like to read the 10,000,000 exercised at ".20"
(1) Xechem and Alembic agreed to terminate the Old Note and enter into the New Note. Pursuant to the terms of the New Note, Xechem agrees to repay Alembic in full the outstanding principal and interest remaining from the New Note as follows: $1,000,000 to be paid on or before January 31, 2006 (the "Initial Payment"), with the balance (the "Remaining Balance") due on or before December 31, 2006. Furthermore, for every month beginning July 2006, in which any portion of the New Note remains unpaid, Xechem shall pay to Alembic as additional consideration the sum of $16,600, for a total of up to $99,600. Notwithstanding the foregoing, if Xechem increases its Initial Payment to $1,500,000, then the $16,600 monthly additional consideration payment will be reduced to $12,500. The New Note continues to bear interest at the rate of 8%. Unlike the Old Note, the New Note is not convertible into shares of Xechem's common stock.
(2) The parties agreed to terminate the MOU and the Cooperation Agreement. Under the MOU and the Cooperation Agreement, Alembic had previously agreed to loan Xechem $3,000,000 (the "Old Note"). As additional consideration for the Old Note, Xechem agreed to pay Alembic a fee (the "Investment Fee") during the License Term (15 years) equal to the product of the Alembic Applicable Percentage multiplied by the Gross Product Sales Amount, as those terms are defined herein. The Gross Product Sales Amount means the amount of gross sales revenue generated by the company from sales of NICOSAN/HEMOXIN(TM) in Nigeria and other African countries, calculated on a cash received basis. For the period from the commencement date through the fifth anniversary, the Alembic Applicable percentage is 15%, for the period from the fifth to the tenth anniversary, the Alembic Applicable percentage is 10%, and for the period from the tenth anniversary to the end of the term, the Alembic Applicable percentage is 5%. During the License Term, the company also agreed to pay Alembic a U.S. Export Fee in an amount equal to one percent of the amount of purchase price paid by
the company for any NICOSAN/HEMOXIN(TM) sold by the company in the United States and internationally, except Nigeria (the "Export Fee"). Xechem also issued Alembic a warrant to purchase 10,000,000 shares of Xechem's common stock at an exercise price of $0.20 per share (the "Warrant"). Alembic also agreed to provide certain production and regulatory compliance personnel to assist Xechem Nigeria, which services would be compensated upon terms agreeable to the parties (the "Services"). The company also gave Alembic the right of first offer regarding the licensing of any distribution rights with respect to NICOSAN/HEMOXIN(TM) in the territory of Africa and India (the "Distribution Rights"). All existing agreements and understandings between Xechem and Xechem Nigeria, on the one hand and Alembic on the other regarding the Cooperation Agreement, the MOU and the Old Note are terminated, including the Investment Fee, the Export Fee, the Warrant, the Services and the Distribution Rights. Notwithstanding the foregoing, the parties agreed that the provisions addressing the disclosure of confidential information, non-circumvention, confidentiality and nonsolicitation shall not be terminated and shall remain in full force and effect.
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