Exhibit 10.1

 

 

SETTLEMENT AGREEMENT

 

 

THIS SETTLEMENT AGREEMENT (this “Agreement”) is dated this 8th day of January,
2016 (the “Execution Date”), by and between VIROPRO, INC., a Nevada corporation
(the “Company”) and MAGNA EQUITIES II, LLC (f/k/a Hanover Holdings I, LLC), a
New York limited liability company, and its affiliates (the “Holder”) (each a
"Party" and collectively the "Parties"). Capitalized terms not defined herein
shall have the meaning as set forth in the Transaction Documents (as defined
below).

 

RECITALS

 

WHEREAS, the Holder and the Company entered into those certain Securities
Purchase Agreements, dated November 28, 2011, January 17, 2012, and March 21,
2012, pursuant to which, among other things, the Company issued to the Holder
Convertible Promissory Notes of even date, respectively, in the Original
Principal Amounts of $15,000, $35,000, and $25,000, respectively (collectively,
the “Transaction Documents”).

 

WHEREAS, pursuant to recent discussions between the Holder and the Company, the
Holder and the Company have mutually agreed to settle and extinguish any and all
outstanding amounts owed in full satisfaction of the Transaction Documents and
any other transaction between the Company and the Holder in accordance with the
terms of this Agreement (the "Settlement").

 

NOW, THEREFORE, in consideration of the terms and conditions contained herein,
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the Company and the Holder hereby agree as follows:

 

AGREEMENT

 

Section 1. Settlement of Outstanding Amounts Owed. Subject to and upon the terms
and conditions set forth in this Agreement, on the date mutually agreed upon by
the Holder and the Company, the Company hereby agrees to issue, or cause its
registered Transfer Agent to issue to the Holder so that it holds in total an
amount of shares equal to 4.99% of the Company’s Shares Outstanding, being
60,370,336 based on Shares Outstanding of 1,209,826,364 as of 1/7/16 (such
shares, the “Settlement Shares”). The Settlement Shares shall contain a
restrictive legend until such time as the Settlement Shares have been registered
under the 1933 Act or may be sold pursuant to Rule 144 or Regulation S. Upon
receipt of the issuance of the Settlement Shares by the Holder, any and all
outstanding amounts owed by the Company to the Holder pursuant to the
Transaction Documents shall be considered automatically and irrevocably repaid
in full.

 

Section 2. Securities Law Disclosure; Publicity. The Company shall, no later
than four (4) Business Days following the Execution Date, issue a Current Report
on Form 8-K disclosing the material terms of the transactions contemplated
hereby.

 

Section 3. Settlement Shares. The Company shall use commercial best efforts to
ensure the removal of the restrictive legend on the Settlement Shares in the
event that (i) the Settlement Shares are able to be sold under Rule 144 or any
other exemption under the Securities Act and (ii) the Company receives a written
request of the Holder to assist with such removal. Such commercial best efforts
shall include, but not be limited to, providing the Holder, upon the Holder’s
request, with written representation in the form so chosen by the Holder of the
Company’s shell status pursuant to Rule 144(i)(1) of the 1933 Act. The Parties
agree that such commercial best efforts are to be used to effect removal of said
restrictive legend no later than ten (10) Business Days after the Settlement
Shares are able to be sold under Rule 144 or any other exemption under the
Securities Act, the Holder provides a written request to the Company's transfer
agent and the Company to provide a written opinion of the Company's counsel to
provide an opinion to remove the restrictive legend and the Holder has provided
all necessary documentation to the Company's transfer agent and to the Company's
counsel to allow removal of the restrictive legend from the Settlement Shares
(the “Deadline”). If the Company (i) shall determine to prepare and file with
the SEC a Registration Statement relating to an offering for its own account or
the account of others under the 1933 Act of any of its equity securities, other
than on Form S-4 or Form S-8 (each as promulgated under the 1933 Act) or their
then equivalents, and (ii) grants piggyback rights to any of its current debt or
equity holders as of the Execution Date, then the Company shall deliver to the
Investor a written notice of such determination and, if within fifteen days
after the date of the delivery of such notice, the Investor shall so request in
writing, the Company shall include in such Registration Statement all or any
part of the Settlement Shares the Holder requests to be registered.

 

 

 

 

Section 4. Compensation for Buy-In. In addition to any other rights available to
the Holder, if the Company for any reason fails to have the restrictive legend
on the Settlement Shares removed by the Deadline, and if after such Deadline the
Holder is required by its brokerage firm to purchase (in an open market
transaction or otherwise), or the Holder’s brokerage firm otherwise purchases,
shares of Common Stock to deliver in satisfaction of a sale by the Holder of all
or any portion of the Settlement Shares (a “Buy-In”), then the Company shall pay
in cash to the Holder the amount, if any, by which (x) the Holder’s total
purchase price (including any brokerage commissions) for the Common Stock so
purchased exceeds (y) the product of (1) the aggregate number of shares of
Settlement Shares sold by the Holder or the Holder’s brokerage firm multiplied
by (2) the actual sale price at which the sell order giving rise to such
purchase obligation was executed (including any brokerage commissions). The
payment of all amounts due by the Company to the Holder shall be paid no later
than the fifth (5th) trading day after notice is provided by the Holder to the
Company requesting the payment of any such liquidated damages. The Holder shall
provide the Company written notice indicating the amounts payable to such Holder
in respect of the Buy-In and, upon request of the Company, evidence of the
amount of such loss.

 

Section 5. Trading Restrictions. If the Settlement Shares are sold pursuant to a
Registration Statement, as contemplated by Section 3 of this Agreement, the
Holder shall trade no more than 10% of the intra-day volume of the Common Stock
traded on the principal securities exchange or trading market for such security.
Notwithstanding the foregoing, the Holder shall be entitled to sell up to a
minimum of $5,000 worth of Settlement Shares per week. The Holder further agrees
to provide the Company, upon request, with weekly trading records detailing the
number of Settlement Shares sold by the Holder, the net proceeds received from
the sale of such Settlement Shares by the Holder, and the date on which such
shares were sold by the Holder.

 

Section 6. Representations and Warranties of the Company. The Company represents
and warrants to the Buyer that the number of Shares Outstanding contained in
Section 1 of this Agreement is accurate, true, complete, and correct.

 

Section 7. Mutual Release. In consideration of the covenants and agreements
contained in this Agreement, the Company and the Holder hereby fully and forever
release, remise, quit-claim, and discharge each other and their respective
representatives, attorneys, agents, directors, officers, and/or employees from
any and all past, present, or future actions, claims, demands, damages,
accounts, debts, liens, lawsuits, and rights or causes of action of every kind,
name, nature, and description, known or unknown, whether arising out of
contract, tort, or otherwise, in law or equity, that have been asserted or that
could have been asserted among or between the parties arising out of or related
to the Transaction Documents, and/or any historical business dealings or
business relationship among or between the Company and the Holder.

 

Section 8. Scope of Release. By executing this Agreement, the Parties intend to
resolve and settle all outstanding issues that now exist or may exist with
respect to the matters described in the Recitals of this Agreement. 

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Section 9. Right and Power to Grant Release. Each Party warrants that it has not
made any assignment, encumbrance, hypothecation or other complete or partial
transfer of all or any part of any interest, claim, right, damage, cost,
liability, right of action, claim for relief or cause of action released herein
and further warrants and represents to the other that the warranting party is
legally authorized and entitled to settle and release each and every claim,
right, damage, liability, obligation, cost, right of action, claim for relief or
cause of action herein referred to and to give a valid, full and acquaintance
thereof.

 

Section 10. Compromise, No Admission of Liability. The Parties herein
acknowledge that this Agreement is entered into in settlement and compromise of
claims. It is expressly acknowledged and agreed that nothing in this Agreement
shall constitute or be construed as an admission of liability, fault,
wrongdoing, or violation of any rule, regulation, or law, or as evidence of
such. It is further agreed that nothing in this Agreement shall constitute or be
construed as an admission by any party hereto of any issue of law, fact, or
liability.

 

Section 11. Recitals. The terms of this Agreement are contractual and not mere
recitals. The Parties acknowledge the accuracy of the Recitals and incorporate
the Recitals into and make them a part of this Agreement.

 

Section 12. Complete and Entire Agreement. The understandings set forth herein
represent the complete agreement of the Parties and may not be altered or
changed except by the mutual agreement of the Parties, evidenced in a writing
signed by all parties and specifically identified as an amendment to this
Agreement.

 

Section 13. Severability. If any covenant or provision of this Agreement is
invalid, illegal or incapable of being enforced by reason of any rule of law,
administrative order, judicial decision or public policy, all other covenants
and provisions herein shall, nevertheless, remain in full force and effect.

 

Section 14. Choice of Law. This Agreement shall in all respects be interpreted,
enforced and governed by and under the laws of the State of New York, without
regard to New York's rules governing conflicts of law.

 

Section 15. Binding Nature of Agreement. This Agreement and all covenants
contained herein shall be binding upon the parties hereto and their respective
affiliates, administrators, successors, and assigns.

 

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Section 16. Costs of Enforcement. Should one Party seek to enforce any and/or
all terms of this Agreement, the prevailing Party in that enforcement action
shall be entitled to its attorneys’ fees and costs incurred in such action.

 

Section 17. Execution in Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which will be deemed an
original, and it will not be necessary in making proof of this Agreement to
produce or account for more than one such counterpart. A facsimile of an
original signature shall be effective as an original signature.

 

By signing below, the Company and the Holder confirm that they are entering into
this Agreement voluntarily and with a full understanding of all of its terms.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the parties have executed this Settlement Agreement as of
the date first written above.

 

VIROPRO, INC.             By /s/ Kenneth A. Sorensen   Name: Kenneth A. Sorensen
  Title: Chairman               MAGNA EQUITIES II, LLC             By /s/ Marc
Manuel   Name: Marc Manuel   Title: Managing Director  

 

 

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