383 F.Supp.2d 428 (2003)

SPENCER TRASK SOFTWARE AND INFORMATION SERVICES LLC, formerly known as Spencer Trask Internet Group, LLC; and Spencer Trask Ventures, Inc., Plaintiffs,
v.
RPOST INTERNATIONAL LIMITED; Zafar Kahn; Terry Tomkow; and Ken Barton, Defendants.

No. 02 Civ. 1276(PKL).

United States District Court, S.D. New York.

January 24, 2003.

*429 *430 *431 *432 *433 *434 Patterson, Belknap, Webb & Tyler LLP, New York City, Steven P. Younger, Jon-Peter F. Kelly, for Plaintiffs.

Stillman & Friedman, P.C., New York City, John B. Harris, Hill & Barlow, P.C., Boston, MA, Daniel C. Winston, David S. Friedman, for Defendants.^[1]

OPINION AND ORDER

LEISURE, District Judge.

Defendants RPost International Limited, Zafar Kahn, Terry Tomkow, and Ken Barton (collectively "RPost") move to dismiss this action brought by Spencer Trask Software and Information Services, LLC and Spencer Trask Ventures, Inc. (collectively "Spencer Trask"), pursuant to Federal Rule of Civil Procedure 12(b)(6). For the reasons stated below, defendants' motion to dismiss is granted in part and denied in part.

*435 On February 11, 2002, Spencer Trask filed its initial complaint in New York Supreme Court for, inter alia, breach of contract, promissory estoppel, unjust enrichment and breach of warranty. After RPost removed the action to this Court, the Court denied a motion for a temporary restraining order seeking to enjoin RPost's Series C financing, principally on the ground that Spencer Trask had not shown irreparable harm. Defendants then moved to dismiss, or in the alternative, for summary judgment.

Thereafter, on March 18, 2002, plaintiffs filed an Amended Complaint, adding claims for securities fraud and common law fraud. As a result, defendants withdrew their motion to dismiss in order to address the new issues raised in the plaintiffs' Amended Complaint. Defendants then brought this motion to dismiss the plaintiffs' Amended Complaint, and moved this Court for a stay of discovery during the pendency of their motion to dismiss. On April 8, 2002, the Court granted the latter portion of said motion and entered a stay of discovery pending disposition of the motion to dismiss.

BACKGROUND

On a motion to dismiss, the plaintiffs' well-pleaded allegations in their Amended Complaint are assumed to be true. Rothman v. Gregor, 220 F.3d 81, 91 (2d Cir.2000). Therefore the relevant facts, as alleged by the plaintiffs in their Amended Complaint, are as follows. Spencer Trask is an experienced venture capital investor that provides financing for emerging companies, particularly in the technology sector, and in return, Spencer Trask generally receives company stock. Plaintiffs' First Amended Complaint ("Am.Comp.") ¶ 19. RPost is a start-up internet company which aims to provide an electronic mail service for sending "registered e-mails" with security similar to registered mail sent through traditional postal services. Id. ¶ 20. In July 2001, RPost circulated an offering memorandum (the "July Memorandum") among investors, seeking investors to complete its Series B round of financing-a private placement of convertible debt of up to $2 million. The proposed terms for investment called for the Series B notes to convert into shares in RPost at a 50% discount to the closing price in RPost's later Series C round of financing. The July Memorandum made numerous representations about the company: listing the "Directors and Advisors" of RPost and describing their backgrounds, and including in that group Marvin Runyon, a former Postmaster General of the United States. Id. ¶ 22. The July Memorandum also listed Brigadier General Richard W. Pryor (Ret.), a former President of Worldcom, as the "Interim CEO" of RPost, and included him in the list of people identified under a heading titled "Team — Founders and Leadership Team". Id. ¶ 23. The July Memorandum made representations concerning RPost's relationship with the United States Postal Service (USPS), stating that RPost offered registered e-mail "in partnership with the USPS," and representing that their "partnership was on the cusp of completion." Id. ¶ 25. Furthermore, the July Memorandum made representations concerning RPost's capitalization, stating that the authorized capital stock of the company consisted of 120,000,000 "ordinary" shares, of which approximately 21,000,000 were issued and outstanding. Id. ¶ 27.

On August 13, 2001, Kevin Kimberlin, Chairman of Spencer Trask & Co., and Danny Zottoli, Chief Executive Officer of Information Services, met with defendants Kahn and Barton, two of the three founders of RPost. Kahn explained that RPost was raising a "Series B" round of financing, but was in need of further financing to *436 close out that round. Id. ¶ 30. Kahn represented that RPost expected to sign in 60 days a final operational contract with the USPS, which would give RPost the exclusive use of the USPS brand for the provision of USPS electronic registered mail. Id. Spencer Trask expressed its willingness to provide financing, but only if terms could be reached that ensured that Spencer Trask would have a sufficient stake in the company to justify the risk it would be taking. Id. ¶ 31. On August 22, 2001, the parties met again, and reached an agreement on terms for the investment by Spencer Trask ("August Agreement"). Id. ¶ 36. The proposed terms for the investment provided that: (1) Spencer Trask would provide RPost with $500,000 in Series B financing, subject only to Spencer Trask's due-diligence review; (2) Information Services would purchase, subject to due diligence, 6% of the fully-diluted outstanding capital stock from each of the three founders for $1.8 million, with Spencer Trask having the right to purchase the shares in three separate tranches over an 18 month period; (3) Spencer Trask would raise or invest $1 million for RPost in its subsequent Series C round of financing provided that two conditions were met: (a) RPost did in fact enter into an exclusive contract with the USPS; and (b) that before March 1, 2002, RPost also raised $1 million of Series C financing from other investors at a pre-money valuation of $30 million or less; and (4) Spencer Trask agreed to make a non-binding commitment to use its best efforts to raise funds for RPost's Series D round of financing. The overall result of the agreed structure was to give Spencer Trask the right to acquire over 20% of RPost stock. Kahn and Kimberlin shook hands on the deal and Kimberlin congratulated Kahn on becoming a partner with Spencer Trask. Id. ¶ 38. That same day, in response to a request by Spencer Trask, Kahn sent an e-mail representing that "[t]he total issued and outstanding shares in the company, RPost International Limited ... are 22,336,000." Id. ¶ 40. Spencer Trask relied on this figure in calculating how many shares would be purchased from each founder in the August Agreement. Id.

After Kimberlin and Kahn shook hands on the August Agreement, Kimberlin asked Zottoli to draw up the terms to which they had agreed. David Hochman, a Managing Director at Spencer Trask & Co., drew up four short letter agreements to document the deal; and Hochman and Zottoli then telephoned Kahn and walked him through each sentence reflected in the letter agreements. Kahn told them that the terms in the letters were satisfactory. Hochman then sent the draft letter agreements to Kahn via e-mail on August 23, 2001. These proposed letter agreements summarized the parties' discussions regarding Spencer Trask's purchase of the founders' shares in RPost, provided for payment of $200,000 in cash by Spencer Trask "[o]n execution," and concluded with the sentence, "We are prepared to move promptly to consummate this transaction following the execution of this letter." Draft agreements, attached as Ex. B to Affidavit of Kevin B. Kimberlin ("Kimberlin Aff.")

Over the next two months, RPost proposed some revisions to the terms of the August Agreement, some of which were material, but Spencer Trask did not accept the material changes. Am. Comp. ¶ 43. The parties never signed or executed any of the four letter agreements written by Hochman. RPost did not provide Spencer Trask with due-diligence materials until the second week of October, a full month after RPost had assured Spencer Trask that those materials would be sent, and those materials did not include several of the documents needed by Spencer Trask *437 in order to complete their due diligence. In a telephone call on October 26, 2001, Kahn emphasized the urgency of closing Spencer Trask's Series B investment due to the imminence of RPost's signing an exclusive agreement with the USPS. Id. ¶ 48. On October 30, 2001, Kahn sent Spencer Trask a letter urging Spencer Trask to provide the Series B financing right away, stating that it was closing financing that week; and on November 1, 2001, Spencer Trask invested $500,000 in RPost's Series B round of financing. In exchange, Spencer Trask received a subordinated promissory note (the "Promissory Note") that was convertible into preferred shares of RPost, the amount of which would be determined by the Series C financing, and the parties executed a Subordinated Convertible Debt Agreement (the "Debt Agreement") on November 1, 2001. Id. ¶ 50. In the October 30, 2001 letter, RPost represented that it had 9,624,000 "authorized options in stock option reserve"; but in the Debt Agreement signed on November 1, 2001, RPost represented that it had 3,630,000 authorized options in reserve. Id.

On December 20, 2001, RPost sent Spencer Trask another offering memorandum, which was dated November 2001 (the "November Memorandum"). Like the July Memorandum, the November Memorandum made various representations concerning RPost's management; its relationship with the USPS; and its capital structure. Am. Comp. ¶ 51.

Despite Spencer Trask's repeated reminders of the need to receive additional information from RPost in order to complete the due diligence needed in order to close the August Agreement, defendants delayed providing that information and scheduling interviews, such that the due diligence was only finalized on January 9, 2002. Id. ¶ 66. However, on January 15, 2002, when Kimberlin met with Khan and Barton and stated that Spencer Trask was ready to proceed to the final closing of the remaining phases of the August Agreement, Barton told Kimberlin that their circumstances had changed and that they "did not need" that deal anymore. Id. ¶ 67.

In February 2002, Spencer Trask asked RPost a series of questions concerning its capitalization structure and corporate governance. Spencer Trask responded to those questions in a letter dated February 22, 2002, via its counsel Hill & Barlow, with the following information: (1) RPost had 21,645,000 shares of common stock issued and outstanding; (2) RPost had outstanding options exercisable for 686,000 shares of common stock; (3) RPost had reserved 9,564,000 additional shares under its option plan; (4) the three founders of the company-defendants Tomkow, Khan and Barton-were the only members of RPost's board of directors; (5) RPost did not have an "Executive Committee"; (6) neither Mr. Runyon nor General Pryor were "current statutory officers" of RPost. Id. ¶ 69. In addition, the plaintiffs alleged that they learned information about the qualifications and background of Kahn and Barton that made RPost's representations regarding these individuals in the July and November appear misleading. Id. ¶ 71. Plaintiffs continue to allege that as of March 12, 2002, RPost had still not finalized any agreement with the USPS. Id. ¶ 73.

DISCUSSION

A. Motion to Dismiss Standard

The Court may grant a motion to dismiss only if "it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957); *438 see also Lipsky v. Commonwealth United Corp., 551 F.2d 887, 894-95 (2d Cir.1976). The Court must read the complaint generously and draw all reasonable inferences in favor of the plaintiff, accepting the complaint's allegations as true. Conley, 355 U.S. at 46-46, 78 S.Ct. 99; Hosp. Bldg. Co. v. Trustees of Rex Hosp., 425 U.S. 738, 740, 96 S.Ct. 1848, 48 L.Ed.2d 338 (1976); Dubin v. E.F. Hutton Group, Inc. 695 F.Supp. 138 (S.D.N.Y.1988). Accordingly, the factual allegations set forth in the Amended Complaint do not constitute findings of fact by the Court, but rather are presumed to be true for the purpose of deciding the motion to dismiss. See Emergent Capital Inv. Mgmt., LLC v. Stonepath Group, Inc., 165 F.Supp.2d 615, 625 (S.D.N.Y.2001). Thus, "[t]he issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims." Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974).

In deciding a motion under Rule 12(b)(6), the Court may consider only the facts stated on the face of the complaint, documents appended to the complaint or documents incorporated by reference in the complaint. Schnall v. Marine Midland Bank, 225 F.3d 263, 266 (2d Cir.2000). "[T]he complaint is deemed to include any written instrument attached to it as an exhibit or any statements or documents incorporated in it by reference." Cortec Indus., Inc. v. Sum Holding L.P., 949 F.2d 42, 47 (2d Cir.1991); Fed.R.Civ.P. 10(c). When a party introduces matters extraneous to the pleadings, the Court must convert the motion to dismiss into a motion for summary judgment or exclude certain matters from consideration. See Fonte v. Bd. of Managers of Cont'l Towers Condominium, 848 F.2d 24, 25 (2d Cir.1988); Fed. R.Civ. P. 12(b). However, the Second Circuit has held that "when a plaintiff chooses not to attach to the complaint or incorporate by reference a [document] upon which it solely relies and which is integral to the complaint," the court may nevertheless take that document into consideration in deciding the defendants' motion to dismiss, without converting the proceeding to one for summary judgment. Cortec Indus., 949 F.2d at 47-48; see also Int'l Audiotext Network, Inc. v. AT & T Co., 62 F.3d 69, 72 (2d Cir.1995).^[2]

*439 B. Claim I: Breach of Contract

Spencer Trask asserts several claims seeking to enforce the alleged August Agreement with RPost: breach of contract, breach of implied contract, promissory estoppel, unjust enrichment, and breach of the duty of good faith and fair dealing. Defendants argue that all of Spencer Trask's contract-based claims fail for two reasons: (1) the Amended Complaint and incorporated documents conclusively establish the absence of any claims as matter of law; and (2) the Statute of Frauds bars all of those claims. The Court will first address whether the Amended Complaint and the incorporated documents establish a claim upon which relief can be granted.

Defendants contend that the facts as alleged in the Amended Complaint and the documents incorporated by reference into the complaint show, as a matter of law, that RPost did not manifest an intent to enter into a binding agreement in their conversations with Spencer Trask on August 22, 2001, and therefore, Spencer Trask and RPost did not enter into a binding agreement as result of their oral discussions and handshake on that date. Consequently, defendants contend that plaintiffs cannot state a claim for breach of contract. While plaintiffs assert that the parties did enter into a binding preliminary agreement in their conversation on August 22, 2001, they argue that the issue of whether or not the parties intended to be bound in their August Agreement, and consequently, whether the August Agreement constitutes an enforceable contract, cannot be determined as a matter of law at this early stage of the litigation. See Plaintiffs' Memorandum of Law in Opposition to Defendants' Motion to Dismiss the First Amended Complaint ("Pl.Opp.") at 13. While the Court can make the determination of whether the parties intended to be bound in an alleged preliminary agreement on a motion to dismiss, courts are often reluctant to rule on the issue of intent to form a binding agreement in a judgment on the pleadings, and must be cautious in making such determinations. Advanced Marine Techs., 16 F.Supp.2d at 381 n. 27. In Advanced Marine Techs., the Court granted a 12(b)(6) motion to dismiss a breach of contract claim after concluding that the plaintiff could allege no set of facts to show that the defendants intended to be bound in their preliminary agreement. In that case, the Court disagreed with the plaintiff's interpretation of the Second Circuit's language in Consarc Corp. v. Marine Midland Bank, 996 F.2d 568 (2d Cir.1993), suggesting that summary judgment and, by a parity of reasoning, a motion to dismiss, may never be granted on the issue of intention to be bound. The Court stated that the proper reading of the language in Consarc would merely indicate that "courts must be cautious in granting summary judgment, perhaps especially so where the issue is intent, but summary judgment nevertheless may be appropriate in such a case if there is no genuine issue of material fact for trial." Advanced Marine Techs., 16 F.Supp.2d at 381 n. 27. However, in cases where the intent to be bound is not conclusively determinable based on the facts alleged in the complaint and the documents incorporated by reference, "the issue of whether and when the parties intended to be bound is a factual issue that should [be] submitted to the jury." Int'l Minerals & *440 Res., S.A. v. Pappas, 96 F.3d 586, 593 (2d Cir.1996).

Under New York contract law, parties may enter into a contract orally, even though they contemplate later memorializing their agreement in writing. See Ciaramella v. Reader's Digest Ass'n, 131 F.3d 320, 322 (2d Cir.1997).^[3] In such a case, the mere intention to commit the agreement to writing will not prevent contract formation prior to the execution of that writing. Consarc, 996 F.2d at 574 ("Simply because the parties contemplate memorializing their agreement in a formal document does not prevent their agreement from coming into effect before written documents are drawn up. That is, if the parties have settled on the contract's substantial terms, a binding contract will have been created, even though they also intended to memorialize it in a writing.") (citations omitted)); R.G. Group, Inc. v. Horn & Hardart Co., 751 F.2d 69, 74 (2d Cir.1984). If, however, either party communicates an intent not to be bound until he achieves a fully executed document, "no amount of negotiation or oral agreement to specific terms will result in the formation of a binding contract." Winston v. Mediafare Entm't Corp., 777 F.2d 78, 80 (2d Cir.1985) (citing R.G. Group, 751 F.2d at 74 ("Under New York law, if the parties do not intend to be bound by an agreement until it is in writing and signed, then there is no contract until that event occurs.")). "It is the intent of the parties that will determine the time of contract formation." Id. at 78.

In general, "preliminary manifestations of assent that require further negotiation and further contracts do not create binding obligations." Shann v. Dunk, 84 F.3d 73, 77 (2d Cir.1996). However, the Second Circuit has recognized that in some rare instances, if a preliminary agreement clearly manifests the intent of the parties, it can create a binding obligation. See id; Arcadian Phosphates, Inc. v. Arcadian Corp., 884 F.2d 69, 72 (2d Cir.1989). Noting that it is a rare instance in which a preliminary agreement clearly manifests such an intention as to create a binding obligation, Judge Pierre N. Leval, then a District Court judge, helpfully outlined two separate categories of such binding preliminary contracts. See Teachers Ins. & Annuity Ass'n of America v. Tribune Co., 670 F.Supp. 491, 497-99 (S.D.N.Y.1987). The first type is a fully binding preliminary agreement, which is created when the parties have agreed upon all essential terms, but agree to memorialize their agreement in a more formal document. See Adjustrite Sys., Inc. v. GAB Bus. Services, Inc., 145 F.3d 543, 548 (2d Cir.1998). "A binding preliminary agreement binds both sides to their ultimate contractual objective in recognition that, `despite the anticipation of further formalities', a contract has been reached." Id. (citing Tribune, 670 F.Supp. at 498). The second type of preliminary agreement, termed by Judge Leval as a "binding preliminary commitment," is created when the parties agree on certain major terms but leave other terms open for negotiation, accepting "a mutual commitment to negotiate together in good faith in an effort to reach final agreement." Tribune, 670 F.Supp. at 498. "In contrast to a fully binding preliminary agreement, a `binding preliminary commitment' does not commit the parties to their ultimate contractual objective but rather to the obligation to negotiate the open issues in good faith in an attempt to reach the ... objective within *441 the agreed framework." See Adjustrite, 145 F.3d at 548.

The key issue, in finding that the plaintiffs have stated a claim for either type of agreement, is whether the parties intended to be bound by that preliminary agreement. See Adjustrite, 145 F.3d at 548. In ascertaining whether the parties evinced this intention to be bound, the court must look to "the words and deeds [of the parties] which constitute objective signs in a given set of circumstances." R.G. Group, 751 F.2d at 74. Subjective evidence of intent, however, is generally not considered. See Adjustrite, 145 F.3d at 548; Rule v. Brine, Inc., 85 F.3d 1002, 1010 (2d Cir.1996). Instead, "[w]hat matters are the parties' expressed intentions, the words and deeds which constitute objective signs in a given set of circumstances." R.G. Group, 751 F.2d at 74. The analysis must not put "disproportionate emphasis ... on any single act, phrase or other expression, but, instead, [should consider] the totality of all of these, given the attendant circumstances, the situation of the parties, and the objectives they were striving to attain." Brown Bros. Elec. Contractors, Inc. v. Beam Constr. Corp., 41 N.Y.2d 397, 393 N.Y.S.2d 350, 352, 361 N.E.2d 999 (1977).

Plaintiffs have alleged that the parties entered into a fully binding preliminary agreement in their oral agreement on August 22, 2001. Am. Comp. ¶ 2. In the alternative, plaintiffs argue that if the Court finds they have failed to state a claim that the parties entered into a fully binding preliminary agreement, the August Agreement represented a binding preliminary commitment between the parties, and as such that the defendants have breached their duty to negotiate in good faith under such a commitment. See Pl. Opp. at 18.

1) August Agreement Is Not a Binding Preliminary Agreement

The Court has identified four factors to be considered in determining whether parties to a preliminary agreement, which calls for the execution of a formal instrument, intended to be bound in the absence of such an executed final instrument. Adjustrite, 145 F.3d at 549. In Winston, the Court looked at the following four factors in determining whether the preliminary agreement between the parties represented a binding preliminary agreement: (1) whether the parties have expressly reserved the right not to be bound without a written contract; (2) whether there has been partial performance of the contract; (3) whether the parties have agreed to all terms of the alleged contract; and (4) whether the alleged agreement is the type that is usually committed to writing. See 777 F.2d at 80. This Court has also found the Winston factors to be instructive in determining whether a preliminary agreement should be considered binding as a preliminary commitment to negotiate in good faith, altering the factors considered only slightly and placing less of a focus on the existence of unresolved terms between the parties. See Tribune, 670 F.Supp. at 499-503. In the analysis of both these types of binding agreements, the Court has found the language of the agreements to be the most important factor in discerning the parties' manifested intent. See id. at 499. In this case, that is a bit more difficult since the alleged agreement was an oral agreement and the only evidence we have of its language is the language of the draft agreements, which the plaintiffs allege embody the terms of the alleged oral agreement. See Am. Comp. ¶ 41.

a) Express Reservation of Right Not to Be Bound Absent a Writing

While there was not an express reservation of the right not to be bound in the *442 draft Agreements, there was such a reservation in the July Memorandum, and there were several expressions of the mutual intent not to be bound prior to the execution of the draft agreements. See July Memorandum at 4; Draft agreements. The draft agreements, the terms of which were allegedly agreed to by both parties over the telephone after Hochman and Zottoli "walked Kahn through each sentence reflected in the agreements," Am. Comp. ¶¶ 41, 42, were sent via e-mail to the defendants the day after the alleged oral agreement. Those agreements laid out the terms agreed to in the alleged oral contract, and concluded with the sentence, "We are prepared to move promptly to consummate this transaction following the execution of this letter." Draft agreements (emphasis added). That is not the only reference to execution in these agreements, as the agreements include a requirement that Spencer Trask make a payment of $200,000 "[o]n execution." Id. Plaintiffs do not allege that they paid this money. Lastly, all four draft agreements contained blank signature lines with an open agreement date: "Agreed, as of August ____, 2001." Id. These provisions of the draft agreements, each sentence of which the plaintiffs allege were agreed to by both parties, "appear to place importance on the formalities of execution," thereby reflecting a mutual intent on the part of both parties not to be bound to the terms of the agreement until the agreement was executed. Winston, 777 F.2d at 82; Davidson Pipe Co., Inc. v. Laventhol & Horwath, 1986 WL 2201, *4 (S.D.N.Y. Feb. 11, 1986) (holding that similar provisions attach "great significance to the execution date" and may be viewed as "an impediment to forming a binding agreement prior to some formal time of execution" (quotations omitted)). Of those three provisions in the draft agreements, the critical language at the end of the agreements, indicating that the plaintiffs "were prepared to move promptly to consummate this transaction following the execution of this letter," is the strongest indication that the parties did not evince an intent to be bound prior to execution. See draft agreements (emphasis added); Reprosystem, B.V. v. SCM Corp., 727 F.2d 257, 262 (2d Cir.1984) (holding that a term stating the agreement would be effective "when executed" could conclusively establish that no binding force was intended prior to execution). This language is indistinguishable from terms that courts have found preclude a binding preliminary agreement as a matter of law. See R.G.Group, 751 F.2d at 76 (explicit wording of agreement declared that obligations would commence "when duly executed"); Davidson Pipe Co., 1986 WL 2201, at *4 (obligations started "[c]oncurrently with the execution and delivery of this Agreement").

Furthermore, the defendants did include an explicit reservation of their right not to be bound in the absence of a written agreement in the July Memorandum provided by RPost to Spencer Trask, which lay out the terms for deals involving investment in RPost's Series B round of financing. See July Memorandum at 4. The plaintiffs reviewed the July Memorandum and, as alleged in the Amended Complaint, relied heavily on the representations therein. See Am. Comp. ¶¶ 29, 21-28, 91(a)-(e), (g)-(j). In that Memorandum, RPost states, "We may not sell the convertible debt or accept any offer to purchase the convertible debt until we have delivered to you and you have executed the agreement reflecting the definitive terms and conditions of the offering." Id. at 4. Plaintiffs have alleged that their investment in the Series B financing was part of the August Agreement, therefore the provision of the July Memorandum, which applied to the sale or purchase of convertible *443 debt for that financing and explicitly reserved the defendants' right not to be bound absent a written agreement, is indicative of the defendants' objective intent not to be bound to a sale or purchase of convertible debt in the absence of a written agreement. See ABC Trading Co. v. Westinghouse Electric Supply Co., 382 F.Supp. 600, 602 (E.D.N.Y.1974) (rejecting an alleged oral agreement because an earlier letter from one of the parties, written three and one-half months before the alleged oral agreement, had said, "If your client finds this proposal agreeable in principle, we can proceed to reduce it to a written agreement.")

The plaintiffs place much weight on the defendants' admission that there was an "agreement on terms," and the fact that Kimberlin and Khan shook hands on the oral agreement made in the August 22, 2001 meeting, and plaintiffs argue that such an agreement should establish the parties' intention to be bound. However, such an agreement can only serve as an indication of the parties' intention to be bound, and cannot, as plaintiffs contend, conclusively establish that the parties intended to be bound.^[4]See Tribune, 670 F.Supp. at 497 ("[M]ore is needed than agreement on each detail [to create a binding obligation. There must be] overall agreement ... to enter into a binding contract."); Arcadian Phosphates, 884 F.2d at 72. Their alleged oral agreement and handshake must be considered with all the other words and deeds of the parties, identifiable from the facts alleged in the Amended Complaint and the incorporated documents, and which would constitute objective signs of their intent to be bound. See, e.g., R.G. Group, 751 F.2d at 76 (Court held that parties' alleged handshake agreement on the deal was not sufficient to show a mutual intent to be bound in light of the reservation of that right in the parties' other deeds and words); Ciaramella, 131 F.3d at 325 (finding statement "[w]e have a deal" was not an explicit waiver of an express signature requirement); Davidson Pipe Co., 1986 WL 2201, at *5 (finding an oral statement "we have a deal" to be insufficient to bind parties who have reserved right to be bound only by an executed contract).

b) Partial Performance

The second factor looks to whether one party has partially performed, and that performance has been accepted by the party disclaiming the contract. See R.G. Group, 751 F.2d at 76. Partial performance is a significant factor in determining the existence of a binding oral agreement. See Cleveland Wrecking Co. v. Hercules Constr. Corp., 23 F.Supp.2d 287, 296 (E.D.N.Y.1998); see also Viacom Int'l Inc. v. Tandem Prod., Inc., 368 F.Supp. 1264, 1270 (S.D.N.Y.1974), aff'd, 526 F.2d 593 (2d Cir.1975). Plaintiffs contend that there has been partial performance of the August Agreement: Spencer Trask by investing $500,000 in RPost's Series B financing round and RPost by providing Spencer Trask with due diligence through January 2001. See Pl. Opp. at 16. Partial performance requires some actual performance of the contract, such that the plaintiffs must have conferred something of value upon the defendants *444 which the defendants accepted. Cleveland Wrecking Co., 23 F.Supp.2d at 296 (quoting P.A. Bergner & Co. v. Martinez, 823 F.Supp. 151, 157 (S.D.N.Y.1993)). While it is clear that the plaintiffs' investment of $500,000 did confer a benefit upon the defendants, the defendants assert that that investment was part of the contract signed by the parties in the Debt Agreement and therefore not indicative of the plaintiffs' performance of the August Agreement. Defendants argue that language in the Debt Agreement, stating that "This Agreement constitutes the entire agreement among the parties hereto with respect to the subject matter hereof," indicates that the plaintiffs' Series B investment was not part of a package deal, and should not be seen as partial performance of the August Agreement. Debt Agreement ¶ 9(e); see Def. Mem. at 16. Plaintiffs assert that this language does not preclude the Series B investment from being part of a larger package deal, because the language merely indicates that the Debt Agreement was the entire agreement with respect to the "subject matter hereof"-meaning the Series B round of financing that it governed. See Pl. Opp. at 21. Accordingly, it is not appropriate for the Court to make a conclusive determination of whether or not the language in the Debt Agreement bars the plaintiffs' investment from being seen as partial performance of the August Agreement at this early stage. Therefore, making all reasonable inferences in favor of the plaintiffs, the Court finds that the second factor slightly favors the plaintiffs.

c) Agreement on All Terms

Turning to the third factor, plaintiffs alleged that the parties reached an oral "agreement on terms," and that RPost thereafter proposed material revisions to those terms. Am. Comp. ¶¶ 37, 43.^[5] While the Court must take as true the plaintiffs' allegation that the parties reached an agreement on terms, it appears from further allegations in the Amended Complaint that the parties were still negotiating several of these material terms. See Am. Comp. ¶¶ 43-44. It seems clear from the negotiations that ensued that the plaintiffs' alleged "agreement on terms" was not an agreement to all terms, and even drawing all reasonable inferences in favor of the plaintiffs, the Court cannot find that this factor weig