EXHIBIT 3.10
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): June 23, 2016
NATURALNANO, INC. |
(Exact name of Registrant as specified in its charter) |
Nevada | 000-49901 | 87-0646435 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
Registrant's telephone number, including area code: (727) 393-3382
13613 Gulf Boulevard
Madeira Beach, Florida 33738
(Address of principal executive offices)
763 Linden Avenue
Rochester, New York 14625
(Former Address)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
This Amendment on Form 8-K/A to the Current Report on Form 8-K for NaturalNano, Inc. restates and amends in its entirety the Current Report on Form 8-K filed with the Securities and Exchange Commission on June 29, 2016, for the purpose of (i) updating and clarifying the previously filed information; (ii) providing additional information, including reporting certain actions which have been taken since such filing; and (iii) filing certain exhibits, including certain documents referred to in the June 29, 2016 Current Report on Form 8-K and in this Amendment.
Item 1.01 Entry into a Material Definitive Agreement.
Acquisition of Omni Shrimp, Inc. as Wholly-owned Subsidiary
NaturalNano, Inc., (OTCPK: NNAN) announced that on June 23, 2016 (the "Effective Date"), it entered into a Share Exchange Agreement (the "Exchange Agreement") with all of the shareholders of Omni Shrimp, Inc., a Florida corporation ("Omni"), (see "About Omni Shrimp" below), pursuant to which the shareholders of Omni exchanged with the Company all of the outstanding shares of stock of Omni, and Omni thereupon became a wholly owned subsidiary of the Company. In consideration for the exchange of the Omni shares, the Company issued an aggregate of 28,500 shares of a newly created Series E Preferred Stock of the Company (the "Series E Preferred Stock") to those shareholders.
As a result of their ownership of the Series E Preferred Stock, those former Omni shareholders acquired the right to vote, in the aggregate, 95% of the voting control of the Company. The Series E Preferred Stock is also convertible into common stock which, in the aggregate, would represent up to 95% of the outstanding common stock after the conversion. Additional information about the Series E Preferred Stock is provided in Item 5.03 below.
In addition, on the Effective Date, the holders of all of the Company's outstanding Series B and Series D Preferred Stock, including James Wemett, (who has been a director of the Company and was the only officer and a principal shareholder of the Company prior to the Exchange Transaction on the Effective Date), as the holder of the Series D shares, surrendered those shares to the Company.
Transfer of Former Lines of Business
Subsequent to the closing of the Exchange Transaction pursuant to which Omni became a wholly-owned subsidiary of the Company, the Company entered into an Asset Purchase Agreement, with James Wemett, who had been the President and CEO of the Company until the closing of the Exchange Transaction and NaturalNano Corp., a New York corporation wholly-owned by Mr. Wemett ("Transferee"), pursuant to which the Transferee acquired all right, title and interest to those specific business activities of the Company which the Company had been conducting immediately prior to the closing of the Exchange Transaction, specifically, (i) developing and commercializing material additives based on a technology utilizing halloysite nanotubes, which line of business the Company had been engaged in for more than three years prior to the Effective Date, and (ii) reselling Ebola personal protective equipment and ancillary supplies. These business activities generated revenues for the Company, which revenues increased from $125,638 in 2012 to $368,066 in 2015.
In connection with the transaction contemplated by the Asset Purchase Agreement, Mr. Wemett waived all accumulated compensation due to him from the Company, the Transferee assumed certain liabilities relating to those transferred business activities, the Company and Mr. Wemett exchanged releases, and the Company issued to Mr. Wemett a six year divisible Warrant with cashless exercise rights to purchase up to 2,000,000 shares of the Company's common stock at a purchase price of $0.05 per share.
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About Omni Shrimp, Inc.
Omni Shrimp, Inc., located in Madeira Beach, Florida on the Gulf of Mexico, is a fast growing seller of wild American shrimp. It is a wholesaler of locally caught shrimp, predominantly the highly popular Key West pink variety, to large distributors in the US, who then resell the product to grocery store chains, restaurants and other retail stores in the Florida, Boston and New York markets.
About NaturalNano, Inc.
Until the closing of its acquisition of Omni and the subsequent disposition of its older business lines and related assets, as reported above, NaturalNano, Inc., was located in Rochester, New York. Until the closing of the transactions contemplated by the Asset Purchase Agreement with the Transferee, the Company had been engaged in the development and commercialization of material additives based on proprietary nanomaterial technology utilizing Halloysite Nanotubes (HNTs). While engaged in that line of business, the company provided industry with additives designed to improve the processing characteristics and mechanical properties of engineering thermoplastics, and additives designed to optimize the release of active agents such as vitamins and fragrance in cosmetic products. In 2014 the Company had also entered into an additional line of business engaged in the sale of Ebola personal protection gear and supplies; the Company was also engaged in this line of business through the closing of the transactions contemplated by the Asset Purchase Agreement.
As set forth above, after completing its acquisition of Omni Shrimp, Inc. as a wholly-owned subsidiary, the Company entered into the Asset Purchase Agreement. With the consummation of the transactions contemplated by the Asset Purchase Agreement, the Company has exited the foregoing two older lines of business, while maintaining its new line of business as a seller of wild American shrimp.
Relocation of Offices
After the closing of the Exchange Transaction, which resulted in the Company's entry, through its wholly owned subsidiary, of a new line of business, and the subsequent disposition of the Company's older lines of business, the Company has relocated its principal offices to the Omni headquarters at 13613 Gulf Boulevard, Madeira Beach, Florida 33738.
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Item 2.01 Completion of Acquisition or Disposition of Assets.
As reported in Item 1.01 above, on June 23, 2016, the Company acquired all of the shares of Omni Shrimp, Inc. from the shareholders of Omni. As a result Omni became a wholly-owned subsidiary of the Company.
As also reported in Item 1.01 above, after the acquisition of Omni the Company transferred all right, title and interest to those specific business activities of the Company which the Company had been conducting immediately prior to the closing of the Exchange Transaction earlier on that date to the Transferee, a corporation entity wholly-owned by James Wemett, who had been the President and CEO of the Company until the closing of the Exchange Transaction and who, at that time, was still a director of the Company.
The information in Item 1.01 and other items of this Current Report are incorporated herein by reference.
Item 3.02 Unregistered Sales of Equity Securities.
As reported in Item 1.01 above, on the Effective Date, the Company issued an aggregate of 28,500 shares of its Series E Preferred Stock to three entities, which had been the shareholders of Omin, in exchange for all of the outstanding shares of Omni owned by those Omni shareholders. Each of those entities, by virtue of their respective beneficial owners, is an accredited investor. One of those entities is wholly-owned by Colm Wrynn. Another one of those entities is wholly-owned by Daniel Stelcer. As of the date of filing this Current Report on Form 8-K/A, Mr. and Mr. Stelcer are directors and officers of the Company. Additional information about Messrs. Wrynn and Stelcer are in the Schedule 14f-1 filed by the Company on June 28 , 2016 . Additional information about the Series E Preferred Stock is provided in Item 5.03 below.
As reported in Item 1.01 above, the Company issued to James Wemett a six year divisible Warrant with cashless exercise to purchase up to 2,000,000 shares of the Company's common stock at a purchase price of $0.05 per share. The text of the Warrant issued to Mr. Wemett is attached as an exhibit to this Current Report on Form 8-K/A.
The information in Item 1.01 and other items of this Current Report are incorporated herein by reference.
Item 5.01 Change of Control of Registrant.
As reported in Item 1.01 above, as a result of the issuance of the 28,500 shares of the Company's Series E Preferred Stock to the former shareholders of Omni, those shareholders acquired the right to vote 95% of the voting control of the Company. The Series E Preferred Stock is also convertible into common stock which, in the aggregate, would represent up to 95% of the outstanding common stock after the conversion. Additional information about the Series E Preferred Stock is provided in Item 5.03 below.
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As reported in Item 5.02 below, Isaac Onn and Alex Ruckdaschel resigned as directors of the Company effective as of June 15, 2016, and Colm Wrynn was elected to fill one of the Board vacancies on June 21, 2016. Mr. Wrynn is the sole principal of one of the former Omni shareholders which, as of the Effective Date, acquired 9,500 shares of Series E Preferred Stock.
As also reported in Item 5.02 below, James Wemett resigned as a director effective as of ten (10) days after the delivery to the shareholders of the Company of the Information Statement pursuant to Rule 14f-1, and Dan Stelcer, the sole principal of one of the former Omni shareholders which holds 9,500 shares of Series E Preferred Stock, was elected to fill the vacancy when Mr. Wemett's resignation becomes effective.
Mr. Wemett's resignation as a director and Mr. Stelcer's election as a director are now effective.
As a result of the changes in the directors of the Company noted above and the changes in the officers of the Company reported in Item 5.02 below, each of Mr. Wrynn and Mr. Stelcer are now officers and directors of the Company and each, through an entity of which each is the sole beneficial owner, is the owner of voting control of 31.67% of the votes eligible to be cast on issues presented to the shareholders of the Company and, by virtue of the conversion provisions of the Series E Preferred Stock, the beneficial owner of at least that percentage of shares of Common Stock.
The information in Items 1.01 and 5.02 and other items of this Current Report are incorporated herein by reference.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
As disclosed in an Information Statement pursuant to Rule 14f 1 filed on June 28, 2016, two of the Company's directors, Isaac Onn and Alex Ruckdaschel, resigned from those positions on June 15, 2016. Neither resignation was the result of any disagreement with the management of the Company.
On June 21, 2016, to fill one of the Board vacancies, Colm Wrynn was elected as a director of the Company.
Effective as of the closing of the Exchange Transaction on the Effective Date, James Wemett, who had been the only officer of the Company, resigned as an officer of the Company, and Colm Wrynn, the President of Omni, became the President and Chief Executive Officer of the Company, and Daniel Stelcer, a Vice President of Omni, became the Secretary and Chief Operating Officer of the Company. Each of Mr. Wrynn and Mr. Stelcer, respectively, is the sole beneficial owner of one of the former Omni shareholders, each of which now owns 9,500 shares of Series E Preferred Stock. Mr. Wemett also resigned as a director of the Company, effective as of ten (10) days after the delivery to the shareholders of the Company of the Information Statement pursuant to Rule 14f-1, and Mr. Stelcer was elected to fill the vacancy when Mr. Wemett's resignation becomes effective. That Information Statement was delivered to the shareholders on July 1, 2016, and, accordingly Mr. Wemett's resignation and Mr. Stelcer's election are now effective. Mr. Wemett's resignation was not the result of any disagreement with the management of the Company.
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In connection with the transaction contemplated by the Asset Purchase Agreement, Mr. Wemett waived all accumulated compensation due to him from the Company, the Transferee assumed certain liabilities relating to those transferred business activities, the Company and Mr. Wemett exchanged releases, and the Company issued to Mr. Wemett a six year divisible Warrant with cashless exercise to purchase up to 2,000,000 shares of the Company's common stock at a purchase price of $0.05 per share.
Biographical information relating to Mr. Wrynn and Mr. Stelcer were included in the Schedule 14f-1 filed by the Company with SEC on June 28, 2016.
The information in Item 1.01 and other items of this Current Report are incorporated herein by reference.
Item 5.03 Amendments to Articles of Incorporation or Bylaws.
Series E Preferred Stock
On June 22, 2016, the Company filed the Certificate of Designation of Preferences, Rights and Limitations of Series E Preferred Stock (the "Certificate of Designation"), with the Secretary of State of Nevada setting forth the rights and preferences of the Series E Preferred Stock. All of the authorized shares of Series E Preferred Stock were issued on June 23, 2016 (the "Effective Date").
A summary of material provisions of the Series E Preferred Stock as set forth in the Certificate of Designation is set forth below.
Designation, Amount and Par Value
The number of shares designated and authorized as Series E Preferred Stock is 28,500. Each share of Series E Preferred Stock has a par value of $0.001 per share and a stated value of $35.00 per share ("Stated Value").
Dividends
Holders of the Series E Preferred Stock will be entitled to receive cumulative dividends at the rate of 5% per annum of the Stated Value, payable quarterly commencing September 30, 2016. Such dividends shall be paid in duly authorized, fully paid, and non-assessable shares of Common Stock. The dividend share amount shall be valued at the volume weighted average price of the Common Stock for the ten consecutive trading days ending on the trading date that is immediately prior to the dividend payment date. Additionally, holders shall be entitled to receive dividends on shares of Series E Preferred Stock on an as if converted basis in the same form as dividends actually paid on shares of Common Stock if and when such dividends are paid. Dividends shall cease to accrue with respect to any shares of Series E Preferred Stock that is converted.
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Conversion and Dilution
Each share of Series E Preferred Stock is convertible into shares of Common Stock according to a formula, which is based, depending on the date of conversion, on the actual issued and outstanding shares or the fully diluted shares as of the date of conversion (excluding shares outstanding then by reason of the conversion of any shares of Series E Preferred Stock or of the issuance of dividends on Series E Preferred Stock and subject to certain other adjustments as noted below). In general, conversion of all of the shares of the Series E Preferred Stock would represent up to 95% of the outstanding Common Stock after the conversion.
From the Effective Date until (but not including) the date which is 180 days before the second anniversary of the Effective Date, the determination of the number of shares of Common Stock outstanding is based on the actual number of outstanding shares as of the date of conversion. Thereafter and through the second anniversary of the Effective Date, the determination will be based on the outstanding shares on a fully diluted basis (excluding shares issuable on conversion of Series E Preferred Stock) on the conversion date. After the second anniversary of the Effective Date, such determination will be based on the outstanding on a fully diluted basis as of the second anniversary of the Effective Date (excluding shares issuable on conversion of Series E Preferred Stock).
As applied to the current outstanding shares as of the Effective Date, each share of Series E Preferred Stock would convert into approximately 1,940 shares of Common Stock. As the outstanding shares increases, that number will increase.
The Company will reserve and keep available , out of its authorized unissued shares of Common Stock, sufficient shares for the sole purpose of issuance of shares upon conversion of the Series E Preferred Stock and payment of dividends on the Series E Preferred Stock. No fractional shares shall be issued upon conversion of the Series E Preferred Stock.
Liquidation
Holders of Series E Preferred Stock are not entitled to receive any distributions in the event of any liquidation, dissolution or winding up of the Company, either voluntary or involuntary.
Voting
For so long as any Series E Preferred Stock is outstanding, each share of Series E Preferred Stock shall have the right to cast 1/300 of one (1) percent of the total votes eligible to be cast, so that if all 28,500 shares of Series E Preferred Stock are outstanding, the Series E Preferred Stock shall be entitled to an aggregate 95% of the total eligible votes on all matters, and the holders of the Common Stock and any other shares shall be entitled to a proportional share of the remaining 5%.
The foregoing summary of the provisions of the Series E Preferred Stock does not purport to be complete and is qualified in its entirety by reference to the text of the Certificate of Designation, which is attached to this Current Report on Form 8-K/A, and is expressly made subject to the more complete information set forth therein.
Cancellation of Series B, C and D Preferred Stock
On the Effective Date, the holders of all of the Company's outstanding Series B and Series D Preferred Stock, including James Wemett (who was then a director of the Company and who, prior to the closing of the Exchange Transaction on the Effective Date, was the only officer and a principal shareholder of the Company), as the holder of the Series D shares, surrendered those shares to the Company.
After such surrender, there are no outstanding shares of the Company's Series B, Series C or Series D Preferred Stock. By resolution of the Board of Directors, on July 6, 2016, the Company filed with the office of the Secretary of State of Nevada a separate Certificate of Withdrawal of the Certificate of Designations of Preferences, Rights and Limitations for each of those Series. Copies of these Certificates of Withdrawal are attached as exhibits to this Current Report on Form 8-K/A.
The information in Item 1.01 and other items of this Current Report are incorporated herein by reference.
The statements made herein referencing the Exchange Agreement, the Asset Purchase Agreement,, the Warrant issued to Mr. Wemett, and the Series E Preferred Stock are qualified in their entirety by reference to the text of said documents, each of which is attached as an Exhibit to this Current Report on Form 8-K/A, and are expressly made subject to the more complete information set forth therein.
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Item 9.01. Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired. Financial Statements required by this item will be filed by amendment to this report no later than 71 calendar days after the date this Current Report must be filed.
(b) Pro Forma Financial Information (Unaudited). Pro Forma Financial Information required by this item will be filed by amendment to this report no later than 71 calendar days after the date this Current Report must be filed.
(c) Exhibits
Exhibit No. | Description | |
3.10 | Amended and Restated Bylaws | |
3.11 | Certificate of Designation of Preferences, Rights and Limitations of Series E Preferred Stock | |
3.12 | Certificate of Withdrawal of Certificate of Designation of Preferences, Rights and Limitations of Series B Preferred Stock | |
3.13 |
| Certificate of Withdrawal of Certificate of Designation of Preferences, Rights and Limitations of Series C Preferred Stock |
3.14 |
| Certificate of Withdrawal of Certificate of Designations of Preferences, Rights and Limitations of Series D Preferred Stock |
10.192 | Share Exchange Agreement among Omni Shrimp, Inc., the Shareholders of Omni and Natural Nano Inc. dated as of June 23, 2016 | |
10.193 |
| Surrender and Amendment Agreement dated as of June 23, 2016 among NaturalNano Inc., the Surrendering Holders and the Amending Holders |
10.194 |
| Asset Purchase Agreement dated as of June 23, 2016 among NaturalNano, Inc., a Nevada corporation, NaturalNano Corp., a New York corporation, and James Wemett. |
10.195 |
| Bill of Sale dated as of June 23, 2016 among NaturalNano, Inc., NaturalNano Corp., and James Wemett |
10.196 | Warrant dated as of June 23, 2016 issued by NaturalNano, Inc. |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
NATURALNANO INC. | |||
Dated: July 21, 2016 | By: | /s/ Colm Wrynn | |
| Name: | Colm Wrynn | ||
| Title: | Chief Executive Officer | ||
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EXHIBIT 3.10
EXHIBIT 3.11
EXHIBIT 3.12
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EXHIBIT 3.13
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EXHIBIT 3.14
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EXHIBIT 10.192
SHARE EXCHANGE AGREEMENT
by and among
Omni Shrimp, Inc. ("Omni")
and
the Shareholders of Omni,
on the one hand;
and
NaturalNano Inc. ("Pubco"),
on the other hand
June 23, 2016
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SHARE EXCHANGE AGREEMENT
This Share Exchange Agreement, dated as of June 23, 2016 (this "Agreement"), is made and entered into by and among Omni Shrimp, Inc., a Florida corporation ("Omni"), and the shareholders of Omni (each a "Shareholder" and collectively, "Shareholders"), on the one hand; and NaturalNano, Inc., a Nevada corporation ("Pubco"), on the other hand.
RECITALS
WHEREAS, on June 23, 2016, the Board of Directors of Pubco has adopted resolutions approving Pubco's acquisition of all the equity interests of Omni held by the Shareholders (the "Acquisition") by means of a share exchange with the Shareholders, upon the terms and conditions hereinafter set forth in this Agreement;
WHEREAS, the Shareholders own all of the equity interests, consisting of 300 shares of common stock of Omni (the "Omni Shares" or the "Omni Equity Interest");
WHEREAS, upon consummation of the transactions contemplated by this Agreement, Omni will become a 100% wholly-owned subsidiary of Pubco; and
WHEREAS, it is intended that the terms and conditions of this Agreement comply in all respects with Section 368(a)(1)(B) and/or Section 351 of the Internal Revenue Code of 1986, as amended (the "Code") and the regulations corresponding thereto, so that the Acquisition shall qualify as a tax free reorganization under the Code, and that this share exchange transaction shall qualify as a transaction in securities exempt from registration or qualification under the Securities Act of 1933, as amended and in effect on the date of this Agreement.
AGREEMENT
NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as follows:
ARTICLE 1
THE ACQUISITION
1.1 The Acquisition. Upon the terms and subject to the conditions hereof, at the Closing (as hereinafter defined) the parties shall do the following:
(a) The Shareholders will sell, convey, assign, transfer and deliver to Pubco certificates representing the Omni Equity Interest held by the Shareholders, which in the aggregate shall constitute 100% of the issued and outstanding equity interests of Omni on a fully-diluted basis, accompanied by properly executed and authenticated stock powers or instrument of like tenor.
(b) As consideration for the acquisition of the Omni Equity Interest, Pubco shall issue an aggregate of twenty-eight thousand five hundred (28,500) newly and duly issued, fully paid and non-assessable shares (the "Issuable Shares") of Pubco Series E Preferred Stock, par value $0.001 (the "Pubco Preferred Stock") described in the Certificate of Designation attached hereto as Exhibit A (the "Certificate of Designation") convertible into Pubco common stock, par value $.001 ("Pubco Common Stock"). At the Closing, the outstanding Omni Equity Interests beneficially owned by the Shareholders shall be contributed and transferred to Pubco and Pubco shall issue the Issuable Shares. The Issuable Shares shall be convertible into approximately 95% of the outstanding shares of Pubco Common Stock immediately subsequent to the Closing, subject to adjustment as described in the Certificate of Designation.
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1.2 Closing Date. The closing of the Acquisition (the "Closing") shall take place no later than two business days after all the conditions provided for in this Agreement have been satisfied. Such date is referred to herein as the "Closing Date."
1.3 Surrender and Exchange of Certificates.
(a) At the Closing, Pubco shall register the Issuable Shares in the name of the Shareholders in the amounts set forth on Schedule 1.3(a) hereto.
(b) Promptly after the Closing and upon surrender of a certificate or certificates representing the Omni Equity Interest outstanding immediately prior to the Closing (or an affidavit and indemnification in form reasonably acceptable to counsel for Pubco stating that a Shareholder has lost his certificate or certificates or that such have been destroyed), Pubco shall issue to such Shareholder so surrendering such certificate or certificates, a certificate or certificates registered in the name of the Shareholder representing the number of shares of Pubco Preferred Stock that such Shareholder shall be entitled to receive. Until the certificate, certificates or affidavit is or are surrendered as contemplated by this Section 1.3(b), each certificate or affidavit that immediately prior to the Closing represented any outstanding Omni Equity Interest shall be deemed at and after the Closing to represent only the right to receive upon surrender as aforesaid the Pubco Common Stock.
1.4 Taking of Necessary Action; Further Action. If, at any time after the Closing, any further action is necessary or desirable to carry out the purposes of this Agreement, the Shareholders, Omni, and/or Pubco (as applicable) shall take all such lawful and necessary action.
1.5 Certain Definitions. The following capitalized terms as used in this Agreement shall have the respective definitions:
"Action" shall have the meaning ascribed to such term in Section 2.9.
"Affiliate" means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
"Best Knowledge" means the actual knowledge, after due investigation and inquiry, of the officers, directors or advisors of the referenced party.
"Business" means Pubco's current business activities of (i) developing and commercializing material additives based on a technology utilizing halloysite nanotubes and (ii) reselling Ebola personal protective equipment and ancillary supplies.
"Certificate of Designation" shall mean Pubco's Certificate of Designation of Series E Preferred Stock, par value $0.001, annexed hereto as an Exhibit.
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"Charter Documents" shall have the meaning ascribed to such term in Section 4.1.
"Claim Notice" shall have the meaning ascribed to such term in Section 5.3(a).
"Closing" shall have the meaning ascribed to such term in Section 1.2.
"Common Stock Equivalents" means any securities of Pubco or of any subsidiary of Pubco which would entitle the holder thereof to acquire at any time Pubco Common Stock, including, without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive Pubco Common Stock.
"Contract" means any contract, lease, license, indenture, note, bond, agreement, permit, concession, franchise or other instrument.
"ERISA" means the Employee Retirement Income Security Act of 1974 or any successor law and the regulations and rules issued pursuant to that act or any successor law.
"Evaluation Date" shall have the meaning ascribed to such term in Section 4.16.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Agent" shall have the meaning ascribed to such term in Section 1.3.
"Financial Statements" shall have the meaning ascribed to such term in Section 4.7.
"FINRA" means the Financial Industry Regulatory Authority.
"GAAP" means generally accepted accounting principles in the United States.
"Indemnified Party" shall have the meaning ascribed to such term in Section 5.3.
"Indemnifying Party" shall have the meaning ascribed to such term in Section 5.3.
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"Intellectual Property" shall have the meaning ascribed to such term in Section 2.8.
"Intellectual Property Rights" shall have the meaning ascribed to such term in Section 2.8.
"Issuable Shares" shall have the meaning ascribed to such term in Section 1.1(b).
"Knowledge" means the actual knowledge of the officers, directors or advisors of the referenced party.
"Law" means any federal, state, local law, statute, code, ordinance, rule or regulation.
"Liabilities" means any direct or indirect indebtedness, guaranty, endorsement, claim, loss, damage, deficiency, cost, expense, obligation or responsibility, fixed or unfixed, known or unknown, asserted choate or inchoate, liquidated or unliquidated, secured or unsecured.
"Liens" means a lien, adverse claim, charge, security interest, encumbrance, mortgage, hypothecation, easement, option, right of first refusal, preemptive right or other restriction or encumbrance of any nature whatsoever, including without limitation proxies, options or voting agreements.
"Material Adverse Effect" means an adverse change or effect on either referenced party or the combined entity resulting from the consummation of the transaction contemplated by this Agreement, or on the financial condition, results of operations or business, before or after the consummation of the transaction contemplated in this Agreement, which individually or as a whole is or would be considered material.
"Material Conflict" shall have the meaning ascribed to such term in Section 5.3(a).
"Money Laundering Laws" shall have the meaning ascribed to such term in Section 2.25.
"Notice Period" shall have the meaning ascribed to such term in Section 5.3(a).
"Omni Accounting Date" shall have the meaning ascribed to such term in Section 2.7.
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"Omni Financial Statements" shall have the meaning ascribed to such term in Section 2.7.
"Person" means any individual, corporation, partnership, joint venture, trust, business association, organization, governmental authority or other entity.
"Pubco Common Stock" shall have the meaning ascribed to such term in Section 1.1(b).
"Pubco Intellectual Property Rights" shall have the meaning ascribed to such term in Section 4.14.
"Pubco Preferred Stock" shall have the meaning ascribed to such term in Section 1.1(b).
"Registration Expenses" shall have the meaning ascribed to such term in Section 6.15.
"Required Approvals" shall have the meaning ascribed to such term in Section 4.4.
"Securities Act" means the Securities Act of 1933, as amended.
"SEC" means the United States Securities & Exchange Commission.
"SEC Reports" shall have the meaning ascribed to such term in Section 4.7.
"Selling Expenses" shall have the meaning ascribed to such term in Section 6.15.
"Tax Returns" means all federal, state, local and foreign returns, estimates, information statements and reports relating to Taxes.
"Tax" or "Taxes" means any and all applicable central, federal, provincial, state, local, municipal and foreign taxes, including, without limitation, gross receipts, income, profits, sales, use, occupation, value added, ad valorem, transfer, franchise, withholding, payroll, recapture, employment, excise and property taxes, assessments, governmental charges and duties together with all interest, penalties and additions imposed with respect to any such amounts and any obligations under any agreements or arrangements with any other person with respect to any such amounts and including any liability of a predecessor entity for any such amounts.
"Trading Day" means a day on which the principal Trading Market is open for trading.
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"Trading Market" means the following markets or exchanges on which Pubco Common Stock is listed or quoted for trading on the date in question: the NYSE MKT LLC, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, the OTC QB, OTC Pink Marketplace operated or maintained by the OTC Markets Group, Inc. or the OTC Bulletin Board.
"Transaction" means the transactions contemplated by this Agreement, including the share exchange.
"Transaction Documents" means this Agreement, the agreements referred to in Section 6.12 and 6.13, the Certificate of Designation and the Issuable Shares.
"Underlying Shares" means the common stock of Pubco issuable upon conversion of the Issuable Shares.
"United States" means and includes the United States of America, its territories and possessions, any State of the United States, and the District of Columbia.
1.6 Tax Consequences. It is intended that the terms and conditions of this Agreement comply in all respects with Section 368(a)(1)(B) and/or Section 351 of the Code and the regulations corresponding thereto, so that the Acquisition shall qualify as a tax-free reorganization under the Code. Each party hereto is required to obtain his or its own tax advice with respect to the tax nature of the Transaction.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF OMNI
Except as otherwise disclosed herein or in the disclosure schedule delivered by Omni to Pubco at the time of execution of this Agreement, Omni and each Stockholder, jointly and severally, hereby represent and warrant to Pubco as of the date hereof and as of the Closing Date (unless otherwise indicated), as follows:
2.1 Organization. Omni has been duly incorporated, validly exists as a corporation, and is in good standing under the laws of its jurisdiction of incorporation, and has the requisite power to carry on its business as now conducted and to own and operate its assets as now owned and operated by it. Set forth on Schedule 2.1 of the disclosure schedules is a list of those jurisdictions in which Omni presently conducts its business, owns, holds and operates its properties and assets. The Company is duly qualified or authorized to do business as a foreign company and is in good standing under the laws of each jurisdiction in which it owns or leases property and each other jurisdiction in which the conduct of its business or the ownership of its assets requires such qualification or authorization (which jurisdictions are set forth on Schedule 2.1).
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2.2 Capitalization. The authorized capital stock of Omni consists of (i) 300 shares of common stock, no par value per share , and (ii) no shares of Preferred Stock, of which at the Closing, 300 shares of common stock shall be issued and outstanding. All of the issued and outstanding shares of capital stock of Omni, as of the Closing, are duly authorized, validly issued, fully paid, non-assessable and free of preemptive rights and any other Liens, and were issued in compliance with the Securities Act and any other applicable Law. There are no voting trusts or any other agreements or understandings with respect to the voting of Omni's capital stock. Except for the Omni Shares, no other class of capital stock or other security of Omni is authorized, issued, reserved for issuance or outstanding. There are no authorized or outstanding options, warrants, equity securities, calls, rights, commitments or agreements of any character by which Omni or the Shareholder is obligated to issue, deliver or sell, or cause to be issued, delivered or sold, any shares of capital stock or other securities of Omni. There are no outstanding contractual obligations (contingent or otherwise) of Omni to retire, repurchase, redeem or otherwise acquire any outstanding shares of capital stock of, or other ownership interests in, Omni. The delivery of the Omni Shares pursuant to this Agreement will vest in Pubco good and valid title to all of the Omni Equity Interests on a fully diluted basis free of all Liens. Upon Closing, Omni shall become a wholly owned subsidiary of Pubco.
2.3 Subsidiaries. Omni has no direct or indirect subsidiaries and does not own any equity or debt securities or other ownership interest in any other Person, nor is it a party to any Contract to acquire any such securities or other ownership interest.
2.4 Certain Corporate Matters. Omni is duly qualified to do business as a corporation and is in good standing under the laws of the state of Florida, and in each other jurisdiction in which the ownership of its property or the conduct of its business requires it to be so qualified, except where the failure to be so qualified would not have a Material Adverse Effect on Omni's financial condition, results of operations or business. Omni has full corporate power and authority and all authorizations, licenses and permits necessary to carry on the business in which it is engaged and to own and use the properties owned and used by it.
2.5 Authority Relative to this Agreement. Omni has the requisite power and authority to enter into this Agreement and any other documents and agreements to carry out its respective obligations hereunder. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby by Omni have been duly authorized by Omni's Board of Directors and its shareholders and no other actions on the part of Omni are necessary to authorize this Agreement or the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by Omni and constitutes a valid and binding agreement, enforceable against Omni in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency or other similar laws affecting the enforcement of creditors' rights generally or by general principles of equity.
2.6 Consents and Approvals; No Violations. Except for the filing of the Current Report on Form 8-K, and Schedule 14f-1no filing with, and no permit, authorization, consent or approval of, any third party, public body or authority is necessary for the consummation by Omni of the transactions contemplated by this Agreement. Neither the execution and delivery of this Agreement by Omni nor the consummation by Omni of the transactions contemplated hereby, nor compliance by them with any of the provisions hereof, will (a) conflict with or result in any breach of any provisions of the charter or bylaws of Omni, (b) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, cancellation or acceleration) or result in the creation of any Lien under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, license, Contract, agreement or other instrument or obligation to which Omni is a party or by which any of Omni's properties or assets may be bound, or (c) violate any order, writ, injunction, decree, statute, rule or regulation applicable to Omni or any of its properties or assets.
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2.7 Books and Records and Financial Statements. Omni has delivered to Pubco an unaudited balance sheet, and the related unaudited statements of income or operations and cash flows (the "Omni Financial Statements") for the period ended March 31, 2016 (the "Omni Accounting Date"). The Omni Financial Statements fairly present in all material respects the financial condition and operating results of Omni as of the dates, and for the periods, indicated therein, subject to normal year-end audit adjustments. Except as set forth in the Omni Financial Statements, Omni has no material liabilities or obligations, contingent or otherwise, other than (i) liabilities incurred in the ordinary course of business subsequent to March 31, 2016; (ii) obligations under contracts and commitments incurred in the ordinary course of business; which, in all such cases, individually and in the aggregate would not reasonably be expected to have a Material Adverse Effect. All receivables reflected in the Omni Financial Statements are valid and have arisen only from bona fide, arms-length transactions entered into in the ordinary course of business consistent with past practices, and are not subject to defease, offset or any counterclaim and are good and collectible.
2.8 Intellectual Property. Omni owns, is licensed or otherwise possesses legally enforceable rights to use, license and exploit all issued patents, copyrights, trademarks, service marks, trade names, trade secrets, and registered domain names and all applications for registration therefor (collectively, the "Intellectual Property Rights") and all computer programs and other computer software, databases, know-how, proprietary technology, formulae, and development tools, together with all goodwill related to any of the foregoing (collectively, the "Intellectual Property"), free and clear of all Liens, in each case as is necessary to conduct its business as presently conducted, the absence of which would be considered reasonably likely to result in a Material Adverse Effect. No claim by any third party contesting the validity, enforceability, use or ownership of any of the Intellectual Property has been made or is currently outstanding, and there exists no basis for such claim. Omni has not received any notices of and has no Knowledge of any facts that indicate a likelihood of any infringement or misappropriation by, or conflict with, any Person with respect to any of the Intellectual Property. The Intellectual Property has not infringed, misappropriated or otherwise conflicted with any proprietary rights of any third parties and Omni has no Knowledge of any infringement, misappropriation or conflict that will occur as a result of the continued operation of its business consistent with the manner that it has heretofore operated its business. No third party is infringing, misappropriating or diluting any intellectual property rights of the Company.
2.9 Litigation. There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the Knowledge of Omni, threatened against or affecting Omni or any of its properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an "Action") which (i) adversely affects or challenges the legality, validity or enforceability of this Agreement, or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Neither Omni nor any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. There has not been, and to the Knowledge of Omni, there is not pending or contemplated, any investigation by the SEC involving Omni or any current or former director or officer of Omni.
2.10 Legal Compliance. To the Best Knowledge of Omni, no claim has been filed against Omni alleging a violation of any applicable Laws. Omni has complied with and is in compliance with all Laws applicable to it. Omni holds all of the material permits, licenses, certificates or other authorizations of foreign, federal, state or local governmental agencies required for the conduct of Omni's business as presently conducted. No loss, non-renewal, suspension, modification or expiration of, nor any noncompliance with, any of such permits, licenses or other authorizations is pending or, to Omni's Knowledge, threatened.
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2.11 Contracts. Except as disclosed in Schedule 2.11 of the disclosure schedules hereto, there are no Contracts that are material to the business, properties, assets, condition (financial or otherwise), results of operations or prospects of Omni. Omni is not in violation of or in default under (nor does there exist any condition which upon the passage of time or the giving of notice would cause such a violation of or default under) any Contract to which Omni is a party or by which Omni or any of Omni's properties or assets are bound, except for violations or defaults that would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. Each of the Contracts disclosed in Schedule 2.11 are assets of Omni, and are now, and will be at Closing, in full force and effect in accordance with their respective terms. To the Knowledge of Omni, no other party to a Contract has breached, violated or defaulted under any Contract and no circumstance (including the transaction contemplated by this Agreement) exists that, with notice or lapse of time or both, would constitute a default by any party thereto.
2.12 Material Changes. Since the Omni Accounting Date: (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) Omni has not incurred any Liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice, and (B) Liabilities not required to be reflected in the Omni Financial Statements, (iii) Omni has not altered its method of accounting, (iv) Omni has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock, and (v) Omni has not issued any equity securities or convertible securities to any Person, including without limitation, any officer, director or Affiliate.
2.13 Labor Relations. No labor dispute exists or, to the Knowledge of Omni, is imminent with respect to any of the employees of Omni which could reasonably be expected to result in a Material Adverse Effect. None of Omni's employees is a member of a union that relates to such employee's relationship with Omni, and Omni is not a party to a collective bargaining agreement, and Omni believes that its relationships with its employees is good. No executive officer, to the Knowledge of Omni, is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third party, and the continued employment of each such executive officer does not subject Omni to any liability with respect to any of the foregoing matters. Omni is in compliance with all U.S. federal, state, local and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
2.14 Title to Assets. Omni owns no real property and has good and marketable title in all personal property owned by it, in each case free and clear of all Liens, except for Liens that do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by Omni and Liens for the payment of Taxes, the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under lease by Omni is held by Omni under valid, subsisting and enforceable leases with which Omni is in compliance. To the Knowledge of Omni, no other party to any such lease has breached, violated or defaulted under any lease and no circumstance (including the transaction contemplated by this Agreement) exists that, with notice or lapse of time or both, would constitute a default by any party thereto
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2.15 Transactions with Affiliates and Employees. None of the Affiliates, officers or directors of Omni and, to the Knowledge of Omni, none of the employees of Omni is presently a party to any transaction with Omni (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to the Knowledge of Omni, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner, in each case in excess of $100,000, other than for: (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of Omni and (iii) other employee benefits. All of such arrangements are as disclosed in Schedule 2.15 of the disclosure schedules hereto.
2.16 Business Records and Due Diligence. Omni has received and reviewed all of the Pubco materials and items set out infra in paragraph 4.32.
2.17 Certain Fees. No brokerage or finder's fees or commissions are or will be payable by Omni to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by this Agreement, except as set forth on Schedule 2.17 hereto.
2.18 Registration Rights. No Person has any right to cause Omni (or any successor) to effect the registration under the Securities Act of any securities of Omni (or any successor).
2.19 Tax Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, Omni has timely filed all necessary Tax Returns and has paid or accrued all Taxes shown as due thereon, and Omni has no Knowledge of a tax deficiency which has been asserted or threatened against Omni.
2.20 No General Solicitation. Neither Omni nor any person acting on behalf of Omni has offered or sold securities in connection herewith by any form of general solicitation or general advertising.
2.21 Foreign Corrupt Practices. Neither Omni, nor to the Knowledge of Omni, any agent or other person acting on behalf of Omni, has: (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by Omni (or made by any person acting on its behalf of which Omni is aware) which is in violation of law or (iv) violated in any material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended ("FCPA").
2.22 Obligations of Management. Each officer and key employee of Omni is currently devoting substantially all of his or her business time to the conduct of business of Omni. Omni is not aware that any officer or key employee of Omni is planning to work less than full time at Omni in the future. No officer or key employee is currently working or, to Omni's Knowledge, plans to work for a competitive enterprise, whether or not such officer or key employee is or will be compensated by such enterprise.
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2.23 Minute Books. The minute books of Omni annexed hereto as Schedule 2.23 contains a complete summary of all meetings and copies of any written consents in lieu of meetings of directors and stockholders of Omni since the time of Omni's incorporation.
2.24 Employee Benefits. Omni has not (nor for the two years preceding the date hereof has had) any plans which are subject to ERISA.
2.25 Money Laundering Laws. The operations of Omni are and have been conducted at all times in compliance with applicable financial record-keeping and reporting requirements of the money laundering statutes of all U.S. and non-U.S. jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental body (collectively, the "Money Laundering Laws") and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving Omni with respect to the Money Laundering Laws is pending or, to the knowledge of Omni, threatened.
2.26 Disclosure. The representations and warranties and statements of fact made by Omni in this Agreement, and all statements set forth in the certificates delivered by Omni at the Closing pursuant to this Agreement, are, as applicable, accurate, correct and complete and do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements and information contained herein not false or misleading. The copies of all documents furnished by Omni pursuant to the terms of this Agreement are complete and accurate copies of the original documents. The schedules, certificates, and any and all other statements and information, whether furnished in written or electronic form, to Pubco or its representatives by or on behalf of Omni in connection with this Agreement and the transactions contemplated hereby do not contain any material misstatement of fact or omit to state a material fact or any fact necessary to make the statements contained therein not misleading.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
Except as otherwise disclosed herein or in the disclosure schedule delivered by the Shareholders to Pubco at the time of execution of this Agreement, each Shareholder for himself or herself hereby represents and warrants to Pubco as of the date hereof and as of the Closing Date (unless otherwise indicated), as follows:
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3.1 Ownership of the Omni Equity Interest. Each Shareholder owns, beneficially and of record, good and marketable title to the amount of the Omni Equity Interest set forth opposite such Shareholder's name in Schedule 3.1 hereto, free and clear of all Liens. The Shareholder represent that he has no right or claims whatsoever to any equity interests of Omni, other than the Omni Equity Interest and does not have any options, warrants or any other instruments entitling him to exercise or purchase or convert into additional equity interests of Omni. At the Closing, the Shareholder will convey to Pubco good and marketable title to the Omni Equity Interests, free and clear of any Liens. No Shareholder is a party to any voting trust or other Contract with respect to the voting, redemption, sale, transfer or other disposition of the Omni Equity Interests.
None of the execution, delivery and performance by the Shareholder of this Agreement and each other agreement, document, instrument or certificate contemplated by this Agreement to be executed by such Shareholder the consummation of the transactions contemplated hereby or thereby, or compliance by such Shareholder with any of the provisions hereof or thereof will: (i) cause such Shareholder to breach any Law or order, judgment, decree or award that is applicable to such Shareholder; or (ii) conflict with or result in a breach or termination of any of the terms, conditions or provisions of, or constitute a default under, accelerate any oblations arising under, trigger any payment under, require any Consent under, or any notice under, or result in the creation of any Lien pursuant to, or otherwise adversely affect, in any respect, of any of the terms, conditions or provisions of any Contract to which such Shareholder is a party or by which such Shareholder (or such Shareholder's assets) may be bound. No consent, waiver, approval or authorization of, or declaration or filing with, or notification to, any Person (including any spousal consent or consent of the beneficiary of any trust) or governmental body is required on the part of such Shareholder in connection with the execution and delivery of this Agreement and each other agreement, document, instrument or certificate contemplated by this Agreement, or the compliance by such Shareholder with any of the provisions thereof, or the consummation of the transactions contemplated thereby.
3.2 Authority Relative to this Agreement. The Shareholder has all requisite power, authority and legal capacity to execute and deliver this Agreement and each other agreement, document, instrument or certificate contemplated by this Agreement to be executed by such Shareholder in connection with the consummation of the transactions contemplated by this Agreement, and to consummate the transactions and perform its obligations contemplated hereby and thereby. This Agreement has been duly and validly executed and delivered by the Shareholder and constitutes a valid and binding agreement of such person, enforceable against such Shareholder in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency or other similar laws affecting the enforcement of creditors' rights generally or by general principles of equity.
3.3 Acquisition of Restricted Securities for Investment. The Shareholder acknowledges that the Issuable Shares and Underlying Shares will not be registered pursuant to the Securities Act or any applicable state securities laws, that the Issuable Shares and Underlying Shares will be characterized as "restricted securities" under federal securities laws, and that under such laws and applicable regulations the Issuable Shares and Underlying Shares cannot be sold or otherwise disposed of without registration under the Securities Act or an exemption therefrom. In this regard, the Shareholder is familiar with Rule 144 promulgated under the Securities Act, as currently in effect, and understands the resale limitations imposed thereby and by the Securities Act. Further, the Shareholder acknowledges and agrees that:
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(a) The Shareholder is acquiring the Issuable Shares and Underlying Shares for investment, for such Shareholder's own account and not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and the Shareholder has no present intention of selling, granting any participation in, or otherwise distributing the same. The Shareholder further represents that he does not have any Contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participation to such person or to any third person, with respect to any of the Issuable Shares and Underlying Shares.
(b) The Shareholder understands that the Issuable Shares and Underlying Shares are not registered under the Securities Act on the ground that the sale and the issuance of securities hereunder is exempt from registration under the Securities Act pursuant to Section 4(a)(2) thereof, and that Pubco's reliance on such exemption is predicated on the Shareholder's representations set forth herein.
3.4 Status of Shareholder. The Shareholder is an "Accredited Investor" as that term is defined in Rule 501 of Regulation D promulgated under the Securities Act, an excerpt of which is included in the attached Annex I, and such Shareholder is not acquiring the Issuable Shares and Underlying Shares as a result of any advertisement, article, notice or other communication regarding the Issuable Shares and Underlying Shares published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general solicitation or general advertisement.
3.5 Investment Risk. The Shareholder is able to bear the economic risk of acquiring the Issuable Shares and Underlying Shares pursuant to the terms of this Agreement, including a complete loss of the Shareholder's investment in the Issuable Shares and Underlying Shares.
3.6 Restrictive Legends. The Shareholder acknowledges that the certificate(s) representing the Issuable Shares and Underlying Shares shall each conspicuously set forth on the face or back thereof a legend in substantially the following form:
"[NEITHER] THIS SECURITY [NOR THE SECURITIES INTO WHICH THIS SECURITY IS [EXERCISABLE] [CONVERTIBLE]] HAS [NOT] BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY [AND THE SECURITIES ISSUABLE UPON [EXERCISE] [CONVERSION] OF THIS SECURITY] MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES."
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3.7 Disclosure. The representations and warranties and statements of fact made by the Shareholder in this Agreement, and all statements set forth in the certificates delivered by the Shareholder at the Closing pursuant to this Agreement, are, as applicable, accurate, correct and complete and do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements and information contained herein not false or misleading. The copies of all documents furnished by the Shareholder pursuant to the terms of this Agreement are complete and accurate copies of the original documents. The schedules, certificates, and any and all other statements and information, whether furnished in written or electronic form in connection with this Agreement and the transactions contemplated hereby do not contain any material misstatement of fact or omit to state a material fact or any fact necessary to make the statements contained therein not misleading.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PUBCO
Except as otherwise disclosed herein or in the disclosure schedule delivered by Pubco to Omni at or prior to the time of execution of this Agreement or in the SEC Reports, Pubco hereby represents and warrants to Omni and the Shareholder as of the date hereof and as of the Closing Date (unless otherwise indicated), as follows:
4.1 Organization and Qualification. Pubco is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of State of Nevada, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. Pubco is not, to its Knowledge, in violation nor default of any of the provisions of its articles of incorporation, bylaws or other organizational or charter documents (collectively the "Charter Documents"). Pubco is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in a Material Adverse Effect, and no proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.
4.2 Authorization; Enforcement. Pubco has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder. The execution and delivery of this Agreement by Pubco and the consummation by it of the transactions contemplated hereby have been duly authorized by all necessary action on the part of Pubco and no further action is required by Pubco, the Board of Directors or Pubco's stockholders in connection therewith other than in connection with the Required Approvals, as defined in Section 4.4. This Agreement has been (or upon delivery will have been) duly executed by Pubco and, when delivered in accordance with the terms hereof, will constitute the valid and binding obligation of Pubco enforceable against Pubco in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors' rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.
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4.3 No Conflicts. The execution, delivery and performance by Pubco of this Agreement and the consummation by Pubco of the other transactions to which it is a party and as contemplated hereby do not and will not: (i) conflict with or violate any provision of Pubco's certificate or articles of incorporation, bylaws or other organizational or charter documents, (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of Pubco, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Pubco debt or otherwise) or other understanding to which Pubco is a party or by which any property or asset of Pubco is bound or affected, or (iii) subject to the Required Approvals, as defined by Section 4.4, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which Pubco is subject (including federal and state securities laws and regulations), or by which any property or asset of Pubco is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected to result in a Material Adverse Effect.
4.4 Filings, Consents and Approvals. Pubco is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by Pubco of this Agreement, other than the filing of the Certificate of Designation with the Secretary of State of the State of Nevada and the Current Report(s) on Form 8-K with the SEC and such filings as are required to be made under applicable federal and state securities laws (collectively, the "Required Approvals").
4.5 Issuance of the Issuable Shares. The Issuable Shares are duly authorized and, when issued and acquired in accordance with this Agreement, will be duly and validly issued, fully paid and non-assessable, free and clear of all Liens imposed on or by Pubco other than restrictions on transfer provided for in this Agreement.
4.6 Capitalization. The capitalization of Pubco is as set forth in the SEC Reports. Other than as set forth in the SEC Reports, Pubco has not issued any capital stock since its most recently filed periodic report under the Exchange Act. No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by this Agreement. Except as set forth in the SEC Reports, there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire any shares of Pubco Common Stock, or Contracts, commitments, understandings or arrangements by which Pubco or any subsidiary of Pubco is or may become bound to issue additional shares of Pubco Common Stock or Common Stock Equivalents. Except as set forth in the SEC Reports, the issuance of the Issuable Shares will not obligate Pubco to issue shares of Pubco Common Stock or other securities to any Person (other than to the Shareholder) and will not result in a right of any holder of Pubco securities to adjust the exercise, conversion, exchange or reset price under any of such securities. Except as set forth in the SEC Reports, all of the outstanding shares of capital stock of Pubco are validly issued, fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. No further approval or authorization of any stockholder or Pubco's board of directors is required for the issuance of the Issuable Shares or Underlying Shares. There are no stockholders agreements, voting agreements or other similar agreements with respect to Pubco's capital stock to which Pubco is a party or, to the Knowledge of Pubco, between or among any of Pubco's stockholders.
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4.7 SEC Reports; Financial Statements. Except for the Form 10-Q for the quarter ended March 30, 2016, Pubco has filed all reports, schedules, forms, statements and other documents required to be filed by Pubco under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, since January 1, 2015 (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein together with the Form 10-K to be filed by Pubco pursuant to Section 6.10 herein, being collectively referred to herein as the "SEC Reports") on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. To the Knowledge of Pubco, as of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The financial statements of Pubco included in the SEC Reports ("Financial Statements") comply in all material respects with applicable accounting requirements and the rules and regulations of the SEC with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with GAAP, except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of Pubco as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.
4.8 Material Changes. Since the date of the latest audited financial statements included within the SEC Reports, except as specifically disclosed in a subsequent SEC Report filed prior to the date hereof or in connection herewith: (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) Pubco has not incurred any Liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in Pubco's financial statements pursuant to GAAP or disclosed in filings made with the SEC, (iii) Pubco has not altered its method of accounting, (iv) Pubco has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock, and (v) Pubco has not issued any equity securities to any officer, director or Affiliate. Pubco does not have pending before the SEC any request for confidential treatment of information. Except for the issuance of the Issuable Shares contemplated by this Agreement or as set forth on Schedule 4.8, no event, liability or development has occurred or exists with respect to Pubco or any subsidiary of Pubco or their respective business, properties, operations or financial condition, that would be required to be disclosed by Pubco under applicable securities laws at the time this representation is made or deemed made that has not been publicly disclosed at least one (1) Trading Day prior to the date that this representation is made.
4.9 Litigation. There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the Knowledge of Pubco, threatened against or affecting Pubco or any of its properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an "Action") which (i) adversely affects or challenges the legality, validity or enforceability of this Agreement or the Issuable Shares, or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Neither Pubco nor any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. Except as set forth on Schedule 4.9 hereto, there has not been, and to the Knowledge of Pubco, there is not pending or contemplated, any investigation by the SEC involving Pubco or any current director or officer of Pubco. The SEC has not issued any stop order or other order suspending the effectiveness of any registration statement filed by Pubco under the Securities Act.
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4.10 Labor Relations. No labor dispute exists or, to the Knowledge of Pubco, is imminent with respect to any of the employees of Pubco which could reasonably be expected to result in a Material Adverse Effect. None of Pubco's employees is a member of a union that relates to such employee's relationship with Pubco, and Pubco is not a party to a collective bargaining agreement, and Pubco believes that its relationships with their employees are good. No executive officer, to the Knowledge of Pubco , is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any other Contract or agreement or any restrictive covenant in favor of any third party, and the continued employment of each such executive officer does not subject Pubco to any liability with respect to any of the foregoing matters. Pubco is in compliance with all U.S. federal, state, local and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
4.11 Compliance. To the Knowledge of Pubco and except with respect to the SEC Reports, Pubco: (i) is not in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by Pubco under), nor has Pubco received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is not in violation of any order of any court, arbitrator or governmental body, or (iii) is not or has not been in violation of any statute, rule or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws applicable to its business and all such laws that affect the environment, except in each case as could not have or reasonably be expected to result in a Material Adverse Effect.
4.12 Regulatory Permits. Pubco possesses all certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct its business, except where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect ("Material Permits"), and Pubco has not received any notice of proceedings relating to the revocation or modification of any Material Permit.
4.13 Title to Assets. Pubco has good and marketable title in all personal property owned by it that is material to the business of, in each case free and clear of all Liens, except for Liens disclosed in the SEC Reports or that do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by Pubco and Liens for the payment of Taxes, the payment of which is neither delinquent nor subject to penalties. Pubco does not own any real property. Any real property and facilities held under lease by Pubco are held by Pubco under valid, subsisting and enforceable leases with which Pubco is in compliance.
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4.14 Patents and Trademarks. Pubco has, or has rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights as described in the SEC Reports as necessary or material for use in connection with their business and which the failure to so have could have a Material Adverse Effect (collectively, the "Pubco Intellectual Property Rights"). Pubco has not received a notice (written or otherwise) that any of the Pubco Intellectual Property Rights used by Pubco violates or infringes upon the rights of any Person. To the Knowledge of Pubco, all such Pubco Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights. Pubco has taken reasonable security measures to protect the secrecy, confidentiality and value of all of their intellectual properties, except where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
4.15 Transactions with Affiliates and Employees. Except as set forth in the SEC Reports, none of the officers or directors of Pubco and, to the Knowledge of Pubco, none of the employees of Pubco is presently a party to any transaction with Pubco (other than for services as employees, officers and directors), including any Contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to the Knowledge of Pubco, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner, in each case in excess of $100,000, other than for: (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of Pubco and (iii) other employee benefits.
4.16 Sarbanes-Oxley; Internal Accounting Controls. Pubco is in material compliance with all provisions of the Sarbanes-Oxley Act of 2002 which are applicable to it as of the Closing Date. Pubco maintains a system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed in accordance with management's general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management's general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Pubco has established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for Pubco and designed such disclosure controls and procedures to ensure that information required to be disclosed by Pubco in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Pubco's certifying officers have evaluated the effectiveness of Pubco's disclosure controls and procedures as of the end of the period covered by Pubco's most recently filed periodic report under the Exchange Act (such date, the "Evaluation Date"). Pubco presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officer about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in Pubco's internal control over financial reporting (as such term is defined in the Exchange Act) that has materially affected, or is reasonably likely to materially affect, Pubco's internal control over financial reporting.
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4.17 Certain Fees. No brokerage or finder's fees or commissions are or will be payable by Pubco to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by this Agreement.
4.18 Issuance of Issuable Shares. Assuming the accuracy of the Shareholder's representations and warranties set forth in Section 3, no registration under the Securities Act is required for the offer and issuance of the Issuable Shares and Underlying Shares by Pubco to the Shareholder as contemplated hereby. The issuance of the Issuable Shares and Underlying Shares hereunder does not contravene the rules and regulations of the applicable Trading Market.
4.19 Investment Company. Pubco is not, and is not an Affiliate of, an "investment company" within the meaning of the Investment Company Act of 1940, as amended.
4.20 Listing and Maintenance Requirements. Pubco Common Stock is currently quoted on the OTC Pink Marketplace under the symbol "NNAN" and Pubco has not, in the 24 months preceding the date hereof, received any notice from the OTC Pink Marketplace to the effect that Pubco is not in compliance with the quoting, listing or maintenance requirements of the OTC Pink Marketplace. Pubco is, and has no reason to believe that it will not, in the foreseeable future continue to be, in compliance with all such quoting, listing and maintenance requirements of the OTC Pink Marketplace.
4.21 Application of Takeover Protections. Pubco has taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under Pubco's articles of incorporation or the laws of Nevada that is or could become applicable to a Shareholder as a result of a Shareholder and Pubco fulfilling their obligations or exercising their rights under this Agreement, including without limitation as a result of Pubco's issuance of the Issuable Shares and the Shareholder's ownership of the Issuable Shares and Underlying Shares.
4.22 No Integrated Offering. To the Knowledge of Pubco, and assuming the accuracy of the Shareholders' representations and warranties set forth in Section 3, neither Pubco, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Issuable Shares to be integrated with prior offerings by Pubco for purposes of (i) the Securities Act which would require the registration of any such securities under the Securities Act, or (ii) any applicable shareholder approval provisions of any Trading Market on which any of the securities of Pubco are listed or designated.
4.23 Tax Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, Pubco has filed all necessary Tax Returns and has paid or accrued all Taxes shown as due thereon, and Pubco has no knowledge of a tax deficiency which has been asserted or threatened against Pubco.
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4.24 No General Solicitation. Neither Pubco nor any person acting on behalf of Pubco has offered or sold any of the Issuable Shares by any form of general solicitation or general advertising.
4.25 Foreign Corrupt Practices. Neither Pubco, nor to the Knowledge of Pubco, any agent or other person acting on behalf of Pubco, has: (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by Pubco (or made by any person acting on its behalf of which Pubco is aware) which is in violation of law or (iv) violated in any material respect any provision of the FCPA.
4.26 Transfer Agent. Pubco's transfer agent is Continental Stock Transfer and Trust. Such transfer agent is eligible to transfer securities via Depository Trust Company ("DTC") and Deposit Withdrawal Agent Commission ("DWAC"). Pubco is not DTC eligible.
4.27 No Disagreements with Accountants and Lawyers. To the Knowledge of Pubco, there are no disagreements of any kind, including but not limited to any disagreements regarding fees owed for services rendered, presently existing, or reasonably anticipated by Pubco to arise, between Pubco and the accountants and lawyers formerly or presently employed by Pubco which could affect Pubco's ability to perform any of its obligations under this Agreement, and Pubco is current with respect to any fees owed to its accountants and lawyers.
4.28 Regulation M Compliance. Pubco has not, and to the Knowledge of Pubco, no one acting on behalf of Pubco has, (i) taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of Pubco to facilitate the sale or resale of any of the Issuable Shares, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the securities of Pubco, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of Pubco.
4.29 Money Laundering Laws. The operations of Pubco are and have been conducted at all times in compliance with the Money Laundering Laws and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving Pubco with respect to the Money Laundering Laws is pending or, to the best Knowledge of Pubco, threatened.
4.30 Minute Books. The minute books of Pubco made available to Omni and the Shareholders contain a complete summary of all meetings and written consents in lieu of meetings of directors and stockholders since the time of incorporation.
4.31 Employee Benefits. Pubco has not (nor for the two years preceding the date hereof has) had any plans which are subject to ERISA.
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4.32 Business Records and Due Diligence. Prior to the Closing, Pubco delivered to Omni all records and documents relating to Pubco, which Pubco possesses, including, without limitation, books, records, government filings, Tax Returns, Charter Documents, corporate records, stock records, consent decrees, orders, and correspondence, director and stockholder minutes, resolutions and written consents, stock ownership records, financial information and records, and other documents used in or associated with Pubco which have been requested in writing by Omni.
4.33 Contracts. Except as set forth in Schedule 4.33 or the SEC Reports, there are no Contracts that are material to the business, properties, assets, condition (financial or otherwise), results of operations or prospects of Pubco taken as a whole. Except as set forth in Schedule 4.33 or the SEC Reports, Pubco is not in violation of or in default under (nor does there exist any condition which upon the passage of time or the giving of notice would cause such a violation of or default under) any Contract to which it is a party or by which it or any of its properties or assets is bound, except for violations or defaults that would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
4.34 No Undisclosed Liabilities. Except as otherwise disclosed in Schedule 4.34 or the SEC Reports and in the Form 10-K to be filed by Pubco after Closing for the 2015 fiscal year, Pubco has no other undisclosed liabilities whatsoever, either direct or indirect, matured or unmatured, accrued, absolute, contingent or otherwise. Pubco represent that at the date of Closing, Pubco shall have no liabilities or obligations whatsoever, either direct or indirect, matured or un-matured, accrued, absolute, contingent or otherwise.
4.35 No SEC or FINRA Inquiries. To the Knowledge of Pubco, neither Pubco nor any of its present officers or directors is, or has ever been, the subject of any formal or informal inquiry or investigation by the SEC or FINRA. Pubco's Common Stock trades on the OTCPK Market.
4.36 Disclosure. The representations and warranties and statements of fact made by Pubco in this Agreement, and all statements set forth in the certificates delivered by Pubco at the Closing pursuant to this Agreement, are, as applicable, accurate, correct and complete and do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements and information contained herein not false or misleading. The copies of all documents furnished by Pubco pursuant to the terms of this Agreement are complete and accurate copies of the original documents. The schedules, certificates, and any and all other statements and information, whether furnished in written or electronic form, to Omni or its representatives by or on behalf of Pubco in connection with this Agreement and the transactions contemplated hereby do not contain any material misstatement of fact or omit to state a material fact or any fact necessary to make the statements contained therein not misleading.
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ARTICLE 5
INDEMNIFICATION; SURVIVAL OF REPRESENTATIONS
5.1 Indemnification.
(a) Subject to the provisions of this Article 5, and irrespective of any due diligence investigation conducted by Omni with regard to the transactions contemplated hereby, Pubco agrees to indemnify fully in respect of, hold harmless and defend Omni and the Shareholders, and each of the officers, agents and directors of Omni against any damages, liabilities, costs, claims, proceedings, investigations, penalties, judgments, deficiencies, including taxes, expenses (including, but not limited to, any and all interest, penalties and expenses whatsoever reasonably incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever) and losses (each, a "Claim" and collectively "Claims") to which it or they may become subject arising out of or based on any breach of or inaccuracy in any of the representations and warranties or covenants or conditions made by Pubco in this Agreement.
(b) Subject to the provisions of this Article 5, Omni and each Shareholder agrees to indemnify fully in respect of, hold harmless and defend Pubco and each of its officers, agents and directors against any Claims to which they may become subject arising out of or based on any breach of or inaccuracy in any of the representations and warranties or covenants or conditions made by Omni and/or any Shareholder in this Agreement.
5.2 Survival of Representations and Warranties. Notwithstanding any provision in this Agreement to the contrary, the representations and warranties given or made by Pubco, Omni and the Shareholders under this Agreement shall survive the date hereof for a period of forty-eight (48) months from and after the Closing Date (the last day of such period is herein referred to as the "Expiration Date"), except that any written claim for breach thereof made and delivered prior to the Expiration Date to the party against whom such indemnification is sought shall survive thereafter and, as to any such claim, such applicable expiration will not effect the rights to indemnification of the party making such claim; provided, however, that any representations and warranties that were fraudulently made shall not expire on the Expiration Date and shall survive indefinitely and claims with respect to fraud by Pubco, Omni or the Shareholders must be made at any time, as long as such claim is made within a reasonable period of time after discovery by the claiming party.
5.3 Method of Asserting Claims, Etc. The party claiming indemnification is hereinafter referred to as the "Indemnified Party" and the party against whom such claims are asserted hereunder is hereinafter referred to as the "Indemnifying Party." All Claims for indemnification by any Indemnified Party under this Article 5 shall be asserted as follows:
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(a) In the event that any Claim or demand for which an Indemnifying Party would be liable to an Indemnified Party hereunder is asserted against or sought to be collected from such Indemnified Party by a third party, said Indemnified Party shall, within ten (10) business days from the date upon which the Indemnified Party has Knowledge of such Claim, notify the Indemnifying Party of such claim or demand, specifying the nature of and specific basis for such claim or demand and the amount or the estimated amount thereof to the extent then feasible (which estimate shall not be conclusive of the final amount of such Claim or demand) (the "Claim Notice"). The Indemnified Party's failure to so notify the Indemnifying Party in accordance with the provisions of this Agreement shall not relieve the Indemnifying Party of liability hereunder unless such failure materially prejudices the Indemnifying Party's ability to defend against the claim or demand. The Indemnifying Party shall have 30 days from the giving of the Claim Notice (the "Notice Period") to notify the Indemnified Party: (i) whether or not the Indemnifying Party disputes the liability of the Indemnifying Party to the Indemnified Party hereunder with respect to such Claim or demand, and (ii) whether or not the Indemnifying Party desires, at the sole cost and expense of the Indemnifying Party, to defend the Indemnified Party against such Claims or demand; provided, however, that any Indemnified Party is hereby authorized prior to and during the Notice Period to file any motion, answer or other pleading which he shall deem necessary or appropriate to protect his interests or those of the Indemnifying Party and not prejudicial to the Indemnifying Party. In the event that the Indemnifying Party notifies the Indemnified Party within the Notice Period that he, she or it does not dispute liability for indemnification under this Article 5 and that such person desires to defend the Indemnified Party against such claim or demand and except as hereinafter provided, the Indemnifying Party shall have the right to defend by all appropriate proceedings, which proceedings shall be promptly settled or prosecuted by him to a final conclusion. The Indemnified Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party except to the extent that the employment thereof has been specifically authorized by the Indemnifying Party in writing, the Indemnifying Party has failed after a reasonable period of time to assume such defense and to employ counsel or in such action there is, in the reasonable opinion of such separate counsel, a material conflict on any material issue between the position of the Indemnifying Party and the position of such Indemnified Party (a "Material Conflict"). If requested by the Indemnifying Party and there is no Material Conflict, the Indemnified Party agrees to cooperate with the Indemnifying Party and his, her or its counsel in contesting any Claim or demand which the Indemnifying Party elects to contest or, if appropriate and related to the Claim in question, in making any Counterclaim against the person asserting the third party Claim or demand, or any cross-complaint against any person. No Claim for which indemnity is sought hereunder and for which the Indemnifying Party has acknowledged liability for indemnification under this Article 5 may be settled without the consent of the Indemnifying Party, which consent shall not be unreasonably withheld or delayed.
(b) In the event any Indemnified Party should have a Claim against any Indemnifying Party hereunder which does not involve a Claim or demand being asserted against or sought to be collected from him by a third party, the Indemnified Party shall give a Claim Notice with respect to such Claim to the Indemnifying Party. If, after receipt of a Claim Notice, the Indemnifying Party does not notify the Indemnified Party within the Notice Period that he, she or it disputes such Claim, then the Indemnifying Party shall be deemed to have admitted liability for such Claim in the amount set forth in the Claim Notice.
(c) The Indemnifying Party shall be given the opportunity to defend the respective Claim.
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ARTICLE 6
COVENANTS OF THE PARTIES
6.1 Corporate Examinations and Investigations. Prior to the Closing, each party shall be entitled, through its employees and representatives, to make such investigations and examinations of the books, records and financial condition of Omni and Pubco as each party may request. In order that each party may have the full opportunity to do so, the Shareholder shall furnish each party and its representatives during such period with all such information concerning the affairs of Omni or Pubco as each party or its representatives may reasonably request and cause Omni or Pubco and their respective officers, employees, consultants, agents, accountants and attorneys to cooperate fully with each party's representatives in connection with such review and examination and to make full disclosure of all information and documents requested by each party and/or its representatives. Any such investigations and examinations shall be conducted at reasonable times and under reasonable circumstances, it being agreed that any examination of original documents will be at each party's premises, with copies thereof to be provided to each party and/or its representatives upon request.
6.2 Cooperation; Consents. Prior to the Closing, each party shall cooperate with the other parties to the end that the parties shall (i) in a timely manner make all necessary filings with, and conduct negotiations with, all authorities and other persons the consent or approval of which, or the license or permit from which is required for the consummation of the Acquisition and (ii) provide to each other party such information as the other party may reasonably request in order to enable it to prepare such filings and to conduct such negotiations.
6.3 Conduct of Business. Subject to the provisions hereof, from the date hereof through the Closing, each party hereto shall (i) conduct its business in the ordinary course and in such a manner so that the representations and warranties contained herein shall continue to be true and correct in all material respects as of the Closing as if made at and as of the Closing and (ii) not enter into any material transactions or incur any material liability not required or specifically contemplated hereby, without first obtaining the written consent of Omni and the Shareholders on the one hand and Pubco on the other hand. Without the prior written consent of Omni, the Shareholders or Pubco, except as required or specifically contemplated hereby, each party shall not undertake or fail to undertake any action if such action or failure would render any of said warranties and representations untrue in any material respect as of the Closing.
6.4 Litigation. From the date hereof through the Closing, each party hereto shall promptly notify the representative of the other parties of any lawsuits, claims, proceedings or investigations which after the date hereof are threatened or commenced against such party or any of its affiliates or any officer, director, employee, consultant, agent or shareholder thereof, in their capacities as such, which, if decided adversely, could reasonably be expected to have a Material Adverse Effect.
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6.5 Notice of Default. From the date hereof through the Closing, each party hereto shall give to the representative of the other parties prompt written notice of the occurrence or existence of any event, condition or circumstance occurring which would constitute a violation or breach of this Agreement by such party or which would render inaccurate in any material respect any of such party's representations or warranties herein.
6.6 Officers and Directors. Pubco and Omni shall cause the Board of Directors of Pubco and the officers of Pubco and Omni to be the individuals identified on Schedule 6.6 hereto.
6.7 Confidentiality; Access to Information.
(a) Confidentiality. Any confidentiality agreement or letter of intent previously executed by the parties shall be superseded in its entirety by the provisions of this Agreement. Each party agrees to maintain in confidence any non-public information received from the other party, and to use such non-public information only for purposes of consummating the transactions contemplated by this Agreement. Such confidentiality obligations will not apply to (i) information which was known to the one party or their respective agents prior to receipt from the other party; (ii) information which is or becomes generally known; (iii) information acquired by a party or their respective agents from a third party who was not bound to an obligation of confidentiality; and (iv) disclosure required by law. In the event this Agreement is terminated as provided in Article 8 hereof, each party will return or cause to be returned to the other all documents and other material obtained from the other in connection with the Transaction contemplated hereby.
(b) Access to Information.
(i) Omni will afford Pubco and its financial advisors, accountants, counsel and other representatives reasonable access during normal business hours, upon reasonable notice, to the properties, books, records and personnel of Omni during the period prior to the Closing to obtain all information concerning the business, including the status of product development efforts, properties, results of operations and personnel of Omni, as Pubco may reasonably request. No information or Knowledge obtained by Pubco in any investigation pursuant to this Section 6.7(b) will affect or be deemed to modify any representation or warranty contained herein or the conditions to the obligations of the parties to consummate the Transaction.
(ii) Pubco will afford Omni and its financial advisors, underwriters, accountants, counsel and other representatives reasonable access during normal business hours, upon reasonable notice, to the properties, books, records and personnel of Pubco during the period prior to the Closing to obtain all information concerning the business, including the status of product development efforts, properties, results of operations and personnel of Pubco, as Omni may reasonably request. No information or knowledge obtained by Omni in any investigation pursuant to this Section 6.7(b) will affect or be deemed to modify any representation or warranty contained herein or the conditions to the obligations of the parties to consummate the Transaction.
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6.8 Public Disclosure. Except to the extent previously disclosed or to the extent the parties believe that they are required by applicable law or regulation to make disclosure, prior to Closing, no party shall issue any statement or communication to the public regarding the transaction contemplated herein without the consent of the other party, which consent shall not be unreasonably withheld. To the extent a party hereto believes it is required by law or regulation to make disclosure regarding the Transaction, it shall, if possible, immediately notify the other party prior to such disclosure. Notwithstanding the foregoing, the parties hereto agree that Omni will prepare and file a Current Report on Form 8-K pursuant to the Exchange Act to report the execution of this Agreement.
6.9 Omni Audits. Within sixty (60) calendar days after the Closing, Omni shall deliver to Pubco complete and accurate audited financial statements prepared in accordance with GAAP for each annual period since Omni's inception and any reviewed stub periods as are required by the SEC to enable Pubco to be able to comply with its reporting obligations under all applicable laws, rules and regulations including but not limited to the Exchange Act and specifically Form 8-K, Schedule 14C and Schedule 14F, as and if required. Pubco shall cause all such filings to be timely made.
6.10 [Intentionally Omitted]
6.11 [Intentionally Omitted]
6.12 Series E and Series D Preferred Stock And Convertible Promissory Note Surrender Agreement. Pubco shall cause the holders of all of its outstanding Series B and Series D Preferred Stock and holders of certain convertible promissory notes described on Schedule 6.12 to conditionally surrender for nominal consideration all such preferred stock and the convertible promissory notes in the amounts set forth on Schedule 6.12.1 pursuant to a Surrender Agreement annexed hereto as Schedule 6.12.2. It is agreed and understood by Pubco, Omni and the Shareholders that the aforedescribed surrenders will not occur in the event any of the requirements of Sections 7.1 and 7.2 are not accomplished. Subsequent to the surrender of the aforedescribed convertible promissory notes, Pubco shall have outstanding, in the aggregate as of the date of such surrender not more than $1,710,000 of principal and interest outstanding on the unsurrendered convertible promissory notes.
6.13 Sale of Business. Immediately after Closing, the Business will be transferred and sold to an Affiliate of James Wemett in consideration for all accrued salary and compensation owed by Pubco to Mr. Wemett and the assumption by said Affiliate of certain liabilities more particularly specified in the Asset Purchase Agreement annexed as Schedule 6.13.
6.14 Net Operating Loss. The parties hereto will endeavor to structure the Transaction in a way to take advantage for tax purposes of Pubco's current operating net loss. The parties acknowledge that such operating net loss may not be available to Pubco subsequent to the Closing. Such unavailability shall not give rise to any rescission right or damages for any party to this Agreement.
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6.15 Piggy-Back Registrations. If at any time after the Closing Date there is not an effective registration statement covering all of the Underlying Shares and Pubco determines to prepare and file with the SEC a registration statement relating to an offering for its own account or the account of others under the Securities Act of any of its equity securities, but excluding Forms S-4 or S-8 and similar forms which do not permit such registration, then Pubco shall send to each holder of any of the issued Issuable Shares and Underlying Shares written notice of such determination and, if within fifteen calendar days after receipt of such notice, any such holder shall so request in writing, Pubco shall include in such registration statement all or any part of the Underlying Shares such holder requests to be registered and which inclusion of such Underlying Shares will be subject to customary underwriter cutbacks applicable to all holders of registration rights and minimum cutbacks in accordance with guidance provided by the SEC (including, but not limited to, Rule 415). The obligations of Pubco under this Section may be waived by any holder of any of the Securities entitled to registration rights under this Section 6.15. The holders whose Underlying Shares are included or required to be included in such registration statement are granted the same rights, benefits, liquidated or other damages and indemnification granted to other holders of securities included in such registration statement. In no event shall the liability of any holder of Securities or permitted successor in connection with any Underlying Shares included in any such registration statement be greater in amount than the dollar amount of the net proceeds actually received by such purchaser upon the sale of the Underlying Shares sold pursuant to such registration or such lesser amount in proportion to all other holders of Securities included in such registration statement. All expenses incurred by Pubco in complying with Section 6.15, including, without limitation, all registration and filing fees, printing expenses (if required), fees and disbursements of counsel and independent public accountants for Pubco, fees and expenses (including reasonable counsel fees) incurred in connection with complying with state securities or "blue sky" laws, fees of the FINRA, transfer taxes, and fees of transfer agents and registrars, are called "Registration Expenses." All underwriting discounts and selling commissions applicable to the sale of Registrable Securities are called "Selling Expenses." The Company will pay all Registration Expenses in connection with the registration statement under Section 6.15. Selling Expenses in connection with each registration statement under Section 6.15 shall be borne by the holder and will be apportioned among such holders in proportion to the number of shares included therein for a holder relative to all the securities included therein for all selling holders, or as all holders may agree. It shall be a condition precedent to the obligations of Pubco to complete the registration pursuant to this Agreement with respect to the Issuable Shares and Underlying Shares of a particular purchaser that such purchaser shall furnish to Pubco in writing such information and representation letters, including a completed form of a securityholder questionnaire, with respect to itself and the proposed distribution by it as Pubco may reasonably request to assure compliance with federal and applicable state securities laws.
ARTICLE 7
CONDITIONS TO CLOSING
7.1 Conditions to Obligations of Omni and the Shareholders. The obligations of Omni and the Shareholders under this Agreement shall be subject to each of the following conditions:
(a) Closing Deliveries. At the Closing, Pubco shall have delivered or caused to be delivered to Omni and the Shareholders the following:
(i) this Agreement duly executed by Pubco;
(ii) letter of resignation from all officers and directors of Pubco except as identified on Schedule 6.6;
(iii) resolutions duly adopted by the Board of Directors of Pubco approving the following events or actions, as applicable:
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a. the execution, delivery and performance of this Agreement;
b. the Acquisition and the terms thereof; and
c. the appointment of the officers and directors identified on Schedule 6.6;
(iv) a certificate of good standing for Pubco from the State of Nevada, dated not earlier than five (5) days prior to the Closing Date;
(v) A certificate of Continental Stock Transfer and Trust, Pubco's transfer agent and registrar, certifying as of the business day prior to the Acquisition, a true and complete list of the names and addresses of the record owners of all of the outstanding shares of Pubco Common Stock, together with the number of shares of Pubco Common Stock held by each record owner;
(vii) a certificate of the Secretary of Pubco, dated as of the Closing Date, certifying as to (i) the incumbency of officers of Pubco executing this Agreement and all exhibits and schedules hereto and all other documents, instruments and writings required pursuant to this Agreement (the "Transaction Documents"), (ii) a copy of the Articles of Incorporation and By-Laws of Pubco, as in effect on and as of the Closing Date, and (iii) a copy of the resolutions of the Board of Directors of Pubco authorizing and approving Pubco's execution, delivery and performance of the Transaction Documents, all matters in connection with the Transaction Documents, and the transactions contemplated thereby;
(viii) all corporate records, board minutes and resolutions, tax and financial records, agreements, seals and any other information or documents reasonably requested by Omni's representatives with respect to Pubco; and
(ix) such other documents as Omni and/or the Shareholders may reasonably request in connection with the transactions contemplated hereby.
(b) Representations and Warranties to be True. The representations and warranties of Pubco herein contained shall be true in all material respects at the Closing with the same effect as though made at such time. Pubco shall have performed in all material respects all obligations and complied in all material respects with all covenants and conditions required by this Agreement to be performed or complied with by them at or prior to the Closing.
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(c) No Assets and Liabilities. At the Closing, Pubco shall have no payables (contingent or otherwise) other than the unsurrendered convertible promissory note described in Section 6.12 and not in excess of $600,000 of additional payables, no material past due tax obligations and except as contemplated in this Agreement, no material changes to its business or financial condition shall have occurred since the date of this Agreement.
(d) Outstanding Capital Stock. Pubco shall have no more than 2,911,658 shares of common stock issued and outstanding in the aggregate at the Closing.
(e) No Adverse Effect. The business and operations of Pubco will not have suffered any Material Adverse Effect.
(f) The Agreements referred to in Section 6.11 shall have been entered into.
7.2 Conditions to Obligations of Pubco. The obligations of Pubco under this Agreement shall be subject to each of the following conditions:
(a) Closing Deliveries. On the Closing Date, Omni and/or the Shareholder shall have delivered to Pubco the following:
(i) this Agreement duly executed by Omni and the Shareholder;
(ii) resolutions duly adopted by the Board of Directors of Omni authorizing and approving the execution, delivery and performance of this Agreement;
(iii) certificates representing the Omni Equity Interests to be delivered pursuant to this Agreement duly endorsed or accompanied by duly executed stock powers or instruments of like tenor;
(iv) a certificate of the Secretary or other duly qualified officer of Omni, dated as of the Closing Date, certifying as to (i) the incumbency of officers of Omni the Transaction Documents, (ii) a copy of the Articles of Incorporation and By-Laws of Omni, as in effect on and as of the Closing Date, and (iii) a copy of the resolutions of the Board of Directors of Omni authorizing and approving Omni's execution, delivery and performance of the Transaction Documents, all matters in connection with the Transaction Documents, and the Transaction contemplated thereby; and
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(v) all corporate records, board minutes and resolutions, tax and financial records, agreements, seals and such other documents as Pubco may reasonably request in connection with the transactions contemplated hereby.
(b) Representations and Warranties True and Correct. The representations and warranties of Omni and the Shareholders herein contained shall be true in all material respects at the Closing with the same effect as though made at such time. Omni and the Shareholders shall have performed in all material respects all obligations and complied in all material respects with all covenants and conditions required by this Agreement to be performed or complied with by them at or prior to the Closing.
(c) No Adverse Effect. The business and operations of Omni will not have suffered any Material Adverse Effect.
ARTICLE 8
TERMINATION
8.1 This Agreement may be terminated at any time prior to the Closing:
(a) by mutual written agreement of Pubco and any Shareholder;
(b) by either Pubco or the Shareholder if the Transaction shall not have been consummated for any reason by June 30, 2016; provided, however, that the right to terminate this Agreement under this Section 8.1(b) shall not be available to any party whose action or failure to act has been a principal cause of or resulted in the failure of the Transaction to occur on or before such date and such action or failure to act constitutes a breach of this Agreement;
(c) by either Pubco or the Shareholder if a Governmental Entity shall have issued an order, decree or ruling or taken any other action, in any case having the effect of permanently restraining, enjoining or otherwise prohibiting the Transaction, which order, decree, ruling or other action is final and non-appealable; or
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(d) by the Shareholder, upon a material breach of any representation, warranty, covenant or agreement on the part of Pubco set forth in this Agreement, or if any representation or warranty of Pubco shall have become materially untrue, in either case such that the conditions set forth in Section 7.1 would not be satisfied as of the time of such breach or as of the time such representation or warranty shall have become untrue, provided, that if such inaccuracy in the representations and warranties by Pubco or breach by Pubco is curable by Pubco prior to the Closing Date, then the Shareholder may not terminate this Agreement under this Section 8.1(d) for thirty (30) days after delivery of written notice from the Shareholder to Pubco of such breach, provided Pubco continue to exercise commercially reasonable efforts to cure such breach (it being understood that the Shareholder may not terminate this Agreement pursuant to this Section 8.1(d) if they shall have materially breached this Agreement or if such breach by Pubco is cured during such thirty (30) day period).
8.2 Notice of Termination; Effect of Termination. Any termination of this Agreement under Section 8.1 above will be effective immediately upon (or, if the termination is pursuant to Section 8.1(d) or Section 8.1(e) and the proviso therein is applicable, thirty (30) days after) the delivery of written notice of the terminating party to the other parties hereto. In the event of the termination of this Agreement as provided in Section 8.1, this Agreement shall be of no further force or effect and the Transaction shall be abandoned, except as set forth in Section 8.1, Section 8.2 and Article 9 (General Provisions), each of which shall survive the termination of this Agreement.
ARTICLE 9
GENERAL PROVISIONS
9.1 Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be:
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(i) | if to Omni, to: | Omni Shrimp, Inc. | |
13613 Gulf Boulevard | |||
Madeira Beach, FL 33163 | |||
With a copy by fax only to: | Samuel M. Krieger, Esq. | ||
Krieger & Prager LLP | |||
skrieger@kplawfirm.com | |||
2123632999 | |||
(ii) | if to Shareholders, to: | Colm Wrynn | |
22 Sunnyvale Road | |||
Port Washington, NY 11050 | |||
Linda Giahpietro | |||
8757 Kent Place | |||
Castle Pines, CO 80108 | |||
Daniel Stelcer | |||
4 Richards Road | |||
Port Washington, NY 11050 | |||
With a copy by fax only to: | Samuel M. Krieger, Esq. | ||
Krieger & Prager LLP | |||
skrieger@kplawfirm.com | |||
2123632999 | |||
(iii) | if to Pubco, to: | NaturalNano, Inc. | |
13613 Gulf Boulevard | |||
Madeira Beach, FL 33163 | |||
With a copy by fax only to: | Samuel M. Krieger, Esq. | ||
Krieger & Prager LLP | |||
skrieger@kplawfirm.com | |||
2123632999 |
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9.2 Interpretation. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. References to Sections and Articles refer to sections and articles of this Agreement unless otherwise stated.
9.3 Entire Agreement. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.
9.4 Amendments; Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by all parties. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right.
9.5Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. The parties may not assign this Agreement or any rights or obligations hereunder.
9.6 No Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.
9.7 Governing Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any action, suit or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If any party shall commence an action or proceeding to enforce any provisions of the Transaction Documents, the prevailing party in such action, suit or proceeding shall be reimbursed by the other party for its reasonable attorneys' fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.
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9.8 Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to each other party, it being understood that the parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a ".pdf" format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or ".pdf" signature page were an original thereof.
9.9 Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.
9.10 Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.
9.11 Construction. The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments thereto. Each party hereto acknowledges and agrees that it has received or has had the opportunity to receive independent legal counsel of its own choice and that it has been sufficiently apprised of its rights and responsibilities with regard to the substance of this Agreement.
9.12 WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.
(Signature Pages Follow)
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IN WITNESS WHEREOF, the parties have executed this Share Exchange Agreement as of the date first written above.
PUBCO: | |||
| |||
NATURALNANO INC., a Nevada corporation | |||
| |||
By: | |||
Chief Executive Officer | |||
| |||
OMNI: | |||
| |||
OMNI SHRIMP, INC. a Florida corporation | |||
By: | |||
President | |||
SHAREHOLDER: | |||
GEEVAGH LLC | |||
Name: | /s/ Colm Wrynn | ||
| Colm Wrynn | |||
|
|
|
|
OMNI VENTURES, INC. | |||
By: | /s/ Linda Giahpietro | ||
Name: | Linda Giahpietro | ||
DCDGG LLC | |||
By: | /s/ Daniel Stelcer | ||
Name: | Daniel Stelcer | ||
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ANNEX A
Definition of Accredited Investor
The securities will only be sold to investors who represent in writing in the Securities Purchase Agreement that they are accredited investors, as defined in Regulation D, Rule 501 under the Act which definition is set forth below:
1. A natural person whose net worth, or joint net worth with spouse, at the time of purchase exceeds $1 million (excluding home); or
2. A natural person whose individual gross income exceeded $200,000 or whose joint income with that person's spouse exceeded $300,000 in each of the last two years, and who reasonably expects to exceed such income level in the current year; or
3. A trust with total assets in excess of $5 million, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person described in Regulation D; or
4. A director or executive officer of the Company; or
5. The investor is an entity, all of the owners of which are accredited investors; or
6. (a) bank as defined in Section 3(a)(2) of the Act, or any savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Act, (b) any broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934, (c) an insurance Company as defined in Section 2(13) of the Act, (d) an investment Company registered under the Investment Company Act of 1940 or a business development Company as defined in Section 2(a)(48) of such Act, (e) a Small Business Investment Company licensed by the United States Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958, (f) an employee benefit plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, if such plan has total assets in excess of $5 million, (g) an employee benefit plan within the meaning of Title I of the Employee Retirement Income Securities Act of 1974, and the employee benefit plan has assets in excess of $5 million, or the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such act, that is either a bank, savings and loan institution, insurance Company, or registered investment advisor, or, if a self-directed plan, with an investment decisions made solely by persons that are accredited investors, (h) a private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940, or (i) an organization described in Section 501(c)(3) of the Internal Revenue code, corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the securities offered, with assets in excess of $5 million.
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EXHIBIT 10.193
SURRENDER AND AMENDMENT AGREEMENT
THIS SURRENDER AND AMENDMENT AGREEMENT (this "Agreement") is made as of this 23 day of June, 2016 by and among NaturalNano, Inc., a Delaware corporation (the "Company"), the entities identified on Schedule A (the "Surrendering Holders" and each such entity, a "Surrendering Holder"), and the entities identified on Schedule B (the "Amending Holders" and each such entity, an "Amending Holder" together with the Surrendering Holders the "Holders").
WHEREAS, in connection with the transactions contemplated by a Share Exchange Agreement (the "Share Exchange Agreement"), to be dated at or about the date hereof, by and among the Company, Omni Shrimp Inc., a Florida corporation ("Omni"), and the shareholders of Omni, the Surrendering Holders will surrender to the Company certain equity securities ("Surrendered Equity"), and debt securities ("Surrendered Debt") (collectively, the Surrendered Shares and Surrendered Debt are referred to herein as the "Surrendered Interests") in the amounts and as further described on Schedule A hereto.
WHEREAS, the Amending Holders hold notes of the Company as identified on Schedule B (the "Retained Notes") which are not being surrendered pursuant to this Agreement and in connection with the transactions contemplated by a Share Exchange Agreement the Company and Amending Holders have agreed to amend the terms of the Retained Notes.
NOW, THEREFORE, in consideration of the mutual promises and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:
1. Surrender of Securities. Upon satisfaction of the conditions set forth on Paragraph 3 below, the Surrendering Holders agree to surrender to the Company the Surrendered Interests, free and clear of any liens, mortgages, adverse claims, charges, security interests, encumbrances, and any interest of any third party. To the extent any portion of the Surrendered Interests consists of a note of which a portion is being retained by an Amending Holder as a Retained Note (as defined below) the Company agrees to reissue such note to such Surrendering Holder in the amount being retained by such Surrendering Holder. The Amending Holder may require the Company to reissue the Retained Notes in one new convertible note substantially in the form of the last convertible note issued by the Company to such Amending Holder.
2. Representations and Warranties of the Holders. Each Holder hereby makes the following representations and warranties to the Company as of the date hereof:
a. The Holder has full power and authority to enter into this Agreement and to consummate the transactions contemplated hereby (the "Transactions"). This Agreement has been duly and validly executed and delivered by the Holder and constitutes the legal, valid and binding obligation of the Holder, enforceable in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or similar laws from time to time in effect that affect creditors' rights generally, and by legal and equitable limitations on the availability of specific remedies.
b. The execution, delivery and performance by the Holder of this Agreement and consummation by the Holder of the Transactions do not and will not: (i) violate the organizational documents of the Holder, (ii) violate any decree or judgment of any court or other governmental authority applicable to or binding on the Holder; or (iii) violate any contract to which the Holder or any of its assets or properties are bound, or conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of , any agreement, indenture or instrument to which Holder is a party.
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c. With respect to the surrender of the Surrendered Interests, (i) the Surrendering Holder is the sole record and beneficial owner of the Surrendered Interests, free and clear of any taxes and liens; (ii) the Surrendered Interests, when delivered and paid for in accordance with the terms of this Agreement will be validly surrendered and free from all taxes and liens (other than any applicable transfer taxes); and (iii) the Surrendered Interests, upon surrendered are not and will not be as of the date hereof subject to any transfer restriction, other than (x) pursuant to security agreements and/or notes specifically set forth herein and/or (y) the restriction that the Surrendered Interests have not been registered under the Securities Act of 1933, as amended ("Securities Act") and, therefore, cannot be resold unless registered under the Securities Act or in a transaction exempt from or not subject to the registration requirements of the Securities Act (collectively, the "Permitted Restrictions"); and will be the legal and beneficial owner of such the Surrendered Interests, free and clear of any liens or transfer restrictions, other than the permitted restrictions.
d. The Holder (i) has adequate information concerning the business and financial condition of the Company and the terms of the Share Exchange Agreement to make an informed decision regarding the surrender of the Surrendered Interests; and (ii) has independently and without reliance upon the Company, and based on such information as the Holder has deemed appropriate, made its own analysis and decision to enter into this Agreement, except that the Holder has relied upon the Company's express representations, warranties and covenants in this Agreement, the Share Exchange Agreement and related documents and the reports publicly available on the EDGAR system of the Securities and Exchange Commission.
e. No proceedings relating to the Surrendered Interests are pending or, to the knowledge of the Holder, threatened before any court, arbitrator or administrative or governmental body that would adversely affect the Holder's right to surrender the Surrendered Interests to the Company.
f. Such Holder does not hold any warrants to purchase shares of the Company's common stock issued by the Company.
3. Conditions Precedent to Release of Shares. The parties acknowledge and agree that, as a condition precedent to the surrender of the Surrendered Interests to the Company, the respective obligations of each of the Company and Omni described in Sections 7.1 and 7.2 of the Shares Exchange Agreement must be timely complied with by both the Company and Omni and all of the transactions and events described in the Share Exchange Agreement required to have occurred as of the latest fulfillment date of the events described in such Sections 7.1 and 7.2 shall have timely occurred pursuant to the unamended terms of the Share Exchange Agreement, which shall have not been amended nor with respect to which any waivers have been granted by any party thereto, time being of the essence with respect to the foregoing required performance and occurrence.
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4. Release of Security Interests. To the extent any Holder has or is entitled to record a security interest in the assets of the Company, securing any amount owed by the Company to the Holders, each Holder hereby releases such security interests and authorizes the Company to file any forms UCC3s in any jurisdiction to record such release.
5. Amendment to Notes. The Company and Amending Holders agree that the following provisions shall apply to the Retained Notes:
a. Each Amending Holder waives any reset, repricing or ratchet right such Amending Holder may have related to the Retained Notes for any issuances of the Company's common stock or common stock equivalents that have occurred prior to the date of this Agreement.
b. The issuance of the Series E Preferred Shares pursuant to the Share Exchange Agreement shall be an Exempt Issuance (as define in the Retained Notes) and shall not trigger any reset, repricing or ratchet right such Amending Holder may have related to the Retained Notes.
c. The Conversion Price of the Retained Notes is amended to be the lower of: (i) the conversion price as would be in effect pursuant to the terms of the Retained Notes as currently in effect; or (ii) 50% of the lowest closing bid price of the Company's common stock on its principal trading market as reported by Bloomberg LP, for the twenty trading days prior to the date of conversion.
d. The Maturity Date of the Retained Notes is hereby extended to one year from the date of this Agreement.
e. Except for the notes held by Oscaleta Partners LLC All interest that has accrued through the date hereof is waived and all interest that will accrue on the Retained Notes will be payable on the Maturity Date.
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f. The following provision shall apply to all the Retained Notes:
The Company shall not effect any conversion of the Retained Notes, and a Holder shall not have the right to convert any portion of the Retained Notes or interest, to the extent that, after giving effect to the conversion set forth on the applicable Notice of Conversion, such Holder (together with such Holder's Affiliates, and any Persons acting as a group together with such Holder or any of such Holder's Affiliates) would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by such Holder and its Affiliates shall include the number of shares of Common Stock issuable upon conversion of the Retained Notes with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which are issuable upon (i) conversion of the remaining, unconverted principal and interest of Retained Notes beneficially owned by such Holder or any of its Affiliates and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company subject to a limitation on conversion or exercise analogous to the limitation contained herein (including, without limitation, the Retained Notes) beneficially owned by such Holder or any of its Affiliates. Except as set forth in the preceding sentence, for purposes of this Section 6(d), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. To the extent that the limitation contained in this Section 6(d) applies, the determination of whether the Retained Notes is convertible (in relation to other securities owned by such Holder together with any Affiliates) and of how many shares of Retained Notes are convertible shall be in the sole discretion of such Holder, and the submission of a Notice of Conversion shall be deemed to be such Holder's determination of whether the shares of Retained Notes may be converted (in relation to other securities owned by such Holder together with any Affiliates) and how many shares of the Retained Notes are convertible, in each case subject to the Beneficial Ownership Limitation. To ensure compliance with this restriction, each Holder will be deemed to represent to the Company each time it delivers a Notice of Conversion that such Notice of Conversion has not violated the restrictions set forth in this paragraph and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 6(d), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as stated in the most recent of the following: (i) the Company's most recent periodic or annual report filed with the Commission, as the case may be, (ii) a more recent public announcement by the Company or (iii) a more recent written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall within two Trading Days confirm orally and in writing to such Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including the Retained Notes, by such Holder or its Affiliates since the date as of which such number of outstanding shares of Common Stock was reported. The "Beneficial Ownership Limitation" shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion of Retained Notes held by the applicable Holder. A Holder may decrease the Beneficial Ownership Limitation at any time and the Holder, upon not less than 61 days' prior notice to the Company, may increase the Beneficial Ownership Limitation provisions of this Section 6(d), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon conversion of this Retained Notes held by the Holder and the provisions of this Section 6(d) shall continue to apply. Any such increase will not be effective until the 61st day after such notice is delivered to the Company and shall only apply to such Holder and no other Holder. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 6(d) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation contained herein or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of Retained Notes.
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6. Applicable Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any action, suit or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If any party shall commence an action or proceeding to enforce any provisions of this Agreement, the prevailing party in such action, suit or proceeding shall be reimbursed by the other party for its reasonable attorneys' fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.
7. Acknowledgement. Each party represents and warrants that it has read and understand this Agreement and has entered into it voluntarily and without coercion; has been advised, and has had the opportunity, to consult with legal counsel of its choosing with respect to this Agreement and the matters contemplated hereby; is entering into this Agreement based upon its own investigation and is not relying on any representations or warranties of the other parties or any other person not set forth herein.
8. Entire Agreement; Amendments. This Agreement and the documents contemplated hereby represent the entire agreement among the parties hereto with respect to the subject matter hereof, and no amendment hereto shall be effective unless in writing and signed by the party sought to be charged thereby.
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9. Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be:
a. | if to the Company, to: | NaturalNano, Inc. 13613 Gulf Boulevard. Madeira Beach, Florida 33708 Fax: (787) 358–5695 Attn: President | |
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| With a copy by fax only to: | Samuel M. Krieger, Esq. Krieger & Prager LLP 39 Broadway, Suite 920 New York, NY 10006 Fax: (212) 363-2999 | |
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b. | if to the Holders, to: | the addresses and fax numbers listed on Schedules A and B hereto. | |
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| With a copy by fax only to: | Grushko & Mittman, P.C. 515 Rockaway Avenue Valley Stream, NY 11581 Attn: Edward M. Grushko, Esq. Fax: (212) 697–3575 |
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10. WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.
11. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. The parties may not assign this Agreement or any rights or obligations hereunder.
12. No Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.
13. Benefits; Binding Effect. This Agreement shall be for the benefit of and binding upon the parties hereto and their respective heirs, personal representatives, legal representatives, successors and, where permitted and applicable, assigns, including, without limitation, any successor to the Company, whether by merger, consolidation, sale of stock, sale of assets or otherwise.
14. Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.
15. Headings. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.
16. Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to each other party, it being understood that the parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a ".pdf" format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or ".pdf" signature page were an original thereof.
[Signatures Follow on Next Pages]
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IN WITNESS WHEREOF, the parties hereto have caused this Surrender and Amendment Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.
| NATURALNANO, INC. | |||
| By: | /s/ James Wemett | ||
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| Name: James Wemett | |
| Title: CEO | |||
[Holders signature pages follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Surrender and Amendment Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.
Alpha Capital Anstalt
Name of Holder
/s/ Kourad Ackermann
Signature
Kourad Ackermann
Name of Signatory:
Title: Director
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IN WITNESS WHEREOF, the parties hereto have caused this Surrender and Amendment Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.
Bull Hunter LLC
Name of Holder
/s/ Mark Groussman
Signature
Mark Groussman
Name of Signatory:
Title: Managing Member
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IN WITNESS WHEREOF, the parties hereto have caused this Surrender and Amendment Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.
Marlin Capital Investments LLC
Name of Holder
/s/ Barry Honig
Signature
Barry Honig
Name of Signatory:
Title: President
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IN WITNESS WHEREOF, the parties hereto have caused this Surrender and Amendment Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.
Oscaleta Partners LLC
Name of Holder
/s/ Henry Sargent
Signature
Henry Sargent
Name of Signatory:
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IN WITNESS WHEREOF, the parties hereto have caused this Surrender and Amendment Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.
James Wemett
Name of Holder
/s/ James Wemett
Signature
James Wemett
Name of Signatory:
Title:
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SCHEDULE A
Surrendering Holder | Surrendered Equity | Surrendered Debt |
Alpha Capital Anstalt Lettstrasse 32 9490 Vaduz Lichtenstein | 5,000 shares of Series B Preferred stock | Notes in the aggregate amount of $272,373.15 as follows: 1. $4,123.15 of a note dated 3/7/2007 in the original principal amount of $500,000; 2. a note in the principal amount of $20,000.00 dated 8/12/2008; 3. a note in the principal amount of $30,000.00 dated 9/29/2008; 4. a note in the principal amount of $34,750.00 dated 3/25/2009; 5. a note in the principal amount of $40,000.00 dated 10/22/2009; 6. a note in the principal amount of $24,000.00 dated 7/20/2012; 7. $50,000.00 of a note dated 1/28/2014 in the original principal amount of $200,000; 8. a note in the principal amount of $24,000.00 dated 6/13/2014; 9. a note in the principal amount of $15,000.00 dated 8/19/2014; and 10. a note in the principal amount of $30,500.00 dated 2/19/2015. |
Marlin Capital Investments LLC 555 S. Federal Highway, Suite 450 Boca Raton FL 33432 | n/a | $15,500 from the following note: 1. $15,500 of a note dated 2/10/15 in the original principal amount of $30,500. |
Bull Hunter LLC 5154 La Gorce Drive Miami Beach FL 33140 | n/a | $10,000 from the following note: 1. $10,000 of a note dated June 27, 2014 in the original principal amount of $150,000. |
James Wemett 6215 Wilkins Tract Livonia, NY 14487 | 100 shares of Series D Preferred stock | n/a |
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SCHEDULE B
Amending Holder | Retained Notes |
Alpha Capital Anstalt | $900,000 from the following notes: 1. $495,876.85 of a note dated 3/7/2007 in the original principal amount of $500,000; 2. a $25,500.00 note dated 11/5/2008; 3. a $3,846.15 note dated 7/19/2010; 4. a $3,077.00 note dated 10/22/2010; 5. a $9,000.00 note dated 11/18/2010; 6. a $35,000.00 note dated 2/3/2011; 7. a $700.00 note dated 6/16/2011; 8. a $2,500.00 note dated 12/4/2012; 9. a $2,500.00 note dated 12/10/2012; 10. a $3,500.00 note dated 2/11/2013; 11. a $5,000.00 note dated 3/19/2013; 12. a $10,000.00 note dated 4/8/2013; 13. a $2,500.00 note dated 6/28/2013; 14. a $3,600.00 note dated 9/13/2013; 15. a $3,900.00 note dated 11/6/2013; 16. a $1,500.00 note dated 11/27/2013; 17. a $3,000.00 note dated 1/8/2014; 18. a $9,000.00 note dated 2/13/2014; 19. $150,000.00 of a note dated 1/28/2014 in the original principal amount of $200,000; and 20. a $130,000.00 note dated 10/22/2014 |
Marlin Capital Investments LLC | $210,000 from the following notes: 1. a $45,000 note dated 5/8/14; 2. a $5,000 note dated 5/8/14; 3. a $15,000 note dated 5/8/14; 4. a $130,000 note dated 5/8/14; and 5. $15,000 of a note in the original principal amount $30,500 dated 2/10/15. |
Bull Hunter LLC | $140,000 from the following notes: 1. $140,000 of a note dated June 27, 2014 in the original principal amount of $150,000. |
Oscaleta Partners LLC 90 Grove Street Ridgefield CT 06877 | 1. A note originally issued to Alpha Capital Anstalt, by NaturalNano, Inc. a Nevada corporation on June 27, 2014 in the principal amount of $150,000 with accrued interest of $24,000.00 thereon; and 2. A note originally issued to Alpha Capital Anstalt, by NaturalNano, Inc. a Nevada corporation on July 28, 2014 in the principal amount of $30,005 with accrued interest of $4,563 thereon. |
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EXHIBIT 10.194
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT, dated as of June 23, 2016 (this "Agreement"), by and among NaturalNano, Inc., a Nevada corporation (the "Seller"), NaturalNano Corp., a New York corporation (the "Purchaser") and James Wemett.
WITNESSETH:
WHEREAS, the Seller is currently involved in the business (the "Business") of (i) developing and commercializing material additives based on a technology utilizing halloysite nanotubes and (ii) reselling Ebola personal protective equipment and ancillary supplies;
WHEREAS, the Board of Directors of the Seller has determined that it is in the best interests of the Seller and its shareholders that the Seller enter a new line of business and divest itself of the current business of the Seller;
WHEREAS, the Purchaser desires to acquire from the Seller, and the Seller desires to sell to the Purchaser, all the assets of the Seller relating to the Business upon the terms and subject to the conditions set forth in this Agreement;
WHEREAS, the Board of Directors of the Seller has determined that it is in the best interests of the Seller and its stockholders for the Purchaser to purchase the assets and assume the liabilities of the Business upon the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual representations, warranties, covenants and agreements hereinafter set forth, the parties do hereby agree as follows:
1. CERTAIN DEFINITIONS.
1.1 Defined Terms. As used in this Agreement, the following terms shall have the meanings specified or referred to below:
"Affiliate" of any Person shall mean any Person which, directly or indirectly, controls or is controlled by that Person, or is under common control with that Person. For the purposes of this definition, "control" (including, with correlative meaning, the terms "controlled by" and "under common control with"), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or by contract or otherwise.
"Agreement" shall have the meaning set forth in the recitals.
"Assets" shall have the meaning set forth in Section 2.1.
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"Assigned Contracts" shall mean, all contracts, agreements, guaranties, plans, policies and arrangements, whether written or oral, relating to the Business to which the Seller is a party or to which the Business is subject, including, without limitation, all customer orders and purchase orders for services to be rendered that are yet to be performed, fulfilled or completed and, in each case, any claim or right or any benefit thereunder or resulting therefrom including, without limitation, any right to indemnification.
"Assumed Liabilities" shall have the meaning set forth in Section 2.2.
"Code" shall mean the Internal Revenue Code of 1986, as amended. All citations to the Code or to the regulations promulgated thereunder shall include any amendments or any substitute or successor provisions thereto.
"Contemplated Transactions" shall mean the purchase of the Assets and the execution, delivery and performance of and compliance with this Agreement and all other agreements to be executed and delivered pursuant to this Agreement.
"Contract" shall mean all contracts, agreements, commitments, notes, bonds, deeds of trust, indentures, leases, mortgages, arrangements, instruments, documents of any nature or description that a Person is party to or obligated by.
"Damages" shall have the meaning set forth in Section 6.1.
"Encumbrance" shall mean any security interest, pledge, mortgage, lien, charge, encumbrance, license, easement, right-of-way, cloud on title, adverse claim, preferential arrangement or restriction of any kind, including, but not limited to, any restriction on the use, voting, transfer, receipt of income or other exercise of any attributes of ownership.
"Excluded Assets" shall mean those assets of the Seller which are owned or leased by Omni Shrimp, Inc., a Florida corporation, a wholly-owned subsidiary of the Seller.
"Governmental Body" shall mean any federal, state or local or any foreign government, governmental, regulatory or administrative authority, agency or commission or any court, tribunal or judicial or arbitral body or any quasi-governmental or private body exercising any regulatory or taxing authority thereunder.
"Intellectual Property" shall mean solely with relation to the Business any and all: (a) invention registrations, (b) patents (including but not limited to design patents), patent registrations and patent applications (including all reissues, divisions, continuations, continuations-in-part, extensions and reexaminations) and all improvements to the inventions disclosed in each such registration, patent or application, (c) trademarks, trademark rights, business identifiers, service marks, trade dress, logos, trade names, brand names and corporate names (and any deviations thereof), whether or not registered, including but not limited to all common law rights, and registrations and applications for registration thereof, including, but not limited to, all marks registered in any trademark offices throughout the world, (d) registered and unregistered copyrights in both published works and unpublished works (including but not limited to copyrights on designs) and registrations and applications for registration thereof, (e) computer software, including, without limitation, source code, operating systems and specifications, data, data bases, files, documentation and other materials related thereto, data and documentation, (f) all know-how, trade secrets and confidential or proprietary, technical and business information (including but not limited to ideas, pricing information, client lists and other data, formulas, compositions, inventions, and conceptions of inventions whether patentable or unpatentable and whether or not reduced to practice), (g) whether or not confidential, technology (including know-how and show-how), production processes and techniques, research and development information, drawings, specifications, designs, plans, proposals, technical data, copyrightable works, financial, marketing and business data, pricing and cost information, business and marketing plans and customer and supplier lists and information, (h) all goodwill associated therewith accruing from the dates of first use thereof, and all rights associated with the foregoing, and (i) all contracts or agreements granting any right, title, license or privilege under the intellectual property rights of any third party.
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"IRS" shall mean the Internal Revenue Service.
"Laws" shall mean all federal, state, local, regional, municipal or foreign laws, statutes, rules, regulations, ordinances, codes, decrees, judgments, orders or other legal requirements.
"Party" shall mean any of the Purchaser or the Seller.
"Person" shall mean any individual, corporation, limited liability company, partnership, joint venture, trust, association, unincorporated organization, other entity or Governmental Body.
"Purchase Price" shall have the meaning set forth in Section 2.4.
"Purchaser Indemnified Parties" shall have the meaning set forth in Section 6.1.
"Records" shall have the meaning set forth in Section 2.1(iii).
"Seller Indemnified Parties" shall have the meaning set forth in Section 6.2.
"Taxes" shall mean all taxes, charges, fees, imposts, levies or other assessments, including, without limitation, all net income, gross receipts, capital, sales, use, ad valorem, value added, transfer, franchise, profits, inventory, capital stock, license, withholding, payroll, employment, social security, unemployment, excise, severance, stamp, occupation, property and estimated taxes, customs duties, fees, assessments and charges of any kind whatsoever, together with any interest and any penalties, fines, additions to tax or additional amounts imposed by any Governmental Body and shall include any transferee liability in respect of Taxes.
"Tax Returns" shall mean any federal, state, local or foreign return, report, information return or other document (including any related or supporting information) filed or required to be filed with any Governmental Body in connection with the determination, assessment or collection of any Taxes or the administration of any laws, regulations or administrative requirements relating to any Taxes.
"Transaction Documents" shall mean, collectively, this Agreement and any and all agreements, exhibits, schedules, certificates, instruments and other documents contemplated hereby or executed and delivered in connection herewith.
"Wemett" shall mean James Wemett, the sole officer, director and owner of the shares of the Purchaser.
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1.2 Construction. As used in this Agreement, the masculine, feminine or neuter gender and the singular or plural numbers shall each be deemed to include the other whenever the context so requires. This Agreement shall be construed as a whole and in accordance with its fair meaning and without regard to any presumption or other rule requiring construction against the Party causing this Agreement or any part hereof to be drafted. The language used in this Agreement will be deemed to be the language chosen by the Parties to express their mutual intent, and no rules of strict construction will be applied against any Party. The Parties acknowledge that each Party has reviewed this Agreement and has had the opportunity to have it reviewed by legal counsel of its own choosing. If any words or phrases are stricken or otherwise eliminated, whether or not other words or phrases have been added, this Agreement shall be construed as if the words or phrases stricken or otherwise eliminated were never included in this Agreement.
2. PURCHASE AND SALE OF ASSETS.
2.1 Purchase and Sale of Assets. Upon the terms and subject to the conditions set forth herein, and on the basis of the representations and warranties contained herein, at the Closing, the Seller shall sell, convey, transfer, assign and deliver to the Purchaser, and the Purchaser shall purchase, acquire and accept from the Seller, all of Seller's right, title and interest in and to the assets of the Seller of every kind, nature and description, personal, tangible and intangible (collectively, the "Assets"), solely relating to the Business, other than the Excluded Assets, including without limiting the generality of the foregoing:
(i) all of the Intellectual Property;
(ii) to the extent transferable, all rights and incidents of interest in and to all licenses, franchises, grants, easements, exceptions, certificates, consents, permits, approvals, orders and other authorizations of any Governmental Body relating to the Assets;
(iii) all documents and records relating to the Assets (including without limitation, all employment and personnel records, technical design and know-how, sales data, customer lists, and all other information relating to customers, representatives, distributors and suppliers and other information including advertising materials) and copies of all accounting books, records, ledgers and electronic data processing materials (collectively, the "Records");
(iv) all claims of the Seller against third parties relating to the Business or the Assets, whether choate or inchoate, known or unknown, contingent or otherwise;
(v) all the Assigned Contracts;
(vi) all transferable prepayments, contractual deposits and other funds to be received for goods or services to be performed after the Closing relating to the Business;
(vii) those physical assets critical to the operation of the Business; and
(viii) all other properties and assets of every and, character or description, tangible or intangible owned by the Seller and used or held for use in connection with the Business.
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2.2 Liabilities. Purchaser shall assume and agree to perform the liabilities of Seller related to the Business or the Assets (the "Assumed Liabilities") arising on and after the Closing, specifically (i) the responsibilities of the Seller in the Assigned Contracts, (ii) the lease between the Seller and Cottrone Development for the current offices of the Seller in Rochester, New York, including utilities and maintenance charges and expenses, as of the Closing Date (approximately $1500 for the period prior to the Closing) and for all periods thereafter, (iii) the obligations of the Seller to the employees of the Seller who work for the Business, including without limitation all payroll, employment and income taxes for the period prior to the Closing Date for the 2013 through 2016 taxable years.
2.3 Transfer of Assets. The transfer of the Assets as herein contemplated shall be made by the Seller, free and clear of all Encumbrances of any kind or nature and shall be effected by such bills of sale, endorsements, assignments, drafts, checks, deeds and other instruments of transfer, conveyance and assignment as shall be necessary or appropriate to transfer, convey and assign the Assets to the Purchaser on the Closing Date as contemplated by this Agreement and as shall be requested by the Purchaser. The Seller shall, at any time and from time to time after the Closing Date, execute and deliver such other instruments of transfer and conveyance and do all such further acts and things as may be reasonably requested by the Purchaser to transfer, convey, assign, and deliver to the Purchaser or to aid and assist the Purchaser in collecting and reducing to possession any and all of the Assets, or to vest in the Purchaser good, valid and legal and beneficial title to the Assets which had been owned by the Seller prior to the Closing.
2.4 Purchase Price. The purchase price for the Assets (the "Purchase Price") shall consist of (i) the satisfaction and release by Wemett to the Seller of all accrued salary and cash compensation owed to the Purchaser as of the Closing Date, which is $766,690, and (ii) the issuance to Purchaser of a 6-year cashless warrant to purchase 2,000,000 shares of common stock of the Seller at $0.05 per share, substantially in the form attached hereto as Exhibit A.
2.5 Transfer Taxes. All municipal, county, state and federal sales and transfer Taxes incurred, if any, in connection with the transactions contemplated by this Agreement shall be the responsibility of, and paid promptly by, the Purchaser. Each Party, as appropriate, shall in a timely manner sign and swear to any return, certificate, questionnaire or affidavit as to any matter within its knowledge required in connection with the payment of any such Tax.
3. THE CLOSING.
3.1 Closing Date. The closing of the transactions contemplated by this Agreement (the "Closing") shall take place at the offices of the Seller simultaneously with the execution and delivery of this Agreement (such date and time of the Closing is referred to herein as the "Closing Date").
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3.2 Deliveries by the Purchaser at the Closing. At the Closing, the Purchaser shall deliver to the Seller the following:
(a) the Release attached hereto as Exhibit B; and
(b) such other instruments and certificates as may be reasonably requested by the Seller.
3.3 Deliveries by the Seller at the Closing. At the Closing, the Seller shall deliver to the Purchaser the following:
(a) executed and acknowledged (if appropriate) assignments, bills of sale and/or certificates of title, dated the Closing Date, transferring to the Purchaser all of the Assets free and clear of all Encumbrances, each satisfactory to the Purchaser in form and substance;
(b) originals of the Records; and
(c) such other instruments and certificates as may be reasonably requested by the Purchaser.
3.4 Power of Attorney. Effective upon the Closing Date, the Seller hereby irrevocably constitutes and appoints the Purchaser, its successors and assigns, the true and lawful attorney of the Seller with full power of substitution, in the name of the Purchaser, or the name of the Seller, on behalf of and for the benefit of the Purchaser, to collect all items being transferred, conveyed and assigned to the Purchaser as provided herein, to endorse, without recourse, checks, notes and other instruments in the name of the Seller which have been transferred to the Purchaser, to institute and prosecute, in the name of the Seller or otherwise, all proceedings which the Purchaser may deem proper in order to collect, assert or enforce any claim, right or title of any kind in or to the Assets, to defend and compromise any and all actions, suits or proceedings in respect of any of the Assets subject to the Seller's indemnification obligations under this Agreement, and to do all such acts and things in relation thereto as the Purchaser may deem reasonably advisable. The Seller agrees that the foregoing powers are coupled with an interest and shall be irrevocable by the Seller directly or indirectly by the dissolution of the Seller or in any manner or for any reason.
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4. REPRESENTATIONS AND WARRANTIES OF THE SELLER. The Seller hereby represents and warrants to the Purchaser as follows:
4.1 Organization and Good Standing. The Seller is a corporation duly organized, validly existing and in good standing under the laws of Nevada. The Seller has all requisite corporate or other power to own, operate and lease the Assets and carry on its business as the same is now being conducted.
4.2 Authority Relative to Agreement. The Seller has all requisite power and authority, corporate or otherwise, to execute, deliver and perform its obligations under this Agreement and has taken all action, corporate or otherwise, necessary in order to execute and deliver this Agreement and all other instruments or agreements to be executed in connection herewith and to consummate the Contemplated Transactions. This Agreement has been duly executed and delivered by the Seller. This Agreement constitutes the valid and binding obligation of the Seller, enforceable against it in accordance with its terms, subject to laws relating to bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, marshaling or other laws and rules of law affecting the enforcement generally of creditors' rights and remedies (including such as may deny giving effect to waivers of debtors' or guarantors' rights).
4.3 Absence of Conflict. Neither the execution and delivery of the Transaction Documents by the Seller nor the consummation of the Contemplated Transactions by the Seller will (a) violate, conflict with, result in a breach or termination of, constitute a default under or give rise to a right to terminate, amend, cancel or accelerate (or an event which, with notice or lapse of time or both, would constitute the same) (i) any Contract to which the Seller is a party or by which any of its properties or assets is bound, (ii) the Certificate of Incorporation or Bylaws of the Seller or (iii) any Law of a Governmental Body or any other restriction of any kind or character applicable to the Seller or any of its properties or assets, or (b) result in the creation or imposition of any Encumbrance upon any Asset or any other property or asset of the Seller.
4.4 Consents and Approvals. No consent, waiver, registration, certificate, approval, grant, franchise, concession, permit, license, exception or authorization of, or declaration or filing with, or notice or report to, (a) any Governmental Body or (b) any other Person (including, but not limited to, any party to a Contract of the Seller, is required in connection with the execution, delivery and performance of the Transaction Documents by the Seller, other than (i) approvals which have already been obtained or will have been obtained prior to the Closing, (ii) where the failure to obtain any such approval would not have a material adverse effect on the Contemplated Transactions and (iii) the filing of a Current Report on Form 8-K disclosing the Contemplated Transactions.
4.5 Litigation. There is no action, suit, hearing, inquiry, review, proceeding or investigation by or before any court or Governmental Body pending, or threatened against or involving the Seller or with respect to the activities of any employee or agent of the Seller. The Seller has not received any notice of any event or occurrence which could result in any such action, suit, hearing, inquiry, review, proceeding or investigation.
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5. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER AND WEMETT. The Purchaser and Wemett hereby represents and warrants to the Seller as follows:
5.1 Authority Relative to Agreement. The Purchaser has all requisite power and authority, corporate or otherwise, to execute, deliver and perform his obligations under this Agreement and has taken all action necessary in order to execute and deliver this Agreement and all other instruments or agreements to be executed in connection herewith and to consummate the Contemplated Transactions. This Agreement has been duly executed and delivered by the Purchaser. This Agreement constitutes the valid and binding obligation of the Purchaser, enforceable against the Purchaser in accordance with its terms, subject to laws relating to bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, marshaling or other laws and rules of law affecting the enforcement generally of creditors' rights and remedies (including such as may deny giving effect to waivers of debtors' or guarantors' rights).
5.2 Absence of Conflict. Neither the execution and delivery of the Transaction Documents by the Purchaser nor the consummation of the Contemplated Transactions by the Purchaser will (a) violate, conflict with, result in a breach or termination of, constitute a default under or give rise to a right to terminate, amend, cancel or accelerate (or an event which, with notice or lapse of time or both, would constitute the same) (i) any material Contract to which the Purchaser is a party or by which any of his properties or assets is bound; (ii) any Law of a Governmental Body or any other restriction of any kind or character applicable to the Purchaser or any of his properties or assets; or (b) result in the creation or imposition of any Encumbrance upon any properties or assets of the Purchaser except where any such violation, conflict, breach, termination, default, amendment, cancellation, acceleration or Encumbrance would not have a material adverse effect on the Purchaser or the Contemplated Transactions.
5.3 Consents and Approvals. No consent, waiver, registration, certificate, approval, grant, franchise, concession, permit, license, exception or authorization of, or declaration or filing with, or notice or report to, (a) any Governmental Body and (b) any other Person (including, but not limited to, any party to a Contract of the Purchaser), is required in connection with the execution, delivery and performance of the Transaction Documents by the Purchaser, other than (i) approvals which have already been obtained or will have been obtained prior to the Closing, (ii) where the failure to obtain any such approval would not have a material adverse effect on the Contemplated Transactions and (iii) the filing of a Current Report on Form 8-K disclosing the Contemplated Transactions.
5.4 Employee Matters. There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of Wemett, threatened against or affecting the Business or any of the employees or agents of the Business before or by any court, arbitrator, governmental or administrative agency or regulatory authority, including but not limited to withholding, payroll, employment, FICA, FUTA, social security, unemployment, severance, or other tax or penalty, fine, governmental fee or other like assessment or charge of any kind whatsoever, for the 2013 through 2016 taxable years.
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6. INDEMNIFICATION; SURVIVAL.
6.1 Indemnification by the Seller. The Seller shall indemnify and hold harmless the Purchaser and his Affiliates, employees and agents and the successors and assigns of all of them (the "Purchaser Indemnified Parties"), and shall reimburse the Purchaser Indemnified Parties for, any loss, liability, claim, damage, expense (including, but not limited to, costs of investigation and defense and attorneys' fees) (collectively, "Damages"), arising from or in connection with (a) any material inaccuracy or breach of any of the representations and warranties, of the Seller in this Agreement or in any certificate or document delivered by the Seller pursuant to this Agreement, or any actions, omissions or statements of fact inconsistent with in any material respect any such representation or warranty, (b) any failure by the Seller to perform or comply with, in any material respect, any agreement, covenant or obligation in this Agreement or in any certificate or document delivered by the Seller pursuant to this Agreement to be performed by or complied with by the Seller, (c) any claim made by a third Person against the Purchaser based upon an act or omission of the Seller or its Affiliates subsequent to the Closing Date or (d) any obligation, debt, claim or liability which is not an Assumed Liability.
6.2 Indemnification by the Purchaser. The Purchaser and Wemett, jointly and severally, shall indemnify and hold harmless the Seller and its Affiliates, officers, directors, stockholders, employees, agents and the successors and assigns of all of them (the "Seller Indemnified Parties"), and shall reimburse the Seller Indemnified Parties for, any Damages arising from or in connection with (a) any material inaccuracy or breach of any of the representations and warranties of the Purchaser in this Agreement or in any certificate or document delivered by the Purchaser to the Seller pursuant to this Agreement, (b) any failure by the Purchaser to perform or comply with, in any material respect, any agreement, covenant or obligation in this Agreement or in any certificate or document delivered by the Purchaser pursuant to this Agreement to be performed by or complied with by the Purchaser, including without limitation Purchaser's obligations with respect to the Assumed Liabilities or (c) any claims made by a third Person against the Seller based upon an Assigned Contract.
6.3 Survival. All representations, warranties, covenants and agreements of the Parties contained herein or in any other certificate or document delivered pursuant hereto shall survive until the expiration of the applicable statute of limitations.
7. MISCELLANEOUS.
7.1 Entire Agreement. This Agreement contains, and is intended as, a complete and exclusive statement of all of the terms and the arrangements between the Parties with respect to the matters provided for, supersedes any previous agreements and understandings between the Parties with respect to those matters and cannot be changed or terminated orally.
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7.2 Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction.
7.3 Governing Law. This Agreement shall be governed by and construed in accordance with the law of the State of New York applicable to agreements made and to be performed therein without giving effect to conflicts of law principles. Each of the Parties agree to submit to the jurisdiction of the federal or state courts located in New York, New York in any actions or proceedings arising out of or relating to this Agreement. Each of the Parties, by execution and delivery of this Agreement, expressly and irrevocably (i) consent and submit to the personal jurisdiction of any of such courts in any such action or proceeding; (ii) consent to the service of any complaint, summons, notice or other process relating to any such action or proceeding by delivery thereof to such party as set forth in Section 7.6 below and (iii) waive any claim or defense in any such action or proceeding based on any alleged lack of personal jurisdiction, improper venue or forum non conveniens or any similar basis. EACH OF THE UNDERSIGNED HEREBY WAIVES FOR ITSELF AND ITS PERMITTED SUCCESSORS AND ASSIGNS THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING INSTITUTED IN CONNECTION WITH THIS AGREEMENT.
7.4 Further Assurances. In case at any time after the Closing, any further action or the execution and delivery of any additional documents or instruments shall be necessary or desirable to carry out the purposes of this Agreement and render effective the consummation of the Contemplated Transactions, the Parties shall take such actions and execute such additional documents and instruments as may be reasonably requested by any other Party.
7.5 Headings. The section headings contained in this Agreement are solely for the purpose of reference, are not part of this Agreement of the Parties and shall not in any way affect the meaning or interpretation of this Agreement. All references in this Agreement to Sections, Schedules and Exhibits are to sections, schedules and exhibits to this Agreement, unless otherwise indicated.
7.6 Notices. All notices and other communications under this Agreement shall be in writing and shall be deemed given when (a) delivered by hand, (b) transmitted by facsimile (and confirmed by return facsimile), or (c) delivered, if sent by Express Mail, Federal Express or other nationally recognized overnight delivery service or registered or certified mail, return receipt requested, to the addressee at the following addresses or facsimile numbers (or to such other addresses, or facsimile number as a party may specify by notice given to the other party pursuant to this provision):
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If to the Purchaser, to:
NaturalNano Corp.
James Wemett
6215 Wilkins Tract
Livonia, NY 14487
If to the Seller, to:
NaturalNano, Inc.
13613 GULF BOULEVARD
MADEIRA BEACH, FL 33163
7.7 Binding Effect; Assignment. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns and heirs and representatives. Except as specifically set forth herein, nothing in this Agreement shall create or be deemed to create any third party beneficiary rights in any Person who is not a Party.
7.8 Counterparts. This Agreement may be executed in any number of counterparts and by facsimile or other electronic means, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
7.9 Amendment and Waiver. This Agreement may be amended, or any provision of this Agreement may be waived, provided that such amendment or waiver will be signed by all the Parties. The waiver of any Party of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any other breach.
Remainder of page intentionally blank; Signature pages to follow
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IN WITNESS WHEREOF, the parties hereto have executed this Asset Purchase Agreement as of the date and year first above written.
NATURALNANO, INC. | |||
| By: | /s/ Colm Wrynn | ||
| Name: | Colm Wrynn | |
| Title: | CEO | ||
NATURALNANO CORP. | |||
| By: | |||
Name: | James Wemett | ||
| Title: | President | ||
| /s/ James Wemett | ||
| James Wemett |
12
EXHIBIT 10.195
Bill of Sale , Assignment and Assumption
BILL OF SALE, ASSIGNMENT AND ASSUMPTION, dated as of June 23, 2016 (this "Bill of Sale and Assignment"), by and between (i) NATURALNANO, INC., a Nevada corporation (the "Transferor"), and (ii) NATURALNANO CORP., a New York corporation (the "Transferee") and JamesWemett ("Transferee's Principal").
WITNESSETH:
WHEREAS, the terms of an Asset Purchase Agreement, dated as of June 23, 2016 (the "Agreement"; capitalized terms used in this Bill of Sale and Assignment have the meanings ascribed to them in the Agreement), to which the Transferor, the Transferee and the Transferee's Principal are parties, contemplated that the Transferor would transfer the business (the "Business") of (i) developing and commercializing material additives based on a technology utilizing halloysite nanotubes and (ii) reselling Ebola personal protective equipment and ancillary supplies, which constituted the business operations of the Transferor conducted by the Transferor prior to the Closing, and the Existing Assets (as defined below) to the Transferee (collectively, the "Existing Business Operations"); and
WHEREAS, the Transferee's Principal, who is the sole director, officer and owner of the Transferee, was, prior to the execution and delivery of the Agreement and the consummation of the transactions contemplated thereby, a director, the President, Chief Executive Officer and Chief Financial Officer and a principal shareholder of the Transferor, and, as a result, familiar with the Existing Business Operations; and
WHEREAS, pursuant to due authorization, the Transferor is presently executing and delivering this Bill of Sale and Assignment to the Transferee for the purpose of selling and assigning to and vesting in the Transferee all of the Transferor's right, title and interest in and to the Existing Business Operations and to all Assets (which excludes the Excluded Assets), including the agreements, accounts and personal property relating thereto as listed in the attached Schedule A, solely relating to the Business as more specifically specified in Section 2.1 of the Agreement (such Assets, collectively, including the Existing Business Operations, the "Existing Assets"); and
WHEREAS, in consideration thereof, the Transferee's Principal is simultaneously executing and delivering to the Transferor an Release (the "Release Agreement"),
NOW, THEREFORE, in consideration of the purchase price contemplated in the Agreement, the execution by the Transferee of the Release Agreement and other good and valuable consideration, and intending to be legally bound, the Transferor hereby grants, sells, conveys, assigns, transfers, sets over to, and vests in the Transferee, its successors and assigns all of the Transferor's right, title and interest, legal and equitable, in and to all of the Existing Assets, including, without limitation, all of its rights and privileges under or otherwise in respect of any contracts, commitments and other agreements which are part of the Existing Assets.
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TO HAVE AND TO HOLD the same, including the appurtenances thereof, unto the Transferee, its successors and assigns forever, to its and their own proper use and benefit, subject to the obligations of the Transferee assumed below.
In furtherance of the foregoing:
1. The Transferor constitutes and appoints the Transferee, its successors and assigns as the Transferor's true and lawful agent and attorney with full power of substitution, in the Transferor's name and stead, but on behalf of and for the benefit of the Transferee (but at the sole cost and expense of the Transferee and/or its successors and assigns), to demand and receive any and all of the Existing Assets which are not in the possession or under the exclusive control of the Transferor, and to give receipts and releases for and in respect of the same, and any part thereof, and from time to time to institute and prosecute in the Transferor's name or in the name of the Transferee, its successors and assigns as the legal attorney of and for the Transferor duly authorized, for the benefit of the Transferee, its successors and assigns any and all proceedings at law, in equity or otherwise, which the Transferee, its successors and assigns may deem proper for the collection and enforcement of any claim or right of any kind granted, sold, conveyed, transferred or assigned, or intended so to be, and to do all acts and things in relation to the Existing Assets which the Transferee, its successors and assigns shall deem desirable, the Transferor declaring that the foregoing powers are coupled with an interest and are and shall be irrevocable by the Transferor or by the Transferor's dissolution or in any manner or for any reason whatsoever; provided, however, that all costs, expenses, claims and liabilities incurred in connection with any such action shall be borne by the Transferee and/or its successors and assigns and not by the Transferor.
2. In the case of any Existing Assets which cannot be effectively or validly transferred or assigned by the Transferor without the consent of another party, or in the case of certain contracts, without the novation thereof, (i) the Transferor will use its best efforts (but at the sole cost and expense of the Transferee and/or its successors and assigns) to obtain such consent or novation or, if any be unobtainable, will use its best efforts (but at the sole cost and expense of the Transferee and/or its successors and assigns) to assure to the Transferee the benefits thereof, and (ii) if and when such consents and novations are obtained, this instrument shall automatically be effective to assign and transfer such Existing Assets.
3. The Transferor for itself, its successors and assigns covenants that, at any time and from time to time after the delivery of this instrument, at the Transferee's request and without further consideration but at no cost or expense to the Transferor, the Transferor will do, execute, acknowledge and deliver, or will cause to be done, executed, acknowledged and delivered, all and every such further acts, conveyances, transfers, assignments, powers of attorney and assurances as the Transferee reasonably may require more effectively to convey, transfer to or vest in, and to put the Transferee in possession of, any of the Existing Assets, or to better enable the Transferee to realize upon or otherwise enjoy any of the Existing Assets or to carry into effect the intent and purposes of the Agreement and of this instrument.
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4. Reference is made to the provisions of Sections 2.2 and 2.5 of the Agreement. By its and his acknowledgment and acceptance of this Bill of Sale and Assignment in the spaces provided below, each of the Transferee and the Transferee's Principal acknowledges and agrees that the terms of said Sections 2.2 and 2.5 apply to the transfer and assignment contemplated hereby and assumes all of the liabilities and obligations set forth in said Section 2.2 and 2.5.
5. Nothing in this instrument, expressed or implied, is intended or shall be construed to confer upon or give to any person, firm or corporation other than the Transferee and its successors and assigns any remedy or claim under or by reason of this instrument or any term, covenant or condition hereof, and all of the terms, covenants, conditions, promises and agreements in this instrument contained shall be for the sole and exclusive benefit of the Transferee and its successors and assigns.
6. Neither the making nor the acceptance of this instrument shall enlarge, restrict or otherwise modify the terms of the Agreement or constitute a waiver or release by the Transferor, the Transferee or the Transferee's Principal of any liabilities, duties or obligations imposed upon any of them by the terms of the Agreement, including, without limitation, the representations and warranties and other provisions which the Agreement provides shall survive the date hereof.
7. The Existing Assets are being sold by the Transferor subject to the representations, warranties and agreements of the Transferor in that certain Share Exchange Agreement, dated as of June 23, 2016 (the "Exchange Agreement"), to which the Transferor, Omni Shrimp, Inc. ("Omni") and the shareholders of Omni named therein are parties. Such representations are further conditioned to reflect that the Transferor has not affirmatively taken any action since the closing of the Exchange Agreement, which action would be expected by the Transferor to have a material adverse effect on the Existing Assets. Specifically, each item of the Existing Assets is, to the knowledge of Transferor, in the same state and condition as it was immediately before the closing of the Exchange Agreement, at a time when the Transferee's Principal was a director, executive officer and principal shareholder of the Transferor.
8 This instrument is being executed by the Transferor and shall be binding upon the Transferor, its successors and assigns for the uses and purposes above set forth and referred to, and shall be effective as of the date hereof.
[Balance of page intentionally left blank]
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9 This instrument shall be governed by and enforced in accordance with the laws of the State of New York.
IN WITNESS WHEREOF, each of the Transferor, the Transferee and the Transferee's Principal has caused this Bill of Sale, Assignment and Assumption to be duly executed as of the date first above written.
| Transferor: NATURAL NANO, INC. a Nevada corporation | |||
| By: | /s/ Colm Wrynn | ||
|
| Colm Wrynn, President | |
Acknowledged: | |||
/s/ Don Stelcer | |||
Don Stelcer, Secretary | |||
Acknowledged and accepted: | |||
Transferee: NATURALNANO CORP. a New York corporation | |||
| By: | /s/ James Wemett | ||
James Wemett, President | |||
Transferee's Principal: | |||
| /s/ James Wemett | |||
James Wemett | |||
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SCHEDULE A
ASSETS
The Assets include:
| (i) | all of the Intellectual Property; | |
| (ii) | to the extent transferable, all rights and incidents of interest in and to all licenses, franchises, grants, easements, exceptions, certificates, consents, permits, approvals, orders and other authorizations of any Governmental Body relating to the Assets; | |
| (iii) | all documents and records relating to the Assets (including without limitation, all employment and personnel records, technical design and know-how, sales data, customer lists, and all other information relating to customers, representatives, distributors and suppliers and other information including advertising materials) and copies of all accounting books, records, ledgers and electronic data processing materials (collectively, the "Records"); | |
| (iv) | all claims of the Transferor against third parties relating to the Business or the Assets, whether choate or inchoate, known or unknown, contingent or otherwise; | |
| (v) | all the Assigned Contracts; | |
| (vi) | all transferable prepayments, contractual deposits and other funds to be received for goods or services to be performed after the Closing relating to the Business; | |
| (vii) | those physical assets critical to the operation of the Business; and | |
| (viii) | all other properties and assets of every character or description, tangible or intangible, owned by the Transferor and used or held for use in connection with the Business. |
5
EXHIBIT 10.196
THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF, AND MAY NOT BE SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT AND SUCH STATE SECURITIES LAWS.
VOID AFTER 5:00 P.M. ON JUNE 22, 2022
NATURALNANO, INC.
WARRANT TO PURCHASE SHARES
Rochester, New York
Certificate No. _____
THIS IS TO CERTIFY THAT, for value received, NaturalNano Corp., a New York corporation or any successor or assignee of James Wemett for estate planning purposes (the "Warrantholder"), is entitled, subject to the provisions and upon the terms and conditions set forth herein, to purchase from NaturalNano, Inc., a Nevada corporation (the "Company"), up to two million (2,000,000) shares (the "Warrant Shares") of the Company's common stock, $0.001 par value per share ("Common Stock"), at an exercise price equal to $0.05 per share (the "Exercise Price") at the times and in the manner set forth below.
As provided herein, the Exercise Price and the number of Warrant Shares which may be purchased upon the exercise of this Warrant are, upon the happening of certain events, subject to modification and adjustment.
The rights of the registered holder of this Warrant shall be subject to the following further terms and conditions:
1. Exercise of Warrant; Payment of Exercise Price.
(a) Exercise of Warrant.
(i) While this Warrant remains outstanding, this Warrant shall be exercisable, in whole or in part, as of the date hereof (the "Exercisability Date"), with the exercise form attached as Exhibit A hereto (the "Exercise Form") duly executed by the Warrantholder or by the Warrantholder's duly authorized attorney-in-fact, at the principal office of the Company, or at such other office or agency in the United States as the Company may designate by notice in writing to the Warrantholder (in either event, the "Company Offices"), accompanied by payment in accordance with Section 1(b), of the aggregate Exercise Price payable for the Warrant Shares being purchased. If the Warrantholder exercises the Warrant for fewer than all of the Warrant Shares issuable in accordance with this Warrant, the Company shall, upon each exercise prior to the Expiration Date, execute and deliver to the Warrantholder a new Warrant (dated as of the date hereof) evidencing the balance of the shares of Common Stock that remain subject to issuance upon the exercise of this Warrant. This Warrant shall expire on the sixth (6th) anniversary of the date hereof (the "Expiration Date").
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(ii) On the date of exercise of this Warrant, the Warrantholder exercising the same shall be deemed to have become the holder of record for all purposes of the shares of Common Stock to which the exercise relates.
(iii) As soon as practicable after the exercise of all or part of this Warrant, the Company, at its expense (including the payment by it of any applicable issue taxes), will cause to be issued in the name of and delivered to the Warrantholder a certificate or certificates evidencing the number of duly authorized, validly issued, fully paid and nonassessable shares of Common Stock to which the Warrantholder shall be entitled upon such exercise.
(b) Payment of Exercise Price.
(i) Payment of the Exercise Price with respect to Warrant Shares being exercised hereunder shall be made by the payment to the Company, in cash, by check or wire transfer, of an amount equal to the Exercise Price multiplied by the number of Warrant Shares then being exercised.
(ii) Cashless Exercise.
(A) Payment upon exercise may be made at the option of the Warrantholder either in (i) cash, wire transfer or by check payable to the order of the Company as provided above, (ii) by delivery of Common Stock issuable upon exercise of the Warrant Shares in accordance with Section 1(b)(ii)(B) below, or (iii) by a combination of any of the foregoing methods, for the number of Common Stock specified in such form (as such exercise number shall be adjusted to reflect any adjustment in the total number of shares of Common Stock issuable to the holder per the terms of this Warrant).
(B) Subject to the provisions herein to the contrary, if the Fair Market Value of one share of Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant for cash, the holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being cancelled) by delivery of a properly endorsed Exercise Form delivered to the Company (the date of such delivery shall be referred to herein as the "Determination Date"), in which event the Company shall issue to the holder a number of shares of Common Stock computed using the following formula:
X=Y (A-B)
A
Where:
X= the number of shares of Common Stock to be issued to the Warrantholder
Y= the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being exercised (at the date of such calculation)
A= Fair Market Value (as defined below)
B= Exercise Price (as adjusted to the date of such calculation)
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Fair Market Value is defined as:
(i) if the Company's Common Stock is traded on an exchange or is quoted on the NASDAQ Global Market, NASDAQ Global Select Market, the NASDAQ Capital Market, the New York Stock Exchange or the NYSE MKT LLC, then the average of the closing sale prices of the Common Stock for the five (5) trading days immediately prior to (but not including) the Determination Date;
(ii) If the Company's Common Stock is not traded on an exchange or on the NASDAQ Global Market, NASDAQ Global Select Market, the NASDAQ Capital Market, the New York Stock Exchange or the NYSE MKT LLC, but is traded on the OTC Bulletin Board or in the over-the-counter market, then the average of the closing bid and ask prices reported for the five (5) trading days immediately prior to (but not including) the Determination Date;
(iii) If the Company's Common Stock is not publicly traded, then as the Warrantholder and the Company agree, or in the absence of such an agreement, by arbitration in accordance with the rules then standing of the American Arbitration Association, before a single arbitrator to be chosen from a panel of persons qualified by education and training to pass on the matter to be decided; or
(iv) If the Determination Date is the date of a liquidation, dissolution or winding up, or any event deemed to be a liquidation, dissolution or winding up pursuant to the Company's charter, then all amounts to be payable per share to holders of the Common Stock pursuant to the charter in the event of such liquidation, dissolution or winding up, plus all other amounts to be payable per share in respect of the Common Stock in liquidation under the charter, assuming for the purposes of this clause (iv) that all of the shares of Common Stock then issuable upon exercise of all of the Warrant Shares are outstanding at the Determination Date.
For purposes of Rule 144 promulgated under the Securities Act of 1933, in effect on the date of the issuance of the Warrant and the Warrant Shares, it is intended, understood and acknowledged that the Warrant Shares issued in a cashless exercise transaction in the manner described above shall be deemed to have been acquired by the Warrantholder, and the holding period for the Warrant Shares shall be deemed to have commenced, on the date this Warrant was originally issued.
2. Issuance of Common Stock; Reservation of Shares.
(a) The Company covenants and agrees that all shares of Common Stock which may be issued upon the exercise of all or part of this Warrant will, upon issuance in accordance with the terms hereof, be validly issued, fully paid and nonassessable and free from all taxes, liens and charges with respect to the issue thereof.
(b) The Company further covenants and agrees that if any shares of Common Stock to be reserved for the purpose of the issuance of shares of Common Stock upon the exercise of this Warrant require registration with, or approval of, any governmental authority under any federal or state law before such shares may be validly issued or delivered upon exercise, then the Company will promptly use its best efforts to effect such registration or obtain such approval, as the case may be.
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3. Adjustments of Exercise Price, Number and Character of Warrant Shares, and Number of Warrants.
The Exercise Price and the number and kind of securities purchasable upon the exercise of this Warrant shall be subject to adjustment from time to time upon the happening of the events enumerated in this Section 3.
(a) Stock Dividends, Subdivisions and Combinations. In case the Company shall at any time on or before the Expiration Date:
(i) pay a dividend in shares of Common Stock or other stock of the Company or make a distribution in shares of Common Stock or such other stock to holders of all its outstanding shares of Common Stock;
(ii) subdivide or reclassify the outstanding shares of Common Stock into a greater number of shares;
(iii) combine the outstanding shares of Common Stock into a smaller number of shares of Common Stock; or
(iv) issue by reclassification of its shares of Common Stock other securities of the Company (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing corporation),
then the number and kind of securities purchasable upon exercise of this Warrant outstanding immediately prior thereto shall be adjusted so that the Warrantholder shall be entitled to receive the kind and number of shares of Common Stock or other securities of the Company which the Warrantholder would have owned or have been entitled to receive after the happening of any of the events described above had this Warrant been exercised in full immediately prior to the earlier of the happening of such event or any record date in respect thereto. In the event of any adjustment of the number of shares of Common Stock or other securities of the Company purchasable upon the exercise of this Warrant pursuant to this Paragraph 3(a), the Exercise Price shall be adjusted to be the amount resulting from dividing the number of shares of Common Stock (including fractional shares of Common Stock) covered by this Warrant immediately after such adjustment into the total amount payable upon exercise of this Warrant in full immediately prior to such adjustment. An adjustment made pursuant to this Paragraph 3(a) shall become effective immediately after the effective date of such event retroactive to the record date for any such event. Such adjustment shall be made successively whenever any event listed above shall occur.
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(b) Extraordinary Dividends. In case the Company shall at any time on or before the Expiration Date fix a record date for the issuance of rights, options, or warrants to all holders of its outstanding shares of Common Stock, entitling them (for a period expiring within 45 days after such record date) to subscribe for or purchase shares of Common Stock (or securities exchangeable for or convertible into shares of Common Stock) at a price per share of Common Stock (or having an exchange or conversion price per share of Common Stock, with respect to a security exchangeable for or convertible into shares of Common Stock) which is lower than the current Exercise Price per share of Common Stock on such record date, then the Exercise Price shall be adjusted by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, of which (i) the numerator shall be the number of shares of Common Stock outstanding on such record date plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock so to be offered (or the aggregate initial exchange or conversion price of the exchangeable or convertible securities so to be offered) would purchase at such current Exercise Price and (ii) the denominator shall be the number of shares of Common Stock outstanding on such record date plus the number of additional shares of Common Stock to be offered for subscription or purchase (or into which the exchangeable or convertible securities so to be offered are initially exchangeable or convertible). Such adjustment shall become effective at the close of business on such record date; however, to the extent that shares of Common Stock (or securities exchangeable for or convertible into shares of Common Stock) are not delivered after the expiration of such rights, options, or warrants, the Exercise Price shall be readjusted (but only with respect to Warrants exercised after such expiration) to the Exercise Price which would then be in effect had the adjustments made upon the issuance of such rights, options, or warrants been made upon the basis of delivery of only the number of shares of Common Stock (or securities exchangeable for or convertible into shares of Common Stock) actually issued. In case any subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company and shall be described in a statement mailed to the Warrantholder. Shares of Common Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation.
(c) Extraordinary Distributions. In case the Company shall at any time after the original date of issuance of this Warrant distribute to all holders of its shares of Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the surviving corporation) evidences of its indebtedness or assets (excluding cash dividends and distributions payable out of consolidated net income or earned surplus in accordance with Nevada law and dividends or distributions payable in shares of stock described in Paragraph 3(a) above) or rights, options, or warrants or exchangeable or convertible securities containing the right to subscribe for or purchase shares of Common Stock (or securities exchangeable for or convertible into shares of Common Stock), then the Exercise Price shall be adjusted by multiplying the Exercise Price in effect immediately prior to the record date for such distribution by a fraction, of which (i) the numerator shall be the current Exercise Price per share of Common Stock of the portion of the evidences of indebtedness or assets so to be distributed or of such rights, options or warrants applicable to one share of Common Stock and (ii) the denominator shall be such current Exercise Price per share of Common Stock. Such adjustment shall be made whenever any such distribution is made, and shall become effective on the date of distribution retroactive to the record date for such transaction.
(d) Notice of Adjustments.Whenever the Exercise Price shall be adjusted pursuant to this Section 3, the Company shall promptly deliver a certificate signed by the President, Chief Executive Officer or a Vice President and by the Chief Financial Officer, Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary of the Company, setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated (including a description of the basis on which the Board of Directors of the Company made any determination hereunder), by first class mail postage prepaid to each Warrantholder.
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(e) Capital Reorganizations and Other Reclassifications.In case of any capital reorganization of the Company, or of any reclassification of the shares of Common Stock (other than a reclassification, subdivision or combination of shares of Common Stock referred to in Paragraph 3(a)), this Warrant shall, after such capital reorganization, reclassification of shares of Common Stock, consolidation, merger, or sale, be immediately exercisable, upon the terms and conditions specified in this Warrant, for the kind, amount and number of shares or other securities, assets, or cash to which a holder of the number of shares of Common Stock purchasable (at the time of such capital reorganization, reclassification of shares of Common Stock, consolidation, merger or sale) upon exercise of this Warrant would have been entitled to receive upon such capital reorganization, reclassification of shares of Common Stock, consolidation, merger, or sale; and in any such case, if necessary, the provisions set forth in this Section 3 with respect to the rights and interests thereafter of the Warrantholder shall be appropriately adjusted so as to be applicable, as nearly equivalent as possible, to any shares or other securities, assets, or cash thereafter deliverable on the exercise of this Warrant. The Company shall not effect any such consolidation, merger, or sale, unless prior to or simultaneously with the consummation thereof the successor corporation or entity (if other than the Company) resulting from such consolidation or merger or the corporation or entity purchasing such assets or other appropriate corporation or entity shall assume, by written instrument, the obligation to deliver to the Warrantholder such shares, securities, assets, or cash as, in accordance with the foregoing provisions, such holders may be entitled to purchase and the other obligations hereunder. The subdivision or combination of shares of Common Stock at any time outstanding into a greater or lesser number of shares shall not be deemed to be a reclassification of the shares of Common Stock for purposes of this Paragraph 3(e).
(f) Adjustments to Other Securities.In the event that at any time, as a result of an adjustment made pursuant to this Section 3, the Warrantholder shall become entitled to purchase any shares or securities of the Company other than the shares of Common Stock, thereafter the number of such other shares or securities so purchasable upon exercise of each Warrant and the exercise price for such shares or securities shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as possible to the provisions with respect to the shares of Common Stock contained in Paragraphs 3(a) through (c), inclusive.
4. Definition of Common Stock. The Common Stock issuable upon exercise of this Warrant shall be the Common Stock as constituted on the date hereof except as otherwise provided in Section 3.
5. Replacement of Securities. If this Warrant shall be lost, stolen, mutilated or destroyed, the Company shall, on such terms as to indemnity or otherwise as the Company may in its discretion reasonably impose, issue a new warrant of like tenor or date representing in the aggregate the right to subscribe for and purchase the number of shares of Common Stock which may be subscribed for and purchased hereunder. Any such new warrant shall constitute an original contractual obligation of the Company, whether or not the allegedly lost, stolen, mutilated or destroyed warrant shall be at any time enforceable by anyone.
6. Registration. This Warrant shall be numbered and shall be registered in a register (the "Warrant Register") maintained at the Company Offices as they are issued. The Warrant Register shall list the name, address and Social Security or other Federal Identification Number, if any, of all warrantholders. The Company shall be entitled to treat the Warrantholder as set forth in the Warrant Register as the owner in fact of this Warrant as set forth therein for all purposes and shall not be bound to recognize any equitable or other claim to or interest in this Warrant on the part of any other person, and shall not be liable for any registration or transfer of this Warrant that is registered or to be registered in the name of a fiduciary or the nominee of a fiduciary unless made with the actual knowledge that a fiduciary or nominee is committing a breach of trust in requesting such registration of transfer, or with such knowledge of such facts that its participation therein amounts to bad faith.
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7. Transfer.NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH WARRANTS HAVE BEEN ACQUIRED, AND ANY SHARES OF COMMON STOCK OR ANY OTHER SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT ARE REQUIRED TO BE ACQUIRED, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT FOR THIS WARRANT AND/OR SUCH SHARES OR OTHER SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER OF THIS WARRANT AND SUCH SHARES OR OTHER SECURITIES TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT AND SUCH STATE SECURITIES LAWS. NO REGISTRATION RIGHTS ARE ATTACHED TO THIS WARRANT OR THE WARRANT SHARES.
8. Exchange of Warrant. This Warrant may be exchanged for another warrant entitling the Warrantholder thereof to purchase a like aggregate number of shares of Common Stock as this Warrant entitles such Warrantholder to purchase. The Warrantholder desiring to so exchange this Warrant shall make such request in writing delivered to the Company, and shall surrender this Warrant therewith. Thereupon, the Company shall execute and deliver to the person entitled thereto a new warrant or warrants, as the case may be, as so requested.
9. Notices. All notices and other communications required or permitted hereunder shall be in writing and shall be mailed by registered or certified mail, postage prepaid, sent by facsimile or electronic mail or otherwise delivered by hand, messenger or courier service addressed:
If to the Company:
NaturalNano, Inc.
13613 Gulf Boulevard
Madeira Beach, Florida 33163.
Fax: 727-398-5695
Telephone: 727-393-3382
With a copy to:
Krieger & Prager LLP
39 Broadway, Suite 920
New York, New York 10006
Fax: (212) 363-2999
Telephone: (212) 363-2900
Email: skrieger@kplawfirm.com
Attention: Samuel M. Krieger, Esq.
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If to the Warrantholder:
NaturalNano Corp.
James Wemett
6215 Wilkins Tract
Livonia, NY 14487
Each such notice or other communication shall for all purposes of this Agreement be treated as effective or having been given (i) if delivered by hand, messenger or courier service, when delivered (or if sent via a nationally-recognized overnight courier service, freight prepaid, specifying next-business-day delivery, one business day after deposit with the courier), or (ii) if sent via mail, at the earlier of its receipt or five (5) days after the same has been deposited in a regularly-maintained receptacle for the deposit of the United States mail, addressed and mailed as aforesaid, or (iii) if sent via facsimile, upon confirmation of facsimile transfer, if sent during normal business hours of the recipient, or if not sent during normal business hours of the recipient, then on the recipient's next business day, or (iv) if sent via electronic mail, upon its delivery, if sent during normal business hours of the recipient, or if not sent during normal business hours of the recipient, then on the recipient's next business day.
10. Miscellaneous. This Warrant and any term hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought. This Warrant is deemed to have been delivered in the State of Nevada and shall be construed and enforced in accordance with and governed by the laws of such State, without regard to its conflicts of laws principles. The headings in this Warrant are for purposes of reference only, and shall not limit or otherwise affect any of the terms hereof.
11. Expiration. Unless as hereinafter provided, the right to exercise this Warrant shall expire at the Expiration Date.
NATURALNANO, INC. | |||
Dated: June 23, 2016 | By: | /s/ Colm Wrynn | |
| Name: | Colm Wrynn | |
| Title: | President | ||
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EXHIBIT A
EXERCISE FORM
Dated:_______________, ____
TO NATURALNANO, INC.,
The undersigned hereby irrevocably elects to exercise the within Warrant, to the extent of purchasing _________________ shares of Common Stock, and hereby makes payment of the Exercise Price in payment of the actual Exercise Price therefor as follows:
¨$___________________ by certified or official bank check payable to the order of the Company or by wire transfer.
¨$________________ by withholding Warrant Shares issuable upon exercise of this Warrant;
¨$_____________ by surrendering to the Company (x) $__________ for Warrant Shares previously acquired by the Warrantholder, and/or (y) $_______for other securities of the Company.
INSTRUCTIONS FOR REGISTRATION OF STOCK
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ASSIGNMENT FORM
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hereby sells, assigns and transfers unto: | |||
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this Warrant and the securities issuable upon exercise of this Warrant to the extent of ________________ Warrants and does hereby irrevocably constitute and appoint ___________________________ Attorney-in-Fact, to transfer the same on the books of the Company with full power of substitution in the premises.
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