UNIT PURCHASE AGREEMENT BETWEEN CANCER THERAPEUTICS, INC. AND CERTAIN UNIT HOLDERS OF NANO THERAPIES, LLC
BETWEEN
CANCER
THERAPEUTICS, INC.
AND
CERTAIN
UNIT HOLDERS
OF
NANO
THERAPIES, LLC
This Unit
Purchase Agreement (this "Agreement") is entered into as of May 27, 2009, by and
between Cancer Therapeutics, Inc., a Delaware corporation ("Buyer"),
and certain holders of units (each a “Seller” and collectively,
"Sellers")
of NanoTherapies, LLC, a Virginia limited liability company (“Nano”), as set forth on the
signature page attached hereto. Buyer and Sellers are referred to
collectively herein as the "Parties."
This
Agreement contemplates a transaction in which Buyer will purchase from Sellers,
and Sellers will sell to Buyer, certain units of Nano in return for a certain
number of shares of common stock of the Buyer as more particularly specified
herein.
Now,
therefore, in consideration of the premises and the mutual promises herein made,
and in consideration of the representations, warranties, and covenants herein
contained, the Parties agree as follows.
1. Definitions.
"Accredited
Investor" has the meaning set forth in Regulation D promulgated under the
Securities Act.
"Additional
Nano Units" means any and all Nano Units that are issued by Nano
following the Closing.
"Adverse
Consequences" means all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs, amounts paid
in settlement, Liabilities, obligations, Taxes, liens, losses, expenses, and
fees, including court costs and reasonable attorneys' fees and
expenses.
"Affiliate"
has the meaning set forth in Rule 12b-2 of the regulations promulgated under the
Securities Exchange Act.
"Affiliated
Group" means any affiliated group within the meaning of 26 U.S.Code
§1504(a) or any similar group defined under a similar provision of state, local
or foreign law.
"Applicable
Rate" means the corporate base rate of interest publicly announced from
time to time by ▇▇▇▇▇ Fargo Bank, N.A.
"Basis"
means any past or present fact, situation, circumstance, status, condition,
activity, practice, plan, occurrence, event, incident, action, failure to act,
or transaction that forms or could form the basis for any specified
consequence.
"Buyer"
has the meaning set forth in the preface above.
"Closing"
has the meaning set forth in §2(c) below.
"Closing
Date" has the meaning set forth in §2(c) below.
"Code"
means the Internal Revenue Code of 1986, as amended.
"Confidential
Information" means any information concerning the businesses and affairs
of Nano that is not already generally available to the public.
“Consideration
Shares” has the meaning set forth in §2(c) below.
"Disclosure
Schedule" has the meaning set forth in §4 below.
"Financial
Statements" has the meaning set forth in §4(g) below.
1
"Indemnified
Party" has the meaning set forth in §8(d) below.
"Indemnifying
Party" has the meaning set forth in §8(d) below.
"Intellectual
Property" means all of the following in any jurisdiction throughout the
world: (a) all inventions (whether patentable or unpatentable and whether or not
reduced to practice), all improvements thereto, and all patents, patent
applications, and patent disclosures, together with all reissuances,
continuations, continuations-in-part, revisions, extensions, and reexaminations
thereof, (b) all trademarks, service marks, trade dress, logos, slogans, trade
names, corporate names, Internet domain names, and rights in telephone numbers,
together with all translations, adaptations, derivations, and combinations
thereof and including all goodwill associated therewith, and all applications,
registrations, and renewals in connection therewith, (c) all copyrightable
works, all copyrights, and all applications, registrations, and renewals in
connection therewith, (d) all mask works and all applications, registrations,
and renewals in connection therewith, (e) all trade secrets and confidential
business information (including ideas, research and development, know-how,
formulas, compositions, manufacturing and production processes and techniques,
technical data, designs, drawings, specifications, customer and supplier lists,
pricing and cost information, and business and marketing plans and proposals),
(f) all customer lists, referral lists, sales leads and business
development contacts (g) all computer software (including source code,
executable code, data, databases, and related documentation), (h) all
advertising and promotional materials, (i) all other proprietary rights, and (j)
all copies and tangible embodiments thereof (in whatever form or
medium).
"Knowledge"
means actual knowledge after reasonable investigation.
"Liability"
means any liability or obligation of whatever kind or nature (whether known or
unknown, whether asserted or unasserted, whether absolute or contingent, whether
accrued or unaccrued, whether liquidated or unliquidated, and whether due or to
become due), including any liability for Taxes.
"Lien"
means any mortgage, pledge, lien, encumbrance, charge, or other security
interest, (b) purchase money liens and liens securing rental payments under
capital lease arrangements, and (c) other liens arising in the Ordinary Course
of Business and not incurred in connection with the borrowing of
money.
"Material
Adverse Effect" or "Material
Adverse Change" means any effect or change that would be materially
adverse to the business, assets, condition (financial or otherwise), operating
results, operations, or business prospects of Nano, taken as a whole, or on the
ability of Sellers to consummate timely the transactions contemplated hereby,
including any adverse change, event, development, or effect arising from or
relating to (a) general business or economic conditions, including such
conditions related to the business of Nano, (b) national or international
political or social conditions, including the engagement by the United States or
the United Kingdom in hostilities, whether or not pursuant to the declaration of
a national emergency or war, or the occurrence of any military or terrorist
attack upon the United States or the United Kingdom, or any of their respective
territories, possessions, or diplomatic or consular offices or upon any military
installation, equipment or personnel of the United States or the United Kingdom,
(c) financial, banking, or securities markets (including any suspension of
trading in, or limitation on prices for, securities on the New York Stock
Exchange, American Stock Exchange, London Stock Exchange, the Alternative
Investment Market of the London Stock Exchange, or Nasdaq National Market for a
period in excess of three hours or any decline of either the Dow ▇▇▇▇▇
Industrial Average or the Standard & Poor's Index of 500 Industrial
Companies by an amount in excess of 30% measured from the close of business on
the date hereof), (d) changes in United States or United Kingdom generally
accepted accounting principles, (e) changes in law, rules, regulations, orders,
or other binding directives issued by any governmental entity, and (f) the
taking of any action contemplated by this Agreement and the other agreements
contemplated hereby.
2
"Nano"
has the meaning set forth in the preface above.
"Nano
Unit" means any membership unit of Nano.
"Ordinary
Course of Business" means the ordinary course of business consistent with
past custom and practice (including with respect to quantity and
frequency).
"Party"
has the meaning set forth in the preface above.
"Person"
means an individual, a partnership, a corporation, a limited liability company,
an association, a joint stock company, a trust, a joint venture, an
unincorporated organization, any other business entity, or a governmental entity
(or any department, agency, or political subdivision thereof).
"Securities
Act" means the United States Securities Act of 1933, as
amended.
"Securities
Exchange Act" means the United States Securities Exchange Act of 1934, as
amended.
"Seller"
has the meaning set forth in the preface above.
"Subsidiary"
means, with respect to any Person, any corporation, limited liability company,
partnership, association, or other business entity of which (i) if a
corporation, a majority of the total voting power of shares of stock entitled
(without regard to the occurrence of any contingency) to vote in the election of
directors, managers, or trustees thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other Subsidiaries
of that Person or a combination thereof or (ii) if a limited liability company,
partnership, association, or other business entity (other than a corporation), a
majority of partnership or other similar ownership interest thereof is at the
time owned or controlled, directly or indirectly, by that Person or one or more
Subsidiaries of that Person or a combination thereof and for this purpose, a
Person or Persons own a majority ownership interest in such a business entity
(other than a corporation) if such Person or Persons shall be allocated a
majority of such business entity's gains or losses or shall be or control any
managing director or general partner of such business entity (other than a
corporation). The term "Subsidiary" shall include all Subsidiaries of such
Subsidiary.
"Tax"
or "Taxes"
means any federal, state, local, or foreign income, gross receipts, license,
payroll, employment, excise, severance, stamp, occupation, premium, windfall
profits, environmental (including taxes under Code §59A), customs duties,
capital stock, franchise, profits, withholding, social security (or similar),
unemployment, disability, real property, personal property, sales, use,
transfer, registration, value added, alternative or add-on minimum, estimated,
or other tax of any kind whatsoever, including any interest, penalty, or
addition thereto, whether disputed or not and including any obligations to
indemnify or otherwise assume or succeed to the Tax liability of any other
Person.
"Tax
Return" means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
"Third
Party Claim" has the meaning set forth in §8(d) below.
3
2. Purchase and Sale of Nano
Units.
(a) Basic
Transaction. On and subject to the terms and conditions of
this Agreement, for the consideration specified in this §2, Buyer agrees to
purchase from each Seller, and each Seller agrees to sell to Buyer, the units of
Nano set forth opposite such Seller’s name on the signature page attached
hereto.
(b) Purchase Price. Buyer agrees
to pay to Sellers the following consideration
(i) Shares. At the
Closing, Buyer shall issue to the Sellers an aggregate of Four Million
(4,000,000) CTI Shares (the “Consideration Shares”) by delivery of certificates
representing the Consideration Shares within thirty (30) days following the
Closing Date. The Consideration Shares shall be allocated among Sellers in
proportion to the units of Nano exchanged as set forth on the signature
page.
(ii) Cash. The Buyer
shall pay the Sellers Five Hundred Thousand Dollars ($500,000) in ten (10) equal
monthly installments, commencing sixty (60) days after the Closing.
(c) Anti-dilution. In
the event that Nano issues Additional Nano Units, Buyer shall have the right to
retain its 25% ownership of Nano by providing additional consideration pari pasu
to Buyer’s unit-holding and in accordance with the terms received by the
recipients of the Additional Nano Units. The consideration to be paid
by Buyer shall be the same as that paid by the Recipients of the Additional Nano
Units.
(d) Closing. The
closing of the transactions contemplated by this Agreement (the "Closing")
shall take place at the offices of the Buyer, commencing at 9:00 a.m. local time
on the second business day following the satisfaction or waiver of all
conditions to the obligations of the Parties to consummate the transactions
contemplated hereby (other than conditions with respect to actions the
respective Parties will take at the Closing itself) or such other date as Buyer
and the Sellers may mutually determine (the "Closing
Date").
(e) Deliveries at
Closing. At the Closing, (i) Sellers will deliver to Buyer the
various certificates, instruments, and documents referred to in §7(a) below,
(ii) Buyer will deliver to Sellers the various certificates, instruments, and
documents referred to in §7(b) below, and (iii) each Seller will deliver to
Buyer certificates representing all of his or its Nano Units, endorsed in blank
or accompanied by duly executed assignment documents.
3. Representations and Warranties
Concerning Transaction.
(a) Sellers' Representations and
Warranties. Each Seller represents and warrants to Buyer that
the statements contained in this §3(a) are correct and complete as of the date
of this Agreement and will be correct and complete as of the Closing Date (as
though made then and as though the Closing Date were substituted for the date of
this Agreement throughout this §3(a)) with respect to himself or itself, except
as set forth in Annex I attached hereto.
(i) Authorization of Transaction.
Seller has full power and authority to execute and deliver this Agreement and to
perform his or her obligations hereunder. This Agreement constitutes the valid
and legally binding obligation of Seller, enforceable in accordance with its
terms and conditions. Seller need not give any notice to, make any filing with,
or obtain any authorization, consent, or approval of any government
or
4
|
|
governmental
agency in order to consummate the transactions contemplated by this
Agreement. The execution, delivery, and performance of this Agreement and
all other agreements contemplated hereby have been duly authorized by
Seller.
|
(ii) Non-contravention. Neither
the execution and the delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will (A) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge, or other
restriction of any government, governmental agency, or court to which Seller is
subject, (B) conflict with, result in a breach of, constitute a default under,
result in the acceleration of, create in any party the right to accelerate,
terminate, modify, or cancel, or require any notice under any agreement,
contract, lease, license, instrument, or other arrangement to which Seller is a
party or by which he is bound or to which any of his assets is subject, or (C)
result in the imposition or creation of a Lien upon or with respect to the Nano
Units.
(iii) Investment. Seller (A)
understands that the Consideration Shares have not been, and will not be,
registered under the Securities Act, or under any state securities laws, and are
being offered and sold in reliance upon federal and state exemptions for
transactions not involving any public offering, (B) is acquiring the
Consideration Shares solely for his or her own account for investment purposes,
and not with a view to the distribution thereof within the United States, (C) is
a sophisticated investor with knowledge and experience in business and financial
matters, (D) has received certain publicly available information concerning the
Buyer and has had the opportunity to obtain additional information as desired in
order to evaluate the merits and the risks inherent in holding the Consideration
Shares, and (E) is an Accredited Investor.
(iv) Nano Units. Seller holds of
record and owns beneficially the number of Nano Units set forth next to his or
her name in §4(b) of the Disclosure Schedule, free and clear of any restrictions
on transfer (other than any restrictions under the Securities Act and state
securities laws), Taxes, Liens, options, warrants, purchase rights, contracts,
commitments, equities, claims, and demands. Seller is not a party to any option,
warrant, purchase right, or other contract or commitment that could require
Seller to sell, transfer, or otherwise dispose of any ownership interest of Nano
(other than this Agreement). Seller is not a party to any voting trust, proxy,
or other agreement or understanding with respect to the voting of units of
Nano.
(b) Buyer's Representations and
Warranties. Buyer represents and warrants to Sellers that the statements
contained in this §3(b) are correct and complete as of the date of this
Agreement and will be correct and complete as of the Closing Date (as though
made then and as though the Closing Date were substituted for the date of this
Agreement throughout this §3(b)), except as set forth in Annex II attached
hereto.
(i) Organization of Buyer. Buyer
is a corporation duly organized, validly existing, and in good standing under
the laws of the jurisdiction of its incorporation.
(ii) Authorization of Transaction.
Buyer has full power and authority (including full corporate power and
authority) to execute and deliver this Agreement and to perform its obligations
hereunder. This Agreement constitutes the valid and legally binding obligation
of Buyer, enforceable in accordance with its terms and conditions. Buyer need
not give any notice to, make any filing with, or obtain any authorization,
consent, or approval of any government or governmental agency in order to
consummate the transactions contemplated by this Agreement. The execution,
delivery, and
5
|
|
performance
of this Agreement and all other agreements contemplated hereby have been
duly authorized by Buyer.
|
(iii) Non-contravention. Neither
the execution and the delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will (A) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge, or other
restriction of any government, governmental agency, or court to which Buyer is
subject or any provision of its charter, bylaws, or other governing documents or
(B) conflict with, result in a breach of, constitute a default under, result in
the acceleration of, create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice under any agreement, contract, lease,
license, instrument, or other arrangement to which Buyer is a party or by which
it is bound or to which any of its assets is subject.
(iv) Investment. Buyer is not
acquiring the Nano Units with a view to or for sale in connection with any
distribution thereof within the meaning of the Securities Act.
4. Representations and Warranties
Concerning Nano. Sellers represent and warrant to Buyer that
the statements contained in this §4 are correct and complete as of the date of
this Agreement and will be correct and complete as of the Closing Date (as
though made then and as though the Closing Date were substituted for the date of
this Agreement throughout this §4), except as set forth in the disclosure
schedule delivered by Sellers to Buyer on the date hereof and initialed by the
Parties (the "Disclosure
Schedule"). The Disclosure Schedule will be arranged in paragraphs
corresponding to the lettered and numbered paragraphs contained in this
§4.
(a) Organization, Qualification, and
Corporate Power. Nano is a limited liability company duly organized,
validly existing, and in good standing under the laws of the jurisdiction of its
formation. Nano is duly authorized to conduct business and is in good standing
under the laws of each jurisdiction where such qualification is required. Nano
has full company power and authority and all licenses, permits, and
authorizations necessary to carry on the businesses in which it is engaged and
to own and use the properties owned and used by it. §4(a) of the Disclosure
Schedule lists the members of Nano. Sellers have delivered to Buyer correct and
complete copies of the Articles of organization, operating agreement, minute
books (containing the records of meetings of the members, and any committees of
the members, and the membership record books of Nano (as amended to
date).
(b) Capitalization. The
entire authorized capital stock of Nano consists of 1,000 Nano Units, of which
100 Nano Units have been issued and outstanding. All of the
issued and outstanding Nano Units have been duly authorized, are validly issued,
fully paid, and non-assessable, and are held of record by the respective Sellers
as set forth in §4(b) of the Disclosure Schedule. There are no
outstanding or authorized options, warrants, purchase rights, subscription
rights, conversion rights, exchange rights, or other contracts or commitments
that could require Nano to issue, sell, or otherwise cause to become outstanding
any of its membership units. There are no outstanding or authorized stock
appreciation, phantom stock, profit participation, or similar rights with
respect to Nano. There are no voting trusts, proxies, or other agreements or
understandings with respect to the voting of the capital stock of
Nano.
(c) Non-contravention. Neither
the execution and the delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will (i) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge, or other
restriction of any government, governmental agency, or court to
6
which
Nano is subject or any provision of the charter or operating agreement of
Nano or (ii) conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
Nano is a party or by which it is bound or to which any of its assets is subject
(or result in the imposition of any Lien upon any of its assets). Nano does not
need to give any notice to, make any filing with, or obtain any authorization,
consent, or approval of any government or governmental agency in order for the
Parties to consummate the transactions contemplated by this
Agreement.
(d) Brokers' Fees. Nano does not
have any Liability or obligation to pay any fees or commissions to any broker,
finder, or agent with respect to the transactions contemplated by this
Agreement.
(e) Title to
Assets. Nano has good and marketable title to, or a valid
leasehold interest in, the properties and assets used by it, or shown on the
Most Recent Balance Sheet or acquired after the date thereof, free and clear of
all Liens, except for properties and assets disposed of in the Ordinary Course
of Business since the date of the Most Recent Balance Sheet.
(f) Financial
Statements. Attached hereto as Exhibit A are the following
financial statements (collectively the "Financial
Statements"): (i) unaudited consolidated and unaudited consolidating
balance sheets and statements of income, changes in stockholders' equity, and
cash flow as of and for the interim period ended May 3, 2009 (the "Most
Recent Fiscal Month End") for Nano. The Financial Statements (including
any notes thereto) present fairly the financial condition and results of
operations of Nano.
(g) Undisclosed Liabilities. Nano
does not have any Liability (and there is no Basis for any present or future
action, suit, proceeding, hearing, investigation, charge, complaint, claim, or
demand against any of them giving rise to any Liability), except for Liabilities
set forth on the face of the Most Recent Balance Sheet (or any notes
thereto).
(h) Legal Compliance. Nano, and
its predecessors and Affiliates have materially complied with all applicable
laws (including rules, regulations, codes, plans, injunctions, judgments,
orders, decrees, rulings, and charges there under and including the Foreign
Corrupt Practices Act, 15 U.S.C. 78dd-1 et seq.) of federal, state, local, and
foreign governments (and all agencies thereof), and no action, suit, proceeding,
hearing, investigation, charge, complaint, claim, demand, or notice has been
filed or commenced against any of them alleging any failure so to
comply.
(i) Intellectual
Property.
(i) Nano owns
and possesses or has the right to use pursuant to a valid and enforceable,
written license, sublicense, agreement, or permission all Intellectual Property
necessary for the operation of the business of Nano as presently conducted. Each
item of Intellectual Property owned by Nano immediately prior to the Closing
hereunder will be owned or available for use by Nano on identical terms and
conditions immediately subsequent to the Closing hereunder. Nano has taken all
necessary action to maintain and protect each item of Intellectual Property that
it owns or uses.
(ii) Nano has
not interfered with, infringed upon, misappropriated, or otherwise come into
conflict with any Intellectual Property rights of third parties, and none of
Sellers and the none of the directors and officers of Nano has ever received any
charge, complaint, claim, demand, or notice alleging any such
interference,
7
infringement,
misappropriation, or violation (including any claim that Nano must license or
refrain from using any Intellectual Property rights of any third party). To the
Knowledge of any of Sellers all members of Nano, no third party has interfered
with, infringed
upon, misappropriated, or otherwise come into conflict with any Intellectual
Property rights of Nano.
(iii) To the
Knowledge of any of Sellers based on agreements and understanding with the
members of Nano: (A) Nano has not in the past nor will interfere with, infringe
upon, misappropriate, or otherwise come into conflict with, any Intellectual
Property rights of third parties as a result of the continued operation of its
businesses as presently conducted; (B) there are no facts that indicate a
likelihood of any of the foregoing; and (C) no notices regarding any of the
foregoing (including, without limitation, any demands or offers to license any
Intellectual Property from any third party) have been received.
(j) Litigation. Neither
Nano nor, with respect to the business or operations of Nano, any of the Sellers
(i) are subject to any outstanding injunction, judgment, order, decree, ruling,
or charge or (ii) are a party or is threatened to be made a party to any action,
suit, proceeding, hearing, or investigation of, in, or before any court or
quasi-judicial or administrative agency of any federal, state, local, or foreign
jurisdiction or before any arbitrator.
(k) Disclosure. The
representations and warranties contained in this §4 do not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements and information contained in this §4 not
misleading.
5. Post-Closing
Covenants. In case at any time after the Closing any further
action is necessary to carry out the purposes of this Agreement, each of the
Parties will take such further action (including the execution and delivery of
such further instruments and documents) as any other Party reasonably may
request, all at the sole cost and expense of the requesting Party (unless the
requesting Party is entitled to indemnification therefore under §8 below).
Sellers acknowledge and agree that from and after the Closing Buyer will be
entitled to inspect all documents, books, records (including Tax records),
agreements, and financial data of any sort relating to Nano.
6. Remedies for Breaches of This
Agreement.
(a) Survival of Representations and
Warranties. All of the other representations and warranties of the
Parties contained in this Agreement shall survive the Closing and continue in
full force and effect until the expiration of any applicable statutes of
limitations plus sixty days.
(b) Indemnification Provisions for
Buyer's Benefit.
(i) In the
event any Seller breaches any of his or her representations, warranties, and
covenants contained herein and, provided that Buyer makes a written claim for
indemnification against any, then each Seller shall be obligated jointly and
severally to indemnify Buyer from and against the entirety of any Adverse
Consequences Buyer may suffer (including any Adverse Consequences Buyer may
suffer after the end of any applicable survival period) resulting from, arising
out of, relating to, in the nature of, or caused by the breach; provided, however, that
Sellers shall not have any obligation to indemnify Buyer from and against any
Adverse
8
Consequences
resulting from, arising out of, relating to, in the nature of, or caused by the
breach of any representation or warranty of Sellers until Buyer has suffered
Adverse Consequences by reason of all such breaches in excess of a $20,000
aggregate threshold.
(ii)
In the event any Seller breaches any of his or her covenants in §2(a) above or
any of his or her representations and warranties in §3(a) above, and provided
that Buyer makes a written claim for indemnification against such a Seller
pursuant to §8(i) below within the survival period, then such Seller shall
indemnify Buyer from and against the entirety of any Adverse Consequences Buyer
may suffer resulting from arising out of, relating to, in the nature of, or
caused by the breach.
(c) Indemnification Provisions for
Sellers' Benefit. In the event Buyer breaches any
of its representations, warranties, and covenants contained herein and, provided
that any Seller makes a written claim for indemnification against Buyer, then
Buyer shall indemnify each Seller from and against the entirety of any Adverse
Consequences suffered resulting from, arising out of, relating to, in the nature
of, or caused by the breach provided however, provided however that Buyers shall
not have any obligation to indemnify Sellers from and against any Adverse
Consequences resulting from, arising out of, relating to, in the nature of, or
caused by the breach of any representation or warranty of Buyers contained
herein until Seller has suffered Adverse Consequences by reason of all such
breaches in excess of a $20,000 aggregate threshold.
(d) Matters Involving Third
Parties.
(i) If any
third party shall notify any Party (the "Indemnified
Party") with respect to any matter (a "Third
Party Claim") which may give rise to a claim for indemnification against
any other Party (the "Indemnifying
Party") under this §6, then the Indemnified Party shall promptly notify
each Indemnifying Party thereof in writing; provided, however, that no
delay on the part of the Indemnified Party in notifying any Indemnifying Party
shall relieve the Indemnifying Party from any obligation hereunder unless (and
then solely to the extent) the Indemnifying Party thereby is
prejudiced.
(ii) Any
Indemnifying Party will have the right to defend the Indemnified Party against
the Third Party Claim with counsel of its choice reasonably satisfactory to the
Indemnified Party so long as (A) the Indemnifying Party notifies the Indemnified
Party in writing within 15 days after the Indemnified Party has given notice of
the Third Party Claim that the Indemnifying Party will indemnify the Indemnified
Party from and against the entirety of any Adverse Consequences the Indemnified
Party may suffer resulting from, arising out of, relating to, in the nature of,
or caused by the Third Party Claim, (B) the Indemnifying Party provides the
Indemnified Party with evidence reasonably acceptable to the Indemnified Party
that the Indemnifying Party will have the financial resources to defend against
the Third Party Claim and fulfill its indemnification obligations hereunder, (C)
the Third Party Claim involves only money damages and does not seek an
injunction or other equitable relief, (D) settlement of, or an adverse judgment
with respect to, the Third Party Claim is not, in the good faith judgment of the
Indemnified Party, likely to establish a precedential custom or practice
materially adverse to the continuing business interests or the reputation of the
Indemnified Party, and (E) the Indemnifying Party conducts the defense of the
Third Party Claim actively and diligently.
(iii) So long
as the Indemnifying Party is conducting the defense of the Third Party Claim in
accordance with §6(d)(ii) above, (A) the Indemnified Party may retain separate
co-counsel at its sole cost and expense and participate in the defense of
the
9
|
|
Third
Party Claim, (B) the Indemnified Party will not consent to the entry of
any judgment or enter into any settlement with respect to the Third Party
Claim without the prior written consent of the Indemnifying Party (not to
be withheld unreasonably), and (C) the Indemnifying Party will not consent
to the entry of any judgment or enter into any settlement with respect to
the Third Party Claim without the prior written consent of the Indemnified
Party (not to be withheld
unreasonably).
|
(iv) In the
event any of the conditions in §6(d)(ii) above is or becomes unsatisfied,
however, (A) the Indemnified Party may defend against, and consent to the entry
of any judgment or enter into any settlement with respect to, the Third Party
Claim in any manner it reasonably may deem appropriate (and the Indemnified
Party need not consult with, or obtain any consent from, any Indemnifying Party
in connection therewith), (B) the Indemnifying Parties will reimburse the
Indemnified Party promptly and periodically for the costs of defending against
the Third Party Claim (including reasonable attorneys' fees and expenses), and
(C) the Indemnifying Parties will remain responsible for any Adverse
Consequences the Indemnified Party may suffer resulting from, arising out of,
relating to, in the nature of, or caused by the Third Party Claim to the fullest
extent provided in this §6.
(e) Other Indemnification
Provisions. The foregoing indemnification provisions are in
addition to, and not in derogation of, any statutory, equitable, or common law
remedy any Party may have with respect to Nano or the transactions contemplated
by this Agreement. Each Seller hereby agrees that he, she, or it will not make
any claim for indemnification against Nano by reason of the fact that he, she,
or it was a director, officer, employee, or agent of any such entity or was
serving at the request of any such entity as a partner, trustee, director,
officer, employee, or agent of another entity (whether such claim is for
judgments, damages, penalties, fines, costs, amounts paid in settlement, losses,
expenses, or otherwise and whether such claim is pursuant to any statute,
charter document, bylaw, agreement, or otherwise) with respect to any action,
suit, proceeding, complaint, claim, or demand brought by Buyer against such
Seller (whether such action, suit, proceeding, complaint, claim, or demand is
pursuant to this Agreement, applicable law, or otherwise).
7. Termination.
(a) Termination of
Agreement. Certain of the Parties may terminate this Agreement
as provided below:
(i) Buyer and
Sellers may terminate this Agreement by mutual written consent at any time prior
to the Closing;
(ii) Buyer may
terminate this Agreement by giving written notice to Sellers at any time prior
to the Closing (A) in the event any of Sellers has breached any material
representation, warranty, or covenant contained in this Agreement in any
material respect, Buyer has notified Sellers of the breach, and the breach has
continued without cure for a period of 30 days after the notice of breach or (B)
if the Closing shall not have occurred on or before June 30, 2009, by reason of
the failure of any condition precedent; and
(iii) Sellers
may terminate this Agreement by giving written notice to Buyer at any time prior
to the Closing (A) in the event Buyer has breached any material representation,
warranty, or covenant contained in this Agreement in any material respect, any
Seller has notified Buyer of the breach, and the breach has continued without
cure for a period of 30 days after the notice of breach or (B) if the Closing
shall
10
not have occurred on or before June 30, 2009, by reason of the failure of any
condition precedent.
(b) Effect of Termination. If any
Party terminates this Agreement pursuant to §7(a) above, all rights and
obligations of the Partieshereunder shall terminate without any Liability of any
Party to any other Party (except for any Liability of any Party then in
breach).
8. Miscellaneous.
(a) Nature of Sellers'
Obligations.
(i) The
covenants of each Seller in §2(a) above concerning the sale of his or her Nano
Units to Buyer and the representations and warranties of each Seller in §3(a)
above concerning the transaction are individual, and not joint and several,
obligations. This means that the particular Seller making the representation,
warranty, or covenant shall be solely responsible to the extent provided in
§6(b)(ii) above for any Adverse Consequences Buyer may suffer as a result of any
breach thereof.
(ii) The
remainder of the representations, warranties, and covenants in this Agreement
are joint and several obligations. This means that each Seller shall be
responsible to the extent provided in §6(b)(i) and (iii) above for the entirety
of any Adverse Consequences Buyer may suffer as a result of any breach
thereof.
(b) No Third-Party
Beneficiaries. This Agreement shall not confer any rights or
remedies upon any Person other than the Parties and their respective successors
and permitted assigns.
(c) Entire
Agreement. This Agreement (including the documents referred to
herein) constitutes the entire agreement among the Parties and supersedes any
prior understandings, agreements, or representations by or among the Parties,
written or oral, to the extent they relate in any way to the subject matter
hereof.
(d) Succession and
Assignment. This Agreement shall be binding upon and inure to
the benefit of the Parties named herein and their respective successors and
permitted assigns. No Party may assign either this Agreement or any of his or
her rights, interests, or obligations hereunder without the prior written
approval of Buyer and Sellers; provided, however, that Buyer
may (i) assign any or all of its rights and interests hereunder to one or more
of its Affiliates and (ii) designate one or more of its Affiliates to perform
its obligations hereunder (in any or all of which cases Buyer nonetheless shall
remain responsible for the performance of all of its obligations
hereunder).
(e) Counterparts. This
Agreement may be executed in one or more counterparts (including by means of
facsimile), each of which shall be deemed an original but all of which together
shall constitute one and the same instrument.
(f) Headings. The
section headings contained in this Agreement are inserted for convenience only
and shall not affect in any way the meaning or interpretation of this
Agreement.
(g) Tag along
rights. If at any time one or more Sellers propose to sell
(“Proposed Sellers”), in one or a series of related transactions, a majority of
the outstanding Units (the “Majority Holding”) to any person, the Proposed
Sellers shall give written notice (“Proposed Sale Notice”) to the Buyer of such
intended sale at least ten business days prior to the date thereof. The Proposed
Sale Notice shall set out, to the extent not described in any accompanying
documents, the identity of the proposed buyer (“Proposed Buyer”), the purchase
price and other terms and conditions of payment, the proposed date of sale
(“Proposed Sale Date”) and the number of Units proposed to be purchased by the
Proposed Buyer (“Proposed Sale Units”).
11
Buyer
shall be entitled, by written notice given to the Proposed Sellers within five
business days of receipt of the Proposed Sale Notice, to be permitted to sell
all of its Units to the Proposed Buyer on the same terms and conditions as those
set out in the Proposed Sale Notice. If Buyer is not given the rights
accorded to it by the provisions of this clause, the Proposed Sellers shall be
restricted
from completing their sale and the Company shall be prohibited from registering
any transfer intended to carry such sale into effect.
(h) Drag along rights. In
the event that Sellers agree to sell a Majority Holding to a Proposed Buyer,
then Proposed Sellers shall have the right to require Buyer (“Non-Consenting
Members”) to accept an offer from the Proposed Buyer (within 10 days of receipt
of such offer) to buy from Non-Consenting Members all (but not some only) of
their Units for cash or in exchange for readily marketable securities at the
same total price per Unit as is then being sold by Proposed Seller to the
Proposed Buyer. In circumstances where the Proposed Buyer is offering
readily marketable securities (either solely or in conjunction with cash) to
Proposed Sellers for its Units in accordance with this clause, the Proposed
Sellers may require the Proposed Buyer to provide a certificate in writing
issued by a firm of independent accountants qualified to act as auditors
certifying that the value attributed to such readily marketable securities
offered in consideration for Non-Consenting Member’s Units in the subject
company has a fair value attributed to them.
(i) Notices. All notices,
requests, demands, claims, and other communications hereunder will be in
writing. Any notice, request, demand, claim, or other communication hereunder
shall be deemed duly given (i) when delivered personally to the recipient, (ii)
one business day after being sent to the recipient by reputable overnight
courier service (charges prepaid), (iii) one business day after being sent to
the recipient by facsimile transmission or electronic mail, or (iv) four
business days after being mailed to the recipient by certified
or registered mail, return receipt requested and postage prepaid, and
addressed to the intended recipient as set forth below:
If
to Sellers:
Nano
Therapies, LLC
▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇
#▇▇▇
▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
If to Buyer:
Cancer
Therapeutics, Inc.
Attn: Chief
Executive Officer
10757 So.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Telefax:
(▇▇▇) ▇▇▇-▇▇▇▇
Any Party
may change the address to which notices, requests, demands, claims, and other
communications hereunder are to be delivered by giving the other Parties notice
in the manner herein set forth.
(j) Governing Law. This Agreement shall
be governed by and construed in accordance with the domestic laws of the State
of Delaware, without giving effect to any choice or conflict of law provision or
rule (whether of the State of Delaware or any other jurisdiction)
that would cause the application of the laws of any jurisdiction other than the
State of Utah.
(k) Amendments and
Waivers. No
12
amendment
of any provision of this Agreement shall be valid unless the same shall be in
writing and signed by Buyer and Sellers. No waiver by any Party of any provision
of this Agreement or any default, misrepresentation, or breach of warranty or
covenant hereunder, whether intentional or not, shall be valid unless the same
shall be in writing and signed by the Party making such waiver nor shall such
waiver be deemed to extend to any prior or subsequent default,
misrepresentation, or breach of warranty or covenant hereunder or affect in any
way any rights arising by virtue of any prior or subsequent such default,
misrepresentation, or breach of warranty or covenant.
(l) Severability. Any
term or provision of this Agreement that is invalid or unenforceable in any
situation in any jurisdiction shall not affect the validity or enforceability of
the remaining terms and provisions hereof or the validity or enforceability of
the offending term or provision in any other situation or in any other
jurisdiction.
(m) Expenses. Each of
Buyers, Sellers, and Nano will bear his, her, or its own costs and expenses
(including legal fees and expenses) incurred in connection with this Agreement
and the transactions contemplated hereby.
(n) Construction. The
Parties have participated jointly in the negotiation and drafting of this
Agreement. In the event an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as if drafted jointly by the Parties
and no presumption or burden of proof shall arise favoring or disfavoring any
Party by virtue of the authorship of any of the provisions of this Agreement.
Any reference to any federal, state, local, or foreign statute or law shall be
deemed also to refer to all rules and regulations promulgated there under,
unless the context requires otherwise. The word "including" shall mean including
without limitation. The Parties intend that each representation, warranty, and
covenant contained herein shall have independent significance.
(o) Incorporation of
Exhibits. The Exhibits identified in this Agreement are
incorporated herein by reference and made a part hereof.
(p) Specific
Performance. Each Party acknowledges and agrees that the other
Parties would be damaged irreparably in the event any provision of this
Agreement is not performed in accordance with its specific terms or otherwise is
breached, so that a Party shall be entitled to injunctive relief to prevent
breaches of this Agreement and to enforce specifically this Agreement and the
terms and provisions hereof in addition to any other remedy to which such Party
may be entitled, at law or in equity.
(q) Submission to Jurisdiction.
Each of the Parties submits to the jurisdiction of any state or federal court
sitting in State of Delaware, in any action or proceeding arising out of or
relating to this Agreement and agrees that all claims in respect of the action
or proceeding may be heard and determined in any such court. Each of
the Parties waives any defense of inconvenient forum to the maintenance of any
action or proceeding so brought and waives any bond, surety, or other security
that might be required of any other Party with respect thereto. Any Party may
make service on any other Party by sending or delivering a copy of the process
(i) to the Party to be served at the address and in the manner provided for the
giving of notices in §8(i) above. Nothing in this §8(q), however, shall affect
the right of any Party to bring any action or proceeding arising out of or
relating to this Agreement in any other court or to serve legal process in any
other manner permitted by law or at equity. Each Party agrees that a final
judgment in any action or proceeding so brought shall be conclusive and may be
enforced by suit on the judgment or in any other manner provided by law or at
equity.
* * * *
*
13
IN
WITNESS WHEREOF, the Parties hereto have executed this Agreement on as of the
date first above written.
|
“Buyer”
|
“Sellers”
|
|
|
CANCER
THERAPEUTICS, INC.
|
(see
attached signature page)
|
|
|
▇▇▇▇▇
▇▇▇▇▇▇▇, CEO
|
14
SELLER’S
SIGNATURE PAGE
WITH
CANCER THERAPEUTICS, INC.
|
Keystone
Nano, Inc.
|
||
|
Number
of Units Held Prior to Closing
|
||
|
BY:
|
||
|
Managing
Member
|
||
|
Montenegro,
LLC
|
Number
of Units Held Prior to Closing
|
|
|
BY:
|
||
|
Managing
Member
|
||
15