Exhibit 10.10
May 4, 2000
Cancer Detection International, LLC
C/o Xxxxxx Xxxxxxx, Esq.
000 Xxxxxxxxxxx Xxxxx
Xx Xxxxx, XX 00000-0000
Gentlemen:
This letter will constitute the undertaking of TSET, Inc., a Nevada
corporation ("TSET"), to acquire all of the equity ownership interests (the "CDI
Interests") of Cancer Detection International, LLC, a Nevada limited liability
company ("CDI"). TSET shall acquire all of the CDI Interests, free and clear of
any and all liens, claims, encumbrances, options, rights of any third parties,
and restrictions of any kind whatsoever, in exchange for 180,000 shares of
TSET's common stock, par value $0.001 per share (the "TSET Shares"), to be
allocated among CDI's equity holders (the "Equity Holders") according to their
pro rata interests therein, to be set forth in writing provided to TSET. The
TSET Shares shall constitute the sole compensation to the Equity Holders for the
CDI Interests. The Equity Holders understand that the TSET Shares shall be
subject to all of the restrictions, conditions, and limitations noted on the
certificates representing the same, and each Equity Holder agrees to comply
therewith at all times. CDI's current management will continue in place and be
responsible for CDI's day-to-day business operations, subject to such strategic
direction as may be provided by TSET from time to time. TSET, at its sole
option, shall be entitled to appoint representatives to CDI's board of directors
proportionate to TSET's ownership interest in CDI, and in no case shall have
less than one representative on CDI's board of directors.
The parties agree that more detailed, definitive legal documentation
(collectively, the "Definitive Agreements") will be completed and signed by
them; however, the parties intend that this letter constitute the basic
agreement between them for the acquisition of CDI contemplated hereby, upon
which the Definitive Agreements shall be based, until such time as the
Definitive Agreements are completed and signed. In connection with preparation
and negotiation of specific provisions of the Definitive Agreements, the parties
agree to fully and amicably cooperate, act in good faith, and exert their
respective best efforts to enable the execution thereof at the earliest
practicable date. The parties agree that the Definitive Agreements shall contain
customary terms, conditions, and undertakings, including, without limitation,
customary and appropriate representations and warranties to be made by CDI and
each Equity Holder, and indemnification provisions in favor of TSET.
CDI has represented to TSET, among other things, and in addition to
those representations and warranties to be made by CDI and each Equity Holder in
the Definitive Agreements, that (a) it engages in the business of performing
state-of-the-art blood laboratory analysis for the very early detection of
cancer (the "Blood Analysis"), through the identification and level of
anti-malignin antibodies; (b) the Blood Analysis can detect very early stage
cancers with a high degree of reliability; (c) CDI has all requisite right,
Cancer Detection International, LLC
May 4, 2000
Page 2
title, and interest in, and authority to perform, the Blood Analysis, without
infringement upon the intellectual property or other proprietary rights of any
other person; (d) CDI has conducted business operations to date in compliance
with all applicable legal requirements; (e) any and all consents of third
parties required for the consummation of the transactions contemplated herein
and in the Definitive Agreements have been obtained; (f) no broker's or finder's
fees are payable to any person in connection with the transactions contemplated
herein and in the Definitive Agreements; (g) CDI and each Equity Holder have
full legal authority and capacity to execute and deliver this letter and the
Definitive Agreements and perform all obligations contained herein and therein;
and (h) there are no litigation or other administrative, arbitral, or
alternative dispute resolution proceedings pending or threatened against CDI or
any Equity Holder seeking to restrain or prohibit in any manner the transactions
contemplated herein and in the Definitive Agreements, nor is there any
outstanding judgment against CDI or any Equity Holder having such effect. CDI
hereby agrees that it shall continue to conduct its business in substantially
the same manner as heretofore conducted and incur no financial liabilities or
commit for the expenditure of any of the Working Capital (as defined below)
without TSET's prior written consent.
TSET shall provide to CDI working capital in the aggregate amount of
$350,000 (the "Working Capital") to enable CDI to, among other things,
effectively market and pay the costs associated with performing the Blood
Analysis. The Working Capital shall be provided in such increments as TSET and
CDI may agree, pursuant to a budget and disbursement schedule to be established
by them, with the administration of the Working Capital to be performed by XXXX.
The parties agree that some initial number of the Blood Analysis, which costs
approximately $300 each, will be offered free of charge to prospective patients
in the Palm Springs, California area.
As the sole owner of CDI, any and all profits resulting from the
conduct of CDI's business shall belong to TSET, and TSET shall be entitled to
distribution thereof from time to time; however, the parties understand that
CDI's main value will derive from using the Blood Analysis to identify early
stage cancers and then refer patients to such cancer diagnostic and treatment
centers as may be established by TSET through another entity. Accordingly, the
parties do not anticipate significant, if any, initial profits to be generated
by CDI.
Any disputes arising out of this letter or the Definitive Agreements
shall be resolved through arbitration rather than litigation, to the extent such
disputes cannot be resolved amicably through good faith efforts. All arbitration
proceedings shall take place in Clackamas County, Oregon and shall be governed
by the rules of the American Arbitration Association applicable to contracts of
this type. The final decision of the arbitrator shall be final and binding upon
the parties and shall be enforceable in any court of competent jurisdiction;
provided, however, that the arbitrator shall not award or require the payment of
incidental, consequential, or punitive damages except in cases of bad faith
breach of this letter or the Definitive Agreements or instances of gross
negligence or willful misconduct. No party shall seek to delay or prevent the
implementation of any arbitral decision. The prevailing party in any arbitration
proceeding shall be entitled to recover reasonable attorney's fees and related
costs and expenses of the arbitration. The parties acknowledge that their
Cancer Detection International, LLC
May 4, 2000
Page 3
agreement to resolve disputes through arbitration constitutes a waiver of their
right to resolve disputes in any court through litigation, and that in
arbitration proceedings the parties may not be entitled to all of the rights
that would otherwise be available to them in court proceedings.
This letter and the Definitive Agreements may be executed in multiple
counterparts (and by facsimile signature, with manual signatures to be exchanged
as soon as practicable thereafter), each of which shall be deemed an original,
and all of which shall be deemed to constitute a single agreement. The parties
agree that the Definitive Agreements shall supersede this letter upon their
execution and delivery; however, no other agreement, whether oral or written,
shall be used to modify or contradict the written agreements of the parties set
forth herein and in the Definitive Agreements. No amendment of this letter or
the Definitive Agreements shall be valid and binding upon the parties unless the
same is in writing and signed by the parties.
This letter shall be governed by and construed in accordance with the
laws of the State of Oregon, exclusive of its conflicts of laws rules.
Your signature, in the space provided below, shall evidence your
acceptance and agreement to this letter, which shall continue in full force and
effect until superseded by the Definitive Agreements. Please sign both enclosed
copies of this letter and return one fully signed copy to TSET by return express
delivery.
Sincerely,
Xxxxxxx X. Xxxxxx
Chairman and Chief Executive Officer
AGREED AND ACCEPTED: May 4, 2000
Cancer Detection International, LLC
By:
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Xxxxxx Xxxxxxx, Esq.
Authorized Signatory and Attorney-in-fact
