EXHIBIT 10.11
SHARE SUBSCRIPTION AGREEMENT
THIS SHARE SUBSCRIPTION AGREEMENT (this "AGREEMENT") is made and entered into as
of this 19th day of January 2005 (the "EFFECTIVE DATE") by and between Telos,
LLC, a company duly established under the laws of the United States of America
("USA") having its principal place of business at __________________________
("INVENTOR"); and
XXXXXX SCIENCE INC, a company duly established and existing under the laws of
the Republic of Korea ("KOREA") having its principal place of business at 00-0
Xxxxxxx-Xxxx, Xxxxx-Xx, Xxxxxxx, Xxxxxxx-Xx, Xxxxx (the "COMPANY").
(Investor and the Company are referred to, for convenience, collectively as the
"PARTIES" and each as a "Party").
RECITALS
WHEREAS, as of the Effective Date, the authorized capital stock of the Company
is Three Hundred Million (300,000,000) shares of common stock, One Hundred
Korean Won (KRW100) par value per share ("COMMON STOCK"), of which Twenty Nine
Million One Hundred Ninety Seven Thousand Three Hundred (29,197300) shares of
Common Stock are issued and outstanding;
WHEREAS, as of the Effective Date, pursuant to the Company's stock option plan
("STOCK OPTION PLAN"), there are presently outstanding stock options for the
purchase of Two Million Seven Hundred Fifty One Thousand Two Hundred Forty Nine
(2,751, 249) shares of Common Stock;
WHEREAS, Investor desires to invest in the Company and as consideration as a
result, Investor has agreed to acquire Two Million Five Hundred Thousand
[2,500,000] shares of Common Stock (the "SHARES") at a price per Share equal to
Four Hundred Korean Won (KRW[400]) (the "PRICE PER SHARE") subject to the terms
and conditions of this Agreement (the "TRANSACTION");
WHEREAS, the Parties desire to execute this Agreement pursuant to which Investor
will acquire the Shares from the Company in accordance with the terms and
conditions of this Agreement (the "TRANSACTION");
WHEREAS, the Parties desire to execute this Agreement pursuant to which Investor
will acquire the Shares from the Company in accordance with the terms and
conditions provided herein.
NOW THEREFORE, in consideration of the mutual covenants herein contained, the
Parties hereto, intending to be legally bound hereby, agree as follows:
1. SUBSCRIPTION/CONTRIBUTION. Subject to the terms and conditions set
forth in this Agreement, the company shall issue, sell, assign and
deliver to Investor, and Investor
shall purchase from the company, the Shares at the Price Per Share in
accordance with the following:
1.1 INITIAL SUBSCRIPTION CLOSING. On a date mutually agreed by the
parties but no later than January 25, 2005 (the "INITIAL
CLOSING DATE"), Investor shall purchase from the Company
[__________] ([1,250,000]) shares of Common Stock (the
"INITIAL SHARES") and the Company shall issue, sell, assign
and deliver to the Investor the Initial Shares (the "INITIAL
CLOSING"). The purchase price for the Initial Shares in the
amount of [_____________] ([____________]} shall be paid by
wire transfer in immediately available funds to the bank
account of the Company provided in the provisions of Section
8.7 of this Agreement.
1.2 SUBSEQUENT SUBSCRIPTION; SUBSEQUENT CLOSING. On a date
mutually agreed by the parties but no later than January [31],
2005, (the "SUBSEQUENT CLOSING DATE"), Investor shall purchase
from the Company [_____________] ([1,250,000]) shares of
Common Stock (the "SUBSEQUENT SHARES") and the Company shall
issue, sell, assign and deliver to the Investor the Subsequent
Shares (the "SUBSEQUENT CLOSING"). The purchase price for the
Initial Shares in the amount of [_____________]
([___________]} shall be paid by wire transfer in immediately
available funds to the bank account of the Company provided in
the provisions of Section 8.7 of this Agreement.
2. NO ENCUMBRANCES. The Shares shall be free and clear of any encumbrance,
claim, lien, charge, mortgage, security interest, equity, option,
pledge, restriction on transferability or other claims or third party
rights of whatever nature on any property or property interest.
3. COMPANY SHAREHOLDER REGISTRY. [At the Initial Closing and Subsequent
Closing (each hereinafter referred to as the "Closing")] the Company
shall cause the Company's shareholder registry to list Investor as the
owner of the Shares.
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to Investor that each of the representations
and warranties set forth below is true and correct in all respects as
of the Effective Date of this Agreement and will be true and correct as
of the Initial Closing Date and Subsequent Closing Date (each
hereinafter referred to as the "CLOSING DATE") as though made then and
as though the Closing Date were substituted for the Effective Date
throughout this Article 4).
4.1 ORGANIZATION, QUALIFICATION AND CORPORATE POWER. The company
is a corporation duly organized, validly existing, and in good
standing under the laws of the jurisdiction of its
incorporation. The Company is duly authorized to conduct the
business and operations of the Company as and to the extent
the same exist are undertaken or conducted as of the Effective
Date of this Agreement (the "BUSINESS") and is in good
standing under the laws of Korea. To the Company's knowledge,
its Business operations as presently conducted to not require
the Company to be authorized to conduct business in any other
jurisdiction. The Company has full corporate power and
authority and all licenses, permits, and
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authorizations necessary to carry on the Business in which it
is engaged and to use the parties owned and used by it.
4.2 CAPITALIZATION. As of the Effective Date of this Agreement,
before giving effect to the Transaction contemplated by this
Agreement, the entire authorized capital stock of the company
consists of Three Hundred Million (300,000,000) shares of
common stock, One Hundred Korean Won (KRW100) par value per
share ("COMMON STOCK"), of which Twenty Nine Million One
Hundred Ninety Seven Thousand Three Hundred (29,197,300)
shares of Common tock are issued and outstanding. As of the
Effective Date, after giving effect to the Transaction
contemplated by this Agreement, the Company will have no more
than [(__________) shares] of Common Stock issued and
outstanding. As of the Effective Date, pursuant to the
Company's Stock Option Plan, there are outstanding stock
options for the purchase of Two Million Seven Hundred Fifty
One Thousand Two Hundred Forty Nine (2,751,249) shares of
Common Stock. Other than this Stock Option Plan, there are no
outstanding or authorized options warrants, purchase rights,
subscription rights, conversion rights, exchange rights or
other contracts or commitments that could require the company
to issue, sell or otherwise cause to become outstanding any of
its capital stock.
4.3 VALID ISSUANCE OF SHARES. The Shares being purchased by
Investor hereunder, when issued and delivered in accordance
with the terms of this Agreement for the consideration
expressed herein, will be duly and validly issued, fully paid
and non-assessable and will be free of restrictions on
transfer, other than restrictions on transfer under this
Agreement or applicable securities.
4.4 AUTHORIZATION AND NON-CONTRAVENTION. The execution, delivery
and performance by the company of this Agreement (including
any related certificates, consents, agreements or other
documents executed in connection herewith, hereinafter the
same shall apply) and the issuance and sale by the Company to
Investor of the Shares, 9a) are within the Company's corporate
power and authority, (b) have been duly authorized by all
necessary corporate, stockholder and other proceedings, and
(c) do not (i) violate any constitution, statute, regulation,
rule, injunction, judgment, order, decrees, ruling, charge, or
other restriction of any government, governmental agency, or
court to which the Company is subject or any provision of the
Articles of Incorporation of the company, (ii) conflict with,
result in a breach of, constitute a default under, result in
the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any
notice under any agreement, contract, lease, license,
instrument, or other arrangement to which the Company is a
party or by which it is bound, or (iii) result in the creation
of any security interest, mortgage, lien or other Encumbrance
upon any property of the Company.
4.5 ENFORCEABILITY. This Agreement constitutes a legally binding
obligation of the Company, enforceable against the Company in
accordance with the terms hereof, except to the extent (a)
such enforceability is limited by (i) bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or
affecting
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generally the enforcement of creditors' rights and (ii)
general principles of equity, or (b) that the availability of
the remedy of specific performance or injunctive or other
equitable relief is subject to the discretion of the court
before which any proceeding therefore may be brought.
4.6 CONSENTS. The execution, delivery and performance by the
Company of this Agreement, and the issuance and sale of the
Shares, do not require the approval or consent of, or any
filing with, any governmental authority or agency, or any
other natural person, corporation, business trust, estate,
trust, partnership, association, joint venture, limited
liability company, government, governmental subdivision or
agency, or any other for profit or not for profit legal or
commercial entity (hereinafter each a "Person") which consent
has not been obtained.
5. REPRESENTATIONS AND WARRANTIES OF INVESTOR. Investor hereby represents
and warrants that:
5.1 Investor is duly incorporated, validly existing and in good
standing under the laws of the jurisdiction of its
organization, with full power and authority to conduct its
business and to execute and deliver this Agreement and to
perform its obligations hereunder;
5.2 Investor is a resident of , or organized under the laws of,
the country or state set forth above and is not acquiring the
Shares as an agent or otherwise for any other person or
entity.
5.3 Investor understand that all the undersigned's representations
and warranties contained in this Agreement will be deemed to
have been reaffirmed and confirmed as of the Closing Date; and
5.4 There are no actions, proceedings or investigations pending
or, to Investor's knowledge, threatened in writing against
Investor or its properties before any court or government
agency.
5.5 Investor is entitled to assign one board seat of the company's
board of directors.
6. COVENANTS.
6.1 CONDUCT OF BUSINESS BY THE COMPANY. During the period from the
Effective Date and continuing until the Closing, the company
covenants and agrees that, unless Investor shall otherwise
agree in writing and unless otherwise expressly permitted
hereunder, the company shall conduct its Business, in the
ordinary course of business, and the Company shall used
commercially reasonable efforts to preserve substantially
intact the business organization of the Company, to keep
available the services of the present officers, employees and
consultants of the Company and to preserve the present
relationships of the company with customers, suppliers and
other Persons with which the company has significant business
relations. By way of amplification and not limitation, during
the period from the Effective Date and continuing until the
Closing, the Company shall not, directly or indirectly, do
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or propose to do any of the following without the prior
written consent of Investor, unless otherwise expressly
permitted hereunder:
(a) issue, sell, pledge, dispose of or encumber, or
authorize the issuance, sale, pledge, disposition or
Encumbrance of, any shares of capital stock of any
class, or any options, warrants, convertible or
exchangeable securities, or other rights of any kind
to acquire any shares of capital stock, or any other
ownership interest (including, without limitation,
any phantom interest), of the Company;
(b) (i) declare, set aside, make or pay any dividend or
other distribution (whether in cash, stock or
property or any combination thereof) in respect of
the Company's capital stock, (ii) split, combine or
reclassify the company's capital stock or issue or
authorize the issuance of any other securities in
respect of, in lieu of or in substitution for any
shares of the Company's capital stock or (iii) amend
the terms of, repurchase, redeem or otherwise acquire
any of its securities, or propose to do any of the
foregoing, except for amendments contemplated in this
Agreement;
(c) except (i) as required by applicable law, (ii)
pursuant to the terms of an agreement existing as of
the Effective Dated (a copy of which shall have been
provided to Investor), or (iii) in the ordinary
course o business, increase the compensation, bonus
or other benefits payable or to become payable to any
of the Company's officers, directors or employees,
grant any severance or termination pay or rights to,
or enter into any employment or severance agreement
with, any of the Company's officers, directors or
employees, increase any benefits payable under
existing severance or termination pay policies or
employment agreements or establish, adopt, enter into
or, except as required by applicable law, terminate
or amend, any employee benefit plan.
6.2 CONSENTS, APPROVALS; TAKING OF NECESSARY ACTION. Each of the
Parties hereto will take all reasonable actions necessary to
comply promptly with all legal requirements which may be
imposed on it by a governmental entity with respect to the
Agreement and will promptly cooperate with and furnish
information to each other in connection with any such
requirements imposed upon any of them in connection with the
Transactions contemplated hereunder. Each of the Parties
hereto will take (or cause to be taken) all reasonable actions
necessary to obtain (and will cooperate with each other in
obtaining) any waiver, order or approval of any governmental
entity or other Person required to be obtained in connection
with the Transaction contemplated hereunder.
6.3 EXPENSES. Each Party hereto will bear its respective costs,
fees and expenses incurred in connection with this Agreement
and the Transaction contemplated hereunder.
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7. INDEMNIFICATION. The Company shall indemnify and hold harmless Investor
and its respective officers, directors, agents, attorneys and employees
from and against any and all losses, costs, payments, damages,
liabilities and expenses arising from claims, demands, actions, causes
of action arising out of any misrepresentation or breach of or default
in connection with any of the representations, warranties, covenants
and agreements given or made by the Company in this Agreement.
8. MISCELLANEOUS.
8.1 WAIVER, AMENDMENT. Neither this Agreement nor any provisions
hereof shall be modified, changed, waived, discharged or
terminated except by an instrument in writing, signed by the
Party against whom any waiver, change, discharge or
termination is sought.
8.2 ASSIGNABILITY. Neither this Agreement nor any right, remedy,
obligation or liability arising hereunder or by reason hereof
shall be assignable by either the Company or Investor without
the prior written consent of the other Party.
8.3 APPLICABLE LAW AND JURISDICTION. This Agreement and the rights
and obligations of the Parties hereunder shall be governed by
and construed in accordance with the laws of the Republic of
Koreas. Any dispute, controversy or difference which may arise
from this Agreement, or the breach thereof, shall be subject
to the jurisdiction of the Seoul District Court.
8.4 SECTION AND OTHER HEADINGS. The section and other headings
contained in this Agreement are for reference purposes only
and shall not affect the meaning or interpretation of this
Agreement.
8.5 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered
shall be deemed to be an original and all of which shall be
deemed to be one and the same agreement.
8.6 [Notices] All notices and other communications provided for
herein shall be in writing and shall be deemed to have been
duly given if delivered personally, telecopied or sent by
e-mail or courier or registered or certified mail:
(a) If to Company, to it at the following address:
Address: Xxxxxx Science Inc.
00-0 Xxxxxxx-Xxxx, Xxxxx-Xx
Xxxxxxx, Xxxxxxx-Xx
Xxxxx
Attention: Xxxxx Xxxx Noh
President
Phone: x00-00-000-0000
Fax: x00-00-000-0000
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(b) If to Investor, to it at the following address:
Address: 0000 Xxxxx Xxxxxx Xxxxxx
Xxxx 000
Xxx Xxxxxxx, XX 00000
Attention: Xxxx Xxx
President
Phone: 000-000-0000
Fax: 000-000-0000
8.7 COMPANY BANK DETAILS. [To be provided]
8.8 BINDING EFFECTS. This provisions of this Agreement shall be
binding upon and inure to the benefit of the Parties hereto
and their respective heirs, legal representatives, successors
and assigns.
8.9 LANGUAGE. This Agreement constitutes the entire agreement
between the Parties pertaining to the subject matter hereof,
and supersedes any other agreements or communications (whether
written or oral) among the Parties regarding such subject
matter.
(SIGNATURE PAGE FOLLOWS)
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IN WITNESS WHEREOF, THE Parties have executed this Share Subscription Agreement
as of the date first written above.
TELOS LLC.
By: /s/ Xxxx Xxx
-----------------------
Name: Xxxx Xxx
Title:
XXXXXX SCIENCE INC.
By: /s/ Xxxxx Xxxx Noh
-----------------------
Name: Xxxxx Xxxx Noh
Title: President & CEO
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