EXHIBIT 4.1
SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT, dated as of _______________, 2004, 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 agrees to pay to
the Company a purchase price of $.75 per share of Common Stock for the number of
shares indicated on the signature page hereto (the "Shares"), for the total
purchase price indicated on the signature page hereto (the "Purchase Price").
The Purchase Price shall be within five (5) days of the Closing Date (as defined
below) (the "Payment Date"). The payment shall be made pursuant to the payment
schedule attached hereto as Annex I. The Company shall issue Certificates (as
defined below) representing the Shares, and each Share shall have a Warrant
attached, as provided below. The Certificates for the Shares shall be in
substantially the same form as attached hereto as Annex II.
(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) "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.
(v) "Closing Date" means the date of the closing of the purchase and sale
of the Shares and Warrants, as provided herein.
(vi) "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 0000 Xxx.
(vii) "Escrow Agent" means the escrow agent identified in the Joint Escrow
Instructions attached hereto as Annex III (the "Joint Escrow Instructions").
(viii) "Escrow Funds" means the Purchase Price delivered to the Escrow
Agent as contemplated by Sections 1(c) and (d) hereof.
(ix) "Escrow Property" means the Escrow Funds and the Certificates
delivered to the Escrow Agent as contemplated by Section 1(c) hereof.
(x) "Finder" means Venture Catalyst, LLC.
(xi) "Holder" means the Person holding the relevant Securities at the
relevant time.
(xii) "Last Audited Date" means December 31, 2003.
(xiii) "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.
(xiv) "Person" means any living person or any entity, such as, but not
necessarily limited to, a corporation, partnership or trust.
(xv) "Piggyback Notice" shall have the meaning described in Section 9
hereof.
(xvi) "Principal Trading Market" means The Over the Counter Bulletin Board.
(xvii) "Purchase Price" shall have the meaning described in Section 1(a)(i)
hereof.
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(xviii) "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.
(xix) "Registrable Securities" means the Shares, the Warrants, the Warrant
Shares and any shares or other securities of the Company issued or issuable with
respect thereto upon any stock split, stock dividend, recapitalization or
similar event, excluding shares or other securities sold or transferred pursuant
to an effective registration statement, sold or otherwise transferred pursuant
to Rule 144 under the 1933 Act, sold or otherwise transferred pursuant to a
transfer not requiring registration under the 1933 Act, held by a Holder who at
such time is not an Affiliate of the Company and that are eligible for sale
pursuant to Rule 144(k) under the 1933 Act, and held by a Holder who at such
time is an Affiliate of the Company if all of such shares or other securities
are eligible for sale pursuant to Rule 144 under the 1933 Act and could be sold
in one transaction in accordance with the volume limitations contained in Rule
144(e)(1)(i) under the 0000 Xxx.
(xx) "Securities" means the Shares and the Warrants.
(xxi) "State of Incorporation" means Nevada.
(xxii) "Trading Day" means any day during which the Principal Trading
Market shall be open for business.
(xxiii) "Transaction Agreements" means this Securities Purchase Agreement,
the Common Stock Certificate, the Joint Escrow Instructions and the Warrants and
includes all ancillary documents referred to in those agreements.
(xxiv) "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
Escrow Agent.
(ii) No later than the Payment Date, but in any event promptly following
payment by the Purchaser to the Escrow Agent 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 the number of shares indicated on the signature
page hereto.
(iii) By signing this Agreement, each of the Purchaser and the Company,
subject to acceptance by the Escrow Agent, agrees to all of the terms and
conditions of, and becomes a party to, the Joint Escrow Instructions, all of the
provisions of which are incorporated herein by this reference as if set forth in
full.
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d. Method of Payment. Payment shall be made by wire transfer of funds or
via check to:
Provectus Pharmaceuticals, Inc.
0000 Xxx Xxxxx Xxxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxxx
pursuant to the wiring instructions provided in the Joint Escrow Instructions.
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 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.
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 V 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 VI hereto (the documents
listed on such Annex VI, to the extent available on XXXXX or otherwise provided
to the Purchaser as indicated on said Annex VI, collectively, the "Company's SEC
Documents").
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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.
j. The Purchaser has taken no action which would give rise to any claim by
any Person for brokerage commission, finder'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 covenant and warrant that they are 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 V 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.
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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 15,489,472 shares are outstanding as of September 30, 2004, 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 September 30, 2004, there
were 19,902,078 shares of Common Stock outstanding on a fully diluted basis. All
issued and outstanding shares of 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.
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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 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.
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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);
(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 V hereto or the
Company's SEC Documents.
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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 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 March 30, 2004, 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, Finders and Others. Except for payment of fees to the
Finder, 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, finder'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.
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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 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 Closing
Date, 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 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 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 and sold in
accordance with an 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):
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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.
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 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 Finder 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 150% of the number of Shares issued on the Payment Date, each Warrant
with an exercise price of $1.00. The Warrants will expire on the date which is
the third annual anniversary of the Payment Date. Each of the Warrants shall be
in the form annexed hereto as Annex VII.
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
11
(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. Finder Fees. The Company shall pay to the Finder 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, as well as fifteen percent (15%)
warrant commission. 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. 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
12
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 on the date which is the first Trading Day
after each of the conditions contemplated by Sections 7 and 8 hereof shall have
either been satisfied or been waived by the party in whose favor such conditions
run. The Payment Date will occur simultaneously with the Closing Date, as
provided in Annex I.
b. Notwithstanding anything to the contrary contained herein, the Escrow
Agent will be authorized to release the Escrow Funds to the Company and to
others and to release the other Escrow Property on the Closing Date upon
satisfaction of the conditions set forth in Sections 7 and 8 hereof and as
provided in the Joint Escrow Instructions.
7. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
The Purchaser understands that the Company's obligation to sell the Shares
to the Purchaser pursuant to this Agreement on the Closing Date is conditioned
upon:
a. The execution and delivery of this Agreement, the Joint Escrow
Instructions and the Investor Questionnaire attached hereto as Annex VIII by the
Purchaser;
b. Delivery by the Purchaser to the Escrow Agent of good funds as payment
in full of an amount equal to the Purchase Price due for the Shares in
accordance with Annex I of this Agreement;
c. The accuracy on the Payment Date of the representations and warranties
of the Purchaser contained in this Agreement and the performance by the
Purchaser on or before such date of all covenants and agreements of the
Purchaser required to be performed on or before such date; and
d. There shall not be in effect any law, rule or regulation prohibiting or
restricting the transactions contemplated hereby, or requiring any consent or
approval which shall not have been obtained.
8. CONDITIONS TO THE PURCHASER'S OBLIGATION TO PURCHASE.
The Company understands that the Purchaser's obligation to purchase the
Shares on the Closing Date and on each subsequent Installment Payment Date is
conditioned upon:
a. The execution and delivery of this Agreement and the other Transaction
Agreements by the Company;
b. Delivery by the Company to the Escrow Agent of the Certificates in
accordance with this Agreement;
13
c. The accuracy in all material respects on the Payment Date of the
representations and warranties of the Company contained in this Agreement and
the performance by the Company on or before such date of all covenants and
agreements of the Company required to be performed on or before such date;
d. On the Closing Date, the Purchaser shall have received an opinion of
counsel for the Company, dated as of the Closing Date, in form, scope and
substance reasonably satisfactory to the Purchaser, substantially to the effect
set forth in Annex IV attached hereto;
e. There shall not be in effect any law, rule or regulation prohibiting or
restricting the transactions contemplated hereby, or requiring any consent or
approval which shall not have been obtained; and
f. From and after the date hereof to and including the Closing Date, each
of the following conditions will remain in effect: (i) the trading of the Common
Stock shall not have been suspended by the SEC or on the Principal Trading
Market; (ii) trading in securities generally on the Principal Trading Market
shall not have been suspended or limited; and (iii) no minimum prices shall been
established for securities traded on the Principal Trading Market.
9. RIGHT TO PIGGYBACK.
Any time during the period beginning on the Closing Date and ending on the
second anniversary thereof, if the Company proposes to register any of its
securities under the Securities Act (other than a registration pursuant to a
registration on Form S-4 or any successor form or an offering of securities by
the Company in connection with an employee benefit, share dividend, share
ownership or dividend reinvestment plan) and the registration form to be used
may be used for the registration of Registrable Securities, the Company will
give prompt written notice (but in no event less than 15 days before the
anticipated filing date of a registration statement filed to register such
securities) to all Holders of its intention to effect such a registration (each,
a "Piggyback Notice") and the Company will include in such registration, on such
terms and conditions as the other securities to be included therein, all
Registrable Securities with respect to which the Corporation has received
written requests for inclusion therein within 10 days after the date of sending
of the Piggyback Notice.
10. 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.
14
11. 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.
12. GOVERNING LAW: MISCELLANEOUS.
a. This Agreement shall be governed by and interpreted in accordance with
the laws of the State of Tennessee 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 Xxxx County, Tennessee, or in
the United States District Court for the Eastern District of Tennessee sitting
at Knoxville 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.
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.
15
13. 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
Purchaser: To the address set forth on the Investor Questionnaire attached
hereto as Annex VIII.
with a copy to:
___________________________________________
___________________________________________
___________________________________________
___________________________________________
Escrow Agent: First Tennessee Bank National Association
000 Xxxxx Xxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Corporate Department 280, Xxxx Xxxxxxx
16
14. 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]
17
The Purchase hereby agrees to purchase _______________ Shares at $.75 per
Share for a total Purchase Price of $________________.
IN WITNESS WHEREOF, this Securities Purchase Agreement has been duly
executed by the Purchaser as of the date set forth below.
______________________________
Date: , 2004 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: , 2004
-----------------------------
18
ANNEX I
PAYMENT SCHEDULE
Payment Date.................... Within five (5) days of closing
ANNEX I
ANNEX II
FORM OF COMMON STOCK CERTIFICATE
ANNEX III
ANNEX III
JOINT ESCROW INSTRUCTIONS
JOINT ESCROW INSTRUCTIONS
______________, 2004
Dear First Tennessee Bank National Association:
As Escrow Agent for Provectus Pharmaceuticals, Inc., a Nevada corporation (the
"Company"); the "Purchasers" as that term is defined in the Securities Purchase
Agreement (the "Purchase Agreement") dated as of the date hereof, to which a
copy of these Joint Escrow Instructions is attached as Annex III, you are hereby
authorized and directed to hold the documents delivered to you pursuant to the
terms of the Purchase Agreement, in accordance with the instructions set forth
below. All terms not defined herein shall have the meanings ascribed to them in
the Purchase Agreement.
15. Within five (5) days of the Closing Date, you are directed to:
a. Accept via wire transfer from the Purchaser the Purchase Price indicated
on the signature page of the Purchase Agreement.
b. Wire transfer the cash portion of the Commission in the amount of ten
percent (10%) pursuant to the following wire instructions:
c. Wire transfer the remaining amount of to the Company pursuant to the
following wire instructions:
First Tennessee Bank - Memphis, Tennessee
Branch: Xxxxx, Tennessee
ABA # 000000000
Account # 100777125
16. This escrow shall terminate upon the performance in full of the
Agreement.
ANNEX III
17. Your duties hereunder may be altered, amended, modified or revoked only
by a writing signed by all of the parties hereto.
18. You shall be obligated only for the performance of such duties as are
specifically set forth herein and may rely and shall be protected in relying or
refraining from acting on any instrument reasonably believed by you to be
genuine and to have been signed or presented by the proper party or parties. You
shall not be personally liable for any act you may do or omit to do hereunder as
Escrow Agent while acting in good faith and in the exercise of your own good
judgment, and any act done or omitted by you pursuant to the advice of your own
attorneys shall be conclusive evidence of such good faith.
19. You are hereby expressly authorized to disregard any and all warnings
given by any of the parties hereto or by any other person or corporation,
excepting only orders or process of courts of law, and are hereby expressly
authorized to comply with and obey orders, judgments or decrees of any court. In
case you obey or comply with any such order, judgment or decree of any court,
you shall not be liable to any of the parties hereto or to any other person,
firm or corporation by reason of such compliance, notwithstanding any such
order, judgment or decree being subsequently reversed, modified, annulled, set
aside, vacated or found to have been entered without jurisdiction.
20. You shall not be liable in any respect on account of the identity,
authorities or rights of the parties executing or delivering or purporting to
execute or deliver the Agreement or any documents or papers deposited or called
for hereunder.
21. If you reasonably require other or further instruments in connection
with these Joint Escrow Instructions or obligations in respect hereto, the
necessary parties hereto shall join in furnishing such instruments.
22. It is understood and agreed that should any dispute arise with respect
to the delivery and/or ownership or right of possession of the securities held
by you hereunder, you are authorized and directed to retain in your possession
without liability to anyone all or any part of said securities until such
dispute shall have been settled either by mutual written agreement of the
parties concerned or by a final order, decree or judgment of a court of
competent jurisdiction after the time for appeal has expired and no appeal has
been perfected, but you shall be under no duty whatsoever to institute or defend
any such proceedings.
23. Any notice required or permitted hereunder shall be given in writing
and shall be deemed effectively given upon personal delivery including delivery
by express courier, or four (4) days after deposit in the United States Post
ANNEX III
Office, by registered or certified mail with postage and fees prepaid, addressed
to each of the other parties entitled to such notice at the following addresses,
or at such other addresses as a party may designate by ten (10) days' advance
written notice to each of the other parties hereto.
COMPANY:
PROVECTUS PHARMACEUTICALS, INC.
0000 Xxx Xxxxx Xxxxxxx, Xxxxx X
Xxxxxxxxx, XX 00000
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
Purchasers: To the notice addresses on Exhibit A hereto.
Escrow Agent: First Tennessee Bank National Association
000 Xxxxx Xxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Corporate Department 280, Xxxx Xxxxxxx
24. Each party hereto agrees to reimburse you for all actual expenses
incurred by you in acting hereunder and to indemnify you and to hold you
harmless against any loss, liability and expense incurred without gross
negligence or bad faith on your part arising out of or in connections with the
acceptance or administration by you of your duties hereunder, including the
costs and expenses of defending yourself against any claim of liability
hereunder.
25. By signing these Joint Escrow Instructions, you become a party hereto
only for the purpose of said Joint Escrow Instructions; you do not become a
party to the Purchase Agreement or the Redemption Agreement.
26. This instrument shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns.
ANNEX III
17. This Agreement shall be governed by and interpreted and determined in
accordance with the laws of the State of Tennessee, as such laws are applied by
Tennessee courts to contracts made and to be performed entirely in Tennessee by
residents of that state.
ANNEX III
IN WITNESS WHEREOF, these Joint Escrow Instructions have been duly executed
by the Company, the Escrow Agent and the Purchasers as of the date set forth
below.
PROVECTUS PHARMACEUTICALS, INC.
By:
--------------------------------
Title:
-----------------------------
Date: , 2004
------------------------
ESCROW AGENT:
-----------------------------------
Date: , 2004
------------------------
PURCHASER:
------------------------------------
Date: , 2004 By:
----------------- ---------------------------------
Its:
--------------------------------
ANNEX III
EXHIBIT A
Purchase Notice Addresses
Purchaser Notice Address
--------- --------------
Copy to:
ANNEX III
ANNEX IV
OPINION OF COUNSEL
ANNEX IV
ANNEX V
COMPANY DISCLOSURE MATERIALS
None.
ANNEX V
ANNEX VI
COMPANY'S SEC DOCUMENTS AVAILABLE ON XXXXX
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 VI
ANNEX VII
FORM OF WARRANT
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.
PROVECTUS PHARMACEUTICALS, INC.
COMMON STOCK PURCHASE WARRANT
1. Issuance; Certain Definitions. In consideration of good and valuable
consideration, the receipt of which is hereby acknowledged by PROVECTUS
PHARMACEUTICALS, INC., a Nevada corporation (the "Company"), _____________ or
registered assigns (the "Holder") is hereby granted the right to purchase at any
time until 5:00 p.m., New York City time, on _______, 2007, ____________________
(_________) fully paid and nonassessable shares of the Company's Common Stock,
$0.001 par value per share (the "Common Stock"), at an initial exercise price
per share (the "Exercise Price") of $1.00 per share, subject to further
adjustment as set forth herein. Capitalized terms not otherwise herein defined
shall have the meanings ascribed to them in the Securities Purchase Agreement
between the Company and the Holder dated _______, 2004 (the "Agreement").
2. Exercise of Warrants.
2.1 Method of Exercise.
(a) This Warrant is exercisable in whole or in part at any time and from
time to time. Such exercise shall be effectuated by submitting to the
Company (either by delivery to the Company or by facsimile
transmission as provided in Section 8 hereof) a completed and duly
executed Notice of Exercise (substantially in the form attached to
this Warrant) as provided in this paragraph. The date such Notice of
Exercise is faxed to the Company shall be the "Exercise Date,"
provided that the Holder of this Warrant tenders this Warrant
Certificate to the Company within five (5) business days thereafter.
The Notice of Exercise shall be executed by the Holder of this Warrant
and shall indicate the number of shares then being purchased pursuant
to such exercise. Upon surrender of this Warrant Certificate, together
with appropriate payment of the Exercise Price for the shares of
Common Stock purchased, the Holder shall be entitled to receive a
certificate or certificates for the shares of Common Stock so
purchased.
(b) If the Notice of Exercise form elects a "cash" exercise, the Exercise
Price per share of Common Stock for the shares then being exercised
shall be payable in cash or by certified or official bank check.
ANNEX VII
1
(c) The Holder shall be deemed to be the holder of the shares issuable to
it in accordance with the provisions of this Section 2.1 on the
Exercise Date
2.2 Limitation on Exercise. Notwithstanding the provisions of this Warrant,
the Agreement or of the other Transaction Agreements, in no event (except (i) as
specifically provided in this Warrant as an exception to this provision, (ii)
while there is outstanding a tender offer for any or all of the shares of the
Company's Common Stock, or (iii) at the Holder's option, on at least sixty-five
(65) days' advance written notice from the Holder) shall the Holder be entitled
to exercise this Warrant, or shall the Company have the obligation to issue
shares upon such exercise of all or any portion of this Warrant to the extent
that, after such exercise the sum of (1) the number of shares of Common Stock
beneficially owned by the Holder and its affiliates (other than shares of Common
Stock which may be deemed beneficially owned through the ownership of the
unexercised portion of the Warrants or other rights to purchase Common Stock),
and (2) the number of shares of Common Stock issuable upon the exercise of the
Warrants with respect to which the determination of this proviso is being made,
would result in beneficial ownership by the Holder and its affiliates of more
than 4.99% of the outstanding shares of Common Stock (after taking into account
the shares to be issued to the Holder upon such exercise). For purposes of the
proviso to the immediately preceding sentence, beneficial ownership shall be
determined in accordance with Section 13(d) of the Securities Exchange Act of
1934, as amended (the "1934 Act"), except as otherwise provided in clause (1) of
such sentence. The Holder, by its acceptance of this Warrant, further agrees
that if the Holder transfers or assigns any of the Warrants, such assignment
shall be made subject to the transferee's or assignee's specific agreement to be
bound by the provisions of this Section 2.2 as if such transferee or assignee
were the original Holder hereof.
3. Reservation of Shares. The Company hereby agrees that at all times during the
term of this Warrant there shall be reserved for issuance upon exercise of this
Warrant such number of shares of its Common Stock as shall be required for
issuance upon exercise of this Warrant (the "Warrant Shares").
4. Mutilation or Loss of Warrant. Upon receipt by the Company of evidence
satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant, and (in the case of loss, theft or destruction) receipt of reasonably
satisfactory indemnification, and (in the case of mutilation) upon surrender and
cancellation of this Warrant, the Company will execute and deliver a duplicate
Warrant and any such lost, stolen, destroyed or mutilated Warrant shall
thereupon become void.
5. Rights of the Holder. The Holder shall not, by virtue hereof, be entitled to
any rights of a stockholder in the Company, either at law or equity, and the
rights of the Holder are limited to those expressed in this Warrant and are not
enforceable against the Company except to the extent set forth herein.
6. Protection Against Dilution and Other Adjustments.
6.1 Adjustment Mechanism. If an adjustment of the Exercise Price is
required pursuant to this Section 6, the Holder shall be entitled to purchase
such number of additional shares of Common Stock as will cause (i) the total
number of shares of Common Stock Holder is entitled to purchase pursuant to this
Warrant, multiplied by (ii) the adjusted Exercise Price per share, to equal
(iii) the dollar amount of the total number of shares of Common Stock Holder is
entitled to purchase before adjustment multiplied by the total Exercise Price
immediately before adjustment.
ANNEX VII
2
6.2 Capital Adjustments. In case of any stock split or reverse stock split,
stock dividend, reclassification of the Common Stock, recapitalization, merger
or consolidation, or like capital adjustment affecting the Common Stock of the
Company prior to the exercise of this Warrant or its applicable portion, the
provisions of this Section 6 shall be applied as if such capital adjustment
event had occurred immediately prior to the exercise date of this Warrant and
the original Exercise Price had been fairly allocated to the stock resulting
from such capital adjustment; and in other respects the provisions of this
Section shall be applied in a fair, equitable and reasonable manner so as to
give effect, as nearly as may be, to the purposes hereof.
6.3 Spin Off. If, for any reason, prior to the exercise of this Warrant in
full, the Company spins off or otherwise divests itself of a part of its
business or operations or disposes all or of a part of its assets in a
transaction (the "Spin Off") in which the Company does not receive compensation
for such business, operations or assets, but causes securities of another entity
to be issued to security holders of the Company, then the Company shall notify
the Holder at least thirty (30) days prior to the record date with respect to
such Spin Off.
7. Transfer to Comply with the Securities Act. This Warrant has not been
registered under the Securities Act of 1933, as amended, (the "Act") and has
been issued to the Holder for investment and not with a view to the distribution
of either the Warrant or the Warrant Shares. Except for transfers to officers,
employees and affiliates of the Holder, neither this Warrant nor any of the
Warrant Shares or any other security issued or issuable upon exercise of this
Warrant may be sold, transferred, pledged or hypothecated in the absence of an
effective registration statement under the Act relating to such security or an
opinion of counsel satisfactory to the Company that registration is not required
under the Act. Each certificate for the Warrant, the Warrant Shares and any
other security issued or issuable upon exercise of this Warrant shall contain a
legend on the face thereof, in form and substance satisfactory to counsel for
the Company, setting forth the restrictions on transfer contained in this
Section.
8. Notices. Any notice or other communication required or permitted hereunder
shall be in writing and shall be delivered personally, telegraphed, sent by
facsimile transmission or sent by certified, registered or express mail, postage
pre-paid. Any such notice shall be deemed given when so delivered personally,
telegraphed, telexed or sent by facsimile transmission, or, if mailed, four days
after the date of deposit in the United States mails, as follows:
If to the Company, to:
PROVECTUS PHARMACEUTICALS, INC.
0000 Xxx Xxxxx Xxxxxxx, Xxxxx X,
Xxxxxxxxx, XX 00000
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
XX Xxx 0000 XXX
XXXXX XXX
0
Xxxxxxx Xxxx, Xxxxxxxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
If to the Holder, to:
Any party may give notice in accordance with this Section to designate to
another address or person for receipt of notices hereunder.
9. Supplements and Amendments; Whole Agreement. This Warrant may be amended or
supplemented only by an instrument in writing signed by the parties hereto. This
Warrant contains the full understanding of the parties with respect to the
subject matter hereof and thereof and there are no representations, warranties,
agreements or understandings other than expressly contained herein and therein.
10. Governing Law. This Warrant shall be deemed to be a contract made under the
laws of the State of Tennessee. The Company and each Purchaser hereby submit to
the jurisdiction of any state court of competent jurisdiction in and for Xxxx
County, Tennessee, or in the United States District Court for the Eastern
District of Tennessee sitting at Knoxville 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.
11. Jury Trial Waiver. The Company and the Holder 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 this Warrant.
12. Counterparts. This Warrant may be executed in any number of counterparts and
each of such counterparts shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute but one and the same
instrument.
13. Descriptive Headings. Descriptive headings of the several Sections of this
Warrant are inserted for convenience only and shall not control or affect the
meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the Company has executed this Warrant as of the ____ day
of ______, 2004.
PROVECTUS PHARMACEUTICALS, INC.
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
ANNEX VII
4
ANNEX VIII
INVESTOR QUESTIONNAIRE
PART I. INVESTOR IDENTIFICATION
1. Name of Investor:___________________________________________________________
2. Number of shares of Common Stock Investor wishes to purchase: ______________
3. Total Investment Amount: $__________________________________________________
($.75 multiplied by the number of shares)
4. Manner in which title is to be held (please check one):
____ Individual ____ Partnership or LLC ____ Corporation ____ Trust
5. Address: Telephone Numbers:
_______________________________________ Home (_____) _____-_______________
Street
_______________________________________ Business (_____) _____-___________
City State Zip Code
6. Investor is a resident or domiciliary of the State of:______________________
(i)
PART II. INVESTOR SUITABILITY REPRESENTATIONS
The Investor understands that the Common Stock (the "Securities") offered
by the Company will not be registered under the Securities Act of 1933, as
amended (the "1933 Act"), or any state securities laws.
The Investor understands that the Company will sell the Securities only to
persons whom it believes to be "accredited investors," as defined by Regulation
D promulgated by the Securities and Exchange Commission under the 1933 Act
("Accredited Investors"). The Investor understands that he, she, or it must,
therefore, provide information to the Company which will enable the Company to
determine whether the Investor qualifies as an Accredited Investor.
The Investor represents and warrants to the Company that the Investor is an
Accredited Investor for the following reason (Please xxxx the appropriate
paragraph; only one paragraph need be marked):
_______ 1. Individual Net Worth Suitability:
The Investor's individual net worth or joint net worth with
his spouse exceeds $1,000,000. (Note: This suitability
requirement may be selected only by a natural person, and NOT
by a corporation, partnership, limited liability company,
trust, estate, unincorporated association or other entity.
OR
_______ 2. Individual Net Income Suitability:
The Investor's individual net income was in excess of $200,000
in each of the two most recent years, or his or her joint
income with his spouse was in excess of $300,000 in each of
those years, and he reasonably expects his net income or joint
net income with his spouse to reach such level in the current
year. (Note: This suitability requirement may be selected only
by a natural person, and NOT by a corporation, partnership,
limited liability company, trust, estate, unincorporated
association or other entity.
OR
_______ 3. Certain Qualified Organizations:
The Investor is (check one):
______ a. A corporation, partnership, limited
liability company, business trust or an
organization described in Section 501(c)(3)
ANNEX VIII
6
of the Internal Revenue Code (tax exempt
organization), not formed for the specific
purpose of acquiring the securities offered,
having total assets in excess of $5,000,000.
______ b. A trust, with total assets in excess of
$5,000,000, not formed for the specific
purpose of acquiring the Securities, whose
purchase is directed by a Sophisticated
Investor who has such knowledge and
experience in financial and business matters
that he or she is capable of evaluating the
merits and risks of an investment in the
Securities.
______ c. A bank, savings and loan association or
other similar institution (as defined in
Sections 3(a)(2) and 3(a)(5)(A) of the 1933
Act).
______ d. An insurance company (as defined in
Section 2(13) of the 1933 Act).
______ e. An investment company registered under
the Investment Company Act of 1940.
______ f. A business development company as
defined in Section 2(a)(48) of the
Investment Company Act of 1940 or private
business development company as defined in
Section 202(a)(22) of the Investment
Advisers Act of 1940.
______ g. A Small Business Investment Company
licensed by the U.S. Small Business
Administration under Sections 301(c) or (d)
of the Small Business Investment Act of
1958.
OR
_______ 4. Other Entity Suitability:
The Investor is a corporation, a partnership, a limited
liability company, an unincorporated association or other
similar entity, and that each owner of an equity interest in
the entity satisfies the suitability requirements of paragraph
(1), (2) or (3) above.
[Remainder of page is blank]
ANNEX VIII
SIGNATURE PAGE
Investor represents and warrants that (a) all the information contained
herein is complete and accurate and contains no material omissions and may be
relied upon by the Company, and (b) Investor will notify the Company in writing
immediately of any change in any of such information.
IN WITNESS WHEREOF, Investor has executed this Subscription Agreement on
the date set forth below.
Dated: ____________, 2004
SIGNATURE FOR INDIVIDUALS SIGNATURE FOR ENTITIES
(if filing a joint investment execute
signature lines for each investor)
--------------------------------------- ------------------------------
(Signature) (Print Name of Entity)
--------------------------------------- By:
(Print Name of Individual) ---------------------------
(Signature)
------------------------------
(Print Name of Person Signing)
---------------------------------------
(Signature) Its:
--------------------------
(Title)
--------------------------------------- Address:
(Print Name of Individual) ----------------------
----------------------
Address: ----------------------
-------------------------------
-------------------------------
-------------------------------
ANNEX VIII
