OPTION AND REIMBURSEMENT AGREEMENT
Exhibit
10.25
This
Option and Reimbursement Agreement (this “Agreement”) is made and entered into
as of December 6, 2005 (“Effective Date”), by and among EverNew Biotech, Inc., a
California corporation with an address located at 000 Xxxxxxx Xxxx Xxxxx, Xxxxxx
Xxxx, Xxx Xxxxx, Xxxxxxxxxx 00000 (“Evernew”), OXIS International, Inc., a
Delaware corporation (“OXIS”), and each of the shareholders of Evernew (the
“Shareholders”), which are listed on Exhibit A.
Recital
A. In
consideration of the services to be performed by Bio Check, Inc. which is
majority owned by OXIS, pursuant to that certain Services Agreement of even
date
herewith (the “Services Agreement”) Evernew and the Shareholders wish to grant
OXIS a call option right, a right of first refusal, and certain other
rights.
NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants and
conditions herein set forth, the parties agree as follows:
Agreement
1. Representations
and Warranties of the Shareholder.
Each
Shareholder represents and warrants that the execution, delivery and performance
of this Agreement by such Shareholder will not result in any breach of, or
default under, any term or provision of any agreement, obligation,
instrument, judgment, decree, order, statute, rule or governmental regulation
to
which such Shareholder is a party or by which such Shareholder may be bound
or
which applies to such Shareholder. Each Shareholder has the legal capacity
and
is duly authorized to enter into this Agreement and perform its obligations
hereunder.
2. Representations
and Warranties of Evernew.
Evernew
represents and warrants that the execution, delivery and performance of this
Agreement by Evernew will not result in any breach of, or default under, any
term or provision of any agreement, obligation,
instrument, judgment, decree, order, statute, rule or governmental regulation
to
which Evernew
is a
party or by which Evernew
may be
bound or which applies to Evernew.
Evernew
has all
rights and permissions necessary for Evernew
to
perform the Evernew Services. Evernew
is duly
authorized to enter into this Agreement and perform its obligations
hereunder.
3. Call
Option.
(a) Evernew
and each Shareholder hereby grant to OXIS the right to purchase all of the
assets and/or equity securities of Evernew on the terms set forth in this
Section 3 (the “Call Option”).
(b) The
Call
Option is exercisable from the date of this Agreement until December 31,
2008.
(c) OXIS
may
exercise the Call Option in one or more tranches by providing written notice
to
the Evernew Representative (as defined below) of its exercise of the Call Option
(the “Call Option Notice”).
(d) The
aggregate exercise price for the Call Option (the “Call Option Price”) shall be
the lower of (i) the amount to be determined in good faith between OXIS and
Evernew by January 31, 2006 (the “Negotiated Price”); and (ii) if applicable,
the consideration offered by a third party as described in a Transfer Notice
delivered to OXIS pursuant to Section 4(a). The Call Option Price shall be
paid
by OXIS by wire transfer to an account provided by Evernew Representative (as
defined below) in an amount equal to the Call Option Price (which may be an
account of counsel to Evernew or the Representative), less the Accumulated
Evernew Amounts as of the date of the Call Closing (as defined below). For
the
purpose of this Agreement, the Accumulated Evernew Amounts as of a particular
date shall comprise of the sum of Monthly Evernew Amounts accrued as of such
date. For the purposes of this Agreement, the Monthly Evernew Amounts shall
comprise of the product of (i) the percentage of all of the issued and
outstanding shares of BioCheck held by OXIS as of the last day of each such
month
(the “Monthly Percentage”) and (iii) the sum of (A) the cost of all Evernew
Services provided by BioCheck each month under the Services Agreement, as
incurred and determined in good faith by BioCheck (“Evernew Service Costs”) and
(B) the amount of Evernew Compensation provided by BioCheck each month under
the
Services Agreement. For purposes of the foregoing, the
Monthly Percentage for the months of January 2005 through November 2005 shall
be
deemed to be fifty-one percent (51%).
(e) The
settlement of the Call Option and payment of the Call Option Price shall occur
within thirty (30) days after the receipt of the Call Option Notice by Evernew
(the “Call Closing”).
(f) Dr.
Xxxx
Xxxx is hereby appointed as the sole representative of Evernew and its
shareholders for the purposes of this Agreement (the “Evernew Representative”).
The Evernew Representative shall have the authority to give and receive notices
and communications, to act on behalf of Evernew and its shareholders with
respect to any matters arising under this Agreement, and to take all actions
necessary or appropriate in the judgment of the Evernew Representative for
the
accomplishment of the transactions contemplated by this Agreement. A
decision, act, consent or instruction of the Evernew Representative shall
constitute a decision, act, consent or instruction of Evernew and all of its
shareholders and shall be final, binding and conclusive upon each of Evernew
and
its shareholders.
4. Rights
of Refusal.
(a) The
parties agree that if at any time Evernew proposes to sell all or substantially
all of its assets or the Shareholders propose to sell any of their equity
securities, (together with Evernew, the “Selling Parties”), then the Evernew
Representative shall promptly give OXIS written notice at least thirty (30)
days
prior to the Selling Parties intention to make the Transfer (the “Transfer
Notice”). The Transfer Notice shall include (i) a description of the assets
or the equity securities to be transferred (the “Offered Property”),
(ii) the name(s) and address(es) of the prospective transferee(s),
(iii) the consideration and (iv) the material terms and conditions upon
which the proposed Transfer is to be made. The Transfer Notice shall certify
that the Selling Parties has received a firm offer from the prospective
transferee(s) and in good faith believes a binding agreement for the Transfer
is
obtainable on the terms set forth in the Transfer Notice. The Transfer Notice
shall also include a copy of any written proposal, term sheet or letter of
intent or other agreement relating to the proposed Transfer.
(b) OXIS
shall have an option for a period of thirty (30) days from the delivery of
the
Transfer Notice from the Evernew Representative set forth in Section 4(a)
to elect to purchase Offered Property subject to the same material terms and
conditions as described in the Transfer Notice, at a price (the “ROFR Price”)
equal to the lesser of (i) the Negotiated Price and (ii) the price set forth
in
the Transfer Notice. OXIS may exercise its right of first refusal and purchase
all or any portion of the Offered Property by notifying the Evernew
Representative in writing (the “ROFR Notice”), before expiration of the thirty
(30) day period.
(c) OXIS
shall effect the purchase of the Offered Property by wire transfer to an account
provided by Evernew Representative in an amount equal to the ROFR Price, less
the Accumulated Evernew Amounts as of the date of the ROFR Closing (as defined
below).
(d) The
settlement of the purchase and sale of the Offered Property and payment of
the
ROFR Price shall occur within thirty (30) days after the receipt of the ROFR
Notice by Evernew (the “ROFR Closing”).
(e) To
the
extent that OXIS does not exercise its rights to purchase the Offered Property
within the time periods specified in Section 4(b), the Selling Parties
shall have a period of ninety (90) days from the expiration of such rights
in
which to sell the Offered Property, upon terms and conditions no more favorable
to either the Selling Parties or the transferee(s) than those specified in
the
Transfer Notice (and at a price no less than set forth in the Transfer Notice),
to the third-party transferee(s) identified in the Transfer Notice, provided,
however, that in the event OXIS delivers a Call Option Notice pursuant to
Section 3(c) prior to the closing of the third party sale as contemplated in
this Section 4(e), EverNew shall not consummate the third party sale as
contemplated herein, and Evernew’s
obligation to consummate the Call Closing shall take precedence over the third
party sale contemplated herein.
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5. Reimbursement
of Evernew Services and Evernew Compensation.
To the
extent OXIS has not exercised the Call Option pursuant to Section 4 or its
right
of first refusal pursuant to Section 5 by December 31, 2007, then (i) Evernew
shall on or prior to March 31, 2008, pay to BioCheck an amount equal to the
aggregate Evernew Service Cost and Evernew Compensation accumulated on and
prior
to March 31, 2008, and (ii) the amount actually paid to BioCheck, multiplied
by
the applicable Monthly Percentage for each monthly period in which the Evernew
Service Cost and Evernew Compensation is determined, shall be deducted from
the
balance of the Accumulated Evernew Amount for periods after such payment is
made.
6. Termination.
This
Agreement shall automatically terminate and be of no further effect on December
31, 2008, unless earlier terminated as set forth in this Section 6. Each party
may terminate this Agreement if the other party breaches this Agreement and
such
breach is not cured within thirty (30) calendar days after the non-breaching
party has given the breaching party written notice reasonably describing the
breach. Each party shall return to the other party within ten (10) calendar
days
of the termination of this Agreement any records, reports, documents or other
materials relating to the services performed by it for the other party which
may
be in such party’s possession.
7. Choice
of Laws; Attorneys Fees.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of California, without regard to principles of conflicts of law. Any
case,
controversy, lawsuit, action, or proceeding arising out of, in connection with,
or related to, this Agreement shall be brought in any court of competent
jurisdiction located in San Mateo, California. If
any
party to this Agreement shall take any action to enforce this Agreement or
bring
any action or commence any arbitration for any relief against any other party,
declaratory or otherwise, arising out of this Agreement, the losing party shall
pay to the prevailing party such party’s reasonable attorneys’ fees and costs
incurred in litigating such suit or arbitration and/or enforcing any judgment
granted therein.
8. Specific
Performance.
Each of
the parties agree that any breach of Sections 3 or 4 may cause irreparable
harm
for which the aggrieved party may have no adequate remedy at law. Accordingly,
each party agrees that the other party shall be entitled (without limitation
of
any other available rights or remedies and without the necessity of posting
a
bond) to seek and obtain injunctive relief against any breach of Sections 3
or 4
from any court of competent jurisdiction, in addition to the right to assert
any
other remedy it may have under this Agreement, at law or in equity.
9. Amendments;
Waivers.
No
modification, amendment or waiver of any of the provisions of this Agreement
shall be effective unless made in writing specifically referring to this
Agreement and duly signed by an authorized representative of each party hereto.
The failure of either party to enforce its rights under this Agreement at any
time for any period of time shall not be construed as a waiver of such
right.
10. Entire
Agreement.
This
Agreement together with each the exhibits attached hereto constitute the entire
agreement between the parties hereto with respect to the specific subject matter
hereof, and any and all written or oral agreements heretofore existing between
the parties hereto with respect to the subject matter hereof are expressly
canceled.
11. Partial
Invalidity.
The
invalidity or unenforceability of any particular provision of this Agreement
shall not affect the other provisions hereof. Should any provision or partial
provision hereof be found illegal or unenforceable for being too broad with
respect to the duration, scope or subject matter thereof, such provision or
partial provision shall be deemed and construed to be reduced to the maximum
duration, scope or subject matter permitted by law.
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12. Notices.
All
notices under this Agreement shall be in writing, and shall be deemed given
when
personally delivered, or three (3) calendar days after being sent by prepaid
certified or registered U.S. mail to the address of the other party to be
noticed as set forth herein or such other address as such party last provided
to
the other by written notice.
13. Counterparts;
Facsimile Signatures.
This
Agreement may be executed simultaneously in counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
instrument. Signatures received by facsimile shall be deemed to be original
signatures.
<Remainder
of Page Intentionally Left Blank>
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IN
WITNESS WHEREOF, this Agreement has been executed and delivered by duly
authorized representatives of all parties hereto as of the date first written
above.
|
OXIS:
OXIS
INTERNATIONAL, INC.
|
EVERNEW:
EVERNEW
BIOTECH, INC.
|
|
By:
_________________________________
|
By:
________________________________
|
|
Name:
_______________________________
|
Name:
_______________________________
|
|
Its:
_________________________________
|
Title:
________________________________
|
|
EVERNEW
SHAREHOLDERS:
|
|
|
_____________________________
Dr.
Xxxx Xxxx
_____________________________
Xxx
Xxxx
_____________________________
Xxxxx
Xxxx
_____________________________
Xxxxx
Xxxx
_____________________________
Xxxxxx
Xxxx
|
_____________________________
Xxxx
Xxx
_____________________________
Xxxxxx
Xxxxxxx
_____________________________
Xxxxxx
X. Xxx
Xxxxxx
Revocable Trust UTD 9/20/03
By:
___________________________
Name:
Xxxx X. Xxxxxx
Title:
Trustee
|
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Exhibit
A
List
of Evernew Biotech, Inc. Shareholders
|
1.
|
Dr.
Xxxx Xxxx
|
|
2.
|
Xxx
Xxxx
|
|
3.
|
Xxxxx
Xxxx
|
|
4.
|
Xxxxx
Xxxx
|
|
5.
|
Xxxxxx
Xxxx
|
|
6.
|
Xxxx
Xxx
|
|
7.
|
Xxxxxx
Xxxxxxx
|
|
8.
|
Xxxxxx
X. Xxx
|
|
9.
|
Xxxxxx
Revocable Trust UTD 9/20/03
|
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