EXHIBIT 10.12
STOCK EXCHANGE AGREEMENT
THIS STOCK EXCHANGE AGREEMENT (the "Agreement") is made and entered
into as of the 6th day of May, 2003 by and among Molichem Medicines, Inc., a
Delaware corporation with its principal place of business at 000 Xxxxxx Xxxxx,
Xxxxx 000, Xxxxxx Xxxx, Xxxxx Xxxxxxxx 00000 ("MMI"); Molichem R&D, Inc., a
North Carolina corporation with its principal place of business at 000 Xxxxxx
Xxxxx, Xxxxx 000, Xxxxxx Xxxx, Xxxxx Xxxxxxxx 00000 ("MRD"); and Lantibio, Inc.,
a North Carolina corporation ("Lantibio").
PREAMBLE
WHEREAS, MMI, through its operating subsidiary MRD, is engaged in
the discovery, development and marketing of pharmaceutical products for the
treatment of serious respiratory and related conditions; and
WHEREAS, MMI has been unable to adequately fund and complete the
development of its proposed products; and
WHEREAS, MMI has had no operating revenues from the sale of its
products since inception, has incurred substantial losses from operations and
anticipates that operating losses will continue and could increase until such
time, if ever, that its compounds are developed, approved, and successfully
marketed; and
WHEREAS, all of MRD's issued and outstanding shares of capital stock
are owned by MMI (the "MRD Shares"); and
WHEREAS, Lantibio desires to acquire MRD by way of its acquisition
of the MRD Shares in exchange for all of its common stock of MMI, consisting of
an aggregate of thirteen million, three hundred fifty five thousand, two hundred
eighty two (13,355,282) shares (the "MMI Shares") and the grant of a
non-exclusive ten year, US license to MMI (the "License"), in the form of the
License Agreement annexed hereto as SCHEDULE A; and
WHEREAS, MMI similarly desires to make such exchange.
NOW, THEREFORE, in consideration of the premises, and of the
promises, covenants and conditions contained herein, the parties intending to be
legally bound, hereby agree as follows:
WITNESSETH:
ARTICLE 1
EXCHANGE OF SHARES
Subject to the hereinafter described conditions, MMI hereby agrees
to transfer and deliver the MRD Shares to Lantibio in exchange for the MMI
Shares and the grant of the License.
ARTICLE 2
CLOSING
The exchange of the MRD Shares for the MMI Shares (the "Share
Exchange") and the execution of the License Agreement shall take place at the
offices of Xxxxxx Xxxxxxxxxx & Xxxxxxxx, LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, or such other place as the parties may mutually agree (the
"Closing"). The Closing shall take place upon the execution of this Agreement or
as soon thereafter as is practicable. The date on which the Closing occurs is
referred to herein as the "Closing Date". At the Closing:
(a) Lantibio shall tender or commit to tender to MMI certificates
representing all of the MMI Shares, duly executed and in proper form for
transfer to MMI, together with such executed consents, powers of attorney, stock
powers and other items as shall be required to convey such stock to MMI, in
compliance with all applicable laws;
(b) MMI shall tender to Lantibio certificates representing all of
the MRD Shares, duly executed and in proper form for transfer to Lantibio,
together with such executed consents, powers of attorney, stock powers and other
items as shall be required to convey such stock to Lantibio, in compliance with
all applicable laws;
(c) MMI and MRD shall execute the License Agreement;
(d) MMI shall accept the resignations of Xxxx Xxxxxx and Xxx Xxxxxx
as directors of MMI;
(e) Lantibio shall cause to be delivered to MMI for cancellation an
aggregate of 637,114 MMI stock options representing all MMI stock options held
by Xxxx Xxxxxx, Xxxxx Xxxxxxxx, Xxxxxxx Xxxxxx, Xxxxxxx Xxxxxx and Xxxxxx
Xxxxxx; and
(f) Xxxxxxxx and the Purchasers shall cause to be delivered to MMI
for cancellation an aggregate of 1,000,000 MMI stock options representing all
MMI stock options held by Xxxxxxx Xxxxx, Xxxxxx Tchakamakian, Gilles Xxxxxxxx,
Xxxx Xxx Xxxxxxx and Xxxxxx Xxxxxxx.
ARTICLE 3
EXEMPTION FROM REGISTRATION
(a) Lantibio hereby represents, warrants, covenants and acknowledges
that:
(1) The MRD Shares are being issued to it without registration
under the provisions of Section 5 of the Securities Act of 1933, as amended (the
"Act"), pursuant to exemptions provided pursuant to Sections 4(1) and 4(2)
thereof;
(2) There is no present market for the MRD Shares and all of the
certificates for the MRD Shares will bear legends restricting their transfer,
sale, conveyance or hypothecation, unless such MRD Shares are either registered
under the provisions of Section 5 of the Act and under applicable state
securities laws, or an opinion of legal counsel, in form and substance
satisfactory to legal counsel to
MRD, is provided certifying that such registration is not required as a result
of applicable exemptions therefrom;
(3) Lantibio is acquiring the MRD Shares for investment purposes
only, and not with a view to further sale or distribution; and
(4) Lantibio, by reason of its shareholders' past and present
affiliations with MMI and MRD, is fully aware of the operations and financial
conditions of such entities, has had full access to all reports filed by MMI
with the Securities and Exchange Commission and has examined all of MMI's and
MRD's books, records and financial statements and fully and completely
questioned MMI's and MRD's officers and directors to its satisfaction as to all
matters deemed pertinent.
(b) MMI hereby represents, warrants, covenants and acknowledges
that:
(1) The MMI Shares are being transferred to it without
registration under the provisions of Section 5 of the Act pursuant to exemptions
provided pursuant to Sections 4(1) and 4(2) thereof; and
(2) MMI is acquiring the MMI Shares for the purpose of canceling
them and returning them to the status of authorized but unissued shares.
ARTICLE 4
REPRESENTATIONS, WARRANTIES AND
COVENANTS OF MMI
MMI hereby represents, warrants and covenants to Lantibio as
follows:
(a) MMI is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Delaware, and MMI has the legal
capacity and all necessary corporate authority to enter into and perform this
Agreement and to consummate the transactions contemplated hereby;
(b) MRD is a corporation duly organized, validly existing, and in
good standing under the laws of the State of North Carolina, and MRD has the
legal capacity and all necessary corporate authority to enter into and perform
this Agreement and to consummate the transactions contemplated hereby;
(c) At the Closing, MRD shall have good and marketable title to all
of its assets free and clear of all liens, claims, charges, and any other
encumbrances;
(d) At the Closing, MMI shall have no liabilities and no assets
except as otherwise set forth in SCHEDULE 4(D);
(e) The MRD Shares represent all of MRD's issued and outstanding
capital stock and at Closing MRD shall have no outstanding subscriptions,
options, warrants, convertible securities, instruments or other agreements that
could result in an obligation to issue additional capital stock of MRD;
(f) This Agreement has been duly authorized, executed and delivered
by MMI and constitutes the legal, valid and binding obligation of MMI,
enforceable against MMI in accordance with its terms;
(g) This Agreement has been duly authorized, executed and delivered
by MRD and constitutes the legal, valid and binding obligation of MRD,
enforceable against MRD in accordance with its terms;
(h) The execution and delivery of this Agreement and the performance
of the obligations imposed hereunder will not conflict with, or result in a
breach by MMI of, any of the terms or provisions of, or constitute a default
under, the certificate of incorporation or bylaws of MMI, or any material
agreement or instrument to which MMI is a party, or by which it or any of its
properties or assets are bound, or result in a violation of any order, decree,
or judgment of any court or governmental agency having jurisdiction over MMI or
MMI's properties, will not conflict with, constitute a default under, or result
in the breach of, any contract, agreement, or other instrument to which MMI is a
party or is otherwise bound and no consent, authorization or order of, or filing
or registration with, any court, governmental, or regulatory authority is
required in connection with the execution and delivery of this Agreement and any
related agreements or the performance by MMI of its obligations hereunder;
(i) The execution and delivery of this Agreement and the performance
of the obligations imposed hereunder will not conflict with, or result in a
breach by MRD of, any of the terms or provisions of, or constitute a default
under, the certificate of incorporation or bylaws of MRD, or any material
agreement or instrument to which MRD is a party, or by which it or any of its
properties or assets are bound, or result in a violation of any order, decree,
or judgment of any court or governmental agency having jurisdiction over MRD or
MRD's properties, will not conflict with, constitute a default under, or result
in the breach of, any contract, agreement, or other instrument to which MRD is a
party or is otherwise bound and no consent, authorization or order of, or filing
or registration with, any court, governmental, or regulatory authority is
required in connection with the execution and delivery of this Agreement and any
related agreements or the performance by MRD of its obligations hereunder;
(j) There is no litigation or proceeding pending or, to the best
knowledge of MMI and MRD, threatened, against MRD or MMI or the properties of
MRD or MMI;
(k) MMI and MRD have filed (except for 2002 tax returns for which
extension requests have been filed) with the appropriate governmental agencies
all tax returns and tax reports required to be filed; all Federal, state and
local income, franchise, sales, use, occupation or other taxes due have been
fully paid or adequately reserved for; and MMI or MRD is not a party to any
action or proceeding by any governmental authority for assessment or collection
of taxes, nor has any claim for assessments been asserted against MMI or MRD;
(l) There are presently no contingent liabilities, factual
circumstances, contractually assumed obligations or unasserted possible claims
which are known to MMI or MRD which might result in a material adverse change in
the future financial condition or operations of MMI; and
(m) MMI owns the MRD Shares free and clear of all liens, claims,
charges, preemptive rights, and any other encumbrances and shall deliver the MRD
Shares to Lantibio at Closing free and clear of all liens, claims, charges,
preemptive rights, and any other encumbrances.
ARTICLE 5
REPRESENTATIONS, WARRANTIES AND
COVENANTS OF LANTIBIO
Lantibio hereby represents and warrants to MMI as follows:
(a) Lantibio has all necessary authority to enter into and perform
this Agreement and to consummate the transactions contemplated hereby;
(b) This Agreement has been duly authorized, executed and delivered
by Lantibio and constitutes a legal, valid and binding obligation of Lantibio,
enforceable against Lantibio in accordance with its terms;
(c) The execution and delivery of this Agreement and the performance
of the obligations imposed hereunder will not conflict with, or result in a
breach by Lantibio of, any of the terms or provisions of, or constitute a
default under, the certificate of incorporation or bylaws of Lantibio, or any
material agreement or instrument to which Lantibio is a party, or by which it or
any of its properties or assets are bound, or result in a violation of any
order, decree, or judgment of any court or governmental agency having
jurisdiction over Lantibio or Lantibio's properties, will not conflict with,
constitute a default under, or result in the breach of, any contract, agreement,
or other instrument to which Lantibio is a party or is otherwise bound and no
consent, authorization or order of, or filing or registration with, any court,
governmental, or regulatory authority is required in connection with the
execution and delivery of this Agreement and any related agreements or the
performance by Lantibio of its obligations hereunder; and
(d) There are presently no contingent liabilities, factual
circumstances, contractually assumed obligations or unasserted possible claims
which are known to Lantibio which might result in a material adverse change in
the future financial condition or operations of Lantibio.
ARTICLE 6
NOTICE
All notices, demands or other communications given hereunder shall
be in writing and shall be deemed to have been duly given when received if sent
by fax or overnight courier, and if mailed shall be deemed to have been given on
the first business day after mailing by United States registered or certified
mail, return receipt requested, postage prepaid, addressed as follows:
To MMI: Molichem Medicines, Inc.
c/o Xxxxxx Xxxxxxxx
000 Xxxxxxxx Xxxx
Xxxxxx Xxxx, Xxxxx Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to: Xxxxxx Xxxxxxxxxx & Xxxxxxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
To Lantibio: Lantibio, Inc.
000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxx Xxxx, Xxxxx Xxxxxxxx 00000
Attn: Dr. Xxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to: Xxxxxx Xxxxxxx Xxxxx & Xxxxxx, LLP
0000 Xxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attention: W. Xxxxx Mannheim
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
ARTICLE 7
MISCELLANEOUS
(a) Each of MMI, MRD and Lantibio agrees to take such actions as are
reasonably necessary to carry out the intentions of the parties under this
Agreement, including but not limited to the prompt execution and delivery of any
documents reasonably necessary to carry out and perform the terms or intention
of this Agreement.
(b) Certain costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid from an escrow
account held by Xxxxxx Gottbetter & Xxxxxxxx, LLP, as previously agreed.
(c) This Agreement shall be governed by and construed in accordance
with the laws of the State of New York, without regard to conflicts of laws of
principles and each party hereby agrees that all performances due and
transactions undertaken pursuant to this Agreement shall be deemed to be due or
have occurred in New York, and the exclusive venue and place of jurisdiction for
any litigation arising from or related to this Agreement shall be the state or
federal courts located in the State and County of New York.
(d) The headings used in this Agreement are for convenience only, do
not form a part of this Agreement, and shall not affect in any way the meaning
or interpretation of this Agreement.
(e) This Agreement may be executed in one or more counterparts which
when taken together shall constitute one agreement.
(f) This Agreement is intended for the benefit of the parties hereto
and is not for the benefit of, nor may any provisions hereof be enforced by any
other person, firm or entity.
(g) This Agreement may be amended, modified and supplemented in
writing only by the mutual consent of the parties hereto.
(h) This Agreement and all of the provisions hereof shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, but neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto without the prior written consent of the other parties, and any
attempts to do so without the consent of the other parties shall be void and of
no effect.
(i) In the event any party breaches the terms of this Agreement, the
non-breaching parties shall be entitled to the recovery of their attorney's fees
and other professional costs and fees incurred in enforcing their rights
hereunder.
(j) This writing constitutes the entire agreement and understanding
between the parties hereto with respect to the subject matter contained herein.
Neither party is relying on any representation or statement not contained in
this writing. This Agreement supercedes and cancels any prior agreements
relating to the subject matter contained herein.
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the date first written above.
MOLICHEM MEDICINES, INC.
By: /S/ XXXXXX XXXXXXXX
Name: Xxxxxx Xxxxxxxx
Title: President
MOLICHEM R&D, INC.
By: /S/ XXXX XXXXXX
Name: Xxxx Xxxxxx, PhD.
Title: President
LANTIBIO, INC.
By: /S/ XXXX XXXXXX
Name: Xxxx Xxxxxx, PhD.
Title: President
SCHEDULE A
LICENSE AGREEMENT
BETWEEN
MOLICHEM MEDICINES, INC.
AND
MOLICHEM R&D, INC.
The License Agreement is included with this Annual Report on Form
10-KSB as Exhibit 10.13
SCHEDULE 4(D)
LIST OF MOLICHEM MEDICINES, INC. ASSETS AND LIABILITIES AT CLOSING
NONE
