Document:

Exhibit 10.1

 

EMMAUS LIFE SCIENCES, INC.

Promissory Note

 

	
Principal Amount: 
    	
$903.750.56
    	
Loan Date:
    	
September 14, 2017
    
	
 
    	
 
    	
 
    	
 
    
	
Currency: 
    	
US dollar
    	
Term:
    	
Due on demand
    
	
 
    	
 
    	
 
    	
 
    
	
Interest Rate: 
    	
10%
    	
Loan Due Date:
    	
Due on demand
    

 

Interest Payment Period: Interest is accrued and paid upon Loan Due Date

 

Lender:     Yutaka Niihara

 

FOR VALUE RECEIVED, Emmaus Life Sciences, Inc., a Delaware corporation, located at 21250 Hawthorne Blvd., Suite 800, Torrance, CA 90503 (“Borrower”) agrees to pay to Lender the sum of the Principal Amount in the stated Currency, together with any accrued interest at the stated Interest Rate, under the following terms and conditions of this this Promissory Note (“Note”).

 

1. Terms of Repayment (Balloon Payment): The entire unpaid Principal Amount and any accrued interest shall become immediately due and payable upon the stated Loan Due Date. Simple interest at the stated Interest Rate will accrue on the outstanding Principal Amount commencing on the Loan Date of this Note and the Borrower shall make payments of interest only as per the stated Interest Payment Period.

 

2. Prepayment: This Note may be prepaid in whole or in part at any time after six months of the Loan Date without premium or penalty. All prepayments shall first be applied to interest, and then to principal payments.

 

3. Place of Payment: All payments due under this Note shall be sent to the Lender’s address, as noted in Attachment 1 hereto, or at such other place as the Lender or subsequently assigned holder of this Note may designate in writing in the future.

 

4. Default: In the event of default, the Borrower agrees to pay all costs and expenses incurred by the Lender, including all reasonable attorney fees as permitted by law for the collection of this Note upon default.

 

5. Acceleration of Debt: If the Borrower (i) fails to make any payment due under the terms of this Note or seeks relief under the U.S. Bankruptcy Code, (ii) fails to deliver shares to the Lender by the deadline set forth in Section 4 hereof, (iii) suffers an involuntary petition in bankruptcy or receivership that is not vacated within thirty (30) days, (iv) consents to the appointment of a receiver, trustee, assignee, liquidator or similar official or such appointment is not discharged or stayed within 30 days, (v) makes a general assignment for the benefit of its creditors or (vi) admits in writing that it is generally unable to pay its debts as they become due, the entire balance of this Note and any interest accrued thereon shall be immediately due and payable to the holder of this Note.

 

 

6. Modification: No modification or waiver of any of the terms of this Note shall be allowed unless by written agreement signed by the parties. No waiver of any breach or default hereunder shall be deemed a waiver of any subsequent breach or default of the same or similar nature.

 

7. Complete Note: This Note is the complete and exclusive statement of agreement of the parties with respect to matters in this Note. This Note replaces and supersedes all prior written or oral agreements or statements by and among the parties with respect to the matters covered by it. No representation, statement, condition or warranty not contained in this Note is binding on the parties.

 

8. Transfer of the Note: This Note may be transferred, in whole or in part, at any time or from time to time, by the Lender. The Borrower hereby waives any notice of the transfer of this Note by the Lender or by any subsequent holder of this Note, agrees to remain bound by the terms of this Note subsequent to any transfer, and agrees that the terms of this Note may be fully enforced by any subsequent holder of this Note. If this Note is to be transferred, the Lender shall surrender this Note to the Borrower, whereupon the Borrower will forthwith issue and deliver upon the order of the Lender a new Note registered as the Lender may request, representing the outstanding Principal Amount being transferred by the Lender and, if less then the entire outstanding Principal Amount is being transferred, a new Note to the Lender representing the outstanding Principal Amount not being transferred. This Note may not be transferred by the Borrower, by operation of law or otherwise, without the prior written consent of the Lender.

 

9. Lost, Stolen or Mutilated Note: Upon receipt by the Borrower of evidence reasonably satisfactory to the Borrower of the loss, theft, destruction or mutilation of this Note, and, in the case of loss, theft or destruction, of any indemnification undertaking by the Lender to the Borrower in customary form and, in the case of mutilation , upon surrender and cancellation of this Note, the Borrower shall execute and deliver to the Lender a new Note representing the outstanding Principal Amount and accrued and unpaid interest thereon.

 

10. Remedies: The remedies provided in this Note shall be cumulative and in addition to all other remedies available under this Note at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the Lender’s right to pursue actual and consequential damages for any failure by the Borrower to comply with the terms of this Note.

 

11. Severability of Provisions: If any portion of this Note is deemed unenforceable, all other provisions of this Note shall remain in full force and effect.

 

12. Choice of Law: All terms and conditions of this Note shall be interpreted under the laws of California, U.S.A., without regard to conflict of law principles.

 

 

Signed Under Penalty of Perjury, this 14th day of September, 2017

 

 

	
Emmaus Life   Sciences, Inc.
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	

    	
 
    
	
By: Willis C. Lee, COO   and CFO
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
/s/ Yutaka Niihara
    	
 
    
	
By: Lender
    	
 
    

 

 

ATTACHMENT 1

 

Lender’s Name:                   Yutaka Niihara

Lender’s Address:Exhibit 10.2

 

 

 

 

 

Loan Agreement

 

Creditor KPM investment (hereinafter “A”) and Debtor Emmaus Life Sciences Inc. USA (hereinafter “B”). The Loan Agreement (hereinafter “formal contract) is concluded as follows.

 

[Preamble]

 

1. This contract is for the purpose of “A” borrowing money from “B”, borrowing it and repaying it, and the “joint sureties” assuring obligation of “B”.

 

2. The parties hereby agree as follows.

 

Article 1 [Loan money of A]

 

A lends USD 3,500,000 to B on the date of this contract, and B borrows it.

 

Article 2 [Maturity date]

 

The maturity date under this Agreement is January 3, 2018. However, if A and B agree and A approves, the maturity date may be extended.

 

Article 3 [Interest]

 

1. A’s interest on the loan shall be 5% per annum and shall be repaid on maturity date.

 

2. B cannot claim deduction or reduction of all or part of the interest amount for any reason.

 

Article 4 [Collateral offer]

 

1. B will provide A as collateral for 6,643,559 shares in Telcon’s registered common stock and 4,248,720 shares in KPM tech’s registered common stock. However, the same collateral confirms that the collateral is provided to Telcon as a security before A is provided as collateral and that the collateral is a back burner.

 

2. The joint surety Emmaus will provide A with USD 5,000,000 of the bonds to be received from Telcon, Inc., which Emmaus holds, as collateral for B’s debt.

 

Article 5 [Trigger clause]

 

1. In the following cases, it is the cause of trigger clause.

 

1 When B is unable to repay the principal at the redemption date of Article 2 without A’s consent

 

2 B or the joint sureties has applied for a provisional seizure, seizure, auction, commencement of composition and commencement of company reorganization procedure to a third party other than A

 

3 When B or the joint sureties enter into settlement

 

4 When A reasonably judges that it is impossible to pay the loan

 

5 When A reasonably judges that either the contents of this Agreement or any of the verbal promises between A, B and the joint sureties cannot be executed or are impossible

 

 

2. In the occurrence of trigger clause, A may, in a reasonable manner, cover the principal of the loan by selling or entry of a change of a holder all collateral provided by B. Also, in this case, B must actively help A to execute the collateral smoothly.

 

Article 6 [Change of content]

 

Changes to the contents of this Agreement may be changed by written agreement of the parties.

 

Article 7 [Conflict resolution]

 

If a dispute arises in connection with this Agreement, A and B shall settle by mutual trust. However, if the settlement is not concluded, in case of filing a lawsuit, at a court of competent court of A’s head office, if B raises a lawsuit, it can file a suit at a court of competent court of B’s head office.

 

In order to confirm and certify the above contract, two contracts shall be prepared and signed by A and B, and one contract shall be kept for each one.

 

[Sign or seal is on the next page]

 

 

October   , 2017

 

Creditor (A)

Company name: KPM investment

Address: 122, Sandan-ro 163beon-gil, Danwon-gu, Ansan-si, Gyeonggi-do, Republic of Korea

Representative Director: Chung Kyun Lee            (Sealed)

 

Debtor (B)

Emmaus Life Sciences Inc. USA

Address: 21259 Hawthorne Blvd. Suite 800 Torrance, CA 90503

CEO: Dr. Yutaka Niihara                         (Sealed)Exhibit 10.3

 

Agreement

 

This Agreement is made and entered as of September 29, 2017, by and between 1) Telcon Holdings Inc. (Hereinafter referred to as “Telcon Holdings”), 2) Telcon Inc. (Hereinafter referred to as “Telcon”) and 3) Emmaus Life Sciences (Hereinafter referred to as “Emmaus”) located in USA.

 

Telcon Holdings, Telcon and Emmaus (Hereinafter referred to as “The Parties”) hereby agree as follows

 

Article 1 [Objective]

 

This Agreement shall be concluded for the smooth execution of the matters stipulated in “Management Control Acquisition Agreement” and in order to agree on matters related to the management of TELCON in the future, executed by the parties on May 27, 2017.

 

Article 2 [Sale of Emmaus Shares held by Hanil Vacuum and KPM Tech to Telcon]

 

(1) The parties agree to sell total 4,444,445 shares (hereinafter referred to as “Target Shares”) of 666,667 shares of Emmaus held by Hanil Vacuum Co., Ltd. (Hanil Vacuum”) and 3,777,778 shares of Emmaus held by KPM Tech to Telkon at a price of USD. 6.6 per share. The contract shall be concluded on the date to be submitted the relevant external evaluation report and on October 31, 2017, whichever comes first.

 

(2) The parties shall cooperate in the external evaluation of the external evaluation agency to evaluate the adequacy on the sale price of target shares actively. If the external evaluation agency is reasonably necessary for external evaluation and the data can be prepared, Emmaus shall endeavor to ensure that target shares shall be sold as soon as possible by providing the data in a timely manner.

 

(3) Telcon shall pay the purchase price of target shares to Hanil Vacuum and KPM Tech as follows. The price of purchase and sale (the Issuing Price of Convertible Bond) for each shall be calculated as the Korean Won-Dollar exchange rate of the transaction day (Basic rate calculated of sale for the first time announced on Foreign Exchange Brokerage on the same day).

 

i ) New convertible bonds issued by Telcon, which make the amount of currency calculated in the above exchange rate as total amount of par value (Provided, it can be appropriately adjusted in consideration of the par value of one bond) shall be paid to Hanil Vacuum.

 

ii) New convertible bonds issued by Telconr which make the amount of currency calculated in the above exchange rate as total amount of par value (Provided, it can be appropriately adjusted in consideration of the par value of one bond) shall be paid to KPM Tech.

 

(4) Telcon shall not sell, offer or otherwise dispose target shares purchased from Hanil Vacuum and KPM Tech according to this Article for 1 year from the acquisition date (Hereinafter referred to as “Mandatory Holding Period”) without the prior written consent of Emmaus.

 

 

(5) Emmaus has a Preferred Purchase Rights if Telcon wants to dispose target shares after mandatory holding period has elapsed. Telcon shall notify Emmaus in written form if Emmaus intends to exercise the Preferred Purchase Rights after mandatory holding period has elapsed, and Emmaus shall notify Telcon in written form within 15 business days from the date of receipt of the notice of whether Preferred Purchase Rights shall be exercised by Telcon (hereinafter, “Prior Notice Period of Preferred Purchase Rights”). Telcon may sell target shares freely if it does not receive notification for the exercise of Preferred Purchase Rights within the Prior Notice Period of Preferred Purchase Rights.

 

(6) If Emmaus is listed on the NASDAQ within 1 year after the conclusion of this agreement, Telcon may dispose of target shares even before mandatory holding period stipulated in paragraph 4 of this article. In such case, Preferred Purchase Rights of Emmaus stipulated in paragraph 4 of this article shall be maintained.

 

Article 3 [Payment of Asian Copyright for Diverticular Disease Treatment]

 

(1) Emmaus and Telcon entered a Copyright Agreement related to a copyright in Korea, Japan and China for a total amount of $ 10,000,000 among the Asian copyright for Diverticular Disease Treatment, USD. 5,000,000 were paid on June 19, 2017 as a down payment, and a balance of USD.5,000,000 not paid to Emmaus shall be paid by December 31, 2017.

 

(2) The parties agree that they shall execute a valuation on the Copyright Agreement to be entered between Emmaus and Telcon related to a copyright in Australia for Diverticular Disease Treatment, conclude the Copyright Agreement related to a copyright in Australia as soon as possible after December 27, 2017. And Telcon agrees to pay Emmaus USD. 5,000,000 by December 31, 2017. However, if the amount of the external evaluation is less than USD.5,000,000 the parties shall conclude the agreement with mutual consultation by calculating the value within the external evaluation amount limit.

 

(3) Telcon Holdings or Any person designated by Telcon Holdings (hereinafter referred to as “Lender”) shall lend Emmaus USD. 3,500,000 (hereinafter referred to as “Loan”) after the resignation of Yutaka Niihara, Internal Director and Willis Lee, Internal Director in accordance with resolution of extraordinary general meeting of shareholders held by Article 4 (2) in this Agreement related to paragraphs 1 and 2 of this Article on September 29, 2017, and after the submission of the written resignation of BAXON KIM, Representative Director and YOUNGDON SON, External Director. However, in case of a request from Emmaus Korea, the lender shall cooperate with the Emmaus to return the loan to Emmaus Korea while the lender processes the foreign exchange report. If the loan is remitted to Emmaus within the term of the loan, Emmaus shall repay the loan immediately upon receipt from Telcon of the full amount of the Asian copyright for: Diverticular Disease Treatment in accordance with Paragraphs 1 and 2 of this Article.

 

(4) Emmaus shall provide the Lender the balance of USD. bond as the security for the loan stipulated in paragraph 3 of this Article for the Asian copyright for Diverticular Disease Treatment that will be paid from Telcon in accordance with Paragraph 1 of this Article. In addition, 6,643,559 shares of Talon held by Emmaus and 3,777,778 shares of KPM Tech held by Emmaus are pledged as subordinated bonds, and a Letter of Commitment shall be submitted to the Lender.

 

(5) Emmaus shall submit an Application for Diverticular Disease Clinical (IND) within the first quarter of 2018 and shall do its best to get the final approval soon.

 

(6) Telcon Holdings, hereby shall exempt the performance of the Agreement on the Fund Raising Obligation for the management support to Telcon stipulated in Article 6 (9) of “Management Control Acquisition Agreement” entered on May 26, 2017 in order for Telcon to pay USD. 10,000,000 in total amount related to the Asian Copyright for Diverticular Disease Treatment in accordance with paragraphs 1 and 2 of this Article. In addition, , Telcon Holdings does its best to ensure that Telcon finances and manages its operations by supporting the operating funds necessary for the management of Telcon.

 

 

Article 4 [Modification of Telcon Board of Directors and holding of extraordinary General Meeting of Shareholders]

 

(1) The parties agree to hold an extraordinary General Meeting of Shareholders in order to change the composition of the Board of Directors of Telcon and to appoint a new executive member under the assumption that they will faithfully fulfill the consent in this Agreement, and entrust Telcon Holdings with voting rights regarding the shares of Telcon held by Emmaus in order to be elected as a new executive member at this extraordinary General Meeting of Shareholders.

 

(2) The parties will hold the Telcon Board of Directors on September 29, 2017, assuming compliance with the provisions of Articles 2 and 3 of this Agreement (Including the completion of Emmaus Korea loan equivalent amount of the loan of Article 3 (3)). In addition, the Representative Director of Telcorn will be changed from previous Representative Director, BAXON KIM to a new Director appointed by Telcon Holdings, and will convene and hold an extraordinary General Meeting of Shareholders for the election of new Board of Directors.

 

(3) Under the assumption that they will faithfully fulfill the consent in this Agreement, Emmaus shall ensure that Internal Director, Yutaka Niihara and Internal Director, Willis Lee resign from the Telcon Board of Directors by September 29, 2017 and submit the required documents for resignation as soon as possible. Representative Director, BAXON KIM and Outside Director, YOUNGDON SOHN shall resign immediately after the Board of Directors, and decided not to object to the change from previous Representative Director, BAXON KIM to a new Director appointed by Telcon Holdings.

 

(4) Telcon shall pay the annual allowance equivalent to one year allowance to the Representative Director, BAXON KIM as retirement allowance or retirement bonus within 30 days from the date of submission of the resignation, and Telcon Holdings shall provide necessary funding so that Telcon can fulfill its obligations.

 

(5) Telcon Holdings shall appoint SANGGON HAN, Auditor of Telcon, as a non-registered president of Telcon with a condition to guarantee the term for one year from the resignation date.

 

Article 5 [[Effectiveness]

 

This Agreement shall become effective from the date on which the parties seal or sign.

 

Article 6 [Penalty]

 

If either Telcon Holdings or Emmaus does not comply with or fails to comply with any of the provisions in this Agreement (Including cases where either Telcon Holdings or Emmaus fails to fulfill the obligations of the Telcon in violation of this Agreement), the offending party shall pay a penalty of five billion Korean Won to the other party.

 

Article 7 [Others]

 

(1) This Agreement shall be construed and enforced in accordance with the laws of the Republic of Korea.

 

(2) Any dispute arising from or relating to this Agreement or the Parties’ relationship shall be adjudicated at Seoul Central District Court as the first court of competent jurisdiction.

 

 

IN WITNESS THEREOF, this Agreement shall be prepared in three copies and one each to each party, the Parties to this Agreement shall seal and sign below through their authorized representatives, and Certificate of Registered Seal shall be attached herein.

 

September 29, 2017

 

Telcon Holdings, Inc.

Address : 5th Floor, 25, Teheran-ro 108-gil, Gangnam-gu, Seoul (Daechidong, Daechi bldg.)

Representative Director : JI HOON KIM (Sealed)

 

Telcon Inc.

Address: 684, Dongtangiheung-ro, Giheung-gu, Yongin-si, Gyeonggi-do

Representative Director: BAXON KIM (Sealed)

 

Emmaus Life Sciences Inc. USA

Address: 21250 Hawthorne Blvd. Suite 800 Torrance, CA 90503

CEO: Mr. Yutaka Niihara (Signed)

 

 

Translated by Song, Young Sun

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