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Series G Convertible Preferred Stock
Exchange Agreement
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EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT, dated as of August 27, 1997 (this
"Agreement"), by and between VIRAGEN, INC., a Delaware corporation (the
"Company"), located at 000 Xxxxxxxxx 00xx Xxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxx
00000, and ADVANTAGE FUND LIMITED, a British Virgin Islands corporation (the
"Holder") located at x/x XXXXX, Xxxx Xxxxxxxxx 0, Xxxxxxx, Xxxxxxxxxxx Antilles.
W I T N E S S E T H:
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WHEREAS, in April 1997 the Holder acquired 5,000 shares of the
Company's 5% Cumulative Convertible Preferred Stock, Series E, $1.00 par value
(the "Series E Preferred Stock"), and assumed all rights and obligations of the
transferor of such shares (the "Transferor") pursuant to the Securities Purchase
Agreement, dated as of December 31, 1996, by and between the Company and the
Transferor (the "Securities Purchase Agreement") and the Registration Rights
Agreement, dated as of December 31, 1996, by and between the Company and the
Transferor (the "Registration Rights Agreement");
WHEREAS, in order to effect certain changes in the terms of the
Series E Preferred Stock, the parties desire to exchange (the "Exchange") the
Holder's Series E Preferred Stock outstanding at the Closing hereunder for a
like number of newly issued shares of 10% Cumulative Convertible Preferred
Stock, Series G, $1.00 par value, of the Company (the "Series G Preferred
Stock"); and
WHEREAS, the parties intend that all of their respective rights and
obligations under the Securities Purchase Agreement and the Registration Rights
Agreement shall, upon the Exchange and subject to the other terms of this
Agreement, continue to apply in full force and effect to the Series G Preferred
Stock issued to the Holder;
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 hereto
agree as follows:
1. AGREEMENT TO EXCHANGE; AMENDMENT OF SECURITIES PURCHASE
AGREEMENT AND REGISTRATION RIGHTS AGREEMENT.
(A) EXCHANGE. The Company and the Holder hereby agree to exchange
on the Closing Date (as defined herein) 4,000 shares (the "Series G Preferred
Shares") of Series G Preferred Stock of the Company for the 4,000 shares (the
"Series E Preferred Shares") of Series E Preferred Stock to be held by the
Holder on the Closing Date. The Series G Preferred Shares shall have the rights,
designations and terms as set forth in the form of Certificate of Designations
attached as ANNEX I to this Agreement (the "Certificate of Designations"). The
shares of the Company's Common Stock, par value $.01 per share ("Common Stock"),
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issuable upon conversion of the Series G Preferred Shares are referred to herein
as the "Common Shares." The Common Shares and the Series G Preferred Shares are
referred to herein collectively as the "Shares."
(B) CLOSING. (1) The exchange of Series G Preferred Shares for
Series E Preferred Shares shall occur at a closing (the "Closing") to be held on
the next business day (the "Closing Date") following the Stockholder Notice
Period (as defined in Section 4(d)(1)) but which in no event shall be later than
August 21, 1997. Either party may terminate this Agreement if the Closing does
not occur on or before September 5, 1997. The Closing shall occur on the Closing
Date at Law Offices of Xxxxx X Xxxxx, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx.
(2) Each of the parties acknowledges that time is of the essence
in effecting the Closing hereunder and shall use its best efforts timely to
satisfy each of the conditions to the other party's obligations to complete the
Exchange set forth in Section 6 or 7, as the case may be, of this Agreement on
or before the Closing Date.
(C) AMENDMENT OF SECURITIES PURCHASE AGREEMENT AND REGISTRATION
RIGHTS AGREEMENT. Subject to the terms of this Agreement which shall govern any
inconsistent provisions, effective upon the Closing, (1) the parties hereby
amend each of the Securities Purchase Agreement and the Registration Rights
Agreement such that all references to the Series E Preferred Shares therein
shall be deemed to be references to the Series G Preferred Shares; and (2) the
respective rights and obligations of the parties with respect to the Series E
Preferred Shares as of the date hereof shall apply with full force and effect to
the Series G Preferred Shares and the Common Shares issuable pursuant thereto.
Except as amended hereby or as otherwise provided herein, the Agreement
(including, without limitation, Section 4(k) thereof) and the Registration
Rights Agreement shall continue in full force and effect.
2. HOLDER REPRESENTATIONS, WARRANTIES, ETC.
The Holder represents and warrants to, and covenants and agrees
with, the Company as follows:
(A) INVESTMENT PURPOSE. The Holder is acquiring the Series G
Preferred Shares for its own account for investment only and not with a view
towards the public sale or distribution thereof.
(B) ACCREDITED INVESTOR. The Holder is an "accredited investor" as
that term is defined in Rule 501 of the General Rules and Regulations under the
Securities Act of 1933, as amended (the "1933 Act") by reason of Rule 501(a)(3).
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(C) REOFFERS AND RESALES. All subsequent offers and sales of the
Shares by the Holder shall be made pursuant to registration of the Shares being
offered and sold under the 1933 Act or pursuant to an exemption from
registration.
(D) EXCHANGE AGREEMENT. This Agreement has been duly and validly
authorized, executed and delivered on behalf of the Holder and is a valid and
binding agreement of the Holder enforceable in accordance with its 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.
3. COMPANY REPRESENTATIONS, WARRANTIES, ETC.
The Company represents and warrants to, and covenants and agrees
with, the Holder that:
(A) CONCERNING THE SHARES. The Shares have been duly authorized
and the Series G Preferred Shares, when issued in exchange for the Series E
Preferred Shares in accordance with this Agreement, and the Common Shares, when
issued upon conversion of the Series G Preferred Shares, will be duly and
validly issued, fully paid and non-assessable and will not subject the holder
thereof to personal liability by reason of being such holder. There are no
preemptive rights of any stockholder of the Company, as such, to acquire any of
the Shares. The Common Stock is listed for trading on the Nasdaq National Market
("Nasdaq") and (1) the Company and the Common Stock meet the criteria for
continued listing and trading on Nasdaq; (2) the Company has not been notified
since January 1, 1997 by the National Association of Securities Dealers, Inc.
(the "NASD") of any failure or potential failure to meet the criteria for
continued listing and trading on Nasdaq and (3) no suspension of trading in the
Common Stock is in effect. The Common Shares are listed for trading on Nasdaq.
(B) EXCHANGE AGREEMENT. This Agreement has been duly and validly
authorized, executed and delivered by the Company and is a valid and binding
agreement of the Company enforceable in accordance with its 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.
(C) NON-CONTRAVENTION. The execution and delivery of this
Agreement by the Company and the consummation by the Company of the issuance of
the Series G Preferred Shares and the other transactions contemplated by this
Agreement, and the terms of the Series G Preferred Stock 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, the certificate of incorporation
or by-laws of the Company, or any indenture, mortgage, deed of trust or other
material agreement or instrument to which the Company is a party or by which it
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or any of its properties or assets are bound, or any 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.
(D) APPROVALS. No authorization, approval or consent of or filing
with any court, governmental body, regulatory agency, self-regulatory
organization, or stock exchange or market or the stockholders of the Company is
required to be obtained by the Company for the issuance and sale of the Series G
Preferred Shares and the Common Shares as contemplated by this Agreement, except
for the filing of the Certificate of Designations with the Secretary of State of
the State of Delaware.
(E) SEC REPORTING STATUS AND FILINGS. The Company has filed with
the Securities and Exchange Commission (the "SEC") all reports and other
information required to be filed under Sections 13(a), 14 and 15(d) of the
Securities Exchange Act of 1934, as amended (the "1934 Act").
(F) INFORMATION PROVIDED. The information provided by or on behalf
of the Company to the Holder in connection with the transactions contemplated by
this Agreement, including, without limitation, all reports and other information
filed with the SEC since January 1, 1996 (the "SEC Reports"), does not contain
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading.
(G) ABSENCE OF CERTAIN CHANGES. Since December 31, 1996, there has
been no material adverse change and no material adverse development in the
business, properties, operations, condition (financial or other), results of
operations or prospects of the Company, except as disclosed in the SEC Reports.
(H) ABSENCE OF LITIGATION. Except as set forth in SCHEDULE 3(H)
attached hereto, 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 or any of its subsidiaries, threatened against or affecting the Company
or any of its subsidiaries, wherein an unfavorable decision, ruling or finding
would have a material adverse effect on the properties, business, condition
(financial or other), results of operations or prospects of the Company and its
subsidiaries taken as a whole or the transactions contemplated by this Agreement
or any of the documents contemplated hereby or which would adversely affect the
validity or enforceability of, or the authority or ability of the Company to
perform its obligations under, this Agreement or any of such other documents.
(I) EXCHANGES OF STOCK. The Company has not and will not pay any
commission or other remuneration for soliciting exchanges of Series E Preferred
Shares for Series G Preferred Shares.
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(J) REGISTRATION STATEMENT. The Registration Statement
(Registration No. 333-25187) (as amended to date, the "Registration Statement")
registering the resale of the shares of Common Stock issuable upon conversion of
the Series E Preferred Stock has been declared effective by the SEC and no
stop-order or similar proceeding relating to the Registration Statement is
pending or threatened.
4. CERTAIN COVENANTS AND ACKNOWLEDGMENTS.
(A) TRANSFER RESTRICTIONS. The Holder and the Company acknowledge
and agree that (1) the Series G Preferred Shares have not been and are not being
registered under the provisions of the 1933 Act and may not be transferred
unless (A) subsequently registered thereunder or (B) the Holder 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 Series G Preferred
Shares to be sold or transferred may be sold or transferred pursuant to an
exemption from such registration; (2) any sale of the Series G Preferred Shares
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 such resale of Series G Preferred Shares 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
wit some other exemption under the 1933 Act or the rules and regulations of the
SEC thereunder; (3) neither the Company nor any other person is under any
obligation to register the Series G Preferred Shares under the 1933 Act or to
comply with the terms and conditions of any exemption thereunder (other than
pursuant to Section 4(c) hereof), with respect to the sale or other transfer of
the Series G Preferred Shares; and (4) the Company shall agree in writing with
any transferee of the Series G Preferred Share that the Company and such
transferee shall be bound by and entitled to the respective rights and
obligations of the Company and the Holder as set forth in this Section 4.
(B) LEGEND. (1) The Holder acknowledges and agrees that the
certificates for the Series G Preferred Shares will bear a
restrictive legend in substantially the following form (and a
stop-transfer order may be placed against transfer of the
certificates for the Series G Preferred Shares):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR APPLICABLE
STATE SECURITIES LAWS. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT
AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE ACT OR
APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL IN FORM,
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SUBSTANCE AND SCOPE REASONABLY ACCEPTABLE TO THE COMPANY THAT REGISTRATION
IS NOT REQUIRED UNDER THE ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER
THE ACT. ANY SUCH SALE, ASSIGNMENT OR TRANSFER MUST ALSO COMPLY WITH
APPLICABLE STATE SECURITIES LAWS.
Upon conversion of the Series G Preferred Shares into Common Shares,
the Company shall issue a Common Stock certificate or certificates without any
restrictive legend to the holder of such shares. Such Common Shares shall not be
subject to any stop transfer instructions and shall be freely transferable on
the books and records of the Company.
(2) The certificates for the Series G Preferred Shares shall bear
the following additional legends:
SECTION 2(e)(2) OF THE CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS
OF THE 10% CUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES G, PURSUANT TO
WHICH THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ISSUED PERMITS A
HOLDER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE TO CONVERT SUCH
SECURITIES IN ACCORDANCE WITH THE CERTIFICATE OF DESIGNATIONS WITHOUT
BEING REQUIRED TO PHYSICALLY SURRENDER THIS CERTIFICATE TO THE CORPORATION
UNLESS ALL OF THE SECURITIES REPRESENTED HEREBY ARE SO CONVERTED.
CONSEQUENTLY, FOLLOWING CONVERSION OF ANY OF THE SECURITIES REPRESENTED BY
THIS CERTIFICATE, THE NUMBER OF SHARES REPRESENTED BY THIS CERTIFICATE MAY
BE LESS THAN THE NUMBER OF SHARES STATED HEREON.
THE CORPORATION WILL FURNISH WITHOUT CHARGE TO EACH STOCKHOLDER WHO SO
REQUESTS, A STATEMENT OF THE POWERS, DESIGNATIONS, PREFERENCES AND
RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS OF EACH CLASS OF
STOCK OR SERIES THEREOF AND THE QUALIFICATIONS, LIMITATIONS OR
RESTRICTIONS OF SUCH PREFERENCES AND/OR RIGHTS.
(C) REPORTING STATUS. So long as the Holder beneficially owns any
of the Series G Preferred Shares or the Common Shares, the Company shall file
all reports required to be filed with the SEC pursuant to Section 13 or 15(d) of
the 1934 Act and the Company 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.
(D) NASD MATTERS. (1) The Company represents and warrants to the
Holder that (A) it has received the NASD's concurrence ("NASD Approval"), a copy
of which is attached hereto as EXHIBIT 4(D), with the Company's position that
the approval by the Company's stockholders given at a Special Meeting of the
Stockholders held on June 27, 1997 of the issuance of the Series E Preferred
Stock shall be deemed shareholder approval of the issuance of the Series G
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Preferred Stock for purposes of Rule 4460(i)(1)(D)(ii) (the "Rule") of the
Nasdaq National Market Issuer Designation Requirements such that the issuance of
Common Shares upon conversion of the Series G Preferred Stock would not be
subject to any restrictions under the Rule and (B) as a condition of such NASD
Approval, the NASD has required the Company to mail a notice to all stockholders
(the "Notice") advising them of the Exchange ten days prior to the Closing Date
(such ten day period is referred to herein as the "Stockholder Notice Period ).
The Company agrees to promptly prepare the Notice, obtain the NASD's prior
approval thereof, mail the Notice to its stockholders and file a Current Report
on Form 8-K with the SEC reporting the Exchange.
(2) If, notwithstanding the NASD Approval, at any time the Holder
is unable to receive on a timely basis Common Shares upon submission to the
Company of a notice of conversion of the Series G Preferred Shares by reason of
the Rule or the provisions of Section 4(i)(ii) of the Securities Purchase
Agreement, the Company shall be entitled to convert its Series G Preferred
Shares in accordance with Section 2(j) of the Certificate of Designations and
shall be entitled to receive liquidated damages pursuant to Section 4(i) of the
Securities Purchase Agreement.
(E) AMENDED PROSPECTUS. At least three business days prior to the
Closing Date, the Company shall provide to the Holder and its counsel for review
a draft amended prospectus, forming part of the Registration Statement, to be
filed by the Company on or before the Closing Date with the SEC covering the
resale of the Common Shares under the 1933 Act.
(F) PAYMENT OF DIVIDENDS ON SERIES E PREFERRED STOCK. For the
period commencing July 18, 1997 to and including the date prior to the Closing
Date, the Company agrees to pay the Holder dividends on its 4,000 Series E
Preferred Shares at the rate of ten percent (10%) per annum of the stated value
of the Series E Preferred Stock as if such 10% rate were set forth in Section 1
of the Certificate of Designations, Preferences and Rights of the Series E
Preferred Stock. Prior to the Closing Date the Company shall pay to the Holder
in cash an amount equal to all accrued and unpaid dividends on the Series E
Preferred Stock payable to and including the date prior to the Closing Date.
(G) EXPENSES. Whether or not the Closing occurs, the Company will
pay or reimburse up to $7,000 of the out-of-pocket expenses (including, without
limitation, legal fees and expenses) incurred by the Holder in connection with
this Agreement and the transactions contemplated hereby.
5. TRANSFER AGENT INSTRUCTIONS; CONVERSION PROCEDURE.
On or prior to the Closing Date, the Company will irrevocably
instruct (the "Transfer Agent Instructions") its transfer agent for the Common
Stock, ChaseMellon Shareholder Services L.L.C. (the "Transfer Agent"), to issue
certificates for Common Shares from time to time upon conversion of Series G
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Preferred Shares in such amounts as specified from time to time to the Transfer
Agent in the conversion notices surrendered in connection with such conversions.
The Transfer Agent Instructions shal provide that the certificates for the
Common Shares shall not bear any restrictive legend and the Common Shares shall
not be subject to any stop-transfer instructions. The Company warrants that no
instruction other than such instructions referred to in this Section 5 and
stop-transfer instructions to give effect to Section 4(a) hereof with respect to
the Series G Preferred Shares will be given by the Company to the Transfer Agent
and that the Common Shares shall otherwise be freely transferable on the books
and records of the Company as and to the extent provided in this Agreement.
Nothing in this Section 5 shall affect in any way the Holder's obligations and
agreement to comply with all applicable securities laws upon resale of the
Common Shares and to comply with the terms and conditions of the Certificate of
Designations. If the Holder provides the Company with an opinion of counsel
reasonably satisfactory in form, scope and substance to the Company that
registration of a resale by the Holder of any of the Series G Preferred Shares
in accordance with clause (1)(B) of Section 4(a) of this Agreement is not
required under the 1933 Act, the Company shall permit the transfer of such
Series G Preferred Shares.
6. CONDITIONS TO THE HOLDER'S OBLIGATIONS.
The Holder's obligation to exchange its Series E Preferred Shares
for Series G Preferred Shares is conditioned upon the following:
(a) Delivery by the Company to the Holder on the Closing Date of
duly executed certificates representing the Series G Preferred Shares duly
registered in the name of the Holder;
(b) Receipt by the Holder on or before the Closing Date of
confirmation of the filing of the Certificate of Designations with the Secretary
of State of the State of Delaware, in form reasonably satisfactory to the
Holder;
(c) The Company shall have transmitted to the SEC for filing,
pursuant to Rule 424(b) under the 1933 Act, an amended prospectus, in form and
substance reasonably satisfactory to the Holder, relating to the resale of the
Common Shares issuable upon conversion of the Series G Preferred Shares, and
shall have provided the Holder with a reasonable number of copies of such
amended prospectus;
(d) The Registration Statement has been declared effective by the
SEC, no stop-order or similar proceeding relating to the Registration Statement
shall be pending or threatened and the Registration Statement registers the
Common Shares for resale in compliance with the 1933 Act;
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(e) On the Closing Date, no legal action, suit or proceeding shall
be pending or threatened which seeks to restrain or prohibit the transactions
contemplated by this Agreement;
(f) The representations and warranties of the Company contained in
this Agreement shall have been true and correct on the date of this Agreement
and shall be true and correct on the Closing Date as if given on and as of the
Closing Date, and on or before the Closing Date the Company shall have performed
all covenants and agreements of the Company contained herein required to be
performed by the Company on or before the Closing Date (including, without
limitation, payment of the expenses of the Holder in accordance with Section
4(g));
(g) On the Closing Date, the Holder having received an opinion of
Atlas, Xxxxxxxx, Trop & Borkson, P.A., counsel for the Company, dated the
Closing Date, addressed to the Holder, in form, scope and substance reasonably
satisfactory to the Holder, substantially in the form of ANNEX II attached
hereto; and
(h) On or before the Closing Date, the Holder shall have received
a copy of the Transfer Agent Instructions together with confirmation that the
same have been given to and accepted by the Transfer Agent.
7. CONDITIONS TO THE COMPANY'S OBLIGATIONS.
The Company's obligations to exchange the new Series G Preferred
Shares for the Holder's Series E Preferred Shares is conditioned upon the
following:
(a) Delivery by the Holder to the Company for cancellation on the
Closing Date of certificates representing the Series E Preferred Shares,
together with executed stock powers;
(b) On the Closing Date, no legal action, suit or proceeding shall
be pending or threatened which seeks to restrain or prohibit the transactions
contemplated by this Agreement; and
(c) The representations and warranties of the Holder contained in
this Agreement shall have been true and correct on the date of this Agreement
and shall be true and correct on the Closing Date as if given on and as of the
Closing Date, and on or before the Closing Date the Holder shall have performed
all covenants and agreements of the Holder required to be performed by the
Holder on or before the Closing Date.
8. GOVERNING LAW; MISCELLANEOUS.
(a) This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Florida without regard to principles of
conflict of laws.
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(b) This Agreement may be executed in counterparts and by the
parties hereto on separate counterparts, all of which together shall constitute
one and the same instrument. A facsimile transmission of this Agreement bearing
a signature on behalf of a party hereto shall be legal and binding on such
party.
(c) The headings, captions and footers of this Agreement are for
convenience of reference and shall not form part of, or affect the
interpretation of, this Agreement.
(d) 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.
(e) No failure or delay by any party in exercising any right or
remedy under this Agreement or otherwise, and no course of dealing between the
parties, shall operate as a waiver thereof or amendment of this Agreement, nor
shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or exercise of any other right or
power.
(f) Neither this Agreement nor any term thereof (including this
paragraph) may be amended, changed, waived, discharged or terminated unless such
amendment, change, waiver, discharge or termination is in writing signed by the
party to be charged with enforcement.
(g) Any notices required or permitted to be given under the terms
of this Agreement, the Certificate of Designations, the Securities Purchase
Agreement or the Registration Rights Agreement shall be sent by mail or
delivered personally, by courier or by telephone line facsimile transmission and
shall be effective five days after being placed in the mail, if mailed,
certified, return receipt requested, or upon receipt, if delivered personally,
by courier or by telephone line facsimile transmission, in each case addressed
to a party. The addresses for such communications shall be:
If to the Company:
Viragen, Inc.
000 Xxxxxxxxx 00xx Xxxxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Mr. Xxxxxx Xxxxx or Xx. Xxxxxx X. Xxxxxx
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With a copy to:
Atlas, Xxxxxxxx, Trop & Borkson, P.A.
New River Center
000 Xxxx Xxx Xxxx Xxxx.
Xxxx Xxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
If to the Holder:
Advantage Fund Limited
x/x XXXXX
Xxxx Xxxxxxxxx 0
Xxxxxxx, Xxxxxxxxxxx Antilles
Facsimile: 011-599-9732-2008
With a copy to:
Genesee International, Inc.
00000 X.X. 0xx Xxxxxx
Xxxxx 0000
Xxxxxxxx, Xxxxxxxxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(h) This Agreement and the Certificate of Designations, together
with the Securities Purchase Agreement and the Registration Rights Agreement,
each as amended hereby, contain the entire understanding of the parties with
respect to the matters covered herein and therein.
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IN WITNESS WHEREOF, the parties have caused this Exchange Agreement
to be duly executed by their respective officers thereunto duly authorized as of
the date first above written.
VIRAGEN, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President
ADVANTAGE FUND LIMITED
By: /s/ X.X. xx Xxxxx
------------------------------------
Name: X.X. xx Xxxxx
Title: President
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SCHEDULE 3(H)
The Company is named as a defendant in XXXXXXX XXXX, AS TRUSTEE, VS.
XXXXXX XXXXX, ET AL. Case No. 94-14243-BKC-AJC, ADV. No. 97-0473-BKC-AJC-A. This
is an action filed by a bankruptcy trustee against the Company and other
defendants seeking a return of alleged preferential transfers. This matter is
preliminarily set for trial in November, 1997. Discovery is proceeding. This
action relates to alleged preferential transfers made to Sector & Associates
Ltd., now Viragen (Europe) Limited, prior to the Company's acquisition of the
latter. The Company denies that preferential transfers were made and will
vigorously defend the claims. In any event, to the extent any preferential
transfers were involved, they would pertain to the Company's majority-owned
subsidiary, Viragen (Europe) Limited, and not the Company.
The Company and its management have received from stockholders
various allegations of improper conduct and breach of fiduciary responsibilities
in connection with the issuance of various series of its Preferred Stock and
associated dilution. In the event of any litigation by its stockholders, the
Company would vigorously defend such claims.
