock Purchase Agreement shall be amended and restated in their
entirety as follows:
ARTICLE I
DEFINITIONS
For convenience, certain terms used in more than one part of this
Agreement are listed in alphabetical order and defined or referred to below
(such terms as well as any other terms defined elsewhere in this Agreement
shall be equally applicable to both the singular and plural forms of the
terms defined).
"Affiliate" means, with respect to any Person, any other Person that
directly or indirectly controls or is controlled by or under common control
with such Person. For the purposes of this definition, "control" when used
with respect to any Person, means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of such
Person, whether through the ownership of voting securities, by contract or
otherwise and the terms of "affiliated," "controlling" and "controlled" have
meanings correlative to the foregoing.
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"Agreement" means this Agreement and the Exhibits hereto.
"Assets" means, with respect to a Party, all of the assets, properties,
goodwill and rights of every kind and description, real and personal,
tangible and intangible, wherever situated and whether or not reflected in
such Party's most recent financial statements, that are owned or possessed by
such Party and its Subsidiaries, taken as a whole.
"Benefit Plan" means all employee benefit, health, welfare, supplemental
unemployment benefit, bonus, pension, profit sharing, deferred compensation,
severance, incentive, stock compensation, stock purchase, retirement,
hospitalization insurance, medical, dental, legal, disability, fringe benefit
and similar plans, programs, arrangements or practices, including, without
limitation, each "employee benefit plan" as defined in Section 3(3) of ERISA.
"Business" means with respect to Seller the entire business and
operations of Seller and its Subsidiaries taken as a whole.
"Business Day" means any day except Saturday, Sunday and any day which
shall be a legal holiday or a day on which banking institutions in the state
of New York generally are authorized or required by law or other government
actions to close.
"Charter Documents" means an entity's certificate or articles of
incorporation, certificate defining the rights and preferences of securities,
articles of organization, general or limited partnership agreement,
certificate of limited partnership, joint venture agreement or similar
document governing the entity.
"Closing" is defined in Section 3.1 of this Agreement.
"Closing Date" is defined in Section 3.1 of this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended. All
citations to provisions of the Code, or to the Treasury Regulations
promulgated thereunder, shall include any amendments thereto and any
substitute or successor provisions thereto.
"Common Stock" means the common stock, par value $0.001 per share, of
Seller.
"Contract" means any written or oral contract, agreement, letter of
intent, agreement in principle, lease, instrument or other commitment that is
binding on any Person or its property under applicable Law.
"Court Order" means any judgment, decree, injunction, order or ruling of
any federal, state, local or foreign court or governmental or regulatory body
or authority, or any arbitrator that is binding on any Person or its property
under applicable Law.
"Default" means (i) a breach, default or violation, (ii) the occurrence
of an event that with or without the passage of time or the giving of notice,
or both, would constitute a breach, default or violation or (iii) with
respect to any Contract, the occurrence of an event that with or without the
passage of time or the giving of notice, or both, would give rise to a right
of termination, renegotiation or acceleration or a right to receive damages
or a payment of penalties.
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"NGCL" means the Nevada General Corporation Law, as amended.
"$" means United States dollars.
"Encumbrances" means any lien, mortgage, security interest, pledge,
restriction on transferability, defect of title or other claim, charge or
encumbrance of any nature whatsoever on any property or property interest.
"Environmental Condition" means any condition or circumstance, including
the presence of Hazardous Substances which does or would (i) require
assessment, investigation, abatement, correction, removal or remediation
under any Environmental Law, (ii) give rise to any civil or criminal
Liability under any Environmental Law, (iii) create or constitute a public or
private nuisance or (iv) constitute a violation of or noncompliance with any
Environmental Law.
"Environmental Law" means all Laws, Court Orders, principles of common
law, and permits, licenses, registrations, approvals or other authorizations
of any Governmental Authority relating to Hazardous Substances, pollution,
protection of the environment or human health.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"First Payments" is defined in section 7.2 of this Agreement.
"GAAP" means United States generally accepted accounting principles
including those set forth: (a) in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public
Accountants, (b) in the statements and pronouncements of the Financial
Accounting Standards Board, (c) in such other statements by such other entity
as approved by a significant segment of the accounting profession, and (d)
the rules and regulations of the SEC governing the inclusion of financial
statements (including pro forma financial statements) in periodic reports
required to be filed pursuant to Section 13 of the Exchange Act, including
opinions and pronouncements in staff accounting bulletins and similar written
statements from the accounting staff of the SEC.
"Governmental Authority" means any federal, state, local, municipal or
foreign or other government or governmental agency or body.
"Governmental Permit" is defined in Section 4.12(c) of this Agreement.
"Hazardous Substances" means any material, waste or substance
(including, without limitation, any product) that may or could pose a hazard
to the environment or human health or safety including, without limitation,
(i) any "hazardous substances" as defined by the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. Sec. 9601 et seq. and
its implementing regulations, (ii) any "extremely hazardous substance,"
"hazardous chemical" or "toxic chemical" as those terms are defined by the
Emergency Planning and Community Right-to-Know Act, 42 U.S.C. Sec. 11001 et
seq. and its implementing regulations, (iii) any "hazardous waste," as
defined under the Solid Waste Disposal Act, as amended by the Resource
Conservation and Recovery Act, 42 U.S.C. Sec. 6901 et seq. and its
implementing regulations (iv) any "pollutant," as defined under the Water
Pollution Control Act, 33 U.S.C. Sec. 1251 et seq. and its implementing
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regulations, as any of such Laws in clauses (i) through (iv) may be
amended from time to time, and (v) any material, substance or waste
regulated under any Laws or Court Orders that currently exist or that
may be enacted, promulgated or issued in the future by any Governmental
Authority concerning protection of the environment, pollution, health
or safety or the public welfare.
"Intellectual Property" means, with respect to a Party, all of the
registered and unregistered patents, servicemarks, trademarks, copyrights,
trade secrets and related intangible rights of a Party.
"Litigation" means any judicial or administrative process or proceeding
or investigation, or any matter under arbitration or mediation.
"Laws" means any law, rule or regulation of any governmental or
regulatory body.
"Material Adverse Effect" with respect to a Party shall mean any event,
change, occurrence, effect, fact or circumstance that either individually or
collectively with one or more other event, change, occurrence, effect, fact
or circumstance is or may reasonably be expected to be materially adverse to
(i) the ability of the Party to perform its obligations under this Agreement
or to consummate the transactions contemplated hereby, or (ii) the business,
tangible assets, liabilities, future prospects, results of operations or
financial condition of the Party and its Subsidiaries, taken as a whole,
other than any event, change, occurrence, effect, fact or circumstance (A)
relating to the economy or securities markets of the United States or any
other region in general, or (B) resulting from entering into this Agreement
or the consummation of the transactions contemplated hereby or the
announcement thereof.
"NYU" is defined above in the Preamble.
"NYU's knowledge" or "knowledge of NYU" with reference to any item means
that which the officer or director of NYU who executes this Agreement
actually knows.
"Person" means any corporation, company, limited liability company,
partnership, limited partnership or any business or other entity and any
natural person.
"SEC Reports" is defined in Section 4.6 of this Agreement.
"Seller" is defined in the Preamble.
"Seller's Assets" means the Assets of Seller.
"Seller's Business" means the Business of Seller.
"Seller's knowledge" or "knowledge of Seller" with reference to any item
means that which an executive officer of Seller actually knows.
"Seller Subsidiary" means any Subsidiary of Seller.
"Seller Welfare Plan" is defined in Section 4.14(e) of this Agreement.
"Subsidiary" shall mean, with respect to any Party, any corporation or
other organization, whether incorporated or unincorporated, of which (a) at
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least a majority of the securities or other interests having by their terms
ordinary voting power to elect a majority of the Board of Directors or others
performing similar functions with respect to such corporation or other
organization is directly or indirectly owned or controlled by such Party or
by any one or more of its Subsidiaries, or by such Party and one or more of
its Subsidiaries or (b) such Party or any other Subsidiary of such Party is a
general partner (excluding any such partnership where such Party or any
Subsidiary of such Party does not have a majority of the voting interest in
such partnership).
"Transaction Documents" shall mean this Agreement and the License
Agreement.
"Transactions" shall mean the transactions provided for or contemplated
by the Transaction Documents.
ARTICLE II
SALE AND TRANSFER OF SHARES; CLOSING
2.1 Sale and Purchase. Subject to the terms and conditions hereof,
at the Closing (as defined in paragraph 3.1 below), Seller agrees to sell,
assign, transfer, convey and deliver to NYU, and NYU agrees to acquire from
Seller, the NYU Shares. In exchange for the Shares, NYU agrees to execute,
deliver and perform the License Agreement.
ARTICLE III
THE CLOSING
3.1 Location, Date. The closing for the Transactions (the "Closing")
shall be held at the offices of Xxxxxx X. Xxxxx in New York, New York at 4:00
p.m. (local time) within three (3) business days after the date on which the
First Payments are made by Seller to NYU. The date on which the Closing
occurs is referred to herein as the "Closing Date".
3.2 Deliveries. At the Closing Seller shall deliver the NYU Shares to
NYU.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to NYU as follows:
4.1 Corporate. Seller is a corporation duly organized, validly
existing and in good standing under the laws under which it was incorporated.
Seller is qualified to do business as a foreign corporation in any
jurisdiction where it is required to be so qualified, except where the failure
to so qualify would not have a Material Adverse Effect. The Charter Documents
and bylaws of Seller have been duly adopted and are current, correct and
complete and Seller is not in violation of any provision of its Charter
Documents. Seller has all necessary corporate power and authority to own,
lease and operate its Assets and to carry on its Business as it is now being
conducted or is proposed to be conducted as a result of the Transactions.
4.2 Authorization. Seller has the requisite corporate power and
authority to execute and deliver the Transaction Documents to which it is a
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party and to perform the Transactions to be performed by it. Such execution,
delivery and performance by Seller has been duly authorized by all necessary
corporate action. No consents or approvals of holders of Seller capital stock
are required for the consummation of the Transactions. Each Transaction
Document executed and delivered by Seller as of the date hereof has been duly
executed and delivered by Seller and constitutes a valid and binding
obligation of Seller enforceable against Seller in accordance with its terms,
except as otherwise limited by bankruptcy, insolvency, reorganization and
other laws affecting creditors rights generally, and except that the remedy of
specific performance or other equitable relief is available only at the
discretion of the court before which enforcement is sought.
4.3 Validity of Contemplated Transactions. Neither the execution and
delivery by Seller of the respective Transaction Documents to which it is or
will be a party, nor the performance of the Transactions to be performed by
it, will (i) conflict with or result in any breach of any provision of the
Charter Documents, the bylaws or similar organizational documents of Seller,
(ii) require any filing with, or permit, authorization, consent or approval
of, any Governmental Entity, (iii) result in a violation of breach of, or
constitute (with or without due notice or the passage of time or both) a
default (or give rise to any right of termination, amendment, cancellation or
acceleration) under, any of the terms, conditions or provisions of any
Contract to which Seller is a party, or (iv) violate any Consent Order,
statute, rule or regulation applicable to Seller or any of its properties or
assets, except, with respect to the foregoing clauses (ii), (iii) and (iv), as
could not reasonably be expected to, individually or in the aggregate, have a
Material Adverse Effect. There are no third party consents or approvals
required to be obtained under any Contracts to which Seller is a party or to
which its assets are bound prior to the consummation of the Transactions,
except where the failure to obtain such consents or approvals could not
reasonably be expected to, individually or in the aggregate, have a Material
Adverse Effect.
4.4 Capitalization and Stock Ownership. The total authorized capital
stock of Seller consists of (a) 100,000,000 shares of Common Stock, and (b) no
shares of preferred stock. Of such authorized capital stock, the only issued
and outstanding shares consist of, as of June 30, 2003, 17,658,750 shares of
Common Stock. As of the Closing Date, including the NYU Shares to be issued
under this Agreement, there shall be 10,846,946 shares of Common Stock issued
and outstanding. All of the issued and outstanding shares of Common Stock are
validly issued, fully paid and non-assessable. Except as set forth in
Seller's SEC Reports, no options, warrants, calls, commitments or other rights
of any character (including conversion or preemptive rights) will entitle any
Person to acquire any securities of Seller, except as expressly contemplated
by this Agreement. At the closing, the NYU Shares shall be duly authorized,
fully paid and non-assessable.
4.5 Listing. The Common Stock is listed for quotation on the NASD
Over-the-Counter Bulletin Board under the symbol "NANS". Seller is in full
compliance with the NASD Over-the-Counter Bulletin Board listing maintenance
requirements. Since listing the Seller Common Stock on the NASD Over-the-
Counter Bulletin Board, Seller has not received any notice from the NASD Over-
the-Counter Bulletin Board that (i) Seller is not in full compliance with the
NASD Over-the-Counter Bulletin Board listing maintenance requirements or (ii)
that the Common Stock may be delisted from the NASD Over-the-Counter Bulletin
Board.
4.6 Seller SEC Reports; Financial Statements. Seller has filed all
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required forms, reports, statements, schedules and other documents with the
SEC since September 30, 1999, including (a) its Annual Reports on Form 10-KSB,
(b) all proxy and information statements relating to Seller's meetings of
stockholders (whether annual or special) held since January 1, 2000, (c) its
Quarterly Reports on Form 10-QSB, and (d) all other reports or registration
statements filed by Seller (collectively, the "SEC Reports"). Each of the SEC
Reports, at the time it was filed, complied in all material respects with all
applicable requirements of the Securities Act and the Exchange Act, and with
the forms and Regulations of the SEC promulgated thereunder, and did not
contain at the time filed any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they
are made, not misleading. The financial statements, including all related
notes and schedules contained in the SEC Reports (or incorporated by reference
therein) fairly present the consolidated financial position of Seller as at
the respective dates thereof and the consolidated results of operations and
cash flows of Seller for the periods indicated in accordance with GAAP applied
on a consistent basis throughout the periods involved (except for changes in
accounting principles disclosed in the notes thereto) and subject in the case
of interim financial statements to normal year-end adjustments not expected
to be material in amount and the absence of notes.
4.7 No Undisclosed Liabilities. Except (a) as disclosed in the
financial statements of Seller, and (b) for liabilities and obligations (i)
incurred in the ordinary course of business and consistent with past practice,
or (ii) incurred pursuant to, or in furtherance of, this Agreement or the
Transactions, Seller has no liabilities or obligations of any nature, whether
or not accrued, contingent or otherwise, which could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.
4.8 Taxes.
(a) Seller has (i) filed (or, in the case of Tax Returns not
yet due, will file) with the appropriate governmental agencies all material
Tax Returns required to be filed on or before the Closing and all such Tax
Returns filed were true, correct and complete in all material respects, and
(ii) paid (or, in the case of Taxes not yet due, will pay), all Taxes shown
on such Tax Returns.
(b) Seller has (i) duly paid or caused to be paid all material
Taxes and all Taxes shown on Tax Returns that are or were due, except to the
extent that a sufficient reserve for Taxes has been made and (ii) provided a
sufficient reserve for the payment of all Taxes not yet due and payable.
(c) No deficiency in respect of any Taxes which has been assessed
against Seller remains unpaid, except for Taxes contested in good faith by
appropriate proceedings, and to the knowledge of Seller there are no
unassessed Tax deficiencies or of any audits or investigations pending or
threatened against Seller with respect to any Taxes.
(d) Seller has not extended or waived the application of any
applicable statute of limitations of any jurisdiction regarding the
assessment or collection of any Tax or any Tax Return.
(e) There are no liens for Taxes upon any Assets of Seller
except for liens for current Taxes not yet due.
(f) No notification has been received by Seller that an audit,
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examination or other proceeding is pending or, to the knowledge of Seller,
threatened with respect to any Taxes due from or with respect to or
attributable to Seller or any Tax Return filed by or with respect to Seller,
except for those that would not reasonably be expected to have a Material
Adverse Effect.
4.9 Title to Assets and Related Matters. Seller has good and
marketable title to its Assets, free from any Encumbrances except (a) items
described in any notes to the consolidated financial statements of Seller
contained in Seller's Annual Report on Form 10-KSB for the fiscal year ended
December 31, 2002 included in the SEC Reports, (b) minor matters that would
not have a Material Adverse Effect, and (c) constitutional and statutory liens
arising from the obligation to pay for the provision of materials or services
not yet in Default and Taxes not yet due.
4.10 Real Property. All material real estate leased or owned by Seller
as of the date hereof and used in the operation of the Seller's Business is
disclosed in the SEC Reports.
4.11 Subsidiaries. As of the date hereof Seller does not own, directly
or indirectly, any interest or investment (whether equity or debt) in any
corporation, partnership, limited liability company, business trust, joint
venture or other legal entity. Seller owns all of the issued and outstanding
shares of capital stock of each Seller Subsidiary. There are no existing
options, warrants, calls, commitments or other rights of any character
(including conversion or preemptive rights) relating to the acquisition or
voting of any issued or unissued capital stock or other securities of any
Seller Subsidiary. All of the shares of capital stock of each Seller
Subsidiary are duly and validly authorized and issued, fully paid and non-
assessable.
4.12 Legal Proceedings; Compliance With Law; Governmental Permits.
(a) There is no Litigation that is pending or, to Seller's
knowledge, threatened against Seller that would have a Material Adverse
Effect. To Seller's knowledge, Seller is and has been in compliance with all
applicable Laws, including Environmental Law and applicable securities laws,
except where the failure to be in compliance would not have a Material
Adverse Effect. There has been no Default under any Laws applicable to
Seller, including Environmental Laws, except for any Defaults either
individually or collectively that would not either individually or
collectively have a Material Adverse Effect. There has been no Default with
respect to any Court Order applicable to Seller. Seller has not received any
written notice and, to the knowledge of Seller, no other communication has
been received to the effect that it is not in compliance with any applicable
Laws, and Seller has no reason to believe that any presently existing
circumstances are likely to result in violations of any applicable Laws,
except to the extent that such failures to comply or violations would not
have a Material Adverse Effect.
(b) To Seller's knowledge, there is no Environmental Condition
at any property presently or formerly owned or leased by Seller or any
predecessor in interest which is reasonably likely either individually or
collectively to have a Material Adverse Effect.
(c) Seller and its Subsidiaries have all material consents,
permits, franchises, licenses, concessions, registrations, certificates of
(collectively, the "Governmental Permits") required in connection with the
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operation of their respective businesses as now being conducted, all of which
are in full force and effect, except where the failure to obtain any such
Governmental Permit or of any such Governmental Permit to be in full force
and effect, would not have a Material Adverse Effect. Seller has complied,
in all material respects, with all of its Governmental Permits, except where
the failure to so comply either individually or collectively would not have
Material Adverse Effect.
4.13 Employee Relations. Seller is not (a) a party to, involved in or,
to Seller's knowledge, threatened by, any labor dispute or unfair labor
practice charge, or (b) currently negotiating any collective bargaining
agreement, and Seller has not experienced any work stoppage during the last
three years.
4.14 ERISA
..
(a) Seller has no Benefit Plans within the meaning of ERISA, the
Code and all other applicable Laws, including applicable Laws of foreign
jurisdictions. There have not been any "prohibited transactions," as such
term is defined in Section 4975 of the Code or Section 406 of ERISA, that
could subject Seller to any material penalty or tax imposed under the Code or
ERISA.
(b) Seller has no current or contingent obligation to contribute to
any multiemployer plan (as defined in Section 3(37) of ERISA), and neither
Seller, nor any entity that has been treated as a single employer with Seller
under Sections 414(b), (c), (m) or (o) of the Code, has any liability,
contingent or otherwise, under Title IV of ERISA or Section 412 of the Code.
(c) There are no pending or, to the knowledge of Seller,
threatened claims by or on behalf of any Seller Benefit Plans, or by or on
behalf of any individual participants or beneficiaries of any Seller Benefit
Plans, alleging any breach of fiduciary duty on the part of Seller or any of
the officers, directors or employees of Seller under ERISA or any other
applicable Regulations, or claiming benefit payments other than those made in
the ordinary operation of such plans, or alleging any violation of any other
applicable Laws. To Seller's knowledge, the Seller's Benefit Plans are not
the subject of any investigation, audit or action by the Internal Revenue
Service, the Department of Labor or the PBGC. Seller has made all required
contributions under the Seller Benefit Plans including the payment of any
premiums payable to the PBGC and other insurance premiums.
(d) The execution of this Agreement and the performance of the
Transactions will not (either alone or in combination with the occurrence of
any additional or subsequent events) constitute an event under any Seller
Benefit Plan that will or may result in any payment (whether of severance pay
or otherwise), acceleration, forgiveness of indebtedness, vesting,
distribution, increase in benefits or obligation to fund benefits with
respect to any current or former employee, director or consultant of Seller.
4.15 Patents, Trademarks, Etc. To the best of Seller's knowledge,
Seller does not infringe upon or unlawfully or wrongfully use any Intellectual
Property owned or claimed by another Person and no Person infringes on or
wrongfully uses any Intellectual Property owned or claimed by Seller, except
for those situations that individually or collectively would not have a
Material Adverse Effect. To the best of Seller's knowledge, Seller owns or
has valid rights to use all Intellectual Property used in the conduct of its
business free and clear of all Encumbrances except where the failure to have
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valid rights to use such Intellectual Property will not either individually or
collectively have a Material Adverse Effect. Seller has not made any claim of
a violation or infringement by others of its rights to or in connection with
its Intellectual Property which is still pending.
4.16 Absence of Certain Changes. Since January 1, 2002, Seller has
conducted its Business in the ordinary course and, as of the date hereof,
there has not been:
(a) any Material Adverse Effect on the Seller Business;
(b) any distribution or payment declared or made in respect of
Seller's capital stock by way of dividends, purchase or redemption of shares
or otherwise;
(c) any increase in the compensation payable or to become payable to
any current director or officer of Seller, except for merit and seniority
increases for employees made in the ordinary course of business, nor any
material change in any existing employment, severance, consulting arrangements
or any Seller Benefit Plan;
(d) any sale, assignment or transfer of any Seller Assets, or any
additions to or transactions involving any Seller Assets, other than those
made in the ordinary course of business or those solely involving Seller and
its Subsidiaries;
(e) other than in the ordinary course of business, any waiver or
release of any material claim or right or cancellation of any material debt
held by Seller;
(f) any change in practice with respect to Taxes, or any election,
change of any election, or revocation of any election with respect to Taxes,
or any settlement or compromise of any dispute involving a Tax liability;
(g) (i) any creation, or assumption of, any long-term debt or
any short-term debt for borrowed money other than under existing notes
payable, lines of credit or other credit facility in the ordinary course of
business or otherwise in the ordinary course of business or with respect to
its Subsidiaries; (ii) any assumption, granting of guarantees, endorsements
or otherwise becoming liable or responsible (whether directly, contingently
or otherwise) for the obligations of any other Person except its
Subsidiaries; or (iii) any loans, advances or capital contributions to, or
investments in, any other Person except its Subsidiaries;
(h) any material agreement, commitment or contract, except
agreements, commitments or contracts for the purchase, sale or lease of goods
or services in the ordinary course of business;
(i) other than in the ordinary course of business, any
authorization, recommendation, proposal or announcement of an intention to
authorize, recommend or propose, or enter into any Contract with respect to,
any (i) plan of liquidation or dissolution, (ii) acquisition of a material
amount of assets or securities, (iii) disposition or Encumbrance of a
material amount of assets or securities, (iv) merger or consolidation except
as contemplated by this Agreement or (v) material change in its
capitalization except as contemplated by this Agreement; or
(j) any change in accounting procedure or practice.
11
4.17 Corporate Records. The minute books of Seller contain accurate,
complete and current copies of all Charter Documents and of all minutes of
meetings, resolutions and other proceedings of its Board of Directors and
stockholders.
4.18 Finder's Fees. No Person is or will be entitled to any commission
or finder's fee or other payment in connection with the Transactions based on
arrangements made by or on behalf of Seller.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF NYU
NYU hereby represents and warrants to Seller as follows:
5.1 Corporate. NYU is a New York Education corporation.
5.2 Authorization. NYU has the requisite corporate power and
authority to execute and deliver the Transaction Documents to which it is a
party and to perform the Transactions to be performed by it. Such execution,
delivery and performance by NYU have been duly authorized by all necessary
corporate action. Each Transaction Document executed and delivered by NYU as
of the date hereof has been duly executed and delivered by NYU and constitutes
a valid and binding obligation of NYU, enforceable against NYU in accordance
with its terms, except as otherwise limited by bankruptcy, insolvency
reorganization and other laws affecting creditors rights generally, and except
that the remedy of specific performance or other equitable relief is available
only at the discretion of the court before which enforcement is sought.
5.3 Validity of Contemplated Transactions. Neither the execution and
delivery by NYU of the respective Transaction Documents to which it is or will
be a party, nor the performance of the Transactions to be performed by it,
will require any filing, consent or approval under or constitute a Default, or
result in a loss of material benefit under, (a) to NYU's knowledge, any Law or
Court Order to which NYU is subject, (b) the Charter Documents or bylaws of
NYU, (c) any other Contracts to which NYU is a party or by which any of the
NYU Assets may be subject, except for Defaults which would not have a Material
Adverse Effect.
5.4 Finder's Fees. No Person is or will be entitled to any
commission, finder's fee or other payment in connection with the Transactions
based on arrangements made by or on behalf of NYU.
5.5 Investment Representations. NYU represents and warrants to Seller
as of the Closing Date that it:
(a) is an "accredited investor" within the meaning of Rule 501
under the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder (the "Securities Act"), and was not organized for the
specific purpose of acquiring the Securities;
(b) has sufficient knowledge and experience in investing in companies
similar to Seller in terms of Seller's stage of development so as to be able
to evaluate the risks and merits of its investment in Seller and it is able
financially to bear the risks thereof;
(c) has had an opportunity to discuss Seller's business, management
and financial affairs with Seller's management;
12
(d) NYU's acquisition of the NYU Shares is for its own account for the
purpose of investment and not with a view to or for resale in connection with
any distribution thereof; and
(e) understands that (i) the NYU Shares have not been registered under
the Securities Act by reason of their issuance in a transaction exempt from
the registration requirements of the Securities Act, (ii) the NYU Shares must
be held indefinitely unless a subsequent disposition thereof is registered
under the Securities Act or is exempt from such registration, (iii) the NYU
Shares will bear a legend to such effect, and (iv) Seller will make a notation
on its transfer books and advise its transfer agent to such effect.
ARTICLE VI
COVENANTS OF THE PARTIES
6.1 Lock-Up. During the five (5) year period following the Closing Date,
NYU shall not sell, transfer, assign, hypothecate or pledge any of the NYU
Shares without the express written consent of Seller. This restriction is in
addition to any restriction imposed under the Securities Act of 1933. The NYU
Shares will bear a legend referring to this restriction.
ARTICLE VII
POST CLOSING FINANCING
7.1 Dilution Protection to Buyers. For the purposes of this section,
"Financed Amount" shall mean a capital raise by Seller, if Seller decides to
make such a raise, of up to two million one hundred thousand dollars
($2,100,000) before deduction of all related costs, fees and expenses through
sales of its Common Stock, in one or more private placements or public
offerings. Seller intends to issue not more than 6,416,503 shares of its
Common Stock in order to raise the Financed Amount. In the event that Seller
issues more than 6,416,503 shares of its Common Stock to raise all or any
portion of the Financed Amount, then Seller shall issue and deliver additional
shares of Common Stock to NYU such that NYU shall maintain the same percentage
ownership of the outstanding shares of Common Stock of the Seller as they
would have had if the Seller had issued 6,416,503 shares of its Common Stock
to raise the Financed Amount. For amounts of capital raised by Seller in
excess of two million one hundred thousand dollars ($2,100,000) before
deduction of all related costs, fees and expenses through sales of its Common
Stock, in one or more private placements or public offerings, additional
shares of Common Stock may be issued in return for such capital and all
shareholders shall be diluted pro rata.
7.2 Cancellation If Financing Not Successful. Seller is obligated under
the License Agreement to pay to NYU the sum of three hundred thousand
($300,000) to fund research and reimbursement for certain patent application
expenses incurred by NYU (collectively, the "First Payments"), which are due
and payable on September 15, 2003 (or any other extended date to be mutually
agreed upon in writing) (the "FP Due Date"). In the event that the First
Payments are not made by the FP Due Date, then this Agreement and the License
Agreement shall automatically terminate.
ARTICLE VIII
GENERAL MATTERS
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8.1 Contents of Agreement. This Agreement, together with the other
Transaction Documents, set forth the entire understanding of the Parties
hereto with respect to the Transactions and supersedes all prior agreements or
understandings among the Parties regarding those matters.
8.2 Amendment, Parties in Interest, Assignment, Etc. This Agreement
may be amended, modified or supplemented only by a written instrument duly
executed by each of the Parties hereto. If any provision of this Agreement
shall for any reason be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provision hereof, and this Agreement shall be construed as if such
invalid, illegal or unenforceable provision had never been contained herein.
This Agreement shall be binding upon and inure to the benefit of and be
enforceable by the respective heirs, legal representatives, successors and
permitted assigns of the Parties hereto. No Party hereto shall assign this
Agreement or any right, benefit or obligation hereunder. Any term or
provision of this Agreement may be waived at any time by the Party entitled
to the benefit thereof by a written instrument duly executed by such Party.
The Parties hereto shall execute and deliver any and all documents and take
any and all other actions that may be deemed reasonably necessary by their
respective counsel to complete the Transactions. Nothing in this Agreement
is intended or will be construed to confer on any Person other than the
Parties hereto any rights or benefits hereunder.
8.3 Interpretation. Unless the context of this Agreement clearly
requires otherwise, (a) references to the plural include the singular, the
singular the plural, the part the whole, (b) references to any gender include
all genders, (c) "or" has the inclusive meaning frequently identified with the
phrase "and/or," (d) "including," "includes" or similar words has the
inclusive meaning frequently identified with the phrase "but not limited to"
and (e) references to "hereunder" or "herein" relate to this Agreement. The
section and other headings contained in this Agreement are for reference
purposes only and shall not control or affect the construction of this
Agreement or the interpretation thereof in any respect. Section, subsection
and Exhibit references are to this Agreement unless otherwise specified. The
Exhibits referred to in this Agreement will be deemed to be a part of this
Agreement. Each accounting term used herein that is not specifically defined
herein shall have the meaning given to it under GAAP.
8.4 Notices. All notices that are required or permitted hereunder
shall be in writing and shall be sufficient if personally delivered or sent by
a nationally recognized overnight courier upon proof of delivery. Any notices
shall be deemed given upon receipt at the address set forth below, unless such
address is changed by notice to the other Party hereto:
If to NYU:
New York University
000 Xxxxx Xxxxxx - 0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxxxx
Executive Director
Industrial Liaison/Technology Transfer
with a required copy (which shall not constitute notice) to:
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Office of Legal Counsel
New York University
Xxxxx Library
00 Xxxxxxxxxx Xxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
Associate General Counsel
If to Seller: Xx. Xxxxxx X. Xxxxx
000 Xxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
with a required copy (which shall not constitute notice) to:
Xxxxxxx X. Xxxxxxx, P.C.
Attorney at Law
0000 Xxxxx Xxxxxxxx Xxxxx,
Xxxxx 000
Xxxxx, Xxxx 00000
8.5 Governing Law and Venue. This Agreement shall be construed and
interpreted in accordance with the Laws of the State of New York without
regard to its provisions concerning conflict of laws. Any dispute or
controversy concerning or relating to this Agreement shall be exclusively
resolved in the federal or state courts located in New York, New York.
8.6 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be binding as of the date first written
above, and all of which shall constitute one and the same instrument. Each
such copy shall be deemed an original, and it shall not be necessary in making
proof of this Agreement to produce or account for more than one such
counterpart.
8.7 Waivers. Compliance with the provisions of this Agreement may be
waived only by a written instrument specifically referring to this Agreement
and signed by the Party waiving compliance. No course of dealing, nor any
failure or delay in exercising any right, will be construed as a waiver, and
no single or partial exercise of a right will preclude any, other or further
exercise of that or any other right.
8.8 Modification. No supplement, modification or amendment of this
Agreement will be binding unless made in a written instrument that is signed
by all of the Parties hereto and that specifically refers to this Agreement.
8.9 Enforcement of Agreement. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement was not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any court of competent
jurisdiction, this being in addition to any other remedy to which they are
entitled at law or equity.
8.10 Severability. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of law or
public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect. Upon such determination that
15
any term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify this
Agreement so as to affect the original intent of the parties as closely as
possible to the fullest extent permitted by Applicable Law in an acceptable
manner to the end that the Transactions are fulfilled to the extent possible.
[Signatures on following page]
IN WITNESS WHEREOF, this Agreement has been executed by the Parties
hereto as of the day and year first written above.
Nanoscience Technologies Inc.
By:__________________________
Name:________________________
Title: ______________________
New York University
By:__________________________
Name:__________________________
Title:__________________________
EXHIBIT A
