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Exhibit
10.5
Memorandum of Understanding
This
Memorandum of Understanding (this “
Memorandum ”) is entered into by and
among Viral Genetics, Inc. , a Delaware
corporation (“ Viral Genetics ”),
and V-Clip Pharmaceuticals, Inc. ,
a California corporation (“
V-Clip ”), and solely with respect to
Section 10 and Exhibit A (ii)-(iii) below,
University License Equity Holdings, Inc. , a
Colorado nonprofit corporation (“ ULEHI
”), this __ day of November 2007 (the “
Effective Date ”).
This
Memorandum is an outline of the general understanding of an
agreement to merge V-Clip with and into Viral Genetics and
shall be deemed a valid and binding agreement of the parties
hereto. ULEHI is a party hereto for purposes of
Section 10 and Exhibit A (ii)-(iii) below
only.
1. Viral
Genetics shall perform work to be done by an independent
laboratory to determine the viability of the Licensed
Process(es) and/or Licensed Product(s) covered by the License
Agreement between V-Clip and The Regents of the University of
Colorado entered into contemporaneously with this Memorandum
(the “ License Agreement
”). The value of such work shall be
equivalent to at least Six Hundred Thousand Dollars
($600,000), which amount may include the in-kind value of work
directed to the viability of the Licensed Processes (as
defined in the License Agreement) or Licensed Products (as
defined in the License Agreement) including, without
limitation, work sponsored by the NIH or similar
entities. Dr. Karen Newell, inventor of
the licensed technology, will collaborate with Viral Genetics
on the experimental design and research site selection and
will have the unrestricted right to use the data developed in
the course of such work in her research at the University of
Colorado.
2. Viral
Genetics shall have the option to require V-Clip to merge with
and into Viral Genetics in accordance with all applicable
laws, rules and regulations (the “
Merger ”) by delivering to V-Clip
written notice of Viral Genetics’ exercise of such
option at any time on or before the date that is the one-year
anniversary of the Effective Date. In exchange for
their stock of V-Clip in connection with the Merger,
V-Clip’s stockholders (“V-Clip
Stockholders ”) shall receive securities issued
by Viral Genetics as set forth in Exhibit A
attached hereto (the “ Merger
Securities ”). Viral Genetics and
V-Clip acknowledge and agree that the terms of the Merger and
the consideration in the form of the Merger Securities (the
“ Merger Consideration ”) have
been negotiated between V-Clip and Viral Genetics on an
arms-length basis.
3. Promptly,
but no later than fifteen (15) days subsequent to the date of
the closing of the Merger (the “
Closing ”), Viral Genetics shall issue
to each V-Clip Stockholder stock certificates, option
agreements, warrant agreements and any other certificates or
agreements representing the Merger Consideration as set forth
in Exhibit A attached hereto.
4. Viral
Genetics hereby represents and warrants to V-Clip that Viral
Genetics has 250,000,000 authorized shares of Common Stock,
$.0001 par value (“ Common Stock
”), of which 155,532,013 shares are issued and
outstanding, and 20,000,000 authorized shares of Preferred
Stock, par value $.0001, of which no shares are issued and
outstanding. All issued and outstanding shares of Common
Stock: (i) have been duly authorized and validly issued, and
(ii) are fully paid and non-assessable. There are
no other authorized or outstanding equity securities of any
class, kind, or character, and there are no outstanding
subscriptions, options, warrants, debt or other agreements, or
commitments obligating Viral Genetics to issue any additional
shares of its capital stock of any class, or any options or
rights with respect thereto, or any securities convertible
into, or exchangeable or exercisable for any shares of capital
stock of any class as of the date hereof, except as set forth
in Exhibit B attached hereto and pursuant to
the terms of this Memorandum. When issued in
compliance with the provisions of this Memorandum, the shares
of Common Stock issued as Merger Consideration will be validly
issued, fully paid and non-assessable. When issued
in compliance with the provisions of this Memorandum and the
option agreements and warrant agreements constituting Merger
Consideration, the shares of Common Stock underlying such
options and warrants will be validly issued, fully paid and
non-assessable. When issued in compliance with the
provisions of this Memorandum and any relevant agreements
constituting Merger Consideration, the shares of Common Stock
underlying any such other Merger Securities will be validly
issued, fully paid and non-assessable.
5. All
corporate action on the part of Viral Genetics and V-Clip, and
their respective officers, directors and stockholders,
necessary for the authorization of this Memorandum has been
taken, and with respect to the Merger has been taken or will
have been taken at the time of the Closing.
6. The
execution of this Memorandum and the consummation of the
Merger will not result in any breach of any of the terms,
conditions, or provisions of, or constitute a default under,
or result in the creation of any lien, charge, or encumbrance
on, any property or assets of Viral Genetics pursuant to any
indenture, mortgage, deed of trust, agreement, corporate
charter, bylaws, contract, or other instrument to which Viral
Genetics is a party or by which Viral Genetics may be bound or
any law, rule, regulation, qualification, license, order or
judgment applicable to Viral Genetics or any of its
property.
7. Viral
Genetics has, and as of the Closing will have, filed all
reports and made all other filings required to be filed by it
under the Securities Act of 1933, as amended (the “
Securities Act ”), and the Securities
Exchange Act of 1934, as amended (collectively with the
Securities Act, the “ Securities Laws
”), and subsequent to the Effective Date will use its
best efforts to file all reports and other
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