UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 7, 2017
ONCBIOMUNE PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
Nevada | 000-52218 | 20-2590810 | ||
(State
or other jurisdiction
of incorporation) |
(Commission File No.) |
(IRS
Employer
Identification No.) |
11441 Industriplex Blvd, Suite 190. Baton Rouge, LA |
70809 | |
(Address of principal executive offices) | (Zip Code) |
(225) 227-2384
Registrant’s telephone number, including area code
Former name or former address, if changed since last report:
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
[ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
[ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
[ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
[ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
ITE M 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
The Contribution Agreement
In furtherance of the previously disclosed term sheet, OncBioMune Pharmaceuticals, Inc. (the “ Company ”) completed the acquisition of 100% of the issued and outstanding capital stock of Vitel Laboratorios, S.A. de C.V., a Mexican variable stock corporation (“ Vitel ”) from its shareholders Manuel Cosme Odabachian and Carlos Fernando Alaman Volnie (collectively, the “Vitel Stockholders”) on March 10, 2017 (the “Closing Date”) pursuant to the terms and conditions of a Contribution Agreement to the Property of Trust F/2868 entered into among the Company and the Vitel Stockholders on the Closing Date (the “Contribution Agreement”). Vitel is a revenue-stage Mexico-based pharmaceutical company that develops and commercializes specialty drugs in Mexico and other Latin American countries.
Pursuant to the terms of the Contribution Agreement the Company agreed to issue 61,158,013 shares of its unregistered common stock, par value $0.0001 per share (the “Common Stock”) and 5,000,000 shares of Series B preferred stock (the “Series B Preferred”) to Banco Actinver, S.A., in its capacity as Trustee (the “Trustee”) of the Irrevocable Management Trust Agreement Trust No. 2868 (the “Trust Agreement”) for the benefit of the Vitel Stockholders in exchange for 100% of the issued and outstanding capital stock of Vitel (the “Vitel Shares”). The Common Stock and Series B Preferred will be held by Trustee for the benefit of the Vitel Stockholders as provided for in the Trust Agreement and 98% of the Vitel Shares will be held by the Trustee for the benefit of the Company as provided for in the Trust Agreement and 2% of the Vitel Shares will be transferred to OBMP. Vitel became a wholly owned subsidiary of the Company as of the Closing Date. In addition, the Company agreed to issue 2,892,000 shares of Series B Preferred to Jonathan F. Head, Ph. D, our Chief Executive Officer and a member of the Board of Directors of the Company (the “Board of Directors”) as provided for in the Contribution Agreement.
To induce the Vitel Stockholders to enter into the Contribution Agreement and as a condition to close the transactions set forth in that agreement, the Company, the Vitel Stockholders, Dr. Head and Andrew A. Kucharchuk, the Company’s President, Chief Financial Officer and a Director also entered into the following agreements as of the Closing Date or perform the following actions (i) a Stockholder’s Agreement among the Company, Dr. Head, Mr. Kucharchuk, Mr. Cosme and Mr. Alaman dated as of the Closing Date (the “Stockholders’ Agreement”); (ii) the Trust Agreement; (iii) the Company, Vitel and the Vitel Stockholders entered into employment agreements with Messrs. Cosme and Alaman described under Item 5.02 below; (iv) the Company and Dr. Head and Mr. Kucharchuk entered into amendments to the employment agreements with, and stock option awards to, Dr. Head and Mr. Kucharchuk described under Item 5.02 below; (v) the Company, Dr. Head, Mr. Kucharchuk and the Vitel Stockholders agreed to consent to an amendment to the Company’s Articles of Incorporation and bylaws substantially in the form of the documents attached to the Stockholders’ Agreement as Exhibit E; (vi) to elect Mr. Cosme, Mr. Alaman, Dr. Head and Mr. Kucharchuk as directors of Vitel and such directors to elect Mr. Cosme, Mr. Alaman, Dr. Head and Mr. Kucharchuk as officers of Vitel; and Vitel Asesores, S.C. agreed to change its name to a name not containing the word “Vitel”.
In addition, Mr. Cosme and Mr. Alaman agreed to forgive all stockholder loans and related party debt to Vitel and its shareholders and their Affiliates; Vitel will have an amount of working capital of $10,000.00 (ten thousand Dollars 00/100) as of the Closing Date; each of Vitel and OBMP shall have a total indebtedness in their balance sheet as of the date hereof in an amount of no greater than $450,000.00 (four hundred and fifty thousand Dollars 00/100) as set forth in the schedules of assets and liabilities of Vitel and the financial statements of OBMP, attached as Schedule 3.1(k) and Schedule 3.2(l), respectively to the Contribution Agreement; and Vitel Asesores, S.C. transferred all intellectual property in its name to Vitel.
The Contribution Agreement and the foregoing summary of the Contribution Agreement have been included to provide investors and security holders with information regarding the terms of the Contribution Agreement. It is not intended to provide any other factual information about the Company or Vitel. The representations, warranties and covenants contained in the Contribution Agreement were made only for purposes of that agreement and as of specified dates; were made solely for the benefit of the parties to the Contribution Agreement; may be subject to limitations agreed upon by the parties to the Contribution Agreement, including being qualified by confidential disclosures made for purposes of allocating contractual risk between the parties instead of establishing these matters as facts; and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Investors should not rely on the representations, warranties and covenants or any description thereof as characterizations of the actual state of facts or condition of the Company or Vitel or their businesses. Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the date of the Contribution Agreement, which subsequent information may or may not be fully reflected in the public disclosures of the Company.
- 2 - |
The Stockholders Agreement
The following is a summary of Stockholders Agreement.
Establishment of Trust; Trust Contribution . Mr. Cosme, Mr. Alaman and the Company shall establish a trust pursuant to the Trust Agreement described below. Mr. Cosme and Mr. Alaman shall each contribute, assign and transfer to the Company ownership of, and title over, one share of the capital stock of Vitel (the “Vitel Shares”) and Mr. Cosme and Mr. Alaman shall contribute, assign and transfer to the Trustee (as defined in the Trust Agreement”) ownership of, and title over, the remaining 98 Vitel Shares for the benefit of the Company pursuant to the terms and conditions of the Trust Agreement. The Company shall contribute, assign and transfer to the Trustee ownership of, and title over, 61,258,013 newly-issued shares of Common Stock and 2,107,681 newly-issued shares of Series B Preferred Stock with 100 votes per share (collectively, the “ OBM Shares ”), for the benefit of Mr. Cosme and Mr. Alaman pursuant to the terms and conditions of the Trust Agreement. Each of Mr. Cosme and Mr. Alaman understands and agrees that the OBM Shares held by the Trust have not been and will not be registered under the Securities Act of 1933, as amended, (“Securities Act”) and are restricted securities under the Securities Act and the rules and regulations promulgated thereunder and are subject to the restrictions on transfer contained in Article 4 of the Shareholders’ Agreement.
Corporate Rights . The corporate rights resulting from the Vitel Shares contributed to the Trust will be exercised by the Trustee pursuant to the written instructions it receives from the Company. For such purposes, and pursuant to the bylaws of Vitel, the Company shall have the authority to instruct the Trustee regarding exercising any corporate rights it may be entitled to in its capacity as the majority Vitel shareholder.
Composition of the Board of Directors . The Stockholders’ Agreement permits the Vitel Stockholders to appoint one member to the Board of Directors, one designated by Dr. Head and Mr. Kucharchuk (the “Management Designee”), and two (2) independent directors shall be designated jointly by Dr. Head and Mr. Kucharchuk (the “Management Stockholders”) on the one hand, and the Vitel Stockholders, on the other, and the Management Stockholders or the Management Designee and the Vitel Stockholders or the Vitel Designee shall jointly appoint, as soon as practicable, an independent fifth member of the Board of Directors. Mr. Cosme shall be the initial designee of the Vitel Stockholders to the Board of Directors (the “Vitel Designee”), Dr. Head shall be the initial designee of the Management Stockholders (the “Management Designee”), and Charles L. Rice, Jr. and Daniel S. Hoverman shall be the initial independent designees jointly appointed by the Management Stockholders and the Vitel Stockholders (hereinafter all members of the Board of Directors which are not the Vitel Designee or the Management Designee, the “Independent Designees”).
Board of Directors Resolutions . The Stockholders’ Agreement requires the Board of Directors to adopt any and all resolutions with a vote from a majority of its members, provided that for any “Major Decision” as defined in the Stockholders’ Agreement, either the Vitel Designee or the Management Designee shall vote in favor of adopting the corresponding resolution. In the event of a deadlock amongst the members of the Vitel Board of Directors, the Board of Directors shall cast the deciding vote to resolve the deadlock amongst the board members of Vitel with a vote from a majority of its members.
Charter or Bylaw Provisions . Each stockholder of the Company who is a party to the Stockholders’ Agreement (each, a “Stockholder”) agrees to vote all of its Company Securities (as defined in the Shareholders Agreement) that are entitled to vote or execute proxies or written consents, as the case may be, and to take all other actions necessary, to ensure that the Company’s Articles of Incorporation and Bylaws (a) facilitate, and do not at any time conflict with, any provision of the Stockholders’ Agreement and (b) permit each Stockholder to receive the benefits to which each such Stockholder is entitled under the Stockholders’ Agreement. In addition, on the date of the Stockholders’ Agreement, the Vitel Stockholders and Management Stockholders agreed to sign, or direct the Trustee to sign, the written consents necessary to amend the Company’s Articles of Incorporation and Bylaws, substantially in the form of the documents attached to the Stockholders’ Agreement as Exhibit E.
- 3 - |
Restrictions on Transfer . Generally, the Stockholders may note at any time, except as discussed below, transfer their respective Company Securities (x) to any of their Affiliates, their spouse, children, grandchildren, parents, sisters, brothers, nieces, nephews or any other relative within the second degree of kindred or a trust or other entity under a Stockholder’s control (the “ Permitted Transferees ”), or (y) with the prior consent of the other Stockholders which are also a party hereto, or (z) as otherwise permitted under the Stockholders’ Agreement (each, a “ Permitted Transfer ”), in the understanding that (1) each Management Stockholder will be considered a Permitted Transferee with respect to each other and each Vitel Stockholder will be considered a Permitted Transferee with respect to each other, (2) transfers by the Stockholders that are a party hereto resulting from their death shall be considered a Permitted Transfer, and (3) any Stockholder that is a party hereto may act individually in regards to the rights provided for in the Stockholders’ Agreement.
Right of First Refusal . In the event a Stockholder that is a party to the Stockholders’ Agreement wishes to transfer its Company Securities (other than a transfer which is part of an acquisition or strategic transaction approved by the directors of the Company as a Major Decision), the other non-transferring Stockholders that are also a party to the Stockholders’ Agreement shall have the irrevocable right of first refusal to purchase that shares of the selling shareholder.
Right of Co-Sale (Tag Along) . In the event that any stockholder who is a party to the Stockholders’ Agreement or group of such stockholders intends to accept an offer (either solicited or unsolicited) from any third party to acquire or otherwise transfer Company Securities (as defined in the Stockholders’ Agreement), representing at least 20% (twenty per cent) of the outstanding Company Securities, on a fully diluted basis, the selling stockholder shall give an offer notice in writing to the other stockholders of the Company who are a party to the Stockholders’ Agreement, with a copy to the Company, containing the terms and conditions of such offer received from the interested third party. Each such stockholder shall have the right to participate in such offer by selling the pro rata proportion of its Company Securities pursuant to such offer to acquire or otherwise Transfer Company Securities (as defined in the Stockholders’ Agreement).
Drag Along . In the event a stockholder who is a party to the Stockholders’ Agreement or group of such stockholders representing at least 32% (thirty two per cent) of the outstanding Company Securities, on a fully diluted basis, intends to accept an offer from any third party to acquire or otherwise Transfer Company Securities, representing at least 50% (fifty per cent) of the outstanding Company Securities, on a fully diluted basis, and the transaction is approved by the Board of Directors as a Major Decision, then each such stockholder shall be obligated to sell its Company Securities pursuant to the offer to purchase. In case the drag along provision included herein is enforced, all the stockholders participating in such sale shall receive the same terms and conditions of sale based on their respective holdings of Company Securities and shall otherwise be treated equally based on such ownership interest.
Termination . The Stockholders’ Agreement terminates upon the earlier of the following: (i) three (3) years as of the Closing Date; (ii) in connection with any Shareholder, whenever such Shareholder directly or indirectly owns less than 5% (five per cent) of the fully diluted shares of the Company; or (iii) upon the consummation of a Liquidation Event (as defined in the Stockholders’ Agreement).
The Trust Agreement
Establishment of Trust; Trust Contribution. Effective as of March 10, 2017, Mr. Cosme, Mr. Alaman and the Company entered into the Irrevocable Management Trust Agreement Number F/2868 between Mr. Cosme, Mr. Alaman (collectively, “Beneficiary A”), the Company (“Beneficiary B”) and the Trustee (the “Trust Agreement”) for the purpose of establishing a trust to hold the OBM Shares and 98 shares of Vitel’s capital stock which were transferred to Trustee pursuant to the Trust Agreement, in addition to other property the beneficiaries may elect to contribute to the trust. Beneficiary A and Beneficiary B are collectively referred to as the “Beneficiaries”.
- 4 - |
Authorities of the Trustee . The Trustee shall have all authorities and powers of attorney required to comply with the Trust Purposes, pursuant to the terms of Article 391 of the Mexican General Law of Negotiable Instruments and Credit Transactions (Ley General de Títulos y Operaciones de Crédito), as amended, or supplemented from time to time (the “LGTOC”); provided that the Trustee shall act at all times pursuant to the instructions of the Beneficiaries.
Property Rights - Vitel Shares . The property rights resulting from the Vitel Shares contributed to the Trust Property (as defined in the Trust Agreement) shall be exercised by the Trustee exclusively for the benefit, and in terms of, the written instructions it receives from Beneficiary B. Beneficiary B shall receive the amounts corresponding to dividends, equity reimbursements, or for any other concept that Vitel distributes to its shareholders (the “Vitel Distributions”).
Property Rights - OBM Shares . The property rights resulting from the OBM Shares contributed to the Trust Property shall be exercised by the Trustee exclusively for the benefit, and in terms of, the written instructions it receives from Beneficiary A. Beneficiary A shall receive the amounts corresponding to dividends, equity reimbursements, or for any other concept that OBM distributes to its shareholders (the “OBM Distributions”).
Corporate Rights - Vitel Shares . The corporate rights resulting from the Vitel Shares shall be exercised by the Trustee pursuant to the written instructions it receives from Beneficiary B. For such purposes, and pursuant to the bylaws of Vitel, Beneficiary B shall have the authority to instruct the Trustee regarding exercising any corporate rights it may be entitled to in its capacity as the majority Vitel shareholder, including, but not limited to, calling shareholder meetings, voting the Vitel Shares pursuant to the instructions given by Beneficiary B, executing unanimous written consents in lieu of a meeting, adopting resolutions agreeing to pay the Vitel Distributions and, in general, resolve any and all matters associated with Vitel, and exercising any other right it may be entitled to in its capacity as the majority Vitel shareholder, pursuant to the provisions of this Agreement, the Vitel bylaws, and Applicable Law.
Corporate Rights - OBM Shares . The corporate rights resulting from the OBM Shares shall be exercised by the Trustee pursuant to the written instructions it receives from Beneficiary A. For such purposes, and pursuant to the bylaws of OBM, Beneficiary A shall have the authority to instruct the Trustee regarding exercising any corporate rights it may be entitled to in its capacity as an OBM shareholder, including, but not limited to, calling special shareholder meetings, voting the OBM Shares pursuant to the instructions given by the Beneficiary A, executing unanimous written consents in lieu of a meeting, adopting resolutions agreeing to pay the OBM Distributions and, in general, resolve any and all matters associated with OBM, and exercising any other right it may be entitled to in its capacity as an OBM shareholder, pursuant to the provisions of this Agreement, the OBM bylaws, the Shareholders Agreement, United States of America Securities Law and applicable law.
Transfer of Beneficiary Rights . Transfer of the rights of the Beneficiaries are restricted in certain circumstances as provided for in Clause IV of the Trust Agreement (other than certain Permitted Transfers), including a right for first refusal if all of the Company’s securities are deregistered with the Securities and Exchange Commission.
Tax Obligations . The Beneficiaries shall pay, as applicable, and without limitation, all taxes of any kind, contributions, and other tax liabilities that may be payable, imposed, or assessed in connection with executing the Trust Agreement, and the distributions received pursuant hereto (jointly, “Taxes”), and the Trustee shall not be liable in connection with the foregoing.
Termination . The Trust Agreement shall remain in full force and effect until the terms and conditions applicable to the Trust Property have been complied and performed in their entirety, and until this has been confirmed in writing, jointly by the Beneficiaries, except that this Trust may be terminated when: (a) ownership of and title over the Trust Property are transferred pursuant to the Trust Purposes; or (b) any of the circumstances set forth in article 392 (three hundred ninety-two) of the LGTOC (except for the provisions of section VI (six) of such article 392 (three hundred ninety-two)) occurs.
- 5 - |
In the event that the Beneficiaries jointly instruct it in writing and it is permitted by the Shareholders Agreement, the Trustee shall return ownership of and title over the Trust Property to the respective Beneficiaries, and these shall be required to receive it. The parties agree to execute any documents required to comply with the terms of this Clause, including those that the Trustee requires.
Maximum Term . The initial term of the Trust Agreement will be 5 (five) years counted from its execution, and upon its expiration such term will subsequently be automatically extended for 1 (one) additional 2 (two) year term, unless the Beneficiaries jointly give notice in writing to the Trustee of their desire to terminate the present Agreement within 90 (ninety) calendar days in advance of the corresponding expiration date, in the understanding that this Agreement may not exceed in any event the term set forth in subsection III of article 394 of the LGTOC.
The foregoing summaries of the Contribution Agreement, the Stockholders’ Agreement and the Trust Agreement are not complete descriptions of all of the parties’ rights and obligations under such agreements and are qualified in their entirety by reference to the Contribution Agreement, the Stockholders’ Agreement and the Trust Agreement, respectively, copies of which are filed herewith as Exhibits 10.1, 10.2 and 10.3, respectively, and are incorporated herein by reference.
Item 2.01. Completion of Acquisition or Disposition of Assets.
The information set forth in Item 1.01, above, of this Current Report on Form 8-K is incorporated by reference into this Item 2.01.
Item 3.02 Unregistered Sales of Equity Securities
The information set forth in Item 1.01, above, of this Current Report on Form 8-K is incorporated by reference into this Item 3.02.
The shares of Common Stock and Series B Preferred referenced herein were issued in reliance upon the exemption from securities registration afforded by the provisions of Section 4(a)(2) of the Securities Act of 1933, as amended, (“Securities Act”), Regulation D and/or Regulation S, as promulgated by the U.S. Securities and Exchange Commission under the Securities Act.
- 6 - |
Item 4.01 | Changes in Registrant’s Certifying Accountant. |
(a) Prior independent registered public accounting firm
On March 9, 2017, the Company’s Board of Directors approved the dismissal of its independent registered public accounting firm Anton & Chia, LLP (“Anton Chia”). Anton Chia audited our financial statements for the fiscal years ended December 31, 2015 and December 31, 2014.
The reports of Anton Chia on our financial statements for the fiscal years ended December 31, 2015 and December 31, 2014 did not contain an adverse opinion or a disclaimer of opinion, nor was either such report qualified or modified as to uncertainty, audit scope, or accounting principles, except that such reports raised substantial doubts on our ability to continue as a going concern as a result of our lack of revenues and income since inception, net losses and accumulated shareholder deficit.
During our most recent fiscal year and through the date of resignation, (a) we had no disagreements with Anton Chia on any matter of accounting principles or practices, financial statement disclosure, or auditing scope of procedure which disagreement if not resolved to the satisfaction of Anton Chia would have caused it to make reference to the subject matter of the disagreement in connection with its reports and (b) there were no “reportable events” (as defined in Item 304(a)(1)(v) of Regulation S-K).
We provided Anton Chia with a copy of this Current Report on Form 8-K prior to its filing with the Securities and Exchange Commission, and requested that the firm furnish us with a letter addressed to the Securities and Exchange Commission stating whether they agree with the statements made in this Current Report on Form 8-K, and if not, stating the aspects with which they do not agree. A copy of the letter provided by Anton Chia will be filed as an amendment to this report within two days of receipt by the Company.
(b) New independent registered public accounting firm
On March 9, 2017, our Board of Directors ratified the engagement of Salberg & Company, P.A. (“Salberg”) as our independent registered public accounting firm and Salberg engagement became effective as of March 9, 2017. During our two most recent fiscal years ended December 31, 2016 and 2015 and from January 1, 2017 through March 9, 2017, neither the Company nor anyone on its behalf consulted Salberg regarding either (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on our consolidated financial statements, and no written report or oral advice was provided to us that Salberg concluded was an important factor considered by us in reaching a decision as to the accounting, auditing or financial reporting issue; or (ii) any matter that was the subject of a disagreement or reportable event as defined in Regulation S-K, Item 304(a)(1)(iv) and Item 304(a)(1)(v).
Item 5.01 | Changes in Control of Registrant. |
The information set forth in Items 1.01, 2.01, and 3.02, above, and Items 5.02 and 5.03, below of this Current Report on Form 8-K is incorporated herein by reference.
As a result of the shares of Company’s Common Stock and Series B Preferred issued to the Trustee and the shares of Series B Preferred issued to Dr. Head and the terms and conditions of the Stockholder Agreement, a change in control of the Company has occurred. Messrs. Cosme and Alaman, as beneficiaries under the Trust Agreement have the power to vote an aggregate of 61,158,013 shares of Common Stock and 5,000,000 shares of Series B Preferred which have 500,000,000 votes or, on a combined basis, an aggregate of approximately 39.76% of the voting control of the Company. Dr. Head has the power to vote 16,926,078 shares of Common Stock previously issued to him and 2,892,000 shares of Series B Preferred issued to him pursuant to the Contribution Agreement which has 289,200,000 votes, or an aggregate of approximately 39.4% of the voting control of the Company. Mr. Kucharchuk has the power to vote 5,000,000 shares of Common Stock previously issued to him which has 5,000,000 votes or approximately .35% of the voting control of the Company. Messrs. Cosme and Alaman, Dr. Head and Mr. Kucharchuk, all of whom are parties to the Stockholders’ Agreement, have an aggregate of approximately 79.51% of the voting control of the Company.
- 7 - |
Item 5.02 | Departure of Directors or Certain Officers; Election Of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Concurrently with the closing on March 10, 2017 pursuant to the Contribution Agreement, Mr. Kucharchuk resigned as a Director of the Company as provided for in the Contribution Agreement and such resignation was not the result of any disagreement with the Company on any matter relating to its operation, policies (including accounting or financial policies) or practices. Mr. Kucharchuk continues to serve in his role as President and Chief Financial Officer of the Company.
Concurrently with the closing on March 10, 2017 pursuant to the Contribution Agreement, Manuel Cosme Cosme was appointed to the Board of Directors and as General Manager of Global Operations for Vitel and Mr. Alaman was appointed as its Chief Operations Officer.
The following is a brief description of the background on Messrs. Cosme and Mr. Alaman.
Manuel Cosme Odabachian . Mr. Cosme, age 36, has been a managing principal of Vitel since he co-founded the company with Mr. Alaman in February 2016. From January 2013 until its sale in January 2016, Mr. Cosme was the managing principal and founder of AVIVIA Pharma S.A. de C.V., a representative of international licenses in Mexico for Kamada, Cheplapharm, Leo Pharma, Orphan Europe, Recordatti, Moleac, Biotest and other licenses. In addition, in 2015 AVIVIA developed a sildenafil gel for the treatment of erectile dysfunction called OsideaGL®. From November 2010 until July 2013, Mr. Cosme was the Country Manager in Mexico for CHIESI Farmaceutici, S.p.A. where he oversaw operations with increasing sales volumes, multiple product registrations and sanitary registrations in Mexico and business plan development for new lines of business that included the respiratory line (Innovair®, Rinoclenil®, Clenil UDV® and other products) and achieved the first Orphan Drug Recognition for the group of products Peyona® Caffeine Citrate. In March 2007, Mr. Cosme was appointed as the Operations Manager in Mexico for Graceway Mexico (Graceway Pharmaceuticals, LLC) and ultimately promoted to Country Manager until the company was sold in July 2010. While at Graceway Mexico, Mr. Cosme was responsible for launching and management of all the hosting, supply, distribution and technical agreements within Mexico including coordination of regulatory affairs, accounting, finance, legal, human resources, business development, quality and supply and other areas such as warehousing and fulfill orders to our customers. From 2003 until 2007, Mr. Cosme held a number of positions within the pharmaceutical sales and distribution business within Mexico. Mr. Cosme was awarded a degree in Industrial Engineering from the Ibero-American University in Mexico City, Mexico. Mr. Cosme speaks Spanish and English fluently.
The background information presented above regarding Mr. Cosme’s specific experience, qualifications, attributes and skills in addition to his reputation for integrity, honesty and adherence to high ethical standards are expected to benefit the Company as a member of its Board of Directors.
There are no family relationships between Mr. Cosme and any of the Company’s other executive officers or directors. Mr. Cosme was appointed to the Board of Directors as provided for in the Shareholders Agreement that was among the conditions of the Company’s acquisition of Vitel.
Carlos Alaman Volnie . Mr. Alaman, age 37, has been a managing principal of Vitel since he co-founded the company with Mr. Cosme in February 2016. Before launching Vitel, Mr. Alaman had been engaged in logistics, printing, consumption and pharmaceutical industries. In January 2011, Mr. Alaman was a founder and CEO at Bodegas Cero Grados, a Toluca, Mexico based provider of pharmaceutical warehousing and logistics services including refrigerated storage space having the highest Mexican governmental authorization for storing, distributing and selling type I, II and III drugs. In 2011, Mr. Alaman launched the pharmaceutical division of Bodega Cero Grados to meet the needs of its customers who sell controlled and over-the-counter pharmaceutical products to both government and private sector customers. Among the products distributed were Alprazolam, Clonazepam, Diazepam, Risperidona and Topiramato. In 2011, Mr. Alaman founded a contract research organization that specializes in conducting clinical trial studies and biodisponibility testing that provides Mexican pharmaceutical regulatory affairs services to transnational laboratories. Clients include Siegfried, Pisa, Kenner, Medex and Alpex. Mr. Alaman was awarded a degree in Industrial Engineering from the Anahuac University in Mexico City, Mexico and a Master’s Degree from the University of Texas at Austin. Mr. Alaman speaks Spanish and English fluently.
Vitel Laboratorios, S.A. de C.V. Employment Agreements
On March 10, 2017, Vitel entered into employment agreements with each of Messrs. Cosme and Alaman. Mr. Cosme was appointed as Vitel’s General Manager of Global Operations and Mr. Alaman was appointed as its Chief Operations Officer. Both of Messrs. Cosme and Alaman will be responsible for, supervising, managing, planning, directing and organizing the activities of the Vitel and will be its two most senior executive officers reporting to Vitel’s Board of Directors with all other employees of Vitel reporting directly or indirectly to them.
- 8 - |
Each of the agreements provides for a base salary of $187,500, annual bonuses and other compensation as required under Mexican Federal Labor Law and an annual bonus target of 50% of salary based on performance objectives to be established by the Company’s Board of Directors annually. In addition, Messrs. Cosme and Alaman are entitled to a $500.00 monthly car allowance, health insurance reimbursement of up to $5,000 per year and other benefits required under Mexican law. The employment agreement also contains a non-compete provision prohibiting them from engaging in business activities that compete with Vitel’s current business and allows them to continue to operate their ongoing pharmaceuticals business so long as such business does not interfere with their duties to Vitel under their respective employment agreements. In addition, if Messrs. Cosme and Alaman seek to pursue any future business opportunities that do not interfere with their obligations to Vitel, they are required to notify the Company and provide it with a notice and an opportunity to participate in such opportunity.
The employment agreements may be terminated upon the employee’s death or disability, and with or without cause. In the event Vitel terminates either of Messrs. Cosme and Alaman’s employment upon their death or disability, for cause (as defined in the employment agreement) or if either of them should resign without cause, the person resigning is entitled to payment of their base salary through the date of termination and certain severance payments they are legally entitled to receive under Mexican Federal Labor Law. At Vitel’s option, it may terminate their employment without cause or the employee may terminate the agreement for good cause (as defined in the agreement) in which event the person terminated is entitled to (i) the equivalent amount of the corresponding severance payment set forth in the Mexican Federal Labor Law for an unjustified dismissal, or if greater (ii) the equivalent amount of up to three years’ gross salary and certain amounts mandated under Mexican labor laws, depending on the date of termination less the number of months elapsed after March 10, 2017. The severance payment shall be paid in equal monthly installments over the remaining term so long as the employee is in compliance with the non-compete provisions provided for in the employment agreement.
The Company is a guarantor of Vitel’s obligations under the employment agreements.
Amendment to Employment Agreements and Stock Options
On March 10, 2017, Daniel S. Hoverman and Charles L. Rice, Jr., non-management members of the Board of Directors determined that it was in the best interests of the Company to reward Dr. Head and Mr. Kucharchuk by amending their employment agreements and awarding them stock options in order to provide incentives to retain and motivate them in their roles with the Company. Following this approval, the Company amended each of the February 2, 2016 employment agreements of Dr. Head and Mr. Kucharchuk to extend the term to March 9, 2020 and to provide for 100% vesting of any unvested portion of any outstanding equity, or equity-based award granted to them by the Company upon termination of their respective employment agreements without cause, as a result of a breach of the agreement by the Company or upon their respective death or disability.
The stock option award approved by Messrs. Hoverman and Rice for Dr. Head and Mr. Kucharchuk included options for each of them to purchase 2,000,000 shares (the “Stock Options”) of Common Stock at an exercise price of $0.25 per share, the date of the grant. One-third of the Stock Options vest on each anniversary date of the award and are exercisable at any time after vesting until 10 years after the grant date. The Stock Options vest so long as the optionee remains an employee of the Company or a subsidiary of the Company on the vesting dates (except as otherwise provided for in the employment agreement between the Company and the optionee as described above).
The foregoing summaries of the Vitel Employment Agreements, the amendment to the employment agreements for Dr. Head and Mr. Kucharchuk and Stock Options are not complete descriptions of all of the parties’ rights and obligations under such agreement and is qualified in its entirety by reference to the Form of Individual Employment Agreement for Vitel Laboratorios, S.A. de C.V., Form of Amendment to Employment Agreement for OncBioMune Pharmaceuticals, Inc. and Form of Stock Option for OncBioMune Pharmaceuticals, Inc., respectively, copies of which are filed herewith as Exhibits 10.4, 10.5 and 10.6, respectively, and are incorporated herein by reference.
- 9 - |
Item 5.03. | Amendments to Articles of Incorporation or Bylaws. |
On March 7, 2017the Company filed a certificate of designation, preferences and rights of Series B preferred stock (the “Certificate of Designation”) with the Secretary of State of the State of Nevada to designate 7,892,000 shares of its previously authorized preferred stock as Series B preferred stock, par value $0.0001 per share and a stated value of $0.0001 per share. The Certificate of Designation and its filing was approved by the Company’s board of directors without shareholder approval as provided for in the Company’s articles of incorporation and under Nevada law.
The holders of shares of Series B preferred stock are entitled to dividends or distributions share for share with the holders of the Common Stock, if, as and when declared from time to time by the Board of Directors. The holders of shares of Series B preferred stock have the following voting rights:
● | Each share of Series B preferred stock entitles the holder to 100 votes on all matters submitted to a vote of the Company’s stockholders. |
● | Except as otherwise provided in the Certificate of Designation, the holders of Series B preferred stock, the holders of Company common stock and the holders of shares of any other Company capital stock having general voting rights and shall vote together as one class on all matters submitted to a vote of the Company’s stockholders; and |
● | Commencing at any time after the date of issuance of any shares of the Series B Preferred Stock (the “Issuance Date”) and upon the earliest of the occurrence of (i) a holder of the Series B Preferred Stock owning, directly or indirectly as a beneficiary or otherwise, shares of Common Stock which are less than 5.0% of the total outstanding shares of Common Stock, (ii) the date a holder of the Series B Preferred Stock is no longer an employee of the Company or any of its subsidiaries or (iii) five years after the Issuance Date, the Company shall have the right to redeem all of the then outstanding Series B Preferred Stock held by such holder at a price equal to the Stated Value (the “Redemption Price”). The Series B Preferred Stock which is redeemed as provided for in the Certificate of Designations shall be returned to the Company (and, if not so returned, shall automatically be deemed canceled). The Redemption Price shall be mailed to such holder at the holder’s address of record, and the Series B Preferred Stock owned by such holder shall be canceled. |
The foregoing description of the Certificate of Designation is qualified in its entirety by reference to the Certificate of Designation, which is filed as Exhibit 3.1 hereto and incorporated herein by reference.
Item 7.01 | Regulation FD Disclosure. |
On March 13, 2017 the Company issued a press regarding its acquisition of Vitel. The press release is attached hereto as Exhibit 99.1 and incorporated herein by this reference.
The information contained in the press release attached hereto is being furnished and shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that Section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01. | Financial Statements and Exhibits. |
(a) Financial Statements of Businesses Acquired
The financial information that is required pursuant to this Item will be filed by amendment not later than 71 calendar days after the date that this initial report on Form 8-K is required to be filed.
(d) Exhibits.
- 10 - |
Exhibit No. | Description | |
3.1* | Certificate of Designation, Rights and Preferences of Series B Preferred Stock filed with the Nevada Secretary of State on March 7, 2017. | |
10.1* | Contribution Agreement to the Property of Trust F/2868 entered into among Manuel Cosme Odabachian, Carlos Fernando Alaman Volnie and OncBioMune Pharmaceuticals, Inc. dated March 10, 2017. | |
10.2* |
Irrevocable Trust Agreement Number F/2868 entered into among Manuel Cosme Odabachian, Carlos Fernando Alaman Volnie and OncBioMune Pharmaceuticals, Inc. as beneficiaries and Banco Actinver, S.A., as Trustee (“Banco Actinver”) (the “Trust Agreement”) dated March 10, 2017. |
|
10.3* | Shareholders Agreement among OncBioMune Pharmaceuticals, Inc., Jonathan F. Head, Ph.D., Andrew A. Kucharchuk, Manuel Cosme Odabachian and Carlos Fernando Alaman Volnie dated March 10, 2017. | |
10.4+ | Form of Individual Employment Agreement for Vitel Laboratorios, S.A. de C.V. | |
10.5+ | Form of Amendment to Employment Agreement for OncBioMune Pharmaceuticals, Inc. | |
10.6+ | Form of Stock Option for OncBioMune Pharmaceuticals, Inc. | |
99.1* | Press Release of OncBioMune Pharmaceuticals, Inc. dated March 13, 2017 (furnished herewith). |
* Filed herewith.
+ Management contract or compensatory plan or arrangement.
- 11 - |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
OncBioMune Pharmaceuticals, Inc. | ||
Date: March 13, 2017 | By: | /s/ Andrew Kucharchuk |
Andrew Kucharchuk Chief Financial Officer and President |
- 12 - |
Execution Version
CONTRIBUTION AGREEMENT TO THE PROPERTY OF TRUST F/2868 (TWO THOUSAND EIGHT HUNDRED SIXTY EIGHT) (THIS “ AGREEMENT ”), dated March 10, 2017, pursuant to the following recitals, representations and clauses, by and between each of:
PARTIES
I. | MANUEL COSME ODABACHIAN (“ MCO ”) , on his own behalf; | |
II. | CARLOS FERNANDO ALAMAN VOLNIE (“ CAV ”) , on his own behalf, and | |
III. | ONCBIOMUNE PHARMACEUTICALS, INC., a Nevada corporation (“ OBMP ”) , represented herein by Andrew Albert Kucharchuk. |
RECITALS
WHEREAS, the parties hereto, simultaneously to the execution hereof, have entered into a trust agreement, dated March 10, 2017, identified as No. F/2868 (two thousand eight hundred sixty eight) (the “ Trust ” or “ Trust Agreement ”), whereby MCO, CAV and OBMP acted in their capacity as trustors and beneficiaries, and Banco Actinver, S.A., Institución de Banca Múltiple, Grupo Financiero Actinver (the “ Trustee ”), acted in its capacity as trustee, for the purpose of establishing a vehicle for a business venture between MCO, CAV and OBMP for the development and commercialization of OBMP’s vaccine technology and other OBMP cancer technologies in Mexico, as well as in connection with expediting clinical development and marketing of OBMP’s therapeutic candidates in Mexico and other countries and territories in Latin America.
WHEREAS, MCO and CAV, along with certain other shareholders of OBMP, simultaneously to the execution hereof, have entered into a shareholders’ agreement in their capacity as direct or indirect shareholders of OBMP (as applicable) (the “ Shareholders’ Agreement ” and together with the Trust Agreement, the “ Related Agreements ”).
NOW THEREFORE, based on the foregoing premises and the representations, warranties, covenants and agreements set forth herein, the parties hereby agree as follows:
CLAUSES
CLAUSE I: DEFINITIONS AND INTERPRETATION
Clause 1.1 Defined Terms. In this Agreement, capitalized terms used herein shall have the following meaning, in the understanding that capitalized terms not defined herein shall have the respective meanings assigned to such terms in the Trust Agreement.
“ Affiliate ” means, in connection with any Person (i) any other Person that, directly or indirectly, Controls, is Controlled by, or is under common Control with, such Person, or (ii) any other Person that owns or controls 50% (fifty percent) or more of the shares or membership interests issued, and with voting rights, of such Person, or (iii) any officer, managing member, executive, or manager of such Person, or (iv) any other Person that is an officer, executive, managing member, manager, or holds 50% (fifty percent) or more of the shares or membership interests with voting rights of any of the Persons mentioned in subsections (i) to (iii) of this definition.
“ Agreement ” has the meaning set forth in the preamble.
“ CAV ” has the meaning set forth under Parties.
“ Closing ” has the meaning set forth in Clause 2.2 .
“ Confidential Information ” has the meaning set forth in Clause 5.1(b) .
“ Control ” means the authority to determine the management, and the policies of a Person, directly or indirectly, whether through holding securities or membership interests with voting rights, through an agreement, or otherwise.
“ Dollars ” means the legal currency of the United States of America.
“ Excluded Business ” or “ Excluded Businesses ” has the meaning set forth in Clause 5.2(a) .
“ Excluded Contracts ” has the meaning set forth in Exhibit “A” .
“ General Indemnity Survival Period ” has the meaning set forth in Clause 4.3(a)(iv) .
“ Governmental Authority ” means any Federal, State, Municipal, or local authority in the United States of America or Mexico.
“ IFRS ” shall mean International Financial Reporting Standards.
“ Indemnified Person ” means the person granting the indemnities referred to in Clause IV hereof, which shall be either of the following, as applicable: (i) MCO and CAV (jointly), or (ii) OBMP.
“ Indemnifying Party ” means the person granting the indemnities referred to in Clause IV hereof, which shall be either the MCO and CAV (jointly and severally in accordance with their respective pro rata percentage of the OBMP Shares they both hold) or OBMP, as applicable
“ LGSM ” means the General Law of Companies ( Ley General de Sociedades Mercantiles ), as amended, or supplemented from time to time.
“ LIC ” means the Credit Institutions Law ( Ley de Instituciones de Crédito ), as amended, or supplemented from time to time.
“ Losses ” has the meaning set forth in Clause 4.1(a) .
2 |
“ Material Adverse Effect ” means any adverse effect upon or change in the condition (financial or otherwise) of Vitel Mexico and/or OBMP, or on their ability to continue or conduct the Vitel Business or the OBMP Business, as applicable, which is Material.
“ Material Contract ” means any agreement or contract (i) involving aggregate payments to or by Vitel or OBMP, as applicable, in excess of US$50,000.00 (fifty thousand Dollars 00/100); or (ii) which is outside the Vitel Business or the OBMP Business, as applicable; or (iii) containing covenants limiting the ability of Vitel or OBMP, as applicable, to compete in any line of business with any Person or in any area or territory; or (iv) which binds Vitel or OBMP, as applicable, to a term of more than one (1) year; or (v) imposes a lien or encumbrance on the assets of Vitel or OBMP, or on the Vitel Shares or the OBMP Shares. All Material Contracts are listed in Schedule I (q) and Schedule II (r) hereof, except in the case of OBMP, those contracts filed with the Securities and Exchange Commission in the United States of America as material contracts, which are not listed separately.
“ Material ” or “ Materially ” means, when used to qualify an event, action, condition, omission, or representation, warranty, covenant or other provision of this Agreement, any circumstance, condition, event, series of substantially similar or substantially related circumstances, conditions or events, that has, in the aggregate, a cost or expense in excess of US$50,000.00 (fifty thousand Dollars 00/100).
“ MCO ” has the meaning set forth under Parties.
“ Mexico ” means the United Mexican States.
“ OBMP ” has the meaning set forth under Parties.
“ OBMP Business ” means pharmaceutical development and sales.
“ OBMP Governmental Permit ” has the meaning set forth in Clause 3.2 (x) .
“ OBMP Indemnified Person ” has the meaning set forth in Clause 4.1(a) .
“ OBMP IP Rights ” has the meaning set forth in Clause 3.2 (gg) .
“ OBMP’s Knowledge ” means the actual knowledge of Jonathan F. Head or Andrew A. Kucharchuk.
“ OBMP Licensed IP Rights ” has the meaning set forth in Clause 3.2 (gg) .
“ OBMP Mexico ” means Oncbiomune Mexico, S.A. de C.V., a Mexican variable stock corporation, 50% (fifty per cent) of which is owned by OBMP and 50% (fifty per cent) is owned by Vitel.
“ OBMP Owned IP Rights ” has the meaning set forth in Clause 3.2 (gg) .
“ OBMP Pipeline ” shall mean the following:
3 |
(a) Ovcavax® Ovarian Cancer;
(b) PA-OBC – Breast Cancer;
(c) PGT-OBM – Renal Cancer; and
(d) Any other product under development, developed or to be developed by OBMP and/or by Dr. Jonathan F. Head in collaboration, under contract or under any other type of business relationship with OBMP or with any OBMP related Person.
“ OBMP Products ” shall mean the following:
(a) Proscavax® Prostate Cancer;
(b) OBMP Pipeline; and
(c) OBMP vaccine technology, OBMP cancer technologies for the treatment of prostate, ovarian and various other types of cancer and any other technology for medical treatment, drug or medical treatment owned by OBMP or by any OBMP related Person or that use or are based on the technology included in the OBMP IP Rights, the OBMP Licensed IP Rights, the OBMP Owned Rights or the OBMP Registered IP Rights.
“ OBMP Registered IP Rights ” has the meaning set forth in Clause 3.2 (kk) .
“ OBMP Shares ” means 61,158,013 shares of common stock and 2,107,681 shares of Series B preferred stock of OBMP.
“ Person ” means any natural or legal person, trust, joint venture, partnership or company, Governmental Authority, or any other entity of any kind, with or without its own legal capacity.
“ Related Agreements ” has the meaning set forth in the recitals,
“ Restricted Business ” has the meaning set forth in Clause 5.2(a) .
“ ROW Opportunity ” has the meaning set forth in Clause 5.2(b) .
“ Shareholders’ Agreement ” has the meaning set forth in the recitals, as the same may be amended, whether in whole or in part, supplemented, or otherwise altered, renewed, or extended at any time.
“ Third Party Claim ” has the meaning set forth in Clause 4.4(a) .
“ Transactions ” has the meaning set forth in Clause 2.2 .
“ Trust ” or “ Trust Agreement ” has the meaning set forth in the recitals.
“ Trustee ” has the meaning set forth under Parties.
“ U.S. GAAP ” means generally accepted accounting principles in the United States of America.
4 |
“ Vitel ” means Vitel Laboratorios, S.A. de C.V., a Mexican variable stock corporation.
“ Vitel Business ” means pharmaceutical development and sales.
“ Vitel Governmental Permit ” has the meaning set forth in Clause 3.1 (w) .
“ Vitel Indemnified Person ” has the meaning set forth in Clause 4.2 .
“ Vitel IP Rights ” has the meaning set forth in Clause 3.1 (ff) .
“ Vitel Licensed IP Rights ” has the meaning set forth in Clause 3.1 (ff) .
“ Vitel Owned IP Rights ” has the meaning set forth in Clause 3.1 (ff) .
“ Vitel Products ” shall mean the following:
(a) Any other product under development, developed or to be developed by Vitel that use or are based on any Vitel IP Rights, Vitel Licensed IP Rights, the Vitel Owned IP Rights and the Vitel Registered IP Rights, or under contract or under any other type of business relationship involving a Material Contract, the Vitel IP Rights, the Vitel Licensed IP Rights, the Vitel Owned IP Rights and the Vitel Registered IP Rights.
“ Vitel Registered IP Rights ” has the meaning set forth in Clause 3.1 (jj) .
“ Vitel Shares ” means 98 (ninety eight) shares of the fixed capital stock of Vitel, representing 98% of its outstanding capital stock.
Clause 1.2 Interpretation of Defined Terms . The definitions set forth in the preceding Clause shall apply both in the singular and plural form of such terms. When the context requires it, any pronoun shall include the corresponding male, female, and neutral form. Unless the context requires otherwise, all references to clauses, paragraphs, subsections, items, or numbers of clauses of this Agreement, and all references to schedules and exhibits, shall be deemed to be references to schedules and exhibits to this Agreement, which are hereby incorporated by reference to form an integral part of this Agreement. Unless the context requires otherwise, the words (a) “ hereof ”, “ herein ”, “ hereunder ”, “ pursuant hereto ”, “ below ”, and words with similar meaning when used in this Agreement, shall be deemed to refer to this Agreement in its entirety, and not to any specific clause, paragraph, subsection, item, or number of this Agreement; (b) “ include ”, “ includes ”, and “ including ” shall be deemed followed by the phrase, “ but not limited to ”, unless otherwise specified; and (c) “ asset ”, or “ property ” shall be deemed to have the meaning and effect, and to refer to, each and every one of the assets and property, whether tangible or intangible, including cash, shares, or interests, representing the capital stock of any company or Person, securities, income, lease and contractual rights. Likewise, references to (i) any agreement, contract, document, or instrument, includes the reference to such agreement, contract, document, or instrument, as amended, whether in whole or in part, supplemented, or otherwise altered from time to time, and (ii) any law, rule, or regulation, includes the amendments thereto from time to time, or any law, rule, or regulation that replaces them.
5 |
CLAUSE II: CONTRIBUTION OF ASSETS; CONDITIONS TO CONTRIBUTION
Clause 2.1 Contribution . As per the terms of the Trust Agreement, the parties hereby acknowledge their contribution, assignment, transfer, conveyance and delivery to the Trustee, free and clear of any liens or encumbrances, the following assets:
(a) MCO and CAV transfer the Vitel Shares to the Trustee, and
(b) OBMP transfers the OBMP Shares to the Trustee.
The Trustee, as provided in the Trust Agreement, accepted and acquired from each party, all the right, title and interest in the Vitel Shares and the OBMP Shares as of this date from each party. As per the terms of the Trust Agreement, the Trustee has acknowledged the receipt of such assets, and as of the date hereof the Vitel Shares and the OBMP Shares shall form part of the Trust Property, solely in furtherance of the Trust Purposes (as such terms are defined in the Trust Agreement).
Clause 2.2 Conditions to the Transaction . The obligations of the parties hereto, as well as the obligations of the parties to the Shareholders’ Agreement to consummate the transactions contemplated by this Agreement and the Related Agreements (collectively, the “ Transactions ”) at a closing to be held on the date hereof (the “ Closing ”) is subject to the fulfillment of each of the following conditions: (i) as applicable, MCO and CAV will have obtained and delivered to OBMP customary payoff letters and lien release documentation reasonably satisfactory to OBMP and their counsel relating to the repayment of all debt of Vitel, including the termination of all liens on any assets of Vitel securing any such debt; (ii) MCO and CAV will have forgiven all stockholder loans and related party debt to Vitel and its shareholders and their Affiliates on such terms that are consistent with the provisions hereof, and provided to OBMP and Vitel (as applicable) releases in respect of any claims by MCO and CAV against Vitel or OBMP relating to such loans; (iii) MCO and CAV will have obtained and delivered to OBMP the resignations of each of the directors and officers of Vitel including MCO and CAV; (iv) Vitel will have an amount of working capital of $10,000.00 (ten thousand Dollars 00/100) as of the consummation of the Transactions; (v) each of Vitel and OBMP shall have a total indebtedness in their balance sheet as of the date hereof in an amount of no greater than $450,000.00 (four hundred and fifty thousand Dollars 00/100) as set forth in the schedules of assets and liabilities of Vitel and the financial statements of OBMP, attached hereto as Schedule 3.1(k) and Schedule 3.2(l) , respectively; (vi) each of MCO and CAV shall have entered into employment agreements with Vitel in form and substance satisfactory to OBMP; (vii) Vitel and OBMP shall each have received all necessary governmental, board of directors and third-party approvals and consents to the Transactions; (viii) Vitel Asesores, S.C. shall each have transferred all intellectual property in its name to Vitel; and (ix) MCO and CAV shall each have transferred one (1) share of the fixed capital stock of Vitel representing 2% of its outstanding capital stock to OBMP. Promptly following the Closing, OBMP shall direct the Trustee to sign the written consents necessary to amend OBMP’s charter and bylaws substantially in the form of the documents attached to the Shareholders’ Agreement as Exhibit E and to elect MCO, CAV, Jonathan F. Head and Andrew A. Kucharchuk as directors of Vitel and such directors to elect MCO, CAV, Jonathan F. Head and Andrew A. Kucharchuk as officers of Vitel; and Vitel Asesores, S.C. shall have changed its name to a name not containing the word “Vitel”.
6 |
CLAUSE III: REPRESENTATIONS AND WARRANTIES
Clause 3.1 Representations and Warranties of MCO and CAV . Except as set forth in the Schedules prepared by MCO and CAV and attached hereto, each of MCO and CAV hereby represents and warrants, individually with respect to themselves, and jointly and severally with respect to Vitel, that all statements contained in this Clause 3.1 are true, complete and correct with respect to themselves as of the date of this Agreement. Moreover, MCO and CAV hereby represent that there has been no omission of information of relevant aspects that would adversely affect the transaction between the parties of that if known by OBMP, would have had as a reasonable result that OBMP would have decided not to enter into this Agreement:
(a) Each is an individual, resident of Mexico, and Vitel is a variable stock corporation, duly organized and validly existing under the laws of Mexico;
(b) Each has full legal capacity and all requisite power and authority to enter into and comply with their obligations under this Agreement pursuant to its terms;
(c) Entering into and performing under this Agreement does not entail a violation or breach of (i) any agreement, contract, license, resolution or order to which MCO, CAV or Vitel is a party (as applicable), or to which any of their assets is subject; or (ii) any law, regulation, circular letter, order, decree from any Governmental Authority, its corporate bylaws or any of its governing documents, applicable to each of MCO, CAV or Vitel (as applicable);
(d) Each is the sole and exclusive owner of 49 shares (together, a total of 98 shares of the fixed capital stock of Vitel) which together represent 98% of the outstanding capital stock of Vitel, which have been duly authorized, validly issued, fully paid and non-assessable and having no connection to illegal activities, and are free from all liens, conditions, limitations or restrictions on ownership, or any option or preferential right of any kind, except for the restrictions set forth in the bylaws of Vitel and in the LGSM (as such term is defined below), which have been obtained from legal sources, as a result of activities performed within the framework of the law, and that there is no connection whatsoever to illegal activities;
(e) Each of MCO and CAV shall transfer to the Trustee, as provided herein and for the Trust Purposes, ownership of and title over his portion of the Vitel Shares;
(f) The 49 shares of Vitel (together, a total of 98 shares of the fixed capital stock of Vitel) that each currently owns are not subject to any contract, agreement, or any other document that pursuant to its terms (i) creates a call option or purchase right, or any other right to acquire such shares, in favor of a third party; or (ii) restricts, in any way, any assignment, transfer, or pledge, except for the restrictions set forth in the bylaws of Vitel and in the LGSM;
(g) Except for the authorizations that, as applicable, have been obtained and are in full force and effect, no authorization or approval whatsoever is required to enter into this Agreement, or to comply with or perform the obligations assumed by each of MCO and CAV in terms of this Agreement, which are legal, valid, binding, and enforceable against him pursuant to their respective terms;
7 |
(h) As of this date there is no, and to the best of their knowledge there is no risk that any, action, complaint, claim, legal requirement, or proceeding will be filed before any court, governmental agency, arbitrator, or judicial body with regard to him or his property or Vitel or the property of Vitel (i) that affects the legality, validity, or enforceability of this Agreement, (ii) the legal title over the Vitel Shares that each of MCO and CAV owns, or the transfer of the Vitel Shares to the Trustee in accordance with the terms of the Trust Agreement, (iii) that prevents the consummation of any of the transactions contemplated herein, or (iv) that may affect the value of OBMP’s investment in the Vitel Shares;
(i) Except as provided in Schedule 3.1 (i) hereof, there is no action, proceeding, arbitration, investigation or audit, whether civil, criminal, administrative or judicial action pending or, to MCO and CAV’s knowledge, threatened, against or involving MCO and CAV or Vitel as of the date of this Agreement. There are no judgments, rulings, assessments or injunctions currently outstanding against Vitel;
(j) Except as provided in Schedule 3.1 (j) hereof, Vitel does not own, directly or indirectly, any equity interest or ownership stake in any Person, and has no commitment to contribute to the capital of, make loans to, or share in the losses of, any Person;
(k) True and complete copies of a list of the assets and liabilities of Vitel as of February 28, 2017 and as are set forth in Schedule 3.1 (k) hereto. Such list has been prepared from, are in accordance with and accurately reflect, the books and records of Vitel, have been prepared in accordance with applicable law and IFRS and fairly present the changes in income, stockholders’ equity and financial position of Vitel, as of the times and for the periods referred to therein and properly reflect the financial position and results of operation of Vitel. Vitel maintains a standard system of accounting established and administered in accordance with IFRS. There has been no material adverse change in the business, results of operations, condition (financial or otherwise) or prospects of Vitel since February 28, 2017;
(l) Vitel does not have any undisclosed liabilities, and (i) as of the date hereof, Vitel has an amount of working capital of $10,000.00 (ten thousand Dollars 00/100); (ii) as of February 28, 2017 has a total indebtedness in its balance sheet in an amount of no greater than $450,000.00 (four hundred and fifty thousand Dollars 00/100), as evidenced in Schedule 3.1(k) (exclusive of Vitel’s related party debt, as discussed in Clause 2.2 hereof); and (iii) after February 28, 2017 has incurred debt only in the normal course of Vitel’s business operations, with the understanding that no other debts have been incurred as of the date hereof that would have a Material Adverse Effect on Vitel;
(m) Except for the execution and delivery of this Agreement or as set forth in Schedule 3.1 (m) , Vitel has conducted the Vitel Business only in the ordinary course, and there has not been a Material Adverse Effect in Vitel;
(n) Set forth on Schedule 3.1 (n) is a true, correct and complete list of all real property owned or leased by Vitel and all real property leases, surveys, encumbrances, and material documents relating to such real property. Vitel has good and marketable title to its respective estate in the owned real property. To MCO and CAV’s knowledge, there is no actual or proposed condemnation, requisition or taking by any Governmental Authority of any portion of the real property or any existing or proposed plan to modify or realign any street or highway abutting the real property. Vitel does not have any right, title or interest in any real property other than the real property listed in Schedule 3.1 (n) ;
8 |
(o) Vitel has good title to all of the tangible personal property reflected in the financial statements, free and clear of all encumbrances. All facilities, machinery, equipment, fixtures, vehicles and other properties owned, leased or used by Vitel are in good operating condition and repair (reasonable wear and tear excepted) and are reasonably fit and usable for the purposes for which they are being used;
(p) The current use of the real property is a lawful use and Vitel holds the necessary consents governing that use. To MCO and CAV’s knowledge, such real property is not in violation of any applicable laws or third party rights;
(q) Schedule 3.1 (q) hereto sets forth a true, complete and correct list of every Material Contract to which the Vitel is a party;
(r) Except as set forth in Schedule 3.1 (r) , (i) there is not and, to MCO and CAV’s knowledge, there has not been any claim nor has it been alleged by any Person, with respect to any Material Contract, any existing or uncured breach or event that, with notice or lapse of time or both, would constitute a breach on the part of Vitel, or, to MCO and CAV’s knowledge, on the part of any other party thereto, and to MCO and CAV’s knowledge, none of the foregoing has been threatened in writing; (ii) no consent from, or notice to, any governmental entity or other Person is required in order to maintain in full force and effect any of Vitel’s contracts following the consummation of this Agreement (other than such consents that have been obtained and such notices that have been duly given); and (iii) each of Vitel’s contracts is in full force and effect and is valid and enforceable in accordance with its terms against the other parties thereto and, to MCO and CAV’s knowledge, to other parties thereto;
(s) There exist no contracts where the shareholders of Vitel (or one of its Affiliates other than Vitel) are a party by which Vitel receives any rights or benefits, including supply contracts;
(t) Schedule 3.1 (t) includes a list of all policies of fire and casualty, liability and other forms of insurance maintained by or on behalf of Vitel, along with the name of the holder of each such policy, and the amount of coverage and of any deductible under each such policy. Each policy listed on Schedule 3.1 (t) is in full force and effect. No notice of cancellation or nonrenewal with respect to, or disallowance of any claim under, or increase of the premium for any such insurance policy listed on Schedule 3.1 (t) has been received by MCO or CAV, or to their knowledge, by Vitel. There is no default with respect to any provision contained in any such insurance policy and there has not been any failure to give any notice or present any claim under any such insurance policy in a timely fashion or in the manner or detail required by any such insurance policy that would have a Material Adverse Effect on the ability of Vitel to enjoy the benefits of any such insurance policy;
9 |
(u) To MCO and CAV’s knowledge, Vitel has complied (except for such past noncompliance which has been fully resolved, including payment of all fines, penalties or other sanctions) and is in compliance, with all applicable environmental laws, including all consents issued pursuant to applicable environmental laws;
(v) Neither MCO and CAV nor Vitel have received any written notice from any governmental entity or third party alleging that Vitel is not in compliance with, or has or may have any liability or investigatory, corrective or remedial obligation under, any environmental law the matter underlying which has not been fully resolved, including payment of all fines, penalties, or other sanctions;
(w) Schedule 3.1 (w) sets forth a true, correct and complete list of all valid, subsisting and in good standing governmental permits with respect to: (a) the ownership or use of Vitel’s properties and/or; (b) the operation of the Vitel Business, in either case that are held by or for the benefit of Vitel (the “ Vitel Governmental Permits ”). Except for the Vitel Governmental Permits, there are no other governmental permits necessary for: (a) the ownership or use of Vitel’s properties; or (b) the operation of the Vitel Business. The execution of this Agreement and the obligations contemplated herein shall not cause a default or breach of or result in the revocation or termination of any Vitel Governmental Permits;
(x) Vitel has complied and is in compliance, in each case in all respects, with all applicable laws;
(y) All of the employee benefit plans of Vitel are in compliance in all respects with applicable law. Schedule 3.1 (y) hereto contains a true and complete list of all employee benefit plans, which are available to an employee, officer or director of Vitel due to their employment with Vitel;
(z) There is no pending and there has not been any labor strike, dispute, slowdown, stoppage or lockout, with respect to Vitel, and to MCO and CAV’s knowledge, no such action is threatened against Vitel, in each case, other than routine individual grievances which are not Material to the Vitel Business, financial condition or results of operations of Vitel;
(aa) Vitel is not a party to or bound by any collective bargaining contract or similar contract with any labor organization applicable to employees of Vitel;
(bb) No labor union is certified by a relevant labor relation’s authority, to the extent applicable, as bargaining agent for any of the employees of Vitel and no union organizing or decertification activities are underway or, to MCO and CAV’s knowledge, threatened;
(cc) All payments, premiums, contributions, reports, returns and similar documents required to be made by any applicable law, have been timely made to the appropriate payee. The consummation of obligations included herein will not result in the creation or acceleration of any benefit or payment to an employee, officer or director of Vitel;
10 |
(dd) All tax returns required to be filed by or with respect to Vitel in any jurisdiction to which it is subject, have been timely filed and all taxes have been paid, including, but not limited to, the submission of tax returns and notices, payment of taxes and other contributions, fines and surcharges, fees of the Mexican Social Security Institute ( Instituto Mexicano del Seguro Social ), the National Workers Housing Fund Institute ( Instituto Nacional del Fondo para la Vivienda de los Trabajadores ) and the Pension System ( Sistema de Ahorro para el Retiro ). All such tax returns are true, correct, complete, and set forth all items required by applicable tax laws. Vitel has paid in full or set up an adequate reserve on the financial statements attached to Schedule 3.1 (k) in respect of all taxes for the periods covered by such tax returns, and there are no outstanding governmental tax encumbrances on any assets of Vitel. No tax examination or audit of Vitel is currently in progress or has been conducted since the date of Vitel’s formation. Neither MCO or CAV, nor Vitel, have applied for and/or received a ruling from any tax authority regarding a past or prospective transaction of Vitel that affects or may affect the tax liability of Vitel after date hereof;
(ee) Vitel is not a party to a tax sharing agreement or similar contract, nor is it included in a consolidated tax return of another Person;
(ff) Vitel is the sole and exclusive owner, or has the valid right or license to use, and, to the extent that it does any of the following, to develop, make, have made, offer for sale, sell, import, copy, modify, create derivative works of, distribute, license, and dispose of all intellectual property relating to, used in, or held for the Vitel Business or by Vitel (such intellectual property being hereinafter collectively referred to as the “ Vitel IP Rights ”). Other than the Vitel IP Rights, neither Vitel, nor MCO or CAV hold or own any other intellectual property of any kind, including any intellectual property that is similar to the Vitel IP Rights. The Vitel IP Rights are sufficient for the conduct of the Vitel Business and Vitel has not transferred, assigned, exclusively licensed or otherwise conveyed to any Affiliate or third party any of the Vitel IP Rights necessary for the conduction of the Vitel Business. As used in this Agreement, “ Vitel Owned IP Rights ” means Vitel IP Rights that are or are purportedly owned by Vitel; and “ Vitel Licensed IP Rights ” means Vitel IP Rights that are not Vitel Owned IP Rights;
(gg) Neither the execution, delivery and performance of this Agreement nor the consummation of the transaction between the parties as provided herein will: (i) constitute a breach of or default under any instrument, license or other contract governing any Vitel IP Right; (ii) cause the forfeiture or termination of, or give rise to a right of forfeiture or termination of, any Vitel IP Right; or (iii) impair the right of Vitel to use, develop, make, have made, offer for sale, sell, import, copy, modify, create derivative works of, distribute, license, or dispose of any Vitel IP Right or portion thereof;
(hh) Except as set forth in Schedule 3.1 (hh) , the operation of the Vitel Business has not infringed or misappropriated, or is infringing or misappropriating, any intellectual property of any other party. There is no pending, or to the knowledge of MCO or CAV, threatened, claim or litigation contesting the validity, ownership or right of Vitel to exercise any Vitel IP Right, nor, to the knowledge of MCO or CAV, is there any legitimate basis for any such claim;
(ii) Vitel has secured valid written assignments from all of Vitel’s current and former founders, interest holders, officers, consultants, independent contractors and employees who were involved in, or who contributed to, the creation or development of any Vitel Owned IP Rights. No current or former founder, interest holder, employee, officer, manager, director, consultant or independent contractor of Vitel has any right, license, claim or interest whatsoever in or with respect to any Vitel Owned IP Rights;
11 |
(jj) Schedule 3.1 (jj) of this Agreement contains a true and complete list of (1) Vitel Owned IP Rights (including all registrations of any patents, copyrights, mask works, trademarks, service marks, and internet domain names, and all applications therefor), (2) Vitel Licensed IP Rights, (3) all applications, registrations, filings and other formal written governmental actions made or taken pursuant to applicable law by Vitel to secure, perfect or protect its interest in Vitel IP Rights and (4) all proceedings or actions before any governmental authority, including the Instituto Mexicano de la Propiedad Industrial or equivalent authority anywhere else in the world) related to any of Vitel IP Rights (collectively, the “ Vitel Registered IP Rights ”). Except as set forth on Schedule 3.1 (hh) , all Vitel Registered Owned IP Rights held by Vitel are valid, enforceable and subsisting, and Vitel is the owner thereof. Except as set forth on Schedule 3.1 (jj) , Vitel exclusively owns all trademarks and trade names used in connection with the operation or conduct of the Vitel Business, including the sale, licensing, distribution or provision of any Vitel products or services;
(kk) Except as set forth on Schedule 3.1 (kk) , there are no royalties, honoraria, fees or other payments payable by Vitel to any third Person (other than salaries payable to employees and independent contractors not contingent on or related to use of their work product) as a result of the use, license-in, manufacture, sale, offering for sale, copying, distribution, or disposition of any Vitel Owned IP Rights by Vitel and none shall become payable as a result of the consummation of the transaction between the parties as provided herein;
(ll) Neither MCO or CAV, nor Vitel, or any Person acting in their behalf, has entered into any contract entitling any Person to any brokers’ or finder’s fee or any other commission or similar fee in connection with the execution and delivery of this Agreement;
(mm) All receivables and trade accounts payable of Vitel are bona fide transactions in the ordinary course of business and valued in accordance with IFRS. No receivable of Vitel is subject to any claim of reduction, customer credit balance, set-off, prepayment, counterclaim, billing adjustment, recoupment or other claim for credit, allowances, adjustments, or subject to bankruptcy or similar proceedings;
(nn) All inventory of Vitel consists of a quantity and quality usable and salable in the ordinary course of business, is not obsolete, defective, damaged or slow moving (subject to reserves therefore reflected in the financial statements), is merchantable, fit for its intended use and is valued in accordance with IFRS. No inventory of Vitel is subject to any consignment, bailment, and warehousing or similar contract;
(oo) Except as set forth on Schedule 3.1 (oo) , Vitel owns or leases all the properties used in the Vitel Business;
12 |
(pp) Except as otherwise disclosed on Schedule 3.1 (pp) there are no liabilities or contracts between: (i) Vitel, on the one hand, and (ii) MCO or CAV (or one of their affiliates) or any Person who currently is serving, or has within the past twenty-four months served, as an officer, director, or equity holder of Vitel (or one of their Affiliates), on the other hand. Neither MCO or CAV, nor any of their Affiliates has any interest in any properties used by Vitel;
(qq) Set forth in Schedule 3.1(qq) are true and complete English translations of the bylaws of Vitel, which constitute all of its governing documents;
(rr) Each of MCO and CAV is an “accredited investor” as defined in Rule 501(a) under the Securities Act. Each of MCO and CAV agrees to furnish any additional information requested by OBMP or any of its Affiliates to assure compliance with applicable U.S. federal and state securities laws in connection with the acquisition of the OBMP Shares;
(ss) Each of MCO and CAV is indirectly acquiring the OBMP Shares solely for their own beneficial account, for investment purposes, and not with a view to, or for resale in connection with, any distribution of the OBMP Shares. Each of MCO and CAV understands that the OBMP Shares have not been registered under the Securities Act or any state securities laws by reason of specific exemptions under the provisions thereof which depend in part upon the investment intent of MCO and CAV and of the other representations made by MCO and CAVO in this Agreement and the Related Agreements. MCO and CAV understand that OBMP is relying upon the representations and agreements contained in this Agreement (and any supplemental information) for the purpose of determining whether the issuance of the OBMP Shares pursuant to the Related Agreements meets the requirements for such exemptions;
(tt) Each of MCO and CAV agrees: (A) that they will not sell, assign, pledge, give, transfer or otherwise dispose of the OBMP Shares or any interest therein, or make any offer or attempt to do any of the foregoing, except pursuant to a registration of the OBMP Shares under the Securities Act and all applicable state securities laws, or in a transaction which is exempt from the registration provisions of the Securities Act and all applicable state securities laws; (B) that the certificates representing the OBMP Shares will bear a legend making reference to the foregoing restrictions as described in Section 4.02 of the Shareholders’ Agreement; and (C) that OBMP and its Affiliates shall not be required to give effect to any purported transfer of such OBMP Shares except upon compliance with the foregoing restrictions;
(uu) Each of MCO and CAV acknowledges that neither OBMP nor any other person offered to sell, issue or transfer the OBMP Shares to it by means of any form of general solicitation or advertising, including but not limited to: (A) any advertisement, article, notice or other article, notice or other communication published in any newspaper, magazine or similar media or broadcast over television or radio or (B) any seminar or meeting whose attendees were invited by any general solicitation or general advertising;
(vv) Except for the representations and warranties expressly contained in this Agreement, neither MCO or CAV, nor any other Person acting on behalf of MCO or CAV, makes any representation or warranty, express or implied;
13 |
Clause 3.2 Representations and Warranties of OBMP . Except as set forth in the Schedules prepared by OBMP and attached hereto, OBMP hereby represents and warrants, through its legal representative, that all statements contained in this Clause 3.2 are true, complete and correct as of the date of this Agreement. Moreover, OBMP hereby represents that there has been no omission of information of relevant aspects that would adversely affect the transaction between the parties of that if known by MCO or CAV, would have had as a reasonable result that MCO and CAV would have decided not to enter into this Agreement:
(a) It is a corporation, duly organized and validly existing under the laws of the State of Nevada, USA;
(b) It has full legal capacity and sufficient corporate authorizations to enter into and comply with its obligations under this Agreement pursuant to its terms, and its representatives have all requisite power and authority to enter into this Agreement on its behalf and perform its obligations hereunder;
(c) Entering into and performing under this Agreement does not entail a violation or breach of (i) any provision of its articles of incorporation, bylaws, or any of its governing documents; or (ii) any agreement, contract, license, resolution or order to which it is a party, or to which OBMP, or any of its assets is subject; or (iii) any law, regulation, circular letter, order or decree from any Governmental Authority applicable to OBMP;
(d) OBMP has an authorized capital stock which consists of (i) 500,000,000 shares of common stock, par value $0.0001 per share, and (ii) 20,000,000 shares of preferred stock, par value $0.0001 per share, and OBMP had 61,158,013 shares of common stock, and 1,000,000 shares of Series A preferred stock, issued and outstanding as of February 20, 2017. Upon the Closing and the consummation of the Transactions set forth herein and in the Related Agreements, (i) the Management Stockholders (as such term is defined in the Shareholders’ Agreement) will collectively hold 21,926,078 shares of common stock, 250,000,000 shares of series A preferred stock, and 289,200,000 shares of series B preferred stock of OBMP, which represent at least 39% (thirty nine per cent) but in no case greater that 40% (forty per cent) of the votes represented by the voting stock of OBMP; (ii) the Vitel Stockholders (as such term is defined in the Shareholders’ Agreement) will collectively hold (indirectly through the Trustee of the Trust Agreement) 61,158,013 shares of common stock, and 500,000,000 shares of series B preferred stock of OMBP, which represent at least 39% (thirty nine per cent) but in no case greater than 40% (forty per cent) of the votes represented by the voting stock of OBMP; and (iii) no other stockholder in OBMP will hold shares of OBMP which represent more than 19% (nineteen per cent) of the votes represented by the voting stock of OBMP. Additionally, OBMP represents that it has issued the OBMP Shares to the Trustee, to hold in its capacity as trustee of this Trust Agreement, for the benefit of MCO and CAV, which shares are free from all liens, conditions, limitations or restrictions on ownership, or any option or preferential right of any kind, and which have been duly authorized, validly issued, fully paid and non-assessable, and that such issuance has no connection whatsoever to illegal activities;
(e) It shall transfer to the Trustee, as provided herein and for the Trust Purposes, ownership of and title over the OBMP Shares;
14 |
(f) The OBMP Shares are not subject to any contract, agreement, or any other document that pursuant to its terms (i) creates a call option or purchase right, or any other right to acquire such shares, in favor of a third party; or (ii) restricts, in any way, any assignment, transfer, or pledge, except for the restrictions set forth in the Shareholders’ Agreement;
(g) Except for the authorizations that, as applicable, have been obtained and are in full force and effect, no authorization or approval whatsoever is required to enter into this Agreement, or to comply with or perform the obligations assumed by it in terms of this Agreement, which are legal, valid, binding, and enforceable against OBMP pursuant to their respective terms;
(h) As of this date there is no, and to the best of its knowledge there is no risk that any, action, complaint, claim, legal requirement, or proceeding will be filed before any court, governmental agency, arbitrator, or judicial body with regard to OBMP or its property (i) that affects the legality, validity, or enforceability of this Agreement, (ii) the legal title over the OBMP Shares or the transfer of the OBMP Shares to the Trustee in accordance with the terms of this Agreement, (iii) that prevents the consummation of any of the transactions contemplated herein or (iv) that may affect the value of MCO and CAV’s investment in the OBMP Shares;
(i) Its representative has sufficient powers of attorney and authorities, and the corporate authorizations required to validly enter into this Agreement on its behalf, and to validly bind OBMP under the terms hereof, and that such powers of attorney, authorities, and corporate or other authorizations have not been revoked, amended, or limited in any way;
(j) Except as provided in Schedule 3.2 (j) hereof, there is no action, proceeding, arbitration, investigation or audit, whether civil, criminal, administrative or judicial action pending or, to OBMP’s knowledge, threatened, against or involving OBMP as of the date of this Agreement. There are no judgments, rulings, assessments or injunctions currently outstanding against OBMP;
(k) Except as provided in Schedule 3.2 (k) hereof, OBMP does not own, directly or indirectly, any equity interest or ownership stake in any Person, and has no commitment to contribute to the capital of, make loans to, or share in the losses of, any Person;
(l) True and complete copies of the financial statements of OBMP as of September 30, 2016 and as are set forth in Schedule 3.2 (l) hereto. The financial statements have been prepared from, are in accordance with and accurately reflect, the books and records of OBMP, have been prepared in accordance with applicable law and U.S. GAAP, and fairly present the changes in income, stockholders’ equity and financial position of OBMP, as of the times and for the periods referred to therein and properly reflect the financial position and results of operation of OBMP. OBMP maintains a standard system of accounting established and administered in accordance with U.S. GAAP. There has been no material adverse change in the business, results of operations, condition (financial or otherwise) or prospects of OBMP since September 30, 2106;
15 |
(m) OBMP does not have any undisclosed liabilities, and (i) as of September 30, 2016, OBMP had a total indebtedness (consisting of loans payable, convertible notes and line of credit drawings) in its balance sheet in an amount of no greater than $450,000.00 (four hundred and fifty thousand Dollars 00/100), as evidenced in Schedule 3.2(l); (ii) on November 2016 it obtained a financing which will be reported in its financial statements as of December 31 st , 2016; and (iii) after September 30, 2016 has incurred debt only in the normal course of OBMP’s business operations, with the understanding that no other debts have been incurred as of the date hereof that would have a Material Adverse Effect in OBMP;
(n) Except for the execution and delivery of this Agreement or as set forth in Schedule 3.2 (n) , OBMP has conducted the OBMP Business only in the ordinary course, and there has not been a Material Adverse Effect in OBMP;
(o) Set forth on Schedule 3.2 (o) is a true, correct and complete list of all real property owned or leased by OBMP and all real property leases, surveys, encumbrances, and material documents relating to such real property. OBMP has good and marketable title to its respective estate in the owned real property. To OBMP’s knowledge, there is no actual or proposed condemnation, requisition or taking by any Governmental Authority of any portion of the real property or any existing or proposed plan to modify or realign any street or highway abutting the real property. OBMP does not have any right, title or interest in any real property other than the real property listed in Schedule 3.2 (o) ;
(p) OBMP has good title to all of the tangible personal property reflected in the financial statements, free and clear of all encumbrances. All facilities, machinery, equipment, fixtures, vehicles and other properties owned, leased or used by OBMP are in good operating condition and repair (reasonable wear and tear excepted) and are reasonably fit and usable for the purposes for which they are being used;
(q) The current use of the real property is a lawful use and OBMP holds the necessary consents governing that use. To OBMP’s knowledge, such real property is not in violation of any applicable laws or third party rights;
(r) Schedule 3.2 (r) hereto sets forth a true, complete and correct list of every Material Contract (i) to which OBMP is a party; and (ii) which has not been filed as an exhibit to a periodic report filed by OMBP with the Securities and Exchange Commission in the United States of America;
(s) Except as set forth in Schedule 3.2 (s) , (i) there is not and, to OBMP’s knowledge, there has not been any claim nor has it been alleged by any Person, with respect to any Material Contract, any existing or uncured breach or event that, with notice or lapse of time or both, would constitute a breach on the part of OBMP, or, to OBMP’s knowledge, on the part of any other party thereto, and to OBMP’s knowledge, none of the foregoing has been threatened in writing; (ii) no consent from, or notice to, any governmental entity or other Person is required in order to maintain in full force and effect any of OBMP’s contracts following the consummation of this Agreement (other than such consents that have been obtained and such notices that have been duly given); and (iii) each of OBMP’s contracts is in full force and effect and is valid and enforceable in accordance with its terms against the other parties thereto and, to OBMP’s knowledge, to other parties thereto;
16 |
(t) Except as set forth in Schedule 3.2(t) , there exist no contracts where the shareholders of OBMP (or one of its Affiliates other than OBMP) are a party by which OBMP receives any rights or benefits, including supply contracts;
(u) Schedule 3.2 (u) includes a list of all policies of fire and casualty, liability and other forms of insurance maintained by or on behalf of OBMP, along with the name of the holder of each such policy, and the amount of coverage and of any deductible under each such policy. Each policy listed on Schedule 3.2 (u) is in full force and effect. No notice of cancellation or nonrenewal with respect to, or disallowance of any claim under, or increase of the premium for any such insurance policy listed on Schedule 3.2 (u) has been received by OBMP. There is no default with respect to any provision contained in any such insurance policy and there has not been any failure to give any notice or present any claim under any such insurance policy in a timely fashion or in the manner or detail required by any such insurance policy that would have a Material Adverse Effect on the ability of OBMP to enjoy the benefits of any such insurance policy;
(v) OBMP has complied (except for such past noncompliance which has been fully resolved, including payment of all fines, penalties or other sanctions) and is in compliance, with all applicable environmental laws, including all consents issued pursuant to applicable environmental laws;
(w) OBMP has not received any written notice from any Governmental Authority or third party alleging that OBMP is not in compliance with, or has or may have any liability or investigatory, corrective or remedial obligation under, any environmental law the matter underlying which has not been fully resolved, including payment of all fines, penalties, or other sanctions;
(x) Schedule 3.2 (x) sets forth a true, correct and complete list of all valid, subsisting and in good standing governmental permits with respect to: (a) the ownership or use of OBMP’s properties and/or; (b) the operation of the OBMP Business, in either case that are held by or for the benefit of OBMP (the “ OBMP Governmental Permits ”). Except for the OBMP Governmental Permits, there are no other governmental permits necessary for: (a) the ownership or use of OBMP’s properties or; (b) the operation of the OBMP Business. The execution of this Agreement and the obligations contemplated herein shall not cause a default or breach of or result in the revocation or termination of any OBMP Governmental Permits;
(y) OBMP has complied and is in compliance, in each case in all respects, with all applicable laws;
(z) All of the employee benefit plans of OBMP are in compliance in all respects with applicable law. Schedule 3.2 (z) hereto contains a true and complete list of all employee benefit plans, which are available to an employee, officer or director of OBMP due to their employment with OBMP;
17 |
(aa) There is no pending and there has not been any labor strike, dispute, slowdown, stoppage or lockout, with respect to OBMP, and to OBMP’s knowledge, no such action is threatened against OBMP, in each case, other than routine individual grievances which are not Material to the OBMP Business, financial condition or results of operations of OBMP;
(bb) OBMP is not a party to or bound by any collective bargaining contract or similar contract with any labor organization applicable to employees of OBMP;
(cc) No labor union is certified by a relevant labor relation’s authority, to the extent applicable, as bargaining agent for any of the employees of OBMP and no union organizing or decertification activities are underway or, to OBMP’s knowledge, threatened;
(dd) All payments, premiums, contributions, reports, returns and similar documents required to be made by any applicable law, have been timely made to the appropriate payee. The consummation of obligations included herein will not result in the creation or acceleration of any benefit or payment to an employee, officer or director of OBMP;
(ee) All tax returns required to be filed by or with respect to OBMP in any jurisdiction to which it is subject, have been timely filed and all taxes have been paid, including, but not limited to, the submission of tax returns and notices, payment of taxes and other contributions, fines and surcharges. All such tax returns are true, correct, complete, and set forth all items required by applicable tax laws. OBMP has paid in full or set up an adequate reserve on the financial statements attached to Schedule 3.2 (l) in respect of all taxes for the periods covered by such tax returns, and there are no outstanding governmental tax encumbrances on any assets of OBMP. No tax examination or audit of OBMP is currently in progress or has been conducted since the date of OBMP’s formation. OBMP has not applied for and/or received a ruling from any tax authority regarding a past or prospective transaction of OBMP that affects or may affect the tax liability of OBMP after date hereof;
(ff) OBMP is not a party to a tax sharing agreement or similar contract, nor is it included in a consolidated tax return of another Person;
(gg) OBMP is the sole and exclusive owner, or has the valid right or license to use, and, to the extent that it does any of the following, to develop, make, have made, offer for sale, sell, import, copy, modify, create derivative works of, distribute, license, and dispose of all intellectual property relating to, used in, or held for the OBMP Business or by OBMP, other than the intellectual property that is owned by OBMP Mexico (such intellectual property being hereinafter collectively referred to as the “ OBMP IP Rights ”). Other than the OBMP IP Rights, OBMP does not hold or own any other intellectual property of any kind, including any intellectual property that is similar to the OBMP IP Rights. The OBMP IP Rights are sufficient for the conduct of the OBMP Business and OBMP has not transferred, assigned, exclusively licensed or otherwise conveyed to any Affiliate or third party any of the OBMP IP Rights necessary for the conduction of the OBMP Business. As used in this Agreement, “ OBMP Owned IP Rights ” means OBMP IP Rights that are or are purportedly owned by OBMP; and “ OBMP Licensed IP Rights ” means OBMP IP Rights that are not OBMP Owned IP Rights;
18 |
(hh) Neither the execution, delivery and performance of this Agreement nor the consummation of the transaction between the parties as provided herein will: (i) constitute a breach of or default under any instrument, license or other contract governing any OBMP IP Right; (ii) cause the forfeiture or termination of, or give rise to a right of forfeiture or termination of, any OBMP IP Right; or (iii) impair the right of OBMP to use, develop, make, have made, offer for sale, sell, import, copy, modify, create derivative works of, distribute, license, or dispose of any OBMP IP Right or portion thereof;
(ii) Except as set forth in Schedule 3.2 (ii) , the operation of the OBMP Business has not infringed or misappropriated, or is infringing or misappropriating, any intellectual property of any other party. There is no pending, or to the knowledge of OBMP, threatened, claim or litigation contesting the validity, ownership or right of OBMP to exercise any OBMP IP Right, nor, to the knowledge of OBMP, is there any legitimate basis for any such claim;
(jj) OBMP has secured valid written assignments from all of OBMP’s current and former founders, interest holders, officers, consultants, independent contractors and employees who were involved in, or who contributed to, the creation or development of any OBMP Owned IP Rights. No current or former founder, interest holder, employee, officer, manager, director, consultant or independent contractor of OBMP has any right, license, claim or interest whatsoever in or with respect to any OBMP Owned IP Rights;
(kk) Schedule 3.2 (kk) of this Agreement contains a true and complete list of (1) OBMP Owned IP Rights (including all registrations of any patents, copyrights, mask works, trademarks, service marks, and internet domain names, and all applications therefor), (2) OBMP Licensed IP Rights, (3) all applications, registrations, filings and other formal written governmental actions made or taken pursuant to applicable law by OBMP to secure, perfect or protect its interest in OBMP IP Rights and (4) all proceedings or actions before any governmental authority, including the Instituto Mexicano de la Propiedad Industrial or equivalent authority anywhere else in the world) related to any of OBMP IP Rights (collectively, the “ OBMP Registered IP Rights ”). Except as set forth on Schedule 3.2 (ii) , all OBMP Registered Owned IP Rights held by OBMP are valid, enforceable and subsisting, and OBMP is the owner thereof. Except as set forth on Schedule 3.2 (kk) , OBMP exclusively owns all trademarks and trade names used in connection with the operation or conduct of the OBMP Business, including the sale, licensing, distribution or provision of any OBMP products or services;
(ll) Except as set forth on Schedule 3.2 (ll) , there are no royalties, honoraria, fees or other payments payable by OBMP to any third Person (other than salaries payable to employees and independent contractors not contingent on or related to use of their work product) as a result of the use, license-in, manufacture, sale, offering for sale, copying, distribution, or disposition of any OBMP Owned IP Rights by OBMP and none shall become payable as a result of the consummation of the transaction between the parties as provided herein;
(mm) Neither OBMP, nor any Person acting in its behalf, has entered into any contract entitling any Person to any brokers’ or finder’s fee or any other commission or similar fee in connection with the execution and delivery of this Agreement;
19 |
(nn) All receivables and trade accounts payable of OBMP are bona fide transactions in the ordinary course of business and valued in accordance with U.S. GAAP. No receivable of OBMP is subject to any claim of reduction, customer credit balance, set-off, prepayment, counterclaim, billing adjustment, recoupment or other claim for credit, allowances, adjustments, or subject to bankruptcy or similar proceedings;
(oo) All inventory of OBMP consists of a quantity and quality usable and salable in the ordinary course of business, is not obsolete, defective, damaged or slow moving (subject to reserves therefore reflected in the financial statements), is merchantable, fit for its intended use and is valued in accordance with IFRS. No inventory of OBMP is subject to any consignment, bailment, and warehousing or similar contract;
(pp) Except as set forth on Schedule 3.2 (pp) , OBMP owns or leases all the properties used in the OBMP Business;
(qq) Except as otherwise disclosed on Schedule 3.2 (qq) there are no liabilities or contracts between: (i) OBMP (or one of its affiliates), on the one hand, and (ii) its current shareholders (or one of their Affiliates) or any Person who currently is serving, or has within the past twenty-four months served, as an officer, director, or equity holder of OBMP (or one of their Affiliates), on the other hand. Neither OBMP, nor any of its Affiliates has any interest in any properties used by OBMP;
(rr) Subject to Section 3.04 of the Shareholders’ Agreement, all members of the Board of Directors of OBMP have the same approval rights, in the understanding that the Vitel Designee (as such term is defined in the Shareholders’ Agreement) to the Board of OBMP shall have the same approval rights as any other member of the Board of OBMP.
(ss) Except for the representations and warranties expressly contained in this Agreement, neither OBMP, nor any other Person acting on behalf of OBMP, makes any representation or warranty, express or implied.
CLAUSE IV: INDEMNIFICATION
Clause 4.1 Indemnification by MCO and CAV .
(a) Subject to the limitations set forth in this Clause IV , from and after the date hereof, MCO and CAV jointly and severally (in accordance with their respective pro rata percentage of the OBMP Shares they both hold) shall indemnify and hold harmless, and agree to pay and/or reimburse OBMP and its Affiliates and the representatives, Affiliates, successors and assigns of each of the foregoing Persons (each, an “ OBMP Indemnified Person ”), from, against and in respect of any and all actions, liabilities, governmental orders, encumbrances, losses, damages, bonds, dues, assessments, fines, penalties, taxes, fees, costs (including reasonable costs of investigation, defense and enforcement of this Agreement), expenses or amounts paid in settlement (including reasonable attorneys’ and experts’ fees and expenses), whether or not involving a Third Party Claim (collectively, “ Losses ”), incurred or suffered by the OBMP Indemnified Person(s) or any of them, as a result of, arising out of or relating to, directly or indirectly:
20 |
(i) any fraud or intentional misrepresentation on the part of Vitel (or any Affiliate (other than a MCO or CAV) or representative thereof) or any breach of, or inaccuracy in, any representation, warranty or statement made by or on behalf of Vitel in this Agreement or in any schedule or certificate delivered by or on behalf of Vitel pursuant to this Agreement;
(ii) any breach or violation of any covenant or agreement of Vitel to the extent required to be performed or complied with by Vitel at or prior to the date hereof in or pursuant to this Agreement;
(iii) any fraud or international misrepresentation on the part of any MCO or CAV (or any Affiliate (other than Vitel) or representative thereof) or any breach of, or inaccuracy in, any representation, warranty or statement made by or on behalf of MCO or CAV in this Agreement or in any schedule or certificate delivered by or on behalf of MCO or CAV pursuant to this Agreement;
(iv) any breach or violation of any covenant or agreement of MCO or CAV (including under this Clause IV ) in or pursuant to this Agreement;
(v) any liability or cost arising out of the manner in which Vitel compensates its employees and other persons who work or have worked for Vitel, which have originated at any point prior to and including the date of this Agreement; or
(vi) past taxes (including interest and penalties) imposed in respect of the income, business, property or operations of Vitel, or for which MCO or CAV may otherwise be liable for the period up to and including the date of this Agreement.
(b) Monetary Limitations . MCO and CAV will have no obligation to indemnify any OBMP Indemnified Person pursuant to Clauses 4.1(a)(i) and 4.1(a)(iii) hereof, unless and until the aggregate amount of all such Losses incurred or suffered by the OBMP Indemnified Persons exceeds $50,000.00 (fifty thousand Dollars 00/100) (at which point MCO and CAV will indemnify the OBMP Indemnified Persons for all such Losses in excess of $50,000.00), and the aggregate liability of MCO and CAV in respect of claims for indemnification pursuant to Clauses 4.1(a)(i) through 4.1(a)(vi) will not exceed the total value of the OBMP Shares as of the date hereof; provided , that the foregoing limitations will not apply to claims based upon gross negligence, fraud or intentional misrepresentation.
Clause 4.2 Indemnification by OBMP .
(a) Indemnification . Subject to the limitations set forth in this Clause IV , from and after the date hereof, OBMP shall indemnify and hold harmless, and agree to pay and/or reimburse each of MCO and CAV and each of their respective Affiliates (other than OBMP and Vitel), and the representatives, Affiliates, successors and assigns of each of the foregoing Persons (each, a “ Vitel Indemnified Person ”), from, against and in respect of any and all Losses incurred or suffered by the Vitel Indemnified Persons or any of them as a result of, arising out of or relating to, directly or indirectly:
21 |
(i) any fraud or intentional misrepresentation on the part of OBMP (or any Affiliate (other than Vitel) or representative therBeof) or any breach of, or inaccuracy in, any representation, warranty or statement made by or on behalf of OBMP in this Agreement or in any schedule or certificate delivered by or on behalf of OBMP pursuant to this Agreement;
(ii) any breach or violation of any covenant or agreement of OBMP to the extent required to be performed or complied with by OBMP at or prior to the date hereof in or pursuant to this Agreement;
(iii) any liability or cost arising out of the manner in which OBMP compensates its employees and other persons who work or have worked for OBMP, which have originated at any point prior to and including the date of this Agreement; or
(iv) past taxes (including interest and penalties) imposed in respect of the income, business, property or operations of OBMP, or for which any OBMP stockholder may otherwise be liable for the period up to and including the date of this Agreement.
(b) Monetary Limitations . OBMP will have no obligation to indemnify any Vitel Indemnified Person pursuant to Clause 4.2(a)(i) hereof, unless and until the aggregate amount of all such Losses incurred or suffered by the Vitel Indemnified Persons exceeds $50,000.00 (fifty thousand Dollars 00/100) (at which point OBMP will indemnify the Vitel Indemnified Persons for all such Losses in excess of $50,000) and OBMP’s aggregate liability in respect of claims for indemnification pursuant to Clauses 4.2(a)(i) through 4.2(a)(iv) will not exceed the total value of the OBMP Shares as of the date hereof; provided , that the foregoing limitations will not apply to claims based upon gross negligence, fraud or intentional misrepresentation.
Clause 4.3. Timing for Claims; Notice of Claims
(a) Timing for Claims . No claim may be made or suit instituted seeking indemnification pursuant to Clause 4.1(a)(i) , 4.1(a)(iii) or 4.2(a)(i) and 4.2(a)(iii) for any breach of, or inaccuracy in, any representation, warranty or statement unless a written notice is provided to the Indemnifying Party:
(i) at any time, in the case of any breach of, or inaccuracy in, the Fundamental Representations;
(ii) at any time, in the case of any claim or suit based upon fraud or intentional misrepresentation;
(iii) at any time prior to the thirtieth (30th) day following the expiration of the applicable statute of limitations (taking into account any tolling periods and other extensions) in the case of any breach of, or inaccuracy in, the Specified Representations; and
22 |
(iv) at any time prior to the twenty four (24) month anniversary of the date hereof (the “ General Indemnity Survival Period ”), in the case of any breach of, or inaccuracy in, any other representation, warranty or statement in this Agreement or in any schedule or certificate delivered pursuant to this Agreement.
Claims for indemnification pursuant to any other provision of Clause 4.1(a) and 4.2(a) are not subject to the limitations set forth in this Clause 4.3 .
(b) Written Notice of Indemnification Claims . In the event that any Indemnified Person wishes to make a claim for indemnification under this Clause IV , the Indemnified Person shall give written notice of such claim to each Indemnifying Party within the applicable time limitations contained in Clause 4.3(a) . Any such notice shall describe the breach or inaccuracy and other material facts and circumstances upon which such claim is based and the estimated amount of Losses involved, in each case, in reasonable detail in light of the facts then known to the Indemnified Person; provided , that no defect in the information contained in such notice from the Indemnified Person to any Indemnifying Party will relieve such Indemnifying Party from any obligation under this Clause IV , except to the extent such failure to include information actually and materially prejudices such Indemnifying Party.
Clause 4.4 Third Party Claims
(a) Notice of Third Party Claims . Promptly after receipt by an Indemnified Person of written notice of the assertion of a claim by any Person who is not a party to this Agreement (a “ Third Party Claim ”) that may give rise to an indemnity claim against an Indemnifying Party under this Clause IV , the Indemnified Person shall give written notice thereof to the Indemnifying Party; provided , that no delay on the part of the Indemnified Person in notifying the Indemnifying Party will relieve the Indemnifying Party from any obligation under this Clause IV , except to the extent such delay actually and materially prejudices the Indemnifying Party.
(b) Assumption of Defense, etc. The Indemnifying Party will be entitled to participate in the defense of any Third Party Claim that is the subject of a notice given by or on behalf of any Indemnified Person pursuant to Clause 4.4(a) . In addition, the Indemnifying Party will have the right to defend the Indemnified Person against the Third Party Claim with counsel of its choice reasonably satisfactory to the Indemnified Person so long as (i) the Indemnifying Party gives written notice that they or it will defend the Third Party Claim to the Indemnified Person within thirty (30) days after the Indemnified Person has given notice of the Third Party Claim under Clause 4.4(a) stating that the Indemnifying Party will, and thereby covenants to, indemnify, defend and hold harmless the Indemnified Person from and against the entirety of any and all Losses the Indemnified Person may suffer resulting from, arising out of, relating to, in the nature of, or caused by the Third Party Claim, (ii) the Indemnifying Party provides the Indemnified Person with evidence reasonably acceptable to the Indemnified Person that the Indemnifying Party will have adequate financial resources to defend against the Third Party Claim and fulfill its indemnification obligations hereunder, (iii) the Third Party Claim involves only money damages and does not seek an injunction or other equitable relief against the Indemnified Person, (iv) the Indemnified Person has not been advised by counsel that an actual or potential conflict exists between the Indemnified Person and the Indemnifying Party in connection with the defense of the Third Party Claim, (v) the Third Party Claim does not relate to or otherwise arise in connection with Taxes or any criminal or regulatory enforcement action, (vi) settlement of, an adverse judgment with respect to, or conduct of the defense of the Third Party Claim by the Indemnifying Party is not, in the good faith judgment of the Indemnified Person, likely to be adverse to the Indemnified Person’s reputation or continuing business interests (including its relationships with current or potential customers, suppliers or other parties material to the conduct of its business) and (vii) the Indemnifying Party conducts the defense of the Third Party Claim actively and diligently. The Indemnified Person may retain separate co-counsel at its sole cost and expense and participate in the defense of the Third Party Claim; provided , that the Indemnifying Party will pay the fees and expenses of separate counsel retained by the Indemnified Person that are incurred prior to the Indemnifying Party’s assumption of control of the defense of the Third Party Claim.
23 |
(c) Limitations on Indemnifying Party Control . The Indemnifying Party will not consent to the entry of any judgment or enter into any compromise or settlement with respect to the Third Party Claim without the prior written consent of the Indemnified Person unless such judgment, compromise or settlement (i) provides for the payment by the Indemnifying Party of money as sole relief for the claimant, (ii) results in the full and general release of all Indemnified Person from all liabilities arising or relating to, or in connection with, the Third Party Claim and (iii) involves no finding or admission of any violation of legal requirements or the rights of any Person.
(d) Indemnified Person’s Control . If the Indemnifying Party does not deliver the notice contemplated by sub-section (i) of Clause 4.4(b) , or the evidence contemplated by sub-section (ii) of Clause 4.4(b) , within ninety (90) days after the Indemnified Person has given notice of the Third Party Claim pursuant to Clause 4.4(a) , or otherwise at any time fails to conduct the defense of the Third Party Claim actively and diligently, the Indemnified Person may defend, and may consent to the entry of any judgment or enter into any compromise or settlement with respect to, the Third Party Claim in any manner it may deem appropriate (and the Indemnified Person need not consult with, or obtain any consent from, the Indemnifying Party in connection therewith). If such notice and evidence is given on a timely basis and the Indemnifying Party conducts the defense of the Third Party Claim actively and diligently but any of the other conditions in Clause 4.4(b) is or becomes unsatisfied, the Indemnified Person may defend, and may consent to the entry of any judgment or enter into any compromise or settlement with respect to, the Third Party Claim; provided , that the Indemnifying Party will not be bound by the entry of any such judgment consented to, or any such compromise or settlement effected, without its prior written consent (which consent will not be unreasonably withheld, conditioned or delayed). In the event that the Indemnified Person conducts the defense of the Third Party Claim pursuant to this Clause 4.4(d) , the Indemnifying Party will (i) advance the Indemnified Person promptly and periodically for the costs of defending against the Third Party Claim (including reasonable attorneys’ fees and expenses) and (ii) remain responsible for any and all other Losses that the Indemnified Person may incur or 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 Clause IV .
24 |
(e) Consent to Jurisdiction Regarding Third Party Claim . OBMP and each of MCO and CAV, hereby consent to the non-exclusive jurisdiction of any court in which any Third Party Claim may be brought against any Indemnified Person for purposes of any claim which such Indemnified Person may have against any such Indemnifying Party pursuant to this Agreement in connection with such Third Party Claim, and in furtherance thereof, the provisions of Clause 5.6 are incorporated herein by reference, mutatis mutandis .
Clause 4.5 No Circular Recovery . Each of MCO and CAV hereby agrees that they will not make any claim for indemnification against OBMP by reason of the fact that each was a controlling person, director, employee or representative of OBMP or Vitel or was serving as such for another Person at the request of OBMP or Vitel (whether such claim is for Losses of any kind or otherwise and whether such claim is pursuant to any legal requirement, organizational document, contractual obligation or otherwise) with respect to any claim brought by an OBMP Indemnified Person against any of MCO or CAV under this Agreement or otherwise relating to this Agreement. With respect to any claim brought by an OBMP Indemnified Person against MCO or CAV under this Agreement or otherwise relating to this Agreement, each of MCO and CAV expressly waives any right of subrogation, contribution, advancement, indemnification or other claim against any of OBMP or Vitel with respect to any amounts owed by MCO or CAV pursuant to this Clause IV or otherwise
Clause 4.6 Indemnity from Trust Shares .
(a) For as long as there are OBMP Shares in the Trust maintained under the Trust Agreement, any and all amounts payable by MCO and CAV as Indemnifying Party to an OBMP Indemnified Person will be paid in OBMP Shares first out of such Trust and based on the Fair Market Value (as such term is defined in the Shareholders’ Agreement) of the OBMP Shares on the date of payment, and thereafter, if and when such OBMP Shares are exhausted, by MCO and CAV as herein provided in cash in accordance with payment instructions provided by OBMP. Subject to Clause 4.1(b) , the existence of the OBMP Shares in the Trust will not be deemed to limit the amount of any allowable claims by any OBMP Indemnified Person pursuant to this Agreement for Losses in excess of the value of such OBMP Shares.
(b) For as long as there are Vitel Shares in the Trust maintained under the Trust Agreement, any and all amounts payable by OBMP as Indemnifying Party to a Vitel Indemnified Person will be paid in Vitel Shares first out of such Trust and based on the Fair Market Value of the Vitel Shares on the date of payment, and thereafter, if and when such Vitel Shares are exhausted, by OBMP as herein provided in cash in accordance with payment instructions provided by MCO and CAV. Subject to Clause 4.2(b) , the existence of the Vitel Shares in the Trust will not be deemed to limit the amount of any allowable claims by any Vitel Indemnified Person pursuant to this Agreement for Losses in excess of the value of such Vitel Shares.
Clause 4.7 Insurance Proceeds . Payments by an Indemnifying Party pursuant to Clause 4.1 or Clause 4.2 in respect of any Losses shall be limited to the amount of any liability or damage that remains after deducting therefrom any insurance proceeds and any indemnity, contribution or other similar payment actually received by the Indemnified Person in respect of any such claim, in each case, in the year in which the applicable indemnified Losses are incurred.
25 |
Clause 4.8 Indemnification Exclusive Remedy . Except for claims based on fraud, from and after the date hereof, the right of each party hereto to demand and receive indemnification payments pursuant to this Clause IV shall be the sole and exclusive right and remedy exercisable by such party with respect to any matters relating to, or arising under, this Agreement.
Clause 4.9 Remedies Cumulative . The rights of each Indemnified Person under this Clause IV are cumulative, and each Indemnified Person will have the right in any particular circumstance, in its sole discretion, to enforce any provision of this Clause IV without regard to the availability of a remedy under any other provision of this Clause IV .
CLAUSE V: GENERAL PROVISIONS
Clause 5.1 Confidentiality
(a) The parties hereto agree that Confidential Information (as defined below) furnished and to be furnished to each was and shall be made available in connection with their investment in OBMP and Vitel, and in furtherance of the purposes of this Agreement and the Shareholders’ Agreement. Each party hereto acknowledges that the Confidential Information that each has obtained or will obtain is the property of OBMP and Vitel, and each of their Subsidiaries. Each party hereto agrees that he or she will not disclose any Confidential Information to any other Person, except that Confidential Information may be disclosed: (i) to the extent required by applicable law, rule or regulation (including complying with any oral or written questions, interrogatories, requests for information or documents, subpoena, civil investigative demand or similar process to which a party hereto is subject or as required to be disclosed by OBMP pursuant to federal securities laws in force in the United States of America which are applicable to OBMP); provided that such party gives OBMP and/or Vitel (as applicable) prompt notice of such requests other than disclosure requirements of the Securities and Exchange Commission of the United States of America, to the extent practicable, so that OBMP and/or Vitel (as applicable) may seek an appropriate protective order or similar relief (and the parties hereto shall cooperate with such efforts by OBMP and/or Vitel, and shall in any event make only the minimum disclosure required by such law, rule or regulation, other than federal securities laws in force in the United States of America which are applicable to OBMP, disclosure which OBMP may make in its reasonable discretion), (ii) after the later of a period of five (5) years from and after the date of this Agreement and or (2) years following the date on which a party hereto ceases to be a stockholder of OBMP, or (iii) if the prior written consent of OBMP and/or Vitel (as applicable) shall have been obtained. For the purposes of clarity and the avoidance of doubt the parties hereto acknowledge and agree that, following the consummation of the transactions contemplated by this Agreement, OBMP shall not be required to seek the consent of MCO or CAV for the use of any of Vitel’s Confidential Information which shall become and be the Confidential Information of OBMP as the beneficial owner of the Vitel Shares. The provisions of this Clause 5.1(a) are in addition to, and separate from, any similar covenants and restrictions in respect of Confidential Information to which a party hereto may be subject by reason of any employment or consulting relationship with OBMP and/or Vitel (as applicable) or its Affiliates or the transactions contemplated herein.
26 |
(b) “ Confidential Information ” shall mean any confidential or proprietary information relating to the business or affairs of OBMP and/or Vitel or any of their Affiliates, including, but not limited to, information relating to financial statements, customer identities, potential customers, employees, sales representatives, suppliers, servicing methods, equipment programs, strategies and information, analyses, profit margins or other proprietary information used by OBMP and/or Vitel or any of their Affiliates; provided, however, that Confidential Information does not include any information which is in the public domain or becomes known in the industry through no wrongful act on the part of the a any of the parties hereto; provided that Confidential Information shall not include information relating to OBMP and/or Vitel or any of their Affiliates that (i) is or becomes generally known to the public other than as a result of a disclosure by the party hereto in violation of this Agreement, (ii) is or was available to the party hereto on a non-confidential basis prior to its disclosure to the party hereto, or (iii) was or becomes available to the party hereto on a non-confidential basis from a source other than OBMP or Vitel, which source is or was (at the time of receipt of the relevant information) not bound by a confidentiality agreement with OBMP or another person.
(c) The parties hereto acknowledge that the success of Vitel after the date hereof depends upon the continued preservation of the confidentiality of certain information possessed by the parties hereto, that the preservation of the confidentiality of such information by such parties hereto is an essential premise of the bargain between MCO, CAV, and OBMP, and that the parties hereto would be unwilling to enter into this Agreement in the absence of Clause 5.1(a) . Accordingly, the parties hereto agree that all information provided by or on behalf of OBMP to the parties hereto and their Affiliates and representatives, together with all information provided by or on behalf of Vitel, MCO and CAV to OBMP and its Affiliates and representatives in connection with the preparation of this Agreement shall be treated as “Confidential Information” in accordance with the provisions of Clause 5.1(a) .
Clause 5.2 Noncompete and Nonsolicitation .
(a) For a period of five (5) years from and after the date of this Agreement, neither MCO or CAV shall, or shall permit, cause or encourage any of their Affiliates to, engage directly or indirectly, as an owner, employee, consultant, contractor or otherwise, in any business or enterprise that is engaged in the development, commercialization, and/or sale of the OBMP Products, the OBMP Pipeline Products or the Vitel Products (collectively the “ Restricted Business ”) anywhere in the world as well as clinical development and marketing of therapeutic candidates similar to products that are part of the Restricted Business anywhere in the world, except for those activities listed on Exhibit A as part of the “ Excluded Businesses ”; provided , that no owner of less than 5% of the outstanding stock of any publicly-traded corporation will be deemed to be so engaged solely by reason thereof in the Restricted Business. For a period of five (5) years from and after the date of this Agreement, MCO and CAV shall not, and shall not permit, cause or encourage any of their Affiliates to, solicit, recruit, offer employment, hire, employ, engage as a consultant, lure or entice away, or in any other manner persuade or attempt to persuade, any Person who is an employee of any of OBMP or Vitel to leave the employ of OBMP or Vitel. If the final judgment of a court of competent jurisdiction declares that any term or provision of this Clause 5.2 is invalid or unenforceable, the parties hereto agree that the reduction in the scope, duration, or area of the term or provision, or the deletion of specific words or phrases, or the replacement of any invalid or unenforceable term or provision shall be carried out so as to include a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement will be enforceable as so modified after the expiration of the time within which the judgment may be appealed.
27 |
(b) Notwithstanding anything to the contrary in Clause 5.2(a) above, in no event shall MCO or CAV be prohibited from engaging in any business under the following conditions:
MCO or CAV (as applicable) shall promptly notify OBMP in writing of any business opportunities in any country or territory in the world, with regard to any expansion of any business activity currently conducted by MCO or CAV beyond the Excluded Contracts so long as such business (i) does not interfere with MCO or CAV’s duties under their employment agreements with Vitel and (ii) does not compete with any of the products that are part of the Restricted Business anywhere in the world (the “ ROW Opportunity ”). OBMP, when presented with an ROW Opportunity, shall have a period of thirty (30) days in which to decide to participate. In the event the parties to the ROW Opportunity are unable to reach an agreement to consummate the transaction contemplated by the ROW Opportunity within thirty (30) days, MCO and/or CAV shall be free to pursue the ROW Opportunity without OBMP or any of its Affiliates.
Clause 5.3 Amendments . This Agreement may not be amended except by an instrument in writing signed on behalf of each of party.
Clause 5.4 Assignments . This Agreement and the rights and obligations hereunder shall not be assignable or transferable by any party (including by operation of law in connection with a merger or consolidation of such party) without the prior written consent of the other parties. Any attempted assignment in violation of this Clause 5. 3 shall be void.
Clause 5.5 Notices . All notices, requirements, and requests associated with this Agreement may be made in writing. All notices shall be deemed duly given if they are given: (a) in person, with return receipt; or (b) through a specialized courier service, with return receipt; or (c) via facsimile, upon written confirmation of receipt thereof; or (d) by email, upon written confirmation of receipt thereof. All notices shall be given to the following addresses, facsimile numbers or emails, and shall become effective once they are received, or when receipt thereof is refused, as provided in the return receipt, or in the receipt of the specialized courier service:
(a) | if to MCO: | |
Manuel Cosme | ||
Secretaria de Marina 700 Torre Bambu Depto 2301 | ||
Lomas del Chamizal | ||
Del. Cuajimalpa | ||
CP. 05120 Mexico | ||
Telephone: +52 55 1327 9067 | ||
Facsimile: +52 55 5202 5854 | ||
Email: mcosme@vitelpharma.com |
28 |
( b) | if to CAV: | |
Carlos Alaman | ||
Tabachines 72 | ||
Bosques de las Lomas | ||
Del. Cuajimalpa | ||
CP. 05120 Mexico | ||
Telephone: +52 55 5257 0848 | ||
Facsimile: +52 55 5202 5854 | ||
Email: calaman@vitelpharma.com | ||
(c) | if to OBMP: | |
Oncbiomune Pharmaceuticals, Inc. | ||
11441 Industriplex Blvd., Suite 190 | ||
Baton Rouge, LA 70809 USA | ||
Attention: Andrew Albert Kucharchuk | ||
Telephone: 225-227-2384 | ||
Facsimile: 225 227-2957 | ||
Email: akucha1.OBMP@gmail.com | ||
With a copy (which shall not constitute notice) to: | ||
Legal & Compliance, LLC | ||
330 Clematis Street, Suite 217 | ||
West Palm Beach, FL 33401 | ||
Attention: Lazarus Rothstein, Esq. | ||
Telephone: 561-433-6217 | ||
Facsimile: 561-514-0832 | ||
Email: lrothstein@legalandcompiance.com |
Clause 5.6 Exhibits and Headings . All documents attached hereto, or that are referenced herein, are incorporated by reference, and shall form an integral part of this Agreement. If there is a conflict between this Agreement and such documents, this Agreement shall govern. The titles and headings included in this Agreement are used solely for convenience purposes, and shall not define, limit, or describe in any way the scope, or intent (or otherwise affect the construction) of any provision of this Agreement.
Clause 5.7 Fees and Expenses . Each party shall pay its own costs and expenses incurred in connection with the preparation and execution of this Agreement.
Clause 5.8 Governing Law . This Agreement shall be governed by, and construed in accordance with, the laws of the State of Nevada, without regard to the conflicts of laws rules of such state.
29 |
Clause 5.9 Arbitration . Any and all claims or controversies arising from or relating to, this Agreement, its interpretation, or its alleged breach or enforcement, shall be resolved by binding arbitration before the American Arbitration Association ( “ AAA ” ) according to the Commercial Arbitration Rules of the AAA then in effect (the “ AAA Rules ”). The arbitration shall occur in New York, New York and the parties waive any objection to this choice of alternative dispute resolution, procedures or venue. The parties shall each appoint a single arbitrator and such arbitrators shall agree upon a third arbitrator or, if no agreement can be reached within fourteen (14) days after the AAA provides the list of names from its National Roster, the AAA shall appoint the third arbitrator according to the AAA Rules then in effect. Any arbitration hereunder shall be conducted in English and shall be completed within one hundred and eighty (180) days after appointment of the third arbitrator. The arbitrators shall be authorized to award reasonable attorneys’ fees and costs to the prevailing party in the arbitration, and to include such sum in the final arbitration award. The arbitrators may not award punitive, consequential or special damages. The arbitration award may be confirmed as a judgment in any court having jurisdiction of the subject matter and parties.
Clause 5.10 Waiver of Jury Trial . EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE RELATED AGREEMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY
Clause 5.11 Specific Enforcement; Cumulative Remedies . The parties hereto acknowledge that money damages may not be an adequate remedy for violations of this Agreement and that any party, in addition to any other rights and remedies which the parties may have hereunder or at law or in equity, may, in his or its sole discretion, apply to a court of competent jurisdiction for specific performance or injunction or such other relief as such court may deem just and proper in order to enforce this Agreement or prevent any violation hereof and, to the extent permitted by applicable law, each party waives any objection to the imposition of such relief. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each party agrees that service of process on such party as provided in Clause 5.5 shall be deemed effective service of process on such party. All rights, powers and remedies provided under this Agreement or otherwise available in respect hereof at law or in equity shall be cumulative and not alternative, and the exercise or beginning of the exercise of any thereof by any party shall not preclude the simultaneous or later exercise of any other such rights, powers or remedies by such party.
Clause 5.12 Entire Agreement . This Agreement and any exhibits and other documents referred to herein constitute the entire agreement and understanding among the parties hereto in respect of the subject matter hereof and thereof and supersede all prior and contemporaneous agreements and understandings, both oral and written, among the parties hereto, or between any of them, with respect to the subject matter hereof and thereof.
30 |
Clause 5.13 Severability . If any term, provision, covenant or restriction of this Agreement or the application thereof to any Person or circumstance is held by a court of competent jurisdiction or other authority to be invalid, void, illegal, unenforceable or against regulatory or public policy to any extent, such term, provision, covenant or restriction shall be deemed modified to the limited extent necessary for such term, provision, covenant or restriction to no longer be invalid, void, illegal, unenforceable or against regulatory or public policy and to achieve the maximum intent of the parties, and the remainder of this Agreement and the application thereof shall not be affected and shall be enforceable to the fullest extent permitted by law.
Clause 5.14 Counterparts; Effectiveness . This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement will become effective when duly executed and delivered by each party hereto. Counterpart signature pages to this Agreement may be delivered by facsimile or electronic delivery ( i.e ., by email of a PDF signature page) and each such counterpart signature page will constitute an original for all purposes.
Clause 5.15 Binding Agreement . Each and all of the covenants, terms, provisions and agreements contained in this Agreement shall be binding upon and inure to the benefit of the parties and their respective heirs, executors, successors and permitted assigns.
IN WITNESS WHEREOF, the parties enter into and execute this Agreement through their respective duly authorized legal representatives, on the date mentioned in the preamble.
[The rest of the page is intentionally left blank. Signature pages follow.]
31 |
Signature page for the Contribution Agreement dated March 10, 2017, entered into by and between Manuel Cosme Odabachian, Carlos Fernando Alaman Volnie and Oncbiomune Pharmaceuticals, Inc.
By: /s/ Manuel Cosme Odabachian
Name: Manuel Cosme Odabachian
On his own behalf
By: /s/ Carlos Fernando Alaman Volnie
Name: Carlos Fernando Alaman Volnie
On his own behalf
[The rest of the page is intentionally left blank. Signature pages follow.]
32 |
Signature page for the Contribution Agreement dated March 10, 2017, entered into by and between Manuel Cosme Odabachian, Carlos Fernando Alaman Volnie and Oncbiomune Pharmaceuticals, Inc.
ONCBIOMUNE PHARMACEUTICALS, INC
By: /s/ Andrew A. Kucharchuk
Name: Andrew A. Kucharchuk
Its: Attorney-in-fact
[The rest of the page is intentionally left blank.]
33 |
EXHIBIT A
ACTIVITIES NOT SUBJECT TO NON-COMPETE
The following business activities shall be deemed Excluded Businesses, as provided for in this Agreement so long as such business activity (i) is currently conducted by MCO or CAV pursuant to the terms of any contract or agreement (the “ Excluded Contracts ”) as in effect as of the date hereof and for so long as such contract or agreement is in effect, without any amendment to or renewal of such contract or agreement after the Closing; (ii) does not interfere with MCO or CAV’s duties under their employment agreements with Vitel, and (iii) does not compete with any of the products that are part of the Restricted Business anywhere in the world (collectively, the “ Excluded Business ”):
- | Clinical trials & contract research organization (CRO) services in Mexico. | |
- | Regulatory affairs consulting services and third party lobbying for sanitary registrations in Mexico. | |
- | Warehousing and/or hosting of pharmaceutical, biological, over-the-counter (OTC), supplements, medical devices and other health care products in Mexico. | |
- | Distribution of pharmaceutical, biological, OTC, supplements, medical devices and other health care products to the private and/or government segment in Mexico. | |
- | Manufacturing and development of branded generics, cosmetic, medical devices and private labels throughout Mexico. | |
- | Consulting services to international and Mexican companies in the healthcare market. | |
- | Consulting for the sale, license, acquisition for Mexican and/or foreign companies in Mexico. |
Execution Version
SCHEDULE 3.1 (i)
List of actions, proceedings, arbitrations, investigations or audit, whether civil, criminal, administrative or judicial action pending or threatened, against or involving MCO and CAV or Vitel as of the date of the Contribution Agreement:
None
SCHEDULE 3.1 (j)
List of equity interest or ownership stake in any Person that are directly or indirectly owned by Vitel:
1. 50% stake in Oncbiomune México, S.A. de C.V.
SCHEDULE 3.1 (k)
True and complete list of assets and liabilities of Vitel as of February 28, 2017
VITEL LABORATORIOS, S.A. DE C.V. | |||||||||||||
Assets and Liabilities as of February 28, 2017 | |||||||||||||
Assets | Liabilities | ||||||||||||
Current Assets | Current Liabilities | ||||||||||||
Cash and Bank Accounts | $ | 959,176.27 | Various Creditors | $ | 8,432,422.66 | ||||||||
Various Debtors | $ | 54,827.08 | Payable Taxes | $ | 122,420.90 | ||||||||
Clients | $ | 3,481,318.52 | |||||||||||
Recoverable Taxes | $ | 973,899.12 | Sum of Current Liabilities | $ | 8,554,843.56 | ||||||||
Sum of Current Assets | $ | 5,469,220.99 | |||||||||||
Fixed Assets | |||||||||||||
Computer Equipment | $ | 10,200.00 | Total Liabilities | $ | 8,554,843.56 | ||||||||
Sum of Fixed Assets | $ | 10,200.00 | |||||||||||
Deffered Assets | |||||||||||||
Payments in advance | $ | - | |||||||||||
Sum of Deferred Assets | $ | - | |||||||||||
Total Assets | $ | 5,479,420.99 |
SCHEDULE 3.1 (m)
Material Adverse Effects known to Vitel:
None
SCHEDULE 3.1 (n)
List of all real property owned or leased by Vitel and all real property leases, surveys, encumbrances:
1. | Mexico City Offices: Monte Pelvoux 130 Piso 3, Lomas de Chapultepec, Código Postal 11000, Delegación Miguel Hidalgo, Ciudad de México, México. | |
2. | Mexico Warehouse: Km. 14.5 s/n exterior, Col. San Antonio La Isla, Estado de México, México, C.P. 52280. |
SCHEDULE 3.1 (q)
List of Material Contracts to which Vitel is a party.
1. | Exclusive distribution and licensing agreement entered by and between AqVida GmbH and Vitel Laboratorios, S.A. de C.V. on June 17, 2016. By means of this agreement, AqVida GmbH granted in favor of Vitel Laboratorios, S.A. de C.V. an exclusive distribution license for certain products in Mexico. | |
2. | Distribution and supply agreement entered by and between Laboratorios Q Pharma SL and Vitel Laboratorios, S.A. de C.V. on February 10, 2016. By means of this agreement, Laboratorios Q Pharma SL appointed Vitel Laboratorios, S.A. de C.V. as its exclusive distributor for certain products in Mexico. | |
3. | Distribution Agreement entered by and between Roha Arzneimittel GmbH, Schwabe México, S.A. de C.V. and Vitel Laboratorios, S.A. de C.V. on August 29, 2016. By means of this agreement, Roha Arzneimittel GmbH appointed Vitel Laboratorios, S.A. de C.V. as its exclusive distributor to promote, market, distribute bud for public contracts and sell certain products in Mexico. | |
4. | Distribution Agreement entered by and between Roha Arzneimittel GmbH and Vitel Laboratorios, S.A. de C.V. on August 17, 2016. By means of this agreement, Roha Arzneimittel GmbH appointed Vitel Laboratorios, S.A. de C.V. as its distributor for certain products in Mexico. | |
5. | Distribution Agreement entered by and between Kamada Ltd. and Vitel Laboratorios, S.A. de C.V. on April 7, 2016. By means of this agreement, Kamada Ltd. appointed Vitel Laboratorios, S.A. de C.V. as its distributor for certain products in Mexico. | |
6. | Shareholders’ Agreement entered by and between OncBioMune México, S.A. de C.V., OncBioMune Pharmaceuticals Inc. and Vitel Laboratorios, S.A. de C.V. on August 19, 2016. By means of this agreement, OncBioMune Pharmaceuticals Inc. and Vitel Laboratorios, S.A. set forth the terms and conditions for the operation of its Mexican subsidiary. | |
7. | Services Agreement entered by and between Tercero Autorizado en Evaluación Sanitaria, S.C. and Vitel Laboratorios, S.A. de C.V. on April 27, 2016. By means of this agreement, Tercero Autorizado en Evaluación Sanitaria, S.C. shall provide evaluation services in accordance with the applicable sanitary laws in favor of Vitel Laboratorios, S.A. de C.V. | |
8. | Shareholders Agreement entered by and between OncBioMune Pharmaceuticals, Inc., and Vitel Laboratorios, S.A., dated August 19, 2016. | |
9. | Warehousing Agreement entered into by and between Bodegas Cero Grados, S.A. de C.V., in its capacity as custodian, and Vitel Laboratorios, S.A. de C.V., in its capacity as client, providing for merchandise warehousing services, dated May 16, 2016. |
SCHEDULE 3.1 (r)
List of claims and Material breaches involving Vitel:
None
SCHEDULE 3.1 (t)
List of all policies of fire and casualty, liability and other forms of insurance maintained by or on behalf of Vitel:
None
SCHEDULE 3.1 (w)
List of all valid, subsisting and in good standing Material governmental permits with respect to: (a) the ownership or use of Vitel’s properties and/or; (b) the operation of the Vitel Business, in either case that are held by or for the benefit of Vitel:
1. | Vitel’s Importer Registration ( Padrón de Importadores ) issued on January 19, 2017 by the Tax Service Administration ( Servicio de Administración Tributaria) | |
2. | Operation Notice ( Aviso de Funcionamiento ) issued on June 2, 2016 by the The Federal Commission for the Protection against Sanitary Risk ( Comisión Federal para la Protección contra Riesgos Sanitarios ). |
SCHEDULE 3.1 (y)
Employee benefit plans of Vitel:
None
SCHEDULE 3.1 (hh)
List of infringements or misappropriations of any intellectual property of Vitel:
None
SCHEDULE 3.1 (jj)
List of (1) Vitel Owned IP Rights (including all registrations of any patents, copyrights, mask works, trademarks, service marks, and internet domain names, and all applications therefor), (2) Vitel Licensed IP Rights, (3) all applications, registrations, filings and other formal written governmental actions made or taken pursuant to applicable law by Vitel to secure, perfect or protect its interest in Vitel IP Rights and (4) all proceedings or actions before any governmental authority, including the Instituto Mexicano de la Propiedad Industrial or equivalent authority anywhere else in the world related to any of Vitel IP Rights.
File Number | Registration Number | Brand Name | Type | Description of the type of brand | Class | Owner | |||||||||
1141583 | 1496892 | VITEL | Brand Registration | NAME | 1 | Vitel Laboratorios, S.A. de C.V. | |||||||||
1141586 | 1258305 | VITEL | Brand Registration | NAME | 35 36 | Vitel Laboratorios, S.A. de C.V. | |||||||||
1713067 | In Progress | VITEL | Brand Registration | MIX / LOGO | 35 | Vitel Laboratorios, S.A. de C.V. | |||||||||
1713074 | In Progress | VITEL | Brand Registration | MIX / LOGO | 5 | Vitel Laboratorios, S.A. de C.V. | |||||||||
1724616 | In Progress | PROSCAVAX | Brand Registration | NAME | 5 | Vitel Laboratorios, S.A. de C.V. | |||||||||
1730567 | In Progress | ONCBIOMUNE | Brand Registration | NAME | 35 | Vitel Laboratorios, S.A. de C.V. | |||||||||
1777475 | In Progress | VIO PHARMACEUTICALS | Brand Registration | NAME | 5 | Vitel Laboratorios, S.A. de C.V. | |||||||||
1777478 | In Progress | VIO PHARMACEUTICALS | Brand Registration | NAME | 35 | Vitel Laboratorios, S.A. de C.V. |
SCHEDULE 3.1 (kk)
List of royalties, honoraria, fees or other payments payable by Vitel to any third Person as a result of the use, license-in, manufacture, sale, offering for sale, copying, distribution, or disposition of any Vitel Owned IP Rights by Vitel:
None
SCHEDULE 3.1 (oo)
List of all properties not owned or leased by Vitel and used in connection with the Vitel Business:
None
SCHEDULE 3.1 (pp)
List of liabilities or contracts between: (i) Vitel, and (ii) MCO or CAV or any person who currently is serving, or has within the past twenty-four months served, as an officer, director, or equity holder of Vitel:
None
Execution Version
Schedule 3.2 (j)
List of actions, proceedings, arbitrations, investigations or audit, whether civil, criminal,
administrative or judicial action pending or threatened, against or involving OBMP.
None.
Execution Version
Schedule 3.2 (k)
List of equity interest or ownership stake in any Person that are directly or indirectly
owned by OBMP.
1.50% stake in Oncbiomune Mexico, S.A. de C.V.
Execution Version
Schedule 3.2 (l)
True and complete copies of the financial statements of OBMP as of September 30, 2016.
See Financial Information included as part of Form 10-Q, filed with the SEC on November 21, 2016 for the quarterly period ending September 30, 2016.
Execution Version
Schedule 3.2 (n)
Material Adverse Effects known to OBMP.
None.
Execution Version
Schedule 3.2 (o)
List of all real property owned or leased by OBMP and all real property leases, surveys, encumbrances, and material documents relating to such real property
1. | Lease Agreement in connection with Baton Rouge facility, located at 11441 Industriplex Blvd., Suite 190, Baton Rouge, LA 70809. |
Execution Version
Schedule 3.2 (r)
List of Material Contracts to which OBMP is a party.
1. | See agreements filed with SEC. |
Execution Version
Schedule 3.2 (s)
List of claims and Material breaches involving OBMP.
None.
Execution Version
Schedule 3.2 (u)
List of all policies of fire and casualty, liability and other forms of insurance maintained by or on behalf of OBMP.
1. | Business and Management Indemnity Policy (Scottsdale Insurance Company, Policy # EKS3199308) | |
2. | General Liability Policy (Scottsdale Insurance Company, Policy # CPS254548) | |
3. | Worker’s Compensation Policy (Louisiana Workers’ Compensation Corporation, Policy # 153175-A) |
Execution Version
Schedule 3.2 (x)
List of all valid, subsisting and in good standing Material governmental permits with respect to: (a) the ownership or use of OBMP’s properties and/or; (b) the operation of the Vitel Business, in either case that are held by or for the benefit of OBMP.
1. PGT/Vaccines:
a. | See attached communications and certifications from the Department of Health and Human Services, Food and Drug Administration, in connection with the drug and drug-related items listed therein. | |
b. | See chart of status of PGT and Vaccine Applications included as part of Schedule 3.2(kk). |
2. Authorization to do Business: OBMP is authorized to do business in Louisiana and Nevada.
Execution Version
Schedule 3.2 (z)
Employee benefit plans of OBMP
OBMP provides health insurance benefits as identified in:
1. Humana # 748626-001
OBMP pays 100% of employee family coverage cost.
Execution Version
Schedule 3.2 (ii)
List of infringements or misappropriations of any intellectual property by OBMP.
None.
Execution Version
Schedule 3.2 (kk)
List of (1) OBMP Owned IP Rights (including all registrations of any patents, copyrights, mask works, trademarks, service marks, and internet domain names, and all applications therefor), (2) OBMP Licensed IP Rights, (3) all applications, registrations, filings and other formal written governmental actions made or taken pursuant to applicable law by OBMP to secure, perfect or protect its interest in OBMP IP Rights and (4) all proceedings or actions before any governmental authority, including the Instituto Mexicano de la Propiedad Industrial or equivalent authority anywhere else in the world related to any of OBMP IP Rights.
1. | Domain Names: |
a. | OncBioMune.com |
2. | Trademarks: |
a. | Pending application for mark “PROSCAVAX” |
3. | Patent / Drug IP : OncBioMune - Status of PGT and Vaccine Applications |
Docket No. | Country | Substatus | Appln. No. | Appln. Date | Patent No. | Grant Date | Title | |||||||
24412CA01 | Canada | PENDING | 2824347 | 01/09/2012 | COMPOSITION AND METHOD FOR TREATING CANCER | |||||||||
24412CN01 | China P.R. |
ALLOWED FEES PAID NOV. 2015 |
201280005114.4 | 01/09/2012 | TBD | TBD | COMPOSITION AND METHOD FOR TREATING CANCER | |||||||
24412EA01 | Eurasia | PENDING | 201370155 | 01/09/2012 | COMPOSITION AND METHOD FOR TREATING CANCER | |||||||||
24412EP01 | Europe |
INTENDED ALLOWANCE MAY 15, 2016 |
12701292.0 | TBD | TBD | COMPOSITION AND METHOD FOR TREATING CANCER | ||||||||
24412HK01 | Hong Kong | PENDING | 14101607.7 | 02/20/2014 | COMPOSITION AND METHOD FOR TREATING CANCER | |||||||||
24412IN01 | India | PENDING | 6659/DELNP/2013 | 01/09/2012 | COMPOSITION AND METHOD FOR TREATING CANCER |
Execution Version
Docket No. | Country | Substatus | Appln. No. | Appln. Date | Patent No. | Grant Date | Title | |||||||
24412JP01 | Japan | PENDING | 2013-549475 | 01/09/2012 | COMPOSITION AND METHOD FOR TREATING CANCER | |||||||||
24412MX01 | Mexico | PENDING | MX/a/2013/008188 | 01/09/2012 | COMPOSITION AND METHOD FOR TREATING CANCER | |||||||||
24412UA01 | Ukraine |
ALLOWED INST. TO PAY FEES APR. 2015 |
2013 09855 | 01/09/2012 | TBD | TBD | COMPOSITION AND METHOD FOR TREATING CANCER | |||||||
24412US01 | United States | ISSUED | 13/005993 | 01/13/2011 | 8647627 | 02/11/2014 | COMPOSITION FOR A CANCER VACCINE | |||||||
24412US02 | United States | ISSUED | 14/137060 | 12/20/2013 | 9211322 | 12/15/2015 | COMPOSITION AND METHOD FOR TREATING CANCER | |||||||
24412US03 | United States | PENDING | 14/942517 | 11/16/2015 | COMPOSITION AND METHOD FOR TREATING CANCER | |||||||||
24413CA01 | Canada | PENDING | 2788663 | 01/31/2011 | TAXANE- AND TAXOID- PROTEIN COMPOSITIONS | |||||||||
24413EP01 | EPC | PENDING | 11702566.8 | 01/31/2011 | TAXANE- AND TAXOID- PROTEIN COMPOSITIONS | |||||||||
24413US02 | United States | ALLOWED | 13/017173 | 01/31/2011 | TBD | TBD | TAXANE- AND TAXOID- PROTEIN COMPOSITIONS |
Execution Version
Schedule 3.2 (ll)
List of royalties, honoraria, fees or other payments payable by OBMP to any third Person as a result of the use, license-in, manufacture, sale, offering for sale, copying, distribution, or disposition of any OBMP Owned IP Rights by OBMP.
None.
Execution Version
Schedule 3.2 (pp)
List of all properties not owned or leased by OBMP and used in connection with the OBMP Business.
None.
Execution Version
Schedule 3.2 (pp)
List of liabilities or contracts between: (i) OBMP and (ii) its current shareholders or any person who currently is serving, or has within the past twenty-four months served, as an officer, director, or equity holder of OBMP.
1. | Employment Agreement between OncBioMune Pharmaceuticals, Inc. and Andrew Kucharchuk effective as of February 2, 2016. | |
2. | Employment Agreement between OncBioMune Pharmaceuticals, Inc. and Jonathan F. Head, Ph.D. effective as of February 2, 2016. |
IRREVOCABLE MANAGEMENT TRUST AGREEMENT NUMBER F/2868 (TWO THOUSAND EIGHT HUNDRED SIXTY EIGHT) DATED MARCH 10, 2017 (THE “ AGREEMENT ”), ENTERED INTO BY AND BETWEEN EACH OF MANUEL COSME ODABACHIAN AND CARLOS FERNANDO ALAMAN VOLNIE, IN THEIR CAPACITY AS TRUSTORS AND BENEFICIARIES (COLLECTIVELY, “ BENEFICIARY A ”), ON THEIR OWN BEHALF; ONCBIOMUNE PHARMACEUTICALS, INC., IN ITS CAPACITY AS TRUSTOR AND BENEFICIARY (“ BENEFICIARY B ”), REPRESENTED HEREIN BY ANDREW ALBERT KUCHARCHUK; AND BANCO ACTINVER, S.A., INSTITUCIÓN DE BANCA MÚLTIPLE, GRUPO FINANCIERO ACTINVER, AS TRUSTEE (THE “ TRUSTEE ”), REPRESENTED HEREIN BY ITS TRUST OFFICERS OSCAR MEJÍA REYES AND GABRIELA ALEJANDRA ESPÍNDOLA; PURSUANT TO THE FOLLOWING REPRESENTATIONS AND CLAUSES:
Representations
I. Each individual constituting Beneficiary A hereby represents, individually with respect to themselves, that:
(a) | Each is an individual, resident of Mexico; |
(b) | Each has full legal capacity and authority to enter into and comply with their obligations under this Agreement pursuant to its terms; |
(c) | Entering into and performing under this Agreement does not entail a violation or breach of (i) any agreement, contract, license, resolution or order to which each is a party, or to which any of their assets is subject; or (ii) any law, regulation, circular letter, order or decree from any Governmental Authority applicable to each individual constituting Beneficiary A; |
(d) | Each individual constituting Beneficiary A is the sole and exclusive owner of 49 shares, (together, a total of 98 shares of the fixed capital stock of Vitel) which together represent 98% of the outstanding capital stock of Vitel Laboratorios, S.A. de C.V. (“ Vitel ”), which are free from all liens, conditions, limitations or restrictions on ownership, or any option or preferential right of any kind, except for the restrictions set forth in the bylaws of Vitel and in the LGSM (as such term is defined below), which have been obtained from legal sources, as a result of activities performed within the framework of the law, and that there is no connection whatsoever to illegal activities; |
(e) | Each individual constituting Beneficiary A wishes to transfer to the Trustee, and for the Trust Purposes, ownership of and title over his portion of the Vitel Shares (as such terms are defined below); |
(f) | The 49 shares of the capital stock of Vitel that each individual constituting Beneficiary A currently owns (together, a total of 98 shares of the fixed capital stock of Vitel) are not subject to any contract, agreement, or any other document that pursuant to its terms (i) creates a call option or purchase right, or any other right to acquire such shares, in favor of a third party; or (ii) restricts, in any way, any assignment, transfer, or pledge, except for the restrictions set forth in the bylaws of Vitel and in the LGSM; |
1 |
(g) | Except for the authorizations that, as applicable, have been obtained and are in full force and effect, no authorization or approval whatsoever is required to enter into this Agreement, or to comply with or perform the obligations assumed by each individual constituting Beneficiary A in terms of this Agreement, which are legal, valid, binding, and enforceable against him pursuant to their respective terms; |
(h) | As of this date there is no, and to the best of his knowledge there is no risk that any, action, complaint, claim, legal requirement, or proceeding will be filed before any court, governmental agency, arbitrator, or judicial body with regard to him or his property (i) that affects the legality, validity, or enforceability of this Agreement, (ii) the legal title over the Vitel Shares that each individual constituting Beneficiary A owns, or the transfer of the Vitel Shares to the Trustee in accordance with the terms of this Agreement, or (iii) that prevents the consummation of any of the transactions contemplated herein; |
(i) | Each individual constituting Beneficiary A, and to the best of their knowledge, their agents are in compliance with the FCPA, or any other Anticorruption Law (as such terms are defined below) in force in the United States of America, and with any other Anticorruption Law in force in Mexico, and such individuals are not Blocked Persons. As of this date, each individual constituting Beneficiary A has not received any notice that any investigation has been initiated against him or, to the best of each individual constituting Beneficiary A’s knowledge, his agents, in connection with a violation of the FCPA, or any other Anticorruption Law; |
(j) | Prior to executing this Agreement, the Trustee invited each individual constituting Beneficiary A to, and suggested that each, procure the services of a professional, firm, or company of his choice to provide him advice and support regarding the scope, consequences, processes, implications, and in general, legal and tax matters directly or indirectly associated with this Agreement, and his support in the negotiation and evaluation of the legal and tax risks associated with the final text to be executed, given that the Trustee waives any liability with regard to such matters; therefore, the Trustee does not warrant or assure that the tax structure provided in this Agreement will not be altered with subsequent amendments to the tax law, and the tax and assessment impacts may change; |
(k) | By executing this Agreement, each individual constituting Beneficiary A expressly and irrevocably authorizes the Trustee, in terms of article 28 of the Law that Regulates Credit Information Companies ( Ley para Regular las Sociedades de Información Crediticia ), to perform, at their sole cost and expense, starting on the date of this Agreement, and at any subsequent time, and during the term of this Agreement, as many information requests as the Trustee may deem necessary from the credit information companies authorized to operate in Mexico; |
2 |
(l) | The Trustee has clearly explained, leaving no room for doubt, the terms, meaning, and legal consequences of (i) article 106, XIX, b) of the LIC, and (ii) section 6 of Circular Letter 1/2005 issued by the Mexican Central Bank ( Banco de México ); |
(m) | Pursuant to the second paragraph of article 80 of the LIC, and item 5 of Circular Letter 1/2005 issued by the Mexican Central Bank, each individual constituting Beneficiary A acknowledges that the Trustee shall be liable for the damages resulting from a breach by the Trustee of its obligations pursuant to this Agreement subject to the limitations set forth in Sections 11.1 and 13.1 of this Agreement; |
(n) | Each individual constituting Beneficiary A acknowledges and agrees that entering into this Trust Agreement requires them to provide to the Trustee, on an annual basis, an update of the information and documentation that the Trustee has requested from them, pursuant to the Know Your Customer Policies of the Trustee, in terms of the Nineteenth, Fortieth, Forty-First, and Forth Transitory general provisions referenced in the fourth paragraph of article One Hundred Fifteen of the LIC; |
(o) | Each individual constituting Beneficiary A understands and agrees that, with the exception of the Shareholders’ Agreement (as such term is defined below) the Trustee does not know, nor is it required to know, the terms and conditions of such agreements associated with and derived from this Agreement, which have been entered into by and between the parties hereto without the participation of the Trustee; provided that the Trustee shall not be liable in any way regarding the veracity, legitimacy, authenticity, or legality of such agreements, and that the Trustee, unless it is a part thereof, and enters into them in compliance with instructions provided pursuant to this Trust Agreement, is not, and shall not be, bound in any way by such agreements, any other documents, and their respective exhibits. Likewise, each individual constituting Beneficiary A acknowledges that the liability regarding legitimacy, authenticity, and legality of the agreements mentioned in this paragraph, is directly and exclusively borne by the parties that execute them; |
(p) | In terms of the provisions of article 17 of the Federal Law to Prevent and Identify Transactions with Resources from Illegal Sources ( Ley Federal para la Prevención e Identificación de Operaciones con Recursos de Procedencia Ilícita ), each individual constituting Beneficiary A hereby represents that he will not perform vulnerable transactions through this Trust Agreement; |
(q) | The Trustee has made each Beneficiary A aware of its Privacy Policy, which refers to the document in physical, electronic or any other format generated by Banco Actinver, S.A., Institución de Banca Múltiple, Grupo Financiero Actinver, in its capacity as responsible party, which can be consulted in the webpage of Banco Actinver, S.A., Institución de Banca Múltiple, Grupo Financiero Actinver, in the following address http://www.actinver.com.mx, same which was made known to each Beneficiary A prior to handling their Personal Information as provided in the Federal Law for the Protection of Personal Information in Possession of Private Entities or Individuals (“ LFPFP ”), and that forms part of this Agreement; and |
3 |
As provided in the LFPDP, the Beneficiaries A hereby grant Banco Actinver, S.A., Institución de Banca Múltiple, Grupo Financiero Actinver their express consent to handle their Personal Information by executing this Agreement, accepting the terms and conditions by which Banco Actinver, S.A., Institución de Banca Múltiple, Grupo Financiero Actinver will have the obligation to inform each Beneficiary A, through its Privacy Policies, the information it will be collecting and for what purpose. Likewise, the Beneficiaries A may request Banco Actinver, S.A., Institución de Banca Múltiple, Grupo Financiero Actinver, at any moment, to be given access, rectification, cancellation or opposition with respect of the Personal Information corresponding to each, through the format provided at Banco Actinver, S.A., Institución de Banca Múltiple, Grupo Financiero Actinver. Such format must contain and include the information and documentation mentioned in the Privacy Policy. Banco Actinver, S.A., Institución de Banca Múltiple, Grupo Financiero Actinver, shall communicate to each Beneficiary A, within a maximum term of 20 (twenty) business days as of the date in which such format was received, the determination which was reached, for purposes of, as applicable, such determination to enter into effect within the following 15 (fifteen) business days following the date in which such response was communicated. In connection with requests for access to Personal Information, the delivery shall take place prior delivery proof of the Beneficiary’s identity. The terms referred herein may be extended in one occasion for an equal amount of days, as long as the circumstances of each case justify such extension. Banco Actinver, S.A., Institución de Banca Múltiple, Grupo Financiero Actinver may deny Access to Personal Information, or carry out any rectification or cancellation, or grant the opposition for the treatment of information as provided in the LFPDP. | |
II. | Beneficiary B hereby represents, through its legal representative, that: |
(a) | It is a corporation, duly organized and validly existing under the laws of the State of Nevada, USA; |
(b) | It has full legal capacity and sufficient corporate authorizations to enter into and comply with its obligations under this Agreement pursuant to its terms; |
(c) | Entering into and performing under this Agreement does not entail a violation or breach of (i) any provision of its corporate bylaws; or (ii) any agreement, contract, license, resolution or order to which it is a party, or to which Beneficiary B, or any of its assets is subject; or (iii) any law, regulation, circular letter, order or decree from any Governmental Authority applicable to Beneficiary B; |
(d) | It has issued the OBM Shares (as such term is defined below) to the Trustee to hold in its capacity as trustee of this Trust Agreement, for the benefit of Beneficiary A, which shares are free from all liens, conditions, limitations or restrictions on ownership, or any option or preferential right of any kind, and which have been duly authorized, validly issued, fully paid and non-assessable, and that such issuance has no connection whatsoever to illegal activities; |
4 |
(e) | It wishes to transfer to the Trustee, and for the Trust Purposes, ownership of and title over the OBM Shares; |
(f) | The OBM Shares are not subject to any contract, agreement, or any other document that pursuant to its terms (i) creates a call option or purchase right, or any other right to acquire such shares, in favor of a third party; or (ii) restricts, in any way, any assignment, transfer, or pledge, except for the restrictions set forth in the Shareholders Agreement; |
(g) | Except for the authorizations that, as applicable, have been obtained and are in full force and effect, no authorization or approval whatsoever is required to enter into this Agreement, or to comply with or perform the obligations assumed by it in terms of this Agreement, which are legal, valid, binding, and enforceable against Beneficiary B pursuant to their respective terms; |
(h) | As of this date there is no, and to the best of its knowledge there is no risk that any, action, complaint, claim, legal requirement, or proceeding will be filed before any court, governmental agency, arbitrator, or judicial body with regard to Beneficiary B or its property (i) that affects the legality, validity, or enforceability of this Agreement, (ii) the legal title over the OBM Shares or the transfer of the OBM Shares to the Trustee in accordance with the terms of this Agreement, or (iii) that prevents the consummation of any of the transactions contemplated herein; |
(i) | Its representative has sufficient powers of attorney and authorities, and the corporate authorizations required to validly enter into this Agreement on its behalf, and to validly bind Beneficiary B under the terms hereof, and that such powers of attorney, authorities, and corporate or other authorizations have not been revoked, amended, or limited in any way; |
(j) | To the best of its knowledge, Beneficiary B, and all its directors, officers, employees, and agents, including the OBM Principal Shareholders, are in compliance with the FCPA, or any other Anticorruption Law (as such terms are defined below) in force in the United States of America, and with any other Anticorruption Law in force in the jurisdiction in which it has been organized, and such individuals are not Blocked Persons. As of this date, it has not received any notice (to the best of Beneficiary B’s knowledge) that any investigation has been initiated against Beneficiary B, or its directors, officers, employees, and agents, including the OBM Principal Shareholders, in connection with a violation of the FCPA, or any other Anticorruption Law; |
(k) | Prior to executing this Agreement, the Trustee invited it to, and suggested that it, procure the services of a professional, firm, or company of its choice to provide it advice and support regarding the scope, consequences, processes, implications, and in general, legal and tax matters directly or indirectly associated with this Agreement, and its support in the negotiation and evaluation of the legal and tax risks associated with the final text to be executed, given that the Trustee waives any liability with regard to such matters, therefore, the Trustee does not warrant or assure that the tax structure provided in this Agreement will not be altered with subsequent amendments to the tax law, and the tax and assessment impacts may change; |
5 |
(l) | By executing this Agreement, it expressly and irrevocably authorizes the Trustee, in terms of article 28 of the Law that Regulates Credit Information Companies, to perform, at its exclusive cost and expense, starting on the date of this Agreement, and at any subsequent time, and during the term of this Agreement, as many information requests as it may deem necessary from the credit information companies authorized to operate in Mexico; |
(m) | The Trustee has clearly explained, leaving no room for doubt, the terms, meaning, and legal consequences of (i) article 106, XIX, b) of the LIC, and (ii) section 6 of Circular Letter 1/2005 issued by the Mexican Central Bank; |
(n) | Pursuant to the second paragraph of article 80 of the LIC, and item 5 of Circular Letter 1/2005 issued by the Mexican Central Bank, it acknowledges that the Trustee shall be liable for the damages resulting from a breach by the Trustee of its obligations pursuant to this Agreement subject to the limitations set forth in Sections 11.1 and 13.1 of this Agreement; |
(o) | It acknowledges and agrees that entering into this Trust Agreement requires it to provide to the Trustee, on an annual basis, an update of the information and documentation that the Trustee has requested from it, pursuant to the Know Your Customer Policies of the Trustee, in terms of the Nineteenth, Fortieth, Forty-First, and Forth Transitory general provisions referenced in the fourth paragraph of article One Hundred Fifteen of the LIC; |
(p) | It understands and agrees that, with the exception of the Shareholders’ Agreement, the Trustee does not know, nor is it required to know, the terms and conditions of such agreements associated with and derived from this Agreement, which have been entered into by and between the parties hereto without the participation of the Trustee; provided that the Trustee shall not be liable in any way regarding the veracity, legitimacy, authenticity, or legality of such agreements, and that the Trustee, unless it is a part thereof, and enters into them in compliance with instructions provided pursuant to this Trust Agreement, is not, and shall not be, bound in any way by such agreements, any other documents, and their respective exhibits. Likewise, it acknowledges that the liability regarding legitimacy, authenticity, and legality of the agreements mentioned in this paragraph, is directly and exclusively borne by the parties that execute them; |
(q) | In terms of the provisions of article 17 of the Federal Law to Prevent and Identify Transactions with Resources from Illegal Sources, it hereby represents that it will not perform vulnerable transactions through this Trust Agreement; and |
6 |
(r) | The Trustee has made Beneficiary B aware of its Privacy Policy, which refers to the document in physical, electronic or any other format generated by Banco Actinver, S.A., Institución de Banca Múltiple, Grupo Financiero Actinver, in its capacity as responsible party, which can be consulted in the webpage of Banco Actinver, S.A., Institución de Banca Múltiple, Grupo Financiero Actinver, in the following address http://www.actinver.com.mx, same which was made known to Beneficiary B prior to handling its Personal Information as provided in the Federal Law for the Protection of Personal Information in Possession of Private Entities or Individuals (“ LFPFP ”), and that forms part of this Agreement. |
As provided in the LFPDP, Beneficiaries B hereby grants Banco Actinver, S.A., Institución de Banca Múltiple, Grupo Financiero Actinver its express consent to handle its Personal Information by executing this Agreement, accepting the terms and conditions by which Banco Actinver, S.A., Institución de Banca Múltiple, Grupo Financiero Actinver will have the obligation to inform Beneficiary B, through its Privacy Policies, the information it will be collecting and for what purpose. Likewise, Beneficiaries B may request Banco Actinver, S.A., Institución de Banca Múltiple, Grupo Financiero Actinver, at any moment, to be given access, rectification, cancellation or opposition with respect of its Personal Information, through the format provided at Banco Actinver, S.A., Institución de Banca Múltiple, Grupo Financiero Actinver. Such format must contain and include the information and documentation mentioned in the Privacy Policy. Banco Actinver, S.A., Institución de Banca Múltiple, Grupo Financiero Actinver, shall communicate to Beneficiary B, within a maximum term of 20 (twenty) business days as of the date in which such format was received, the determination which was reached, for purposes of, as applicable, such determination to enter into effect within the following 15 (fifteen) business days following the date in which such response was communicated. In connection with requests for access to Personal Information, the delivery shall take place prior delivery proof of the Beneficiary’s identity. The terms referred herein may be extended in one occasion for an equal amount of days, as long as the circumstances of each case justify such extension. Banco Actinver, S.A., Institución de Banca Múltiple, Grupo Financiero Actinver may deny Access to Personal Information, or carry out any rectification or cancellation, or grant the opposition for the treatment of information as provided in the LFPDP. | |
III. | The Trustee hereby represents, through its trust officer, that: |
(a) | It is a multiple banking institution ( institución de banca multiple ), duly organized and validly existing under the laws of Mexico, and authorized to act as a trust company in the transactions referenced in article 46 (forty-six), section XV (roman numeral fifteen) of the LIC, as evidenced in public instrument number 35,694 dated March 1 st , 2010, granted by Héctor Manuel Cárdenas Villarreal, Esq., Notary Public number 201 of the Federal District, which has been duly registered in the Public Registry of Commerce under commercial folio number 357980 on April 15, 2010; |
7 |
(b) | It is its intent to enter into this Agreement, and accept its appointment as Trustee, and perform each and every one of the actions required, or deemed convenient, to satisfy and comply with the Trust Purposes, and to comply with its obligations pursuant to this Agreement and Applicable Law; |
(c) | It does not require any authorization or approval to enter into this Agreement, or to comply with, or perform the obligations assumed by it in terms of this Agreement, which are legal, binding, and enforceable against the Trustee pursuant to their terms; and |
(d) | Its trust officers evidence their legal capacity through public instrument 39,122 dated June 7, 2013 granted by José Luis Villavicencio Castañeda, Esq., Notary Public number 218 of Mexico City, whose first official transcript has been duly registered in the Public Registry of Commerce of Mexico City under commercial folio number 39338 on June 11, 2013 and public instrument 96,899, dated March 4, 2015, granted by Joaquin Talavera Sanchez, Esq., Notary Public number 40 of Mexico City, registered in the Public Registry of Commerce of Mexico City under the commercial folio number 357980 dated March 24, 2015; through which their appointment as trust officers, and the powers of attorney granted by the Trustee, were certified, and whose authorities and powers of attorney have not been revoked, amended, or limited in any way as of this date. |
NOW THEREFORE, based on the preceding Representations, the parties agree to the following Clauses:
CLAUSE I: DEFINITIONS
Clause 1.1 Defined Terms . Capitalized terms used herein shall have the following meanings:
“ Affiliate ” means, in connection with any Person (i) any other Person that, directly or indirectly, Controls, is Controlled by, or is under common Control with, such Person, or (ii) any other Person that owns or controls 50% (fifty percent) or more of the shares or membership interests issued, and with voting rights, of such Person, or (iii) any officer, managing member, executive, or manager of such Person, or (iv) any other Person that is an officer, executive, managing member, manager, or holds 50% (fifty percent) or more of the shares or membership interests with voting rights of any of the Persons mentioned in subsections (i) to (iii) of this definition.
“ Agreement ”, “ Trust Agreement ” or “ Trust ” means this Irrevocable Trust Agreement number F/2868 (two thousand eight hundred sixty eight), as amended, whether in whole or in part, supplemented, or otherwise altered, renewed, or extended at any time.
“ Anticorruption Law ” means the FCPA in force in the United States of America, the Federal Anticorruption Law on Public Procurement Matters ( Ley Federal Anticorrupción en Contrataciones Públicas ) in force in Mexico, and all other laws, regulations, orders, and any other similar regulation associated with anticorruption laws, anti-boycott laws, fraud, gifts, bribery, anti-money laundering, intended to control, prevent, or penalize bribery, gifts, illegal gratuities and benefits, or other similar illegal practices.
8 |
“ Applicable Law ” means, with regard to any circumstance described in this Agreement, any laws, rules, regulations, codes, and other general provisions applicable in Mexico to such circumstance, and the orders, decrees, rulings, court orders, notices or agreements that are valid and in force, issued, enacted, or executed by any Governmental Authority that are applicable to such circumstance.
“ Beneficiaries ” means, jointly, Beneficiary A, and Beneficiary B.
“ Beneficiary A ” has the meaning given to such term in the preamble of this Agreement.
“ Beneficiary B ” has the meaning given to such term in the preamble of this Agreement.
“ Beneficiary Rights ” means the rights to which the Beneficiaries of this Agreement are entitled, respectively, pursuant to their capacity as beneficiaries, and in connection with their respective interest in the Trust Property.
“ Blocked Person ” means any Person:
(i) that is included in the Annex, or otherwise subject to the provisions of Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001, and relating to Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (the “ Executive Order ”), or a person who is identified as an affiliate of a Person designated as a terrorist, or associated with terrorism or money laundering pursuant to the regulations enacted in connection with the USA PATRIOT ACT;
(ii) that is owned or Controlled by, or acts on behalf of, any Person included in the Annex, or otherwise subject to, the Executive Order;
(iii) with whom a lender subject to oversight by financial authorities is prohibited from dealing or otherwise engaging in any transaction by any terrorism of money laundering law, including the Executive Order;
(iv) who commits, threatens, or conspires to commit or supports “terrorism”, as such term is defined in the Executive Order;
(v) is a person designated as a “specially designated national and blocked person”, pursuant to the most recent list published by the Office of Foreign Assets Control of the Treasury Department of the United States of America (“ OFAC ”), in its official website, http://www.treas.gov.ofac/tllsdn.pdf , or any replacement website or other replacement official publication of such list;
(vi) who is not in compliance with OFAC, or the USA PATRIOT ACT; or
9 |
(vii) who is an Affiliate of any of the aforementioned Persons.
“ Business Day ” means any day on which banks are not authorized to close in Mexico City.
“ Control ” means the authority to determine the management, and the policies of a Person, directly or indirectly, whether through holding securities or membership interests with voting rights, through an agreement, or otherwise.
“ Distributions ” means, jointly, the OBM Distributions, and the Vitel Distributions.
“ Dollars ” means the legal currency of the United States of America.
“ FCPA ” means the Foreign Corrupt Practices Act of 1977 in force in the United States of America.
“ Governmental Authority ” means any Federal, State, Municipal, or local authority in the United States of America or Mexico.
“ Initial Contribution ” means the amount of 1,000.00 (one thousand 00/100 pesos), which the Beneficiaries shall provide jointly to the Trustee in terms of Clause 2.1(b) of this Agreement.
“ LGSM ” means the General Law of Companies ( Ley General de Sociedades Mercantiles ), as amended, or supplemented from time to time.
“ LGTOC ” means the General Law of Negotiable Instruments and Credit Transactions ( Ley General de Títulos y Operaciones de Crédito ), as amended, or supplemented from time to time.
“ LIC ” means the Credit Institutions Law ( Ley de Instituciones de Crédito ), as amended, or supplemented from time to time.
“ Mexico ” means the United Mexican States.
“ Minimum Price ” has the meaning given to such term in Clause 4.1(b)(i) of this Agreement.
“ Notice of Exercise ” has the meaning given to such term in Clause 4.1(b)(ii) of this Agreement.
“ Notice of Offer ” has the meaning given to such term in Clause 4.1(b)(i) of this Agreement.
“ OBM ” means Oncbiomune Pharmaceuticals, Inc., a Nevada corporation.
10 |
“ OBM Accounts ” means the accounts denominated in Pesos or in Dollars, opened and kept at Banco Actinver, S.A., or at any of the companies belonging to Grupo Financiero Actinver, under the name of the Trustee, for the purposes set forth in Clause 6.1(c) of this Agreement.
“ OBM Distributions ” means the amounts that OBM distributes to its shareholders as dividends, equity reimbursements, or otherwise.
“ OBM Principal Shareholders ” means Jonathan F. Head, Ph.D. and Andrew Albert Kucharchuk.
“ OBM Shares ” means 61,158,013 (sixty one million one hundred fifty eight thousand thirteen) shares of common stock, and 2,107,681 (two million one hundred seven thousand six hundred eighty one) shares of Series B preferred stock, of OBM.
“ Offered Beneficiary Rights ” has the meaning given to such term in Clause 4.1(b)(i) of this Agreement.
“ Permitted Investment ” has the meaning given to such term in Clause 6.2(a) of this Agreement.
“ Permitted Transfer ” means a transfer to a Permitted Transferee, pursuant to Clause IV of this Agreement.
“ Permitted Transferees ” has the meaning given to such term in Clause 4.1(a) of this Agreement.
“ Person ” means any natural or legal person, trust, joint venture, partnership or company, Governmental Authority, or any other entity of any kind, with or without its own legal capacity.
“ Pesos ” means the legal currency of Mexico.
“ Right of First Refusal ” has the meaning given to such term in Clause 4.1(b) of this Agreement.
“ ROFR Deposit ” has the meaning given to such term in Clause 4.1(b)(iii) of this Agreement.
“ ROFR Exercise Period ” has the meaning given to such term in Clause 4.1(b)(ii) of this Agreement.
“ Shareholders’ Agreement ” means the Shareholders Agreement of OBM dated as of the date hereof among Beneficiary A, Beneficiary B and the shareholders named therein, as amended, whether in whole or in part, supplemented, or otherwise altered, renewed, or extended at any time, which will be part of this Agreement as Exhibit “A” .
“ Taxes ” has the meaning given to such term in Clause 10.1 of this Agreement.
11 |
“ Term of the Trust ” means the period of validity and enforceability of this Trust Agreement as specified in Clause 12.2 of this Agreement.
“ Third Party Purchaser ” has the meaning given to such term in Clause 4.1(b)(i) of this Agreement.
“ Third Party Sale Agreement ” has the meaning given to such term in Clause 4.1(b)(vi) of this Agreement.
“ Transfer ” shall mean, with respect to any Beneficiary Rights, (i) when used as a verb, to sell, assign, dispose of, exchange, pledge, charge, encumber, hypothecate or otherwise transfer such Beneficiary Rights or any participation or interest therein, whether directly or indirectly (including by means of any hedging or derivative transactions that may have a similar effect to the foregoing), or agree or commit to do any of the foregoing; and (ii) when used as a noun, a direct or indirect sale, assignment, disposition, exchange, pledge, charge, encumbrance, hypothecation, or other transfer of such Beneficiary Rights or any participation or interest therein (or any hedging or derivative transactions that may have a similar effect to the foregoing) or any agreement or commitment to do any of the foregoing.
“ Trust Accounts ” means jointly, the OBM Accounts and the Vitel Accounts.
“ Trust Property ” has the meaning given to such term in Clause 2.2 of this Agreement.
“ Trust Purposes ” has the meaning given to such term in Clause 2.4 of this Agreement.
“ Trustee ” has the meaning given to such term in the preamble of this Agreement.
“ Vitel Accounts ” means the accounts denominated in Pesos or in Dollars, opened and kept at Banco Actinver, S.A., or at any of the companies belonging to Grupo Financiero Actinver, under the name of the Trustee, for the purposes set forth in Clause 6.1(c) of this Agreement.
“ Vitel Distributions ” means the amounts that Vitel distributes to its shareholders as dividends, equity reimbursements, or otherwise.
“ Vitel Shares ” means 100 (one hundred) shares of the fixed capital stock of Vitel, representing 100% (one hundred per cent) of the capital stock of Vitel, less two shares of the capital stock of Vitel, property of OBM.
Clause 1.2 Interpretation of Defined Terms . The definitions set forth in the preceding Clause shall apply both in the singular and plural form of such terms. When the context requires it, any pronoun shall include the corresponding male, female, and neutral form. Unless the context requires otherwise, all references to clauses, paragraphs, subsections, items, or numbers of clauses of this Agreement, and all references to schedules and exhibits, shall be deemed to be references to schedules and exhibits to this Agreement, which are hereby incorporated by reference to form an integral part of this Agreement. Unless the context requires otherwise, the words (a) “ hereof ”, “ herein ”, “ hereunder ”, “ pursuant hereto ”, “ below ”, and words with similar meaning when used in this Agreement, shall be deemed to refer to this Agreement in its entirety, and not to any specific clause, paragraph, subsection, item, or number of this Agreement; (b) “ include ”, “ includes ”, and “ including ” shall be deemed followed by the phrase, “ but not limited to ”, unless otherwise specified; and (c) “ asset ”, or “ property ” shall be deemed to have the meaning and effect, and to refer to, each and every one of the assets and property, whether tangible or intangible, including cash, shares, or interests, representing the capital stock of any company or Person, securities, income, lease and contractual rights. Likewise, references to (i) any agreement, contract, document, or instrument, includes the reference to such agreement, contract, document, or instrument, as amended, whether in whole or in part, supplemented, or otherwise altered from time to time, and (ii) any law, rule, or regulation, includes the amendments thereto from time to time, or any law, rule, or regulation that replaces them.
12 |
CLAUSE II: THE TRUST
Clause 2.1 Creation of the Trust; Acceptance of the Appointment of the Trustee and Term .
(a) Creation of the Trust . Manuel Cosme Odabachian and Carlos Fernando Alaman Volnie hereby agree to contribute, assign, and transfer to the Trustee, ownership of, and title over, the Vitel Shares, within the following 5 (five) Business Days as of the date hereof. Oncbiomune Pharmaceuticals, Inc. hereby agrees to contribute, assign, and transfer to the Trustee, ownership of, and title over, the OBM Shares, within the following 5 (five) Business Days as of the date hereof. The Beneficiaries jointly settle the Administration and Stock Control Trust Agreement with Banco Actinver, S.A., Institución de Banca Múltiple, Grupo Financiero Actinver, as trustee of the present Trust Agreement, in order to be the owner and proprietor of the Trust Property, in furtherance of the Trust Purposes, as provided herein and in the Applicable Law. Likewise, the Beneficiaries jointly as a single beneficiary, and in equal portions (50% Beneficiary A and 50% Beneficiary B), hereby provide the Initial Contribution to the Trustee.
(b) Delivery of Shares to the Trustee . The parties agree to deliver the Vitel Shares and the OBM Shares, as applicable, as follows within the following 5 (five) Business Days as of the date hereof:
(i) | In connection with the Vitel Shares, the Beneficiaries A shall deliver to the Trustee the Vitel Shares, duly endorsed in favor of the Trustee, and shall cause the Secretary of the Board of Vitel to issue an acknowledgement of such transfer and certifying that the Trustee is registered with Vitel as one of its shareholders; and | |
(ii) | In connection with the OBM Shares, the Beneficiary B shall deliver to the Trustee the newly issued OBM Shares, issued in favor of the Trustee, and shall cause the appropriate official of OBM to issue an acknowledgement of such transfer and certifying that the Trustee is registered with OBM as one of its shareholders. |
13 |
(c) Acceptance of the Appointment of the Trustee . The Trustee hereby (a) accepts its appointment as Trustee of this Agreement, and agrees to duly and faithfully comply with the Trust Purposes, and with all obligations assumed by the Trustee in terms of this Agreement, and Applicable Law; (ii) receives the Initial Contribution pursuant to the terms of this Agreement; and (iii) acknowledges and accepts title over the Trust Property that is transferred to the Trustee for the Trust Purposes. The Trustee is hereby authorized to perform all actions required to comply with the Trust Purposes, and it hereby agrees to perform any actions required or convenient to comply with the Trust Purposes.
Clause 2.2 Trust Purposes .
During the term of this Agreement, the trust property is hereby formed, and shall be composed of, as applicable, the following assets (jointly, the “ Trust Property ”):
(a) the Initial Contribution;
(b) the Vitel Shares;
(c) the OBM Shares;
(d) any amounts and other assets, property, or rights that the Trustee receives pursuant to having title over the Vitel Shares, and the OBM Shares;
(e) each and every amount deposited in the Trust Accounts;
(f) each and every amount resulting from the Permitted Investments;
(g) each and all property assigned to, or acquired by, the Trustee pursuant to the Trust Purposes as provided herein; and
(h) all cash amounts, and all ancillary property, proceeds, products, and returns resulting from, or associated with, the property described in the preceding subsections of this Clause, including the rights resulting from, or associated with, the investments and operation of the Trust.
In order to formalize the transfer of the OBM Shares and the Vitel Shares, the trustors, within five (5) days of the date hereof, will (i) deliver to the Trustee the stock certificates which represent that shares which they own, duly endorsed in favor of the Trustee, and (ii) deliver to the Trustee a certification issued by the Secretary of the Board of Directors which confirms that the transfer of shares referred to in this Trust Agreement has been duly registered in the corresponding Shareholder’s Registry Book of each entity.
For the avoidance of doubt, the parties agree that the OBM Shares and the Vitel Shares shall be endorsed in favor of the Trustee bearing the following legend, and including the place and date in which the endorsement took place, as well as the name or denomination of the endorsing trustor:
14 |
“The undersigned endorses property of the present stock certificate and the shares it covers, in favor of Banco Actinver, S.A., Institución de Banca Múltiple, Grupo Financiero Actinver,, in its capacity as Trustee of the Administration and Stock Control Trust Agreement No. F/2686 (two thousand eight hundred sixty eight), in furtherance of the purposes set forth therein”.
The parties hereby agree that the provisions of this Clause shall act as an inventory of the property that comprises the Trust Property upon the creation of the Trust, and the execution of this Agreement, and the Beneficiaries shall keep a copy hereof, which they receive from the Trustee to their full satisfaction. The foregoing in compliance with the provisions of item five point one of Circular Letter 1/2005 (one slash two thousand five) issued by the Mexican Central Bank.
Clause 2.3 Parties to the Trust . The parties to this Agreement are the following:
MANUEL COSME ODABACHIAN and CARLOS FERNANDO ALAMAN VOLNIE, jointly, in their capacity as Trustors and Beneficiaries A.
ONCBIOMUNE PHARMACEUTICALS, INC. in its capacity as Trustor and Beneficiary B.
Banco Actinver, S.A., Institución de Banca Múltiple, Grupo Financiero Actinver, in its capacity as Trustee.
Clause 2.4 Trust Purposes . The purposes of this Irrevocable Management Trust Agreement (the “ Trust Purposes ”) are that the Trustee perform each and every one of the activities, and that it complies with each and every one of the obligations described in this Clause 2.4 , and in this Agreement, including (i) receiving the Initial Contribution, the Vitel Shares, and the OBM Shares, and exercise, under instructions from the Beneficiary A, and Beneficiary B, as applicable, the corporate and property rights and obligations resulting from holding the Vitel Shares, and the OBM Shares, respectively, in terms of this Agreement and in compliance with the Shareholders Agreement; (ii) manage the Trust Property pursuant to the provisions of this Agreement; (iii) provide to the Beneficiaries the Distributions that it receives as a result holding the Vitel Shares and the OBM Shares, respectively, in terms of this Agreement; and (iv) perform all such activities that the Beneficiaries, as applicable, instruct the Trustee in writing, which are specific for the activities described in this Clause. In connection with the foregoing, the Trustee shall:
(a) be the sole and legitimate owner, maintain and preserve ownership of the property and rights that, currently, or in the future, form part of the Trust Property during the term of this Agreement;
15 |
(b) establish, maintain, and manage the Trust Accounts to adequately manage the funds that form part of the Trust Property, pursuant to the provisions of this Agreement, and apply all funds to the Trust Accounts (including the Permitted Investments) pursuant to this Agreement;
(c) receive from Beneficiary A fiduciary ownership of, and title over, the Vitel Shares;
(d) receive from Beneficiary B fiduciary ownership of, and title over, the OBM Shares;
(e) exercise the corporate and property rights resulting from the Vitel Shares and the OBM Shares, pursuant to the provisions of this Agreement and the Shareholders Agreement;
(f) receive from Vitel and OBM amounts from dividends, equity reimbursements, or that are otherwise distributed in alignment to any legal requirement, respectively, to their shareholders;
(g) provide to the Beneficiaries the Distributions that it receives from Vitel and OBM, respectively, pursuant to the provisions of this Agreement;
(h) dispose of the Vitel Shares in terms of written instructions it receives from Beneficiary A in terms of this Agreement;
(i) dispose of the OBM Shares in terms of written instructions it receives from Beneficiary B in terms of this Agreement;
(j) pursuant to the written instructions from the Beneficiaries, invest any amounts deposited into the Trust Account in Permitted Investments pursuant to the provisions of Clause 6.2 of this Agreement;
(k) grant the general or special powers of attorney for acts of ownership, administration, litigation and collection, subscription of negotiable instruments, and any other that is necessary or convenient to achieve the Trust Purposes, including those required to defend the Trust Property, in favor of the Persons that the Beneficiaries instruct it in writing, as applicable, without this including the authority for the appointed attorneys-in-fact to be able to open and operate bank accounts. The foregoing, provided that the Trustee shall not grant general powers of attorney for acts of ownership, or general powers of attorney to subscribe, guarantee, or endorse negotiable instruments in terms of article 9 of the LGTOC;
(k) in general, perform any other action required or convenient to satisfy or comply with the Trust Purposes, or Applicable Law; and
(l) return the Trust Property to the Beneficiaries pursuant to the provisions of Clause 10.2 of this Agreement.
16 |
Clause 2.5 The Trustee .
(a) Authorities of the Trustee . The Trustee shall have all authorities and powers of attorney required to comply with the Trust Purposes, pursuant to the terms of Article 391 of the LGTOC; provided that the Trustee shall act at all times pursuant to the instructions of the Beneficiaries.
(b) Terms and Conditions of the Trustee’s Services . The Beneficiaries hereby expressly agree that the Trustee shall act at all times pursuant to the provisions of this Agreement, in compliance with the obligations, and exercising the authorities granted to it herein, for the purpose of complying with the Trust Purposes. Likewise, the Trustee shall act pursuant to the instructions it receives in writing from the Beneficiaries, pursuant to the provisions of this Agreement. The Trustee shall not be liable for (1) any actions it performs pursuant to the express provisions of this Agreement, (2) any actions it performs pursuant to the express provisions of any other agreements or documents entered into or granted pursuant to what is expressly set forth herein, including the Shareholders Agreement, (3) any actions that it performs pursuant to written instructions from the Beneficiaries, pursuant to what is expressly set forth in this Agreement, (4) any representation made by the other parties to this Agreement, (5) any delinquency or default regarding any payment, except for cases in which the delinquency or default results from a breach by the Trustee of the obligations set forth in this Agreement, and (6) any event, action, or failure to act by the Beneficiaries, or third parties, which prevent or hinder compliance with the Trust Purposes, unless the Trustee incurs willful misconduct, bad faith, or negligence.
(c) Non-Contemplated Situations . To the extent that a specific situation is not contemplated by the provisions of this Agreement, the Trustee shall give notice to the Beneficiaries of such situation for the purpose that the Beneficiaries, as applicable, issue the pertinent instructions based on which the Trustee shall act, provided the instructions from the Beneficiaries are grounded on express authorities of such body, and the actions of the Trustee, resulting from such instructions, are grounded on specific and legal purposes.
(d) General Liability . Pursuant to rule 5.2 of Circular Letter 1/2005, issued by the Mexican Central Bank, the Trustee shall have general liability for the damages caused as a result of its breach of its obligations pursuant to this Agreement subject to the limitations set forth in Sections 11.1 and 13.2.
(e) Removal of the Trustee . The Trustee may be removed at any time through written notice provided by both Beneficiaries (all Beneficiary A and Beneficiary B, jointly) at least 30 (thirty) calendar days in advance. The Trustee may be removed with cause, at the discretion of the Beneficiaries, at any time.
(f) Resignation by the Trustee . The Trustee may only resign from its appointment if the circumstances set forth in article 391 of the LGTOC occur; provided that the Trustee shall give written notice to the Beneficiaries of its intent to resign its position, at least 30 (thirty) calendar days in advance of the resignation date; and provided, further, that the Trustee shall not be released as trustee of this Agreement, until a replacement trustee has been appointed by both Beneficiaries and such replacement trustee has accepted its appointment in writing.
17 |
(g) Trustee Fees . As consideration for its trustee services under this Agreement, the Trustee shall have the right to receive from the Beneficiaries the fees set forth below, which shall be paid by the Beneficiaries in equal parts (50% from Beneficiary A and 50% from Beneficiary B):
1. | For the review and drafting of the trust agreement, as well as for the acceptance of the appointment as Trustee, the amount of $40,000.00 (forty thousand pesos 00/100 M.N.) that the Trustors will pay in a single payment at the execution of the agreement. | |
2. | For the annual management of the Trust, the amount of $100,000.00 M.N. (one hundred thousand pesos 00/100 M.N.), which will be charged biannually in advance in an amount of $50,000.00 M.N. (fifty thousand pesos 00/100 M.N.) biannually. | |
3. | For each Amendment Agreement, the amount of $20,000.00 (twenty thousand pesos 00/100 M.N.) upon execution of the corresponding agreement. | |
4. | For the execution or appearance of the Trustee to any legal act other than the ones mentioned above, which may include: granting of powers-of-attorney; execution of public deeds, contracts or agreements, the amount of $ 4,000.00 (four thousand pesos 00/100 M.N.) to be paid by the Trustors upon execution of the corresponding act, as required. |
For the transfer of funds via SPEI (Interbank Electronic Payments System) to main national banks, as long as such transactions are carried out in Mexican pesos, as well as for the opening of the necessary subaccounts for the control and management of the estate, the Trustee shall charge no fee.
For the termination of the Trust, the Trustee shall charge no fee.
Any other expenses incurred by the Trustee as a consequence of the management of the Trust, that could consist in reasonable fees for lawyers, notaries, auditors, tax specialists and /or any other necessary expense, will be charged to the amount that each one of them derives in its corresponding moment, prior to the acceptance of the Trustors.
The fees set forth herein do not include the Value Added Tax (IVA), which shall be charged in accordance with the applicable laws. Such trustee fees can be annually increased based on the variations of the National Consumer Price Index ( Indice Nacional de Precios al Consumidor ) published by the Bank of Mexico ( Banco de México ) or its substitute.
In case that the Trustee does not receive its corresponding fees in accordance with the present Clause, the Trustors will have to pay monthly default interests for the amount resulting from adding the 28-day Interbank Equilibrium Interest Rate ( Tasa de Interés Interbancaria de Equilibrio a 28 días) (as published by the Bank of Mexico) on the day when the default was incurred, plus 200 base points. The resulting amount will be the payable annual rate of default interest; said annual rate will be charged for all the period in which the debt remains unpaid.
18 |
The default interests set forth in the present clause will be charged automatically with charge to the available liquid resources in the Trust Assets, in case such funds are insufficient; the Trustors will cover the remaining amounts. The Parties expressly agree that the estate of the present Trust preferably guarantees the payment of the Trustee’s fees. The Trustors, by executing the present Agreement, expressly authorize the Trustee to avoid carrying out any legal act until its corresponding fees have been completely covered, in case of a default in the payment of the Trustee’s fees.
The default interests set forth in the present clause does not include Value Added Tax (IVA), which shall be charged in accordance with the applicable laws.
If the fees that the Trustee is entitled to receive are not covered, the Trustee may resign its appointment without prejudice to the right to exercise legal actions for the collection of said fees.
The Trustee shall abstain from carrying out any administrative procedure, as well as proceed to cancel this Trust as long as there is any debt in favor of the Trust that is pending settlement.
CLAUSE III: EXERCISE OF PROPERTY AND
CORPORATE RIGHTS OF VITEL AND OBM
Clause 3.1 Property Rights .
(a) Vitel Shares . The property rights resulting from the Vitel Shares contributed to the Trust Property shall be exercised by the Trustee exclusively for the benefit, and in terms of, the written instructions it receives from Beneficiary B. Beneficiary B shall receive the amounts corresponding to dividends, equity reimbursements, or for any other concept that Vitel distributes to its shareholders (the “ Vitel Distributions ”). The Vitel Distributions shall be received by the Trustee in the Trust Account, and it shall provide them to Beneficiary B pursuant to the provisions of Clause VII of this Agreement.
(b) OBM Shares . The property rights resulting from the OBM Shares contributed to the Trust Property shall be exercised by the Trustee exclusively for the benefit, and in terms of, the written instructions it receives from Beneficiary A. Beneficiary A shall receive the amounts corresponding to dividends, equity reimbursements, or for any other concept that OBM distributes to its shareholders (the “ OBM Distributions ”). The OBM Distributions shall be received by the Trustee in the Trust Account, and it shall provide them to Beneficiary A pursuant to the provisions of Clause VII of this Agreement.
19 |
Clause 3.2 Corporate Rights .
(a) Vitel Shares . The corporate rights resulting from the Vitel Shares shall be exercised by the Trustee pursuant to the written instructions it receives from Beneficiary B. For such purposes, and pursuant to the bylaws of Vitel, Beneficiary B shall have the authority to instruct the Trustee regarding exercising any corporate rights it may be entitled to in its capacity as the majority Vitel shareholder, including, but not limited to, calling shareholder meetings, voting the Vitel Shares pursuant to the instructions given by Beneficiary B, executing unanimous written consents in lieu of a meeting, adopting resolutions agreeing to pay the Vitel Distributions and, in general, resolve any and all matters associated with Vitel, and exercising any other right it may be entitled to in its capacity as the majority Vitel shareholder, pursuant to the provisions of this Agreement, the Vitel bylaws, and Applicable Law.
(b) OBM Shares . The corporate rights resulting from the OBM Shares shall be exercised by the Trustee pursuant to the written instructions it receives from Beneficiary A. For such purposes, and pursuant to the bylaws of OBM, Beneficiary A shall have the authority to instruct the Trustee regarding exercising any corporate rights it may be entitled to in its capacity as an OBM shareholder, including, but not limited to, calling special shareholder meetings, voting the OBM Shares pursuant to the instructions given by the Beneficiary A, executing unanimous written consents in lieu of a meeting, adopting resolutions agreeing to pay the OBM Distributions and, in general, resolve any and all matters associated with OBM, and exercising any other right it may be entitled to in its capacity as an OBM shareholder, pursuant to the provisions of this Agreement, the OBM bylaws, the Shareholders Agreement, United States of America Securities Law and Applicable Law.
(c) Powers of Attorney . The Trustee shall issue the certificates and documents, and shall grant the necessary powers of attorney to the Person(s) designated in writing by Beneficiary A, and Beneficiary B, as applicable, provided (i) the written request is provided to it at least 3 (three) Business Days in advance; and (ii) the relevant costs are paid by Beneficiary A, and Beneficiary B, as applicable.
CLAUSE IV: TRANSFER OF BENEFICIARY RIGHTS
Clause 4.1 Transfer of Beneficiary Rights .
(a) Permitted Transfers .
(i) Notwithstanding anything to the contrary in this Agreement, the Beneficiaries, acting individually, may at any time, without being subject to Clause 4.1, Transfer their respective Beneficiary Rights (x) to any of their Affiliates (the “ Permitted Transferees ”), or (y) with the prior consent of the other Beneficiary to this Agreement, or (z) as otherwise permitted under this Agreement (each, a “ Permitted Transfer ”), in the understanding that (1) each Beneficiary A will be considered a Permitted Transferee with respect to each other, (2) transfers by either of the Beneficiaries A resulting from their death shall also be considered a Permitted Transfer, and (3) either of the Beneficiaries A may act individually in regards to this Clause.
20 |
(ii) If a Permitted Transferee ceases to be an Affiliate of the Beneficiary who Transferred Beneficiary Rights to such Permitted Transferee, the Beneficiary Rights shall automatically revert or otherwise be transferred back to the original Beneficiary. The agreement or other instrument pursuant to which a Beneficiary carries out a Permitted Transfer must specifically contain a provision expressly contemplating the reversion of Beneficiary Rights or unwinding of the Permitted Transfer should the transferee cease to be a Permitted Transferee at any time after the corresponding Transfer. If according to the applicable law such reversion is not permitted or the transferring Beneficiary does not accept such reversion, then the non-transferring Beneficiary of this Agreement shall be entitled to, provided that the transferring Beneficiary is bound to take any action that may be required from its part: (x) acquire directly or through an Affiliate, the totality of the Beneficiary Rights of the Permitted Transferee that ceased to be an Affiliate, (y) to request OBM or Vitel, as applicable, to carry out a capital reduction in order to redeem the shares which correspond to the Beneficiary Rights of the Permitted Transferee that ceased to be an Affiliate, and to cause the corresponding Affiliate to approve and participate in such reduction in accordance with applicable law, or (z) a combination of the rights set forth in (x) and (y) of this subsection (ii). In the event that more than one non-transferring Beneficiary exercises its right to acquire the Beneficiary Rights of the Permitted Transferee that ceased to be an Affiliate, the Beneficiaries who have exercised such right to purchase the Beneficiary Rights of the Permitted Transferee that ceased to be an Affiliate shall be entitled and obligated to purchase the entirety of such Beneficiary Rights in proportion to their holdings of Beneficiary Rights derived from this Trust vis a vis the other Beneficiaries who have also exercised such right to purchase such Beneficiary Rights. The agreement or other instrument pursuant to which a Beneficiary carries out a Permitted Transfer must specifically contain a provision expressly granting such rights to the non-transferring Beneficiary.
(iii) Each Beneficiary shall previously notify in writing the other Beneficiary and OBM or Vitel, as applicable, of any Permitted Transfer.
(iv) Notwithstanding anything to the contrary in this clause, Beneficiary A may only carry out Permitted Transfers after 3 (three) years from the execution of this Trust Agreement and any Permitted Transfer by Beneficiary A shall be made only to Mexican Affiliates.
(v) Any attempted Transfer in violation of the terms of this Agreement, shall be deemed null and void and the Trustee shall refuse to document or recognize such transfer in its record of Beneficiary Rights.
(b) Right of First Refusal . Subject to the following: (1) the provisions of this Clause IV (particularly the provisions included Clause 4.1(a)), and (2) upon Beneficiary B deregistering all its securities with the Securities and Exchange Commission of the United States of America; in the event a Beneficiary wishes to sell, dispose of, transfer or assign its Beneficiary Rights, the other Beneficiary shall have the irrevocable right of first refusal (“ Right of First Refusal ”), pursuant to the following terms and conditions:
21 |
(i) Notice of Offer . In the event a Beneficiary, directly or indirectly, at any time, wishes or has the intention to Transfer any of its Beneficiary Rights to a third party other than an Affiliate, such Beneficiary must deliver written notice of such intention to the other Beneficiary and to the Trustee, with a copy to the Company (the “ Notice of Offer ”), indicating (1) the percentage of Beneficiary Rights owned by the Beneficiary that are subject to such Transfer (the “ Offered Beneficiary Rights ”), (2) the purchase price (the “ Minimum Price ”) for such Offered Beneficiary Rights, (3) all other material terms and conditions of the proposed Transfer, including payment terms and the identity of the potential third party purchaser (the “ Third Party Purchaser ”) with sufficient detail and (4) the terms and conditions contained in the Notice of Offer shall be maintained for a transfer to the other Beneficiary in the event of a Notice of Exercise (as described below).
(ii) ROFR Exercise Period . The non-transferring Beneficiary, within thirty (30) calendar days after the receipt of the Notice of Offer (the “ ROFR Exercise Period ”), may choose to either (i) purchase the Offered Beneficiary Rights or (ii) not respond to the Notice of Offer. In the event a non-transferring Beneficiary wishes to purchase the Offered Beneficiary Rights, it must exercise its Right of First Refusal by written notice (“ Notice of Exercise ”) given to the transferring Beneficiary of its intent to purchase all, and not less than all, of the Offered Beneficiary Rights on the terms contained in the Notice of Offer, at the proposed Minimum Price. In the event that more than one non-transferring Beneficiary exercises its right to acquire the Offered Beneficiary Rights, the Beneficiaries who have exercised such right to purchase the Offered Beneficiary Rights shall be entitled and obligated to purchase the entirety of such Offered Beneficiary Rights in proportion to their holdings of Beneficiary Rights derived from this Trust vis a vis the other Beneficiaries who have also exercised such right to purchase the Offered Beneficiary Rights.
(iii) Transfer and ROFR Deposit . The Notice of Exercise shall be accompanied by a non-reimbursable deposit of no less than twenty percent (20%) of the Minimum Price set forth in the Notice of Offer (the “ ROFR Deposit ”).
(iv) The Transfer of the Offered Beneficiary Rights shall be made in favor of the non-transferring Beneficiary who delivered a Notice of Exercise, on the same basis set forth in the Notice of Offer, within sixty (60) calendar days after the receipt of the Notice of Exercise. The remaining portion of the Minimum Price must be paid by the non-transferring Beneficiary in immediately available funds at closing of the Transfer.
(v) If upon delivery of the Notice of Exercise the ROFR Deposit is not made, the Notice of Exercise shall be considered as not delivered and the transferring Beneficiary shall have the right to Transfer the Offered Beneficiary Rights to the Third Party Purchaser under the same material terms, including price, outlined to the non-transferring Beneficiary in the Notice of Offer. Notwithstanding the foregoing, the transferring Beneficiary has the right to impose a penalty, in the amount of the respective ROFR Deposit, on the non-transferring Beneficiary if the non-transferring Beneficiary made the ROFR Deposit but later fail(s) to consummate the purchase of the Offered Beneficiary Rights pursuant to the terms of this Agreement for reasons attributed to the non-transferring Beneficiary. In this event, the non-transferring Beneficiary shall forfeit the applicable ROFR Deposit.
22 |
For purposes of the Transfer of Beneficiary Rights between Beneficiaries, the only required representations and warranties shall be those related to ownership of the Beneficiary Rights and nonexistence of liens and encumbrances thereupon.
(vi) Termination of ROFR Exercise Period . If upon termination of the ROFR Exercise Period, a non-transferring Beneficiary: (i) fails to timely deliver a Notice of Exercise regarding all of the Offered Beneficiary Rights in accordance with Section 4.1(b), or (ii) having delivered the Notice of Exercise, does not purchase the Offered Beneficiary Rights pursuant to the terms set forth above, the transferring Beneficiary shall be entitled to enter into a stock purchase agreement (the “ Third Party Sale Agreement ”) with the Third Party Purchaser pursuant to which the transferring Beneficiary agrees to sell the Offered Beneficiary Rights to such Third Party Purchaser under the same terms as those described in the Notice of Offer.
The closing of the Transfer of all of the Offered Beneficiary Rights under this Clause IV will occur no later than ninety (90) calendar days after the day the non-transferring Beneficiary received the Notice of Offer. If the Transfer is not made within said ninety (90) calendar day term, the Transfer process set forth herein must once again be initiated. In the event the Transfer of the Offered Beneficiary Rights requires third party or Governmental Authority authorization, said ninety (90) calendar day term shall be extended as required by said third party or Governmental Authority to accept or reject the sale.
(vii) Adhesion . In the event the Third Party Purchaser acquires all the Offered Beneficiary Rights owned by a Beneficiary in this Trust Agreement, in order for said Transfer to be effective, simultaneously to the date on which the Transfer shall become effective, the Third Party Purchaser must agree in writing to be bound by the terms and conditions set forth in this Agreement and the Shareholder’s Agreement, on the same terms, mutatis mutandis, as the transferring Beneficiary was bound thereunder.
Any Transfer that occurs with respect to the Beneficiary Rights without compliance with the terms set forth in this Clause IV shall be null and void, and shall not be effective against the Trust or the Trustee, and the Trustee shall not record such transfer in its record of Beneficiary Rights. In such event, the Third Party Purchaser may not exercise any rights pertaining to the Offered Beneficiary Rights.
23 |
(viii) Void Assignments . Beneficiaries agree that any Transfer of Beneficiary Rights executed, directly or indirectly, through any means, including transfer of beneficiary rights, partnership interests or similar equities in other companies or rights regarding such equities, shall be void, and shall not be effective against the Trust, the Trustee or the Beneficiaries, and such Transfer shall not be enforceable unless such Transfer of Beneficiary Rights complies with the provisions set forth in this Clause IV .
CLAUSE V: DISPOSAL OF THE TRUST PROPERTY
Clause 5.1 Disposal of the Vitel Shares . Subject to the provisions of this Agreement and the Shareholders’ Agreement, Beneficiary B may give written instructions to the Trustee of the terms pursuant to which the latter may perform the Transfer of all, or part, of the Vitel Shares (including but not limited to a Transfer in connection with the termination of the Shareholders’ Agreement upon the consummation of a Liquidation Event – as such term is defined in the Shareholders’ Agreement). The foregoing, notwithstanding that Beneficiary B may give written instructions to the Trustee, of the terms pursuant to which the latter may grant a special power of attorney for acts of ownership, in favor of the attorney in fact appointed by Beneficiary B, to perform the Transfer of all or part of the Vitel Shares that form part of the Trust Property.
Clause 5.2 Disposal of the OBM Shares . Subject to the provisions of this Agreement and of the Shareholders’ Agreement, Beneficiary A may give written instructions to the Trustee of the terms pursuant to which the latter may perform the Transfer of all, or part, of the OBM Shares (including but not limited to the termination of the Shareholders’ Agreement upon the consummation of a Liquidation Event – as such term is defined in the Shareholders’ Agreement). The foregoing, notwithstanding that Beneficiary A may give written instructions to the Trustee, of the terms pursuant to which the latter may grant a special power of attorney for acts of ownership, in favor of the attorney in fact appointed by Beneficiary A, to perform the Transfer of all or part of the OBM Shares that form part of the Trust Property.
CLAUSE VI: TRUST ACCOUNTS; PERMITTED INVESTMENTS
Clause 6.1 Trust Accounts .
(a) General . On the execution date of this Agreement, the Trustee shall open the Trust Accounts, and keep them during the term of this Agreement. Beneficiary A and Beneficiary B, as applicable, may instruct the Trustee to open one or more bank accounts denominated in Pesos or in Dollars, as applicable. The Trustee may keep the Trust Account at Banco Actinver, S.A., in any of the companies belonging to Grupo Financiero Actinver, or in any other financial institutions approved by the Beneficiaries, as applicable. The Trustee shall receive and maintain in the Trust Accounts the funds contributed by the Beneficiaries while such funds are used in terms of the written instructions it receives from the Beneficiaries, or, as applicable, it shall invest them in Permitted Investments. Likewise, the Trustee shall provide the Distributions to the Beneficiaries, as applicable, with liquid funds deposited into the Trust Account pursuant to the provisions of Clause VII below.
24 |
(b) Vitel Accounts . Beneficiary B may instruct the Trustee to open the accounts required to receive the Vitel Distributions, and any other amount that the Trustee shall receive in its capacity as Vitel shareholder. The funds kept in the Vitel Accounts shall be exclusively owned by Beneficiary B, and the Trustee may only dispose of such amounts in terms of the written instructions it receives from Beneficiary B.
(c) OBM Accounts . Beneficiary A may instruct the Trustee to open the accounts required to receive the OBM Distributions, and any other amount that the Trustee shall receive in its capacity as OBM shareholder. The funds kept in the OBM Accounts shall be exclusively owned by Beneficiary A, and the Trustee may only dispose of such amounts in terms of the written instructions it receives from Beneficiary A.
Clause 6.2 Permitted Investment .
(a) Standing Instructions . The Trustee shall invest the amounts deposited into the Trust Accounts in instruments with maturities that do not exceed the following Business Day, denominated in Pesos, issued or secured by the Mexican Federal Government, with a “AAA” credit rating in the national scale, or its equivalent, given by at least two of the rating agencies authorized by the National Banking and Securities Commission ( Comisión Nacional Bancaria y de Valores ) (a “ Permitted Investment ”).
(d) Interest Rates . If the Permitted Investments are invested with the same financial institution to which the Trustee belongs, such Permitted Investments shall pay interest rates at a higher rate than such institution pays for transactions with the same maturity and similar amounts on the dates on which the deposits are made.
(e) Investment Policies and Guidelines . When making the Permitted Investments pursuant to this Clause, the Trustee shall abide by the guidelines and policies traditionally abided for similar transactions.
(f) Preventive Measures . Pursuant to Circular Letter 1/2005 issued by the Mexican Central Bank, the Trustee has clearly and unequivocally explained to the parties to this Agreement the following preventive measures included in item 5.4 of Circular Letter 1/2005:
(i) The Trustee may perform credit transactions with Banco Actinver, S.A., acting on its own, provide that these are transactions that the LIC, or provisions resulting therefrom, allow it to perform, and preventive measures are established to prevent conflict of interest.
(ii) The Beneficiaries expressly approve that Permitted Investments with Banco Actinver, S.A., or with any other financial institution approved and instructed by the Beneficiaries, as applicable, to be performed.
(iii) The rights and obligations of Banco Actinver, S.A., acting as Trustee, and on its own, shall not be extinguished as a result of a merger of assets and liabilities.
25 |
CLAUSE VII: DISTRIBUTIONS
Clause 7.1 Distributions . Provided there are funds in the Trust Account, as applicable, the Beneficiaries, as applicable, shall instruct the Trustee to distribute these within the Business Day following receipt in the Trust Accounts:
(i) First, to pay the Trustee its fees, and reimburse expenses pursuant to Clause 2.5(g) of this Agreement.
(ii) Second, 100% (one hundred percent) of the remainder, to Beneficiary A, and Beneficiary B, as applicable.
CLAUSE VIII: INFORMATION; ACCOUNT STATEMENTS
Clause 8.1 Access to Information .
(a) Beneficiary A . The Trustee shall provide Beneficiary A, when the latter so requests it in writing, all documentation and information associated with this Trust in its capacity as an OBM shareholder.
(b) Beneficiary B . The Trustee shall provide Beneficiary B, when the latter so requests it in writing, all documentation and information associated with this Trust in its capacity as a Vitel shareholder.
Clause 8.2 Trust Account Statements .
The Trustee will have a record log of all the operations carried out and will keep record of it in accordance with the applicable law. Additionally, within the first 15 (fifteen) business days of each month, the electronic statement of the Trustee will be available in the website www.actinver.com, which has an official and tax validity and contains a report of the state that the Trust Property, having the Beneficiaries the same number of days after the issuance of the electronic statement to provide any comments to the Trustee. In case such reports are not objected to by any of the Beneficiaries within the period set forth herein, they will be understood as approved by the Beneficiaries.
In accordance with the latter, the Trustors and Beneficiaries will execute Exhibit “B” regarding the “Paperless Program” by means of which they grant their consent to avoid receiving their printed account statements.
Clause 8.3 Trustee Accounts and Records .
The Trustee shall keep all accounts and records required to adequately record all transactions performed by the Trustee pursuant to the provisions of this Agreement. The Trustee shall allow (i) Beneficiary A to review the accounts and records in connection with its capacity as a Vitel shareholder, and (ii) Beneficiary B to review the accounts and records in connection with its capacity as an OBM shareholder; the foregoing, provided that such visits shall be performed during business hours, and upon prior written notice to the Trustee at least 3 (three) Business Days in advance.
26 |
CLAUSE IX: DEFENSE OF THE TRUST PROPERTY
Clause 9.1 Defense of the Trust Property .
(a) In the event that defense of the Trust Property against a third party is required, the Trustee shall grant powers of attorney in favor of the Person(s), and under the terms provided by the Beneficiaries, as applicable, in writing; provided that the Trustee assumes no liability in connection with the actions performed by any such attorneys-in-fact, which provision shall be included in the powers of attorney granted by the Trustee; provided, additionally, that each and every one of the reasonable costs, fees, and expenses incurred by such attorneys-in-fact in exercise of such powers of attorney, shall be paid, solely and exclusively, by the Beneficiaries, as applicable, at the expense of the Trust Property, without the Trustee incurring any liability in connection with the foregoing.
(b) In the event that urgent action is required, and it is necessary to take measures to preserve, and maintain the Trust Property, the Trustee shall give immediate notice of such situation to the Beneficiaries, as applicable, and the Trustee may take all immediate measures required to preserve and maintain the Trust Property, and the Trustee shall not be liable in connection with such immediate measures, provided it acts pursuant to Applicable Law. Each and every one of the reasonable expenses incurred by the Trustee pursuant to such measures shall be covered, solely and exclusively, at the expense of the Trust Property, and in the event that the latter is insufficient, the Beneficiaries, as applicable, agree to reimburse any amount that the Trustee disbursed.
CLAUSE X: TAX CONSIDERATIONS
Clause 10.1 Tax Obligations .
The Beneficiaries shall pay, as applicable, and without limitation, all taxes of any kind, contributions, and other tax liabilities that may be payable, imposed, or assessed in connection with executing this Agreement, and the distributions received pursuant hereto (jointly, “ Taxes ”), and the Trustee shall not be liable in connection with the foregoing. The Trustee shall not be required to calculate, withhold, and pay any taxes, assessments, fees, or duties, except as required by Applicable Law. If for any reason the Trustee receives notice from any tax authority regarding any interpretation that the activities that are the subject matter of this Agreement are deemed taxable and thus, the Trustee were required to withhold and pay any Taxes pursuant to this Agreement, or any action associated with it, and the Beneficiaries, as applicable, ignore the notice that the Trustee shall make of such events, and fail to appoint their respective representatives to defend the Trust Property (as applicable to each of the Beneficiaries), the liable party, pursuant to what has been agreed herein, agrees to indemnify, and assist and provide the necessary funds, and hold the Trustee, its shareholders, directors, trust officers, attorneys-in-fact, representatives, advisors, or employees harmless against any actions in connection with such withholdings and payments, and if it were fined, or otherwise sanctioned, the liable party pursuant to what has been agreed herein, agrees to directly and immediately reimburse any expense or disbursement that the Trustee makes on this regard. The Trustee shall at all times have the right to be represented, at the expense of the Trust Property (as applicable to the liable Beneficiary), by its own attorneys, advisors, and tax specialists in connection with any tax obligations charged to it. Pursuant to the foregoing, the Beneficiary that is liable for the failure to pay taxes agrees to indemnify, defend, and hold the Trustee, its shareholders, directors, trust officers, attorneys-in-fact, representatives, advisors, or employees harmless from any liability and damages associated with payment of Taxes (including the reasonable, and arm’s length fees and expenses of tax advisors and attorneys) resulting from entering into or performing under this Agreement.
27 |
If applicable, the obligations resulting from the Foreign Account Tax Compliance Act (hereinafter “FATCA”) in connection with the OBM Shares under this Agreement, shall be at the expense of the Beneficiaries jointly and in equal portions (50% Beneficiary A and 50% Beneficiary B), for which, for the purpose of complying with such obligations, the parties agree that the Trustee, as applicable, may grant a power of attorney with the required authorities to the person(s) that are designated by the Beneficiaries, as applicable, as external advisors. Pursuant to the foregoing, the parties set forth that the Trustee shall not be liable for the actions of the designated external advisors, with its obligation ceasing when the aforementioned power of attorney is granted. The Trustee and Beneficiaries, as applicable, shall provide all documentation and information that they have, which is reasonably requested by the external advisors designated to comply with the FATCA obligations. The parties agree that all expenses, duties, taxes, commissions, fees, and other disbursements that, as applicable, are generated in connection with this Clause, shall be paid at the expense of the Trust Property (as applicable to the liable Beneficiary) and, if there are no funds, or these are insufficient, they shall be settled directly by the Beneficiaries, as applicable.
Clause 10.2 Reversion Right .
For the tax purposes set forth in article 14 (fourteen) of the Federal Tax Code ( Código Fiscal de la Federación ) in force, or any other that replaces it, the Beneficiaries reserve the right to reacquire, in whole or in part, the property and rights that each of them contributed to the Trust Property, pursuant to the provisions of Clause XII below.
CLAUSE XI: INDEMNITY
Clause 11.1 Indemnity .
The Beneficiaries, as applicable, shall indemnify, defend, and hold the Trustee, and its officers, trust officers, executives, directors, employees, and agents, harmless against any complaint, claim, fine, penalty, liability, settlement, damages, loss, cost, or expense of any other kind (including, but not limited to, reasonable attorney fees and expenses) resulting from or incurred in connection with this Agreement, or any other action, or failure to act, in connection herewith, except for those attributable to negligence, willful misconduct, or bad faith of the Trustee, as determined by a court with jurisdiction.
28 |
CLAUSE XII: TERMINATION
Clause 12.1 Termination .
This Trust Agreement shall remain in full force and effect until the terms and conditions applicable to the Trust Property have been complied and performed in their entirety, and until this has been confirmed in writing, jointly by the Beneficiaries, except that this Trust may be terminated when: (a) ownership of and title over the Trust Property are transferred pursuant to the Trust Purposes; or (b) any of the circumstances set forth in article 392 (three hundred ninety-two) of the LGTOC (except for the provisions of section VI (six) of such article 392 (three hundred ninety-two)) occurs.
In the event that the Beneficiaries jointly instruct it in writing and it is permitted by the Shareholders Agreement, the Trustee shall return ownership of and title over the Trust Property to the respective Beneficiaries, and these shall be required to receive it. The parties agree to execute any documents required to comply with the terms of this Clause, including those that the Trustee requires.
Clause 12.2 Maximum Term .
The initial term of this Agreement will be 5 (five) years counted from its execution, and upon its expiration such term will subsequently be automatically extended for 1 (one) additional 2 (two) year term, unless the Beneficiaries jointly give notice in writing to the Trustee of their desire to terminate the present Agreement within 90 (ninety) calendar days in advance of the corresponding expiration date, in the understanding that this Agreement may not exceed in any event the term set forth in subsection III of article 394 of the LGTOC.
CLAUSE XIII: MISCELLANEOUS
Clause 13.1 Legal Prohibitions .
Pursuant to subsection (b) of section XIX of article 106 of the LIC, the Trustee represents that, through this Clause, it has clearly and unequivocally explained to the parties to this Agreement the meaning and consequences of such article, which is herein transcribed for the purposes that may apply:
“ARTICLE 106.- Credit institutions may not:
…
XIX. When performing the transactions referenced in section XV, article 46 of this Law:
29 |
A) Repealed
B) Be liable towards trustors, or principals, for breach by debtors, pursuant to loans granted, or by issuers, for securities acquired, unless such breach is caused by them, pursuant to the provisions of the final part of article 391 of the General Law of Negotiable Instruments and Credit Transactions, or guarantee returns for the funds whose investment is entrusted to them.
If upon termination of the trust, mandate, or agency relationship created for the purpose of granting loans, these were not settled by the debtors, the institution shall transfer them to the trustor or beneficiary, as applicable, or to the principal, abstaining from paying its balance.
In trust, mandate, or agency agreements the above paragraphs shall be included in an evident way and a representation of the trustee representing that it unequivocally provided such information to the persons which entrusted assets to such institution shall be included.
C) Act as trustees, or agents in trusts, mandate or agency agreements, respectively, through which funds from the public are obtained, directly or indirectly, through any action that causes direct or contingent liabilities, except regarding trusts created by the Federal Government, through the Ministry of Finance and Public Credit ( Secretaría de Hacienda y Crédito Público) and trusts through which securities are registered in the National Securities Registry (Registro Nacional de Valores), pursuant to the provisions of the Securities Market Law (Ley del Mercado de Valores);
D) Perform under the trust, mandate or agency agreements referenced in the second paragraph of article 88 of the Investment Companies Law (Ley de Sociedades de Inversión);
E) Act in trust, mandate, or agency agreements through which restrictions or prohibitions contained in financial laws are evaded;
F) Use funds or securities of the trust, mandate or agency agreements intended for providing loans, in which the Trustee has discretionary authorities, to grant these for performing transactions pursuant to which their trust officers; the members of the board of directors or steering committee;, as applicable, both principal and alternate, whether acting in such capacity or not; the employees and officers of the institution, the principal or alternate statutory auditors, whether acting in such capacity or not; the members of the technical committee of the relevant trust; the ascendant or descendant first degree relatives or spouses of the aforementioned persons, the companies in whose meetings such persons or the same institutions have a majority, in addition to the persons that the Mexican Central Bank determines pursuant to general regulations, become or could become debtors
30 |
G) Manage rural properties, unless they have been entrusted with their management, to distribute the estate among the heirs, legatees, associates or creditors, or to pay a debt obligation or to secure their performance with the value of the property itself or of its returns, and without, in these events, such management exceeding the term of two years, except regarding trusts for production or security trusts, and
H) Enter into trusts that manage sums of money periodically contributed by integrated consumer groups through marketing systems, for the purpose of acquiring certain goods or services of those set forth in the Federal Consumer Protection Law (Ley Federal de Protección al Consumidor).
Any agreement contravening the above provisions shall be null and void…”
Likewise, pursuant to the provisions set forth in section 5.5 of Circular Letter 1/2005 (as amended), issued by the Mexican Central Bank, of the Rules to which Credit Institutions; Brokerage Firms; Insurance Companies; Surety Bond Companies, Limited Purpose Financial Companies and the Financiera Rural Shall be Subject in Trust Transactions, the relevant provisions of section 6 of such Circular Letter 1/2005 are transcribed for all legal purposes that may apply:
“6. PROHIBITIONS
“6.1 When forming Trusts, Trust Companies may not:
a) Charge to the trust property, prices different from those agreed upon completing the transaction in question;
b) Guarantee returns or prices for the funds whose investment they are entrusted; and
c) Perform transactions under conditions and terms that contravene their internal policies and sound financial practices.
6.2 Trust Companies may not enter into transactions with securities, negotiable instruments, or any other kind of financial instrument that do not comply with the specifications agreed in the relevant Trust Agreement.
6.3 Trust Companies may not carry out the types of Trust Agreements that they are not authorized to enter into pursuant to the laws and provisions that govern them.
6.4 In no event may Trust Companies pay, at the expense of trust property, any penalty imposed on such Companies by any authority.
31 |
6.5 In security Trusts, Surety Companies and Sofoles (Limited Purpose Financial Companies) may not receive property or rights that have as their purpose to secure the debt obligations in question.
6.6 Trust Companies shall observe the provisions of articles 106 section XIX of the Credit Institutions Law, 103 section IX of the Securities Market Law, 62 section VI of the General Law of Mutual Insurance Institutions and Companies (Ley General de Instituciones y Sociedades Mutualistas de Seguros), 60 section VI Bis of the Federal Surety Companies Law (Ley Federal de Instituciones de Fianzas) and 16 of the Organizational Law of the Rural Financial Institutions (Ley Orgánica de la Financiera Rural) as the case may be for each Company.”
Pursuant to section 5.5 of such Circular Letter 1/2005, the Trustee has informed the parties that the Trustee shall be liable for any damages caused by its breach of its obligations under this Agreement, only if a judicial authority with jurisdiction determines that such breach was caused by the Trustee.
Clause 13.2 Amendments .
This Agreement may only be amended through a written agreement executed by the Beneficiaries, and the Trustee.
Clause 13.3 Assignment .
The Beneficiaries may assign or transfer, in whole or in part, their rights and obligations resulting from this Agreement, pursuant to the provisions of Clause IV of this Agreement.
The Trustee may not assign, or otherwise transfer its respective rights and obligations resulting from this Agreement, without prior written consent from the Beneficiaries, except as provided in Clause 2.5(f) of this Agreement regarding the replacement of the Trustee.
Clause 13.4 Confidentiality .
The parties to this Agreement agree to maintain confidentiality, and to not disclose any information associated with this Trust; provided that those bound by this Clause may disclose any kind of information that (i) has been made available to the general public, unless it is a result of a breach of this Clause, (ii) is required to be included in any report, representation, or document that may be filed before any Governmental Authority, (iii) may be required as a response to any notices or summons in connection with any litigation, (iv) is required to comply with any Applicable Law, including the U.S. securities laws, (v) is provided to the employees, suppliers, and professional advisors of those bound, provided such employees, suppliers, and advisors are warned of the confidentiality obligations set forth herein, and (vi) may be required by any Governmental Authority.
32 |
Clause 13.5 Notices .
All notices, requirements, and requests associated with this Agreement may be made in writing. All notices shall be deemed duly given if they are given: (a) in person, with return receipt; or (b) through a specialized courier service, with return receipt; or (c) via facsimile, upon written confirmation of receipt thereof; or (d) by email, upon written confirmation of receipt thereof. All notices shall be given to the following addresses, facsimile numbers, emails, and shall become effective once they are received, or when receipt thereof is refused, as provided in the return receipt, or in the receipt of the specialized courier service:
To Beneficiary A – Manuel Cosme Odabachian :
Address: | Secretaria de Marina 700 Torre Bambu Depto 2301 |
Lomas del Chamizal | |
Del. Cuajimalpa | |
CP. 05120 Mexico |
Attention: Manuel Cosme Odabachian
Telephone: +52 55 1327 9067
Facsimile: +52 55 5202 5854
Email: mcosme@vitelpharma.com
To Beneficiary A – Carlos Alaman Volnie :
Address: | Tabachines 72 |
Bosques de las Lomas | |
Del. Cuajimalpa | |
CP. 05120 Mexico |
Attention: Carlos Alaman Volnie
Telephone: +52 55 5257 0848
Facsimile: +52 55 5202 5854
Email: calaman@vitelpharma.com
To Beneficiary B :
Address: | Oncbiomune Pharmaceuticals, Inc. |
11441 Industriplex Blvd., Suite 190 | |
Baton Rouge, LA 70809 |
Attention: Andrew Albert Kucharchuk
Telephone: 225-227-2384
Facsimile: 225 227-2957
Email: akucha1.OBMP@gmail.com
With a copy (which shall not constitute notice) to:
Address: | Legal & Compliance, LLC |
330 Clematis Street, Suite 217 | |
West Palm Beach, FL 33401 |
Attention: Lazarus Rothstein, Esq.
Telephone: 561-433-6217
Facsimile: 561-514-0832
Email: lrothstein@legalandcompiance.com
33 |
To the Trustee :
Address: | Montes Urales 540, Piso 4 Col, |
Lomas de Chapultepec, Delg. Miguel Hidalgo, | |
CP 11000, Ciudad de México |
Attention: Oscar Mejía Reyes and/or Daniel Abel Juárez Vilchis
Telephone: 01 (55) 86365550
Email: fiducario@actinver.com.mx
The parties to this Agreement agree that each and every instruction that shall be given to the Trustee pursuant to this Agreement shall be given via facsimile or in pdf or similar format, sent as an attachment via email, or through personal delivery of the instruction letter, and the Trustee is hereby authorized to act pursuant to the instructions given to it by such means, and it is hereby released from any liability that may result from the issuance of such instructions.
The Trustee shall not be required to verify the authenticity of such instructions or communications, or to verify the identity of the Person sending or confirming them. Notwithstanding the foregoing, the Trustee shall have discretionary authorities, if it has reasonable suspicion or justification, to act, or refrain from acting, or request confirmation of any instruction received pursuant to this Agreement; provided that the Trustee shall give notice to the Beneficiaries, as applicable, as soon as possible, in the event that the Trustee does not agree to act pursuant to such instructions until it receives confirmation thereof and will act promptly after receiving such confirmation.
The Trustee is hereby authorized to act pursuant to the instructions from the Beneficiaries, as applicable, in terms of the provisions of this Agreement, given under the terms set forth in this Clause. In the event that any instruction is not signed pursuant to the provisions of this Clause, or it may not be confirmed, the parties expressly instruct the Trustee not to act pursuant to such instructions.
The parties agree that the Trustee shall receive instructions from persons authorized to give them in terms of this Agreement, through instruction letters, which shall be addressed to Banco Actinver, S.A., and shall be sent to the contractual address of the Trustee, in a duly signed original, by the authorized person, via fax, or in the event it is expressly set forth in this Agreement, via email. The parties expressly agree that the Trustee shall not be required to comply with any instruction that is sent via email, or any other electronic or magnetic media different from a physical delivery, or via duly signed fax except as expressly provided herein.
The instruction letters described in the preceding paragraph to be followed by the Trustee shall include, at least, the following requirements:
(i) It shall be addressed to Banco Actinver, S.A.;
34 |
(ii) It shall make reference to the assigned trust number, and be grounded on the relevant clause of the Agreement;
(iii) It shall contain the handwritten signature of whoever is/are authorized to give instructions in terms of this Trust Agreement, who have been duly appointed and certified before the Trustee, sending to the latter, a copy of an official identification in force containing their photograph and signature, and the signature shall coincide with that which is set in the relevant instruction. If the Trustee already has such identification, it is not required to be attached; and
(iv) It shall contain the express and clear instruction of what it wishes the Trustee to do, stating specific sums, amounts, or activities, as applicable.
Failure to comply with one or any of the aforementioned items shall release the Trustee from the obligation to comply with the instruction contained in such letter, and it shall not be liable for the effects of its failure to act, until the errors of the aforementioned instruction letter are cured.
Clause 13.6 Legal Fees . In the event that any Beneficiary obtains a ruling against the other Beneficiary pursuant to any breach of this Agreement, the legal costs and expenses, including reasonable attorney fees, as determined by the court, shall be included in such ruling.
Clause 13.7 Exhibits and Headings . All documents attached hereto, or that are referenced herein, are incorporated by reference, and shall form an integral part of this Agreement. The titles and headings included in this Agreement are used solely for convenience purposes, and shall not define, limit, or describe in any way the scope, or intent (or otherwise affect the construction) of any provision of this Agreement.
Clause 13.8 Delivery of the Agreement . The delivery of the agreement is in compliance with the provisions set forth in section 5.1 (five point one) of Circular “1/2005” issued by Banxico, and the parties hereby receive an original copy of the Trust Agreement, which they acknowledge for the corresponding legal effects.
Clause 13.9 Applicable Law and Jurisdiction . For all matters in connection with the interpretation and performance of this Agreement, the parties hereby expressly and irrevocably submit to the applicable laws of Mexico City, and to the jurisdiction of the courts with jurisdiction of Mexico City (formerly Federal District), therefore, they expressly and irrevocably waive any other jurisdiction they may be entitled to pursuant to their current or future domiciles, or otherwise.
IN WITNESS WHEREOF, the parties enter into and execute this Agreement through their respective duly authorized legal representatives, on the date mentioned in the preamble.
[The rest of the page is intentionally left blank. Signature pages follow.]
35 |
Signature page for the Irrevocable Management Trust Agreement Number F/2868 (two thousand eight hundred sixty eight) dated March 10, 2017, entered into by and between Manuel Cosme Odabachian, Carlos Fernando Alaman Volnie and Oncbiomune Pharmaceuticals, Inc., in their capacity as trustors and beneficiaries; and Banco Actinver, S.A., Institución de Banca Múltiple, Grupo Financiero Actinver, in its capacity as trustee.
BANCO ACTINVER, S.A., INSTITUCIÓN DE BANCA MÚLTIPLE,
GRUPO FINANCIERO ACTINVER in its capacity as Trustee
By: /s/ Oscar Mejía Reyes
Name: Oscar Mejía Reyes
Its: Trust Officer
By: /s/ Gabriela Alejandra Beltrán Espíndola
Name: Gabriela Alejandra Beltrán Espíndola
Its: Trust Officer
[The rest of the page is intentionally left blank. Signature pages follow.]
36 |
Signature page for the Irrevocable Management Trust Agreement Number F/2868 (two thousand eight hundred sixty eight) dated March [*], 2017, entered into by and between Manuel Cosme Odabachian, Carlos Fernando Alaman Volnie and Oncbiomune Pharmaceuticals, Inc., in their capacity as trustors and beneficiaries; and Banco Actinver, S.A., Institución de Banca Múltiple, Grupo Financiero Actinver, in its capacity as trustee.
The TRUSTORS AND BENEFICIARIES A
By: /s/ Manuel Cosme Odabachia n
Name: Manuel Cosme Odabachian
On his own behalf
By: /s/ Carlos Fernando Alaman Volni e
Name: Carlos Fernando Alaman Volnie
On his own behalf
[The rest of the page is intentionally left blank. Signature pages follow.]
37 |
Signature page for the Irrevocable Management Trust Agreement Number F/2868 (two thousand eight hundred sixty eight) dated March 10, 2017, entered into by and between Manuel Cosme Odabachian, Carlos Fernando Alaman Volnie and Oncbiomune Pharmaceuticals, Inc., in their capacity as trustors and beneficiaries; and Banco Actinver, S.A., Institución de Banca Múltiple, Grupo Financiero Actinver, in its capacity as trustee.
ONCBIOMUNE PHARMACEUTICALS, INC.
in its capacity as Trustor and Beneficiary B
By: /s/ Andrew Albert Kucharchuk
Name: Andrew Albert Kucharchuk
Its: Attorney-in-fact
[The rest of the page is intentionally left blank.]
38 |
Exhibit “A”
Copy of Shareholders’ Agreement
39 |
Exhibit “B”
“Paperless Program”
Trust No. F/2868
The “PAPERLESS” Program of Grupo Financiero Actinver allows you to check your monthly statement through our website without sending it by mail to your domicile.
The advantages of the Program are the following:
● | Confidentiality | |
● | Safety | |
● | Easy Access |
CONSENT
By accepting the modality contained herein, you agree to not receive the printed statements corresponding to your account opened pursuant to the Securities Brokerage Agreement linked to your Trust Agreement. In light of the foregoing, you will have access to the information in respect of your statements through electronic means, in particular through the following website: www.actinver.com (the “Website”) as long as the present consent has not been expressly revoked in writing to Grupo Financiero Actinver.
Therefore, if you wish to receive your printed statements by mail please expressly and reliably give notice to Actinver by sending your instruction to the address located at the bottom of this document, so that the new order is applied to the month immediately following the date on which the corresponding notice is recorded.
We inform you that the statements printed through the Actinver website are valid as tax proof in terms of the applicable laws, however, you may request a printed copy of any statement that you have consulted to the address located at the bottom of this document.
Actinver will not be liable in the event that the information regarding its statements is not received by you due to unforeseeable circumstances, force majeure, system failures, interruptions in online communication systems, or any other cause outside the control of Grupo Actinver. In any of the above situations, you must contact the Trustee Department in order to obtain the required attention, as any disagreement regarding the movements that have been reflected on that statement must be filed within a period of no more than sixty calendar days after the cut-off date of the same statement, since otherwise they will be understood as approved by you.
The present document is issued in strict compliance with clause sixty six of the Stock Brokerage Agreement without prejudice to the applicable legal and/or regulatory provisions.
[X] I accept the terms and conditions.
[ ] I do not accept the terms and conditions.
40 |
Execution Version
STOCKHOLDERS’ AGREEMENT
dated as of
March 10, 2017
among
ONCBIOMUNE PHARMACEUTICALS, INC.
and
THE STOCKHOLDERS PARTY HERETO
STOCKHOLDERS’ AGREEMENT (this “ Agreement ”), dated as of March 10, 2017, among:
(i) OncBioMune Pharmaceuticals, Inc., a Nevada corporation (the “ Company ”);
(ii) the individuals named as Management Stockholders on the signature pages hereto, and the individuals who are members of management and become a party to this Agreement after the date hereof pursuant to the terms hereof (collectively, as listed on Schedule A hereto, which may be amended by the Company to reflect changes in the Management Stockholders from time to time, each a “ Management Stockholder ” and collectively, the “ Management Stockholders ”);
(iii) Manuel Cosme Odabachian (“ MCO ”) and Carlos Fernando Alaman Volnie (“ CAV ”), each a resident of Mexico (each a “ Vitel Stockholder ” and collectively, the “ Vitel Stockholders ”); and
(iv) the individuals (if any) who become a party to this Agreement as Additional Stockholders after the date hereof pursuant to the terms hereof (collectively, as listed on Schedule A hereto, which may be amended by the Company to reflect changes in the Additional Stockholders from time to time, each an “ Additional Stockholder ” and collectively, the “ Additional Stockholders ”).
If any Management Stockholder shall hereafter Transfer any of his or her Company Securities to any of his or her Permitted Transferees, the term “ Management Stockholder ” as applied to such Management Stockholder shall mean such Management Stockholder and his or her Permitted Transferees, taken individually and together, and any right, obligation or other action that may be exercised or taken at the election of such Management Stockholder may be exercised or taken at the election of such Management Stockholder and his or her Permitted Transferees.
If any Vitel Stockholder shall hereafter Transfer any of his Company Securities to any of his respective Permitted Transferees (as such terms are defined below), the term “ Vitel Stockholder ” shall mean such Vitel Stockholder and such Permitted Transferees, taken individually and together, and any right, obligation or action that may be exercised or taken at the election of such Vitel Stockholder may be exercised or taken at the election of such Vitel Stockholder and his Permitted Transferees.
If any Additional Stockholder shall hereafter Transfer any of his or her Company Securities to any of his or her Permitted Transferees, the term “ Additional Stockholder ” as applied to such Additional Stockholder shall mean such Additional Stockholder and his or her Permitted Transferees, taken individually and together, and any right, obligation or other action that may be exercised or taken at the election of such Additional Stockholder may be exercised or taken at the election of such Additional Stockholder and his or her Permitted Transferees.
W I T N E S S E T H :
WHEREAS, the Company’s authorized capital stock consists of (i) 500,000,000 shares of common stock, par value $0.0001 per share, and (ii) 20,000,000 shares of preferred stock, par value $0.0001 per share, and the Company currently had 61,158,013 shares of common stock, and 1,000,000 shares of Series A preferred stock, issued and outstanding as of February 20, 2017;
WHEREAS, the Company’s common stock is quoted on the OTCQB, operated by the OTC Markets Group;
WHEREAS, MCO and CAV are the sole and exclusive owners of 98 shares (the “ Vitel Shares ”), together representing 98% of the capital fixed capital stock of Vitel Laboratorios, S.A. de C.V., a Mexican variable stock corporation (“ Vitel ”);
WHEREAS, the Company, the Vitel Stockholders and Banco Actinver, S.A., Institución de Banca Múltiple, Grupo Financiero Actinver, as Trustee (the “ Trustee ”), are contemporaneously herewith entering into (1) an Irrevocable Management Trust Agreement Number F/2868, dated March 10, 2017, in the form attached hereto as Exhibit A (the “ Trust Agreement ”), and (2) a Contribution Agreement to the Property of Trust F/2868, dated March 10, 2017, in the form attached hereto as Exhibit B (the “ Contribution Agreement ” and together with the Trust Agreement, the “ Related Agreements ”), for the purpose of establishing a vehicle for a business venture between MCO and CAV and OBMP; and
WHEREAS, it is the intention of the parties hereto to enter into this Agreement to govern certain of their rights, duties and obligations upon and after the consummation of the transactions contemplated by the Related Agreements;
NOW, THEREFORE, for good and valuable consideration the sufficiency and adequacy of which is hereby acknowledged, the parties hereto agree as follows:
Article
1
DEFINITIONS
SECTION 1.01. Definitions .
(a) The following terms, as used herein, have the following meanings:
“ Affiliate ” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common control with such Person; provided that no securityholder of the Company shall be deemed an Affiliate of any other securityholder solely by reason of an investment in the Company. For the purpose of this definition, the term “control” (including, with correlative meanings, the terms “controlling”, “controlled by” and “under common control with”), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.
“ Aggregate Ownership ” means, with respect to any Stockholder or group of Stockholders, the total number of the relevant class of Company Securities owned (without duplication) by such Stockholder or group of Stockholders as of the date of such calculation, calculated on a Fully-Diluted basis.
“ Board ” means the board of directors of the Company.
2 |
“Business Day” means any day except a Saturday, Sunday or other day on which commercial banks in New York City are authorized by law to close.
“ Bylaws ” means the amended and restated bylaws of the Company, as the same may be amended from time to time.
“ Charter ” means the Amended and Restated Articles of Incorporation of the Company, as the same may be amended from time to time.
“ Closing ” means the execution of this Agreement by the parties hereto, on the date hereof.
“ Common Shares ” means shares of Common Stock.
“ Common Stock ” means the Company’s common stock, par value $0.0001 per share, and any stock into which such Common Stock may thereafter be converted, changed, reclassified or exchanged.
“ Company Securities ” means (i) the Common Stock, (ii) any preferred stock, (iii) any other common stock issued by the Company and (iv) any securities convertible into or exchangeable for, or options, warrants or other rights to acquire, Common Stock or any other common stock issued by the Company.
“ Exchange Act ” means the Securities Exchange Act of 1934, as amended.
“ Fair Market Value ” with respect to the Company Securities as of any date of determination, means:
(i) the average of the opening and closing price per share of Common Stock, as of the date prior to the date hereof;
(ii) if the Company Securities are listed or admitted to trading on a national securities exchange in the United States or reported through The Nasdaq Stock Market (“ Nasdaq ”) then the closing sale price on such exchange or Nasdaq on such date or, if no trading occurred or quotations were available on such date, then the closest preceding date on which such Company Securities were traded or quoted; or
(iii) if not so listed or reported but a regular, active public market for the Company Securities exists (as determined in the sole discretion of the Board, whose discretion shall be conclusive and binding), then the average of the closing bid and ask quotations per Company Security in the over-the-counter market for such Company Securities in the United States on such date or, if no such quotations are available on such date, then on the closest date preceding such date. For purposes of the foregoing, a market in which trading is sporadic and the ask quotations generally exceed the bid quotations by more than fifteen percent (15%) shall not be deemed to be a “regular, active public market.”
If the Board determines that a regular, active public market does not exist for the Company Securities, the Board shall determine the Fair Market Value of the Company Securities in its good faith judgment.
3 |
“ Fully Diluted ” means, with respect to any class of Company Securities, all outstanding shares and all shares issuable in respect of securities convertible into or exchangeable for such shares, all stock appreciation rights, options, warrants and other rights to purchase or subscribe for such class of Company Securities or securities convertible into or exchangeable for such class of Company Securities; provided that if any of the foregoing stock appreciation rights, options, warrants or other rights to purchase or subscribe for such class of Company Securities are subject to vesting, the Company Securities subject to vesting shall be included in the definition of “Fully-Diluted” only upon and to the extent of such vesting.
“ Group of Stockholders ” means a “group” of Stockholders, as such term would be interpreted under Section 13(d) of the Exchange Act.
“Indemnified Person” means indistinctively a Company Indemnified Person or a Vitel Stockholder Indemnified Person, as applicable.
“Indemnifying Party” means the person granting the indemnities referred to in Article 6 hereof, which shall be either the Vitel Stockholders or the Company, as applicable.
“ Initial Ownership ” means, with respect to any Stockholder or group of Stockholders, the Aggregate Ownership by such Stockholder or group of Stockholders as of the date hereof (or, in the case of any Additional Stockholder who becomes a party to this Agreement after the date hereof, as of the date of joinder to or entry of such Additional Stockholder into this Agreement), in each case taking into account any stock split, stock dividend, reverse stock split or similar event.
“ Liquidation Event ” means any of the following events:
(i) The sale, lease, transfer, exclusive license or other disposition, in a single transaction or series of related transactions, by the Company or any Subsidiary of the Company of all or substantially all of the assets of the Company and its Subsidiaries taken as a whole, or the sale or disposition (whether by merger or otherwise) of one or more Subsidiaries of the Company if substantially all of the assets of the Company and its Subsidiaries taken as a whole are held by such Subsidiaries;
(ii) A transaction or series of related transactions in which any Person or a group of Persons (as defined in Rule 13d-5(b) of the Exchange Act) acquires from stockholders of the Company beneficial ownership (as determined in accordance with Rule 13d-3 under the Exchange Act) of Company Securities representing more than fifty percent (50%) of the outstanding voting power of the Company; or
(iii) A merger, consolidation or reorganization of the Company or a Subsidiary of the Company with or into any other corporation, other than (A) any such transaction following which the Company’s stockholders immediately prior to such transaction own immediately following such transaction, solely in respect of the Company Securities held by them prior to such transaction, directly or indirectly through a parent corporation, greater than fifty percent (50%) of the voting power of the equity securities of the surviving corporation, including any consolidation with a wholly-owned Subsidiary and (B) a merger effected solely for the purpose of changing the domicile of the Company.
4 |
“ Permitted Transfer ” means a Transfer to a Permitted Transferee, pursuant to Article 4 of this Agreement.
“ Person ” means an individual, corporation, limited liability company, partnership, association, trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.
“ Plan ” means the Company 2011 Stock Option Plan.
“ Pro Rata Share ” means, for each Stockholder, the fraction that results from dividing (A) such Stockholder’s Aggregate Ownership of Company Securities by (B) the total number of shares of Company Securities then outstanding and owned by all Stockholders (immediately before giving effect to such issuance), calculated on a Fully-Diluted Basis.
“ Rule 144 ” means Rule 144 (or any successor provisions) under the Securities Act.
“ SEC ” means the Securities and Exchange Commission.
“ Securities Act ” means the Securities Act of 1933, as amended.
“ Series B Preferred Stock ” means the Company’s Series B Preferred Stock, par value $0.0001 per share, and any stock in to which such Series B Preferred Stock may thereafter be converted, changed, reclassified or exchanged.
“ Stockholder ” means each Person (other than the Company) who, at any relevant determination date, shall be a party to or bound by this Agreement (as may be amended from time to time) so long as such Person shall “beneficially own” (as such term is defined in Rule 13d-3 of the Exchange Act) any Company Securities.
“ Subsidiary ” means, with respect to any Person, any entity of which securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions are at the time directly or indirectly owned by such Person.
“ Third Party ” means a prospective purchaser of Company Securities in a bona fide arm’s-length transaction from a Stockholder, other than a Permitted Transferee or other Affiliate of such Stockholder.
“ Transactions ” means the obligations of the Company to consummate the transactions contemplated by the Related Agreements
“ Transfer ” means, with respect to any Company Securities, (i) when used as a verb, to sell, assign, dispose of, exchange, pledge, encumber, hypothecate or otherwise transfer such Company Securities or any participation or interest therein, whether directly or indirectly, or agree or commit to do any of the foregoing and (ii) when used as a noun, a direct or indirect sale, assignment, disposition, exchange, pledge, encumbrance, hypothecation, or other transfer of such Company Securities or any participation or interest therein or any agreement or commitment to do any of the foregoing.
5 |
(b) Each of the following terms is defined in the Section set forth opposite such term:
TERM | SECTION | |
AAA | 5.07 | |
Additional Stockholder(s) | Preamble (iv) | |
Agreement | Preamble | |
CAV | Preamble (iii) | |
Company | Preamble (i) | |
Contribution Agreement | 4 th Recital | |
Independent Designees | 3.01(a) | |
Major Decision | 3.04 | |
Management Designee | 3.01(a) | |
Management Stockholder(s) | Preamble (ii) | |
MCO | Preamble (iii) | |
Minimum Price | 4.01(c)(i) | |
Notice of Exercise | 4.01(c)(ii) | |
Notice of Offer | 4.01(c)(i) | |
OBM Shares | 2.01 | |
Offered Company Securities | 4.01(c)(i) | |
Permitted Transfer | 4.01(b)(i) | |
Permitted Transferees | 4.01(b)(i) | |
Related Agreements | 4 th Recital | |
Replacement Nominee | 3.03(a) | |
Right of First Refusal | 4.01(c) | |
ROFR Deposit | 4.01(c)(iii) | |
ROFR Exercise Period | 4.01(c)(ii) | |
Third Party Purchaser | 4.01(c)(i) | |
Third Party Sale Agreement | 4.01(c)(vi) | |
Trust Agreement | 4 th Recital | |
Trustee | 4 th Recital | |
Vitel | 3 rd Recital | |
Vitel Designee | 3.01(a) | |
Vitel Shares | 3 rd Recital | |
Vitel Stockholder(s) | Preamble |
(c) Other Definitional and Interpretive Matters. Unless otherwise expressly provided, for purposes of this Agreement, the following rules of interpretation shall apply:
Calculation of Time Period . When calculating the period of time before which, within which or following which any act is to be done or step taken pursuant to this Agreement, the date that is the reference date in calculating such period shall be excluded. If the last day of such period is a non-Business Day, the period in question shall end on the next succeeding Business Day.
6 |
Dollars . Any reference in this Agreement to $ shall mean U.S. dollars.
Exhibits/Schedules . The Exhibits and Schedules to this Agreement are hereby incorporated and made a part hereof and are an integral part of this Agreement. All Exhibits, Annexes and Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein. Any capitalized terms used in any Schedule, Annex or Exhibit but not otherwise defined therein shall be defined as set forth in this Agreement.
Gender and Number . Any reference in this Agreement to gender shall include all genders, and words imparting the singular number only shall include the plural and vice versa.
Headings . The provision of a Table of Contents, the division of this Agreement into Articles, Sections and other subdivisions and the insertion of headings are for convenience of reference only and shall not affect or be utilized in construing or interpreting this Agreement. All references in this Agreement to any “Section” are to the corresponding Section of this Agreement unless otherwise specified.
Herein . The words such as “ herein ,” “ hereinafter ,” “ hereof ,” and “ hereunder ” refer to this Agreement as a whole and not merely to a subdivision in which such words appear unless the context otherwise requires.
Article
2
TERMS OF THE TRANSACTIONS
SECTION 2.01. Establishment of Trust; Trust Contribution . MCO, CAV and the Company shall establish the Trust. MCO and CAV shall each contribute, assign and transfer to the Company ownership of, and title over, one Vitel Share and MCO and CAV shall contribute, assign and transfer to the Trustee ownership of, and title over, the remaining Vitel Shares for the benefit of the Company pursuant to the terms and conditions of the Related Agreements. The Company shall contribute, assign and transfer to the Trustee ownership of, and title over, 61,258,013 newly-issued shares of Common Stock and 2,107,681 newly-issued shares of Series B Preferred Stock with 100 votes per share (collectively, the “ OBM Shares ”), for the benefit of MCO and CAV pursuant to the terms and conditions of the Related Agreements. Each of MCO and CAV understands and agrees that the OBM Shares held by the Trust have not been and will not be registered under the Securities Act and are restricted securities under the Securities Act and the rules and regulations promulgated thereunder and are subject to the restrictions on transfer contained in Article 4 of this Agreement.
SECTION 2.02. Property Rights . The property rights resulting from the Vitel Shares contributed to the Trust will be exercised by the Trustee exclusively for the benefit, and in terms of the written instructions it receives from, the Company as described in Clause 3.1(a) of the Trust Agreement while the property rights resulting from the OBM Shares contributed to the Trust will be exercised by the Trustee exclusively for the benefit, and in terms of the written instructions it receives from, MCO and CAV as described in Clause 3.1(b) of the Trust Agreement.
7 |
SECTION 2.03. Corporate Rights . The corporate rights resulting from the Vitel Shares contributed to the Trust will be exercised by the Trustee pursuant to the written instructions it receives from the Company. For such purposes, and pursuant to the bylaws of Vitel, the Company shall have the authority to instruct the Trustee regarding exercising any corporate rights it may be entitled to in its capacity as the majority Vitel shareholder, including, but not limited to, calling shareholder meetings, voting the Vitel Shares pursuant to the instructions given by the Company, executing unanimous written consents in lieu of a meeting, adopting resolutions agreeing to pay the Vitel Distributions (as such term is defined in the Trust Agreement) and, in general, resolve any and all matters associated with Vitel, and exercising any other right it may be entitled to in its capacity as the majority Vitel shareholder, pursuant to the provisions of the Trust Agreement, the Vitel bylaws and applicable law. The corporate rights resulting from the OBM Shares contributed to the Trust will be exercised by the Trustee pursuant to the written instructions it receives from MCO and CAV. For such purposes and pursuant to the bylaws of the Company and this Agreement, MCO and CAV shall have the authority to instruct the Trustee regarding exercising any corporate rights it may be entitled to in its capacity as a Vitel Stockholder, including, but not limited to, calling shareholder meetings, voting the OBM Shares pursuant to the instructions given by MCO and CAV, executing unanimous written consents in lieu of a meeting, adopting resolutions agreeing to pay the OBM Distributions (as such term is defined in the Trust Agreement) and, in general, resolve any and all matters associated with OBM, and exercising any other right it may be entitled to in its capacity as a Vitel Stockholder pursuant to the provisions of the Trust Agreement, this Agreement, the Bylaws and Nevada corporate law.
Article
3
CORPORATE GOVERNANCE
SECTION 3.01. Composition of the Board .
(a) The Board of the Company currently consists of five (5) directors. Following the Closing, the Stockholders shall take such actions as may be required so that the Board of the Company shall consist of four (4) directors, including at least one (1) designated by the Vitel Stockholders, one (1) designated by the Management Stockholders, and two (2) independent directors shall be designated jointly by the Management Stockholders and the Vitel Stockholders, in the understanding that the Management Stockholders or the Management Designee and the Vitel Stockholders or the Vitel Designee shall jointly appoint, as soon as practicable, an independent fifth member of the Board of the Company. MCO shall be the initial designee of the Vitel Stockholders to the Board (the “ Vitel Designee ”), Jonathan F. Head, Ph.D. shall be the initial designee of the Management Stockholders (the “ Management Designee ”), and Charles L. Rice, Jr. and Daniel S. Hoverman shall be the initial independent designees jointly appointed by the Management Stockholders and the Vitel Stockholders (hereinafter all Board members which are not the Vitel Designee or the Management Designee, the “ Independent Designees ”).
(b) Each Stockholder agrees that, if at any time it is then entitled to vote for the election of directors to the Board, it shall vote all of its Company Securities that are entitled to vote or execute proxies or written consents, as the case may be, and take all other necessary action (including causing the Company to call a special meeting of Stockholders) in order to ensure that (1) the composition of the Board is as set forth in this Section 3.01 and (2) the slate of directors proposed by the Board for election by the stockholders of the Company is elected.
8 |
(c) The Company agrees to cause each individual designated pursuant to Section 3.01 (a) or 3.03 to be nominated to serve as a director on the Board, and to take all other necessary actions (including calling a special meeting of the Board and/or Stockholders) to ensure that the composition of the Board is as set forth in this Section 3.01 .
SECTION 3.02. Removal . Each Stockholder agrees that, if at any time it is then entitled to vote for the removal of directors from the Board, it shall not vote any of its Company Securities in favor of the removal of any director who shall have been designated by the Vitel Stockholders pursuant to Section 3.01 , unless the Vitel Stockholders shall have consented to such removal in writing; provided that if the Vitel Stockholders shall request in writing the removal of such director, such Stockholder shall vote all its Company Securities that are entitled to vote in favor of such removal.
SECTION 3.03. Vacancies . If, as a result of death, disability, retirement, resignation, removal or otherwise, there shall exist or occur any vacancy on the Board of any director who shall have been designed by the Vitel Stockholders pursuant to Section 3.01 :
(a) The Vitel Stockholders may designate another individual (the “ Replacement Nominee ”) to fill such vacancy and serve as a director on the Board; and
(b) each Stockholder then entitled to vote for the election of directors to the Board agrees that it shall vote all of its Company Securities that are entitled to vote or execute proxies or written consents, as the case may be, in order to ensure that the Replacement Nominee be elected to the Board.
SECTION 3.04. Board Resolutions . The Board of Directors shall adopt any and all resolutions with a vote from a majority of its members, provided that for any of the matters included in Exhibit D hereto (each a “ Major Decision ”) either the Vitel Designee or the Management Designee shall vote in favor of adopting the corresponding resolution. In the event of a deadlock amongst the members of the board of directors of Vitel, the Board of Directors shall cast the deciding vote to resolve the deadlock amongst the board members of Vitel with a vote from a majority of its members, subject to the provision set forth above in connection with Major Decisions regarding Subsidiaries of the Company.
SECTION 3.05. Charter or Bylaw Provisions . Each Stockholder agrees to vote all of its Company Securities that are entitled to vote or execute proxies or written consents, as the case may be, and to take all other actions necessary, to ensure that the Company’s Charter and Bylaws (a) facilitate, and do not at any time conflict with, any provision of this Agreement and (b) permit each Stockholder to receive the benefits to which each such Stockholder is entitled under this Agreement. In addition, on the date hereof, Vitel Stockholders and Management Stockholders shall sign, or direct the Trustee to sign, the written consents necessary to amend the Company’s Charter and Bylaws, substantially in the form of the documents attached hereto as Exhibit E .
9 |
SECTION 3.06. Reimbursement of Expenses . Directors will not be entitled to compensation for service on the Board but the Company will pay all reasonable out-of-pocket expenses incurred by the members of the Board in connection with traveling to and from and attending meetings of the Board and while conducting business at the request of the Company.
SECTION 3.07. Corporate Opportunities . The parties also acknowledge that the Vitel Stockholders and their Affiliates have or may have interests in the same, related or competitive business areas as those engaged in by the Company and its Subsidiaries. For the avoidance of doubt, the Vitel Stockholders and their Affiliates shall be free to pursue only those opportunities permitted by Clause 5.2 of the Contribution Agreement without offering those opportunities to the Company.
SECTION 3.08. Protective Covenants . At and after such time that the Vitel Designee shall have been elected to the Board pursuant to Section 3.01 , the Company shall not (a) amend, alter or repeal any provision of the Charter or Bylaws of the Company relating to the Board as contemplated in this Article 3 , and (b) alter the size or composition of the Board other than in accordance with Sections 3.01 and 3.03 of this Agreement, without the prior written approval of the Vitel Designee (including any Replacement Nominees).
Article
4
RESTRICTIONS ON TRANSFER
SECTION 4.01. General Restrictions on Transfer .
(a) Each Stockholder understands and agrees that the Company Securities held by it on the date hereof have not been and will not be registered under the Securities Act and are restricted securities under the Securities Act and the rules and regulations promulgated thereunder. Each Stockholder agrees that it shall not Transfer any Company Securities (or solicit any offers in respect of any Transfer of any Company Securities), except in compliance with the Securities Act, any other applicable securities or “blue sky” laws and any other restrictions on Transfer contained in this Agreement and Clause IV of the Trust Agreement. Moreover, the restrictions on transfer included in Sections 4.01(c) , (d) and (e) hereof are subject to the Company deregistering all its Company Securities with the Securities and Exchange Commission of the United States of America before such restrictions shall apply.
(b) Permitted Transfers .
(i) Notwithstanding anything to the contrary in this Agreement, the Stockholders that are a party hereto may at any time, without being subject to Clause 4.01, Transfer their respective Company Securities (whether being held directly or indirectly through the trustee of the Trust Agreement) (x) to any of their Affiliates, their spouse, children, grandchildren, parents, sisters, brothers, nieces, nephews or any other relative within the second degree of kindred or a trust or other entity under a Stockholder’s control (the “ Permitted Transferees ”), or (y) with the prior consent of the other Stockholders which are also a party hereto, or (z) as otherwise permitted under this Agreement (each, a “ Permitted Transfer ”), in the understanding that (1) each Management Stockholder will be considered a Permitted Transferee with respect to each other and each Vitel Stockholder will be considered a Permitted Transferee with respect to each other, (2) transfers by the Stockholders that are a party hereto resulting from their death shall be considered a Permitted Transfer, and (3) any Stockholder that is a party hereto may act individually in regards to this Clause.
10 |
(ii) If a Permitted Transferee ceases to be an Affiliate of the Stockholder that is a party hereto who Transferred Company Securities to such Permitted Transferee, such Transfer shall be null and void pursuant to Section 4.01(d) hereof. The agreement or other instrument pursuant to which a party hereto carries out a Permitted Transfer must specifically contain a provision expressly contemplating the reversion of Company Securities or unwinding of the Permitted Transfer should the transferee cease to be a Permitted Transferee at any time after the corresponding Transfer. If according to the applicable law such reversion is not permitted or the transferor does not accept such reversion, then the non-transferring parties hereto shall be entitled to, provided that the transferor is bound to take any action that may be required from its part: (x) acquire directly or through an Affiliate, the totality of the Company Securities of the Permitted Transferee that ceased to be an Affiliate, (y) to instruct the Company to carry out a capital reduction in order to redeem the Company Securities of the Permitted Transferee that ceased to be an Affiliate, and to cause the corresponding Affiliate to approve and participate in such reduction, or (z) a combination of the rights set forth in (x) and (y) of this subsection (ii). In the event that more than one non-transferring party hereto exercises its right to acquire the Company Securities of the Permitted Transferee that ceased to be an Affiliate, the parties hereto who have exercised such right to purchase the Company Securities of the Permitted Transferee that ceased to be an Affiliate shall be entitled and obligated to purchase the entirety of such Company Securities in proportion to their holdings of Company Securities vis a vis the other parties hereto who have also exercised such right to purchase such Company Securities. The agreement or other instrument pursuant to which a party hereto carries out a Permitted Transfer must specifically contain a provision expressly granting such rights to the non-transferring parties hereto.
(iii) Each transferring Stockholder that is a party hereto shall previously notify in writing the non-transferring Stockholders that are also a party hereto of any Permitted Transfer.
(iv) Notwithstanding anything to the contrary in this clause, Vitel Stockholders may only carry out Permitted Transfers after 3 (three) years from the execution of this Agreement and any Permitted Transfer by Vitel Stockholders shall be made only to Mexican Affiliates.
(v) Any attempted Transfer in violation of the terms of this Section shall be null and void.
(c) Right of First Refusal . Subject to the provisions in this Article 4 (particularly the last sentence of Section 4.01(a)), in the event a Stockholder that is a party hereto wishes to Transfer its Company Securities (other than a transfer which is part of an acquisition or strategic transaction approved by the directors of OBM as a Major Decision), the other non-transferring Stockholders that are also a party hereto shall have the irrevocable right of first refusal (“ Right of First Refusal ”), pursuant to the following terms and conditions:
11 |
(i) Notice of Offer . In the event a Stockholder that is a party hereto, directly or indirectly, at any time, wishes or has the intention to Transfer any of its Company Securities to a third party other than an Affiliate (and other than a transfer which is part of an acquisition or strategic transaction approved by the directors of OBM as a Major Decision), such transferor must deliver written notice of such intention to the other Stockholders that are a party hereto, with a copy to the Company (the “ Notice of Offer ”), indicating (1) the amount of Company Securities owned by the transferor that are subject to such Transfer (the “ Offered Company Securities ”), (2) the purchase price (the “ Minimum Price ”) for such Offered Company Securities, (3) all other material terms and conditions of the proposed Transfer, including payment terms and the identity of the potential third party purchaser (the “ Third Party Purchaser ”) with sufficient detail and (4) the terms and conditions contained in the Notice of Offer shall be maintained for a transfer to any other Stockholder that is also a party hereto, in the event of a Notice of Exercise (as described below).
(ii) ROFR Exercise Period . The non-transferring Stockholder, within thirty (30) calendar days after the receipt of the Notice of Offer (the “ ROFR Exercise Period ”), may choose to either (i) purchase the Offered Company Securities, or (ii) not respond to the Notice of Offer. In the event a non-transferring Stockholder wishes to purchase the Offered Company Securities, it must exercise its Right of First Refusal by written notice (“ Notice of Exercise ”) given to the transferring Stockholder of its intent to purchase all, and not less than all, of the Offered Company Securities on the terms contained in the Notice of Offer, at the proposed Minimum Price. In the event that more than one Stockholder exercises its right to acquire the Offered Company Securities, the Stockholders who have exercised such right to purchase the Offered Company Securities shall be entitled and obligated to purchase the entirety of such Offered Company Securities in proportion to their holdings of Company Securities vis a vis the other Stockholder who may have also exercised such right to purchase the Offered Company Securities.
(iii) Transfer and ROFR Deposit . The Notice of Exercise shall be accompanied by a non-reimbursable deposit of no less than twenty percent (20%) of the Minimum Price set forth in the Notice of Offer (the “ ROFR Deposit ”).
(iv) The Transfer of the Offered Company Securities shall be made in favor of the non-transferring Stockholder(s) who delivered a Notice of Exercise, on the same basis set forth in the Notice of Offer, within sixty (60) calendar days after the receipt of the Notice of Exercise. The remaining portion of the Minimum Price must be paid by the non-transferring Stockholder(s) in immediately available funds at closing of the Transfer.
(v) If upon delivery of the Notice of Exercise the ROFR Deposit is not made, the Notice of Exercise shall be considered as not delivered and the transferring Stockholder shall have the right to Transfer the Offered Company Securities to the Third Party Purchaser under the same material terms, including price, outlined to the non-transferring Stockholders in the Notice of Offer. Notwithstanding the foregoing, the transferring Stockholder has the right to impose a penalty, in the amount of the respective ROFR Deposit, on the non-transferring Stockholder(s) if the non-transferring Stockholder(s) made the ROFR Deposit but later fail(s) to consummate the purchase of the Offered Company Securities pursuant to the terms of this Agreement for reasons attributed to the non-transferring Stockholder(s). In this event, the non-transferring Stockholder(s) shall forfeit the applicable ROFR Deposit.
12 |
For purposes of the Transfer of Company Securities between Stockholders pursuant to the terms hereof, the only required representations and warranties shall be those related to ownership of the Company Securities and nonexistence of liens and encumbrances thereupon.
(vi) Termination of ROFR Exercise Period . If upon termination of the ROFR Exercise Period, a non-transferring Stockholder(s): (i) fail(s) to timely deliver a Notice of Exercise regarding all of the Offered Company Securities in accordance with Section 4.01(c)(ii), or (ii) having delivered the Notice of Exercise, does not purchase the Offered Company Securities pursuant to the terms set forth above, the transferring Stockholder shall be entitled to enter into a stock purchase agreement (the “ Third Party Sale Agreement ”) with the Third Party Purchaser pursuant to which the transferring Stockholder agrees to sell the Offered Company Securities to such Third Party Purchaser under the same terms as those described in the Notice of Offer.
The closing of the Transfer of all of the Offered Company Securities under this Article IV will occur no later than ninety (90) calendar days after the day the non-transferring Stockholder received the Notice of Offer. If the Transfer is not made within said ninety (90) calendar day term, the Transfer process set forth herein must once again be initiated. In the event the Transfer of the Offered Company Securities requires any additional third party or governmental authority authorization, said ninety (90) calendar day term shall be extended as required by said third party or governmental authority to accept or reject the sale.
(vii) Adhesion . In the event the Third Party Purchaser acquires all the Offered Company Securities owned by a Stockholder, in order for said Transfer to be effective, simultaneously to the date on which the Transfer shall become effective, the Third Party Purchaser (a) shall have agreed in writing to be bound by the terms of this Agreement by executing a joinder agreement in the form of Exhibit C attached hereto; and (b) the Transfer shall be in compliance with the Securities Act, any other applicable securities or “blue sky” laws and any other restrictions on Transfer contained in this Agreement. Third Party Purchaser shall also provide the Company any such other information reasonably requested by the Company to ensure compliance with the terms of this Agreement and the Company shall be entitled to condition any such Transfer on receipt of an opinion of counsel reasonably acceptable to the Company that such Transfer is exempt from the registration requirements of the Securities Act.
13 |
(vi) Any attempted Transfer in violation of the terms of this Agreement shall be null and void.
(d) Right of Co-Sale (Tag Along) . Subject to the provisions of the last sentence of Section 4.01(a), in the event that any Stockholder or group of Stockholders intend to accept an offer (either solicited or unsolicited) from any third party to acquire or otherwise Transfer Company Securities, representing at least 20% (twenty per cent) of the outstanding Company Securities, on a Fully Diluted basis, the selling Stockholder shall give an offer notice in writing to the Stockholders of the Company, with a copy to the Company, containing the terms and conditions of such offer received from the interested third party. Each Stockholder shall have the right to participate in such offer by selling the pro rata proportion of its Company Securities pursuant to such offer to acquire or otherwise Transfer Company Securities.
(e) Drag Along . In the event a Stockholder or group of Stockholders representing at least 32% (thirty two per cent) of the outstanding Company Securities, on a Fully Diluted basis, intends to accept an offer from any third party to acquire or otherwise Transfer Company Securities, representing at least 50% (fifty per cent) of the outstanding Company Securities, on a Fully Diluted basis, and the transaction is approved by the Company’s board of directors as a Major Decision, then each Stockholder shall be obligated to sell its Company Securities pursuant to the offer to purchase. In case the drag along provision included herein is enforced, all the Stockholders participating in such sale shall receive the same terms and conditions of sale based on their respective holdings of Company Securities and shall otherwise be treated equally based on such ownership interest.
(f) Any attempt to Transfer any Company Securities not in compliance with this Agreement shall be null and void, and the Company shall not, and shall cause any transfer agent not to, give any effect in the Company’s stock records to such attempted Transfer.
SECTION 4.02. Legends .
(a) In addition to any other legend that may be required, each certificate for Company Securities issued to any Stockholder shall bear a legend in substantially the following form:
“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY FOREIGN OR STATE SECURITIES LAWS AND MAY NOT BE OFFERED OR SOLD EXCEPT IN COMPLIANCE THEREWITH. THIS SECURITY IS ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER AS SET FORTH IN THE STOCKHOLDERS’ AGREEMENT DATED AS OF MARCH 10, 2017, COPIES OF WHICH MAY BE OBTAINED UPON REQUEST FROM ONCBIOMUNE PHARMACEUTICALS, INC. OR ANY SUCCESSOR THERETO.”
(b) If any Company Securities (i) are sold under circumstances in which all of the applicable conditions of Rule 144 (or any similar provisions then in force) under the Securities Act are met or (iii) are otherwise Transferred, the Company has delivered a new certificate or other evidence of ownership for such Company Securities not bearing the legend required pursuant to this Agreement and such Company Securities may be resold without subsequent registration under the Securities Act, the Company may request that the holder provide an opinion of legal counsel reasonably acceptable to the Company stating that such Company Securities are freely transferable under the Securities Act, and if it requests and receives such opinion, the Company shall issue to such holder a new certificate evidencing such Company Securities without the first sentence of the legend required by Section 4.03(a) endorsed thereon. If any Company Securities cease to be subject to any and all restrictions on Transfer and all other obligations set forth in this Agreement and Clause IV of the Trust Agreement, the Company, upon the written request of the holder thereof, shall issue to such holder a new certificate evidencing such Company Securities without the second sentence of the legend required by Section 4.03(a) endorsed thereon.
14 |
SECTION 4.03. Permitted Transferees . The provisions of this Article 4 shall apply with respect to Permitted Transfers by any Stockholders that are a party hereto, provided that (a) subject to the provisions of Section 5.04(c) hereof, any Permitted Transferee shall have agreed in writing to be bound by the terms of this Agreement by executing a joinder agreement in the form of Exhibit C attached hereto; and (b) the Transfer is in compliance with the Securities Act, any other applicable securities or “blue sky” laws and any other restrictions on Transfer contained in this Agreement. Such Stockholder must give written prior notice to the Company of any proposed Transfer to a Permitted Transferee, including the identity of such proposed Permitted Transferee and such other information reasonably requested by the Company to ensure compliance with the terms of this Agreement and the Company shall be entitled to condition any such Transfer on receipt of an opinion of counsel reasonably acceptable to the Company that such Transfer is exempt from the registration requirements of the Securities Act.
SECTION 4.04. Restrictions on Transfers by Additional Stockholders . The right of the Additional Stockholders to Transfer any of their Company Securities shall be limited solely by applicable Federal and state securities laws.
SECTION 4.05. Liquidation Event . Upon the occurrence of a Liquidation Event, the Vitel Stockholders shall give written instructions to the Trustee to perform the Transfer each such Vitel Stockholder’s Pro Rata Share of the OBM Shares that form part of the Trust Property to be sold as part of the Liquidation Event. The Vitel Stockholders shall be responsible for the tax consequences to each of them of their participation in any such Liquidation Event.
Article
5
MISCELLANEOUS
SECTION 5.01. Conflicting Agreements . Each Stockholder represents and agrees that it shall not (a) grant any proxy or enter into or agree to be bound by any voting trust or agreement with respect to the Company Securities, except as expressly contemplated by this Agreement, (b) enter into any agreement or arrangement of any kind with any Person with respect to its Company Securities inconsistent with the provisions of this Agreement or for the purpose or with the effect of denying or reducing the rights of any other Stockholder under this Agreement, including agreements or arrangements with respect to the Transfer or voting of its Company Securities or (c) act, for any reason, as a member of a group or in concert with any other Person in connection with the Transfer or voting of its Company Securities in any manner that is inconsistent with the provisions of this Agreement.
15 |
SECTION 5.02. Binding Effect; Assignability; Benefit .
(a) This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, successors, legal representatives and permitted assigns. Any Stockholder that ceases to own beneficially any Company Securities shall cease to be bound by the terms hereof (other than this Article 5 ).
(b) Neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by any party hereto pursuant to any Transfer of Company Securities or otherwise. Any Person acquiring Company Securities that is required or permitted by the terms of this Agreement to become a party hereto shall (unless already bound hereby) execute and deliver to the Company an agreement to be bound by this Agreement in the form of Exhibit C hereto and shall thenceforth be a “Stockholder”.
(c) Nothing in this Agreement, expressed or implied, is intended to confer on any Person other than the parties hereto, and their respective heirs, successors, legal representatives and permitted assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement.
SECTION 5.03. Notices . All notices, requests and other communications to any party shall be in writing and shall be delivered in person, mailed by certified or registered mail, return receipt requested, or sent by email,
If to the Company, to:
OncBioMune Pharmaceuticals, Inc.
11441 Industriplex Blvd., Suite 190
Baton Rouge, LA 70809
Attention: Andrew Albert Kucharchuk
Email: akucha1.OBMP@gmail.com
With a copy (which shall not constitute notice) to:
Legal & Compliance, LLC
330 Clematis Street, Suite 217
West Palm Beach, FL 33401
Attention: Lazarus Rothstein, Esq.
Email: lrothstein@legalandcompiance.com
If to the Vitel Stockholders:
Manuel Cosme Odabachian
Secretaria de Marina 700 Torre Bambu Depto 2301
Lomas del Chamizal
De. Cuajimalpa
CP. 05120 Mexico
Email: mcosme@vitelpharma.com
16 |
Carlos Fernando Alaman Volnie
Tabachines 72
Bosques de Las Lomas
Del. Cuajimalpa
CP. 05120 Mexico
Email: calaman@vitelpharma.com
if to any other Stockholder, to such Stockholder at the address listed on Schedule A hereto,
or, in each case, at such other address or email as such party may hereafter specify for the purpose of notices hereunder by written notice to the other parties hereto. All notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. in the place of receipt and such day is a Business Day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed not to have been received until the next succeeding Business Day in the place of receipt. Any notice, request or other written communication sent by email transmission shall be deemed received upon confirmation of receipt by the receiving party.
Any Person that hereafter becomes a Stockholder shall provide its address and email to the Company, which shall promptly provide such information to each other Stockholder.
SECTION 5.04. Waiver; Amendment; Termination .
(a) No provision of this Agreement may be waived except by an instrument in writing executed by the party against whom the waiver is to be effective. No provision of this Agreement may be amended or otherwise modified except by an instrument in writing executed by the Company and the Vitel Stockholders and if any such amendment or modification will disproportionately and materially and adversely affect the other Stockholders differently than the Vitel Stockholders, the other Stockholders holding at least 51% of the outstanding Common Shares held by the other Stockholders at the time of such proposed amendment or modification will be required.
(b) This Agreement shall terminate the earlier of the following: (i) three (3) years as of the Closing; (ii) in connection with any Person that is a party hereto, whenever such Person directly or indirectly owns less than 5% (five per cent) of the Fully Diluted Company Securities; or (iii) upon the consummation of a Liquidation Event.
in connection with the consummation of a Liquidation Event.
(c) Notwithstanding the foregoing, any Person acquiring 5% (five per cent) or more of the Fully Diluted Company Securities may become a party to this Agreement as a “Management Stockholder,” “Additional Stockholder” and “Stockholder” upon execution and delivery to the Company of the form of Subscription and Joinder Agreement attached hereto as Exhibit C by such Person and the Company, at which time Schedule A shall be amended to reflect the addition of such Stockholder.
17 |
SECTION 5.05. Fees and Expenses . Each party shall pay its own costs and expenses incurred in connection with the preparation and execution of this Agreement and the Related Agreements.
SECTION 5.06. Governing Law . This Agreement shall be governed by, and construed in accordance with, the laws of the State of Nevada, without regard to the conflicts of laws rules of such state.
SECTION 5.07. Arbitration . Any and all claims or controversies arising from or relating to, this Agreement, its interpretation, or its alleged breach or enforcement, shall be resolved by binding arbitration before the American Arbitration Association ( “AAA” ) according to the Commercial Arbitration Rules of the AAA then in effect (the “ AAA Rules ”). The arbitration shall occur in New York, New York and the parties waive any objection to this choice of alternative dispute resolution, procedures or venue. The parties shall each appoint a single arbitrator and such arbitrators shall agree upon a third arbitrator or, if no agreement can be reached within fourteen (14) days after the AAA provides the list of names from its National Roster, the AAA shall appoint the third arbitrator according to the AAA Rules then in effect. Any arbitration hereunder shall be conducted in English and shall be completed within one hundred and eighty (180) days after appointment of the third arbitrator. The arbitrators shall be authorized to award reasonable attorneys’ fees and costs to the prevailing party in the arbitration, and to include such sum in the final arbitration award. The arbitrators may not award punitive, consequential or special damages. The arbitration award may be confirmed as a judgment in any court having jurisdiction of the subject matter and parties.
SECTION 5.08. Waiver of Jury Trial . EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE RELATED AGREEMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY.
SECTION 5.09. Specific Enforcement; Cumulative Remedies . The parties hereto acknowledge that money damages may not be an adequate remedy for violations of this Agreement and that any party, in addition to any other rights and remedies which the parties may have hereunder or at law or in equity, may, in his or its sole discretion, apply to a court of competent jurisdiction for specific performance or injunction or such other relief as such court may deem just and proper in order to enforce this Agreement or prevent any violation hereof and, to the extent permitted by applicable law, each party waives any objection to the imposition of such relief. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each party agrees that service of process on such party as provided in Section 5.03 shall be deemed effective service of process on such party. All rights, powers and remedies provided under this Agreement or otherwise available in respect hereof at law or in equity shall be cumulative and not alternative, and the exercise or beginning of the exercise of any thereof by any party shall not preclude the simultaneous or later exercise of any other such rights, powers or remedies by such party.
18 |
SECTION 5.10. Entire Agreement . This Agreement and any exhibits and other documents referred to herein constitute the entire agreement and understanding among the parties hereto in respect of the subject matter hereof and thereof and supersede all prior and contemporaneous agreements and understandings, both oral and written, among the parties hereto, or between any of them, with respect to the subject matter hereof and thereof.
SECTION 5.11. Spouses . This Agreement must be executed by the spouse of each Stockholder who is a resident of a community property state (which, at the date hereof, are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Puerto Rico, Texas, Washington or Wisconsin), or if married in a jurisdiction outside of the United States of America, to the extent that such marriage is under a community property regime and spousal consent to execute this Agreement would be necessary or convenient. By executing this Agreement, such spouse acknowledges that she or he has read this Agreement and knows its contents and agrees to be bound in all respects by the terms of this Agreement to the same extent as the Stockholders. Each such spouse further agrees that should she or he predecease the Stockholder to whom she or he is married or should she or he become divorced from such Stockholder, any of the Company Securities which such spouse may own or in which she or he may have any interest shall remain subject to all of the restrictions and to all of the rights of the Stockholders contained in this Agreement.
SECTION 5.12. Severability . If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated. Upon such a determination, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner so that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.
SECTION 5.13. Counterparts; Effectiveness . This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement will become effective when duly executed and delivered by each party hereto. Counterpart signature pages to this Agreement may be delivered by facsimile or electronic delivery ( i.e ., by email of a PDF signature page) and each such counterpart signature page will constitute an original for all purposes.
19 |
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.
ONCBIOMUNE PHARMACEUTICALS, INC. | ||
By: | /s/ Andrew Albert Kucharchuk | |
Name: | Andrew Albert Kucharchuk | |
Title: | President and CFO |
[SIGNATURE PAGE TO THE STOCKHOLDERS’ AGREEMENT]
20 |
MANAGEMENT STOCKHOLDERS | |
/s/ Jonathan F. Head, Ph.D. | |
Jonathan F. Head, Ph.D. | |
/s/ Andrew Albert Kucharchuk | |
Andrew Albert Kucharchuk |
[SIGNATURE PAGE TO THE STOCKHOLDERS’ AGREEMENT]
21 |
VITEL STOCKHOLDERS | |
/s/ Manuel Cosme Odabachian | |
Manuel Cosme Odabachian | |
/s/ Carlos Fernando Alaman | |
Carlos Fernando Alaman |
[SIGNATURE PAGE TO THE STOCKHOLDERS’ AGREEMENT]
22 |
Spouse’s Agreement
The undersigned, being the spouse of Jonathan F. Head, Ph.D. agrees to be bound by the provisions of this Agreement, to the extent applicable to the undersigned.
/s/ Priscila T. Head | |
Printed Name: Priscila T. Head |
23 |
Spouse’s Agreement
The undersigned, being the spouse of Andrew Albert Kucharchuk agrees to be bound by the provisions of this Agreement, to the extent applicable to the undersigned.
/s/ Jessica B. Kucharchuk | |
Printed Name: Jessica B. Kucharchuk |
24 |
SCHEDULE
A
MANAGEMENT AND ADDITIONAL STOCKHOLDERS
Management Stockholder |
Common Stock 1 |
Preferred Stock | ||||||
Jonathan F. Head, Ph.D. | 16,926,078 | 500,000 | ||||||
11441 Industriplex Blvd., Suite 190
Baton Rouge, LA 70809 email: jhead@oncbiomune.com |
||||||||
Andrew A. Kucharchuk | 5,000,000 | 0 | ||||||
11441 Industriplex Blvd., Suite 190
Baton Rouge, LA 70809 email: akucha1.obmp@gmail.com |
1 Does not include options to purchase 2,000,000 shares of common stock issued to each of Messrs. Head and Kucharchuk on the date of this Agreement.
25 |
EXHIBIT C
JOINDER TO STOCKHOLDERS’ AGREEMENT
This Joinder Agreement (this “ Joinder Agreement ”) is made as of the date written below by the undersigned (the “ Joining Party ”) in accordance with the Stockholders’ Agreement dated as of March 10, 2017 (the “ Stockholders’ Agreement ”) among OncBioMune Pharmaceuticals, Inc. and certain other persons named therein, as the same may be amended from time to time. Capitalized terms used, but not defined, herein shall have the meaning ascribed to such terms in the Stockholders’ Agreement.
The Joining Party hereby acknowledges, agrees and confirms that, by its execution of this Joinder Agreement, the Joining Party shall be deemed to be a party to and [“Management Stockholder”/”Vitel Stockholder”/”Additional Stockholder”] under the Stockholders’ Agreement as of the date hereof and shall have all of the rights and obligations of the Stockholder from whom it has acquired Company Securities (to the extent permitted by the Stockholders’ Agreement) as if it had executed the Stockholders’ Agreement. The Joining Party hereby ratifies, as of the date hereof, and agrees to be bound by, all of the terms, provisions and conditions contained in the Stockholders’ Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Joinder Agreement as of the date written below.
Date: ______ ___, 20[__]
[NAME OF JOINING PARTY] | ||
By: | ||
Name: | ||
Title: | ||
Address for Notices: |
AGREED ON THIS [__] day of [__], 20[__]:
ONCBIOMUNE PHARMACEUTICALS, INC.
By: | ||
Name: | ||
Title: |
26 |
EXHIBIT D
MAJOR DECISIONS
(a) | Any authorization, increase, sale or issuance of any additional Company Securities, or options, warrants, securities convertible into or exercisable or exchangeable for ownership interests in the Company or similar rights to acquire any interest of any kind in the Company, including but not limited to the approvals in connection with Sections 4.01(c), 4.01(c)(i) and 4.01(e) of the Stockholders’ Agreement which this Exhibit forms part of; | |
(b) | Making, cancelling or modifying any payment of dividends or other distributions of the Company; | |
(c) | Redemption or repurchase of any of the Company Securities; | |
(d) | Any acquisition of substantially all of the assets or stock of another Person or the merger, consolidation, sale of all or substantially all of the assets of the Company or other business combination of the Company; including entering into any merger, spin-off, consolidation or other business combination or any other change of control transaction; | |
(e) | Entering into debt obligations other than those contemplated in a current approved business plan and budget; | |
(f) | Any amendment to the Bylaws of the Company that adversely impacts the parties to this Stockholders’ Agreement; | |
(g) | Approval of the Company’s (consolidated with the Company Subsidiaries, in case of existence) annual budget, its business plans, as well as any material revision of such budget and/or business plans, and/or any material investment not contemplated in a then current budget or business plan. For purposes of this clause, the word “material” shall mean a revision or investment having an expected impact of 10% (ten percent) or more on the line item contained in the annual budget or business plan. | |
(h) | Any authorization or approval of compensation packages paid to the Directors or the first level management of the Company or paid to employees of the Company whose annual compensation would exceed $100,000 (one hundred thousand Dollars 00/100). First level management compensation shall be approved by the Board of Directors. First level management in the Company shall include the CEO and all of his/her direct reports; | |
(i) | Any appointment, renewal and removal of first level management officers; | |
(j) | Selection, approval, ratification or change of the external auditors of the Company; |
27 |
(k) | Any change in the size or composition of the Board of Directors; including the appointment, ratification or change in the President and/or the independent member(s) of the Board of Directors not otherwise contemplated by the Stockholders’ Agreement; | |
(l) | Any appointment, renewal, removal or change in the size or composition of any committees within the Board of Directors as well as its members; including any change in the delegated powers of any committees of the Board of Directors; | |
(m) | Any sale or disposition of any direct or indirect equity interest of the Company in any Subsidiary, as well as any sale or disposition of assets or property by the Company (other than sales of inventory in the ordinary course of business) in excess of $100,000 (one hundred thousand Dollars 00/100) in any fiscal year; | |
(n) | Any changes in the commercial activity of the Company, or material alteration to the nature of the Company’s business or material expansion of the Company’s business, or corporate purpose of the Company; including material deviations in business strategy from what is contemplated in the currently approved Company business plan; | |
(o) | Except for transactions pursuant to contracts or agreements in existence as of the date hereof, any related party transaction, which includes transactions between the Company on the one side, and Stockholders or their Affiliates on the other; | |
(p) | Any contract, agreement or transaction to which the Company is a party by means of which the Company acquires rights or obligations for a term longer than one (1) year or whose value exceeds the amount of $100,000 (one hundred thousand Dollars 00/100), as well as any amendment, termination, cancellation or rescission thereof; provided that the Board by resolution may establish contract values that will not require prior Board approval; | |
(q) | Any action that effects or agrees to change or modify the accounting methods of the Company; | |
(r) | Approving the purchase and/or sale and/or the creation of any mortgage, lien or other form of encumbrance of any significantly material assets of the Company; | |
(s) | Any change to the Company’s capital structure that alters or modifies the rights, preferences or privileges of Company Securities, including the reclassification or recapitalization of the outstanding capital stock of the Company; | |
(t) | Any making, or receiving or repayment of Stockholder loans; | |
(u) | Any grant of any license to another Person of any of the Company’s trademarks, know-how or other intellectual property; and | |
(v) | Any authorization of an officer or Director of the Company to vote any shares of another Person held by the Company. |
28 |
EXHIBIT E
WRITTEN CONSENTS OF THE BOARD OF DIRECTORS OF THE COMPANY
WRITTEN CONSENT OF THE BOARD OF DIRECTORS
OF
ONCBIOMUNE PHARMACEUTICALS, INC.
The undersigned, being all of the members of the Board of Directors (the “ Board ”) of ONCBIOMUNE PHARMACEUTICALS, INC., a Nevada corporation (the “ Corporation ”), do hereby consent that the resolutions set forth below shall be deemed to have been adopted to the same extent and to have the same force and effect as if adopted at a formal meeting of the Corporation’s Board of Directors at a meeting duly called and held for purposes of acting upon proposals to adopt such resolutions (the “ Written Consent ”).
WHEREAS , the Board of Directors deems it advisable and generally in the Corporation’s best interests to amend its Amended and Restated Articles of Incorporation (the “ Amendment to Articles ”) to amend Article 4 to clarify certain limitations on the rights on holders of the Corporation’s common stock, replace Article 8 to permit the Board to amend the Bylaws without shareholder approval and adopt the form of Amendment to Articles attached hereto as Exhibit A .
WHEREAS , the Board of Directors deems it advisable and generally in the Corporation’s best interest to amend and restate its Bylaws and adopt the Amended and Restated Bylaws attached hereto as Exhibit B (the “ Amended and Restated Bylaws ”).
WHEREAS , the Board of Directors deems it advisable and generally in the Corporation’s best interest to appoint a corporate secretary.
NOW, THEREFORE, BE IT RESOLVED , that the Board of Directors hereby approves the Amendment to Articles and the Amended and Restated Bylaws (collectively, the “ Corporate Actions ”); and be it
FURTHER RESOLVED , that the Board of Directors be and hereby directs that the Corporate Actions be submitted to the shareholders of the Corporation for their consideration and approval, and recommends that the Corporation’s shareholders approve the Corporate Actions; and be it
FURTHER RESOLVED, that the Corporation shall notify its shareholders of the Corporate Actions and approves of the officers of the Corporation mailing or otherwise delivering, or causing the mailing or delivery of such notification to the shareholders of the Corporation entitled to notice of the matters set forth in the Written Consent; and be it
FURTHER RESOLVED , that the Board of Directors hereby ratifies and approves that the date of shareholder approval of the Corporate Actions is hereby fixed as the record date as of which the holders of the outstanding shares of the Corporation’s Common Stock shall be entitled to notice of the Written Consent; and be it
FURTHER RESOLVED , at such time as a majority of the shareholders of the Corporation approve and adopt the Corporate Actions that the proper officers of the Corporation be and hereby are authorized and directed to execute on the Corporation’s behalf the Amendment to Articles, and to file such Amendment to Articles with the Secretary of State of Nevada with such effective date as the President of the Corporation deems appropriate but in no event earlier than 20 days after the mailing of the Information Statement to be filed by the Corporation with the Securities and Exchange Commission in accordance with the applicable rule of the Exchange Act of 1934, as amended, and be it.
29 |
FURTHER RESOLVED , that Andrew A. Kucharchuk, is hereby appointed as the corporate Secretary of the Corporation; and be it
FURTHER RESOLVED , that the proper officers of the Corporation be, and each of them hereby is, in accordance with the foregoing resolutions, authorized, empowered and directed, in the name and on behalf of the Corporation, to prepare, execute and deliver, or cause to be prepared, executed and delivered, any and all agreements, amendments, certificates, reports, applications, notices, instruments, schedules, statements, consents, letters or other documents and information and to do or cause to be done any and all such other acts and things as, in the opinion of any such officer, may be necessary, appropriate or desirable in order to enable the Corporation fully and promptly to carry out the purposes and intent of the foregoing resolutions, to make any filings pursuant to federal, state and foreign laws, and to take all other actions that he or she deems necessary, appropriate or advisable in order to comply with the applicable laws and regulations of any jurisdiction (domestic or foreign), or otherwise to effectuate and carry out the purposes of the foregoing resolutions and to permit the transactions contemplated thereby to be lawfully consummated, and any such action taken or any agreements, amendments, certificates, reports, applications, notices, instruments, schedules, statements, consents, letters or other documents and information executed and delivered by them or any of them in connection with any such action shall be conclusive evidence of their or his or her authority to take, execute and deliver the same; and it is further
FURTHER RESOLVED , that each of the proper officers of the Corporation is authorized and directed, in the name and on behalf of the Corporation, to take or cause to be taken any and all such further actions and to prepare, execute and deliver or cause to be prepared, executed and delivered all such further agreements, documents, certificates and undertakings, and to incur all such fees and expenses, as in his or her judgment shall be necessary, appropriate or advisable to carry out and effectuate the purpose and intent of any and all of the foregoing resolutions; and be it
FURTHER RESOLVED , that all actions previously taken by any officer, director, representative or agent of the Corporation, in the name or on behalf of the Corporation or any of its affiliates in connection with the transactions contemplated by the foregoing resolutions be, and each of the same hereby is, adopted, ratified, confirmed and approved in all respects as the act and deed of the Corporation; and be it
FURTHER RESOLVED , that the Board hereby adopts, as if expressly set forth herein, the form of any and all resolutions required by any authority to be filed in connection with any applications, reports, filings, consents to service of process, powers of attorney, covenants and other papers, instruments and documents relating to the matters contemplated by the foregoing resolutions if (i) in the opinion of a proper officer of the Corporation executing the same, the adoption of such resolutions is necessary or advisable, and (ii) the secretary or an assistant secretary of the Corporation evidences such adoption by inserting with this written consent copies of such resolutions, which will thereupon be deemed to be adopted by the Board with the same force and effect as if originally set forth herein.
Dated: March __, 2017
Board of Directors:
Jonathan F. Head, Ph. D., Director | Daniel S. Hoverman, Director | |
Manuel Cosme Odabachian, Director | Charles L. Rice, Jr., Director |
30 |
Exhibit A
Amendment to Amended and Restated Articles of Incorporation
ARTICLES OF AMENDMENT TO
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
ONCBIOMUNE PHARMACEUTICALS, INC.
Pursuant to NRS 78.390 of the Nevada Revised Statutes (the “NRS”), ONCBIOMUNE PHARMACEUTICALS, INC., a Nevada corporation (the “Corporation”), hereby amends its Amended and Restated Articles of Incorporation as follows:
1. Amendments .
(a) Article 4 – Capital Stock of the Corporation’s Amended and Restated Articles of Incorporation is hereby amended by adding the following new Section 4.3:
Section 4.3 Rights of Holders of Common Stock . The following rights, powers, privileges and restrictions, qualifications, and limitations apply to the Common Stock.
(a) General . The voting, dividend and liquidation rights of the holders of the Common Stock are subject to and qualified by the rights, powers and privileges of the holders of the Preferred Stock.
(b) Voting . The holders of the Common Stock are entitled to one vote for each share of Common Stock held at all meetings of stockholders (and written actions in lieu of meetings). Unless required by law, there shall be no cumulative voting. The number of authorized shares of Common Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by (in addition to any vote of the holders of one or more series of Preferred Stock that may be authorized by the Board) the affirmative vote of the holders of shares of capital stock of the Corporation representing a majority of the votes represented by all outstanding shares of capital stock of the Corporation entitled to vote. Further, holders of the Common Stock shall have no right to vote on the designations, preferences, limitations and relative or other rights of the Preferred Stock or any series thereof (collectively, the “Preferences”), or on any amendment, alteration or repeal of the Preferences or the Preferred Stock, at any time, whether before or after the issuance thereof.
(b) Article 8 of the Corporation’s Amended and Restated Articles of Incorporation is hereby amended by replacing the existing Article 8 in its entirety with the following new Article 8:
31 |
ARTICLE 8 – AMENDMENTS AND STOCKHOLDER ACTIONS
Section 8.1 Amendments. The Board of Directors, without the necessity of stockholder vote, shall have the authority to amend or repeal these Amended and Restated Articles of Incorporation to the fullest extent allowable by the NRS.
Section 8.2 Stockholder Actions . Where a stockholder vote is required by the NRS, including, but not limited to (i) amendments to these Amended and Restated Articles of Incorporation, (ii) sale of substantially all of its assets, or (iii) mergers, conversion or exchanges, the affirmative vote of the holders of at least 60% of the votes of all stockholders of the Corporation who have voting power, voting together as a single class, is required to amend or repeal these Articles of Incorporation.
The Board may make, amend and repeal the Bylaws of the Corporation or adopt new Bylaws. Nothing herein shall deny the concurrent power of the stockholders to adopt, alter, amend or repeal the Bylaws.
2. Effective Date . The effective date of this amendment to the Amended and Restated Articles of Incorporation shall be the close of business on the date of filing with Nevada Secretary of State.
3. Adoption of Amendment .
(a) The foregoing amendment to the Articles of Incorporation was approved by the Board of Directors of the Corporation by unanimous written consent in lieu of meeting on March __, 2017.
(b) The vote by which the stockholders holding shares in the Corporation entitling them to exercise at least a majority of the voting power, or such greater proportion of the voting power as may be required in the case of a vote by classes or series, or as may be required by the provisions of the Amended and Restated Articles of Incorporation have voted in favor of the amendment is: [___]%.
IN WITNESS WHEREOF, the undersigned has executed these Articles of Amendment to Amended and Restated Articles of Incorporation as of March, 2017.
ONCBIOMUNE PHARMACEUTICALS, INC. | ||
By: | ||
Jonathan F. Head, Ph.D., Chief Executive Officer |
32 |
Exhibit B
Amended and Restated Bylaws
AMENDED AND RESTATED BYLAWS
OF
ONCBIOMUNE PHARMACEUTICALS, INC.,
a Nevada corporation
Article 6 - OFFICES
The registered office of the corporation shall be at such address as shall be set forth from time to time in the office of the Secretary of State of Nevada.
The corporation may also have offices at such other places both within and outside the State of Nevada as the Board of Directors may from time to time determine or the business of the corporation may require.
Article 7 - BOARD OF DIRECTORS
SECTION 7.01. GENERAL POWERS
The directors shall in all cases act as a Board. The business of the corporation shall be managed under the direction of its Board of Directors, which may exercise all such powers of the corporation and do all such lawful acts and things as are not by statute or by the articles of incorporation or by these bylaws directed or required to be exercised or done by the stockholders.
SECTION 7.02. NUMBER OF DIRECTORS
The number of directors of the corporation shall be fixed from time to time by a resolution adopted by the Board; provided that in no event shall the number of directors be less than one, and provided further that no reduction in the number of directors shall have the effect of shortening the term of any incumbent director.
SECTION 7.03. TERM OF OFFICE; qUALIFICATIONS
The directors shall be elected at the annual meeting of the stockholders, and each director shall hold office until the next annual meeting of stockholders and until his or her successor shall have been elected and qualified.
Only persons who are nominated in accordance with the following procedures shall be eligible for election as directors of the corporation, except as may be otherwise provided in the articles of incorporation. Nominations of persons for election to the Board of Directors may be made at any annual meeting of stockholders, or at any special meeting of stockholders called for the purpose of electing directors, (a) by or at the direction of the Board of Directors (or any duly authorized committee thereof) or (b) by any stockholder of the corporation (i) who is a stockholder of record on the date of the giving of the notice provided for in this Section 3 of Article II and on the record date for the determination of stockholders entitled to vote at such meeting and (ii) who complies with the notice procedures set forth in this Section 3 of Article II.
In addition to any other applicable requirements, for a nomination to be made by a stockholder, such stockholder must have given timely notice thereof in proper written form to the secretary of the corporation. To be timely, a stockholder’s notice to the secretary must be delivered to or mailed and received at the principal executive offices of the corporation (a) in the case of an annual meeting, not less than 60 days nor more than 90 days prior to the anniversary date of the immediately preceding annual meeting of stockholders; provided, however, that in the event that the annual meeting is called for a date that is not within 30 days before or after such anniversary date, notice by the stockholder in order to be timely must be so received not later than the close of business on the 10 th day following the day on which such notice of the date of the annual meeting was mailed or such public disclosure of the date of the annual meeting was made, whichever first occurs; and (b) in the case of a special meeting of stockholders called for the purpose of electing directors, not later than the close of business on the 10 th day following the day on which notice of the date of the special meeting was mailed or public disclosure of the date of the special meeting was made, whichever first occurs. Public disclosure shall have the meaning set forth in Article IV, Section 13 herein.
33 |
To be in proper written form, a stockholder’s notice to the secretary must set forth (a) as to each person whom the stockholder proposes to nominate for election as a director (i) the name, age, business address and residence address of the person, (ii) the principal occupation or employment of the person, (iii) the class or series and number of shares of capital stock of the corporation which are owned beneficially or of record by the person and (iv) any other information relating to the person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations promulgated thereunder; and (b) as to the stockholder giving the notice (i) the name and record address of such stockholder, (ii) the class or series and number of shares of capital stock of the corporation which are owned beneficially or of record by such stockholder, (iii) a description of all arrangements or understandings between such stockholder and each proposed nominee and any other person or persons (including their names) pursuant to which the nomination(s) are to be made by such stockholder, (iv) a representation that such stockholder intends to appear in person or by proxy at the meeting to nominate the persons named in its notice and (v) any other information relating to such stockholder that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder. Such notice must be accompanied by a written consent of each proposed nominee to being named as a nominee and to serve as a director if elected.
No person shall be eligible for election as a director of the corporation unless nominated in accordance with the procedures set forth in this Section 3 of Article II. If the chairman of the meeting determines that a nomination was not made in accordance with the foregoing procedures, the chairman shall declare to the meeting that the nomination was defective and such defective nomination shall be disregarded.
SECTION 7.04. VACANCIES
Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, and the directors so chosen shall hold office until the next annual election and until their successors are duly elected and qualified. If there are no directors in office, then an election of directors may be held in the manner provided by statute.
SECTION 7.05. MEETINGS OF THE BOARD
A regular meeting of the directors shall be held at the principal offices of the corporation or at such other place and at such date and time as may be fixed by resolution of the Board. No notice need be given for regularly scheduled meetings of the Board as set up in the resolutions called for above. An annual meeting of the Board may be called without notice immediately after the annual meeting of the stockholders. Special meetings may be held at the request of the president, vice president, secretary or any two directors by giving written notice not less than 24 hours before the meeting. Notice must include the date, time and place of any such meeting and be served to each director via personal delivery, facsimile, email or overnight courier. Any such notice shall be deemed to have been given as of the date so personally delivered, sent via facsimile transmission or sent via email or as of the day following dispatch by overnight courier. The attendance of a director at a meeting constitutes a waiver of notice of such meeting, unless the express purpose of a director’s attendance is to protest, before or at the commencement of said meeting, the transaction of any business because the meeting is not lawfully called or convened.
34 |
SECTION 7.06. COMMITTEES
The Board of Directors may designate an executive committee and one or more other committees, each committee to consist of one of more directors of the corporation. Any such committee, to the extent provided in any such resolution, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the corporation. Any such committee shall keep written minutes of its meetings and report the same to the Board at the next regular meeting of the Board. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and disqualified from voting, whether or not he, she or they constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in the place of any such absent or disqualified member. Each such committee shall serve at the pleasure of the Board of Directors.
SECTION 7.07. QUORUM
A majority of the directors then in office shall constitute a quorum for the transaction of business at any meeting of the Board of Directors, provided, that the directors present at a meeting at which a quorum is initially present may continue to transact business notwithstanding the withdrawal of directors if any action taken is approved by a majority of the required quorum for such meeting. If less than a majority of the Board is present at a meeting, a majority of the directors present may adjourn the meeting without further notice, from time to time.
SECTION 7.08. PARTICIPATION BY CONFERENCE CALL
The members of the Board of Directors or of any committee commissioned by the Board may participate in and be counted present at any such meeting at which contact is made via video conference system, a conference telephone or similar communications equipment where, by the use of such equipment, all persons participating in any such meeting can hear each other at the same time.
SECTION 7.09. BOARD DECISIONS
Unless a vote of a greater number is required by the laws of the State of Nevada, the articles of incorporation, or these bylaws, the affirmative vote of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors.
SECTION 7.10. CHAIRMAN
The Board of Directors may, from their number, elect a chairman of the Board who shall preside at all meetings of the Board and stockholders and may have such additional responsibilities and powers as may from time to time be vested in him by resolution of the Board.
SECTION 7.11. VICE CHAIRMAN
The Board of Directors may, from their number, elect a vice chairman of the board who shall perform the duties and have the powers as the Board may from time to time designate. In the absence of the chairman of the board or if he or she is unable or unwilling to perform his or her duties, the vice chairman of the board shall assume the duties and responsibilities of the chairman of the board.
SECTION 7.12. COMPENSATION
The directors shall receive only such compensation for their services as directors as may be allowed by resolution of the Board. The Board may also provide that the corporation shall reimburse each such director for any expense incurred by such director on account of such director’s attendance at any meetings of the Board or committees of the Board. Neither the payment of such compensation nor the reimbursement of such expenses shall be construed to preclude any director from serving the corporation or its subsidiaries in any other capacity and receiving compensation therefor.
35 |
SECTION 7.13. WRITTEN CONSENT TO ACTION BY DIRECTORS
Any action required to be taken at a meeting of the directors of the corporation or any other action which may be taken at a meeting of the directors or of a committee, may be taken without a meeting, if a consent in writing, setting forth the action so taken, shall be signed by all of the directors, or all of the members of the committee, as the case may be, then in office. Such consent shall have the same legal effect as a unanimous vote of all the directors or members of the committee.
Article 8 - OFFICERS
SECTION 8.01. NUMBER; TERM
The officers of the corporation shall each be elected by the Board of Directors and shall be a president, a treasurer and a secretary. The Board, as it deems necessary, may from time to time elect one or more vice presidents, assistant treasurers, assistant secretaries and such other officers as it sees fit. Any person may hold two or more offices.
The officers shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board. Any officer may be removed at any time by the affirmative vote of a majority of the directors then in office. If the office of any officer becomes vacant for any reason, the vacancy shall be filled by the Board of Directors.
SECTION 8.02. RESIGNATION
Any officer may resign at any time by delivering a written resignation to the Board of Directors, the president or the secretary. Unless otherwise specified therein, such resignation shall take effect upon delivery.
SECTION 8.03. PRESIDENT
The president shall be the chief executive officer of the corporation and, unless otherwise determined by resolution of the Board of Directors, have charge and control of the business and affairs of the corporation. In the absence of a chairman and vice chairman of the board, the president shall, when present, preside over all stockholders’ meetings. The president shall perform all duties incident to the office of president and such other duties as may from time to time be designated by the Board.
SECTION 8.04. VICE PRESIDENT
Each vice president shall perform the duties and have the powers as the Board of Directors may from time to time designate. In the absence of the president or if such person is unable or unwilling to perform his duties the vice president, if only one, or such vice president, if more than one, who is so designated by the Board will assume the duties and responsibilities of the president.
SECTION 8.05. TREASURER
The treasurer shall have charge and custody of, and be responsible for, all funds and securities of the corporation; keep full and accurate accounts of receipts and disbursements in books belonging to the corporation; receive and give receipts for monies due and payable to the corporation from any source whatsoever, and shall deposit all monies and valuable effects in the name and to the credit of the corporation in such banks and other depositories as shall be authorized by the Board of Directors.
If required by the Board the treasurer shall give a bond for the faithful discharge of his duties in such amount and with such surety as the Board shall determine. The treasurer shall perform all duties as stated above in addition to any additional duties or powers as the Board may from time to time so designate to him.
36 |
SECTION 8.06. ASSISTANT TREASURER
Each assistant treasurer shall perform the duties and have the powers as the Board of Directors may from time to time designate. In the absence of the treasurer or if such person is unable or unwilling to perform his duties the assistant treasurer, if only one, or such assistant treasurer, if more than one, who is so designated by the Board will assume the duties and responsibilities of the treasurer.
SECTION 8.07. SECRETARY
The secretary shall record in books kept for the purpose all votes and proceedings of the Board and the stockholders. Unless the Board of Directors shall appoint a transfer agent and/or registrar or other officer or officers for the purpose, subject to such other and different rules and guidelines as may be adopted from time to time by the Board of Directors, the secretary shall be charged with the duty of keeping, or causing to be kept accurate records of all stock outstanding, stock certificates issued, and stock transfers. All such records may be kept solely in the stock certificate books. The secretary shall also perform other duties and have other powers as the Board of Directors may from time to time designate.
SECTION 8.08. ASSISTANT secretary
Each assistant secretary shall perform the duties and have the powers as the Board of Directors may from time to time designate. In the absence of the secretary or if such person is unable or unwilling to perform his duties the assistant secretary, if only one, or such assistant secretary, if more than one, who is so designated by the Board will assume the duties and responsibilities of the secretary.
SECTION 8.09. ABSENCE
In the absence of the secretary or assistant secretary at any meeting of the stockholders, a secretary shall be chosen by the chairman of the meeting to perform the duties of the secretary thereat.
Article 9 - STOCKHOLDERS
SECTION 9.01. ANNUAL MEETING
Annual meetings of the stockholders shall be held on the day and at the time as may be set by the Board of Directors from time to time and as indicated in the notice of such meeting. At the annual meeting, the stockholders shall elect by vote a Board of Directors and transact such other business as may properly be brought before the meeting.
SECTION 9.02. SPECIAL MEETINGS
Special meetings of the stockholders for any purpose or purposes, unless otherwise prescribed by statute or by the articles of incorporation, may be called by the Board of Directors, by a director, or by the president and shall be called by the secretary, or in the event of his absence, incapacity, refusal or death, any other officer of the corporation, upon written request of one or more stockholders owning at least 60% of all the shares issued and outstanding and entitled to vote. Such request shall be delivered to the president of the corporation and shall state the purpose or purposes of the proposed meeting. Upon such direction or request, a special meeting of the stockholders must be held not less than 10 nor more than 60 days thereafter, as the secretary may fix. If the secretary shall neglect to issue such call, the person or persons making such direction or request may issue the call. The business transacted at any special meeting of stockholders shall be confined to the purposes stated in the notice.
SECTION 9.03. PLACE OF MEETINGS
All annual and special meetings of the stockholders shall be held at the corporation’s principal offices or at another place within or outside the State of Nevada as designated by the Board of Directors.
37 |
SECTION 9.04. NOTICE OF MEETING
Written notice of the time, date and place of every meeting of stockholders shall be given by the secretary or by any other officer of the corporation designated by the directors or by these bylaws, not less than 10 calendar days prior to the meeting and not more than 60 calendar days before the meeting, to each stockholder entitled to vote at such meeting. Notice must be served to each stockholder entitled to vote via personal delivery, telegraph or mail addressed to that stockholder at his address as it appears in the records of the corporation. The notice of a special meeting shall include a description of the purpose or purposes for which the meeting is called.
SECTION 9.05. WAIVER OF NOTICE
Any stockholder may waive notice of any meeting of stockholders (however called or noticed, whether or not called or noticed, and whether before, during or after the meeting) by signing a written waiver of notice or a consent to the holding of such meeting or an approval of the minutes thereof. Attendance at a meeting, in person or by proxy, shall constitute waiver of all defects of notice regardless of whether a waiver, consent or approval is signed or any objections are made, unless attendance is solely for the purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened. All such waivers, consents or approvals shall be made a part of the minutes of the meeting.
SECTION 9.06. CHAIRMAN OF MEETING
The following individual is entitled to preside as chairman at a meeting of stockholders:
(a) | the chairman of the board, if any; |
(b) | if the chairman of the board is absent or unwilling to act as chairman of the meeting, the vice chairman of the board, if any; |
(c) | if the chairman and vice chairman of the board are absent or unwilling to act as chairman of the meeting, the president, if any. |
If, at any meeting of stockholders, there is no chairman or vice chairman of the board or president present within 15 minutes after the time set for holding the meeting, or if the chairman and vice chairman of the board and the president are unwilling to act as chairman of the meeting, or if the chairman and vice chairman of the board and the president have advised the secretary, if any, or any director present at the meeting, that they will not be present at the meeting, the directors present must choose one of their number to be chairman of the meeting or if all of the directors present decline to take the chairman or fail to so choose or if no director is present, the stockholders entitled to vote at the meeting who are present in person or by proxy may choose any person present at the meeting to chair the meeting.
SECTION 9.07. CLOSING OF THE TRANSFER BOOKS
The Board of Directors of the corporation may in its discretion fix a date not less than 10 calendar days and not more than 60 calendar days prior to the date of any annual meeting or special meeting of the stockholders or prior to the payment of any dividend or the making of any other distribution as the record date for determining the stockholders having the right to notice of, and to vote at such meeting or any adjournment thereof, or the right to receive such distribution or dividend. In lieu of fixing such closing date the directors may order the closing of the stock transfer books for a stated period not to exceed, in any case, 60 calendar days for the expressed purposes stated above. If no record date is fixed and the transfer records are not closed, the record date for determining stockholders entitled to vote at any meeting to elect directors shall be determined as the close of business on the day next preceding the date of notice of the meeting and, for a meeting for any other purpose, shall be determined as the close of business on the day on which the Board acts with respect thereto.
38 |
The holders of record of shares of the corporation on such record date or on the date of closing of the stock transfer books shall, if a dividend or distribution be declared, have the sole right to receive such distribution or dividend, or, if such shares have a voting right, the sole right to receive notice of, to vote at, and to attend such meeting.
SECTION 9.08. VOTING LISTS
The officers of the corporation shall cause to be prepared from the stock ledger, at least 10 days before every meeting of stockholders, a complete list of the stockholders entitled to vote at such meeting or any adjournment thereof, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least 10 days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the registered office of the corporation. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof and may be inspected by any stockholder who is present. The original stock ledger shall be the only evidence as to who are the stockholders entitled to examine the stock ledger, the list required by this section, or the books of the corporation, or to vote in person or by proxy at any meeting of stockholders.
SECTION 9.09. VOTING
When a quorum is present at any meeting, the vote of the holders of stock having at least 60% of the votes of all stockholders of the Corporation who have voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one on which by express provision of the statutes of the state of Nevada or of the articles of incorporation a greater vote is required, in which case such express provision shall govern and control the decision of such question.
Unless otherwise provided in the articles of incorporation, each stockholder shall at every meeting of the stockholders be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such stockholder, subject to the modification of such voting rights of any class or classes of the corporation’s capital stock by the articles of incorporation.
SECTION 9.10. PROXY VOTING
At all meetings of the stockholders, a stockholder may vote by proxy executed in writing by the stockholder or by his duly authorized attorney-in-fact. Such proxy must be filed with the secretary of the corporation before or at the time of the meeting. No proxy dated more than six months before the meeting named therein shall be accepted, and no such proxy shall be valid after the adjournment of such meeting except if such proxy is coupled with an interest as determined by applicable law. A proxy coupled with an interest may be irrevocable if it so provides and shall be valid and enforceable until the interest terminates or for such shorter period of time as the proxy provides.
SECTION 9.11. ACTION by consent
Any action permitted or required at any stockholders meeting, including the election of directors, may be taken without a meeting, unless otherwise provided by law, if a consent in writing is signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.
SECTION 9.12. QUORUM; ADJOURNMENT
Stock representing at least 60% of the voting power of all outstanding stock of the corporation entitled to vote, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business, except as otherwise provided by statute or by the articles of incorporation. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such reconvened meeting at which a quorum is present or represented, any business may be transacted which might have been transacted at the meeting as originally notified. If the adjournment is for more than 30 days or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.
39 |
SECTION 9.13. NOTICE OF STOCKHOLDER BUSINESS AT ANNUAL MEETINGS
At any annual meeting of stockholders, only such business shall be conducted as shall have been properly brought before the meeting. In addition to any other requirements imposed by or pursuant to law, the articles of incorporation or these bylaws, each item of business to be properly brought before an annual meeting must (a) be specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board or the persons calling the meeting pursuant to the articles of incorporation; (b) be otherwise properly brought before the meeting by or at the direction of the Board; or (c) be otherwise properly brought before the meeting by a stockholder. For business to be properly brought before an annual meeting by a stockholder, the stockholder must have given timely notice thereof in writing to the secretary of the corporation. To be timely, a stockholder’s notice to the secretary must be delivered to or mailed and received at the principal executive offices of the corporation not less than 60 days nor more than 90 days prior to the anniversary date of the immediately preceding annual meeting of stockholders; provided, however, that in the event that the annual meeting is called for a date that is not within 30 days before or after such anniversary date, notice by the stockholder in order to be timely must be so received not later than the close of business on the 10 th day following the day on which such notice of the date of the annual meeting was mailed or such public disclosure of the date of the annual meeting was made, whichever first occurs. Public disclosure of an adjournment or postponement of an annual meeting shall not commence a new time period (or extend any time period) for the giving of a stockholder’s notice. For purposes of these by laws “public disclosure” shall mean disclosure in a press release reported by the Dow Jones, Associated Press, Reuters or comparable national news service, or in a document publicly filed by the corporation with the Securities and Exchange Commission. To be in proper written form, a stockholder’s notice to the secretary must set forth as to each matter such stockholder proposes to bring before the annual meeting (i) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (ii) the name and record address of such stockholder, (iii) the class or series and number of shares of capital stock of the corporation which are owned beneficially or of record by such stockholder, (iv) a description of all arrangements or understandings between such stockholder and any other person or persons (including their names) in connection with the proposal of such business by such stockholder and any material interest of such stockholder in such business, and (v) a representation that such stockholder intends to appear in person or by proxy at the annual meeting to bring such business before the meeting.
SECTION 9.14. INSPECTOR OF ELECTION
There shall be appointed at least one inspector of the vote for each stockholders’ meeting. Such inspector(s) shall first take and subscribe an oath or affirmation faithfully to execute the duties of inspector at such meeting with strict impartiality and according to the best of their ability. Unless appointed in advance of any such meeting by the Board of Directors, such inspector(s) shall be appointed for the meeting by the presiding officer. No director or candidate for the office of director shall be appointed as such inspector. Such inspector(s) shall be responsible for tallying and certifying each vote required to be tallied and certified by them as provided in the resolution of the Board of Directors appointing them or in their appointment by the person presiding at such meeting, as the case may be.
40 |
Article 10 - STOCK CERTIFICATES
SECTION 10.01. SHARE CERTIFICATES
The shares of the corporation shall be represented by certificates in such form as the appropriate officers of the corporation may from time to time prescribe; provided that the Board may provide by resolution or resolutions that some or all of any or all classes or series of stock of the corporation shall be uncertificated shares. Notwithstanding the foregoing, every holder of uncertificated shares of a class or series some but not all of which are represented by certificates, shall be entitled, upon request, to a certificate representing such shares. Every holder of uncertificated shares shall be entitled to receive a statement of holdings as evidence of share ownership. Shares represented by certificates shall be numbered and registered in a share register as they are issued. Share certificates shall exhibit the name of the registered holder, the number and class of shares and the series, if any, represented thereby, the par value of each share or a statement that such shares are without par value as the case may be, and any other information required by law, regulation or stock exchange rule. Except as otherwise expressly provided by law, the rights and obligations of the holders of uncertificated shares and the rights and obligations of the holders of certificated shares of the same class and series shall be identical.
SECTION 10.02. LOST OR DESTROYED CERTIFICATES
Lost, mutilated, or destroyed certificates may be replaced by the issue of a new certificate upon such terms and indemnity to the corporation as the Board may determine. The Board may as it sees fit require the owner or owner’s representative to give a bond to the corporation with or without surety against any loss or claim which may arise from the issue of replacement certificate or certificates.
SECTION 10.03. SHARE TRANSFERS
Upon surrender to the corporation, or a transfer agent of the corporation, of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, the corporation may issue to the person entitled thereto (a) a new certificate for such shares or (b) if requested by the holder and such shares are of a class or series of stock which may be uncertificated, (i) evidence of equivalent uncertificated shares or (ii) both a new certificate and evidence of uncertificated shares equaling in the aggregate the number of shares represented by the surrendered certificate, and in any case, the corporation shall cancel the old certificate and record the transaction upon its books. Upon receipt by the corporation, or a transfer agent of the corporation, of proper transfer instructions for uncertificated shares, accompanied by proper evidence of succession, assignment or authority to transfer, the corporation may issue to the person entitled thereto (a) evidence of equivalent uncertificated shares or (b) if requested by the holder, (i) a certificate for such shares or (ii) both a certificate and evidence of uncertificated shares equaling in the aggregate the number of shares covered by such transfer instructions, and in any case, the corporation shall cancel the old uncertificated shares and record the transaction upon its books.
SECTION 10.04. transfer agents and registrars
The Board may appoint one or more transfer agents and one or more registrars (any one of which may be appointed as both transfer agent and registrar) and may require all certificates for shares to bear the signature or signatures of any of them, any of which signature or signatures may be facsimile. In case any officer or officers of the corporation who have signed, or whose facsimile signature or signatures have been used on, any such certificate or certificates shall cease to be such officer or officers, whether because of death, resignation or otherwise, before such certificate or certificates have been delivered by the corporation, such certificate or certificates may, nevertheless, be issued and delivered as though the person or persons who signed such certificate or certificates or whose facsimile signature or signatures have been used thereon had not ceased to be such officer or officers of the corporation.
41 |
Article 11 - INSURANCE AND OFFICER AND DIRECTOR CONTRACTS
SECTION 11.01. Indemnification: Third-Party Actions.
The corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative (other than an action by or in the right of the corporation), by reason of the fact that such person is or was a director, officer, employee, or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise (an “Indemnified Person”), against expenses (including attorneys’ fees), judgments, fines, and amounts paid in settlement actually and reasonably incurred by him in connection with any such action, suit, or proceeding, if such Indemnified Person acted in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit, or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interests of the corporation, or, with respect to any criminal action or proceeding, such person had reasonable cause to believe that his conduct was unlawful.
SECTION 11.02. Indemnification: Corporate Actions.
The corporation shall indemnify any Indemnified Person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action or suit by or in the right of the corporation to procure a judgment in its favor, against expenses (including attorneys’ fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit, if such Indemnified Person acted in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification shall be made in respect of any claim, issue, or matter as to which such person shall have been adjudged by a court of competent jurisdiction, after exhaustion of all appeals therefrom, to be liable to the corporation or for amounts paid in settlement to the corporation, unless and only to the extent that the court in which such action r suit was brought or other court of competent jurisdiction shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses as the court deems proper.
SECTION 11.03. Determination.
To the extent that an Indemnified Person has been successful on the merits or otherwise in defense of any action, suit, or proceeding referred to in Article VI, Sections 1 and 2 hereof, or in defense of any claim, issue, or matter therein, such Indemnified Person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith. Any other indemnification under Article VI, Sections 1 or 2 hereof, unless ordered by a court, shall be made by the corporation only in a specific case in which a determination is made that indemnification of the Indemnified Person is proper in the circumstances because such person has met the applicable standard or conduct set forth in Article VI, Sections 1 or 2 hereof. Such determination shall be made either (i) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit, or proceeding, (ii) if such a quorum is not obtainable, or, even if obtainable, a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (iii) by the stockholders by a majority vote of a quorum of stockholders at any meeting duly called for such purpose.
42 |
SECTION 11.04. Advances.
Expenses incurred by an Indemnified Person in defending a civil or criminal action, suit, or proceeding shall be paid by the corporation in advance of the final disposition of such action, suit, or proceeding on receipt of an undertaking by or on behalf of such Indemnified Person to repay such amount if it shall ultimately be determined that such Indemnified Person is not entitled to be indemnified by the corporation as authorized by this section.
SECTION 11.05. Scope of Indemnification.
The indemnification and advancement of expenses provided by, or granted pursuant to, Article VI, Sections 1, 2 and 4:
(a) Shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled, under any bylaw, agreement, vote of stockholders or disinterested directors, or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office; and
(b) Shall, unless otherwise provided when authorized or ratified, continue as to a person who ceases to be an Indemnified Person and shall inure to the benefit of the heirs, executors, and administrators of such Indemnified Person.
SECTION 11.06. Insurance.
The corporation may purchase and maintain insurance on behalf of any person who is or was an Indemnified Person against any liability asserted against and incurred by such Indemnified Person in any such capacity or arising out of the Indemnified Person’s status as such, whether or not the corporation would have the power to indemnify the Indemnified Person against any such liability.
SECTION 11.07. Officer and Director Contracts.
No contract or other transaction between the corporation and one or more of its directors or officers or between the corporation and any corporation, partnership, association, or other organization in which one or more of the corporation’s directors or officers are directors, officers, or have a financial interest, is either void or voidable solely on the basis of such relationship or solely because any such director or officer is present at or participates in the meeting of the Board of Directors or a committee thereof which authorizes the contract or transaction or solely because the vote or votes of each director or officer are counted for such purpose, if:
(a) The material facts of the relationship or interest are disclosed or known to the Board of Directors or committee and the Board or committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors even though the disinterested directors be less than a quorum;
(b) The material facts of the relationship or interest is disclosed or known to the stockholders and they approve or ratify the contract or transaction in good faith by a majority vote of the shares voted at a meeting of stockholders called for such purpose or written consent of stockholders holding a majority of the shares entitled to vote (the votes of the common or interested directors or officers shall be counted in any such vote of stockholders); or
(c) The contract or transaction is fair as to the corporation at the time it is authorized, approved, or ratified by the Board of Directors, a committee thereof, or the stockholders.
43 |
Article 12 - FISCAL YEAR
The fiscal year of the corporation shall be fixed by resolution of the Board.
Article 13 - DIVIDENDS
The Board of Directors may from time to time declare, and the corporation may pay, dividends on its outstanding stock in the manner and on the terms and conditions provided by the articles of incorporation and bylaws.
Article 14 - SEAL
The corporation may or may not have a corporate seal, as may from time to time be determined by the Board of Directors. If a corporate seal is adopted, it shall be circular in form and shall be inscribed with the name of the corporation as it appears on the articles of incorporation, the state of incorporation and the year of incorporation. The secretary shall have custody of the seal and may affix it to any instrument requiring the corporate seal, as may any other officer of the corporation if so authorized by the Board of Directors.
Article 15 - Acquisition of Controlling Interest
The corporation elects not to be governed by NRS 78.378 to 78.3793, inclusive.
Article 16 - Combinations with InterestED Stockholders
The corporation elects not to be governed by NRS 78.411 to 78.444, inclusive.
Article 17 - AMENDMENTS
All bylaws of the corporation may be amended, altered or repealed, and new bylaws may be made, by the affirmative vote of a majority of the directors cast at any regular or special meeting at which a quorum is present provided that such authority has been delegated to the Board of Directors by the articles of incorporation.
Article 18 - PROVISIONS OF LAW
The provisions of these bylaws shall be controlled by and are subject to any specific provisions of the articles of incorporation or of law which relate to their specific subject matter, and shall also be subject to any more specific provisions, or exceptions dealing with the same subject matter appearing elsewhere in these bylaws as amended from time to time.
44 |
WRITTEN CONSENT IN LIEU OF MEETING OF THE
SHAREHOLDERS OF ONCBIOMUNE PHARMACEUTICALS, INC.
(March __, 2017)
The undersigned, being a majority of the voting power of the shareholders of ONCBIOMUNE PHARMACEUTICALS, INC., a Nevada corporation (the “Corporation”), hereby adopt the following resolution by unanimous written consent:
RESOLVED, that the undersigned shareholders hereby ratify and approve the February __, 2017 actions of the Board of Directors of the Corporation including the amendment to Articles 4 and 8 of the Amended and Restated Articles of Incorporation and the adoption of the Amended and Restated Bylaws as provided for aforementioned Written Consent of the Board of Directors of the Corporation.
IN WITNESS WHEREOF, the undersigned being shareholders of the Corporation have executed this written consent, which may be executed in multiple counterparts, all of which taken together shall constitute one original, the actions taken herein to be effective as of the date first written above.
Shareholder Name and Affiliation | Type of Stock |
Shares Beneficially Held |
No. of Votes |
Percent of Total Votes |
||||||||||
Jonathan F. Head, Ph. D | Common | 16,926,078 | 16,926,078 | |||||||||||
Series A Preferred | 500,000 | 250,000,000 | ||||||||||||
Series B Preferred | 2,892,000 | 289,200,000 | ||||||||||||
Total Shares/Votes | 556,126,078 | 39.40 | % | |||||||||||
Andrew A. Kucharchuk | Common | 5,000,000 | 5,000,000 | 0.35 | % | |||||||||
Banco Actinver, S.A., as Trustee of Irrevocable Trust No. 2868 under the Irrevocable Management Trust Agreement No. 2868
By:____________________________ Oscar Mejia Reyes, Trust Officer By:____________________________ Gabriela Alejandra, Trust Officer |
Common | 61,158,013 | 61,158,013 | % | ||||||||||
Series B Preferred | 50,000,000 | 500,000,000 | ||||||||||||
Total Shares/Votes | 561,158,013 | 39.76 | % | |||||||||||
Total Shareholder Votes | 79.51 | % |
45 |
CERTIFICATE OF SECRETARY
ONCBIOMUNE PHARMACEUTICALS, INC.
The undersigned, Andrew A. Kucharchuk, Secretary of ONCBIOMUNE PHARMACEUTICALS, INC., a Nevada corporation (the “Company”), does hereby certify on behalf of the Company that the Written Consents of the Board of Directors and Shareholders with an effective date of March__, 2017 as set forth above (the “Written Consents”) are a true and correct copy of the Written Consents adopted by the Board of Directors and Shareholders of the Company. The Written Consents have not been amended, modified or rescinded, and remain in full force and effect as of the date hereof.
IN WITNESS WHEREOF , the undersigned has executed this Certificate on this __ day of March, 2017.
ONCBIOMUNE PHARMACEUTICALS, INC. | |
Andrew A. Kucharchuk, Secretary |
46 |
Execution Version
FORM OF
INDIVIDUAL EMPLOYMENT AGREEMENT ENTERED INTO, BY AND BETWEEN, ON THE ONE PART VITEL LABORATORIOS, S.A DE C.V. HEREINAFTER REFERRED TO AS “THE COMPANY”, REPRESENTED BY MANUEL COSME ODABACHIAN, AND ON THE OTHER PART, [__] , IN HIS OWN RIGHT, HEREINAFTER REFERRED TO AS THE “EMPLOYEE”, ON HIS OWN RIGHT, WITH THE APPEARANCE OF ONCBIOMUNE PHARAMCEUTICALS, INC. , HEREINAFTER REFERRED TO AS “GUARANTOR”, REPERESENTED BY ANDREW ALBERT KUCHARCHUK, UNDER THE FOLLOWING RECITALS AND CLAUSES:
R E C I T A LS
I. | The Company represents that it: |
a) | Is a company duly organized in accordance with the laws of the United States of Mexico. | |
b) | It is domiciled at [__], and has the following RFC: [__]. | |
c) | Desires to retain the services of an individual with the experience, capacity and ability necessary to hold the position of Chief Operations Officer, which is a position of “trust” with the Company. |
II. | The Employee represents that: |
a) | His name is as hereinabove set forth, that he is a male of Mexican nationality, born in Mexico City, that he is born on [__], that he is married, domiciled at [__], has the following RFC: [__], and the following CURP: [__]. | |
b) | He is familiar with the work that he is to perform for the Company and has the necessary knowledge and experience to carry out the duties assigned to him as the [__], under the terms of this Agreement. | |
c) | Conflict of Interests. Employee hereby agrees that all of his decisions and actions with respect of the Company shall be made primarily for the benefit of the Company, and not for Employee’s individual benefit. |
To avoid any conflict of interest, Employee agrees:
1. | To notify the Company in writing of any corporate or business ties, employment or other circumstance which could originate a conflict of interest, except as it relates to the Excluded Business; | |
2. | To reject any payment or consideration from any third party, in any form, that may affect Employee’s ability to make independent decisions related to the Company; |
2 |
3. | Not to make or offer any gifts of any kind to third parties, in exchange for services from the Company, except for customary gifts; | |
4. | Not to perform any activities for personal gain or in favor of third parties which could imply a competing activity except as provided for in Clause Seventeenth; and | |
5. | Conduct Employee’s duties ethically, in compliance with laws and pursuant to the business judgment rule, and in any case in such a way as not to adversely affect the reputation of the Company. |
III. | The Guarantor represents that: |
a) | It is a legal entity duly organized and legally existing in accordance with the laws of the State of Nevada, United States of America | |
b) | Andrew Albert Kucharchuk has the necessary authorities to represent it and bind it for the purposes set forth in Clause Sixteenth of this Agreement. |
In consideration of the foregoing, the Parties agree to the following:
C L A U S E S
FIRST. - Indefinite Term Agreement. The term of this Agreement is indefinite (the “Term”) and shall begin having effects on the date hereof (the “Effective Date”).
SECOND. - Position and Activities . The Employee agrees to carry out his personal services for the Company as Chief Operations Officer as set forth below, together with such other duties as may be reasonably required from time to time by the Board of Directors of the Company. The Employee and Manuel Cosme Odabachian shall be the employees and officers of the Company with the highest level of authority thereat, being subordinated only and exclusively to the Board of Directors of the Company (and the Board of Directors of Guarantor in the case of deadlock).
The activities that the Employee has to execute while rendering his services consist of Chief Operations Officer, including without limitation, supervising, managing, planning, directing and organizing the activities of the Company and its subsidiaries. The Employee shall be one of the two most senior executive officers of the Company, and all other employees of the Company shall report directly or indirectly to him, except for Manuel Cosme Odabachian, who will hold a position of similar ranking to the Employee.
The Employee will perform his services at the domicile of the Company located at Mexico City, Mexico except for certain travel as reasonably required in the performance of the Employee’s duties under this Agreement.
THIRD. - Work Shift. The Employee shall render his services to the Company during the necessary hours to meet the high level responsibilities assigned to him as per this Agreement, and within a schedule during normal business hours to be self-determined by him at his reasonable discretion but which may not exceed from 40 (forty) hours per week, from Monday to Friday. Employee acknowledges that as part of his responsibilities under this Agreement, some traveling may be required outside of these prescribed business hours.
3 |
FOURTH . – Salary . As remuneration for his services, the Employee will receive a monthly salary in the amount of US$15,625.00 (Fifteen Thousand Six Hundred and Twenty Five 00/100 Dollars), less applicable payroll deductions.
The Monthly Salary will be paid to the Employee in arrears, half of it every fifteen days. The Parties agree that the salary already includes the payment of the days of rest and legal holidays. The salary shall be paid to Employee in Mexican Pesos, in accordance with the exchange rate published in the Mexican Federal Official Gazette, on the business day prior to the payment date.
FIFTH. – Extralegal Benefits . The Employee shall enjoy the extralegal benefits described in Exhibit “A” hereto.
SIXTH. – Rest for Obligatory Legal Holidays . The Company shall provide the Employee with obligatory holidays, in accordance with the provisions of the Federal Labor Law.
SEVENTH. – Vacations and Vacation Premium. The Employee shall enjoy 15 (fifteen) days of vacation per year.
The Company shall pay the Employee a vacation premium equivalent to 25% (twenty-five percent) of the vacation days corresponding to him, in accordance to article 80 of the Federal Labor Law (the “Vacation Premium”).
EIGHTH. – Year End Bonus . The Parties agree that the Company will pay to the Employee an annual Year End Bonus equal to 15 (fifteen) days of salary, no later than December 20 of each year (the “Year End Bonus”).
NINTH. – Reimbursement of expenses. Should the Employee in meeting his obligations, need to travel to other places within or outside the Mexican Republic, and to incur in transportation, lodging and meal expenses, he shall incur them on them on the basis of reasonable expenditures in accordance with the policies that the Company has in place at that time.
TENTH. – Medical Examinations. The Employee agrees to submit himself to periodical medical examination whenever the Company requires so, in accordance with the provisions of Section X of the Article 134 of the Federal Labor Law, in the understanding that the physician who practices such will be designated and paid by the Company.
ELEVENTH. – Social Security. The Employee shall be enrolled with the Mexican Social Security Institute in order to receive Mexican Social Security medical benefits. The Company will be authorized to make the necessary discounts from the Employee’s salary in order to cover before the Mexican Institute of Social Security the corresponding fees. Both Parties agree to comply with all matters relative to the Social Security Law and its Regulations.
TWELFTH. – Training. The Employee will be trained by the Company in accordance with the planning and training programs established by the Company.
4 |
THIRTEENTH. – Member on Third Party’s Board of Directors. The employee shall be able to be appointed as a member of the Board of Directors and/or Board of Managers of any company that does not directly compete with the Company.
FOURTEENTH. – Employee’s Seniority. The Company recognizes to the Employee a seniority as of February 18, 2016, which shall serve exclusively as a reference to determine the rights and obligations that derive from this employment relationship, and in particular to compute the payment set forth in the Clause Fifteenth below.
FIFTEENTH. – Conventional Payment for termination of the Agreement .
If within three years of the Effective Date (a) Employee’s employment with the Company is terminated by the Company without Cause, or (b) Employee terminates his employment with the Company or resigns for Good Reason, Employee will be paid by the Company either (i) the equivalent amount of the corresponding severance payment set forth in the Federal Labor Law for an unjustified dismissal , OR if greater (ii) the equivalent amount of up to three years’ gross salary, depending on the date of termination (the “Severance Payment”). In case of clause (ii), the Severance Payment shall be reduced by an amount equal to the product of (i) a fraction the numerator of which is the number of completed months elapsed after the Effective Date to the date of termination, and the denominator of which is thirty-six (36) (the “Remaining Term”) and such fraction shall be multiplied by (ii) the Severance Payment. The Severance Payment shall be paid in equal monthly installments over the Remaining Term so long as Employee is in compliance with the Non-Compete provisions provided for in Clause SEVENTEENTH below. In addition, Employee shall be obligated to sign a release agreement in such form and content as reasonably approved by the Company prior to payment of the Severance Payment.
Besides the meaning attributed to it in the Federal Labor Law, “Cause” will also mean the:
1. | Employee’s conviction of, or plea of “no contest” to, a felony or its equivalent under Mexican law; |
2. | Employee’s willfully engaging in an act or series of acts of gross misconduct that result in demonstrable and material injury to the Company or the Guarantor; or |
3. | Employee’s material breach of any provision of this Agreement, which breach has not been cured in all material respects within twenty (20) days after the Company gives notice thereof to Employee. |
“Good Reason” means the occurrence of any of the following events without the Employee’s prior written consent, unless within 30 days after the Employee gives written notice of such event, the Company cures any such event:
1. | the Company’s material breach of this Agreement; |
2. | the Company’s appointment/hiring of any employee or officer that is not subordinated to the Employee or Manuel Cosme Odabachian, so long as such person is employed by the Company, or any of its affiliates or subsidiaries; |
5 |
3. | a material diminution in the Employee’s responsibilities or authorities, or a material adverse change in his position or title; |
4. | a material reduction in the Employee’s Salary or benefits, including his Performance Bonus; or |
5. | relocation of the Employee’s principal place of work by more than 75 kilometers without the Employee’s prior written consent. |
Any occurrence of a Good Reason event shall be deemed to be waived by the Employee unless he gives the Company written notice of such event within 90 days after it occurs and he terminates his employment hereunder within one year after such event occurs.
SIXTEENTH .- Guaranty . Guarantor hereby guarantees the correct and complete compliance of the obligations set on the Company as per Clause Fifteenth of this Agreement, and therefore jointly with the Company, obligates to pay to the Employee exclusively the Conventional Payment set forth in it, should the events described therein come to materialize.
This does not create an employment relationship between the Employee and the Guarantor.
SEVENTEENTH.- Non-Compete and Non-Solicitation.
(a) For a period of five (5) years from the Effective Date, the Employee shall not, nor shall he permit, cause or encourage anyone to, engage directly or indirectly, as an owner, employee, consultant, contractor or otherwise, in any business or enterprise that is engaged in the development, commercialization, sales of the OBMP Products, the OBMP Pipeline Products or the Vitel Products (collectively, the “Restricted Business”) anywhere in the world as well as clinical development and marketing of therapeutic candidates similar to products that are part of the Restricted Business anywhere in the world except for those activities listed on Exhibit “B” (the “Excluded Businesses”) ; provided , that no owner of less than 5% of the outstanding stock of any publicly-traded corporation will be deemed to be so engaged solely by reason thereof in the Business. For a period of five (5) years from and after the date of this Agreement, the Employee shall not, and shall not permit, cause or encourage anyone to, solicit, recruit, offer employment, hire, employ, engage as a consultant, lure or entice away, or in any other manner persuade or attempt to persuade, any Person who is an employee of any of Guarantor or the Company to leave the employ of Guarantor or the Company. If the final judgment of a court of competent jurisdiction declares that any term or provision of this Clause SEVENTEENTH is invalid or unenforceable, the parties hereto agree that the reduction in the scope, duration, or area of the term or provision, or the deletion of specific words or phrases, or the replacement of any invalid or unenforceable term or provision shall be carried out so as to include a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement will be enforceable as so modified after the expiration of the time within which the judgment may be appealed.
6 |
(b) Notwithstanding anything to the contrary in paragraph (a) above, in no event shall the Employee be prohibited from engaging in any business under the following conditions:
Employee shall promptly notify the Company and Guarantor in writing of any business opportunities in ROW with regard to any expansion of any business activity currently conducted by the Employee beyond the Excluded Contracts so long as such business (i) does not interfere with Employee’s duties under this Agreement and (ii) does not compete with any of the products that are part of the Restricted Business anywhere in the world (the “ROW Opportunity”). The Company or Guarantor who is presented with an ROW Opportunity, shall have a period of thirty (30) days in which to decide to participate. In the event the parties to the ROW Opportunity are unable to reach an agreement to consummate the transaction contemplated by the ROW Opportunity within thirty (30) days, the Employee shall be free to pursue the ROW Opportunity without the Company or the Guarantor.
Defined terms in this Clause shall have the meaning attributed to them in Exhibit “B” hereto.
EIGHTEENTH.- Applicable law and jurisdiction . The Parties agree that for any matter not covered by this Agreement, the provisions of the Federal Labor Law shall apply, and in case of any conflict or controversy arising as a consequence of the execution, interpretation or enforcement of this Agreement, they submit to the jurisdiction of the corresponding Labor Conciliation and Arbitration Board
March 10, 2017.
THE EMPLOYEE/ EL EMPLEADO | THE COMPANY/LA COMPAÑÍA | |
Carlos Fernando Alamán Volnie | Manuel Cosme Odabachian |
GUARANTOR
________________________________
Oncbiomune Pharmaceuticals, Inc.
Attorney-in-fact
7 |
EXHIBIT “A”
EXTRALEGAL BENEFITS OF EMPLOYEE
The Employee shall enjoy the following benefits in additions to the ones set forth in this Agreement:
● | Car Allowance. –Throughout the first 3 years of this Agreement, the Company will pay the Employee the gross amount of US$500.00 (Five hundred 00/100 US Dollars) per month, as a car allowance for the Employee. |
The car allowance will be paid to the Employee in Mexican Pesos, taking into accordance the US Dollar exchange rate (USD) published in the Mexican Official Gazette, on the prior business day to the payment date. | |
● | Health Insurance Allowance. –. On a monthly basis, the Company will reimburse Employee or pay the cost of Employee’s major medical insurance policy covering Employee and his family selected by Employee up to an annual amount of insurance premiums of USD$5,000.00 (the “Health Insurance Allowance”), in the understanding that any amount in excess of such Health Insurance Allowance will not be covered by the Company. |
The Health Insurance allowance will be paid to the Employee in Mexican Pesos, taking into accordance the US Dollar exchange rate (USD) published in the Mexican Official Gazette, on the prior business day to the payment date | |
● | Performance Bonus. Every year the Employee will be given an annual performance objectives for the Company, pursuant to the payment of a bonus (the “Bonus”); the bonus target, will be an amount equal to fifty percent (50%) of his Salary (the “Bonus Target”). The performance objectives will be established by the Guarantor’s Board of Directors and communicated to the Employee in writing as soon as practicable after commencement of every calendar year. The Bonus may be greater or less than the Target Bonus (ranging from a threshold Bonus to a maximum Bonus), based on the level of achievement of the applicable performance objectives. |
March 10, 2017.
THE EMPLOYEE/ EL EMPLEADO | THE COMPANY/LA COMPAÑÍA | |
Carlos Fernando Alamán Volnie | Manuel Cosme Odabachian |
GUARANTOR
________________________________
Oncbiomune Pharmaceuticals, Inc.
Attorney-in-fact
8 |
EXHIBIT “B”
ACTIVITIES NOT SUBJECT TO NON-COMPETE
The following business activities shall be deemed Excluded Business as provided for in this Agreement so long as such business activity (i) is currently conducted by the Employee pursuant to the terms of any contract or agreement (the “Excluded Contracts”) as in effect as of the Effective Date and for so long as such contract or agreement is in effect, without any amendment to or renewal of such contract or agreement after the Effective Date; (ii) does not interfere with Employee’s duties under this Agreement and (iii) does not compete with any of the products that are part of the Restricted Business anywhere in the world (collectively, the “ Excluded Business ”):
- | Clinical trials & contract research organization (CRO) services in Mexico. |
- | Regulatory affairs consulting services and third party lobbying for sanitary registrations in Mexico. |
- | Warehousing and/or hosting of pharmaceutical, biological, over-the-counter (OTC), supplements, medical devices and other health care products in Mexico. |
- | Distribution of pharmaceutical, biological, OTC, supplements, medical devices and other health care products to the private and/or government segment in Mexico. |
- | Manufacturing and development of branded generics, cosmetic, medical devices and private labels throughout Mexico. |
- | Consulting services to international and Mexican companies in the healthcare market. |
- | Consulting for the sale, license, acquisition for Mexican and/or foreign companies in Mexico. |
Within 20 days from the Effective Date, Employee shall provide the Company with a list of the Current Contracts.
9 |
NEW DEFINED TERMS
“ OBMP Products ” shall mean the following:
(a) Proscavax® Prostate Cancer;
(b) OBMP Pipeline; and
(c) OBMP vaccine technology, OBMP cancer technologies for the treatment of prostate, ovarian and various other types of cancer and any other technology for medical treatment, drug or medical treatment owned by OBMP or by any OBMP related Person or that use or are based on the technology included in the OBMP IP Rights, the OBMP Licensed IP Rights, the OBMP Owned Rights or the OBMP Registered IP Rights.
“ OBMP Pipeline ” shall mean the following:
(a) Ovcavax® Ovarian Cancer;
(b) PA-OBC – Breast Cancer;
(c) PGT-OBM – Renal Cancer; and
(d) Any other product under development, developed or to be developed by OBMP and/or by Dr. Jonathan F. Head in collaboration, under contract or under any other type of business relationship with OBMP or with any OBMP related Person.
“ Vitel Products ” shall mean the following:
(a) Any other product under development, developed or to be developed by Vitel that use or are based on any Vitel IP Rights, Vitel Licensed IP Rights, the Vitel Owned IP Rights and the Vitel Registered IP Rights, or under contract or under any other type of business relationship involving a Material Contract, the Vitel IP Rights, the Vitel Licensed IP Rights, the Vitel Owned IP Rights and the Vitel Registered IP Rights.
“ ROW ” shall mean all the countries and territories in the world.
FORM OF
AMENDMENT TO EMPLOYMENT AGREEMENT
Andrew Kucharchuk
THIS AMENDMENT TO EMPLOYMENT AGREEMENT (the “Amendment”) is made effective as of March 10, 2017 by and between OncBioMune Pharmaceuticals, Inc., a Nevada corporation (the “Company”) and [__] (“Executive”). The Company and Customer may collectively be referred to as the “Parties”.
BACKGROUND
A. The Company and Executive are the parties to that certain Employment Agreement dated as of February 2, 2016 (the “Agreement”); and
B. The parties desire to amend certain parts of the Agreement as set forth below.
NOW, THEREFORE, in consideration of the execution and delivery of the Agreement and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:
1. Section 2 of the Agreement is hereby amended by deleting the existing Section 2 in its entirety and replacing it with the following:
2. Term . Subject to the provisions for termination hereinafter provided, the term of this Agreement shall begin on the date hereof and shall end at 11:59 p.m., local time, on March 9, 2020, provided, however, that the term of this Agreement shall automatically renew for successive one year terms, unless Executive or the Company gives written notice to the other not less than one hundred twenty (120) days prior to March 9, 2020 or the expiration of any such one-year term that he or it, as the case may be, is electing not to so extend the term of this Agreement (the “ Employment Period ”). Notwithstanding the foregoing, the term of this Agreement shall end on the date on which Executive’s employment is earlier terminated by him or the Company in accordance with the provisions of Paragraph 7(a) below.
Section 8(a) of the Agreement is hereby amended by deleting the existing Section 8(a) in its entirety and replacing it with the following:
8. Certain Termination Payments .
(a) If Executive’s employment with the Company is terminated by the Company without Cause or by Executive pursuant to Paragraph 7(a)(v), the Company shall (i) continue to pay to Executive the per annum rate of salary then in effect under Paragraph 4(a) and provide him and his family with the benefits described in Paragraph 4 then in effect (unless the terms of the applicable plans expressly prohibit the continuation of such benefits after such termination and cannot be amended, with applicability of such amendment limited to Executive, to provide for such continuation, in which case the Company shall procure and pay for substantially similar substitute benefits except for any pension or 401(k) Plan benefit) for the balance of the term that would have remained hereunder had such termination not occurred and (ii) Executive will be entitled to 100% vesting of any unvested portion of any outstanding equity, or equity-based award granted to Executive by the Company (an “Equity Award”). In addition, Executive will be entitled to 100% vesting of any Equity Award upon Executive’s death or Disability.
- 1 - |
3. This Amendment shall be deemed part of, but shall take precedence over and supersede any provisions to the contrary contained in the Agreement. All initial capitalized terms used in this Amendment shall have the same meaning as set forth in the Agreement unless otherwise provided. Except as specifically modified hereby, all of the provisions of the Agreement which are not in conflict with the terms of this Amendment shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first above written.
OncBioMune Pharmaceuticals, Inc. |
Executive |
||
By: | |||
Print Name: | [ _] | ||
Its: |
- 2 - |
FORM OF
NON-QUALIFIED STOCK OPTION AGREEMENT
Name of Optionee: | [__] | ||
No. of Option Shares: | [__] | ||
Option Exercise Price per Share: | [__] | ||
Grant Date: | [__] | ||
Expiration Date: | Ten years after the Grant Date |
OncBioMune Pharmaceuticals, Inc. (the “Company”) hereby grants to the Optionee named above an option (the “Stock Option”) to purchase on or prior to the Expiration Date specified above all or part of the number of shares of Common Stock, par value $0.0001 per share (the “Stock”) of the Company specified above at the Option Exercise Price per Share specified above subject to the terms and conditions set forth herein. This Stock Option is not intended to be an “incentive stock option” under Section 422 of the Internal Revenue Code of 1986, as amended.
1. Exercisability Schedule . No portion of this Stock Option may be exercised until such portion shall have become exercisable. Except as set forth below, and subject to the discretion of the Company’s Board of Directors (the “Board of Directors”) to accelerate the exercisability schedule hereunder, this Stock Option shall be exercisable with respect to the following number of Option Shares on the dated indicated so long as Optionee remains an employee of the Company or a subsidiary of the Company on such dates (except as otherwise provided for in the employment agreement between the Company and the Optionee) .
Incremental
Number of
Option Shares Exercisable |
Exercisability Date | |
[__] | [__] |
Once exercisable, this Stock Option shall continue to be exercisable at any time or times prior to the close of business on the Expiration Date.
2. Manner of Exercise .
(a) The Optionee may exercise this Stock Option only in the following manner: from time to time on or prior to the Expiration Date of this Stock Option, the Optionee may give written notice to the Board of Directors of his or her election to purchase some or all of the Option Shares purchasable at the time of such notice by delivering to the Board of Directors a fully executed “Exercise Notice” as set forth in Exhibit A or by any other method approved by the Board of Directors. This notice shall specify the number of Option Shares to be purchased.
- 1 - |
(b) Payment of the purchase price for the Option Shares may be made by one or more of the following methods: (i) in cash, by certified or bank check or other instrument acceptable to the Board of Directors; (ii) through the delivery (or attestation to the ownership) of shares of Stock that have been purchased by the Optionee on the open market or that are beneficially owned by the Optionee and are not then subject to any restrictions under any Company plan and that otherwise satisfy any holding periods as may be required by the Board of Directors; (iii) by the Optionee delivering to the Company a properly executed exercise notice together with irrevocable instructions to a broker to promptly deliver to the Company cash or a check payable and acceptable to the Company to pay the option purchase price, provided that in the event the Optionee chooses to pay the option purchase price as so provided, the Optionee and the broker shall comply with such procedures and enter into such agreements of indemnity and other agreements as the Board of Directors shall prescribe as a condition of such payment procedure; (iv) by a “net exercise” arrangement pursuant to which the Company will reduce the number of shares of Stock issuable upon exercise by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate exercise price; or (v) a combination of (i), (ii), (iii) and (iv) above. Payment instruments will be received subject to collection.
(c) The transfer to the Optionee on the records of the Company or of the transfer agent of the Option Shares will be contingent upon (i) the Company’s receipt from the Optionee of the full purchase price for the Option Shares, as set forth above, (ii) the fulfillment of any other requirements contained herein or in any other agreement or provision of laws, and (iii) the receipt by the Company of any agreement, statement or other evidence that the Company may require to satisfy itself that the issuance of Stock to be purchased pursuant to the exercise of Stock Options and any subsequent resale of the shares of Stock will be in compliance with applicable laws and regulations. In the event the Optionee chooses to pay the purchase price by previously-owned shares of Stock through the attestation method, the number of shares of Stock transferred to the Optionee upon the exercise of the Stock Option shall be net of the Stock attested to.
(d) The shares of Stock purchased upon exercise of this Stock Option shall be transferred to the Optionee on the records of the Company or of the transfer agent upon compliance to the satisfaction of the Board of Directors with all requirements under applicable laws or regulations in connection with such transfer and with the requirements hereof. The determination of the Board of Directors as to such compliance shall be final and binding on the Optionee. The Optionee shall not be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares of Stock subject to this Stock Option unless and until this Stock Option shall have been exercised pursuant to the terms hereof, the Company or the transfer agent shall have transferred the shares to the Optionee, and the Optionee’s name shall have been entered as the stockholder of record on the books of the Company. Thereupon, the Optionee shall have full voting, dividend and other ownership rights with respect to such shares of Stock.
(e) The minimum number of shares with respect to which this Stock Option may be exercised at any one time shall be 100 shares, unless the number of shares with respect to which this Stock Option is being exercised is the total number of shares subject to exercise under this Stock Option at the time.
(f) Notwithstanding any other provision hereof, no portion of this Stock Option shall be exercisable after the Expiration Date hereof.
(g) Limitation on Exercise . The grant of this Option and the issuance of Stock upon exercise of this Option are subject to compliance with all applicable laws. This Option may not be exercised if the issuance of Stock upon exercise would constitute a violation of any applicable laws. In addition, this Option may not be exercised unless (i) a registration statement under the Securities Act of 1933, as amended (the “Securities Act”) is in effect at the time of exercise of this Option with respect to the Stock; or (ii) in the opinion of legal counsel to the Company, the Stock issuable upon exercise of this Option may be issued in accordance with the terms of an applicable exemption from the registration requirements of the Securities Act. The Optionee is cautioned that unless the foregoing conditions are satisfied, the Optionee may not be able to exercise the Option when desired even though the Option is vested. As a further condition to the exercise of this Option, the Company may require the Optionee to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or regulation and to make any representation or warranty with respect thereto as may be requested by the Company. Any shares of Stock that are issued will be “restricted securities” as that term is defined in Rule 144 under the Securities Act, and will bear an appropriate restrictive legend, unless they are registered under the Securities Act. The Company is under no obligation to register the Stock issuable upon exercise of this Option.
- 2 - |
(h) Special Termination Period . If exercise of the Option on the last day of the Expiration Date is prevented by operation of Section 2(g), then this Option shall remain exercisable until 14 days after the first date that Section 2(g) no longer operates to prevent exercise of the Option.
3. Termination of Employment . If the Optionee’s employment by the Company or any of its subsidiaries is terminated, the period within which to exercise the Stock Option may be subject to earlier termination as set forth below.
(a) Termination Due to Death . If the Optionee’s employment terminates by reason of the Optionee’s death, any portion of this Stock Option outstanding on such date, to the extent exercisable on the date of death, may thereafter be exercised by the Optionee’s legal representative or legatee for a period of 12 months from the date of death or until the Expiration Date, if earlier.
(b) Termination Due to Disability . If the Optionee’s employment terminates by reason of the Optionee’s disability (as determined by the Board of Directors), any portion of this Stock Option outstanding on such date, to the extent exercisable on the date of such disability, may thereafter be exercised by the Optionee for a period of 12 months from the date of disability or until the Expiration Date, if earlier.
(c) Termination for Cause . If the Optionee’s employment terminates for Cause, any portion of this Stock Option outstanding on such date shall terminate immediately and be of no further force and effect. For purposes hereof, “Cause” shall mean, unless otherwise provided in an employment agreement between the Company and the Optionee, a determination by the Board of Directors that the Optionee shall be dismissed as a result of (i) the Optionee’s dishonest statements or acts with respect to the Company or any affiliate of the Company, or any of the Company’s current or prospective customers, suppliers vendors or other third parties with which such entity does business; (ii) the Optionee’s commission of (A) a felony or (B) any misdemeanor involving moral turpitude, deceit, dishonesty or fraud; (iii) the Optionee’s failure to perform his assigned duties and responsibilities to the reasonable satisfaction of the Company which failure continues, in the reasonable judgment of the Company, after written notice given to the grantee by the Company; (iv) the Optionee’s gross negligence, willful misconduct or insubordination with respect to the Company or any affiliate of the Company; or (v) the Optionee’s material violation of any provision of any agreement(s) between the Optionee and the Company relating to noncompetition, nondisclosure and/or assignment of inventions.
(d) Other Termination . If the Optionee’s employment terminates for any reason other than the Optionee’s death, the Optionee’s disability or Cause, and unless otherwise determined by the Board of Directors, any portion of this Stock Option outstanding on such date may be exercised, to the extent exercisable on the date of termination, for a period of one year from the date of termination or until the Expiration Date, if earlier.
- 3 - |
The Board of Directors’ determination of the reason for termination of the Optionee’s employment shall be conclusive and binding on the Optionee and his or her representatives or legatees.
4. Intentionally Deleted .
5. Transferability . This Agreement is personal to the Optionee, is non-assignable and is not transferable in any manner, by operation of law or otherwise, other than by will or the laws of descent and distribution. This Stock Option is exercisable, during the Optionee’s lifetime, only by the Optionee, and thereafter, only by the Optionee’s legal representative or legatee.
6. Lock-Up Agreement . In connection with any underwritten public offering of shares of the Stock made by the Company pursuant to a registration statement filed under the Securities Act, the Optionee shall not offer, sell, contract to sell, pledge, hypothecate, grant any option to purchase or make any short sale of, or otherwise dispose of any Stock (including but not limited to Stock subject to this Option) or any rights to acquire Stock of the Company for such period beginning on the date of filing of such registration statement with the Securities and Exchange Commission and ending at the time as may be established by the underwriters for such public offering; provided, however, that such period shall end not later than one hundred eighty (180) days from the effective date of such registration statement. The foregoing limitation shall not apply to shares registered for sale in such public offering.
7. Tax Withholding . The Optionee shall, not later than the date as of which the exercise of this Stock Option becomes a taxable event for Federal income tax purposes, pay to the Company or make arrangements satisfactory to the Board of Directors for payment of any Federal, state, and local taxes required by law to be withheld on account of such taxable event. The Company shall have the authority to cause the minimum required tax withholding obligation to be satisfied, in whole or in part, by withholding from shares of Stock to be issued to the Optionee a number of shares of Stock with an aggregate Fair Market Value that would satisfy the minimum withholding amount due.
8. No Obligation to Continue Employment . Neither the Company nor any Subsidiary is obligated by or as a result of this Agreement to continue the Optionee in employment and this Agreement shall not interfere in any way with the right of the Company or any Subsidiary to terminate the employment of the Optionee at any time.
9. Integration . This Agreement constitutes the entire agreement between the parties with respect to this Stock Option and supersedes all prior agreements and discussions between the parties concerning such subject matter.
10. Data Privacy Consent . In order to administer this Agreement and to implement or structure future equity grants, the Company, its subsidiaries and affiliates and certain agents thereof (together, the “Relevant Companies”) may process any and all personal or professional data, including but not limited to Social Security or other identification number, home address and telephone number, date of birth and other information that is necessary or desirable for the administration of this Agreement (the “Relevant Information”). By entering into this Agreement, the Grantee (i) authorizes the Company to collect, process, register and transfer to the Relevant Companies all Relevant Information; (ii) waives any privacy rights the Grantee may have with respect to the Relevant Information; (iii) authorizes the Relevant Companies to store and transmit such information in electronic form; and (iv) authorizes the transfer of the Relevant Information to any jurisdiction in which the Relevant Companies consider appropriate. The Grantee shall have access to, and the right to change, the Relevant Information. Relevant Information will only be used in accordance with applicable law.
- 4 - |
11. Notices . Notices hereunder shall be mailed or delivered to the Company at its principal place of business and shall be mailed or delivered to the Optionee at the address on file with the Company or, in either case, at such other address as one party may subsequently furnish to the other party in writing.
OncBioMune Pharmaceuticals Inc. | ||
By: | ||
Title: |
The foregoing Agreement is hereby accepted and the terms and conditions thereof hereby agreed to by the undersigned. Electronic acceptance of this Agreement pursuant to the Company’s instructions to the Grantee (including through an online acceptance process) is acceptable.
Dated: | |||
Optionee’s Signature | |||
Optionee’s name and address: | |||
- 5 - |
EXHIBIT A
EXERCISE FORM
OncBioMune Pharmaceuticals Inc.
___________________________________________
Ladies and Gentlemen:
I hereby exercise the Option granted to me effective as March __, 2017, by OncBioMune Pharmaceuticals Inc. (the “Corporation”), subject to all the terms and provisions of the Non-Qualified Stock Option Agreement of OncBioMune Pharmaceuticals Inc. (the “Option”) , and notify you of my desire to purchase ______ non-qualified shares of Common Stock of the Corporation at a price of $_____ per share pursuant to the exercise of said Option.
Payment Amount: $___________________
Date: | ||
Optionee Signature | ||
Received by OncBioMune Pharmaceuticals Inc. on | ||
Broker Information:
Firm Name
Contact Person |
Broker Address |
City, State, Zip Code | Phone Number |
Broker Account Number |
Electronic Transfer Number: |
- 6 - |
OncBioMune Acquires Vitel Laboratorios, Gains Two Revenue Generating Drugs, Robust Pipeline and Extensive Distribution Network
BATON ROUGE, LA—( March 13, 2017) - OncBioMune Pharmaceuticals, Inc. (OTCQB: OBMP) (“OncBioMune” or the “Company”), a clinical stage biopharmaceutical company engaged in the development of novel cancer products and a proprietary vaccine technology, is pleased to announce the completion of its previously announced plans to acquire Vitel Laboratorios, S.A. de C.V. (“Vitel”) on March 10, 2017.
The acquisition of Vitel is expected to transform OncBioMune into a revenue-generating international pharmaceutical company with a more diverse product line with a particularly deep reach throughout Mexico, Central and Latin America, and relationships across Europe and Asia. The acquisition of Vitel includes two drugs it licenses and sells in Mexico, Bekunis® for constipation and Cirkused® for stress. Approved for sale in the fourth quarter of 2016, the two over-the-counter products have generate significant sales that have exceeded Vitel’s early projections. Vitel has a total of seven other products that are either already in the registration stage or planned for launch later in 2017.
The acquisition of Vitel includes its 50% ownership interest in Oncbiomune México, S.A. De C.V., a Mexican company (“Oncbiomune Mexico”), an entity we jointly launched with Vitel in August 2016. Oncbiomune Mexico was launched for the purposes of developing and commercializing our PROSCAVAX vaccine technology and cancer technologies in México, Central and Latin America (“MALA”) for the treatment of prostate, ovarian and various other types of cancer and includes a portfolio of owned products and licenses with OncBioMune.
Vitel founder Manuel Cosme Odabachian, an expert in drug licensing, development and marketing, will join OncBioMune as General Manager of Global Operations and take over Mr. Kucharchuk’ s role as a member of our Board of Directors. In addition to overseeing Vitel’s Mexican operations, including the upcoming Phase 2/3 trial of ProscaVax for prostate cancer already in motion through our Oncbiomune Mexico joint venture with Vitel, Mr. Odabachian will spearhead ongoing and future international negotiations to further broaden our expanding portfolio, with a focus on drugs in advanced stages of development or already on the market.
“The acquisition of Vitel is expected to add a great deal of value to OncBioMune and represents a major milestone that immediately leapfrogs us years ahead in development, while providing cash flow to help fund development of our pipeline and commercialization of even more products,” said Jonathan Head, Ph. D., Chief Executive Officer at OncBioMune. “Bringing Vitel under our umbrella gives us a formidable network and international presence that opens the door to a litany of possibilities towards meeting our goals. Our mid-term plan is continuing to build shareholder value through the clinical development of ProscaVax in the U.S. and Mexico, maintaining an aggressive position on growing our revenue streams through licensing/acquisition of additional drugs for the international markets and positioning us to seek qualification for an listing on a national stock exchange.”
“Additionally, I am excited to work with Manuel as a new member of our leadership team,” added Dr. Head. “His years of experience, industry connections and history of tremendous successes will be invaluable in our efforts to regularly attain new milestones.”
Vitel has license agreements covering the Mexican market with Roha Arnzemittel, GmbH (“Roha”) for Bekunis® (for constipation) and Cirkused® (for stress), as well as licensing rights to the remainder of Roha’s pipeline at Vitel’s discretion.
Vitel also has Mexican territorial rights through licensing agreements with; Kamada for KamRab® (for rabies), KamRho® (an Rh immunization) and Glassia® (for Anti-D deficiency); Aqvida for Imatinib (for cancer), and other oncology products; QPharma for Androferti (a male fertility drug) and is currently developing two innovative orphan drugs through their own research and development
For Mexico, Central and Latin America, Vitel has relationships that are expected to forge development and commercialization of several products, including, Gem Pharmaceuticals for GPX-150 (for sarcoma); EOC Pharma for Telatinib (for first line oral gastric cancer treatment); and Rational Vaccines for the first and only herpes Vaccine technology for the treatment of HSV-2 and HSV-1.
In addition to its product pipeline and relationships, Vitel’s network channel partners cover a wide range of drug development and marketing. A sampling of relationships includes, CID Information Systems (marketing intelligence), Grupo Nichos (pharmaceutical salesforce, demand generation), CeroGrados (pharmaceutical warehousing, and old chain), CRO’s authorized by the COFEPRIS and Regulatory Affairs parties that are authorized by the COFEPRIS for dossier build up and pre-inspection.
The acquisition of Vitel is structured as an all-stock transaction. The current shareholders in Vitel will exchange their shares for our newly-issued restricted common stock and voting preferred stock. Additional details of the acquisition can be found in the Company’s Form 8-K filed with the Securities and Exchange Commission and on the OncBioMune website.
Sign up for OncBioMune email alerts at: http://oncbiomune.com/email-alerts/.
About OncBioMune Pharmaceuticals, Inc.
OncBioMune Pharmaceuticals is a clinical-stage biopharmaceutical company engaged in the development of novel cancer immunotherapy products, with a proprietary Vaccine Technology that is designed to stimulate the immune system to attack its own cancer while not hurting the patient. Our lead product, ProscaVax™ is scheduled to commence a Phase 2 clinical study in 2016. OncBioMune also has a portfolio of targeted therapies, some of which are biosimilars to blockbuster drugs. OncBioMune is headquartered in Baton Rouge, Louisiana.
Forward-Looking Statements
This news release contains statements that involve expectations, plans or intentions (such as those relating to our expectations regarding expected sales and product launches, the effect of the acquisition on shareholder value, cash flows, gross margins, and clinical development, testing and regulatory approval of ProscaVax in the U.S. and Mexico). Such risks and uncertainties include, among other things, the uncertainty regarding the market acceptance of newly released products and our ability to source new products, and our need for, and the availability of, substantial capital to fund our operations and research and development) and other factors discussed from time to time in the our Securities and Exchange Commission filings. These statements are forward-looking and are subject to risks and uncertainties, so actual results may vary materially. You can identify these forward-looking statements by words such as “may,” “should,” “expect,” “anticipate,” “believe,” “estimate,” “intend,” “plan” and other similar expressions. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors not within our control. We caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.
Contact:
OncBioMune Pharmaceuticals, Inc.
Andrew Kucharchuk
President and Chief Financial Officer
akucharchuk@oncbiomune.com