FORM OF VOTING AGREEMENT
VOTING AGREEMENT (this "Agreement"), dated as of ______________, by
and among Aphton Corporation, a Delaware corporation (the "Company"), and the
stockholders of the Company signatory hereto (the "Stockholders").
WHEREAS, in connection with entering into a Securities Purchase
Agreement by and among the Company and the investors signatory thereto (the
"Investors") of even date herewith (the "Securities Purchase Agreement"), the
Company has agreed, upon the terms and subject to the conditions of the
Securities Purchase Agreement, to issue and sell to the Investors (i)
convertible notes of the Company (the "Initial Notes"), which will be
convertible into shares of the Company's common stock, par value $0.001 per
share (the "Common Stock") (as converted, the "Initial Conversion Shares"), and
which bear interest, which at the option of the Company, subject to certain
conditions, may be paid in accordance with the terms of the Initial Notes in
shares of Common Stock ("Interest Shares"), and (ii) warrants (the "Initial
Warrants") which will be exercisable to purchase shares of Common Stock (as
exercised collectively, the "Initial Warrant Shares");
WHEREAS, in connection with the Securities Purchase Agreement, the
Investors shall be required to purchase and the Company shall be required to
issue and sell, upon the terms and subject to the conditions of the Securities
Purchase Agreement, (i) additional convertible notes (the "Additional Notes" and
collectively with the Initial Notes, the "Notes"), which will be convertible
into shares of Common Stock (as converted, the "Additional Conversion Shares"
and collectively with the Initial Conversion Shares, the "Conversion Shares") in
accordance with the terms of the Additional Notes and which bear interest, which
at the option of the Company, subject to certain conditions, may be paid in
Interest Shares, and (ii) additional warrants (the "Additional Warrants" and
collectively with the Initial Warrants, the "Warrants"), which will be
exercisable to purchase shares of Common Stock (as exercised collectively, the
"Additional Warrant Shares" and collectively with the Initial Warrant Shares,
the "Warrant Shares"; the Notes, the Conversion Shares, the Interest Shares, the
Warrants and the Warrant Shares collectively are referred to herein as the
"Securities");
WHEREAS, as of the date hereof, each Stockholder owns that number of
shares of the Common Stock set forth next to such Stockholder's name on the
schedule attached hereto (the "Schedule"), which represent in that percentage of
the total issued and outstanding Common Stock as is set forth next to such
Stockholder's name on such Schedule; and
WHEREAS, as a condition to the willingness of the Investors to enter
into the Securities Purchase Agreement, the Investors have required that the
Stockholders agree, and in order to induce the Investors to enter into the
Securities Purchase Agreement, the Stockholders have agreed, to enter into this
Agreement with respect to all the shares of Common Stock now owned and which may
hereafter be acquired by the Stockholders (the "Shares") and any other
securities, if any, which the Stockholders are entitled to vote at any meeting
of stockholders of the Company (the "Other Securities").
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, and intending to be legally bound
hereby, the parties hereto hereby agree as follows:
ARTICLE I
PROXY OF THE STOCKHOLDERS
SECTION 1.01. Voting Agreement. The Stockholders hereby agree that
during the time this Agreement is in effect, at any meeting of the stockholders
of the Company, however called, in connection with a solicitation of votes of
the stockholders of the Company, however solicited, and in any action by consent
of the stockholders of the Company, the Stockholders shall vote the Shares and
the Other Securities: (a) in favor of (i) the increase in the authorized Common
Stock to sixty (60) million shares, (ii) the Company's issuance of all of the
Securities as described in the Securities Purchase Agreement and other
Transaction Documents (as defined in the Securities Purchase Agreement), copies
of which have been provided to each Stockholder, in accordance with the
Company's Certificate of Incorporation and Bylaws and applicable law and the
rules and regulations of The NASDAQ National Market (the "Principal Market") and
(iii) any amendment to the Company's Certificate of Incorporation that may be
necessary to issue the Securities; and (b) against any corporate action or
agreement that would result in a breach of any covenant, representation or
warranty or any other obligation or agreement of the Company under the
Transaction Documents or that could result in any of the conditions to the
Company's obligations under the Transaction Documents not being fulfilled. The
Stockholders acknowledge receipt and review of copies of the Transaction
Documents.
SECTION 1.02. Irrevocable Proxy. Each Stockholder hereby irrevocably
appoints Xxxx Xxxxx, until termination hereof, as its attorney-in-fact and
proxy, with full power of substitution, to vote and otherwise act (by written
consent, proxy solicitation or otherwise) with respect to the Shares and the
Other Securities, that such Stockholder is entitled to vote at any meeting of
stockholders of the Company (whether annual or special and whether or not an
adjourned or postponed meeting), in response to any proxy solicitation or
consent in lieu of any such meeting or otherwise, on the matters and in the
manner specified in Section 1.01 hereof. THIS PROXY AND POWER OF ATTORNEY IS
IRREVOCABLE AND COUPLED WITH AN INTEREST. Each Stockholder hereby revokes all
other proxies and powers of attorney with respect to the Shares and the Other
Securities that such Stockholder may have heretofore appointed or granted, and
no subsequent proxy or power of attorney shall be given or written consent
executed (and if given or executed, shall not be effective) by such Stockholder
with respect to the matters specified in Section 1.01 hereof. All authority
herein conferred or agreed to be conferred shall survive the death or incapacity
of each Stockholder and any obligation of each Stockholder under this Agreement
shall be binding upon the heirs, personal representatives, successors and
assigns of such Stockholder.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
Each Stockholder, solely with respect to itself, hereby represents and
warrants to the Investors as follows:
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SECTION 2.01. Authority Relative to This Agreement. Such Stockholder
has all necessary power and authority to execute and deliver this Agreement, to
perform its obligations hereunder and to consummate the transactions
contemplated hereby. This Agreement has been duly executed and delivered by such
Stockholder and constitutes a legal, valid and binding obligation of such
Stockholder, enforceable against such Stockholder in accordance with its terms.
SECTION 2.02. No Conflict. (a) The execution and delivery of this
Agreement by such Stockholder do not, and the performance of this Agreement by
such Stockholder shall not, (i) conflict with or violate the organizational
documents of such Stockholder (if such Stockholder is an entity), any foreign,
federal, state or local law, statute, ordinance, rule, regulation, order,
judgment or decree applicable to such Stockholder or by which the Shares or the
Other Securities owned by such Stockholder are bound or affected or (ii) result
in any breach of or constitute a default (or an event that with notice or lapse
of time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or encumbrance on any of the Shares or the Other Securities
owned by such Stockholder pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which such Stockholder is a party or by which such Stockholder or
the Shares or Other Securities owned by such Stockholder are bound or affected.
(b) The execution and delivery of this Agreement by such Stockholder
do not, and the performance of this Agreement by such Stockholder shall not,
require any consent, approval, authorization or permit of, or filing with or
notification to, any person, any United States federal or state agency or any
other government or governmental agency except for applicable requirements, if
any, of the Securities Exchange Act of 1934, as amended (the "1934 Act").
SECTION 2.03. Title to the Shares. As of the date hereof, such
Stockholder is the sole record and beneficial owner of the number of Shares set
forth next to such Stockholder's name on the Schedule, which Shares represent on
the date hereof the percentage of the outstanding Common Stock set forth
thereon. Such Shares are all the securities of the Company owned, either of
record or beneficially, by such Stockholder. Such Shares are owned free and
clear of all security interests, liens, claims, pledges, options, rights of
first refusal, agreements, limitations on such Stockholder's voting rights,
charges and other encumbrances of any nature whatsoever. Except as provided in
this Agreement, such Stockholder has not appointed or granted any proxy, which
appointment or grant is still effective, with respect to the Shares or Other
Securities owned by such Stockholder. Until termination of this Agreement, such
Stockholder shall not further borrow against, or otherwise further encumber, its
Shares. Such Stockholder has sole voting power and sole power to issue
instructions with respect to the matters set forth in Article 1 hereof, sole
power of disposition and sole power to agree to all matters set forth in this
Agreement.
ARTICLE III
COVENANTS OF THE STOCKHOLDERS
SECTION 3.01. No Disposition or Encumbrance of Shares. Each
Stockholder hereby covenants and agrees, solely with respect to itself, that,
except as contemplated by this
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Agreement, such Stockholder shall not offer or agree to sell,
transfer, tender, assign, hypothecate or otherwise dispose of, grant a proxy or
power of attorney with respect to, or create or permit to exist any security
interest, lien, claim, pledge, option, right of first refusal, agreement,
limitation on such Stockholder's voting rights, charge or other encumbrance of
any nature whatsoever with respect to its Shares or, directly or indirectly,
initiate, solicit or encourage any person to take actions which could reasonably
be expected to lead to the occurrence of any of the foregoing or take any action
that would make any representation or warranty of such Stockholder contained
herein untrue or incorrect or have the effect of preventing or disabling such
Stockholder from performing its obligations under this Agreement; provided, that
such Stockholder may assign, sell or transfer any Shares or Other Securities
provided that any such recipient of such Shares or Other Securities has
delivered to the Company and each Investor a written agreement in a form
reasonably satisfactory to the Investors that such recipient shall be bound by
and such Shares and/or Other Securities so transferred, assigned or sold shall
remain subject to this Agreement; and provided, further, that such written
agreement does not violate Section 14(a) of the 1934 Act and the rules and
regulations promulgated thereunder.
SECTION 3.02. Company Cooperation. The Company hereby covenants and
agrees that it will not recognize any sale, transfer, tender, assignment,
hypothecation or other disposal of, grant of proxy or power of attorney with
respect to, or the creation or permission to exist of any security interest,
lien, claim, pledge, option, right of first refusal, agreement on any of the
Shares or Other Securities subject to this Agreement unless the provisions of
Section 3.01 have been complied with.
ARTICLE IV
MISCELLANEOUS
SECTION 4.01. Termination. This Agreement (except for Article IV of
this Agreement) shall terminate upon the date that each Stockholder votes the
shares and the Other Securities in favor of the items set forth in Section
1.01(a) hereof.
SECTION 4.02. Further Assurances. Each party hereto will execute and
deliver all such further documents and instruments and take all such further
action as may be necessary in order to consummate the transactions contemplated
hereby.
SECTION 4.03. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with the terms hereof and that the parties hereto
and the Investors shall be entitled to specific performance of the terms hereof,
in addition to any other remedy at law or in equity. The Investors shall be
entitled to their reasonable attorneys' fees in any action brought to enforce
this Agreement in which they are the prevailing party.
SECTION 4.04. Entire Agreement. This Agreement constitutes the entire
agreement among the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and understandings, both written and oral, among
the parties hereto with respect to the subject matter hereof.
SECTION 4.05. Amendment. This Agreement may not be amended except by
an instrument in writing signed by the parties hereto.
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SECTION 4.06. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of this Agreement is not affected in any manner materially adverse to
any party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in a mutually acceptable manner in order that the
terms of this Agreement remain as originally contemplated to the fullest extent
possible.
SECTION 4.07. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York applicable to
contracts executed in and to be performed in that State.
SECTION 4.08. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally, via
facsimile (which is confirmed) or sent by a nationally recognized overnight
courier service to the parties at the following addresses (or such other address
for a party as shall be specified by like notice):
If to the Company:
Aphton Corporation
00 XX Xxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxxx
With a copy to:
White & Case LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxxx Xxxx, Esq.
If (x) to a Stockholder, to its address and facsimile number set forth on the
Schedule, with copies to such Stockholder's representatives as set forth
thereon, and (y) to an Investor, to its address and facsimile number set forth
on the Schedule, with copies to such Investor's representatives as set forth
thereon or in either case, to such other address and/or facsimile number and/or
to the attention of such other person as the recipient party has specified by
written notice given to each other party five (5) days prior to the
effectiveness of such change.
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IN WITNESS WHEREOF, the Stockholders and the Company have duly
executed this Agreement as of the date first above written.
STOCKHOLDERS:
______________________________
THE COMPANY:
APHTON CORPORATION
By:___________________________
Name:
Title:
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SCHEDULE
Stockholders Shares Share Percentage Representative
[Name]
[Contact Info]
Investors
[Name]
[Contact Info]
