Exhibit 10.1

 

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February 22, 2018

 

PharmaCyte Biotech, Inc.
23046 Avenida de la Carlota
Suite 600
Laguna Hills, CA 92653

Attention: Kenneth L. Waggoner

 

Re: Financial Advisory, Offering and At the Market Offering (“ATM”)

 

Dear Mr. Waggoner:

 

This letter agreement (“Agreement”) will confirm the basis upon which PharmaCyte
Biotech, Inc. (“Company”) has engaged Aeon Capital, Inc. (“Aeon”) to act as the
Company’s sole financial advisor and exclusive placement agent in connection
with a planned offering of the Company’s shares of common stock (“Common
Stock”), par value $0.0001 per share (“Transaction”).

The terms of our appointment are as follows:

 

1.Engagement Period. The Company hereby engages Aeon, for the period beginning
on the date hereof and ending upon consummation of the “Offering,” as defined
below (“Engagement Period”), subject to the provisions of Section 14 hereof.
During the Engagement Period and as long as Aeon is proceeding in good faith
with the Offering, the Company agrees not to enter into any agreement with any
other source of financing (whether equity, debt or otherwise), any underwriter,
potential underwriter, placement agent, financial advisor, fund, investment
vehicle or any other person or entity in connection with an offering of the
Company’s securities or any other financing by the Company, except as otherwise
mutually agreed to by Aeon and the Company.

 

a.Offering. The Company agrees that, from time to time during the term of this
Agreement, on the terms and subject to the conditions set forth herein, it may
issue and sell through Aeon, acting as agent and/or principal, shares (“Shares”
or “Securities”) of the Company’s Common Stock, having an aggregate offering
price of up to $25,000,000. The Company has filed, in accordance with the
provisions of the Securities Act of 1933, as amended, and the rules and
regulations thereunder (collectively, “Securities Act”), with the Securities and
Exchange Commission (“SEC”) a registration statement on
Form S-3 (File No. 333-220441), including a base prospectus, relating to certain
securities, including the Common Stock, to be issued from time to time by the
Company, and which incorporates by reference documents that the Company has
filed or will file in accordance with the provisions of the Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder (collectively,
“Exchange Act”). The Company will prepare a prospectus supplement specifically
relating to the Shares (“Prospectus Supplement”) to the base prospectus included
as part of such registration statement. Aeon will act the exclusive sales agent
for the Company, on a “reasonable best efforts” basis, in connection with the
Offering.

 

b.Agent Sales. Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company may sell and issue
Shares from time to time through Aeon, acting as sales agent, and Aeon agrees to
use its reasonable best efforts to sell, as sales agent for the Company, the
Shares on the following terms:

 

 

 

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i.The Shares shall be sold on any day that (A) is a trading day for the OTCQB
operated by the OTC Markets Group, Inc. (“OTCQB”), (B) the Chief Executive
Officer of the Company has instructed Aeon by telephone (confirmed promptly by
electronic mail) to make such sales (“Sales Notice”) and (C) the Company has
satisfied its obligations under Section 6 of this Agreement. In each Sales
Notice the Company shall state (A) the maximum amount of the Shares to be sold
by Aeon (subject to the limitations set forth in Section 1(a)), (B) the minimum
price per Share at which such Shares may be sold and (C) the date on which the
sales should begin and end. Subject to the terms and conditions hereof, Aeon
shall use its reasonable efforts to sell all the Shares in accordance with each
Sales Notice delivered to Aeon consistent with its normal trading and sales
practices and applicable state and federal laws, rules and regulations and the
rules of the OTCQB to sell such up to the amount specified, and otherwise in
accordance with the terms of such Sales Notice.

 

ii.The Company acknowledges and agrees that (A) there can be no assurance that
Aeon will be successful in selling the Shares, (B) Aeon will incur no liability
or obligation to the Company or any other person or entity if it does not sell
Shares for any reason other than a failure by Aeon to use its reasonable efforts
consistent with its normal trading and sales practices and applicable law and
regulations to sell such Shares as required under this Agreement and (C) Aeon
shall be under no obligation to purchase Shares on a principal basis pursuant to
this Agreement. Notwithstanding (ii)(C) above, if Aeon purchases and sells as a
principal in any transaction, and not as a sales agent for the Company, Aeon
shall only resell to the public and not through privately negotiated
transactions, or to or for its own account.

 

iii.Aeon may sell Shares by any method permitted by law deemed to be an ATM as
defined in Rule 415 of the Securities Act, including, without limitation, sales
made directly on the OTCQB, on any other existing trading market for the Common
Stock or to or through a market maker. Aeon may also sell Shares in Transactions
structured as a public offering of a distinct block or blocks of the Company’s
Securities (“Block Trades”); provided, however, that any Shares sold in Block
Trades must first be approved for sale by the Company.

 

iv.Aeon shall provide written confirmation (which may be by facsimile or
electronic mail) to the Company following the close of trading on the OTCQB each
day in which the Shares are sold under this Section 1(b) setting forth the
number of the Shares sold on such day, the aggregate sales price, the Net
Proceeds (as defined below) payable to the Company and the compensation payable
by the Company to Aeon with respect to such sales pursuant to Section 2 below.

 

v.Unless otherwise specified in the applicable Sales Notice, settlement for
sales of Shares will occur on the second Business Day following the date on
which such sales are made (each a “Settlement Date”). On or before each
Settlement Date the Company shall, or shall cause its transfer agent to, issue
and deliver the Shares sold pursuant to such Sales Notice to Aeon’s account at
The Depository Trust Company via the DWAC system. The amount of proceeds to be
delivered to the Company on a Settlement Date against receipt of the Shares sold
(“Net Proceeds”) will be equal to the aggregate sales price received by Aeon at
which such Shares were sold, after deduction for (i) Aeon’s commission, discount
or other compensation for such sales payable by the Company pursuant
to Section 2 hereof and (ii) any transaction fees imposed by any governmental or
self-regulatory organization in respect of such sales. On each Settlement Date,
Aeon will deliver the related Net Proceeds in same day funds to an account
designated by the Company on, or prior to, the Settlement Date. 

 

vi.Any obligation of Aeon to use its reasonable efforts to sell the Shares on
behalf of the Company shall be subject to the continuing accuracy of the
representations and warranties of the Company herein, to the performance by the
Company of its obligations hereunder and to the continuing satisfaction of the
additional conditions specified in Section 6 of this Agreement.

 

 

 

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2.Compensation.

 

a.In connection with a Transaction structured as an ATM, the Company will pay
Aeon a cash fee of three percent (3%) (“ATM Placement Fee”) of the aggregate
sales price from the issuance of Securities.

 

b.In connection with a Block Trade, the Company will pay Aeon aggregate
transaction fee (“Traditional Placement Fee”) as stated below.

 

i.Cash Fee. The Company shall pay to Aeon an aggregate cash fee equal to seven
percent (7%) of the aggregate sales price of Securities sold or amount drawn in
the Block Trade.

 

ii.Warrant Fee. In connection with the consummation of a Block Trade the Company
shall issue to Aeon or its designee five-year warrants (“Agent Warrants”) to
purchase an aggregate of five percent (5%) of the number of such Securities sold
by the Company in such Block Trade. The Agent Warrants shall contain customary
terms and be in substantially the form agreed to by the Company and Aeon. The
exercise price for the Agent Warrants shall be the price at which the Shares are
sold in such Block Trade.

 

iii.For any Transaction involving an investor introduced to Aeon by the Company,
the cash compensation described above shall be reduced by three percent (3%).

 

3.Expenses. In addition to any fees or other compensation that may be paid to
Aeon hereunder, whether or not any Transaction occurs, the Company will
reimburse Aeon promptly upon receipt of an invoice for fees and expenses of
Aeon’s counsel related to this Agreement not to exceed $10,000.

 

4.SEC Filings. The Company represents and warrants to, and agrees with, Aeon
that:

 

a.The Company has filed, in accordance with the provisions of the Securities
Act, with the SEC a registration statement on Form S-3 (File No. 333-220441). At
the time of such filing, the Company met the requirements of Form S-3 under the
Securities Act. Such registration statement meets the requirements set forth in
Rule 415(a)(1)(x) under the Securities Act and complies with this Rule. The
Company will file with the SEC, pursuant to Rule 424(b) under the Securities Act
and the rules and regulations (“Rules and Regulations”) of the SEC promulgated
thereunder, a supplement to the form of prospectus included in such registration
statement relating to the placement of the Shares and the plan of distribution
thereof and has advised Aeon of all further information (financial and other)
with respect to the Company required to be set forth therein. Such registration
statement, including the exhibits thereto, as amended at the date of its
effectiveness under the Securities Act, is hereinafter called the “Registration
Statement”; such prospectus in the form in which it appears in the Registration
Statement is hereinafter called the “Base Prospectus”; and the supplemented form
of prospectus, in the form in which it will be filed with the SEC pursuant to
Rule 424(b) (including the Base Prospectus as so supplemented) is hereinafter
called the “Prospectus Supplement.” Any reference in this Agreement to the
Registration Statement, the Base Prospectus or the Prospectus Supplement shall
be deemed to refer to and include the documents incorporated by reference
therein (“Incorporated Documents”) pursuant to Item 12 of Form S-3 which were
filed under the Exchange Act, on or before the date of this Agreement, or the
issue date of the Base Prospectus or the Prospectus Supplement, as the case may
be; and any reference in this Agreement to the terms “amend,” “amendment” or
“supplement” with respect to the Registration Statement, the Base Prospectus or
the Prospectus Supplement shall be deemed to refer to and include the filing of
any document under the Exchange Act after the date of this Agreement, or the
issue date of the Base Prospectus or the Prospectus Supplement, as the case may
be, and deemed to be incorporated therein by reference. All references in this
Agreement to financial statements and schedules and other information that is
“contained,” “included,” “described,” “referenced,” “set forth” or “stated” in
the Registration Statement, the Base Prospectus or the Prospectus Supplement
(and all other references of like import) shall be deemed to mean and include
all such financial statements and schedules and other information that is or is
deemed to be incorporated by reference in the Registration Statement, the Base
Prospectus or the Prospectus Supplement, as the case may be. No stop order
suspending the effectiveness of the Registration Statement or the use of the
Base Prospectus or the Prospectus Supplement has been issued, and no proceeding
for any such purpose is pending or initiated or, to the Company's knowledge,
threatened by the SEC. For purposes of this Agreement, “free writing prospectus”
has the meaning set forth in Rule 405 under the Securities Act and the “Time of
Sale Prospectus” means the preliminary prospectus, if any, together with the
free writing prospectuses, if any, used in connection with the Transaction,
including any documents incorporated by reference therein.

 

 

 

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b.The Registration Statement and any further documents related thereto to be
filed with the SEC will contain all exhibits and schedules as required by the
Securities Act. Each of the Registration Statement and any post-effective
amendment thereto, at the time it became effective, complied in all material
respects with the Securities Act and the Exchange Act and the applicable Rules
and Regulations and did not and, as amended or supplemented, if applicable, will
not, contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading. The Base Prospectus, the Time of Sale Prospectus, if any, and
the Prospectus Supplement, each as of its respective date, comply in all
material respects with the Securities Act and the Exchange Act and the
applicable Rules and Regulations. Each of the Base Prospectus, the Time of Sale
Prospectus, if any, and the Prospectus Supplement, as amended or supplemented,
did not and will not contain as of the date thereof any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The Incorporated Documents, when they were filed with the SEC,
conformed in all material respects to the requirements of the Exchange Act and
the applicable Rules and Regulations, and none of such documents, when they were
filed with the SEC, contained any untrue statement of a material fact or omitted
to state a material fact necessary to make the statements therein (with respect
to Incorporated Documents incorporated by reference in the Base Prospectus or
Prospectus Supplement), in light of the circumstances under which they were
made, not misleading; and any further documents so filed and incorporated by
reference in the Base Prospectus, the Time of Sale Prospectus, if any, or
Prospectus Supplement, when such documents are filed with the SEC, will conform
in all material respects to the requirements of the Exchange Act and the
applicable Rules and Regulations and will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. No post-effective amendment to the Registration Statement reflecting
any facts or events arising after the date thereof which represent, individually
or in the aggregate, a fundamental change in the information set forth therein
is required to be filed with the SEC. There are no documents required to be
filed with the SEC in connection with the transaction contemplated hereby that
(x) have not been filed as required pursuant to the Securities Act or (y) will
not be filed within the requisite time period. There are no contracts or other
documents required to be described in the Base Prospectus, the Time of Sale
Prospectus, if any, or Prospectus Supplement, or to be filed as exhibits or
schedules to the Registration Statement, that have not been described or filed
as required.

 

c.The Company has delivered, or will as promptly as practicable deliver, to Aeon
complete conformed copies of the Registration Statement and of each consent and
certificate of experts, as applicable, filed as a part thereof, and conformed
copies of the Registration Statement (without exhibits), the Base Prospectus,
the Time of Sale Prospectus, if any, and the Prospectus Supplement, as amended
or supplemented, in such quantities and at such places as Aeon reasonably
request. Neither the Company nor any of its directors and officers has
distributed and none of them will distribute, any offering material in
connection with the offering and sale of the Shares other than the Base
Prospectus, the Time of Sale Prospectus, if any, the Prospectus Supplement, the
Registration Statement, copies of the documents incorporated by reference
therein and any other materials permitted by the Securities Act.

 

5.Representations and Warranties. Except as set forth under the corresponding
section of the Disclosure Schedules attached to this Agreement, which Disclosure
Schedules shall be deemed a part hereof, the Company hereby makes the
representations and warranties set forth below to the Aeon.

 

a.Organization and Qualification. All of the direct and indirect subsidiaries of
the Company (“Subsidiary” or “Subsidiaries”) are set forth on Schedule 5(a).
Except as set forth in Schedule 5(a), the Company owns, directly or indirectly,
all of the capital stock or other equity interests of each Subsidiary free and
clear of any “Liens” ,which for purposes of this Agreement shall mean a lien,
charge, security interest, encumbrance, right of first refusal, preemptive right
or other restriction, and all the issued and outstanding shares of capital stock
of each Subsidiary are validly issued and are fully paid, non-assessable and
free of preemptive and similar rights to subscribe for or purchase securities.
The Company and each of the Subsidiaries organized under the laws of the United
States is an entity duly incorporated or otherwise organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation or
organization (as applicable), with the requisite power and authority to own and
use its properties and assets and to carry on its business as currently
conducted. Except as set forth on Schedule 5(a), neither the Company nor any
Subsidiary is in violation or default of any of the provisions of its respective
certificate or articles of incorporation, bylaws or other organizational or
charter documents. Each of the Company and the Subsidiaries is duly qualified to
conduct business and is in good standing as a foreign corporation or other
entity in each jurisdiction in which the nature of the business conducted or
property owned by it makes such qualification necessary, except where the
failure to be so qualified or in good standing, as the case may be, could not
have or reasonably be expected to result in (i) a material adverse effect on the
legality, validity or enforceability of this Agreement, (ii) a material adverse
effect on the results of operations, assets, business, prospects or condition
(financial or otherwise) of the Company and the Subsidiaries, taken as a whole
or (iii) a material adverse effect on the Company’s ability to perform in any
material respect on a timely basis its obligations under this Agreement (any of
(i), (ii) or (iii), a “Material Adverse Effect”) and no “Proceeding” ,which for
purposes of this Agreement shall mean any action, claim, lawsuit, investigation
or proceeding (including, without limitation, an investigation or partial
proceeding, such as a deposition, whether commenced or threatened) has been
instituted in any such jurisdiction revoking, limiting or curtailing or seeking
to revoke, limit or curtail such power and authority or qualification.

 

 

 

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b.Authorization; Enforcement. The Company has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by this
Agreement and otherwise to carry out its obligations hereunder. The execution
and delivery of this Agreement by the Company and the consummation by it of the
transactions contemplated hereby have been duly authorized by all necessary
action on the part of the Company, and no further action is required by the
Company, its board of directors or its stockholders in connection therewith
other than in connection with the “Required Approvals” (as defined in subsection
5(d) below). This Agreement has been (or upon delivery will have been) duly
executed by the Company and, when delivered in accordance with the terms hereof,
will constitute the valid and binding obligation of the Company enforceable
against the Company in accordance with its terms except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium and other laws of
general application affecting enforcement of creditors’ rights generally and
(ii) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies.

 

c.No Conflicts. The execution, delivery and performance of this Agreement by the
Company, the issuance and sale of the Securities and the consummation by the
Company of the other transactions contemplated hereby do not and will not (i)
conflict with or violate any provision of the Company’s or any Subsidiary’s
certificate or articles of incorporation, bylaws or other organizational or
charter documents, or (ii) conflict with, or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, result
in the creation of any Lien upon any of the properties or assets of the Company
or any Subsidiary, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both) of
any agreement, credit facility, debt or other instrument evidencing a Company or
Subsidiary debt or otherwise, or other understanding to which the Company or any
Subsidiary is a party or by which any property or asset of the Company or any
Subsidiary is bound or affected or (iii) subject to the Required Approvals,
conflict with or result in a violation of any law, rule, regulation, order,
judgment, injunction, decree or other restriction of any court or governmental
authority to which the Company or a Subsidiary is subject (including federal and
state securities laws and regulations), or by which any property or asset of the
Company or a Subsidiary is bound or affected; except in the case of each of
clauses (ii) and (iii) could not have or reasonably be expected to result in a
Material Adverse Effect.

 

d.Filings, Consents and Approvals. The Company is not required to obtain any
consent, waiver, authorization or order of, give any notice to, or make any
filing or registration with, any court or other federal, state, local or other
governmental authority or other “Person” , defined as an individual or
corporation, partnership, trust, incorporated or unincorporated association,
joint venture, limited liability company, joint stock company, government (or an
agency or subdivision thereof) or other entity of any kind, including, without
limitation, the OTCQB) in connection with the execution, delivery and
performance by the Company of this Agreement, other than such filings as are
required to be made under applicable federal and state securities laws
(collectively, “Required Approvals”).

 

e.Issuance of the Securities; Registration. The Securities are duly authorized
and, when issued and paid for in accordance with this Agreement, will be duly
and validly issued, fully paid and nonassessable, free and clear of all liens
imposed by the Company other than restrictions on transfer provided for in this
Agreement. The issuance by the Company of the Securities will be registered
under the Securities Act. All of the Securities will be freely transferable and
tradable by the purchasers of the Securities (“Purchaser” or “Purchasers”)
without restriction, other than any restrictions arising solely from an act or
omission of a Purchaser. The Securities will be issued pursuant to the
Registration Statement, and the issuance of the Securities will be registered by
the Company under the Securities Act. The Registration Statement is available
for the issuance of the Securities thereunder, and the Company has not received
any notice that the SEC has issued or intends to issue a stop-order with respect
to the Registration Statement or that the SEC otherwise has suspended or
withdrawn the effectiveness of the Registration Statement, either temporarily or
permanently, or intends or has threatened in writing to do so. The "Plan of
Distribution" section under the Registration Statement permits the issuance and
sale of the Securities hereunder. Upon receipt of the Securities, the Purchasers
will have good and marketable title to such Securities, and the Securities will
be freely tradable on the OTCQB.

 

f.Capitalization. The capitalization of the Company is as set forth on Schedule
5(f). Except as set forth on Schedule 5(f), the Company has not issued any
capital stock since its most recently filed periodic report under the Exchange
Act, other than pursuant to the exercise of employee stock options under the
Company’s stock option plans, the issuance of shares of Common Stock to
employees and pursuant to the conversion or exercise of securities exercisable,
exchangeable or convertible into Common Stock (“Common Stock Equivalents”). No
Person has any right of first refusal, preemptive right, right of participation,
or any similar right to participate in the transactions contemplated by this
Agreement. Except as a result of the purchase and sale of the Securities or as
described in the SEC Reports (as defined below) or disclosed to Aeon, there are
no outstanding options, warrants, scrip rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities, rights or
obligations convertible into or exercisable or exchangeable for, or giving any
Person any right to subscribe for or acquire, any shares of Common Stock, or
contracts, commitments, understandings or arrangements by which the Company or
any Subsidiary is or may become bound to issue additional shares of Common Stock
or Common Stock Equivalents. The issuance and sale of the Securities will not
obligate the Company to issue shares of Common Stock or other securities to any
Person (other than the Purchasers) and will not result in a right of any holder
of Company securities to adjust the exercise, conversion, exchange or reset
price under such securities. All of the outstanding Shares are validly issued,
fully paid and nonassessable, have been issued in compliance with all federal
and state securities laws, and none of such outstanding Shares was issued in
violation of any preemptive rights or similar rights to subscribe for or
purchase securities. There are no stockholder agreements, voting agreements or
other similar agreements with respect to the Company’s capital stock to which
the Company is a party or, to the knowledge of the Company, between or among any
of the Company’s stockholders, except as otherwise disclosed to Aeon.

 

 

 

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g.SEC Reports; Financial Statements. The Company has complied in all material
respects with requirements to file all reports, schedules, forms, statements and
other documents required to be filed by it under the Securities Act and the
Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two
years preceding the date of this Agreement (the foregoing materials, including
the exhibits thereto and documents incorporated by reference therein, being
collectively referred to herein as the “SEC Reports”) on a timely basis or has
received a valid extension of such time of filing and has filed any such SEC
Reports prior to the expiration of any such extension. As of their respective
dates, the SEC Reports complied in all material respects with the requirements
of the Securities Act and the Exchange Act and the Rules and Regulations. None
of the SEC Reports, when filed, contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The financial
statements of the Company included in the SEC Reports comply in all material
respects with applicable accounting requirements and Rules and Regulations with
respect thereto as in effect at the time of filing. Such financial statements
have been prepared in accordance with United States generally accepted
accounting principles applied on a consistent basis during the periods involved
(“GAAP”), except as may be otherwise specified in such financial statements or
the Notes thereto and except that unaudited financial statements may not contain
all Notes required by GAAP, and fairly present in all material respects the
financial position of the Company and its consolidated subsidiaries as of and
for the dates thereof and the results of operations and cash flows for the
periods then ended, subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments.

 

h.Material Changes; Undisclosed Events, Liabilities or Developments. Since the
date of the latest audited financial statements included within the SEC Reports,
except as specifically disclosed in the SEC Reports, (i) there has been no
event, occurrence or development that has had or that could reasonably be
expected to result in a Material Adverse Effect, (ii) the Company has not
incurred any liabilities (contingent or otherwise) other than (A) trade payables
and accrued expenses incurred in the ordinary course of business consistent with
past practice and (B) liabilities not required to be reflected in the Company’s
financial statements pursuant to GAAP or required to be disclosed in filings
made with the SEC, (iii) the Company has not altered its method of accounting,
(iv) the Company has not declared or made any dividend or distribution of cash
or other property to its stockholders or purchased, redeemed or made any
agreements to purchase or redeem any shares of its capital stock and (v) the
Company has not issued any equity securities to any officer, director or
“Affiliate” (defined as any Person that, directly or indirectly through one or
more intermediaries, controls or is controlled by or is under common control
with a Person, as such terms are used in and construed under Rule 144 under the
Securities Act), except pursuant to existing Company stock option plans or as a
result of a direct stock grant or a direct option grant. The Company does not
have pending before the SEC any request for confidential treatment of
information. Except for the issuance of the Securities contemplated by this
Agreement or as set forth on Schedule 5(h), no event, liability or development
has occurred or exists with respect to the Company or a Subsidiary or their
respective business, properties, operations or financial condition, that would
be required to be disclosed by the Company under applicable securities laws at
the time this representation is made that has not been publicly disclosed one
trading day prior to the date hereof.

 

i.Litigation. There is no action, lawsuit, inquiry, notice of violation,
Proceeding or investigation pending or, to the knowledge of the Company,
threatened against or affecting the Company, any Subsidiary or any of their
respective properties before or by any court, arbitrator, governmental or
administrative agency or regulatory authority (federal, state, county, local or
foreign) (collectively, “Action”) which (i) adversely affects or challenges the
legality, validity or enforceability of any of this Agreement or the Securities
or (ii) could, if there were an unfavorable decision, have or reasonably be
expected to result in a Material Adverse Effect. Neither the Company nor any
Subsidiary, nor any director or officer thereof, is or has been the subject of
any Action involving a claim of violation of or liability under federal or state
securities laws or a claim of breach of fiduciary duty. There has not been, and
to the knowledge of the Company, there is not pending or contemplated, any
investigation by the SEC involving the Company or any current or former director
or officer of the Company. The SEC has not issued any stop order or other order
suspending the effectiveness of any registration statement filed by the Company
or any Subsidiary under the Exchange Act or the Securities Act. No employee of
the Company’s or any Subsidiary is a member of a union that relates to such
employee’s relationship with the Company, and neither the Company or any of its
Subsidiaries is a party to a collective bargaining agreement. The Company and
its Subsidiaries believe that their relationships with their employees are good.
No executive officer, to the knowledge of the Company, is, or is now expected to
be, in violation of any material term of any employment contract,
confidentiality, disclosure or proprietary information agreement or
non-competition agreement, or any other contract or agreement or any restrictive
covenant, and the continued employment of each such executive officer does not
subject the Company or any of its Subsidiaries to any liability with respect to
any of the foregoing matters. The Company and its Subsidiaries are in compliance
with all federal, state, local and foreign laws and regulations relating to
employment and employment practices, terms and conditions of employment and
wages and hours, except where the failure to be in compliance could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

 

 

 

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j.Labor Relations. No material labor dispute exists or, to the knowledge of the
Company, is imminent with respect to any of the employees of the Company which
could reasonably be expected to result in a Material Adverse Effect.

 

k.Compliance. Neither the Company nor any Subsidiary (i) is in default under or
in violation of (and no event has occurred that has not been waived that, with
notice or lapse of time or both, would result in a default by the Company or any
Subsidiary under), nor has the Company or any Subsidiary received notice of a
claim that it is in default under or that it is in violation of, any indenture,
loan or credit agreement or any other agreement or instrument to which it is a
party or by which it or any of its properties is bound (whether or not such
default or violation has been waived), (ii) is in violation of any order of any
court, arbitrator or governmental body or (iii) is or has been in violation of
any statute, rule or regulation of any governmental authority, including
,without limitation, all foreign, federal, state and local laws applicable to
its business and all such laws that affect the environment, except in each case
as could not reasonably be expected to have a Material Adverse Effect.

 

l.Regulatory Permits. The Company and the Subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state, local or
foreign regulatory authorities necessary to conduct their respective businesses
as described in the SEC Reports, except where the failure to possess such
permits could not have or reasonably be expected to result in a Material Adverse
Effect (“Material Permits”). Neither the Company nor any Subsidiary has received
any notice of proceedings relating to the revocation or modification of any
Material Permit.

 

m.Title to Assets. To the extent possible, the Company and the Subsidiaries have
good and marketable title in fee simple to all real property owned by them that
is material to the business of the Company and the Subsidiaries and good and
marketable title in all personal property owned by them that is material to the
business of the Company and the Subsidiaries, in each case free and clear of all
Liens, except for Liens as do not materially affect the value of such property
and do not materially interfere with the use made and proposed to be made of
such property by the Company and the Subsidiaries and Liens for the payment of
federal, state or other taxes, the payment of which is neither delinquent nor
subject to penalties. Any real property and facilities held under lease by the
Company and the Subsidiaries are held by them under valid, subsisting and
enforceable leases with which the Company and the Subsidiaries are in
compliance.

 

n.Patents and Trademarks. The Company and the Subsidiaries have, or have rights
to use, all patents, patent applications, trademarks, trademark applications,
service marks, trade names, trade secrets, inventions, copyrights, licenses and
other similar intellectual property rights necessary or material for use in
connection with their respective businesses as described in the SEC Reports and
which the failure to so have could reasonably be expected to have a Material
Adverse Effect (collectively, “Intellectual Property Rights”). Neither the
Company nor any Subsidiary has received notice (written or otherwise) that the
Intellectual Property Rights used by the Company or any Subsidiary violates or
infringes upon the rights of any third party. To the knowledge of the Company,
all such Intellectual Property Rights are enforceable and there is no existing
infringement by another Person of any of the Intellectual Property Rights of
others. The Company and its Subsidiaries have taken reasonable security measures
to protect the secrecy, confidentiality and value of all their intellectual
properties, except where failure to do so could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.

 

o.Insurance. The Company is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent
and customary in the businesses in which the Company is engaged, including, but
not limited to, directors and officers insurance coverage at least $5 million in
the aggregate. To the best knowledge of the Company, such insurance contracts
and policies are accurate and complete. The Company has no reason to believe
that it will not be able to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage from similar insurers as may
be necessary to continue its business without a significant increase in cost.

 

p.Transactions with Affiliates and Employees. Except as set forth in the SEC
Reports, none of the officers or directors of the Company and, to the knowledge
of the Company, none of its employees are presently a party to any transaction
with the Company or any Subsidiary (other than for services as employees,
officers and directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of real
or personal property to or from, or otherwise requiring payments to or from any
officer, director or such employee or, to the knowledge of the Company, any
entity in which any officer, director, or any such employee has a substantial
interest or is an officer, director, trustee or partner, other than for (i)
payment of salary or consulting fees for services rendered, (ii) reimbursement
of expenses incurred on behalf of the Company and (iii) other employee benefits,
including stock option agreements with the Company.

 

 

 

 7 

 

 

q.Sarbanes-Oxley. Except as set forth on Schedule 5(q), the Company is in
material compliance with the provisions of the Sarbanes-Oxley Act of 2002 which
are applicable to it as of the date of this Agreement.

 

r.Certain Fees. Except as otherwise provided in this Agreement, no brokerage or
finder’s fees or commissions are or will be payable by the Company to any
broker, financial advisor or consultant, finder, placement agent, investment
banker, bank or other Person with respect to the transactions contemplated by
this Agreement. The Purchasers shall have no obligation with respect to any fees
or with respect to any claims made by or on behalf of other Persons for fees of
a type contemplated in this Section that may be due in connection with the
transactions contemplated by this Agreement.

 

s.OTCQB Rules. The issuance and sale of the Securities hereunder will not
contravene the rules and regulations of the OTCQB.

 

t.Investment Company. The Company is not, and is not an Affiliate of, and
immediately after receipt of payment for the Securities, will not be or be an
Affiliate of, an “investment company” within the meaning of the Investment
Company Act of 1940, as amended. The Company shall conduct its business in a
manner so that it will not become subject to the Investment Company Act.

 

u.Registration Rights. Except as disclosed in the SEC Reports, no Person has any
right to cause the Company to cause the registration under the Securities Act of
any Securities of the Company.

 

v.Application of Takeover Protections. The Company and its Board of Directors
will take reasonable actions to render inapplicable any control share
acquisition, business combination, poison pill (including any distribution under
a rights agreement) or other similar anti-takeover provision under the Company’s
Certificate of Incorporation (or similar charter documents) or the laws of its
state of incorporation that is or could become applicable to the Purchasers as a
result of the Purchasers and the Company fulfilling their obligations or
exercising their rights under this Agreement, including without limitation as a
result of the Company’s issuance of the Securities and the Purchasers’ ownership
of the Securities.

 

w.Solvency. Based on the financial condition of the Company as of the date of
this Agreement: (i) the fair saleable value of the Company’s assets exceeds the
amount that will be required to be paid on or in respect of the Company’s
existing debts and other liabilities (including known contingent liabilities) as
they mature; (ii) the Company’s assets do not constitute unreasonably small
capital to carry on its business for the current fiscal year as now conducted
and as proposed to be conducted including its capital needs taking into account
the particular capital requirements of the business conducted by the Company,
and projected capital requirements and capital availability thereof; and (iii)
the current cash flow of the Company, together with the proceeds the Company
would receive, were it to liquidate all of its assets, after taking into account
all anticipated uses of the cash, would be sufficient to pay all amounts on or
in respect of its debt when such amounts are required to be paid. The Company
does not intend to incur debts beyond its ability to pay such debts as they
mature (taking into account the timing and amounts of cash to be payable on or
in respect of its debt). The Company has no knowledge of any facts or
circumstances which lead it to believe that it will file for reorganization or
liquidation under the bankruptcy or reorganization laws of any jurisdiction
within one (1) year from the date of this Agreement. The SEC Reports set forth
as of the dates thereof all outstanding secured and unsecured Indebtedness of
the Company or any Subsidiary, or for which the Company or any Subsidiary has
commitments. For the purposes of this Agreement, “Indebtedness” shall mean: (i)
any liabilities for borrowed money or amounts owed in excess of $50,000 (other
than trade accounts payable and accrued expenses incurred in the ordinary course
of business); (ii) all guaranties, endorsements and other contingent obligations
in respect of Indebtedness of others, whether or not the same are or should be
reflected in the Company’s balance sheet (or the Notes thereto), except
guaranties by endorsement of negotiable instruments for deposit or collection or
similar transactions in the ordinary course of business; and (iii) the present
value of any lease payments in excess of $50,000 due under leases required to be
capitalized in accordance with GAAP. Neither the Company nor any Subsidiary is
in default with respect to any Indebtedness.

 

x.Tax Status. Except for matters that would not, individually or in the
aggregate, have or reasonably be expected to result in a Material Adverse
Effect, the Company and each Subsidiary has filed all necessary federal, state
and foreign income and franchise tax returns and has paid or accrued all taxes
shown as due thereon, and the Company has no knowledge of a tax deficiency which
has been asserted or threatened against the Company or any Subsidiary.

 

 

 

 8 

 

 

y.Foreign Corrupt Practices. Neither the Company, nor to the knowledge of the
Company, any agent or other person acting on behalf of the Company, has (i)
directly or indirectly, used any funds for unlawful contributions, gifts,
entertainment or other unlawful expenses related to foreign or domestic
political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to any foreign or domestic political
parties or campaigns from corporate funds, (iii) failed to disclose fully any
contribution made by the Company (or made by any person acting on its behalf of
which the Company is aware) which is in violation of law or (iv) violated in any
material respect any provision of the Foreign Corrupt Practices Act of 1977, as
amended.

 

z.Audit Firm. To the knowledge of the Company, the Company’s audit firm who the
Company expects will express its opinion with respect to the financial
statements to be included in the Company’s next Annual Report on Form 10-K, is a
registered public accounting firm as required by the Securities Act.

 

aa.Regulation M Compliance. The Company has not, and to its knowledge no one
acting on its behalf has, (i) taken, directly or indirectly, any action designed
to cause or to result in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of any of the
Securities, (ii) sold, bid for, purchased, or, paid any compensation for
soliciting purchases of, any of the Securities (other than for Aeon’s placement
of the Securities), or (iii) paid or agreed to pay to any person any
compensation for soliciting another to purchase any other securities of the
Company.

 

bb.Approvals. The issuance and quotation of the Shares on the OTCQB requires no
further approvals, including but not limited to, the approval of shareholders.

 

cc.FINRA Affiliations. There are no affiliations with any Financial Industry
Regulatory Authority (“FINRA”) member firm among the Company’s officers,
directors or, to the knowledge of the Company, any five percent (5%) or greater
stockholder of the Company, except as set forth in the Base Prospectus.

 

6.Offering Conditions. The Offering will be conditioned upon, among other
things, the following:

 

a.No stop order suspending the effectiveness of the Registration Statement shall
have been issued and no proceedings for that purpose shall have been initiated
or threatened by the SEC, and any request for additional information on the part
of the SEC (to be included in the Registration Statement, the Base Prospectus or
the Prospectus Supplement or otherwise) shall have been complied with to the
reasonable satisfaction of Aeon.

 

b.Aeon shall not have discovered and disclosed to the Company on or prior to any
Settlement Date that the Registration Statement, the Base Prospectus or the
Prospectus Supplement or any amendment or supplement thereto contains an untrue
statement of a fact which, in the opinion of counsel for Aeon, is material or
omits to state any fact which, in the opinion of such counsel, is material and
is required to be stated therein or is necessary to make the statements therein
not misleading.

 

c.All corporate proceedings and other legal matters incident to the
authorization, form, execution, delivery and validity of each of this Agreement,
the Shares, the Registration Statement, the Base Prospectus and the Prospectus
Supplement and all other legal matters relating to this Agreement and the
transactions contemplated hereby shall be reasonably satisfactory in all
material respects to counsel for Aeon, and the Company shall have furnished to
such counsel all documents and information that they may reasonably request to
enable them to opine upon such matters.

 

d.Aeon shall have received from outside counsel to the Company such counsel’s
written opinion, addressed to Aeon in form and substance reasonably satisfactory
to Aeon, which opinion shall include a “10b-5” representation from such counsel.

 

e.(i) Neither the Company nor any of its Subsidiaries shall have sustained since
the date of the latest audited financial statements included or incorporated by
reference in the Base Prospectus, any loss or interference with its business
from fire, explosion, flood, terrorist act or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth in or contemplated by the Base
Prospectus and (ii) since such date there shall not have been any change in the
capital stock or long-term debt of the Company or any of its Subsidiaries or any
change, or any development involving a prospective change, in or affecting the
business, general affairs, management, financial position, stockholders’ equity,
results of operations or prospects of the Company and its Subsidiaries,
otherwise than as set forth in or contemplated by the Base Prospectus, the
effect of which, in any such case described in clause (i) or (ii), is, in the
judgment of Aeon, so material and adverse as to make it impracticable or
inadvisable to proceed with the sale or delivery of the Shares on the terms and
in the manner contemplated by the Base Prospectus, the Time of Sale Prospectus,
if any, and the Prospectus Supplement.

 

 

 

 9 

 

 

f.The Common Stock is registered under the Exchange Act and, as of the date of
each Settlement Date, the applicable Shares shall be listed and authorized for
trading on the OTCQB, and satisfactory evidence of such actions shall have been
provided to the Aeon. The Company shall have taken no action designed to, or
likely to have the effect of terminating the registration of the Common Stock
under the Exchange Act or delisting or suspending from trading the Common Stock
from the OTCQB, nor has the Company received any information suggesting that the
SEC is contemplating terminating such registration or the OTCQB is contemplating
not quoting the Company’s Shares on the OTCQB.

 

g.Subsequent to the execution and delivery of this Agreement, there shall not
have occurred any of the following: (i) trading in securities generally on the
New York Stock Exchange, the NASDAQ Stock Market, the OTCQB or in trading in any
securities of the Company on any exchange or in the over-the-counter market
shall have been suspended or minimum or maximum prices or maximum ranges for
prices shall have been established on any such exchange or such market by the
SEC, by such exchange or by any other regulatory body or governmental authority
having jurisdiction; (ii) a banking moratorium shall have been declared by
federal or state authorities or a material disruption has occurred in commercial
banking or securities settlement or clearance services in the United States;
(iii) the United States shall have become engaged in hostilities in which it is
not currently engaged, the subject of an act of terrorism, there shall have been
an escalation in hostilities involving the United States, or there shall have
been a declaration of a national emergency or war by the United States; or (iv)
there shall have occurred any other calamity or crisis or any change in general
economic, political or financial conditions in the United States or elsewhere,
if the effect of any such event in clause (iii) or (iv) makes it, in the sole
judgment of Aeon, impracticable or inadvisable to proceed with the sale or
delivery of the Shares on the terms and in the manner contemplated by the Base
Prospectus and the Prospectus Supplement.

 

h.No action shall have been taken and no statute, rule, regulation or order
shall have been enacted, adopted or issued by any governmental agency or body
which would, as of a Settlement Date, prevent the issuance or sale of the Shares
or materially and adversely affect or potentially and adversely affect the
business or operations of the Company; and no injunction, restraining order or
order of any other nature by any federal or state court of competent
jurisdiction shall have been issued as of a Settlement Date which would prevent
the issuance or sale of the Shares or materially and adversely affect or
potentially and adversely affect the business or operations of the Company.

 

i.The Company will prepare and file with the SEC a Current Report on Form 8-K
with respect to the Company’s engagement of Aeon, including this Agreement as an
exhibit thereto.

 

j.If applicable, the Company shall have entered into subscription agreements
with each of the Purchasers and such agreements shall be in full force and
effect and shall contain representations and warranties of the Company as agreed
between the Company and the Purchasers.

 

k.FINRA shall have raised no objection to the fairness and reasonableness of the
terms and arrangements of this Agreement. In addition, the Company shall, if
requested by Aeon, make or authorize Aeon’s counsel to make on the Company’s
behalf, an Issuer Filing with FINRA pursuant to NASD Rule 2710 with respect to
the Registration Statement and pay all filing fees required in connection
therewith.

 

l.Prior to each Settlement Date, the Company shall have furnished to Aeon such
further information, certificates and documents as Aeon may reasonably request.

 

7.Finders’ Fees and Adjustments. The Company represents to Aeon that the Company
is or will be liable for any finder’s fees to third parties in connection with
the introduction of the Company to Aeon. The Company represents and warrants to
Aeon that the entry into this Agreement or any other action of the Company in
connection with the proposed Offering will not violate any agreement between the
Company and any other underwriter. Aeon reserves the right to reduce any item of
their compensation or adjust the terms thereof as specified herein in the event
that a determination and/or suggestion will be made by FINRA to the effect that
the underwriters’ aggregate compensation is in excess of FINRA rules or that the
terms thereof require adjustment; provided, however, the aggregate compensation
otherwise to be paid to the underwriters by the Company may not be increased
above the amounts stated herein without the written approval of the Company.

 

8.Integration. Other than as previously disclosed or reflected in its public
filings, neither the Company nor any of its affiliates has either prior to the
effective date of the Registration Statement, made any offer or sale of any
securities which are required to be “integrated” pursuant to the Securities Act
or the regulations thereunder with the offer and sale of the Shares pursuant to
the Registration Statement.

 

 

 

 10 

 

 

9.Company Cooperation. During the Engagement Period, the Company agrees to
cooperate with Aeon and to furnish, or cause to be furnished, to Aeon, any and
all information and data concerning the Company and the Offering that Aeon
reasonably deems appropriate (“Information”). During the Engagement Period, the
Company will provide Aeon reasonable access during normal business hours to all
of the Company’s assets, properties, books, contracts, commitments and records
and to the Company’s officers, directors, employees, appraisers, independent
accountants, legal counsel and other consultants and advisors. The Company
acknowledges and agrees that in rendering its services hereunder, Aeon will be
using and relying on such Information (and information available from public
sources and other sources deemed reliable by Aeon) without independent
verification thereof by Aeon or independent appraisal by Aeon of any of the
Company’s assets. Except as contemplated by the terms hereof or as required by
applicable law, Aeon will keep strictly confidential all non-public Information
concerning the Company provided to Aeon. No obligation of confidentiality will
apply to Information that: (i) is in the public domain as of the date hereof or
hereafter enters the public domain without a breach by Aeon; (ii) was known or
became known by Aeon prior to the Company’s disclosure thereof to Aeon as
demonstrated by the existence of its written records; (iii) becomes known to
Aeon from a source other than the Company, and other than by the breach of an
obligation of confidentiality owed to the Company; (iv) is disclosed by the
Company to a third party without restrictions on its disclosure; or (v) is
independently developed by Aeon.

 

10.Administration. Aeon will collaborate on the engagement of all other
professionals, background checks and the like to avoid duplication of effort or
cost. For administrative convenience, Aeon will serve to administer such
professionals and will pay and submit invoices for expense reimbursement to the
Company related to services and expenses that are for the benefit of Aeon. Other
reimbursable expenses of Aeon will be submitted directly to the Company for
payment in accordance with Section 1 hereof. The allocation of the compensation
payable to Aeon as selling commission to other dealers or for other permitted
purposes set forth in Section 1 of this Agreement shall be determined by Aeon
without reference to the Company. Disbursements of such allocations shall be
made solely and directly by Aeon as it determines.

 

11.Third-Party Rights. This Agreement does not create, and shall not be
construed as creating, rights enforceable by any person or entity not a party
hereto, except those entitled hereto by virtue of the indemnification provisions
hereof. The Company acknowledges and agrees that Aeon is not and shall not be
construed as a fiduciary of the Company and shall have no duties or liabilities
to the equity holders or the creditors of the Company or any other person by
virtue of this Agreement or the retention of Aeon hereunder, all of which are
hereby expressly waived.

 

12.Indemnification.

 

a.To the extent permitted by law, the Company will indemnify Aeon, together with
its respective affiliates, stockholders, directors, officers, employees and
controlling persons (within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act) against all losses, claims, damages, expenses
and liabilities, as the same are incurred (including the reasonable fees and
expenses of counsel), relating to or arising out of its activities hereunder or
pursuant to this Agreement, except to the extent that any losses, claims,
damages, expenses or liabilities (or actions in respect thereof) are found in a
final judgment (not subject to appeal) by a court of law to have resulted
primarily and directly from any Aeon’s willful misconduct, bad faith or gross
negligence in performing the services described in this Agreement.

 

b.Promptly after receipt by any Aeon of notice of any claim or the commencement
of any action or Proceeding with respect to which such Aeon is entitled to
indemnity hereunder, Aeon will notify the Company in writing of such claim or of
the commencement of such action or proceeding, but failure to so notify the
Company shall not relieve the Company from any obligation it may have hereunder,
except and only to the extent such failure results in the forfeiture by the
Company of substantial rights and defenses. If the Company so elects or is
requested by Aeon, the Company will assume the defense of such action or
Proceeding and will employ counsel reasonably satisfactory to such Aeon and will
pay the fees and expenses of such counsel. Notwithstanding the preceding
sentence, Aeon will be entitled to employ counsel separate from counsel for the
Company and from any other party in such action if counsel for Aeon reasonably
determines that it would be inappropriate under the applicable rules of
professional responsibility for the same counsel to represent both the Company
and Aeon. In such event, the reasonable fees and disbursements of no more than
one such separate counsel will be paid by the Company, in addition to local
counsel. The Company will have the exclusive right to settle the claim or
Proceeding provided that the Company will not settle any such claim, action or
proceeding unless either: (i) such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising or
that may arise out of such claim, action or Proceeding; or (ii) the Company has
obtained the prior written consent of Aeon, which consent shall not be
unreasonably withheld.

 

c.The Company agrees to notify Aeon promptly of the assertion against it or any
other person of any claim or the commencement of any action or Proceeding
relating to a transaction contemplated by this Agreement.

 

 

 

 11 

 

 

d.If for any reason the foregoing indemnity is unavailable to Aeon or
insufficient to hold Aeon harmless, then the Company shall contribute to the
amount paid or payable by Aeon as a result of such losses, claims, damages or
liabilities in such proportion as is appropriate to reflect not only the
relative benefits received by the Company on the one hand and Aeon on the other,
but also the relative fault of the Company on the one hand and Aeon on the other
that resulted in such losses, claims, damages or liabilities, as well as any
relevant equitable considerations. The amounts paid or payable by a party in
respect of losses, claims, damages and liabilities referred to above shall be
deemed to include any reasonable legal or other fees and expenses incurred in
defending any litigation, proceeding or other action or claim. Notwithstanding
the provisions hereof, Aeon’s share of the liability hereunder shall not be in
excess of the amount of fees actually received, or to be received, by Aeon under
this Agreement (excluding any amounts received as reimbursement of expenses
incurred by Aeon).

 

e.These indemnification provisions shall remain in full force and effect whether
or not the Transaction contemplated by this Agreement is completed, shall
survive the termination of this Agreement and shall be in addition to any
liability that the Company might otherwise have to any indemnified party under
this Agreement or otherwise.

 

13.Termination. The term of Aeon's engagement hereunder shall continue in
accordance with the Agreement and shall end on the final closing of the
Transaction; provided, however, the Agreement can be terminated by either party
for any reason, without or without cause, upon thirty (30) days written notice
of termination to the other party.

 

14.Notices. Any notice or other communication required or permitted to be given
by any party to any other party pursuant to the terms of this Agreement
(“Notice”) shall be in writing, unless otherwise specified in this Agreement,
and if sent to Aeon, shall be delivered to Aeon at 1715 Hwy 35, Suite 103,
Middletown, New Jersey, e-mail: dmallios @ aeoncapitalinc.com Attention:
Demetrios Mallios with a copy to Ortoli Rosenstadt, LLP, 501 Madison Avenue, New
York, New York, Attention William Rosenstadt, e-mail:wsr@ortolirosenstadt.com;
or; or if sent to the Company, shall be delivered to PharmaCyte Biotech, Inc.,
23046 Avenida de la Carlota, Suite 600, Laguna Hills, California 92653
attention: Kenneth L. Waggoner, e-mail: kwaggoner@pharmacyte.com, with a copy to
Pepper Hamilton LLP, 620 Eighth Avenue, New York, New York 10018-1405,
attention: Merrill Kraines, e-mail: krainesm@pepperlaw.com. Each party to this
Agreement may change such address for Notices by sending to the parties to this
Agreement Notice of a new address for such purpose. Each such Notice or other
communication shall be deemed given: (i) when delivered personally or by
verifiable facsimile transmission (with an original to follow) on or before 4:30
p.m., New York City time, on a Business Day (as defined below), or, if such day
is not a Business Day on the next succeeding Business Day; (ii) on the next
Business Day after timely delivery to a nationally-recognized overnight courier;
and (iii) on the Business Day actually received if deposited in the U.S. mail
(certified or registered mail, return receipt requested, postage prepaid). For
purposes of this Agreement, “Business Day” shall mean any day on which
commercial banks in the City of New York are open for business.

 

15.Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the Company and Aeon and their respective successors and the
affiliates, controlling persons, officers and directors. References to any of
the parties contained in this Agreement shall be deemed to include the
successors and permitted assigns of such party. Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and permitted assigns any rights,
remedies, obligations or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement. Neither party may assign its
rights or obligations under this Agreement without the prior written consent of
the other party.

 

16.Entire Agreement; Amendment; Severability. This Agreement (including all
schedules and exhibits attached hereto and Sales Notices issued pursuant hereto)
constitutes the entire agreement and supersedes all other prior and
contemporaneous agreements and undertakings, both written and oral, among the
parties hereto with regard to the subject matter hereof. Neither this Agreement
nor any term hereof may be amended, except pursuant to a written instrument
executed by the Company and Aeon. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable as written by a court of competent
jurisdiction, then such provision shall be given full force and effect to the
fullest possible extent that it is valid, legal and enforceable, and the
remainder of the terms and provisions herein shall be construed as if such
invalid, illegal or unenforceable term or provision was not contained herein,
but only to the extent that giving effect to such provision and the remainder of
the terms and provisions hereof shall be in accordance with the intent of the
parties as reflected in this Agreement.

 

 

 

 12 

 

 

17.Miscellaneous. The Company represents that it is free to enter into this
Agreement and the transactions contemplated hereby, that it will act in good
faith and that it will not hinder Aeon’s efforts hereunder. This Agreement will
be deemed to have been made and delivered in New York City and both the binding
provisions of this Agreement and the transactions contemplated hereby will be
governed as to validity, interpretation, construction, effect and in all other
respects by the internal laws of the State of New York, without regard to the
conflict of laws principles thereof. Each of Aeon and the Company: (i) agrees
that any lawsuit, action or Proceeding arising out of or relating to this
Agreement and/or the transactions contemplated hereby will be instituted
exclusively in New York Supreme Court, County of New York, or in the United
States District Court for the Southern District of New York; (ii) waives any
objection which it may have or hereafter to the venue of any such lawsuit,
action or Proceeding; and (iii) irrevocably consents to the jurisdiction of the
New York Supreme Court, County of New York, and the United States District Court
for the Southern District of New York in any such suit, action or proceeding.
The Company and Aeon each hereby irrevocably waives any right it may have to a
trial by jury in respect of any claim based upon or arising out of this
Agreement or any transaction contemplated hereby. Each of Aeon and the Company
further agrees to accept and acknowledge service of any and all process which
may be served in any such lawsuit, action or proceeding in the New York Supreme
Court, County of New York, or in the United States District Court for the
Southern District of New York and agrees that service of process upon the
Company mailed by certified mail to the Company’s address will be deemed in
every respect effective service of process upon the Company, in any such
lawsuit, action or Proceeding, and service of process upon Aeon mailed by
certified mail to Aeon’s address will be deemed in every respect effective
service process upon Aeon, in any such lawsuit, action or Proceeding.

 

[SIGNATURE PAGE FOLLOWS]

 

 

 

 

 13 

 

This Agreement may be executed in counterparts (including facsimile or .pdf
counterparts), each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.

 

 

 

Very truly yours,

 

AEON CAPITAL, INC.

 

 

By /s/ Demetrios Mallios                              
Demetrios Mallios
Head of Investment Banking

 

 

 

 

Accepted and agreed as of the date first written above:

 

PHARMACYTE BIOTECH, INC.

 

By /s/ Kenneth L. Waggoner                      
Kenneth L. Waggoner
Chief Executive Officer

President and General Counsel

 

 

 

 

 

 

 

 

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