EXCHANGE AGREEMENT
This
Exchange Agreement (the “Agreement”)
is
entered into, effective as of May 15, 2007 (the “Effective
Date”),
between Intellect
Neurosciences, Inc.
(f/k/a/
GlobePan Resources, Inc.; the “Company”)
and
[ ]
(the
“Holder”).
RECITALS
A. The
Company entered into an agreement and plan of merger on January 25, 2007 (the
“Merger”)
pursuant to which the Company’s wholly owned subsidiary was merged with and into
Intellect Neurosciences, Inc., a privately held Delaware company (“Intellect”).
B. Prior
to
the Merger, the Holder was the holder of such number of shares of Series B
Convertible Preferred Stock of Intellect (“Intellect
Preferred Stock”)
as set
forth opposite the Holder’s name on Schedule
A
hereto.
Pursuant to the Certificate of Incorporation of Intellect, as in effect prior
to
the Merger (“Intellect
Charter”),
such
Intellect Preferred Stock had certain anti-dilution and other rights and
privileges.
C. Pursuant
to the Merger, each share of Intellect Preferred Stock issued and outstanding
prior to the merger was converted into one share of the Company’s Common Stock.
As a result, the Holder is the holder of such number of shares of the Company’s
Common Stock as set forth opposite the Holder’s name on Schedule
A
hereto
(“Holder
Common Stock”).
D. The
Company and the Holder have agreed, in order to provide the Holder with
substantially the same rights he/she/it had as a holder of the Intellect
Preferred Stock, that each share of Holder Common Stock issued to the Holder
pursuant to the Merger shall be exchanged for the right to receive one-tenth
(1/10) of a share of a new series of preferred stock of the company, to be
designated as Series B Convertible Preferred Stock of the Company, $.001 par
value per share (“New
Preferred Stock”)
having
the rights and preferences set forth in a Certificate of Designation
substantially in the form attached hereto as Exhibit
A
(“Certificate
of Designation”).
E. The
Holder wishes to exchange each share of his/her/its Holder Common Stock for
one-tenth (1/10) of a share of New Preferred Stock, (the “New
Shares”),
pursuant to Section 3(a)(9) of the Securities Act of 1933, as amended (the
“Exchange”).
F. In
consideration of the premises and the mutual covenants and undertakings set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:
AGREEMENT
1. Exchange.
(a) On
a date
to be agreed upon between the Company and the Holder (but in no event later
than
the third business date after the date of this Agreement), the Holder will
transfer and deliver (or cause to be transferred and delivered) to the Company
certificates representing the Holder’s Intellect Preferred Stock, with
appropriate transfer documents executed in blank to the Company covering (i)
any
and all of Holder’s rights in and to the Holder Intellect Preferred Stock and
(ii) any and all of Holder’s rights in and to, and to receive, shares of Holder
Common Stock (“Transfer
Documents”).
Such
Transfer Documents shall in form and substance be reasonably acceptable to
the
Company.
(b) Upon
receipt of (i) certificates representing the Holder’s Intellect Preferred Stock
and (ii) the Transfer Documents, the Company will issue and deliver (or cause
to
be issued and delivered) to Holder the New Shares in the name of Holder, or
in
the name of a custodian or nominee of Holder, as requested by Holder prior
to
the date hereof, in exchange for the Holder Common Stock and any and all rights
related thereto. The New Shares shall be delivered to each Holder’s address
as set forth on Schedule
A
hereto.
(c) Effective
upon Holder’s receipt of the New Shares, Holder irrevocably transfers any and
all of Holder’s rights in and to, and to receive, shares of Holder Common Stock
and waives any and all rights related to the Holder Common Stock.
2. Representations
and Warranties of the Holder.
The
Holder represents and warrants to the Company that
(a) If
the
Holder is a corporation, partnership, trust or other entity, (i) it is properly
organized, validly existing and in good standing in its jurisdiction of
organization; (ii) has all requisite corporate power and authority to enter
into
this Agreement, to perform its obligations hereunder and to consummate the
Exchange; (iii) has taken all corporate acts and other proceedings required
to
be taken by it to authorize the execution, delivery and performance of this
Agreement and the consummation of the Exchange.
(b) The
Holder, if an individual, is at least twenty-one (21) years of age and of
sufficient legal capacity to execute this Agreement.
(c) This
Agreement has been duly executed and delivered by the Holder and constitutes
a
legal, valid and binding obligation of the Holder, enforceable against the
Holder in accordance with its terms.
(d) Holder
had, prior to the Merger, good and valid title to the Intellect Preferred Stock,
free and clear of liens, claims and encumbrances; and has good and valid right
to receive Holder Common Stock, free and clear of liens, claims and
encumbrances.
(e) Upon
delivery to the Company of any certificates representing the Intellect Preferred
Stock and the Transfer Documents, Holder conveys to the Company good and valid
title to the Holder Common Stock, free and clear of liens, claims, encumbrances,
security interests, options, charges and restrictions of any kind.
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(f) Holder
acknowledges that (i) it has reviewed the Company’s filings with the Securities
and Exchange Commission (the “SEC”)
since
September 9, 2005, and (ii) it understands that the rights and privileges of
holders of the New Shares are substantially different from the rights the Holder
has as a holder of the Holder Common Stock.
(g) Holder
hereby acknowledges that the New Shares are being issued without registration
under the Securities Act of 1933, as amended, in reliance upon Section 3(a)(9)
thereof and are deemed restricted securities under such Act and will not be
freely transferable by the Holder. Accordingly, all certificates representing
the New Shares will bear a restrictive legend in substantially the form set
forth on Schedule
B
hereto.
(h) Holder
has the requisite knowledge and experience in financial and business matters
so
that it is capable of evaluating the merits and risks of the Exchange and
acquiring the New Shares in connection therewith and has had such opportunity
as
it has deemed adequate to obtain from representatives of the Company such
information as is necessary to permit the Holder to evaluate the merits and
risks of the Exchange. The Holder is an “accredited investor” as defined in Rule
501 promulgated under the Securities Act of 1933, as amended.
(i) Holder
is
not at present, and has not been during the preceding three months, an
“affiliate” of the Company as that term is defined in paragraph (a)(1) of Rule
144 pursuant to the Securities Act of 1933, as amended.
(j) In
entering into this Agreement and the Exchange, the Holder acknowledges that
it
has acted and is acting for itself and not at the direction or instruction
of
any other person, including without limitation, the Company, and the Holder
has
not, is not and will not hold itself out as, an agent of the Company in
connection with the Exchange or in connection with any subsequent sale of the
New Shares.
(k) Holder
confirms that the Company has not retained or authorized the Holder to act
on
its behalf in connection with the Exchange, and the Company has not paid or
given, directly or indirectly, any commission or other remuneration, to Holder,
for soliciting the acquisition of any of the Holder Common Stock or the
Exchange.
(l) Holder
is
a resident of the state set forth opposite the Holder’s name on Schedule
A
hereto
for purposes of securities laws applicable to the Exchange and intends that
such
state’s securities laws of that state alone together shall govern the
Exchange.
(m) Holder
consents or has consented to the Merger and has not in connection with the
Merger exercised any appraisal rights the Holder may have or have had pursuant
to Section 262 of the Delaware General Corporation Law.
3. Representations,
Warranties and Agreements of the Company.
The
Company hereby represents and warrants to the Holder and agrees as
follows:
(a) The
Company is a corporation duly organized, validly existing and in good standing
under the laws of Delaware. The Company has all requisite corporate power and
authority to enter into this Agreement, to perform its obligations hereunder
and
to consummate the Exchange. All corporate acts and other proceedings required
to
be taken by the Company to authorize the execution, delivery and performance
of
this Agreement and the consummation of the Exchange have been duly and properly
taken. This Agreement has been duly executed and delivered by the Company and
constitutes a legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms.
3
(b) The
Company shall file with the Secretary of State of the State of Delaware the
Certificate of Designations in substantially the form attached hereto as
Exhibit
A.
(c) Based
in
part on the representations of the Holder contained herein, the Company hereby
represents that (i) the issuance of the New Shares is exempt from the
registration requirements of Section 5 of the Securities Act of 1933, as
amended, in reliance upon Section 3(a)(9) thereof, and (ii) when issued in
accordance with this Agreement, the New Shares will be (A) duly authorized
and
validly issued, fully-paid, non-assessable shares of the Company’s Series B
Preferred Stock, and (B) bear a restrictive legend as set forth on Schedule
B
hereto.
(d) The
Company has not retained or authorized the Holder to act on the Company’s behalf
in connection with the Exchange, and no broker, investment banker, finder or
other person has been retained by or authorized to act on behalf of the Company
in connection with the Exchange, and the Company has not paid or given, directly
or indirectly, any commission or other remuneration, to any person, for
soliciting the acquisition of the Holder Common Stock or the
Exchange.
4. Registration
Rights.
(a) The
Company hereby grants the following registration rights to holders of Series
B
Preferred Stock. If the Company at any time proposes to register any of its
securities under the Securities Act of 1933 for sale to the public, whether
for
its own account or for the account of other security holders or both, except
with respect to registration statements on Forms X-0, X-0 or another form not
available for registering the Common Stock held by or purchaseable by Holder
(the “Registrable Securities”) for sale to the public, provided the Registrable
Securities are not otherwise registered for resale by the Holder pursuant to
an
effective registration statement, each such time it will give at least fifteen
(15) days' prior written notice to the record holder of the Registrable
Securities of its intention so to do. Upon the written request of the Holder,
received by the Company within ten (10) days after the giving of any such notice
by the Company, to register any of the Registrable Securities not previously
registered, the Company will cause such Registrable Securities as to which
registration shall have been so requested to be included with the securities
to
be covered by the registration statement proposed to be filed by the Company,
all to the extent required to permit the sale or other disposition of the
Registrable Securities so registered by the Holder of such Registrable
Securities (the “Seller” or “Sellers”). Unless instructed in writing to the
contrary, the Holder hereby automatically exercises the registration rights
granted in this Section 4. The Seller is hereby given the same rights and
benefits as any other party identified in such registration. The Company shall
prosecute any such registration statement to effectiveness as promptly as
reasonably practicable. The expenses of any such registration, other than
underwriter’s discounts or selling commissions, shall be borne by the Company.
In the event that any registration pursuant to this Section 4 shall be, in
whole
or in part, an underwritten public offering of common stock of the Company,
the
number of shares of Registrable Securities to be included in such an
underwriting may be reduced by the managing underwriter if and to the extent
that the Company and the underwriter shall reasonably be of the opinion that
such inclusion would adversely affect the marketing of the securities to be
sold
by the Company therein; provided, however, that the Company shall notify the
Seller in writing of any such reduction. Notwithstanding the foregoing
provisions, the Company may withdraw or delay or suffer a delay of any
registration statement referred to in this Section 4 without thereby incurring
any liability to the Seller due to such withdrawal or delay.
4
(b) In
addition to the rights set forth in paragraph (a) of this Section 4, Holders
under this Agreement and agreements of like tenor holding at least 50% of all
Registrable Securities hereunder and thereunder may, on any one occasion
beginning 180 days after the date of this Agreement, if the Registrable
Securities are not then included in a registration statement filed or proposed
to be filed with the Securities and Exchange Commission pursuant to the
Securities Act of 1933, demand that a registration statement be filed covering
such Registrable Securities and any other Registrable Securities hereunder
and
under agreements of like tenor the Holders of which, upon 15 days’ written
notice from the Company, request such inclusion. Thereafter, within 60 days
after such demand, the Company shall file a registration statement covering
the
Registrable Securities requested to be included therein and shall prosecute
such
registration statement to effectiveness as promptly as reasonably practicable.
The Company shall bear the expenses of such registration other than
underwriter’s discounts or selling commissions, if any.
5. Information
Provided in Connection with the Exchange.
Other
than with respect to this Agreement, the Company confirms that it has not
provided Holder or its counsel with any information that constitutes or might
constitute material, nonpublic information. The Company acknowledges and agrees
that Holder neither makes nor has made any representations or warranties with
respect to the transactions contemplated hereby other than those specifically
set forth in this Agreement. The Company understands and confirms that Holder
will rely on the Company’s representations set forth in Section 3 in effecting
the Exchange.
6. Confidentiality.
Neither
the Company nor the Holder shall issue any press releases or any other public
statements with respect to the transactions contemplated hereby; provided,
however, that the Company shall be entitled to make a press release regarding
the Exchange and thereafter the Company shall be entitled to make other public
disclosure with respect to the Exchange (i) as is required by law and
regulations, or (ii) to explain the Company’s reasons for and business analysis
behind Exchange and the impact of the Exchange on the Company’s business.
7. Company
Acknowledgement.
Anything
in this Agreement or any other document to the contrary notwithstanding, it
is
understood acknowledged and agreed by the Company that:
5
a. Nothing
contained herein, and no action taken by Holder pursuant hereto, shall be deemed
to constitute Holder as a partnership, an association, a joint venture or any
other kind of entity, or create a presumption that Holder are in any way acting
in concert or as a group with respect to securities of the Company or the
transactions contemplated hereby.
x. Xxxxxx
confirms that it has independently participated in the negotiation of the
transaction contemplated hereby with the advice of its own counsel and
advisors.
c. The
Holder’s holding period for the New Shares for purposes of Rule 144 promulgated
by the SEC pursuant to the Securities Act of 1933, as amended, shall be deemed
to have commenced on the date of the Merger.
8. Notices.
All
notices and other communications under this Agreement, including any notices
with respect to the transfer of the New Shares, shall be in writing and shall
be
deemed given when (a) delivered personally, (b) one business day after being
delivered to a nationally recognized overnight courier or (c) when sent by
facsimile (with confirmation of transmission received by the sender) to the
parties at the addresses (or at such other address as shall be specified by
like
notice):
If
to the Company:
0
Xxxx
00xx
Xxxxxx
Xxx
Xxxx,
XX 00000
Attention:
|
Xxxxxx
Xxxx, President and
|
Chief
Financial Officer
|
Facsimile
No.: 000-000-0000
If
to the Holder:
[
Insert
Address]
9. Amendment.
Neither
this Agreement nor any of the terms hereof may be amended, supplemented, waived
or modified except by an instrument in writing signed by the party against
which
the enforcement of such amendment, supplement, waiver or modification is
sought.
10. Governing
Law.
THIS
AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAWS. Any
action brought by either party against the other concerning the transactions
contemplated by this Agreement shall be brought only in the state courts of
New
York or in the federal courts located in the state of New York. Each party
hereto waives, and agrees not to assert in any such suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction in New York of
such court, that the suit, action or proceeding is brought in an inconvenient
forum or that the venue of the suit, action or proceeding is improper.
11. Counterparts.
This
Agreement may be executed in any number of counterparts, and each such
counterpart shall be deemed to be an original instrument, but all such
counterparts will together constitute but one and the same instrument. Delivery
of an executed counterpart of a signature page by facsimile transmission shall
be effective as a delivery of a manually executed counterpart of this
Agreement.
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12. Entire
Agreement.
This
Agreement constitutes the entire agreement and supersedes all prior agreements
and understandings, both written and oral, between the parties with respect
to
the subject matter hereof.
13. Assignment.
Neither
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by the Company or the Holder without the prior written consent
of
the other.
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IN
WITNESS WHEREOF, each of the parties has caused this Agreement to be duly
executed on its behalf as of the date first written above.
_________________________________
By:
Xxxxxx
Xxxx
Title:
President
& Chief Financial Officer
HOLDER:
[
]
By:
_______________________
Name:
Title:
8
SCHEDULE
A
9
SCHEDULE
B
RESTRICTIVE
LEGEND
"These
shares have not been registered under the Securities Act of 1933. They may
not
be offered or transferred by sale, assignment, pledge or otherwise unless
(i) a
registration statement for the shares under the Securities Act of 1933 is
in
effect or (ii) the corporation has received an opinion of counsel, which
opinion
is satisfactory to the corporation, to the effect that such registration
is not
required under the Securities Act of 1933."
10
EXHIBIT
A
CERTIFICATE
OF DESIGNATIONS
See
attached.
11