SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999
Commission File No. 0-22307
SENESCO TECHNOLOGIES, INC.
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(Exact Name of Small Business Issuer as Specified in Its Charter)
Idaho 84-1368850
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(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
34 Chambers Street, Princeton, New Jersey 08542
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(Address of Principal Executive Offices) (Zip Code)
(609) 252-0680
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(Issuer's Telephone Number, Including Area Code)
Check whether the Issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days.
Yes: X No:
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State the number of shares outstanding of each of the Issuer's classes of
common stock, as of March 31, 1999:
Class Number of Shares
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Common Stock, $.0015 par value 2,700,008
Transitional Small Business Disclosure Format (check one):
Yes: No: X
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SENESCO TECHNOLOGIES, INC. AND SUBSIDIARY
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TABLE OF CONTENTS
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Page
PART I FINANCIAL INFORMATION
Item 1. Financial Statements.................................... 1
CONDENSED CONSOLIDATED BALANCE SHEET
as of March 31, 1999 (unaudited)............................. 2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended March 31, 1999 and From Inception
on July 1, 1998 through March 31, 1999 (unaudited)........... 3
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS'
EQUITY (DEFICIT)............................................. 4
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
From Inception on July 1, 1998 through
March 31, 1999 (unaudited)................................... 5
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)................................................. 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations..................... 9
Liquidity and Capital Resources.............................. 13
Results of Operations........................................ 15
PART II OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds............... 16
Item 4. Submission of Matters to a Vote of Security Holders..... 16
Item 5. Other Information....................................... 19
Item 6. Exhibits and Reports on Form 8-K........................ 22
SIGNATURES ..................................................... 23
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PART I. FINANCIAL INFORMATION.
------------------------------
ITEM 1. FINANCIAL STATEMENTS.
Certain information and footnote disclosures required under generally
accepted accounting principles have been condensed or omitted from the following
consolidated financial statements pursuant to the rules and regulations of the
Securities and Exchange Commission, although Senesco Technologies, Inc. and its
subsidiary (the "Company") believes that the disclosures are adequate to assure
that the information presented is not misleading in any material respect.
The results of operations for the interim periods presented herein are not
necessarily indicative of the results to be expected for the entire fiscal year.
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SENESCO TECHNOLOGIES, INC. AND SUBSIDIARY
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(A DEVELOPMENT STAGE COMPANY)
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CONDENSED CONSOLIDATED BALANCE SHEET
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<TABLE>
<CAPTION>
March 31,
1999
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(unaudited)
ASSETS
------
<S> <C> <C>
Equipment, net of Accumulated Depreciation of $1,613...................... $ 28,241
Intangible Assets, net of Accumulated Amortization of $549............... 53,260
Security Deposit.......................................................... 10,863
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TOTAL ASSETS.............................................................. $ 92,364
==========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
----------------------------------------------
CURRENT LIABILITIES
Accounts Payable........................................................ $274,474
Note Payable............................................................ 432,892
Accrued Payroll Taxes................................................... 9,597
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Total Current Liabilities............................................... 716,963
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred Stock, 5,000,000 shares, $0.001 par value, authorized,
0 shares issued and outstanding......................................... --
Common Stock, 16,666,667 shares, $0.0015 par value, authorized,
2,700,008 shares issued and outstanding................................. 4,050
Capital in excess of par.................................................. 81,129
Deficit accumulated during the development stage.......................... (709,778)
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Total Stockholders' Equity (Deficit)...................................... (624,599)
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)...................... $ 92,364
==========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
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SENESCO TECHNOLOGIES, INC. AND SUBSIDIARY
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(A DEVELOPMENT STAGE COMPANY)
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
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(unaudited)
From Inception
For the Three on July 1, 1998
Months Ended through
March 31, 1999 March 31, 1999
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Revenue............................ $ 0 $ 0
Operating Expenses:
Selling, general and
administrative.................. 275,305 546,964
Research and development........... 142,922 151,922
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Total Operating Expenses........... 418,227 698,886
Interest expense................... 8,543 10,892
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Net Loss........................... $ (426,770) $ (709,778)
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Basic Net Loss Per Share........... $ (0.19) $ (0.49)
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Basic Weighted Average
Number of Shares Outstanding.... 2,303,341 1,434,453
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See Notes to Condensed Consolidated Financial Statements.
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SENESCO TECHNOLOGIES, INC. AND SUBSIDIARY
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(A DEVELOPMENT STAGE COMPANY)
-----------------------------
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
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FROM INCEPTION ON JULY 1, 1998 THROUGH MARCH 31, 1999 (unaudited)
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<TABLE>
<CAPTION>
Capital in Excess Accumulated
Common Stock of Par Value Deficit Total
-------------------- ------------------- ------------- -------
Shares Amount
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<S> <C> <C> <C>
Issuance of common
stock..................... 1,000,008 $ 1,500 $ (1,500) -- --
Contribution of capital
through payment of
expenses.................. -- -- 85,179 -- $ 85,179
Issuance of common stock
in reverse merger......... 1,700,000 2,550 (2,550) -- --
Net loss.................. -- -- -- $(709,778) $(709,778)
--------- --------- -------- --------- ---------
Balance at
March 31, 1999............ 2,700,008 $ 4,050 $ 81,129 $(709,778) $(624,599)
========= ======= ======== ========= =========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
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SENESCO TECHNOLOGIES, INC. AND SUBSIDIARY
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(A DEVELOPMENT STAGE COMPANY)
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CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
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(unaudited)
From Inception on
July 1, 1998
through
March 31, 1999
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Cash flows used in operating activities:
Net loss............................................ $ (709,778)
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Adjustments to reconcile net loss
to cash used in operating activities:
Capital contributed through payment of expenses
by shareholder.................................... 85,179
Depreciation and amortization....................... 2,162
(Increase) in operating assets:
Patent costs........................................ (53,809)
Security deposit.................................... (10,863)
Increases in operating liabilities:
Accounts payable.................................... 274,474
Accrued expenses.................................... 9,597
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Net cash flows used in operating activities......... (403,038)
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Cash flows from investing activity:
Purchase of equipment............................... (29,854)
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Cash flows provided by financing activity:
Proceeds from note payable.......................... 432,892
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Net change in cash and cash at end of period........ $ 0
============
See Notes to Condensed Consolidated Financial Statements.
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SENESCO TECHNOLOGIES, INC. AND SUBSIDIARY
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------
(unaudited)
Note 1 - Basis of Presentation:
The financial statements included herein have been prepared by the Company,
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations.
In the opinion of the Company's management, the accompanying unaudited
consolidated financial statements contain all adjustments, consisting solely of
those which are of a normal recurring nature, necessary to present fairly its
financial position as of March 31, 1999, the results of its operations for the
three months ended March 31, 1999 and for the period from inception on July 1,
1998 through March 31, 1999 and its cash flows for the period from inception on
July 1, 1998 through March 31, 1999.
Interim results are not necessarily indicative of results for the full
fiscal year.
Senesco, Inc., a New Jersey corporation and wholly-owned subsidiary of the
Company ("Senesco"), was incorporated on November 24, 1998 and is the successor
entity to Senesco, L.L.C., a New Jersey limited liability company, which was
formed on June 25, 1998 but commenced operations on July 1, 1998.
Senesco is a development stage company that was organized to commercially
exploit technology acquired and developed in connection with the identification
and characterization of a gene which controls the aging of fruits, vegetables
and flowers.
Note 2 - Related Party Transactions:
During the period from inception on July 1, 1998 through March 31, 1999, a
shareholder of the Company paid expenses on its behalf in the amounts of
$85,179. These amounts were contributed by the shareholder to the capital of the
Company.
In January 1999, Senesco entered into a subleasing arrangement pursuant to
which it subleases office space from a company controlled by a director and
shareholder of the Company on a month to month basis for a monthly rental of
$5,500. The Company believes that such lease is on terms at least as favorable
as the Company would have received from any third party.
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SENESCO TECHNOLOGIES, INC. AND SUBSIDIARY
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
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(unaudited)
Note 3 - Loss Per Share:
Basic loss per common share is computed by dividing the loss by the
weighted average number of common shares outstanding during the period. During
the three-month period ended March 31, 1999 and for the period from inception on
July 1, 1998 through March 31, 1999, there were no dilutive securities
outstanding.
Note 4 - Significant Events:
On January 21, 1999, Nava Leisure USA, Inc., an Idaho corporation and the
predecessor registrant to the Company ("Nava"), effected a one for three
reverse-stock-split of the number of shares of its common stock outstanding,
restating the number of shares of common stock outstanding from 3,000,025 to
1,000,008. In addition, the number of shares of authorized common stock was
decreased from 50,000,000 shares, $.0005 par value, to 16,666,667 shares, $.0015
par value (the "Common Stock").
On January 22, 1999, Nava consummated the merger (the "Merger") with
Senesco. Nava issued 1,700,000 shares of Common Stock, on a post-split basis,
for all of the outstanding capital stock of Senesco. At the time of the Merger,
Senesco's assets included $22,107 in cash, $13,894 in related party receivables
from a shareholder, $26,869 in capital assets, and $16,417 in patent costs and
intellectual property rights. Senesco also had $23,185 in accounts payable and
accrued expenses and a note payable of $252,527 in principal and accrued
interest. Pursuant to the Merger, the shareholders of Senesco acquired majority
control of Nava, and the name of Nava was changed to Senesco Technologies, Inc.
(hereinafter referred to as the "Company").
For accounting purposes, the Merger has been treated as a recapitalization
of the Company with Senesco Technologies, Inc. as the acquirer (reverse
acquisition).
On October 22, 1998, as amended on October 23, 1998, Senesco entered into a
loan agreement with South Edge International Limited providing for a bridge loan
in the aggregate amount of $254,000 (the "South Edge Loan"), $220,000 of which
has been borrowed as of March 31, 1999. In addition, on October 23, 1998,
Senesco entered into a loan agreement with the Parenteau Corporation providing
for a bridge loan in the aggregate amount of $202,000, all of which has been
borrowed as of March 31, 1999 (the "Parenteau Loan" and together with the South
Edge Loan, the "Bridge Financing"). The Bridge Financing is evidenced by
promissory notes bearing interest at an annual rate equal to the prime rate as
reported in the Wall Street Journal plus 2%. As of March 31, 1999, Senesco had
borrowed $422,000 pursuant to such Bridge Financing. The total loan amount
outstanding under the Bridge Financing, plus interest, is due October 22, 1999,
one year from the date the Bridge Financing was entered into. Moreover, the
Bridge Financing was made in anticipation of the Merger, and provided that in
the event the Company consummated an equity financing in excess of $1,500,000,
the entire loan amount
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outstanding under the Bridge Financing, plus accrued interest, will become
immediately due and payable. Therefore, approximately $422,000, plus accrued
interest of approximately $10,892, of the $2 million raised in connection with
the Private Placement (discussed below) will be used to repay the Bridge
Financing.
Note 5 - Subsequent Events:
Equity Financing
On May 21, 1999, the Company consummated a private placement of 379,597
shares of its Common Stock, at $5.26875 per share, for an aggregate fair market
value of $2,000,000 (the "Private Placement"). The Company engaged Lionheart
Services, Inc. as its Placement Agent pursuant to the Placement Agency Agreement
dated as of April 30, 1999 (the "Placement Agency Agreement"). The Placement
Agency Agreement provides for, among other things, a 10% sales commission on the
first $800,000 raised and a 5% sales commission on the remaining balance, to be
paid in cash or Common Stock of the Company. In addition, the Placement Agency
Agreement provides that the Placement Agent will pay all of its expenses from a
non-accountable expense allowance equal to 3% of the total proceeds of the
Private Placement. In connection with the Private Placement, the Company also
executed a Common Stock Purchase Agreement with each purchaser of Common Stock,
dated as of May 11, 1999 (the "Stock Purchase Agreement"). Pursuant to the Stock
Purchase Agreement, the purchase price per share of Common Stock was equal to
80% of the average closing bid and ask prices of the Company's Common Stock
during the twenty (20) trading days ending three days prior to the Closing Date
(as defined therein). The Stock Purchase Agreement also provides for price
protection whereby upon the issuance or sale by the Company of any additional
Common Stock or Common Stock equivalents within a period of sixty (60) days
following the Closing Date, other than options or warrants currently outstanding
as of the date of the Stock Purchase Agreement, for a consideration per share
less than the purchase price provided for in the Stock Purchase Agreement (the
"Reduced Purchase Price"), then the Company shall immediately issue such
additional shares of Common Stock to the purchaser which each such purchaser's
investment would have purchased at the Reduced Purchase Price. In addition, the
Company entered into a Registration Rights Agreement with each purchaser dated
as of May 11, 1999 (the "Registration Rights Agreement"). The Registration
Rights Agreement provides for, among other things, a demand registration right
beginning after January 22, 2000, as well as piggy-back registration rights for
a three-year period from the Closing Date.
Insider Participation
Certain directors and an executive officer of the Company participated in
the Private Placement. Specifically, such directors and the executive officer of
the Company purchased, in the aggregate, 170,818 shares of restricted Common
Stock on the same terms and conditions as all purchasers thereunder.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
OVERVIEW
History and Organization
The predecessor entity to the registrant, Nava Leisure USA, Inc. (the
registrant, prior to the Merger (defined below) is referred to herein, as
"Nava"), was organized on April 1, 1964 under the laws of the State of Idaho
under the name, "Felton Products, Inc.," having the stated purpose of engaging
in various investment activities, without limitation of its general corporate
powers to engage in any lawful activities. Nava engaged in limited investment
and business development operations and, from the time of its inception, Nava
has undergone several name and business changes. Until the Merger and since
approximately 1988, Nava had no assets, capital or income. Prior to the Merger,
Nava was considered a development stage company and, due to its status as a
"shell" corporation, its principal business purpose was to merge with or
otherwise acquire an operating entity.
On March 27, 1997, Nava voluntarily registered its Common Stock under
Section 12(g) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), in order to make information concerning itself more readily available to
the public. On October 9, 1998, Nava entered into an Agreement and Plan of
Merger by which, subject to approval of the stockholders of Nava, Nava Leisure
Acquisition Corp., a New Jersey corporation and a wholly-owned subsidiary of
Nava, was to merge with and into Senesco, Inc., a New Jersey corporation
("Senesco"), and the stockholders of Senesco were to receive newly issued Common
Stock of Nava such that the stockholders of Senesco would acquire a majority of
Nava's outstanding Common Stock (the "Merger"). On January 21, 1999, the
stockholders of Nava approved the Merger and the transactions contemplated
thereby. The Merger was consummated on January 22, 1999, the date upon which the
Certificate of Merger filed with the Secretary of State of the State of New
Jersey was declared effective. Pursuant to the Merger, Nava changed its name to
Senesco Technologies, Inc. (herein referred to as the "Company"), and Senesco
remained a wholly-owned subsidiary of the Company. Senesco was incorporated on
November 24, 1998 under the name, "Senesco of New Jersey, Inc." and is the
successor entity to Senesco, L.L.C., a New Jersey limited liability company
which was formed on June 25, 1998.
Business of the Company
The business of the Company will be operated through Senesco. The primary
business of the Company is the development and commercial exploitation of
potentially significant technology in connection with the identification and
characterization of a gene (a lipase gene) which controls the aging (senescence)
of plants (flowers, fruits and vegetables).
The Company has formulated a research and development plan to attempt to
further characterize the gene in flowers, fruits, vegetables and crops.
Senescence in plant tissues is the natural aging of these tissues. Loss of
cellular membrane integrity attributable to lipase gene activity is an early
event during the senescence of all plant tissues that prompts the deterioration
of fresh flowers, fruits and vegetables. This loss of integrity is attributable
to the formation of lipid metabolites in membrane bilayers that "phase-separate"
and causes the membranes to become "leaky." A decline in cell function ensues
leading to deterioration and eventual death (spoilage) of the tissue.
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Presently, the technology utilized for controlling senescence and
increasing the shelf life of flowers, fruits and vegetables relies on reducing
ethylene biosynthesis, and hence only has application to a limited number of
plants that are ethylene-sensitive.
The Company's research and development plan focuses on four major groups of
consumer products: fruits, vegetables, flowers and crops. The Company's research
and development efforts seek to isolate and characterize the lipase gene in an
example from each of these four categories. Once a gene is characterized, the
Company seeks to create a transgenic (i.e., genetically altered) example of each
to show proof of concept in each category. The Company is presently focusing on
tomato, carnation, arabadopsis and banana plants.
Once work has been completed on these four plants, the Company will
continue its research and development strategy by expanding the altered lipase
technology into a variety of other commercially viable agricultural crops. Such
plants are expected to include corn, lettuce and strawberries, among others.
Following development of altered lipase seedlings and seeds, if successful, the
Company's overall marketing strategy is expected to be flexible in order to
allow for differences in plant reproduction and farming procedures customarily
employed in different sectors of the broad agricultural and horticultural
markets. There can be no assurance, however, that the Company's research and
development efforts will be successful, or if successful, that the Company will
successfully commercially exploit its technology.
Joint Venture
On May 14, 1999, the Company entered into a joint venture agreement with
Rahan Meristem, an Israeli company engaged in the worldwide export marketing of
genetically engineered banana plants (the "Joint Venture"). The Company will
contribute, by way of a limited, exclusive world-wide license to the Joint
Venture, access to its technology, discoveries, inventions, know-how (patentable
or otherwise), pertaining to plant genes and their cognate expressed proteins
that are induced during senescence (plant aging) for the purpose of developing,
on a joint basis, genetically altered banana plants and other plant media which
will result in a "longer shelf life" banana. Rahan Meristem will contribute its
technology, inventions and know-how with respect to banana plants. The Joint
Venture would be owned 50% by the Company and 50% by Rahan Meristem. There can
be no assurance, however, that the Company's Joint Venture will be successful,
or if successful, that the Company will successfully commercially exploit its
technology.
Research and Development Agreement
The inventor of the Company's technology, John E. Thompson, Ph.D., is the
Dean of Science at the University of Waterloo in Waterloo, Ontario and was
recently appointed as the President and Chief Executive Officer of the Company.
Dr. Thompson is also a shareholder of the Company and owns approximately fifteen
and seventy-four hundredths percent (15.74%) of the outstanding shares of the
Common Stock of the Company as of March 31, 1999. Senesco entered into a
three-year research and development agreement, dated as of September 1, 1998,
with Dr. Thompson and the University of Waterloo (the "R&D Agreement"). The R&D
Agreement provides that the University of Waterloo shall perform research to
enhance the intellectual property rights of Senesco, and Senesco shall pay for
the cost of work and make certain payments totaling $750,000 Canadian (as
specified therein).
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Patent Application
Dr. Thompson and his colleagues, Yuwen Hong and Katalin Hudak, filed a
patent application on June 26, 1998 (the "Patent Application") to protect their
invention, titled "A Plant Lipase Exhibiting Senescence-Induced Expression and a
Method for Controlling Senescence in a Plant." By assignment dated June 25, 1998
and recorded with the United States Patent and Trademark Office (the "PTO") on
June 26, 1998, Dr. Thompson and Messrs. Hong and Hudak assigned all of their
rights in and to the Patent Application and any other applications filed in the
United Sates or elsewhere with respect to the invention and/or improvements
thereto to Senesco, L.L.C. The Company succeeded to the assignment and ownership
of the Patent Application. Dr. Thompson, and Messrs. Hong and Hudak filed a new
patent application on February 16, 1999 (the "New Patent Application" and
together with the Patent Application, the "Patent Applications") titled "DNA
Encoding A Plant Lipase, Transgenic Plants and a Method for Controlling
Senescence in Plants." The New Patent Application serves as a continuation of
the Patent Application. Concurrent with the filing of the New Patent Application
with the PTO and as in the case of the original Patent Application, Dr.
Thompson, Messrs. Hong and Hudak assigned all of their rights in and to the New
Patent Application and any other applications filed in the United Sates or
elsewhere with respect to such invention and/or improvements thereto to Senesco.
Dr. Thompson and Messrs. Hong and Hudak have received shares of restricted
common stock of the Company in consideration for the assignments of both Patent
Applications. The inventions include a method for controlling senescence of the
cDNA for a carnation petal lipase, a vector containing a cDNA for the carnation
petal lipase, and a transformed microorganism expressing the lipase of cDNA.
Management believes that the inventions provide a means for delaying
deterioration and spoilage, which could greatly increase the shelf-life of
fruits, vegetables, and flowers by silencing or substantially repressing the
expression of the lipase gene induced coincident with the onset of senescence.
There can be no assurance that patent protection will be granted with respect to
the Patent Applications or that, if granted, the validity of such patents will
not be challenged. Furthermore, although the Company believes that its
technology is unique and will not violate or infringe upon the proprietary
rights of any third party, there can be no assurance that no such claims will be
made or if made, could be successfully defended against.
Competition
The Company's competitors in the field of plant senescence gene technology
are companies that develop and produce transgenic plants. Such companies
include: Archer Daniels Midland, Inc.; Monsanto Corporation and its
subsidiaries; Agritope Inc.; Dekalb Genetics; American Cyanamid; ArgEvo;
Cargill; DNAP Holding Corporation; and Garst Seed Company, among others. The
Company believes that its proprietary technology is unique and that, therefore,
its competitors' products will not be in direct competition with the Company.
However, there can be no assurance that its competitors will not develop a
similar product with superior properties or greater cost-effectiveness than the
Company.
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Government Regulation
At present, no governmental license or approval is necessary for the
conduct of lipase gene research and development. However, approval by the
Federal Food and Drug Administration (the "FDA") is required in order to sell or
offer for sale to the general public a genetically engineered plant or plant
product.
The Company believes that it's current activities, which to date have been
confined to research and development efforts, do not and will not require
licensing or approval by any governmental regulatory agency until such time as
the Company has developed a marketable genetically engineered plant for use by
the general public. Government regulations are, however, subject to change and,
in such event, there can be no assurance that the Company may not be subject to
such regulation or require such licensing or approval in the future. In
addition, products developed by the Company will require FDA approval prior to
being marketed and sold for use by the general public. There can be no assurance
that such approval will be obtained in a timely manner, if at all.
Employees
The Company currently has five employees, four of whom are currently
executive officers and are involved in the management of the Company.
Safe Harbor Statement
Certain statements included in the Form 10-QSB, including, without
limitation, statements regarding the anticipated growth in the markets for the
Company's services, the continued development of the lipase technology, the
approval of the Company's Patent Applications, the possibility of FDA approval
in order to sell or offer for sale to the general public a genetically
engineered plant or plant product, the successful implementation of the Joint
Venture with Rahan Meristem, the success of the R&D Agreement, statements
relating to the Company's Patent Applications, the anticipated longer term
growth of the Company's business, and the timing of the projects and trends in
future operating performance, are forward-looking statements within the meaning
of Section 21E of the Securities Exchange Act of 1934, as amended. The factors
discussed herein and others expressed from time to time in the Company's filings
with the Securities and Exchange Commission could cause actual results and
developments to be materially different from those expressed in or implied by
such statements.
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LIQUIDITY AND CAPITAL RESOURCES
Overview
The Company's cash over-draft was $6,305, and the Company's working capital
deficit was $716,963 as at March 31, 1999.
As of March 31, 1999, the Company has a tax loss carry-forward of $709,778
to off-set future taxable income.
Financing Needs
To date, the Company has not generated any revenues or conducted any
business. The Company has not been profitable since inception, expects to incur
additional operating losses in the future, and will need significant additional
financing to continue the development and commercialization of its technology.
The Company does not expect to generate any significant revenues from operations
in the near future.
The Company expects its capital requirements to increase significantly over
the next several years as it commences new research and development efforts,
undertakes new product developments, increases sales and administration
infrastructure and embarks on developing in-house business capabilities and
facilities. Therefore, the Company expects that its future need for capital will
increase. The Company's future liquidity and capital funding requirements will
depend on numerous factors, including, but not limited to, the levels and costs
of the Company's research and development initiatives and the cost and timing of
the expansion of the Company's sales and marketing efforts.
The Company anticipates that its available credit will be sufficient to
fund working capital needs and capital requirements through Fiscal 1999.
However, in order to fund its research and development and commercialization
efforts (discussed above), including the hiring of additional employees, and in
order to pay off the Bridge Financing (defined below), on May 21, 1999, the
Company consummated a private placement of 379,597 shares of its Common Stock
for an aggregate fair market value of $2 million (the "Private Placement"). See
"Part II, Item 5. Other Information." Certain directors and an executive officer
of the Company participated in the Private Placement on the same terms and
conditions as all purchasers thereunder. As a result of the Private Placement,
as of May 24, 1999, the Company had 3,079,605 shares of Common Stock issued and
outstanding, and up to an additional 37,960 shares of Common Stock may be issued
to the Placement Agent in lieu of such placement agency fees and expenses.
Additional financings will be required thereafter which may, if and when
consummated by the Company, cause further dilution of ownership.
On October 22, 1998, as amended on October 23, 1998, Senesco entered into a
loan agreement with South Edge International Limited providing for a bridge loan
in the aggregate amount of $254,000 (the "South Edge Loan"), $220,000 of which
has been borrowed as of March 31, 1999. In addition, on October 23, 1998,
Senesco entered into a loan agreement with the Parenteau Corporation providing
for a bridge loan in the aggregate amount of $202,000, all of which has been
borrowed as of March 31, 1999 (the "Parenteau Loan" and together with the
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<PAGE>
South Edge Loan, the "Bridge Financing"). The Bridge Financing is evidenced by
promissory notes bearing interest at an annual rate equal to the prime rate as
reported in the Wall Street Journal plus 2%. As of March 31, 1999, Senesco had
borrowed $422,000 pursuant to such Bridge Financing. The total loan amount
outstanding under the Bridge Financing, plus interest, is due October 22, 1999,
one year from the date the Bridge Financing was entered into. Moreover, the
Bridge Financing was made in anticipation of the Merger, and provided that in
the event the Company consummated an equity financing in excess of $1,500,000,
the entire loan amount outstanding under the Bridge Financing, plus accrued
interest, will become immediately due and payable. Therefore, approximately
$422,000, plus accrued interest of approximately $10,892, of the $2 million
raised in connection with the Private Placement (discussed below) will be used
to repay the Bridge Financing.
Year 2000 Compliance
Historically, certain computer programs have been written using two digits
rather than four to define the applicable year, which could result in the
computer recognizing a date using "00" as the year 1900 rather than the year
2000. This, in turn, could result in major system failures or miscalculations,
and is generally referred to as the "Year 2000 Problem." The Company has
assessed its state of readiness with respect to the Year 2000 Problem. The
Company's management has reviewed and tested the Company's internal business
systems for Year 2000 compliance. The Company believes that, based on results of
such review and testing, the Company's internal business systems, including its
computer systems, are Year 2000 compliant. The Company does not anticipate any
material future expenditures relating to the Year 2000 compliance of its
internal systems. There can be no assurance, however, that the Year 2000 Problem
will not adversely affect the Company's business, financial condition, results
of operations or cash flows.
In addition, the Company receives data derived from the computer systems of
various sources, which data or software may or may not be Year 2000 compliant.
Although the Company is currently taking steps to address the impact, if any, of
the Year 2000 Problem relating to the data received from its clients, failure of
such computer systems to properly address the Year 2000 Problem may adversely
affect the Company's business, financial condition, results of operations or
cash flows.
The Year 2000 disclosures discussed above are based on numerous
expectations which are subject to uncertainties. Certain risk factors which
could have a material adverse effect on the Company's results of operations and
financial condition include but are not limited to: failure to identify critical
systems which will experience failures, errors in the remediation efforts,
inability to obtain new replacements for non-compliant systems or equipment,
general economic downturn relating to Year 2000 failures in the U.S. and in
other countries, failures in global banking systems and capital markets, or
extended failures by public and private utility companies or common carriers
supplying services to the Company.
-14-
<PAGE>
RESULTS OF OPERATIONS
Three Months Ended March 31, 1999 and for the Period From Inception on July 1,
- --------------------------------------------------------------------------------
1998 through March 31, 1999
- ---------------------------
The Company is a development stage company. From inception through March
31, 1999, the Company had no revenues. In addition, operating expenses were
$426,770 and $709,778 for the three months ended March 31, 1999 and for the
period from inception on July 1, 1998 through March 31, 1999, respectively.
The Company has incurred losses each year since inception and has an
accumulated deficit of $709,778 at March 31, 1999. The Company expects to
continue to incur losses over, approximately, the next two to three years from
expenditures on research, product development, marketing and administrative
activities.
The Company does not expect to generate any revenues from product sales
for, approximately, the next two to three years while the Company engages in
significant research and development efforts. No assurance can be given,
however, that such research and development efforts will result in any
commercially viable products. Successful future operations will depend on the
Company's ability to transform its research and development activities into
commercializable products.
-15-
<PAGE>
PART II. OTHER INFORMATION.
---------------------------
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
On January 21, 1999, in connection with the Merger, Nava effected a
three-for-one reverse stock split whereby the 3,000,025 shares of issued and
outstanding common stock of Nava, $.0005 par value, was reduced to 1,000,008
shares of common stock, $.0015 par value (the "Common Stock"). In addition, the
number of shares of authorized Common Stock was decreased from 50,000,000
shares, $.0005 par value, to 16,666,667 shares, $.0015 par value.
On January 22, 1999, Nava issued an aggregate of 1,700,000 shares of
restricted Common Stock of Nava, on a post-split basis, to the shareholders of
Senesco in connection with the Merger.
On May 21, 1999, the Company issued an aggregate of 379,597 shares of
restricted Common Stock of the Company to accredited investors in connection
with the Private Placement. Certain directors and an executive officer of the
Company participated in the Private Placement. Specifically, such directors and
the executive officer of the Company purchased, in the aggregate, 170,818 shares
of restricted Common Stock on the same terms and conditions as all purchasers
thereunder. See "Item 5. Other Information."
No underwriter was employed by the Company in connection with the issuance
of the securities described above; however, the Company did engage the services
of a placement agent in connection with the Private Placement. The placement
agent is entitled to receive a 10% sales commission on the first $800,000 raised
and a 5% sales commission on the remaining balance, to be paid in cash or Common
Stock of the Company. See "Item 5. Other Information." The Company believes that
the issuance of the foregoing shares of Common Stock of the Company was exempt
from registration under Section 4(2) of the Securities Act of 1933, as amended
(the "Act"), as transactions not involving a public offering. No public offering
was involved and the securities were acquired by accredited investors for
investment and not with a view to distribution. Appropriate legends have been
affixed to the stock certificates issued to the shareholders of Senesco and the
purchasers of the Private Placement. All purchasers had adequate access to
information about the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
(a) The Special Meeting of Stockholders of Nava (the "Meeting") was held on
January 21, 1999.
(b) The following is a complete list of the Directors of Nava, each of whom
were elected at the Meeting, and whose term of office continued after
the Meeting:
Phillippe O. Escaravage
Christopher Forbes
Steven Katz
(c) There were 1,936,646 shares of common stock of the Nava, $.0005 par
value (the "Common Stock"), on a pre-reverse stock split basis, present
at the Meeting in person or by proxy out of a total number of 3,000,025
shares of Common Stock, on a pre-reverse stock split basis, issued and
outstanding and entitled to vote at the Meeting.
-16-
<PAGE>
(d) The additional proposals and results of the vote of the stockholders
taken at the Meeting by ballot and by proxy as solicited by Nava on
behalf of the Board of Directors were as follows:
(i) The results of the vote taken at the Meeting for the election of
the nominees for the Board of Directors of Nava were as follows:
Nominee Class For Withheld
------------------------ ----- ----------------- ------------
Phillippe O. Escaravage A 1,939,646 0
Christopher Forbes A 1,939,646 0
Steven Katz B 1,939,646 0
(ii) A vote was taken on the proposal to ratify the appointment of
Goldstein, Golub & Kessler, LLP as independent auditors of Nava
for the fiscal year ending June 30, 1999. The results of the vote
taken at the Meeting with respect to such appointment were as
follows:
For Against Abstain
--------------- ------------- -------------
1,936,646 0 0
(iii) A vote was taken on the proposal to amend the By-laws of Nava to
increase the number of directors from three (3) members to five
(5) members and to amend the By-laws of Nava to create two
classes of directors; Class A to consist of four (4) directors
elected to a one-year term, and Class B to consist of one (1)
director elected to a two-year term. The results of the vote
taken at the Meeting with respect to such amendment were as
follows:
For Against Abstain
--------------- ------------- -------------
1,936,646 0 0
(iv) A vote was taken on the proposal to merge Nava Leisure
Acquisition Corp., a wholly owned subsidiary of Nava, with and
into Senesco, whereby the Company would be the successor entity.
The results of the vote taken at the Meeting with respect to such
Merger were as follows:
For Against Abstain
--------------- ------------- -------------
1,936,646 0 0
-17-
<PAGE>
(v) A vote was taken on the proposal to effect a three-for-one
reverse stock split of Nava's outstanding Common Stock. The
results of the vote taken at the Meeting with respect to such
reverse stock split were as follows:
For Against Abstain
--------------- ------------- -------------
1,936,646 0 0
(vi) A vote was taken on the proposal to amend the Articles of
Incorporation of Nava to change the name of Nava to "Senesco
Technologies, Inc." The results of the vote taken at the Meeting
with respect to such amendment were as follows:
For Against Abstain
--------------- ------------- -------------
1,936,646 0 0
(vii) A vote was taken on the proposal to give the Board of Directors
of Nava the authority to reincorporate the successor company to
the Merger in the State of Delaware. The results of the vote
taken at the Meeting with respect to such granting of authority
were as follows:
For Against Abstain
--------------- ------------- -------------
1,936,646 0 0
(viii) A vote was taken on the proposal to ratify the terms of the
Bridge Financing, providing up to $500,000 in financing to
support expansion of Nava's operations in the interim period
prior to the completion of a public or private offering of
securities, such bridge financing to be evidenced by a promissory
note bearing interest at an annual rate equal to the prime rate
plus 2%. The results of the vote taken at the Meeting with
respect to such ratification were as follows:
For Against Abstain
--------------- ------------- -------------
1,936,646 0 0
(ix) A vote was taken on the proposal to adopt the 1998 Stock Option
Plan and to reserve 500,000 shares of Common Stock, on a
post-split basis, under the Plan. The results of the vote taken
at the Meeting with respect to such adoption were as follows:
For Against Abstain
--------------- ------------- -------------
1,936,646 0 0
-18-
<PAGE>
ITEM 5. OTHER INFORMATION.
Merger and Change in Control
On January 22, 1999, in connection with the Merger, Nava issued 1,700,000
shares of common stock, on a post-split basis, for all of the issued and
outstanding shares of common stock of Senesco. At the time of the Merger,
Senesco's assets included $22,107 in cash, $13,894 in related party receivables
from a shareholder, $26,869 in capital assets, and $16,417 in patent costs and
intellectual property rights. See "Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations - Overview." Senesco also had
$23,185 in accounts payable and accrued expenses and a note payable of $252,527
in principal and accrued interest. Pursuant to the Merger, the shareholders of
Senesco acquired majority control of the Company, and the name of the Company
was changed to Senesco Technologies, Inc.
The Company is a development stage company that was organized to
commercially exploit technology acquired and developed in connection with the
identification and characterization of a gene which controls the aging of
fruits, vegetables and flowers.
Management Change and Additions to the Board of Directors
In connection with the Merger, as of the date of the Special Meeting of
Stockholders on January 21, 1999, all of the former members of the Board of
Directors of Nava, consisting of J. Rockwell Smith, Jim Ruzicka and James Kerr,
resigned from the Board of Directors. There were no disagreements between the
former members of the Board of Directors and Nava. At the Special Meeting, the
members of the Board of Directors of the Company were elected.
On January 22, 1999, the Board of Directors of the Company appointed the
following executive officers; Phillippe O. Escaravage as Chairman of the Board
and Chief Operating Officer, Sascha Fedyszyn as Vice President, and Christian
Ahrens as Secretary. On January 27, 1999, the Board of Directors appointed John
E. Thompson, Ph.D. as the President and Chief Executive Officer of the Company.
On February 23, 1999 and March 1, 1999, the Board of Directors elected
Thomas C. Quick and Ruedi Stalder, respectively, to the Company's Board of
Directors to hold office until the next annual meeting of shareholders and until
each of their successors are duly elected and qualified.
Bridge Financing
On October 22, 1998, as amended on October 23, 1998, Senesco entered into a
loan agreement with South Edge International Limited providing for a bridge loan
in the aggregate amount of $254,000 (the "South Edge Loan"), $220,000 of which
has been borrowed as of March 31, 1999. In addition, on October 23, 1998,
Senesco entered into a loan agreement with the Parenteau Corporation providing
for a bridge loan in the aggregate amount of $202,000, all of which has been
borrowed as of March 31, 1999 (the "Parenteau Loan" and together with the South
Edge Loan, the "Bridge Financing"). The Bridge Financing is evidenced by
promissory notes bearing interest at an annual rate equal to the prime rate as
reported in the Wall Street
-19-
<PAGE>
Journal plus 2%. As of March 31, 1999, Senesco had borrowed $422,000, pursuant
to such Bridge Financing. The total loan amount outstanding under the Bridge
Financing, plus interest, is due October 22, 1999, one year from the date the
Bridge Financing was entered into. Moreover, the Bridge Financing was made in
anticipation of the Merger, and provided that in the event the Company
consummated an equity financing in excess of $1,500,000, the entire loan amount
outstanding under the Bridge Financing, plus accrued interest, will become
immediately due and payable. Therefore, the Company intends to use approximately
$422,000 of the amount raised in connection with the proposed Private Placement
to pay off the Bridge Financing. Therefore, approximately $422,000, plus accrued
interest of approximately $10,892, of the $2 million raised in connection with
the Private Placement (discussed below) will be used to repay the Bridge
Financing.
Equity Financing
On May 21, 1999, the Company consummated a private placement of 379,597
shares of its Common Stock, at $5.26875 per share, for an aggregate fair market
value of $2,000,000 (the "Private Placement"). The Company engaged Lionheart
Services, Inc. as its Placement Agent pursuant to the Placement Agency Agreement
dated as of April 30, 1999 (the "Placement Agency Agreement"). The Placement
Agency Agreement provides for, among other things, a 10% sales commission on the
first $800,000 raised and a 5% sales commission on the remaining balance, to be
paid in cash or Common Stock of the Company. In addition, the Placement Agency
Agreement provides that the Placement Agent will pay all of its expenses from a
non-accountable expense allowance equal to 3% of the total proceeds of the
Private Placement. In connection with the Private Placement, the Company also
executed a Common Stock Purchase Agreement with each purchaser of Common Stock,
dated as of May 11, 1999 (the "Stock Purchase Agreement"). Pursuant to the Stock
Purchase Agreement, the purchase price per share of Common Stock was equal to
80% of the average closing bid and ask prices of the Company's Common Stock
during the twenty (20) trading days ending three days prior to the Closing Date
(as defined therein). The Stock Purchase Agreement also provides for price
protection whereby upon the issuance or sale by the Company of any additional
Common Stock or Common Stock equivalents within a period of sixty (60) days
following the Closing Date, other than options or warrants currently outstanding
as of the date of the Stock Purchase Agreement, for a consideration per share
less than the purchase price provided for in the Stock Purchase Agreement (the
"Reduced Purchase Price"), then the Company shall immediately issue such
additional shares of Common Stock to the purchaser which each such purchaser's
investment would have purchased at the Reduced Purchase Price. In addition, the
Company entered into a Registration Rights Agreement with each purchaser dated
as of May 11, 1999 (the "Registration Rights Agreement"). The Registration
Rights Agreement provides for, among other things, a demand registration right
beginning after January 22, 2000, as well as piggy-back registration rights for
a three-year period from the Closing Date.
Insider Participation
Certain directors and an executive officer of the Company participated in
the Private Placement. Specifically, such directors and the executive officer of
the Company purchased, in the aggregate, 170,818 shares of restricted Common
Stock on the same terms and conditions as all purchasers thereunder.
-20-
<PAGE>
Corrective Press Release
As announced in the Company's press release dated February 16, 1999, it has
come to the Company's attention that its patent pending technology was
previously described in an earlier report as patented technology. To date, no
such patent has yet been issued. There can be no assurance that patent
protection will be granted with respect to the patent application or that, if
granted, the validity of such patent will not be challenged or that the
Company's technology will not infringe on the proprietary rights of any third
party.
-21-
<PAGE>
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
4.1 Amended Loan Agreement dated as of October 23, 1998 made by and
among Senesco, L.L.C., Phillippe O. Escaravage and South Edge
International Limited.
4.2 Loan Agreement dated as of October 23, 1998 made by and among
Senesco, L.L.C., Phillippe O. Escaravage and Parenteau
Corporation.
4.3 Form of Stock Purchase Agreement dated as of May 11, 1999 made by
and among the Company and the Purchasers (as defined therein).
4.4 Form of Registration Rights Agreement dated as of May 11, 1999
made by and among the Company and the Purchasers (as defined
therein).
4.5 Placement Agency Agreement dated as of April 30, 1999 made by and
between the Company and Lionheart Services, Inc.
10.1 Indemnification Agreement dated as of February 23, 1999 made by
and between the Company and Thomas C. Quick.
10.2 Indemnification Agreement dated as of March 1, 1999 made by and
between the Company and Ruedi Stalder.
10.3 Research Agreement dated as of September 1, 1998 made by and
among Senesco, Inc., Dr. John E. Thompson and The University of
Waterloo.
27 Financial Data Schedule.
(b) Reports on Form 8-K.
None.
-22-
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934,
the registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
SENESCO TECHNOLOGIES, INC.
DATE: May 24, 1999 By: /s/ Phillip O. Escaravage
-------------------------------------
Phillip O. Escaravage, Chairman and Chief
Operating Officer
(Principal Executive Officer)
DATE: May 24, 1999 By: /s/ Sascha P. Fedyszyn
-------------------------------------
Sascha P. Fedyszyn, Vice President
(Principal Financial and
Accounting Officer)
-23-
SENESCO, L.L.C.
11 CHAMBERS STREET
PRINCETON, NEW JERSEY 08542
October 23, 1998
VIA FEDERAL EXPRESS
- -------------------
South Edge International Limited
Armoury Building, 2nd Floor
37 Reid Street
P.O. Box HM 279
Hamilton, HM AX Bermuda
Attention: Douglas M. Tufts
Re: Acknowledgment Letter re: Loan Agreement
----------------------------------------
Dear Mr. Tufts:
In connection with that certain Loan Agreement, dated October 22, 1998, and
as amended hereby, (the "Loan Agreement"), made by and between Senesco, L.L.C.,
a New Jersey limited liability company (the "Company"), Phillippe O. Escaravage,
as guarantor, and South Edge International Limited (the "Lender"), enclosed
please find the amended Promissory Note, dated October 23, 1998, which should be
attached as an amended Exhibit A to the Loan Agreement (the "Amended Promissory
---------
Note") to replace the current Exhibit A to the Loan Agreement.
---------
By signing below, the Company and the Lender acknowledge and agree that, as
of the date above, the Lender will only advance the Company Two Hundred Fifty
Four Thousand Dollars ($254,000), of the aggregate amount of Five Hundred
Thousand Dollars ($500,000) provided in the Loan Agreement. Upon execution,
please send such originally executed Acknowledgment, as well as the originally
executed Promissory Note, to the attention of Emilio Ragosa, at Buchanan
Ingersoll Professional Corporation, 500 College Road East, Princeton, New Jersey
08540, via overnight courier. Upon receipt of such Acknowledgment and Promissory
Note, the original Promissory Note will be voided, and the Amended Promissory
Note, executed by Mr. Escaravage on behalf of the Company, will be delivered to
your attention.
<PAGE>
IN WITNESS WHEREOF, the parties hereto acknowledge the foregoing by
executing beneath their respective names as of the date first written above.
SENESCO, L.L.C. SOUTH EDGE INTERNATIONAL LIMITED
By: /s/ Phillippe O. Escaravage By: /s/ William A. Manuel, Jr.
------------------------------ --------------------------------
Phillippe O. Escaravage, William A. Manuel, Jr.
Managing Member Director
11 Chambers Street Armory Building, 2nd Floor
Princeton, New Jersey 08542 37 Reid Street
P.O. Box HM 279
Hamilton, HM AX Bermuda
<PAGE>
Exhibit A
---------
Amended Note
THIS NOTE HAS BEEN ISSUED PURSUANT TO AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF FEDERAL AND STATE SECURITIES LAWS AND MAY NOT BE SOLD OR
TRANSFERRED WITHOUT COMPLIANCE WITH SUCH REQUIREMENTS OR A WRITTEN OPINION OF
COUNSEL ACCEPTABLE TO THE OBLIGOR THAT SUCH TRANSFER WILL NOT RESULT IN ANY
VIOLATION OF SUCH LAWS OR AFFECT THE LEGALITY OF ITS ISSUANCE.
PROMISSORY NOTE
$254,000 October 23, 1998
FOR VALUE RECEIVED, the undersigned, Senesco, L.L.C., a limited liability
company organized and existing under the laws of the State of New Jersey (the
"Obligor"), hereby promises to pay to the order of South Edge International
Limited (the "Holder"), the principal sum of Two Hundred Fifty-Four Thousand
Dollars ($254,000) payable as set forth below. The Obligor also promises to pay
to the order of the Holder interest on the principal amount hereof at a rate per
annum equal to two percent (2%) above the Prime Rate as reported in the Wall
Street Journal on the date of this Note, which interest shall be payable at such
time as the principal is due hereunder. Interest shall be calculated on the
basis of a year of 365 days and for the number of days actually elapsed. Any
amounts of interest and principal not paid when due shall bear interest at the
maximum rate of interest allowed by applicable law. The payments of principal
and interest hereunder shall be made in coin or currency of the United States of
America which at the time of payment shall be legal tender therein for the
payment of public and private debts.
This Note shall be subject to the following additional terms and
conditions:
1. Payments. Subject to Section 2 hereof, all principal and interest due
--------
hereunder shall be payable in one (1) installment on October 22, 1999
(the "Maturity Date"); provided, however, that the parties may
-------- -------
mutually agree to extend the term of this Note beyond the Maturity
Date. In the event that any payment to be made hereunder shall be or
become due on a Saturday, Sunday or any other day which is a legal
bank holiday under the laws of the State of New Jersey, such payment
shall be or become due on the next succeeding business day.
2. Prepayments.
-----------
a) The Obligor and the Holder understand and agree that the
principal amount of this Note is intended as a loan to the
Obligor in anticipation of a merger (the "Merger") between the
Obligor and Nava Leisure Acquisition, Inc., a wholly-owned
subsidiary of Nava Leisure USA, Inc., an Idaho corporation, to
create Senesco Technologies, Inc., a Delaware corporation
("STI"). Subsequent to the consummation of the Merger, in the
event STI
<PAGE>
consummates an equity financing through the issuance of preferred
stock or other equity securities or securities convertible into
equity that results in proceeds to STI in excess of $1,500,000
(an "Equity Financing"), the entire unpaid principal amount of
this Note (together with accrued interest hereon) shall become
due and immediately payable to the Holder upon consummation of
such Equity Financing.
b) In the event the Merger is not consummated within four (4) months
from the date hereof, the entire unpaid principal amount of this
Note (together with accrued interest hereon) shall, at the option
of the Holder, exercised by written notice to the Obligor as
provided herein, become immediately due and payable; provided,
--------
however, that the parties may mutually agree to renegotiate the
-------
terms of this Note at such time.
3. No Waiver. No failure or delay by the Holder in exercising any right,
---------
power or privilege under this Note shall operate as a waiver thereof
nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided shall be cumulative
and not exclusive of any rights or remedies provided by law. No course
of dealing between the Obligor and the Holder shall operate as a
waiver of any rights by the Holder.
4. Waiver of Presentment and Notice of Dishonor. The Obligor and all
-----------------------------------------------
endorsers, guarantors and other parties that may be liable under this
Note hereby waive presentment, notice of dishonor, protest and all
other demands and notices in connection with the delivery, acceptance,
performance or enforcement of this Note.
5. Place of Payment. All payments of principal of this Note and the
-----------------
interest due thereon shall be made at such place as the Holder may
from time to time designate in writing.
6. Events of Default. The entire unpaid principal amount of this Note and
-----------------
the interest due hereon shall, at the option of the Holder exercised
by written notice to the Obligor, forthwith become and be due and
payable, without presentment, demand, protest or other notice of any
kind, all of which are hereby expressly waived, if any one or more of
the following events (herein called "Events of Default") shall have
occurred (for any reason whatsoever and whether such happening shall
be voluntary or involuntary or come about or be effected by operation
of law or pursuant to or in compliance with any judgment, decree or
order of any court or any order, rule or regulation of any
administrative or governmental body) and be continuing at the time of
such notice, that is to say:
<PAGE>
a) if default shall be made in the due and punctual payment of the
principal of this Note and the interest due thereon when and as
the same shall become due and payable, whether at maturity, or by
acceleration or otherwise, and such default shall have continued
for a period of five days;
b) if the Obligor shall:
(i) admit in writing its inability to pay its debts generally
as they become due;
(ii) file a petition in bankruptcy or a petition to take
advantage of any insolvency act;
(iii) make an assignment for the benefit of creditors;
(iv) consent to the appointment of a receiver of the whole or
any substantial part of his property;
(v) on a petition in bankruptcy filed against him, be
adjudicated a bankrupt;
(vi) file a petition or answer seeking reorganization or
arrangement under the Federal bankruptcy laws or any
other applicable law or statute of the United States of
America or any State, district or territory thereof; or
c) if a court of competent jurisdiction shall enter an order,
judgment, or decree appointing, without the consent of the
Obligor, a receiver of the whole or any substantial part of
Obligor's property, and such order, judgment or decree shall not
be vacated or set aside or stayed within 90 days from the date of
entry thereof; and
d) if, under the provisions of any other law for the relief or aid
of debtors, any court of competent jurisdiction shall assume
custody or control of the whole or any substantial part of
Obligor's property and such custody or control shall not be
terminated or stayed within 90 days from the date of assumption
of such custody or control.
7. Remedies. In case any one or more of the Events of Default specified
--------
in Section 6 hereof shall have occurred and be continuing, the Holder
may proceed to protect and enforce its rights either by suit in equity
and/or by action at law, whether for the specific performance of any
covenant or agreement contained in this Note or in aid of the exercise
of any power granted in this Note, or the Holder may proceed to
enforce the payment of all sums due upon this Note or to enforce any
other legal or equitable right of the Holder.
<PAGE>
8. Severability. In the event that one or more of the provisions of this
------------
Note shall for any reason be held invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not
affect any other provision of this Note, but this Note shall be
construed as if such invalid, illegal or unenforceable provision had
never been contained herein.
9. Governing Law. This Note and the rights and obligations of the
-------------
Obligor and the Holder shall be governed by and construed in
accordance with the laws of the State of New Jersey.
********
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused this Note to be executed
and delivered on the date first written above.
SENESCO, L.L.C.
By: /s/ Phillippe O. Escaravage
-----------------------------
Phillippe O. Escaravage,
Managing Member
<PAGE>
EXHIBIT B
---------
See Drawdown schedule attached hereto.
LOAN AGREEMENT
This LOAN AGREEMENT (this "Agreement") is made as of the 23rd day of
October 1998 by and between Senesco, L.L.C., a New Jersey limited liability
company (the "Company"), and Parenteau Corporation Inc. (the "Lender").
The parties hereby agree as follows:
SECTION 1. AMOUNT AND TERMS OF THE LOAN
1.1 THE LOAN. Subject to the terms of this Agreement, the Company shall
borrow from the Lender and the Lender shall lend to the Company up to Two
Hundred Two Thousand Dollars ($202,000) (the "Loan") pursuant to a promissory
note in the form attached hereto as Exhibit A (the "Note").
---------
1.2 DRAW DOWN SCHEDULE. The Company agrees to receive $94,000 of the
Loan and the Lender agrees to pay the Company $94,000 of the Loan upon the
execution of the Note. The Company agrees to receive the remainder of the Loan
and the Lender agrees to pay the Company upon and pursuant to the schedule
attached hereto as Exhibit B (the "Drawdown Schedule").
---------
1.3 INTEREST. The Loan shall bear interest on the unpaid principal
balance thereof from the date of disbursement until the Loan is repaid in full
at a per annum rate equal to two percent (2%) above the Prime Rate as reported
in the Wall Street Journal on the date of execution of the Note. Interest shall
be payable at such time as the principal is due hereunder.
1.4 METHOD OF PAYMENT TO LENDER. All payments of principal and interest
on the Note shall be paid directly to the Lender at its office at 4446 St.
Laurent, Suite 801, Montreal, PQ H2W 1Z5, Canada, Attn.: Francois Parenteau or
to such other place as the Lender shall designate.
SECTION 2. THE CLOSING
2.1 CLOSING DATE. The closing of the purchase and sale of the Note (the
"Closing") shall be held on October 23, 1998 or at such other time as the
Company and the Lender shall agree (the "Closing Date").
2.2 DELIVERY. At the Closing (i) the Lender will deliver to the Company
a check or wire transfer funds in the amount of $94,000, and (ii) the Company
shall deliver to the Lender, a Note representing the Loan. The Lender shall pay
the Company the remainder of the Loan pursuant to Section 1.2.
<PAGE>
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Lender as follows:
3.1 CORPORATE POWER. The Company will have at the Closing Date all
requisite corporate power to execute and deliver this Agreement and to carry out
and perform its obligations under the terms of this Agreement.
3.2 AUTHORIZATION. All corporate action on the part of the Company
necessary for the authorization, execution, delivery and performance of this
Agreement by the Company and the performance of the Company's obligations
hereunder, including the issuance and delivery of the Note, has been taken or
will be taken prior to the Closing. This Agreement and the Note, when executed
and delivered by the Company, shall constitute valid and binding obligations of
the Company enforceable in accordance with their terms, subject to laws of
general application relating to bankruptcy, insolvency, the relief of debtors
and, with respect to rights to indemnity, subject to federal and state
securities laws.
3.3 GOVERNMENTAL CONSENTS. All consents, approvals, orders or
authorizations of, or registrations, qualifications, designations, declarations
or filings with, any governmental authority, required on the part of the Company
in connection with the valid execution and delivery of this Agreement, the
offer, sale or issuance of the Note or the consummation of any other transaction
contemplated hereby shall have been obtained and will be effective at the
Closing.
3.4 OFFERING. Assuming the accuracy of the representations and
warranties of the Lender contained in Section 4 hereof, the offer, issue and
sale of the Note is and will be exempt from the registration and prospectus
delivery requirements of the Securities Act of 1933, as amended (the "1933
Act"), and has been registered or qualified (or are exempt from resignation and
qualification) under the registration, permit or qualification requirements of
all applicable state securities laws.
SECTION 4. REPRESENTATION AND WARRANTIES OF THE LENDER
4.1 PURCHASE FOR OWN ACCOUNT. The Lender represents that it is
acquiring the Note solely for its own account and beneficial interest for
investment and not for sale or with a view to distribution of the Note or any
part thereof, has no present intention of selling (in connection with a
distribution or otherwise), granting any participation in, or otherwise
distributing the same, and does not presently have reason to anticipate a change
in such intention.
4.2 NO COMMISSIONS. The Lender represents that it has no knowledge that
any commission or other remuneration is due or payable, directly or indirectly,
to any party arising from the transaction contemplated hereby.
4.3. ACCREDITED INVESTOR. The Lender is an "accredited investor" as
such term is defined in Rule 501 under the Securities Act.
<PAGE>
SECTION 5. MISCELLANEOUS
5.1 PROHIBITION ON TRANSFER OR ASSIGNMENT. The Lender agrees that it
shall not sell, transfer, assign, or otherwise convey the Note without the prior
written approval of the Company, which approval shall not be unreasonably
withheld.
5.2 BINDING AGREEMENT. The terms and conditions of this Agreement shall
inure to the benefit of and be binding upon the respective successors and
assigns of the parties. Nothing in this Agreement, express or implied, is
intended to confer upon any third party any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
5.3 GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of New Jersey as applied to agreements among New
Jersey residents, made and to be performed entirely within the State of New
Jersey.
5.4 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
5.5 TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
5.6 NOTICES. Any notice required or permitted under this Agreement
shall be given in writing and shall be deemed effectively given upon personal
delivery or upon deposit with the United States Post Office, by registered or
certified mail, postage prepaid, addressed to the Company at 11 Chambers Street,
Princeton, New Jersey 08542, or to the Lender at 4446 St. Laurent, Suite 801,
Montreal, PQ H2W 1Z5, Canada, Attn.: Francois Parenteau, or at such other
address as such party may designate by ten (10) days advance written notice to
the other party.
5.7 MODIFICATION; WAIVER. No modification or waiver of any provision of
this Agreement or consent or departure therefrom shall be effective unless in
writing and approved by the Company and the Lender.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
COMPANY: LENDER:
SENESCO, L.L.C. PARENTEAU CORPORATION INC.
By:/s/ Phillippe O. Escaravage By:/s/ Francois Parenteau
-------------------------------- --------------------------------
Name: Phillippe O. Escaravage Name: Francois Parenteau
Title: Managing Member Title:
<PAGE>
Exhibit A
---------
THIS NOTE HAS BEEN ISSUED PURSUANT TO AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF FEDERAL AND STATE SECURITIES LAWS AND MAY NOT BE SOLD OR
TRANSFERRED WITHOUT COMPLIANCE WITH SUCH REQUIREMENTS OR A WRITTEN OPINION OF
COUNSEL ACCEPTABLE TO THE OBLIGOR THAT SUCH TRANSFER WILL NOT RESULT IN ANY
VIOLATION OF SUCH LAWS OR AFFECT THE LEGALITY OF ITS ISSUANCE.
PROMISSORY NOTE
$202,000 October 23, 1998
FOR VALUE RECEIVED, the undersigned, Senesco, L.L.C., a limited liability
company organized and existing under the laws of the State of New Jersey (the
"Obligor"), hereby promises to pay to the order of Parenteau Corporation Inc.
(the "Holder"), the principal sum of Two Hundred Two Thousand Dollars ($202,000)
payable as set forth below. The Obligor also promises to pay to the order of the
Holder interest on the principal amount hereof at a rate per annum equal to two
percent (2%) above the Prime Rate as reported in the Wall Street Journal on the
date of this Note, which interest shall be payable at such time as the principal
is due hereunder. Interest shall be calculated on the basis of a year of 365
days and for the number of days actually elapsed. Any amounts of interest and
principal not paid when due shall bear interest at the maximum rate of interest
allowed by applicable law. The payments of principal and interest hereunder
shall be made in coin or currency of the United States of America which at the
time of payment shall be legal tender therein for the payment of public and
private debts.
This Note shall be subject to the following additional terms and
conditions:
1. Payments. Subject to Section 2 hereof, all principal and interest
--------
due hereunder shall be payable in one (1) installment on October 22,
1999 (the "Maturity Date"); provided, however, that the parties may
-------- -------
mutually agree to extend the term of this Note beyond the Maturity
Date. In the event that any payment to be made hereunder shall be or
become due on a Saturday, Sunday or any other day which is a legal
bank holiday under the laws of the State of New Jersey, such payment
shall be or become due on the next succeeding business day.
2. Prepayments. In connection with the merger (the "Merger") between
-----------
the Obligor and Nava Leisure Acquisition, Inc., a wholly-owned
subsidiary of Nava Leisure USA, Inc., an Idaho corporation, to create
Senesco Technologies, Inc., an Idaho corporation ("STI"), in the event
STI consummates an equity financing through the issuance of preferred
stock or other equity securities or securities convertible into equity
that results in proceeds to STI in excess of $1,500,000 (an "Equity
Financing"), the entire unpaid principal amount of this Note (together
with accrued interest hereon) shall become due and immediately payable
to the Holder upon consummation of such Equity Financing.
<PAGE>
3. No Waiver. No failure or delay by the Holder in exercising any right,
---------
power or privilege under this Note shall operate as a waiver thereof
nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided shall be cumulative
and not exclusive of any rights or remedies provided by law. No course
of dealing between the Obligor and the Holder shall operate as a
waiver of any rights by the Holder.
4. Waiver of Presentment and Notice of Dishonor. The Obligor and all
----------------------------------------------
endorsers, guarantors and other parties that may be liable under this
Note hereby waive presentment, notice of dishonor, protest and all
other demands and notices in connection with the delivery, acceptance,
performance or enforcement of this Note.
5. Place of Payment. All payments of principal of this Note and the
----------------
interest due thereon shall be made at such place as the Holder may
from time to time designate in writing.
6. Events of Default. The entire unpaid principal amount of this Note
-----------------
and the interest due hereon shall, at the option of the Holder
exercised by written notice to the Obligor, forthwith become and be
due and payable, without presentment, demand, protest or other notice
of any kind, all of which are hereby expressly waived, if any one or
more of the following events (herein called "Events of Default") shall
have occurred (for any reason whatsoever and whether such happening
shall be voluntary or involuntary or come about or be effected by
operation of law or pursuant to or in compliance with any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body) and be continuing at the time of
such notice, that is to say:
<PAGE>
a) if default shall be made in the due and punctual payment of the
principal of this Note and the interest due thereon when and as
the same shall become due and payable, whether at maturity, or by
acceleration or otherwise, and such default shall have continued
for a period of five days;
b) if the Obligor shall:
(i) admit in writing its inability to pay its debts generally
as they become due;
(ii) file a petition in bankruptcy or a petition to take
advantage of any insolvency act;
(iii) make an assignment for the benefit of creditors;
(iv) consent to the appointment of a receiver of the whole or
any substantial part of his property;
(v) on a petition in bankruptcy filed against him, be
adjudicated a bankrupt;
(vi) file a petition or answer seeking reorganization or
arrangement under the Federal bankruptcy laws or any other
applicable law or statute of the United States of America
or any State, district or territory thereof; or
c) if a court of competent jurisdiction shall enter an order,
judgment, or decree appointing, without the consent of the
Obligor, a receiver of the whole or any substantial part of
Obligor's property, and such order, judgment or decree shall not
be vacated or set aside or stayed within 90 days from the date of
entry thereof; and
d) if, under the provisions of any other law for the relief or aid
of debtors, any court of competent jurisdiction shall assume
custody or control of the whole or any substantial part of
Obligor's property and such custody or control shall not be
terminated or stayed within 90 days from the date of assumption
of such custody or control.
7. Remedies. In case any one or more of the Events of Default specified
--------
in Section 6 hereof shall have occurred and be continuing, the Holder
may proceed to protect and enforce its rights either by suit in equity
and/or by action at law, whether for the specific performance of any
covenant or agreement contained in this Note or in aid of the exercise
of any power granted in this Note, or the Holder may proceed to
enforce the payment of all sums due upon this Note or to enforce any
other legal or equitable right of the Holder.
<PAGE>
8. Severability. In the event that one or more of the provisions of this
------------
Note shall for any reason be held invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not
affect any other provision of this Note, but this Note shall be
construed as if such invalid, illegal or unenforceable provision had
never been contained herein.
9. Governing Law. This Note and the rights and obligations of the
--------------
Obligor and the Holder shall be governed by and construed in
accordance with the laws of the State of New Jersey.
********
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused this Note to be executed and
delivered on the date first written above.
SENESCO, L.L.C.
By: /s/ Phillippe O. Escaravage
--------------------------------
Phillippe O. Escaravage,
Managing Member
<PAGE>
EXHIBIT B
---------
See Drawdown schedule attached hereto.
COMMON STOCK PURCHASE AGREEMENT
-------------------------------
COMMON STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of May 11,
1999, by and between Senesco Technologies, Inc., an Idaho corporation (the
"Corporation"), and [Name] (the "Purchaser").
W I T N E S S E T H :
---------------------
WHEREAS, the Corporation desires to sell, transfer and assign to the
Purchaser, and the Purchaser desires to purchase from the Corporation, [ ]
shares (the "Shares") of the Corporation's common stock, $0.0015 par value (the
"Common Stock"), equal to an aggregate of $[ ], at a price per share equal to
80% of the average closing bid and ask prices of the Corporation's Common Stock
during the twenty (20) trading days ending three days prior to the Closing Date,
equal to $5.26875 per share of Common Stock (the "Purchase Price"); and
WHEREAS, the Company is entering into similar Common Stock Purchase
Agreements with other purchasers who are purchasing Common Stock on the
identical terms as set forth herein for an aggregate offering amount to all
purchasers of $2,000,000, consisting of an aggregate of 379,597 shares of Common
Stock, and whose rights shall vest on a pari passu basis with the Purchasers
herein;
NOW, THEREFORE, in consideration of the promises and the mutual covenants
contained herein, the parties hereto, intending to be legally bound, hereby
agree as follows:
SECTION I
PURCHASE, SALE AND REGISTRATION OF THE SHARES
---------------------------------------------
A. Purchase and Sale. Subject to the terms and conditions of this
-----------------
Agreement and on the basis of the representations, warranties, covenants and
agreements herein contained, the Corporation hereby agrees to sell, transfer,
assign and convey the Shares to the Purchaser, and the Purchaser agrees to
purchase, acquire and accept the Shares from the Corporation.
B. Purchase Price. The aggregate purchase price for the Shares to be
--------------
paid by the Purchaser to the Corporation is an aggregate of $[ ] (the "Aggregate
Purchase Price"). The Aggregate Purchase Price shall be paid in cash by the
Purchaser to the Corporation on the Closing Date.
C. Price Protection. Upon the issuance or sale by the Corporation of any
----------------
additional Common Stock or Common Stock equivalents within a period of sixty
(60) days following the Closing Date, other than options or warrants currently
outstanding as of the date of this Agreement, for a consideration per share less
than the Purchase Price (the "Reduced Purchase Price"), the Purchase Price
shall, upon such issuance or sale, be reduced to the amount of consideration per
share received by the Corporation for such stock. Pursuant thereto, the
Corporation shall immediately issue such additional shares of Common Stock to
the Purchaser at the Reduced Purchase Price (the "Additional
<PAGE>
Shares"), such that the Shares purchased hereunder plus the Additional Shares,
shall equal the Aggregate Purchase Price.
D. Registration Rights. The Corporation and the Purchaser intend to
--------------------
enter into a Registration Rights Agreement providing that the Corporation shall
register the Shares, pursuant to the Securities Act of 1933, as amended (the
"1933 Act").
SECTION II
REPRESENTATIONS, WARRANTIES, COVENANTS
AND AGREEMENTS OF THE CORPORATION
---------------------------------
The Corporation represents and warrants to, and covenants and agrees with,
the Purchaser, as of the date hereof, that:
A. Organization; Good Standing. The Corporation is a corporation duly
---------------------------
organized, validly existing and in good standing under the laws of the State of
Idaho and has full corporate power and authority to own its properties and to
conduct the business in which it is now engaged.
B. Authority. The Corporation has the full corporate power, authority and
---------
legal right to execute and deliver this Agreement and to perform all of its
obligations and covenants hereunder, and no consent or approval of any other
person or governmental authority is required therefore. The execution and
delivery of this Agreement by the Corporation, the performance by the
Corporation of its obligations and covenants hereunder and the consummation by
the Corporation of the transactions contemplated hereby have been duly
authorized by all necessary corporate action. This Agreement constitutes a valid
and legally binding obligation of the Corporation, enforceable against the
Corporation in accordance with its terms.
C. No Legal Bar; Conflicts. Neither the execution and delivery of this
-----------------------
Agreement, nor the consummation of the transactions contemplated hereby,
violates any provision of the Certificate of Incorporation, as amended, or
By-Laws of the Corporation or any law, statute, ordinance, regulation, order,
judgment or decree of any court or governmental agency, or conflicts with or
results in any breach of any of the terms of or constitutes a default under or
results in the termination of or the creation of any lien pursuant to the terms
of any contract or agreement to which the Corporation is a party or by which the
Corporation or any of its assets is bound.
D. Non-Assessable Shares. The Shares being issued hereunder have been
---------------------
duly authorized and, when issued to the Purchaser for the consideration herein
provided, will be validly issued, fully paid and non-assessable.
2
<PAGE>
SECTION III
REPRESENTATIONS, WARRANTIES, COVENANTS
AND AGREEMENTS OF THE PURCHASER
-------------------------------
The Purchaser represents and warrants to, and covenants and agrees with,
the Corporation, as of the date hereof, that:
A. Organization (if applicable). The Purchaser is, and as of the Closing
------------
will be, duly organized, validly existing and in good standing under the laws of
its jurisdiction of organization.
B. Authorization. The Purchaser has, and as of the Closing will have, all
-------------
requisite power and authority to execute, deliver and perform this Agreement and
to consummate the transactions contemplated hereby. The execution, delivery and
performance of this Agreement, and the consummation of the transactions
contemplated hereby, have been duly and validly authorized by all necessary
action on the part of the Purchaser. This Agreement has been duly executed and
delivered by the Purchaser and constitutes its legal, valid and binding
obligation, enforceable against the Purchaser in accordance with its terms,
except as the enforceability thereof may be limited by bankruptcy, insolvency or
other similar laws affecting the enforceability of creditors' rights in general
or by general principles of equity.
C. No Legal Bar; Conflicts. Neither the execution and delivery of this
-----------------------
Agreement, nor the consummation by the Purchaser of the transactions
contemplated hereby, violates any law, statute, ordinance, regulation, order,
judgment or decree of any court or governmental agency applicable to the
Purchaser, or violates, or conflicts with, any contract, commitment, agreement,
understanding or arrangement of any kind to which the Purchaser is a party or by
which the Purchaser is bound.
D. No Litigation. No action, suit or proceeding against the Purchaser
-------------
relating to the consummation of any of the transactions contemplated by this
Agreement nor any governmental action against the Purchaser seeking to delay or
enjoin any such transactions is pending or, to the Purchaser's knowledge,
threatened.
E. Investment Intent. The Purchaser (i) is an accredited investor within
-----------------
the meaning of Rule 501(a) under the Securities Act, (ii) is aware of the limits
on resale imposed by virtue of the nature of the transactions contemplated by
this Agreement, specifically the restrictions imposed by Rule 144 of the
Securities Act, and is aware that the certificates representing the Purchaser's
respective ownership of Common Stock will bear related restrictive legends and
(iii) except as otherwise set forth herein, is acquiring the shares of the
Corporation hereunder without registration under the Securities Act in reliance
on the exemption from registration contained in Section 4(2) of the Securities
Act and/or Rule 506 promulgated pursuant to Regulation D of the Securities Act,
for investment for its own account, and not with a view toward, or for sale in
connection with, any distribution thereof, nor with any present intention of
distributing or selling such shares. The Purchaser represents that the
Accredited Investor Questionnaire is true and
3
<PAGE>
complete in all respects. The Purchaser has been given the opportunity to ask
questions of, and receive answers from, the officers of the Corporation
regarding the Corporation, its current and proposed business operations and the
Common Stock, and the officers of the Corporation have made available to the
Purchaser all documents and information that the Purchaser has requested
relating to an investment in the Corporation. The Purchaser has been represented
by competent legal counsel in connection with its purchase of the Common Stock
and acknowledges that the Corporation has relied upon the Purchaser's
representations in this Section 3 in offering and selling Common Stock to the
Purchaser.
F. Economic Risk; Restricted Securities. The Purchaser recognizes that
-------------------------------------
the investment in the Common Stock involves a number of significant risks. The
foregoing, however, does not limit or modify the representations, warranties and
agreements of the Corporation in Section 2 of this Agreement or the right of the
Purchaser to rely thereon. The Purchaser is able to bear the economic risks of
an investment in the Common Stock for an indefinite period of time, has no need
for liquidity in such investment and, at the present time, can afford a complete
loss of such investment.
G. Access to Information. The Purchaser has received a copy of the
-----------------------
following documents:
(i) The Company's Business Plan;
(ii) The Company's Private Placement Memorandum; and
(iii) The following Company's reports filed with the Commission as of the
date hereof:
1. Registration Statement on Form 10-SB filed on March 27, 1997;
2. Annual Report on Form 10-KSB for the year ended June 30, 1998
filed on September 25, 1998;
3. Quarterly Report on Form 10-QSB for the quarter ended
September 30, 1998 filed on November 12, 1998;
4. Quarterly Report on Form 10-QSB for the quarter ended December
31, 1998 filed on February 17, 1999, together with
Notification of Late Filing on Form 12b-25 filed on February
16, 1999; and
5. Definitive Proxy Statement filed on January 8, 1999.
The Purchaser represents that it has not received any information about the
Company other than what has been disclosed in the documents set forth above.
4
<PAGE>
H. Suitability. The Purchaser has carefully considered, and has, to the
-----------
extent the Purchaser deems it necessary, discussed with the Purchaser's own
professional legal, tax and financial advisers the suitability of an investment
in the Common Stock for the Purchaser's particular tax and financial situation,
and the Purchaser has determined that the Common Stock is a suitable investment.
I. Legend. The Purchaser acknowledges that the certificates evidencing the
------
Shares will bear the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE SHARES HAVE BEEN
ACQUIRED FOR INVESTMENT AND MAY NOT BE PLEDGED, HYPOTHECATED, SOLD
OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
FOR THE SHARES UNDER SUCH ACT OR AN OPINION OF COUNSEL TO THE ISSUER
THAT REGISTRATION IS NOT REQUIRED UNDER THE ACT.
SECTION IV
THE CLOSING AND CONDITIONS TO CLOSING
-------------------------------------
A. Time and Place of the Closing. The closing shall be held at the offices
-----------------------------
of Buchanan Ingersoll Professional Corporation, 500 College Road East,
Princeton, New Jersey 08540, on May 11, 1999 (the "Closing Date"), or such other
time and place as the Corporation and the Purchaser may mutually agree.
B. Delivery by the Corporation. Delivery of the Shares shall be made by
---------------------------
the Corporation to the Purchaser on the Closing Date by delivering a certificate
representing the Shares with an executed stock power, each such certificate to
be accompanied by any requisite documentary or transfer tax stamps.
C. Delivery by the Purchaser. On the Closing Date, the Purchaser shall
--------------------------
deliver to the Corporation the entire Aggregate Purchase Price by check or by
wire transfer to an account specified in writing to Purchaser by the
Corporation.
D. Other Conditions to Closing.
---------------------------
(1) As of the Closing Date, all requisite action by the
Corporation's Board of Directors and shareholders shall have been taken pursuant
to the By-Laws of the Corporation.
(2) As of the Closing Date, the Corporation and the Purchaser shall
have entered into the Registration Rights Agreement.
5
<PAGE>
SECTION V
MISCELLANEOUS
-------------
A. Entire Agreement. This Agreement contains the entire agreement between
----------------
the parties hereto with respect to the transactions contemplated hereby, and no
modification hereof shall be effective unless in writing and signed by the party
against which it is sought to be enforced.
B. Invalidity, Etc. If any provision of this Agreement, or the application
---------------
of any such provision to any person or circumstance, shall be held invalid by a
court of competent jurisdiction, the remainder of this Agreement, or the
application of such provision to persons or circumstances other than those as to
which it is held invalid, shall not be affected thereby.
C. Headings. The headings of this Agreement are for convenience of
--------
reference only and are not part of the substance of this Agreement.
D. Binding Effect. This Agreement shall be binding upon and inure to the
---------------
benefit of the parties hereto and their respective successors and assigns.
E. Governing Law. This Agreement shall be governed by and construed in
--------------
accordance with the laws of the State of New Jersey applicable in the case of
agreements made and to be performed entirely within such State.
F. Dispute Resolution. The parties to this Agreement individually and on
------------------
behalf of the Corporation agree to arbitrate all disputes or differences
hereunder or arising from their roles as shareholders, directors or officers
thereof. Such submission to arbitration shall be a condition precedent to the
bringing of any action, suit or proceeding by any such shareholder, director or
officer, either individually or on behalf of the Corporation. All of such
differences or disputes shall be settled and finally determined by arbitration
in the township of Princeton, New Jersey, according to the Rules of American
Arbitration Association (the "AAA") now in force or hereafter adopted, by
arbitrators selected by the AAA.
G. Counterparts. This Agreement may be executed in one or more identical
------------
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
*****
6
<PAGE>
IN WITNESS WHEREOF, this Common Stock Purchase Agreement has been duly
executed by the parties hereto as of the date first above written.
CORPORATION PURCHASER
Senesco Technologies, Inc.
- ------------------------------------ --------------------------------------
By: Phillip O. Escaravage, Chairman [name]
and Chief Operating Officer [address]
7
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (the "Agreement") is dated as of May 11,
1999 between SENESCO TECHNOLOGIES, INC., an Idaho corporation (the "Company"),
and [ ] (individually, a "Purchaser" and collectively, the "Purchasers").
RECITALS
--------
WHEREAS, it is a condition precedent to the obligations of each Purchaser
under the stock purchase agreement made by and between the Purchaser and the
Company, dated as of the date hereof, (the "Stock Purchase Agreement") that the
Company grant registration rights for the shares of common stock, $0.0015 par
value, of the Company (the "Common Stock"), in connection with resales by the
Purchasers of the Common Stock; and
WHEREAS, the Company is entering into similar Registration Rights
Agreements with other purchasers who are purchasing Common Stock on the
identical terms as set forth herein and whose rights shall vest on a pari passu
basis with the Purchasers herein;
WHEREAS, the Company and the Purchasers now desire to enter into this
Agreement in order to facilitate such resales.
AGREEMENT
---------
The parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions. The following terms, as used herein, have the following
-----------
meanings.
"Board" means the Board of Directors of the Company.
"Business Day" means any day except a Saturday, Sunday or other day on
which banks in New Jersey are authorized by law to close.
"Common Stock" means the Common Stock, par value $0.0015 per share, of the
Company.
"Closing Date" shall mean the Closing Date of the Securities Purchase
Agreement.
"Commission" means the Securities and Exchange Commission.
"Company" means Senesco Technologies, Inc., an Idaho corporation.
"Company Registration Statement" means the Registration Statement of the
Company relating to the registration for sale of Common Stock contemplated by
Section 2.3, including the Prospectus
1
<PAGE>
included therein, all amendments and supplements thereto (including
post-effective amendments) and all exhibits and material incorporated by
reference therein.
"Effective Time" means the date of effectiveness of any Registration
Statement.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Holders" has the meaning given to it in Section 2.1(b) hereof.
"NASD" means the National Association of Securities Dealers, Inc.
"Person" means an individual, corporation, partnership, association, trust
or other entity or organization, including a government or political subdivision
or an agency or instrumentality thereof.
"Prospectus" means the prospectus included in any Registration Statement,
as amended or supplemented by any prospectus supplement and by all other
amendments thereto, including post-effective amendments, and all material
incorporated by reference into such Prospectus.
"Registration Statements" means the Company Registration Statement and the
Shelf Registration Statement.
"Restricted Securities" means any Securities until (i) a registration
statement covering such Securities has been declared effective by the Commission
and such Securities have been disposed of pursuant to such effective
registration statement, (ii) such Securities qualify to be sold under
circumstances in Rule 144(k) (or any similar provisions then in force) under the
Securities Act or to the extent such Securities are otherwise freely tradeable
under Rule 144, (iii) such Securities are otherwise transferred, the Company has
delivered a new certificate or other evidence of ownership for such Securities
not bearing a legend restricting further transfer and such Securities may be
resold without registration under the Securities Act, or (iv) such Securities
shall have ceased to be outstanding.
"Securities" means the shares of Common Stock.
"Securities Act" means the Securities Act of 1933, as amended.
"Shelf Registration Statement" means the registration statement of the
Company relating to the shelf registration for resale of Restricted Securities
contemplated by Section 2.2 herein, including the Prospectus included therein,
all amendments and supplements thereto (including post-effective amendments) and
all exhibits and material incorporated by reference therein.
"Stock Purchase Agreement" has the meaning given to it in the recitals to
this Agreement.
As used in this Agreement, words in the singular include the plural, and in
the plural include the singular.
2
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ARTICLE 2
REGISTRATION RIGHTS
2.1 Securities Subject to this Agreement.
------------------------------------
(a) The Securities entitled to the benefits of this Agreement are the
Restricted Securities, but only for so long as they remain Restricted
Securities.
(b) A Person is deemed to be a holder of Restricted Securities (each, a
"Holder") whenever such Person is the registered holder of such Restricted
Securities on the Company's books and records.
2.2 Shelf Registration.
------------------
(a) The Company shall:
(i) as expeditiously as practicable after January 22, 2000, cause to
be filed with the Commission a Shelf Registration Statement on Form S-3 (or, if
such form is superseded by a successor form, such successor form); or if Form
S-3 is not available with respect to the registration of the Restricted
Securities, any form on which the Company is permitted under the Securities Act,
which Shelf Registration Statement shall provide for resales of all Restricted
Securities the Holders of which shall have provided to the Company the
information required pursuant to Section 2.2(c) herein; and
(ii) use its best reasonable efforts to cause such Shelf Registration
Statement to be declared effective by the Commission as soon as reasonably
practicable thereafter.
(b) In connection with the Shelf Registration Statement, the Company shall
comply with all the provisions of Section 2.4 below and shall use its reasonable
efforts to effect such registration to permit the sale of the Restricted
Securities being sold in accordance with the intended method or methods of
distribution thereof (as indicated in the information furnished to the Company
pursuant to Section 2.2.(c)). Subject to Section 2.2(d), the Company shall use
its best efforts to keep such Shelf Registration Statement continuously
effective, supplemented and amended as required by the provisions of Section
2.2(d) to the extent necessary to ensure that it is available for resales of
Restricted Securities by the Holders of Restricted Securities, and to ensure
that it conforms with the requirements of this Agreement, the Securities Act and
the policies, rules and regulations of the Commission as announced from time to
time, for a period of one (1) year from the Effective Time or such longer period
as required by Section 2.2(d) or such shorter period that will terminate when
all the Securities covered by the Shelf Registration Statement have been sold
pursuant to the Shelf Registration Statement or otherwise cease to be Restricted
Securities. Upon the occurrence of any event that would cause any Shelf
Registration Statement or the Prospectus contained therein (i) to contain a
material misstatement or omission or (ii) not to be effective and usable for
sale or resale of Restricted Securities during the period required by this
Agreement, the Company shall file promptly an appropriate amendment to such
Shelf Registration Statement or the related Prospectus or any document
incorporated therein by reference, in the case of clause (i), correcting any
such misstatement or omission, and, in the case of either clause (i) or (ii),
use its reasonable efforts to cause such
3
<PAGE>
amendment to be declared effective and such Registration Statement and the
related Prospectus to become usable for its intended purpose(s) as soon as
practicable thereafter.
(c) No Holder of Restricted Securities may include any of its Restricted
Securities in the Shelf Registration Statement pursuant to this Agreement unless
and until such Holder furnishes to the Company in writing, within ten (10)
Business Days after receipt of a written request therefor, such information
specified in Item 507 of Regulation S-K under the Securities Act or such other
information as the Company may reasonably request for use in connection with the
Shelf Registration Statement or Prospectus or preliminary Prospectus included
therein and in any application to the NASD. Each Holder as to which the Shelf
Registration Statement is being effected agrees to furnish promptly to the
Company all information required to be disclosed in order to make the
information previously furnished to the Company by such Holder not materially
misleading.
(d) Notwithstanding anything to the contrary contained herein, if (x) the
Board determines in good faith that the registration and distribution of
Restricted Securities (or the use of such Shelf Registration Statement or the
Prospectus contained therein) would interfere with any proposed or pending
material corporate transaction involving the Company or any of its subsidiaries
or would require premature disclosure thereof or would require the Company to
disclose information that the Company has not otherwise made public and that the
Company reasonably determines is in the best interests of the Company not to
disclose at such time, and (y) the Company notifies the Holders in writing not
later than three (3) days following such determination (such notice a "Blackout
Notice"), the Company may (A) postpone the filing of such Shelf Registration
Statement or (B) allow such Shelf Registration Statement to fail to be effective
and usable or elect that such Shelf Registration Statement not be usable for a
reasonable period of time, but not in excess of 30 days (a "Blackout Period");
provided, however, that the aggregate number of days included in all Blackout
- -------- -------
Periods shall not exceed 90 during any consecutive 12 months and shall not
exceed 150 during the period specified in Section 2.2(b) of this Agreement; and
provided, further, that the period referred to in Section 2.2(b) during which
- -------- -------
the Shelf Registration Statement is required to be effective and usable shall be
extended by the aggregate number of days during which the Shelf Registration
Statement was not effective or usable pursuant to the foregoing provisions.
2.3 Piggyback Registration.
----------------------
(a) At any time that the Company proposes to file a Company Registration
Statement within three (3) years from the date hereof, either for its own
account or for the account of a stockholder or stockholders, the Company shall
give the Holders written notice of its intention to do so and of the intended
method of sale (the "Registration Notice") within a reasonable time prior to the
anticipated filing date of the Company Registration Statement effecting such
Company Registration. Each Holder may request inclusion of any Restricted
Securities in such Company Registration by delivering to the Company, within ten
(10) Business Days after receipt of the Registration Notice, a written notice
(the "Piggyback Notice") stating the number of Restricted Securities proposed to
be included and that such shares are to be included in any underwriting only on
the same terms and conditions as the shares of Common Stock otherwise being sold
through underwriters under such Company Registration Statement. The Company
shall use its best efforts to cause all Restricted Securities specified in the
Piggyback Notice to be included in the Company Registration Statement and any
related offering, all to the extent requisite to permit the sale by the Holders
of such Restricted
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<PAGE>
Securities in accordance with the method of sale applicable to the other shares
of Common Stock included in such Company Registration Statement; provided,
--------
however, that if, at any time after giving written notice of its intention to
- -------
register any securities and prior to the effective date of the Company
Registration Statement filed in connection with such registration, the Company
shall determine for any reason not to register or to delay registration of such
securities, the Company may, at its election, give written notice of such
determination to each Holder of Restricted Securities and, thereupon:
(i) in the case of a determination not to register, shall be
relieved of its obligation to register any Restricted Securities in
connection with such registration (but not from its obligation to pay the
Registration Expenses in connection therewith), and
(ii) in the case of a delay in registering, shall be permitted to
delay registering any Restricted Securities for the same period as the
delay in registering such other securities.
(b) The Company's obligation to include Restricted Securities in a Company
Registration Statement pursuant to Section 2.3(a) shall be subject to the
following limitations:
(i) The Company shall not be obligated to include any Restricted
Securities in a registration statement filed on Form S-4, Form S-8 or such
other similar successor forms then in effect under the Securities Act.
(ii) If a Company Registration Statement involves an underwritten
offering and the managing underwriter advises the Company in writing that,
in its opinion, the number of the Restricted Securities requested to be
included in such Company Registration Statement exceeds the number which
can be sold in such offering without adversely affecting the offering, the
Company will not include any Restricted Securities in such Company
Registration Statement, or if some of the requested Restricted Securities
can be included in such Company Registration Statement, the Company will
only include such number of Restricted Securities which the Company is so
advised can be sold in such offering without adversely affecting the
offering, determined as follows:
(A) first, all securities proposed by the Company to be sold
for it own account shall be included in the Company Registration
Statement, and
(B) second, any Restricted Securities requested to be included
in such registration and any other securities of the Company in
accordance with the priorities, if any, then existing among the
holders of such securities pro rata among the holders thereof
requesting such registration on the basis of the number of shares of
such securities requested to be included by such holders.
(ii) The Company shall not be obligated to include Restricted
Securities in more than two (2) Company Registration Statement(s).
(c) No Holder of Restricted Securities may include any of its Restricted
Securities in the Company Registration Statement pursuant to this Agreement
unless and until such Holder furnishes to the Company in writing, within ten
(10) Business Days after receipt of a written request therefor, such
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<PAGE>
information specified in Item 507 of Regulation S-K under the Securities Act or
such other information as the Company may reasonably request for use in
connection with the Company Registration Statement or Prospectus or preliminary
Prospectus included therein and in any application to the NASD. Each Holder as
to which the Company Registration Statement is being effected agrees to furnish
promptly to the Company all information required to be disclosed in order to
make all information previously furnished to the Company by such Holder not
materially misleading.
2.4 Registration Procedures. In connection with any Registration Statement
-----------------------
and any Prospectus required by this Agreement to permit the sale or resale of
Restricted Securities, the Company shall:
(a) prepare and file with the Commission such amendments and
post-effective amendments to such Registration Statement as may be necessary to
keep such Registration Statement effective (i) if such Registration Statement is
a Company Registration Statement, until the earlier of such time as all of such
securities have been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof set forth in such Company
Registration Statement or (ii) if such Registration Statement is a Shelf
Registration Statement, for the applicable period set forth in Section 2.2(b)
herein; cause the Prospectus to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424 under the
Securities Act, and to comply fully with the applicable provisions of Rules 424
and 430A, as applicable, under the Securities Act in a timely manner; and comply
with the provisions of the Securities Act with respect to the disposition of all
securities covered by such Registration Statement during the applicable period
in accordance with the intended method or methods of distribution by the sellers
thereof set forth in such Registration Statement or supplement or the
Prospectus;
(b) promptly (and in respect of events covered by clause (i) hereof, on
the same day as the Company shall receive notice of effectiveness) advise the
Holders covered by such Registration Statement and, if requested by such
Persons, to confirm such advice in writing, (i) when the Prospectus or any
Prospectus supplement or post-effective amendment has been filed, and when the
same has become effective, (ii) of any request by the Commission for
post-effective amendments to such Registration Statement or post-effective
amendments to such Registration Statement or post-effective amendments or
supplements to the Prospectus or for additional information relating thereto,
(iii) of the issuance by the Commission of any stop order suspending the
effectiveness of any such Registration Statement under the Securities Act or of
the suspension by any state securities commission of the qualification of the
Restricted Securities for offering or sale in any jurisdiction, or the
initiation of any proceeding for any of the preceding purposes, and (iv) of the
existence of any fact or the happening of any event that makes any statement of
a material fact made in any such Registration Statement, the related Prospectus,
any amendment or supplement thereto, or any document incorporated by reference
therein untrue, or that requires the making of any additions to or changes in
any such Registration Statement or the related Prospectus in order to make the
statements therein not misleading. If at any time the Commission shall issue any
stop order suspending the effectiveness of such Registration Statement, or any
state securities commission or other regulatory authority shall issue an order
suspending the qualification or exemption from qualification of the Restricted
Securities under state securities or Blue Sky laws, the Company shall use its
reasonable efforts to obtain the withdrawal or lifting of such order at the
earliest possible time;
6
<PAGE>
(c) promptly furnish to each Holder of Restricted Securities covered by
any Registration Statement, and each underwriter, if any, without charge, at
least one conformed copy of any Registration Statement, as first filed with the
Commission, and of each amendment thereto, including all documents incorporated
by reference therein and all exhibits (including exhibits incorporated therein
by reference) and such other documents as such Holder may reasonably request;
(d) deliver to each Holder covered by any Registration Statement, and each
underwriter, if any, without charge, as many copies of the Prospectus (including
each preliminary prospectus) and any amendment or supplement thereto as such
person reasonably may request.
(e) enter into such customary agreements and take all such other
reasonable action in connection therewith (including those reasonably requested
by the selling Holders or the underwriter(s), if any) required in order to
expedite or facilitate the disposition of such Restricted Securities pursuant to
such Registration Statement, including, but not limited to, dispositions
pursuant to an underwritten registration, and in such connection:
(i) make such representations and warranties to the selling Holders
and underwriter(s), if any, in form, substance and scope as are customarily made
by issuers to underwriters in underwritten offerings (whether or not sales of
securities pursuant to such Registration Statement are to be to an
underwriter(s)) and confirm the same if and when requested;
(ii) obtain opinions of counsel to the Company (which counsel and
opinions, in form and substance, shall be reasonably satisfactory to the selling
Holders and the underwriter(s), if any, and their respective counsel) addressed
to each selling Holder and underwriter, if any, covering the matters customarily
covered in opinions requested in underwritten offerings (whether or not sales of
securities pursuant to such Registration Statement are to be made to an
underwriter(s)) and dated the date of effectiveness of any Registration
Statement (and, in the case of any underwritten sale of securities pursuant to
such Registration Statement, each closing date of sales to the underwriter(s)
pursuant thereto);
(iii) use reasonable efforts to obtain comfort letters dated the
date of effectiveness of any Registration Statement (and, in the case of any
underwritten sale of securities pursuant to such Registration Statement, each
closing date of sales to the underwriter(s) pursuant thereto) from the
independent certified public accountants of the Company addressed to each
selling Holder and underwriter, if any, such letters to be in customary form and
covering matters of the type customarily covered in comfort letters in
connection with underwritten offerings (whether or not sales of securities
pursuant to such Registration Statement are to be made to an underwriter(s));
(iv) provide for the indemnification provisions and procedures of
Section 2.6 hereof with respect to selling Holders and the underwriter(s), if
any, and;
(v) deliver such documents and certificates as may be reasonably
requested by the selling Holders or the underwriter(s), if any, and which are
customarily delivered in underwritten offerings (whether of not sales of
securities pursuant to such Registration Statement are to be made to an
underwriter(s), with such documents and certificates to be dated the date of
effectiveness of any Registration Statement.
7
<PAGE>
The actions required by clauses (i) through (v) above shall be done at each
closing under such underwriting or similar agreement, as and to the extent
required thereunder, and if at any time the representations and warranties of
the Company contemplated in clause (i) above cease to be true and correct, the
Company shall so advise the underwriter(s), if any, and each selling Holder
promptly, and, if requested by such Person, shall confirm such advice in
writing;
(f) prior to any public offering of Restricted Securities, cooperate with
the selling Holders, the underwriter(s), if any, and their respective counsel in
connection with the registration and qualification of the Restricted Securities
under the securities or Blue Sky laws of such U.S. jurisdictions as the selling
Holders or underwriter(s), if any, may reasonably request in writing by the time
any Registration Statement is declared effective by the Commission, and do any
and all other acts or filings necessary or advisable to enable disposition in
such U.S. jurisdictions of the Restricted Securities covered by any Registration
Statement and to file such consents to service of process or other documents as
may be necessary in order to effect such registration or qualification;
provided, however, that the Company shall not be required to register or qualify
- -------- -------
as a foreign corporation in any jurisdiction where it is not then so qualified
or as a dealer in securities in any jurisdiction where it would not otherwise be
required to register or qualify but for this Section 2.4, or to take any action
that would subject it to the service of process in suits or to taxation, in any
jurisdiction where it is not then so subject;
(g) in connection with any sale of Restricted Securities that will result
in such securities no longer being Restricted Securities, cooperate with the
selling Holders and the underwriter(s), if any, to facilitate the timely
preparation and delivery of certificates representing Restricted Securities to
be sold and not bearing any restrictive legends; and enable such Restricted
Securities to be in such denominations and registered in such names as the
Holders or the underwriter(s), if any, may request at least two (2) Business
Days prior to any sale of Restricted Securities made by such underwriters;
(h) use its reasonable efforts to cause the disposition of the Restricted
Securities covered by any Registration Statement to be registered with or
approved by such other U.S. governmental agencies or authorities as may be
necessary to enable the seller or sellers thereof or the underwriter(s), if any,
to consummate the disposition of such Restricted Securities, subject to the
proviso contained in Section 2.2(f);
(i) if any fact or event contemplated by Section 2.4(b) shall exist or
have occurred, prepare a supplement or post-effective amendment to any
Registration Statement or related Prospectus or any document incorporated
therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of Restricted Securities, the Prospectus will not
contain an untrue statement of a material fact or omit to state any material
fact necessary to make the statement therein not misleading;
8
<PAGE>
(j) cooperate and assist in the performance of any due diligence
investigation by any underwriter (including any "qualified independent
underwriter") that is required to be retained in accordance with the rules and
regulations of the NASD, and use its reasonable efforts to cause any
Registration Statement to become effective and approved by such U.S.
governmental agencies or authorities as may be necessary to enable the Holders
selling Restricted Securities to consummate the disposition of such Restricted
Securities;
(k) otherwise use its reasonable efforts to comply with all applicable
rules and regulations of the Commission, and make generally available to its
security holders with regard to such Registration Statement, as soon as
practicable, a consolidated earnings statement meeting the requirements of Rule
158 (which need not be audited) for the twelve-month period (i) commencing at
the end of any fiscal quarter in which Restricted Securities are sold to the
underwriter in a firm or best efforts underwritten offering or (ii) if not sold
to an underwriter in such an offering, beginning with the first month of the
Company's first fiscal quarter commencing after the effective date of any
Registration Statement;
(l) provide a CUSIP number for all Restricted Securities not later than
the effective date of any Registration Statement;
(m) use its best efforts to list, not later than the effective date of
such Registration Statement, all Restricted Securities covered by such
Registration Statement on the NASD OTC Electronic Bulletin Board or any other
trading market on which any Common Stock of the Company are then admitted for
trading; and
(n) provide promptly to each Holder covered by any Registration Statement
upon request each document filed with the Commission pursuant to the
requirements of Section 12 and Section 14 of the Exchange Act.
Each Holder agrees by acquisition of a Restricted Security that, upon
receipt of any notice from the Company of the existence of any fact of the kind
described in Section 2.4(b)(iv) or the commencement of a Blackout Period, such
Holder will forthwith discontinue disposition of Restricted Securities pursuant
to any Registration Statement until such Holder's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 2.4(i), or until it
is advised in writing, in accordance with the notice provisions of Section 5.3
herein (the "Advice"), by the Company that the use of the Prospectus may be
resumed, and has received copies of any additional or supplemental fillings that
are incorporated by reference in the Prospectus. If so directed by the Company,
each Holder will deliver to the Company all copies, other than permanent file
copies, then in such Holder's possession, of the Prospectus covering such
Restricted Securities that was current at the time of receipt of such notice. In
the event the Company shall give any such notice, the time period regarding the
effectiveness of the Shelf Registration Statement set forth in Section 2.2(b)
shall be extended by the number of days during the period from and including the
date of the giving of such notice pursuant to Section 2.4(b)(iv) or the
commencement of a Blackout Period to and including the date when each selling
Holder covered by such Registration Statement shall have received the copies of
the supplemented or amended Prospectus contemplated by Section 2.4(i) or shall
have received (in accordance with the notice provisions of Section 5.3) the
Advice.
9
<PAGE>
2.5 Preparation; Reasonable Investigation. In connection with the
----------------------------------------
preparation and filing of each Registration Statement under the Securities Act,
the Company will give the Holders of Restricted Securities registered under such
Registration Statement, their underwriter, if any, and their respective counsel
and accountants, the opportunity to participate in the preparation of such
Registration Statement, each prospectus included therein or filed with the
Commission, and each amendment thereof or supplement thereto, and will give each
to them access to its books and records and such opportunities to discuss the
business, finances and accounts of the Company and its subsidiaries with its
officers, directors and the independent public accountants who have certified
its financial statements as shall be necessary, in the opinion of such Holders
and such underwriters' respective counsel, to conduct a reasonable investigation
within the meaning of the Securities Act.
2.6 Certain Rights of Holders. The Company will not file any registration
-------------------------
statement under the Securities Act which refers to any Holder of Restricted
Securities by name or otherwise without the prior approval of such Holder, which
consent shall not be unreasonably withheld or delayed.
2.7 Registration Expenses.
---------------------
(a) All expenses incident to the Company's performance of or compliance
with this Agreement will be borne by the Company, regardless of whether a
Registration Statement becomes effective, including without limitation: (i) all
registration and filing fees and expenses (including filings made with the NASD
and reasonable counsel fees in connection therewith); (ii) all reasonable fees
and expenses of compliance with federal securities and state Blue Sky or
securities laws (including all reasonable fees and expenses of one counsel to
the underwriter(s) in any underwriting) in connection with compliance with state
Blue Sky or securities laws for all states in the United States; (iii) all
expenses of printing, messenger and delivery services and telephone calls; (iv)
all fees and disbursements of counsel for the Company; and (v) all fees and
disbursements of independent certified public accountants of the Company
(including the expenses of any special audit and comfort letters required by or
incident to such performance), but excluding from this paragraph, fees and
expenses of counsel to the underwriter(s), if any, unless otherwise set forth
herein.
(b) In addition, in connection with the filing of the Shelf Registration
Statement required to be filed by this Agreement, the Company will reimburse the
Holders of the Restricted Securities being registered pursuant to any Shelf
Registration Statement for the reasonable fees and disbursements of not more
than one counsel to review such Registration Statement.
(c) Notwithstanding the foregoing, the Company will not be responsible for
any underwriting discounts, commissions or fees attributable to the sale of
Restricted Securities or any legal fees or disbursements (other than any such
fees or disbursements relating to Blue Sky compliance or otherwise as set for
the under Section 2.7(a)) incurred by any underwriter(s) in any underwritten
offering if the underwriter(s) participates in such underwritten offering at the
request of the Holders of Restricted Securities, or any transfer taxes that may
be imposed in connection with a sale or transfer of Restricted Securities.
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<PAGE>
(d) The Company shall, in any event, bear its internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expenses of any annual
audit and the fees and expenses of any Person, including special experts,
retained by the Company.
2.8 Indemnification; Contribution.
-----------------------------
(a) The Company agrees to indemnify and hold harmless (i) each Holder
covered by any Registration Statement, (ii) each other Person who participates
as an underwriter in the offering or sale of such securities, (iii) each person,
if any, who controls (within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act) any such Holder or underwriter (any of the
persons referred to in this clause (iii) being hereinafter referred to as a
"controlling person") and (iv) the respective officers, directors, partners,
employees, representatives and agents of any such Holder or underwriter or any
controlling person (any person referred to in clause (i), (ii), (iii) or (iv)
may hereinafter be referred to as an "indemnified Person"), to the fullest
extent lawful, from and against any and all losses, claims, damages,
liabilities, judgments or expenses, joint or several (or actions or proceedings,
whether commenced or threatened, in respect thereof) (collectively, "Claims"),
to which such indemnified Person may become subject under either Section 15 of
the Securities Act or Section 20 of the Exchange Act or otherwise, insofar as
such Claims arise out of or are based upon, or are caused by any untrue
statement or alleged untrue statement of a material fact contained in any
Registration Statement or Prospectus (or any amendment or supplement thereto),
or any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading, or
a violation by the Company of the Securities Act or any state securities law, or
any rule or regulation promulgated under the Securities Act or any state
securities law, or any other law applicable to the Company relating to any such
registration or qualification, except insofar as such losses, claims, damages,
liabilities, judgments or expenses of any such indemnified Person; (x) are
caused by any such untrue statement or omission or alleged untrue statement or
omission that is based upon information relating to such indemnified Person
furnished in writing to the Company by or on behalf of any of such indemnified
Person expressly for use therein; (y) with respect to the preliminary
Prospectus, result from the fact that such Holder sold Securities to a person to
whom there was not sent or given, at or prior to the written confirmation of
such sale, a copy of the Prospectus, as amended or supplemented, if the Company
shall have previously furnished copies thereof to such Holder in accordance with
this Agreement and said Prospectus, as amended or supplemented, would have
corrected such untrue statement or omission; or (z) as a result of the use by an
indemnified Person of any Prospectus when, upon receipt of a Blackout Notice or
a notice from the Company of the existence of any fact of the kind described in
Section 2.4(b)(iv), the indemnified Person or the related Holder was not
permitted to do so. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of any indemnified Person
and shall survive the transfer of such securities by such Holder.
In case any action shall be brought or asserted against any of the
indemnified Persons with respect to which indemnity may be sought against the
Company, such indemnified Person shall promptly notify the Company and the
Company shall assume the defense thereof. Such indemnified Person shall have the
right to employ separate counsel in any such action and to participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of the indemnified Person unless (i) the employment of such counsel
shall have been specifically authorized in writing by
11
<PAGE>
the Company, (ii) the Company shall have failed to assume the defense and employ
counsel or (iii) the named parties to any such action (including any implied
parties) include both the indemnified Person and the Company and the indemnified
Person shall have been advised in writing by its counsel that there may be one
or more legal defenses available to it which are different from or additional to
those available to the Company (in which case the Company shall not have the
right to assume the defense of such action on behalf of the indemnified Person),
it being understood, however, that the Company shall not, in connection with
such action or similar or related actions or proceedings arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel) at any time for all the indemnified Persons, which firm shall be (x)
designated by such indemnified Persons and (y) reasonably satisfactory to the
Company. The Company shall not be liable for any settlement of any such action
or proceeding effected without the Company's prior written consent, which
consent shall not be withheld unreasonably, and the Company agrees to indemnify
and hold harmless any indemnified Person from and against any loss, claim,
damage, liability, judgment or expense by reason of any settlement of any action
effected with the written consent of the Company. The Company shall not, without
the prior written consent of each indemnified Person, settle or compromise or
consent to the entry of judgment on or otherwise seek to terminate any pending
or threatened action, claim, litigation or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not any
indemnified Person is a party thereto), unless such settlement, compromise,
consent or termination includes an unconditional release of each indemnified
Person from all liability arising out of such action, claim litigation or
proceeding.
(b) Each Holder of Restricted Securities covered by any Registration
Statement agrees, severally and not jointly, to indemnify and hold harmless the
Company and its directors, officers and any person controlling (within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act)
the Company, and the respective officers, directors, partners, employees,
representatives and agents of each person, to the same extent as the foregoing
indemnity from the Company to each of the indemnified Persons, but only (i) with
----
respect to actions based on information relating to such Holder furnished in
writing by or on behalf of such Holder expressly for use in any Registration
Statement or Prospectus, and (ii) to the extent of the gross proceeds, if any,
received by such Purchaser from the sale or other disposition of his or its
Restricted Securities covered by such Registration Statement. In case any action
or proceeding shall be brought against the Company or its directors or officers
or any such controlling person in respect of which indemnity may be sought
against a Holder of Restricted Securities covered by any Registration Statement,
such Holder shall have the rights and duties given the Company in Section 2.8(a)
(except that the Holder may but shall not be required to assume the defense
thereof), and the Company or its directors or officers or such controlling
person shall have the rights and duties given to each Holder by Section 2.8(a).
12
<PAGE>
(c) If the indemnification provided for in this Section 2.8 is unavailable
to an indemnified party under Section 2.7(a) or (b) (other than by reason of
exceptions provided in those Sections) in respect of any losses, claims,
damages, liabilities, judgments or expenses referred to therein, then each
applicable indemnifying party (in the case of the Holders severally and not
jointly), in lieu of indemnifying such indemnified party, shall contribute to
the amount paid or payable by such indemnified party as a result of such losses,
claims damages, liabilities, judgments or expenses (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Holder on the other hand from sale of Restricted Securities or (ii)
if such allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Company and such Holder in connection with the statements or omissions which
resulted in such losses, claims, damages, liabilities, judgments or expenses, as
well as any other relevant equitable considerations. The relative fault of the
Company on the one hand and of such Holder on the other shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or by such Holder and the parties
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The amount paid to a party as a result of
the losses, claims, damages, liabilities judgments and expenses referred to
above shall be deemed to include, subject to the limitations set forth in the
second paragraph of Section 2.8(a), any legal or other fees or expenses
reasonably incurred by such party in connection with investigating or defending
any action or claim.
The Company and each Holder of Restricted Securities covered by any
Registration Statement agree that it would not be just and equitable if
contribution pursuant to this Section 2.8(c) were determined by pro rata
allocation (even if the Holders were treated as one entity for such purpose) or
by any other method of allocation which does not take into account the equitable
considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 2.8(c) no Holder (and none of its
related indemnified Persons) shall be required to contribute, in the aggregate,
any amount in excess of the amount by which the dollar amount of proceeds
received by such Holder upon the sale of the Restricted Securities exceeds the
amount of any damages which such Holder has otherwise been required to pay by
reason of such untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentations (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
The indemnity, and contribution provisions contained in this Section 2.8
are in addition to any liability which the indemnifying person may otherwise
have to the indemnified persons referred to above.
2.9 Participation in Underwritten Registrations. No Holder may participate
-------------------------------------------
in any underwritten registration hereunder unless such Holder (a) agrees to sell
such Holder's Restricted Securities on the basis provided in any underwriting
arrangements approved by the Persons entitled hereunder to approve such
arrangements and (b) completes and executes all reasonable questionnaires,
powers of attorney, indemnities, underwriting agreements, lock-up letters and
other documents required under the terms of such underwriting arrangements.
13
<PAGE>
2.10 Selection of Underwriters. The Holders of Restricted Securities
---------------------------
covered by any Registration Statement who desire to do so may sell such
Restricted Securities in an underwritten offering. In any such underwritten
offering, the investment banker or investment bankers and manager or managers
that will administer the offering will be selected by the Holders of a majority
of the Restricted Securities included in such offering if such registration is
pursuant to the Shelf Registration Statement, and by the Company if such
registration is pursuant to a Company Registration Statement; provided, however,
-------- -------
that such investment bankers and managers must be reasonably satisfactory to the
Company or the Holders, respectively. Such investment bankers and managers are
referred to herein as the "underwriters".
ARTICLE 3
MISCELLANEOUS
3.1 Entire Agreement. This Agreement, together with the Stock Purchase
----------------
Agreement, constitutes the entire agreement between the parties with respect to
the subject matter hereof and supersedes all prior agreement and understandings,
both oral and written, between the parties with respect to the subject matter
hereof.
3.2 Successors and Assigns. This Agreement shall inure to the benefit of
----------------------
and be binding upon the successors and assigns of each of the parties, including
without limitation and without the need for an express assignment, subsequent
Holders of Restricted Securities; provided, however, that this Agreement shall
-------- -------
not inure to the benefit of or be binding upon a successor or assign of a Holder
unless and to the extent such successor or assign acquired Restricted Securities
from such Holder at a time when such Holder could not transfer such Restricted
Securities pursuant to any Registration Statement or pursuant to Rule 144 under
the Securities Act as contemplated by clause (ii) of the definition of
Restricted Securities.
3.3. Notices. All notices and other communications given or made pursuant
-------
hereto or pursuant to any other agreement among the parties, unless otherwise
specified, shall be in writing and shall be deemed to have been duly given or
made if sent by telecopy (with confirmation in writing), delivered personally or
by overnight courier or sent by registered or certified mail (postage prepaid,
return receipt requested) to the parties at the telecopy number, if any, or
address set forth below or at such other addresses as shall be furnished by the
parties by like notice. Notices sent by telecopier shall be effective when
receipt is acknowledged, notices delivered personally or by overnight courier
shall be effective upon receipt and notices sent by registered or certified mail
shall be effective three days after mailing:
if to a Holder: to such Holder at the address set forth on the
records of the Company as the record owners of the
Common Stock
with copies to: Beckman, Millman & Sanders, LLP
116 John Street
New York, New York 10038
Telephone Number: (212) 406-4700
Fax: (212) 406-3750
Attention: Michael Beckman, Esq.
14
<PAGE>
if to the Company: Senesco Technologies, Inc.
34 Chambers Street
Princeton, New Jersey 08542
Telephone Number: (609) 252-0680
Fax: (609) 252-0049
Attention: Phillip O. Escaravage, Chairman and
Chief Operating Officer
with copies to: Buchanan Ingersoll Professional Corporation
500 College Road East
Princeton, New Jersey 08540
Telephone Number: (609) 987-6800
Fax: (609) 520-0360
Attention: David J. Sorin, Esq.
3.4 Headings. The headings contained in this Agreement are for convenience
--------
only and shall not affect the meaning or interpretation of this Agreement.
3.5 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument.
3.6 Applicable Law. This Agreement shall be governed by and construed in
--------------
accordance with the internal laws of the State of New Jersey without giving
effect to the choice law provisions.
3.7 Specific Enforcement. Each party hereto acknowledges that the remedies
--------------------
at law of the other parties for a breach or threatened breach of this Agreement
would be inadequate, and, in recognition of this fact, any party to this
Agreement, without posting any bond, and in addition to all other remedies which
may be available, shall be entitled to obtain equitable relief in the form of
specific performance, a temporary restraining order, a temporary to permanent
injunction or any other equitable remedy which may then be available.
3.8 Amendment and Waivers. The provisions of this Agreement may not be
----------------------
amended, modified or supplemented, and waivers or consents to or departures from
the provisions hereof may not be given unless the Company has obtained the
written consent of Holders of a majority of the Restricted Securities.
* * * * * * * *
15
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
COMPANY:
SENESCO TECHNOLOGIES, INC.
By:
-------------------------------------------
Name: Phillip O. Escaravage
Title: Chairman and Chief Operating Officer
PURCHASERS:
By:
-------------------------------------------
Name:
Address:
LIONHEART SERVICES, INC.
230 PARK AVENUE
NEW YORK, NEW YORK
April 30, 1999
Senesco Technologies, Inc.
34 Chambers Street
Princeton, NJ 08542
Attn: Phillip Escaravage,
Chairman
Gentlemen:
Reference is made to our recent discussion relating to a proposed offering
(the "Offering") by Senesco Technologies, Inc. an Idaho corporation (the
"Company"), of that number of shares of its $ .0015 par value per share common
stock (the "Shares") necessary to raise a minimum of $800,000.00 as herein
described. Based on our discussions, financial materials which you have
submitted to us and representations which you have made to us describing the
Company, its principals, the present and proposed business activities of the
Company and the Company's operations and financial condition, we hereby agree to
place, on a best efforts basis, the Company's Shares upon the following terms
and conditions:
1. The Company will sell and Lionheart Services, Inc. (the "Placement
Agent") will use its best efforts to offer and sell as Agent for the
Company that number of Shares necessary to raise gross proceeds of
$800,000.00 (the "Minimum Offering"). The Placement Agent shall place
the Minimum Offering on a "best efforts, all or none basis." The
number of Shares which the Company shall issue in exchange for the
gross proceeds of this Placement shall be calculated as follows: The
gross proceeds, as a numerator shall be divided by a number which
shall be the denominator and calculated as: eighty (80%) percent of
the twenty (20) trading day average of the mean between the bid and
asked price for the Company's common stock as quoted on the O-T-C
Bulletin Board for the twenty (20) trading day period ending three (3)
trading days prior to the Closing of the Placement herein. If the
Minimum Offering is not completed within sixty (60) days from the
Effective Date, as described herein (the "Initial Offering"), all
monies received as a result of subscriptions for shares respecting the
Minimum Offering will be refunded to the subscribers without reduction
or interest. The "Effective Date" of the Offering for the purposes of
this Placement Agreement shall mean the first Friday following the day
upon which the Placement Agent has received from the Company: (i) a
completed "due diligence" package, and (ii) an executed copy of this
Placement Agreement. The Company and the Placement Agent may mutually
agree to extend the foregoing sixty (60) day period for an additional
sixty (60) days on the same placement terms and conditions that were
in effect for the initial sixty
<PAGE>
(60) days. The Placement Agent shall promptly deposit into an escrow
account at a mutually appointed escrow agent designated by the
Placement Agent, all proceeds from subscriptions to purchase the
number of Shares necessary to conclude the Minimum Offering
("Escrow"). After subscriptions for the number of Shares necessary to
conclude the Minimum Offering have been received and accepted (the
"Initial Closing"), the funds in Escrow shall be paid over to the
Company in exchange for the number of Shares to be issued as
calculated above. Should the Company and the Placement Agent agree to
seek to continue sales of common stock of the Company, the Offering
may continue on a "best efforts" basis upon the remaining applicable
terms and conditions as herein set forth and for such further sums as
the Company and the Placement Agent may agree. The Company and the
Placement Agent may agree as to a termination date of the Offering for
any additional number of Shares. The offering will continue on a
"best-efforts" basis with respect to the remaining number of Shares up
to the number of Shares necessary to conclude the Maximum Offering,
and the proceeds from the sale of such remaining Shares shall not be
subject to any Escrow.
2. The Shares shall be sold by the Company and offered by the
Placement Agent to "Accredited Investors" only pursuant to the
definition in and the applicable rules promulgated under Regulation D
under the Securities Act of 1933, as amended, (the "Act"). The Company
and the Placement Agent shall take all steps necessary to fully comply
with the applicable terms of Regulation D under the Act.
In connection therewith:
a) The certificates delivered to the purchasers of the
Shares in the Regulation D Offering at the Initial Closing and
each subsequent Closing shall be dated the date of each Closing
and shall bear a legend restricting their resale under the Act.
b) At any time, or from time to time the holders of the
majority of the Shares shall have the right to require the
Company to prepare and file one (1) Registration Statement, if
then required under the Act, covering all or any portion of the
Shares, issued pursuant to this Agreement, including any shares
issued pursuant to Paragraph 6 hereof, but such request cannot be
made before January 23, 2000. The Company shall bear all expenses
incurred by the Company in the preparation and filing of such
Registration Statement, but shall not bear the fees and expenses
or any counsel or accountants or other advisors retained by the
holders of the Shares requesting such Registration. In addition
if at any time during the three (3) year period following the
Closing of the Offering hereunder, the Company shall prepare and
file a Registration Statement under the Act, except for a
Registration Statement on Form S-8, with respect to a Public
Offering of equity or debt securities of the Company, the Company
will, upon request
<PAGE>
of the holders of the Shares, include in such Registration
Statement such number of the Shares as the holders thereof may
request. The Company shall bear all fees and expenses incurred by
the Company in connection with such Registration Statement, but
shall not bear the fees and expenses of any counsel or
accountants or advisors retained by the holders requesting
inclusion in such Registration Statement. In the event of such
proposed Registration, the Company shall then furnish the then
holders of the Shares with not less than thirty (30) days prior
written notice of the proposed date of filing the Registration
Statement. The notice shall continue to be given by the Company
to such holders until such time as all of the Shares shall be
registered or counsel to the Company shall provide and opinion to
the holders of the Shares that inclusion in such Registration
Statement shall not be necessary because the Shares may be sold
without Registration pursuant to Rule 144 of the Act.
3. The above commitments by the Placement Agent are subject to
receipt by the Placement Agent of all information and verifications
thereof which the Placement Agent or its legal counsel may request
from the Company in a manner and form satisfactory to the Placement
Agent and its legal counsel.
4. The Placement Agent shall act exclusively as agent and not as
principal in selling the Shares for the Company on a best efforts
basis (subject to the terms and conditions set forth in this Placement
Agreement). The Placement Agent may, in its discretion, negotiate with
other placing agents who, acting severally, would contract to sell, as
agents, portions of the Shares.
5. Pending the time period commencing upon execution of this
Placement Agreement and ending sixty (60) days after the Effective
Date, the Company will not negotiate with any other underwriter, or
placement agent relating to a possible offer or sale of the Shares.
6. The Company shall pay the Placement Agent or its designee(s) a
ten (10%) percent commission in cash, or in like kind securities, on
all Shares sold in connection with the Offering, provided at least the
Minimum Offering is completed.
7. The Company shall be responsible for and shall bear all expenses
directly and necessarily incurred in connection with the proposed
financing, including but not limited to: the fees and expenses of its
legal counsel, the costs of preparing, printing and delivering all
offering materials utilized in connection with the offer and sale of
the Shares. The costs of preparing, printing and delivering all
placement and selling documents, including but not limited to: this
Placement Agreement, and if requested any Officer & Director
Questionnaires. The Placement Agent will pay all of its expenses from
a non-accountable expense allowance equal to three (3%) percent of the
total proceeds of the Offering. If the proposed financing is not
completed because the Company prevents it or because
<PAGE>
of a breach by the Company of any such covenants, representations or
warranties, the Company's liability for such expense allowance shall
be equal to the actual expenses incurred by the Placement Agent.
8. The Placement Agent may terminate the Offering at any time (i) in
the event of war; (ii) in the event of any material adverse change in
the business, property or financial condition of the Company (of which
the Placement Agent shall be the sole judge); (iii) in the event of
any action, suit or proceeding at law or at equity against the
Company, or by the Federal, State or other commission, board or agency
where any unfavorable decision would materially adversely affect the
business, property, financial condition or income of the Company; and
(iv) in the event of adverse market conditions of which event the
Placement Agent's commitment will be subject to receipt by the
Placement Agent of all information and verifications thereof which the
Placement Agent or its counsel may request from the Company in a
manner and form satisfactory to the Placement Agent.
9. (a) The Company is a corporation duly incorporated and
validly existing in good standing under the laws of the State of
its incorporation and is lawfully qualified to do business as a
foreign corporation in good standing in every jurisdiction in
which the conduct of its business requires it to be so qualified.
(b) The Shares have been duly authorized, and when paid
for and delivered in accordance with this Placement Agreement,
will be validly issued, fully paid and non-assessable; all
corporate action required to be taken by the Company for
authorization, issuance and sale of the Shares has been validly
and sufficiently taken; and the certificates representing the
Shares are in proper legal form.
(c) This Placement Agreement has been authorized, executed
and delivered by the Company and is a valid and binding agreement
of the Company enforceable in accordance with its terms, except
to the extent limited by bankruptcy, reorganization, moratorium
or similar laws affecting the rights of creditors generally and
subject to the extent a court may order an equitable remedy or
the enforceability of the indemnification provisions may be
limited under federal securities laws.
10. (a) The Company agrees to indemnify and defend the
Placement Agent and each person, if any, who controls the
Placement Agent within the meaning of Section 15 of the Act free
and harmless from and against any and all losses, claims,
damages, liabilities, and expenses, joint or several (including
reasonable legal or other expenses) incurred by the Placement
Agent and controlling person in connection with defending any
claims or liabilities, whether or not resulting in any liability
to the Placement Agent or to any controlling person which the
Placement Agent or controlling person
<PAGE>
may incur under the Securities Act or at common law or otherwise,
but only to the extent that the losses, claims, damages,
liabilities, and expenses shall arise out of or be based upon any
untrue statement or alleged untrue statement of a material fact
contained in any of the Offering documents.
(b) The Placement Agent agrees to give the Company an
opportunity to participate in the defense or preparation of the
defense of any action brought against the Placement Agent or
controlling person of the Placement Agent to enforce any claim or
liability, and the company shall have the right to participate.
The Company shall, subject to the provisions stated below, have
the right to assume the defense of any action (including the
employment of counsel and payment of expenses) insofar as the
action shall relate to any alleged liability in respect of which
indemnity may be sought against the Company. In the event of any
assumption by the Company, the Placement Agent or any controlling
person shall have the right to employ separate counsel in any
action and to participate in the defense, but the fees and
expenses of counsel shall not be at the expense of the Company
unless, (i) the Company does not assume the defense, or (ii) the
employment of counsel has been specifically authorized by the
Company. The Company shall not be liable to indemnify any person
for any settlement of any action effected without the Company's
consent. The agreement of the Company under the foregoing
indemnity is expressly conditioned upon notice of any action
having been sent by the Placement Agent or controlling person, as
the case may be, to the Company, by letter, telegram or facsimile
(addresses as required by Section 16) promptly after the
commencement of any action against the Placement Agent or
controlling person, notice either being accompanied by copies of
papers served or filed in connection with the action or by a
statement of the nature of the action to the extent the nature of
the action shall relieve the Company of its respective
liabilities under the foregoing indemnity provisions, but failure
to notify the Company shall not relieve it from any liability
which it may have to the Placement Agent or controlling person
other than on account of the indemnity provisions contained in
this Section.
(c) The provisions of this Section shall not in any way
prejudice any rights which:
(i) The Placement Agent, or any person who controls
the Placement Agent within the meaning of Section 15 of the
Act, may have against the Company, or any person who
controls the Company within the meaning of Section 15 of the
Securities Act, or
(ii) The Company or any person who controls the Company
within the meaning of Section 15 of the Act, may have
<PAGE>
against the Placement Agent, or any person who controls the
Placement Agent within the meaning of Section 15 of the
Securities Act, or
(iii) The indemnity provisions contained in this Section
12 shall survive the Offering and shall inure to the benefit
of successors of the Placement Agent and successors of any
person who controls the Placement Agent within the meaning
of Section 15 of the Act, and shall be valid irrespective of
any investigation made for on behalf of the Placement Agent.
11. This Agreement shall be governed by the laws of the State of New
York.
12. Any notice required or permitted to be given under this
Placement Agreement shall be given in writing by depositing the notice
in the United States Mail, postage pre-paid, or by Western Union,
charges pre-paid, addressed as set forth above, or follows, or by
facsimile:
TO THE PLACEMENT AGENT:
-----------------------
Lionheart Services, Inc.
230 Park Avenue
Suite 516
New York, New York
Attn: Charles Duncan Soukop
TO THE COMPANY:
---------------
Attn: Phillip Escaravage
If the foregoing conforms with your understanding, please sign, date and
return to us enclosed copy of this letter.
LION HEART SERVICES, INC.
BY: /s/ Charles D. Soukop
-----------------------------
CHARLES DUNCAN SOUKOP,
PRESIDENT
AFFIRMED AND AGREED to this
2nd Day of May, 1999
BY: /s/ Phillip Escaravage
----------------------------
PHILLIP ESCARAVAGE
SENESCO TECHNOLOGIES, INC.
INDEMNIFICATION AGREEMENT
This Indemnification Agreement ("Agreement") is made as of February 23,
1999 by and between Senesco Technologies, Inc., an Idaho corporation (the
"Company"), and Thomas C. Quick ("Indemnitee").
WHEREAS, Indemnitee is a director of the Company and performs valuable
services in such capacities for the Company;
WHEREAS, the Company and Indemnitee recognize the substantial increase in
corporate litigation in general, subjecting directors, officers, employees,
agents and fiduciaries to expensive litigation risks at the same time as the
availability and coverage of liability insurance may be limited;
WHEREAS, the Company and Indemnitee further recognize the difficulty in
obtaining liability insurance for its directors, officers, employees, agents and
fiduciaries, the significant increases in the cost of such insurance and the
general reductions in the coverage of such insurance;
WHEREAS, Indemnitee does not regard the current protection available as
adequate under the present circumstances, and the Indemnitee and other
directors, officers, employees, agents and fiduciaries of the Company may not be
willing to continue to serve in such capacities without additional protection;
and
WHEREAS, the Company desires to attract and retain the services of highly
qualified individuals, such as Indemnitee, to serve the Company and, in part, in
order to induce Indemnitee to continue to provide services to the Company as a
director, the Company wishes to provide for the indemnification and advancing of
expenses to Indemnitee to the maximum extent permitted by law.
NOW, THEREFORE, the Company and Indemnitee hereby agree as follows:
1. Indemnification.
---------------
(a) Indemnification of Expenses. The Company shall indemnify
------------------------------
Indemnitee to the fullest extent permitted by law if Indemnitee was or is or
becomes a party to or witness or other participant in, or is threatened to be
made a party to or witness or other participant in, any threatened, pending or
completed action, suit, proceeding or alternative dispute resolution mechanism,
or any hearing, inquiry or investigation that Indemnitee in good faith believes
might lead to the institution of any such action, suit, proceeding or
alternative dispute resolution mechanism, whether civil, criminal,
administrative, investigative or other (hereinafter a "Claim") by reason of (or
arising in part out of) any event or occurrence related to the fact that
Indemnitee is or was a director, officer, employee, agent or fiduciary of the
Company, or any subsidiary of the Company, or is or was serving at the request
of the Company as a director, officer, employee, agent or fiduciary of another
corporation, partnership, joint venture, trust or other enterprise, or by
<PAGE>
reason of any action or inaction on the part of Indemnitee while serving in such
capacity (hereinafter an "Indemnifiable Event") against any and all expenses
(including attorneys' fees and all other costs, expenses and obligations
incurred in connection with investigating, defending, being a witness in or
participating in (including on appeal), or preparing to defend, be a witness in
or participate in, any such action, suit, proceeding, alternative dispute
resolution mechanism, hearing, inquiry or investigation), judgments, fines,
penalties and amounts paid in settlement (if such settlement is approved in
advance by the Company, which approval shall not be unreasonably withheld) of
such Claim and any federal, state, local or foreign taxes imposed on the
Indemnitee as a result of the actual or deemed receipt of any payments under
this Agreement (collectively, hereinafter "Expenses"), including all interest,
assessments and other charges paid or payable in connection with or in respect
of such Expenses. Such payment of Expenses shall be made by the Company as soon
as practicable but in any event no later than thirty (30) days after written
demand by Indemnitee therefor is presented to the Company.
(b) Reviewing Party. Notwithstanding the foregoing, (i) the
----------------
obligations of the Company under Section l(a) shall be subject to the condition
that the Reviewing Party (as described in Section 10(e) hereof) shall not have
determined (in a written opinion, in any case in which the Independent Legal
Counsel referred to in Section 1(c) hereof is involved) that Indemnitee would
not be permitted to be indemnified under applicable law, and (ii) the obligation
of the Company to make an advance payment of Expenses to Indemnitee pursuant to
Section 2(a) (an "Expense Advance") shall be subject to the condition that, if,
when and to the extent that the Reviewing Party determines that Indemnitee would
not be permitted to be so indemnified under applicable law, the Company shall be
entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse the
Company) for all such amounts theretofore paid; provided, however, that if
Indemnitee has commenced or thereafter commences legal proceedings in a court of
competent jurisdiction to secure a determination that Indemnitee should be
indemnified under applicable law, any determination made by the Reviewing Party
that Indemnitee would not be permitted to be indemnified under applicable law
shall not be binding and Indemnitee shall not be required to reimburse the
Company for any Expense Advance until a final judicial determination is made
with respect thereto (as to which all rights of appeal therefrom have been
exhausted or lapsed). Indemnitee's obligation to reimburse the Company for any
Expense Advance shall be unsecured and no interest shall be charged thereon. If
there has not been a Change in Control (as defined in Section 10(c) hereof), the
Reviewing Party shall be selected by the Board of Directors, and if there has
been such a Change in Control (other than a Change in Control which has been
approved by a majority of the Company's Board of Directors who were directors
immediately prior to such Change in Control), the Reviewing Party shall be the
Independent Legal Counsel referred to in Section l(c) hereof. If there has been
no determination by the Reviewing Party or if the Reviewing Party determines
that Indemnitee substantively would not be permitted to be indemnified in whole
or in part under applicable law, Indemnitee shall have the right to commence
litigation seeking an initial determination by the court or challenging any such
determination by the Reviewing Party or any aspect thereof, including the legal
or factual bases therefor, and the Company hereby consents to service of process
and to appear in any such proceeding. Any determination by the Reviewing Party
otherwise shall be conclusive and binding on the Company and Indemnitee.
-2-
<PAGE>
(c) Change in Control. The Company agrees that if there is a Change
-----------------
in Control of the Company (other than a Change in Control which has been
approved by a majority of the Company's Board of Directors who were directors
immediately prior to such Change in Control) then with respect to all matters
thereafter arising concerning the rights of Indemnitee to payments of Expenses
and Expense Advances under this Agreement or any other agreement or under the
Company's Certificate of Incorporation or By-laws as now or hereafter in effect,
the Company shall seek legal advice only from Independent Legal Counsel (as
defined in Section 10(d) hereof) selected by Indemnitee and approved by the
Company (which approval shall not be unreasonably withheld). Such counsel, among
other things, shall render its written opinion to the Company and Indemnitee as
to whether and to what extent Indemnitee would be permitted to be indemnified
under applicable law. The Company agrees to pay the reasonable fees of the
Independent Legal Counsel referred to above and to fully indemnify such counsel
against any and all expenses (including attorneys' fees), claims, liabilities
and damages arising out of or relating to this Agreement or its engagement
pursuant hereto.
(d) Mandatory Payment of Expenses. Notwithstanding any other
--------------------------------
provision of this Agreement other than Section 9 hereof, to the extent that
Indemnitee has been successful on the merits or otherwise, including, without
limitation, the dismissal of an action without prejudice, in defense of any
action, suit, proceeding, inquiry or investigation referred to in Section (1)(a)
hereof or in the defense of any claim, issue or matter therein, Indemnitee shall
be indemnified against all Expenses incurred by Indemnitee in connection
therewith.
2. Expenses; Indemnification Procedure.
-----------------------------------
(a) Advancement of Expenses. The Company shall advance all Expenses
-----------------------
incurred by Indemnitee. The advances to be made hereunder shall be paid by the
Company to Indemnitee as soon as practicable but in any event no later than five
(5) days after written demand by Indemnitee therefor to the Company.
(b) Notice/Cooperation by Indemnitee. Indemnitee shall, as a
----------------------------------
condition precedent to Indemnitee's right to be indemnified under this
Agreement, give the Company notice in writing as soon as practicable of any
Claim made against Indemnitee for which indemnification will or could be sought
under this Agreement. Failure to give such notice, however, will not relieve the
Company of any obligation on this Agreement, except to the extent the Company is
actually prejudiced thereby. Notice to the Company shall be directed to the
Chief Executive Officer of the Company at the address shown on the signature
page of this Agreement (or such other address as the Company shall designate in
writing to Indemnitee). In addition, Indemnitee shall give the Company such
information and cooperation as it may (at the Company's expense) reasonably
require and as shall be within Indemnitee's power.
(c) No Presumptions; Burden of Proof. For purposes of this
------------------------------------
Agreement, the termination of any claim, action, suit or proceeding, by
judgment, order, settlement (whether with or without court approval) or
conviction, or upon a plea of nolo contendere, or its equivalent, shall not
---- ----------
create a presumption that Indemnitee did not meet any particular standard of
conduct or have
-3-
<PAGE>
any particular belief or that a court has determined that indemnification is not
permitted by applicable law. In addition, neither the failure of the Reviewing
Party to have made a determination as to whether Indemnitee has met any
particular standard of conduct or had any particular belief, nor an actual
determination by the Reviewing Party that Indemnitee has not met such standard
of conduct or did not have such belief, prior to the commencement of legal
proceedings by Indemnitee to secure a judicial determination that Indemnitee
should be indemnified under applicable law, shall be a defense to Indemnitee's
claim or create a presumption that Indemnitee has not met any particular
standard of conduct or did not have any particular belief. In connection with
any determination by the Reviewing Party or otherwise as to whether the
Indemnitee is entitled to be indemnified hereunder, the burden of proof shall be
on the Company to establish that Indemnitee is not so entitled.
(d) Notice to Insurers. If, at the time of the receipt by the
-------------------
Company of a notice of a Claim pursuant to Section 2(b) hereof, the Company has
liability insurance in effect which may cover such Claim, the Company shall give
prompt notice of the commencement of such Claim to the insurers in accordance
with the procedures set forth in the respective policies. The Company shall
thereafter take all necessary or desirable action to cause such insurers to pay,
on behalf of the Indemnitee, all amounts payable as a result of such action,
suit, proceeding, inquiry or investigation in accordance with the terms of such
policies. Nothing in this Section 2(d) shall limit the Company's obligations as
otherwise provided for herein, including the Company's obligation to pay
Expenses under Section 1(b) or to advance Expenses under Section 2(a).
(e) Selection of Counsel. In the event the Company shall be
----------------------
obligated hereunder to pay the Expenses of any action, suit, proceeding, inquiry
or investigation, the Company, if appropriate, shall be entitled to assume the
defense of such action, suit, proceeding, inquiry or investigation with counsel
approved by Indemnitee, upon the delivery to Indemnitee of written notice of its
election so to do. After delivery of such notice, approval of such counsel by
Indemnitee and the retention of such counsel by the Company, the Company will
not be liable to Indemnitee under this Agreement for any fees of counsel
subsequently incurred by Indemnitee with respect to the same action, suit,
proceeding, inquiry or investigation; provided that, (i) Indemnitee shall have
the right to employ Indemnitee's counsel in any such action, suit, proceeding,
inquiry or investigation at Indemnitee's expense and (ii) if (A) the employment
of counsel by Indemnitee has been previously authorized by the Company, (B)
Indemnitee shall have reasonably concluded that there may be a conflict of
interest between the Company and Indemnitee in the conduct of any such defense,
or (C) the Company shall not continue to retain such counsel to defend such
action, suit, proceeding, inquiry or investigation, then the fees and expenses
of Indemnitee's counsel shall be at the expense of the Company.
-4-
<PAGE>
3. Additional Indemnification Rights; Nonexclusivity.
-------------------------------------------------
(a) Scope. The Company hereby agrees to indemnify the Indemnitee
-----
to the fullest extent permitted by law, notwithstanding that such
indemnification is not specifically authorized by the other provisions of this
Agreement, the Company's Certificate of Incorporation, the Company's By-laws or
by statute. In the event of any change after the date of this Agreement in any
applicable law, statute or rule which expands the rights of the corporation to
indemnify a member of its board of directors or an officer, employee, agent or
fiduciary, it is the intent of the parties hereto that Indemnitee shall enjoy by
this Agreement the greater benefits afforded by such change. In the event of any
change in any applicable law, statute or rule which narrows the rights of this
Company to indemnify a member of its board of directors or an officer, employee,
agent or fiduciary, such change, to the extent not otherwise required by such
law, statute or rule to be applied to this Agreement, shall have no effect on
this Agreement or the parties' rights and obligations hereunder.
(b) Nonexclusivity. The indemnification provided by this Agreement
--------------
shall be in addition to any rights to which Indemnitee may be entitled under the
Company's Certificate of Incorporation, its By-laws, any agreement, any vote of
shareholders or disinterested directors, the relevant business corporation law
of the Company's state of incorporation, or otherwise. The indemnification
provided under this Agreement shall continue as to Indemnitee for any action
taken or not taken while serving in an indemnified capacity even though
Indemnitee may have ceased to serve in such capacity.
4. No Duplication of Payments. The Company shall not be liable under
---------------------------
this Agreement to make any payment in connection with any action, suit,
proceeding, inquiry or investigation made against Indemnitee to the extent
Indemnitee has otherwise actually received payment (under any insurance policy,
Certificate of Incorporation, By-laws or otherwise) of the amounts otherwise
indemnifiable hereunder.
5. Partial Indemnification. If Indemnitee is entitled under any provision
-----------------------
of this Agreement to indemnification by the Company for some or a portion of
Expenses in the investigation, defense, appeal or settlement of any civil or
criminal action, suit, proceeding, inquiry or investigation, but not, however,
for all of the total amount thereof, the Company shall nevertheless indemnify
Indemnitee for the portion of such Expenses to which Indemnitee is entitled.
6. Mutual Acknowledgment. Both the Company and Indemnitee acknowledge
----------------------
that in certain instances, Federal law or applicable public policy may prohibit
the Company from indemnifying its directors, officers, employees, agents or
fiduciaries under this Agreement or otherwise. Indemnitee understands and
acknowledges that the Company has undertaken or may be required in the future to
undertake with the Securities and Exchange Commission to submit the question of
indemnification to a court in certain circumstances for a determination of the
Company's right under public policy to indemnify Indemnitee.
-5-
<PAGE>
7. Liability Insurance. To the extent the Company maintains liability
-------------------
insurance applicable to directors, officers, employees, agents or fiduciaries,
Indemnitee shall be covered by such policies in such a manner as to provide
Indemnitee the same rights and benefits as are accorded to the most favorably
insured of the Company's directors, if Indemnitee is a director; or of the
Company's officers, if Indemnitee is not a director of the Company but is an
officer; or of the Company's key employees, agents or fiduciaries, if Indemnitee
is not an officer or director but is a key employee, agent or fiduciary.
8. Exceptions. Any other provision herein to the contrary
----------
notwithstanding, the Company shall not be obligated pursuant to the terms of
this Agreement:
(a) Excluded Action or Omissions. To indemnify Indemnitee for acts,
----------------------------
omissions or transactions from which Indemnitee may not be relieved of liability
under applicable law.
(b) Claims Initiated by Indemnitee. To indemnify or advance expenses
------------------------------
to Indemnitee with respect to proceedings or claims initiated or brought
voluntarily by Indemnitee and not by way of defense, except (i) with respect to
proceedings brought to establish or enforce a right to indemnification under
this Agreement or any other agreement or insurance policy or under the Company's
Certificate of Incorporation or By-laws now or hereafter in effect relating to
Claims for Indemnifiable Events, (ii) in specific cases if the Board of
Directors has approved the initiation or bringing of such suit, or (iii) as
otherwise required under the applicable provisions of the business corporation
law of the Company's state of incorporation, regardless of whether Indemnitee
ultimately is determined to be entitled to such indemnification, advance expense
payment or insurance recovery, as the case may be.
(c) Lack of Good Faith. To indemnify Indemnitee for any expenses
------------------
incurred by the Indemnitee with respect to any proceeding instituted by
Indemnitee to enforce or interpret this Agreement, if a court of competent
jurisdiction determines that each of the material assertions made by the
Indemnitee in such proceeding was not made in good faith or was frivolous; or
(d) Claims Under Section 16(b). To indemnify Indemnitee for
-----------------------------
expenses and the payment of profits arising from the purchase and sale by
Indemnitee of securities in violation of Section 16(b) of the Securities
Exchange Act of 1934, as amended, or any similar successor statute.
9. Period of Limitations. No legal action shall be brought and no
----------------------
cause of action shall be asserted by or in the right of the Company against
Indemnitee, Indemnitee's estate, spouse, heirs, executors or personal or legal
representatives after the expiration of two years from the date of accrual of
such cause of action, and any claim or cause of action of the Company shall be
extinguished and deemed released unless asserted by the timely filing of a legal
action within such two-year period; provided, however, that if any shorter
-------- -------
period of limitations is otherwise applicable to any such cause of action, such
shorter period shall govern.
-6-
<PAGE>
10. Construction of Certain Phrases.
-------------------------------
(a) For purposes of this Agreement, references to the "Company"
shall include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers, employees,
agents or fiduciaries, so that if Indemnitee is or was a director, officer,
employee, agent or fiduciary of such constituent corporation, or is or was
serving at the request of such constituent corporation as a director, officer,
employee, agent or fiduciary of another corporation, partnership, joint venture,
employee benefit plan, trust or other enterprise, Indemnitee shall stand in the
same position under the provisions of this Agreement with respect to the
resulting or surviving corporation as Indemnitee would have with respect to such
constituent corporation if its separate existence had continued.
(b) For purposes of this Agreement, references to "other
enterprises" shall include employee benefit plans; references to "fines" shall
include any excise taxes assessed on Indemnitee with respect to an employee
benefit plan; and references to "serving at the request of the Company" shall
include any service as a director, officer, employee, agent or fiduciary of the
Company which imposes duties on, or involves services by, such director,
officer, employee, agent or fiduciary with respect to an employee benefit plan,
its participants or its beneficiaries; and if Indemnitee acted in good faith and
in a manner Indemnitee reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan, Indemnitee shall be
deemed to have acted in a manner "not opposed to the best interests of the
Company" as referred to in this Agreement.
(c) For purposes of this Agreement a "Change in Control" shall be
deemed to have occurred if (i) any "person" (as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended), other than
a trustee or other fiduciary holding securities under an employee benefit plan
of the Company or a corporation owned directly or indirectly by the shareholders
of the Company in substantially the same proportions as their ownership of stock
of the Company, is or becomes the "beneficial owner" (as determined in
accordance with Rule 13d-3 under said Act), directly or indirectly, of
securities of the Company representing more than 20% of the total voting power
represented by the Company's then outstanding Voting Securities, (ii) during any
period of two consecutive years, individuals who at the beginning of such period
constitute the Board of Directors of the Company and any new director whose
election by the Board of Directors or nomination for election by the Company's
shareholders was approved by a vote of at least two thirds (2/3) of the
directors then still in office who either were directors at the beginning of the
period or whose election or nomination for election was previously so approved,
cease for any reason to constitute a majority thereof, or (iii) the shareholders
of the Company approve a merger or consolidation of the Company with any other
corporation other than a merger or consolidation which would result in the
Voting Securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into Voting Securities of the surviving entity) at least 80% of the total voting
power represented by the Voting Securities of the Company or such surviving
entity outstanding immediately after such merger or
-7-
<PAGE>
consolidation, or the shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of (in one transaction or a series of transactions) all or substantially
all of the Company's assets.
(d) For purposes of this Agreement, "Independent Legal Counsel"
shall mean an attorney or firm of attorneys, selected in accordance with the
provisions of Section 1(c) hereof, who shall not have otherwise performed
services for the Company or Indemnitee within the last three years (other than
with respect to matters concerning the rights of Indemnitee under this
Agreement, or of other indemnitees under similar indemnity agreements).
(e) For purposes of this Agreement, a "Reviewing Party" shall
mean any appropriate person or body consisting of a member or members of the
Company's Board of Directors or any other person or body appointed by the Board
of Directors who is not a party to the particular Claim for which Indemnitee is
seeking indemnification, or Independent Legal Counsel.
(f) For purposes of this Agreement, "Voting Securities" shall
mean any securities of the Company that vote generally in the election of
directors.
11. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall constitute an original.
12. Binding Effect; Successors and Assigns. This Agreement shall be
-----------------------------------------
binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective successors and assigns, including any direct or
indirect successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business and/or assets of the Company, spouses, heirs,
and personal and legal representatives. The Company shall require and cause any
successor (whether direct or indirect by purchase, merger, consolidation or
otherwise) to all, substantially all, or a substantial part, of the business
and/or assets of the Company, by written agreement in form and substance
satisfactory to Indemnitee, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform if no such succession had taken place. This Agreement shall
continue in effect regardless of whether Indemnitee continues to serve as a
director of the Company or of any other enterprise at the Company's request.
13. Attorneys' Fees. In the event that any action is instituted by
---------------
Indemnitee under this Agreement or under any liability insurance policies
maintained by the Company to enforce or interpret any of the terms hereof or
thereof, Indemnitee shall be entitled to be paid all Expenses incurred by
Indemnitee with respect to such action, regardless of whether Indemnitee is
ultimately successful in such action, and shall be entitled to the advancement
of Expenses with respect to such action, unless as a part of such action the
court of competent jurisdiction over such action determines that each of the
material assertions made by Indemnitee as a basis for such action were not made
in good faith or were frivolous. In the event of an action instituted by or in
the name of the Company under this Agreement to enforce or interpret any of the
terms of this Agreement,
-8-
<PAGE>
Indemnitee shall be entitled to be paid all Expenses incurred by Indemnitee in
defense of such action (including costs and expenses incurred with respect to
Indemnitee's counterclaims and cross-claims made in such action), and shall be
entitled to the advancement Expenses with respect to such action, unless as a
part of such action the court having jurisdiction over such action determines
that each of Indemnitee's material defenses to such action were made in bad
faith or were frivolous.
14. Notice. All notices, requests, demands and other communications
------
under this Agreement shall be in writing and shall be deemed duly given (i) if
delivered by hand and receipted for by the party addressee, on the date of such
receipt, or (ii) if mailed by domestic certified or registered mail with postage
prepaid, on the third business day after the date postmarked. Addresses for
notice to either party are as shown on the signature page of this Agreement, or
as subsequently modified by written notice.
15. Consent to Jurisdiction. The Company and Indemnitee each hereby
------------------------
irrevocably consent to the jurisdiction of the courts of the State of New Jersey
for all purposes in connection with any action or proceeding which arises out of
or relates to this Agreement and agree that any action instituted under this
Agreement shall be commenced, prosecuted and continued only in the Superior
Court of the State of New Jersey in and for Mercer County, which shall be the
exclusive and only proper forum for adjudicating such a claim.
16. Severability. The provisions of this Agreement shall be severable in
------------
the event that any of the provisions hereof (including any provision within a
single section, paragraph or sentence) are held by a court of competent
jurisdiction to be invalid, void or otherwise unenforceable, and the remaining
provisions shall remain enforceable to the fullest extent permitted by law.
Furthermore, to the fullest extent possible, the provisions of this Agreement
(including, without limitations, each portion of this Agreement containing any
provision held to be invalid, void or otherwise unenforceable, that is not
itself invalid, void or unenforceable) shall be construed so as to give effect
to the intent manifested by the provision held invalid, illegal or
unenforceable.
17. Choice of Law. This Agreement shall be governed by and its provisions
-------------
construed and enforced in accordance with the laws of the State of New Jersey,
as applied to contracts between New Jersey residents, entered into and to be
performed entirely within the State of New Jersey, without regard to the
conflict of laws principles thereof.
18. Subrogation. In the event of payment under this Agreement, the Company
-----------
shall be subrogated to the extent of such payment to all of the rights of
recovery of Indemnitee, who shall execute all documents required and shall do
all acts that may be necessary to secure such rights and to enable the Company
effectively to bring suit to enforce such rights.
19. Amendment and Termination. No amendment, modification, termination or
-------------------------
cancellation of this Agreement shall be effective unless it is in writing signed
by both the parties hereto. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provisions hereof
(whether or not similar) nor shall such waiver constitute a continuing waiver.
-9-
<PAGE>
20. Integration and Entire Agreement. This Agreement sets forth the
----------------------------------
entire understanding between the parties hereto and supersedes and merges all
previous written and oral negotiations, commitments, understandings and
agreements relating to the subject matter hereof between the parties hereto.
21. No Construction as Employment Agreement. Nothing contained in this
----------------------------------------
Agreement shall be construed as giving Indemnitee any right to be retained in
the employ of the Company or any of its subsidiaries.
**********
-10-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
SENESCO TECHNOLOGIES, INC.
/s/ Phillip O. Escaravage
-------------------------------------------
By: Phillip O. Escaravage
Title: Chairman and Chief Operating Officer
AGREED TO AND ACCEPTED:
INDEMNITEE:
/s/ Thomas C. Quick
- ----------------------------
(signature)
Thomas C. Quick
- ----------------------------
(address)
SENESCO TECHNOLOGIES, INC.
INDEMNIFICATION AGREEMENT
This Indemnification Agreement ("Agreement") is made as of March 1, 1999 by
and between Senesco Technologies, Inc., a Idaho corporation (the "Company"), and
Ruedi Stalder ("Indemnitee").
WHEREAS, Indemnitee is a director of the Company and performs valuable
services in such capacities for the Company;
WHEREAS, the Company and Indemnitee recognize the substantial increase in
corporate litigation in general, subjecting directors, officers, employees,
agents and fiduciaries to expensive litigation risks at the same time as the
availability and coverage of liability insurance may be limited;
WHEREAS, the Company and Indemnitee further recognize the difficulty in
obtaining liability insurance for its directors, officers, employees, agents and
fiduciaries, the significant increases in the cost of such insurance and the
general reductions in the coverage of such insurance;
WHEREAS, Indemnitee does not regard the current protection available as
adequate under the present circumstances, and the Indemnitee and other
directors, officers, employees, agents and fiduciaries of the Company may not be
willing to continue to serve in such capacities without additional protection;
and
WHEREAS, the Company desires to attract and retain the services of highly
qualified individuals, such as Indemnitee, to serve the Company and, in part, in
order to induce Indemnitee to continue to provide services to the Company as a
director, the Company wishes to provide for the indemnification and advancing of
expenses to Indemnitee to the maximum extent permitted by law.
NOW, THEREFORE, the Company and Indemnitee hereby agree as follows:
1. Indemnification.
---------------
(a) Indemnification of Expenses. The Company shall indemnify
-----------------------------
Indemnitee to the fullest extent permitted by law if Indemnitee was or is or
becomes a party to or witness or other participant in, or is threatened to be
made a party to or witness or other participant in, any threatened, pending or
completed action, suit, proceeding or alternative dispute resolution mechanism,
or any hearing, inquiry or investigation that Indemnitee in good faith believes
might lead to the institution of any such action, suit, proceeding or
alternative dispute resolution mechanism, whether civil, criminal,
administrative, investigative or other (hereinafter a "Claim") by reason of (or
arising in part out of) any event or occurrence related to the fact that
Indemnitee is or was a director, officer, employee, agent or fiduciary of the
Company, or any subsidiary of the Company, or is or was serving at the request
of the Company as a director, officer, employee, agent or fiduciary of another
corporation, partnership, joint venture, trust or other enterprise, or by
<PAGE>
reason of any action or inaction on the part of Indemnitee while serving in such
capacity (hereinafter an "Indemnifiable Event") against any and all expenses
(including attorneys' fees and all other costs, expenses and obligations
incurred in connection with investigating, defending, being a witness in or
participating in (including on appeal), or preparing to defend, be a witness in
or participate in, any such action, suit, proceeding, alternative dispute
resolution mechanism, hearing, inquiry or investigation), judgments, fines,
penalties and amounts paid in settlement (if such settlement is approved in
advance by the Company, which approval shall not be unreasonably withheld) of
such Claim and any federal, state, local or foreign taxes imposed on the
Indemnitee as a result of the actual or deemed receipt of any payments under
this Agreement (collectively, hereinafter "Expenses"), including all interest,
assessments and other charges paid or payable in connection with or in respect
of such Expenses. Such payment of Expenses shall be made by the Company as soon
as practicable but in any event no later than thirty (30) days after written
demand by Indemnitee therefor is presented to the Company.
(b) Reviewing Party. Notwithstanding the foregoing, (i) the
----------------
obligations of the Company under Section l(a) shall be subject to the condition
that the Reviewing Party (as described in Section 10(e) hereof) shall not have
determined (in a written opinion, in any case in which the Independent Legal
Counsel referred to in Section 1(c) hereof is involved) that Indemnitee would
not be permitted to be indemnified under applicable law, and (ii) the obligation
of the Company to make an advance payment of Expenses to Indemnitee pursuant to
Section 2(a) (an "Expense Advance") shall be subject to the condition that, if,
when and to the extent that the Reviewing Party determines that Indemnitee would
not be permitted to be so indemnified under applicable law, the Company shall be
entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse the
Company) for all such amounts theretofore paid; provided, however, that if
Indemnitee has commenced or thereafter commences legal proceedings in a court of
competent jurisdiction to secure a determination that Indemnitee should be
indemnified under applicable law, any determination made by the Reviewing Party
that Indemnitee would not be permitted to be indemnified under applicable law
shall not be binding and Indemnitee shall not be required to reimburse the
Company for any Expense Advance until a final judicial determination is made
with respect thereto (as to which all rights of appeal therefrom have been
exhausted or lapsed). Indemnitee's obligation to reimburse the Company for any
Expense Advance shall be unsecured and no interest shall be charged thereon. If
there has not been a Change in Control (as defined in Section 10(c) hereof), the
Reviewing Party shall be selected by the Board of Directors, and if there has
been such a Change in Control (other than a Change in Control which has been
approved by a majority of the Company's Board of Directors who were directors
immediately prior to such Change in Control), the Reviewing Party shall be the
Independent Legal Counsel referred to in Section l(c) hereof. If there has been
no determination by the Reviewing Party or if the Reviewing Party determines
that Indemnitee substantively would not be permitted to be indemnified in whole
or in part under applicable law, Indemnitee shall have the right to commence
litigation seeking an initial determination by the court or challenging any such
determination by the Reviewing Party or any aspect thereof, including the legal
or factual bases therefor, and the Company hereby consents to service of process
and to appear in any such proceeding. Any determination by the Reviewing Party
otherwise shall be conclusive and binding on the Company and Indemnitee.
-2-
<PAGE>
(c) Change in Control. The Company agrees that if there is a Change
-----------------
in Control of the Company (other than a Change in Control which has been
approved by a majority of the Company's Board of Directors who were directors
immediately prior to such Change in Control) then with respect to all matters
thereafter arising concerning the rights of Indemnitee to payments of Expenses
and Expense Advances under this Agreement or any other agreement or under the
Company's Certificate of Incorporation or By-laws as now or hereafter in effect,
the Company shall seek legal advice only from Independent Legal Counsel (as
defined in Section 10(d) hereof) selected by Indemnitee and approved by the
Company (which approval shall not be unreasonably withheld). Such counsel, among
other things, shall render its written opinion to the Company and Indemnitee as
to whether and to what extent Indemnitee would be permitted to be indemnified
under applicable law. The Company agrees to pay the reasonable fees of the
Independent Legal Counsel referred to above and to fully indemnify such counsel
against any and all expenses (including attorneys' fees), claims, liabilities
and damages arising out of or relating to this Agreement or its engagement
pursuant hereto.
(d) Mandatory Payment of Expenses. Notwithstanding any other
--------------------------------
provision of this Agreement other than Section 9 hereof, to the extent that
Indemnitee has been successful on the merits or otherwise, including, without
limitation, the dismissal of an action without prejudice, in defense of any
action, suit, proceeding, inquiry or investigation referred to in Section (1)(a)
hereof or in the defense of any claim, issue or matter therein, Indemnitee shall
be indemnified against all Expenses incurred by Indemnitee in connection
therewith.
2. Expenses; Indemnification Procedure.
(a) Advancement of Expenses. The Company shall advance all Expenses
-----------------------
incurred by Indemnitee. The advances to be made hereunder shall be paid by the
Company to Indemnitee as soon as practicable but in any event no later than five
(5) days after written demand by Indemnitee therefor to the Company.
(b) Notice/Cooperation by Indemnitee. Indemnitee shall, as a
----------------------------------
condition precedent to Indemnitee's right to be indemnified under this
Agreement, give the Company notice in writing as soon as practicable of any
Claim made against Indemnitee for which indemnification will or could be sought
under this Agreement. Notice to the Company shall be directed to the Chief
Executive Officer of the Company at the address shown on the signature page of
this Agreement (or such other address as the Company shall designate in writing
to Indemnitee). In addition, Indemnitee shall give the Company such information
and cooperation as it may reasonably require and as shall be within Indemnitee's
power.
(c) No Presumptions; Burden of Proof. For purposes of this
------------------------------------
Agreement, the termination of any claim, action, suit or proceeding, by
judgment, order, settlement (whether with or without court approval) or
conviction, or upon a plea of nolo contendere, or its equivalent, shall not
---- ----------
create a presumption that Indemnitee did not meet any particular standard of
conduct or have any particular belief or that a court has determined that
indemnification is not permitted by applicable law. In addition, neither the
failure of the Reviewing Party to have made a determination
-3-
<PAGE>
as to whether Indemnitee has met any particular standard of conduct or had any
particular belief, nor an actual determination by the Reviewing Party that
Indemnitee has not met such standard of conduct or did not have such belief,
prior to the commencement of legal proceedings by Indemnitee to secure a
judicial determination that Indemnitee should be indemnified under applicable
law, shall be a defense to Indemnitee's claim or create a presumption that
Indemnitee has not met any particular standard of conduct or did not have any
particular belief. In connection with any determination by the Reviewing Party
or otherwise as to whether the Indemnitee is entitled to be indemnified
hereunder, the burden of proof shall be on the Company to establish that
Indemnitee is not so entitled.
(d) Notice to Insurers. If, at the time of the receipt by the
-------------------
Company of a notice of a Claim pursuant to Section 2(b) hereof, the Company has
liability insurance in effect which may cover such Claim, the Company shall give
prompt notice of the commencement of such Claim to the insurers in accordance
with the procedures set forth in the respective policies. The Company shall
thereafter take all necessary or desirable action to cause such insurers to pay,
on behalf of the Indemnitee, all amounts payable as a result of such action,
suit, proceeding, inquiry or investigation in accordance with the terms of such
policies. Nothing in this Section 2(d) shall limit the Company's obligations as
otherwise provided for herein, including the Company's obligation to pay
Expenses under Section 1(b) or to advance Expenses under Section 2(a).
(e) Selection of Counsel. In the event the Company shall be
----------------------
obligated hereunder to pay the Expenses of any action, suit, proceeding, inquiry
or investigation, the Company, if appropriate, shall be entitled to assume the
defense of such action, suit, proceeding, inquiry or investigation with counsel
approved by Indemnitee, upon the delivery to Indemnitee of written notice of its
election so to do. After delivery of such notice, approval of such counsel by
Indemnitee and the retention of such counsel by the Company, the Company will
not be liable to Indemnitee under this Agreement for any fees of counsel
subsequently incurred by Indemnitee with respect to the same action, suit,
proceeding, inquiry or investigation; provided that, (i) Indemnitee shall have
the right to employ Indemnitee's counsel in any such action, suit, proceeding,
inquiry or investigation at Indemnitee's expense and (ii) if (A) the employment
of counsel by Indemnitee has been previously authorized by the Company, (B)
Indemnitee shall have reasonably concluded that there may be a conflict of
interest between the Company and Indemnitee in the conduct of any such defense,
or (C) the Company shall not continue to retain such counsel to defend such
action, suit, proceeding, inquiry or investigation, then the fees and expenses
of Indemnitee's counsel shall be at the expense of the Company.
-4-
<PAGE>
3. Additional Indemnification Rights; Nonexclusivity.
-------------------------------------------------
(a) Scope. The Company hereby agrees to indemnify the Indemnitee
-----
to the fullest extent permitted by law, notwithstanding that such
indemnification is not specifically authorized by the other provisions of this
Agreement, the Company's Certificate of Incorporation, the Company's By-laws or
by statute. In the event of any change after the date of this Agreement in any
applicable law, statute or rule which expands the rights of the corporation to
indemnify a member of its board of directors or an officer, employee, agent or
fiduciary, it is the intent of the parties hereto that Indemnitee shall enjoy by
this Agreement the greater benefits afforded by such change. In the event of any
change in any applicable law, statute or rule which narrows the rights of this
Company to indemnify a member of its board of directors or an officer, employee,
agent or fiduciary, such change, to the extent not otherwise required by such
law, statute or rule to be applied to this Agreement, shall have no effect on
this Agreement or the parties' rights and obligations hereunder.
(b) Nonexclusivity. The indemnification provided by this Agreement
--------------
shall be in addition to any rights to which Indemnitee may be entitled under the
Company's Certificate of Incorporation, its By-laws, any agreement, any vote of
shareholders or disinterested directors, the relevant business corporation law
of the Company's state of incorporation, or otherwise. The indemnification
provided under this Agreement shall continue as to Indemnitee for any action
taken or not taken while serving in an indemnified capacity even though
Indemnitee may have ceased to serve in such capacity.
4. No Duplication of Payments. The Company shall not be liable under
-----------------------------
this Agreement to make any payment in connection with any action, suit,
proceeding, inquiry or investigation made against Indemnitee to the extent
Indemnitee has otherwise actually received payment (under any insurance policy,
Certificate of Incorporation, By-laws or otherwise) of the amounts otherwise
indemnifiable hereunder.
5. Partial Indemnification. If Indemnitee is entitled under any provision
-----------------------
of this Agreement to indemnification by the Company for some or a portion of
Expenses in the investigation, defense, appeal or settlement of any civil or
criminal action, suit, proceeding, inquiry or investigation, but not, however,
for all of the total amount thereof, the Company shall nevertheless indemnify
Indemnitee for the portion of such Expenses to which Indemnitee is entitled.
6. Mutual Acknowledgment. Both the Company and Indemnitee acknowledge
---------------------
that in certain instances, Federal law or applicable public policy may prohibit
the Company from indemnifying its directors, officers, employees, agents or
fiduciaries under this Agreement or otherwise. Indemnitee understands and
acknowledges that the Company has undertaken or may be required in the future to
undertake with the Securities and Exchange Commission to submit the question of
indemnification to a court in certain circumstances for a determination of the
Company's right under public policy to indemnify Indemnitee.
-5-
<PAGE>
7. Liability Insurance. To the extent the Company maintains liability
-------------------
insurance applicable to directors, officers, employees, agents or fiduciaries,
Indemnitee shall be covered by such policies in such a manner as to provide
Indemnitee the same rights and benefits as are accorded to the most favorably
insured of the Company's directors, if Indemnitee is a director; or of the
Company's officers, if Indemnitee is not a director of the Company but is an
officer; or of the Company's key employees, agents or fiduciaries, if Indemnitee
is not an officer or director but is a key employee, agent or fiduciary.
8. Exceptions. Any other provision herein to the contrary
----------
notwithstanding, the Company shall not be obligated pursuant to the terms of
this Agreement:
(a) Excluded Action or Omissions. To indemnify Indemnitee for acts,
----------------------------
omissions or transactions from which Indemnitee may not be relieved of liability
under applicable law.
(b) Claims Initiated by Indemnitee. To indemnify or advance expenses
------------------------------
to Indemnitee with respect to proceedings or claims initiated or brought
voluntarily by Indemnitee and not by way of defense, except (i) with respect to
proceedings brought to establish or enforce a right to indemnification under
this Agreement or any other agreement or insurance policy or under the Company's
Certificate of Incorporation or By-laws now or hereafter in effect relating to
Claims for Indemnifiable Events, (ii) in specific cases if the Board of
Directors has approved the initiation or bringing of such suit, or (iii) as
otherwise required under the applicable provisions of the business corporation
law of the Company's state of incorporation, regardless of whether Indemnitee
ultimately is determined to be entitled to such indemnification, advance expense
payment or insurance recovery, as the case may be.
(c) Lack of Good Faith. To indemnify Indemnitee for any expenses
------------------
incurred by the Indemnitee with respect to any proceeding instituted by
Indemnitee to enforce or interpret this Agreement, if a court of competent
jurisdiction determines that each of the material assertions made by the
Indemnitee in such proceeding was not made in good faith or was frivolous; or
(d) Claims Under Section 16(b). To indemnify Indemnitee for
-----------------------------
expenses and the payment of profits arising from the purchase and sale by
Indemnitee of securities in violation of Section 16(b) of the Securities
Exchange Act of 1934, as amended, or any similar successor statute.
9. Period of Limitations. No legal action shall be brought and no cause
----------------------
of action shall be asserted by or in the right of the Company against
Indemnitee, Indemnitee's estate, spouse, heirs, executors or personal or legal
representatives after the expiration of two years from the date of accrual of
such cause of action, and any claim or cause of action of the Company shall be
extinguished and deemed released unless asserted by the timely filing of a legal
action within such two-year period; provided, however, that if any shorter
-------- -------
period of limitations is otherwise applicable to any such cause of action, such
shorter period shall govern.
-6-
<PAGE>
10. Construction of Certain Phrases.
-------------------------------
(a) For purposes of this Agreement, references to the "Company"
shall include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers, employees,
agents or fiduciaries, so that if Indemnitee is or was a director, officer,
employee, agent or fiduciary of such constituent corporation, or is or was
serving at the request of such constituent corporation as a director, officer,
employee, agent or fiduciary of another corporation, partnership, joint venture,
employee benefit plan, trust or other enterprise, Indemnitee shall stand in the
same position under the provisions of this Agreement with respect to the
resulting or surviving corporation as Indemnitee would have with respect to such
constituent corporation if its separate existence had continued.
(b) For purposes of this Agreement, references to "other
enterprises" shall include employee benefit plans; references to "fines" shall
include any excise taxes assessed on Indemnitee with respect to an employee
benefit plan; and references to "serving at the request of the Company" shall
include any service as a director, officer, employee, agent or fiduciary of the
Company which imposes duties on, or involves services by, such director,
officer, employee, agent or fiduciary with respect to an employee benefit plan,
its participants or its beneficiaries; and if Indemnitee acted in good faith and
in a manner Indemnitee reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan, Indemnitee shall be
deemed to have acted in a manner "not opposed to the best interests of the
Company" as referred to in this Agreement.
(c) For purposes of this Agreement a "Change in Control" shall be
deemed to have occurred if (i) any "person" (as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended), other than
a trustee or other fiduciary holding securities under an employee benefit plan
of the Company or a corporation owned directly or indirectly by the shareholders
of the Company in substantially the same proportions as their ownership of stock
of the Company, is or becomes the "beneficial owner" (as determined in
accordance with Rule 13d-3 under said Act), directly or indirectly, of
securities of the Company representing more than 20% of the total voting power
represented by the Company's then outstanding Voting Securities, (ii) during any
period of two consecutive years, individuals who at the beginning of such period
constitute the Board of Directors of the Company and any new director whose
election by the Board of Directors or nomination for election by the Company's
shareholders was approved by a vote of at least two thirds (2/3) of the
directors then still in office who either were directors at the beginning of the
period or whose election or nomination for election was previously so approved,
cease for any reason to constitute a majority thereof, or (iii) the shareholders
of the Company approve a merger or consolidation of the Company with any other
corporation other than a merger or consolidation which would result in the
Voting Securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into Voting Securities of the surviving entity) at least 80% of the total voting
power represented by the Voting Securities of the Company or such surviving
entity outstanding immediately after such merger or
-7-
<PAGE>
consolidation, or the shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of (in one transaction or a series of transactions) all or substantially
all of the Company's assets.
(d) For purposes of this Agreement, "Independent Legal Counsel"
shall mean an attorney or firm of attorneys, selected in accordance with the
provisions of Section 1(c) hereof, who shall not have otherwise performed
services for the Company or Indemnitee within the last three years (other than
with respect to matters concerning the rights of Indemnitee under this
Agreement, or of other indemnitees under similar indemnity agreements).
(e) For purposes of this Agreement, a "Reviewing Party" shall mean
any appropriate person or body consisting of a member or members of the
Company's Board of Directors or any other person or body appointed by the Board
of Directors who is not a party to the particular Claim for which Indemnitee is
seeking indemnification, or Independent Legal Counsel.
(f) For purposes of this Agreement, "Voting Securities" shall mean
any securities of the Company that vote generally in the election of directors.
11. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall constitute an original.
12. Binding Effect; Successors and Assigns. This Agreement shall be
----------------------------------------
binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective successors and assigns, including any direct or
indirect successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business and/or assets of the Company, spouses, heirs,
and personal and legal representatives. The Company shall require and cause any
successor (whether direct or indirect by purchase, merger, consolidation or
otherwise) to all, substantially all, or a substantial part, of the business
and/or assets of the Company, by written agreement in form and substance
satisfactory to Indemnitee, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform if no such succession had taken place. This Agreement shall
continue in effect regardless of whether Indemnitee continues to serve as a
director of the Company or of any other enterprise at the Company's request.
13. Attorneys' Fees. In the event that any action is instituted by
----------------
Indemnitee under this Agreement or under any liability insurance policies
maintained by the Company to enforce or interpret any of the terms hereof or
thereof, Indemnitee shall be entitled to be paid all Expenses incurred by
Indemnitee with respect to such action, regardless of whether Indemnitee is
ultimately successful in such action, and shall be entitled to the advancement
of Expenses with respect to such action, unless as a part of such action the
court of competent jurisdiction over such action determines that each of the
material assertions made by Indemnitee as a basis for such action were not made
in good faith or were frivolous. In the event of an action instituted by or in
the name of the Company under this Agreement to enforce or interpret any of the
terms of this Agreement,
-8-
<PAGE>
Indemnitee shall be entitled to be paid all Expenses incurred by Indemnitee in
defense of such action (including costs and expenses incurred with respect to
Indemnitee's counterclaims and cross-claims made in such action), and shall be
entitled to the advancement Expenses with respect to such action, unless as a
part of such action the court having jurisdiction over such action determines
that each of Indemnitee's material defenses to such action were made in bad
faith or were frivolous.
14. Notice. All notices, requests, demands and other communications under
------
this Agreement shall be in writing and shall be deemed duly given (i) if
delivered by hand and receipted for by the party addressee, on the date of such
receipt, or (ii) if mailed by domestic certified or registered mail with postage
prepaid, on the third business day after the date postmarked. Addresses for
notice to either party are as shown on the signature page of this Agreement, or
as subsequently modified by written notice.
15. Consent to Jurisdiction. The Company and Indemnitee each hereby
------------------------
irrevocably consent to the jurisdiction of the courts of the State of New Jersey
for all purposes in connection with any action or proceeding which arises out of
or relates to this Agreement and agree that any action instituted under this
Agreement shall be commenced, prosecuted and continued only in the Superior
Court of the State of New Jersey in and for Mercer County, which shall be the
exclusive and only proper forum for adjudicating such a claim.
16. Severability. The provisions of this Agreement shall be severable in
------------
the event that any of the provisions hereof (including any provision within a
single section, paragraph or sentence) are held by a court of competent
jurisdiction to be invalid, void or otherwise unenforceable, and the remaining
provisions shall remain enforceable to the fullest extent permitted by law.
Furthermore, to the fullest extent possible, the provisions of this Agreement
(including, without limitations, each portion of this Agreement containing any
provision held to be invalid, void or otherwise unenforceable, that is not
itself invalid, void or unenforceable) shall be construed so as to give effect
to the intent manifested by the provision held invalid, illegal or
unenforceable.
17. Choice of Law. This Agreement shall be governed by and its provisions
-------------
construed and enforced in accordance with the laws of the State of New Jersey,
as applied to contracts between New Jersey residents, entered into and to be
performed entirely within the State of New Jersey, without regard to the
conflict of laws principles thereof.
18. Subrogation. In the event of payment under this Agreement, the Company
-----------
shall be subrogated to the extent of such payment to all of the rights of
recovery of Indemnitee, who shall execute all documents required and shall do
all acts that may be necessary to secure such rights and to enable the Company
effectively to bring suit to enforce such rights.
19. Amendment and Termination. No amendment, modification, termination or
-------------------------
cancellation of this Agreement shall be effective unless it is in writing signed
by both the parties hereto. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provisions hereof
(whether or not similar) nor shall such waiver constitute a continuing waiver.
-9-
<PAGE>
20. Integration and Entire Agreement. This Agreement sets forth the
----------------------------------
entire understanding between the parties hereto and supersedes and merges all
previous written and oral negotiations, commitments, understandings and
agreements relating to the subject matter hereof between the parties hereto.
21. No Construction as Employment Agreement. Nothing contained in this
----------------------------------------
Agreement shall be construed as giving Indemnitee any right to be retained in
the employ of the Company or any of its subsidiaries.
**********
-10-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
SENESCO TECHNOLOGIES, INC.
/s/ Phillip O. Escaravage
--------------------------------------------
By: Phillip O. Escaravage
Title: Chairman and Chief Operating Officer
AGREED TO AND ACCEPTED:
INDEMNITEE:
/s/ Ruedi Stalder
- ----------------------------
(signature)
Ruedi Stalder
- ----------------------------
(address)
RESEARCH AGREEMENT
between
THE UNIVERSITY OF WATERLOO
and Dr. John E. Thompson
and
SENESCO, INC.
THIS AGREEMENT, effective as of the 1st day of September, 1998, by and between
THE UNIVERSITY OF WATERLOO ("Waterloo"), located in the town of Waterloo and the
Province of Ontario, N2L 3G1, of the country of Canada, Dr. John E. Thompson
("Thompson") of the University of Waterloo and SENESCO, Inc.("Senesco"), a New
Jersey Corporation located in the United States at 34 Chambers Street,
Princeton, New Jersey 08542, U.S.A.
WITNESSETH:
WHEREAS Waterloo and Senesco have in common the desire to encourage and
facilitate the discovery, dissemination and application of new knowledge;
WHEREAS Senesco has conceived of certain inventions. currently holds
intellectual property rights in such inventions and desires to further research
and develop such inventions on a worldwide basis,
WHEREAS Waterloo and Thompson are equipped and well-qualified to perform
research and development in the subject area of this Agreement; and
WHEREAS Senesco wishes to retain Waterloo to perform research and development
services under the guidance of Thompson;
NOW, THEREFORE, in consideration of the foregoing and the mutual promises and
covenants contained herein, the parties hereto agree as follows:
<PAGE>
AGREEMENT
ARTICLE I. DEFINITIONS.
"Confidential Information" shall mean:
A. Any and all knowledge, know-how, practices, processes or other
information disclosed by Senesco directly or indirectly to Waterloo and/or
Thompson whether said disclosure is made orally, in writing, by submission of
samples, or otherwise, including without limitation information relating to the
matters which are the subject of this Agreement and all other information
regarding Senesco's past, present or future research, technology, know-how,
ideas, concepts, designs, products, prototypes, processes, machines,
compositions of matter, business plans, technical information, drawings,
specifications and the like, and any knowledge or information developed by
Waterloo and/or Thompson as a result of work in connection with this Agreement.
B. Any and all discoveries, inventions, conceived inventions and
know-how, whether or not patentable, and whether or not reduced to practice,
including without limitation any and all biological isolates, compositions of
matter, methods or processes, test data, findings, designs, machines, devices,
apparatus, manufactures, and any improvements and/or any utility for the
foregoing, which are made, conceived, discovered or developed by Waterloo or
Thompson, whether alone or in conjunction with others, which arise in any way
from, during or as a result of the performance of Waterloo's and Thompson's
services to Senesco under this Agreement, and which relate to the Scope of Work
(as hereinbelow defined), including, but not limited the subject matter set
forth in the Protocol or which arose prior to this Agreement, but, as of the
effective date hereof, has not been publicly disclosed. Such information may or
may not be protectable in the form of a patent, a copyright or as a trade
secret.
C. This does not include information which:
(1) is established by written records to be in the public domain other than
as a consequence or an act of Waterloo or Thompson;
(2) if disclosed to Waterloo or Senesco, was in Waterloo's possession prior
to the disclosure and is demonstrated through written records that such
information was in Waterloo's or Thompson's possession prior to disclosure
from Senesco, and was not the subject of an earlier confidential
relationship with Senesco; or
(3) was rightfully acquired by Waterloo or Thompson from a third party, who
was lawfully in possession of such information after the disclosure and was
under no obligation to Senesco to maintain its confidentiality.
-2-
<PAGE>
The work performed hereunder shall be under the supervision of Dr. John E.
Thompson, of the Department of Biology, at the University of Waterloo. No
substitution of Thompson may be made without the prior written consent of
Senesco.
"Employee" means an employee of the University of Waterloo involved either
directly or indirectly within the Scope of Work, as herein below defined, under
this Agreement.
"Scope of Work" means the research and development on plant genes and their
cognate expressed proteins that are induced during or coincident with cell
deterioration and related processes, which may initiate or facilitate senescence
or other degradation of plants or plant tissues, together with methods for
controlling senescence or other degradation, that involve altering the
expression of these genes. This further includes promotion and marketing of
transgenic or other modified plants containing these genes and/or their
expressed cognate proteins as a means for controlling senescence or other
degradation of plants or plant tissues.
"Technology and Inventions" shall mean any and all discoveries, inventions,
conceived inventions and know-how, whether or not patentable, and whether or not
reduced to practice, including any and all biological isolates, compositions of
matter, methods or processes, test data, findings, designs, machines, devices,
apparatus, manufactures, and any improvements, and/or any utility for the
foregoing, which are made, conceived, discovered or developed by Waterloo,
whether alone or in conjunction with others, which arise in any way from, during
or as a result of the performance of Waterloo's and Thompson's services to
Senesco under this Agreement and which relate to the Scope of Work, including,
but not limited to the subject matter set forth in the Protocol. Such Technology
and Inventions may or may not be protectable in the form of a patent, a
copyright or as a trade secret.
ARTICLE II. STATEMENT OF THE WORK.
Waterloo shall perform research to enhance the Intellectual Property rights
of Senesco in accordance with the protocol entitled "Regulation of Post-Harvest
Development by Altering the Expression of Senescence-Induced Lipase"
("Protocol"), which is attached hereto and incorporated herein as Exhibit A.
ARTICLE III. PERIOD OF PERFORMANCE.
The period of performance of this Agreement is contemplated to be three (3)
years, annually renewable by Senesco at the cost indicated below, unless sooner
terminated or extended as elsewhere provided herein or by mutual agreement.
-3-
<PAGE>
ARTICLE IV. COST AND PAYMENT.
A. Senesco agrees to pay for the cost of work specified in the Budget as set
forth in Exhibit A. Payment shall be made according to the Payment Schedule
provided in Exhibit B. Payment is to be made by Senesco in Canadian dollars.
B. The total financial obligation of Senesco for the three year period is
limited to $735,000 Canadian, which shall not be exceeded without the
written authorization of Senesco.
C. Payments shall be sent to: Mr. Barry C. Scott, Director, Research Finance,
the University of Waterloo, 200 University Avenue West, Waterloo, Ontario
N2L 3G1 CANADA.
D. Invoices to Senesco shall be sent to: Mr. Phillip O. Escaravage, Chairman,
Senesco, Inc. 34 Chambers Street, Princeton, New Jersey 08542 U.S.A.
ARTICLE V. RELATIONSHIP OF THE PARTIES.
A. Waterloo's relationship to Senesco in the performance of this Agreement is
that of an independent contractor. The work performed hereunder shall be
under the supervision of Thompson, who is considered essential to the work
being performed. No substitution of Thompson may be made without the prior
written consent of Senesco. Waterloo and Thompson shall ensure that all
Employees, researchers and other personnel involved with performing work in
connection with this Agreement are familiar with and understand the terms of
this Agreement prior to their performance hereunder, including, without
limitation, their obligation to take all actions necessary to vest title to
any Technology and Inventions in Senesco.
B. Neither party is authorized or empowered to act as an agent for the other
for any purpose and shall not on behalf of the other enter into any
contract, warranty or representation as to any matter. Neither shall be
bound by the acts or conduct of the other.
C. Waterloo and its Employees acknowledge they are aware of this Agreement and
are bound by its terms.
ARTICLE VI. CONFIDENTIALITY.
A. In order to carry out the terms of this Agreement and to facilitate
performance of the work hereunder, Senesco may disclose certain Confidential
Information, defined under Article I, to Waterloo and Thompson which Senesco
considers confidential and proprietary.
B. Senesco possesses all right, title and interest to all Confidential
Information, whether disclosed by Senesco or developed under this Agreement.
Waterloo and Thompson each agree that the Confidential Information will be
kept in strict confidence.
-4-
<PAGE>
C. Prior to the commencement of work under this Agreement, each Waterloo
Employee to undertake work relating to this Agreement shall agree to be
bound by the Confidentiality and non-compete provisions of this Agreement by
signing a copy of the form Acknowledgment attached as Exhibit C.
D. Waterloo and Thompson shall not, without the express written consent of
Senesco, directly or indirectly disclose, furnish, disseminate, make
available such Confidential Information in any way, in whole or in part, to
any person or entity other than Employees of Waterloo directly or indirectly
involved in the work under this Agreement, and then only on a need to know
basis as required for performance of this Agreement; said Employees are
subject to the same restrictions upon disclosure of this Confidential
Information as Waterloo and Thompson.
E. Waterloo and/or Thompson will promptly inform Senesco if they discover that
a third party is making or threatening to make unauthorized use of
Confidential Information.
F. The above obligations with respect to Confidential Information shall survive
for a period of ten (10) years after the termination of this Agreement, and
any extensions or renewals.
ARTICLE VII. PATENT RIGHTS.
A. Waterloo and Thompson hereby assign and agree to assign to Senesco all
right, title and interest to any Technology and Inventions made, conceived
of or arising under this Agreement within the Scope of Work.
B. All information and know-how relating to any Technology and Inventions made,
conceived of or arising under this Agreement is deemed Confidential
Information and shall be kept in strict confidence by Waterloo and Thompson
pursuant to this Agreement.
C. Waterloo and Thompson shall promptly disclose to Senesco, in writing, any
Technology and Inventions made, conceived of or arising under the Agreement.
D. Senesco has the sole discretion for the selection of the means for
intellectual property protection for the Technology and Inventions, whether
to maintain trade secret protection or seek protection by patent. Senesco
has the sole discretion for the selection of the technology to protect by
patent and will make all decisions regarding the scope of protection sought.
E. Senesco has the sole discretion to select patent counsel or other legal
representatives to help secure patent rights to any Technology and
Inventions arising out of this Agreement.
-5-
<PAGE>
F. If Senesco decides that a patent application is to be filed, Senesco, shall,
at its own cost, prepare, file and prosecute such application. Designation
of inventors in a patent application is a matter of patent law and shall be
solely within the discretion of qualified patent counsel or other legal
representative for Senesco.
G. Waterloo and Thompson shall at the request and expense of Senesco, at any
time during or after the termination of this Agreement, execute all
documents and perform all such acts as Senesco may deem necessary or
advisable to confirm Senesco's sole and exclusive ownership right, title and
interest in such Technology and Inventions in any country. Waterloo and
Thompson each agree to do all acts and execute all documents at the expense
and request of Senesco, that Senesco may deem necessary to enforce its
rights to the Technology and Inventions, including but not limited to
assisting in the preparation of patent applications, assisting in
litigation, appearing for depositions and appearing as trial witnesses.
ARTICLE VIII. PUBLICITY.
A. Waterloo and Thompson shall not disclose this Agreement with Senesco in any
publicity, advertising or news release without the prior written approval of
an authorized representative of Senesco. Senesco will not use the name of
Waterloo in any publicity, advertising or news release without the prior
written approval of Waterloo.
B. Except: Waterloo may, at its own discretion, provide a brief listing of the
research conducted under this Agreement, including the name of the sponsor,
Senesco, as part of a public compendium of Waterloo research.
C. Senesco may, at its own discretion, provide information relating to or
arising from this Agreement to investors, licensees, relevant government
agencies and other such parties.
ARTICLE IX. PUBLICATION.
A. Senesco, recognizes that Waterloo, may be desirous of publishing information
as part of Waterloo's policy and function as a university to disseminate
information for the purpose of scholarship. Waterloo and Thompson recognize
that such publication may jeopardize the protection of intellectual property
rights contemplated under this Agreement.
B. Waterloo shall not publish any Confidential Information relating to this
Agreement or any Technology and Inventions conceived of, made or arising
under this Agreement until permission in writing is given by Senesco.
Senesco agrees that Waterloo personnel shall be permitted to present at
symposia, national or regional professional meetings, and to publish in
journals, theses or dissertations, or otherwise of their own choosing,
methods and results of the Protocol, PROVIDED: (1) that Senesco shall have
been provided copies of any proposed publication or presentation at least
ninety (90) days in advance of the submission
-6-
<PAGE>
of such proposed publication or presentation; and (2) Senesco shall have
thirty (30) days after receipt of said copies to object to such proposed
presentation or proposed publication; and (3) in the event that Senesco
makes such objection, Thompson and Waterloo personnel shall refrain from
making such presentation or publication for a period of sixty (60) days to
allow Senesco to file patent application(s) or seek other protection for its
proprietary subject matter contained in the proposed presentation or
publication; and (4) in the event Senesco is unable to obtain meaningful
protection within sixty (60) days on the subject matter under the terms of
this Article, Waterloo and Thompson agree to postpone publication for up to
an additional ninety (90) days during which time the parties shall negotiate
a version of the publication which does not compromise Senesco's proprietary
interests in the subject matter and is otherwise acceptable to Senesco.
Under no circumstances will Waterloo or Thompson be allowed to disclose
Confidential Information of Senesco.
ARTICLE X. NONCOMPETITION.
A. Notwithstanding any provisions of this Agreement to the contrary, the
parties agree that Waterloo independently works on many projects which may
be similar in some respects to the subject matter set forth in the Protocol.
The parties agree that Waterloo shall not be precluded from pursuing such
projects through its own personnel, EXCEPT:
(1) Thompson agrees not to conduct any research, act as a consultant or
perform any other services, either directly or indirectly, for any
entity in the world which is competitive with Senesco relating to the
subject matter provided in Article X.B. herein, for a period of two (2)
years after the termination of this Agreement; and
(2) Each person working on this project agrees to first notify Senesco
prior to accepting employment or undertaking services for any entity in
the world which is competitive with Senesco relating to the subject
matter provided in Article X.B. herein. In view of the confidentiality
obligations herein, each person working on this project agrees to use
his best efforts not to personally conduct any research, act as a
consultant, or perform any other services relating to the subject
matter provided in Article X.B. herein, either directly or indirectly
for any entity for a period of two (2) years after termination of this
Agreement.
B. The scope of noncompetition shall include research and development on plant
genes and their cognate expressed proteins that are induced during or
coincident with cell deterioration and related processes, which may initiate
or facilitate senescence or other degradation of plants or plant tissues,
together with methods for controlling senescence or other degradation, that
involve altering the expression of these genes. This further includes
promotion and marketing of transgenic or other modified plants containing
these genes and/or their expressed cognate proteins as a means for
controlling senescence or other degradation of plants or plant tissues.
-7-
<PAGE>
C. The parties agree that the period of time and scope of the restrictions
specified herein are both reasonable and justifiable to prevent harm to the
legitimate business interests of Senesco, including but not limited to
preventing transfer of Confidential Information to Senesco's competitors
and/or preventing other unauthorized disclosures or use of Senesco's
Technology and Inventions.
ARTICLE XI. REPORTS AND CONFERENCES.
A. Written project reports shall be provided by Waterloo to Senesco monthly, to
be received by the seventh day of the following month. A final report shall
be submitted by Waterloo within thirty (30) days of completion of the
project or within thirty (30) days of the termination of this Agreement. The
content of the written project reports will be agreed upon by the parties.
B. During the term of this Agreement, representatives of Waterloo will meet
with representatives of Senesco at times and places mutually agreed upon to
discuss the progress and results, as well as ongoing plans, or changes
therein, of the Protocol to be performed hereunder.
ARTICLE XII. ASSIGNMENT.
No right or obligation to this Agreement shall be assigned by Waterloo
without the prior written permission of Senesco. Senesco has the right to assign
its rights and obligations; however, it must also seek permission of Waterloo,
such permission not to be unreasonably withheld. Waterloo shall not subcontract
any work to be performed without Senesco's prior written consent. Any work by
any subcontractor shall be under the direct supervision of Thompson.
ARTICLE XIII. SUPPLIES AND EQUIPMENT.
Waterloo shall provide laboratory space, personnel and equipment already
owned by Waterloo for conducting the research contemplated by the Agreement.
Waterloo shall retain title to any equipment purchased with funds provided by
Senesco under this Agreement.
ARTICLE XIV. TERMINATION.
A. Senesco has the right to terminate this Agreement upon thirty (30) days
advance written notice to Waterloo. In the event of such a termination,
Waterloo shall refund all unexpended and unobligated funds to Senesco after
withholding amounts necessary to discharge obligations that cannot be
canceled. Waterloo agrees to provide Senesco with copies of all work
products which exist at the time of termination.
-8-
<PAGE>
B. In the event Senesco terminates this agreement, then Dr. John E. Thompson
shall not be obligated under the noncompetition provision, specifically
Article X.A., paragraph (1).
C. Senesco's rights under Articles VI and VII, VIII, X and XI shall survive
termination of this Agreement.
D. In the event Senesco wishes to abandon its interest in the Technology and
Inventions, Waterloo and Senesco will enter into good faith negotiations for
Waterloo to acquire said Technology and Inventions.
ARTICLE XV. INDEMNIFICATION.
A. Waterloo shall defend, indemnify and hold Senesco, its officers, employees
and agents harmless from and against any and all liability, loss, expense
(including reasonable attorneys' fees) or claims for injury or damages
arising out of the performance of this Agreement but only in proportion to
and to the extent such liability, loss, expense, attorneys' fees or claims
for injury or damages are caused by or result from the negligent or
intentional acts or omissions of Waterloo, its officers, agents or
employees.
B. Senesco shall defend, indemnify and hold Waterloo, its officers, employees
and agents harmless from and against any and all liability, loss, expense
(including reasonable attorneys' fees) or claims for injury or damages
arising out of the performance of this Agreement but only in proportion to
and to the extent such liability, loss, expense, attorneys' fees or claims
for injury or damages are caused by or result from the negligent or
intentional acts or omissions of Senesco, its officers, agents or employees.
ARTICLE XVI. GOVERNING LAW.
This Agreement shall be construed in accordance with and governed by the
laws, statutes, rules, court decisions and customs prevailing in the State of
New Jersey and the United States, except to the extent that the laws of the
Province of Ontario and the Federal Government of Canada shall govern Workman's
Compensation, Employment Standards Act, Ontario Human Rights Code, Environmental
Protection Act, Occupational Health and Safety Act or any other similar statutes
that would take priority.
ARTICLE XVII. INTEGRATION.
This Agreement states the entire contract between the parties in respect to
the subject matter of the Agreement and supersedes any previous written or oral
representations, statements, negotiations or agreements. This Agreement my be
modified only by written amendment executed by the authorized representatives of
both parties.
-9-
<PAGE>
ARTICLE XVIII. AGREEMENT MODIFICATION.
Any agreement to change the terms of this Agreement in any way shall be
valid only if the change is made in writing and approved by mutual agreement of
authorized representatives of the parties hereto.
ARTICLE XIX. GOVERNING LANGUAGE.
In the event that a translation of this Agreement is prepared and signed by
the parties, this English language Agreement shall be the official version and
shall govern if there is a conflict between the translation and this English
language Agreement.
ARTICLE XX. NOTICES.
Notices under this Agreement shall be sent by registered mail, return
receipt requested, or delivered by hand, to the following address of either
party unless changed by written notice.
Senesco: Waterloo:
Phillip O. Escaravage, Chairman Judy Brown, Contracts Manager
Senesco, Inc. Office of Research
34 Chambers Street University of Waterloo
Princeton, New Jersey 08542 U. S.A. 200 University Avenue West
Telephone: (609) 252-0680 Waterloo, Ontario N2L 3G1
CANADA
Telephone: (519) 888-4567, X2022
Fax: (519) 746-7151
-10-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
written above.
SENESCO, Inc., a New Jersey THE UNIVERSITY OF WATERLOO
Corporation ("Senesco") ("Waterloo")
By: /s/ Phillip O. Escaravage By: /s/ Carolyn M. Hansson
--------------------------------- ---------------------------------
Phillip O. Escaravage Carolyn M. Hansson
Title: Chairman Title: Vice President, University
Research
By: /s/ Barry C. Scott
---------------------------------
Barry C. Scott
Title: Director, Research Finance
/s/ John E. Thompson
- ------------------------------------
Dr. John E. Thompson
-11-
<PAGE>
EXHIBIT C
ACKNOWLEDGMENT OF EMPLOYEES AND RESEARCHERS OF
THE UNIVERSITY OF WATERLOO
In consideration of the substantial benefits that I have or will continue to
receive as an employee and/or researcher of the University of Waterloo, and as a
condition to being able to participate in the project described in the Research
Agreement executed between Senesco, Inc. ("Senesco") and The University of
Waterloo ("Waterloo"), effective as of September 1, 1998, I hereby agree to be
bound to the confidentiality and non-disclosure provisions set forth as the
obligations required of the University of Waterloo pursuant to the Agreement as
if I were a signatory to such Agreement. I acknowledge and agree that any
inventions or rights which may be protectable under intellectual property law
developed, created, or conceived of by me (either in whole or in part) within
the Scope of Work, as defined in the Research Agreement, shall be owned solely
by Senesco, and I hereby agree to take any actions requested by Senesco in order
to more fully vest title in the same in Senesco as required by such Agreement.
----------------------------------
(Employee Name)
----------------------------------
(Signature)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS AT MARCH 31, 1999 WHICH ARE INCLUDED
IN THE REGISTRANT'S FORM 10-QSB AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0001035354
<NAME> Senesco Technologies, Inc.
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<S> <C> <C>
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<FISCAL-YEAR-END> JUN-30-1999 JUN-30-1999
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<FN>
<F1> -- This amount represents Basic Earnings per Share in accordance with the
requirements of Statement of Financial Accounting Standards No. 128 - "Earnings
per Share."
<F2> -- This amount represents Diluted Earnings per Share in accordance with the
requirements of Statement of Financial Accounting Standards No. 128 - "Earnings
per Share."
</FN>
</TABLE>
