NOTE REPURCHASE AGREEMENT
Exhibit 10.1
THIS NOTE REPURCHASE AGREEMENT (this “Agreement”) to repurchase VaxGen, Inc. 51/2% Convertible
Senior Subordinated Notes Due April 1, 2010 is made as of February 4, 2008, by and between Xmark
Opportunity Fund, L.P. (“Fund L.P.”) and Xmark Opportunity Fund, Ltd. (“Fund Ltd.”, and together
with Fund L.P., the “Holders”), on the one hand, and VaxGen, Inc., a Delaware corporation
(“Company”), on the other hand.
W I T N E S S E T H:
WHEREAS, the Holders are the owners and holders of those two certain 51/2% Convertible Senior
Subordinated Notes Due April 1, 2010 (together, the “Notes”), in the aggregate principal amount of
One Million Five Hundred Thousand Dollars ($1,500,000), issued under an Indenture, dated as of
April 5, 2005 (the “Indenture”), between the Company and U.S. Bank National Association, as trustee
(the “Trustee”);
WHEREAS, the Notes, to date, have not matured; and
WHEREAS, the Holders, desiring to sell the Notes, approached the Company with respect thereto,
and the Company in turn desires to repurchase the Notes.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the Holders and the Company hereby agree as follows:
1. Sale of Notes. Subject to the terms and conditions of this Agreement, the Company
agrees to purchase from the Holders, and the Holders agree to sell to the Company, the Notes at an
aggregate purchase price of Seven Hundred Fifty Thousand Dollars ($750,000), plus accrued and
unpaid interest thereon in the amount of Twenty-Eight Thousand Four Hundred Sixteen Dollars and
Sixty-Seven Cents ($28,416.67) (collectively, the “Purchase Price”). The purchase and sale of the
Notes shall take place at the offices of Cooley Godward Kronish, 0000 Xxxxxxx Xxxxxx, Xxxx Xxxx,
Xxxxxxxxxx 00000 at 9:00 A.M. (local time), on the date hereof (which time and place are designated
as the “Closing”). At the Closing, the Holders shall deliver to the Company the Notes, duly
endorsed or accompanied by an assignment duly endorsed and in a form acceptable to the Trustee,
against payment of the Purchase Price therefor by wire transfer in the amounts and using the wire
transfer instructions as set forth on Exhibit A hereto. Upon receipt by the Holders of the
Purchase Price, the Company shall become the legal and beneficial owner of the Notes and of all
rights and interest therein or related thereto and to the monies due and to become due under the
terms of the Notes. The Holders hereby agree that upon receipt of the Purchase Price, the Notes
shall be cancelled and the Company shall have no further obligation to the Holders thereunder.
2. Representations and Warranties of the Holders. Each of the Holders hereby
represents and warrants to the Company with respect to the Note issued to such Holder that:
2.1 Ownership of Note. The Holder has, and at the Closing will have, good and
marketable right, title and interest (legal and beneficial) in and to the Note, free and clear of
all liens, pledges, security interests, charges, contractual obligations, claims or encumbrances of
any kind. Upon payment for the Note in accordance with this Agreement, the Holder will convey the
Note to the Company free and clear of all liens, pledges, security interests, charges, contractual
obligations, claims or encumbrances of any kind.
2.2 Organization; Authorization. The Holder has full power and authority to enter
into this Agreement. The execution, delivery and performance by the Holder of this Agreement has
been duly authorized by all requisite action by the Holder and this Agreement constitutes a valid
and binding obligation of the Holder, enforceable against the Holder in accordance with its terms,
except as enforcement may be limited by general principles of equity and by bankruptcy, insolvency
and similar laws affecting creditors’ rights and remedies generally.
2.3 No Consent Required. No consent, authorization, approval, order, license,
certificate or permit or act of or from, or declaration or filing with, any foreign, federal,
state, local or other governmental authority or regulatory body or any court or other tribunal or
any party to any contract, agreement, instrument, lease or license to which the Holder is a party,
is required for the execution, delivery or performance by the Holder of this Agreement or any of
the other agreements, instruments and documents being or to be executed and delivered hereunder or
in connection herewith or for the consummation of the transactions contemplated hereby.
2.4 Disclosure of Information. The Holder has received all the information it
considers necessary or appropriate to determine whether to sell the Note to the Company pursuant to
this Agreement. The Holder acknowledges (i) the Company has not made any representation or
warranty, express or implied, except as set forth herein, regarding any aspect of the sale and
purchase of the Note, the operation or financial condition of the Company or the value of the Note,
(ii) that it is not relying upon the Company in making its decision to sell the Note to the Company
pursuant to this Agreement and (iii) that the Company is relying upon the truth of the
representations and warranties in this Section 2 in connection with the purchase of the Note
hereunder.
2.5 Tax Consequences. The Holder has had an opportunity to review the federal, state
and local tax consequences of the sale of the Note to the Company and the transactions contemplated
by this Agreement with its own tax advisors. The Holder is relying solely on such advisors and not
on any statements or representations of the Company.
2.6 No Conflict. Neither the execution and delivery of this Agreement or the
consummation of any of the transactions contemplated hereby nor compliance with or fulfillment of
the terms, conditions and provisions hereof or thereof will conflict with, result in a breach of
the terms, conditions or provisions of, or constitute a default (with or without notice or lapse of
time, or both), or an event creating rights of acceleration, termination or cancellation or a loss
of rights under (i) any material note, instrument, agreement, mortgage, lease, license, franchise,
permit or other authorization, right, restriction or obligation to which the Holder is a
party or by which the Holder or any of its properties is bound, (ii) any judgment or decree
applicable to, or affecting, the Holder or (iii) any statute, law or rule to which the Holder is
subject.
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2.7 No Solicitation. The Holder has made no general solicitation in connection with
the sale of the Note, acknowledges that it independently approached the Company regarding the
transactions contemplated hereby and that the Company did not initiate or attempt to initiate the
transactions contemplated hereby.
3. Representations and Warranties of the Company. The Company hereby represents and
warrants to the Holders that:
3.1 Organization; Authorization. The Company has full power and authority to enter
into this Agreement. The execution, delivery and performance by the Company of this Agreement has
been duly authorized by all requisite action by the Company and this Agreement constitutes a valid
and binding obligation of the Company, enforceable against the Company in accordance with its
terms, except as enforcement may be limited by general principles of equity and by bankruptcy,
insolvency and similar laws affecting creditors’ rights and remedies generally.
3.2 No Consent Required. No consent, authorization, approval, order, license,
certificate or permit or act of or from, or declaration or filing with, any foreign, federal,
state, local or other governmental authority or regulatory body or any court or other tribunal or
any party to any contract, agreement, instrument, lease or license to which the Company is a party,
is required for the execution, delivery or performance by the Company of this Agreement or any of
the other agreements, instruments and documents being or to be executed and delivered hereunder or
in connection herewith or for the consummation of the transactions contemplated hereby.
3.3 No Conflict. Neither the execution and delivery of this Agreement or the
consummation of any of the transactions contemplated hereby nor compliance with or fulfillment of
the terms, conditions and provisions hereof or thereof will conflict with, result in a breach of
the terms, conditions or provisions of, or constitute a default (with or without notice or lapse of
time, or both), or an event creating rights of acceleration, termination or cancellation or a loss
of rights under (i) any material note, instrument, agreement, mortgage, lease, license, franchise,
permit or other authorization, right, restriction or obligation to which the Company is a party or
by which the Company or any of its properties is bound, (ii) any judgment or decree applicable to,
or affecting, the Company or (iii) any statute, law or rule to which the Company is subject.
3.4 No Litigation. There is no action, suit, proceeding, judgment, claim or
investigation pending or, to the knowledge of the Company, threatened against the Company which
could reasonably be expected in any manner to challenge or seek to prevent, enjoin, alter or
materially delay any of the transactions contemplated by this Agreement.
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4. Securities Act; Transfer Restrictions. The Company hereby acknowledges
that the (i) securities are not registered pursuant to the Securities Act of 1933, as amended,
and (ii) the Notes and the common stock underlying the Notes may only may be disposed of in
compliance with Federal and State securities laws.
5. Miscellaneous.
5.1 Governing Law. This Agreement shall be governed by and construed under the laws
of the State of New York, without regard to its choice of law provisions. The parties hereto
hereby agree that any action brought under this Agreement or related to the transactions
contemplated hereby shall be brought in a Federal or State court located in the County of San
Francisco in the State of California.
5.2 Counterparts. This Agreement may be executed in two or more counterparts and by
facsimile or electronic signature, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
5.3 Publicity. The Holders will use reasonable commercial efforts to keep the terms
and existence of this transaction confidential, provided that the Holder may share the details of
this transaction in confidence with its attorneys, investors and financial and tax advisors, and
may advise other potential purchasers of the Notes that the Notes have been repurchased by the
Company. The Holders shall not be prohibited from referring communications with any other party
regarding the transactions contemplated hereby to the Company.
5.4 Titles and Subtitles. The titles and subtitles used in this Agreement are used
for convenience only and are not to be considered in construing or interpreting this Agreement.
5.5 Notices. All notices and other communications given or made pursuant hereto shall
be in writing and shall be deemed effectively given: (i) upon personal delivery to the party to be
notified, (ii) when sent by confirmed facsimile if sent during the normal business hours of the
recipient; if not, then on the next business day, (iii) five (5) days after having been sent by
registered or certified mail, return receipt requested, postage prepaid or (iv) one (1) day after
deposit with a nationally-recognized overnight courier, specifying next-day delivery, with written
verification of receipt. All communications shall be sent to the respective parties at the
addresses set forth on the signature pages attached hereto (or at such other addresses as shall be
specified by notice given in accordance with this Section 5.5).
5.6 Amendment and Waivers. Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively), only with the written consent of Holders and
the Company.
5.7 Further Assurances. Each party hereby agrees to execute any additional documents
and take any additional actions as may be reasonably necessary to carry out the terms of this
Agreement.
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5.8 Severability. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, such provision shall be excluded from this Agreement and the
balance of this Agreement shall be interpreted as if such provision were so excluded and shall be
enforceable in accordance with its terms.
5.9 Entire Agreement. This Agreement and the documents referred to herein constitute
the entire agreement among the parties and no party shall be liable or bound to any other party in
any manner by any warranties, representations or covenants except as specifically set forth herein
or therein.
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IN WITNESS WHEREOF, the Holders and the Company have executed this Agreement effective as of
the date and year first above written.
| XMARK OPPORTUNITY FUND, L.P. | ||
By:
|
XMARK OPPORTUNITY GP, LLC, its General Partner | |
By:
|
XMARK OPPORTUNITY PARTNERS, LLC, its Sole Member | |
By:
|
XMARK CAPITAL PARTNERS, LLC, its Managing Member | |
By: Name: |
/s/ Xxxxxxxx X. Xxxx
|
|||
Title:
|
Chief Executive Officer |
| XMARK OPPORTUNITY FUND, LTD. | ||
By:
|
XMARK OPPORTUNITY MANAGER, LLC, its Investment Manager | |
By:
|
XMARK OPPORTUNITY PARTNERS, LLC, its Sole Member | |
By:
|
XMARK CAPITAL PARTNERS, LLC, its Managing Member | |
By: Name: |
/s/ Xxxxxxxx X. Xxxx
|
|||
Title:
|
Chief Executive Officer |
Address for notices:
Xmark Capital Partners, LLC
00 Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxx, XX 00000
00 Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxx, XX 00000
VAXGEN, INC.
By: Name: |
/s/ Xxxxx X. Xxxxx
|
|||
Title:
|
President and Chief Executive Officer |
Address for notices:
VaxGen, Inc.
000 Xxxxxx Xxxxx Xxxxxxxxx
Xxxxx Xxx Xxxxxxxxx, XX 00000
000 Xxxxxx Xxxxx Xxxxxxxxx
Xxxxx Xxx Xxxxxxxxx, XX 00000
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