1
Exhibit 10.2
AMENDMENT TO AGREEMENT DATED OCTOBER 5, 1995
This AMENDMENT TO AGREEMENT DATED OCTOBER 5, 1995 is made on
the day of October, 1995, by and between NutraGenics, Inc., a Nevada
corporation, having its principle offices at 0000 X. Xxxxxx Xxxx, Xxxxx 000,
Xxxxxxxxxx, Xxxxxxx 00000 (hereinafter referred to as "NutraGenics"), and Xxxxxx
Xxxx, residing at 000 Xxxxxxxx Xxxx, Xxx, Xxx Xxxx 00000 (hereinafter referred
to as "Xxxx").
W I T N E S S E T H:
WHEREAS, NutraGenics has entered into an Agreement with Xxxx on October
5, 1995, (the "October 5 Agreement") in which among other undertakings Xxxx
loaned the sum of two hundred and fifty thousand ($250,000) dollars and an
additional sum of money yet to be determined and representing the payment of
legal fees to Xxxxxx Xxxx, Esq., on behalf of NutraGenics relating to legal
services rendered by Xxxxxx Xxxx, Esq. to NutraGenics concerning the sale of
NutraGenics' products in compliance with Federal Food and Drug Administration
(FDA) regulations; and
WHEREAS, Xxxx has the right and option to accept as repayment of all or
part of his loan to NutraGenics, the unregistered common stock of NutraGenics at
a price of one dollar and fifty cents ($1.50) per share (the "Option"); and
2
WHEREAS, NutraGenics and Xxxx wish to protect the Option and the
NutraGenics stock he may purchase upon exercise of the option against dilution
in the event of the occurrence of certain events by adding antidilutive terms to
the Option in the October 5th Agreement in the form of an amendment to the
October 5th Agreement;
NOW THEREFORE, in consideration of the mutual covenants herein
contained and for other good and valuable consideration the sufficiency of which
is hereby acknowledged, the parties intending to be legally bound agree as
follows:
FIRST: AMENDMENT TO OCTOBER 5TH AGREEMENT
Paragraph EIGHTH of the October 5th Agreement entitled,
"OPTION TO CONVERT LOANS INTO UNREGISTERED COMMON STOCK OF
NUTRAGENICS", is hereby amended by adding the following paragraphs
to paragraph EIGHTH:
In the event that, during the period between the date hereof and the
Closing Date (the "Option Period"), any reclassification, reorganization, stock
split, stock dividend, merger consolidation, combination, exchange of
securities, or other similar change in respect of the capitalization of
NutraGenics shall occur, then appropriate adjustment shall be made in the number
of shares of common stock of NutraGenics and/or kind of securities to be issued
in the event Xxxx exercises the Option to accept repayment of part or all of his
Loans (the "Option Shares") and the Exercise Price so that the Option Shares
shall be that number of shares of common stock and/or other securities that Xxxx
would have held after such
2
3
reclassification, reorganization, stock split, stock dividend, merger,
consolidation, combination, exchange of securities, or other similar change if
the Closing Date had occurred immediately prior to such reclassification,
reorganization, stock split, stock dividend, liquidation, spin-off or similar
other change and all references herein to the Option Shares shall be deemed to
refer to such adjusted number and/or kind of securities.
In the event that, during the Option Period there is a partial or
complete liquidation or spin-off of any assets owned by NutraGenics, NutraGenics
will give Xxxx at least thirty (30) days prior written notice of such event so
that Xxxx may exercise any part of all of the Option prior to such liquidation
or spin-off.
At any time during the Option Period Xxxx shall have the right to,
purchase from NutraGenics, in round numbered size allotments of blocks of at
least ten thousand (10,000) shares, up to that number of Option Shares then
subject to the Option, at the Exercise Price in effect at the time of such
exercise. Xxxx shall sign an investment letter for all stock issued pursuant to
the option in form and substance as previously executed as part of the October
5th Agreement.
In the event cf the demise of Xxxx at any time during the option
period, Xxxx'x estate shall have the right to exercise the option for a period
which is the lesser of one year or the balance of the Option Period.
3
4
SECOND: COUNTERPARTS
This Agreement may be signed upon any number of counterparts with the
same effect as if the signature to each were upon the same agreement. Signatures
by facsimile transmission shall be deemed acceptable and binding on the parties
hereto.
THIRD: EFFECT OF AMENDMENT TO OCTOBER 5TH AGREEMENT
Except as altered, amended or modified by this Amendment to
Agreement, the October 5th Agreement shall remain in full force and effect and
binding upon NutraGenics and Xxxx pursuant to its terms and conditions.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
NUTRAGENICS, INC.
(SEAL)
By: /s/ Xxxxxx Xxxxxx Xxxx
-----------------------------
XXXXXX XXXXXX LANE, PRESIDENT
/s/ Xxxxxx Xxxx
--------------------------------
XXXXXX XXXX
4
5
AGREEMENT
This AGREEMENT entered into this 5th day of October, 1995 by and
between NutraGenics, Inc. a Nevada corporation, having its principle offices at
0000 X. Xxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxx 00000 (hereinafter referred
to as "NutraGenics") and Xxxxxx Xxxx, residing at 000 Xxxxxxxx Xxxx, Xxx, Xxx
Xxxx 00000 (hereinafter referred to as the "Xxxx").
W I T N E S S E T H:
WHEREAS, NutraGenics is a public company that has acquired a licensing
agreement which permits the exclusive manufacture, marketing and sale of a
vitamin E-like complex ("TRF(25)") that has been shown to be effective in
reducing cholesterol and critical events associated with coronary heart disease
and stroke; NutraGenics has applied for a United States trademark for the
vitamin E-like complex (TRF(25)) under the name "Vitenol-E(TM)"; and NutraGenics
is in the business of manufacturing, marketing and selling the aforementioned
vitamin E-like complex (TRF(25)) under the name Vitenol-E(TM)";
WHEREAS, Xxxx is a biochemist and has been in the nutrition, health and
vitamin industry for 60 years, has owned a company that manufactured, marketed
and distributed vitamins and pharmaceuticals, currently owns a vitamin mail
order business and has extensive knowledge in the nutrition, health and vitamin
industry;
1
6
WHEREAS, pursuant to this Agreement, Xxxx and Xxxx'x Children are
purchasing Two Hundred and Fifty Thousand (250,000) shares of common stock of
NutraGenics $.001 par value at a price of one ($1.00) Dollar per share for
investment purposes only;
WHEREAS, Xxxx has agreed, as hereinafter set forth to advance on behalf
of NutraGenics, as a loan to NutraGenics, the money required to pay for the
legal fees of Xxxxxx Xxxx, Esq. for his expertise with regard to the laws, rules
and regulations promulgated and enforced by the Federal Food and Drug
Administration, and for his consultation and approval that the vitamin E-like
complex (TRF(25)), known as Vitenol-E(TM), can be properly and legally marketed,
sold and labeled as a nutritional supplement that will lower cholesterol; and
WHEREAS, Xxxx has agreed, as hereinafter set forth, to make an
additional secured loan of Two Hundred and Fifty Thousand ($250,000.00) Dollars
to NutraGenics for period of two (2) years;
NOW THEREFORE, in consideration of the mutual covenants and provisions
herein contained, the parties intending to be legally bound, agree as follows:
FIRST: COMMON STOCK TO BE SOLD
Subject to the terms and conditions of this Agreement and in reliance
on the representations and warranties contained herein, Xxxx and Xxxx'x Children
hereby purchase from NutraGenics, and NutraGenics hereby sells to Xxxx and
Xxxx'x Children Two Hundred and Fifty Thousand (250,000) unregistered Shares of
the Common
2
7
Stock of Nutragenics $.001 par value (hereinafter referred to as the "Stock") on
terms and conditions as hereinafter set forth.
SECOND: PURCHASE PRICE
(a) The purchase price for the Stock is One ($1.00) Dollar per share or
a total purchase price of Two Hundred and Fifty Thousand ($250,000) Dollars
payable to NutraGenics at closing.
(b) Upon closing and the payment of the sum of Two Hundred and Fifty
Thousand ($250,000) Dollars to NutraGenics, NutraGenics shall deliver to Xxxx
and Xxxx'x Children the Stock being sold
herein in Stock Certificates issued as follows:
(i) One Hundred and Fifty Thousand (150,000) shares shall be
issued in Fifteen (15) Stock Certificates of Ten Thousand
(10,000) Shares each, issued in the name of Xxxxxx Xxxx;
(ii) Thirty-Three Thousand Three Hundred and Thirty-Three (33,333)
shares shall be issued in Three (3) Stock Certificates of Ten
Thousand (10,000) shares each and One (1) Stock Certificate of
Three Thousand and Thirty-Three (3,333) shares, issued in the
name of Xxxxxxx Xxxx;
(iii) Thirty-Three Thousand Three Hundred and Thirty-Three (33,333)
shares shall be issued in Three (3) Stock Certificates of Ten
Thousand (10,000) shares each and One (1) Stock Certificate of
Three Thousand and Thirty-Three (3,333) shares, issued in the
name of Xxxxxx Xxxx; and
3
8
(iv) Thirty-Three Thousand Three Hundred and Thirty-Four
(33,334) shares shall be issued in Three (3) Stock
Certificates of Ten Thousand (10,000) shares each and
One (1) Stock Certificate of Three Thousand and
Thirty-Four (3,334) shares, issued in the name of
Xxxxx Xxxxxxx;
Each of the aforesaid named individuals, Xxxxxxx Xxxx, Xxxxxx Xxxx, and
Xxxxx Xxxxxxx, (hereinafter together referred to as "Xxxx'x Children") to whom
NutraGenics stock will be issued shall execute an investment letter in form and
substance as annexed hereto.
THIRD: NUTRAGENICS' REPRESENTATIONS AND WARRANTIES
(a) NutraGenics represents and warrants that the Stock, when
issued pursuant to the terms. and conditions of this Agreement,
will have been duly authorized, validly issued, fully paid and
nonassessable.
(b) NutraGenics represents and warrants that it will pay any
and all taxes required to be paid and arising out of the issuance
and sale of the Stock.
(c) NutraGenics agrees to sign any and all other documents
reasonably required to be signed in order to effectuate the issuance of the
Stock being sold herein by NutraGenics.
(d) NutraGenics represents and warrants that there is no claim,
litigation, proceeding or investigation pending or to the knowledge of
NutraGenics threatened in which NutraGenics is a party or a defendant that may
in any way effect the value of the vitamin
4
9
E-like complex (TRF(25)) known as Vitenol-E(TM), including any applications,
renewal applications, or amendments to any existing registration, submitted to
the United States Food and Drug Administration or the United States Patent and
Trademark Office.
(e) NutraGenics represents and warrants that it has complied in all
material respects with all applicable laws, regulations, orders and ordinances
of the United States, and all state and local governments and agencies thereof,
which could adversely effect the vitamin E-like complex (TRF(25)) known as
Vitenol-E(TM).
(f) NutraGenics represents and warrants that it is the sole and
undisputed holder of the world wide exclusive license from LipoGenics, Inc. to
the industrial proprietary rights, including pending United States and foreign
applications relating to tocotrienols and tocotrienol-like compounds and their
preparation and use, and the technology, including trade secret formulas and
processes, and know-how, relating to such tocotrienols and tocotrienol-like
compounds and their preparation and use (such Industrial Property Rights,
technology, trade secrets and know-how being hereinafter referred to as
"LipoGenics technology"). That the nutritional supplement technology based on a
vitamin E-like complex (TRF(25)) has been shown to be effective in reducing
cholesterol and in reducing critical events associated with coronary heart
disease and stroke as well as having antioxidant and anticoagulant properties.
(g) NutraGenics represents and warrants that the above-described
exclusive license for the vitamin E-like complex (TRF (25))
5
10
is, and will be at the time of execution of this agreement, validly existing and
in full force and effect; NutraGenics represents and warrants that it has not
violated, nor is in breach or default of, any of the conditions and terms of
such license agreement. NutraGenics further represents and warrants that said
license agreement is free and clear of all pledges, mortgages, charges,
encumbrances and liens. A true copy of such fully executed License Agreement is
annexed hereto.
(h) NutraGenics represents and warrants that LipoGenics has patent
applications pending on the following four basic elements: 1) a method of
manufacturing Vitenol-E(TM) dietary supplements ("Processing" claims); 2)
Vitenol-E(TM) products derived via the proprietary methods ("Products by
Process" claims); 3) chemical composition of key compounds in Vitenol-E(TM)
("Composition of Structure" claims); and 4) the use of the proprietary
Vitenol-E(TM) product and its compounds ("Utility" claims). As of the date of
the execution of this Agreement, the following patent applications have been
submitted and prosecuted by LipoGenics:
Applications # Inventors Title
1. WO 9117985 X. Xxxxxxx, X. Xxxxxx Process for recovering
X. Xxxxx, X. Xxxx tocotrienols, tocopherols
and tocotrienol-like
compounds
2. WO 930977 X. Xxxx X. Xxxxxxx Tocotrienols and
X. Xxxxxx tocotrienol-like compounds
and methods for their use
NutraGenics further represents and warrants that there have been no issues
raised by the. United States Patent and Trademark Office that NutraGenics
believes will prevent the issuance of the patents for the above-described patent
applications.
6
11
(i) NutraGenics represents and warrants that to its knowledge and
belief, except for a sum of $100,000 plus interest due Health Care Investors
being assumed by NutraGenics, Inc. from LipoGenics, Inc. as part of its License
Agreement, the patent application, numbers WO 911785 and WO 930977, for the
vitamin E-like complex are free and clear of all pledges, mortgages, charges,
encumbrances and liens, and that all such registrations and filings with the
United States Patent and Trademark Office, and any other state or federal agency
are existing, valid and current.
(j) That the financial statements given to Xxxx and annexed hereto have
been prepared in accordance with generally accepted accounting practices applied
on a consistent basis, and are true, accurate and complete.
(k) That the reports of the clinical tests with regard to the vitamin
E-like complex (TRF(25)) for the product known as Vitenol-E(TM), and supplied to
Xxxx, copies of which are annexed hereto, have been carried out following Food
and Drug Administration protocol and are true, accurate and complete.
FOURTH: XXXX'X INVESTMENT REPRESENTATIONS
Xxxx and Xxxx'x Children represent that the Stock being acquired by
them is for investment for their own accounts, with no present intention of
reselling or otherwise distributing the same. Xxxx and Xxxx'x Children have been
advised that the Shares have not been registered under the Securities Act of
1933, as amended, (the "Act") on the basis that the sale to Xxxx and Xxxx'x
Children is exempt from registration under Section 4(2) of the Act as not
7
12
involving any public offering and that NutraGenics' reliance on such exemption
is predicated in part on Xxxx and Xxxx'x Children's aforesaid representation.
Xxxx and Xxxx'x Children have been advised that while they have the right to
dispose of their own property when and as they see fit, they realize that, in
the view of the Securities and Exchange Commission, the statutory basis for
exemption would not be present if, notwithstanding Xxxx and Xxxx'x Children's
said representation, Xxxx or any of Xxxx'x Children had in mind merely acquiring
the Shares for resale upon the occurrence or nonoccurrence of some predetermined
event. At present Xxxx nor' any of Xxxx'x Children know of no circumstance in
the foreseeable future which would require the sale or hypothecation of the
Shares. Xxxx and Xxxx'x Children represent that they have such knowledge and
experience in financial matters to evaluate the merits and risks of an
investment in the Shares, and that they can bear the economic risk of an
investment in the Shares.
Xxxx and Xxxx'x Children further represent that they have had the
opportunity to seek outside legal advice with respect to acquiring the Shares.
Xxxx and Xxxx'x Children understand that the Shares are characterized as
"restricted securities" under federal securities laws, since the Shares are
being acquired in a transaction not involving a public offering and that under
such laws and applicable regulations, such securities may be resold without
registration under the Act only in certain limited circumstances. Xxxx and
Xxxx'x Children hereby represent that they understand the resale limitations
imposed by the Act and are
8
13
generally familiar with and understand the existing resale limitations imposed
by the Act and the rules and regulations promulgated thereunder.
FIFTH: LOAN TO NUTRAGENICS FOR THE PAYMENT OF THE LEGAL FEES
FOR XXXXXX X. XXXX, ESQ.
Xxxx hereby agrees to loan to NutraGenics a sum of money to pay for the
legal fees of Xxxxxx X. Xxxx, Esq. for his expertise with regard to the laws,
rules and regulations promulgated and enforced by the Federal Food and Drug
Administration, and for his consultation and approval that the vitamin E-like
complex (TRF(25)), known as Vitenol-E(TM), can be properly and legally labeled,
marketed and sold as a nutritional supplement that will lower cholesterol. Said
loan shall be limited to reasonable out-of-pocket expenses and reasonable
attorneys fees paid directly to the law firm Bass & Xxxxxx, on behalf of Xxxxxx
X. Xxxx, Esq., Said loan shall be made pursuant to the following terms and
conditions:
(a) The law firm of Bass & Xxxxxx shall be the exclusive law firm
retained for consultation and approval that the vitamin E-like complex
(TRF(25)), known as Vitenol-E(TM), can be properly and legally labelled,
marketed and sold as a nutritional supplement that will lower cholesterol, in
accordance with the laws, rules and regulations promulgated and enforced by the
Federal Food and Drug Administration.
(b) All legal fees in connection with the above-described consultation,
shall be paid directly by Xxxx to the law firm Bass
9
14
& Xxxxxx and shall be approved by both Xxxx and NutraGenics in advance of being
incurred.
(c) The loan described in this paragraph "FIFTH", shall be for a period
of twelve (12) months from the date of execution of this Agreement. At the
expiration of said time period, NutraGenics shall repay all monies advanced by
Xxxx pursuant to this paragraph; provided, however, that Xxxx shall have the
sole right, in his discretion, to extend the date of payment of said loan for an
additional period of twelve (12) months. No interest shall accrue on this loan
during the period of said loan.
(d) Notwithstanding the fact that this loan commitment is being made to
NutraGenics, NutraGenics acknowledges that this loan commitment is being made
solely to pay for the legal fees of Xxxxxx X. Xxxx, Esq., incurred in connection
with his consultation and approval that the vitamin E-like complex (TRF(25)),
known as Vitenol-E(TM), can be properly and legally labeled, marketed and sold
as a nutritional supplement that will lower cholesterol, in accordance with the
laws, rules and regulations promulgated and enforced by the Federal Food and
Drug Administration, and NutraGenics acknowledges that it shall not incur any
costs or expenses in connection with Xxxxxx X. Xxxx, Esq.'s consultation without
the prior written consent and approval from Xxxx.
(e) Pursuant to the terms and conditions hereinafter set forth in
paragraph "EIGHTH", Xxxx, at his sole option, may elect to receive common stock
of NutraGenics as repayment of said loan, at
10
15
a purchase price of One ($1.50) Dollar and Fifty Cents per share of common stock
of NutraGenics.
(f) Simultaneously with the execution of this Agreement, a separate
Promissory Note shall be executed by NutraGenics evidencing the loan being made
by Xxxx pursuant to this paragraph.
SIXTH: SECURED LOAN TO NUTRAGENICS FOR TWO HUNDRED AND FIFTY
THOUSAND DOLLARS ($250,000,00)
Xxxx hereby agrees to loan to NutraGenics the sum of Two Hundred and
Fifty Thousand ($250,000.00) Dollars pursuant to the following terms and
conditions:
(a) The loan of Two Hundred and Fifty Thousand ($250,000.00) Dollars
(hereinafter referred to as the "Secured Loan") shall be secured by NutraGenics'
accounts receivables, inventory, patents, trademarks, machinery, equipment,
licenses and contracts, including but not limited to, the exclusive license
agreement to manufacture, market and sell the vitamin E-like complex (TRF(25))
known as Vitenol- E(TM), pursuant to the following documents: a separate
Promissory Note in the amount of $250,000; a Security Agreement - Chattel
Mortgage; an Equipment Security Agreement - Chattel Mortgage; an Inventory
Security Agreement; and Form UCC-1 Financing Statements filed with the
appropriate local and state agencies. All above-described documents shall be
executed simultaneously with the execution of this Agreement.
(b) The term of the Secured Loan shall be for a period of two (2) years
with a variable interest rate based upon the six-month London Interbank Offered
Rate ("Libor") plus the spread of 1 1/2
11
16
points above Libor (which includes the facility fee of 3/4 of a point charged by
Xxxxxxx Xxxxx), and said variable interest on the Secured Loan shall be paid by
NutraGenics quarterly directly to Xxxxxx Xxxx.
(c) The proceeds of the Investment and Secured Loan shall be used in
accordance with the terms and conditions hereinafter set forth in paragraph
"SEVENTH".
(d) Pursuant to the terms and conditions hereinafter set forth in
paragraph "EIGHTH", Xxxx, at his sole option, may elect to receive all or part
common stock of NutraGenics as repayment of said Secured Loan, at a purchase
price of One ($1.50) Dollar and Fifty Cents per share of common stock of
NutraGenics.
SEVENTH: INVESTORS POSITION - USE OF PROCEEDS
(a) Xxxx and Xxxx'x Children are purchasing Two Hundred and
Fifty Thousand Shares (250,000) of NutraGenics unregistered common stock as
hereinabove set forth in paragraph "SECOND" at a purchase price of One ($1.00)
Dollar per share, for a total purchase price of Two Hundred and Fifty Thousand
($250,000) Dollars (hereinafter referred to as the "Investment").
(b) Xxxx is advancing the Secured Loan, as hereinabove set forth in
paragraph "SIXTH" in the amount of Two Hundred and Fifty Thousand ($250,000)
Dollars.
(c) The aforesaid proceeds of the Investment and Secured Loan shall be
used by NutraGenics primarily for the manufacture, marketing and sales of the
product known as Vitenol-E(TM). The proceeds of the Investment and Secured Loan
shall not be used for
12
17
the repayment of any debt of NutraGenics nor for the payment of any royalties to
LipoGenics, Inc., the corporation that developed and owns the vitamin E-like
complex (TRF(25)) referred to herein and known as Vitenol-E(TM).
(d) NutraGenics shall maintain complete and accurate financial books
and records reflecting NutraGenics' use of aforesaid proceeds of the Investment
and Secured Loan. Xxxx, or any representative of Xxxx, shall have the right,
upon two (2) days written notice, to examine and copy said books and records of
NutraGenics at any time during the normal business hours of NutraGenics, and
NutraGenics at its own expense shall be obligated and bound to make said books
and records available for review and copying by Xxxx, or any representative of
Xxxx, in the State and City of New York.
(e) Until such time as the Secured Loan of $250,000 made by Xxxx to
NutraGenics has been paid in full, Xxxx shall receive copies of all filings with
the United States Securities and Exchange Commission, press releases, sales
literature, material contracts and financial and accounting reports, financial
statements and tax returns prepared by, for or on behalf of NutraGenics.
(f) The within "Use of Proceeds" provision is a material provision and
of the essence of this Agreement, any breach hereof shall result in the
following:
(i) The balance of the principal and interest of the
Secured Loan shall become immediately due and
13
18
payable by NutraGenics to Xxxx pursuant to the terms
and conditions of the Promissory Note executed by
NutraGenics representing the Secured Loan.
(ii) Xxxx and Xxxx'x Children shall have the right and
option to sell their equity ownership in NutraGenics,
or any portion thereof, to NutraGenics at a price
equal to $2.00 per share or the then fair market
value per share whichever is greater. Xxxx or any of
Xxxx'x Children shall elect such option by notifying
NutraGenics in writing by certified or registered
mail. NutraGenics, within thirty (30) days of receipt
of such notice, shall purchase said stock. The
closing shall be held within thirty (30) days of such
notice, at which time 100% of the purchase price
shall be paid in cash or by certified check and the
stock certificates sold shall at closing be properly
endorsed and delivered to NutraGenics by Xxxx or
Xxxx'x Children.
EIGHTH: OPTION TO CONVERT LOANS INTO UNREGISTERED COMMON
STOCK OF NUTRAGENICS
At any time during the term of each of the loans made pursuant to this
Agreement, Xxxx, at his sole option, may elect to receive unregistered common
stock of NutraGenics as repayment of all or any portion of all loans made by him
to NutraGenics, at a purchase price of One Dollar and Fifty Cents ($1.50) per
share of
14
19
unregistered common stock of NutraGenics. Xxxx shall notify Nutragenics in
writing by certified or registered mail of his election to receive unregistered
common stock of NutraGenics as repayment of all or any portion of the loans
being made pursuant to this Agreement. The closing and the issuance to Xxxx of
the unregistered common stock of NutraGenics shall be held within thirty (30)
days of Xxxx'x notification (the "Closing Date").
NINTH: NUTRAGENICS RIGHT TO PREPAY LOANS
NutraGenics shall have the right to prepay either or both of
the loans made pursuant to this Agreement, and in that event, NutraGenics shall
notify Xxxx of its intention to prepay either or both of said loans by certified
or registered mail. Upon receipt of such notice, Xxxx shall have the option to
elect to receive unregistered common stock of NutraGenics- in lieu of a cash
repayment of all or part of said loans, Xxxx shall notify NutraGenics of such an
election in writing by certified or registered mail within thirty (30) days of
receipt of NutraGenics, notice to prepay said loans. In the event Xxxx does not
elect to receive NutraGenics' stock in repayment of all of his loans he shall be
paid the balance due in cash or good certified check. The closing and the
payment in cash or good certified check and/or the issuance to Xxxx of the
unregistered common stock of NutraGenics shall be held within thirty (30) days
of Xxxx'x notification.
TENTH: "PIGGY BACK" RIGHTS OF REGISTRATION
In the event NutraGenics shall at any time after the date
hereof, seek to further register or qualify any of its capital
15
20
stock or the securities holdings of any of its controlling shareholders, on each
such occasion it shall furnish Xxxx and each of Xxxx'x Children with at least
thirty (30) days prior written notice thereof, and Xxxx and Xxxx'x Children
shall have the option without cost or expense to Xxxx or any of Xxxx'x Children,
to include his or her Stock, or any portion thereof, in such registration or
qualification with the consent of the underwriter, who may also require
appropriate and reasonable limitations on the sale of such Stock after their
registration. Xxxx and each of Xxxx'x Children shall exercise their respective
"piggy-back rights" of registration by giving written notice to NutraGenics and
the underwriter within twenty (20) days of receipt of written notice from
NutraGenics. All expenses in connection with preparing and filing the
registration statement (and any registration or qualification under the
securities or "Blue Sky" laws of states in which the offering will be made under
such registration statement) shall be borne in full by NutraGenics (including up
to a maximum of five (5) states in which NutraGenics would not otherwise sell
shares registered under such registration statement in which the shares are also
registered). This piggy-back right of registration shall be limited to the
shares of NutraGenics' common stock being purchased by Xxxx or any of Xxxx'x
Children and the NutraGenics' common stock which Xxxx may elect to receive as
repayment of his loans and further limited in dollar amount to 125% of the cost
of the NutraGenics' common stock purchased by Xxxx and Xxxx'x Children,
including any conversion of debt into common stock. This
16
21
piggy-back right of registration may be assigned and transferred by Xxxx or any
of Xxxx'x Children to any third party who may receive the NutraGenics stock
issued to Xxxx pursuant to this Agreement.
ELEVENTH: INDEMNIFICATION
NutraGenics agrees to indemnify and hold harmless Xxxx and each of
Xxxx'x Children and each person, if any, who is a representative of Xxxx or any
of Xxxx'x Children, and each person to whom Xxxx or any of Xxxx'x Children
assign his or her NutraGenics' common stock, from and against any losses,
claims, damages, liabilities (which shall include, but not be limited to, all
reasonable costs of defense and investigation and all reasonable attorneys'
fees), to which Xxxx or any of Xxxx'x Children, such representative or assignee,
may become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise.out of or are based
upon any untrue statement or an alleged untrue statement of any material fact
contained in (A) the Registration Statement, any Preliminary Prospectus, the
Prospectus, or any amendment thereof or supplement thereto, (B) any blue sky
application or other document executed by NutraGenics specifically for that
purpose or based upon written information furnished by NutraGenics filed in any
state or other jurisdiction in order to qualify any or all of the Exchange
Shares under the securities laws thereof (any such application, document being
hereinafter called a "Blue Sky Application") , or .arise out of or are based
upon the omission or alleged omission to state in the Registration Statement,
any supplement thereto, or in any Blue Sky Application, a material fact required
to be stated
17
22
therein or necessary to make the statements therein not misleading; provided,
however, that NutraGenics will not be liable in any such case to the extent, but
only to the extent, that any such loss, claim, damage, or liability arises out
of or is based upon an untrue statement or alleged untrue statement or omission
or alleged omission made in reliance upon and in conformity with written
information furnished to NutraGenics through Xxxx or any of Xxxx'x Children or
on behalf of Xxxx or any of Xxxx'x Children or Xxxx'x or any of Xxxx'x
Children's assigns specifically for use in the preparation of the Registration
Statement or any such amendment of supplement thereof or any such Blue Sky
Application or any such Preliminary Prospectus or the Prospectus or any such
amendment or supplement thereto. This indemnity will be in addition to any
liability which Xxxx or Xxxx'x Children or any of Xxxx or Xxxx'x Children's
representatives or assigns may otherwise have.
The terms and conditions of this paragraph shall survive the
termination or expiration of this Agreement.
TWELFTH: ELECTION OF XXXX TO THE BOARD OF DIRECTORS
If elected, Xxxx agrees to serve as a member of the Board of
Directors of NutraGenics for three (3) consecutive one (1) year terms commencing
October , 1995.
THIRTEENTH: APPROVAL OF BOARD OF DIRECTORS
This Agreement and the terms and conditions herein is subject to the
prior approval of the Board of Directors of NutraGenics through the adoption and
execution of formal executed resolutions of the Board of Directors of
NutraGenics. A copy of such executed
18
23
resolutions shall be delivered to Xxxx at closing.
FOURTEENTH: AGREEMENT CONDITIONED ON APPROVAL OF LICENSE
AGREEMENT BETWEEN NUTRAGENICS AND LIPOGENICS, INC.
This Agreement shall be conditioned upon the written approval by the
Board of Directors of LipoGenics, Inc. and the Board of Directors of NutraGenics
of the terms and conditions of a License Agreement between LipoGenics, Inc. and
NutraGenics in form and substance as annexed hereto.
FIFTEENTH: ENDORSEMENT OF STOCK CERTIFICATE
Xxxx and Xxxx'x Children agree that there will be placed on the
certificates for the Shares, or any substitutions therefor, a legend stating in
substance as follows:
The shares represented by this certificate have not been
registered under the Securities Act of 1933, have been acquired for
investment and may not be sold transferred or assigned in the absence
of an effective registration statement for these shares under the
Securities Act of 1933 or an opinion of Company's counsel that
registration is not required under said Act.
SIXTEENTH: DESCRIPTION OF AUTHORIZED CAPITAL STOCK AND WARRANTS
The total number of authorized shares of NutraGenics' common stock is
Fifty Million (50,000,000) par value $.001.
The total number of issued and outstanding shares of NutraGenics common
stock is ( ). Except for the options created for C. Xxxxxxx Xxxx
to purchase one and Eighty Thousand (180, 000) shares of NutraGenics' common
stock, there are no warrants or options to purchase shares of NutraGenics
common stock.
19
24
SEVENTEENTH: CONSULTING AGREEMENT BETWEEN
NUTRAGENICS AND XXXX
NutraGenics and Xxxx acknowledge and agree that Xxxx at the request of
NutraGenics, agrees to be reasonably available as a consultant to NutraGenics
for a period of twelve (12) months from the date of execution of this Agreement.
EIGHTEENTH: NON-WAIVER
All representations and warranties made by the parties to this
Agreement shall survive the closing. No action or omission by the parties hereto
shall constitute a waiver of any covenants, warranties or representations,
unless such waiver shall be executed in writing by the party for whose benefit
such covenant, warranty or representation is designed.
NINETEENTH: ARBITRATION OF DISPUTES
Any and all disputes of whatsoever kind or nature arising out of or
concerning this Agreement, its interpretation or effect, shall be determined by
the exclusive means of Arbitration before the American Arbitration Association
of the City of New York, located in the City of New York in accordance with its
rules and regulations then in effect, and the decision upon such Arbitration
shall be final and binding upon all of the parties of this Agreement. The costs
and expense of Arbitration, including the reasonable attorney's fees, shall be
paid by the party against whom the Arbiters render a decision, unless the
decision of the Arbiters specifically provides otherwise for good cause, and
judgment upon such award may be entered in the Supreme Court of the State of New
York or any other State in which any party to this Agreement is a
20
25
resident. Such determination shall be made by a panel of at least three (3)
Arbiters.
TWENTIETH: LAWS TO GOVERN
This Agreement shall be construed and enforced in accordance with the
laws of the State of New York without giving effect to the conflict of laws and
principles thereof and the parties consent to the exclusive jurisdiction of the
state and federal courts of the State of New York.
TWENTY-FIRST: NOTICES
All necessary notices, demands, and requests required or permitted to
be given under the provisions of this Agreement shall be deemed duly given five
(5) days after being mailed by certified mail, return receipt requested, postage
prepaid and addressed as follows:
A. If to be given to NutraGenics at
0000 Xxxxx Xxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
B. If to be given to Xxxxxx Xxxx or Xxxx' s Children c/o
Xxxxxx Xxxx at
000 Xxxxxxxx Xxxx
Xxx, Xxx Xxxx 00000
TWENTY-SECOND: ENTIRE AGREEMENT
This Agreement contains all of the terms and conditions agreed upon by
the parties hereto with reference to the subject matter hereof. No other
agreements, oral or otherwise, shall be deemed to exist or to bind any of the
parties hereto, and all prior agreements and understandings are superseded
hereby. This
21
26
Agreement cannot be modified or changed except by written instrument signed by
all of the parties hereto.
TWENTY-THIRD: HEADINGS
The headings of the paragraphs of this Agreement are for the
convenience of reference only and do not form a part thereof and in no way
modify, interpret or construe the meanings of the parties.
TWENTY-FOURTH: COUNTERPARTS
To facilitate execution, this Agreement may be executed in as many
counterparts as may be required and its shall not be necessary that the
signatures of, or on behalf of, each party, or that the signatures of all
persons required to bind any party, appear on each counterpart; but it shall be
sufficient that the signature of, or on behalf of, each party, or that the
signatures of the persons required to bind any party, appear on one or more of
the counterparts. All counterparts shall collectively constitute a single
agreement. It shall not be necessary in making proof of this Agreement to
produce or account for more than a number of counterparts containing the
respective signatures of, or on behalf of, all of the parties hereto. Signatures
by facsimile transmission shall be deemed acceptable and binding upon the
parties.
TWENTY-FIFTH: SEVERANCE OF AGREEMENT
Should any provision or portion of any provision of this
Agreement be invalid for any reason the validity of the remaining
22
27
provisions, or of the other portions of the provision in question, shall not be
effected thereby.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their duly authorized officers, and their corporate seals to be
affixed hereto.
NUTRAGENICS, INC.
/s/Xxxxxx X. Xxxx
------------------------------
By: XXXXXX X. XXXX
CHIEF EXECUTIVE OFFICER
/s/Xxxxxx Xxxx
------------------------------
XXXXXX XXXX
/s/Xxxxxxx X. Xxxx
------------------------------
XXXXXXX XXXX
/s/Xxxxxx Xxxx
------------------------------
XXXXXX XXXX
/s/Xxxxx Xxxxxxx
------------------------------
XXXXX XXXXXXX
23
