AVAX TECHNOLOGIES, INC. CONVERTIBLE NOTE AND WARRANT PURCHASE AGREEMENT Dated as of October 24, 2008
Exhibit
10.1
AVAX
TECHNOLOGIES, INC.
CONVERTIBLE
NOTE AND WARRANT
Dated
as of October 24, 2008
AVAX
TECHNOLOGIES, INC.
CONVERTIBLE
NOTE
AND WARRANT
October
24, 2008
To
the Purchasers Listed on the Signature Pages Hereto:
Ladies
and Gentlemen:
AVAX
Technologies, Inc., a Delaware corporation (the “Company”), proposes, subject to
the terms and conditions contained herein, to sell to the Purchasers listed
on
the signature pages hereto (individually, a “Purchaser” and collectively the
“Purchasers”), up to $1,500,000 aggregate principal amount of the Company’s 6%
Convertible Notes Due December 31, 2008 (individually, a “Note” and
collectively, the “Notes”) and warrants to purchase up to 15, fully paid and
non-assessable shares of common stock, par value $.004 per share, of the Company
(the “Common Stock”) for $0.10 per share (individually a “Warrant” and
collectively, the “Warrants”) pursuant to this Convertible Note and Warrant
Purchase Agreement (the “Agreement”). The Notes will be convertible into
shares of Common Stock or other securities of the Company, as more fully
described therein.
The
sale
of the Notes and Warrants to the Purchasers will be made without registration
of
the Notes or Warrants under the Securities Act of 1933, as amended (the
“Securities Act”) in reliance upon an exemption from the registration
requirements of the Securities Act.
Section
1. Purchase
and Sale of Notes and Warrants.
Subject to the terms and conditions of this Agreement, the Company will issue
and sell to the Purchasers, and the Purchasers will purchase from the Company
(i) a Note at a purchase price of 100% of the principal amount of the Note
(the
“Purchase Price”) and (ii) a Warrant. The Purchase Price is set forth on that
Purchaser’s signature page, and the number of shares of Common Stock subject to
the Warrant issued to each Purchaser is set forth on the signature page for
that
Purchaser. The Note, the Warrants and the equity securities issuable upon
conversion or exercise thereof are collectively referred to herein as the
“Securities.”
Section
2. Closing.
The closing (the “Closing”) of the purchase and sale of each Note and the
Warrant (the “Transaction”) will take place by telephone, facsimile and express
mail on such date as each Purchaser and the Company may agree, provided that
no
Notes or Warrants may be issued by the Company pursuant to this Agreement after
[_____], 2008 or for an aggregate principal amount of Notes of less than
$1,500,000. The date of the Closing for each Purchaser is referred to as the
“Closing Date.” At the Closing, each Purchaser shall deliver to the
Company, by check or wire transfer of immediately available funds to the
Company’s bank account, the Purchase Price, and the Company shall issue and
deliver to each Purchaser a Note and a Warrant against payment of the Purchase
Price.
Section
3. Conditions
to the Obligations of Purchaser at Closing.
The obligation of each Purchaser to purchase and pay for the Note and the
Warrant at Closing is subject to the satisfaction on or prior to the Closing
Date of the following conditions, each of which may be waived by a
Purchaser:
3.1
Representations and Warranties.
The representations and warranties of the Company contained in Section 6 must
be
true and correct in all material respects on and as of the Closing Date except
to the extent that the representations and warranties relate solely to an
earlier date in which case the representations and warranties must be true
and
correct in all material respects on and as of such earlier date.
3.2 Performance
of Covenants.
The Company will have performed or complied in all material respects with all
covenants and agreements required to be performed by it on or prior to the
Closing pursuant to this Agreement.
3.3 No
Injunctions; etc.
No
court or governmental injunction, order or decree prohibiting the purchase
and
sale of the Note and Warrant will be in effect. There will not be in
effect any law, rule or regulation prohibiting or restricting the sale or
requiring any consent or approval of any person that has not been obtained
which
prohibits the consummation of any of the transactions contemplated by this
Agreement.
3.4 Closing
Documents.
The Company will have delivered to the Purchaser (a) a certificate of the
Corporate Secretary of the Company, dated as of the first Closing Date,
certifying (i) the attached are true and complete copies of the Certificate
of
Incorporation and Bylaws of the Company, as in effect on the date of such
certification; and (ii) the attached are true and complete copies of the
resolutions of the Board of Directors of the Company authorizing the execution,
delivery and performance of this Agreement, the Notes and the Warrants as in
effect on the date of such certification.
3.5 Waivers
and Consents.
The Company will have obtained all consents and waivers necessary to execute
and
deliver this Agreement and all related documents and agreements and to issue
and
deliver the Note and the Warrant, and all consents and waivers will be in full
force and effect.
3.6 Satisfaction
of Purchaser.
All proceedings to be taken in connection with the Transaction are to be
consummated at or prior to the Closing, and all documents incidental thereto
shall be reasonably satisfactory in form and substance to Purchaser and its
counsel, and Purchaser and its counsel shall have received copies of all
documents and information which it may have reasonably requested in connection
with the Transaction and of all corporate proceedings in connection therewith,
in form and substance reasonably satisfactory to Purchaser and its
counsel.
Section
4. Conditions to the Obligations of the Company at
Closing.
The obligation of the Company to issue and sell the Note and the Warrant to
the
Purchaser at Closing is subject to the satisfaction on or prior to the Closing
Date of the following conditions, each of which may be waived by the
Company:
4.1 Representations
and Warranties.
The representations and warranties of the Purchaser contained in this Agreement
must be true and correct in all material respects as of the Closing
Date.
4.2 No
Injunctions.
No
court or governmental injunction, order or decree prohibiting the purchase
or
sale of the Note and Warrant will be in effect.
Section
5. Representations and Warranties of Purchaser.
Each Purchaser represents and warrants to the Company that:
5.1
Authority, etc.
Purchaser has the power and authority to execute and deliver this Agreement
and
to perform its obligations hereunder. The execution and delivery by
Purchaser of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary corporate or
other action on the part of Purchaser. If Purchaser is an individual,
Purchaser has the legal capacity to enter into this Agreement. This
Agreement constitutes a legal, valid and binding obligation of Purchaser,
enforceable against Purchaser in accordance with its terms, subject to laws
of
general application relating to bankruptcy, insolvency and the relief of debtors
and rules of law governing specific performance, injunctive relief or other
equitable remedies, and to limitations of public policy.
5.2 Reliance
on Exemptions.
Purchaser understands that the Securities are being offered and sold to it
in
reliance on specific exemptions from the registration requirements of United
States federal and state securities laws and that the Company is relying in
part
upon the truth and accuracy of, and such Purchaser's compliance with, the
representations, warranties, agreements, acknowledgments and understandings
of
such Purchaser set forth in this Agreement in order to determine the
availability of such exemptions and the eligibility of such Purchaser to acquire
the Securities.
5.3
Legends. Purchaser
understands that the Notes and the Warrants and any securities issued in respect
of or exchange for the Notes and the Warrants, may bear one or all of the
following legends:
(a) “THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH
A
VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE
OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF
1933.”
(b) Any
legend required by the securities laws of any state to the extent such laws
are
applicable to the shares represented by the certificate so
legended.
5.4
Accredited
Investor.
Purchaser is an “accredited investor” as defined in Rule 501(a) of Regulation D
under the Securities Act. Purchaser is acquiring the Securities for its
own account and not with a present view to, or for sale in connection with,
any
distribution thereof in violation of the registration requirements of the
Securities Act. The Purchaser has such knowledge and experience in financial,
tax, and business matters, including, without limitation, experience in
investments by actual participation, so as to enable it to utilize the
information made available to it in connection with the Agreement, to evaluate
the merits and risks of an investment in the Securities and to make an informed
investment decision with respect thereto.
5.5 Access
to Information.
Purchaser acknowledges that it has been afforded (i) the opportunity to ask
the
questions it deemed necessary of, and to receive answers from, representatives
of the Company concerning the Company and the terms and conditions of the
Transaction; and (ii) the opportunity to request such additional information
concerning the Company as the Company possesses or can acquire without
unreasonable effort or expense.
5.6
No General Solicitation.
Purchaser is not purchasing the Note and the Warrant as a result of any
advertisement, article, notice or other communication published in a newspaper
or magazine or similar media or broadcast over television or radio, whether
closed circuit, or generally available, or any seminar, meeting or other
conference whose attendees were invited by any general solicitation or general
advertising.
5.7 Ability
to Bear Economic Risk. Purchaser
acknowledges that investment in the Securities involves a high degree of risk,
and represents that it is able, without materially impairing its financial
condition, to hold the Securities for an indefinite period of time and to suffer
a complete loss of its investment.
5.8 Risk
Factors. Purchaser
has carefully considered the potential risks relating to the Company and the
Securities. Purchaser fully understands that the Company is a development stage
company and that the Company is subject to all of the risks inherent in any
development stage company. Purchaser understands that Purchaser’s investment in
the Securities is a speculative investment which involves a high degree of
risk
of loss of the Purchaser’s entire investment. Purchaser understands that the
Company has made no assurance that there will be any future financings or
liquidity in the Company.
Section
6. Representations and Warranties of the Company.
The Company represents and warrants to each Purchaser that as of the date hereof
and the Closing Date:
6.1 Organization,
Good Standing and Qualification.
The Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. The Company has full
corporate power and authority to own and hold its properties and to conduct
its
business. The Company is duly licensed and qualified to do business, and
in good standing, in each jurisdiction in which the nature of its business
requires licensing, qualification or good standing, except for any failure
to be
so licensed or qualified or in good standing that would not have a material
adverse effect on the Company or its business, properties, prospects, results
of
operations, assets, condition (financial or otherwise), or on its ability to
perform its obligations under this Agreement.
6.2
Corporate Power, Authorization; Enforceability.
(a) The Company has full corporate power and authority to execute, deliver
and
enter into this Agreement and to consummate the transactions contemplated
hereby. All action on the part of the Company, its directors or
stockholders necessary for the authorization, execution, delivery and
performance of this Agreement by the Company, the authorization, sale, issuance
and delivery of the Securities contemplated hereby and the performance of the
Company’s obligations hereunder has been taken. Each of the Note and the
Warrant to be purchased on the Closing Date has been duly authorized and, when
issued in accordance with this Agreement, will constitute a legal, valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms and will not be subject to any preemptive rights or other similar
rights of stockholders of the Company. This Agreement has been duly
executed and delivered by the Company and constitutes a legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, subject to laws of general application relating to
bankruptcy, insolvency and the relief of debtors and rules of law governing
specific performance, injunctive relief or other equitable remedies, and to
limitations of public policy.
(b)
When the Note and the Warrant are delivered and paid for pursuant to this
Agreement on the Closing Date, the Note will be convertible into Common Stock
or
other securities of the Company in accordance with its terms and the Warrant
will be exercisable for shares of Common Stock in accordance with its terms;
the
Common Stock initially issuable upon conversion of the Note and upon exercise
of
the Warrant has been duly authorized and reserved for issuance upon such
conversion or exercise and, when and if issued upon such conversion of the
Note
or exercise of the Warrant, will be validly issued, fully paid and
nonassessable, and the stockholders of the Company have no preemptive rights
with respect to the Securities.
6.3
Financial Statements and SEC Documents.
(a) Included in the Company’s Form 10-K for the year ended December 31,
2007, are true and complete copies of the audited consolidated balance sheet
(the “Balance Sheet”) of the Company as of December 31, 2007, and the
related audited consolidated statements of operations, stockholders’ equity and
cash flows for the years ended December 31, 2007 and 2006 and for the
period from January 12, 1990 (incorporation) to December 31, 2007 (the “Audited
Financial Statements”), accompanied by the report of Xxxxxx, Xxxxxxx &
Xxxxxxxxx, LLP with respect to the years ended December 31, 2007 and 2006.
The Company’s Quarterly Reports on Form 10-Q for the quarter ended
March 31, 2008 is available to the Purchaser on the Securities and Exchange
Commission’s (the “SEC”) XXXXX System. Included in the Quarterly Report
are the requisite unaudited consolidated balance sheets of the Company and
the
related unaudited consolidated statements of operations and statements of cash
flows (the “Unaudited Financial Statements,” and together with the “Audited
Financial Statements,” the “Financial Statements”). The Financial
Statements have been prepared in accordance with generally accepted accounting
principles, applied consistently with the past practices of the Company (except
as may be indicated in the notes thereto), and as of their respective dates,
fairly present, in all material respects, the financial position of the Company
and the results of its operations as of the time and for the periods indicated
therein.
(b)
A copy of each report, schedule, effective registration statement and definitive
proxy statement filed by the Company with the SEC (as the documents may have
been amended since the time of their filing, the “SEC Documents”), has also been
made available to the Purchaser via the SEC’s XXXXX System. As of their
respective filing dates, each SEC Document complied in all material respects
with the requirements of the Securities Act or the Securities Exchange Act
of
1934, as amended (the “Exchange Act”), as applicable, and the rules and
regulations of the SEC thereunder applicable to the SEC Document. The SEC
Documents, taken as a whole, neither contain any untrue statement of a material
fact nor omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
6.4
Material Misstatements.
The information contained in the SEC Documents, including the Financial
Statements, does not contain an untrue statement of a material fact or omit
to
state a material fact necessary in order to make the statements made herein
and
therein, in light of the circumstances under which they were made, not
misleading.
6.5 No
Integration.
Neither the Company, nor any of its affiliates, nor any person acting on their
behalf, has directly or indirectly made any offers or sales of any security
or
solicited any offers to buy any security under circumstances that would prevent
the parties hereto from consummating the transactions contemplated hereby
pursuant to an exemption from registration under the Securities Act pursuant
to
the provisions of Regulation D. The transactions contemplated hereby are
exempt from the registration requirements of the Securities Act, assuming
the accuracy of the representations and warranties herein contained of Purchaser
to the extent relevant for such determination. The issuance of the
Securities to the Purchaser will not be integrated with any other issuance
of
the Company’s securities (past or current) that requires stockholder consent or
that would result in a violation of the Securities Act.
6.6
Litigation.
Except as set forth in the SEC Documents and updates provided by the Company
to
the Purchaser, there is no material action, suit, proceeding, inquiry or
investigation before or by any court, public board, governmental agency or
authority, or self-regulatory organization or body pending or threatened against
or affecting the Company or any of its directors or officers in their capacities
as such.
Section
7. Covenants of the Company.
The Company covenants and agrees as follows:
7.1 Reporting
Status.
So
long as the Company is subject to the reporting requirements of the Exchange
Act, the Company will use its best efforts to file timely all reports required
to be filed with the SEC pursuant to the Exchange Act.
7.2
Form D.
The Company will file a Form D within 15 days of the Closing Date with respect
to the Note and the Warrant with the SEC as required under Regulation D under
the Securities Act, and will provide a copy thereof to the
Purchaser.
7.3
Integration.
The Company will insure that the issuance of the Note and the Warrant to the
Purchaser will not be integrated with any other issuance of the Company’s
securities in the future, which requires stockholder approval or which would
result in a violation of the Securities Act.
7.4 Offering
of Securities.
The Company will use its reasonable efforts to close an offering of securities
on or before November 15, 2008, in which the gross proceeds to the Company
are
not less than $15,000,000 (the “Offering”). Upon the closing of the
Offering, the Note will automatically convert into shares of Common Stock or
the
other securities issued in the Offering, in accordance with the terms of the
Note.
Section
8. Survival of Representations and Warranties.
Notwithstanding any investigation made by any party to this Agreement, all
representations and warranties made by the Company and the Purchaser herein
and
in the Note and the Warrant delivered pursuant hereto, shall survive for a
period of one year after the Closing Date and shall thereupon expire together
with the associated right to indemnification pursuant to Section 10(a)(iv),
unless a claim for indemnification (whether or not fixed as to liability or
liquidated as to amount) shall be made with respect thereto prior to the end
of
such period, in which case such representation or warranty with respect to
which
such claim has been made, and the associated right to indemnification shall
survive until such claim is satisfied, settled or dismissed.
Section
9. Registration Rights.
9.1 In
connection with the Offering, the Company anticipates filing a registration
statement with the SEC to register for reoffering and resale the securities
sold
by the Company in the Offering. Upon completion of the Offering, the
Purchaser shall have the right, upon the same terms as the investors in the
Offering, to include in any registration statement of the Company filed in
connection therewith, all of the Registrable Securities held by the
Purchaser. For the purposes of this Agreement, “Registrable Securities”
means the Common Stock or other securities of the Company issuable upon
conversion of the Note and the Common Stock issuable upon exercise of the
Warrant.
9.2 If
the
Offering has not been completed by January 1, 2009, or if the Offering has
been
completed by such date but does not obligate the Company to register the
securities issued thereby with the SEC, at any time thereafter, Purchasers
holding at least one-third of the Registrable Securities (including for this
purpose, the Registrable Securities issuable upon conversion of any Notes and
exercise of any Warrants held by such Purchasers) may demand, and Company shall
be required to (i) use all reasonable efforts to conduct an offering of the
Registrable Securities in which such Registrable Securities are sold to an
underwriter for reoffering to the public, and (ii) upon written request of
Purchasers holding at least one-third of the Registrable Securities (including
for this purpose, the Registrable Securities issuable upon conversion of any
Notes and exercise of any Warrants held by such Purchasers) (the “Registration
Request”), that the Company prepare, and, as soon as practicable but in no event
later than 90 days after the date of the Registration Request (the “Filing
Deadline”), file with the SEC a Registration Statement on Form S-3 covering the
resale of all of the Registrable Securities. In the event that Form S-3 is
unavailable for such a registration, the Company shall use such other form
as is
available for such a registration. Any registration statement prepared pursuant
hereto (including (in each case) the prospectus, amendments and supplements
to
such registration statement or prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by reference
or
deemed to be incorporated by reference in such registration statements, the
“Registration Statement”) shall register for resale all Registrable Securities
held by Purchaser. The Company shall use all reasonable efforts to have the
Registration Statement declared effective by the SEC as soon as practicable,
but
in no event later than the date that is 120 days after Filing Deadline (the
“Effectiveness Deadline”). The Company shall use commercially reasonable efforts
to keep the Registration Statement continuously effective under the Securities
Act until the fifth anniversary of the date such Registration Statement is
declared effective by the SEC or such earlier date when all Registrable
Securities covered by such Registration Statement have been sold publicly or
may
be sold pursuant to paragraph (k) of Rule 144 (the “Effectiveness
Period”).
9.3 If
at any
time the SEC takes the position that the offering of some or all of the
Registrable Securities in a Registration Statement is not eligible to be made
on
a delayed or continuous basis under the provisions of Rule 415 as a result
of a
characterization by the SEC of the transaction described by the Registration
Statement as a primary offering by the Company, the Company shall use all
reasonable efforts to persuade the SEC that the offering contemplated by the
Registration Statement is a valid secondary offering and not an offering “by or
on behalf of the issuer” as defined in Rule 415. In the event that, despite the
Company’s reasonable efforts and compliance with the terms of this Section 9,
the SEC refuses to alter its position, the Company shall, upon obtaining consent
of the Purchasers of a majority of the Registrable Securities participating
in
the Registration Statement, (i) remove from the Registration Statement such
portion of the Registrable Securities (the “Cut Back Shares”) and/or (ii) agree
to such restrictions and limitations on the registration and resale of the
Registrable Securities as the SEC may require to assure the Company’s compliance
with the requirements of Rule 415. Any Registrable Securities not able to be
included in a Registration Statement filed pursuant to this Section 9 shall
reduce the number of Registrable Securities of each Holder covered by such
Registration Statement on a pro-rata
basis
based on the number of Registrable Securities purchased by each such Holder
and
the Company shall have no liability to any Holder as a result of the
Registration Statement covering less than all of the Registrable Securities
under the circumstances described in this proviso. Within 9 months, or such
earlier time as permitted by the SEC, of the initial registration filed
hereunder being declared effective, the Company shall file an additional
registration statement containing the Cut Back Shares. With regard to the new
Registration Statement, all of the provisions of this Section 9 shall again
be
applicable to the Cut Back Shares.
9.4 In
connection with the Company's registration obligations hereunder, the Company
shall:
(a)
(i)
Prepare and file with the SEC such amendments, including post-effective
amendments, to each Registration Statement and the prospectus used in connection
therewith as may be necessary to keep the Registration Statement continuously
effective as to the applicable Registrable Securities for the Effectiveness
Period and prepare and file with the SEC such additional Registration Statements
in order to register for resale under the Securities Act all of the Registrable
Securities; (ii) cause the related prospectus to be amended or supplemented
by
any required prospectus supplement, and as so supplemented or amended to be
filed pursuant to Rule 424; (iii) respond as promptly as reasonably possible,
and in any event within twenty-one days, to any comments received from the
SEC
with respect to the Registration Statement or any amendment thereto and as
promptly as reasonably possible provide the Purchasers true and complete copies
of all correspondence from and to the SEC relating to the Registration
Statement; and (iv) comply in all material respects with the provisions of
the
Securities Act and the Exchange Act with respect to the disposition of all
Registrable Securities covered by the Registration Statement during the
applicable period in accordance with the intended methods of disposition by
the
Purchasers thereof set forth in the Registration Statement as so amended or
in
such prospectus as so supplemented.
(c)
Use
commercially reasonable efforts to avoid the issuance of or, if issued, obtain
the withdrawal of (i) any order suspending the effectiveness of any Registration
Statement, or (ii) any suspension of the qualification (or exemption from
qualification) of any of the Registrable Securities for sale in any
jurisdiction, as soon as possible.
(e)
Furnish
to each Purchaser, without charge, at least one conformed copy of each
Registration Statement and each amendment thereto, including financial
statements and schedules, all documents incorporated or deemed to be
incorporated therein by reference, and all exhibits to the extent requested
by
such Purchaser (including those previously furnished or incorporated by
reference) promptly after the filing of such documents with the
SEC.
(f)
Promptly
deliver to each Purchaser, without charge, as many copies of the prospectus
or
prospectuses (including each form of prospectus) as such Purchaser may
reasonably request. The Company hereby consents to the use of such prospectus
by
each of the selling Purchasers in connection with the offering and sale of
the
Registrable Securities covered by such prospectus.
(g)
(i)
In
the time and manner required by the Over the Counter Bulletin Board, or any
national securities exchange, market or trading or quotation facility on which
the Common Stock is then listed or quoted (each a “Trading Market”), prepare and
file with such Trading Market an additional shares listing application covering
all of the Registrable Securities; (ii) take all steps necessary to cause such
Registrable Securities to be approved for listing on each Trading Market as
soon
as possible thereafter; (iii) provide to the Purchasers evidence of such
listing; and (iv) maintain the listing of such Registrable Securities on each
such Trading Market.
(h)
Prior
to
any public offering of Registrable Securities, use its best efforts to register
or qualify or cooperate with the selling Purchasers in connection with the
registration or qualification (or exemption from such registration or
qualification) of such Registrable Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions within the United States
as
any Purchaser requests in writing, to keep each such registration or
qualification (or exemption therefrom) effective during the Effectiveness Period
and to do any and all other acts or things necessary or advisable to enable
the
disposition in such jurisdictions of the Registrable Securities covered by
a
Registration Statement; provided
however,
that
the Company shall not be obligated to file any general consent to service of
process or to qualify as a foreign corporation or as a dealer in securities
in
any jurisdiction in which it is not so qualified or to subject itself to
taxation in respect of doing business in any jurisdiction in which it is not
otherwise subject.
(i)
Cooperate
with the Purchasers to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be delivered to a transferee
pursuant to a Registration Statement, which certificates shall be free, to
the
extent permitted by this Agreement, of all restrictive legends, and to enable
such Registrable Securities to be in such denominations and registered in such
names as any such Purchasers may request.
(j)
As
promptly as reasonably possible, prepare any appropriate supplement or
amendment, including a post-effective amendment, to the Registration Statement
or a supplement to the related prospectus or any document incorporated or deemed
to be incorporated therein by reference, and file any other required document
so
that, as thereafter delivered, neither the Registration Statement nor such
prospectus will contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(k)
Cooperate
with any due diligence investigation undertaken by the Purchasers in connection
with the sale of Registrable Securities, including, without limitation, by
making available any documents and information requested by the Purchasers;
provided
however,
that
the Company will not deliver or make available to any Purchaser material,
nonpublic information unless such Purchaser specifically requests in advance
to
receive material, nonpublic information in writing.
(l)
Comply
with all applicable rules and regulations of the SEC.
Section
10. Indemnification.
(a) The Company will indemnify, to the extent permitted by law, the Purchaser
and each director, officer or controlling person of the Purchaser within the
meaning of Section 15 of the Securities Act against all losses, claims, damages,
liabilities and expenses, (or action in respect thereof), including any of
the
foregoing incurred in settlement of any litigation, commenced or threatened,
arising out of or based on (i) any untrue statement or alleged untrue statement
of a material fact contained in, or information incorporated by reference into,
any registration statement or prospectus (or any amendment or supplement
thereto) or any preliminary prospectus prepared in connection with the
registration contemplated by Section 9, (ii) any omission or alleged omission
to
state therein a material fact required to be stated therein or necessary to
make
the statements therein not misleading, (iii) any failure by the Company to
fulfill and perform any agreement, covenant or undertaking herein, or (iv)
any
failure or breach of the representations and warranties of the Company set
forth
in Section 6 to be accurate as of the date hereof and as of the Closing Date,
and will promptly reimburse the Purchaser and each director, officer or
controlling person of the Purchaser for reasonable legal and other expenses
incurred in connection with investigating or defending any claim, loss, damage,
liability or action as incurred; provided
however,
that
the Company will not be liable in any such case to the extent that any such
loss, claim, damage, liability or action arises directly out of or is based
upon
an untrue statement or alleged untrue statement or by any omission or alleged
omission made in such registration statement or prospectus made in reliance
upon
and in conformity with written information furnished by the Purchaser
specifically for use in the preparation of the registration statement or
prospectus, provided
further, however,
that
the Company will not be liable in any such case to the extent that any such
loss, claim, damage, liability or action arises directly out of or is based
primarily upon an untrue statement or omission made in any preliminary
prospectus or final prospectus if (i) the Purchaser failed to send or deliver
a
copy of the final prospectus or prospectus supplement with or prior to the
delivery of written confirmation of the sale of the Registrable Securities,
and
(ii) the final prospectus or prospectus supplement would have corrected such
untrue statement or omission. The indemnification obligation of the
Company with respect to clause (iv) above, will survive for a period ending
on
the first anniversary of the Closing Date, unless a claim for indemnification
(whether or not fixed as to liability or liquidated as to amount) is made with
respect hereto prior to the end of such period, in which case the right to
indemnification shall survive until such claim is satisfied, settled or
dismissed.
(b)
In
connection with any Registration Statement in which the Purchaser may
participate, the Purchaser will furnish to the Company in writing the
information as is reasonably requested by the Company for use in the
Registration Statement or prospectus and will indemnify, to the extent permitted
by law, the Company, its directors and officers and each person or entity,
if
any, who controls the Company within the meaning of Section 15 of the Securities
Act, against any losses, claims, damages, liabilities and expenses resulting
from any untrue statement of a material fact or any omission of a material
fact
required to be stated in the shelf registration statement or prospectus or
any
amendment thereof or supplement thereto or necessary to make the statements
therein not misleading, but only to the extent the losses, claims, damages,
liabilities or expenses are caused by an untrue statement or by an omission
made
in reliance upon and in conformity with the written information specifically
furnished by the Purchaser to the Company for use in connection with the
preparation of the shelf registration statement or prospectus; provided
however,
that
the indemnity will not apply to the extent that the loss, claim, damage,
liability or expense arises out of or is based upon a violation of this
Agreement by the Company. If the offering pursuant to any registration is
made through underwriters, the Purchaser agrees to enter into an underwriting
agreement in customary form with the underwriters and to indemnify the
underwriters, their officers and directors, if any, and each person or entity
who controls the underwriters within the meaning of the Securities Act to the
same extent as hereinabove provided with respect to indemnification by the
Purchaser. Notwithstanding the foregoing or any other provision of this
Agreement, in no event will the Purchaser be liable for any losses, claims,
damages, liabilities or expenses in excess of the net proceeds received by
Purchaser upon the disposition of Registrable Securities pursuant to the
registration statement giving rise to such claim.
(c) Promptly
after receipt by an indemnified party under Section 10(a) or (b) of notice
of
any claim as to which indemnity may be sought, including the commencement of
any
action or proceeding, the indemnified party will, if a claim in respect thereof
may be made against the indemnifying party under this Section, promptly notify
the indemnifying party in writing of the commencement thereof; provided that
the
failure of the indemnified party to so notify the indemnifying party will not
relieve the indemnifying party from its obligations under this Section except
to
the extent that the indemnifying party is adversely affected by the failure.
In
case any action or proceeding is brought against any indemnified party, and
it
notifies the indemnifying party of the commencement thereof, the indemnifying
party and its counsel may conduct the defense of any action with counsel
approved by the indemnified party (which approval will not be unreasonably
withheld or delayed) although in such event the indemnified party will be
entitled to participate therein at the indemnified party’s expense, and after
notice from the indemnifying party to the indemnified party of its election
to
so assume the defense thereof, the indemnifying party will not be liable to
the
indemnified party under that Section for any legal or any other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof unless incurred at the written request of the indemnifying party.
Notwithstanding the above, the indemnified party will have the right to employ
counsel of its own choice in any action or proceeding (and be reimbursed by
the
indemnifying party for the reasonable fees and expenses of the counsel and
other
reasonable costs of the defense) if representation of the indemnified party
by
the counsel retained by the indemnifying party would be inappropriate due to
actual or potential differing interests or conflicts between the indemnified
party and any other party represented by the counsel in the action or proceeding
or counsel to the indemnified party is of the opinion that it would not be
desirable for the same counsel to represent both the indemnifying party and
the
indemnified party because the representation might result in a conflict of
interest; provided
however,
that
the indemnifying party will not in connection with any one action or proceeding
or separate but substantially similar actions or proceedings arising out of
the
same general allegations, be liable for the reasonable fees and expenses of
more
than one separate firm of attorneys at any time for all indemnified parties,
except to the extent that local counsel, in addition to regular counsel, is
required in order to effectively defend against the action or proceeding.
An indemnifying party will not be liable to any indemnified party for any
settlement or entry of judgment concerning any action or proceeding effected
without the consent of the indemnifying party.
(d) If
the indemnification provided for in Section 10(a) or (b) is held by a court
of
competent jurisdiction to be unavailable under applicable law to an indemnified
party in respect of any losses, claims, damages or liabilities referred to
therein, then each applicable indemnifying party, in lieu of indemnifying the
indemnified party, will contribute to the amount paid or payable by the
indemnified party as a result of the losses, claims, damages or liabilities
in
the proportion as is appropriate to reflect the relative fault of the Company
on
the one hand and of the indemnified party on the other in connection with the
statements or omissions which resulted in the losses, claims, damages, or
liabilities, as well as any other relevant equitable considerations
including the relative benefits to the parties. The relative fault of the
Company on the one hand and of the indemnified party on the other will be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the Company or by the indemnified party
and
the parties’ relative intent, knowledge, access to information and opportunity
to correct or prevent the statement or omission. The amount paid or
payable by a party as a result of the losses, claims, damages and liabilities
referred to above will be deemed to include, subject to the limitations set
forth in Section 10(c), any legal or other fees or expenses reasonably incurred
by the party in connection with investigating or defending any action or
claim. No person or entity guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) will be entitled to
contribution from any person or entity that is not guilty of fraudulent
misrepresentation.
Section
11. Miscellaneous.
11.1
Notices.
Any notice or other communication given hereunder will be deemed sufficient
if
in writing and sent by registered or certified mail, return receipt requested,
or delivered by hand against written receipt therefor, or sent by confirmed
facsimile, addressed to:
If
to the
Company:
AVAX
Technologies, Inc.
2000
Xxxxxxxx Xxxxxx
Xxxxx
000
Xxxxxxxxxxxx,
XX 00000
Attn:
Xxxxxxxx Xxxxxxxx
Facsimile:
(000) 000-0000
With
a
copy to:
Mintz,
Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
Chrysler
Center
660
Xxxxx
Xxxxxx
Xxx
Xxxx,
XX 00000
Attn:
Xxxxx Xxxxxxx
Facsimile:
(000) 000-0000
If
to the
Purchaser:
To
the
name and address or facsimile number of the Purchaser on the signature page
hereto.
Notices
will be deemed to have been given or delivered on the date of mailing, except
notices of change of address, which will be deemed to have been given or
delivered when received.
11.2 Successors
and Assigns.
This Agreement will be binding upon and inure to the benefit of the parties
hereto and to their respective heirs, legal representatives, successors and
assigns.
11.3 Entire
Agreement.
This Agreement, the Note and the Warrant collectively set forth the entire
agreement and understanding among the parties as to the subject matter hereof
and merges and supersedes all prior discussions, agreements and understandings
of any and every nature among them. This Agreement may be amended only by
mutual written agreement of the Company and the Purchasers holding a majority
of
the principal amount of Notes issued under this Agreement.
11.4 Governing
Law.
The terms and provisions hereof will be construed in accordance with and
governed by the laws of the State of Delaware without regard to that State’s
conflicts of law principles.
11.5
Severability.
The holding of any provision of this Agreement to be invalid or unenforceable
by
a court of competent jurisdiction will not affect any other provision of this
Agreement, which will remain in full force and effect. If any provision of
this Agreement is declared by a court of competent jurisdiction to be invalid,
illegal or incapable of being enforced in whole or in part, the provision will
be interpreted so as to remain enforceable to the maximum extent permissible
consistent with applicable law and the remaining conditions and provisions
or
portions thereof will nevertheless remain in full force and effect and
enforceable to the extent they are valid, legal and enforceable, and no
provisions will be deemed dependent upon any other covenant or provision unless
so expressed herein.
11.6
No Waiver.
A
waiver by either party of a breach of any provision of this Agreement will
not
operate, or be construed, as a waiver of any subsequent breach by that same
party.
11.7 Further
Assurances.
The parties agree to execute and deliver all further documents, agreements
and
instruments and take further action as may be necessary or appropriate to carry
out the purposes and intent of this Agreement. Any documentary, stamp tax
or similar issuance or transfer taxes due as a result of the conveyance,
transfer or sale of the Note and the Warrant between the Purchaser (or any
permitted transferee), on the one hand, and the Company, on the other hand,
pursuant to this Agreement will be borne by the Company.
11.8 Counterparts.
This Agreement may be executed in two or more counterparts, each of which will
be deemed an original, but all of which will together constitute the same
instrument.
11.9
No Third Party Beneficiaries.
Nothing in this Agreement creates in any person not a party to this Agreement
or
specifically identified in this Agreement any legal or equitable right, remedy
or claim under this Agreement, and this Agreement is for the exclusive benefit
of the parties hereto and those persons specifically identified by the parties
hereto in the provisions above, including, for the avoidance of doubt, where
applicable each director, officer or controlling person of each Purchaser.
The parties expressly recognize that this Agreement is not intended to create
a
partnership, joint venture or other similar arrangement between any of the
parties or their respective affiliates.
IN
WITNESS WHEREOF,
the
undersigned have duly executed this Note Purchase Agreement as of the date
first
above written.
|
NAME
OF PURCHASER
|
|
AVAX
TECHNOLOGIES, INC.
|
||||||
|
|
|
|
||||||
|
By:
|
|
|
By:
|
|
|
|||
|
Name:
|
Xxxxxxxx
Xxxxxxxx
|
|||||||
|
Title:
|
Chief
Executive Officer
|
|||||||
|
|
|
|
||||||
|
Dated:
,
2008
|
|
Dated:
,
2008
|
||||||
|
|
|
|
||||||
|
Address:
|
|
|
||||||
|
|
|
|
||||||
|
Facsimile:
|
|
|
||||||
|
Tax
Id No.:
|
|
|
||||||
Principal
Amount of Notes Purchased:
$
Warrants
to purchase
shares
of
Common
Stock
Purchase
Price: $
Closing
Date:
,
2008
