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Exhibit 10.10
BIOFACTORS, INC.
UNIT SUBSCRIPTION AGREEMENT
BioFactors, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
1. Purchase and Sale of the Units. The Company has authorized
the issuance and sale of up to 10 Units to the purchasers hereunder
(individually, a "Purchaser," and collectively, the "Purchasers") pursuant to
the terms of the offer set forth in this Unit Subscription Agreement (this
"Agreement") dated as of May 17, 1996.
1.1 Description of the Units. Each Unit shall
consist of:
(a) a promissory note of the Company in
the principal amount of Fifty Thousand Dollars ($50,000), bearing simple
interest at the rate of 10% per annum from the Closing (as defined below)
(computed on the basis of a 360-day year consisting of twelve 30-day months),
substantially in the form set forth in Exhibit A hereto (herein referred to
individually as a "Note" and collectively as the "Notes," which terms shall also
include any notes delivered in exchange or replacement therefor). The Notes
shall mature and the principal and all accrued interest payable thereon shall
become due and payable in full upon the earlier of (i) the closing of the
Company's proposed initial public offering of its securities with gross proceeds
of at least $5,000,000 ("IPO"), as defined below, or (ii) at the close of
business on September 30, 1996. The terms of the Notes may be amended by
Purchasers holding more than 50% of the aggregate outstanding principal amount
of the Notes.
(b) fifteen thousand (15,000) shares of
the Company's common stock, $0.01 par value per share ("Common Stock") (herein
referred to individually as a "Share" and collectively as the "Shares") (a Note
and the Shares being, a "Unit"). The purchase price shall equal $0.50 per Share
(a total of $7,500 per Unit), which is hereby agreed to be the fair market value
per share of such Common Stock.
1.2 Agreement to Purchase. Subject to the terms
and conditions of this Agreement, each Purchaser agrees, severally, but not
jointly, to purchase at the Closing, and the Company agrees to sell and issue to
each Purchaser at the Closing, Units as set forth opposite each such Purchaser's
name on the Schedule of Purchasers attached hereto as Schedule A at the
purchase price set forth thereon.
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1.3 Acceptance or Rejection.
(a) The undersigned understands and agrees that the
Company reserves the right to reject this subscription for the Units in whole or
part in any order, if, in its reasonable judgment, it deems such action in the
best interest of the Company, at any time prior to the Closing, notwithstanding
prior receipt by the undersigned of notice of acceptance of the undersigned's
subscription.
(b) The undersigned understands and agrees that the
subscriptions may be revoked provided that written notice of revocation is sent
by certified or registered mail, return receipt requested, and is received by
the Company at least two business days prior to the Closing.
(c) In the event of rejection of this subscription, or in
the event the sale of the Units subscribed for by the undersigned is not
consummated by the Company for any reason (in which event this Subscription
Agreement shall be deemed to be rejected), this Subscription Agreement and any
other agreement entered into between the undersigned and the Company relating to
this subscription shall thereafter have no force or effect and the Company shall
promptly return or cause to be returned to the undersigned the purchase price
remitted to the Company by the undersigned, without interest thereon or
deduction therefrom, in exchange for the Units.
1.4 Closings.
(a) The initial closing of this offering shall take place
at 10:00 a.m., Denver time, on May 17, 1996, (or such other date as the Company
may establish) at the offices of ▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, or at such other date, time and place as
shall be designated by the Company (the "Closing," which term also shall include
any subsequent closing described below). At or promptly after the Closing, the
Company will execute and deliver the Notes and the certificates evidencing the
Shares, each dated the date of the Closing, to the Purchasers, in the respective
principal amounts set forth on Schedule A, against delivery by the Purchasers of
the full purchase price for the Units by wire transfer of the purchase price to
the account designated by the Company not less than two (2) business days prior
to the date of the Closing. The initial Closing is not contingent on a minimum
number of Units being subscribed for.
(b) If fewer than 10 Units are sold at the initial Closing,
the Company may issue additional Units at one or more subsequent closings held
on or before July 31, 1996, which date may be extended by the Company, without
notice to the Purchasers, for an additional period not to exceed 30 days. Upon
execution of counterpart signature pages to this Agreement any additional
purchaser purchasing Units at any such subsequent closing shall be added to
Schedule A and shall be deemed to be a Purchaser for purposes of this
Agreement. The date of the final purchase and sale of the Notes shall be
referred to herein as the "Final Closing.
2. Acceptance or Rejection of Subscription. The Company reserves the
right to reject any subscription for the Units, in whole or in part, at any time
prior to the Closing, if the Company deems such action to be in its best
interests. In the event of rejection, any subscription
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moneys tendered shall be returned to the Purchaser and this Agreement with
respect to such Purchaser shall have no force and effect.
3. Planned Initial Public Offering: Lock-Up; Registration Rights.
3.1 IPO. The term "IPO" as used herein shall mean the proposed initial
public offering of the Company's securities with gross proceeds of at least
$5,000,000 pursuant to an effective registration statement under the Securities
Act of 1933, as amended (the "Act"). There can be no assurances that a
registration statement ("Registration Statement") will be filed or, if filed,
will be declared effective by the Securities and Exchange Commission (the
"Commission") or, if the Registration Statement is declared effective by the
Commission, that the Company will be able to consummate such IPO.
3.2 Lock-Up. Notwithstanding Section 3.3 below, to facilitate the
closing of the IPO, the undersigned hereby agrees that the Shares may not
directly or indirectly be sold, offered for sale, assigned, hypothecated,
pledged, transferred, distributed or otherwise disposed of for a period
beginning on the date of the Closing and ending eighteen (18) months after the
Effective Date (the "Holding Period"), unless the managing underwriter of the
IPO, in its sole discretion, agrees to the sale of all or part of such
securities at an earlier date. The undersigned further consents to the placing
of legends and stop-transfer orders with the Transfer Agent of the Company's
securities with respect to any of such securities registered in the name of the
undersigned or beneficially owned by the undersigned. The parties hereto agree
that the managing underwriter is intended to be a third-party beneficiary of
this Subscription Agreement and that no modification of the "lock-up" provisions
contained in this Section 3.2 may be made without the prior written consent of
the managing underwriter. The undersigned further agrees to execute any
standalone lock-up agreement as may be requested by the managing underwriter.
3.3 Piggyback Registration. Subject to Section 3.2, at any time
commencing 12 months after the date of issuance of the Units and expiring two
years thereafter, if (but without any obligation to do so) the Company proposes
to register any of its stock or other securities under the Act, in connection
with the public offering of such securities (other than in connection with a
merger, acquisition or exchange offer on Form S-4, a registration relating
solely to the sale of securities to participants in a Company stock plan, a
registration relating solely to a Rule 145 transaction or pursuant to Form S-8
or successor forms), the Company will give each Purchaser written notice by
registered or certified mail at least thirty (30) days prior to the filing of
each such registration statement, to the holder(s) of the Shares, of such
registration. Upon the written request of any Purchaser given within ten (10)
days after receipt of such notice by the Purchaser of his desire to include any
Shares in such proposed registration statement, the Company shall afford such
Purchasers the opportunity to have any such Shares registered under the
registration statement.
Notwithstanding the provisions of this Section 3.3, the following
conditions shall apply:
(a) The Company shall have the right at any time after it shall have
given written notice pursuant to this Section 3.3 (irrespective of whether a
written request for inclusion of any such securities shall have been made) to
elect not to file any such proposed
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registration statement, or to withdraw the same after the filing but prior to
the effective date thereof.
(b) If any registration pursuant to this Section 3.4 shall be
underwritten in whole or in part, the Company may require that the Shares
requested for inclusion be included in the underwriting on the same terms and
conditions as the securities otherwise being sold through the underwriter(s).
(c) If the managing underwriter in an underwritten public offering of
securities shall advise the Company in writing that inclusion of some or all of
the Shares would, in such managing underwriter's opinion, materially interfere
with the proposed distribution of the securities to be offered by, the Company,
in respect of which registration was originally to be effected, then the number
of Shares to be included in the registration statement may be reduced pro rata
(by the number of shares) among the holders of Shares requesting registration or
excluded in their entirety, if so required by the underwriter, in which event,
the Company will give priority for inclusion in such registration statement (i)
first, to shares of Common Stock the Company proposes to sell, if any, (ii)
second, to shares of Common Stock requested to be included by holders of
securities subject to that certain Investors' Rights Agreement dated as of June
1, 1994, by and among the Company and the Investors named therein, as amended,
and to securities held by the managing underwriter and/or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ &
Company, L.P. ("▇▇▇▇▇▇ ▇▇▇▇▇▇▇"), if any, (iii) third, to shares of Common Stock
requested to be included by holders of securities issued pursuant to that
certain Secured Note and Warrant Purchase Agreement dated as of December 1,
1994, by and among the Company and the Purchasers named therein, as amended, and
(iv) fourth, to the Shares requested to be included and securities requested to
be included by Pari Passu Holders, pro rata among the holders of such securities
on the basis of the number of shares held. "Part Passu Holders" shall mean (A)
holders of securities issued pursuant to that certain Secured Note and Stock
Purchase Agreement dated as of December 1, 1995 by and among the Company and the
Purchasers named therein, as amended, (B) holders of securities issued pursuant
to that certain Unsecured Note and Stock Purchase Agreement dated as of February
1, 1996 by and among the Company and the Purchasers named therein, as amended
and (C) holders, if any, of registrable securities issued pursuant to a bridge
financing in an amount equal to or greater than $500, 000, for which the
managing underwriter and/or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ acted as placement agent.
(d) No Purchaser shall have any right to obtain or seek an injunction
restraining or otherwise delaying any such registration as the result of any
controversy that might arise with respect to the interpretation or
implementation of this Section 3.3.
3.4 COVENANTS WITH RESPECT TO REGISTRATION. Whenever required under
Section 3.3 to effect the registration of any Shares:
(a) The Company shall prepare and file with the Commission such
amendments and supplements to such registration statement and the prospectus
used in connection with such registration statement as, in the opinion of
counsel to the Company, may be necessary to comply with the provisions of the
Act with respect to the disposition of all securities covered by such
registration statement.
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(b) Before filing any registration statement or any amendment thereto
that includes any Shares, the Company shall furnish to the holders of the shares
to be included in such registration statement copies of the sections in the
registration statement that includes information relating to the holders of the
Shares for their review and comment and each holder of Shares agrees that he or
it shall provide the Company and the managing underwriter, if any, with all
information regarding the holder of the Shares that is reasonably requested to
be included in the registration statement.
(c) The Company shall furnish to such Purchasers such numbers of copies
of a prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as they may reasonably request
in order to facilitate the disposition of Shares owned by them.
(d) The Company shall use its best efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Purchasers; provided, however, that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do business or to
file a general consent to service of process in any such states or
jurisdictions, unless the Company is already subject to service in such
jurisdiction and except as may be required by the Act.
(e) If requested by the managing underwriter in the event of any
underwritten public offering, the Company shall enter into and perform its
obligations under an underwriting agreement, in usual and customary form, with
the managing underwriter of such offering. Each Purchaser participating in such
underwriting shall also enter into and perform its obligations under such an
agreement.
(f) The Company shall notify each Purchaser, at any time when a
prospectus is required to be delivered under the Act, of the happening of any
event as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the circumstances
then existing.
(g) The Company shall cause all such securities registered pursuant
hereto to be listed on each securities exchange or automated inter-dealer
quotation system on which similar securities issued by the Company are then
listed.
(h) It shall be a condition precedent to the obligations of the Company
to take any action pursuant to Section 3.3 with respect to the Shares of any
selling Purchaser that such Purchaser shall furnish to the Company such
information regarding itself, the securities held by it, and the intended method
of disposition of such securities as shall be required to effect the
registration of such Purchaser's securities.
(i) The Company shall pay all expenses other than underwriting
discounts and commissions incurred in connection with registrations, filings or
qualifications pursuant to Section 3.3, including (without limitation) all
registration, filing and qualification fees,
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printers' and accounting fees, fees and disbursements of counsel for the
Company (but not including any fees and expenses of counsel or other
professionals retained by the Purchasers) shall be borne by the Company.
3.5 Indemnification.
(a) Indemnification of Holder of Shares. In the event that the Company
registers any of the Shares under the Act, the Company will indemnify and hold
harmless Purchaser from and against any and all losses, claims, damages,
expenses or liabilities to which he becomes subject under the Act and, except as
hereinafter provided, will reimburse Purchaser for any legal or other expenses,
if any, reasonably incurred by him in connection with investigating or defending
any actions, whether or not resulting in any liability, insofar as such losses,
claims, damages, expenses, liabilities or actions arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact contained in
the registration statement, in any preliminary prospectus or in the prospectus
(or the registration statement or prospectus as from time to time amended or
supplemented by the Company) or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary in order to make the statements therein not misleading, unless (i)
such untrue statement or omission was made in such registration statement,
preliminary prospectus or prospectus in reliance upon and in conformity with
information furnished in writing to the Company in connection therewith by
Purchaser expressly for use therein or (ii) such violation arises from the
failure of Purchaser to comply with any legal requirement applicable to him to
deliver a copy of the prospectus or any supplements or amendments thereto after
the Company has furnished Purchaser with a sufficient number of copies of the
same. Promptly after receipt by Purchaser of notice of the commencement of any
action in respect of which indemnity may be sought from the Company, Purchaser
shall notify the Company in writing of the commencement thereof and, subject to
the provisions hereinafter stated, the Company shall assume the defense of such
action (including the employment of counsel selected by the Company, who shall
be counsel reasonably satisfactory to Purchaser), and the payment of expenses
insofar as such action shall relate to any alleged liability of which indemnity
may be sought against the Company. Purchaser shall have the right to employ
separate counsel in any such action and to participate in the defense thereof,
but the fees and expenses of such counsel shall not be at the expense of the
Company. The Company shall not be required to indemnify any person for any
settlement of any such action effected without the Company's prior written
consent. The Company shall not, except with the approval of each party being
indemnified under this Section, consent to entry of any judgment or enter into
any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to the parties being so indemnified of a
release from all liability in respect to such claim or litigation.
(b) Indemnification of the Company. In the event that the Company
registers any of the Shares under the Act, Purchaser will indemnify and hold
harmless the Company, each of its directors, each of its officers who have
signed the registration statement, each underwriter of the Shares so registered
(including any broker or dealer through whom the shares may be sold) and each
person, if any, who controls the Company within the meaning of Section 15 of the
Act from and against any losses, claims, damages, expenses or liabilities, joint
or several, to which they become or any of them may become subject under the act
and, except as hereinafter provided, will reimburse the Company, and each such
director, officer, underwriter or
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controlling person for any legal or other expenses reasonably incurred by them
or any of them in connection with investigating or defending any actions
whether or not resulting in any liability, insofar as such losses, claims,
damages, expenses, liabilities or actions arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in
the registration statement or in any preliminary prospectus or prospectus (as
from time to time amended or supplemented) or arise out of or are based upon
the omission or alleged omission to state therein a material fact required to
be stated therein or necessary in order to make the statements therein not
misleading, but only insofar as any such statement or omission was made in
reliance upon and in conformity with information furnished in writing to the
Company in connection therewith by Purchaser expressly for use therein.
Promptly after receipt of notice of the commencement of any action in respect
of which indemnity may be sought against Purchaser, the Company will notify
Purchaser in writing of the commencement thereof, and Purchaser shall, subject
to the provisions hereinafter stated, assume the defense of such action
(including the employment of Purchaser, who shall be counsel reasonably
satisfactory to the Company) and the payment of expenses insofar relate to the
alleged liability in respect of which indemnity may be sought against
Purchaser. The Company and officer, underwriter or controlling person to employ
separate counsel in any such action the defense thereof, but the fees and
expenses of such counsel shall not be at the expense of Purchaser. Purchaser
shall not be required to indemnify any person for any settlement of any such
action effected without Purchaser's consent.
3.6 No Transfer. The registration rights granted by Section 3.3 hereof
shall not be transferable or assumable without the Company's prior written
consent. Any purported transfer or assignment in violation of this provision
shall be void.
4. Representations and Warranties of the Purchasers. Each Purchaser
severally, but not jointly, hereby represents and warrants to, and agrees with,
the Company that:
4.1 Such Purchaser is aware that the investment in the Units involves a
high degree of risk of loss of his or its entire investment.
4.2 Such Purchaser has received the unaudited balance sheets of the
Company as of December 31 1995 and the unaudited income statement for the year
ended December 31, 1995 (the "Financial Statements"), and understands and
acknowledges that there is no assurance as to the future performance of the
Company.
4.3 Such Purchaser understands and acknowledges that there may be
certain adverse tax consequences to him or it in connection with his or its
purchase of the Units (including, but not limited to, the tax consequences
described in Section 6) that the Company is not giving and has not given any
advice on the tax consequences of the investment and that the Company has
advised all Purchasers to seek the advice of their own experts in such areas
prior to making this investment.
4.4 This Agreement has been duly executed and delivered by such
Purchaser and constitutes the Purchaser's valid and legally binding obligations.
enforceable in accordance with its terms. Each Purchaser represents that he or
it has full power and authority to enter into this Agreement.
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4.5 The Confidential Investor Questionnaire being delivered by the
Purchaser to the Company simultaneously herewith is true, complete and correct
in all material respects, and the Purchaser understands that the Company has
determined that the exemption of the Units from the registration provisions of
the Securities Act pursuant to Regulation D thereof, which is available for
non-public offerings, is applicable to the offer and sale of the Units, and
that such determination is based in part upon the representations, warranties
and agreements made by the Purchaser herein and in the Subscriber's
Confidential Investor Questionnaire.
4.6 The Note and the Shares to be received by such Purchaser pursuant
to the terms hereof (collectively. the "Securities"), will be acquired for
investment for such Purchaser's own account, not as a nominee or agent, and not
with a view to the resale or distribution of any part thereof, and such
Purchaser has no present intention of selling, granting any participation in or
otherwise distributing the same. Notwithstanding such representations, the
undersigned realizes that the basis for the exemption may not be present if the
undersigned has in mind merely acquiring the Securities for a fixed or
determined period in the future. or for a market rise or for sale if the market
does not rise. The undersigned does not have any such intention.
4.7 Such Purchaser understands that the Securities he or it is
receiving hereunder are characterized as "restricted securities" under the
federal securities laws inasmuch as they are being acquired from the Company in
a transaction not involving a public offering and that under such laws and
applicable regulations such securities may be resold without registration under
the Securities Act of 1933, as amended (the "Act"), only in certain limited
circumstances, in particular, the Securities may not be sold pursuant to Rule
144 promulgated under the Act ("Rule 144") unless all of the conditions of Rule
144 are met. The undersigned also understands that, except as otherwise provided
herein and in the certificates for the Shares, the Company is under no
obligation to register the Units or any of the components of the Units on his or
its behalf or to assist him or it in complying with any exemption from
registration under the Securities Act or applicable state securities laws. The
undersigned further understands that sales or transfers of the Units and the
components of the Units are further restricted by state securities laws and the
provisions of this Agreement.
4.8 The undersigned's overall commitment to investments which are not
readily marketable is not disproportionate to the undersigned's net worth and an
investment in the Units will not cause such overall commitment to become
excessive.
4.9 The undersigned is not relying on the Company, or its affiliates,
with respect to economic considerations involved in this investment. The
undersigned represents and warrants that he or it has such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of an investment in the Units and has obtained, in his or its
own judgment, sufficient information from the Company to evaluate the merits and
risks of an investment in the Company. The undersigned further represents and
warrants that he or it has not utilized any person as a purchaser
representative as such term is defined in Regulation D in connection with
evaluating such merits and risks, but rather has relied solely upon his or its
own investigation in making a decision to invest in the Company.
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4.10 No representations or warranties have been made to the Purchaser
by the Company or any of its directors, agents, employees or affiliates; and in
entering into this transaction the Purchaser is not relying upon any
information other than that contained in the Financial Statements and the
results of independent investigations, if any, by the Purchaser.
4.11 The undersigned represents and warrants that he or it has had a
reasonable opportunity to ask questions and to receive satisfactory answers
concerning the offering and other matters pertaining to his or its investment
and all such questions have been answered to the Purchaser's full satisfaction;
the Purchaser further represents and warrants that he or it has had reasonable
opportunity to obtain all the information he or it considers necessary or
appropriate for deciding whether to purchase the Units.
4.12 The undersigned represents and warrants that he or it is an
"Accredited Investor" within the meaning of Rule 501 (a) of Regulation D,
promulgated under the Act.
4.13 The address set forth on the signature page hereto is the
Purchaser's true and correct domicile, and the Purchaser has no present
intention of becoming a resident of any other state or jurisdiction.
4.14 Without in any way limiting the representations set forth above,
such Purchaser further agrees not to make any disposition of the Securities
unless there is then in effect a registration statement under the Act covering
such proposed disposition and such disposition is made in accordance with such
registration statement; or such Purchaser shall have notified the Company of the
proposed disposition and shall have furnished the Company with a statement of
the circumstances surrounding the proposed disposition, and, if reasonably
requested by the Company, such Purchaser shall have furnished the Company with
an opinion of counsel, reasonably satisfactory to the Company, that such
disposition will not require registration of such shares under the Act. It is
agreed that the Company will not require opinions of counsel for transactions
made pursuant to Rule 144 except if reasonably requested by the Company.
4.15 It is understood that the Securities may bear one or all of the
following legends:
(a) "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED "SECURITIES ACT"), OR UNDER ANY STATE SECURITIES LAWS. THEY
MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, ASSIGNED OR
TRANSFERRED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT
TO THE SECURITIES UNDER SUCH ACT OR APPLICABLE STATE SECURITIES LAWS PURSUANT
TO A SPECIFIC EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, BUT ONLY
UPON A HOLDER HEREOF FIRST HAVING OBTAINED THE WRITTEN OPINION OF COUNSEL TO
THE CORPORATION, OR OTHER OF COUNSEL REASONABLY SATISFACTORY TO THE CORPORATION
THAT THE PROPOSED DISPOSITION IS CONSISTENT WITH ALL APPLICABLE PROVISIONS OF
THE SECURITIES ACT, AS WELL AS ANY APPLICABLE "BLUE SKY" OR SIMILAR SECURITIES
LAW.
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(b) Any legend required by the laws of the State of Delaware or
applicable state securities laws.
5. Conditions of Purchaser's Obligations at Closing. The obligations
of each Purchaser under subsection 1.2 of this Agreement are subject to the
fulfillment on or before the Closing of each of the following conditions, the
waiver of which shall not be effective against any Purchaser who does not
consent in writing thereto:
5.1 Performance. The Company shall have performed and complied with all
agreements, obligations, and conditions contained in this Agreement that are
required to be performed or complied with, and shall have obtained all necessary
consents, approvals and waivers as are necessary or appropriate for consummation
of the transactions contemplated by this Agreement, on or before the Closing.
(b) Qualifications. The Company shall have obtained all necessary Blue Sky law
permits and qualifications, or secured exemptions therefrom, required by any
state for the offer and sale of the Units.
6. Certain Tax Consequences. Each Purchaser hereby acknowledges that
for federal income tax purposes the purchase price of each Unit is required to
be allocated between the Note and the Shares, that the amount allocable to the
Note will be less than the principal amount of the Note, and that the allocation
of consideration made herein between the Note and the Shares (being $42,500 and
$7,500, respectively, per Unit) shall be binding upon each Purchaser unless such
Purchaser explicitly discloses on its tax return that it is making a different
allocation. It is further understood that such allocation does not bind the
Internal Revenue Service ("IRS"), and in the event the IRS determines that the
fair market value of the Shares is greater than the Purchase Price of the Shares
set forth in Section 1.1(b), the cost basis of the Note would have to be reduced
by the amount of such excess and the Note would be deemed to be issued at a
further discount. Individual cash basis holders of Notes must report the
difference between the allocated cost of the Notes and the aggregate principal
and interest received as ordinary income upon payment of the Notes. Other Note
holders are subject to the rules under Internal Revenue Code Sections 1281-1283
regarding the ratable accrual of the discount and interest on short-term
obligations. Gain on the sale or exchange of a discounted Note will be ordinary
income up to the accrued portion of the discount and interest.
7. Indemnity. The undersigned agrees to indemnify and hold harmless
the Company, its officers and directors, employees and its affiliates and each
other person, if any, who controls any thereof, against any loss, liability,
claim, damage and expense whatsoever (including, but not limited to, any and
all expenses whatsoever reasonably incurred in investigating, preparing or
defending against any litigation commenced or threatened or any claim
whatsoever) arising out of or based upon any false representation or warranty
or breach or failure by the undersigned to comply with any covenant or
agreement made by the undersigned herein or in any other document furnished by
the undersigned to any of the foregoing in connection with this transaction.
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8. Miscellaneous.
8.1 Survival of Warranties. The warranties, representations,
and covenants of the Company and the Purchasers contained in or made pursuant to
this Agreement shall survive the execution and delivery of this Agreement and
the Closing and shall in no way be affected by any investigation of the subject
matter thereof made by or on behalf of the Purchasers or the Company.
8.2 Successors and Assigns. Except as otherwise provided
herein, the terms and conditions of this Agreement shall inure to the benefit of
and be binding upon the respective successors and assigns of the parties.
Nothing in this Agreement, express or implied, is intended to confer upon any
party other than the parties hereto or their respective successors and assigns
any rights, remedies, obligations, or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement.
8.3 Governing Law. This Agreement shall be governed by and
construed under the laws of the State of Colorado, disregarding any Colorado
principles of conflicts of laws that otherwise would provide for the application
of the substantive laws of another jurisdiction.
8.4 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same Agreement.
8.5 Titles and Subtitles. The titles and subtitles used in
this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
8.6 Notices. Unless otherwise provided, all notices, offers,
acceptances and any other acts required or permitted under this Agreement shall
be given in writing and shall be deemed effectively given upon personal
delivery to the party to be notified, upon receipted delivery by facsimile
transmission, one (1) day after deposit with Federal Express or similar air
courier, two (2) days in the case of non-U.S. purchasers, or four (4) days
after deposit with the United States Post Office, by registered or certified
mail, postage prepaid, and addressed to the party to be notified at the address
indicated below for such party, or at such other address as such party may
designate by ten (10) days' advance written notice to the other, as follows:
Purchaser: At the address designated on the appropriate
signature page of this Agreement.
The Company: BioFactors, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
Fax: ▇▇▇-▇▇▇-▇▇▇▇
-11-
12
8.7 Entire Agreement; Amendments and Waivers. This Agreement
and the Notes constitute the full and entire understanding and agreement between
the parties with regard to the subject matter hereof and thereof. Any term of
this Agreement may be amended and the observance of any term of this Agreement
may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company
and the holders of Notes representing a majority of the aggregate principal
amount of all of the Notes then outstanding. Any amendment or waiver effected in
accordance with this Section 8.7 shall be binding upon each holder of any
securities acquired under this Agreement at the time outstanding (including
securities, if any, for which any such securities are convertible or
exercisable), each future holder of all such securities, and the Company.
8.8 Severability. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-12-
13
BIOFACTORS, INC.
UNIT SUBSCRIPTION AGREEMENT
MAY 17, 1996
ALL SUBSCRIBERS MUST COMPLETE THIS PAGE
IN WITNESS WHEREOF, the undersigned has executed this
Agreement on the ___________ day of _________________, 1996.
___________________ x $50,000 Per Unit = $______________
Units Subscribed For Purchase Price
Manner in which Title is to be held (Please Check One):
Purchase Price
1. Individual
2. Joint Tenants with Right
of Survivorship
3. Community Property
4. Tenants in Common
5. Corporation/Partnership/
Limited Liability Company
6. ▇▇▇
7. Trust/Estate/Pension or
Profit Sharing Plan
Date Opened:____________
8. As a Custodian for
_________________________
Under the Uniform Gift to
Minors Act of the State
of ______________________
9. Married with Separate
Property
10. ▇▇▇▇▇
11. Tenants by the Entirety
--------------------------------------------------------------------------------
IF MORE THAN ONE SUBSCRIBER, EACH SUBSCRIBER MUST SIGN.
INDIVIDUAL SUBSCRIBERS MUST COMPLETE PAGES 14 AND 15.
SUBSCRIBERS WHICH ARE ENTITIES MUST COMPLETE PAGES 16 AND 17.
14
BIOFACTORS, INC.
UNIT SUBSCRIPTION AGREEMENT
MAY 17, 1996
EXECUTION BY NATURAL PERSONS
--------------------------------------------------------------------------------
Exact Name in Which Title is to be Held
Name (Please Print) Name of Additional Purchaser
Residence: Number and Street Address of Additional
Purchaser
City, State and Zip Code City, State and Zip Code
Social Security Number Social Security Number
/s/ ▇▇▇▇ ▇▇▇▇▇▇
----------------------------
▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Attorney-in-fact for
▇▇▇▇▇ Elsaca Sauc
(Signature) (Signature of Additional
Purchaser)
ACCEPTED this __________ day of _________________, 1996, on behalf of the
Company.
BIOFACTORS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: President and CEO
15
BIOFACTORS, INC.
UNIT SUBSCRIPTION AGREEMENT
MAY 17, 1996
ACKNOWLEDGMENT FOR INDIVIDUAL
State of New York )
) ss.:
County of New York )
The foregoing instrument was acknowledged before me this
28th day of May, 1996, by ▇▇▇▇▇ ▇. ▇▇▇▇▇.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
[SEAL] Notary Public
My commission expires: Residing at:
March 25, 1997 [NOTARY STAMP]
--------------------------------- -----------------------------
16
BIOFACTORS, INC.
UNIT SUBSCRIPTION AGREEMENT
MAY 17, 1996
ACKNOWLEDGMENT FOR INDIVIDUAL
State of New York )
) ss.:
County of New York )
The foregoing instrument was acknowledged before me this
28th day of May, 1996, by ▇▇▇▇▇ ▇. ▇▇▇▇▇.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
[SEAL] Notary Public
My commission expires: Residing at:
March 25, 1997 [NOTARY STAMP]
--------------------------------- -----------------------------
17
BIOFACTORS, INC.
UNIT SUBSCRIPTION AGREEMENT
MAY 17, 1996
ACKNOWLEDGMENT FOR INDIVIDUAL
State of New York )
) ss.:
County of New York )
The foregoing instrument was acknowledged before me this
28th day of May, 1996, by ▇▇▇▇▇ ▇. ▇▇▇▇▇.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
[SEAL] Notary Public
My commission expires: Residing at:
March 25, 1997 [NOTARY STAMP]
--------------------------------- -----------------------------
18
BIOFACTORS, INC.
UNIT SUBSCRIPTION AGREEMENT
MAY 17, 1996
ACKNOWLEDGMENT FOR INDIVIDUAL
State of Nevada )
) ss.:
County of ▇▇▇▇▇ )
The foregoing instrument was acknowledged before me this
15th day of May, 1996, by ▇▇▇▇▇▇▇ ▇▇▇▇▇.
as Attorney-In-Fact for
▇▇▇▇▇ Elsaca Saud
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
[SEAL] Notary Public
My commission expires: Residing at:
5/1/98 Las Vegas, Nevada
--------------------------------- -----------------------------
[NOTARY STAMP]
19
BIOFACTORS, INC.
UNIT SUBSCRIPTION AGREEMENT
MAY 17, 1996
EXECUTION BY SUBSCRIBER WHICH IS AN ENTITY
(Corporation, Partnership, Trust, Etc.)
--------------------------------------------------------------------------------
Name of Entity (Please Print)
Date of Incorporation or Organization:
State of Principal Offices:
Federal Taxpayer Identification
Heleric Trading Ltd.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇▇▇ Family Partners, Inc.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
[seal]
(If Entity is a Corporation)
Address
Taxpayer Identification Number
ACCEPTED this _____ day of _________________,1996, on behalf
of the Company.
BIOFACTORS, INC,
By:
Name:
Title:
20
BIOFACTORS, INC.
UNIT SUBSCRIPTION AGREEMENT
MAY 17, 1996
ACKNOWLEDGMENT FOR CORPORATION OR OTHER ENTITY
State of New York )
) ss.:
County of Bronx )
The foregoing instrument was acknowledged before me this
29th day of May, 1996, by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, an officer of ▇▇▇▇▇▇▇▇ Family
Partners, Inc., a New York corporation.
[SEAL] ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
COMMISSIONER OF DEEDS --------------------------
CITY OF NEW YORK NO. 3-2034 Notary Public
COMM. EXPIRES JULY 1, 1996
My Commission expires: Residing at:
Yonkers, N.Y.
------------------------------------
21
BIOFACTORS, INC.
UNIT SUBSCRIPTION AGREEMENT
MAY 17, 1996
ACKNOWLEDGMENT FOR CORPORATION OR OTHER ENTITY
State of New York )
) ss.:
County of Queens )
The foregoing instrument was acknowledged before me this
12th day of June, 1996, by ▇▇▇▇▇▇ ▇▇▇▇▇, a Vice President of Heleric Trading
Ltd., a New York corporation.
[SEAL] /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------
Notary Public
My Commission expires: Residing at:
3/30/97
------------------------------------ ---------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇
NOTARY PUBLIC STATE OF NEW YORK
NO. ▇▇-▇▇▇▇▇▇▇
Qualified in Queen's County
Comission Expires March 30, 1997
22
BIOFACTORS, INC.
UNIT SUBSCRIPTION AGREEMENT
MAY 17, 1996
SCHEDULE A
SCHEDULE OF PURCHASERS
============================================================
NAME OF PURCHASER PRINCIPAL AMOUNT NO. OF SHARES OF
OF NOTE COMMON STOCK
------------------------------------------------------------
▇▇▇▇▇ Elsaca Saud $75,000.00 22,500
------------------------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇ $50,000.00 15,000
------------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ $50,000.00 15,000
------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ $50,000.00 15,000
------------------------------------------------------------
▇▇▇▇▇▇▇▇ Family $50,000.00 15,000
Partners, Inc.
------------------------------------------------------------
Heleric Trading, $25,000.00 7,500
Ltd.
============================================================
23
BIOFACTORS, INC.
FIRST AMENDMENT TO
UNIT SUBSCRIPTION AGREEMENT
THIS FIRST AMENDMENT TO UNIT SUBSCRIPTION AGREEMENT (this
"Amendment") is entered into as of the 1st day of October, 1996, by and among
BioFactors, Inc., a Delaware corporation ("BioFactors" or the "Company") and the
parties named on the signature pages hereto (all of such parties other than the
Company, collectively, the "Majority Holders") and amends that certain Unit
Subscription Agreement dated as of May 17, 1996, by and among the Company and
the Purchasers named therein (the "Unit Agreement").
RECITALS
WHEREAS, the Majority Holders are the holders of unsecured
promissory notes of the Company (the "Notes") and shares (the "Shares") of
common stock of the Company (the "Common Stock"), $0.01 par value per share,
issued pursuant to the Unit Agreement and, collectively, are the holders of
Notes representing in excess of fifty percent of the aggregate principal amount
of all the Notes outstanding as of the date hereof and, pursuant to Section 8.7
of the Unit Agreement, can bind each holder of Notes or Shares outstanding as of
the date of this Agreement;
WHEREAS, the Company has entered into a letter of intent with
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ & Co. ("▇▇▇▇▇▇▇▇▇ ▇▇▇▇"), providing for underwriting and
financial advisory services (the "Underwriting");
WHEREAS, as a condition precedent to the Underwriting, the
Company is required to enter into a definitive agreement with Voice Plus, Inc.,
a California corporation ("Voice Plus"), for the formation of a holding company
("Registrant") and the merger of each of BioFactors (the "BFI Merger") and Voice
Plus with and into separate, wholly-owned subsidiaries of Registrant,
concurrently with ▇▇▇▇▇▇▇▇▇ ▇▇▇▇'▇ Underwriting of the initial public offering
of Registrant's securities pursuant to a registration statement filed under the
Securities Act of 1933 (the "IPO");
WHEREAS, upon the consummation of the BFI Merger, the
Company's stockholders, including the Majority Holders, are to receive shares of
common stock of Registrant ("Registrant Common Stock") in exchange for the
BioFactors Common Stock held by them in a three-for-four (three shares of common
stock of Registrant for every four shares of BioFactors Common Stock)
conversion, or such other ratio as ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ may determine is necessary;
WHEREAS, as a further condition precedent to the Underwriting,
the Company is required to enter into agreements amending the terms of
outstanding securities including, in particular, this Amendment providing for
the consent of the Majority Holders (a) to extend the Maturity date of the Notes
to provide additional time to accomplish the IPO, (b) to effect the mandatory
conversion at the IPO of all accrued interest on the Notes into common stock of
Registrant, (c) to amend and coordinate the registration rights granted in
connection with the Shares and certain other shares of its Common Stock and
securities convertible into or exercisable for its Common Stock, and (d) to
effect certain other amendments to the Unit Agreement;
WHEREAS, as consideration for the agreements herein, the
Company will cause Registrant to issue warrants to holders of the Notes; and
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24
WHEREAS, the Company and the Majority Holders desire to enter
into this Amendment to facilitate the Underwriting, it being acknowledged that
the Underwriting will be of substantial benefit to the Company and to the
Majority Holders.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the
following mutual covenants and agreements, the parties hereby agree as follows:
1. Definitions. All capitalized terms used herein and
not otherwise defined shall have the meanings given such terms in the Unit
Agreement.
2. Amendments. The Majority Holders hereby agree to
amend the Unit Agreement as follows:
(a) Maturity Date Extension; Conversion of
Accrued Interest. Section 1.1(a) of the Unit Agreement is hereby amended in its
entirety, as follows:
"1.1(a) a promissory note of the Company in the principal
amount of Fifty Thousand Dollars ($50,000), bearing simple
interest at the rate of 10% per annum from the Closing
(computed on the basis of a 360-day year consisting of twelve
30-day months), substantially in the form set forth in EXHIBIT
A hereto (herein referred to individually as a "Note" and
collectively as the "Notes," which terms shall also include
any notes delivered in exchange or replacement therefor). The
Note shall mature and the principal and all accrued interest
thereon shall become due and payable in full at the close of
business on March 31, 1997; provided, however, that in the
event the IPO (defined below) is consummated prior to the
Maturity Date, the principal of the Notes shall be paid in
full within five business days of the receipt by Registrant
(defined below) of the proceeds of the IPO and all accrued
interest on the Notes calculated through the IPO closing date
shall be converted into common stock of Registrant at a
conversion price equal to the price per share to the public in
the IPO (the "IPO Price"). In connection with such conversion,
no fractional shares of common stock shall be issued; instead,
the number of shares of common stock otherwise issuable will
be rounded up to the next whole share."
(b) Registration Rights. Section 3 of the Unit
Agreement is hereby amended in its entirety, as follows:
"3. Planned Initial Public Offering; Registration Rights.
3.1 Initial Public Offering. The term "IPO" as used
herein shall mean the proposed initial public offering of the
Company's securities, or the securities of a holding company
formed to hold the capital stock of BioFactors (such entity,
whether the Company or a holding company, being referred to
herein as, the "Registrant" and the Common Stock of such
entity being "Registrant Common Stock"), pursuant to an
effective registration statement filed under the Securities
-2-
25
Act of 1933, as amended. The undersigned understands and
agrees that there can be no assurances that a registration
statement will be filed or, if filed, will be declared
effective by the Securities and Exchange Commission (the
"Commission") or, if the registration statement is declared
effective by the Commission, that Registrant will be able to
consummate such IPO.
3.2 Registration Rights. Upon the execution of the
Registration Rights Agreement, substantially in the form
attached hereto as EXHIBIT B (the "Rights Agreement"), the
Purchasers will become parties to the Rights Agreement and the
Shares, and any shares of common stock issuable upon the the
exercise or conversion of any securities issued pursuant to
this Agreement, shall become subject thereto."
3. Waiver, The Majority Holders hereby agree to waive
defaults, if any, on the Notes occurring prior to the Date hereof.
4. Automatic Conversion. The Majority Holders hereby
consent to the automatic conversion upon the consummation of the IPO of all
accrued interest on the Notes, at a conversion price and calculated as set forth
in Section 1.1(a) of the Unit Agreement, into Common Stock of Registrant.
5. Issuance of Additional Warrants. In consideration of
the agreements herein, the Company hereby agrees that, upon the closing of the
IPO, the payment of the principal of the Notes and the conversion of the accrued
interest thereon, the Company shall, for no additional monetary consideration,
cause Registrant to issue and deliver to each holder of Notes, a warrant to
purchase seventy-five (75) shares of Registrant Common Stock for each One
Thousand Dollars ($1,000) in original principal amount of such holder's Notes at
an exercise price equal to 120% of the IPO Price (the "Warrants").
6. Proxy. The undersigned hereby irrevocably appoints
▇▇▇▇ ▇▇▇▇▇ as the undersigned's attorney and proxy, with full power of
substitution, to vote or to consent in writing in lieu of a vote or meeting with
respect to all of the Shares held by the undersigned which the undersigned is
entitled to vote at any meeting of stockholders (whether annual or special and
whether or not an adjourned meeting) of the Company, or pursuant to written
action taken in lieu of any such meeting or otherwise, in such manner as to
cause the BFI Merger and any agreement effecting the BFI Merger to be approved.
This proxy is irrevocable, is coupled with an interest sufficient in law to
support an irrevocable proxy and is granted in consideration of and as an
inducement to cause the Company to issue the Warrants. In connection with giving
this proxy, the undersigned understands and agrees that the Merger effectively
will cause a reverse split of the Company's capital stock in that every four (4)
shares of BioFactors Common Stock issued and outstanding or held in treasury
immediately prior to the effective time of the BFI Merger shall, automatically
and without any action of the part of the respective holders thereof, be
converted into approximately three (3) shares of Registrant Common Stock (or
such other number of shares as ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ and the Company shall determine).
7. Construction of Waiver. The Unit Agreement shall be
deemed amended only to the extent set forth herein and remains in full force and
effect.
-3-
26
8. Counterparts. This Amendment may be executed in any
number of counterparts, each of which when so executed and delivered shall be an
original, but all of which together shall constitute one and the same
instrument.
[The remainder of this page intentionally left blank.]
-4-
27
IN WITNESS WHEREOF, the parties hereto have caused this FIRST
AMENDMENT TO UNIT SUBSCRIPTION AGREEMENT to be duly executed as of the day and
year first above written.
BIOFACTORS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇, President & CEO
HOLDER:
(Individual)
/s/ ▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------------
(Signature)
▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------------
(Print Name)
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------------
(Signature)
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------------
(Print Name)
/s/ ▇▇▇▇▇▇ HUARSKY
--------------------------------------------------
(Signature)
▇▇▇▇▇▇ Huarsky
--------------------------------------------------
(Print Name)
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------------------
(Signature)
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Attorney-in-Fact for
▇▇▇▇▇ Elsaca Sauc
HOLDER:
(Entity)
Heleric Trading, LtO.
------------------------------------------------
(Print name of entity)
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------------
(Signature of officer or other authorized person)
Title: V.P.
------------------------------------------
▇▇▇▇▇▇▇▇ Family Partners, Inc.
------------------------------------------------
(Print name of entity)
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------------------
(Signature of officer or other authorized person)
Title: President
------------------------------------------
-5-
28
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED "SECURITIES ACT"), OR UNDER ANY STATE SECURITIES LAWS. THEY MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, ASSIGNED OR TRANSFERRED IN THE
ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES
UNDER SUCH ACT OR APPLICABLE STATE SECURITIES LAWS PURSUANT TO A SPECIFIC
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, BUT ONLY UPON A HOLDER
HEREOF FIRST HAVING OBTAINED THE WRITTEN OPINION OF COUNSEL TO THE CORPORATION,
OR OTHER OF COUNSEL REASONABLY SATISFACTORY TO THE CORPORATION THAT THE PROPOSED
DISPOSITION IS CONSISTENT WITH ALL APPLICABLE PROVISIONS OF THE SECURITIES ACT,
AS WELL AS ANY APPLICABLE "BLUE SKY" OR SIMILAR SECURITIES LAW."
BIOFACTORS, INC.
PROMISSORY NOTE
$_______________ No.______
May ________, 1996
FOR VALUE RECEIVED, the undersigned, BIOFACTORS, INC., a
Delaware corporation ("Maker"), hereby promises to pay to the order of
___________________, or registered assigns ("Holder") at such place as the
Holder may from time to time designate in writing, the principal sum of
________________ THOUSAND DOLLARS ($___________), and to pay simple interest on
the unpaid balance of said principal from the date hereof through maturity at
the rate of ten percent (10%) per annum.
1. Maturity.
(a) Principal and accrued interest under this
Note shall be due and payable at the Maturity Date as set forth in the Unit
Agreement (defined below).
(b) Principal and interest payments hereunder
shall be made in money of the United States of America, lawful at such times for
the satisfaction of public and private debts.
2. Prepayment. The Company may prepay this Note in whole
at any time, or in part from time to time, without penalty or premium, upon
thirty (30) days' written notice to the Holder. Each partial prepayment shall
first be applied to interest accrued through the date of prepayment and then to
principal.
3. Unit Agreement. This Note is the Maker's "Note" and
is issued pursuant to and is subject to and entitled to the benefit
of that certain Unit Subscription Agreement dated as of May 17, 1996, between
Maker and the Purchasers named therein, as the same may be amended, modified or
supplemented from time to time as permitted thereby (as amended, the "Unit
Agreement"). Capitalized terms used herein without definition shall have the
meaning set forth in the Unit Agreement.
-1-
29
4. Registered Note. This Note is a registered Note and is
transferable only by surrender thereof at the principal offices of the Company,
duly endorsed or accompanied by a written instrument of transfer duly executed
by the registered holder of this Note or his attorney duly authorized in
writing. The Maker may treat the person whose name appears in the Note register
as the owner hereof for the purpose of receiving payment as herein provided.
Transfers are subject to the restrictions set forth in the Unit Agreement.
6. Waiver of Demand, Protest, etc. Maker hereby waives
diligence, presentment, demand, protest and notice of any kind whatsoever. Maker
promises to pay costs of collection and reasonable attorneys' fees if default is
made in the payment of this Note. The right to plead any and all statutes of
limitation as a defense to this Note or to any agreement to pay the same, is
hereby expressly waived by the undersigned to the full extent permitted by law.
7. Notice. Any notice required or permitted hereunder shall be
given in accordance with the Unit Agreement.
8. Governing Law. THE MAKER AND THE HOLDER AGREE THAT THIS
NOTE AND THE LEGAL RELATIONS BETWEEN THE MAKER AND THE HOLDER, AND ALL RIGHTS
AND OBLIGATIONS HEREUNDER, INCLUDING MATTERS OF CONSTRUCTION, VALIDITY, AND
PERFORMANCE, SHALL BE GOVERNED BY AND INTERPRETED, CONSTRUED, APPLIED, AND
ENFORCED IN ACCORDANCE WITH THE LAW OF THE STATE OF COLORADO WITHOUT REFERENCE
TO THE LAW OF ANOTHER JURISDICTION.
IN WITNESS WHEREOF, the undersigned has caused this Note to be
executed as of this __________ day of _______________, 1996.
MAKER: BIOFACTORS, INC.
By:
Name:
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