Attached files
| file | filename |
|---|---|
| 8-K - Omnimmune Holdings, Inc. | omnimmune-8k012510.htm |
| EX-10.1 - Omnimmune Holdings, Inc. | ex10-1.htm |
| EX-10.2 - Omnimmune Holdings, Inc. | ex10-2.htm |
| EX-10.4 - Omnimmune Holdings, Inc. | ex10-4.htm |
Exhibit 10.3
Omnimmune
Holdings, Inc.
Term
Sheet for Debt Financing
and
Agreed Upon Restructuring
January
13, 2010
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Issuer
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Omnimmune
Holdings, Inc. (the “Company”).
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Security
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Unsecured
promissory notes (the “Notes”) in substantially the form attached hereto
as Schedule A, bearing interest at 10% per annum, payable semi-annually in
cash or additional notes of like tenor. The Notes will mature
five years after the first issuance of any Note.
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Conversion
Feature of Notes
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The
Notes will be convertible, at one time or from time to time, into common
stock of the Company at $.01 per share, subject to applicable adjustments
to account for any technical corporate actions including stock splits,
stock dividends, mergers, reorganizations or
recapitalizations. The conversion privilege shall specify that
no conversion shall be allowed if (i) it will cause the holder of the Note
being converted to beneficially own more than 4.99% of the Company’s
common stock, calculated in accordance with rules of the Securities and
Exchange Commission (the “SEC”) pursuant to Section 13(d) of the
Securities Exchange Act, as amended (the Act”), or (ii) there is not a
sufficient number of authorized and unissued shares of Common Stock to
accommodate the conversion request as measured at the time the request for
conversion is received.
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Funding
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A
minimum funding of $200,000 will occur upon signing of a binding letter of
intent. Thereafter, through March 31, 2010, as such date may be
extended by up to 60 days in the discretion of the Company, the Company
will continue to offer Notes in minimum increments of $25,000, up to a
maximum funding of $500,000 in the aggregate. Closings will
occur as subscriptions are received. Margie Chassman will use
her best efforts to purchase any Notes not subscribed for, up to the
maximum funding of $500,000, no later than March 31,
2010.
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Adjustment
to Other Securities
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As
part of the restructuring of the Company, which restructuring is
contemplated as a tax-free reorganization predicated upon an agreed upon
recapitalization, the warrants included in the Units sold by the Company
in 2008 will be adjusted for original investors in the Units who fund at
least $25,000 of the Notes, such that the aggregate exercise price for the
Unit warrants will remain the same but the exercise price will be reduced
to $.05 per share of common stock. In addition, as part of the
agreed upon recapitalization, the convertible debt held by Margie
Chassman, up to an aggregate amount of $800,000 shall have its conversion
price adjusted to $.01 per share. Any existing convertible debt
of the Company held by Margie Chassman in excess of $800,000, if any,
shall have its conversion price adjusted to $.01 per share. The
Unit warrants and convertible debt held by Margie Chassman shall contain
provisions permitting exercise or conversion only if as a result of any
such exercise or conversion she would beneficially own no more than 4.99%
of the common stock of the Company.
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Lock-Up
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In
connection with the recapitalization of the Company and the transactions
contemplated hereby, Chassman has agreed to restrict her ability to
transfer or sell any convertible notes, including those acquired through
this financing, as well as the shares of Common Stock underlying such
notes, for a period of two years from the date hereof, subject to the
limitations and terms contained in the Lock_Up Agreement between Chassman
and the Company in substantially the form annexed hereto and
made a part hereof as Schedule B.
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Registration
Rights
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Note
purchasers will get piggyback registration rights for the common stock
issuable upon conversion of the Notes.
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Compliance
With Securities Laws
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All
parties acknowledge that neither the Notes, the convertible notes held by
Chassman, nor the shares underlying the any such notes have been
registered under the Act. Accordingly, neither the Notes, the
convertible notes held by Chassman, nor the common shares issuable upon
conversion of the Notes may be sold, offered for sale, pledged or
hypothecated in the absence of an effective registration statement under
the Act covering the Notes or the common shares issuable upon
conversion of the Notes under said Act or an opinion of counsel reasonably
satisfactory to the Company that such registration is not
required.
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Proxy
Statement
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Upon
full funding of $500,000, and subject to the Company having sufficient
wherewithal to cover the costs and expenses related thereto, including
legal costs, the Company will use its best efforts to prepare and file a
proxy statement with the SEC and to clear it for mailing and mail it to
stockholders within 90 days of the signing of a binding letter of intent,
to obtain stockholder approval for (i) an increase in the authorized
common stock of the Company to 500 million shares;
(ii) obtaining authority to cause a reverse stock split for the
Company’s common stock in the range of one share for each five to fifty
shares outstanding; and (iii) amending the Company’s certificate of
incorporation to include a blank check preferred stock authorization.
Investor acknowledges and agrees that pending an increase in authorized
common shares, any conversion and exercise rights shall be limited based
on the current total of 50,000,000 authorized shares in the
aggregate.
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Management
Incentives
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Investor
agrees and acknowledges that, subject to Board approval, to be sought
contemporaneously with approval of this Term Sheet, as part of the agreed
upon recapitalization of the Company, management, together with certain
angel investors, will receive anti-dilution protection with respect to
their collective ownership interests that will enable management and the
angel investors to own or control a total of 49.44% of the
Company on a fully diluted basis as described hereinbelow, of which
management shall own or control 47.51% and the angel investors
shall own or control 1.93%. Investor acknowledges
and understands that, subject to Board approval, (i) management will be
fully protected from dilution with respect to a combined 47.51% interest
through the next $3.5 million in Net Funding (as defined below), and (ii)
the angel investors will be fully protected from dilution through the
completion of the financing being raised hereunder. Set forth
as Schedule C is a list of the breakdown of the management and angel
investor percentages described above.
As
used herein, Net Funding means any single transaction or series of related
transactions over a combined period of no more than twelve consecutive
months which result in the Company receiving not less than $3.5 million in
total funding within said twelve month period, inclusive of
this debt offering, net of all transaction costs, fees and other expenses
associated with each capital raise, and net of interest, dividends, or
other cash payments made in respect of the Notes and any notes payable to
Margie Chassman. Notwithstanding the above, if during any 90 day period
following the date hereof the Company fails to raise a minimum of $250,000
in new money, as measured on a cumulative basis, then all Net Funding
amounts received by the Company prior thereto will be excluded from the
calculation for purposes of determining whether the Company has realized
$3.5 million in Net Funding during any 12 month period.
All
anti-dilution protection for management and the angel investors shall be
effectuated through the issuance of additional shares, options or other
convertible securities, including preferred shares, as determined by the
Board, and shall give effect to all dilutive securities issued by the
Company, including the convertible Notes, as well as dilution caused
through adjustment to the pricing of previously issued
securities. By way of clarification, upon issuance of any
debt or equity securities which, through subsequent conversion or exercise
of option or warrants, could result in the issuance of additional shares
of Common Stock, or upon the approval of any adjustments to the conversion
or exercise price of any previously issued securities, the anti-dilution
rights in favor of management would thereupon be triggered and appropriate
shares would be issued or subject to issuance, as the case may be,
immediately upon issuance of such debt or equity
securities. Any shares issued, or subject to issuance, to
management by virtue of its anti-dilution rights would be subject to
clawback if and to the extent that the shares underlying any convertible
debt securities, warrants, options or other securities which resulted in
such issuance to management were to become conclusively unissuable in the
future (e.g., upon the expiration of options and warrants,
etc.).
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Counsel
Fee for Investors
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Andrew
Levinson, counsel for the investors in the Notes, shall receive a fee of
$15,000, of which half shall be payable upon the first closing and half
shall be payable upon the final funding of $500,000 of Notes, in the
aggregate.
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Board
Approval
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This
term sheet shall remain subject to Board of Director approval which
approval shall be sought immediately following the execution of this term
sheet.
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IN WITNESS WHEREOF, the
parties hereto, intending to be fully bound by the terms and conditions of this
term sheet, have executed it or caused it to be executed by their duly
authorized representatives as of the day and year set forth above at
the top of page one.
MARGIE
CHASSMAN
/s/ Margie Chassman
OMNIMMUNE
HOLDINGS, INC.
By:/s/ Harris
Lichtenstein
Harris A.
Lichtenstein, CEO
SCHEDULE
A
FORM
OF CONVERTIBLE NOTE
[Filed
Separately as Exhibit 10.2]
SCHEDULE
B
LOCK-UP
AGREEMENT WITH MARGIE CHASSMAN
[Filed
Separately as Exhibit 10.4]
SCHEDULE
C
BREAKDOWN
OF PERCENTAGE OWNERSHIP INTERESTS OF OMNIMMUNE HOLDINGS, INC. SUBJECT TO
ANTI-DILUTION PROTECTION
MANAGEMENT1
| Harris Lichtenstein: | 14.17% | |
| Alex Krichevsky: | 14.17% | |
| Mark Germain: | 13.62% | |
| Howard Becker: | 5.55% | |
| Total Management: | 47.51%2 |
ANGEL
INVESTORS3
1.93
%
TOTAL SHARES
SUBJECT TO
ANTI-DILUTION
PROTECTION: 49.44%
1
Anti-dilution protection to remain in place until Company
realizes $3.5 million in Net Funding (as defined in the Term Sheet)
and is subject to Board Approval
2 The 47.51 % total
percentage interest in favor of management represents the total percentage
ownership interest for management as part of the agreed upon recapitalization of
the Company. While individual percentages may be adjusted, either
through agreement of management or through enforcement of individual contracts
with management personnel, the overall collective percentage ownership of the
Company in favor of management shall remain at 47.51% throughout the period
contemplated by the Term Sheet, with the final individual percentages to be
allocated or re-allocated, as the case may be, as agreed upon by management or
approved by the Board.
3
Anti-dilution protection to remain in place through consummation of this
$500,000 Offering and is subject to Board Approval