SICAV ONE SECURITIES PURCHASE AGREEMENT
SICAV
ONE SECURITIES PURCHASE AGREEMENT
THIS
STOCK PURCHASE AND SUBSCRIPTION AGREEMENT (this “Agreement”) is made and entered
into as of December 7, 2005, between IsoRay,
Inc, a corporation organized and existing under the laws of the State of
Minnesota (the “Company”), and Mercatus & Partners, LP (the
“Purchaser”).
WHEREAS,
PURCHASER desires to subscribe for and purchase Shares of the Company;
and
WHEREAS,
Company desires for Purchaser to subscribe for and to purchase Shares of the
Company.
NOW,
THEREFORE, subject to the terms and conditions set forth in this Agreement,
for
good, valuable and binding consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto, intending to be legally bound
hereby, now agree as follows:
ARTICLE
I
INTRODUCTION
AND DEFINITIONS
This
Agreement is entered into by the parties for purchase of equity shares of the
Company by the Purchaser for placement into a European bank SICAV fund.
This
is not an immediate funding,
and the Company recognizes the Purchaser shall have up to thirty (30) days,
as
set forth in this Agreement to tender the Purchase Price to the company through
the intermediary Custodial Bank and intermediary Purchaser, once the valuation
and repurchase of the shares is made in accordance with the terms of this
Agreement. The Company shall have the right to contact the Custodial Bank
administrator for Purchaser account verification and for confirmation of the
share status, location and control at each step of the process. Purchaser shall
have up to thirty (30) days from the date of delivery of the Shares to the
Custodial Bank to pay the Purchase Price. In the event the Purchase Price is
not
paid within thirty (30) days from the date of delivery of the Shares to the
Custodial Bank, the Shares shall be returned to the Company as provided in
the
Joint Written Direction attached as Schedule B to this Agreement. The particular
expected time line and transaction sequence is set forth in Schedule A to this
Agreement.
Certain
Definitions.
As used
in this Agreement, and unless the context requires a different meaning, the
following terms have the meanings indicated:
“Affiliate”
means,
with respect to any Person, any Person that, directly or indirectly, controls,
is controlled by or is under common control with such Person. For the purposes
of this definition, “control”
(including, with correlative meanings, the terms “controlled
by”
and
“under
common control with”)
shall
mean the possession, directly or indirectly, of the power to direct or cause
the
direction of the management and policies of such Person, whether through the
ownership of voting securities or by contract or otherwise.
1
“Agreement”
shall
have the meaning set forth in the introductory paragraph of this
Agreement.
“Attorney-in-fact”
means
the agent of the bank account holder, Banca MB, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esquire. The
attorney-in-fact, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, has full oversight authority of the Purchaser
and the receiving bank to verify share deposit, valuation process and share
transaction status.
“Business
Day”
means
any day except Saturday, Sunday, any day which shall be a legal holiday or
a day
on which banking institutions in the State of New York are authorized or
required by law or other government actions to close.
“Change
of Control”
means
the acquisition, directly or indirectly, by any Person of ownership of, or
the
power to direct the exercise of voting power with respect to, a majority of
the
issued and outstanding voting shares of the Company.
“Closing”
shall
have the meaning set forth in this document.
“Closing
Date”
shall
be the date this Agreement is executed by both parties.
“Common
Stock”
shall
have the meaning in the recital.
“Company”
shall
have the meaning set forth in the introductory paragraph.
“Custodial
Bank”
means
the bank that will receive and retain the Shares of the Company on behalf of
the
parties, until payment is received the purchase is complete in accordance with
Schedules A and B. In this case, the Custodial Bank is ▇▇▇▇▇ Brothers ▇▇▇▇▇▇▇▇,
(BBH), New York City, New York. The account holder is Banca MB as the
intermediary fund receiving bank.
“Default”
means
any event or condition which constitutes an Event of Default or which with
the
giving of notice or lapse of time or both would, unless cured or waived, become
an Event of Default.
“Disclosure
Documents”
means
the
Company’s reports filed under the Exchange Act with the SEC.
“Event
of Default”
shall
have the meaning set forth in the document.
“Exchange
Act”
means
the Securities Exchange Act of 1934, as amended.
“Execution
Date”
means
the date of this Agreement first written above.
“Indemnified
Party”
shall
have the meaning set forth in the document.
“Indemnifying
Party”
shall
have the meaning set forth in the document.
“NASD”
means
the National Association of Securities Dealers, Inc.
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“Nasdaq”
shall
mean the Nasdaq Stock Market, Inc.®
“OTCBB”
shall
mean the NASD over-the counter Bulletin Board®.
“Per
Share Market Value”
of the
Common Stock means on any particular date (a) the last sale price of
shares
of Common Stock on such date or, if no such sale takes place on such date,
the
last sale price on the most recent prior date, in each case as officially
reported on the principal national securities exchange on which the Common
Stock
is then listed or admitted to trading.
“Person”
means
an individual or a corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or political subdivision thereof) or
other entity of any kind.
“Proceeding”
means
an action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or threatened.
"Placement
Agent"
shall
have the meaning set forth in Section 3.1(k).
“Purchase
Price”
shall
have the meaning set forth in this document.
“Purchaser”
shall
have the meaning set forth in the introductory paragraph.
“Reporting
Issuer”
means a
company that is subject to the reporting requirements of Section 13 or 15(d)
of
the Exchange Act.
“Required
Approvals”
shall
have the meaning set forth in Section
3.1(f).
“Securities”
means
the Common Stock and stock of any other class into which such shares may
hereafter have been reclassified or changed.
“SEC”
means
the Securities and Exchange Commission.
“Securities
Act”
means
the Securities Act of 1933, as amended.
“Shares”
shall
have the meaning set forth herein.
“Subsidiaries”
shall
have the meaning set forth herein.
“Trading
Day”
means
(a) a day on which the Common Stock is quoted on Nasdaq, the OTCBB or
the
principal stock exchange on which the Common Stock has been listed, or
(b) if the Common Stock is not quoted on Nasdaq, the OTCBB or any stock
exchange.
“Transaction
Documents”
means
this Agreement and all exhibits and schedules hereto and all other documents,
instruments and writings required pursuant to this Agreement.
“U.S.”
means
the United States of America.
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ARTICLE
II
The
PURCHASER hereby irrevocably subscribes for and agrees to purchase 889,073
shares of
the
Common Stock of the COMPANY
(the
“Shares”).
The
purchase price to be paid by the Purchaser shall be $3.502
per
share for the purchase of the Shares.
This
agreement is binding under the conditions and timing set forth
herein.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES
3.1 Representations,
Warranties and Agreements of the Company.
The
Company hereby makes the following representations and warranties to the
Purchaser, all of which shall survive the Closing:
(a) Organization
and Qualification.
The
Company is a corporation, duly incorporated, validly existing and in good
standing under the laws of the State of Minnesota, with the requisite corporate
power and authority to own and use its properties and assets and to carry on
its
business as currently conducted. The Company has no subsidiaries other than
as
set forth on Schedule
3.1(a)
attached
hereto (collectively, the “Subsidiaries”).
Each
of the Subsidiaries is a corporation, duly incorporated, validly existing and
in
good standing under the laws of the jurisdiction of its incorporation, with
the
full corporate power and authority to own and use its properties and assets
and
to carry on its business as currently conducted. Each of the Company and the
Subsidiaries is duly qualified to do business and is in good standing as a
foreign corporation in each jurisdiction in which the nature of the business
conducted or property owned by it makes such qualification necessary, except
where the failure to be so qualified or in good standing, as the case may be,
would not, individually or in the aggregate, have a material adverse effect
on
the results of operations, assets, prospects, or financial condition of the
Company and the Subsidiaries, taken as a whole (a “Material
Adverse Effect”).
(b) Authorization,
Enforcement.
The
Company has the requisite corporate power and authority to enter into and to
consummate the transactions contemplated hereby and by each other Transaction
Document and to otherwise to carry out its obligations hereunder and thereunder.
The execution and delivery of this Agreement and each of the other Transaction
Documents by the Company and the consummation by it of the transactions
contemplated hereby and thereby has been duly authorized by all necessary action
on the part of the Company. Each of this Agreement and each of the other
Transaction Documents has been or will be duly executed by the Company and
when
delivered in accordance with the terms hereof or thereof will constitute the
valid and binding obligation of the Company enforceable against the Company
in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation
or
similar laws relating to, or affecting generally the enforcement of, creditors’
rights and remedies or by other equitable principles of general
application.
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(c) Capitalization.
The
authorized, issued and outstanding capital stock of the Company is set forth
on
Schedule
3.1(c).
No
shares of Common Stock are entitled to preemptive or similar rights, nor is
any
holder of the Common Stock entitled to preemptive or similar rights arising
out
of any agreement or understanding with the Company by virtue of this Agreement.
Except as disclosed in Schedule
3.1(c),
there
are no outstanding options, warrants, script, rights to subscribe to,
registration rights, calls or commitments of any character whatsoever relating
to securities, rights or obligations convertible into or exchangeable for,
or
giving any person any right to subscribe for or acquire, any shares of Common
Stock, or contracts, commitments, understandings, or arrangements by which
the
Company or any Subsidiary is or may become bound to issue additional shares
of
Common Stock, or securities or rights convertible or exchangeable into shares
of
Common Stock. Neither the Company nor any Subsidiary is in violation of any
of
the provisions of its Certificate of Incorporation, bylaws or other charter
documents.
(d) Issuance
of Securities.
The
Shares have been duly and validly authorized for issuance, offer and sale
pursuant to this Agreement and, when issued and delivered as provided hereunder
against payment in accordance with the terms hereof, shall be valid and binding
obligations of the Company enforceable in accordance with their respective
terms.
(e) No
Conflicts.
The
execution, delivery and performance of this Agreement and the other Transaction
Documents by the Company and the consummation by the Company of the transactions
contemplated hereby and thereby do not and will not (i) conflict with
or
violate any provision of its Certificate of Incorporation or bylaws (each as
amended through the date hereof) or (ii) be subject to obtaining any
consents except those referred to in Section 3.1(f), conflict with, or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture or
instrument to which the Company is a party, or (iii) result in a violation
of any law, rule, regulation, order, judgment, injunction, decree or other
restriction of any court or governmental authority to which the Company or
its
Subsidiaries is subject (including, but not limited to, those of other countries
and the federal and state securities laws and regulations), or by which any
property or asset of the Company or its Subsidiaries is bound or affected,
except in the case of clause (ii), such conflicts, defaults, terminations,
amendments, accelerations, cancellations and violations as would not,
individually or in the aggregate, have a Material Adverse Effect. The business
of the Company and its Subsidiaries is not being conducted in violation of
any
law, ordinance or regulation of any governmental authority.
(f) Consents
and Approvals.
Except
as specifically set forth in
Schedule 3.1(f),
neither
the Company nor any Subsidiary is required to obtain any consent, waiver,
authorization or order of, or make any filing or registration with, any court
or
other federal, state, local or other governmental authority or other Person
in
connection with the execution, delivery and performance by the Company of this
Agreement and each of the other Transaction Documents (together with the
consents, waivers, authorizations, orders, notices and filings referred to
in
Schedule 3.1(f),
the
“Required
Approvals”).
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(g) Litigation;
Proceedings.
Except
as specifically disclosed in
Schedule 3.1(g),
there
is no action, suit, notice of violation, proceeding or investigation pending
or,
to the best knowledge of the Company, threatened against or affecting the
Company or any of its Subsidiaries or any of their respective properties before
or by any court, governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign) which (i) relates to or challenges
the legality, validity or enforceability of any of the Transaction Documents,
the Shares or the Underlying Shares, (ii) could, individually or in
the
aggregate, have a Material Adverse Effect or (iii) could, individually or in
the
aggregate, materially impair the ability of the Company to perform fully on
a
timely basis its obligations under the Transaction Documents.
(h) No
Default or Violation.
Except
as set forth in Schedule 3.1(h)
hereto,
neither the Company nor any Subsidiary (i) is in default under or in vio-lation
of any indenture, loan or credit agreement or any other agreement or instrument
to which it is a party or by which it or any of its properties is bound, except
such conflicts or defaults as do not have a Material Adverse Effect, (ii) is
in
violation of any order of any court, arbitrator or governmental body, except
for
such violations as do not have a Material Adverse Effect, or (iii) is in
violation of any statute, rule or regu-lation of any governmental authority
which could (individually or in the aggregate) (iv) adversely affect the
legality, validity or enforceability of this Agree-ment, (v have a Material
Adverse Effect or (vi) adversely impair the Company’s ability or obligation to
perform fully on a timely basis its obligations under this
Agreement.
(i) Disclosure
Documents.
The
Disclosure Documents are accurate in all material respects and do not contain
any untrue statement of material fact or omit to state any material fact
necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading.
(j) Non-Registered
Offering.
Neither
the Company nor any Person acting on its behalf has taken or will take any
action (including, without limitation, any offering of any securities of the
Company under circumstances which would require the integration of such offering
with the offering of the Securities under the Securities Act) which might
subject the offering, issuance or sale of the Securities to the registration
requirements of Section 5 of the Securities Act.
(k) Placement
Agent.
The
Company accepts and agrees that Artemis Capital (“Artemis”)
is
acting for the Purchaser and does not regard any person other than the Purchaser
as its customer in relation to this Agreement, and that it has not made any
recommendation to the Company, in relation to this Agreement and is not advising
the Company with regard to the suitability or merits of the transaction. The
Placement Agent shall be the Company contact for all information relating to
the
status of funding, location of Shares, settlement of the payment of the Purchase
Price and any other information requests of the Company. Notwithstanding the
above, in the event the Purchase Price is not paid as required herein, Company
may directly contact the Custodial Bank and provide Company notice of demand
for
the return of the Shares as provided in Schedule B.
6
The
Purchaser acknowledges and agrees that the Company makes no representation
or
warranty with respect to the transactions contemplated hereby other than those
specifically set forth in Section
3.1
hereof.
3.2 Representations
and Warranties of the Purchaser.
The
Purchaser hereby represents and warrants to the Company as follows:
(a) Organization;
Authority.
The
Purchaser is a corporation, duly organized, validly existing and in good
standing under the laws of the jurisdiction of its formation with the requisite
power and authority to enter into and to consummate the transactions
contemplated hereby and by the other Transaction Documents and otherwise to
carry out its obligations hereunder and thereunder. The acquisition of the
Shares to be purchased by the Purchaser hereunder has been duly authorized
by
all necessary action on the part of the Purchaser. This Agreement has been
duly
executed and delivered by the Purchaser and constitutes the valid and legally
binding obligation of the Purchaser, enforceable against it in accordance with
its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws relating
to,
or affecting generally the enforcement of, creditors rights and remedies or
by
other general principles of equity.
(b) Investment
Intent.
The
Purchaser is acquiring the Shares to be purchased by it hereunder, for its
own
account for investment purposes only and not with a view to or for distributing
or reselling such Shares, or any part thereof or interest therein, without
prejudice, however, to such Purchaser’s right, subject to the provisions of this
Agreement, at all times to sell or otherwise dispose of all or any part of
such
Shares in compliance with applicable federal and state securities laws.
(c) Experience
of Purchaser.
The
Purchaser, either alone or together with its representatives, has such
knowledge, sophistication and experience in business and financial matters
so as
to be capable of evaluating the merits and risks of an investment in the Shares
to be acquired by it hereunder, and has so evaluated the merits and risks of
such investment.
(e) Ability
of Purchaser to Bear Risk of Investment.
The
Purchaser is able to bear the economic risk of an investment in the Securities
to be acquired by it hereunder and, at the pre-sent time, is able to afford
a
complete loss of such investment.
(f) Access
to Information.
The
Purchaser acknowledges that it has been afforded (i) the opportunity to ask
such
questions as it has deemed necessary of, and to receive answers from,
representatives of the Company concerning the terms and conditions of the
Securities offered hereunder and the merits and risks of investing in such
securities; (ii) access to information about the Company and the Company’s
financial condition, results of operations, business, properties, management
and
prospects sufficient to enable it to evaluate its investment in the Securities;
and (iii) the opportunity to obtain such additional information which the
Company possesses or can acquire without unreasonable effort or expense that
is
necessary to make an informed investment decision with respect to the investment
and to verify the accuracy and completeness of the information that it has
received about the Company.
7
(g) Reliance.
The
Purchaser understands and acknowledges that (i) the Shares being offered and
sold to it hereunder are being offered and sold without registration under
the
Securities Act in a private placement that is exempt from the registration
provisions of the Securities Act under Section 4(2) of the Securities Act and
(ii) the availability of such exemption depends in part on, and that the Company
will rely upon the accuracy and truthfulness of, the foregoing representations
and such Purchaser hereby consents to such reliance.
(h) No
Short Position.
The
Purchaser, or any subsequent purchaser, shall not take or cause any short
position to be taken in the security or Shares for a period of one year from
the
date of issuance to the Purchaser.
The
Company acknowledges and agrees that the Purchaser makes no representations
or
warranties with respect to the transactions contemplated hereby other than
those
specifically set forth in this Section
3.2.
ARTICLE
IV
OTHER
AGREEMENTS OF THE PARTIES
4.1 Manner
of Offering.
The
Securities are being issued pursuant to section 4(2) of the Securities Act,
and
Rule 506 thereunder.
4.2 Notice
of Certain Events.
The
Company shall, on a continuing basis, (i) advise the Purchaser promptly
after obtaining knowledge of, and, if requested by the Purchaser, confirm such
advice in writing, of (A) the issuance by any state securities commission of
any
stop order suspending the qualification or exemption from qualification of
the
Shares, for offering or sale in any jurisdiction, or the initiation of any
proceeding for such purpose by any state securities commission or other
regulatory authority, or (B) any event that makes any statement of a
material fact made by the Company in Section
3.1
or in
the Disclosure Documents untrue or that requires the making of any additions
to
or changes in Section
3.1
or in
the Disclosure Documents in order to make the statements therein, in the light
of the circumstances under which they are made, not misleading, (ii) use its
best efforts to prevent the issuance of any stop order or order suspending
the
qualification or exemption from qualification of the Securities under any state
securities or Blue Sky laws, and (iii) if at any time any state securities
commission or other regulatory authority shall issue an order suspending the
qualification or exemption from qualification of the Securities under any such
laws, and use its best efforts to obtain the withdrawal or lifting of such
order
at the earliest possible time.
4.3 Blue
Sky Laws.
The
Company shall cooperate with the Purchaser in connection with the exemption
from
registration of the Shares under the securities or Blue Sky laws of such
jurisdictions as the Purchasers may request; provided,
however,
that
neither the Company nor its Subsidiaries shall be required in connection
therewith to qualify as a foreign corporation where they are not now so
qualified. The Company agrees that it will execute all necessary documents
and
pay all necessary state filing or notice fees to enable the Company to sell
the
Shares to the Purchaser.
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4.4 Integration.
The
Company shall not and shall use its best efforts to ensure that no Affiliate
shall sell, offer for sale or solicit offers to buy or otherwise negotiate
in
respect of any security (as defined in Section 2 of the Securities Act) that
would be integrated with the offer or sale of the Securities in a manner that
would require the registration under the Securities Act of the sale of the
Shares to the Purchaser.
4.5 Furnishing
of Rule 144(c) Materials.
The
Company shall, for so long as any of the Shares remain outstanding and during
any period in which the Company is not subject to Section 13 or 15(d)
of
the Exchange Act, make available to any registered holder of the Shares
(“Holder” or “Holders”) in connection with any sale thereof and any prospective
purchaser of such Shares from such Person, such information in accordance with
Rule 144(c) promulgated under the Securities Act as is required to sell
the
Shares under Rule 144 promulgated under the Securities Act.
4.6 Solicitation
Materials.
The
Company shall not (i) distribute any offering materials in connection with
the
offering and sale of the Shares other than the Disclosure Documents and any
amendments and supplements thereto prepared in compliance herewith or (ii)
solicit any offer to buy or sell the Shares by means of any form of general
solicitation or advertising.
4.7 Listing
of Common Stock.
If the
Common Stock is or shall become listed on the OTCBB or on another exchange,
the
Company shall (a) use its best efforts to maintain the listing of its
Common Stock on the OTCBB or such other exchange on which the Common Stock
is
then listed until two years from the date hereof, and (b) shall provide
to
the Purchaser evidence of such listing.
4.8 Indemnification.
(a) Indemnification
(i) The
Company shall, notwithstanding termination of this Agreement and without
limitation as to time, indemnify and hold harmless the Purchaser and its
officers, directors, agents, employees and affiliates, each Person who controls
the Purchaser (within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act) (each such Person, a “Control
Person”)
and
the officers, directors, agents, employees and affiliates of each such Control
Person, to the fullest extent permitted by applicable law, from and against
any
and all losses, claims, damages, liabilities, costs (including, without
limitation, costs of preparation and attorneys’ fees) and expenses
(collectively, “Losses”),
as
incurred, arising out of, or relating to, a breach or breaches of any
representation, warranty, covenant or agreement by the Company under this
Agreement or any other Transaction Document.
(ii) The
Purchaser shall, notwithstanding termination of this Agreement and without
limitation as to time, indemnify and hold harmless the Company, its officers,
directors, agents and employees, each Control Person and the officers,
directors, agents and employees of each Control Person, to the fullest extent
permitted by application law, from and against any and all Losses, as incurred,
arising out of, or relating to, a breach or breaches of any representation,
warranty, covenant or agreement by the Purchaser under this Agreement or the
other Transaction Documents.
9
(b) Conduct
of Indemnification Proceedings.
If any
Proceeding shall be brought or asserted against any Person entitled to indemnity
hereunder (an “Indemnified
Party”),
such
Indemnified Party promptly shall notify the Person from whom indemnity is sought
(the “Indemnifying
Party”)
in
writing, and the Indemnifying Party shall assume the defense thereof, including
the employment of counsel reasonably satisfactory to the Indemnified Party
and
the payment of all fees and expenses incurred in connection with defense
thereof; provided, that the failure of any Indemnified Party to give such notice
shall not relieve the Indemnifying Party of its obligations or liabilities
pursuant to this Agreement, except (and only) to the extent that it shall be
finally determined by a court of competent jurisdiction (which determination
is
not subject to appeal or further review) that such failure shall have
proximately and materially adversely prejudiced the Indemnifying
Party.
An
Indemnified Party shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or Parties
unless: (1) the Indemnifying Party has agreed to pay such fees and expenses;
or
(2) the Indemnifying Party shall have failed promptly to assume the defense
of
such Proceeding and to employ counsel reasonably satisfactory to such
Indemnified Party in any such Proceeding; or (3) the named parties to any such
Proceeding (including any impleaded parties) include both such Indemnified
Party
and the Indemnifying Party, and such Indemnified Party shall have been advised
by counsel that a conflict of interest is likely to exist if the same counsel
were to represent such Indemnified Party and the Indemnifying Party (in which
case, if such Indemnified Party notifies the Indemnifying Party in writing
that
it elects to employ separate counsel at the expense of the Indemnifying Party,
the Indemnifying Party shall not have the right to assume the defense of the
claim against the Indemnified Party but will retain the right to control the
overall Proceedings out of which the claim arose and such counsel employed
by
the Indemnified Party shall be at the expense of the Indemnifying Party). The
Indemnifying Party shall not be liable for any settlement of any such Proceeding
effected without its written consent, which consent shall not be unreasonably
withheld. No Indemnifying Party shall, without the prior written consent of
the
Indemnified Party, effect any settlement of any pending Proceeding in respect
of
which any Indemnified Party is a party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability on claims
that are the subject matter of such Proceeding.
All
fees
and expenses of the Indemnified Party to which the Indemnified Party is entitled
hereunder (including reasonable fees and expenses to the extent incurred in
connection with investigating or preparing to defend such Proceeding in a manner
not inconsistent with this Section) shall be paid to the Indemnified Party,
as
incurred, within ten (10) Business Days of written notice thereof to the
Indemnifying Party.
No
right
of indemnification under this Section shall be available as to a particular
Indemnified Party if there is a non-appealable final judicial determination
that
such Losses arise solely out of the negligence or bad faith of such Indemnified
Party in performing the obligations of such Indemnified Party under this
Agreement or a breach by such Indemnified Party of its obligations under this
Agreement.
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(c) Contribution.
If a
claim for indemnification under this Section is unavailable to an Indemnified
Party or is insufficient to hold such Indemnified Party harmless for any Losses
in respect of which this Section would apply by its terms (other than by reason
of exceptions provided in this Section), then each Indemnifying Party, in lieu
of indemnifying such Indemnified Party, shall contribute to the amount paid
or
payable by such Indemnified Party as a result of such Losses in such proportion
as is appropriate to reflect the relative benefits received by the Indemnifying
Party on the one hand and the Indemnified Party on the other and the relative
fault of the Indemnifying Party and Indemnified Party in connection with the
actions or omissions that resulted in such Losses as well as any other relevant
equitable considerations. The relative fault of such Indemnifying Party and
Indemnified Party shall be determined by reference to, among other things,
whether there was a judicial determination that such Losses arise in part out
of
the negligence or bad faith of the Indemnified Party in performing the
obligations of such Indemnified Party under this Agreement or the Indemnified
Party’s breach of its obligations under this Agreement. The amount paid or
payable by a party as a result of any Losses shall be deemed to include any
attorneys’ or other fees or expenses incurred by such party in connection with
any Proceeding to the extent such party would have been indemnified for such
fees or expenses if the indemnification provided for in this Section was
available to such party.
(d) Non-Exclusivity.
The
indemnity and contribution agreements contained in this Section are in addition
to any obligation or liability that the Indemnifying Parties may have to the
Indemnified Parties.
ARTICLE
V
MISCELLANEOUS
5.1 Fees
and Expenses.
Except
as set forth in this Agreement, each party shall pay the fees and expenses
of
its advisers, counsel, accountants and other experts, if any, and all other
expenses incurred by such party incident to the negotiation, preparation,
execution, delivery and performance of this Agreement. The Company shall pay
all
stamp and other taxes and duties levied in connection with the issuance of
the
Shares pursuant hereto. The Purchaser shall pay the Placement Agent
pursuant
to the terms and conditions contained in Schedule 5.1.
The
Purchaser shall be responsible for any taxes payable by the Purchaser that
may
arise as a result of the investment hereunder or the transactions contemplated
by this Agreement or any other Transaction Document. The Company shall pay
all
costs, expenses, fees and all taxes incident to and in connection with:
(A) the issuance and delivery of the Shares, (B) the exemption
from
registration of the Securities for offer and sale to the Purchaser under the
securities or Blue Sky laws of the applicable jurisdictions, and (C) the
preparation of certificates for the Shares (including, without limitation,
printing and engraving thereof), and (D) all fees and expenses of counsel
and accountants of the Company.
5.2 Entire
Agreement.
This
Agreement, together with all of the Exhibits and Schedules annexed hereto,
and
any other Transaction Document contains the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements
and
understandings, oral or written, with respect to such matters. This Agreement
shall be deemed to have been drafted and negotiated by both parties hereto
and
no presumptions as to interpretation, construction or enforceability shall
be
made by or against either party in such regard.
11
5.3 Notices.
Any
notice or other communication required or permitted to be given hereunder shall
be in writing and shall be deemed to have been duly given upon facsimile
transmission (with written transmission confirmation report) at the 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) whichever shall first occur. The addresses
for such communications shall be:
| If to the Company: | IsoRay, Inc. |
| OTCBB: ISRY |
| ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ |
| ▇▇▇▇▇ ▇▇▇ |
| ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ |
| Phone: (▇▇▇) ▇▇▇-▇▇▇▇ |
|
With
copies to:
|
|
If
to the Purchaser:
|
Mercatus
& Partners, Limited
|
|
▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
|
|
▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇
|
|
Attn:
▇▇▇▇ ▇▇▇▇, Director
|
|
Phone:
(▇▇▇) ▇▇▇-▇▇▇▇
|
|
With
copies to:
|
5.4 Amendments;
Waivers.
No
provision of this Agreement may be waived or amended except in a written
instrument signed, in the case of an amendment, by both the Company and the
Purchaser, or, in the case of a waiver, by the party against whom enforce-ment
of any such waiver is sought. No waiver of any default with respect to any
provision, condition or require-ment of this Agreement shall be deemed to be
a
continuing waiver in the future or a waiver of any other provision, condition
or
requirement hereof, nor shall any delay or omission of either party to exercise
any right hereunder in any manner impair the exercise of any such right accruing
to it thereafter.
5.5 Headings.
The
headings herein are for convenience only, do not constitute part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof.
5.6 Successors
and Assigns.
This
Agreement shall be binding upon and inure to the benefit of the parties and
their respective successors and permitted assigns. The assignment by a party
of
this Agreement or any rights hereunder shall not affect the obligations of
such
party under this Agreement.
12
5.7 No
Third Party Beneficiaries.
This
Agreement is intended for the benefit of the parties hereto and their respective
permitted successors and assigns and is not for the benefit of, nor may any
provision hereof be enforced by, any other person.
5.8 Governing
Law; Venue; Service of Process.
The
parties hereto acknowledge that the transactions contemplated by this Agreement
and the exhibits hereto bear a reasonable relation to the State of New York.
The
parties hereto agree that the internal laws of the State of New York shall
govern this Agreement and the exhibits hereto, including, but not limited to,
all issues related to usury. Any action to enforce the terms of this Agreement
or any of its exhibits, or any other Transaction Document shall be brought
exclusively in the state and/or federal courts situate in the County and State
of New York. Service of process in any action by the Purchaser to enforce the
terms of this Agreement may be made by serving a copy of the summons and
complaint, in addition to any other relevant documents, by commercial overnight
courier to the Company at its principal address set forth in this
Agreement.
5.9 Survival.
The
representa-tions and warranties of the Company and the Purchaser contained
in
this agreement shall survive the Closing.
5.10 Counterpart
Signatures.
This
Agreement may be executed in two or more counterparts, all of which when taken
together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to
the
other party, it being understood that both parties need not sign the same
counterpart. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid and binding obligation of
the
party executing (or on whose behalf such signature is executed) the same with
the same force and effect as if such facsimile signature page were an original
thereof.
5.11 Publicity.
The
Company and the Purchaser shall consult with each other in issuing any press
releases or otherwise making public statements with respect to the transactions
contemplated hereby and neither party shall issue any such press release or
otherwise make any such public statement without the prior written consent
of
the other, which consent shall not be unreasonably withheld or delayed, unless
counsel for the disclosing party deems such public statement to be required
by
applicable federal and/or state securities laws. Except as otherwise required
by
applicable law or regulation, the Company will not disclose to any third party
(excluding its legal counsel, accountants and representatives) the names of
the
Purchaser.
5.12 Severability.
In case
any one or more of the provisions of this Agreement shall be invalid or
unenforceable in any respect, the validity and enforceability of the remaining
terms and provisions of this Agreement shall not in any way be affected or
impaired thereby and the parties will attempt to agree upon a valid and
enforceable provision which shall be a reasonable substitute therefore, and
upon
so agreeing, shall incorporate such substitute provision in this
Agreement.
5.13 Limitation
of Remedies.
With
respect to claims by the Company or any person acting by or through the Company,
or by the Purchaser or any person acting through the Purchaser, for remedies
at
law or at equity relating to or arising out of a breach of this Agreement,
liability, if any, shall, in no event, include loss of profits or incidental,
indirect, exemplary, punitive, special or consequential damages of any
kind.
13
5.14 Delivery
of
Shares.
The Company shall deliver the Shares directly to the Custodial Bank, for deposit
into the Banca MB account in accordance with the directions provided in Schedule
A, within five business days following delivery of the Joint Written Direction,
in the form attached hereto as Schedule B, signed by both the Company and the
Purchaser, to the Custodial Bank
and SICAV. The
Shares may not sold or a short position taken on the Securities by the Purchaser
on or before January 1, 2007 and the Shares’ Certificates shall bear a
restrictive legend prohibiting transfer until that date.
5.15 Delivery
of Payment.
The Purchaser shall, within thirty (30) days of the delivery of the Shares
to
the Custodial Bank issue the Payment to the Company via wire transfer to the
directed wire transfer bank and account as specified
below:
Beneficiary
Account Name: Holland
& Knight LLP
Beneficiary
Account No.: ________________
ABA/Transit
No.: ______________
Beneficiary
Bank:
Chase Manhattan Bank
If
the Purchase Price is not paid within thirty (30) days of the delivery of the
Shares to the Custodial Bank, the Company has the right to demand recall of
the
shares after that time, and such Shares shall be transmitted back to the Company
within ten (10) business days from the date of the demand, as provided in the
Joint Written Direction attached hereto as Schedule B. The timeline from deposit
to payment shall be as provided in Schedule A attached
hereto.
5.16 Registration
of
Shares. As
part
of this Agreement
the Company has agreed
to file
a registration statement pursuant to Form
SB-2
or amend a previously filed Form SB-2 Registration Statement registering the
Shares on or before sixty (60) days after execution of this
Agreement.
[Signatures
on Following Page]
14
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first indicated above.
| Company: | ||
| IsoRay, Inc. | ||
| |
|
|
| By: | /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |
|
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ |
||
| Title: Chairman/CEO | ||
| Purchaser: | ||
| ▇▇▇▇ ▇▇▇▇ on behalf of Purchaser | ||
| |
|
|
| By: | /s/ ▇▇▇▇ ▇▇▇▇ | |
|
Name: ▇▇▇▇ ▇▇▇▇ |
||
| Title: Director | ||
15