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EXHIBIT 10.082
PRIVATE EQUITY CREDIT AGREEMENT
BY AND BETWEEN
▇▇▇▇▇▇▇ LLC
AND
BIOSHIELD TECHNOLOGIES, INC.
Dated as of June 30, 1999
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ARTICLE I CERTAIN DEFINITIONS........................................................................ 1
Section 1.1 Defined Terms.................................................................. 1
ARTICLE II PURCHASE AND SALE OF COMMON STOCK.......................................................... 8
Section 2.1 Investments.................................................................... 8
Section 2.2 Mechanics...................................................................... 8
Section 2.3 Closings....................................................................... 9
Section 2.4 Special Circumstances; Adjustment Period....................................... 9
Section 2.5 Termination of Investment Obligation.......................................... 10
Section 2.6 Blackout Shares............................................................... 10
Section 2.7 Liquidated Damages............................................................ 10
ARTICLE III REPRESENTATIONS AND WARRANTIES OF INVESTOR................................................ 11
Section 3.1 Intent........................................................................ 11
Section 3.2 Sophisticated Investor........................................................ 11
Section 3.3 Authority..................................................................... 11
Section 3.4 Not an Affiliate.............................................................. 11
Section 3.5 Organization and Standing..................................................... 12
Section 3.6 Absence of Conflicts.......................................................... 12
Section 3.7 Disclosure; Access to Information............................................. 12
Section 3.8 Manner of Sale................................................................ 12
Section 3.9 Financial Capacity............................................................ 12
Section 3.10 No SEC or NASD Proceedings................................................... 12
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY............................................. 13
Section 4.1 Organization of the Company................................................... 13
Section 4.2 Authority..................................................................... 13
Section 4.3 Capitalization................................................................ 13
Section 4.4 Common Stock.................................................................. 14
Section 4.5 SEC Documents................................................................. 14
Section 4.6 Exemption from Registration; Valid Issuances.................................. 14
Section 4.7 No General Solicitation or Advertising in
Regard to this Transaction.................................................... 15
Section 4.8 Corporate Documents........................................................... 15
Section 4.9 No Conflicts.................................................................. 15
Section 4.10 No Material Adverse Change................................................... 16
Section 4.11 No Undisclosed Liabilities................................................... 16
Section 4.12 No Undisclosed Events or Circumstances....................................... 16
Section 4.13 No Integrated Offering....................................................... 16
Section 4.14 Litigation and Other Proceedings............................................. 16
Section 4.15 No Misleading or Untrue Communication........................................ 17
Section 4.16 Material Non-Public Information.............................................. 17
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ARTICLE V COVENANTS OF INVESTOR..................................................................... 17
Section 5.1 Compliance with Law........................................................... 17
Section 5.2 Limitation on Short Sales..................................................... 17
ARTICLE VI COVENANTS OF THE COMPANY.................................................................. 17
Section 6.1 Registration Rights........................................................... 17
Section 6.2 Reservation of Common Stock................................................... 17
Section 6.3 Listing of Common Stock....................................................... 18
Section 6.4 Exchange Act Registration..................................................... 18
Section 6.5 Legends....................................................................... 18
Section 6.6 Corporate Existence........................................................... 18
Section 6.7 Additional SEC Documents...................................................... 18
Section 6.8 Notice of Certain Events Affecting
Registration; Suspension of Right to Make a Put............................... 18
Section 6.9 Expectations Regarding Put Notices............................................ 19
Section 6.10 Consolidation; Merger........................................................ 19
Section 6.11 Issuance of Put Shares and Blackout Shares................................... 19
Section 6.12 Legal Opinion on Subscription Date........................................... 20
ARTICLE VII CONDITIONS TO DELIVERY OF PUT NOTICES AND
CONDITIONS TO CLOSING..................................................................... 20
Section 7.1 Conditions Precedent to the Obligation of the
Company to Issue and Sell Common Stock........................................ 20
Section 7.2 Conditions Precedent to the Right of the
Company to Deliver a Put Notice and the
Obligation of Investor to Purchase Put Shares................................. 20
Section 7.3 Due Diligence Review; Non-Disclosure of
Non-Public Information........................................................ 23
ARTICLE VIII LEGENDS................................................................................... 24
Section 8.1 Legends....................................................................... 24
Section 8.2 No Other Legend or Stock Transfer
Restrictions.................................................................. 25
Section 8.3 Investor's Compliance......................................................... 25
ARTICLE IX NOTICES; INDEMNIFICATION.................................................................. 25
Section 9.1 Notices....................................................................... 25
Section 9.2 Indemnification............................................................... 27
Section 9.3 Method of Asserting Indemnification Claims.................................... 27
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ARTICLE X MISCELLANEOUS............................................................................. 30
Section 10.1 Governing Law; Jurisdiction.................................................. 30
Section 10.2 Assignment................................................................... 30
Section 10.3 Third Party Beneficiaries.................................................... 31
Section 10.4 Termination.................................................................. 31
Section 10.5 Entire Agreement, Amendment; No Waiver....................................... 31
Section 10.6 Fees and Expenses............................................................ 31
Section 10.7 No Brokers................................................................... 31
Section 10.8 Counterparts................................................................. 31
Section 10.9 Survival; Severability....................................................... 31
Section 10.10 Further Assurances.......................................................... 32
Section 10.11 No Strict Construction...................................................... 32
Section 10.12 Equitable Relief............................................................ 32
Section 10.13 Title and Subtitles......................................................... 32
Section 10.14 Reporting Entity for the Common Stock....................................... 32
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PRIVATE EQUITY CREDIT AGREEMENT is entered into as of the 30th day of
June, 1999 (this "Agreement"), by and between ▇▇▇▇▇▇▇, LLC, an entity organized
and existing under the laws of the Cayman Islands ("Investor"), and BioShield
Technologies, Inc., a corporation organized and existing under the laws of the
State of Georgia (the "Company").
WHEREAS, the parties desire that, upon the terms and subject to the
conditions contained herein, the Company shall issue and sell to Investor, from
time to time as provided herein, and Investor shall purchase, up to six million
two hundred and fifty thousand dollars ($6,250,000) of the Common Stock (as
defined below); and
WHEREAS, such investments will be made in reliance upon the provisions
of Section 4(2) ("Section 4(2)") of the Securities Act of 1933 and the rules
and regulations promulgated thereunder (the "Securities Act"), and/or upon such
other exemption from the registration requirements of the Securities Act as may
be available with respect to any or all of the investments in Common Stock to
be made hereunder.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
Section 1.1 Defined Terms. As used in this Agreement, the following
terms shall have the following meanings specified or indicated (such meanings
to be equally applicable to both the singular and plural forms of the terms
defined)
"Adjustment Period" shall have the meaning specified in
Section 2.4(b).
"Adjustment Period Notice" shall have the meaning specified
in Section 2.4(a).
"Agreement" shall have the meaning specified in the preamble
hereof.
"Bid Price" shall mean the closing bid price of the Common
Stock on the Principal Market.
"Blackout Notice" shall have the meaning specified in the
Registration Rights Agreement.
"Blackout Shares" shall have the meaning specified in Section
2.6.
"By-Laws" shall have the meaning specified in Section 4.8.
"Certificate" shall have the meaning specified in Section
4.8.
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"Claim Notice" shall have the meaning specified in Section
9.3(a).
"Closing" shall mean one of the closings of a purchase and
sale of shares of Common Stock pursuant to Section 2.1.
"Closing Date" shall mean, with respect to a Closing, the
twentieth (20th) Trading Day following the Put Date related to such Closing, or
such earlier date as the Company and Investor shall agree, provided all
conditions to such Closing have been satisfied on or before such Trading Day.
"Commitment Period" shall mean the period commencing on the
earlier to occur of (a) the Effective Date or (b) such earlier date as the
Company and Investor shall agree, and expiring on the earlier to occur of (i)
the date on which Investor shall have purchased Put Shares pursuant to this
Agreement for an aggregate Purchase Price of the Maximum Commitment Amount,
(ii) the date this Agreement is terminated pursuant to Section 2.5, or (iii)
the date occurring twenty-four (24) months from the date of commencement of the
Commitment Period.
"Common Stock" shall mean the Company's common stock, no par
value, and any shares of any other class of common stock whether now or
hereafter authorized, having the right to participate in the distribution of
dividends (as and when declared) and assets (upon liquidation of the Company).
"Common Stock Equivalents" shall mean any securities that are
convertible into or exchangeable for Common Stock or any warrants, options or
other rights to subscribe for or purchase Common Stock or any such convertible
or exchangeable securities.
"Company" shall have the meaning specified in the preamble to
this Agreement.
"Condition Satisfaction Date" shall have the meaning
specified in Section 7.2.
"Damages" shall mean any loss, claim, damage, liability,
costs and expenses (including, without limitation, reasonable attorneys' fees
and disbursements and costs and expenses of expert witnesses and
investigation).
"Discount" shall mean twenty percent (20%).
"Dispute Period" shall have the meaning specified in Section
9.3(a).
"DTC" shall the meaning specified in Section 2.3.
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"DWAC" shall the meaning specified in Section 2.3.
"Effective Date" shall mean the date on which the SEC first
declares effective a Registration Statement registering resale of the
Registrable Securities as set forth in Section 7.2(a).
"Exchange Act" shall mean the Securities Exchange Act of 1934
and the rules and regulations promulgated thereunder.
"FAST" shall the meaning specified in Section 2.3.
"Indemnified Party" shall have the meaning specified in
Section 9.3(a).
"Indemnifying Party" shall have the meaning specified in
Section 9.3(a).
"Indemnity Notice" shall have the meaning specified in
Section 9.3(b).
"Initial Registrable Securities" shall have the meaning
specified in the Registration Rights Agreement.
"Initial Registration Statement" shall have the meaning
specified in the Registration Rights Agreement.
"Investment Amount" shall mean the dollar amount (within the
range specified in Section 2.2) to be invested by Investor to purchase Put
Shares with respect to any Put Date as notified by the Company to Investor in
accordance with Section 2.2.
"Investor" shall have the meaning specified in the preamble
to this Agreement.
"Legend" shall have the meaning specified in Section 8.1.
"Market Price" on any given date shall mean the average of
the Bid Prices for the twenty (20) Trading Days immediately following the Put
Date.
"Maximum Commitment Amount" shall mean six million two
hundred and fifty thousand dollars ($6,250,000), subject to increase as agreed
to by the Company and Investor.
"Minimum Commitment Amount" shall mean two hundred fifty
thousand dollars ($250,000).
"Material Adverse Effect" shall mean any effect on the
business, operations, properties, prospects or financial condition of the
Company that is material and
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adverse to the Company or to the Company and such other entities controlling or
controlled by the Company, taken as a whole, and/or any condition,
circumstance, or situation that would prohibit or otherwise materially
interfere with the ability of the Company to enter into and perform its
obligations under any of (a) this Agreement and (b) the Registration Rights
Agreement.
"Maximum Put Amount" shall mean, with respect to any Put, one
million five hundred thousand dollars ($1,500,000), subject to increase as
agreed to by the Company and Investor.
"Minimum Put Amount" shall mean, with respect to any Put, two
hundred fifty thousand dollars ($250,000), subject to decrease as agreed to by
the Company and Investor.
"NASD" shall mean the National Association of Securities
Dealers, Inc.
"Nasdaq" shall mean The Nasdaq Stock Market, Inc.
"New Bid Price" shall have the meaning specified in Section
2.6.
"Old Bid Price" shall have the meaning specified in Section
2.6.
"Outstanding" shall mean, with respect to the Common Stock,
at any date as of which the number of shares of Common Stock is to be
determined, all issued and outstanding shares of Common Stock, including all
shares of Common Stock issuable in respect of outstanding scrip or any
certificates representing fractional interests in shares of Common Stock;
provided, however, that Outstanding shall not include any shares of Common
Stock then directly or indirectly owned or held by or for the account of the
Company.
"Person" shall mean an individual, a corporation, a
partnership, an association, a trust or other entity or organization, including
a government or political subdivision or an agency or instrumentality thereof.
"Preferred Stock" shall mean the Company's preferred stock,
no par value.
"Principal Market" shall mean the Nasdaq National Market, the
Nasdaq SmallCap Market, the American Stock Exchange or the New York Stock
Exchange, whichever is at the time the principal trading exchange or market for
the Common Stock.
"Purchase Price" shall mean, with respect to a Put, the
Market Price on the applicable Put Date (or such other date on which the
Purchase Price is calculated in accordance with the terms and conditions of
this Agreement) less the product of the Discount and the Market Price.
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"Put" shall mean each occasion that the Company elects to
exercise its right to tender a Put Notice requiring Investor to purchase shares
of Common Stock, subject to the terms and conditions of this Agreement.
"Put Date" shall mean the Trading Day during the Commitment
Period that a Put Notice is deemed delivered pursuant to Section 2.2(b).
"Put Notice" shall mean a written notice to Investor setting
forth the Investment Amount with respect to which the Company intends to
require Investor to purchase shares of Common Stock pursuant to the terms of
this Agreement.
"Put Shares" shall mean all shares of Common Stock issued or
issuable pursuant to a Put that has been exercised or may be exercised in
accordance with the terms and conditions of this Agreement.
"Registrable Securities" shall mean the (a) Put Shares, (b)
the Blackout Shares and (c) any securities issued or issuable with respect to
any of the foregoing by way of exchange, stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization or otherwise. As to any particular
Registrable Securities, once issued such securities shall cease to be
Registrable Securities when (i) a Registration Statement has been declared
effective by the SEC and such Registrable Securities have been disposed of
pursuant to a Registration Statement, (ii) such Registrable Securities have
been sold under circumstances under which all of the applicable conditions of
Rule 144 are met, (iii) such time as such Registrable Securities have been
otherwise transferred to holders who may trade such shares without restriction
under the Securities Act, and the Company has delivered a new certificate or
other evidence of ownership for such securities not bearing a restrictive
legend or (iv) in the opinion of counsel to the Company, which counsel shall be
reasonably acceptable to Investor, such Registrable Securities may be sold
without registration under the Securities Act or the need for an exemption from
any such registration requirements and without any time, volume or manner
limitations pursuant to Rule 144(k) (or any similar provision then in effect)
under the Securities Act.
"Registration Rights Agreement" shall mean the registration
rights agreement in the form of Exhibit A hereto.
"Registration Statement" shall mean a registration statement
on Form SB-2 (if use of such form is then available to the Company pursuant to
the rules of the SEC and, if not, on such other form promulgated by the SEC for
which the Company then qualifies and which counsel for the Company shall deem
appropriate and which form shall be available for the resale of the Registrable
Securities to be registered thereunder in accordance with the provisions of
this Agreement and the Registration Rights Agreement and in accordance with the
intended method of distribution of such securities), for the registration of
the resale by Investor of the Registrable Securities under the Securities Act.
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"Regulation D" shall have the meaning specified in the
recitals of this Agreement.
"Remaining Put Shares" shall have the meaning specified in
Section 2.6.
"Rule 144" shall mean Rule 144 under the Securities Act or
any similar provision then in force under the Securities Act.
"SEC" shall mean the Securities and Exchange Commission.
"Section 4(2)" shall have the meaning specified in the
recitals of this Agreement.
"Securities Act" shall have the meaning specified in the
recitals of this Agreement.
"SEC Documents" shall mean, as of a particular date, all
reports and other documents file by the Company pursuant to Section 13(a) or
15(d) of the Exchange Act since the beginning of the Company's then most
recently completed fiscal year as of the time in question (provided that if the
date in question is within ninety days of the beginning of the Company's fiscal
year, the term shall include all documents filed since the beginning of the
second preceding fiscal year).
"Subscription Date" shall mean the date on which this
Agreement is executed and delivered by the Company and Investor.
"Third Party Claim" shall have the meaning specified in
Section 9.3(a).
"Trading Cushion" shall mean a minimum of twenty (20) Trading
Days between Put Dates, unless a shorter period is agreed to by the Company and
Investor.
"Trading Day" shall mean any day during which the Principal
Market shall be open for business.
"Transfer Agent" shall mean the transfer agent for the Common
Stock (and to any substitute or replacement transfer agent for the Common Stock
upon the Company's appointment of any such substitute or replacement transfer
agent).
"Underwriter" shall mean any underwriter participating in any
disposition of the Registrable Securities on behalf of Investor pursuant to a
Registration Statement.
"Valuation Event" shall mean an event in which the Company at
any time during a Valuation Period takes any of the following actions:
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(a) subdivides or combines the Common Stock;
(b) pays a dividend in shares of Common Stock or makes any
other distribution of shares of Common Stock, except for dividends
paid with respect to the Preferred Stock;
(c) issues any warrants, options or other rights to
subscribe for or purchase shares of Common Stock and the price per
share for which shares of Common Stock may at any time thereafter be
issuable pursuant to such warrants, options or other rights shall be
less than the Bid Price in effect immediately prior to such issuance;
(d) issues any securities convertible into or exchangeable
for shares of Common Stock and the consideration per share for which
shares of Common Stock may at any time thereafter be issuable pursuant
to the terms of such convertible or exchangeable securities shall be
less than the Bid Price in effect immediately prior to such issuance;
(e) issues shares of Common Stock otherwise than as
provided in the foregoing subsections (a) through (d), at a price per
share less, or for other consideration lower, than the Bid Price in
effect immediately prior to such issuance, or without consideration;
(f) makes a distribution of its assets or evidences of
indebtedness to the holders of Common Stock as a dividend in
liquidation or by way of return of capital or other than as a dividend
payable out of earnings or surplus legally available for dividends
under applicable law or any distribution to such holders made in
respect of the sale of all or substantially all of the Company's
assets (other than under the circumstances provided for in the
foregoing subsections (a) through (e); or
(g) takes any action affecting the number of Outstanding
Common Stock, other than an action described in any of the foregoing
subsections (a) through (f) hereof, inclusive, which in the opinion of
the Company's Board of Directors, determined in good faith, would have
a materially adverse effect upon the rights of Investor at the time of
a Put.
"Valuation Period" shall mean the period of twenty (20)
Trading Days immediately following the date on which the applicable Put Notice
is deemed to be delivered and during which the Purchase Price of the Common
Stock is valued; provided, however, that if a Valuation Event occurs during any
Valuation Period, a new Valuation Period shall begin on the Trading Day
immediately after the occurrence of such Valuation Event and end on the
twentieth Trading Day thereafter.
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ARTICLE II
PURCHASE AND SALE OF COMMON STOCK
Section 2.1 Investments.
(a) Puts. Upon the terms and conditions set forth herein
(including, without limitation, the provisions of Article VII), on any Put Date
the Company may exercise a Put by the delivery of a Put Notice. The number of
Put Shares that Investor shall receive pursuant to such Put shall be determined
by dividing the Investment Amount specified in the Put Notice by the Purchase
Price with respect to such Put Date.
(b) Minimum Amount of Puts. The Company shall, in
accordance with Section 2.2(a), deliver to Investor during the Commitment
Period, Put Notices with an aggregate Investment Amount at least equal to the
Minimum Commitment Amount. If the Company for any reason fails to issue and
deliver such Put Shares during the Commitment Period, on the first Trading Day
after the expiration of the Commitment Period, the Company shall wire to
Investor a sum in immediately available funds equal to the product of (i) the
Minimum Commitment Amount minus the aggregate Investment Amounts of the Put
Notices delivered to Investor hereunder and (ii) the Discount.
(c) Maximum Amount of Puts. Unless the Company obtains the
requisite approval of its shareholders in accordance with the corporate laws of
the State of Georgia and the applicable rules of the Principal Market, no more
than 1,263,831 shares of Common Stock (representing approximately 19.99% of the
Outstanding Common Stock on the date hereof) may be issued and sold to Investor
pursuant to this Agreement.
Section 2.2 Mechanics.
(a) Put Notice. At any time during the Commitment Period,
the Company may deliver a Put Notice to Investor, subject to the conditions set
forth in Section 7.2; provided, however, the Investment Amount for each Put as
designated by the Company in the applicable Put Notice shall be neither less
than the Minimum Put Amount nor more than the Maximum Put Amount.
(b) Date of Delivery of Put Notice. A Put Notice shall be
deemed delivered on (i) the Trading Day it is received by facsimile or
otherwise by Investor if such notice is received on or prior to 12:00 noon New
York time, or (ii) the immediately succeeding Trading Day if it is received by
facsimile or otherwise after 12:00 noon New York time on a Trading Day or at
any time on a day which is not a Trading Day.
Section 2.3 Closings. On each Closing Date for a Put, (a) the Company
shall deliver to Investor one or more certificates, at Investor's option,
representing the Put Shares to be purchased by Investor pursuant to Section 2.1
herein, registered in the name
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of Investor and (b) Investor shall deliver to the Company the Investment Amount
specified in the Put Notice by wire transfer of immediately available funds to
an account designated by the Company on or before the Closing Date. In lieu of
delivering physical certificates representing the Common Stock issuable in
accordance with clause (a) of this Section 2.3, and provided that the Transfer
Agent then is participating in the Depository Trust Company ("DTC") Fast
Automated Securities Transfer ("FAST") program, upon request of Investor, the
Company shall use its commercially reasonable efforts to cause the Transfer
Agent to electronically transmit the Put Shares by crediting the account of the
holder's prime broker with DTC through its Deposit Withdrawal Agent Commission
("DWAC") system. In addition, on or prior to such Closing Date, each of the
Company and Investor shall deliver to the other all documents, instruments and
writings required to be delivered or reasonably requested by either of them
pursuant to this Agreement in order to implement and effect the transactions
contemplated herein.
Section 2.4 Special Circumstances; Adjustment Period.
(a) Adjustment Period Notice. In the event that the Company
shall in good faith anticipate executing an agreement of acquisition, merger or
consolidation within ninety (90) days after giving Investor Adjustment Period
Notice (as defined below), the Company may, in its sole discretion, give
Investor at least twenty-one (21) days irrevocable advance notice, in the form
of Exhibit B hereto ("Adjustment Period Notice"), that the Company shall
initiate an Adjustment Period (as defined below). The Company shall not give
such Adjustment Period Notice if it constitutes the disclosure of material
non-public information to Investor.
(b) Actions During the Adjustment Period. During the
Adjustment Period:
(i) the Discount shall be increased to {twenty-one
percent (21%)};
(ii) the duration of the Trading Cushion shall be
shortened to ten (10) Trading Days until the expiration of five (5) consecutive
weeks after the date on which the Adjustment Period Notice was given (the
"Adjustment Period"); and
(iii) the Company may not deliver a Put Notice such that
the number of Put Shares to be purchased by Investor upon the applicable
Closing, when aggregated with all other shares of Common Stock then owned by
Investor beneficially or deemed beneficially owned by Investor, would result in
Investor owning more than 4.9% of all of such Common Stock as would be
outstanding on such Closing Date, as determined in accordance with Section
13(d) of the Exchange Act and the regulations promulgated thereunder. For
purposes of this Section 2.4(b)(iii), in the event that the amount of Common
Stock outstanding as determined in accordance with Section 13(d) of the
Exchange Act is greater on a Closing Date than on the date upon which the Put
Notice associated with such Closing Date is given, the amount of Common Stock
outstanding on
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such Closing Date shall govern for purposes of determining whether Investor,
when aggregating all purchases of Common Stock made pursuant to this Agreement
would own more than 4.9% of the Common Stock following such Closing Date.
Section 2.5 Termination of Investment Obligation. The obligation of
Investor to purchase shares of Common Stock shall terminate permanently without
penalty (including with respect to a Closing Date that has not yet occurred) in
the event that (a) there shall occur any stop order or suspension of the
effectiveness of any Registration Statement for an aggregate of thirty (30)
Trading Days during the Commitment Period, for any reason other than deferrals
or suspension during a Blackout Period in accordance with the Registration
Rights Agreement, as a result of corporate developments subsequent to the
Subscription Date that would require such Registration Statement to be amended
to reflect such event in order to maintain its compliance with the disclosure
requirements of the Securities Act, (b) the Company shall at any time fail to
comply with the requirements of Section 6.3, 6.4, 6.5 or 6.6 and such failure
shall continue for more than thirty (30) days, or (c) the Company shall provide
thirty (30) days notice of termination to Investor.
Section 2.6 Blackout Shares. In the event that, (a) within five
Trading Days following any Closing Date, the Company gives a Blackout Notice to
Investor of a Blackout Period in accordance with the Registration Rights
Agreement, and (b) the Bid Price on the Trading Day immediately preceding such
Blackout Period ("Old Bid Price") is greater than the Bid Price on the first
Trading Day following such Blackout Period that Investor may sell its
Registrable Securities pursuant to an effective Registration Statement ("New
Bid Price"), then the Company shall issue to Investor the number of additional
shares of Registrable Securities (the "Blackout Shares") equal to the
difference between (i) the product of the number of Put Shares held by Investor
immediately prior to the Blackout Period that were issued on the most recent
Closing Date (the "Remaining Put Shares") multiplied by the Old Bid Price,
divided by the New Bid Price, and (ii) the Remaining Put Shares.
Section 2.7 Liquidated Damages. Each of the Company and Investor
acknowledge and agree that the sum payable under Section 2.1(b) and the
requirement to issue Blackout Shares under Section 2.6 shall give rise to
liquidated damages and not penalties. Each of the Company and Investor further
acknowledge that (a) the amount of loss or damages likely to be incurred is
incapable or is difficult to precisely estimate, (b) the amounts specified in
such Sections bear a reasonable proportion and are not plainly or grossly
disproportionate to the probable loss likely to be incurred by Investor in
connection with the failure by the Company to make Puts with aggregate Purchase
Prices totaling at least the Minimum Commitment Amount or in connection with a
Blackout Period under the Registration Rights Agreement, and (c) each of the
Company and Investor are sophisticated business parties and have been
represented by sophisticated and able legal and financial counsel and
negotiated this Agreement at arm's length.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF INVESTOR
Investor represents and warrants to the Company that:
Section 3.1 Intent. Investor is entering into this Agreement for its
own account and Investor has no present arrangement (whether or not legally
binding) at any time to sell the Common Stock to or through any person or
entity; provided, however, that by making the representations herein, Investor
does not agree to hold the Common Stock for any minimum or other specific term
and reserves the right to dispose of the Common Stock at any time in accordance
with federal and state securities laws applicable to such disposition.
Section 3.2 Sophisticated Investor. Investor is a sophisticated
investor (as described in Rule 506(b)(2)(ii) of Regulation D) and an accredited
investor (as defined in Rule 501 of Regulation D), and Investor has such
experience in business and financial matters that it is capable of evaluating
the merits and risks of an investment in Common Stock. Investor acknowledges
that an investment in the Common Stock is speculative and involves a high
degree of risk.
Section 3.3 Authority. (a) Investor has the requisite power and
authority to enter into and perform its obligations under this Agreement and
the transactions contemplated hereby in accordance with its terms; (b) the
execution and delivery of this Agreement and the Registration Rights Agreement,
and the consummation by it of the transactions contemplated hereby and thereby
have been duly authorized by all necessary action and no further consent or
authorization of Investor or its partners is required; and (c) this Agreement
has been duly authorized and validly executed and delivered by Investor and is
a valid and binding agreement of Investor enforceable against it in accordance
with its terms, subject to applicable bankruptcy, insolvency, or similar laws
relating to, or affecting generally the enforcement of, creditors' rights and
remedies or by other equitable principles of general application.
Section 3.4 Not an Affiliate. Investor is not an officer, director or
"affiliate" (as that term is defined in Rule 405 of the Securities Act) of the
Company.
Section 3.5 Organization and Standing. Investor is a limited
partnership duly organized, validly existing and in good standing under the
laws of the Delaware and has all requisite power and authority to own, lease
and operate its properties and to carry on its business as now being conducted.
Investor is duly qualified as a foreign corporation to do business and is in
good standing in every jurisdiction in which the nature of the business
conducted or property owned by it makes such qualification necessary, other
than those in which the failure so to qualify would not have a material adverse
effect on Investor.
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Section 3.6 Absence of Conflicts. The execution and delivery of this
Agreement and any other document or instrument contemplated hereby, and the
consummation of the transactions contemplated hereby and thereby, and
compliance with the requirements hereof and thereof, will not (a) violate any
law, rule, regulation, order, writ, judgment, injunction, decree or award
binding on Investor, (b) violate any provision of any indenture, instrument or
agreement to which Investor is a party or is subject, or by which Investor or
any of its assets is bound, or conflict with or constitute a material default
thereunder, (c) result in the creation or imposition of any lien pursuant to
the terms of any such indenture, instrument or agreement, or constitute a
breach of any fiduciary duty owed by Investor to any third party, or (d)
require the approval of any third-party (that has not been obtained) pursuant
to any material contract, instrument, agreement, relationship or legal
obligation to which Investor is subject or to which any of its assets,
operations or management may be subject.
Section 3.7 Disclosure; Access to Information. Investor has received
all documents, records, books and other information pertaining to Investor's
investment in the Company that have been requested by Investor. Investor has
reviewed or received copies of the SEC Documents.
Section 3.8 Manner of Sale. At no time was Investor presented with or
solicited by or through any leaflet, public promotional meeting, television
advertisement or any other form of general solicitation or advertising.
Section 3.9 Financial Capability. Investor presently has the
financial capacity and the necessary capital to perform its obligations
hereunder and shall and has provided to the Company such financial and other
information that the Company has requested to demonstrate such capacity.
Section 3.10 No SEC or NASD Proceedings. To the knowledge of
Investor, there are no disciplinary proceedings involving Investor or any of
its employees pending before the NASD, the SEC or any other regulatory
authority to which Investor is subject.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Investor that:
Section 4.1 Organization of the Company. The Company is a corporation
duly organized and validly existing and in good standing under the laws of the
State of Georgia and has all requisite power and authority to own, lease and
operate its properties and to carry on its business as now being conducted. The
Company does not own more than fifty percent (50%) of the outstanding capital
stock of or control any other business entity other than Allergy
▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc. ("ASC"). The Company is duly qualified as a foreign
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corporation to do business and is in good standing in every jurisdiction in
which the nature of the business conducted or property owned by it makes such
qualification necessary, other than those in which the failure so to qualify
would not have a Material Adverse Effect.
Section 4.2 Authority. (a) The Company has the requisite corporate
power and authority to enter into and perform its obligations under this
Agreement and the Registration Rights Agreement and to issue the Put Shares and
the Blackout Shares, if any; (b) the execution and delivery of this Agreement
and the Registration Rights Agreement by the Company and the consummation by it
of the transactions contemplated hereby and thereby have been duly authorized
by all necessary corporate action and no further consent or authorization of
the Company or its Board of Directors or stockholders is required; and (c) each
of this Agreement and the Registration Rights Agreement has been duly executed
and delivered by the Company and constitute valid and binding obligations of
the Company enforceable against the Company in accordance with their respective
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, or similar laws relating to, or affecting generally the enforcement
of, creditors' rights and remedies or by other equitable principles of general
application.
Section 4.3 Capitalization. As of March 31, 1999, the authorized
capital stock of the Company consisted of 50,000,000 shares of Common Stock, of
which 6,144,125 shares were issued and outstanding, and no shares of preferred
stock were issued and outstanding. All of the outstanding shares of Common
Stock of the Company have been duly and validly authorized and issued and are
fully paid and nonassessable.
Section 4.3 Capitalization. As of March 31, 1999, the authorized
capital stock of the Company consisted of 50,000,000 shares of Common Stock, of
which 6,144,125 shares were issued and outstanding, and no shares of preferred
stock were issued and outstanding. All of the outstanding shares of Common
Stock of the Company have been duly and validly authorized and issued and are
fully paid and nonassessable.
Section 4.4 Common Stock. The Company has registered the Common Stock
pursuant to Section 12(b) or 12(g) of the Exchange Act and is in full
compliance with all reporting requirements of the Exchange Act, and the Company
has maintained all requirements for the continued listing or quotation of the
Common Stock, and such Common Stock is currently listed or quoted on the
Principal Market. As of the date of this Agreement, the Principal Market is the
Nasdaq SmallCap Market.
Section 4.5 SEC Documents. The Company has delivered or made available
to Investor true and complete copies of the SEC Documents (including, without
limitation, proxy information and solicitation materials). The Company has not
provided to Investor any information that, according to applicable law, rule or
regulation, should have been disclosed publicly prior to the date hereof by the
Company, but which has not been so disclosed. As of their respective dates, the
SEC Documents complied in all material respects with the requirements of the
Securities Act or the Exchange Act, as the case may be, and other federal,
state and local laws, rules and regulations applicable to such SEC Documents,
and none of the SEC Documents contained any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading. The financial statements of the Company
included in the SEC Documents comply as to form and substance in all material
respects with applicable accounting
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requirements and the published rules and regulations of the SEC or other
applicable rules and regulations with respect thereto. Such financial
statements have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis during the periods involved (except
(a) as may be otherwise indicated in such financial statements or the notes
thereto or (b) in the case of unaudited interim statements, to the extent they
may not include footnotes or may be condensed or summary statements) and fairly
present in all material respects the financial position of the Company as of
the dates thereof and the results of operations and cash flows for the periods
then ended (subject, in the case of unaudited statements, to normal year-end
audit adjustments).
Section 4.6 Exemption from Registration; Valid Issuances. The sale and
issuance of the Put Shares and the Blackout Shares, if any in accordance with
the terms and on the bases of the representations and warranties set forth in
this Agreement, may and shall be properly issued by the Company to Investor
pursuant to Section 4(2), Regulation D and/or any applicable state law. When
issued and paid for as herein provided, the Put Shares, and the Blackout
Shares, if any, shall be duly and validly issued, fully paid, and
nonassessable. Neither the sales of the Put Shares or the Blackout Shares,
if any, pursuant to, nor the Company's performance of its obligations under,
this Agreement or the Registration Rights Agreement shall (a) result in the
creation or imposition of any liens, charges, claims or other encumbrances upon
the Put Shares or the Blackout Shares, if any, or any of the assets of the
Company, or (b) entitle the holders of Outstanding Common Stock to preemptive
or other rights to subscribe to or acquire the Common Stock or other securities
of the Company. The Put Shares and the Blackout Shares, if any, shall not
subject Investor to personal liability by reason of the ownership thereof.
Section 4.7 No General Solicitation or Advertising in Regard to this
Transaction. Neither the Company nor any of its affiliates nor any person
acting on its or their behalf (a) has conducted or will conduct any general
solicitation (as that term is used in Rule 502(c) of Regulation D) or general
advertising with respect to any of the Put Shares or the Blackout Shares, if
any, or (b) made any offers or sales of any security or solicited any offers to
buy any security under any circumstances that would require registration of the
Common Stock under the Securities Act.
Section 4.8 Corporate Documents. The Company has furnished or made
available to Investor true and correct copies of the Company's Certificate of
Incorporation, as amended and in effect on the date hereof (the "Certificate"),
and the Company's By-Laws, as amended and in effect on the date hereof (the
"By-Laws").
Section 4.9 No Conflicts. The execution, delivery and performance of
this Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby, including without limitation the issuance of
the Put Shares and the Blackout Shares, if any, do not and will not (a) result
in a violation of the Certificate or By-Laws or (b) conflict with, or
constitute a material default (or an event that with notice or lapse of time or
both would become a material default) under, or give to others any rights
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of termination, amendment, acceleration or cancellation of, any material
agreement, indenture, instrument or any "lock-up" or similar provision of any
underwriting or similar agreement to which the Company is a party, or (c)
result in a violation of any federal, state, local or foreign law, rule,
regulation, order, judgment or decree (including federal and state securities
laws and regulations) applicable to the Company or by which any property or
asset of the Company is bound or affected (except for such conflicts, defaults,
terminations, amendments, accelerations, cancellations and violations as would
not, individually or in the aggregate, have a Material Adverse Effect) nor is
the Company otherwise in violation of, conflict with or in default under any of
the foregoing; provided, however, that for purposes of the Company's
representations and warranties as to violations of foreign law, rule or
regulation referenced in clause (c), such representations and warranties are
made only to the best of the Company's knowledge insofar as the execution,
delivery and performance of this Agreement by the Company and the consummation
by the Company of the transactions contemplated hereby are or may be affected
by the status of Investor under or pursuant to any such foreign law, rule or
regulation. The business of the Company is not being conducted in violation of
any law, ordinance or regulation of any governmental entity, except for
possible violations that either singly or in the aggregate do not and will not
have a Material Adverse Effect. The Company is not required under federal,
state or local law, rule or regulation to obtain any consent, authorization or
order of, or make any filing or registration with, any court or governmental
agency in order for it to execute, deliver or perform any of its obligations
under this Agreement or issue and sell the Common Stock in accordance with the
terms hereof (other than any SEC, NASD or state securities filings that may be
required to be made by the Company subsequent to any Closing, any registration
statement that may be filed pursuant hereto, and any shareholder approval
required by the rules applicable to companies whose common stock trades on the
Nasdaq National Market); provided that, for purposes of the representation made
in this sentence, the Company is assuming and relying upon the accuracy of the
relevant representations and agreements of Investor herein.
Section 4.10 No Material Adverse Change. Since January 1, 1999, no
event has occurred that would have a Material Adverse Effect on the Company,
except as disclosed in the SEC Documents.
Section 4.11 No Undisclosed Liabilities. The Company has no
liabilities or obligations that are material, individually or in the aggregate,
and that are not disclosed in the SEC Documents or otherwise publicly
announced, other than those incurred in the ordinary course of the Company's
businesses since March 1, 1998 and which, individually or in the aggregate, do
not or would not have a Material Adverse Effect on the Company.
Section 4.12 No Undisclosed Events or Circumstances. Since January 1,
1999, no event or circumstance has occurred or exists with respect to the or
its businesses, properties, prospects, operations or financial condition, that,
under applicable law, rule or regulation, requires public disclosure or
announcement prior to the date hereof by the
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Company but which has not been so publicly announced or disclosed in the SEC
Documents.
Section 4.13 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, other than pursuant to this Agreement, under circumstances
that would require registration of the Common Stock under the Securities Act.
Section 4.14 Litigation and Other Proceedings. Except as may be set
forth in the SEC Documents, there are no lawsuits or proceedings pending or to
the best knowledge of the Company threatened, against the Company, nor has the
Company received any written or oral notice of any such action, suit,
proceeding or investigation, which would have a Material Adverse Effect. Except
as set forth in the SEC Documents, no judgment, order, writ, injunction or
decree or award has been issued by or, so far as is known by the Company,
requested of any court, arbitrator or governmental agency which would have a
Material Adverse Effect.
Section 4.15 No Misleading or Untrue Communication. The Company, any
Person representing the Company, and, to the knowledge of the Company, any
other Person selling or offering to sell the Put Shares or the Blackout
Shares, if any, in connection with the transactions contemplated by this
Agreement, have not made, at any time, any oral communication in connection
with the offer or sale of the same which contained any untrue statement of a
material fact or omitted to state any material fact necessary in order to make
the statements, in the light of the circumstances under which they were made,
not misleading.
Section 4.16 Material Non-Public Information. The Company is not in
possession of, nor has the Company or its agents disclosed to Investor, any
material non-public information that (a) if disclosed, would reasonably be
expected to have a materially adverse effect on the price of the Common Stock
or (b) according to applicable law, rule or regulation, should have been
disclosed publicly by the Company prior to the date hereof but which has not
been so disclosed.
ARTICLE V
COVENANTS OF INVESTOR
Section 5.1 Compliance with Law. Investor's trading activities with
respect to shares of the Common Stock will be in compliance with all applicable
state and federal securities laws, rules and regulations and the rules and
regulations of the NASD and the Principal Market on which the Common Stock is
listed.
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Section 5.2 Limitation on Short Sales. Investor and its Affiliates
shall not engage in short sales of the Common Stock; provided, however, that
Investor may enter into any short sale or other hedging or similar arrangement
it deems appropriate with respect to Put Shares after it receives a Put Notice
with respect to such Put Shares so long as such sales or arrangements do not
involve more than the number of such Put Shares (determined as of the date of
such Put Notice). Investor and its Affiliates agree to provide to the Company
upon written request from time to time its securities trading records in order
to demonstrate that it has complied with this Section 5.2.
ARTICLE VI
COVENANTS OF THE COMPANY
Section 6.1 Registration Rights. The Company shall cause the
Registration Rights Agreement to remain in full force and effect and the
Company shall comply in all respects with the terms thereof.
Section 6.2 Reservation of Common Stock. As of the date hereof, the
Company has available and the Company shall reserve and keep available at all
times, free of preemptive rights, shares of Common Stock for the purpose of
enabling the Company to satisfy any obligation to issue the Put Shares and the
Blackout Shares, if any. The number of shares so reserved from time to time, as
theretofore increased or reduced as hereinafter provided, may be reduced by the
number of shares actually delivered hereunder.
Section 6.3 Listing of Common Stock. The Company shall maintain the
listing of the Common Stock on a Principal Market, and will cause the Put
Shares and the Blackout Shares, if any, to be listed on the Principal Market.
The Company further shall, if the Company applies to have the Common Stock
traded on any other Principal Market, include in such application the Put
Shares and the Blackout Shares, if any, and shall take such other action as is
necessary or desirable in the reasonable opinion of Investor to cause the
Common Stock to be listed on such other Principal Market as promptly as
possible. The Company shall use its commercially reasonable efforts to continue
the listing and trading of the Common Stock on the Principal Market (including,
without limitation, maintaining sufficient net tangible assets) and will comply
in all respects with the Company's reporting, filing and other obligations
under the bylaws or rules of the NASD and the Principal Market.
Section 6.4 Exchange Act Registration. The Company shall take all
commercially reasonable steps to cause the Common Stock to continue to be
registered under Section 12(g) or 12(b) of the Exchange Act, will use its
commercially reasonable efforts to comply in all material respects with its
reporting and filing obligations under said Act, and will not take any action
or file any document (whether or not permitted by said Act or the rules
thereunder) to terminate or suspend such registration or to terminate or
suspend its reporting and filing obligations under said Act.
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Section 6.5 Legends. The certificates evidencing the Put Shares and
the Blackout Shares, if any, shall be free of legends, except as provided for
in Article VIII.
Section 6.6 Corporate Existence. The Company shall take all
commercially reasonable steps necessary to preserve and continue the corporate
existence of the Company.
Section 6.7 Additional SEC Documents. The Company shall deliver to
Investor, promptly after the originals thereof are submitted to the SEC for
filing, copies of all SEC Documents so furnished or submitted to the SEC.
Section 6.8 Notice of Certain Events Affecting Registration;
Suspension of Right to Make a Put. The Company shall promptly notify Investor
upon the occurrence of any of the following events in respect of a registration
statement or related prospectus in respect of an offering of Registrable
Securities: (a) receipt of any request for additional information by the SEC or
any other federal or state governmental authority during the period of
effectiveness of the registration statement for amendments or supplements to
the registration statement or related prospectus; (b) the issuance by the SEC
or any other federal or state governmental authority of any stop order
suspending the effectiveness of any Registration Statement or the initiation of
any proceedings for that purpose; (c) receipt of any notification with respect
to the suspension of the qualification or exemption from qualification of any
of the Registrable Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; (d) the happening of any event
that makes any statement made in such Registration Statement or related
prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires the making of any
changes in the registration statement, related prospectus or documents so that,
in the case of a Registration Statement, it will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, and
that in the case of the related prospectus, it will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and (e) the Company's
reasonable determination that a post-effective amendment to the registration
statement would be appropriate, and the Company shall promptly make available
to Investor any such supplement or amendment to the related prospectus. The
Company shall not deliver to Investor any Put Notice during the continuation of
any of the foregoing events.
Section 6.9 Expectations Regarding Put Notices. Within ten (10) days
after the commencement of each calendar quarter occurring subsequent to the
commencement of the Commitment Period, the Company undertakes to notify
Investor as to its reasonable expectations as to the dollar amount it intends
to raise during such calendar quarter, if any, through the issuance of Put
Notices. Such notification shall constitute only the Company's good faith
estimate with respect to such calendar quarter and shall in no way obligate the
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Company to raise such amount during such calendar quarter or otherwise limit
its ability to deliver Put Notices during such calendar quarter. The failure by
the Company to comply with this provision can be cured by the Company's
notifying Investor at any time as to its reasonable expectations with respect
to the current calendar quarter.
Section 6.10 Consolidation; Merger. The Company shall not, at any time
after the date hereof, effect any merger or consolidation of the Company with
or into, or a transfer of all or substantially all of the assets of the Company
to, another entity unless the resulting successor or acquiring entity (if not
the Company) assumes by written instrument the obligation to deliver to
Investor such shares of stock and/or securities as Investor is entitled to
receive pursuant to this Agreement.
Section 6.11 Issuance of Put Shares and Blackout Shares. The sale of
the Put Shares, the issuance of the Blackout Shares, if any, shall be made in
accordance with the provisions and requirements of Regulation D and any
applicable state law.
Section 6.12 Legal Opinion on Subscription Date. The Company's legal
counsel shall deliver to Investor upon execution of this Agreement an opinion
in the form of Exhibit C, except for paragraph 7 thereof.
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ARTICLE VII
CONDITIONS TO DELIVERY OF
PUT NOTICES AND CONDITIONS TO CLOSING
Section 7.1 Conditions Precedent to the Obligation of the Company to
Issue and Sell Common Stock. The obligation hereunder of the Company to issue
and sell the Put Shares to Investor incident to each Closing is subject to the
satisfaction, at or before each such Closing, of each of the conditions set
forth below.
(a) Accuracy of Investor's Representation and Warranties.
The representations and warranties of Investor shall be true and correct in all
material respects as of the date of this Agreement and as of the date of each
such Closing as though made at each such time, except for changes which have
not had a Material Adverse Effect.
(b) Performance by Investor. Investor shall have performed,
satisfied and complied in all respects with all covenants, agreements and
conditions required by this Agreement to be performed, satisfied or complied
with by Investor at or prior to such Closing.
Section 7.2 Conditions Precedent to the Right of the Company to
Deliver a Put Notice and the Obligation of Investor to Purchase Put Shares. The
right of the Company to deliver a Put Notice and the obligation of Investor
hereunder to acquire and pay for the Put Shares incident to a Closing is
subject to the satisfaction, on (a) the date of delivery of such Put Notice and
(b) the applicable Closing Date (each a "Condition Satisfaction Date"), of each
of the following conditions:
(a) Registration of Registrable Securities with the SEC. As
set forth in the Registration Rights Agreement, the Company shall have filed
with the SEC the Initial Registration Statement with respect to the resale of
the Initial Registrable Securities by Investor and such Registration Statement
shall have been declared effective by the SEC prior to the first Put Date, and
in any event no later than ninety (90) days after filing of the Initial
Registration Statement. For the purposes of any Put Notice with respect to the
Registrable Securities other than the Initial Registrable Securities, the
Company shall have filed with the SEC a Registration Statement with respect to
the resale of such Registrable Securities by Investor which shall have been
declared effective by the SEC prior to the Put Date therefor.
(b) Effective Registration Statement. As set forth in the
Registration Rights Agreement, a Registration Statement shall have previously
become effective for the resale by Investor of the Registrable Securities
subject to such Put Notice and such Registration Statement shall remain
effective on each Condition Satisfaction Date and (i) neither the Company nor
Investor shall have received notice that the SEC has issued or intends to issue
a stop order with respect to such Registration Statement or that the SEC
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otherwise has suspended or withdrawn the effectiveness of such Registration
Statement, either temporarily or permanently, or intends or has threatened to
do so (unless the SEC's concerns have been addressed and Investor is reasonably
satisfied that the SEC no longer is considering or intends to take such
action), and (ii) no other suspension of the use or withdrawal of the
effectiveness of such Registration Statement or related prospectus shall exist.
(c) Accuracy of the Company's Representations and
Warranties. The representations and warranties of the Company shall be true and
correct in all material respects as of each Condition Satisfaction Date as
though made at each such time (except for representations and warranties
specifically made as of a particular date) with respect to all periods, and as
to all events and circumstances occurring or existing to and including each
Condition Satisfaction Date, except for any conditions which have temporarily
caused any representations or warranties herein to be incorrect and which have
been corrected with no continuing impairment to the Company or Investor.
(d) Performance by the Company. The Company shall have
performed, satisfied and complied in all material respects with all covenants,
agreements and conditions required by this Agreement and the Registration
Rights Agreement to be performed, satisfied or complied with by the Company at
or prior to each Condition Satisfaction Date.
(e) No Injunction. No statute, rule, regulation, executive
order, decree, ruling or injunction shall have been enacted, entered,
promulgated or adopted by any court or governmental authority of competent
jurisdiction that prohibits or directly and materially adversely affects any of
the transactions contemplated by this Agreement, and no proceeding shall have
been commenced that may have the effect of prohibiting or materially adversely
affecting any of the transactions contemplated by this Agreement.
(f) Adverse Changes. Since the date of filing of the
Company's most recent SEC Document, no event that had or is reasonably likely
to have a Material Adverse Effect has occurred.
(g) No Suspension of Trading In or Delisting of Common
Stock. The trading of the Common Stock shall not have been suspended by the
SEC, the Principal Market or the NASD and the Common Stock shall have been
approved for listing or quotation on and shall not have been delisted from the
Principal Market.
(h) Legal Opinion. The Company shall have caused to be
delivered to Investor, within five (5) Trading Days of the effective date of
the Initial Registration Statement and each subsequent Registration Statement,
an opinion of the Company's legal counsel in the form of Exhibit C hereto,
addressed to Investor.
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(i) Due Diligence. No dispute between the Company and
Investor shall exist pursuant to Section 7.3 as to the adequacy of the
disclosure contained in any Registration Statement.
(j) Ten Percent Limitation. On each Closing Date, the
number of Put Shares then to be purchased by Investor shall not exceed the
number of such shares that, when aggregated with all other shares of
Registrable Securities then owned by Investor beneficially or deemed
beneficially owned by Investor, would result in Investor owning no more than
9.9% of all of such Common Stock as would be outstanding on such Closing Date,
as determined in accordance with Section 16 of the Exchange Act and the
regulations promulgated thereunder. For purposes of this Section 7.2(j), in the
event that the amount of Common Stock outstanding as determined in accordance
with Section 16 of the Exchange Act and the regulations promulgated thereunder
is greater on a Closing Date than on the date upon which the Put Notice
associated with such Closing Date is given, the amount of Common Stock
outstanding on such Closing Date shall govern for purposes of determining
whether Investor, when aggregating all purchases of Common Stock made pursuant
to this Agreement and Blackout Shares, if any, would own more than 9.9% of the
Common Stock following such Closing Date.
(k) Minimum Bid Price. The average of the Bid Prices for
the twenty (20) Trading Days immediately preceding the Put Notice shall have
equaled or exceeded $1.00 (as adjusted for stock splits, stock dividends,
reverse stock splits, and similar events).
(l) No Knowledge. The Company shall have no knowledge of
any event more likely than not to have the effect of causing such Registration
Statement to be suspended or otherwise ineffective (which event is more likely
than not to occur within the fifteen Trading Days following the Trading Day on
which such Notice is deemed delivered).
(m) Trading Cushion. The Trading Cushion shall have elapsed
since the immediately preceding Put Date.
(n) Shareholder Vote. The issuance of shares of Common
Stock with respect to the applicable Closing, if any, shall not violate the
shareholder approval requirements of the Principal Market.
(o) Other. On each Condition Satisfaction Date, Investor
shall have received and been reasonably satisfied with such other certificates
and documents as shall have been reasonably requested by Investor in order for
Investor to confirm the Company's satisfaction of the conditions set forth in
this Section 7.2., including, without limitation, a certificate in
substantially the form and substance of Exhibit D hereto, executed by an
executive officer of the Company and to the effect that all the conditions to
such Closing shall have been satisfied as at the date of each such certificate.
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Section 7.3 Due Diligence Review; Non-Disclosure of Non-Public
Information.
(a) The Company shall make available for inspection and
review by Investor, advisors to and representatives of Investor (who may or may
not be affiliated with Investor and who are reasonably acceptable to the
Company), any Underwriter, any Registration Statement or amendment or
supplement thereto or any blue sky, NASD or other filing, all financial and
other records, all SEC Documents and other filings with the SEC, and all other
corporate documents and properties of the Company as may be reasonably
necessary for the purpose of such review, and cause the Company's officers,
directors and employees to supply all such information reasonably requested by
Investor or any such representative, advisor or Underwriter in connection with
such Registration Statement (including, without limitation, in response to all
questions and other inquiries reasonably made or submitted by any of them),
prior to and from time to time after the filing and effectiveness of such
Registration Statement for the sole purpose of enabling Investor and such
representatives, advisors and Underwriters and their respective accountants and
attorneys to conduct initial and ongoing due diligence with respect to the
Company and the accuracy of such Registration Statement.
(b) Each of the Company, its officers, directors, employees
and agents shall in no event disclose non-public information to Investor,
advisors to or representatives of Investor (including, without limitation, in
connection with the giving of the Adjustment Period Notice pursuant to Section
2.4) unless prior to disclosure of such information the Company identifies such
information as being non-public information and provides Investor, such
advisors and representatives with the opportunity to accept or refuse to accept
such non-public information for review. The Company may, as a condition to
disclosing any non-public information hereunder, require Investor's advisors
and representatives to enter into a confidentiality agreement in form and
substance reasonably satisfactory to the Company and Investor.
(c) Nothing herein shall require the Company to disclose
non-public information to Investor or its advisors or representatives, and the
Company represents that it does not disseminate non-public information to any
investors who purchase stock in the Company in a public offering, to money
managers or to securities analysts; provided, however, that notwithstanding
anything herein to the contrary, the Company shall, as hereinabove provided,
immediately notify the advisors and representatives of Investor and any
Underwriters of any event or the existence of any circumstance (without any
obligation to disclose the specific event or circumstance) of which it becomes
aware, constituting non-public information (whether or not requested of the
Company specifically or generally during the course of due diligence by such
persons or entities), which, if not disclosed in the prospectus included in a
Registration Statement would cause such prospectus to include a material
misstatement or to omit a material fact required to be stated therein in order
to make the statements therein, in light of the circumstances in which they
were made, not misleading. Nothing contained in this Section 7.3 shall be
construed to mean that such persons or entities other than Investor (without
the written consent of Investor
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prior to disclosure of such information) may not obtain non-public information
in the course of conducting due diligence in accordance with the terms and
conditions of this Agreement and nothing herein shall prevent any such persons
or entities from notifying the Company of their opinion that based on such due
diligence by such persons or entities, any Registration Statement contains an
untrue statement of a material fact or omits a material fact required to be
stated in such Registration Statement or necessary to make the statements
contained therein, in light of the circumstances in which they were made, not
misleading.
ARTICLE VIII
LEGENDS
Section 8.1 Legends. Unless otherwise provided below, each certificate
representing Registrable Securities will bear the following legend (the
"Legend"):
The securities represented by this certificate have not
been registered under the Securities Act of 1933 (the
"Securities Act") or qualified under applicable state
securities laws. These securities may not be offered,
sold, pledged, hypothecated, transferred or otherwise
disposed of except pursuant to (i) an effective
registration statement and qualification in effect with
respect thereto under the Securities Act and under any
applicable state securities law, (ii) to the extent
applicable, Rule 144 under the Securities Act, or (iii) an
opinion of counsel reasonably acceptable to BioShield
Technologies, Inc. that such registration and
qualification is not required under applicable federal and
state securities laws.
As soon as practicable after the execution and delivery hereof, the
Company shall issue to the Transfer Agent instructions in substantially the
form of Exhibit E hereto. Such instructions shall be irrevocable by the Company
from and after the date thereof or from and after the issuance thereof except
as otherwise expressly provided in the Registration Rights Agreement. It is the
intent and purpose of such instructions, as provided therein, to require the
Transfer Agent to issue to Investor certificates evidencing shares of Common
Stock incident to a Closing, free of the Legend, without consultation by the
transfer agent with the Company or its counsel and without the need for any
further advice or instruction or documentation to the Transfer Agent by or from
the Company or its counsel or Investor; provided that (a) a Registration
Statement shall then be effective, (b) Investor confirms to the Transfer Agent
and the Company that it has or intends to sell such Common Stock to a third
party which is not an affiliate of Investor or the Company and Investor agrees
to redeliver the certificate representing such shares of Common Stock to the
Transfer Agent to add the Legend in the event the Common Stock is not sold, and
(c) if reasonably
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requested by the transfer agent or the Company, Investor confirms to the
transfer agent and the Company that Investor has complied with the prospectus
delivery requirement under the Securities Act. At any time after the Effective
Date, upon surrender of one or more certificates evidencing Common Stock that
bear the Legend, to the extent accompanied by a notice requesting the issuance
of new certificates free of the Legend to replace those surrendered
Section 8.2 No Other Legend or Stock Transfer Restrictions. No legend
other than the one specified in Section 8.1 has been or shall be placed on the
share certificates representing the Common Stock and no instructions or "stop
transfers orders," so called, "stock transfer restrictions," or other
restrictions have been or shall be given to the Company's transfer agent with
respect thereto other than as expressly set forth in this Article VIII.
Section 8.3 Investor's Compliance. Nothing in this Article VIII shall
affect in any way Investor's obligations under any agreement to comply with all
applicable securities laws upon resale of the Common Stock.
ARTICLE IX
NOTICES; INDEMNIFICATION
Section 9.1 Notices. All notices, demands, requests, consents,
approvals, and other communications required or permitted hereunder shall be in
writing and, unless otherwise specified herein, shall be (a) personally served,
(b) deposited in the mail, registered or certified, return receipt requested,
postage prepaid, (c) delivered by reputable air courier service with charges
prepaid, or (d) transmitted by hand delivery, telegram, or facsimile, addressed
as set forth below or to such other address as such party shall have specified
most recently by written notice given in accordance herewith. Any notice or
other communication required or permitted to be given hereunder shall be deemed
effective (i) upon hand delivery or delivery by facsimile, with accurate
confirmation generated by the transmitting facsimile machine, at the address or
number designated below (if delivered on a business day during normal business
hours where such notice is to be received), or the first business day following
such delivery (if delivered other than on a business day during normal business
hours where such notice is to be received) or (ii) on the second business day
following the date of mailing by express courier service or on the fifth
business day after deposited in the mail, in each case, fully prepaid,
addressed to such address, or upon actual receipt of such mailing, whichever
shall first occur. The addresses for such communications shall be:
If to the Company:
BioShield Technologies, Inc.
Suite B109
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy (which shall not constitute notice) to:
▇▇▇▇ Moss Kline & ▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
if to Investor:
▇▇▇▇▇▇▇, LLC
Executive Pavilion
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Either party hereto may from time to time change its
address or facsimile number for notices under this Section 9.1 by giving at
least ten (10) days' prior written notice of such changed address or facsimile
number to the other party hereto.
Section 9.2 Indemnification.
(a) The Company agrees to indemnify and hold harmless
Investor and its officers, directors, employees, and agents, and each Person or
entity, if any, who controls Investor within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, together with the Controlling
Persons (as defined in the Registration Rights Agreement) from and against any
Damages, joint or several, and any action in respect thereof to which Investor,
its partners, affiliates, officers, directors, employees, and duly authorized
agents, and any such Controlling Person becomes subject to, resulting from,
arising out of or relating to any misrepresentation, breach of warranty or
nonfulfillment of or failure to perform any covenant or agreement on the part
of Company contained in this Agreement, as such Damages are incurred, except to
the extent such Damages result primarily from Investor's failure to perform any
covenant or agreement contained in this Agreement or Investor's or its
officers, directors, employees, agents or Controlling Persons negligence,
recklessness or bad faith in performing its obligations under this Agreement.
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(b) Investor agrees to indemnify and hold harmless the
Company and its officers, directors, employees, and agents, and each Person or
entity, if any, who controls Investor within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, together with the Controlling
Persons from and against any Damages, joint or several, and any action in
respect thereof to which Investor, its partners, affiliates, officers,
directors, employees, and duly authorized agents, and any such Controlling
Person becomes subject to, resulting from, arising out of or relating to any
misrepresentation, breach of warranty or nonfulfillment of or failure to
perform any covenant or agreement on the part of Company contained in this
Agreement, as such Damages are incurred, except to the extent such Damages
result primarily from the Company's failure to perform any covenant or
agreement contained in this Agreement or the Company's or its officers,
directors, employees, agents or Controlling Persons negligence, recklessness or
bad faith in performing its obligations under this Agreement.
Section 9.3 Method of Asserting Indemnification Claims. All claims for
indemnification by any Indemnified Party (as defined below) under Section 9.2
shall be asserted and resolved as follows:
(a) In the event any claim or demand in respect of which
any person claiming indemnification under any provision of Section 9.2 (an
"Indemnified Party") might seek indemnity under Section 9.2 is asserted against
or sought to be collected from such Indemnified Party by a person other than a
party hereto or an affiliate thereof (a "Third Party Claim"), the Indemnified
Party shall deliver a written notification, enclosing a copy of all papers
served, if any, and specifying the nature of and basis for such Third Party
Claim and for the Indemnified Party's claim for indemnification that is being
asserted under any provision of Section 9.2 against any person (the
"Indemnifying Party"), together with the amount or, if not then reasonably
ascertainable, the estimated amount, determined in good faith, of such Third
Party Claim (a "Claim Notice") with reasonable promptness to the Indemnifying
Party. If the Indemnified Party fails to provide the Claim Notice with
reasonable promptness after the Indemnified Party receives notice of such Third
Party Claim, the Indemnifying Party shall not be obligated to indemnify the
Indemnified Party with respect to such Third Party Claim to the extent that the
Indemnifying Party's ability to defend has been prejudiced by such failure of
the Indemnified Party. The Indemnifying Party shall notify the Indemnified
Party as soon as practicable within the period ending thirty (30) calendar days
following receipt by the Indemnifying Party of either a Claim Notice or an
Indemnity Notice (as defined below) (the "Dispute Period") whether the
Indemnifying Party disputes its liability or the amount of its liability to the
Indemnified Party under Section 9.2 and whether the Indemnifying Party desires,
at its sole cost and expense, to defend the Indemnified Party against such
Third Party Claim.
(i) If the Indemnifying Party notifies the Indemnified
Party within the Dispute Period that the Indemnifying Party desires to defend
the Indemnified Party with respect to the Third Party Claim pursuant to this
Section 9.3(a), then the Indemnifying Party shall have the right to defend,
with counsel reasonably satisfactory to the Indemnified
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Party, at the sole cost and expense of the Indemnifying Party, such Third Party
Claim by all appropriate proceedings, which proceedings shall be vigorously and
diligently prosecuted by the Indemnifying Party to a final conclusion or will
be settled at the discretion of the Indemnifying Party (but only with the
consent of the Indemnified Party in the case of any settlement that provides
for any relief other than the payment of monetary damages or that provides for
the payment of monetary damages as to which the Indemnified Party shall not be
indemnified in full pursuant to Section 9.2). The Indemnifying Party shall have
full control of such defense and proceedings, including any compromise or
settlement thereof; provided, however, that the Indemnified Party may, at the
sole cost and expense of the Indemnified Party, at any time prior to the
Indemnifying Party's delivery of the notice referred to in the first sentence
of this clause (i), file any motion, answer or other pleadings or take any
other action that the Indemnified Party reasonably believes to be necessary or
appropriate to protect its interests; and provided further, that if requested
by the Indemnifying Party, the Indemnified Party will, at the sole cost and
expense of the Indemnifying Party, provide reasonable cooperation to the
Indemnifying Party in contesting any Third Party Claim that the Indemnifying
Party elects to contest. The Indemnified Party may participate in, but not
control, any defense or settlement of any Third Party Claim controlled by the
Indemnifying Party pursuant to this clause (i), and except as provided in the
preceding sentence, the Indemnified Party shall bear its own costs and expenses
with respect to such participation. Notwithstanding the foregoing, the
Indemnified Party may take over the control of the defense or settlement of a
Third Party Claim at any time if it irrevocably waives its right to indemnity
under Section 9.2 with respect to such Third Party Claim.
(ii) If the Indemnifying Party fails to notify
the Indemnified Party within the Dispute Period that the Indemnifying Party
desires to defend the Third Party Claim pursuant to Section 9.3(a), or if the
Indemnifying Party gives such notice but fails to prosecute vigorously and
diligently or settle the Third Party Claim, or if the Indemnifying Party fails
to give any notice whatsoever within the Dispute Period, then the Indemnified
Party shall have the right to defend, at the sole cost and expense of the
Indemnifying Party, the Third Party Claim by all appropriate proceedings, which
proceedings shall be prosecuted by the Indemnified Party in a reasonable manner
and in good faith or will be settled at the discretion of the Indemnified Party
(with the consent of the Indemnifying Party, which consent will not be
unreasonably withheld). The Indemnified Party will have full control of such
defense and proceedings, including any compromise or settlement thereof;
provided, however, that if requested by the Indemnified Party, the Indemnifying
Party will, at the sole cost and expense of the Indemnifying Party, provide
reasonable cooperation to the Indemnified Party and its counsel in contesting
any Third Party Claim which the Indemnified Party is contesting.
Notwithstanding the foregoing provisions of this clause (ii), if the
Indemnifying Party has notified the Indemnified Party within the Dispute Period
that the Indemnifying Party disputes its liability or the amount of its
liability hereunder to the Indemnified Party with respect to such Third Party
Claim and if such dispute is resolved in favor of the Indemnifying Party in the
manner provided in clause (iii) below, the Indemnifying Party will not be
required to bear the costs and expenses of the
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Indemnified Party's defense pursuant to this clause (ii) or of the Indemnifying
Party's participation therein at the Indemnified Party's request, and the
Indemnified Party shall reimburse the Indemnifying Party in full for all
reasonable costs and expenses incurred by the Indemnifying Party in connection
with such litigation. The Indemnifying Party may participate in, but not
control, any defense or settlement controlled by the Indemnified Party pursuant
to this clause (ii), and the Indemnifying Party shall bear its own costs and
expenses with respect to such participation.
(iii) If the Indemnifying Party notifies the
Indemnified Party that it does not dispute its liability or the amount of its
liability to the Indemnified Party with respect to the Third Party Claim under
Section 9.2 or fails to notify the Indemnified Party within the Dispute Period
whether the Indemnifying Party disputes its liability or the amount of its
liability to the Indemnified Party with respect to such Third Party Claim, the
amount of Damages specified in the Claim Notice shall be conclusively deemed a
liability of the Indemnifying Party under Section 9.2 and the Indemnifying
Party shall pay the amount of such Damages to the Indemnified Party on demand.
If the Indemnifying Party has timely disputed its liability or the amount of
its liability with respect to such claim, the Indemnifying Party and the
Indemnified Party shall proceed in good faith to negotiate a resolution of
such dispute; provided, however, that it the dispute is not resolved within
thirty (30) days after the Claim Notice, the Indemnifying Party shall be
enlisted to institute such legal action as it deems appropriate.
(b) In the event any Indemnified Party should have a claim
under Section 9.2 against the Indemnifying Party that does not involve a Third
Party Claim, the Indemnified Party shall deliver a written notification of a
claim for indemnity under Section 9.2 specifying the nature of and basis for
such claim, together with the amount or, if not then reasonably ascertainable,
the estimated amount, determined in good faith, of such claim (an "Indemnity
Notice") with reasonable promptness to the Indemnifying Party. The failure by
any Indemnified Party to give the Indemnity Notice shall not impair such
party's rights hereunder except to the extent that the Indemnifying Party
demonstrates that it has been irreparably prejudiced thereby. If the
Indemnifying Party notifies the Indemnified Party that it does not dispute the
claim or the amount of the claim described in such Indemnity Notice or fails to
notify the Indemnified Party within the Dispute Period whether the Indemnifying
Party disputes the claim or the amount of the claim described in such Indemnity
Notice, the amount of Damages specified in the Indemnity Notice will be
conclusively deemed a liability of the Indemnifying Party under Section 9.2 and
the Indemnifying Party shall pay the amount of such Damages to the Indemnified
Party on demand. If the Indemnifying Party has timely disputed its liability or
the amount of its liability with respect to such claim, the Indemnifying Party
and the Indemnified Party shall proceed in good faith to negotiate a resolution
of such dispute; provided, however, that it the dispute is not resolved within
thirty (30) days after the Claim Notice, the Indemnifying Party shall be
enlisted to institute such legal action as it deems appropriate.
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ARTICLE X
MISCELLANEOUS
Section 10.1 Governing Law; Jurisdiction. This Agreement shall be
governed by and interpreted in accordance with the laws of the State of Georgia
without regard to the principles of conflicts of law. Each of the Company and
Investor hereby submit to the exclusive jurisdiction of the United States
Federal and state courts located in Atlanta, Georgia with respect to any
dispute arising under this Agreement, the agreements entered into in connection
herewith or the transactions contemplated hereby or thereby.
Section 10.2 Assignment. This Agreement shall be binding upon and
inure to the benefit of the Company and Investor and their respective
successors and permitted assigns. Neither this Agreement nor any rights of
Investor or the Company hereunder may be assigned by either party to any other
person. Notwithstanding the foregoing, (a) the provisions of this Agreement
shall inure to the benefit of, and be enforceable by, any transferee of any of
the Common Stock purchased or acquired by Investor hereunder with respect to
the Common Stock held by such person, and (b) Investor's interest in this
Agreement may be assigned at any time, in whole but not in part, to any
affiliate of Investor.
Section 10.3 Third Party Beneficiaries. This Agreement is intended for
the benefit of the Company and Investor and their respective successors and
permitted assigns, and is not for the benefit of, nor may any provision hereof
be enforced by, any other person.
Section 10.4 Termination. This Agreement shall terminate twelve (12)
months after the commencement of the Commitment Period (unless extended by the
agreement of the Company and Investor); provided, however, that the provisions
of Article VI, VIII, and Sections 10.1, 10.2, and 10.4 shall survive the
termination of this Agreement.
Section 10.5 Entire Agreement, Amendment; No Waiver. This Agreement
and the instruments referenced herein contain the entire understanding of the
Company and Investor with respect to the matters covered herein and therein
and, except as specifically set forth herein or therein, neither the Company
nor Investor makes any representation, warranty, covenant or undertaking with
respect to such matters. No provision of this Agreement may be waived or
amended other than by an instrument in writing signed by the party to be
charged with enforcement.
Section 10.6 Fees and Expenses. Each of the Company and Investor
agrees to pay its own expenses in connection with the preparation of this
Agreement and performance of its obligations hereunder.
Section 10.7 No Brokers. Each of the Company and Investor represents
that other than ▇.▇. ▇▇▇▇▇ Securities, Inc. and Greenfield Capital Partners,
LLC (for which the Company shall be responsible for the fees of such entities)
it has had no dealings in connection with this transaction with any finder or
broker who will demand payment of any
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fee or commission from the other party. The Company on the one hand, and
Investor, on the other hand, agree to indemnify the other against and hold the
other harmless from any and all liabilities to any persons claiming brokerage
commissions or finder's fees on account of services purported to have been
rendered on behalf of the indemnifying party in connection with this Agreement
or the transactions contemplated hereby.
Section 10.8 Counterparts. This Agreement may be executed in multiple
counterparts, each of which may be executed by less than all of the Company and
Investor and shall be deemed to be an original instrument which shall be
enforceable against the parties actually executing such counterparts and all of
which together shall constitute one and the same instrument. This Agreement,
once executed by a party, may be delivered to the other parties hereto by
facsimile transmission of a copy of this Agreement bearing the signature of the
parties so delivering this Agreement.
Section 10.9 Survival; Severability. The representations, warranties,
covenants and agreements of the parties hereto shall survive each Closing
hereunder for a period of one year. In the event that any provision of this
Agreement becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable or void, this Agreement shall continue in full force and
effect without said provision; provided that such severability shall be
ineffective if it materially changes the economic benefit of this Agreement to
any party.
Section 10.10 Further Assurances. Each party shall do and perform, or
cause to be done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates, instruments and
documents, as the other party may reasonably request in order to carry out the
intent and accomplish the purposes of this Agreement and the consummation of
the transactions contemplated hereby.
Section 10.11 No Strict Construction. 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.
Section 10.12 Equitable Relief. The Company recognizes that in the
event that it fails to perform, observe, or discharge any or all of its
obligations under this Agreement, any remedy at law may prove to be inadequate
relief to Investor. The Company therefore agrees that Investor shall be
entitled to temporary and permanent injunctive relief in any such case without
the necessity of proving actual damages.
Section 10.13 Title and Subtitles. The titles and subtitles used in
this Agreement are used for the convenience of reference and are not to be
considered in construing or interpreting this Agreement.
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Section 10.14 Reporting Entity for the Common Stock. The reporting
entity relied upon for the determination of the trading price of the Common
Stock on any given Trading Day for the purposes of this Agreement shall be
Bloomberg L.P. or any successor thereto. The written mutual consent of Investor
and the Company shall be required to employ any other reporting entity.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Private Equity
Credit Agreement to be executed by the undersigned, thereunto duly authorized,
as of the date first set forth above.
BIOSHIELD TECHNOLOGIES, INC.
By:
-----------------------------------
Name:
Title:
▇▇▇▇▇▇▇, LLC
BY: SOUTHRIDGE CAPITAL MANAGEMENT LLC,
GENERAL PARTNER
By:
------------------------------------
Name:
Title:
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EXHIBIT A
[FORM OF REGISTRATION RIGHTS AGREEMENT]
39
EXHIBIT B
ADJUSTMENT PERIOD NOTICE
Notice is hereby granted that the Board of Directors of BioShield
Technologies, Inc. (the "Company") anticipates executing a merger or
acquisition agreement within ninety (90) days of the date hereof.
The following five-week period is hereby designated as an Adjustment
Period pursuant to Section 2.4 of the Private Equity Credit Agreement, dated
June__, 1999, by and between the Company and ▇▇▇▇▇▇▇, LLC.
Beginning: ________________________________
(no sooner that twenty-one (21) days from the date
this notice is deemed to be delivered)
Expiring: _________________________________
The undersigned has executed this Certificate this ____ day of
________, 19__.
By:
--------------------------------
Name:
-------------------------------
Title:
------------------------------
40
EXHIBIT C
FORM OF OPINION OF THE COMPANY'S INDEPENDENT COUNSEL
41
EXHIBIT D
COMPLIANCE CERTIFICATE
In connection with the issuance of shares of common stock of BioShield
Technologies, Inc. (the "Company") pursuant to the Put Notice, dated
_____________ delivered by the Company to ▇▇▇▇▇▇▇, LLC, ("Investor") pursuant
to Article II of the Private Equity Credit Agreement (the "Agreement"), dated
June__, 1999, by and between the Company and Investor (the "Agreement"), the
undersigned hereby certifies as follows:
1. The undersigned is the duly elected Chief [Executive] [Financial]
Officer of the Company.
2. The representations and warranties of the Company set forth in
Article V of the Agreement are true and correct in all material respects as
though made on and as of the date hereof (other than representations and
warranties made as of a specific date), except for changes which have not had a
Material Adverse Effect.
3. The Company has performed in all material respects all covenants
and agreements to be performed by the Company on or prior to the Closing Date
related to the Put Notice and has complied in all material respects with all
obligations and conditions contained in Article VII of the Agreement.
The terms used herein but not defined herein shall have the meanings
specified in the Agreement.
The undersigned has executed this Certificate this_________ day of
___________, 199___.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
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EXHIBIT E
INSTRUCTIONS TO TRANSFER AGENT