HIGHGATE HOUSE FUNDS, LTD.
XXXXXXXXXX EQUITY PARTNERS LTD.
000 XXXXXX XXXXXX, XXXXX 0000
XXXXXX XXXX, XXX XXXXXX 00000
July 28, 2006
Nanoscience Technologies, Inc.
00 Xxxxxxxxxxx Xx., Xxxxx 0000 #00
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxx
Dear Xx. Xxxxxx:
The undersigned, Highgate House Funds, Ltd. ("Highgate") and Xxxxxxxxxx
Equity Partners, Ltd. ("Xxxxxxxxxx"), are parties to certain agreements with
Nanoscience Technologies, Inc. ("Nanoscience," or the "Company"), dated December
14, 2005, including without limitation, the following (collectively, the
"Highgate Documents"):
(i) Securities Purchase Agreement (the "SPA");
(ii) Investor Registration Rights Agreement;
(iii) Amended and Restated Security Agreement (the "Security
Agreement");
(iv) 8% Secured Convertible Debenture in the principal amount of
$1,050,359.20 (denominated Debenture No. HGH-0003);
(v) 8% Secured Convertible Debenture in the principal amount of
$320,000 (denominated Debenture No. HGH-0004)
(vi) 8% Secured Convertible Debenture in the principal amount of
$320,000 (denominated Debenture No. HGH-0005, with the two
above-referenced debentures, the "Highgate Debentures");
(vii) Warrant to Purchase 100,000 shares of Nanoscience Common Stock
(the "Highgate Warrant").
By agreement among Highgate, Xxxxxxxxxx and Nanoscience, dated February
8, 2006, Highgate assigned Debenture No. HGH-0005 to Xxxxxxxxxx, and Xxxxxxxxxx
was granted certain rights originally granted under the Highgate Documents to
Highgate. The Highgate Documents, including the SPA, the Security Agreement and
the Highgate Debentures, contain certain restrictions on the ability of
Nanoscience to, INTER ALIA, issue any capital securities, including warrants, or
grant a security interest in and to any of its assets.
The Company desires to raise additional financing (the "Cornell
Financing") through the issue and sale of a convertible debenture and common
stock purchase warrant to Cornell Capital Partners, LP, and to enter into the
following agreements, of even date hereof, with Cornell in respect thereof
(collectively, the "Cornell Documents") pursuant to which it intends to issue
such securities, grant a security interest in and to substantially all of the
Company's assets, and xxxxx Xxxxxxx certain other rights:
(i) Securities Purchase Agreement;
(ii) Investor Registration Rights Agreement;
(iii) Security Agreement;
Nanoscience Technologies, Inc.
Page 2 of 3
(iv) 8% Secured Convertible Debenture in the principal amount of
$120,000 (the "Cornell Debenture");
(v) Warrant to Purchase 1,000,000 shares of Nanoscience Common Stock
(the "Cornell Warrant"); and
(vi) Irrevocable Transfer Agent Instructions.
To facilitate and enable the Cornell Financing, Highgate and Xxxxxxxxxx
hereby (i) consent to the entry by Nanoscience into and its performance under
each of the Cornell Documents, including without limitation, the grant of a
security interest in and to substantially all of the assets of the Company in
favor of Cornell, the issuance of the Cornell Debenture and Cornell Warrant, and
the granting of certain registration and purchase rights in favor of Cornell and
(ii) waive any rights they may have under or arising out of any of the Highgate
Documents arising solely from the execution and delivery by Nanoscience of, or
performance by Nanoscience of the Company's obligations under, the Cornell
Documents, including any rights to anti-dilution adjustments under the Highgate
Debentures or the Highgate Warrant.
Highgate and Xxxxxxxxxx hereby represent and warrant that no third party
holds any interest in either the Highgate Debentures or Highgate Warrant, and
that no third party consent or waiver is required in order for either to grant
the consent and waiver set forth herein.
Except as expressly set forth above, all of the terms and conditions of
the Highgate Documents shall continue in full force and effect, and shall not be
in any way changed, modified or superseded. The consent of Highgate and
Xxxxxxxxxx set forth herein shall be a one-time consent and shall not be deemed
a consent other than as specified herein.
Please indicate your agreement to the foregoing by signing below where
indicated.
Sincerely,
HIGHGATE HOUSE FUNDS, LTD.
By: Yorkville Advisors, LLC
Its: General Partner
By: /s/ Xxxx Xxxxxx
---------------------------------
Name: Xxxx Xxxxxx
Its: President and Portfolio Manager
XXXXXXXXXX EQUITY PARTNERS LTD.
By: Yorkville Advisors, LLC
Its: General Partner
By: /s/ Xxxx Xxxxxx
---------------------------------
Name: Xxxx Xxxxxx
Its: President and Portfolio Manager
Nanoscience Technologies, Inc.
Page 3 of 3
Acknowledged and Agreed
on July 28, 2006:
NANOSCIENCE TECHNOLOGIES, INC.
By: /s/ Xxxxx Xxxxxx
-----------------------
Name: Xxxxx Xxxxxx
Title: Chief Operating Officer