Contract
EXHIBIT 10.2
THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS WARRANT AND THE COMMON SHARES
ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT OR AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO VIRAGEN, INC. THAT SUCH REGISTRATION IS NOT REQUIRED.
Right
to Purchase _________ shares of Common Stock of Viragen, Inc. (subject to
adjustment as provided herein)
FORM OF CLASS A COMMON STOCK PURCHASE WARRANT
No. _ _ _
-A |
Issue Date: ___________, 2006 |
VIRAGEN, INC., a corporation organized under the laws of the State of Delaware (the
“Company”), hereby certifies that, for value received,
or its assigns (the “Holder”) is
entitled, subject to the terms set forth below, to purchase from the Company at any time after the
issue date (the “Issue Date”) until 5:00 p.m., E.S.T on the third (3rd) anniversary of the Issue
Date (the “Expiration Date”), ___fully paid and nonassessable shares of Common Stock at a per
share purchase price of $1.25. The aforedescribed purchase price per share, as adjusted from time
to time as herein provided, is referred to herein as the “Purchase Price.” The number and
character of such shares of Common Stock and the Purchase Price are subject to adjustment as
provided herein. The Company may reduce the Purchase Price without the consent of the Holder.
Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that
certain Subscription Agreement (the “Subscription Agreement”) entered into by the Company and
Holders of the Warrants.
As used herein the following terms, unless the context otherwise requires, have the following
respective meanings:
(a) The term “Company” shall include Viragen, Inc. and any corporation which shall succeed or
assume the obligations of Viragen, Inc. hereunder.
(b) The term “Common Stock” includes (a) the Company’s Common Stock, $0.01 par value per
share, as authorized on the date of the Subscription Agreement, and (b) any other securities into
which or for which any of the securities described in (a) may be converted or exchanged pursuant to
a plan of recapitalization, reorganization, merger, sale of assets or otherwise.
(c) The term “Other Securities” refers to any stock (other than Common Stock) and other
securities of the Company or any other person (corporate or otherwise) which the holder of the
Warrant at any time shall be entitled to receive, or shall have received, on the exercise of the
Warrant, in lieu of or in addition to Common Stock, or which at any time shall be issuable or shall
have been issued in exchange for or in replacement of Common Stock or Other Securities pursuant to
Section 5 herein or otherwise.
(d) The term “Warrant Shares” shall mean the Common Stock issuable upon exercise of this
Warrant.
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1. Exercise of Warrant.
1.1. Number of Shares Issuable upon Exercise. From and after the Issue Date through
and including the Expiration Date, the Holder hereof shall be entitled to receive, upon exercise of
this Warrant in whole in accordance with the terms of subsection 1.2 or upon exercise of this
Warrant in part in accordance with subsection 1.3, shares of Common Stock of the Company, subject
to adjustment pursuant to Section 4.
1.2. Full Exercise. This Warrant may be exercised in full by the Holder hereof by
delivery of an original or facsimile copy of the form of subscription attached as Exhibit A hereto
(the “Subscription Form”) duly executed by such Holder and surrender of the original Warrant within
four (4) days of exercise, to the Company at its principal office or at the office of its Warrant
Agent (as provided hereinafter), accompanied by payment, in cash, wire transfer or by certified or
official bank check payable to the order of the Company, in the amount obtained by multiplying the
number of shares of Common Stock for which this Warrant is then exercisable by the Purchase Price
then in effect.
1.3. Partial Exercise. This Warrant may be exercised in part (but not for a
fractional share) by surrender of this Warrant in the manner and at the place provided in
subsection 1.2 except that the amount payable by the Holder on such partial exercise shall be the
amount obtained by multiplying (a) the number of whole shares of Common Stock designated by the
Holder in the Subscription Form by (b) the Purchase Price then in effect. On any such partial
exercise, the Company, at its expense, will forthwith issue and deliver to or upon the order of the
Holder hereof a new Warrant of like tenor, in the name of the Holder hereof or as such Holder (upon
payment by such Holder of any applicable transfer taxes) may request, the whole number of shares of
Common Stock for which such Warrant may still be exercised.
1.4. Fair Market Value. Fair Market Value of a share of Common Stock as of a
particular date (the “Determination Date”) shall mean:
(a) If the Company’s Common Stock is traded on an exchange or is quoted on the National
Association of Securities Dealers, Inc. Automated Quotation (“NASDAQ”), National Market System, the
NASDAQ SmallCap Market or the American Stock Exchange, LLC, then the closing or last sale price,
respectively, reported for the last business day immediately preceding the Determination Date;
(b) If the Company’s Common Stock is not traded on an exchange or on the NASDAQ National
Market System, the NASDAQ SmallCap Market or the American Stock Exchange, Inc., but is traded in
the over-the-counter market, then the average of the closing bid and ask prices reported for the
last business day immediately preceding the Determination Date;
(c) Except as provided in clause (d) below, if the Company’s Common Stock is not publicly
traded, then as the Holder and the Company agree, or in the absence of such an agreement, by
arbitration in accordance with the rules then standing of the American Arbitration Association,
before a single arbitrator to be chosen from a panel of persons qualified by education and training
to pass on the matter to be decided; or
(d) If the Determination Date is the date of a liquidation, dissolution or winding up, or any
event deemed to be a liquidation, dissolution or winding up pursuant to the Company’s charter, then
all amounts to be payable per share to holders of the Common Stock pursuant to the charter in the
event of such liquidation, dissolution or winding up, plus all other amounts to be payable per
share in respect of the Common Stock in liquidation under the charter, assuming for the
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purposes of this clause (d) that all of the shares of Common Stock then issuable upon exercise
of all of the Warrants are outstanding at the Determination Date.
1.5. Company Acknowledgment. The Company will, at the time of the exercise of the
Warrant, upon the request of the Holder hereof acknowledge in writing its continuing obligation to
afford to such Holder any rights to which such Holder shall continue to be entitled after such
exercise in accordance with the provisions of this Warrant. If the Holder shall fail to make any
such request, such failure shall not affect the continuing obligation of the Company to afford to
such Holder any such rights.
1.6. Delivery of Stock Certificates, etc. on Exercise. The Company agrees that the
shares of Common Stock purchased upon exercise of this Warrant shall be deemed to be issued to the
Holder hereof as the record owner of such shares as of the close of business on the date on which
this Warrant shall have been surrendered and payment made for such shares as aforesaid. As soon as
practicable after the exercise of this Warrant in full or in part, and in any event within three
(3) business days thereafter, the Company at its expense (including the payment by it of any
applicable issue taxes) will cause to be issued in the name of and delivered to the Holder hereof,
or as such Holder (upon payment by such Holder of any applicable transfer taxes) may direct in
compliance with applicable securities laws, a certificate or certificates for the number of duly
and validly issued, fully paid and nonassessable shares of Common Stock (or Other Securities) to
which such Holder shall be entitled on such exercise, plus, in lieu of any fractional share to
which such Holder would otherwise be entitled, cash equal to such fraction multiplied by the then
Fair Market Value of one full share of Common Stock, together with any other stock or other
securities and property (including cash, where applicable) to which such Holder is entitled upon
such exercise pursuant to Section 1 or otherwise.
2. Cashless Exercise.
(a) Except as described below, if a Registration Statement (as defined in the Subscription
Agreement) (“Registration Statement”) is effective and the Holder may sell its shares of Common
Stock upon exercise hereof pursuant to the Registration Statement, this Warrant may be exercisable
in whole or in part for cash only as set forth in Section 1 above. If no such Registration
Statement is available during the time that such Registration Statement is required to be effective
pursuant to the terms of the Subscription Agreement, then payment upon exercise may be made at the
option of the Holder either in (i) cash, wire transfer or by certified or official bank check
payable to the order of the Company equal to the applicable aggregate Purchase Price, (ii) by
cashless exercise in accordance with Section (b) below or (iii) by a combination of any of the
foregoing methods, for the number of Common Stock specified in such form (as such exercise number
shall be adjusted to reflect any adjustment in the total number of shares of Common Stock issuable
to the holder per the terms of this Warrant) and the holder shall thereupon be entitled to receive
the number of duly authorized, validly issued, fully-paid and non-assessable shares of Common Stock
(or Other Securities) determined as provided herein.
(b) If the Fair Market Value of one share of Common Stock is greater than the Purchase Price
(at the date of calculation as set forth below), in lieu of exercising this Warrant for cash, the
holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the
portion thereof being cancelled) by surrender of this Warrant at the principal office of the
Company together with the properly endorsed Subscription Form in which event the Company shall
issue to the holder a number of shares of Common Stock computed using the following formula:
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| X = | Y (A-B) A |
|||
| Where | X = | the number of shares of Common Stock to be issued to the holder |
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| Y = | the number of shares of Common Stock
purchasable under the Warrant or, if only a portion of the Warrant is
being exercised, the portion of the Warrant being exercised (at the
date of such calculation) |
|||
| A = | the Fair Market Value of one share of the
Company’s Common Stock (at the date of such calculation) |
|||
| B = | Purchase Price (as adjusted to the date of such
calculation) |
(c) The Holder may employ the cashless exercise feature described in Section (b) above
commencing only during the pendency of a Non-Registration Event as described in Section 10 of the
Subscription Agreement. For purposes of Rule 144 promulgated under the 1933 Act, it is intended,
understood and acknowledged that the Warrant Shares issued in a cashless exercise transaction shall
be deemed to have been acquired by the Holder, and the holding period for the Warrant Shares shall
be deemed to have commenced, on the date this Warrant was originally issued pursuant to the
Subscription Agreement.
3. Adjustment for Reorganization, Consolidation, Merger, etc.
3.1. Reorganization, Consolidation, Merger, etc. In case at any time or from time to
time, the Company shall (a) effect a reorganization, (b) consolidate with or merge into any other
person or (c) transfer all or substantially all of its properties or assets to any other person
under any plan or arrangement contemplating the dissolution of the Company, then, in each such
case, as a condition to the consummation of such a transaction, proper and adequate provision shall
be made by the Company whereby the Holder of this Warrant, on the exercise hereof as provided in
Section 1, at any time after the consummation of such reorganization, consolidation or merger or
the effective date of such dissolution, as the case may be, shall receive, in lieu of the Common
Stock (or Other Securities) issuable on such exercise prior to such consummation or such effective
date, the stock and other securities and property (including cash) to which such Holder would have
been entitled upon such consummation or in connection with such dissolution, as the case may be, if
such Holder had so exercised this Warrant, immediately prior thereto, all subject to further
adjustment thereafter as provided in Section 4.
3.2. Dissolution. In the event of any dissolution of the Company following the
transfer of all or substantially all of its properties or assets, the Company, prior to such
dissolution, shall at its expense deliver or cause to be delivered the stock and other securities
and property (including cash, where applicable) receivable in accordance with Section 3.1 by the
Holder of the Warrants upon their exercise after the effective date of such dissolution pursuant to
this Section 3.
3.3. Continuation of Terms. Upon any reorganization, consolidation, merger or
transfer (and any dissolution following any transfer) referred to in this Section 3, this Warrant
shall continue in full force and effect and the terms hereof shall be applicable to the Other
Securities and property receivable on the exercise of this Warrant after the consummation of such
reorganization, consolidation or merger or the effective date of dissolution following any such
transfer, as the case may be, and shall be binding upon the issuer of any Other Securities,
including, in the case of any such transfer, the person acquiring all or substantially all of the
properties or assets of the Company, whether or not such person shall have expressly assumed the
terms of this Warrant as provided in Section 4. In
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the event this Warrant does not continue in full force and effect after the consummation of
the transaction described in this Section 3, then only in such event will the Company’s securities
and property (including cash, where applicable) receivable by the Holder of the Warrants be
delivered to the Trustee as contemplated by Section 3.2.
4. Extraordinary Events Regarding Common Stock. In the event that the Company shall
(a) issue additional shares of the Common Stock as a dividend or other distribution on outstanding
Common Stock, (b) subdivide its outstanding shares of Common Stock, or (c) combine its outstanding
shares of the Common Stock into a smaller number of shares of the Common Stock, then, in each such
event, the Purchase Price shall, simultaneously with the happening of such event, be adjusted by
multiplying the then Purchase Price by a fraction, the numerator of which shall be the number of
shares of Common Stock outstanding immediately prior to such event and the denominator of which
shall be the number of shares of Common Stock outstanding immediately after such event, and the
product so obtained shall thereafter be the Purchase Price then in effect. The Purchase Price, as
so adjusted, shall be readjusted in the same manner upon the happening of any successive event or
events described herein in this Section 4. The number of shares of Common Stock that the Holder of
this Warrant shall thereafter, on the exercise hereof as provided in Section 1, be entitled to
receive shall be adjusted to a number determined by multiplying the number of shares of Common
Stock that would otherwise (but for the provisions of this Section 4) be issuable on such exercise
by a fraction of which (a) the numerator is the Purchase Price that would otherwise (but for the
provisions of this Section 4) be in effect, and (b) the denominator is the Purchase Price in effect
on the date of such exercise.
5. Certificate as to Adjustments. In each case of any adjustment or readjustment in
the shares of Common Stock (or Other Securities) issuable on the exercise of the Warrants, the
Company at its expense will promptly cause its Chief Financial Officer or other appropriate
designee to compute such adjustment or readjustment in accordance with the terms of the Warrant and
prepare a certificate setting forth such adjustment or readjustment and showing in detail the facts
upon which such adjustment or readjustment is based, including a statement of (a) the consideration
received or receivable by the Company for any additional shares of Common Stock (or Other
Securities) issued or sold or deemed to have been issued or sold, (b) the number of shares of
Common Stock (or Other Securities) outstanding or deemed to be outstanding, and (c) the Purchase
Price and the number of shares of Common Stock to be received upon exercise of this Warrant, in
effect immediately prior to such adjustment or readjustment and as adjusted or readjusted as
provided in this Warrant. The Company will forthwith mail a copy of each such certificate to the
Holder of the Warrant and any Warrant Agent of the Company (appointed pursuant to Section 11
hereof).
6. Reservation of Stock, etc. Issuable on Exercise of Warrant; Financial Statements.
The Company will at all times reserve and keep available, solely for issuance and delivery on the
exercise of the Warrants, all shares of Common Stock (or Other Securities) from time to time
issuable on the exercise of the Warrant. This Warrant entitles the Holder hereof to receive copies
of all financial and other information distributed or required to be distributed to the holders of
the Company’s Common Stock.
7. Assignment; Exchange of Warrant. Subject to compliance with applicable securities
laws, this Warrant, and the rights evidenced hereby, may be transferred by any registered holder
hereof (a “Transferor”). On the surrender for exchange of this Warrant, with the Transferor’s
endorsement in the form of Exhibit B attached hereto (the “Transferor Endorsement Form”) and
together with an opinion of counsel reasonably satisfactory to the Company that the transfer of
this Warrant will be in compliance with applicable securities laws, the Company at its expense,
twice, only, but with payment by the Transferor of any applicable transfer taxes, will issue and
deliver to or on the order of the Transferor thereof a new Warrant or Warrants of like tenor, in
the name of the Transferor and/or the transferee(s) specified in such Transferor Endorsement Form
(each a “Transferee”), calling in the aggregate on the face
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or faces thereof for the number of shares of Common Stock called for on the face or faces of
the Warrant so surrendered by the Transferor. No such transfers shall result in a public
distribution of the Warrant.
8. Replacement of Warrant. On receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of any such
loss, theft or destruction of this Warrant, on delivery of an indemnity agreement or security
reasonably satisfactory in form and amount to the Company or, in the case of any such mutilation,
on surrender and cancellation of this Warrant, the Company at its expense, twice only, will execute
and deliver, in lieu thereof, a new Warrant of like tenor.
9. Registration Rights. The Holder of this Warrant has been granted certain
registration rights by the Company. These registration rights are set forth in the Subscription
Agreement. The terms of the Subscription Agreement are incorporated herein by this reference.
10. Warrant Agent. The Company may, by written notice to the Holder of the Warrant,
appoint an agent (a “Warrant Agent”) for the purpose of issuing Common Stock (or Other Securities)
on the exercise of this Warrant pursuant to Section 1, exchanging this Warrant pursuant to Section
7, and replacing this Warrant pursuant to Section 8, or any of the foregoing, and thereafter any
such issuance, exchange or replacement, as the case may be, shall be made at such office by such
Warrant Agent.
11. Transfer on the Company’s Books. Until this Warrant is transferred on the books
of the Company, the Company may treat the registered holder hereof as the absolute owner hereof for
all purposes, notwithstanding any notice to the contrary.
12. Notices. All notices, demands, requests, consents, approvals, and other
communications required or permitted hereunder shall be in writing and, unless otherwise specified
herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return
receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges
prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below
or to such other address as such party shall have specified most recently by written notice. Any
notice or other communication required or permitted to be given hereunder shall be deemed effective
(a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (if delivered on a
business day during normal business hours where such notice is to be received), or the first
business day following such delivery (if delivered other than on a business day during normal
business hours where such notice is to be received) or (b) on the second business day following the
date of mailing by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur or (c) three business days after
deposited in the mail if delivered pursuant to subsection (ii) above. The addresses for such
communications shall be: (i) if to the Company to: 000 X.X. 00xx Xxxxxx, Xxxxxxxxxx,
Xxxxxxx 00000, telecopier: (000) 000-0000, and (ii) if to the Holder, to the addresses and
telecopier number set forth in the first paragraph of this Warrant. The Company may change its
address for notices but only to an address and fax number located in the United States.
14. Miscellaneous. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party against which
enforcement of such change, waiver, discharge or termination is sought. This Warrant shall be
construed and enforced in accordance with and governed by the laws of Florida. Any dispute
relating to this Warrant shall be adjudicated in Broward County in the State of Florida. The
headings in this Warrant are for purposes of reference only, and shall not limit or otherwise
affect any of the terms hereof. The invalidity or unenforceability of any provision hereof shall
in no way affect the validity or enforceability of any other provision.
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IN WITNESS WHEREOF, the Company has executed this Warrant as of the date first written above.
| VIRAGEN, INC. |
||||
| By: | /s/ | |||
| Name: | ||||
| Title: | ||||
Witness:
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Exhibit A
FORM OF SUBSCRIPTION
FORM OF SUBSCRIPTION
(to be signed only on exercise of Warrant)
TO: VIRAGEN, INC.
The undersigned, pursuant to the provisions set forth in the attached Warrant (No.___), hereby
irrevocably elects to purchase (check applicable box):
| o ___ shares of the Common Stock covered by such Warrant; or | ||
| o the maximum number of shares of Common Stock covered by such Warrant pursuant to the cashless exercise procedure set forth in Section 2. |
The undersigned herewith makes payment of the full purchase price for such shares at the price per
share provided for in such Warrant, which is $_______________. Such payment takes the form of (check
applicable box or boxes):
| o $_______________ in lawful money of the United States; and/or | ||
| o the cancellation of the Warrant to the extent necessary, in accordance with the formula set forth in Section 2, to exercise this Warrant with respect to the maximum number of shares of Common Stock purchasable pursuant to the cashless exercise procedure set forth in Section 2. |
The undersigned requests that the certificates for such shares be issued in the name of, and
delivered to _________________________________whose address is
The undersigned represents and warrants that the representations and warranties in Section 4 of the
Subscription Agreement (as defined in this Warrant) are true and accurate with respect to the
undersigned on the date hereof.
The undersigned represents and warrants that all offers and sales by the undersigned of the
securities issuable upon exercise of the within Warrant shall be made pursuant to registration of
the Common Stock under the Securities Act of 1933, as amended (the “Securities Act”), or pursuant
to an exemption from registration under the Securities Act.
Dated: __________________
specified on the fact of the Warrant.)
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Exhibit B
FORM OF TRANSFEROR ENDORSEMENT
(To be signed only on transfer of Warrant)
(To be signed only on transfer of Warrant)
For value received, the undersigned hereby sells, assigns, and transfers unto the person(s)
named below under the heading “Transferees” the right represented by the within Warrant to purchase
the percentage and number of shares of Common Stock of VIRAGEN, INC. to which the within Warrant
relates specified under the headings “Percentage Transferred” and “Number Transferred,”
respectively, opposite the name(s) of such person(s) and appoints each such person Attorney to
transfer its respective right on the books of VIRAGEN, INC. with full power of substitution in the
premises.
Transferees
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Percentage Transferred | Number Transferred | ||||||
Dated: __________________, __________________
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Signed in the presence of: |
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ACCEPTED AND AGREED: [TRANSFEREE] |
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