Document:

fwfh_ex106.htm

EXHIBIT 10.6
 
 
 
 
 
 
 
 
 
Terms & Conditions of Employment 
 
Between 
 
Department of Coffee and Social Affairs Limited
 
and
 
Ashley Lopez
 
    

 
Terms and Conditions of Employment   	 
	i

	

	 

 
Your Terms and Conditions of Employment 

 
 
Overview
 
Department of Coffee and Social Affairs Limited, of 6 Newburgh Street, London, W1F 7RQ provides these Terms and Conditions of Employment, which apply to your employment.
 
These terms and conditions must be read with the Staff Handbook which is called What We Do and How We Do It and also applies to your employment. If you have not already done so, you will need:
 
		·	to make sure you have access to, and have read and understood, a copy of the What We Do and How We Do It document — either online or in hard copy.
		 
	 

		·	to read and understand the What We Do and How We Do It document.

 
These Terms and Conditions of Employment:
 
		·	overrule any inconsistent provision in What We Do and How We Do It;
		 
	 

		·	contain all the terms required by the Employment Rights Act 1996;
		 
	 

		·	contain the entire agreement between you and your Employer about your employment; and
		 
	 

		·	take priority over all previous agreements between you and your Employer about your employment.

 
By signing this document, you confirm that you have read and understood all of it.
 
Any questions?
 
If you have any questions about the What We Do and How We Do It document or these Terms and Conditions, then you should discuss them in the first instance with your Line Manager.
 

 
Ashley Lopez    	 
	ii

	

	 

 
Table of contents
 
	Operative Terms
	 
	2
	
	Your title and your Line Manager
	 
	2
	
	Limit on your authority
	 
	2
	
	Start of your employment
	 
	2
	
	Continuous period of employment
	 
	2
	
	Duration of your employment
	 
	2
	
	Punctuality
	 
	3
	
	Employer may lay you off or reduce hours
	 
	3
	
	Your normal place of work
	 
	3
	
	Travel to other sites
	 
	4
	
	Your pay
	 
	4
	
	No pension scheme rights
	 
	4
	
	Use of email
	 
	4
	
	Deductions from your pay
	 
	4
	
	Reimbursing your expenses
	 
	4
	
	Your annual holiday entitlement
	 
	5
	
	Taking your holidays
	 
	5
	
	Your holiday entitlement when your employment ends
	 
	5
	
	Public and bank holidays
	 
	6
	
	Use of your own vehicle
	 
	6
	
	Your Employer's property
	 
	6
	
	Sickness and injury
	 
	6
	
	Limit on your other employment
	 
	7
	
	Preserving Confidentiality
	 
	7
	
	Confidential Information — definition
		8
	
	Your health and safety
	 
	8
	
	Grievance procedure
	 
	9
	
	Dismissal disciplinary, capability rules and procedures and appeals
	 
	9
	
	You resigning
	 
	9
	
	Termination — when your Employer may end your employment
		9
	
	Employer may pay you in lieu of notice
	 
	10
	
	Garden leave
	 
	10
	
	Employer may change these terms and conditions
	 
	11
	
	Collective agreements
		11
	

 

 
Ashley Lopez    	 
	1

	

	 

 
DATED: 3 January 2015 

 
 
Operative Terms
 
Your title and your Line Manager
 
	1	You are employed as the Chief Executive Officer. You report directly to the Board of Directors.

 
Your duties
 
	2	You must:

 
	 
	2.1 	work to the best of your ability;
	 
	 
	 

	 
	2.2 	try wherever possible to promote, develop and expand your Employer's business and interests;
	 
	 
	 

	 
	2.3 	always follow your Employer's rules and procedures; and
	 
	 
	 

	 
	2.4 	always act with consideration for the needs of your colleagues and of your Employer's customers.

 
Limit on your authority
 
	3	You do not have authority to enter into any contracts or agreements on your Employer's behalf — unless your Employer has given you relevant authority in advance.

 
Start of your employment
 
	4	Terms of this contract are effective as of January 3, 2015.

 
Continuous period of employment
 
	5	N/A

 
Duration of your employment
 
	6	You may end your employment it by giving your Employer notice under clause 52. Your employer may end it by giving you notice under clause 53, 54 or 55.

 

 
Ashley Lopez    	 
	2

	

	 

 
Your probationary period
 
	7	The first six months of your employment in this role will be probationary. During that period your Employer will review your performance. If your performance is not acceptable, then your Employer may:

 
	 
	7.1 	extend your probationary period; or
	 
	 
	 

	 
	7.2 	end your employment on one 1 months notice
	 
	 
	 

	 
	7.3 	or transition you to a different role.

 
	8	If you successfully complete your Probationary Period, then your Employer will confirm your appointment in writing.
	 
	 

	9	Your probationary period will be considered as continuing until you receive that confirmation (or until you receive a notice under clause 7).

 
Your normal working hours
 
	10	Your normal working hours will be 40 hours per week and any additional hours worked will be considered over time. Over time hours will be paid in accordance with the minimum hourly rate.

 
Punctuality
 
	11	If you arrive to work late and fail to respond to verbal requests to improve your timekeeping you may fail your probationary period or be subject to disciplinary procedures accordingly.

 
Employer may lay you off or reduce hours
 
	12	If it is necessary for any business reason, then your Employer reserves the right to lay you off without pay or reduce your hours of work.

 
Your normal place of work
 
	13	Your normal place of work will be 6 Newburgh Street, London, W1F7RQ. However, from time to time, your Employer may require you to work at other locations. When your Employer asks you to work at another location, it will take into consideration your personal circumstances, as well as the needs of the business.
	 
	 

	14
	You will not normally be expected to work outside the United Kingdom.

 

 
Ashley Lopez    	 
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Travel to other sites
 
	15	If you are required to work at other locations, then:

 
	 
	15.1	any time you spend travelling to those sites does not count as "working time" for the purposes of the Working Time Regulations.
	 
	 
	 

	 
	15.2	you will not be paid for travelling time.

 
Your pay
 
	16	Your starting annual salary is £26,000 per annum and increases to £60,000 on February 1 2017, from which your Employer will make appropriate deductions from your pay for income tax and National Insurance contributions.
	 
	 

	17	You will be paid in arrears fortnightly by electronic transfer.
	 
	 

	18	You may be entitled to a bonus; this is up to the discretion of the Board of Directors and will be agreed with you at a later date.

 
No pension scheme rights
 
	19	The Employer has no pension scheme applicable to your employment.

 
Use of email
 
	20	You agree that for the purpose of running the business, your Employer may pass your email address and contact details on to third parties.

 
Deductions from your pay
 
	21	Your Employer may deduct from your pay any amounts you owe it — including, for example:

 
	 
	21.1	any overpayment (including overpayment of holiday entitlement);
	 
	 
	 

	 
	21.2	loans your Employer has made to you.
	 
	 
	 

	 
	21.3	losses your Employer suffers as a result of your negligence or a breach of your duties.

 
Reimbursing your expenses
 
	22	Your Employer will reimburse you for any reasonable and necessary out-of-pocket expenses you spend in carrying out your duties. These will be paid in the calendar month following the expense — as long as:

 
	 
	22.1	your Employer has approved the expense in advance; and
	 
	 
	 

	 
	22.2	you produce evidence of the expenses in a form your Employer requires.

 

 
Ashley Lopez    	 
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Your annual holiday entitlement
 
	23	The Employer's holiday year runs from 1st September to 31st August.
	 
	 

	24	Each holiday year, you are entitled to the equivalent of 36 days' paid holiday including all normal public holidays.
	 
	 

	25	If at the end of your Employer's holiday year you have untaken holidays, then:

 
	 
	25.1 	you cannot carry forward those holidays into the next holiday year; and

 
	26	Maternity and Paternity and Parental Leave Rights; In accordance with current legislation you will have rights re Maternity or Paternity Leave. This will always be carefully considered but within the context and nature of our business requirements and working patters of a relatively small number of staff.

 
Taking your holidays
 
	27	You must agree your holidays with your Line Manager. Your Line Manager may have to turn down your request if they feel that too many other people are going to be away at the same time — this is because Holidays must be taken at times which are convenient to your Employer. You should therefore not book any holidays before you have spoken to your Line Manager.
	 
	 

	28	You may take up to 10 working days at any one time — however your Employer may allow you to take more.

 
Your holiday entitlement when your employment ends
 
	29	If you give, or your Employer gives, notice to end your employment, then your Employer may require you to take any unused holiday entitlement during your notice period.
	 
	 

	30	When your employment ends, you will be entitled to be paid for the holidays you have earned in the current holiday year but have not yet taken. Your Employer will deduct income tax and National Insurance contributions from the payment if relevant.
	 
	 

	31	If when your employment ends you have taken more holidays than you have earned in that holiday year on a pro rata basis, then you will owe your Employer a sum equivalent to a day's pay for each day's holiday that you have taken in excess of your accrued entitlement. You agree that your Employer may deduct such sum from any payments due to you — including, for example from your final salary payment, or from any payment in lieu of notice.

 

 
Ashley Lopez    	 
	5

	

	 

 
Public and bank holidays
 
	32	Because of the nature of your Employer's business, you may be required to work on public or Bank Holidays. If you do, then you will be entitled to take another day's holiday in lieu.

 
Use of your own vehicle
 
	33	If you are allowed by your Employer to use your own vehicle for carrying out your duties, then:

 
	 
	33.1 	you must make sure that your vehicle is adequately insured for business purposes and for carrying any of your Employer's equipment;
	 
	 
	 

	 
	33.2 	you must ensure that at all times your vehicle is fit for that purpose;
	 
	 
	 

	 
	33.3 	your Employer will repay your mileage at a rate per mile it agrees to before each journey; and
	 
	 
	 

	 
	33.4 	you must keep a detailed record of your business mileage.

 
Your Employer's property
 
	34	If you use any of your Employer's equipment or property, then you must take all reasonable steps to maintain it in good condition and to prevent its loss or theft.
	 
	 

	35	If through negligence you cause any damage to your Employer's property or equipment, then you agree to:

 
	 
	35.1 	be responsible for the damage caused; and
	 
	 
	 

	 
	35.2 	your Employer deducting these sums from your pay.

 
	36	When your employment comes to an end, or at any time when your Employer asks:

 
	 
	36.1 	you will return to your Employer all of your Employer's equipment and property in your possession.
	 
	 
	 

	 
	36.2 	your Employer may deduct the value of any equipment or property you have failed to return to your Employer from any amount it owes to you.

 
Sickness and injury
 
	37	The Employee shall during any period of absence more than 2 consecutive working days, due to sickness or injury, provide to the Company documentary evidence of ill health or injury from a Doctor or Medical Centre. Failure to provide such documentation for periods of absence shall constitute unauthorised leave and be considered a negligent discharge of duties under clause 54.1 of this Agreement and be grounds for immediate dismissal.

 

 
Ashley Lopez    	 
	6

	

	 

 
Limit on your other employment
 
	38	During your employment, you agree not to hold any other employment or carry on any trade, business or profession — without first getting your Employer's written consent. Even if your Employer gives that consent, then you must not use your Employer's property or resources in carrying out these activities.
	 
	 

	39	Your Employer will not consent to you doing the other work under clause 38 if the other work is likely:

 
	 
	39.1 	to have an adverse effect on your ability to do your job for your Employer.
	 
	 
	 

	 
	39.2 	to bring your Employer's business into disrepute.
	 
	 
	 

	 
	39.3 	to conflict with the interests of your employer.

 
Preserving Confidentiality
 
	40	While you are employed by your Employer, you will have access to and be trusted with information about your Employer's business and finances, and about its dealings, transactions, technology, products and affairs. All of this information is, or may be, Confidential Information — as defined in clause 44.
	 
	 

	41	You agree that you will not (at any time, either during or after the end of your employment) divulge or communicate Confidential Information — unless you do so:

 
	 
	41.1 	to someone authorised to have that information;
	 
	 
	 

	 
	41.2 	in properly carrying out your duties;
	 
	 
	 

	 
	41.3 	as authorised by your Employer; or
	 
	 
	 

	 
	41.4 	as ordered by a Court.

 
	42	You also promise:

 
	 
	42.1 	to use your best endeavours to prevent the disclosure of the Confidential Information; and
	 
	 
	 

	 
	42.2 	not to seek to exploit in any way, or to otherwise make use of, any Confidential Information.

 
	43	The restrictions contained in clause 40 to 42 do not apply to information or knowledge which is, or which becomes, available to the public — unless this is as a result of any act or omission by you.

 

 
Ashley Lopez    	 
	7

	

	 

 
Confidential Information — definition
 
	44	Confidential Information includes, but is not limited to, the following:

 
	 
	44.1 	your Employer's trade secrets;
	 
	 
	 

	 
	44.2 	details of the business and finances of your Employer;
	 
	 
	 

	 
	44.3 	details of business plans, profits, expenses and financial arrangements with third parties;
	 
	 
	 

	 
	44.4 	the contents of and set up of the IT systems operated by your Employer — including all databases;
	 
	 
	 

	 
	44.5 	information about the identity of, orders placed by, requirements of, fees charged to or finances of customers;
	 
	 
	 

	 
	44.6 	details of customers including their names and addresses, details of any specific requirements or instructions received, of any financial arrangements, and of any security arrangements or access arrangements in their properties;
	 
	 
	 

	 
	44.7 	details of other employees, Directors and consultants of your Employer —including but not limited to details of their salary and health;
	 
	 
	 

	 
	44.8 	details of any tenders your Employer has submitted or plans to submit;
	 
	 
	 

	 
	44.9 	any matter contained within a customers file or files;
	 
	 
	 

	 
	44.10 	any other confidential information generally relating to customers or suppliers;
	 
	 
	 

	 
	44.11 	the prices at which any supplier supplies goods or services (or both) to your Employer;
	 
	 
	 

	 
	44.12 	details of any negotiations taking place with existing or potential customers
	 
	 
	 

	 
	44.13 	other information generally about your Employer's business (whether or not this information is recorded in writing or electronically or on tape); and
	 
	 
	 

	 
	44.14 	any other information which you are notified is confidential, or is marked as confidential, whether about your Employer, suppliers, customers or any employees or contractors of those people or organisations.

 
Your health and safety
 
	45	Your Employer will take all reasonable steps to ensure your health safety and welfare while you are at work. You have a legal duty to take care of your own health and safety and that of your colleagues.
	 
	 

	46	You must familiarise yourself with your Employer's Health & Safety Policy which is set out in the What We Do and How We Do It document.

 

 
Ashley Lopez    	 
	8

	

	 

 
Grievance procedure
 
	47	If you have a grievance relating to your employment, then you should deal with it in accordance with your Employer's Grievance Procedure. A copy of the current Grievance Procedure is set out in the What We Do and How We Do It document. This procedure is not contractual.
	 
	 

	48	If you have a formal grievance, then you should raise it in writing with your Line Manager in accordance with our Grievance Procedure, or if the grievance concerns that person, with another director or senior manager.

 
Dismissal disciplinary, capability rules and procedures and appeals
 
	49	Your Employer's Dismissal Disciplinary and Capability Rules and Procedures are set out in the What We Do and How We Do It document. They are not contractual.
	 
	 

	50	Your Employer may demote you or suspend you (or both) without pay instead of or in addition to imposing any other disciplinary sanction.
	 
	 

	51	If you are dissatisfied with any grievance, disciplinary or dismissal decision relating to you, then you should raise an appeal in writing with the Chief Operating Officer, in accordance with our Dismissal and Disciplinary Procedure. If the original decision was made by that person, or they were involved in the relevant process, then you may raise it with another director or senior manager.

 
You resigning
 
	52	If you decide to resign from your employment, you need to give your Employer six months notice in writing.

 
Termination — when your Employer may end your employment
 
	53	Normal notice Your Employer may terminate your employment by giving you written notice for the longer of:

 
	 
	53.1 	Six months’ notice in writing; and
	 
	 
	 

	 
	53.2 	one weeks’ notice for every complete year of service with your Employer (up to a maximum of 12 weeks' notice).

 

 
Ashley Lopez    	 
	9

	

	 

 
	54	Termination without notice Your Employer may also terminate your employment in writing without either notice or a payment in lieu of notice if you:

 
	 
	54.1 	are guilty of any dishonesty, or of any act of gross misconduct or gross incompetence, or of any other fundamental breach of contract in the course of your employment;
	 
	 
	 

	 
	54.2 	do anything outside the course of your employment which in the reasonable opinion of your Employer will materially prejudice its interests or be damaging to its reputation;
	 
	 
	 

	 
	54.3 	are convicted of a criminal offence other than a minor road traffic offence; or

 
	55	Health issues Your Employer may terminate your employment on the grounds of sickness or injury under clause 53 or 56 regardless of any right you may have to participate in, or obtain benefits under, any permanent health insurance scheme or contractual sick pay scheme that your Employer has in place for its employees from time to time.

 
Employer may pay you in lieu of notice
 
	56	Your Employer may terminate your employment immediately at any time (regardless of whether notice has been given by either party) by paying you a sum equal to the Basic Pay that you would have been entitled to receive:

 
	 
	56.1 	under these terms and conditions during the notice period specified in clause 53, or
	 
	 
	 

	 
	56.2 	if notice has already been given, for the remainder of the notice period.

 
	57	The choice of whether or not to make a payment in lieu is entirely within the discretion of your Employer. The fact that your Employer is entitled to make a payment in lieu of notice does not mean that you are entitled to receive it.
	 
	 

	58	Any payment in lieu of notice:

 
	 
	58.1 	will not include an element for any bonus, pension contributions or benefits in kind; and
	 
	 
	 

	 
	58.2 	will be paid less any deductions of Income Tax and National Insurance contributions that your Employer must make.

 
Garden leave
 
	59	If either you or your Employer has given notice to terminate the employment, then your Employer may at any time and for any period (or periods) suspend you from performing your job, or exclude you from entering your Employer's premises(or suspend and exclude you). This is known as "garden leave".
	 
	 

	60	During a garden leave period, your Employer will continue to pay your salary and to provide you with any other contractual benefits you are entitled to, and will let you know the rules that apply to you during that time.

 

 
Ashley Lopez    	 
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	61
	Your employment continues during any garden leave period, as do your duties of fidelity and good faith.

 
Employer may change these terms and conditions
 
	62	Your Employer may make reasonable minor changes to your terms and conditions of employment. If it does, then it will notify you of them by way of general notice. Any notified changes take effect from the date of the notice.

 
Collective agreements
 
	63	There are no Collective Agreements that affect your Terms and Conditions of Employment.  

 
 

THIS AGREEMENT has been signed and entered into on the date written at the top of the document.
 
SIGNED by ASHLEY LOPEZ

 
SIGNED by STEFAN ALLESCH-- TAYLOR and on behalf of and with the authority of Department of Coffee and Social Affairs Limited

 
 

 
Ashley Lopez
 
	11PRIVATE AND
CONFIDENTIAL

 

January 16, 2017

 

 

Yutaka Niihara, MD, MPH

Chairman, CEO

Emmaus Life Sciences, Inc.

21250 Hawthorne Blvd, Suite 800

Torrance, CA 90503

Re:Letter
of Intent for Acquisition

 

Dear Dr. Niihara:

This letter confirms
our understanding of the mutual present intentions of Generex Biotechnology Corporation (the "Purchaser") and Emmaus
Life Sciences Inc. (the "Company") and, hereinafter also together referred to as the “Parties”, with respect
to the principal terms and conditions under which the Purchaser will acquire a controlling interest of the outstanding capital
stock of the Company for a total consideration of $225,000,000 (hereinafter referred to as the "Acquisition").

The obligations of the Parties hereto
to consummate the Acquisition are subject to the negotiation and execution of a formal Purchase Agreement referred to in paragraph
4 below. This letter is intended to be binding regarding the provisions set forth in this letter and the Parties will use their
best good faith efforts to enter into a formal Purchase Agreement incorporating the terms of this letter. Without affecting the
general applicability of the foregoing, the provisions set forth in paragraphs 10, 11, 13, 14 and 16 shall survive the termination
hereof. This letter shall not confer on any person or entity, other than the parties hereto, any rights or remedies.

 1. Terms:

 

 a. Purchase of Stock. At the closing (the "Closing"), subject to the satisfaction of all conditions precedent contained in a formal Purchase Agreement, the Purchaser will purchase Fifty One (51%) percent of the issued and outstanding common stock of the Company at the Closing (the "Shares"). The parties further agree that should any warrants, options or other convertible securities subsequently be exercised so Purchaser will hold less than 51% of outstanding Shares, Purchaser shall receive the appropriate adjustment in Shares to ensure that the Fifty One (51%) percent equity position remains.

    	 	1	 

     

    
 b. Purchase Price. The purchase price for the Shares will consist of $10,000,000 in cash and $215,000,000 worth of the Purchaser’s Common Stock. Purchaser’s Common Stock will be valued at $3.80 per share at the Closing, provided that if a material event occurs that increases the fair market value of Purchaser’s shares prior to the Closing, the value of the Purchaser Common Stock shall be increased to such higher market value up to a maximum of $12.00 per share. The Parties agree and acknowledge that the foregoing price per share assumes the consummation of a reverse stock split of Purchaser’s Common Stock at a 1000 to 1 basis, and if such reverse stock does not occur or occurs on different terms, the per share price shall be adjusted accordingly. The Purchaser’s capital stock will be issued without registration or qualification to the Company. The Company Shares will be issued to Purchaser without registration or qualification to Purchaser.

 

 c. Company Earn Back. The Company shall have the right to “Earn Back” up to Thirty Six (36%) percent of its capital stock (out of the total 51% issued to Purchaser at closing) upon achieving one of the following conditions:

                                                             
i.      Receiving
FDA approval by July 7, 2017 (unless the approval date is extended by the FDA for administrative reasons beyond the Company’s
control, in which case such later date of FDA approval shall apply), for its oral pharmaceutical grade L-glutamine treatment for
sickle cell anemia and sickle ß0-thalassemia that has successfully completed its Phase III Clinical Trial;; or

                                                           
ii.      Securing
a contractual agreement with a pharmaceutical company to which Company receives an upfront payment from the pharmaceutical company.

 

In respect of this earn back
right, Purchaser shall grant to the Company or its designee an option to acquire up to 36% of the Company shares from Purchaser,
which option shall be exercisable upon the occurrence of the events set forth in clause i or ii above at an exercise price of $100
for each One Percent (1%) of the Company’s capital stock. The foregoing option shall be assignable by the Company in whole
or in part. In addition, upon “Spin off” of Company as provided in paragraph 3 below, Company shall have the right
to buy back from Purchaser an additional Five (5%) percent of its capital stock at valuation equal to the then current fair market
value less a ten (10%) discount. In respect of this buyback right, Purchaser shall grant to the Company or its designee an option
to acquire the 5% buyback shares which shall be exercisable upon the occurrence of the spin off with an exercise price equal to
90% of the then fair market value of the Company stock. The consideration for such purchase shall be in cash.

 

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 d. Purchaser Earn Back. Purchaser is agreeing at Closing to issue to Company Two Hundred and Fifteen Million ($215,000,000) dollars’ worth of its common stock as part of the compensation for the acquisition; BUT should Company not receive the expected FDA approval by July 7th 2017 (unless the approval date is extended by the FDA for administrative reasons beyond the Company’s control, in which case such later date of FDA approval shall apply) for its oral pharmaceutical grade L-glutamine treatment for sickle cell anemia and sickle ß0-thalassemia that has already completed its Phase III Clinical Trial and more trials, tests or other requirements for approval by the FDA is required resulting in additional time to achieve such approval and additional expense, such funds may be raised by Purchaser (at request of Company) or by Company. If Purchaser (at Company’s request) agrees to pay for all the additional work, then Company agrees that either Company will issue additional Company shares to Purchaser in consideration for such funding, or Purchaser has the right to receive back an amount of its common stock originally issued to Company at Closing. The amount of additional issuance or earn back will be in direct proportion to the amount of funds needed by Company to pay for the additional work required by the FDA to achieve final approval and contributed to the Company by Purchaser. For example, should Purchaser be required to expend an additional Thirty ($30) Million dollars so Company can effectuate the additional work for the FDA then Purchaser shall receive back from Company the number of Purchaser’s common stock issued to Company at closing equal to the additional funds provided by Purchaser to Company divided by the price per Purchaser share applied at the Closing or Company shall issue $30 million worth of Company stock, valued at the Closing valuation. For clarity, $215,000,000 worth of common stock less $30,000,000 worth of common stock at the valuation when originally issued at original closing resulting in a net $185,000,000 of Purchaser common stock to Company. Alternatively, Company shall have the right to raise the funds on its own by sale of Purchaser shares (subject to Purchaser’s right of first refusal) or issuance of its own shares of capital stock.

 

 e. Payment of Ten ($10,000,000) Million. As good faith, Purchaser agrees that upon execution of this Letter of Intent and by no later than January 16, 2017, the date set for representatives of both Purchaser and Company to meet in Los Angeles, California, Purchaser shall provide Company with an initial deposit of five hundred thousand dollars ($500,000, the “Deposit”) at their meeting place on January 16, 2017. The Parties further agree that Purchaser shall provide an additional one million, five hundred thousand dollars ($1,500,000, the “Additional Deposit”) within three (3) weeks of the Parties meeting on January 16th, 2017. In addition, upon signing of the formal Purchase Agreement, which

 

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 the Parties anticipate to occur no later than 45 days after the date of this letter, Purchaser shall provide an additional two million dollars ($2,000,000, the “Second Additional Deposit”) The remaining six million dollars ($6,000,000) shall be paid at closing of the formal Purchase Agreement, which shall be done no later than sixty (60) days from the date of this letter. If the formal Purchase Agreement is not executed within the forty five (45) days after the date of this letter, or the Closing does not occur within sixty (60) days after the date of this letter, all deposits then made to Company shall be refunded to Purchaser within five (5) business, plus a breakup fee equal to warrants to acquire Company capital stock with a market value of $500,000 with a strike price corresponding to the Closing valuation of Company at $450 million. The breakup fee shall be payable only if the failure to execute the Purchase Agreement or the close is not caused by the fault of or breach of obligations by Purchaser.

 

 f. Potential Transactions with Third Parties. If the Company engages in advanced negotiations regarding a potential licensing of Company’s technology or strategic partnership transaction with respect to the Company technology, Company will inform Purchaser of the proposed terms of such a transaction and the Parties will engage in good faith discussions regarding the structure of such a transaction.

 

 g. Purchaser’s NASDAQ Listing. Purchaser agrees to file for and receive a listing on NASDAQ immediately after the closing of the Acquisition. The Parties agree that receiving this listing will be a material term of the formal Purchase Agreement. Furthermore, the Parties acknowledge and understand that procedurally NASDAQ has a review process that allows NASDAQ up to thirty (30) days to respond to any filing made by Purchaser. Such thirty day response period begins once NASDAQ receives the filing. In addition, when comments are received back from NASDAQ by Purchaser and Purchaser responds, NASDAQ once again has up to an additional thirty days to respond to Purchaser’s responses. Therefore, the Parties agree that Purchaser will use all reasonable efforts to expedite the approval process and Company agrees to allow Purchaser up to four months from the Closing to receive approval from NASDAQ for an “up-listing” or at least provide Company with documentation that the filing has been made AND that NASDAQ is committed to the listing pending some request for additional information. In such case, the Parties agree that Purchaser will have the additional time to complete the listing requirement. For example, NASDAQ will require audited financial statements of the Company for the filing. Purchaser will assist Company but any such delay by Company to complete said audit could delay the approval process. Therefore, the Parties agree to work together to

 

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facilitate and expedite the process so that the up-listing will be successful and timely. But, should Purchaser not be able to receive approval from NASDAQ for listing within the above timeline (except for reasonable delays not to exceed [30] days in the aggregate), Company shall have the absolute right, at its sole discretion, to rescind the transaction. Notwithstanding any other provision of this paragraph, in the event that the up listing is not consummated by October 31, 2017 (“Final Listing Date”), regardless of the cause, Company shall have the absolute right, at its sole discretion, to rescind the Acquisition; provided however if the FDA approval date is extended by the FDA for administrative reasons beyond the Company’s control, then the Final Listing Date shall be delayed for a corresponding period. Rescission shall be defined as:

                                                             
i.      Purchaser’s
surrender of Company’s capital stock back to Company less an amount equal to $10,000,000 worth (amount of cash Purchaser
provided Company at closing) of Company capital stock based upon an agreed valuation of Company at time of Closing equal to $450
Million dollars, with any antidilution adjustments for subsequent issuance of shares of capital stock by Company and 

                                                           
ii.      Company’s
surrendering of Purchaser’s capital stock back to Purchaser less an amount equal to $10,000,000 worth of Purchaser’s
capital stock based upon the same valuation of Purchaser at time of Closing.

Purchaser’s obligation to
surrender Company’s capital stock in exchange for Purchaser’s capital stock pursuant to the rescission shall be evidenced
by an option granted from Purchaser to Company to allow the Company to acquire Company capital stock from Purchase at an exercise
price equal to the Purchaser capital stock, after adjustment for the $10,000,000 cash investment. The foregoing option shall be
assignable by the Company in whole or in part.

 

 h. Anti-Takeover Provision. The Parties further agree to ensure that legal counsel’s for both Company and Purchaser shall include within any formal Purchase Agreement a provision outlining “poison pill” language to thwart any attempt to remove either Dr. Yutaka Niihara (Company CEO and after transaction Executive Chairman of combined entity) and/or Joseph Moscato (CEO of Purchaser) during the term of their employment with the joint entity post-merger. Such provision shall be incorporated as a material term of the formal Purchase Agreement.

 

    	 	5	 

     

    

 

 2. Board Representation. Upon closing, Dr. Yutaka Niihara shall be elected to serve as Purchaser’s Executive-Chairman of the Board that will include all rights and privileges commonly associated to such a position including management responsibilities along with the CEO. To provide business and management continuity to Company, Purchaser agrees that Company’s existing board of directors shall continue to be the directors of Company for a period of three years. A representative of Purchaser will be elected as a director of Company. Purchaser shall enter into a voting agreement with certain other major stockholders of Company that it will vote with such major stockholders to preserve the current board composition of Company, with the addition of a Purchaser representative, for a period of 3 years or until a spin off (as defined in section 3 below) of the Company occurs. Purchaser shall execute and deliver an irrevocable proxy coupled with an interest in connection with such voting agreement.

 

 3. Stockholder Approval. Prior to the closing, the certificate of incorporation and bylaws of Company shall be amended to provide that for any matter for which the approval of stockholders representing a majority of outstanding shares is required, the approval of stockholders representing a 55% majority of outstanding shares shall be required.

 

 4. “Spin off” of Company. Purchaser and Company agree that once Company has achieved its required benchmarks of: 

                                                             
i.      Receiving
FDA approval by July 7, 2017 (unless the approval date is extended by the FDA for administrative reasons beyond the Company’s
control, in which case such later date of FDA approval shall apply) for its oral pharmaceutical grade L-glutamine treatment for
sickle cell anemia and sickle ß0-thalassemia that has successfully completed its Phase III Clinical Trial; or

                                                           
ii.      Securing
a contractual agreement with a pharmaceutical company to which Company receives an upfront payment from the pharmaceutical company,
then

the Company, at the discretion
of the Board of the Company, shall have the option and right of spinning off as a public or private company or file as quickly
as possible with the Securities and Exchange Commission (“SEC”) and effectuate an S-1 filing according to the United
States Security Act to “Spin off” Company for a listing on a major U.S. Exchange (i.e. NASDAQ or NYSE), without any
further consent of Purchaser. Purchaser shall cooperate fully with Company with the effectuation of such an S-1 filing.

 

 5. Formal Purchase Agreement. The Purchaser and the Company hereby agree to use reasonable diligence to commence good faith negotiations in order to execute and deliver a definitive stock purchase relating to the Acquisition (the "Purchase Agreement") acceptable to parties hereto within 45 days of Company’s acceptance of this letter. All terms and conditions concerning the Acquisition shall be stated in the Purchase Agreement (or agreements to be entered into pursuant to the Purchase Agreement), including without limitation, representations, warranties, covenants, holdback provisions and indemnities that are usual and customary in a transaction of this nature as such may be mutually agreed upon between the parties.

 

    	 	6	 

     

    

 

 6. Representations and Warranties. The Purchase Agreement will contain representations and warranties customary to transactions of this type, including without limitation, representations and warranties by the Company and Purchaser, as applicable, as to (a) the accuracy and completeness of the Company's and Purchaser’s financial statements for the past three years and current financial statements; (b) disclosure of all the Company's and Purchaser’s contracts, commitments and liabilities, direct or contingent; (c) the physical condition, suitability, ownership and absence of liens, claims and other adverse interests with respect to the Company's and Purchaser’s assets; (d) ownership of the Shares and Purchaser’s shares; (e) the absence of liabilities with respect to the Company and Purchaser, other than as set forth a balance sheet dated as of the date of the execution of this letter of intent, and liabilities incurred in the ordinary course of business since that date; (f) the absence of a material adverse change in the condition (financial or otherwise), business, properties, assets or prospects of the Company and Purchaser; (g) the absence of pending or threatened litigation, claims, investigations or other matters affecting the Acquisition, Company or Purchaser; (h) the Company's and Purchaser’s compliance with laws and regulations applicable to its business and obtaining all licenses and permits required for its business; and (i) the due incorporation, organization, valid existence, good standing and capitalization of the Company and Purchaser.

 

 7. Conditions to Consummation of the Acquisition. The obligation of the Parties with respect to the Acquisition shall be subject to satisfaction of conditions customary to transactions of this type, including without limitation;

 

 a. Execution of the formal Purchase Agreement by the Parties;

 b. Satisfactory completion of all due diligence by the Parties (a due diligence list will be provided to the Company upon execution of this Letter of Intent) including, but not limited to, full access to all properties, documents, contracts, books, records and operations of either Party relating to their individual businesses. The Parties will furnish to each other copies of documents and with such other information as either Party may request.

 

 8. “Stand Still”. Upon the execution of this letter of Intent and until such time either of the Parties gives notice of termination of negotiations OR the latest sixty (60) days after the Parties’ date of this letter, the Company agrees to not enter into nor continue any existing negotiations for any financing, merger or acquisition of the Company or its assets, except for obtaining investments from existing stockholders of Company, investments with other investors (provided Purchaser shall have the right to maintain its 51% ownership as of the Closing without additional consideration in the event additional shares are issued pre-Closing), and discussions regarding licensing Company’s technology that have already been commenced (provided Company will inform and discuss such transactions with Purchaser prior to finalization) (“Permitted Activities”). The Company acknowledge that

 

    	 	7	 

     

    

 

the Purchaser will incur significant expense in connection with its due diligence review and preparation and negotiation of the Purchase Agreement. As a result, upon execution of this Letter of Intent, except for the Permitted Activities, the Company shall terminate any existing discussions or negotiations with, and shall cease to provide information to or otherwise cooperate with, any party other than the Purchaser and its representatives with respect to an Acquisition Transaction (as defined below). In addition, from and after the date hereof, except for the Permitted Activities, none of the Company nor any of its shareholders, subsidiaries or affiliates, or any of their respective officers, directors, employees, members, managers, representatives or agents, will directly or indirectly encourage, solicit, initiate, have or continue any discussions or negotiations with or participate in any discussions or negotiations with or provide any information to or otherwise cooperate in any other way with, or enter into any agreement, letter of intent or agreement in principle with, or facilitate or encourage any effort or attempt by any corporation, partnership, company, person or other entity or group (other than the Purchaser and its shareholders, subsidiaries or affiliates, or any of their respective officers, directors, employees, members, managers, representatives or agents) concerning any merger, joint venture, recapitalization, reorganization, sale of substantial assets, sale of any shares of capital stock, investment or similar transaction involving the Company or any subsidiary or division of the Company (each, an "Acquisition Transaction"). Except for the Permitted Activities, the Company shall notify the Purchaser promptly of any inquiries, proposals or offers made by third parties to the Company or any of its shareholders, subsidiaries or affiliates, or any of their respective officers, directors, employees, members, managers, representatives or agents with respect to an Acquisition Transaction and furnish the Purchaser the terms thereof (including, without limitation, the type of consideration offered and the identity of the third party). Except for the Permitted Activities, Company shall deal exclusively with the Purchaser with respect to any possible Acquisition Transaction and the Purchaser shall have the right to match the terms of any proposed transactions in lieu of such parties.

 

 9. Conduct of Business. The Company shall use its commercially reasonable efforts to preserve intact the business organization and its Board, employees and other business relationships of the Company; shall continue to operate in the ordinary course of business and maintain its books, records and accounts in accordance with generally accepted accounting principles, consistent with past practice; shall use its reasonable efforts to maintain the Company's current financial condition, including working capital levels; shall not incur any indebtedness (except in the ordinary course, pursuant to agreements entered into prior to the date hereof or pursuant to the Permitted Activities) or enter into any agreements to make business or product line acquisitions; and shall not declare or make any dividend or stock distributions.

 

    	 	8	 

     

    

 

10. Expenses. Each of the Parties shall pay all of its expenses incident to this Letter of Intent, the Purchase Agreement and consummation of the transactions contemplated hereby and thereby. The Parties each represent and warrant that there are no brokerage or finder's fees which are or will be payable in connection with the Acquisition.

 

 11. Confidentiality. The Parties understand that they will be disclosing Confidential Information including, but not limited to, Intellectual Property Information to each other. Therefore, the Parties agree to receive Confidential Information for the sole purpose of discussing and negotiating a formal Purchase Agreement between them. “Confidential Information” shall mean and include Confidential Information” means and includes (i) all material, non-public information, materials or data in any form (whether disclosed before or after the date of this Agreement, or whether oral, written, graphic, electronic, visual or fixed in any tangible medium of expression) which the party receiving the information (“Receiving Party”) knows or has reason to know is confidential to the disclosing party (“Disclosing Party”), (ii) the Disclosing Party’s trade secrets, know how, current and future business plans, current and future marketing plans and strategies, current and future business models and plans, current and future business methods, practices and models, identities of vendors and product lines, customer or prospect data, records, information and profiles, supplier or vendor information (including contact information), pricing and data, historical or prospective financial information, budgets, cost and expense data, personnel records, information and contracts, and (iii) any other information of the Disclosing Party which, when disclosed in a written or other tangible form, is conspicuously marked “Confidential,” “Proprietary” or “Secret” or, when disclosed verbally, the Receiving Party is sent a written summary of such information within thirty (30) days following its disclosure which identifies such information as “Confidential,” “Proprietary” or “Secret.”All Confidential Information delivered pursuant to this Agreement;

 

 a. shall not be copied, distributed, disclosed, or disseminated in any way or form by the Receiving Party without the prior written consent of the Disclosing Party except as provided in this Letter of Intent;

 

 b. shall be maintained in confidence, and may only be disclosed to those representatives of Receiving Party who (1) have a need to know the same in order to use it for the purpose described above, and (2) have executed a confidentiality agreement containing the similar terms as this Agreement, thereby obligating them to maintain the secrecy of Confidential Information;

 

 c. shall not be used by Receiving Party for any purpose except that which is stated in above, without the express prior written permission of Disclosing Party; and

 

    	 	9	 

     

    
 d. shall remain the property of Disclosing Party. Except as provided in the next sentence, in the event the parties do not proceed with the transaction which is the subject of this Agreement, or at any time after a party has determined not to continue with a possible transaction, upon written request of Disclosing Party, Receiving Party shall promptly return to Disclosing Party all written material provided by Disclosing Party, including but not limited to Confidential Information, and will destroy any other written material containing or reflecting any Confidential Information (whether prepared by Receiving Party or its Representatives) and will not retain any copies, extracts or other reproductions, in whole or in part, of such written material. Receiving Party’s law department may, however, retain one copy of the material provided by Disclosing Party for the sole purpose of evaluating non-compliance with this Agreement. All documents, memoranda, notes and other writings prepared by Receiving Party and its Representatives based on Confidential Information shall be destroyed, and such destruction shall be certified in writing to Disclosing Party by an authorized officer of Receiving Party supervising such destruction.

 

 12. Disclosure. The Parties agree that each shall cause its directors, officers, shareholders, employees, agents, other representatives and affiliates not to disclose to any person the fact that discussions or negotiations are taking place concerning the transactions contemplated hereby, the status thereof, or the existence of this letter and the terms thereof, unless in the opinion of such Party disclosure is required to be made by applicable law, regulation or court order, and such disclosure is made after prior consultation with the other.

 

 13. Termination. Subject to the terms of this letter, upon the earlier of (a) the mutual written agreement of the Parties hereto; (b) the giving of notice by either Party of the termination of negotiations of a Purchase Agreement; (c) the failure of Purchaser to pay the Deposit or Additional Deposit when required or (d) the failure by the Parties hereto to execute and deliver the formal Purchase Agreement within 45 days after the execution of this letter, this letter shall terminate and the Parties shall be released from all liabilities and obligations with respect to the subject matter hereof, except as provided in the second paragraph of page 1 of this letter.

 

 14. Jurisdiction and Venue. All claims arising out of the interpretation, application or enforcement of this Agreement, including, without limitation, any breach hereof, shall be settled by final and binding arbitration in held exclusively in Los Angeles County, California in accordance with the commercial rules then prevailing of the American Arbitration Association by a single (1) arbitrator appointed by the American Arbitration Association. The decision of the arbitrator shall be binding on the Parties and may be entered and enforced in any court of competent jurisdiction by either party. The arbitration shall be pursued and brought to conclusion as rapidly as is possible. Each party shall bear its own attorneys’ fees, expert witness fees, and costs incurred in connection with any arbitration.

 

    	 	10	 

     

    

 

 15. Counterparts. This letter may be executed in one or more counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument.

 

 16. Governing Law. This letter shall be governed by the laws of the State of California, without regard to such state’s principles of conflicts of laws.

If the foregoing
correctly sets forth our mutual understanding, please so indicate by signing two copies of this letter in the spaces provided below
and returning one copy to Purchaser.

 

	Generex Biotechnology Corporation	 	Emmaus Life Sciences, Inc.
	By:	 	 	 	By:	 
	Title:	 	 	 	Title:	 
	Accepted and agreed on Date:	 	 	Yutaka Niihara, MD, MPH
	 	 	 	 	Accepted and agreed on Date: ___

 

    	 	11

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