EXHIBIT 10.18

 

SHAREHOLDERS’ AGREEMENT

 

THIS SHAREHOLDERS’ AGREEMENT (the “Agreement”) is made effective the 29th day of
May, 2015, by and among Memcine Pharmaceuticals, Inc., an Iowa corporation (the
“Corporation”), Spotlight Innovation Inc. (“Spotlight”), with an address at 6750
Westown Parkway, Suite 200-226, West Des Moines, Iowa 50266, Dr. Tony Vanden
Bush, Ph.D. with an address at 2208 Arizona Ave., Iowa City, Iowa 52240-
(“Vanden Bush”), and the University of Iowa Research Foundation, with an address
at 112 N. Capitol Street, Iowa City, IA 52242 (“UIRF”). Vanden Bush, Spotlight
and UIRF are hereinafter individually referred to as a “Shareholder” and
collectively referred to as the “Shareholders”. The Shareholders hold the
respective amounts of shares of capital stock of the Corporation set forth on
Schedule A hereto (the “Schedule of Shareholders”).

 

Recitals:

 

 

A.

The Capitalization of the Company is as set forth below (after completion of the
actions set forth on that certain Securities Purchase Agreement between the
Corporation and Spotlight):

  

 

 

(i)

150,000 shares of Common Stock owned by Vanden Bush (after retirement of 850,000
shares of Common Stock).

 

 

 

   

 

(ii)

822,500 shares of Common Stock owned by Spotlight (acquired pursuant to said
Securities Purchase Agreement.

 

 

 

   

 

(iii)

27,500 shares of Common Stock owned by UIRF.

 

 

 

   

 

(iv)

Each of the Shareholders wish to document their understanding of the operation
of the Corporation.

  

 

B.

The Shareholders wish to state their purposes relating to the Corporation. To
determine their rights, interests and obligations to Corporation. The
Shareholders wish to impose restrictions upon transfer of shares of Comon Stock.

 

Agreement:

 

NOW, THEREFORE, in consideration of the premises and mutual covenants contained
herein and intending to be legally bound hereby, the parties agree as follows:

 

ARTICLE 1. Organization and Board Representation.

 

1.1 Organization of Corporation. Vanden Bush confirms that a Certificate of
Incorporation for the Corporation was filed with the Iowa Secretary of State,
attached hereto and made a part hereof as Exhibit A. Bylaws for the Corporation
were adopted in a form contained in Exhibit B attached hereto and made a part
hereof. Both the Bylaws and Certificate of Incorporation are true copies of
those in force for the Corporation.

 

1.2 Board of Directors. The Board of Directors of the Coorporation (the “Board
of Directors”) shall initially consist of three members: Vanden Bush, Cristopher
Grunewald and John Krohn.

 

1.3 Business of Corporation. The Corporation shall engage in such business(es)
as the Board of Directors shall from time to time agree. Vanden Bush represents
that he currently is operating the business of the Corporation and shall move
the entire operation of such business into the Corporation at a location to be
mutually agreed upon by the Shareholders. It is acknowledged and agreed that the
Board of Directors, and such officers appointed by the Board of Directors shall
handle all of the day to day operations of the business of the Corporation, and
Vanden Bush shall enter into an advisory agreement with the Corporation to
assist in the day to day operations of the Corporation. The Board of Directors
shall agree on the bank which the Corporation shall utilize for business
accounts, and only the officers of the Corporation shall be granted signatory
authority on such bank accounts.

 

 
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1.4 Stock Purchase. Spotlight has agreed to pay to the Corporation Twenty Five
Thousand ($25,000) Dollars for 822,500 shares of Common Stock of the Corporation
as per the terms of a Securities Purchase Agreement.

 

1.5 Chief Scientific Officer. Vanden Bush agrees to enter into a consulting
agreement with the Corporation (in the form annexed hereto), whereby Vanden Bush
shall serve as Chief Scientific Officer of the Corporation pursuant to the terms
of said agreement.

 

1.6 Investment. Spotlight agrees to provide the Corporation with up to Three
Million ($3,000,000) Dollars to fund the operations of the Corporation via
investment, grants or other means. At least $150,000 will be provided by
Spotlight to the Corporation on or before July 1, 2015, and at least $150,000
will be provided by Spotlight to the Corporation on or before December 31, 2015.
The timing of the remaining investment will be determined by the milestones set
by the Board of Directors along with Vanden Bush. In the event Spotlight fails
to provide the funding as provided above within the proscribed timeframes, and
such failure is due to the actions, or inactions of a Tony Vanden Bush or other
affiliates of the Corporation, and due to no fault of Spotlight (which shall not
include Spotlight’s ability to procure financing), and provided no bona fide
dispute exists, upon the expiration of twenty days after the proscribed date,
the remaining Shareholders shall be entitled to purchase the shares (pro rata)
of Common Stock owned by Spotlight for a purchase price equal to the amount
funded by Spotlight up to such date, with the closing of such purchase to occur
within thirty days after the expiration of the aforementioned cure period.

 

ARTICLE 2. Stock Transfer Restrictions.

 

a. Legend on Stock Certificates. The certificates for the shares of stock of the
Corporation subject to this Article 2 shall bear the following restrictive
legend:

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED EXCEPT IN
ACCORDANCE WITH THE TERMS OF A CERTAIN SHAREHOLDERS’ AGREEMENT DATED THE 27th
DAY OF May, 2015, BY AND AMONG Memcine Pharmaceuticals, Inc. (THE
“CORPORATION”), DR. TONY VANDEN BUSH, PH.D., Spotlight innovation inc. AND the
university of Iowa RESEARCH FOUNDATION. SUCH AGREEMENT IS AVAILABLE FOR
INSPECTION AT THE PRINCIPAL OFFICE OF THE CORPORATION. THE SECURITIES
REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER SAID ACT, OR AN OPINION OF
COUNSEL TO THE CORPORATION THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT.

 

b. Agreement Binding on Transferees of the Shareholders. In the event that, at
any time or from time to time, any shares of stock owned by a Shareholder are
transferred to any party pursuant to any provision hereof, the transferee shall
take such shares of stock pursuant to all provisions, conditions and covenants
of this Agreement, and, as a condition precedent to the transfer of such shares
of stock, the transferee shall agree (for and on behalf of himself or itself,
his or its legal representatives and his or its transferees and assigns) in
writing to be bound by all provisions of this Agreement as a party hereto and in
the capacity of a Shareholder. In the event that there shall be any transfer to
any person or entity pursuant to any provision of this Agreement and in
compliance with the provisions of this Article 2, all references in this
Agreement to the Shareholders or to any Shareholder shall thereafter be deemed
to include such transferee, and the provisions hereof shall thereafter be
applicable to such transferee (and not the transferor Shareholder).

 

 
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ARTICLE 3. Right of First Refusal. If any Shareholder (the “Selling
Shareholder”) desires to sell or transfer any of his shares of stock in the
Corporation, the Selling Shareholder shall first present to the Corporation and
the other Shareholders a copy of the good faith bona fide offer (the “Offer”)
from a proposed third-party purchaser disclosing to the Corporation and the
other Shareholders all the terms and conditions of the proposed purchase of such
stock (the “Offered Shares”). The Corporation shall then have ten (10) days to
agree in writing to purchase the Offered Shares on the same terms and conditions
as are disclosed in the Offer. If the Corporation does not agree in writing to
purchase the Offered Shares during such ten (10) day period, the Corporation
shall have no further rights with respect to the Offered Shares and the Offered
Shares must then be offered in writing to the other Shareholders, pro rata in
accordance with their ownership of Common Stock at the time of the Offer, on the
same terms and conditions as are disclosed in the Offer, for ten (10) days, with
each Shareholder to have an additional five (5) days to agree to purchase his
pro rata share of the Offered Shares not purchased by the other Shareholders. If
the other Shareholders do not agree in writing to purchase all the Offered
Shares during such fifteen (15) day period, the other Shareholders shall have no
further rights with respect to the Offered Shares during the permitted period of
sale as described in the following sentence. If neither the Corporation nor the
other Shareholders elect to purchase all of the Offered Shares, the Selling
Shareholder shall have one hundred twenty (120) days to close the sale of the
Offered Shares not purchased by the Corporation or the other Shareholders with
the proposed third-party purchaser pursuant to the same terms and conditions as
stated in the Offer; provided, however, that as a condition precedent to such
closing, the third-party purchaser shall agree in writing to be bound by the
terms and conditions of this Agreement and any amendment hereto that may be in
effect at such time, in an instrument reasonably satisfactory to the
Corporation. If the sale is not closed within such one hundred twenty (120) day
period, the Selling Shareholder shall reoffer the Offered Shares to the
Corporation and the other Shareholders pursuant to the procedures described
above prior to any subsequent sale to a third-party purchaser. For purposes of
this Article 3, a “bona fide offer” shall mean an offer in writing, signed by
the offeror (who must be a person financially capable of carrying out the terms
of the Offer), in a form legally enforceable against the offeror. Closing for
the purchase by the Corporation or the non-Selling Shareholders (as the case may
be) of any of the stock of the Corporation accepted for purchase pursuant to
this Article 3 shall be held at the Corporation’s principal office within five
(5) business days of the final date on which notice of intention to purchase
could be given by the non-Selling Shareholders to the Selling Shareholder.

 

ARTICLE 4. Term of the Agreement. This Agreement shall terminate on: (i) the
written agreement of all Shareholders; (ii) the acquisition of all of the
outstanding stock of the Corporation by one Shareholder; (iii) the bankruptcy of
the Corporation, the execution by it of any assignment for the benefit of
creditors, or the appointment of a receiver for the Corporation; (iv) the
voluntary or involuntary dissolution of the Corporation; or (v) the Corporation
(or any successor thereto, by merger, consolidation or otherwise) becoming a
reporting company under the Securities Exchange Act of 1934, as amended. Unless
the parties otherwise agree in writing and except as provided above, this
Agreement shall not terminate, and all rights and obligations hereunder shall
continue in full force and effect, even upon the death of any Shareholder.

 

ARTICLE 5. Miscellaneous.

 

5.1 Notice and Addresses. Except as otherwise provided herein, all notices,
offers, acceptances, consents, waivers and other acts under this Agreement shall
be in writing, and shall not be waived orally and shall be sufficiently given if
delivered against receipted copy or if mailed, postage prepaid, to the addresses
set forth in the opening paragraph of this Agreement, or to such other address
as any of them, by notice to the others, may designate from time to time. Except
as otherwise provided in this Agreement, time shall be counted to or from, as
the case may be, the delivery in person or the mailing.

 

5.2 Governing Law. This Agreement shall be governed and construed in accordance
with the laws of the State of Iowa without regard to such state’s conflicts of
laws principles.

 

 
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5.3 Venue; Jury Trial Waiver. The parties agree that any action or other
proceeding brought by any party under or in relation to this Agreement,
including to interpret or enforce any provision of this Agreement, shall be
brought in, and each party agrees to and does hereby submit to the exclusive
jurisdiction and venue of, the United States District Court of Iowa and any
appellate courts therefrom. The parties each irrevocably waives, to the fullest
extent permitted by law, any right to trial by jury of any claim, demand, action
or cause of action arising under this Agreement, whether now existing or
hereafter arising, and whether in contract, tort, equity, or otherwise. In the
event of a breach by any Shareholder of the provisions of this Agreement, the
Corporation shall be entitled to an injunction restraining such Shareholder from
soliciting employees, customers or suppliers, or from engaging, participating or
otherwise being connected with any business or from otherwise violating the
terms of this Agreement. The Shareholders waive any requirement for security or
the posting of any bond or other surety in connection with any temporary or
permanent award of injunctive, mandatory or other equitable relief. Nothing
herein contained shall be construed as prohibiting the Corporation from pursuing
any other remedies available to it for such breach or threatened breach,
including without limitation the recovery of damages from a Shareholder.

 

5.4 Benefit. This Agreement shall be binding on and shall inure to the benefit
of the parties hereto and their respective executors, administrators, legatees,
distributees, and permitted successors and assigns.

 

5.5 Severability. If any of the provisions, or portions thereof, of this
Agreement are held to be unenforceable or invalid, the validity and
enforceability of the remaining provisions, or portions thereof, shall not be
affected thereby and shall be interpreted and enforced to the greatest extent
permitted by law so as to give effect to the original intent of the parties
hereto.

 

5.6 Amendment. This Agreement may be amended only by written agreement signed by
the Corporation and Shareholder(s) collectively holding capital stock of the
Company with at least sixty percent (60%) of the aggregate voting power of the
then-current aggregate outstanding capital stock of the Company held by
Shareholders. Any amendment effected in accordance with this Section 5.6 shall
be binding upon each Shareholder, regardless of whether such Shareholder
executed the written instrument approving such amendment.

 

5.7 Counterparts. This Agreement may be executed in one or more counterparts,
each of which will be deemed an original, but all of which will constitute one
and the same instrument.

 

5.8 Survival of Agreements. The agreements set forth in this Agreement shall
survive the consummation of the transactions contemplated hereunder.

 

5.9 Number and Gender. Whenever required by the context, the singular number
shall include the plural, and the masculine, feminine or neuter gender shall
include all genders.

 

5.10 Entire Agreement. This Agreement, and the exhibits attached hereto,
supersedes all prior negotiations and constitutes the entire agreement among the
parties with respect to the subject matter hereof.

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed
effective the day and year first above written.

 

 

MEMCINE PHARMACEUTICALS, INC.

 

 

 

 

By:  

 

 

 

Cristopher Grunewald, President

 

  

 
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SHAREHOLDERS:

 

 

Spotlight Innovation Inc.

 

By:          Cristopher Grunewald     Dr. Tony Vanden Bush, Ph.D.     President
          University of Iowa Research Foundation   By:    

  

 
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Schedule A:

 

SCHEDULE OF SHAREHOLDERS

 

Name of Holder

  Shares of
Common Stock  

Dr. Tony Vanden Bush, Ph.D.

 

150,000

 

Spotlight Innovation Inc.

   

822,500

 

University of Iowa Research Foundation

   

27,500

 

Totals

   

1,000,000

 

 

 

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