EXHIBIT 99.2
PURCHASE AGREEMENT
DATED AS OF APRIL 1, 2004
BY AND BETWEEN
VIRAGEN, INC.
AND
[NAME OF INVESTOR]
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7% CONVERTIBLE NOTE DUE 2006
AND
COMMON STOCK PURCHASE WARRANT
VIRAGEN, INC.
PURCHASE AGREEMENT
7% CONVERTIBLE NOTE DUE 2006
AND
COMMON STOCK PURCHASE WARRANT
TABLE OF CONTENTS
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1. Definitions.....................................................................................1
2. Purchases and Sales of the Note and Warrant.....................................................5
2.1 Purchase and Sale......................................................................5
2.2 Escrow Funding.........................................................................6
2.3 Closing................................................................................6
3. Representations and Warranties of the Company...................................................6
3.1 Organization, Good Standing and Qualification..........................................6
3.2 Authorization..........................................................................7
3.3 Capitalization.........................................................................7
3.4 Valid Issuance, Enforceable Obligation.................................................7
3.5 Consents...............................................................................8
3.6 Delivery of SEC Filings; Business; Non-Public Information..............................8
3.7 Use of Proceeds........................................................................8
3.8 No Material Adverse Change.............................................................9
3.9 Registration Statements................................................................9
3.10 Form S-3 Eligibility..................................................................10
3.11 No Conflict, Breach, Violation or Default.............................................10
3.12 Tax Matters...........................................................................10
3.13 Title to Properties...................................................................11
3.14 Certificates, Licenses, Authorizations and Permits....................................11
3.15 No Labor Disputes.....................................................................11
3.16 Intellectual Property.................................................................11
3.17 Environmental Matters.................................................................12
3.18 Litigation............................................................................12
3.19 Financial Statements..................................................................12
3.20 Insurance Coverage....................................................................12
3.21 Compliance with AMEX Continued Listing Requirements...................................13
3.22 Acknowledgement of Potential Dilution.................................................13
3.23 Brokers and Finders...................................................................13
3.24 No Directed Selling Efforts or General Solicitation...................................13
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3.25 No Integrated Offering................................................................13
3.26 Disclosures...........................................................................13
3.27 Absence of Rights Agreement...........................................................14
4. Representations and Warranties of the Purchaser................................................14
4.1 Organization and Existence............................................................14
4.2 Purchase Entirely for Own Account.....................................................14
4.3 Investment Experience.................................................................14
4.4 Disclosure of Information.............................................................14
4.5 Restricted Securities.................................................................14
4.6 Accredited Investor...................................................................14
4.7 No General Solicitation...............................................................14
4.8 Residency of Purchaser................................................................15
4.9 Brokers and Finders...................................................................15
4.10 Authorization.........................................................................15
4.11 Risk Factors..........................................................................15
4.12 Reliance..............................................................................15
4.13 No Representations....................................................................15
4.14 Survival..............................................................................15
5. Registration Rights Agreement..................................................................15
6. Certain Covenants of the Company and the Purchaser.............................................16
6.1 Stockholder Approval; Reverse Stock Split; Rule 144...................................16
6.2 Limitation on Certain Transactions....................................................17
6.3 Right of the Purchasers to Participate in Future Transactions.........................17
6.4 Reports and Information...............................................................19
6.5 Press Releases........................................................................20
6.6 No Conflicting Agreements.............................................................20
6.7 Insurance.............................................................................20
6.8 Compliance with Laws..................................................................20
6.9 Listing of Underlying Shares and Warrant Shares and
Related Matters.......................................................................21
6.10 Form 8-K..............................................................................21
6.11 Legends...............................................................................21
6.12 Limitation on Certain Actions.........................................................22
6.13 Best Efforts..........................................................................22
6.14 Debt Obligation.......................................................................22
7. Conditions to Escrow Funding...................................................................23
7.1 Conditions to the Company's Obligations...............................................23
7.2 Conditions to the Purchaser's Obligations.............................................23
8. Conditions to Closing..........................................................................24
8.1 Conditions to the Company's Obligations to Issue and Sell.............................24
8.2 Conditions to the Purchaser's Obligations to Purchase.................................24
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9. Miscellaneous..................................................................................26
9.1 Successors and Assigns................................................................26
9.2 Counterparts..........................................................................26
9.3 Titles and Subtitles..................................................................26
9.4 Notices...............................................................................26
9.5 Expenses..............................................................................27
9.6 Amendments and Waivers................................................................27
9.7 Severability..........................................................................27
9.8 Entire Agreement......................................................................27
9.9 Survival..............................................................................27
9.10 Further Assurances....................................................................28
9.11 Applicable Law........................................................................28
9.12 Remedies..............................................................................28
9.13 Jurisdiction..........................................................................28
9.14 Survival..............................................................................28
9.15 Construction; Purchaser Status........................................................29
EXHIBITS
Exhibit A - Form of Note
Exhibit B - Form of Warrant
Exhibit C - Form of Registration Rights Agreement
Exhibit D - Form of Escrow Agreement
Exhibit E - Form of Opinion of Legal Counsel to the Company to be Delivered on Escrow Funding Date
Exhibit F - Form of Press Release
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PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT dated as of April 1, 2004 (this
"Agreement"), by and between VIRAGEN, INC., a Delaware corporation (the
"Company"), and [NAME OF PURCHASER] (the "Purchaser").
W I T N E S S E T H:
WHEREAS, the Purchaser wishes to purchase from the Company,
and the Company wishes to sell and issue to the Purchaser, upon the terms and
subject to the conditions of this Agreement, (i) a Note (such capitalized term
and all other capitalized terms used herein having the respective meanings
provided herein) in principal amount set forth on the signature pages hereto and
(ii) a Warrant initially entitling the holder to purchase the number of shares
of Common Stock set forth on the signature pages hereto for the Purchase Price;
and
WHEREAS, at or before the Closing, the parties hereto are
executing and delivering, one to the other, the Registration Rights Agreement,
pursuant to which, among other things, the Company will agree to provide certain
registration rights under the 1933 Act, and the rules and regulations
promulgated thereunder, and applicable state securities laws for the resale of
the shares of Common Stock issuable upon conversion of the Note and issuable
upon exercise of the Warrant;
NOW THEREFORE, in consideration of the premises and the mutual
covenants made herein and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. DEFINITIONS.
1.1 As used in this Agreement, the terms "Agreement",
"Company" and "Purchaser" shall have the respective meanings assigned to such
terms in the introductory paragraph of this Agreement.
1.2 All the agreements or instruments herein defined shall
mean such agreements or instruments as the same may from time to time be
supplemented or amended or the terms thereof waived or modified to the extent
permitted by, and in accordance with, the terms thereof and of this Agreement.
1.3 The following terms shall have the following meanings
(such meanings to be equally applicable to both the singular and plural forms of
the terms defined):
"Affiliate" means, with respect to any Person, any other
Person that directly, or indirectly through one or more intermediaries,
controls, is controlled by or is under common control with the subject Person.
For purposes of this definition, "control" (including, with correlative meaning,
the terms "controlled by" and "under common control with"), as used with respect
to any Person, shall mean the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities or by contract or otherwise.
"Aggregation Parties" shall have the meaning provided in
Section 6.3(b).
"AMEX" means the American Stock Exchange, Inc.
"Approved Markets" shall have the meaning provided in Section
6.9.
"Board of Directors" means the Board of Directors of the
Company.
"Business Day" means any day other than a Saturday, Sunday or
a day on which commercial banks in The City of New York are authorized or
required by law or executive order to remain closed.
"Closing" means the closing of the purchase and sale of the
Note and Warrant on the Closing Date.
"Closing Date" means 10 a.m., New York City time, the date
that is five Business Days after the Stockholder Approval Condition is
satisfied, or such other time or date as mutually agreed by the parties hereto.
"Closing Location" means the Law Offices of ▇▇▇▇▇ ▇ ▇▇▇▇▇,
Penthouse Suite, ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇.
"Common Stock" means the Common Stock, $.01 per share, of the
Company.
"Common Stock Equivalent" means any warrant, option,
subscription or purchase right with respect to shares of Common Stock, any
security convertible into, exchangeable for, or otherwise entitling the holder
thereof to acquire, shares of Common Stock or any warrant, option, subscription
or purchase right with respect to any such convertible, exchangeable or other
security.
"Default Period" shall have the meaning provided in Section
6.12.
"Encumbrances" means all mortgages, deeds of trust, claims,
security interests, liens, pledges, leases, subleases, charges, escrows,
options, proxies, rights of occupancy, rights of first refusal, preemptive
rights, covenants, conditional limitations, hypothecations, prior assignments,
easements, title retention agreements, indentures, security agreements or any
other encumbrances of any kind.
"Environmental Law" shall have the meaning provided in Section
3.17.
"Escrow Agent" means Law Offices of ▇▇▇▇▇ ▇ ▇▇▇▇▇, as escrow
agent.
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"Escrow Agreement" means the Escrow Agreement, dated as of the
date hereof, among the Company, the Purchaser and the Escrow Agent in the form
attached as EXHIBIT D.
"Escrow Funding Date" means April 1, 2004, or such other date
as mutually agreed by the Company and the Purchaser.
"Event of Default" shall have the meaning to be provided or
provided in the Note.
"Excluded Shares" shall have the meaning provided in Section
6.3(b).
"Generally Accepted Accounting Principles" means, for any
Person, the United States generally accepted accounting principles and practices
applied by such Person from time to time in the preparation of its audited
financial statements.
"Intellectual Property" means all franchises, patents,
trademarks, service marks, tradenames (whether registered or unregistered),
copyrights, corporate names, licenses, trade secrets, proprietary software or
hardware, proprietary technology, technical information, discoveries, designs
and other proprietary rights, whether or not patentable, and confidential
information (including, without limitation, know-how, processes and technology)
used in the conduct of the business of the Company or any Subsidiary, or in
which the Company or any Subsidiary has an interest.
"Margin Stock" shall have the meaning provided in Regulation U
of the Board of Governors of the Federal Reserve System (12 C.F.R. Part 221).
"Material Adverse Effect" means a material adverse effect on
(i) the business, properties, operations, condition (financial or other),
results of operations or prospects of the Company and the Subsidiaries, taken as
a whole; (ii) the validity or enforceability of, or the ability of the Company
to perform its obligations under, the Transaction Documents; or (iii) the rights
and remedies of the Purchaser under the terms of the Transaction Documents.
"1934 Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC promulgated thereunder.
"1933 Act" means the Securities Act of 1933, as amended, and
the rules and regulations of the SEC promulgated thereunder.
"Nasdaq" means the Nasdaq National Market.
"Nasdaq Small Cap" means the Nasdaq Small Cap Market.
"Note" means the Company's 7% Convertible Note due 2006 in the
principal amount set forth on the signature page hereto and in the form attached
as EXHIBIT A.
"NYSE" means the New York Stock Exchange, Inc.
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"Optional Redemption Consideration" shall have the meaning to
be provided or provided in the Note.
"Other Purchase Agreements" means the several Purchase
Agreements between the Company and the purchasers parties thereto pursuant to
which the Company is issuing other 7% Convertible Notes due 2006 and Common
Stock Purchase Warrants.
"Person" means an individual, corporation, partnership,
limited liability company, trust, business trust, association, joint stock
company, joint venture, pool, syndicate, sole proprietorship, unincorporated
organization, governmental authority or any other form of entity not
specifically listed herein.
"Purchase Price" means the amount shown on the signature pages
to this Agreement as the Purchaser's Purchase Price.
"Purchaser Share Notice" shall have the meaning provided in
Section 6.11.
"Redemption Warrant" means the Common Stock Purchase Warrant
issuable or issued by the Company in the form attached as EXHIBIT F to the Note.
"Registration Rights Agreement" means the Registration Rights
Agreement by and between the Company and the Purchaser in the form attached as
EXHIBIT C.
"Registration Statement" shall have the meaning provided in
the Registration Rights Agreement.
"Regulation D" means Regulation D adopted by the SEC under the
1933 Act.
"Repurchase Event" shall have the meaning to be provided or
provided in the Note.
"Restricted Ownership Percentage" shall have the meaning
provided in Section 6.3(b).
"Reverse Stock Split" shall have the meaning provided in
Section 6.1(b).
"SEC" means the U.S. Securities and Exchange Commission.
"SEC Filings" means the Company's Annual Report on Form 10-K
for the fiscal year ended June 30, 2003 and all other reports filed by the
Company pursuant to Section 13 or 15(d) of the 1934 Act since June 30, 2003 and
on or before the date of this Agreement.
"Securities" means the Note, the Underlying Shares, the
Warrant, the Redemption Warrant and the Warrant Shares.
"Stockholder Approval" shall have the meaning provided in
Section 6.1(a).
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"Stockholder Approval Condition" means the Company shall have
obtained the Stockholder Approval and approval by its stockholders of the
Reverse Stock split on or before the date that is 120 days after the Escrow
Funding Date.
"Stockholder Meeting" shall have the meaning provided in
Section 6.1(a).
"Subsidiary" means any corporation or other entity of which a
majority of the capital stock or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other persons
performing similar functions are at the time directly or indirectly owned by the
Company.
"Transaction Documents" means this Agreement, the Registration
Rights Agreement, the Note, the Warrant, the Redemption Warrant and the Escrow
Agreement.
"2003 10-K" means the Company's Annual Report on Form 10-K for
the fiscal year ended June 30, 2003, as filed as the SEC.
"Underlying Shares" means the shares of Common Stock issued or
issuable upon conversion of the Note or issuable or issued in lieu of payment of
cash interest on the Note.
"Variable Rate Transaction" means a transaction in which the
Company issues or sells any Common Stock or Common Stock Equivalent (a) that is
convertible into, exchangeable or exercisable for, or includes the right to
receive additional shares of Common Stock either (x) at a conversion, exercise
or exchange rate or other price that is based upon and/or varies with the
trading prices of or quotations for the Common Stock at any time after the
initial issuance of such debt or equity securities, or (y) with a fixed
conversion, exercise, exchange or purchase price that is subject to being reset
at some future date after the initial issuance of Common Stock or Common Stock
Equivalent or upon the occurrence of specified or contingent events directly or
indirectly related to the business of the Company or the market for the Common
Stock (but excluding standard stock split, reverse stock split and stock
dividend anti-dilution provisions), or (b) pursuant to an "equity line"
structure which provides for the sale, from time to time, of securities of the
Company which are registered for sale or resale pursuant to the 1933 Act.
"Warrant" means the Company's Common Stock Purchase Warrant in
the form attached hereto as EXHIBIT B.
"Warrant Shares" means the shares of Common Stock issuable or
issued upon exercise of or otherwise pursuant to the Warrant or the Redemption
Warrant.
2. PURCHASES AND SALES OF THE NOTE AND WARRANT.
2.1 PURCHASE AND SALE. Upon the terms and subject to the
conditions of this Agreement, the Purchaser hereby agrees to purchase from the
Company, and the Company hereby agrees to sell to the Purchaser, on the Closing
Date, the Note and the Warrant for the Purchase Price. The Closing shall be held
at the Closing Location.
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2.2 ESCROW FUNDING. (a) On the Escrow Funding Date, upon the
terms and subject to the conditions of this Agreement, the Purchaser shall
deliver to the Escrow Agent an amount equal to the Purchase Price, to be held by
the Escrow Agent pursuant to the Escrow Agreement. The Escrow Agent shall hold
such funds in escrow until such time that the Escrow Agent is required or
permitted to disburse such funds in accordance with the Escrow Agreement.
(b) As provided in the Escrow Agreement, if on or before the
date that is 120 days after the Escrow Funding Date the Stockholder Approval
Condition and the other conditions precedent to the obligation of the Purchaser
to purchase the Note and the Warrant on the Closing Date set forth in the
Transaction Documents are not satisfied or waived by the Purchaser, then after
the date that is 120 days after the Escrow Funding Date the Purchaser shall have
the right to instruct the Escrow Agent to release all escrowed funds held under
the Escrow Agreement to the Purchaser, in which case the Purchaser shall have no
further obligation to purchase the Note and the Warrant.
(c) From the Escrow Funding Date until the earlier of (1) the
date the Purchaser instructs the Escrow Agent to release all escrowed funds to
the Purchaser and (2) the Closing Date, the Company shall pay interest to the
Purchaser on the amount of the Purchase Price at the rate of 10% per annum as
compensation for the Purchaser's commitment under this Agreement. Such interest
shall be payable by the Company on the last day of each calendar month and on
the earlier of the dates referred to in the preceding clauses (1) and (2) of
this Section 2.2(c).
2.3 CLOSING. (a) On the Closing Date, upon the terms and
subject to the conditions provided in this Agreement, the Company shall deliver
or cause to be delivered to the Purchaser the following:
(i) the Note, duly executed by the Company, registered in the
name of the Purchaser, and
(ii) the Warrant, duly executed by the Company, registered in
the name of the Purchaser.
(b) At the Closing, upon the terms and subject to the
conditions provided in this Agreement, the Purchaser shall deliver or cause to
be delivered to the Company by release from the Escrow Agent to the Company of
an amount equal to the Purchase Price, less the amount of accrued and unpaid
interest payable by the Company pursuant to Section 2.2(c), the amount of which
shall be deemed paid to the Company as part of the Purchase Price and
immediately paid to the Purchaser as such interest.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
hereby represents and warrants to, and covenants and agrees with, the Purchaser
that:
3.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. The Company
and each Subsidiary is a corporation duly incorporated, validly existing and
subsisting and in good standing under the laws of the jurisdiction of its
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incorporation and has all requisite corporate power and authority to carry on
its business as now conducted and to own its properties. The Company and each
Subsidiary is duly qualified to do business as a foreign corporation and is in
good standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property makes such qualification or licensing necessary
unless the failure to so qualify would not be reasonably likely to result in a
Material Adverse Effect. The Company has no Subsidiaries other than those listed
in SCHEDULE 3.1 and has no investment in any other Person except such
investments as would be classified as current assets on a balance sheet of the
Company, prepared in accordance with Generally Accepted Accounting Principles.
3.2 AUTHORIZATION. The Company has full corporate power and
authority and has taken all requisite action on the part of the Company, its
officers, directors and stockholders necessary for (i) the authorization,
execution and delivery of the Transaction Documents, (ii) authorization of the
performance of all obligations of the Company under the Transaction Documents,
and (iii) the authorization, issuance (or reservation for issuance) and delivery
of the Securities. The Transaction Documents constitute the legal, valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms, subject to bankruptcy, insolvency, reorganization,
moratorium and similar laws of general applicability, relating to or affecting
creditors' rights generally.
3.3 CAPITALIZATION. Set forth on SCHEDULE 3.3 hereto is (a)
the authorized capital stock of the Company on the date hereof; (b) the number
of shares of capital stock issued and outstanding on the date hereof; (c) the
number of shares of capital stock issuable pursuant to the Company's stock
option, stock purchase, stock award and similar plans; and (d) the number of
shares of capital stock issuable and reserved for issuance pursuant to all
Common Stock Equivalents outstanding or which the Company has agreed to issue
(other than the Note and the Warrant). All of the issued and outstanding shares
of the Company's capital stock have been duly authorized and validly issued and
are fully paid, nonassessable and free of preemptive rights. No Person is
entitled to preemptive or similar statutory or contractual rights with respect
to any securities of the Company. Except as set forth on SCHEDULE 3.3 or in the
SEC filings, there are no outstanding Common Stock Equivalents or other rights,
agreements or arrangements of any character under which the Company is or may be
obligated to issue any equity securities of any kind, and except as contemplated
by this Agreement and the Other Purchase Agreements, the Company is not
currently in negotiations for the issuance of any Common Stock Equivalents or
capital stock of any kind. The Company has no knowledge of any voting
agreements, buy-sell agreements, option or right of first purchase agreements or
other agreements of any kind among any of the security holders of the Company
relating to the securities of the Company held by them. Except as set forth on
SCHEDULE 3.3, except in connection with the Other Purchase Agreements and except
for registration rights relating to registration statements currently on file,
the Company has not granted any Person the right (which is now outstanding or
effective) to require the Company to register any securities of the Company
under the 1933 Act, whether on a demand basis or in connection with the
registration of securities of the Company for its own account or for the account
of any other Person.
3.4 VALID ISSUANCE, ENFORCEABLE OBLIGATION. The aggregate
number of shares of Common Stock issued, outstanding and reserved for issuance
is 400,799,378. The Company does not have any obligation to issue shares of
Common Stock for which it has not reserved an adequate number of shares of
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Common Stock. The Note, the Warrant and the Redemption Warrant are duly
authorized by all necessary actions, corporate or otherwise, on the part of the
Company; the Underlying Shares and the Warrant Shares have been duly authorized
and when issued in accordance herewith and with the terms of the Note, the
Warrant and the Redemption Warrant, will be validly issued, fully paid,
non-assessable and free and clear of all Encumbrances and restrictions, except
for restrictions on transfer imposed by applicable securities laws; and the Note
and the Warrant, when issued in accordance with this Agreement, and the
Redemption Warrant, when issued in accordance with the Note, will be free and
clear of all Encumbrances and restrictions, except for restrictions on transfer
imposed by applicable securities laws.
3.5 CONSENTS. The execution, delivery and performance by the
Company of the Transaction Documents and the offer, issuance and sale of the
Securities require no consent of, action by or in respect of, or filing with,
any Person, governmental body, agency, or official other than filings that have
been or will be made pursuant to applicable state securities laws and the
requirements of the AMEX and other than the filing of a Form D by the Company
with the SEC, each of which the Company undertakes to file within the applicable
time periods.
3.6 DELIVERY OF SEC FILINGS; BUSINESS; NON-PUBLIC INFORMATION.
The Company has timely filed all material reports and other documents required
to be filed with the SEC pursuant to the 1934 Act since June 30, 2002. At their
respective times of filing with the SEC, the SEC Filings complied in all
material respects with the requirements of the 1934 Act and did not contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading. The Company and the Subsidiaries are
engaged only in the business described in the SEC Filings, and the SEC Filings
contain a complete and accurate description of the business of the Company and
the Subsidiaries. The Company has not provided to any Purchaser (i) any
information required to be filed under the 1934 Act that has not been so filed
or (ii) any material non-public information concerning the Company and the
Subsidiaries.
3.7 USE OF PROCEEDS. The proceeds of the sale of the Note and
the Warrant hereunder and of the exercise of the Warrant and the Redemption
Warrant shall be used by the Company for working capital and general corporate
purposes. None of such proceeds will be used, directly or indirectly (A) to make
any loan to or investment in any other Person or (B) for the purpose, whether
immediate, incidental or ultimate, of purchasing or carrying any Margin Stock or
for the purpose of maintaining, reducing or retiring any indebtedness which was
originally incurred to purchase or carry any stock that is currently a Margin
Stock or for any other purpose which might constitute the transactions
contemplated by this Agreement a "purpose credit" within the meaning of such
Regulation U of the Board of Governors of the Federal Reserve System; and
neither the Company nor any agent acting on its behalf has taken or will take
any action which might cause this Agreement or the transactions contemplated
hereby to violate Regulation T, Regulation U or any other regulation of the
Board of Governors of the Federal Reserve System or to violate the 1934 Act, in
each case as in effect now or as the same may hereafter be in effect.
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3.8 NO MATERIAL ADVERSE CHANGE. Since the filing of the 2003
Form 10-K with the SEC, and except as otherwise identified and described in the
SEC Filings subsequently filed by the Company with the SEC pursuant to the 1934
Act, there has not been:
(i) any material change in the consolidated assets,
liabilities, financial condition or operating results of the Company
and the Subsidiaries from that reflected in the financial statements
included in the 2003 10-K, a copy of which has been delivered to the
Purchasers, except changes in the ordinary course of business which
have not had, in the aggregate, a Material Adverse Effect;
(ii) any declaration or payment of any dividend, or
any authorization or payment of any distribution, on any of the capital
stock of the Company, or any redemption or repurchase of any securities
of the Company or any Subsidiary;
(iii) any material damage, destruction or loss,
whether or not covered by insurance, to any assets or properties of the
Company or any Subsidiary;
(iv) any waiver by the Company or any Subsidiary of a
material right or of a material debt owed to it which waiver is adverse
to the Company or any Subsidiary;
(v) any satisfaction or discharge of any Encumbrance
or payment of any obligation by the Company or any Subsidiary, except
in the ordinary course of business and which is not material to the
assets, properties, prospects, financial condition, operating results
or business of the Company and the Subsidiaries taken as a whole (as
such business is presently conducted and the Company has publicly
disclosed it is proposed to be conducted);
(vi) any material change or amendment to a material
contract or arrangement by which the Company or any Subsidiary or any
of their respective assets or properties is bound or subject;
(vii) any material labor difficulties or labor union
organizing activities with respect to employees of or contractors to
the Company or any Subsidiary;
(viii) any transaction entered into by the Company or
any Subsidiary other than in the ordinary course of business; or
(ix) any other event or condition of any character
that may have a Material Adverse Effect.
3.9 REGISTRATION STATEMENTS. During the preceding two years,
each registration statement and any amendment thereto filed by the Company
pursuant to the 1933 Act, as of the date such registration statement or
amendment became effective, complied as to form in all material respects with
the 1933 Act, and did not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements made therein, in light of the circumstances under
which they were made, not misleading; and each prospectus or supplement filed
pursuant to Rule 424 under the 1933 Act, as of its issue date and as of the
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closing of any sale of securities pursuant thereto did not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading.
3.10 FORM S-3 ELIGIBILITY. The Company is currently eligible
to register the resale of its Common Stock in a secondary offering on a
registration statement on Form S-3 under the 1933 Act and the Company shall
maintain such eligibility at least until the Registration Statement is ordered
effective by the SEC.
3.11 NO CONFLICT, BREACH, VIOLATION OR DEFAULT. (a) The
execution, delivery and performance of the Transaction Documents by the Company
and the issuance and sale of the Securities will not conflict with or result in
a breach or violation of any of the terms and provisions of, or constitute a
default under (i) the Company's Certificate of Incorporation (including any
articles of amendment or articles designating series of shares) or the Company's
Bylaws, both currently in effect (copies of which have been provided to the
Purchaser before the date hereof) and as in effect on the date of issuance of
the Securities, (ii) any statute, rule, regulation or order of any governmental
agency or body or any court, domestic or foreign, having jurisdiction over the
Company or any Subsidiary or any of their respective assets or properties, or
(iii) any agreement or instrument to which the Company or any Subsidiary is a
party or by which the Company or any Subsidiary is bound or to which any of the
properties of the Company or any Subsidiary is subject.
(b) Except where it would not have a Material Adverse Effect,
the Company and each Subsidiary (i) is not in violation of any statute, rule or
regulation applicable to the Company or any Subsidiary or its assets, (ii) is
not in violation of any judgment, order or decree applicable to the Company or
any Subsidiary or any of their respective assets, and (iii) is not in breach or
violation of any agreement, note or instrument to which it or its assets are a
party or are bound or subject. To the best of the Company's knowledge, neither
the Company nor any Subsidiary has received notice from any Person of any claim
or investigation that, if adversely determined, would render the preceding
sentence untrue or incomplete.
3.12 TAX MATTERS. The Company and the Subsidiaries have timely
prepared and filed all tax returns required to have been filed by the Company
with all appropriate governmental agencies and timely paid all taxes owed by
them, except where failure to make such payment would not have a Material
Adverse Effect. The charges, accruals and reserves on the books of the Company
and the Subsidiaries in respect of taxes for all fiscal periods are adequate in
all material respects, and there are no material unpaid assessments against the
Company or any Subsidiary nor, to the knowledge of the Company, any basis for
the assessment of any additional taxes, penalties or interest for any fiscal
period or audits by any foreign, U.S. federal, state, representations or
warranties in or local taxing authority, except such as are not material. All
material taxes and other assessments and levies that the Company or any
Subsidiary is required to withhold or to collect for payment have been duly
withheld and collected and paid to the proper governmental entity or third party
when due. There are no tax liens or claims pending or threatened against the
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Company or any Subsidiary or any of their respective assets or property which if
adversely decided, would have a Material Adverse Effect. There are no
outstanding tax sharing agreements or other such arrangements between the
Company or any Subsidiary and any other Person.
3.13 TITLE TO PROPERTIES. Except as disclosed in the SEC
Filings, the Company and each Subsidiary has good and marketable title to all
real properties and all other properties and assets owned by it, in each case
free from Encumbrances and defects that would materially affect the value
thereof or materially interfere with the use made or currently planned to be
made thereof by the Company or such Subsidiary; and except as disclosed in the
SEC Filings, the Company and each Subsidiary holds any leased real or personal
property under valid and enforceable leases with no exceptions that would
materially interfere with the use made or currently planned to be made thereof
by the Company or such Subsidiary.
3.14 CERTIFICATES, LICENSES, AUTHORIZATIONS AND PERMITS. The
Company and each Subsidiary possesses adequate certificates, licenses,
authorizations or permits issued by appropriate governmental agencies or bodies
necessary to conduct the business now operated by it and has not received any
notice of proceedings relating to the revocation or modification of any such
certificate, license, authorization or permit that, if determined adversely to
the Company or any Subsidiary, would individually or in the aggregate have a
Material Adverse Effect.
3.15 NO LABOR DISPUTES. No material labor dispute with the
employees of or contractors to the Company or any Subsidiary exists or, to the
knowledge of the Company, is imminent.
3.16 INTELLECTUAL PROPERTY. (1) The Company and each
Subsidiary holds all Intellectual Property, free and clear of all Encumbrances
and restrictions on use or transfer, whether or not recorded, and has sole title
to and ownership of or has the full, exclusive (subject to the rights of its
licensees or licensors) right to use in its field of business, for the life of
the proprietary right all Intellectual Property; (2) the use of the Intellectual
Property by the Company or any Subsidiary does not, to the knowledge of the
Company after due inquiry, violate or infringe on the rights of any other
Person; (3) neither the Company nor any Subsidiary has received any notice of
any conflict between the asserted rights of others and the Company or any
Subsidiary with respect to any Intellectual Property; (4) the Company and each
Subsidiary has used its best efforts to perfect its rights in and to all
Intellectual Property used by it in its business or in which it has an interest;
(5) the Company and each Subsidiary are in compliance with all material terms
and conditions of its agreements relating to the Intellectual Property; (6)
neither the Company nor any Subsidiary is or has been a defendant in any action,
suit, investigation or proceeding relating to infringement or misappropriation
by the Company or any Subsidiary of any Intellectual Property; (7) neither the
Company nor any Subsidiary has been notified of any alleged claim of
infringement or misappropriation by the Company or any Subsidiary of any
Intellectual Property; (8) the Company has no knowledge of any claim of
infringement or misappropriation by the Company or any Subsidiary of any
Intellectual Property; (9) to the knowledge (after due inquiry) of the Company,
none of the products the Company and the Subsidiaries are researching,
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developing, propose to research and develop, make, have made, use, or sell,
infringes or misappropriates any Intellectual Property right of any third party;
(10) none of the trademarks and service marks used by the Company or any
Subsidiary, to the knowledge of the Company after due inquiry, infringes the
trademark or service ▇▇▇▇ rights of any third party; (11) to the Company's
knowledge none of the material processes and formulae, research and development
results and other know-how relating to the Company's or the Subsidiaries'
respective businesses, the value of which to the Company or any Subsidiary is
contingent upon maintenance of the confidentiality thereof, has been disclosed
to any Person other than Persons bound by written confidentiality agreements;
and (12) the Company owns directly, or possesses adequate rights to use, all
Intellectual Property used in or relating to the development, manufacture, use,
distribution or marketing of the Company's products, and none of such
Intellectual Property is owned, claimed or used by, or subject to any
Encumbrance of or by, any Subsidiary.
3.17 ENVIRONMENTAL MATTERS. Neither the Company nor any
Subsidiary is in violation of any statute, rule, regulation, decision or order
of any governmental agency or body or any court, domestic or foreign, relating
to the use, disposal or release of hazardous or toxic substances or relating to
the protection or restoration of the environment or human exposure to hazardous
or toxic substances (collectively, "Environmental Laws"), does not own or
operate any real property contaminated with any substance that is subject to any
Environmental Laws, is not liable for any off-site disposal or contamination
pursuant to any Environmental Laws, and is not subject to any claim relating to
any Environmental Laws, which violation, contamination, liability or claim would
individually or in the aggregate have a Material Adverse Effect; and neither the
Company nor any Subsidiary is aware of any pending investigation that might lead
to such a claim.
3.18 LITIGATION. Except as set forth in the SEC Filings, there
are no pending actions, suits or proceedings against or affecting the Company or
any Subsidiary or any of their respective properties that, if determined
adversely to the Company or such Subsidiary, would individually or in the
aggregate have a Material Adverse Effect, or which are otherwise material in the
context of the sale of the Securities; and to the Company's knowledge, no such
actions, suits or proceedings are threatened or contemplated.
3.19 FINANCIAL STATEMENTS. The consolidated financial
statements included in each SEC Filing present fairly and accurately in all
material respects the consolidated financial position of the Company and the
Subsidiaries as of the dates reported and the consolidated results of
operations, changes in stockholders' equity and cash flows for the periods
reported, all in conformity with Generally Accepted Accounting Principles
applied on a consistent basis and in conformity with the rules and regulations
of the SEC under the 1934 Act applicable to the Company. Except as set forth in
the consolidated financial statements of the Company included in the SEC Filings
filed prior to the date hereof, neither the Company nor any Subsidiary has any
liabilities, contingent or otherwise, except those which individually or in the
aggregate are not material to the financial condition or operating results of
the Company and the Subsidiaries, taken as a whole.
3.20 INSURANCE COVERAGE. The Company and each Subsidiary
maintains in full force and effect insurance coverage that is customary for
comparably situated companies for the business being conducted and properties
owned or leased by it, and the Company reasonably believes such insurance
coverage to be adequate against all liabilities, claims and risks against which
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it is customary for comparably situated companies to insure.
3.21 COMPLIANCE WITH AMEX CONTINUED LISTING REQUIREMENTS. The
Company is in compliance with all applicable AMEX continued listing
requirements, except where failure to comply would not result in de-listing from
or the imposition of restrictions or limitations by the AMEX, and is in good
standing on such market. There are no proceedings pending or to the Company's
knowledge threatened against the Company relating to the continued listing of
the Company's Common Stock on the AMEX and the Company has not received any
notice of, nor to the knowledge of the Company is there any basis for, the
suspension of trading of the Common Stock on, or delisting of the Common Stock
from, the AMEX.
3.22 ACKNOWLEDGEMENT OF POTENTIAL DILUTION. The Company
understands that the number of shares of Common Stock issuable pursuant to the
Note, the Warrant and the Redemption Warrant may be substantial and that such
issuance may have a dilutive effect on the Company's equity capitalization.
3.23 BROKERS AND FINDERS. The Purchaser shall have no
liability or responsibility for the payment of any commission or finder's fee to
any third party in connection with or resulting from this Agreement or the
transactions contemplated by this Agreement by reason of any agreement of or
action taken by the Company.
3.24 NO DIRECTED SELLING EFFORTS OR GENERAL SOLICITATION.
Notwithstanding anything contained on any schedule hereto, neither the Company
nor any Person acting on its behalf has conducted any general solicitation or
general advertising (as those terms are used in Regulation D) in connection with
the offer or sale of any of the Securities.
3.25 NO INTEGRATED OFFERING. Neither the Company nor any of
its Affiliates, nor any Person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, under circumstances that would (1) adversely affect reliance
by the Company on Section 4(2) of the 1933 Act and Regulation D for the
exemption from registration under the 1933 Act for the transactions contemplated
hereby or would require registration of the offer and sale of the Note, the
Warrant, the Redemption Warrant, the Underlying Shares or the Warrant Shares to
the Purchaser under the 1933 Act; or (2) require the integration of the offering
of the Securities with any other offering of securities for purposes of
determining the need to obtain stockholder approval of the transactions
contemplated hereby under the rules of the AMEX.
3.26 DISCLOSURES. For purposes of this Agreement and the
transactions contemplated hereby, none of the representations or warranties made
by the Company under any of the Transaction Documents and no written information
furnished by the Company pursuant hereto, or in any other document, certificate
or written statement furnished by the Company to the Purchaser or any authorized
representative of the Purchaser, pursuant to the Transaction Documents or in
connection therewith, contains any untrue statement of a material fact or omits
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to state a material fact necessary in order to make the statements contained
herein and therein, in light of the circumstances under which they were made,
not misleading.
3.27 ABSENCE OF RIGHTS AGREEMENT. The Company has not adopted
a shareholder rights plan or similar arrangement relating to accumulations of
beneficial ownership of Common Stock or a change of control in the Company.
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The
Purchaser hereby represents and warrants to the Company that:
4.1 ORGANIZATION AND EXISTENCE. Such Purchaser is a validly
existing partnership and has all requisite partnership power and authority to
invest in the Securities pursuant to this Agreement.
4.2 PURCHASE ENTIRELY FOR OWN ACCOUNT. The Securities to be
acquired by the Purchaser pursuant to this Agreement will be acquired for the
Purchaser's own account, not as nominee or agent, and not with a view to the
resale or distribution of any part thereof in violation of applicable securities
laws, and the Purchaser has no present intention of selling, granting any
participation in, or otherwise distributing the same in violation of applicable
securities laws.
4.3 INVESTMENT EXPERIENCE. The Purchaser acknowledges that it
can bear the economic risk and complete loss of its investment in the Securities
and has such knowledge of and experience with securities and financial or
business matters that it is capable of evaluating the merits and risks of the
purchase of the Note and Warrant.
4.4 DISCLOSURE OF INFORMATION. The Purchaser has had an
opportunity to receive documents related to the Company and to ask questions of
and receive answers from the Company regarding the terms and conditions of the
offering of the Securities; PROVIDED HOWEVER, that neither such inquiries nor
any other investigation conducted by the Purchaser shall modify, amend, limit or
otherwise affect the Purchaser's right to rely on the Company's representations
and warranties contained in the Transaction Documents or made pursuant to the
Transaction Documents.
4.5 RESTRICTED SECURITIES. The Purchaser understands that the
Note, the Warrant and the Redemption Warrant are characterized as "restricted
securities" under the U.S. federal securities laws inasmuch as they are being
acquired from the Company in a transaction not involving a public offering and
that under such laws and applicable regulations such securities may be resold
without registration under the 1933 Act only in certain limited circumstances.
4.6 ACCREDITED INVESTOR. The Purchaser is an "accredited
investor" as defined in Rule 501(a) of Regulation D.
4.7 NO GENERAL SOLICITATION. The Purchaser did not learn of
the offering of the Note and Warrant through any public advertising or general
solicitation (as these terms are used in Regulation D).
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4.8 RESIDENCY OF PURCHASER. The Purchaser is a resident of the
state or other jurisdiction indicated below the Purchaser's name on the
signature pages to this Agreement.
4.9 BROKERS AND FINDERS. The Company shall have no liability
or responsibility for the payment of any commission or finder's fee to any third
party in connection with or resulting from this Agreement or the transactions
contemplated by this Agreement by reason of any agreement of the Purchaser.
4.10 AUTHORIZATION. The Purchaser has full corporate power and
authority and has taken all requisite action on the part of the Purchaser, its
partners, officers necessary for (i) the authorization, execution and delivery
of the Transaction Documents and (ii) authorization of the performance of all
obligations of the Purchaser under the Transaction Documents. The Transaction
Documents constitute the legal, valid and binding obligations of the Purchaser,
enforceable against the Purchaser in accordance with their terms, subject to
bankruptcy, insolvency, reorganization, moratorium and similar laws of general
applicability, relating to or affecting creditors' rights generally.
4.11 RISK FACTORS. Without limiting any of the Purchaser's
other representations and warranties hereunder, the Purchaser acknowledges that
the Purchaser has reviewed and is aware of the risk factors described in the SEC
Filings.
4.12 RELIANCE. The Purchaser has consulted its own financial,
legal and tax advisors with respect to the economic, legal and tax consequences
of an investment in the Note and Warrant and has not relied on the SEC Filings
or the Company, its officers, directors or professional advisors as to such
consequences.
4.13 NO REPRESENTATIONS. No oral representations have been
made by the Company to the Purchaser in connection with the Transaction
Documents; and no written representations have been made by the Company to the
Purchaser other than as stated in the Transaction Documents and the SEC Filings.
4.14 SURVIVAL. The Purchaser acknowledges that the
representations, warranties and agreements made by the Purchaser herein shall
survive the execution and delivery of this Agreement and the purchase of the
Note and Warrant.
5. REGISTRATION RIGHTS AGREEMENT. The Company acknowledges and
agrees that the Company's execution and delivery of, and full performance of its
obligations under, the Registration Rights Agreement is a material inducement to
the Purchaser to execute and deliver this Agreement and purchase and pay for the
Note and Warrant. The Company agrees to execute and deliver to the Purchaser the
Registration Rights Agreement at or before the Closing.
-15-
6. CERTAIN COVENANTS OF THE COMPANY AND THE PURCHASER.
6.1 STOCKHOLDER APPROVAL; REVERSE STOCK SPLIT; RULE 144.
(a) STOCKHOLDER APPROVAL. The Company shall seek, and use its
best efforts to obtain, on or before the date which is 120 days after the Escrow
Funding Date, stockholder approval of the issuance of the Underlying Shares and
the Warrant Shares, which approval shall meet the requirements of Rule 713 of
the AMEX set forth in the AMEX Company Guide (the "Stockholder Approval"). The
Company shall call a meeting of stockholders (the "Stockholder Meeting") to be
held within 120 days after the Escrow Funding Date, shall prepare and file with
the SEC as promptly as practical, but in no event later than 45 days after the
Escrow Funding Date, preliminary proxy materials which set forth a proposal to
seek the Stockholder Approval, and the Board of Directors shall recommend
approval thereof by the Company's stockholders. The Company shall mail and
distribute its proxy materials for the Stockholder Meeting to its stockholders
at least 45 days prior to the date of the Stockholder Meeting, shall actively
solicit proxies to vote for the Stockholder Approval, and within 30 days after
the Escrow Funding Date shall retain a proxy solicitation firm of recognized
national standing to assist in the solicitation. The Company shall provide the
Purchaser an opportunity to review and comment on such proxy materials by
providing (which may be by e-mail) copies of such proxy materials and any
revised preliminary proxy materials to the Purchaser a reasonable period of time
prior to their filing with the SEC. The Company shall provide the Purchaser
(which may be by e-mail) copies of all correspondence from or to the SEC or its
staff concerning the proxy materials for the Stockholder Meeting promptly after
the same is sent or received by the Company and summaries of any comments of the
SEC staff which the Company receives orally promptly after receiving such oral
comments. The Company shall furnish to the Purchaser and its legal counsel
(which may be by e-mail) a copy of its definitive proxy materials for the
Stockholder Meeting and any amendments or supplements thereto promptly after the
same are first used, mailed to stockholders or filed with the SEC, shall inform
the Purchaser of the progress of solicitation of proxies for such meeting and
shall inform the Purchaser of any adjournment of the Stockholder Meeting and
shall report the result of the vote of stockholders on such proposition at the
conclusion of the Stockholder Meeting.
(b) REVERSE STOCK SPLIT. In connection with the Stockholder
Meeting, the Company shall also seek, and use its best efforts to obtain, on or
before the date that is 120 days after the Escrow Funding Date a reverse split
of its Common Stock of not less than one for each ten shares of Common Stock
outstanding prior thereto (the "Reverse Stock Split"). The Company shall include
the Reverse Stock Split in the preliminary, revised preliminary and definitive
proxy materials prepared, filed with the SEC and used for the Stockholder
Approval, and the Company's seeking of approval of the Reverse Stock Split shall
be conducted in accordance with the requirements of Section 6.1(a).
(c) RULE 144. The Company acknowledges that, for purposes of
determining the holding period under Rule 144 for Underlying Shares issued upon
conversion of, or in lieu of cash payment of interest on, the Note, the holding
period of such Underlying Shares shall be tacked to the holding period of the
Note, for purposes of determining the holding period under Rule 144 for Warrant
Shares issued in a "net" or "cashless" exercise of the Warrant or the Redemption
Warrant, the holding period of such Warrant Shares may be tacked to the holding
period of the Warrant or the Redemption Warrant, as the case may be, and for
purposes of determining the holding period under Rule 144 for the Redemption
Warrant, the holding period of the Redemption Warrant may be tacked to the
holding period of the Note. The Company agrees not to take a position contrary
thereto unless the SEC or its staff by rule or interpretation changes its rules
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and interpretations thereof in effect on the date of this Agreement or such
rules or interpretations are held invalid or incorrect by a court of competent
jurisdiction.
6.2 LIMITATION ON CERTAIN TRANSACTIONS.
(a) Beginning as of the date of this Agreement and until the
effective date of the Registration Statement as contemplated by the Registration
Rights Agreement, without the prior written consent of the Purchaser (which
consent may be withheld in the Purchaser's sole discretion), the Company shall
not issue or sell or agree to issue or sell any securities in a capital raising
transaction, unless such securities will not be, and are not, registered for
sale or resale under the 1933 Act until on or after the effective date of the
Registration Statement, provided that the limitation of this Section 6.2(a)
shall not apply to securities issued pursuant to the Company's duly adopted
employee or director bona fide share and option plans or pursuant to exercise or
conversion of Common Stock Equivalents that are outstanding on the date of this
Agreement.
(b) So long as the Note remains outstanding, without the prior
written consent of the registered holder of the Note (which consent may be
withheld in such holder's sole discretion), the Company shall not issue or sell,
or agree to issue or sell, any securities in a Variable Rate Transaction.
(c) If the Company contemplates an offering of its equity or
debt securities within six months after the Closing Date, the Company agrees
that, upon the reasonable request of the Purchaser, the Company shall first
disclose the terms and conditions and other relevant facts of such proposed
transaction to AMEX and, in the event that the proposed transaction is not
pursuant to a sale registered under the 1933 Act that constitutes a public
offering that is exempt from Rule 713 of the AMEX, use its best efforts to
obtain from AMEX its assurance that such transaction will not be integrated with
the offering which is the subject of this Agreement for purposes of Rule 713 of
the AMEX rules. If the Company fails to seek such assurances or obtain such
stockholder approval of the additional transaction, then, at the election of the
Purchaser, the Company shall redeem within five days after such election all or
such portion as specified in writing to the Company by such Purchaser of the
Note for the Optional Redemption Consideration for which purpose the cash
portion of the Optional Redemption Consideration shall be computed as 120% of
the principal amount of the Note or portion thereof so specified by the
Purchaser to be redeemed and otherwise as if such redemption were made under
Section 2(b) of the Note.
6.3 RIGHT OF THE PURCHASERS TO PARTICIPATE IN FUTURE
TRANSACTIONS.
(a) RIGHT TO PARTICIPATE. So long as the Note remains
outstanding, the Purchaser will have a right to participate in any sales of any
of the Company's securities in a capital raising transaction on the terms and
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conditions set forth in this Section 6.3. During such period, the Company shall
give ten Business Days advance written notice to the Purchaser prior to any
non-public offer or sale of any of the Company's capital stock or any Common
Stock Equivalents in a capital raising transaction by providing to the Purchaser
a comprehensive term sheet containing all significant business terms of such a
proposed transaction. The Purchaser shall have the right to participate in such
proposed transaction and to purchase [17.5% FOR ALEXANDRA] [2.5% FOR ALPHA]
[7.5% FOR BRISTOL] [5% FOR CRESCENT] [10% FOR CRESTVIEW] [10% FOR OMICRON]
[17.5% FOR PALISADES] [30% FOR SATELLITE] percent of such securities which are
the subject of such proposed transaction for the same consideration and on the
same terms and conditions as contemplated for such third-party sale (or such
lesser portion thereof as specified by the Purchaser). If the Purchaser elects
to exercise its rights hereunder it must deliver written notice to the Company
within five Business Days following receipt of the notice and comprehensive term
sheet from the Company, which notice from the Purchaser shall be contingent upon
receipt of satisfactory definitive documents for such transaction from the
Company. If, subsequent to the Company giving notice to the Purchaser hereunder
but prior to the Purchaser exercising its right to participate (or the
expiration of the five-day period without response from the Purchaser or the
rejection of such offer for such financing by the Purchaser), the terms and
conditions of the proposed third-party sale are changed from that disclosed in
the comprehensive term sheet provided to the Purchaser, the Company shall be
required to provide a new notice and comprehensive term sheet reflecting such
revised terms to the Purchaser hereunder and the Purchaser shall have the right,
which must be exercised within five Business Days of such new notice and such
revised comprehensive term sheet, to exercise its rights to purchase the
securities on such changed terms and conditions as provided hereunder. In the
event the Purchaser does not exercise its rights hereunder with respect to a
proposed transaction within the period or periods provided, or affirmatively
declines to engage in such proposed transaction with the Company, then the
Company may proceed with such proposed transaction on the same terms and
conditions as noticed to the Purchaser (assuming the Purchaser has consented to
the transaction, if required, pursuant to Section 6.2 of this Agreement) with
the Purchaser if it has elected to participate in such proposed transaction,
PROVIDED that if such proposed transaction is not consummated within 60 days
following the Company's notice hereunder, then the right of first refusal
hereunder shall again apply to the Purchaser for such proposed transaction. The
rights and obligations of this Section 6.3 shall in no way diminish the other
rights of the Purchaser pursuant to this Section 6.
(b) LIMITATION ON RIGHT OF FIRST REFUSAL. Notwithstanding
anything to the contrary contained herein, the number of shares of Common Stock
that may be acquired directly or through acquisition of Common Stock Equivalents
by the Purchaser pursuant to any capital raising transaction as described in
subsection (a) above shall not exceed a number that, when added to the total
number of shares of Common Stock deemed beneficially owned by the Purchaser
(other than by virtue of the ownership of securities or rights to acquire
securities (including the Note and Warrant) that have limitations on the
Purchaser's right to convert, exercise or purchase similar to the limitation set
forth herein (the "Excluded Shares")), together with all shares of Common Stock
deemed beneficially owned at such time (other than by virtue of ownership of
Excluded Shares) by Persons whose beneficial ownership of Common Stock would be
aggregated with the beneficial ownership of the Purchaser for purposes of
determining whether a group exists or for purposes of determining the
Purchaser's beneficial ownership in either case for purposes of Section 13(d) of
the 1934 Act and Regulation 13D-G thereunder, would result in beneficial
ownership by the Purchaser or such group of more than 9.9% of the shares of the
-18-
Company's Common Stock (the "Restricted Ownership Percentage"), computed in
accordance with Regulation 13D-G. The Purchaser shall have the right at any time
and from time to time to reduce its Restricted Ownership Percentage immediately
upon notice to the Company in the event and only to the extent that Section 16
of the 1934 Act or the rules promulgated thereunder (or any successor statute or
rules) is changed to reduce the beneficial ownership percentage threshold
thereunder from 10%. If the Purchaser is unable by reason of the Restricted
Ownership Percentage to acquire the full amount of securities which the
Purchaser would otherwise be entitled to acquire pursuant to this Section 6.3
and thereafter, at any time prior to the later of (x) repayment or conversion in
full of the Note and (y) the expiration or exercise in full of the Redemption
Warrant, the Purchaser could acquire such securities without exceeding its
Restricted Ownership Percentage, then the Purchaser shall be entitled to acquire
such securities at such time.
6.4 REPORTS AND INFORMATION. For so long as the Purchaser
beneficially owns any of the Securities, the Company will furnish to the
Purchaser the following reports and information, each of which shall be provided
to the Purchaser by e-mail (at such address as specified in writing by the
Purchaser for such purpose) or reputable overnight courier:
(a) QUARTERLY FINANCIAL INFORMATION. In the absence of a
Quarterly Report on Form 10-Q timely filed with the SEC for any of the Company's
first three fiscal quarters in any fiscal year, within 45 days after the end of
any such fiscal quarter consolidated balance sheets of the Company as at the end
of each of the Company's first three fiscal quarters and the related
consolidated statements of operations, stockholders' equity and cash flows for
such period and for the portion of the Company's fiscal year ended on the last
day of such quarter, all in reasonable detail and certified by the principal
financial officer of the Company to have been prepared in accordance with
Generally Accepted Accounting Principles, subject to year-end and audit
adjustments.
(b) ANNUAL FINANCIAL INFORMATION. In the absence of a Form
10-K timely filed with the SEC within 105 days after the end of any fiscal year,
then within such period consolidated balance sheets of the Company as at the end
of each fiscal year and the related consolidated statements of earnings,
stockholders' equity and cash flows for such year, all in reasonable detail and
accompanied by the report on such consolidated financial statements of an
independent certified public accountant selected by the Company and reasonably
satisfactory to the Purchaser.
(c) STOCKHOLDER AND ANALYST REPORTS AND INFORMATION. Copies of
all notices, financial statements, reports and documents as the Company shall
send or make available generally to its stockholders or to financial analysts,
promptly after providing same to the stockholders or financial analysts.
(d) OTHER INFORMATION. Such other information relating to the
Company and the Subsidiaries as from time to time may reasonably be requested by
the Purchaser provided the Company or its Subsidiary has such information
available to it in the ordinary course of its business, and further provided
that the Company, solely in its own discretion, determines that such information
-19-
is not confidential in nature and disclosure to such Purchaser would not be
harmful to the Company or its Subsidiary.
Notwithstanding anything to the contrary contained in this
Section 6.4(b), the Company shall not disclose material nonpublic information to
the Purchaser, or to advisors to or representatives of the Purchaser, unless
prior to disclosure of such information the Company identifies such information
as being material nonpublic information and provides the Purchaser, such
advisors and representatives with the opportunity to accept or refuse to accept
such material nonpublic information for review. The Company may, as a condition
to disclosing any material nonpublic information hereunder, require the
Purchaser's advisors and representatives to enter into a confidentiality
agreement (including an agreement with such advisors and representatives
prohibiting them from trading in Common Stock during such period of time as they
are in possession of material nonpublic information) in form reasonably
satisfactory to the Company and the Purchaser.
(e) RULE 144. The Company agrees to make publicly available on
a timely basis the information required by Rule 144(c) under the 1933 Act.
6.5 PRESS RELEASES. Any press release or other publicity
concerning this Agreement or the transactions contemplated by this Agreement
shall be submitted to the Purchaser for comment at least two (2) Business Days
prior to issuance, unless the release is required to be issued within a shorter
period of time by law or pursuant to the rules of the AMEX, Nasdaq or another
national securities exchange. The Company shall, on the Escrow Funding Date or
on the next succeeding Business Day, issue a press release, in the form of
EXHIBIT F hereto, concerning the transactions contemplated hereby. The Company's
other press releases and other public information, to the extent concerning the
Transaction Documents, shall contain such information as reasonably requested by
the Purchaser and be reasonably approved by the Purchaser in writing prior to
issuance.
6.6 NO CONFLICTING AGREEMENTS. The Company will not take any
action, enter into any agreement or make any commitment that would conflict or
interfere in any material respect with the obligations to the Purchaser under
the Transaction Documents.
6.7 INSURANCE. For so long as the Purchaser beneficially owns
any of the Securities, the Company shall, and shall cause each Subsidiary to,
have in full force and effect (a) insurance reasonably believed to be adequate
on all assets and activities of a type customarily insured, covering property
damage and loss of income by fire or other casualty, and (b) insurance
reasonably believed to be adequate protection against all liabilities, claims
and risks against which it is customary for companies similarly situated as the
Company and the Subsidiaries to insure.
6.8 COMPLIANCE WITH LAWS. So long as the Purchaser
beneficially owns any Securities, the Company will use reasonable efforts to
comply with all applicable laws, rules, regulations, orders and decrees of all
governmental authorities, except to the extent non-compliance (in one instance
or in the aggregate) would not have a Material Adverse Effect.
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6.9 LISTING OF UNDERLYING SHARES AND WARRANT SHARES AND
RELATED MATTERS. The Company agrees to obtain the listing of the Underlying
Shares and Warrant Shares on the AMEX not later than the Closing Date (or such
earlier date as required by AMEX) and, to the extent necessary, to take such
action to cause the Underlying Shares and the Warrant Shares to continue to be
eligible for trading on the AMEX. The Company agrees that if the Company applies
to have its Common Stock or other securities traded on any other principal stock
exchange or market, it will include in such application the Underlying Shares
and Warrant Shares and will take such other action as is necessary to cause such
Common Stock to be so listed. For so long as any of the Note, the Warrant or the
Redemption Warrant remains outstanding, the Company will take all action
necessary to continue the listing and trading of its Common Stock on at least
one of the AMEX, the NYSE or Nasdaq (collectively, "Approved Markets"), and will
comply in all respects with the Company's reporting, filing and other
obligations under the bylaws or rules of such exchange or market, as applicable,
to ensure the continued eligibility for trading of the Common Stock thereon.
Neither the Company nor any of its Affiliates, nor any Person acting on its or
their behalf, shall directly or indirectly make any offers or sales of any
security or solicit any offers to buy any security which may cause the
integration of the offering hereunder with any other offering of securities for
purposes of determining the need to obtain stockholder approval of the
transactions contemplated hereby under the rules of the AMEX. Unless in its
reasonable judgment such would constitute material non-public information, the
Company shall notify the Purchasers in advance if it intends to make any private
placement of securities within the six-month period after the Closing Date, and
unless the Company shall have received stockholder approval of the transactions
contemplated hereby under the rules of the AMEX, at the Purchaser's reasonable
request, the Company shall request a ruling from the AMEX in advance that such
private placement will not be integrated with the transactions contemplated
hereunder pursuant to the rules of the AMEX.
6.10 FORM 8-K. Within two Business Days after the Escrow
Funding Date, the Company will publicly report the issue and sale of the Note
and Warrant by filing with the SEC a Current Report on Form 8-K under the 1934
Act which report shall describe the material terms and include copies of the
Transaction Documents as exhibits to such report.
6.11 LEGENDS. Until registration for resale pursuant to the
Registration Rights Agreement or until sales under Rule 144(k) under the 1933
Act are permitted, certificates evidencing the Underlying Shares and the Warrant
Shares may bear one or both of the following legends or legends substantially
similar thereto:
(a) "The shares represented by this certificate may not be
transferred without (i) the opinion of counsel reasonably satisfactory
to the corporation that such transfer may lawfully be made without
registration under the Securities Act of 1933 or qualification under
applicable state securities laws; or (ii) such registration or
qualification."
(b) If required by the authorities of any state in connection
with the issuance of sale of the Securities, the legend required by
such state.
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Upon registration for resale pursuant to the Registration Rights Agreement or
upon Rule 144(k) under the 1933 Act becoming available, the Company shall
promptly (but in no event later than five Business Days after surrender of the
legended certificates to the Company) cause certificates evidencing the
Underlying Shares and Warrant Shares previously issued to be replaced with
certificates which do not bear the restrictive legends set forth in the
preceding clause (a) of this Section, and all Underlying Shares and Warrant
Shares subsequently issued shall not bear the restrictive legend set forth in
the preceding clause (a) of this Section. If the Purchaser notifies the Company
that the Purchaser has not received such certificates without the restrictive
legend set forth in the preceding clause (a) of this Section within three
Business Days after surrender of such legended certificates (each, a "Purchaser
Share Notice"), and the Purchaser does not receive such certificates without the
restrictive legend set forth in the preceding clause (a) of this Section within
two Business Days after giving a particular Purchaser Share Notice, then the
Company shall pay cash liquidated damages to the Purchaser at the rate of 2% per
month of the original Purchase Price of the Note and Warrant in respect of which
such Underlying Shares and Warrant Shares are issuable or issued and for which
the certificates have not been provided in compliance with the above, for so
long as the Company fails to provide such certificates. A Purchaser Share Notice
may be given by telephone or e-mail to the Company's Chief Financial Officer or
General Counsel. The Purchaser agrees that any sale by the Purchaser of
Underlying Shares and Warrant Shares pursuant to the Registration Statement
shall be made by the Purchaser in compliance with the prospectus delivery
requirements of the 1933 Act and in accordance with the plan of distribution set
forth in the Registration Statement and related prospectus, as amended and
supplemented from time to time.
6.12 LIMITATION ON CERTAIN ACTIONS. From the date of execution
and delivery of this Agreement by the parties hereto to the date of issuance of
the Note, the Company (1) shall comply with Section 4 of the Note as if the Note
were outstanding, (2) shall not take any action which, if the Note were
outstanding, (A) would constitute an Event of Default or, with the giving of
notice or the passage of time or both, would constitute an Event of Default or
(B) would constitute a Repurchase Event or, with the giving of notice or the
passage of time or both, would constitute a Repurchase Event.
6.13 BEST EFFORTS. Each of the parties shall use its best
efforts timely to satisfy each of the conditions to the other party's
obligations to sell and purchase the Note set forth in Section 7 or 8, as the
case may be, of this Agreement on or before the Escrow Funding Date or the
Closing Date, as the case may be.
6.14 DEBT OBLIGATION. So long as any portion of the Note is
outstanding, the Company shall cause its books and records to reflect the Note
as a debt of the Company in its unpaid principal amount, shall cause its
financial statements to reflect the Note as a debt of the Company in such amount
as shall be the greatest amount permitted in accordance with generally accepted
accounting principles and, whenever appropriate, as a valid senior, unsecured
debt obligation of the Company for money borrowed.
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7. CONDITIONS TO ESCROW FUNDING.
7.1 CONDITIONS TO THE COMPANY'S OBLIGATIONS. The Company's
obligation to execute and deliver the Escrow Agreement is conditioned upon
satisfaction of the following conditions precedent on or before the Escrow
Funding Date (any or all of which may be waived by the Company in its sole
discretion):
(a) On the Escrow Funding Date, no legal action, suit or
proceeding shall be pending or threatened which seeks to restrain or prohibit
the transactions contemplated by this Agreement; and
(b) The representations and warranties of the Purchaser
contained in this Agreement shall have been true and correct on the date of this
Agreement and shall be true and correct on the Escrow Funding Date as if given
on and as of the Escrow Funding Date (except for representations given as of a
specific date, which representations shall be true and correct as of such date),
and on or before the Escrow Funding Date the Purchaser shall have performed all
covenants and agreements of the Purchaser contained herein or in any of the
other Transaction Documents required to be performed by the Purchaser on or
before the Escrow Funding Date.
7.2 CONDITIONS TO THE PURCHASER'S OBLIGATIONS. The Purchaser's
obligation to execute and deliver the Escrow Agreement and to deposit the
Purchase Price with the Escrow Agent are conditioned upon satisfaction of the
following conditions precedent on or before the Escrow Funding Date (any or all
of which may be waived by the Purchaser in its sole discretion):
(a) On the Escrow Funding Date, no legal action, suit or
proceeding shall be pending or threatened which seeks to restrain or prohibit
the transactions contemplated by this Agreement;
(b) The representations and warranties of the Company
contained in this Agreement shall have been true and correct on the date of this
Agreement and the representations and warranties of the Company contained in the
Transaction Documents shall be true and correct on the Escrow Funding Date as if
given on and as of the Escrow Funding Date (except for representations given as
of a specific date, which representations shall be true and correct as of such
date), and on or before the Escrow Funding Date the Company shall have performed
all covenants and agreements of the Company contained herein or in any of the
other Transaction Documents required to be performed by the Company on or before
the Escrow Funding Date;
(c) No event which, if the Note were outstanding, would
constitute an Event of Default or a Repurchase Event or which, with the giving
of notice or the passage of time, or both, would constitute an Event of Default
or a Repurchase Event shall have occurred and be continuing;
(d) The Company shall have delivered to the Purchaser a
certificate, dated the Escrow Funding Date, duly executed by its Chief Executive
Officer or Chief Financial Officer, to the effect set forth in subparagraphs
(a), (b) and (c) of this Section 7.2;
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(e) The Company shall have delivered to the Purchaser a
certificate, dated the Escrow Funding Date, of the Secretary of the Company
certifying (A) the Certificate of Incorporation and By-Laws of the Company as in
effect on the Escrow Funding Date, (B) all resolutions of the Board of Directors
(and committees thereof) of the Company relating to this Agreement and the other
Transaction Documents and the transactions contemplated hereby and thereby and
(C) such other matters as reasonably requested by the Purchaser;
(f) On the Escrow Funding Date, the Purchaser shall have
received an opinion of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, LLP, counsel for the Company, dated
the Escrow Funding Date, addressed to the Purchaser, in form, scope and
substance reasonably satisfactory to the Purchaser, substantially in the form
attached as EXHIBIT E; and
(g) On the Escrow Funding Date, (i) trading in securities on
the NYSE, the AMEX or Nasdaq shall not have been suspended or materially limited
and (ii) a general moratorium on commercial banking activities in the State of
New York shall not have been declared by either federal or state authorities,
nor shall there have occurred any material outbreak or escalation of hostilities
or other national or international calamity or crisis of such magnitude in its
effect on, or any material adverse change in any financial market which, in each
case, in the good faith judgment of the Purchaser, makes it impracticable or
inadvisable to purchase the Note and Warrant.
8. CONDITIONS TO CLOSING.
8.1 CONDITIONS TO THE COMPANY'S OBLIGATIONS TO ISSUE AND SELL.
The Company's obligation to issue and sell the Note and the Warrant to the
Purchaser is conditioned upon satisfaction of the following conditions precedent
on or before the Closing Date (any or all of which may be waived by the Company
in its sole discretion):
(a) On the Closing Date the closings under the Other Purchase
Agreements shall have occurred;
(b) On the Closing Date, no legal action, suit or proceeding
shall be pending or threatened which seeks to restrain or prohibit the
transactions contemplated by this Agreement; and
(c) The representations and warranties of the Purchaser
contained in this Agreement shall have been true and correct on the date of this
Agreement and the representations and warranties of the Purchaser contained in
the Transaction Documents shall be true and correct on the Closing Date as if
given on and as of the Closing Date (except for representations given as of a
specific date, which representations shall be true and correct as of such date),
and on or before the Closing Date the Purchaser shall have performed all
covenants and agreements of the Purchaser contained herein or in any of the
other Transaction Documents required to be performed by the Purchaser on or
before the Closing Date.
8.2 CONDITIONS TO THE PURCHASER'S OBLIGATIONS TO PURCHASE. The
Purchaser's obligation to purchase the Note and Warrant is conditioned upon
-24-
satisfaction of the following conditions precedent on or before the Closing Date
(any or all of which may be waived by the Purchaser in its sole discretion):
(a) On the Closing Date, no legal action, suit or proceeding
shall be pending or threatened which seeks to restrain or prohibit the
transactions contemplated by this Agreement;
(b) The representations and warranties of the Company
contained in this Agreement shall have been true and correct on the date of this
Agreement and the representations and warranties of the Company contained in the
Transaction Documents shall be true and correct on the Closing Date as if given
on and as of the Closing Date (except for representations given as of a specific
date, which representations shall be true and correct as of such date), and on
or before the Closing Date the Company shall have performed all covenants and
agreements of the Company contained herein or in any of the other Transaction
Documents required to be performed by the Company on or before the Closing Date;
(c) No event which, if the Note were outstanding, would
constitute an Event of Default or Repurchase Agreement or which, with the giving
of notice or the passage of time, or both, would constitute an Event of Default
or repurchase Agreement shall have occurred and be continuing;
(d) The Stockholder Approval Condition shall have been
satisfied;
(e) The Company shall have delivered to the Purchaser a
certificate, dated the Closing Date, duly executed by its Chief Executive
Officer or Chief Financial Officer, to the effect set forth in subparagraphs
(a), (b), (c) and (d) of this Section 8.2;
(f) The Company shall have delivered to the Purchaser a
certificate, dated the Closing Date, of the Secretary of the Company certifying
(A) the Certificate of Incorporation and By-Laws of the Company as in effect on
the Closing Date, (B) all resolutions of the Board of Directors (and committees
thereof) of the Company relating to this Agreement and the other Transaction
Documents and the transactions contemplated hereby and thereby and (C) such
other matters as reasonably requested by the Purchaser;
(g) On the Closing Date, the Purchaser shall have received an
opinion of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, LLP, counsel for the Company, dated the Closing
Date, addressed to the Purchaser, in form, scope and substance reasonably
satisfactory to the Purchaser; and
(h) On the Closing Date, (i) trading in securities on the
NYSE, the AMEX or Nasdaq shall not have been suspended or materially limited and
(ii) a general moratorium on commercial banking activities in the State of New
York shall not have been declared by either federal or state authorities, nor
shall there have occurred any material outbreak or escalation of hostilities or
other national or international calamity or crisis of such magnitude in its
effect on, or any material adverse change in any financial market which, in each
case, in the good faith judgment of the Purchaser, makes it impracticable or
inadvisable to purchase the Note and Warrant.
-25-
9. MISCELLANEOUS.
9.1 SUCCESSORS AND ASSIGNS. This Agreement may not be assigned
by the Company. This Agreement may not be assigned by the Purchaser prior to the
Closing without the prior written consent of the Company, which consent may not
be unreasonably withheld or delayed, except that after the Closing, without the
prior written consent of the Company, but after notice given to the Company, the
Purchaser may assign its rights and delegate its duties hereunder in whole or in
part to an Affiliate or to any transferee of Securities from the Purchaser. The
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and permitted assigns of the parties.
Nothing in this Agreement, express or implied, is intended to confer upon any
party other than the parties hereto or their respective successors and permitted
assigns any rights, remedies, obligations, or liabilities under or by reason of
this Agreement, except as expressly provided in this Agreement.
9.2 COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9.3 TITLES AND SUBTITLES. The titles and subtitles used in
this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
9.4 NOTICES. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given only upon delivery to each party to be notified by (i)
personal delivery, (ii) telephone line facsimile transmission, upon receipt of
confirmation of complete transmittal, or (iii) a recognized overnight air
courier, addressed to the party to be notified at the address as follows, or at
such other address as such party may designate by ten days' advance written
notice to the other party:
If to the Company:
Viragen, Inc.
▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Chief Financial Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy to:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Purchaser:
to the address set forth on the signature pages
hereto.
9.5 EXPENSES. The parties hereto shall pay their own costs and
expenses in connection herewith [FOR PALISADES, OMICRON, SATELLITE AND ALEXANDRA
ONLY: , EXCEPT THAT THE COMPANY SHALL PAY OR REIMBURSE THE PURCHASER, AT OR
BEFORE THE CLOSING, FOR ITS LEGAL AND DUE DILIGENCE EXPENSES INCURRED IN
CONNECTION HEREWITH TO THE EXTENT NOT PREVIOUSLY PAID; PROVIDED, HOWEVER, IN NO
EVENT SHALL THE COMPANY BE REQUIRED TO PAY MORE THAN [$2,500 FOR PALISADES]
[$2,500 FOR OMICRON] [$2,500 FOR SATELLITE] [$32,500 FOR ALEXANDRA] TOWARDS SUCH
EXPENSES OF THE PURCHASER.] The Company shall pay all fees and expenses of any
placement agents in connection with the transactions contemplated by this
Agreement pursuant to a separate agreement between such parties.
9.6 AMENDMENTS AND WAIVERS. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the Purchaser;
PROVIDED, HOWEVER, that any such amendment or waiver effected in accordance with
this paragraph shall be binding upon each holder of any Securities purchased
under this Agreement at the time outstanding, each future holder of all such
securities, and the Company.
9.7 SEVERABILITY. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and the balance of this Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.
9.8 ENTIRE AGREEMENT. This Agreement, including the Exhibits
and Schedules hereto, the other Transaction Documents and other documents
contemplated hereby and thereby constitute the entire agreement among the
parties hereof with respect to the subject matter hereof and thereof and
supersede all prior agreements and understandings, both oral and written,
between the parties with respect to the subject matter hereof and thereof.
9.9 SURVIVAL. All representations, warranties, covenants and
agreements contained in this Agreement shall be deemed to be representations,
warranties, covenants and agreements as of the date hereof, except as expressly
provided to be made or deemed made as of another date. The representations and
-27-
warranties shall survive the execution and delivery of, and the Closing under,
this Agreement.
9.10 FURTHER ASSURANCES. The parties shall execute and deliver
all such further instruments and documents and take all such other actions as
may reasonably be required to carry out the transactions contemplated hereby and
to evidence the fulfillment of the agreements herein contained.
9.11 APPLICABLE LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York without regard
to principles of conflicts of laws.
9.12 REMEDIES.
(a) The Purchaser shall be entitled to specific performance of
the Company's obligations under the Transaction Documents.
(b) The Company on the one hand and the Purchaser shall
indemnify the other and hold it harmless from any loss, cost, expense or fees
(including reasonable attorneys' fees and expenses) arising out of any breach of
any of its representations, warranties, covenants or agreements in any of the
Transaction Documents, or arising out of the enforcement of this Section 9.12.
9.13 JURISDICTION. The parties hereby agree that all actions
or proceedings arising directly or indirectly from or in connection with this
Agreement shall be litigated only in the Supreme Court of the State of New York
or the United States District Court for the Southern District of New York
located in New York County, New York. The parties consent and submit to the
jurisdiction and venue of the foregoing courts and consent that any process or
notice of motion or other application to either of said courts or a judge
thereof may be served inside or outside the State of New York or the Southern
District of New York (but with respect to any party hereto, such consent shall
not be deemed a general consent to jurisdiction and service for any third
parties) by registered mail, return receipt requested, directed to the party
being served at its address provided in or pursuant to this Agreement (and
service so made shall be deemed complete three (3) days after the same has been
posted as aforesaid) or by personal service or in such other manner as may be
permissible under the rules of said courts. The Company hereby waives any right
to a jury trial in connection with any litigation pursuant to this Agreement.
9.14 SURVIVAL. The respective representations, warranties,
covenants and agreements of the Company and the Purchaser contained in this
Agreement and the documents delivered in connection with this Agreement shall
survive the execution and delivery of this Agreement and the other Transaction
Documents and the Closing and delivery of and payment for the Note and issuance
of the Warrant, and shall remain in full force and effect regardless of any
investigation made by or on behalf of the Purchaser or any Person controlling or
acting on behalf of the Purchaser or by the Company or any Person controlling or
acting on behalf of the Company.
-28-
9.15 CONSTRUCTION; PURCHASER STATUS. The language used in this
Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be applied against
any party. The Purchaser is not acting as part of a "group" (as that term is
used in Section 13(d) of the ▇▇▇▇ ▇▇▇) in negotiating and entering into this
Agreement or purchasing the Note and the Warrant or acquiring, disposing of or
voting any of the Underlying Shares or the Warrant Shares. The Company hereby
confirms that it understands and agrees that the Purchaser is not acting as part
of any such group.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed by their respective officers or other representatives thereunto
duly authorized as of the date first above written.
VIRAGEN, INC.
By:
------------------------------------
Name:
Title:
-30-
THE PURCHASER:
[NAME]
BY: [NAME],
AS INVESTMENT ADVISOR
By:
-----------------------------
Name:
Title:
Purchase Price: $
Number of Warrant Shares:
Initial Conversion Price of Note: $
Initial Exercise Price of Warrant: $
Address for Notices:
[Name]
Attn:
Telephone: ( )
Facsimile: ( )
E-mail:
with copies to:
[Name of Advisor]
[Address]
Telephone: ( )
Facsimile: ( )
-31-