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EXHIBIT 6.8
TECHNOLOGY PURCHASE AGREEMENT dated as of July 16, 1999, by
and between ADVANCED PLANT PHARMACEUTICALS, INC., a Delaware
corporation (the "Purchaser") having its principal office at
00 Xxxxxx Xxxx, Xxx Xxxx, XX 00000, and X.X. XXXXXXXXX
("Seller"), who resides at Xxxxxxxx Xx.00, Xxxxxxxxx, Xxxxxx.
WITNESSETH
WHEREAS, the Purchaser is engaged in the business of developing,
testing and selling plant based pharmaceuticals (the "Business"), and is
desirous of purchasing certain technology which pertains to the Business of the
Purchaser;
WHEREAS, the Seller has developed a concept of standardizing whole
plant pharmaceutical grade products and has developed a technological process by
which to utilize virtually the whole of the nutrients found in plants in the
production of dietary supplements (the "Process" which term is meant to include
the underlying concept of standardizing whole plant pharmaceutical grade
products);
WHEREAS, Seller represents that he is the sole owner of all rights and
interests to the Process;
WHEREAS, the Purchaser is desirous of purchasing such Process from
Seller so that Purchaser have the exclusive right to use such Process for the
development, manufacture, distribution and sale of plant based dietary
supplements;
WHEREAS, Seller is willing to sell, transfer and assign all of his
right, title and interest in and to such Process to the Purchaser in accordance
with the terms and provisions set forth below;
NOW, THEREFORE, in consideration of the foregoing premises, and the
representations, warranties, covenants and agreements contained herein, and for
other good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged, the undersigned parties hereby agree as follows:
1. PURCHASE AND SALE OF PROCESS TECHNOLOGY.
1.1 Subject to the provisions of this Agreement, the Seller hereby
sells, conveys, transfers, assigns and delivers to the Purchaser, by appropriate
instruments in the forms annexed hereto, and Purchaser purchases and accepts,
for the consideration hereinafter defined, the Process as described in Schedule
A (as attached hereto), specifically including, but without limitation, all
rights owned, held or enjoyed by the Seller relating to or connected with the
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research and development of the Process including all related documentation,
studies and tests, formulations, recipes, manufacturing procedures, extraction
methodologies and trade secrets.
1.2 Purchase Price
The purchase price that Purchaser shall pay to Seller for the
purchase of the Process shall be the following:
(A) 18,000,000 shares of the Purchaser's common stock, par value $.0007 (the
"Purchase Price" or the "Shares"). Seller hereby acknowledges and understands
that such 18,000,000 Shares and any additional Shares issuable pursuant to
paragraph 1.2(D) below, shall be issued by the Purchaser to Seller conditioned
on the occurrence of the following event:
that the stockholders of the Purchaser (the "Stockholders") vote in
favor of increasing the number of shares that the Purchaser is
authorized to issue from 120,000,000 to a number equivalent to or
greater than 250,000,000 shares. The Purchaser hereby agrees to put
forward a proposal to its Stockholders to increase the number of shares
it is authorized to issue from 120,000,000 to 250,000,000 prior to the
latter of September 30, 1999 or if and when the Company's Form 10-SB is
declared effective by the Securities and Exchange Commission. Seller
acknowledges and understands that the Purchaser cannot give any
assurances that its Stockholders will vote in favor of such proposal.
If such increase in the shares that the Purchaser is authorized to
issue is approved by the majority of the Stockholders, the Purchaser
shall issue the Shares representing the Purchase Price to the Seller
within fifteen business days from the time that the Certificate of
Amendment to the Purchaser's Certificate of Incorporation is effective
and if after Stockholder approval, such shares are not issued to Seller
in accordance with this section, then ownership of the Process shall
return to XX Xxxxxxxxx or his designee; and
(B) Purchaser shall pay to the Seller in U.S. Dollars a royalty payment of $.01
(one cent) per bottle with respect to each product manufactured with the Process
and an additional one percent (1%) of the Company's suggested retail price of
each product sold that was manufactured with the Process. Such payments shall be
made to the Seller within thirty (30) days after the end of each calendar
quarter for products manufactured and for products sold which were manufactured
using the Process made during such Calendar Quarter; and
(C) Purchaser shall pay to the Seller ten percent (10%) of the Purchaser's net
profits that Purchaser retains from sale of products manufactured with the
Process. The amount of the Purchaser's "net profits" from such sales shall be
determined by the Company's then independent public accountants regularly
retained using generally accepted accounting principles; and
(D) (i) In the event that the Purchaser enters into any agreement
with a third party for sale of products manufactured using the
Process, which agreement unconditionally provides for payment
to the Purchaser of not less than $20,000,000, upon receipt by
the Purchaser of such $20,000,000 from such third party, the
Purchaser shall issue to the Seller 5,000,000 Shares for each
twenty million dollars required to be paid to the Purchaser
under the terms of such agreement or agreements.
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(ii) the Purchaser shall issue to the Seller 5,000,000 Shares for
every $20,000,000 of gross proceeds received by the Purchaser,
other than proceeds from sales made pursuant to agreements
covered in 1.2(D)(i) immediately above pursuant to which
Shares are issued to the Seller from the sale of products
manufactured using the Process.
Provided, however, that the maximum number of Shares the Purchaser shall be
required to issue to the Seller pursuant to the provisions of clauses 1.2(D)(i)
and (ii) shall be twenty five million Shares.
(1.3) The certificates evidencing the Shares to be issued paid
by the Purchaser to Seller, which constitute the Purchase Price, shall be
endorsed with the following restrictive legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THESE SHARES HAVE BEEN
ACQUIRED FOR INVESTMENT PURPOSES ONLY AND NOT WITH A VIEW TOWARD DISTRIBUTION OR
RESALE. THESE SHARES MAY NOT BE MORTGAGED, PLEDGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED ABSENT REGISTRATION OF SUCH SHARES UNDER THE ACT, OR AN OPINION OF
COUNSEL FOR THE CORPORATION THAT REGISTRATION IS NOT REQUIRED UNDER THIS ACT OR
AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
(1.4) Purchaser agrees that at no time prior March 15, 2000,
will the Purchaser's Board of Directors propose an increase in the number of
Shares the Purchaser is authorized to issue in excess of 250,000,000 shares and
further agrees not to propose a stock split, a reverse stock split of greater
than five to one or a stock dividend.
2. Representations and Warranties of Seller.
Seller hereby makes the following representations and warranties to Purchaser in
order to induce the Purchaser to enter in to this Agreement:
(a) Authority. The Seller has full power and authority to execute,
deliver and perform this Agreement and to carry out the transactions
contemplated thereby and hereby.
(b) Governmental Filings. The Seller is not required to submit any
notice, report or other filing to any governmental or regulatory agency, nor is
any notice or report required to be obtained by the Purchaser in connection with
the execution or delivery of this Agreement, or the consummation of the
transactions contemplated thereby and hereby.
(c) Title and Related Matters. The Seller, who asserts that he has
created the Process, has good and marketable title to the Process free and clear
of all liens, pledges, charges and encumbrances, liabilities or any other
adverse claims of every kind or character, and Purchaser shall acquire good and
valid title to the Process, free and clear of all liens, pledges, charges
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security interests, restrictions, licenses, encumbrances, liabilities or any
other adverse claim of any kind or character.
(d) Infringement. To the best of the Seller's knowledge, no persons
other than the Purchaser has heretofore utilized the Process. To the best of the
Seller's knowledge, the Process will not infringe or violate any valid patent,
trademark, trade name or copyright of others and the Seller has not received any
notice, claim or protest respecting any such violation or infringement.
(e) Broker. No agent, broker or other person acting pursuant to
authority of Seller is entitled to any commission or finder's fee in connection
with the transactions contemplated by this Agreement.
(g) Accuracy of Information. No representation, statement or
information made or furnished by Seller to Purchaser, in this Agreement, and the
schedules hereto and the documents set forth contain, or shall contain, any
untrue statement of fact or omits or shall omit any fact necessary to make the
information contained in such representation, or information not misleading,
and, there are no obligations, contingent or otherwise, of the Seller that are
not shown on any such schedule.
(h) Claims. No claim has been asserted by any person other than Seller
and purchaser with regard to the Process or the rights to the use thereof.
(i) Use. The Seller will not, without the Purchaser's written consent,
hereafter use the Process or permit any persons other than Purchaser and the
Purchaser's designees and assigns, to use the Process.
(j) Governmental Approvals. The Seller has taken all necessary actions
to provide that in the developing, testing and manufacturing of the Process ,
the Seller is and shall continue to be in compliance in all material respects
with all United States and foreign, state, county, local or other governmental
statutes and ordinances, and with all rules and regulations of all United States
and foreign, state, county, local and other governmental agencies and bodies,
applicable to him, and to the Process.
(k) Investment Representations.
(i) The Seller will acquire the Shares for the Seller's own
account, for investment purposes only, and not with a view to the sale or other
distribution thereof, in whole or in part, in violation of the Act, the General
Rules and Regulations ("Rules and Regulations") of the Securities and Exchange
Commission ("Commission") promulgated thereunder, or any other applicable
securities laws.
(ii) The Seller is familiar with and has received
documentation concerning the business and financial condition of the Purchaser
and Seller has had the opportunity to obtain answers to any questions concerning
the Purchaser's business, financial and other affairs. The
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Seller fully understands that any payment hereunder in Shares is conditional
upon approval by the Stockholders of an increase in the number of shares the
Purchaser is authorized to issue. Moreover Seller understands that such Shares
given to him as the Purchase Price are also subject to the conditions set forth
in Section 1.2 above, present an exceptional risk, and the Shares may decline in
value such that Seller may lose the entire current value of the Shares.
(iii) The Seller has been advised that the Shares have not
been registered under the Securities Act and that the Shares issued and
delivered in reliance on an exemption from the registration requirements of the
Securities Act, Section 4(2) thereof as a transaction by an issuer not involving
a public offering. The Seller has also been advised that it may not make any
disposition of the Shares unless (a) the Shares are registered under the
Securities Act, or (b) the sale, transfer or other disposition is made in
conformity with the provisions of Rule 144 of the Rules and Regulations, or (c)
prior thereto (1) notice of the proposed disposition is given to the Purchaser
with a detailed statement of the circumstances surrounding the proposed
disposition and (2) the Purchaser shall have received the opinion of counsel for
the Purchaser at the expense of Seller to the effect (x) that the proposed
disposition will not be in contravention of any of the provisions of the
Securities Act or of the Rules and Regulations thereunder, or (y) that
appropriate action necessary for compliance with the Securities Act and the
Rules and Regulations thereunder has been taken.
(iv) The Seller understands that the Purchaser is under no
obligation to register the Shares under the Securities Act, or to take any other
action in order to make compliance with an exemption from the registration
provisions of the Securities Act in connection with any sale of the Shares by
the Seller.
(v) The Seller has been advised that the Shares constitute
"restricted securities," as that term is defined in Rule 144 of the Rules and
Regulations.
(vi) The Seller understands that there will be placed upon the
certificates representing the Shares, and upon any certificates issued in
substitution therefor, an appropriate stop transfer legend regarding the
restrictions on the transfer of the Shares under the Securities Act.
(l) Absence of Litigation. Seller is not aware and has not received
notice of any threatened, pending or commenced litigation, arbitration or
administrative hearing or investigation, or other action seeking to prevent, or
having a potential detrimental effect upon Purchaser in connection with the
Process or the consummation of the transactions contemplated by this Agreement.
(m) Insolvency Proceedings. No insolvency proceedings, including
bankruptcy, receivership, reorganization, composition or arrangement with
creditors, are pending or threatened against Seller.
(n) Schedule Being True and Correct. The schedules and exhibits to this
Agreement are true and correct in all respects.
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(o) Conflicts. The execution, delivery and performance of this
Agreement, shall not conflict with or result in the breach or violation of any
of the Seller's contracts, agreements, commitments, licenses, permits,
authorizations or concession to which he is a party or by which he is bound, or
any statute, rule, regulation, ordinance, code, order, judgment, writ,
injunction, decree or award of any court or administrative governmental body, or
constitute an event which with notice, lapse of time, or both, would result in
any such breach, or violation and which would have a material adverse effect on
the Seller.
3.2 Representations and Warranties of Purchaser.
Purchaser makes the following representations and warranties as of the date
hereof:
(a) Organization and Good Standing. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware.
(b) Authority. Except of Stockholder authorization to increase the
number of shares of its common stock, the Purchaser has (a) full power and has
taken all corporate action necessary to execute, deliver and perform this
Agreement, as amended and partially restated and to carry out the transaction
contemplated hereby and (b) has full power to execute, deliver and perform the
obligations of Purchaser under this Agreement and has been duly and effectively
authorized by Purchaser's Board of Directors and no further corporate authority
therefor or approval thereof is required by law.
(c) Conflicts. The execution, delivery and performance of this
Agreement shall not conflict with or result in the breach or violation of any of
the Purchaser's contracts, agreements, commitments, licenses, permits,
authorizations or concession to which it is a party or by which it is bound, or
any statute, rule, regulation, ordinance, code, order, judgment, writ,
injunction, decree or award of any court or administrative governmental body, or
constitute an event which with notice, lapse of time, or both, would result in
any such breach, or violation and which would have a material adverse effect on
the Purchaser.
(d) Brokers. No agent, broker or other person acting pursuant to
authority of Purchaser is entitled to any commission or finder's fee in
connection with the transactions contemplated hereby.
(e) Governmental Filings. Except for filing with the Commission
required by the Nasdaq Stock Market, Purchaser is not required to submit any
notice, report or other filing to any governmental or regulatory agency, nor is
any notice of any report required to be obtained by Purchaser in connection with
the execution or delivery of this Agreement or the consummation of the
transactions contemplated hereby.
4. Indemnification Rights.
(a) Seller hereby agrees to indemnify and hold harmless Purchaser and
its respective officers, directors, shareholders, employees, agents, and
attorneys against any and all losses,
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claims, demands, liabilities, and expenses (including reasonable legal or other
expenses, including reasonable attorneys' fees) incurred by each such person in
connection with defending or investigating any such claims or liabilities,
whether or not resulting in any liability to such person, to which any such
indemnified party may become subject under an intellectual property theory,
under any other statutes, at common law or otherwise, insofar as such losses,
claims, demands, liabilities and expenses (i) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact made by Seller
and contained in this Agreement or the schedules and documents attached hereto,
or (ii) arise out of or are based upon any breach by Seller of any
representation, warranty, or agreement made by Seller contained herein in this
Agreement.
(b) In order for any person to make a claim for indemnification under
this Section 4 ("Indemnitee"), the Indemnitee shall notify Seller as the
indemnifying party ("Indemnitor") of the claim in writing promptly after
discovering the claim or receiving written notice of a claim against if (if by a
third party), describing the claim, the amount thereof (if known), and the basis
thereof. The Indemnitor shall be entitled to participate in the defense of such
action at its expense, and at its option (subject to the limitations set forth
below) shall be entitled to assume control of such defense with reputable
counsel; provided, that prior to Indemnitor assuming control of such defense it
or they shall first verify to the Indemnitee in writing that such Indemnitor
shall be fully responsible for such claim and that it will provide the full
indemnification required hereunder to Indemnitee with respect to such claim,
including payment thereof and performance thereunder; and provided further,
that:
(i) The Indemnitee shall be entitled to participate in the
defense of such claim and to employ counsel of its choice for such purpose, the
fees and expenses of such separate counsel which shall be borne by Indemnitee.
Notwithstanding the foregoing, the fees and expenses of such separate counsel
incurred prior to the date the Indemnitor's counsel effectively assumes control
of such defense shall be borne by the Indemnitor; and
(ii) The Indemnitee shall be entitled to assume control of
such defense and the Indemnitor shall nevertheless bear the fees and expenses of
counsel retained by the Indemnitee for such purposes if, upon petition by
Indemnitee, the appropriate court rules that the Indemnitor failed or is failing
to vigorously prosecute or defend such claim; and
(iii) The Indemnitor shall not be entitled to control the
defense of any claim to the extent that the claim seeks an injunction or
equitable relief against Indemnitee which, if successful, could materially
interfere with the business of the Indemnitee. If the Indemnitor, with the
consent of the Indemnitee, shall control the defense of any such claim, the
Indemnitor shall obtain the prior written consent of the Indemnitee (which shall
not be unreasonably withheld) before entering into any settlement of a claim or
ceasing to defend such claim, if pursuant to or as a result of such settlement
or cessation, injunction or other equitable relief will be imposed against the
Indemnitee. If Indemnitee withholds consent, Indemnitee shall be responsible for
any losses above the losses that would have been incurred as a result of such
settlement.
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5.1 Survival of Representations, Warranties and Covenants. All representations
and warranties contained herein or appended hereto shall be valid and
enforceable and shall survive the consummation of the transaction contemplated
hereby, irrespective of any investigation made by or on behalf of either party
for a period of five (5) years following the date of this Agreement. All
covenants and other agreements contained herein shall be valid and enforceable
for a period of six (6) years following the date hereof.
5.2 Notices. All notices which are permitted or required under this Agreement
shall be in writing and delivered personally or by certified mail, postage
prepaid, addressed as follows, or to such other person or address as may be
designated by written notice by one party to the other parties:
If to Purchaser: Advanced Plant Pharmaceuticals, Inc.
Attention: Xxxxxx Xxxxxxxxx
00 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
With a copy to: Feder, Kaszovitz, Isaacson, Weber, Xxxxx & Bass LLP
Attention: Xxxx X. Xxxxxxx, Esq.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
If to Seller: Xx. X.X. Xxxxxxxxxx
Xxxxxxxx Xx. 00
Xxxxxxxxx, Xxxxxx
Notices shall be deemed delivered when delivered personally or when
mailed by prepaid certified or registered mail with return receipt requested, or
air courier which provides for evidence of delivery.
The addresses set forth above shall be conclusive for all purposes
unless and until written notice, in the manner for notice provided in this
section 6.2, of a change of address shall be sent to the parties herein.
5.3 Severability. Any provision of this Agreement which is invalid or
unenforceable shall be ineffective to the extent of such invalidity or
unenforceability, without affecting in any way the remaining provision hereof.
5.4 Schedules. It is acknowledged and agreed that all exhibits and schedules are
an integral part hereof and are incorporated, in total, by reference fully as a
part of this Agreement.
5.5 Amendment. This Agreement may not be modified, amended or terminated except
by written agreement subscribed by both parties hereto.
5.6 Waiver. No waiver of any breach or default hereunder shall be considered
valid unless
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in writing and signed by the party giving such waiver, and no such waiver shall
be deemed a waiver of any subsequent breach or default of the same or similar
nature.
5.7 Headings. The paragraph headings contained herein are for the purpose of
convenience only and are not intended to define or limit the contents of said
paragraphs.
5.8 Counterparts. This Agreement may be executed in one or more counterparts,
all of which taken together shall be deemed one original.
5.9 Governing Law. This Agreement will be deemed to have been made and delivered
in the State of New York and its validity, interpretation, and construction, as
well as the remedies for its enforcement or breach are to be applied pursuant
to, and in accordance with, the laws of the State of New York for contracts made
and to be performed in that State.
5.10 Jurisdiction and Venue. The Purchaser and Seller each hereby (i) agrees
that any legal suit, action or proceeding arising out of or relating to this
Agreement prior to its amendment and as amended and partially restated shall be
instituted exclusively in New York State Supreme Court, County of New York, or
in the United States District Court for the Southern District of New York, (ii)
waives any objection to the venue of any such suit, action or proceeding and the
right to assert that such forum is not a convenient forum, and (iii) irrevocably
consents to the jurisdiction of the New York State Supreme Court, County of New
York, and the United States District Court for the Southern District of New York
in any such suit, action or proceeding, and the Purchaser and Seller each
further agrees to accept and acknowledge service or any and all process which
may be served in any such suit, action or proceeding in New York State Supreme
Court, County of New York or in the United States District Court for the
Southern District of New York and agrees that service of process upon it mailed
by certified mail to its address shall be deemed in every respect effective
service of process upon it in any suit, action or proceeding.
IN WITNESS WHEREOF, this Agreement has been duly executed as of the
date first written above.
ADVANCED PLANT PHARMACEUTICALS, INC.
(Purchaser)
By:
/s/ Xxxxx Xxxxxxxxx
-----------------------------
Xxxxx Xxxxxxxxx, President
ACCEPTED AND AGREED:
(Seller)
By:
/s/ XX Xxxxxxxxx
-----------------------------
X.X. XXXXXXXXX, an individual
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SCHEDULE A
The Process being sold by Seller and purchased by Purchaser shall be that
thirteen step process which utilizes whole plants for the production of dietary
supplements. Seller claims that the Process will (i) preserve, in the dietary
supplements produced with such Process, virtually the whole of the natural
ingredients found in the plant and (ii) will result in all of the dietary
supplements produced with such Process having near identical ingredient
formulations. Such Process was described in writing by Seller to Xx. Xxxxxxx
Xxxxxxx, the Scientific Directory of Advanced Plant Pharmaceuticals, Inc. and a
copy of the procedures for application of the Process has been delivered to the
Company.
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SCHEDULE B
XXXX OF SALE
KNOW ALL MEN BY THESE PRESENTS:
The undersigned, X.X. XXXXXXXXX ("Seller"), in consideration of certain payments
and other good and valuable consideration paid to Seller by ADVANCED PLANT
PHARMACEUTICALS, INC. ("Assignee"), the receipt and sufficiency of which is
hereby acknowledged, pursuant to the terms of that certain Technology Purchase
Agreement, dated as of July 16, 1999 ("Technology Purchase Agreement"), by and
between Seller and Assignee, the closing of the transaction contemplated thereby
held on the date hereof, hereby assigns, grants, conveys, sells, transfers and
delivers to Assignee all of his respective rights, title and interest in and to
the Process (as such term is defined in the Technology Purchase Agreement and as
identified and described more particularly on Schedule A thereto), including,
without limitation:
(i) all rights owned, held or enjoyed by the Seller relating to or
connected with the research, development and application of the Process by the
Seller in the United States and worldwide. Such rights shall include, but not be
limited to, the complete underlying dossier and supporting documentation,
studies and tests, formulations, extraction methodologies and technical
processes; (ii) copies of all books and records of the Seller relating to
studies, trade secrets, technical information, development of the Process; (iii)
any and all other property rights of the Seller, of any kind, character and
description, whether tangible or intangible, which are appurtenant to the
ownership of, including but not limited to all information and records acquired
for, used in, or in any way related to the developing, testing and manufacturing
of by the Seller.
To have and to hold the same unto Assignee and its assigns forever.
The Technology Purchase Agreement and all of the terms, conditions,
representations, warranties and covenants therein and the schedules and exhibits
thereto, are incorporated into this General Assignment by reference as if same
were set forth herein.
Any provision of this assignment which may be unenforceable or invalid under any
law shall be ineffective to the extent of such unenforceability or invalidity
without affecting the enforceability or validity of any other provision hereof.
IN WITNESS WHEREOF, Seller has caused these presents to be signed in
his name on this 16th day of July, 1999.
/s/ XX Xxxxxxxxx
----------------
X.X. XXXXXXXXX
