Cascade Technologies Corp.
December
11, 2009
Via
E-Mail
Spectral
Molecular Imaging, Inc.
d/b/a
Optical Molecular Imaging, Inc.
0000
Xxxxxxx Xxxxx
Los
Angeles, CA 90046
Attention: Xx.
Xxxxxx Xxxxxx
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Re:
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Memorandum
of Agreement Relating to
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The Exchange of Shares for
Certain Assets
Ladies
and Gentlemen:
The
purpose of this memorandum of agreement is to confirm the principal terms of the
agreement among Cascade Technologies Corp, a Wyoming corporation (“Cascade”), Spectral
Molecular Imaging, Inc., a Nevada corporation which does business as Optical
Molecular Imaging, Inc. (“Optical”), and the
principal shareholders of Optical, in which Cascade or a newly formed subsidiary
of Cascade (as applicable, the “Company”) would
acquire in a share exchange (the “Exchange”) with the
shareholders (the “Holders”) of Optical
all of the issued and outstanding capital stock of Optical (the “Optical Stock”), in
consideration of the issuance or transfer of certain shares of preferred stock
and common stock of Cascade to the Holders. In the Exchange, the
Company will agree to issue to the Holders 10,000,000 shares of Series A
Convertible Preferred Stock (“Series A Preferred”)
and 14,678,710 shares of common stock, no par value (“Common Stock”) of
Cascade. Each share of Series A Preferred will initially be
convertible into 10 shares of Common Stock of Cascade. The closing
(the “Closing”)
of the Exchange will occur as soon as practicable after the date hereof, and in
any event within five business days of the date when all conditions to the
Closing have been satisfied or waived. We currently expect to
consummate the Closing on or about December 18, 2009.
We have
agreed to use our mutual commercially reasonable best efforts to negotiate,
sign, and deliver definitive agreements approved by our respective Boards of
Directors which will set forth in detail our agreed transactions, upon the
following principal terms and conditions:
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1.
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Exchange.
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1.1.
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At
Closing the Company will (a) issue to the Holders an aggregate of
14,678,710 shares of Common Stock and (b) covenant and agree to issue to
the Holders an aggregate of 10,000,000 shares of Series A Preferred upon
the filing of Articles of Amendment Setting forth the Designation, Rights
and Preferences of the Series A Preferred as provided
below.
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1.2.
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At
the Closing, the respective Holders will deliver to the Company the
certificates representing the Optical Stock, together with stock powers,
duly executed in blank, as set forth on Schedule A
hereto.
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1.3.
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The
Closing shall provide for conditions subsequent that an amendment and
restatement of the Articles of Incorporation of Cascade and Articles of
Amendment Setting forth the Designation, Rights and Preferences of the
Series B Preferred as provided below shall have been filed with the
Wyoming Secretary of State.
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2.
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Financing.
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2.1.
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Concurrent
with the Exchange, Cascade shall have concluded a private placement of
convertible notes of the Company at a face amount equal to the purchase
price therefor and providing for gross proceeds to Cascade of not less
than $1.0 million (the “Financing”). Each
such note will be convertible into shares of Series B Convertible
Preferred Stock (the “Series B
Preferred”) at a price of $.50 per share upon the filing of
Articles of Amendment Setting forth the Designation, Rights and
Preferences of the Series B Preferred as provided below. The Financing
shall provide for conditions subsequent that an amendment and restatement
of the Articles of Incorporation of Cascade and Articles of Amendment
Setting forth the Designation, Rights and Preferences of the Series B
Preferred as provided below shall have been filed with the Wyoming
Secretary of State.
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3.
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Capitalization.
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3.1.
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Upon
consummation of the Exchange and the Financing, and after taking into
account (a) the cancelation (the “Cancelation”)
of 142,110,816 shares of restricted Common Stock presently outstanding and
held by the principal shareholder of Cascade, (b) a 3.64-for-one stock
split or a 2.64 share dividend per share (as applicable, the “Split”) to be
implemented by Cascade, (c) the issuance by Cascade to Optical of the
10,000,000
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shares of
Common Stock (the “Common Issuance”),
(d) the issuance by Cascade to Optical of the 10,000,000 shares of Series A
Preferred (the “Series
A Issuance”), and (e) the issuance by Xxxxxxx of the not less than
2,000,000 shares of Series B Preferred (the “Series B Exchange”)
contemplated in the Financing, the Capitalization of Cascade shall be as set
forth in Schedule
B hereto. Unless the context otherwise requires, all
computations in this memorandum of agreement assume and give effect to the
Exchange, the Financing, the Cancelation, the Split, the Common Issuance, the
Series A Issuance, and the Series B Exchange.
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4.
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Tax
Treatment.
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4.1.
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The
parties agree and acknowledge that it is their specific intent that the
Exchange shall be structured and consummated in such a manner that the
transaction will not be taxable to Cascade, Optical or the Holders
pursuant to Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as
amended. The parties will cooperate to ensure such tax
treatment and qualification
therefor.
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5.
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Conditions to
Closing.
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5.1.
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Conditions Precedent
or Concurrent. The Closing of the Exchange shall be
subject to the satisfaction or waiver of the following conditions at or
prior to the Closing:
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5.1.1.
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Consummation
of the Financing.
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5.1.2.
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Consummation
of the Cancelation.
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5.1.3.
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Consummation
of the Split, including requisite approval thereof by the Financial
Industry Regulatory Authority, Inc.
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5.1.4.
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Cascade
shall effect the Common Issuance to the
Holders.
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5.1.5.
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Xxxxxxx
shall have filed with the Secretary of State of the State of Wyoming the
Articles of Amendment to the Articles of Incorporation to effect the Split
or shall have effected the Split in the form of a share dividend in
accordance with the Wyoming Business Corporation
Act.
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5.1.6.
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Cascade’s
Board of Directors and shareholders shall have approved the Articles of
Restatement of Articles of Incorporation in substantially the form set
forth in Schedule C
hereto.
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5.1.7.
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Cascade’s
Board of Directors shall have approved the Articles of Amendment Setting
forth the Designation, Rights and Preferences for the Series A Preferred
in substantially the form set forth in Schedule D
hereto.
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5.1.8.
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Cascade’s
Board of Directors shall have approved the Articles of Amendment Setting
forth the Designation, Rights and Preferences for the Series B Preferred
in substantially the form set forth in Schedule E
hereto.
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5.1.9.
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Certain
of the existing directors of Cascade shall have tendered their
resignations, subject to and effective upon elapse of the applicable
period required under Securities and Exchange Commission (“SEC”) Rule
14f-1.
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5.1.10.
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The
existing directors of Cascade shall have appointed the director designees
of Optical, subject to and effective upon elapse of the applicable period
required under SEC Rule 14f-1.
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5.1.11.
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The
parties shall have obtained all permits, authorizations, regulatory
approvals and third-party consents necessary for the consummation of the
Exchange.
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5.1.12.
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No
regulatory or legal action shall be pending which would restrict or
inhibit the consummation of the Exchange or any transaction related
thereto.
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5.1.13.
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Optical
and the Holders shall have received an opinion of counsel to Optical that
the Exchange shall be a tax-free reorganization within the meaning of
Sections 354 and 368(a)(1)(B) of the Internal Revenue Code of
1986.
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5.2.
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Conditions Concurrent
or Subsequent. The Closing of the Exchange shall be subject to the
satisfaction of the following conditions at or promptly following the
Closing:
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5.2.1.
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Cascade
shall file with the SEC a Schedule 14F and mail to Cascade’s shareholders
an appropriate notice as required under SEC Rule
14f-1.
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5.2.2.
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Cascade
shall timely file with the SEC a Current Report on Form 8-K announcing the
consummation of the Exchange and providing such information as is required
by SEC Form 8-K.
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5.2.3.
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Cascade
shall file a Schedule 14C relating to the shareholder action in respect of
the Articles of Restatement of Articles of Incorporation in substantially
the form set forth in Schedule C
hereto with the SEC and mail such notice to
shareholders.
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5.2.4.
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Xxxxxxx
shall have filed with the Wyoming Secretary of State the Articles of
Restatement of Articles of Incorporation in substantially the form set
forth in Schedule C
hereto.
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5.2.5.
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Xxxxxxx
shall have filed with the Secretary of State of the State of Wyoming the
Articles of Amendment Setting forth the Designation, Rights and
Preferences for the Series A Preferred in substantially the form set forth
in Schedule
D hereto.
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5.2.6.
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Xxxxxxx
shall have filed with the Secretary of State of the State of Wyoming the
Articles of Amendment Setting forth the Designation, Rights and
Preferences for the Series B Preferred in substantially the form set forth
in Schedule
E hereto.
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5.2.7.
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Cascade
shall effect the Series A Issuance to the
Holders.
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5.2.8.
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Cascade
and the investors in the Financing shall effect the Series B
Exchange.
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5.2.9.
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The
Company may vend out the pre-Closing assets of the Company comprising its
renewable energy business and any other assets not to be used in or useful
to the business of the Company as contemplated to be conducted following
the Closing, and, if so, the vendee of such assets shall assume all
pre-Closing liabilities of the Company relating to the operation of such
assets and indemnify and hold harmless the Company from and against any
such liabilities.
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6.
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Definitive
Agreements. The definitive agreements shall include,
contain or provide:
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6.1.
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Representations and
Warranties. Customary and usual representations and
warranties by the parties, and, in the case of corporate entities, the
principal executive officer shall certify these representations and
warranties “to his or her personal knowledge and
information.”
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6.2.
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Special
Covenants. Special covenants of Cascade regarding
satisfaction of the conditions subsequent to the Exchange, including as
provided in paragraph 5.2 above.
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6.3.
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Conditions. Conditions
to the parties’ obligations to close, including continued accuracy of
representations and warranties and compliance with covenants, receipt by
all parties of all corporate, regulatory and other third-party approvals
and authorizations necessary to consummate the Exchange and completion of
all actions, proceedings, instruments, opinions and documents required to
carry out the Exchange or incidental thereto and all other related legal
matters in a manner satisfactory to counsel for Optical in its sole and
absolute discretion.
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6.4.
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Indemnities. Indemnities
with respect to breaches of representations, warranties, covenants and
agreements contained in the definitive
agreement.
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6.5.
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Opinions of
Counsel. For the delivery at Closing of favorable
opinions of counsel for the corporate parties with respect to customary
and usual matters of law covered in transactions of this type, including
with respect to such capitalization and issuance matters relating to the
Common Stock of Cascade as Optical’s counsel shall
require.
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7.
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Financial and Other
Information.
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Each
party agrees to provide to the other in a timely manner prior to Closing (a)
reasonable access to its books and records and (b) customary schedules
listing: such party’s material contracts; real and personal
properties; pending, threatened and contemplated legal proceedings; employees;
assets and liabilities, including contingencies and commitments; and other
information reasonably requested.
Each
party will also provide to the other annual financial statements and interim
financial statements consisting of a balance sheet and a related statements of
income, cash flows, and shareholder’s equity for the period then ended which
fairly present the financial condition of each as of their respective dates and
for the periods involved, and such statements shall be prepared in accordance
with generally accepted accounting principles of the United States consistently
applied, on Closing, for such period or periods as shall be set forth in the
definitive agreement.
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8.
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Expenses. Subject
to the express terms of this memorandum of agreement, each party will bear
its own costs and expenses incurred in connection with consummating the
transactions contemplated hereby. Each party shall indemnify
and hold harmless the other
therefrom.
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9.
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Conduct of Business of
Cascade Pending Closing. Except as discussed in
paragraphs 5.1.1 to 5.1.11 above and until Closing or termination of this
memorandum of agreement, Cascade will conduct business only in the
ordinary course and none of the assets of Cascade shall be sold or
disposed of except in the ordinary course of business or with the written
consent of Optical. Until Closing, Cascade shall remain current
in its reporting obligations with the
SEC.
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10.
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Conduct of Business of
Optical Pending Closing. Until Closing or termination of
this memorandum of agreement, Optical will conduct business only in the
ordinary course and none of the assets of Optical shall be sold or
disposed of except in the ordinary course of business or with the written
consent of Cascade.
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11.
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Other.
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11.1.
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Optical
represents and warrants to Cascade that each principal shareholder of
Optical has been provided a copy of this memorandum of agreement and each
such principal shareholder has agreed to participate in the Exchange and
exchange their Optical Stock for Parent stock subject to and in accordance
with the definitive agreements to be negotiated between Cascade and
Optical.
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11.2.
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Each
of Cascade, Optical, and each principal shareholder of Optical shall use
their commercially reasonable best efforts to satisfy all conditions to
the Closing and to obtain all permits, authorizations (including corporate
authorizations), regulatory approvals and third-party consents necessary
or appropriate for the consummation of the
Exchange.
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11.3.
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The
definitive agreements shall be executed promptly following the execution
of this memorandum of agreement. This memorandum of agreement
will remain effective through December 31, 2009, unless terminated by
either Cascade or Optical due to another party’s breach. This
memorandum of agreement may be extended past December 31, 2009 by written
approval from both Cascade and
Optical.
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11.4.
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All
notices or other information deemed required or necessary to be given to
any of the parties shall be given at the addresses set forth below their
signatures below.
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11.5.
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The
transactions which are contemplated herein, to the extent permitted, shall
be governed by and construed in accordance with the law of the State of
California.
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11.6.
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Each
party and its agents, attorneys and representatives shall have full and
free access to the properties, books and records of the other party (the
confidentiality of which the investigating party agrees to retain) for
purposes of conducting investigations of the other
party.
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11.7.
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The
substance of any public announcement with respect to the Exchange and
other transactions contemplated hereby, other than notices required by
law, shall be approved in advance by all parties or their duly authorized
representatives.
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11.8.
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In
the event of the abandonment of the transactions contemplated by this
memorandum of agreement prior to the consummation of the Exchange, each
party shall bear and pay its own costs and expenses and shall indemnify
and hold the other parties harmless therefrom. Following
execution and delivery of the definitive agreement, that agreement will
control the rights of the parties in this
respect.
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This
memorandum of agreement evidences the present mutual intention of the parties
hereto and is intended to be legally binding to the extent provided
herein. The transactions contemplated herein may be terminated only
as provided herein or in a writing signed by Xxxxxxx and Optical.
This
memorandum of agreement may be executed in any number of counterparts and each
such counterpart shall be deemed to be an original instrument, but all of such
counterparts together shall constitute but one agreement.
By their
execution hereof, each of Cascade and Optical, for itself and on behalf of the
majority shareholders of Optical (each a “party”), acknowledges
to and agrees with the other parties that in the exercise of the several rights
granted to each party pursuant to this memorandum of agreement, a party, and/or
officers, directors, employees, shareholders, partners, agents or
representatives, may become familiar with or aware of certain Confidential
Information (as such
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term is
hereinafter defined) disclosed by another party or one or more of its officers,
directors, employees, shareholders, partners, agents or representatives (each of
such relationships being defined herein as an
“Affiliate”). Accordingly, each party hereby agrees that any
and all Confidential Information disclosed or furnished to it or to any of its
Affiliates, by another party or any of its Affiliates, is and shall remain
proprietary to the disclosing party. No party, nor any Affiliate of
such, shall have any rights to distribute or divulge any of such Confidential
Information to any third party without the disclosing party’s prior consent, or
to use any of such Confidential Information in any way detrimental to the
disclosing party or any of its Affiliates, or in any way which would otherwise
destroy, injure or impair any of the disclosing party’s or its Affiliates’
rights in or in respect of any such Confidential Information including, without
limitation, by using any of such Confidential information to solicit away from
the disclosing party any of its employees, contractors, customers or vendors or
other business relationships, or to establish or assist any person or entity
which is or will be, directly or indirectly, in competition with the disclosing
party. For purposes of this Agreement, the term “Confidential
Information” shall mean any and all proprietary information belonging to a
disclosing party, whether tangible or intangible, written or oral, including,
without limitation, any intellectual property rights, books and records,
computer software and files, lists of (or proprietary information concerning)
its customers, suppliers, vendors and other business relationships, and any
other item which may properly be classified as a protected trade
secret. To constitute Confidential Information under this memorandum
of agreement, information shall be identified at the time of communication and
in the form of such communication (e.g., in writing if the information is
communicated in writing). Each party expressly agrees and understands
that its agreement to abide by the provisions of this paragraph constitute a
material part of the consideration inducing the other party to enter into this
memorandum of agreement and consider the transactions contemplated herein, and
that any violation of such provisions could create immediate and irreparable
harm to the disclosing party. In the event of any breach of the
provisions of this paragraph, the parties hereby agree that, in addition to
whatever other remedies may be available to a party, a disclosing party shall be
entitled to seek injunctive and other equitable relief, and each party hereby
waives any bonding or other requirement as a precursor thereto.
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If the
foregoing correctly sets forth the agreement of the parties, please execute this
memorandum of agreement in duplicate as provided below, retain one copy for your
records, and return one to the undersigned, whereupon this will be a binding
agreement among the parties hereto in accordance with the terms
hereof.
Very
truly yours,
By: /s/ X.
Xxxxxxxx
Name: X.
Xxxxxxxx
Title: Chief Financial Officer
Address
for Notices:
0000 0xx
Xxxxxx X.X.
Calgary,
Alberta T2G 0T7
E-Mail: xxxxxxxxx@xxxxxxxxxxxxx.xxx
Agreed
and Accepted
as of the
11th day
of December 2009:
“Optical”
Spectral
Molecular Imaging, Inc.
By: /s/ Xxxxxx X.
Xxxxxx
Xxxxxx X. Xxxxxx Ph.D.
Chairman
Address
for Notices:
0000
Xxxxxxx Xxxxx
Los
Angeles, CA 90046
E-Mail: xxxxxxxx@xxxxx.xxx
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Schedules
omitted. The Registrant has agreed to furnish supplementally a copy of any
omitted schedule to the Commission upon request.
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Schedule
A – Optical Stock
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Schedule
B – Capitalization
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Schedule
C – Form of Articles of Restatement of Articles of Incorporation of
Cascade to Authorize the Issuance of Blank Check Preferred Stock and
Change the Name of Cascade
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Schedule
D – Form of Articles of Amendment Setting forth the Designation, Rights
and Preferences for the Series A
Preferred
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Schedule
E – Form of Articles of Amendment Setting forth the Designation, Rights
and Preferences for the Series B
Preferred
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11
