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EXHIBIT 10.49
ADVANCED VIRAL RESEARCH CORP.
PLACEMENT AGENT AGREEMENT
Dated as of: February 9, 2001
May ▇▇▇▇▇ Group, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇
Ladies and Gentlemen:
The undersigned, Advanced Viral Research Corp. (the "Company"), hereby
agrees with May ▇▇▇▇▇ Group, Inc. ("May ▇▇▇▇▇") as follows:
1. Offering. The Company hereby engages May ▇▇▇▇▇ to act as its
exclusive placement agent in a transaction involving the issuance and sale by
the Company (the "Offering") of the Company's Common Stock, $0.00001 par value
per share (the "Common Stock"), at a price per share equal to the Purchase
Price, as that term is defined in the Equity Line of Credit Agreement dated the
date hereof between the Company and the investor named therein ( the "Credit
Agreement"), for an aggregate price of $50,000,000. All capitalized terms used
herein and not otherwise defined shall have the same meaning ascribed to them as
in the Credit Agreement. The Investor will be granted certain registration
rights with respect to the Common Stock as more fully set forth in the
Registration Rights Agreement between the Company and the Investor dated the
date hereof, and May ▇▇▇▇▇ will be granted common stock purchase warrants and
certain registration rights as described herein. The documents to be executed
and delivered in connection with the Offering, including but not limited to this
Agreement, the Credit Agreement, the Registration Rights Agreement, the Escrow
Agreement, the Warrants (as hereinafter defined) and the Warrant Registration
Rights Agreement (as hereinafter defined) are referred to sometimes hereinafter
collectively as the "Offering Materials." The Company's Common Stock and the
Warrants are sometimes referred to hereinafter collectively as the "Securities."
May ▇▇▇▇▇ shall not be obligated to sell any Securities and this Offering by May
▇▇▇▇▇ shall be solely on a "best efforts basis." This engagement shall not
prohibit the Company from being involved in any other capital transaction not
prohibited by the terms of this engagement.
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2. Information.
A. The Company shall issue to May ▇▇▇▇▇'▇ designees upon the
execution of the Credit Agreement the following: (i) a warrant in substantially
the form annexed hereto to purchase an aggregate of 5,000,000 shares of Common
Stock at an exercise price per share equal to the greater of $1.00 or 110% of
the Bid Price of the Common Stock on the date of the execution of the Credit
Agreement, exercisable in part or in whole at any time by May ▇▇▇▇▇ at its
discretion for a period of sixty (60) months from the date of issuance (the
"Class A Warrants"), and (ii) a warrant in substantially the same form annexed
hereto to purchase 5,000,000 shares of Common Stock at an exercise price equal
to the greater of $1.00 or 110% of the Bid Price of the Common Stock on the
applicable Advance Date, exercisable pro rata on the basis of the number of
shares of Common Stock issuable on each Advance Date for a period of sixty
months from the date of issuance (the "Class B Warrants"), (the Class A Warrants
and the Class B Warrants are referred to collectively as the "Warrants"). The
Warrants shall be issued to the individuals and in the amounts set forth on
Schedule A. The Company may redeem the Warrants at a redemption price of $.01
per share provided that the Bid Price for the Common Stock equals at least $4.00
per share for a period of ten (10) consecutive Trading Days, as described in the
Warrants. The holders of the Warrants shall be entitled to certain "piggyback"
registration rights with respect to the shares of Common Stock issuable upon
exercise of the Warrants pursuant to a registration rights agreement in
substantially the same form annexed hereto (the "Warrant Registration Rights
Agreement").
3. Representations, Warranties and Covenants of May ▇▇▇▇▇.
A. May ▇▇▇▇▇ represents, warrants and covenants as follows:
(i) May ▇▇▇▇▇ has the necessary power to enter into this
Agreement, and to consummate the transactions contemplated hereby and thereby.
(ii) The execution and delivery by May ▇▇▇▇▇ of this
Agreement and the consummation of the transactions contemplated herein and
therein will not result in any violation of, or be in conflict with, or
constitute a default under, any agreement or instrument to which May ▇▇▇▇▇ is a
party or by which May ▇▇▇▇▇ or its properties are bound, or any judgment,
decree, order or, to May ▇▇▇▇▇'▇ knowledge, any statute, rule or regulation
applicable to May ▇▇▇▇▇. This Agreement, when executed and delivered by May
▇▇▇▇▇, ▇▇▇▇ constitute the legal, valid and binding obligations of May ▇▇▇▇▇,
enforceable in accordance with their respective terms, except to the extent that
(a) the enforceability hereof or thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws from time to time in
effect and affecting the rights of creditors generally, (b) the enforceability
hereof or thereof is subject to general principles of equity, or (c) the
indemnification provisions hereof or thereof may be held to violate public
policy.
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(iii) Upon receipt of an executed Credit Agreement, and the
documents related thereto, May ▇▇▇▇▇ will promptly forward executed copies of
the Credit Agreement and the documents related thereto to the Company or its
counsel.
(iv) May ▇▇▇▇▇ will not deliver any documents related to
the Offering to any person it does not reasonably believe to be an Accredited
Investor based upon documentary evidence thereof, where appropriate.
(v) May ▇▇▇▇▇ will not intentionally take any action that
it reasonably believes would cause the Offering to violate the provisions of the
1933 Act, the 1934 Act, the respective rules and regulations promulgated
thereunder (the "Rules and Regulations") or applicable "Blue Sky" laws of any
state or jurisdiction.
(vi) May ▇▇▇▇▇ shall use all reasonable efforts to
determine (a) whether the Investor is an Accredited Investor and (b) that any
information furnished by the Investor is true and accurate. May ▇▇▇▇▇ shall have
no obligation to insure that (x) any check, note, draft or other means of
payment for the Common Stock will be honored, paid or enforceable against the
Investor in accordance with its terms, or (y) subject to the performance of May
▇▇▇▇▇'▇ obligations and the accuracy of May ▇▇▇▇▇'▇ representations and
warranties hereunder, the Offering is exempt from the registration requirements
of the 1933 Act or any applicable state "Blue Sky" law.
(vii) May ▇▇▇▇▇ is a member of the National Association of
Securities Dealers, Inc., and is a broker-dealer registered as such under the
1934 Act and under the securities laws of the states in which the Securities
will be offered or sold by May ▇▇▇▇▇, unless an exemption for such state
registration is available to May ▇▇▇▇▇. May ▇▇▇▇▇ is in compliance with all
material rules and regulations applicable to May ▇▇▇▇▇ generally and applicable
to May ▇▇▇▇▇'▇ participation in the Offering.
4. Representations and Warranties of the Company.
A. The Company represents and warrants as follows:
(i) The execution, delivery and performance of each of
this Agreement, the Credit Agreement, the Escrow Agreement, the Warrant
Registration Rights Agreements, the Warrants and the Investor's Registration
Rights Agreement has been or will be duly and validly authorized by the Company
and is, or with respect to this Agreement, the Credit Agreement, the Escrow
Agreement, the Warrant Registration Rights Agreements, the Warrants and the
Investor's Registration Rights Agreement will be, a valid and binding agreement
of the Company, enforceable in accordance with its respective terms, except to
the extent that (a) the enforceability hereof or thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws from time to
time in effect and affecting the rights of creditors generally, (b) the
enforceability hereof or thereof is subject to general principles of equity or
(c) the indemnification provisions hereof or thereof may be held to violate
public policy. The Securities to be issued pursuant to the transactions
contemplated by this Agreement, the Credit Agreement and the Warrants have been
duly authorized and, when issued and paid for in
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accordance with (x) this Agreement, the Credit Agreement and the Warrants and
the certificates/instruments representing such Securities, (y) will be valid and
binding obligations of the Company, enforceable in accordance with their
respective terms, except to the extent that (1) the enforceability thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
from time to time in effect and affecting the rights of creditors generally, and
(2) the enforceability thereof is subject to general principles of equity. All
corporate action required to be taken for the authorization, issuance and sale
of the Securities has been duly and validly taken by the Company.
(ii) The Company has a duly authorized, issued and
outstanding capitalization as set forth in the Credit Agreement. The Company is
not a party to or bound by any instrument, agreement or other arrangement
providing for it to issue any capital stock, rights, warrants, options or other
securities, except for this Agreement and the agreements described herein and as
described in the Credit Agreement. All issued and outstanding securities of the
Company, have been duly authorized and validly issued and are fully paid and
non-assessable; the holders thereof have no rights of rescission or preemptive
rights with respect thereto and are not subject to personal liability solely by
reason of being security holders; and none of such securities was issued in
violation of the preemptive rights of any holders of any security of the
Company. The Company has 1,000,000,000 shares of authorized Common Stock,
380,214,618 of which will be issued and outstanding as of the date hereof.
(iii) The Common Stock has been duly authorized and when
issued and paid for in accordance with the this Agreement, the Credit Agreement,
the Warrants and the certificates/instruments representing such Common Stock,
will be validly issued, fully-paid and non-assessable; the holders thereof will
not be subject to personal liability solely by reason of being such holders;
such securities are not and will not be subject to the preemptive rights of any
holder of any security of the Company.
(iv) The Company has good and marketable title to, or
valid and enforceable leasehold estates in, all items of real and personal
property necessary to conduct its business (including, without limitation any
real or personal property stated in the Offering Materials to be owned or leased
by the Company), free and clear of all liens, encumbrances, claims, security
interests and defects of any material nature whatsoever, other than those set
forth in the Offering Materials and liens for taxes not yet due and payable.
(v) Except as set forth on Schedule 4A(v), there is no
litigation or governmental proceeding pending or, to the best of the Company's
knowledge, threatened against, or involving the properties or business of the
Company, except as set forth in the Offering Materials.
(vi) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State of
Delaware. Except as set forth in the Offering Materials, the Company does not
own or control, directly or indirectly, an interest in any other corporation,
partnership, trust, joint venture or other business entity.
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The Company is duly qualified or licensed and in good standing as a foreign
corporation in each jurisdiction in which the character of its operations
requires such qualification or licensing and where failure to so qualify would
have a material adverse effect on the Company. The Company has all requisite
corporate power and authority, and all material and necessary authorizations,
approvals, orders, licenses, certificates and permits of and from all
governmental regulatory officials and bodies (domestic and foreign) to conduct
its businesses (and proposed business) as described in the Offering Materials,
and the Company is doing business in strict compliance with all such
authorizations, approvals, orders, licenses, certificates and permits and all
foreign, federal, state and local laws, rules and regulations concerning the
business in which it is engaged. Any disclosures in the Offering Materials
concerning the effects of foreign, federal, state and local regulation on the
Company's businesses as currently conducted and as contemplated are correct in
all material respects and do not omit to state a material fact. The Company has
all corporate power and authority to enter into this Agreement, the Credit
Agreement, the Warrant Registration Rights Agreement, the Escrow Agreement, the
Warrants and the Registration Rights Agreement to carry out the provisions and
conditions hereof and thereof, and all consents, authorizations, approvals and
orders required in connection herewith and therewith have been obtained. No
consent, authorization or order of, and no filing with, any court, government
agency or other body is required by the Company for the issuance of the
Securities or execution and delivery of the Credit Agreement, Warrant
Registration Rights Agreement, the Escrow Agreement, the Warrants and
Registration Rights Agreement except for applicable federal and state securities
laws. The Company, in the last three years, has not incurred any liability
arising under or as a result of the application of any of the provisions of the
1933 Act, the 1934 Act or the Rules and Regulations.
(vii) There has been no material adverse change in the
condition or prospects of the Company, financial or otherwise, from the latest
dates as of which such condition or prospects, respectively, are set forth in
the Offering Materials, and the outstanding debt, the property and the business
of the Company conform in all material respects to the descriptions thereof
contained in the Offering Materials.
(viii) Except as set forth in the Offering Materials, the
Company is not in breach of, or in default under, any term or provision of any
material indenture, mortgage, deed of trust, lease, note, loan or credit
agreement or any other material agreement or instrument evidencing an obligation
for borrowed money, or any other material agreement or instrument to which it is
a party or by which it or any of its properties may be bound or affected. The
Company is not in violation of any provision of its charter or by-laws (other
than the obligation to hold annual meetings of its shareholders and related
matters) or in violation of any franchise, license, permit, judgment, decree or
order, or in violation of any statute, rule or regulation. Neither the execution
and delivery of this Agreement, the Credit Agreement, the Warrant Registration
Rights Agreement, the Escrow Agreement, the Warrants, the Registration Rights
Agreement nor the issuance and sale or delivery of the Securities, nor the
consummation of any of the transactions contemplated herein or in the Credit
Agreement, the Warrant Registration Rights Agreement, the Escrow Agreement, the
Warrants, or the Registration Rights Agreement, nor the compliance by the
Company with the terms and provisions hereof or thereof, has
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conflicted with or will conflict with, or has resulted in or will result in a
breach of, any of the terms and provisions of, or has constituted or will
constitute a default under, or has resulted in or will result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company or pursuant to the terms of any indenture, mortgage, deed of trust,
note, loan or credit agreement or any other agreement or instrument evidencing
an obligation for borrowed money, or any other agreement or instrument to which
the Company may be bound or to which any of the property or assets of the
Company is subject except (a) where such default, lien, charge or encumbrance
would not have a material adverse effect on the Company and (b) as described in
the Offering Materials; nor will such action result in any violation of the
provisions of the charter or the by-laws of the Company or, assuming the due
performance by May ▇▇▇▇▇ of its obligations hereunder, any statute or any order,
rule or regulation applicable to the Company of any court or of any foreign,
federal, state or other regulatory authority or other government body having
jurisdiction over the Company.
(ix) Subsequent to the dates as of which information is
given in the Offering Materials, and except as may otherwise be indicated or
contemplated herein or therein, the Company has not (a) issued any securities or
incurred any liability or obligation, direct or contingent, for borrowed money,
or (b) entered into any transaction other than in the ordinary course of
business, or (c) declared or paid any dividend or made any other distribution on
or in respect of its capital stock. Except as described in the Offering
Materials, the Company has no outstanding obligations to any officer or director
of the Company.
(x) There are no claims for services in the nature of a
finder's or origination fee with respect to the sale of the Common Stock or any
other arrangements, agreements or understandings that may affect May ▇▇▇▇▇'▇
compensation, as determined by the National Association of Securities Dealers,
Inc.
(xi) Except as set forth on Schedule 4A(v), the Company
owns or possesses, free and clear of all liens or encumbrances and rights
thereto or therein by third parties, the requisite licenses or other rights to
use all trademarks, service marks, copyrights, service names, trade names,
patents, patent applications and licenses necessary to conduct its business
(including, without limitation, any such licenses or rights described in the
Offering Materials as being owned or possessed by the Company) and, except as
set forth in the Offering Materials, there is no claim or action by any person
pertaining to, or proceeding, pending or threatened, which challenges the
exclusive rights of the Company with respect to any trademarks, service marks,
copyrights, service names, trade names, patents, patent applications and
licenses used in the conduct of the Company's businesses (including, without
limitation, any such licenses or rights described in the Offering Materials as
being owned or possessed by the Company) except any claim or action that would
not have a material adverse effect on the Company; the Company's current
products, services or processes do not infringe or will not infringe on the
patents currently held by any third party.
(xii) Except as described in the Offering Materials, the
Company is not under any obligation to pay royalties or fees of any kind
whatsoever to any third party
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with respect to any trademarks, service marks, copyrights, service names, trade
names, patents, patent applications, licenses or technology it has developed,
uses, employs or intends to use or employ, other than to their respective
licensors.
(xiii) Subject to the performance by May ▇▇▇▇▇ of its
obligations hereunder, the Credit Agreement and the offer and sale of the
Securities comply, and will continue to comply, up to the Commitment Period in
all material respects with the requirements of Rule 506 of Regulation D
promulgated by the SEC pursuant to the 1933 Act and any other applicable federal
and state laws, rules, regulations and executive orders. Neither the Offering
Materials nor any amendment or supplement thereto nor any documents prepared by
the Company in connection with the Offering will contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. All statements of material facts in the
Offering Materials are true and correct as of the date of the Offering Materials
and will be true and correct on the date of the Closing.
(xiv) All taxes which are due and payable from the Company
have been paid in full and the Company does not have any tax deficiency or claim
outstanding assessed or proposed against it.
(xv) None of the Company nor any of its officers,
directors, employees or agents, nor any other person acting on behalf of the
Company, has, directly or indirectly, given or agreed to give any money, gift or
similar benefit (other than legal price concessions to customers in the ordinary
course of business) to any customer, supplier, employee or agent of a customer
or supplier, or official or employee of any governmental agency or
instrumentality of any government (domestic or foreign) or any political party
or candidate for office (domestic or foreign) or other person who is or may be
in a position to help or hinder the business of the Company (or assist it in
connection with any actual or proposed transaction) which (A) might subject the
Company to any damage or penalty in any civil, criminal or governmental
litigation or proceeding, or (B) if not given in the past, might have had a
materially adverse effect on the assets, business or operations of the Company
as reflected in any of the financial statements contained in the Offering
Materials, or (C) if not continued in the future, might adversely affect the
assets, business, operations or prospects of the Company in the future.
5. Certain Covenants and Agreements of the Company.
The Company covenants and agrees at its expense and without any expense
to May ▇▇▇▇▇ as follows:
A. To advise May ▇▇▇▇▇ of any material adverse change in the
Company's financial condition, prospects or business or of any development
materially affecting the Company or rendering untrue or misleading any material
statement in the Offering Materials occurring at any time prior to any Advance
Date as soon as the Company is either informed or becomes aware thereof.
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B. To use its best efforts to cause the Common Stock issuable in
connection with the Credit Agreement and upon exercise of the Warrants to be
qualified or registered for sale on terms consistent with those stated in the
Investor's Registration Rights Agreement and the Warrant Registration Rights
Agreement, respectively, and under the securities laws of such jurisdictions (up
to 10) as May ▇▇▇▇▇ and the Investor shall reasonably request, provided that
such states and jurisdictions do not require the Company to qualify as a foreign
corporation. Qualification, registration and exemption charges and fees shall be
at the sole cost and expense of the Company.
C. Upon written request, to provide and continue to provide the
to each holder of Securities, copies of all quarterly financial statements and
audited annual financial statements prepared by or on behalf of the Company,
other reports prepared by or on behalf of the Company for public disclosure and
all documents delivered to the Company's stockholders.
D. To deliver, during the Commitment Period, to May ▇▇▇▇▇, upon
May ▇▇▇▇▇'▇ request, in the manner provided in Section 10(B) of this Agreement,
within forty five (45) days after the end of each of the first three quarters of
each fiscal year of the Company, commencing with the first quarter ending after
the Commitment Period, a statement of its income for each such quarterly period,
and its balance sheet and a statement of changes in stockholders' equity as of
the end of such quarterly period, all in reasonable detail, certified by its
principal financial or accounting officer; (ii) within ninety (90) days after
the close of each fiscal year, its balance sheet as of the close of such fiscal
year, together with a statement of income, a statement of changes in
stockholders' equity and a statement of cash flow for such fiscal year, such
balance sheet, statement of income, statement of changes in stockholders' equity
and statement of cash flow to be in reasonable detail and accompanied by a copy
of the certificate or report thereon of independent auditors if audited
financial statements are prepared; and (iii) a copy of all documents, reports
and information furnished to its stockholders at the time that such documents,
reports and information are furnished to its stockholders.
E. To comply with the terms of the Credit Agreement, the Warrant
Registration Rights Agreement, the Escrow Agreement, the Warrants and the
Registration Rights Agreement.
F. To keep available out of its authorized Common Stock solely
for the purpose of issuance upon the exercise of the Warrants, such number of
shares of Common Stock as shall then be issuable upon the exercise or conversion
thereof.
G. To issue to May ▇▇▇▇▇'▇ designees, upon the execution of the
Credit Agreement, the Warrants to purchase 10,000,000 shares of Common Stock in
the form substantially as annexed hereto.
H. To ensure that any transactions between or among the Company,
or any of its officers, directors and affiliates be on terms and conditions that
are no less favorable to the Company, than the terms and conditions that would
be available in an "arm's length" transaction with an independent third party.
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6. Indemnification.
A. The Company hereby agrees that it will indemnify and hold May
▇▇▇▇▇ and each officer, director, shareholder, employee or representative of May
▇▇▇▇▇, and each person controlling, controlled by or under common control with
May ▇▇▇▇▇ within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act or the SEC's rules and regulations promulgated thereunder (the "Rules
and Regulations"), harmless from and against any and all loss, claim, damage,
liability, cost or expense whatsoever (including, but not limited to, any and
all reasonable legal fees and other expenses and disbursements incurred in
connection with investigating, preparing to defend or defending any action, suit
or proceeding, including any inquiry or investigation, commenced or threatened,
or any claim whatsoever or in appearing or preparing for appearance as a witness
in any action, suit or proceeding, including any inquiry, investigation or
pretrial proceeding such as a deposition) to which May ▇▇▇▇▇ or such indemnified
person of May ▇▇▇▇▇ may become subject under the 1933 Act, the 1934 Act, the
Rules and Regulations, or any other federal or state law or regulation, common
law or otherwise, arising out of or based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in (a) Section 4 of this
Agreement, (b) the Offering Materials (except those written statements relating
to May ▇▇▇▇▇ given by an indemnified person for inclusion therein), (c) any
application or other document or written communication executed by the Company
or based upon written information furnished by the Company filed in any
jurisdiction in order to qualify the Common Stock under the securities laws
thereof, or any state securities commission or agency; (ii) the omission or
alleged omission from documents described in clauses (a), (b) or (c) above of a
material fact required to be stated therein or necessary to make the statements
therein not misleading; or (iii) the breach of any representation, warranty,
covenant or agreement made by the Company in this Agreement. The Company further
agrees that upon demand by an indemnified person, at any time or from time to
time, it will promptly reimburse such indemnified person for any loss, claim,
damage, liability, cost or expense actually and reasonably paid by the
indemnified person as to which the Company has indemnified such person pursuant
hereto. Notwithstanding the foregoing provisions of this Paragraph 6(A), any
such payment or reimbursement by the Company of fees, expenses or disbursements
incurred by an indemnified person in any proceeding in which a final judgment by
a court of competent jurisdiction (after all appeals or the expiration of time
to appeal) is entered against May ▇▇▇▇▇ or such indemnified person as a direct
result of May ▇▇▇▇▇ or such person's gross negligence or willful misfeasance
will be promptly repaid to the Company.
B. May ▇▇▇▇▇ hereby agrees that it will indemnify and hold the
Company and each officer, director, shareholder, employee or representative of
the Company, and each person controlling, controlled by or under common control
with the Company within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act or the Rules and Regulations, harmless from and against any and
all loss, claim, damage, liability, cost or expense whatsoever (including, but
not limited to, any and all reasonable legal fees and other expenses and
disbursements incurred in connection with investigating, preparing to defend or
defending any action, suit or proceeding, including any inquiry or
investigation, commenced or threatened, or any claim whatsoever or in appearing
or
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preparing for appearance as a witness in any action, suit or proceeding,
including any inquiry, investigation or pretrial proceeding such as a
deposition) to which the Company or such indemnified person of the Company may
become subject under the 1933 Act, the 1934 Act, the Rules and Regulations, or
any other federal or state law or regulation, common law or otherwise, arising
out of or based upon (i) the conduct of May ▇▇▇▇▇ or its officers, employees or
representatives in its acting as Placement Agent for the Offering or (ii) the
breach of any representation, warranty, covenant or agreement made by May ▇▇▇▇▇
in this Agreement.
C. Promptly after receipt by an indemnified party of notice of
commencement of any action covered by Section 6(A) or 6(B), the party to be
indemnified shall, within five (5) business days, notify the indemnifying party
of the commencement thereof; the omission by one indemnified party to so notify
the indemnifying party shall not relieve the indemnifying party of its
obligation to indemnify any other indemnified party that has given such notice
and shall not relieve the indemnifying party of any liability outside of this
indemnification if not materially prejudiced thereby. In the event that any
action is brought against the indemnified party, the indemnifying party will be
entitled to participate therein and, to the extent it may desire, to assume and
control the defense thereof with counsel chosen by it which is reasonably
acceptable to the indemnified party. After notice from the indemnifying party to
such indemnified party of its election to so assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under such
Section 6(A) or 6(B) for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof, but the
indemnified party may, at its own expense, participate in such defense by
counsel chosen by it, without, however, impairing the indemnifying party's
control of the defense. Subject to the proviso of this sentence and
notwithstanding any other statement to the contrary contained herein, the
indemnified party or parties shall have the right to choose its or their own
counsel and control the defense of any action, all at the expense of the
indemnifying party if, (i) the employment of such counsel shall have been
authorized in writing by the indemnifying party in connection with the defense
of such action at the expense of the indemnifying party, or (ii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
such indemnified party to have charge of the defense of such action within a
reasonable time after notice of commencement of the action, or (iii) such
indemnified party or parties shall have reasonably concluded that there may be
defenses available to it or them which are different from or additional to those
available to one or all of the indemnifying parties (in which case the
indemnifying parties shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties), in any of which events
such fees and expenses of one additional counsel shall be borne by the
indemnifying party; provided, however, that the indemnifying party shall not, in
connection with any one action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstance, be liable for the reasonable fees and expenses of more than one
separate firm of attorneys at any time for all such indemnified parties. No
settlement of any action or proceeding against an indemnified party shall be
made without the consent of the indemnifying party.
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D. In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in Section 6(A) or 6(B)
is due in accordance with its terms but is for any reason held by a court to be
unavailable on grounds of policy or otherwise, the Company and May ▇▇▇▇▇ shall
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with the investigation
or defense of same) which the other may incur in such proportion so that May
▇▇▇▇▇ shall be responsible for such percent of the aggregate of such losses,
claims, damages and liabilities as shall equal the percentage of the gross
proceeds paid to May ▇▇▇▇▇ and the Company shall be responsible for the balance;
provided, however, that no person guilty of fraudulent misrepresentation within
the meaning of Section 11(f) of the 1933 Act shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section 6(D), any person controlling, controlled by or under
common control with May ▇▇▇▇▇, or any partner, director, officer, employee,
representative or any agent of any thereof, shall have the same rights to
contribution as May ▇▇▇▇▇ and each person controlling, controlled by or under
common control with the Company within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act and each officer of the Company and each director
of the Company shall have the same rights to contribution as the Company. Any
party entitled to contribution will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in respect of
which a claim for contribution may be made against the other party under this
Section 6(D), notify such party from whom contribution may be sought, but the
omission to so notify such party shall not relieve the party from whom
contribution may be sought from any obligation they may have hereunder or
otherwise if the party from whom contribution may be sought is not materially
prejudiced thereby. The indemnity and contribution agreements contained in this
Section 6 shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any indemnified person or any termination
of this Agreement.
7. Payment of Expenses.
The Company hereby agrees to bear all of the expenses in connection
with the Offering, including, but not limited to the following: filing fees,
printing and duplicating costs, advertisements, postage and mailing expenses
with respect to the transmission of Offering Materials, registrar and transfer
agent fees, Escrow Agent fees and expenses, fees of the Company's counsel and
accountants, issue and transfer taxes, if any, and counsel fees and expenses
(such counsel fees not to exceed $20,000 plus out of pocket expenses).
8. Conditions of Each Closing
Each Closing shall be held at the offices of May ▇▇▇▇▇ or its counsel.
The obligations of May ▇▇▇▇▇ hereunder shall be subject to the continuing
accuracy of the representations and warranties of the Company herein as of the
date hereof and as of each Advance Date with respect to the Company as if it had
been made on and as of such Advance Date; the accuracy on and as of each Advance
Date of the statements of the officers of the Company made pursuant to the
provisions hereof; and the performance by
12
the Company on and as of each Closing of its covenants and obligations hereunder
and to the following further conditions:
A. At each Closing, May ▇▇▇▇▇ shall receive the opinion of Wolf
Block ▇▇▇▇▇▇ & ▇▇▇▇▇-▇▇▇▇▇, LLP and/or Berman, Wolf, ▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇,
P.A and Cohen, Pontani, ▇▇▇▇▇▇▇▇▇ & Pavane (with respect to the opinion required
pursuant to paragraph 4.25(j) of the Credit Agreement) dated as of the date of
the Closing, which opinion shall be in the form set forth in the Credit
Agreement.
B. At or prior to each Closing, counsel for May ▇▇▇▇▇ shall have
been furnished such documents, certificates and opinions as they may reasonably
require for the purpose of enabling them to review or pass upon the matters
referred to in this Agreement and the Offering Materials or in order to evidence
the accuracy, completeness or satisfaction of any of the representations,
warranties or conditions herein contained.
C. At and prior to each Closing, (i) there shall have been no
material adverse change in the condition or prospects or the business
activities, financial or otherwise, of the Company from the latest dates as of
which such condition is set forth in the Offering Materials; (ii) there shall
have been no transaction, not in the ordinary course of business, entered into
by the Company which has not been disclosed in the Offering Materials or to May
▇▇▇▇▇ in writing; (iii) except as set forth in the Offering Materials, the
Company shall not be in default under any provision of any instrument relating
to any outstanding indebtedness for which a waiver or extension has not been
otherwise received; (iv) except as set forth in the Offering Materials, the
Company shall not have issued any securities (other than those to be issued as
provided in the Offering Materials) or declared or paid any dividend or made any
distribution of its capital stock of any class and there shall not have been any
change in the indebtedness (long or short term) or liabilities or obligations of
the Company (contingent or otherwise); (v) no material amount of the assets of
the Company shall have been pledged or mortgaged, except as indicated in the
Offering Materials; and (v) no action, suit or proceeding, at law or in equity,
against the Company or affecting any of its properties or businesses shall be
pending or threatened before or by any court or federal or state commission,
board or other administrative agency, domestic or foreign, wherein an
unfavorable decision, ruling or finding could materially adversely affect the
businesses, prospects or financial condition or income of the Company, except as
set forth in the Offering Materials.
D. At each Closing, May ▇▇▇▇▇ shall have received a certificate
of the Company signed by its chief executive officer and chief financial
officer, dated as of the applicable Advance Date, to the effect that the
conditions set forth in subparagraph (C) above have been satisfied and that, as
of the applicable Advance Date, the representations and warranties of the
Company set forth herein are true and correct.
E. At the initial Closing, the Company shall have duly executed
and delivered to May ▇▇▇▇▇, or its designees, the Warrants, in the names and
denominations specified by May ▇▇▇▇▇.
13
9. Termination.
This Agreement shall be co-terminus with, and terminate upon the same
terms and conditions as those set forth in, the Credit Agreement. The rights of
the Investor and the obligations of the Company under the Registration Rights
Agreement, and the rights of May ▇▇▇▇▇ and the obligations of the Company under
the Warrants and the Warrant Registration Rights Agreement shall survive the
termination of this Agreement unabridged.
10. Miscellaneous.
A. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but all which shall be deemed
to be one and the same instrument.
B. Any notice required or permitted to be given hereunder shall
be given in writing and shall be deemed effective when deposited in the United
States mail, postage prepaid, or when received if personally delivered or faxed,
addressed as follows:
To May ▇▇▇▇▇:
May ▇▇▇▇▇ Group, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
To the Company:
Advanced Viral Research Corp.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, M.D.
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
14
with a copy to:
Wolf, Block, ▇▇▇▇▇▇ & ▇▇▇▇▇-▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
or to such other address of which written notice is given to the others.
C. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by the
internal laws of the State of New York, without giving effect to any choice of
law or conflict of law provision or rule (whether of the State of New York or
any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of New York. Each party hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in
the City of New York, Borough of Manhattan, for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, that such suit, action or proceeding is
brought in an inconvenient forum or that the venue of such suit, action or
proceeding is improper. Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address for such
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law. 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 in that
jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION
OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
D. This Agreement and the other agreements referenced herein
contain the entire understanding between the parties hereto and may not be
modified or amended except by a writing duly signed by the party against whom
enforcement of the modification or amendment is sought.
E. If any provision of this Agreement shall be held to be invalid
or unenforceable, such invalidity or unenforceability shall not affect any other
provision of this Agreement.
15
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
ADVANCED VIRAL RESEARCH CORP.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, M.D.
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, M.D.
Title: President
MAY ▇▇▇▇▇ GROUP, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Managing Director
16
SCHEDULE A
Class A Warrants
Name Amount
---- --------
▇▇▇▇ ▇▇▇▇▇▇ 995,000
Hunter Singer 995,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 995,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 995,000
▇▇▇▇▇▇▇▇ ▇▇▇▇-May 995,000
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 25,000
Class B Warrants
Name Amount
---- ---------
▇▇▇▇ ▇▇▇▇▇▇ 1,000,000
Hunter Singer 1,000,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 1,000,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 1,000,000
▇▇▇▇▇▇▇▇ ▇▇▇▇-May 500,000
▇▇▇▇ May 385,000
▇▇▇▇▇ ▇▇▇▇▇ 50,000
▇▇▇▇ ▇▇▇▇▇▇▇▇ 25,000
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 40,000
