EXHIBIT 4.1
SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT, dated as of _______, 2005, is entered
into by and between PROVECTUS PHARMACEUTICALS, INC., a Nevada corporation, with
headquarters located at 0000 Xxx Xxxxx Xxxxxxx, Xxxxx X, Xxxxxxxxx, XX 00000
(the "Company"), and _______________(the "Purchaser").
R E C I T A L S :
WHEREAS, the Company and the Purchaser are executing and delivering this
Agreement in accordance with and in reliance upon the exemption from securities
registration for offers and sales to accredited investors afforded, inter alia,
by Rule 506 under Regulation D ("Regulation D") as promulgated by the United
States Securities and Exchange Commission (the "SEC") under the Securities Act
of 1933, as amended (the "1933 Act"), and/or Section 4(2) of the 1933 Act; and
WHEREAS, the Company wishes to sell to the Purchaser and the Purchaser wish
to buy from the Company shares of the Common Stock, $.001 par value, of the
Company (the "Common Stock"), together with the Warrants (as defined below)
exercisable for the purchase of shares of Common Stock;
NOW THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. AGREEMENT TO PURCHASE; PURCHASE PRICE.
a. Purchase.
(i) Subject to the terms and conditions of this Agreement and the other
Transaction Agreements (as defined below), the Purchaser hereby agree to
pay to the Company a purchase price of $.75 per share of Common Stock for
____________ (_______) shares (the "Shares"), for a total purchase price of
____________ ($_______) (the "Purchase Price"). The Purchase Price shall be
within five (5) days of the Closing Date (as defined below). The Company
shall issue Certificates (as defined below) representing the Shares, and
each Share shall have a Warrant attached, as provided below.
(ii) The Purchase Price shall be payable in United States Dollars.
b. Certain Definitions. As used herein, each of the following terms has the
meaning set forth below, unless the context otherwise requires:
(i) "1933 Act" means the Securities Act of 1933.
(ii) "1934 Act" means the Securities Act of 1934.
(iii)"Affiliate" means, with respect to a specific Person referred to in
the relevant provision, another Person who or which controls or is
controlled by or is under common control with such specified Person.
(iv) "Broker" means Network 1 Financial Securities, Inc.
(v) "Certificates" means the Shares and the Warrants, each duly executed
by the Company and issued on the Closing Date in the name of the
Purchaser.
(vi) "Closing Date" means the date of the closing of the purchase and sale
of the Shares and Warrants, as provided herein.
(vii)"Company Control Person" means each director, executive officer,
promoter, and such other Persons as may be deemed in control of the
Company pursuant to Rule 405 under the 1933 Act or Section 20 of the
1934 Act.
(vii b) "Effective Date" means the effective date of the Registration
Statement covering the Registrable Securities.
(viii) "Holder" means the Person holding the relevant Securities at the
relevant time.
(ix) "Last Audited Date" means December 31, 2004.
(x) "Material Adverse Effect" means an event or combination of events,
which individually or in the aggregate, would reasonably be expected
to (w) adversely affect the legality, validity or enforceability of
the Securities or any of the Transaction Agreements, (x) have or
result in a material adverse effect on the results of operations,
assets, prospects, or condition (financial or otherwise) of the
Company and its subsidiaries, taken as a whole, (y) adversely impair
the Company's ability to perform fully on a timely basis its
obligations under any of the Transaction Agreements or the
transactions contemplated thereby, or (z) materially and adversely
affect the value of the rights granted to the Purchaser in the
Transaction Agreements.
(xi) "Person" means any living person or any entity, such as, but not
necessarily limited to, a corporation, partnership or trust.
(xii) "Principal Trading Market" means The Over the Counter Bulletin Board.
(xiii) "Purchaser Control Person" means each director, executive officer,
promoter, and such other Persons as may be deemed in control of the
relevant Purchaser pursuant to Rule 405 under the 1933 Act or Section
20 of the 1934 Act.
(xiv)"Registrable Securities" has the meaning set forth in the
Registration Rights Agreement, in the form annexed hereto as Annex IV,
as executed by each Purchaser and the Company simultaneously with the
execution of this Agreement.
(xv) "Registration Rights Agreement" means the Registration Rights
Agreement.
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(xvi)"Registration Statement" has the meaning set forth in the
Registration Rights Agreement.
(xvii) "Securities" means the Shares and the Warrants.
(xviii) "State of Incorporation" means Nevada.
(xix)"Trading Day" means any day during which the Principal Trading Market
shall be open for business.
(xx) "Transaction Agreements" means this Securities Purchase Agreement, the
Common Stock Certificate, the Registration Rights Agreement, and the
Warrants and includes all ancillary documents referred to in those
agreements.
(xxi)"Warrant Shares" means the shares of Common Stock issuable upon
exercise of the Warrants.
c. Form of Payment; Delivery of Certificates.
(i) On the Payment Date, the Purchaser shall pay the Purchase Price by
delivering immediately available good funds in United States Dollars
to the Company.
(ii) No later than the Payment Date, but in any event promptly following
payment by the Purchaser to the Company of the Payment, the Company
shall deliver the Certificate, each duly executed on behalf of the
Company and issued in the name of the Purchaser, to the Purchaser. The
Common Stock Certificate on the Payment Date shall be for _________
(_______) Shares.
d. Method of Payment. Payment shall be made by via check or wire transfer to:
Provectus Pharmaceuticals, Inc.
0000 Xxx Xxxxx Xxxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxxx
2. PURCHASER REPRESENTATIONS, WARRANTIES, ETC.; ACCESS TO INFORMATION;
INDEPENDENT INVESTIGATION.
The Purchaser represents and warrants to, and covenants and agrees with,
the Company as follows:
a. Without limiting Purchaser's right to sell the Shares pursuant to the
Registration Statement or otherwise to sell any of the Securities in compliance
with the 1933 Act, the Purchaser is purchasing the Securities and will be
acquiring the Shares for its own account for investment only and not with a view
towards the public sale or distribution thereof and not with a view to or for
sale in connection with any distribution thereof.
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b. The Purchaser is (i) an "accredited investor" as that term is defined in
Rule 501 of the General Rules and Regulations under the 1933 Act by reason of
Rule 501(a)(3), (ii) experienced in making investments of the kind described in
this Agreement and the related documents, (iii) able, by reason of the business
and financial experience of its officers (if an entity) and professional
advisors (who are not affiliated with or compensated in any way by the Company
or any of its Affiliates or selling agents), to protect its own interests in
connection with the transactions described in this Agreement, and the related
documents, and (iv) able to afford the loss of the entire Purchase Price.
c. All subsequent offers and sales of the Securities by the Purchaser shall
be made pursuant to registration of the Shares under the 1933 Act or pursuant to
an exemption from registration.
d. The Purchaser understands that the Securities are being offered and sold
to it in reliance on specific exemptions from the registration requirements of
the 1933 Act and state securities laws and that the Company is relying upon the
truth and accuracy of, and the Purchaser's compliance with, the representations,
warranties, agreements, acknowledgments and understandings of the Purchaser set
forth herein in order to determine the availability of such exemptions and the
eligibility of the Purchaser to acquire the Securities.
e. The Purchaser and its advisors, if any, have been furnished with all
materials relating to the business, finances and operations of the Company and
materials relating to the offer and sale of the Securities and the offer of the
Shares which have been requested by the Purchaser, including those set forth on
Annex VI hereto. The Purchaser and its advisors, if any, have been afforded the
opportunity to ask questions of the Company and have received complete and
satisfactory answers to any such inquiries. Without limiting the generality of
the foregoing, the Purchaser has also had the opportunity to obtain and to
review the Company's filings on XXXXX listed on Annex VII hereto (the documents
listed on such Annex VII, to the extent available on XXXXX or otherwise provided
to the Purchaser as indicated on said Annex VII, collectively, the "Company's
SEC Documents").
f. The Purchaser understands that its investment in the Securities involves
a high degree of risk.
g. The Purchaser hereby represents that, in connection with its purchase of
the Securities, it has not relied on any statement or representation by the
Company or any of its officers, directors and employees or any of its attorneys
or agents, except as specifically set forth herein.
h. The Purchaser understands that no United States federal or state agency
or any other government or governmental agency has passed on or made any
recommendation or endorsement of the Securities.
i. This Agreement and the other Transaction Agreements to which the
Purchaser is a party, and the transactions contemplated thereby, have been duly
and validly authorized, executed and delivered on behalf of the Purchaser and
are valid and binding agreements of the Purchaser enforceable in accordance with
their respective terms, subject as to enforceability to general principles of
equity and to bankruptcy, insolvency, moratorium and other similar laws
affecting the enforcement of creditors' rights generally.
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j. The Purchaser has taken no action which would give rise to any claim by
any Person for brokerage commission other than Network 1 Financial Securities,
Inc., Broker's fees or similar payments by the Company relating to this
Agreement or the transactions contemplated hereby. The Company shall have no
obligation with respect to such fees or with respect to any claims made by or on
behalf of other Persons for fees of a type contemplated in this paragraph that
may be due in connection with the transactions contemplated hereby. The
Purchaser shall indemnify and hold harmless each of the Company, its employees,
officers, directors, agents, and partners, and their respective Affiliates, from
and against all claims, losses, damages, costs (including the costs of
preparation and attorney's fees) and expenses suffered in respect of any such
claimed or existing fees, as and when incurred.
k. The Purchaser hereby covenants and warrants that, between the Closing
Date and the date on which he or she no longer holds any of the Securities,
Purchaser will not engage in any hedging transactions or shorting transactions
in any securities of the Company, including the Securities.
l. The Purchaser hereby covenants and warrants that he or she is not acting
as a "group" for purposes of Section 13 of the Securities Exchange Act of 1934.
3. COMPANY REPRESENTATIONS, ETC. The Company represents and warrants to the
Purchaser as of the date hereof and as of the Closing Date that, except as
otherwise provided in the Annex VI hereto or in the Company's SEC Documents:
a. Rights of Others Affecting the Transactions. There are no preemptive
rights of any shareholder of the Company, as such, to acquire the Shares or the
Warrants. No party has a currently exercisable right of first refusal which
would be applicable to any or all of the transactions contemplated by the
Transaction Agreements.
b. Status. The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Incorporation and has the
requisite corporate power to own its properties and to carry on its business as
now being conducted. The Company is duly qualified as a foreign corporation to
do business and is in good standing in each jurisdiction where the nature of the
business conducted or property owned by it makes such qualification necessary,
other than those jurisdictions in which the failure to so qualify would not have
or result in a Material Adverse Effect. The Company has registered its stock and
is obligated to file reports pursuant to Section 12 or Section 15(d) of the
Securities Exchange Act of 1934, as amended (the "1934 Act"). The Common Stock
is listed and quoted on the Principal Trading Market. The Company has received
no notice, either oral or written, with respect to the continued eligibility of
the Common Stock for such listing and quotation on the Principal Trading Market,
and the Company has maintained all requirements on its part for the continuation
of such listing and quotation.
c. Authorized Shares. The authorized capital stock of the Company consists
of (i) 100,000,000 shares of Common Stock, $.001 par value per share, of which
approximately 17,086,052 shares are outstanding as of June 30, 2005, and (ii)
25,000,000 shares of Preferred Stock, $.001 par value per share, of which no
shares are outstanding as of the date hereof. As of June 30, 2005, there were
35,586,820 shares of Common Stock outstanding on a fully diluted basis,
excluding however the shares of Common Stock which would have been issued upon
the conversion of the Company's Convertible Debentures. All issued and
outstanding shares of
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Common Stock have been duly authorized and validly issued and are fully paid.
The Company has sufficient authorized and unissued shares of Common Stock as may
be necessary to effect the issuance of the Securities. The Securities have been
duly authorized and, when issued, in accordance with their terms, will be duly
and validly issued, fully paid and non-assessable and, except to the extent, if
any, provided by the law of the State of Incorporation, will not subject the
Holder thereof to personal liability by reason of being such Holder.
d. Transaction Agreements and Stock. This Agreement and each of the other
Transaction Agreements, and the transactions contemplated thereby, have been
duly and validly authorized by the Company, this Agreement has been duly
executed and delivered by the Company and this Agreement is, and the
Certificates and each of the other Transaction Agreements, when executed and
delivered by the Company, will be, valid and binding agreements of the Company
enforceable in accordance with their respective terms, subject as to
enforceability to general principles of equity and to bankruptcy, insolvency,
moratorium, and other similar laws affecting the enforcement of creditors'
rights generally.
e. Non-contravention. The execution and delivery of this Agreement and each
of the other Transaction Agreements by the Company, the issuance of the
Securities, and the consummation by the Company of the other transactions
contemplated by this Agreement, the Certificates and the other Transaction
Agreements do not and will not conflict with or result in a breach by the
Company of any of the terms or provisions of, or constitute a default under (i)
the certificate of incorporation or by-laws of the Company, each as currently in
effect, (ii) any indenture, mortgage, deed of trust, or other material agreement
or instrument to which the Company is a party or by which it or any of its
properties or assets are bound, including any listing agreement for the Common
Stock except as herein set forth, or (iii) to its knowledge, any existing
applicable law, rule, or regulation or any applicable decree, judgment, or order
of any court, United States federal or state regulatory body, administrative
agency, or other governmental body having jurisdiction over the Company or any
of its properties or assets, except where such conflict, breach or default which
would not have or result in a Material Adverse Effect.
f. Approvals. No authorization, approval or consent of any court,
governmental body, regulatory agency, self-regulatory organization, or stock
exchange or market or the shareholders of the Company is required to be obtained
by the Company for the issuance and sale of the Securities to the Purchaser as
contemplated by this Agreement, except such authorizations, approvals and
consents that have been obtained.
g. Filings. None of the Company's SEC Documents contained, at the time they
were filed, any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the statements
made therein in light of the circumstances under which they were made, not
misleading. Since March 1, 2002, the Company has timely filed all requisite
forms, reports and exhibits thereto required to be filed by the Company with the
SEC.
h. Absence of Certain Changes. Since the Last Audited Date, there has been
no material adverse change and no Material Adverse Effect, except as disclosed
in the Company's SEC Documents. Since the Last Audited Date, except as provided
in the Company's SEC Documents, the Company has not (i) incurred or become
subject to any material liabilities (absolute or contingent) except liabilities
incurred in the ordinary course of business consistent
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with past practices; (ii) discharged or satisfied any material lien or
encumbrance or paid any material obligation or liability (absolute or
contingent), other than current liabilities paid in the ordinary course of
business consistent with past practices; (iii) declared or made any payment or
distribution of cash or other property to shareholders with respect to its
capital stock, or purchased or redeemed, or made any agreements to purchase or
redeem, any shares of its capital stock; (iv) sold, assigned or transferred any
other tangible assets, or canceled any debts or claims, except in the ordinary
course of business consistent with past practices; (v) suffered any substantial
losses or waived any rights of material value, whether or not in the ordinary
course of business, or suffered the loss of any material amount of existing
business; (vi) made any changes in employee compensation, except in the ordinary
course of business consistent with past practices; or (vii) experienced any
material problems with labor or management in connection with the terms and
conditions of their employment.
i. Full Disclosure. There is no fact known to the Company (other than
general economic conditions known to the public generally or as disclosed in the
Company's SEC Documents) that has not been disclosed in writing to the Purchaser
that would reasonably be expected to have or result in a Material Adverse
Effect.
j. Absence of Litigation. There is no action, suit, proceeding, inquiry or
investigation before or by any court, public board or body pending or, to the
knowledge of the Company, threatened against or affecting the Company before or
by any governmental authority or nongovernmental department, commission, board,
bureau, agency or instrumentality or any other person, wherein an unfavorable
decision, ruling or finding would have a Material Adverse Effect or which would
adversely affect the validity or enforceability of, or the authority or ability
of the Company to perform its obligations under, any of the Transaction
Agreements. The Company is not aware of any valid basis for any such claim that
(either individually or in the aggregate with all other such events and
circumstances) could reasonably be expected to have a Material Adverse Effect.
There are no outstanding or unsatisfied judgments, orders, decrees, writs,
injunctions or stipulations to which the Company is a party or by which it or
any of its properties is bound, that involve the transaction contemplated herein
or that, alone or in the aggregate, could reasonably be expect to have a
Material Adverse Effect.
k. Absence of Certain Company Control Person Actions or Events. None of the
following has occurred during the past ten (10) years with respect to a Company
Control Person:
(1) A petition under the federal bankruptcy laws or any state insolvency
law was filed by or against, or a receiver, fiscal agent or similar officer was
appointed by a court for the business or property of such Company Control
Person, or any partnership in which he was a general partner at or within two
years before the time of such filing, or any corporation or business association
of which he was an executive officer at or within two years before the time of
such filing;
(2) Such Company Control Person was convicted in a criminal proceeding or
is a named subject of a pending criminal proceeding (excluding traffic
violations and other minor offenses);
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(3) Such Company Control Person was the subject of any order, judgment or
decree, not subsequently reversed, suspended or vacated, of any court of
competent jurisdiction, permanently or temporarily enjoining him from, or
otherwise limiting, the following activities:
(i) acting, as an investment advisor, underwriter, broker or dealer in
securities, or as an affiliated person, director or employee of any investment
company, bank, savings and loan association or insurance company, as a futures
commission merchant, introducing broker, commodity trading advisor, commodity
pool operator, floor broker, any other Person regulated by the Commodity Futures
Trading Commission ("CFTC") or engaging in or continuing any conduct or practice
in connection with such activity;
(ii) engaging in any type of business practice; or
(iii) engaging in any activity in connection with the purchase or sale of
any security or commodity or in connection with any violation of federal or
state securities laws or federal commodities laws;
(4) Such Company Control Person was the subject of any order, judgment or
decree, not subsequently reversed, suspended or vacated, of any federal or state
authority barring, suspending or otherwise limiting for more than 60 days the
right of such Company Control Person to engage in any activity described in
paragraph (3) of this item, or to be associated with Persons engaged in any such
activity; or
(5) Such Company Control Person was found by a court of competent
jurisdiction in a civil action or by the CFTC or SEC to have violated any
federal or state securities law, and the judgment in such civil action or
finding by the CFTC or SEC has not been subsequently reversed, suspended, or
vacated.
l. Prior Issues. During the twelve (12) months preceding the date hereof,
the Company has not issued any stock option grants, convertible securities or
any shares of its Common Stock, except as provided in Annex VI hereto or the
Company's SEC Documents.
m. No Undisclosed Liabilities or Events. The Company has no liabilities or
obligations other than those disclosed in the Transaction Agreements or the
Company's SEC Documents or those incurred in the ordinary course of the
Company's business since the Last Audited Date, or which individually or in the
aggregate, do not or would not have a Material Adverse Effect. No event or
circumstances has occurred or exists with respect to the Company or its
properties, business, operations, condition (financial or otherwise), or results
of operations, which, under applicable law, rule or regulation, requires public
disclosure or announcement prior to the date hereof by the Company but which has
not been so publicly announced or disclosed. There are no proposals currently
under consideration or currently anticipated to be under consideration by the
Board of Directors or the executive officers of the Company which proposal would
(X) change the certificate of incorporation or other charter document or by-laws
of the Company, each as currently in effect, with or without shareholder
approval, which change would reduce or otherwise adversely affect the rights and
powers of the shareholders of the Common Stock or (Y) materially or
substantially change the business, assets or capital of the Company, including
its interests in subsidiaries.
n. No Default. Neither the Company nor any of its subsidiaries is in
default in the performance or observance of any material obligation, agreement,
covenant or condition
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contained in any material indenture, mortgage, deed of trust or other material
instrument or agreement to which it is a party or by which it or its property is
bound.
o. No Integrated Offering. Neither the Company nor any of its Affiliates
nor any person acting on its or their behalf has, directly or indirectly, at any
time since November 30, 2003, made any offer or sales of any security or
solicited any offers to buy any security under circumstances that would
eliminate the availability of the exemption from registration under Regulation D
in connection with the offer and sale of the Securities as contemplated hereby.
p. Dilution. The number of Shares issuable upon conversion of the Warrants
may have a dilutive effect on the ownership interests of the other shareholders
(and Persons having the right to become shareholders) of the Company. The
Company's executive officers and directors have studied and fully understand the
nature of the Securities being sold hereby and recognize that they have such a
potential dilutive effect. The Board of Directors of the Company has concluded,
in its good faith business judgment, that such issuance is in the best interests
of the Company. The Company specifically acknowledges that its obligation to
issue the Warrant Shares upon exercise of the Warrants is binding upon the
Company and enforceable regardless of the dilution such issuance may have on the
ownership interests of other shareholders of the Company, and the Company will
honor every Notice of Exercise (as contemplated by the Warrants), unless the
Company is subject to an injunction (which injunction was not sought by the
Company) prohibiting the Company from doing so.
q. Fees to Brokers, and Others. Except for payment of fees and commissions
to the Broker, payment of which is the sole responsibility of the Company, the
Company has taken no action which would give rise to any claim by any Person for
brokerage commission, Broker's fees or similar payments by Purchaser relating to
this Agreement or the transactions contemplated hereby. Purchaser shall have no
obligation with respect to such fees or with respect to any claims made by or on
behalf of other Persons for fees of a type contemplated in this paragraph that
may be due in connection with the transactions contemplated hereby. The Company
shall indemnify and hold harmless each Purchaser, its employees, officers,
directors, agents, and partners, and their respective Affiliates, from and
against all claims, losses, damages, costs (including the costs of preparation
and attorney's fees) and expenses suffered in respect of any such claimed or
existing fees, as and when incurred.
r. Certain New Transactions. For purposes of this Agreement, "New
Transaction" means the offer or sale of new common stock in a capital raising or
other financing transaction by or on behalf of the Company to a new investor in
a transaction offered or consummated after the date hereof; provided, however,
that it is specifically understood that the term "New Transaction" does not
include (i) the sale of the Securities to the Purchaser, (ii) the issuance of
Common Stock upon the exercise or conversion of options, warrants, or
convertible securities outstanding at the date hereof or in connection with a
put exercised by the Company pursuant to the terms of an equity line agreement
in effect on the date hereof, (iii) the issuance of options or warrants
hereafter granted to employees or consultants for compensatory purposes or the
issuance of Common Stock upon the exercise of such options or warrants, (iv) the
issuance of Common Stock or securities exercisable for or convertible into
Common Stock in connection with a merger, acquisition or other business
combination or a strategic partnering or joint venture transaction or the
exercise or conversion
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of such securities, (v) the issuance of Common Stock or securities exercisable
for or convertible into Common Stock in connection with the settlement of claims
which are the subject of law suits, arbitrations and similar proceedings or the
conversion or exercise of such securities, and (vi) the issuance of warrants to
equipment lessors in connection with capital lease transactions or the exercise
of such warrants. If within 180 days of the effective date of that certain
registration statement covering the Registrable Securities, the Company
consummates a New Transaction in which it sells or is deemed to sell Common
Stock or securities exercisable for or convertible into Common Stock at a lower
price than the Shares, or issues warrants with an exercise price lower than the
Warrants, then the Company shall issue additional shares of Common Stock so that
the effective price per share for the Shares equals the price of the new shares
and if the Company issues warrants, the exercise price of the warrants will be
lowered to the price of the new warrants.
4. CERTAIN COVENANTS AND ACKNOWLEDGMENTS.
a. Transfer Restrictions. The Purchaser acknowledges that (1) the
Securities have not been and are not being registered under the provisions of
the 1933 Act and, except as provided in the Registration Rights Agreement or
otherwise included in an effective registration statement, the Shares have not
been and are not being registered under the 1933 Act, and may not be transferred
unless (A) subsequently registered thereunder or (B) the Purchaser shall have
delivered to the Company an opinion of counsel, reasonably satisfactory in form,
scope and substance to the Company, to the effect that the Securities to be sold
or transferred may be sold or transferred pursuant to an exemption from such
registration; (2) any sale of the Securities made in reliance on Rule 144
promulgated under the 1933 Act may be made only in accordance with the terms of
said Rule and further, if said Rule is not applicable, any resale of such
Securities under circumstances in which the seller, or the Person through whom
the sale is made, may be deemed to be an underwriter, as that term is used in
the 1933 Act, may require compliance with some other exemption under the 1933
Act or the rules and regulations of the SEC thereunder; and (3) neither the
Company nor any other Person is under any obligation to register the Securities
(other than pursuant to the Registration Rights Agreement) under the 1933 Act or
to comply with the terms and conditions of any exemption thereunder.
b. Restrictive Legend. The Purchaser acknowledges and agrees that, until
such time as the Common Stock has been registered under the 1933 Act as
contemplated by the Registration Rights Agreement and sold in accordance with an
effective Registration Statement or otherwise in accordance with another
effective registration statement, the certificates and other instruments
representing any of the Securities (including the Warrant Shares) shall bear a
restrictive legend in substantially the following form (and a stop-transfer
order may be placed against transfer of any such Securities):
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OFFERED
FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES OR AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED.
c. Filings. The Company undertakes and agrees to make all necessary filings
in connection with the sale of the Securities to the Purchaser under any United
States laws and regulations applicable to the Company, or by any domestic
securities exchange or trading market, and to provide a copy thereof to the
Purchaser promptly after such filing.
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d. Reporting Status. So long as the Purchaser beneficially owns any of the
Securities, the Company shall file all reports required to be filed with the SEC
pursuant to Section 13 or 15(d) of the 1934 Act, shall take all reasonable
action under its control to ensure that adequate current public information with
respect to the Company, as required in accordance with Rule 144(c)(2) of the
1933 Act, is publicly available, and shall not terminate its status as an issuer
required to file reports under the 1934 Act even if the 1934 Act or the rules
and regulations thereunder would permit such termination. The Company will take
all reasonable action under its control to maintain the continued listing and
quotation and trading of its Common Stock (including, without limitation, all
Registrable Securities) on the Principal Trading Market or a listing on the
NASDAQ/Small Cap or National Markets and, to the extent applicable to it, will
comply in all material respects with the Company's reporting, filing and other
obligations under the by-laws or rules of the Principal Trading Market and/or
the National Association of Securities Dealers, Inc., as the case may be, at
least through the date which is thirty (30) days after the later of the date on
which all of the Warrants have been exercised or have expired.
e. Use of Proceeds. The Company shall use the proceeds received hereunder
as
follows:
(i) payment of certain fees to the Broker as described below in Section
4(i); and (ii) the remainder shall be used for general corporate
purposes.
f. Warrants. The Company agrees to issue to the Purchaser on the Payment
Date transferable warrants (the "Warrants") for the purchase of a number of
shares 100% to the number of Shares issued on the Payment Date, each Warrant
with an exercise price of $0.75. The Warrants will expire on the date which is
the fifth annual anniversary of the Payment Date. Each of the Warrants shall be
in the form annexed hereto as Annex VIII, and shall have registration rights as
provided in the Registration Rights Agreement.
g. Available Shares. The Company shall have at all times authorized and
reserved for issuance, free from preemptive rights, a number of shares (the
"Minimum Available Shares") at least equal to the number of shares issuable upon
exercise of all outstanding Warrants held by all Holders.
h. Publicity, Filings, Releases, Etc. Each of the parties agrees that it
will not disseminate any information relating to the Transaction Agreements or
the transactions contemplated thereby, including issuing any press releases,
holding any press conferences or other forums, or filing any reports
(collectively, "Publicity"), without giving the other party reasonable advance
notice and an opportunity to comment on the contents thereof. Neither party will
include in any such Publicity any statement or statements or other material to
which the other party reasonably objects. Notwithstanding the foregoing, each of
the parties hereby consents to the inclusion of the text of the Transaction
Agreements in filings made with the SEC.
i. Broker Fees. The Company shall pay to the Broker a commission in the
form of cash equal in value to ten percent (10%) of the gross proceeds from the
sale of the Common Stock under this Agreement, three percent (3% )
unaccountable, as well as ten percent
11
(10%) in common stock. Such commission is more fully described in the Broker
Commission Agreement between the Company and the Broker of even date herewith.
j. Attorneys' Fees. The Company shall bear its legal fees and expenses
incurred in connection with the preparation and negotiation of the documents
contemplated by this transaction. Other than the amounts contemplated in the
immediately preceding sentence, 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
5. TRANSFER AGENT INSTRUCTIONS.
a. The Company warrants that, with respect to the Securities, other than
the stop transfer instructions to give effect to Section 4(a) hereof, it will
give its transfer agent no instructions inconsistent with instructions to issue
Common Stock from time to time, including upon exercise of the Warrants in such
amounts as specified from time to time by the Company to the transfer agent,
bearing the restrictive legend specified in Section 4(b) of this Agreement prior
to registration of the Shares under the 1933 Act, registered in the name of the
Purchaser or its nominee and in such denominations to be specified by the
Purchaser in connection with each exercise of the Warrants. Except as so
provided, the Shares shall otherwise be freely transferable on the books and
records of the Company as and to the extent provided in this Agreement and the
Registration Rights Agreement. Nothing in this Section shall affect in any way
the Purchaser's obligations and agreement to comply with all applicable
securities laws upon resale of the Securities. If the Purchaser provides the
Company with an opinion of counsel reasonably satisfactory to the Company that
registration of a resale by the Purchaser of any of the Securities in accordance
with clause (1)(B) of Section 4(a) of this Agreement is not required under the
1933 Act, the Company shall (except as provided in clause (2) of Section 4(a) of
this Agreement) permit the transfer of the Securities and, in the case of the
Warrant Shares, promptly instruct the Company's transfer agent to issue one or
more certificates for Common Stock without legend in such name and in such
denominations as specified by the Purchaser.
b. Subject to the provisions of this Agreement, the Company will permit the
Purchaser to exercise its right to exercise the Warrants in the manner
contemplated by the Warrants.
c. In lieu of delivering physical certificates representing the Securities,
provided the Company's transfer agent is participating in the Depository Trust
Company ("DTC") Fast Automated Securities Transfer program, upon request of the
Holder and its compliance with the provisions contained in this paragraph, so
long as the certificates therefor do not bear a legend and the Holder thereof is
not obligated to return such certificate for the placement of a legend thereon,
the Company shall use its best efforts to cause its transfer agent to
electronically transmit the Common Stock issuable to the Holder by crediting the
account of Holder's Prime Broker with DTC through its Deposit Withdrawal Agent
Commission system.
6. CLOSING DATE.
a. The Closing Date shall occur when each payment is received by the
Company.
12
7. INDEMNIFICATION.
The Company agrees to indemnify and hold harmless each Purchaser and its
officers, directors, employees, and agents, and each Purchaser Control Person
from and against any losses, claims, damages, liabilities or expenses incurred
(collectively, "Damages"), joint or several, and any action in respect thereof
to which Purchaser, its partners, Affiliates, officers, directors, employees,
and duly authorized agents, and any such Purchaser Control Person becomes
subject to, resulting from, arising out of or relating to any misrepresentation,
breach of warranty or nonfulfillment of or failure to perform any covenant or
agreement on the part of Company contained in this Agreement, as such Damages
are incurred, except to the extent such Damages result primarily from
Purchaser's failure to perform any covenant or agreement contained in this
Agreement or Purchaser's or its officers', directors', employees', agents' or
Purchaser Control Persons' negligence, recklessness or bad faith in performing
its obligations under this Agreement.
8. JURY TRIAL WAIVER. The Company and the Purchaser hereby waive a trial by
jury in any action, proceeding or counterclaim brought by either of the Parties
hereto against the other in respect of any matter arising out or in connection
with the Transaction Agreements.
9. GOVERNING LAW: MISCELLANEOUS.
a. This Agreement shall be governed by and interpreted in accordance with
the laws of the State of New York for contracts to be wholly performed in such
state and without giving effect to the principles thereof regarding the conflict
of laws. The Company and each Purchaser hereby submit to the jurisdiction of any
state court of competent jurisdiction in and for New York County, New York, or
in the United States District Court for the Southern District of New York
sitting at New York City in any action or proceeding arising out of or relating
to this Agreement and agree that all claims in respect of the action or
proceeding may be heard and determined in any such court; agree not to bring any
action or proceeding arising out of or relating to this Agreement in any other
court; waive any defense of inconvenient forum to the maintenance of any action
or proceeding so brought and waive any bond, surety, or other security that
might be required of any other party with respect thereto; and agree that a
final judgment in any action or proceeding so brought shall be conclusive and
may be enforced by suit on the judgment or in any other manner provided by law
or in equity.
b. Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.
c. This Agreement shall inure to the benefit of and be binding upon the
successors and assigns of each of the parties hereto.
d. All pronouns and any variations thereof refer to the masculine, feminine
or neuter, singular or plural, as the context may require.
e. A facsimile transmission of this signed Agreement shall be legal and
binding on all parties hereto.
13
f. This Agreement may be signed in one or more counterparts, each of which
shall be deemed an original.
g. The headings of this Agreement are for convenience of reference and
shall not form part of, or affect the interpretation of, this Agreement.
h. If any provision of this Agreement shall be invalid or unenforceable in
any jurisdiction, such invalidity or unenforceability shall not affect the
validity or enforceability of the remainder of this Agreement or the validity or
enforceability of this Agreement in any other jurisdiction.
i. This Agreement may be amended only by an instrument in writing signed by
the party to be charged with enforcement thereof.
j. This Agreement supersedes all prior agreements and understandings among
the parties hereto with respect to the subject matter hereof.
10. NOTICES. Any notice required or permitted hereunder shall be given in
writing (unless otherwise specified herein) and shall be deemed effectively
given on the earliest of:
(a) the date delivered, if delivered by personal delivery as against
written receipt therefor or by confirmed facsimile transmission,
(b) the seventh business day after deposit, postage prepaid, in the United
States Postal Service by registered or certified mail, or
(c) the third business day after mailing by domestic or international
express courier, with delivery costs and fees prepaid,in each case, addressed to
each of the other parties thereunto entitled at the following addresses (or at
such other addresses as such party may designate by ten (10) days' advance
written notice similarly given to each of the other parties hereto):
Company: PROVECTUS PHARMACEUTICALS, INC.
at its address at the head of this Agreement
Attn: Xxx Xxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
with a copy to:
Xxxxx Xxxxxx
Baker, Donelson, Bearman, Xxxxxxxx & Xxxxxxxxx, P.C.
000 Xxxxxxxxxxx Xxxx
Xxxx Xxxxxx Xxx 0000 XXX
Xxxxxxx Xxxx, XX 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
14
Purchaser: To the addresses set forth on the Investor Questionnaires
attached hereto as Annex IX.
with a copy to:
Network 1 Financial Securities, Inc.
0 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxx Xxxxxxxxxx
11. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The Company's and the
Purchaser' representations and warranties herein shall survive the execution and
delivery of this Agreement and the delivery of the Certificates and the payment
of the Purchase Price, and shall inure to the benefit of the Purchaser and the
Company and their respective successors and assigns.
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]
15
IN WITNESS WHEREOF, this Securities Purchase Agreement has been duly
executed by the Purchaser as of the date set forth below.
------------------------------
Date: , 2005 By:
------------------------------ ------------------------------
Its:
------------------------------
As of the date set forth below, the undersigned hereby accepts this Agreement
and represents that the foregoing statements are true and correct and that it
has caused this Securities Purchase Agreement to be duly executed on its behalf.
PROVECTUS PHARMACEUTICALS, INC.
By:
-----------------------------------
Title:
-----------------------------------
Date: , 2005
--------------------------
16
ANNEX I
PAYMENT SCHEDULE
--------------------------------------------------------------------------------
Payment Date.................... When payment is received by Company
---------------------------------- ---------------------------------------------
---------------------------------- ---------------------------------------------
---------------------------------- ---------------------------------------------
ANNEX II
FORM OF COMMON STOCK CERTIFICATE
To be provided upon issuance of stock certificate after payment received by
Company.
ANNEX III
Intentionally Left Blank
ANNEX IV
REGISTRATION RIGHTS AGREEMENT
ANNEX V
Reserved - N/A
ANNEX VI
COMPANY DISCLOSURE MATERIALS
None.
ANNEX VII
COMPANY'S SEC DOCUMENTS AVAILABLE ON XXXXX
10QSB 08/15/05
10QSB 05/16/05
10KSB 03/31/05
10QSB 11/12/2004
10QSB 08/16/2004
10QSB 05/17/2004
DEF 14A 04/29/2004
S-2/A 04/07/2004
10KSB/A 03/30/2004
10KSB 03/30/2004
8-K/A 03/25/2004
4 03/10/2004
4 03/01/2004
4 03/01/2004
4 03/01/2004
3 02/25/2004
S-2 02/12/2004
RW 02/11/2004
S-3 01/16/2004
8-K 12/15/2003
4 12/10/2003
REGDEX 12/04/2003
8-K 12/02/2003
10QSB 11/14/2003
S-8 10/01/2003
10QSB 08/14/2003
8-K 06/26/2003
4 06/18/2003
4 06/02/2003
4 05/30/2003
4 05/30/2003
4 05/30/2003
4 05/30/2003
8-K 05/22/2003
10QSB 05/09/2003
DEF 14A 04/30/2003
PRER14A 04/21/2003
10KSB 04/15/2003
PRE 14A 04/08/2003
NT 10-K 03/27/2003
8-K/A 01/09/2003
8-K 01/03/2003
8-K 12/20/2002
8-K 12/10/2002
8-K 11/27/2002
10QSB 11/15/2002
S-8 09/17/2002
10QSB/A 09/03/2002
8-K 08/20/2002
10QSB/A 08/15/2002
ANNEX VIII
FORM OF WARRANT
ANNEX IX
INVESTOR QUESTIONNAIRE
