Exhibit 10.1

 

[ex10i_001.jpg]  CONFIDENTIAL

 

January 3, 2017

 

Re: Letter of Intent for Tender Exchange of Existing Debt and Equity Securities

Prepared for: _______________

 

Dear _____:

 

This letter agreement, including that certain Addendum of even date thereto
include as attached on Exhibit B, sets forth our agreement and understanding as
to the essential terms of the tender exchange of existing debt and equity
securities of Amarantus BioScience Holdings, Inc. (the "Company") located at 315
Montgomery Street, Suite 900, San Francisco, CA 94104, including surrender of
all warrants owned by _____ (“Holder”) and a collateral release of assets of the
Company, in return for receipt of newly issued equity securities in the Company
(“Tender Exchange”) as duly authorized and issued by the Company. The parties
intend this letter agreement to be binding and enforceable, and that it will
inure to the benefit of the parties and their respective successors and assigns.

 

1.       Definitive Legal Agreements. The purpose of this letter agreement
constructed as a binding Letter of Intent (this “LOI”) is to set forth certain
specific financial terms of the Tender Exchange for the Holder, and the
conditions precedent to be achieved by or before the Closing Date (defined
below). Legal agreements, releases, the forms of the securities, and any other
documents that may be required to attain the completion of the conditions
precedent for the Tender Exchange (“Legal Agreements”) shall contain customary
conditions, representations, warranties, covenants, indemnities and other terms,
including terms substantially as set forth in this LOI and in the Tender
Exchange Term Sheet attached as Exhibit A hereto. Upon execution of this LOI,
the parties hereto will continue in good faith to commit their resources to
negotiate, prepare, and review the Legal Agreements required to execute the
Tender Exchange as soon as practicable, but no later than the expiration of the
Stand Still Period (as defined in Paragraph 3 below), as such may be extended
pursuant to Paragraph 3. A majority of all such Holders will be required to
agree and execute the Legal Agreements, and the Tender Exchange completed as
soon as possible. The parties agree that the Legal Agreements shall incorporate
the financial terms as provided herein, which terms shall not be subject to
re-negotiation.

 

2.       Termination. AMBS retains the sole right to terminate this LOI, in the
event that a) less than a majority of Holders of debt and equity securities
respectively execute this form of LOI and subsequently the related Legal
Agreements as may be required (“Lack of Majority”), and/or b) failure to attain
completion of conditions precedent by or before the Closing Date. AMBS will
advise the Holders by written notice at any time after the earliest of the
following to occur (a “Termination Event”): (i) Lack of Majority; or (ii)
absence of agreement on non-financial terms of the Legal Agreements and/or
failure to attain completion of conditions precedent on a timely basis by the
Closing Date.

 

 

Initials: ______ / ______

 

 

 

 

Binding LOI for Tender Exchange

Page 2 of 15

 

3.       Stand Still Period. Unless this LOI is terminated as provided in
Paragraph 2 above, for a period from the date of execution of this LOI up to and
including the Closing Date (the “Stand Still Period”), each Holder agrees not
to, directly or indirectly, and shall cause its employees, shareholders and
directors not to, directly or indirectly, solicit, encourage, contact, enable or
negotiate with any other person regarding the pledge, hypothecation, lien, sale,
license or other transfer of the assets, debt, and equity securities of AMBS
that are the subject of the Tender Exchange. The parties may extend the Stand
Still Period by mutual agreement on a change to the Closing Date if such mutual
agreement is by or before the previously agreed Closing Date. During the Stand
Still Period AMBS maintains the right to operate its business including as
required any financings related thereto.

 

4.       Closing Date: The closing date shall be determined as 3 business days
following the attainment of the conditions precedent as specified in Exhibit A
(“Closing Date”); provided, however in the event of a Funding Date (defined in
Exhibit A below), such closing date shall be no later than the Funding Closing
Date (defined in Exhibit A below).

 

5.       Confidentiality; Restrictions on Use. Each of AMBS and the Holder will
use the Due Diligence Information (defined below) solely for the purpose of
completing the Legal Agreements and unless and until the parties consummate the
Tender Exchange, its affiliates, directors, officers, employees, advisors, and
agents (the Purchaser's "Representatives") will keep the Due Diligence
Information strictly confidential. Each of AMBS and the Holder will disclose the
Due Diligence Information only to those its’ respective Representatives who need
to know such information for the purpose of consummating the Tender Exchange.
Each of AMBS and the Holder agrees to be responsible for any breach of this
paragraph 5 by any of its’ respective Representatives. In the event the Tender
Exchange is not consummated, each of AMBS and the Holder the Purchaser will
certify in writing that all such materials or copies of such materials have been
destroyed, except for the retention as may be required by law or securities
exchange regulations. The Holder will not use any Due Diligence Information
(“Restrictions”) in the event that the Tender Exchange is not consummated.
Neither party shall make any public announcement or public statement or respond
to any press inquiry pertaining to this LOI or the Tender Exchange without the
prior written approval of the other party, except for disclosures (a) as may be
required by law or securities exchange regulations or (b) to Representatives and
existing shareholders or funding parties, provided such disclosure is on a
need-to-know basis and subject to non-use and non-disclosure provisions
consistent with the confidentiality provisions herein. The provisions of this
paragraph 5 will survive the termination of this LOI.

 

 

Initials: ______ / ______

 

 

 

 

Binding LOI for Tender Exchange

Page 3 of 15

 

6.       Due Diligence. In connection with the due diligence hereunder, during
the Stand Still Period, the Holder and AMBS will cause its representatives to
make available the necessary data, information and materials required to
understand the rationale of the Tender Exchange and to complete the Legal
Agreements (“Due Diligence Information”) to the other party or its
Representatives as they may reasonably request, in all cases subject to the
confidentiality obligations specified in clause 5.

 

7.      Corporate Authority. Each party acknowledges it has all requisite
corporate power and authority to enter into this LOI and, to consummate the
Tender Exchange as contemplated herein. By execution of this LOI including
Exhibit A, each party affirms that this LOI is not subsequently subject to any
board ratification or approval.

 

8.       Conditions to Obligation. The Holder and AMBS will be obligated to
consummate the Tender Exchange unless AMBS has failed to obtain completion of
the conditions precedent, notwithstanding AMBS’ best efforts to attain agreement
with the Holder on the Legal Agreements that are required in connection with the
Tender Exchange.

 

9.       Miscellaneous. This LOI (together with Exhibit A hereto) and the Legal
Agreements shall be governed by and construed in accordance with the laws of the
State of New York, without regard to conflicts of laws principles. This LOI
together with Exhibit A hereto is the entire agreement between the parties with
respect to the subject matter herein and may be modified only by a subsequent
written agreement signed by both parties. Each of AMBS and the Holder will be
solely responsible for its own expenses, including legal fees, incurred in
connection with the Tender Exchange, including the negotiation and execution of
the Legal Agreements. By their signatures set forth below, the parties hereby
agree to this LOI together with Exhibit A hereto as of the last date of the
signatures set forth below.

 

(Signatures on following page)

 

 

Initials: ______ / ______

 

 

 

 

Binding LOI for Tender Exchange

Page 4 of 15

 

If you are in agreement with the terms of this letter agreement, please initial
each page with no other changes and sign in the space provided below and return
that signed copy back to my attention by or before 12 noon EST on Thursday
January 5, 2017. Upon receipt of a signed copy of this letter, we will proceed
with our plans for consummating the Tender Exchange in a timely manner.

 

Very truly yours,

 

AMARANTUS BIOSCIENCE HOLDINGS, INC.

 

By:    

 

Gerald E. Commissiong       President & Chief Executive Officer  

 

Agreed and Accepted by:  

 

:       By:           Name:           Title:         Date:  

 

 

Initials: ______ / ______

 

 

 

 

CONFIDENTIAL

 

Page 5 of 15

 

Exhibit A

 

To Binding Letter of Intent between

 

Amarantus BioScience Holdings Inc. (OTCMKTS: AMBS) and

 

Holder: _______________

 

Amarantus BioScience Holdings Inc. (“AMBS” or the “Company”) hereby proposes the
indicative terms and conditions of its restructuring (“Restructuring”) including
terms for the tender exchange of existing a) convertible debt (“Debt Exchange”)
and b) preferred equity (“Preferred Exchange”) (for each type of security, an
“Exchange” and collectively, the “Tender Exchange”) as summarized for you
(“Holder”) on the following page Table A for the Debt Exchange and Table B for
the Preferred Exchange, with a summary overall as Table C. Eighty percent (80%)
of the current principal of the convertible debt and seventy-five percent (75%)
the preferred equity respectively will be used for the Debt Exchange and the
Preferred Exchange, as further described below.

 

Documentation: Terms herein, except for the financial terms of the Exchange
summarized herein which are agreed, are subject to agreement and execution of
final documentation by or before the Closing Date (defined below) of each
security Exchange comprising the Tender Exchange that is required to occur
simultaneously. AMBS will pay up to $100,000 in aggregate (“Maximum Legal
Costs”) for all of the Holder’s legal counsel representing parties to the Debt
Exchange and the Preferred Exchange based on submitted invoices and all back-up
to the Holder, and if the aggregate of invoices is in excess of the Maximum
Legal Costs, then the Maximum Legal Costs will be allocated pro rata to each
Holder based on their respective investment amount, which pro rata share may be
combined for convenience for Holders using the same legal counsel; provided
after such allocation, any legal costs in excess of each Holder’s allocation
will be the responsibility of that Holder.     Debt exchange:

AMBS proposes to exchange the shares of Avant Diagnostics, Inc. (OTCMKST: AVDX)
that it beneficially owns, for the convertible debt previously issued by AMBS,
as follows:

 

1)      “Debt Exchange Amount” shall be for the outstanding unpaid principal
amount only of the convertible debt and for the surrender of all warrants issued
therewith as of the Closing Date

 

2)      “Debt Exchange Factor for Avant” shall be forty percent (40%)

 

 

Initials: ______ / ______

 

 

 

 

CONFIDENTIAL

 

Page 6 of 15

 

   

3)      “Number of Shares” in AVDX shall be a) the product the Debt Exchange
Amount times the Debt Exchange Factor for Avant, with such product divided by b)
the lower of i) $0.16 per share and ii) the share price of AVDX as of two (2)
business days preceding the Closing Date as defined below (“AVDX Divisor”), with
such AVDX Divisor being subject to a floor of $0.12 per share (“AVDX Floor”), to
estimate c) the number of shares, with final share amount issued to be rounded
down (no fractional shares)

 

4)      “Liquidation Terms for AVDX” to be memorialized on the legend of the
AVDX securities as follows: the Debt Holder shall be allowed to sell that amount
of the AVDX common stock equal to i) on a daily basis, up to five percent (5%)
of the average trading volume subject to ii) a maximum of 0.50% (1/2%) of the
outstanding shares of AVDX and a minimum of 0.4167% per trading day (derived
from 25% divided by 60 trading days) times twenty-five percent (25%) of the
Number of Shares (“AVDX Leak Out Percentage”) after the date that is the earlier
of iii) the quarterly period end date (each such quarter, an “AVDX Liquidation
Interval”) following nine (9) months after the Closing Date of this Tender
Exchange defined below and for the next two (2) successive quarters thereafter
(“AVDX Quarterly Liquidation Amount”) and iv) the first close of trading no
earlier than six (6) months after the Closing Date of this Tender Exchange
defined below when that closing price for AVDX is greater than one hundred and
fifty percent (150%) of the AVDX Divisor (such AVDX price the “AVDX Qualifying
Price”) (such first date, the “AVDX First Liquidation Date”); provided, however
the such liquidation is on a non-cumulative basis so that if the Debt Holder did
not sell any of its AVDX shares in the previous AVDX Liquidation Interval, the
maximum amount of shares sold in any subsequent AVDX Liquidation Interval cannot
be greater than the AVDX Quarterly Liquidation Amount for that quarter; and
finally, there will be no liquidation restrictions after the third successive
quarterly period following the AVDX First Liquidation Date.

 

5)      AVDX completes the up-listing of its equity including compliance with
reporting requirements within nine (9) months from the Closing Date defined
below, otherwise the Liquidation Terms for AVDX will not apply and the Holders
are free to trade the shares.

 

 

Initials: ______ / ______

 

 

 

 

CONFIDENTIAL

 

Page 7 of 15

 

 

Furthermore, AMBS also proposes to issue to Debt Exchange participants new
convertible notes with respect to new shares in AMBS common stock (“New Notes
(Debt)”), which shall be subject to Conversion Terms and Trading Restrictions
described below, as follows:

 

6)      “Debt Exchange Amount” shall be for the outstanding unpaid principal
amount only of the convertible debt and for the surrender of all warrants issued
therewith as of the Closing Date

 

7)      “Debt Exchange Factor for New Notes” shall be forty percent (40 %)

 

8)      “New Notes Principal Amount (Debt)” of the New Notes (Debt) shall be a)
the product of the Debt Exchange Amount times the Debt Exchange Factor for New
Notes (Debt), to estimate b) the principal amount of the New Notes (Debt)

 

9)      The New Notes (Debt) will be non-interest bearing and will have an
initial maturity date of nine months from the Tender Exchange Date, to provide
sufficient time for the restructuring and related up-list of AMBS

 

Provided, however, that the sum of the Debt Exchange Factor for Avant plus the
Debt Exchange Factor for New Notes (Debt) shall not exceed eighty percent (80%)
in relation to the current outstanding unpaid principal amount of the
convertible debt that is the subject of this Tender Exchange.

   

Preferred Exchange:

AMBS proposes to exchange the shares of Avant Diagnostics, Inc. (OTCMKST: AVDX)
that it beneficially owns, for the preferred equity previously issued by AMBS,
as follows:

 

1)      “Preferred Exchange Amount Avant” shall be for the stated value of
previously issued preferred equity and for the surrender of all warrants issued
therewith as of the Closing Date

 

2)      “Preferred Exchange Factor for Avant” shall be thirty-seven and one-half
percent (37.50%)

 

3)      “Number of Shares” in AVDX shall be a) the product the Preferred
Exchange Amount Avant times the Preferred Exchange Factor for Avant, with such
product divided by b) the lower of i) $0.16 per share and ii) the share price of
AVDX as of two (2) business days preceding the Closing Date as defined below
(“AVDX Divisor”), with such AVDX Divisor being subject to a floor of $0.12 per
share (“AVDX Floor”), to estimate c) the number of shares, with final share
amount issued to be rounded down (no fractional shares). For clarity, the AVDX
Divisor and AVDX Floor herein for the Preferred Holders is intended to be the
same as used for the Debt Exchange of Avant for the Debt Holders described above

 

 

Initials: ______ / ______

 

 

 

 

CONFIDENTIAL

 

Page 8 of 15

 

 

4)      “Liquidation Terms for AVDX” as previously defined shall also apply to
the Preferred Holder for these AVDX shares.

 

5)      AVDX completes the up-listing of its equity including compliance with
reporting requirements within nine (9) months from the Closing Date defined
below, otherwise the Liquidation Terms for AVDX will not apply and the Holders
are free to trade the shares.

 

Furthermore, AMBS proposes to exchange the new shares of common stock in AMBS
via a new convertible note (“New Notes (Preferred)”) with subsequent Conversion
Terms and Trading Restrictions described below, for the preferred equity
previously issued by AMBS, as follows:

 

6)      “Preferred Exchange Amount AMBS” shall be for the stated value of
previously issued preferred equity and for the surrender of all warrants issued
therewith as of the Closing Date

 

7)      “Preferred Exchange Factor for New Notes (Preferred)” shall be
thirty-seven and one-half percent (37.50%)

 

8)      “New Notes Principal Amount (Preferred)” of the New Notes (Preferred)
shall be the product of a) Preferred Exchange Amount AMBS times the Preferred
Exchange Factor for New Notes (Preferred), to estimate b) the principal amount
of the New Notes (Preferred)

 

9)      The New Notes AMBS (Preferred) will be non-interest bearing and will
have an initial maturity date of nine months from the Tender Exchange Date, to
provide sufficient time for the restructuring and related up-list of AMBS

 

Provided, however, that the sum of the Preferred Exchange Factor for Avant plus
the Preferred Exchange Factor for New Notes (Preferred) shall not exceed
seventy-five percent (75%) in relation to the total amount of preferred equity
issued by AMBS to the Holder that is the subject of this Tender Exchange.

 

 

Initials: ______ / ______

 

 

 

 

CONFIDENTIAL

 

Page 9 of 15

 

Conversion Terms & Trading Restrictions for New Notes
(Debt) and New Notes (Preferred):

The New Notes (Debt) and the New Notes (Preferred) will be subject to the
following Conversion Terms and Trading Restrictions:

 

1)      “Conversion Terms” as follows: conversion to new AMBS shares shall be
permitted after the up-list of AMBS to NASDAQ or NYSE at price per share equal
to or greater than the minimum price per share required for the up-list (“Up
List Price”) and the passage of minimum time of any regulatory period for the
shares being free to trade (“Free Trading Date”). After the up-list, the “New
Notes Conversion Amount” shall be the Tranche Size (defined below) of the New
Notes Principal Amount (Debt) or New Notes Principal Amount (Preferred) divided
by 100% of the average price per share of AMBS for the immediately preceding
twelve (12) trading days (“Determination Period”) with such share price subject
to an increase cap of two hundred fifty percent (250%) of the Up List Price
(“Conversion Price”) to estimate the number of new AMBS shares, with final share
amount issued to be rounded down (no fractional shares). The daily liquidation
by any Holder of such block of new AMBS shares as issued (“Tranche Block”) shall
be limited to no more than 5% of the average trading volume of the prior five
(5) trading days subject to a minimum of 0.3125% per trading day (derived from
25% divided by 80 trading days) times the Tranche Size defined below
(“Liquidation Limit”). “Trading Restrictions” for these new AMBS shares are
listed as 2) and 3) below:

2)      For any sale proposed by any Holder of the new AMBS shares in excess of
the Liquidation Limit size (i.e. a block trade), AMBS will have a) the right of
first refusal to purchase such block at a price equal to the average price per
share of the prior five (5) trading days using the closing price, and b) if not
purchased by AMBS, AMBS will have approval rights of the counter party proposed
by any Holder for such block trade

 

 

 

Initials: ______ / ______

 

 

 

 

CONFIDENTIAL

 

Page 10 of 15

 

 

3)      “Tranche Size” shall be 25% of the New Notes Principal Amount (Debt) or
New Notes Principal Amount (Preferred), and the Holder will be able to liquidate
a maximum of the Tranche Size amount beginning at the next trading day after the
date that is the earlier of i) nine (9) months from the Closing Date of this
Tender Exchange defined below (“First Liquidation Interval”) and ii) the first
close of trading when that closing price for AMBS is greater than one hundred
and fifty percent (150%) of the Up List Price (such AMBS price the “Qualifying
Price”), and subsequently at four (4) month intervals thereafter (“Subsequent
Liquidation Interval”) in each case liquidating any Tranche Blocks subject to
the Liquidation Limit of the Tranche Size continuously over such period; any
unused amounts of a Tranche Size would be rolled to the next Liquidation
Interval and eligible for sale in Tranche Block sizing (or aggregated for a
block trade on terms as described above). During the Determination Period, there
will be no trading or liquidation of shares. The intent of the Tranche Size and
the liquidation intervals as defined is to enable the Holder to sell out 100%
the position over time within approximately twenty-four months from the Free
Trading Date

 

4)      AMBS will ensure that there are sufficient AMBS shares in reserve prior
to the execution of conversion with no delay to the Holders of New Notes (Debt)
and the New Notes (Preferred)

 

5)      AMBS completes the up-listing of its equity including compliance with
reporting requirements within nine (9) months from the date of this LOI,
otherwise the liquidation terms for AMBS as specified by clauses 1 through 3 of
this section will not apply and the Holders are free to trade the shares

    New Class of Shares in
Cutanogen:

AMBS proposes to issue a new class of shares of its equity interest in Cutanogen
(“New Class”), as follows:

 

1)     “New Class Equity” shall be thirty-five percent (35%) of AMBS equity in
Cutanogen determined as of the date of this LOI, such that after issuance of the
New Class, AMBS will own sixty-five percent (65%) of the remaining common stock
of Cutanogen

 

2)     “New Class Debt %” shall be the percentage amount of the New Class Equity
available for the Debt Holders in aggregate as twenty percent (20%)

 

3)     “New Class Preferred %” shall be the percentage amount of the New Class
Equity available for the Preferred Holders in aggregate as fifteen percent (15%)

 

 

Initials: ______ / ______

 

 

 

 

CONFIDENTIAL

 

Page 11 of 15

 

 

4)      For any Debt Holder, its’ “Debt Holder Allocation to Cutanogen” shall be
determined as the pro-rata share of its principal investment in AMBS with
respect to other current Debt Holders multiplied by New Class Debt %, noting
that the sum of all such Debt Holder Allocation to Cutanogen shall equal the New
Class Debt % of twenty percent (20%)

 

5)      For any Preferred Holder, its’ “Preferred Holder Allocation to
Cutanogen” shall be determined as the pro-rata share of its equity investment in
AMBS with respect to other current Preferred Holders multiplied by New Class
Preferred %, noting that the sum of all such Preferred Holder Allocation to
Cutanogen shall equal the New Class Preferred % of fifteen percent (15%)

 

6)      The New Class shall a) have no voting rights, b) be subject to dilution

 

7)      AMBS will have repurchase rights in its sole discretion for a period of
thirty-six (36) months from the issuance date of the New Class for an aggregate
repurchase amount of fifty million dollars ($50,000,000)

 

Holder Name:________________
Debt Holder Allocation to Cutanogen: 10.5%
Preferred Holder Allocation to Cutanogen: 1.8%
(indicative, subject to verification of related investment amounts)

 

Closing Date:

Three (3) business days following the attainment of the conditions precedent
listed below; provided, however in the event of a Funding Date (defined below),
such closing date shall be no later than the Funding Closing Date (defined
below).

    Funding Date and Funding Closing Date: In the event that any funding is
agreed for a minimum of a) $1.5 million for AMBS, or b) $2.5 million for
Cutanogen, or c) $1.5 million for AVDX (for any such funding, a “Funding Date”)
the Holders agree to unconditionally release all of the assets of AMBS and a
subordination of the Holders interests therein, by or before the first related
closing date as agreed by the funding source (“Funding Closing Date”).

 

 

Initials: ______ / ______

 

 

 

 

CONFIDENTIAL

 

Page 12 of 15

 

Conditions Precedent:

Documentation to evidence progress, completion or binding agreement to attain
the following:

 

1)      form of binding LOI from each Holder (convertible debt, preferred
equity, etc.)

 

2)      Letter of intent for the merger of AVDX and PHDx

 

3)      Letter of intent for the investment of assets into AMBS by SeD
BioMedical (or other entity owned by such owner) including a list of target
assets

 

4)      Summary of strategy for Cutanogen including a) documentation for the
relationship with Alliqua, and b) prior to or contemporaneous with the first
Funding Date, the issuance to Debt Holders and the Preferred Holders of the New
Class of shares in Cutanogen

 

5)      Debt Exchange agreement and closing docs

 

6)      Preferred Exchange agreement and closing docs

 

7)      Delivery of physical securities and notes by all Holders (including any
warrants attached or issued) to escrow agent at location of closing & settlement

 

8)      New securities to be issued to the Holder

 

9)      Other documents, agreements, and requirements as identified by AMBS
legal counsel as being necessary for closing the Tender Exchange

 

 

Initials: ______ / ______

 

 

 

 

CONFIDENTIAL

 

Page 13 of 15

 

Exhibit B

 

Addendum to Tender Exchange Letter of Intent

 

January 3, 2017

 

In addition to the terms agreed to in the binding letter of intent, January 3,
2017, the following terms will be incorporated into the definitive agreement. In
the event of any inconsistency between these terms and the terms of such letter
of intent, including Exhibit A letter attached thereto, the terms of this
Addendum shall prevail.

 

1.General

 

a.Management and Bankers have no intention of bringing variable rate financing
into any of the transactions related to the Amarantus restructure strategy. In
the unlikely scenario that a variable transaction is engaged, the structured
note holders will have the right of participation in these structures.

 

b.New investors coming into either Amarantus or Avant will be subject to a lock
up period in parallel with the release of the structured and/or preferred
holders’ release from their lock up.

 

c.The secured holders will stand still from any action for 90 days to complete
the Avant merger, for 90 days to complete the Cutanogen financing and
restructure, and for 120 days to complete the Amarantus restructure and
financing.

 

d.The strategies for the AMBS, AVDX and Cutanogen will only be implemented upon
the signing of the LOI and the cooperative support of the secured debt holders.
Funding would be pursued immediately following the signing of the LOI.
Successful funding for any of the two entities at the following levels would
trigger the unconditional release of all assets of AMBS by the debt holders:
$2.5 million for Cutanogen, $1.5 million for AVDX, or $1.5 million for AMBS,
accompanied by an asset injected by SED Biomedical into AMBS that is valued by a
nationally recognized firm at a minimum of $12.5 million.

 

e.The majority of the Series E holders must be in support of the terms agreed to
by the secured holders.

 

f.Amarantus will pay up to $250,000 in aggregate for all of the Holder’s legal
counsel representing parties to the Debt Exchange and the Preferred Exchange
based on submitted invoices and all back-up to the Holder, and if the aggregate
of invoices is in excess of the Maximum Legal Costs, then the Maximum Legal
Costs will be allocated pro rata to each Holder based on their respective
investment amount, which pro rata share may be combined for convenience for
Holders using the same legal counsel; provided after such allocation, any legal
costs in excess of each Holder’s allocation will be the responsibility of that
Holder.

 

 

Initials: ______ / ______

 

 

 

 

CONFIDENTIAL

 

Page 14 of 15

 

g.The valuation at which new money, in excess of $1 million, comes into the
public entities will be accompanied by a fairness opinion.

 

2.Amarantus

 

a.An LOI between Amarantus and Mr. Chan’s SED Biomedical, concerning injection
of assets from SED Biomedical to Amarantus, will be filed with the SEC within 30
days of the signing of the LOI. A list of the targeted assets will be included
in the LOI filed.

 

b.Shares will be reserved for conversion by secured and preferred holders.

 

3.Cutanogen

 

a.Secured and preferred holders will have the ability to sell their interest in
Cutanogen to a third party upon approval from the newly appointed board of
directors of Cutanogen.

 

b.A letter of intent is being drafted for Alliqua to provide management
infrastructure to Cutanogen on an interim basis.

 

4.Avant-PHDx

 

a.An LOI between Avant and PHDx, concerning the merger of the two companies,
will be filed with the SEC within 30 days of the signing of the LOI.

 

 

Initials: ______ / ______

 

 

 

 

CONFIDENTIAL

 

Page 15 of 15

 

Very truly yours,

 

AMARANTUS BIOSCIENCE HOLDINGS, INC.

 

By:_______________________

 

Gerald E. Commissiong

 

President & Chief Executive Officer

 

Agreed and Accepted by:

 

      By:           Name:           Title:         Date:  

 

 

Initials: ______ / ______