MODIFICATION AGREEMENT AND RELEASE
MODIFICATION
AGREEMENT AND RELEASE
This
MODIFICATION AGREEMENT AND RELEASE,
is made
and entered into as of November 18, 2008 (this “Agreement”),
by
and between Neuro-Hitech, Inc., a Delaware corporation (the “Company”),
▇▇▇▇▇
▇▇▇▇▇▇▇ (the “▇▇▇▇▇▇▇”)
and TG
United Pharmaceuticals, Inc. (the “Manufacturer”).
The
Company, ▇▇▇▇▇▇▇ and the Manufacturer are each referred to herein as a “Party”
and collectively, as the “Parties.”
R
E C I T A L S
WHEREAS,
on June 6, 2008 the Company, pursuant to an Amended and Restated Stock Purchase
Agreement by and among the Company, a wholly-owned subsidiary of the Company
and
▇▇▇▇▇▇▇ (the “Purchase
Agreement”),
acquired the capital stock of MCR American Pharmaceuticals, Inc., a Florida
corporation (“MCR”),
and
AMBI Pharmaceuticals, Inc., a Florida corporation (“AMBI”).
WHEREAS,
▇▇▇▇▇▇▇ owns and controls the Manufacturer”, and concurrent with the closing
under the Purchase Agreement the Manufacturer and the Company entered into
a
Manufacturing and Distribution Agreement dated June 6, 2008 (the “Manufacturing
Agreement”).
WHEREASE,
concurrent with the closing under the Purchase Agreement, ▇▇▇▇▇▇▇ and the
Company entered into a Consulting Agreement dated as of June 6, 2008 (the
“Consulting
Agreement”),
an
Escrow Agreement dated as of June 6, 2008 (the “Escrow
Agreement”)
and a
Lock-Up Agreement dated as of June 6, 2008 (the “Lock-Up
Agreement”).
WHEREAS,
as part of the consideration paid to ▇▇▇▇▇▇▇ pursuant to the Purchase Agreement,
▇▇▇▇▇▇▇ was issued that certain Convertible Promissory Note in the principal
amount of $3,000,000 (the “Convertible
Note”)
and
that certain 7% Subordinated Promissory Note in the principal amount of
$3,000,000 (together with the Convertible Note, the “Notes”).
WHEREAS,
since the closing, disputes have arisen among the Parties, including claims
of
the Company in respect of the representations and warranties made by ▇▇▇▇▇▇▇
in
the Purchase Agreement and certain other matters.
WHEREAS,
the Parties wish to settle all differences between them with respect to the
Purchase Agreement by making certain amendments to the Purchase Agreement and
the Manufacturing Agreement.
NOW,
THEREFORE, in consideration of the mutual covenants and agreements herein
contained, the parties hereto hereby agree as follows:
ARTICLE
I
MODIFICATION
Section
1.1. Upon
and
subject to the terms and conditions set forth herein,
(a) Upon
issuance of the A Shares and B Shares (defined below), ▇▇▇▇▇▇▇
shall concurrently surrender to the Company the Notes, together with all
appropriate endorsements and instruments of transfer.
(b) Upon
issuance of the A Shares and B Shares, (i) notwithstanding anything to the
contrary in the Purchase Agreement, any and all “accounts payable” as that term
is understood under generally accepted accounting principles, due and owing
as
of June 6, 2008, by MCR and AMBI to ▇▇▇▇▇▇▇, the Manufacturer or their
affiliates, for goods or services received by MCR or AMBI prior to June 6,
2008,
are hereby agreed to be paid and satisfied, with the Company, MCR and AMBI
having no further liability in respect of such accounts payable and (ii) the
Company shall receive an inventory credit of $1,257,716.70 applicable for
inventory ordered from ▇▇▇▇▇▇▇, the Manufacturer or their affiliates after
November 1, 2008 (the “Inventory
Credit”).
The
Inventory Credit may be applied against invoices at a rate of up to $100,000
per
month. Any amount remaining under the Inventory Credit after 12 months may
be
applied to any future invoices for inventory.
(c) Concurrent
with the execution of this Agreement, the Company shall issue to ▇▇▇▇▇▇▇
1,500,000
shares of the Company’s newly-designated Series A Preferred Stock (the
“A
Shares”),
which
shares have the rights and privileges set forth in a Certificate of Designation
consistent in all material respects with the Certificate of Designation attached
as Exhibit
A
hereto
and containing such other provisions as are customary in the private placement
of convertible preferred stock. The A Shares shall be subject to the provisions
of the Lock-Up Agreement.
(d) Concurrent
with the execution of this Agreement, the Company shall issue to the
Manufacturer 1,397,463 shares of the Company’s newly-designated Series B
Preferred Stock (the “B
Shares”),
which
shares have the rights and privileges set forth in a Certificate of Designation
consistent in all material respects with the Certificate of Designation attached
as Exhibit
B
hereto
and containing such other provisions as are customary in the private placement
of convertible preferred stock. The B Shares shall be subject to the provisions
of the Lock-Up Agreement.
(e) Concurrent
with the execution of this Agreement, counsel to the Company shall render to
▇▇▇▇▇▇▇ and the Manufacturer a legal opinion substantially in the form attached
hereto as Exhibit
C.
Section
1.2 Additional
Agreements of ▇▇▇▇▇▇▇ and the Company.
(a) The
Manufacturing Agreement shall be amended as follows:
(i) The
provisions of Section 3.3 of the Manufacturing Agreement shall be null, void
and
of no further force and effect.
The
definition of “Product” as used in Section 2.1 is amended to read as
follows:
“Products”
shall mean the branded products set forth on Attachment A hereto and all
corresponding generics of the Products.
(ii) The
provisions of Section 2.3 of the Manufacturing Agreement shall be null, void
and
of no further force and effect, it being agreed that Manufacturer shall be
under
no obligation to discount any product sold to Distributor.
(iii) All
invoices delivered by Manufacturer prior to November 1, 2008 shall be deemed
to
have been withdrawn and shall not be due and owing. All invoices delivered
by
Manufacturer from and after November 1, 2008 shall represent valid obligations
of the Company, due and payable in accordance with the Manufacturing Agreement.
Commencing on December 1, 2008, the Company further covenants and agrees (i)
that it shall make minimum monthly payments of $100,000 to the Manufacturer
(exclusive of the Inventory Credit) and (ii) that the aggregate amount of such
minimum monthly payments and the aggregate amount due from the Company to the
Manufacturer shall be “trued-up” no less frequently than quarterly, with the
Company paying the Manufacturer any additional amount due within 45 days after
the end of each calendar quarter and any excess payments being applied by the
Manufacturer to future orders.
2
(b) The
Parties agree as follows with respect to the composition of the Company’s Board
of Directors (the “Board”):
(i) concurrently
with the execution and delivery of this Agreement, ▇▇▇▇▇▇▇ shall be appointed
to
the Board and appointed to be a Vice Chairman of the Company (such position
to
constitute an officer of the Company);
(ii) concurrently
with the execution and delivery of this Agreement, the Board shall consist
of
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ and two other designees of ▇▇▇▇▇▇▇ in accordance with
Exhibit
A;
and
(iii) at
such
time as a majority of the independent directors determines that, in connection
with the Company completing a listing or other action which requires that the
Board be composed of a majority of independent directors, ▇▇▇▇▇▇▇, in appointing
such additional directors, shall make reasonable efforts to cause the Board to
be composed of a majority of independent directors (“independent” for the
purposes of is subsection having the meaning given under the Nasdaq listing
rules).
(c) The
Consulting Agreement is hereby terminated and of no further force and effect;
provided, however, that ▇▇▇▇▇▇▇ shall continue to be reimbursed for all
reasonable expenses incurred by him in connection with the performance by
▇▇▇▇▇▇▇ of services for the benefit of the company of the sort described in
Section 1 of the Consulting Agreement.
(d) The
Lock-Up Agreement is hereby amended by deleting from Section 1(a) thereof the
words “continuing for a period of twelve months from the Closing” and replacing
such words with “until March 31, 2009.”
(e) Any
remaining and unperformed obligations under the Purchase Agreement are hereby
terminated, except for Sections
6(a)-(e), 6(h), 8(a), 8(b)(ii)-(vi), 8(e), 8(f), 8(g), 9 and 11 of the Purchase
Agreement, which shall continue in effect in accordance with their
terms.
(f) The
Company shall, prior to any proposed issuance by the Company of any equity
securities, securities that are convertible into or exchangeable for equity
securities or any other rights to acquire equity securities (“New
Securities”),
offer
to ▇▇▇▇▇▇▇ by written notice the right, for a period of ten (10) days, to
purchase for cash at an amount equal to the price or other consideration for
which such New Securities are to be issued, and on other terms not less
favorable than the terms on which any third party purchaser shall be offered
such New Securities, a portion of such New Securities equal to a fraction,
the
numerator of which shall be the number of ▇▇▇▇▇▇▇’▇ Securities and the
denominator of which shall be the number of Total Securities immediately prior
to the issuance of the New Securities (such fraction being referred to as
▇▇▇▇▇▇▇’▇ “Pro
Rata Fraction”).
3
(i) If
New
Securities are to be issued and sold by the Company for services, property,
or
other non-cash consideration, ▇▇▇▇▇▇▇ will be allowed to participate in such
issue and sale by substituting cash in the amount of the fair market value,
per
share, of such non-cash consideration. The determination of the fair market
value of the such non-cash consideration shall be made by the Company and
▇▇▇▇▇▇▇, or if the Company and ▇▇▇▇▇▇▇ do not reach agreement as to such fair
market value within ten business days, by a third person selected by agreement
of the Company and ▇▇▇▇▇▇▇. If the Company and ▇▇▇▇▇▇▇ do not reach agreement
as
to such third party within ten business days, then the determination shall
be
made by an independent appraiser selected by a majority of the Board of
Directors. If a third party’s determination is required, the time periods
provided for the closing of ▇▇▇▇▇▇▇’▇ Pro Rata Fractions shall be extended for
such period of time as is reasonably necessary to complete such
determination.
(ii) Notwithstanding
paragraph (e) above, ▇▇▇▇▇▇▇’▇ rights pursuant to this Section 1.2(f) shall not
apply to (A) Securities issued or issuable on a pro rata basis to all of the
Company’s shareholders in connection with any stock split, dividend, reverse
stock split or recapitalization, (B) Common Stock issued or issuable (and/or
options, warrants or other Common Stock rights issued pursuant to such options,
warrants or other rights) to employees, officers or directors of, or consultants
or advisors to the Company or any subsidiary, pursuant to stock purchase or
stock plans or other arrangements that have previously been approved by the
Board of Directors or subsequently are approved by the Board of Directors,
including a majority of the directors appointed by the holder of the Series
A
Preferred Stock (the “Preferred
Directors”),
(C)
the issuance of Common Stock (adjusted appropriately for stock dividends,
splits, combinations and similar transactions) upon the exercise of warrants
outstanding as of the date of this Agreement, (D) any Securities offered to
the
public pursuant to a registration statement filed under the Securities Act
of
1933, (E) any Securities issued upon conversion of the Series A Preferred,
(F)
any Common Stock and/or options, warrants or other purchase rights (and the
Common Stock issued pursuant to such options, warrants or other rights) issued
in connection with commercial credit arrangements, equipment financings or
similar transactions that have previously been approved by the Board of
Directors or subsequently are approved by the Board of Directors, including
a
majority of the Preferred Directors, (G) any Common Stock and/or options,
warrants or other Common Stock purchase rights (and the shares of Common Stock
issued pursuant to such options, warrants or other rights) issued as
consideration (and not for financing purposes) in connection with (x) bona
fide
acquisitions of businesses, products or technology or (y) strategic transactions
involving the Company and other entities (including joint ventures, marketing
or
distributions arrangements, and technology transfer or development
arrangements), in either case the terms of which have previously been approved
by the Board of Directors or subsequently are approved by the Board of
Directors, including a majority of the Preferred Directors.
(iii) The
Company’s written notice to ▇▇▇▇▇▇▇ described in paragraph (e) above shall
describe the New Securities proposed to be issued by the Company and specify
the
number, price, payment and other principal terms. ▇▇▇▇▇▇▇ may purchase all
or
any portion of his Pro Rata Fraction of the New Securities by accepting the
Company’s offer by written notice thereof given by it to the Company prior to
the expiration of the aforesaid ten (10) day period, in which event the Company
shall promptly sell and ▇▇▇▇▇▇▇ shall buy, upon the terms specified, the number
of New Securities agreed to be purchased by ▇▇▇▇▇▇▇.
4
(iv) The
Company shall be free at any time prior to 90 days after the date of its notice
of offer to ▇▇▇▇▇▇▇, to offer and sell to any third party or parties the
remainder of such New Securities proposed to be issued by the Company (including
but not limited to the New Securities not agreed by ▇▇▇▇▇▇▇ to be purchased
by
him), at a price and on payment terms no more favorable to the third party
offeree or offerees than those specified in such notice of offer to ▇▇▇▇▇▇▇.
However, if such third party sale or sales are not consummated within such
90-day period, the Company shall not sell such New Securities that have not
been
purchased within such period without again complying with this Section
1.2(f).
(v) For
the
purposes of this Section 1.2(f), the term “▇▇▇▇▇▇▇
Securities”
shall
mean all outstanding shares of Common Stock at the date of determination that
are held by ▇▇▇▇▇▇▇ and his affiliates together with all shares of Common Stock
issuable, directly or indirectly, pursuant to all outstanding securities
convertible into, or exchangeable for, shares of Common Stock, in each case
held
by ▇▇▇▇▇▇▇ and his affiliates, and the term “Total
Securities”
shall
mean, as of the date of determination, all shares of Common Stock then
outstanding at the date of determination together with all shares of Common
Stock issuable, directly or indirectly, pursuant to all outstanding securities
convertible into, or exchangeable for, shares of Common Stock.
(g) The
Company shall cause to be presented to the Company’s stockholders at its next
annual or special meeting of stockholders, to be held in all events by no later
than June 30, 2009, the following proposed amendments to the Company’s
certificate of incorporation: (i) an amendment increasing the number of
authorized but unissued shares of Common Stock to be such number of shares
as
will be sufficient to permit the conversion in full of the Series A Preferred
and Series B Preferred, (ii) an amendment requiring the consent of 66⅔ percent
of the outstanding Common Stock to approve a transaction in which the Company
or
all or substantially all of its assets are acquired and the holders of the
Common Stock receive less than $4.5 million of consideration at closing of
such
transaction (net of any contingencies and not subject to any escrow), (iii)
an
amendment providing that the holders of the Common Stock and the holders of
the
Series A Preferred shall vote as a single class on the increase or decrease
of
the authorized Common Stock and (iv) an amendment deleting the provision for
the
authorization of Class A Common Stock. The Company shall take all such actions
as shall be reasonably necessary to enable such amendments to be presented
the
stockholders for adoption, including timely filed a proxy statement with the
Securities and Exchange Commission
(h) The
Company shall enter into its standard form Indemnification Agreement with
▇▇▇▇▇▇▇ and the additional directors designated pursuant to Section
1.2(b)(ii).
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
Section
2.1. Representations
and Warranties of the Company.
The
Company hereby represents and warrants to ▇▇▇▇▇▇▇ and the Manufacturer, as
of
the date hereof, as follows:
(a) Organization,
Good Standing and Power.
The
Company is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware. The Company has the 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 the Company, enforceable in accordance with its
terms and conditions.
5
(b) Authorization;
Enforcement.
The
Company has the requisite power and authority to enter into and perform this
Agreement and transactions contemplated herein, except that he Company does
not
have sufficient authorized Common Stock to permit the full coversionof the
Shares. The execution and delivery of this Agreement by the Company has been
duly and validly authorized by all necessary corporate action, and no further
corporate consent or authorization is required for the Company to effect the
transactions contemplated hereby, except such corporate and stockholder action
as is necessary to provide sufficient shares of common stock to permit the
full
conversion of the Shares. No vote of the holders of any class or series of
capital stock or other securities of the Company is necessary to approve the
transactions contemplated hereby (other than to provide sufficient shares of
Common Stock to permit the full conversion of the Shares).
(c) Issuance
of Shares.
The
Shares have been duly authorized by all necessary corporate action and, when
issued in accordance with the terms hereof, shall be validly issued and
outstanding, fully paid and non-assessable. Assuming the accuracy of the
representations of ▇▇▇▇▇▇▇ in Section 2.2(b) of this Agreement, the Shares
will
be issued in compliance with all applicable federal and state securities laws.
(d) No
Conflicts.
The
execution, delivery and performance of this Agreement by the Company and the
consummation by the Company of the transactions contemplated hereby does not
and
will not (i) violate any provision of the Company’s Certificate of Incorporation
or Bylaws, each as amended to date, (ii) conflict with, or constitute a default
(or an event which with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment, acceleration
or
cancellation of, any agreement, mortgage, deed of trust, indenture, note, bond,
license, lease agreement, instrument or obligation to which the Company is
a
party or by which any of the Company’s properties or assets are bound, or (iii)
result in a violation of any federal, state, local or foreign statute, rule,
regulation, order, judgment or decree (including federal and state securities
laws and regulations) applicable to the Company or by which any property or
asset of the Company is bound or affected, except, in all cases, other than
violations pursuant to clauses (i) or (iii) (with respect to federal and state
securities laws) above, except, for such conflicts, defaults, terminations,
amendments, acceleration, cancellations and violations as would not,
individually or in the aggregate, have a material adverse effect on the
Company.
(e) Capitalization.
The
authorized capital of the Company will consist, immediately prior to the
issuance of the Shares (the “Closing”),
of:
(i) 44,999,990
shares of common stock, $0.001 par value per share (the “Common Stock”),
31,520,303 shares of which are issued and outstanding immediately prior to
the
Closing. All of the outstanding shares of Common Stock have been duly authorized
and are fully paid and nonassessable. There are insufficient shares of common
stock currently authorized to permit the full conversion of the Shares.
(ii) 5,000,000
shares of Preferred Stock, of which 1,500,000 shares have been designated Series
A Preferred Stock and 1,397,463 shares have been designated Series B Preferred
Stock, none of which are issued and outstanding immediately prior to the
Closing.
(iii) The
Company has reserved 2,350,000 shares of Common Stock for issuance to officers,
directors, employees and consultants of the Company pursuant to its amended
and
restated 2006 Incentive Stock Plan (the “Company
Stock Plan”)
and
400,000 shares of Common Stock for issuance to directors of the Company pursuant
to its 2006 Non-Employee Directors Stock Option Plan (the “Director
Stock Plan”).
Of
such reserved shares of Common Stock, options to purchase 982,330 shares of
Common Stock have been granted and are currently outstanding and stock
appreciation rights for 365,000 shares of Common Stock have been granted and
are
currently outstanding. Of the 1,767,670 shares of Common Stock that remain
available for grant, 1,352,670 shares of Common Stock remain available for
grant
pursuant to the Company Stock Plan and 50,000 shares of Common Stock remain
available for grant pursuant to the Director Stock Plan.
6
(iv) Schedule
2.1(e) hereto sets forth, immediately following the Closing, the number of
shares of the following: (A) issued and outstanding Common Stock, including,
with respect to restricted Common Stock, vesting schedule; (B) issued stock
options, including vesting schedule and exercise price; (C) shares not yet
issued but reserved for issuance pursuant to the Company Stock Plan or the
Director Stock Plan; (D) each series of Preferred Stock; and (E) warrants or
stock purchase rights, if any. Except for (x) the conversion privileges of
the
Shares to be issued under this Agreement, (y) the pre-emptive rights to be
provided to ▇▇▇▇▇▇▇ pursuant hereto, and (z) the securities and rights described
in Schedule 2.1(e) hereto, there are no outstanding options, warrants, rights
(including conversion or preemptive rights and rights of first refusal or
similar rights) or agreements, orally or in writing, to purchase or acquire
from
the Company any shares of Common Stock or Series A Preferred Stock, or any
securities convertible into or exchangeable for shares of Common Stock or Series
A Preferred Stock.
(f) Certificate
of Incorporation and Bylaws.
The
copies of the Company’s Certificate of Incorporation, as amended, and Bylaws, as
amended, that are filed as exhibits to the Company’s Forms 8-K dated January 23,
2006, January 30, 2006 and August 11, 2006, are complete and correct copies
thereof as in effect on the date hereof, with no subsequent amendments thereto
having been adopted or approved.
(g) SEC
Filings.
The
Company has filed or furnished all forms, reports and other documents required
to be filed or furnished by it under the Securities Act or the Securities
Exchange Act, as the case may be, since January 1, 2006 (collectively, the
“SEC
Filings”). Each of the SEC Filings (i) as of its date, complied in all material
respects with the requirements of the Securities Act or the Securities Exchange
Act, as the case may be, and (ii) did not, at the time it was filed, contain
any
untrue statement of a material fact or omit to state a material fact required
to
be stated therein or necessary in order to make the statements made therein,
in
the light of the circumstances under which they were made, not
misleading.
Section
2.2. Representations
and Warranties of ▇▇▇▇▇▇▇ and the Manufacturer.
▇▇▇▇▇▇▇
and the Manufacturer hereby represent and warrant to the Company, as of the
date
hereof, as follows:
(a) Authorization
and Power.
Each of
▇▇▇▇▇▇▇ and the Manufacturer has the full power and authority to execute and
deliver and consummate this Agreement and to perform his or its obligations
hereunder. This Agreement constitutes the valid and legally binding obligation
of ▇▇▇▇▇▇▇ and the Manufacturer, enforceable in accordance with its terms and
conditions.
(b) Investment.
Each of
▇▇▇▇▇▇▇ and the Manufacturer (A) understands that the Shares have not been,
and
will not be, registered under the Securities Act or under any state securities
laws, and are being offered and issued in reliance upon federal and state
exemptions for transactions not involving any public offering, (B) is acquiring
the Shares solely for his or its own account for investment purposes, and not
with a view to the distribution thereof, (C) is a sophisticated investor with
knowledge and experience in business and financial matters, (D) has received
certain information concerning the Company and has had the opportunity to obtain
additional information as desired in order to evaluate the merits and the risks
inherent in holding the Shares, (E) is able to bear the economic risk and lack
of liquidity inherent in holding the Shares, and (F) is an accredited investor,
as defined in Regulation D under the Securities Act of 1933, as
amended.
7
(c) No
Tax
Representations.
Each of
▇▇▇▇▇▇▇ and the Manufacturer understands the tax consequences of the
transactions contemplated by this Agreement. Each of ▇▇▇▇▇▇▇ and the
Manufacturer confirms that he or it is not relying on any statements or
representations of the Company or any of its agents with respect to the tax
effect of the transactions contemplated by this Agreement. Each of ▇▇▇▇▇▇▇
and
the Manufacturer has had the opportunity to consult with his or its own legal,
accounting, tax, investment and other advisors, who are unaffiliated with the
Company or any affiliate of the Company, with respect to the tax treatment
of
the transactions contemplated by this Agreement. Each of ▇▇▇▇▇▇▇ and the
Manufacturer also acknowledges that he or it is solely responsible for any
of
his or its own tax liability that may arise as a result of the transactions
contemplated by this Agreement.
ARTICLE
III
RELEASES
3.1 Mutual
Release.
Except
as otherwise limited by the final sentence of this section (the “Reserved
Claims”):
(a) each
Party hereby releases and forever discharges the other Parties and their
directors, officers, stockholders, employees, affiliates, successors and assigns
and each of them, separately and collectively, from any and all existing claims,
demands, causes of actions, obligations, damages and liabilities of any nature
whatsoever, known or unknown, that each ever had, now has, or may have had
against any of the other Parties that relate to or arise out of the Consulting
Agreement and the Escrow Agreement, and
(b) each
Party hereby releases and forever discharges the other Parties and their
directors, officers, stockholders, employees, affiliates, successors and assigns
and each of them, separately and collectively, from any and all existing claims,
demands, causes of actions, obligations, damages and liabilities of any nature
whatsoever, known or unknown, that each ever had, now has, or may have had
against any of the other Parties that relate to or arise out of the Purchase
Agreement and any certificate or other instrument delivered thereunder, except
as may have arisen, or may hereafter arise from, the matters described in
Section 1.2(e) of this Agreement
((a)
and
(b) being, collectively, the “Released
Claims”).
Notwithstanding anything to the contrary in this Agreement, such releases shall
not
release
the Parties from the representations, warranties and covenants made hereunder
and their respective obligations under this Agreement and the Manufacturing
Agreement.
3.2 Known
and Unknown Claims.
Except
for the Reserved Claims, the mutual releases in this Agreement extend to
Released Claims that the Parties do not know or suspect to exist in their favor,
which, if known by them, would have materially affected their decision to enter
into the Agreement. The Parties expressly waive and relinquish any such right
or
benefit, whether by statute or legal principle with similar effect. In
connection with such waiver and relinquishment, the Parties acknowledge that
they are aware that, after executing this Agreement, they or their attorneys
or
agents may discover Released Claims or facts in addition to, or different from,
those which they now know or believe to exist with respect to the subject matter
of this Agreement or the Parties hereto, but that it is the Parties’ intention
hereby to fully, finally and forever settle and release all of the Released
Claims, whether known or unknown, suspect or unsuspected, which now exist,
may
exist or heretofore may have existed between them. In furtherance of this
intention, the releases herein given shall be, and remain in effect, as, full
and complete releases notwithstanding discovery or existence of any such
additional or different claim or fact.
8
ARTICLE
IV
MISCELLANEOUS
Section
4.1. Fees
and Expenses.
Each of
the Parties will bear his or its own costs and expenses incurred in connection
with this Agreement and the transactions contemplated herein; provided, however,
that the Company shall reimburse ▇▇▇▇▇▇▇ and the Manufacturer, simultaneously
with the execution and delivery of this Agreement, for their reasonable
attorneys’ fees incurred in connection with the negotiation of this Agreement
(and the Exhibits hereto) and matters arising since the closing of the
transactions contemplated by the Purchase Agreement, all in an amount not to
exceed $20,000.
Section
4.2 Tax
Cooperation.
It is
expressly agreed by the Parties that this transaction represents a reduction
in
the consideration paid by the Company to ▇▇▇▇▇▇▇ pursuant to the Purchase
Agreement. The Parties agree to cooperate fully, as and to the extent reasonably
requested by the other Party, in connection with the filing of any tax returns
related to the matters described herein, and agree not to take any position
inconsistent with respect to the characterization of the modification of the
Purchase Agreement in any tax return, unless required by applicable
laws.
Section
4.3. 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, among the Parties
with respect to the subject matter of this Agreement, including the
Purchase Agreement, the Notes, the Consulting Agreement
and the
Manufacturing Agreement.
Section
4.4. 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 when personally delivered, one business day after
it
is deposited with a nationally recognized courier for overnight delivery or
two
business days after it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set
forth
below:
| If to ▇▇▇▇▇▇▇ or the |
▇▇▇▇▇
▇▇▇▇▇▇▇
|
| Manufacturer: |
▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇
|
▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇
| With a copy to: |
▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇, LLP
|
▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
| If to the Company: |
▇▇▇
▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
Chief Executive Officer
9
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.
Section
4.5. Amendments
and Waivers.
No
amendment of any provision of this Agreement shall be valid unless the same
shall be in writing and signed by the Parties. No waiver by any Party of any
default, misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall 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
occurrence.
Section
4.6. 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.
Section
4.7. Successors
and Assigns.
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 its rights, interests, or
obligations hereunder without the prior written approval of the other; provided,
however, that the Company may (i) assign any or all of its rights and interests
hereunder to one or more of its affiliates, or (ii) designate one or more of
its
affiliates to perform its obligations hereunder (in any or all of which cases
the Company nonetheless shall remain responsible for the performance of all
of
its obligations hereunder).
Section
4.8. No
Third Party Beneficiaries.
This
Agreement shall not confer any rights or remedies upon any individual,
partnership, corporation, limited liability company, association, joint stock
company, trust, joint venture, unincorporated organization, governmental entity
(or any department, agency, or political subdivision thereof) or any other
entity, other than the Parties, MCR, AMBI their affiliates and their respective
successors and permitted assigns.
Section
4.9. 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 Delaware.
Section
4.10. Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed an original but all of which together will constitute one and the same
instrument.
Section
4.11. 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.
10
Section
4.12. Certain
Interpretive Matters and Definitions.
(i) Unless
the context of this Agreement otherwise requires, (A) the terms “hereof,”
“herein,” “hereby” and derivative or similar words refer to this entire
Agreement and not to any particular provision of this Agreement; and (B) the
term “Section” without any reference to a specified document refer to the
specified Section of this Agreement.
(ii) The
words
“including,” “include” and “includes” are not exclusive and shall be deemed to
be followed by the words “without limitation”; if exclusion is intended, the
word “comprising” is used instead.
(iii) The
word
“or” shall be construed to mean “and/or” unless the context clearly prohibits
that construction.
(iv) Any
reference to any federal, state, local, provincial or foreign statute or law,
including any one or more sections thereof, shall be deemed also to refer to,
unless the context requires otherwise, all rules and regulations promulgated
thereunder, including Treasury Regulations.
(v) Any
representation or warranty contained herein as to the enforceability of a
contract, including this Agreement, shall be subject to the effect of any
bankruptcy, insolvency, reorganization, moratorium or other similar law
affecting the enforcement of creditors’ rights generally and to general
equitable principles (regardless of whether such enforceability is considered
in
a proceeding in equity or at law).
(vi) The
Parties have participated jointly in the negotiation and drafting of this
Agreement. If 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 hereof.
[Signature
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11
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date
first above written.
| NEURO-HITECH, INC. | ||
| By: | /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ | |
| /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ | ||
| ▇▇▇▇▇ ▇▇▇▇▇▇▇ | ||
| TG UNITED PHARMACEUTICALS, INC. | ||
| By: | /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ | |
MCR
American Pharmaceuticals, Inc. and AMBI Pharmaceuticals, Inc. hereby acknowledge
and agree to Section 1.1 of the foregoing Agreement.
| MCR AMERICAN PHARMACEUTICALS, INC. | ||
| By: | /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ | |
| AMBI PHARMACEUTICALS, INC. | ||
| By: | /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ | |