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Exhibit 10.23
SETTLEMENT AGREEMENT
This Settlement Agreement (the "Agreement") is entered into this 17th day
of September, 1996 (the "Effective Date") by and between Demeter
BioTechnologies, Ltd., a Colorado corporation with its principal executive
offices at Brightleaf Square, Suite 19D, 000 Xxxx Xxxx Xxxxxx, Xxxxxx, Xxxxx
Xxxxxxxx 00000 (the "Company"), and Xxxx Xxxxxxxx, whose address is 0000 Xxxx
0xx, Xxxxxx,XX 00000 ("Xxxxxxxx"). The Company and Xxxxxxxx are collectively
referred to herein as the "Parties."
WHEREAS, on May 10, 1993, July 10, 1993, August 16, 1993, January 11,
1994, April 13, 1995, September 18, 1995, and other occasions, the Parties
executed a Promissory Note and Loan Agreement wherein Xxxxxxxx loaned the
Company the aggregate principal unpaid amount of $82,500 (collectively, the
"Notes and Loan Agreements"), and
WHEREAS, as of the Effective Date the Company is indebted to Xxxxxxxx in
the aggregate amount of $109,516 ($82,500 principal), and
WHEREAS, pursuant to the terms of the Notes and Loan Agreements the
Company has issued, or is obligated to issue, to Xxxxxxxx an aggregate of
59,722 warrants (the "Warrants") and 141,719 shares of restricted common stock
(the "Stock"), and
WHEREAS, the Parties desire to resolve and settle any and all outstanding
obligations and issues between them, whether arising out of the Notes and Loan
Agreements, the Warrants, the Stock, or otherwise.
THEREFORE, for good and valuable consideration, the receipt of which is
acknowledged, the Parties agree as follows:
1. CLOSING DATE. This transaction will close on or before September 30,
1996 (the "Closing Date") in Oklahoma City, Oklahoma.
2. DELIVERY OF STOCK. The Company agrees that on or before the Closing
Date it will deliver to Xxxxxxxx a certificate for 365,715 shares of the
Company's restricted (Rule 144) common stock (the "Common Stock").
3. RESTRICTED STOCK, LEGEND REQUIREMENT. Xxxxxxxx acknowledges and
understands that the Common Stock will be restricted, that it is being issued
to it in a private transaction, and that it has not been registered under the
Securities Act of 1933 (the "Act"), or the securities laws of any states in
reliance on exemptions from the registration requirements of the Act and such
state securities laws. The Common Stock is subject to restrictions on
transferability and may not be transferred or resold except as permitted under
the Act and such laws pursuant to registration or exemption therefrom. The
Common Stock has not been approved or disapproved by the Securities and
Exchange Commission or any other regulatory authority. The certificate
evidencing the Common Stock will bear substantially the following legend:
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THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "ACT") AND ARE "RESTRICTED SECURITIES" AS THAT TERM
IS DEFINED IN RULE 144 UNDER THE ACT. THE SHARES MAY NOT BE OFFERED FOR SALE,
SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE ACT, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF
THE COMPANY.
4. REGISTRATION RIGHTS. The Company will prepare and file with the
Securities and Exchange Commission (the "SEC"), as soon as practicable but in
any event by December 31, 1996, a registration statement for an offering to be
made on a delayed or continuous basis pursuant to Rule 415 of the Securities
Act of 1933 (the "Act") registering the resale from time to time by the
holder(s) of the Common Stock (the "Registration Statement"). The Registration
Statement will be on Form S-1 or another appropriate form permitting
registration of the Common Stock for resale by the holder(s) in the manner or
manners designated by them. The Company will cause the Registration Statement
to become effective under the Act within ninety (90) days of the date of filing
and will keep the Registration Statement continuously effective under the Act
until the earlier of (a) the sale of the Common Stock pursuant to the
Registration Statement or Rule 144 under the Act, or (b) the expiration of the
holding period applicable to sales of the Common Stock under Rule 144(k) under
the Act, or any successor provision.
The Company will prepare and file with the SEC such amendments and
post-effective amendments to the Registration Statement as may be necessary to
keep the Registration Statement continually effective for the applicable period
specified above, it will cause the related prospectus to be supplemented by any
required prospectus supplement, and as so supplemented to be filed pursuant to
Rule 424 (or any similar provisions then in force) under the Act, and it will
comply with the provisions of the Act with respect to the disposition of all
securities covered by the Registration Statement during the applicable period
in accordance with the intended methods of disposition of the sellers thereof
set forth in the Registration Statement as amended or the prospectus as so
supplemented.
The Company will pay all expenses of the Registration Statement, it will
provide each registered holder copies of the prospectus, and it will notify
each registered holder when the Registration Statement has become effective.
5. DELIVERY OF PROMISSORY NOTES, WARRANTS AND MUTUAL RELEASES. Xxxxxxxx
agrees that on or before the Closing Date he will deliver the Promissory Notes,
marked "Paid," dated and signed, and the Warrants, marked "Canceled," dated and
signed, to the Company. The Parties agree that on or before the Closing Date
they will deliver to each other, in binding counterparts if necessary, the
Mutual Release attached to this Agreement as Exhibit A.
6. PRIVATE PLACEMENT MEMORANDUM. Xxxxxxxx acknowledges that prior to
his execution of this Agreement he received and read the copy of the Private
Placement Memorandum dated September 12, 1996 attached to this Agreement as
Exhibit B.
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7. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to Xxxxxxxx as follows:
A. DULY ORGANIZED, VALIDLY EXISTING, GOOD STANDING. The Company is a
duly organized and validly existing corporation in good standing under the laws
of the State of Colorado, is qualified to do business and is in good standing
under the laws of the State of North Carolina, and has the corporate power and
authority to own its properties, to transact the business in which it is
engaged, and to perform its obligations under this Agreement.
B. STOCK DULY AUTHORIZED. The issuance and delivery by the Company of
the Common Stock to has been duly authorized and all necessary corporate action
has been taken, and such issuance and delivery will not contravene or conflict
with the Company's Articles of Incorporation or Bylaws, or any applicable law
of which the Company is aware, or any agreement of which the Company is a party.
C. ABSENCE OF ENCUMBRANCES. The Company is the owner, beneficially and
of record, of the Common Stock and owns the Common Stock free and clear of any
lien, mortgage, adverse claim, charge, security interest, encumbrance,
restriction, limitation, contract, agreement, arrangement, understanding,
instrument, obligation, defect or irregularity ("Liens"). Upon delivery of the
Common Stock, Xxxxxxxx will acquire good and marketable title to the Common
Stock free and clear of any Liens, including restrictions and limitations that
may arise under community property or similar laws, subject, however, to such
restrictions on resale as may exist under Rule 144 or other applicable laws
until such time as the Common Stock is registered or exempt from registration.
D. REGISTRATION RIGHTS. The Company will register the Common Stock as
set forth in Section 4 of this Agreement.
8. REPRESENTATIONS AND WARRANTIES OF XXXXXXXX. Xxxxxxxx represents and
warrants to the Company as follows:
A. OPPORTUNITY ASK QUESTIONS. He has had the opportunity to ask questions
of the Company related to the Common Stock and the Company and has received from
the Company copies of all information related to the Common Stock and the
Company which he deems material in order to enter into this Agreement.
B. ACCREDITED INVESTOR. If so required, he meets the definition of an
"Accredited Investor," as that term is defined in Regulation D under the
Securities Act of 1933, that being an individual with a net worth of at least
$1,000,000, or an annual income in each of the last two years of at least
$200,000 with the reasonable expectation of reaching the same income level
in 1996.
9. TERM. The term of this Agreement will begin on the Effective Date and
will expire on the earlier of (a) the sale of the Common Stock pursuant to the
Registration Statement or Rule 144 under the Act, (b) the expiration of the
holding period applicable to sales of the Common Stock
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under Rule 144(k) under the Act, or (b) December 31, 2000, whichever occurs
first.
10. CONSTRUCTION. This Agreement will be construed and governed by the
laws of the State of Oklahoma. The prevailing party in any dispute to enforce
this Agreement will be entitled to recover its costs and a reasonable
attorney's fee.
11. FACSIMILE AND COUNTERPART COPIES. The Parties agree that facsimile
copies and counterparts of this Agreement and any Exhibits and any signatures
on this Agreement or any Exhibits will be as legally binding and enforceable
as the single original or a copy of this Agreement and any Exhibits.
12. ENTIRE AGREEMENT; AMENDMENT. There are no verbal understandings
between the Parties. This Agreement contains the entire agreement between the
Parties, supersedes all previous agreements, whether oral or written, between
the Parties, and cannot be changed, modified, amended or supplemented except
by written agreement signed by both Parties.
13. FURTHER ACTIONS. The Parties agree to execute and deliver such
certificates, agreements and other documents and to take such other action as
may be reasonably required by the other party in order to record, effectuate,
consummate or implement the transaction contemplated by this Agreement.
IN WITNESS WHEREOF, the Parties have duly signed this Settlement Agreement
consisting of four pages and Exhibits A and B as of the Effective Date.
Xxxx Xxxxxxxx Demeter BioTechnologies, Ltd.
/s/ XXXX XXXXXXXX By: /s/ XXXXXXX X. XXXXXXX
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Xxxx Xxxxxxxx Xxxxxxx X. Xxxxxxx, President
By: /s/ XXXXX X. XXXXXX
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Xxxxx X. Xxxxxx, Vice President
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EXHIBIT A TO
SETTLEMENT AGREEMENT
BETWEEN DEMETER BIOTECHNOLOGIES, LTD., AND XXXX XXXXXXXX
DATED SEPTEMBER 17, 1996
MUTUAL RELEASE
COME NOW Demeter BioTechnologies, Ltd., a Colorado corporation with its
principal executive offices at Brightleaf Square, Suite 19D, 000 Xxxx Xxxx
Xxxxxx, Xxxxxx, Xxxxx Xxxxxxxx, 00000 (the "Company"), and Xxxx Xxxxxxxx, whose
address is 0000 Xxxx 0xx, Xxxxxx 00000 ("Xxxxxxxx") and for good and valuable
consideration, the receipt of which is hereby acknowledged, do hereby release
each other, and each other's officers, directors, and employees from any and
all obligations, claims or causes of action which they might have against each
other, and each other's officers, directors, partners and employees arising out
of the Promissory Notes and Loan Agreements between the Company and Xxxxxxxx
dated May 10, 1993, July 10, 1993, August 16, 1993, January 11, 1994, April 13,
1995 and September 18, 1995 (collectively, the "Notes and Loan Agreements"),
arising out of any amendments to the Notes and Loan Agreements, any warrants
and stock issued or issuable pursuant to the terms of the Notes and Loan
Agreements, or arising out of any other promissory notes, warrants,
understandings, agreements, letter agreements or arrangements between the
Company and Xxxxxxxx, whether written or oral, and arising out of any and all
other relationships of whatever nature between the Company and Xxxxxxxx, all
from the beginning of time to the date of the Mutual Release.
This Mutual Release shall not release the Company and Xxxxxxxx from any
obligations contained in the Settlement Agreement to which this Mutual Release
is annexed as Exhibit A.
Facsimile copies and counterparts of this Mutual Release and any
signatures thereon shall be as legally binding and enforceable as the single
original copy of this Mutual Release and any signatures thereon.
Dated this 23 day of September, 1996.
Xxxx Xxxxxxxx Demeter BioTechnologies, Ltd.
/s/ XXXX XXXXXXXX By: /s/ XXXXXXX X. XXXXXXX
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Xxxx Xxxxxxxx Xxxxxxx X. Xxxxxxx, President
By: /s/ XXXXX X. XXXXXX
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Xxxxx X. Xxxxxx, Vice President
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EXHIBIT B TO
SETTLEMENT AGREEMENT
BETWEEN DEMETER BIOTECHNOLOGIES, LTD., AND XXXX XXXXXXXX
DATED SEPTEMBER 17, 1996
PRIVATE PLACEMENT MEMORANDUM DATED SEPTEMBER 12, 1996
DEMETER BIOTECHNOLOGIES, LTD. 1996 EXCHANGE OFFER
