Exhibit 10.3
SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT, dated as of June 25, 2004, is entered
into by and between PROVECTUS PHARMACEUTICALS, INC., a Nevada corporation, with
headquarters located at 0000 Xxx Xxxxx Xxxxxxx, Xxxxx X, Xxxxxxxxx, XX 00000
(the "Company"), and A.I. INTERNATIONAL CORPORATE HOLDINGS, LTD.; AMERICAN
EQUITY CONSULTING SERVICES, INC.; AND CASTLERIGG MASTER INVESTMENTS, LTD. (the
"Purchasers").
R E C I T A L S :
WHEREAS, the Company and the Purchasers are executing and delivering this
Agreement in accordance with and in reliance upon the exemption from securities
registration for offers and sales to accredited investors afforded, inter alia,
by Rule 506 under Regulation D ("Regulation D") as promulgated by the United
States Securities and Exchange Commission (the "SEC") under the Securities Act
of 1933, as amended (the "1933 Act"), and/or Section 4(2) of the 1933 Act; and
WHEREAS, the Company wishes to sell to the Purchasers and the Purchasers
wish to buy from the Company shares of the Common Stock, $.001 par value, of the
Company (the "Common Stock"), together with the Warrants (as defined below)
exercisable for the purchase of shares of Common Stock;
NOW THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
(1) AGREEMENT TO PURCHASE; PURCHASE PRICE.
(a) Purchase.
(i) Subject to the terms and conditions of this Agreement and the other
Transaction Agreements (as defined below), the Purchasers hereby agree to pay to
the Company a purchase price of $.75 per share of Common Stock for One Million
Three Hundred Thirty Three Thousand Three Hundred and Thirty Three (1,333,333)
shares (the "Shares"), for a total purchase price of One Million Dollars
($1,000,000) (the "Purchase Price"). The Purchase Price shall be paid in three
equal installments, with all funds due within forty-five (45) days of the
Closing Date (as defined below). Each installment payment of Three Hundred
Thirty Three Thousand Three Hundred Thirty Three Dollars and Thirty-Three One
Hundredths ($333,333.33)(each an "Installment Payment") shall be made pursuant
to the payment schedule attached hereto as Annex I, with each payment date
constituting a "Installment Payment Date." The Company shall issue Certificates
(as defined below) representing the Shares, and each Share shall have a Warrant
attached, as provided below. The Certificates for the Shares shall be in
substantially the same form as attached hereto as Annex II.
(ii) The Purchase Price shall be payable in United States Dollars.
(b) Certain Definitions. As used herein, each of the following terms has
the meaning set forth below, unless the context otherwise requires:
(i) "1933 Act" means the Securities Act of 1933.
(ii) "1934 Act" means the Securities Act of 1934.
(iii) "Affiliate" means, with respect to a specific Person referred to in the
relevant provision, another Person who or which controls or is controlled by or
is under common control with such specified Person.
(iv) "Certificates" means the Shares and the Warrants, each duly executed by the
Company and issued on the Closing Date in the name of the Purchaser.
(v) "Closing Date" means the date of the closing of the purchase and sale of the
Shares and Warrants, as provided herein.
(vi) "Company Control Person" means each director, executive officer, promoter,
and such other Persons as may be deemed in control of the Company pursuant to
Rule 405 under the 1933 Act or Section 20 of the 0000 Xxx.
(vii) "Effective Date" means the effective date of the Registration Statement
covering the Registrable Securities.
(vii) "Escrow Agent" means the escrow agent identified in the Joint Escrow
Instructions attached hereto as Annex III (the "Joint Escrow Instructions").
(viii) "Escrow Funds" means the Purchase Price delivered to the Escrow Agent as
contemplated by Sections 1(c) and (d) hereof.
(ix) "Escrow Property" means the Escrow Funds and the Certificates delivered to
the Escrow Agent as contemplated by Section 1(c) hereof.
(x) "Finder" means Xxxxx Consulting Services, Inc.
(xi) "Holder" means the Person holding the relevant Securities at the relevant
time.
(xii) "Last Audited Date" means December 31, 2003.
(xiii) "Material Adverse Effect" means an event or combination of events, which
individually or in the aggregate, would reasonably be expected to (w) adversely
affect the legality, validity or enforceability of the Securities or any of the
Transaction Agreements, (x) have or result in a material adverse effect on the
results of operations, assets, prospects, or condition (financial or otherwise)
of the Company and its subsidiaries, taken as a whole, (y) adversely impair the
Company's ability to perform fully on a timely basis its obligations under any
of the Transaction Agreements or the transactions contemplated thereby, or (z)
materially and adversely affect the value of the rights granted to the Purchaser
in the Transaction Agreements.
(xiv) "Person" means any living person or any entity, such as, but not
necessarily limited to, a corporation, partnership or trust.
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(xv) "Principal Trading Market" means The Over the Counter Bulletin Board.
(xvi) "Purchaser Control Person" means each director, executive officer,
promoter, and such other Persons as may be deemed in control of the relevant
Purchaser pursuant to Rule 405 under the 1933 Act or Section 20 of the 1934 Act.
(xvii) "Registrable Securities" has the meaning set forth in the Registration
Rights Agreement, in the form annexed hereto as Annex IV, as executed by each
Purchaser and the Company simultaneously with the execution of this Agreement.
(xviii) "Registration Rights Agreement" means the Registration Rights Agreement.
(xix) "Registration Statement" has the meaning set forth in the Registration
Rights Agreement.
(xx) "Securities" means the Shares and the Warrants.
(xxi) "State of Incorporation" means Nevada.
(xxii) "Trading Day" means any day during which the Principal Trading Market
shall be open for business.
(xxiii) "Transaction Agreements" means this Securities Purchase Agreement, the
Common Stock Certificate, the Joint Escrow Instructions, the Registration Rights
Agreement, and the Warrants and includes all ancillary documents referred to in
those agreements.
(xxiv) "Warrant Shares" means the shares of Common Stock issuable upon exercise
of the Warrants.
(c) Form of Payment; Delivery of Certificates.
(i) On each Installment Payment Date, the Purchasers shall pay the Purchase
Price by delivering immediately available good funds in United States Dollars to
the Escrow Agent.
(ii) No later than on each Installment Payment Date, but in any event promptly
following payment by the Purchaser to the Escrow Agent of each Installment
Payment, the Company shall deliver the Certificates, each duly executed on
behalf of the Company and issued in the name of the Purchaser, to the Escrow
Agent. The Common Stock Certificate on the first Installment Payment Date shall
be for Four Hundred Forty Four Thousand Four Hundred Forty Four (444,444)
Shares; the Common Stock Certificate for the second Installment Payment Date
shall be for Four Hundred Forty Four Thousand Four Hundred Forty Four (444,444)
Shares; and the Common Stock Certificate for the third Installment Payment Date
shall be for Four Hundred Forty Four Thousand Four Hundred Forty Five (444,445)
Shares.
(iii) By signing this Agreement, each of the Purchaser and the Company, subject
to acceptance by the Escrow Agent, agrees to all of the terms and conditions of,
and becomes a party to, the Joint Escrow Instructions, all of the provisions of
which are incorporated herein by this reference as if set forth in full.
(d) Method of Payment. Payment into escrow of the Installment Payment shall
be made by wire transfer of funds to:
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XxXxxxxxxx & Xxxxx, LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxx
pursuant to the wiring instructions provided in the Joint Escrow Instructions.
(2) PURCHASER REPRESENTATIONS, WARRANTIES, ETC.; ACCESS TO INFORMATION;
INDEPENDENT INVESTIGATION.
Each Purchaser represents and warrants to, and covenants and agrees with,
the Company as follows:
(a) Without limiting Purchaser's right to sell the Shares pursuant to the
Registration Statement or otherwise to sell any of the Securities in compliance
with the 1933 Act, the Purchaser is purchasing the Securities and will be
acquiring the Shares for its own account for investment only and not with a view
towards the public sale or distribution thereof and not with a view to or for
sale in connection with any distribution thereof.
(b) The Purchaser is (i) an "accredited investor" as that term is defined
in Rule 501 of the General Rules and Regulations under the 1933 Act by reason of
Rule 501(a)(3), (ii) experienced in making investments of the kind described in
this Agreement and the related documents, (iii) able, by reason of the business
and financial experience of its officers (if an entity) and professional
advisors (who are not affiliated with or compensated in any way by the Company
or any of its Affiliates or selling agents), to protect its own interests in
connection with the transactions described in this Agreement, and the related
documents, and (iv) able to afford the loss of the entire Purchase Price.
(c) All subsequent offers and sales of the Securities by the Purchaser
shall be made pursuant to registration of the Shares under the 1933 Act or
pursuant to an exemption from registration.
(d) The Purchaser understands that the Securities are being offered and
sold to it in reliance on specific exemptions from the registration requirements
of the 1933 Act and state securities laws and that the Company is relying upon
the truth and accuracy of, and the Purchaser's compliance with, the
representations, warranties, agreements, acknowledgments and understandings of
the Purchaser set forth herein in order to determine the availability of such
exemptions and the eligibility of the Purchaser to acquire the Securities.
(e) The Purchaser and its advisors, if any, have been furnished with all
materials relating to the business, finances and operations of the Company and
materials relating to the offer and sale of the Securities and the offer of the
Shares which have been requested by the Purchaser, including those set forth on
Annex VI hereto. The Purchaser and its advisors, if any, have been afforded the
opportunity to ask questions of the Company and have received complete and
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satisfactory answers to any such inquiries. Without limiting the generality of
the foregoing, the Purchaser has also had the opportunity to obtain and to
review the Company's filings on XXXXX listed on Annex VII hereto (the documents
listed on such Annex VII, to the extent available on XXXXX or otherwise provided
to the Purchaser as indicated on said Annex VII, collectively, the "Company's
SEC Documents").
(f) The Purchaser understands that its investment in the Securities
involves a high degree of risk.
(g) The Purchaser hereby represents that, in connection with its purchase
of the Securities, it has not relied on any statement or representation by the
Company or any of its officers, directors and employees or any of its attorneys
or agents, except as specifically set forth herein.
(h) The Purchaser understands that no United States federal or state agency
or any other government or governmental agency has passed on or made any
recommendation or endorsement of the Securities.
(i) This Agreement and the other Transaction Agreements to which the
Purchaser is a party, and the transactions contemplated thereby, have been duly
and validly authorized, executed and delivered on behalf of the Purchaser and
are valid and binding agreements of the Purchaser enforceable in accordance with
their respective terms, subject as to enforceability to general principles of
equity and to bankruptcy, insolvency, moratorium and other similar laws
affecting the enforcement of creditors' rights generally.
(j) The Purchaser has taken no action which would give rise to any claim by
any Person for brokerage commission, finder's fees or similar payments by the
Company relating to this Agreement or the transactions contemplated hereby. The
Company shall have no obligation with respect to such fees or with respect to
any claims made by or on behalf of other Persons for fees of a type contemplated
in this paragraph that may be due in connection with the transactions
contemplated hereby. The Purchaser shall indemnify and hold harmless each of the
Company, its employees, officers, directors, agents, and partners, and their
respective Affiliates, from and against all claims, losses, damages, costs
(including the costs of preparation and attorney's fees) and expenses suffered
in respect of any such claimed or existing fees, as and when incurred.
(k) The Purchaser hereby covenants and warrants that, between the Closing
Date and the date on which he or she no longer holds any of the Securities,
Purchaser will not engage in any hedging transactions or shorting transactions
in any securities of the Company, including the Securities.
l. The Purchasers hereby covenant and warrant that they are not acting
as a "group" for purposes of Section 13 of the Securities Exchange Act of
1934.
(3) COMPANY REPRESENTATIONS, ETC. The Company represents and warrants to
the Purchaser as of the date hereof and as of the Closing Date that, except as
otherwise provided in the Annex VI hereto or in the Company's SEC Documents:
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(a) Rights of Others Affecting the Transactions. There are no preemptive
rights of any shareholder of the Company, as such, to acquire the Shares or the
Warrants. No party has a currently exercisable right of first refusal which
would be applicable to any or all of the transactions contemplated by the
Transaction Agreements.
(b) Status. The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Incorporation and has the
requisite corporate power to own its properties and to carry on its business as
now being conducted. The Company is duly qualified as a foreign corporation to
do business and is in good standing in each jurisdiction where the nature of the
business conducted or property owned by it makes such qualification necessary,
other than those jurisdictions in which the failure to so qualify would not have
or result in a Material Adverse Effect. The Company has registered its stock and
is obligated to file reports pursuant to Section 12 or Section 15(d) of the
Securities Exchange Act of 1934, as amended (the "1934 Act"). The Common Stock
is listed and quoted on the Principal Trading Market. The Company has received
no notice, either oral or written, with respect to the continued eligibility of
the Common Stock for such listing and quotation on the Principal Trading Market,
and the Company has maintained all requirements on its part for the continuation
of such listing and quotation.
(c) Authorized Shares. The authorized capital stock of the Company consists
of (i) 100,000,000 shares of Common Stock, $.001 par value per share, of which
approximately 13,666,558 shares are outstanding as of June 21, 2004, and (ii)
25,000,000 shares of Preferred Stock, $.001 par value per share, of which no
shares are outstanding as of the date hereof. As of June 21, 2004, there were
17,867,599 shares of Common Stock outstanding on a fully diluted basis,
excluding however the shares of Common Stock which would have been issued upon
the conversion of the Company's 8% Convertible Debentures. All issued and
outstanding shares of Common Stock have been duly authorized and validly issued
and are fully paid. The Company has sufficient authorized and unissued shares of
Common Stock as may be necessary to effect the issuance of the Securities. The
Securities have been duly authorized and, when issued, in accordance with their
terms, will be duly and validly issued, fully paid and non-assessable and,
except to the extent, if any, provided by the law of the State of Incorporation,
will not subject the Holder thereof to personal liability by reason of being
such Holder.
(d) Transaction Agreements and Stock. This Agreement and each of the other
Transaction Agreements, and the transactions contemplated thereby, have been
duly and validly authorized by the Company, this Agreement has been duly
executed and delivered by the Company and this Agreement is, and the
Certificates and each of the other Transaction Agreements, when executed and
delivered by the Company, will be, valid and binding agreements of the Company
enforceable in accordance with their respective terms, subject as to
enforceability to general principles of equity and to bankruptcy, insolvency,
moratorium, and other similar laws affecting the enforcement of creditors'
rights generally.
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(e) Non-contravention. The execution and delivery of this Agreement and
each of the other Transaction Agreements by the Company, the issuance of the
Securities, and the consummation by the Company of the other transactions
contemplated by this Agreement, the Certificates and the other Transaction
Agreements do not and will not conflict with or result in a breach by the
Company of any of the terms or provisions of, or constitute a default under (i)
the certificate of incorporation or by-laws of the Company, each as currently in
effect, (ii) any indenture, mortgage, deed of trust, or other material agreement
or instrument to which the Company is a party or by which it or any of its
properties or assets are bound, including any listing agreement for the Common
Stock except as herein set forth, or (iii) to its knowledge, any existing
applicable law, rule, or regulation or any applicable decree, judgment, or order
of any court, United States federal or state regulatory body, administrative
agency, or other governmental body having jurisdiction over the Company or any
of its properties or assets, except where such conflict, breach or default which
would not have or result in a Material Adverse Effect.
(f) Approvals. No authorization, approval or consent of any court,
governmental body, regulatory agency, self-regulatory organization, or stock
exchange or market or the shareholders of the Company is required to be obtained
by the Company for the issuance and sale of the Securities to the Purchaser as
contemplated by this Agreement, except such authorizations, approvals and
consents that have been obtained.
(g) Filings. None of the Company's SEC Documents contained, at the time
they were filed, any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the statements
made therein in light of the circumstances under which they were made, not
misleading. Since March 1, 2002, the Company has timely filed all requisite
forms, reports and exhibits thereto required to be filed by the Company with the
SEC.
(h) Absence of Certain Changes. Since the Last Audited Date, there has been
no material adverse change and no Material Adverse Effect, except as disclosed
in the Company's SEC Documents. Since the Last Audited Date, except as provided
in the Company's SEC Documents, the Company has not (i) incurred or become
subject to any material liabilities (absolute or contingent) except liabilities
incurred in the ordinary course of business consistent with past practices; (ii)
discharged or satisfied any material lien or encumbrance or paid any material
obligation or liability (absolute or contingent), other than current liabilities
paid in the ordinary course of business consistent with past practices; (iii)
declared or made any payment or distribution of cash or other property to
shareholders with respect to its capital stock, or purchased or redeemed, or
made any agreements to purchase or redeem, any shares of its capital stock; (iv)
sold, assigned or transferred any other tangible assets, or canceled any debts
or claims, except in the ordinary course of business consistent with past
practices; (v) suffered any substantial losses or waived any rights of material
value, whether or not in the ordinary course of business, or suffered the loss
of any material amount of existing business; (vi) made any changes in employee
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compensation, except in the ordinary course of business consistent with past
practices; or (vii) experienced any material problems with labor or management
in connection with the terms and conditions of their employment.
(i) Full Disclosure. There is no fact known to the Company (other than
general economic conditions known to the public generally or as disclosed in the
Company's SEC Documents) that has not been disclosed in writing to the Purchaser
that would reasonably be expected to have or result in a Material Adverse
Effect.
(j) Absence of Litigation. There is no action, suit, proceeding, inquiry or
investigation before or by any court, public board or body pending or, to the
knowledge of the Company, threatened against or affecting the Company before or
by any governmental authority or nongovernmental department, commission, board,
bureau, agency or instrumentality or any other person, wherein an unfavorable
decision, ruling or finding would have a Material Adverse Effect or which would
adversely affect the validity or enforceability of, or the authority or ability
of the Company to perform its obligations under, any of the Transaction
Agreements. The Company is not aware of any valid basis for any such claim that
(either individually or in the aggregate with all other such events and
circumstances) could reasonably be expected to have a Material Adverse Effect.
There are no outstanding or unsatisfied judgments, orders, decrees, writs,
injunctions or stipulations to which the Company is a party or by which it or
any of its properties is bound, that involve the transaction contemplated herein
or that, alone or in the aggregate, could reasonably be expect to have a
Material Adverse Effect.
(k) Absence of Certain Company Control Person Actions or Events. None of
the following has occurred during the past ten (10) years with respect to a
Company Control Person:
(1) A petition under the federal bankruptcy laws or any state
insolvency law was filed by or against, or a receiver, fiscal agent or
similar officer was appointed by a court for the business or property of
such Company Control Person, or any partnership in which he was a general
partner at or within two years before the time of such filing, or any
corporation or business association of which he was an executive officer at
or within two years before the time of such filing;
(2) Such Company Control Person was convicted in a criminal proceeding
or is a named subject of a pending criminal proceeding (excluding traffic
violations and other minor offenses);
(3) Such Company Control Person was the subject of any order, judgment
or decree, not subsequently reversed, suspended or vacated, of any court of
competent jurisdiction, permanently or temporarily enjoining him from, or
otherwise limiting, the following activities:
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(A) acting, as an investment advisor, underwriter, broker or
dealer in securities, or as an affiliated person, director or employee
of any investment company, bank, savings and loan association or
insurance company, as a futures commission merchant, introducing
broker, commodity trading advisor, commodity pool operator, floor
broker, any other Person regulated by the Commodity Futures Trading
Commission ("CFTC") or engaging in or continuing any conduct or
practice in connection with such activity;
(B) engaging in any type of business practice; or
(C) engaging in any activity in connection with the purchase or
sale of any security or commodity or in connection with any violation
of federal or state securities laws or federal commodities laws;
(4) Such Company Control Person was the subject of any order, judgment
or decree, not subsequently reversed, suspended or vacated, of any federal
or state authority barring, suspending or otherwise limiting for more than
60 days the right of such Company Control Person to engage in any activity
described in paragraph (3) of this item, or to be associated with Persons
engaged in any such activity; or
(5) Such Company Control Person was found by a court of competent
jurisdiction in a civil action or by the CFTC or SEC to have violated any
federal or state securities law, and the judgment in such civil action or
finding by the CFTC or SEC has not been subsequently reversed, suspended,
or vacated.
(l) Prior Issues. During the twelve (12) months preceding the date hereof,
the Company has not issued any stock option grants, convertible securities or
any shares of its Common Stock, except as provided in Annex VI hereto or the
Company's SEC Documents.
(m) No Undisclosed Liabilities or Events. The Company has no liabilities or
obligations other than those disclosed in the Transaction Agreements or the
Company's SEC Documents or those incurred in the ordinary course of the
Company's business since the Last Audited Date, or which individually or in the
aggregate, do not or would not have a Material Adverse Effect. No event or
circumstances has occurred or exists with respect to the Company or its
properties, business, operations, condition (financial or otherwise), or results
of operations, which, under applicable law, rule or regulation, requires public
disclosure or announcement prior to the date hereof by the Company but which has
not been so publicly announced or disclosed. There are no proposals currently
under consideration or currently anticipated to be under consideration by the
Board of Directors or the executive officers of the Company which proposal would
(X) change the certificate of incorporation or other charter document or by-laws
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of the Company, each as currently in effect, with or without shareholder
approval, which change would reduce or otherwise adversely affect the rights and
powers of the shareholders of the Common Stock or (Y) materially or
substantially change the business, assets or capital of the Company, including
its interests in subsidiaries.
(n) No Default. Neither the Company nor any of its subsidiaries is in
default in the performance or observance of any material obligation, agreement,
covenant or condition contained in any material indenture, mortgage, deed of
trust or other material instrument or agreement to which it is a party or by
which it or its property is bound.
(o) No Integrated Offering. Neither the Company nor any of its Affiliates
nor any person acting on its or their behalf has, directly or indirectly, at any
time since November 30, 2003, made any offer or sales of any security or
solicited any offers to buy any security under circumstances that would
eliminate the availability of the exemption from registration under Regulation D
in connection with the offer and sale of the Securities as contemplated hereby.
(p) Dilution. The number of Shares issuable upon conversion of the Warrants
may have a dilutive effect on the ownership interests of the other shareholders
(and Persons having the right to become shareholders) of the Company. The
Company's executive officers and directors have studied and fully understand the
nature of the Securities being sold hereby and recognize that they have such a
potential dilutive effect. The Board of Directors of the Company has concluded,
in its good faith business judgment, that such issuance is in the best interests
of the Company. The Company specifically acknowledges that its obligation to
issue the Warrant Shares upon exercise of the Warrants is binding upon the
Company and enforceable regardless of the dilution such issuance may have on the
ownership interests of other shareholders of the Company, and the Company will
honor every Notice of Exercise (as contemplated by the Warrants), unless the
Company is subject to an injunction (which injunction was not sought by the
Company) prohibiting the Company from doing so.
(q) Fees to Brokers, Finders and Others. Except for payment of fees to the
Finder, payment of which is the sole responsibility of the Company, the Company
has taken no action which would give rise to any claim by any Person for
brokerage commission, finder's fees or similar payments by Purchaser relating to
this Agreement or the transactions contemplated hereby. Purchaser shall have no
obligation with respect to such fees or with respect to any claims made by or on
behalf of other Persons for fees of a type contemplated in this paragraph that
may be due in connection with the transactions contemplated hereby. The Company
shall indemnify and hold harmless each Purchaser, its employees, officers,
directors, agents, and partners, and their respective Affiliates, from and
against all claims, losses, damages, costs (including the costs of preparation
and attorney's fees) and expenses suffered in respect of any such claimed or
existing fees, as and when incurred.
(r) Certain New Transactions. For purposes of this Agreement, "New
Transaction" means the offer or sale of new common stock in a capital raising or
other financing transaction by or on behalf of the Company to a new investor in
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a transaction offered or consummated after the date hereof; provided, however,
that it is specifically understood that the term "New Transaction" does not
include (i) the sale of the Securities to the Purchasers, (ii) the issuance of
Common Stock upon the exercise or conversion of options, warrants, or
convertible securities outstanding at the date hereof or in connection with a
put exercised by the Company pursuant to the terms of an equity line agreement
in effect on the date hereof, (iii) the issuance of options or warrants
hereafter granted to employees or consultants for compensatory purposes or the
issuance of Common Stock upon the exercise of such options or warrants, (iv) the
issuance of Common Stock or securities exercisable for or convertible into
Common Stock in connection with a merger, acquisition or other business
combination or a strategic partnering or joint venture transaction or the
exercise or conversion of such securities, (v) the issuance of Common Stock or
securities exercisable for or convertible into Common Stock in connection with
the settlement of claims which are the subject of law suits, arbitrations and
similar proceedings or the conversion or exercise of such securities, and (vi)
the issuance of warrants to equipment lessors in connection with capital lease
transactions or the exercise of such warrants. If within 180 days of the
effective date of that certain registration statement covering the Registrable
Securities, the Company consummates a New Transaction in which it sells or is
deemed to sell Common Stock or securities exercisable for or convertible into
Common Stock at a lower price than the Shares, or issues warrants with an
exercise price lower than the Warrants, then the Company shall issue additional
shares of Common Stock so that the effective price per share for the Shares
equals the price of the new shares and if the Company issues warrants, the
exercise price of the warrants will be lowered to the price of the new warrants.
s. As of the Closing Date, the Company will have entered into a Securities
Redemption Agreement with the holders of the Company's 8% Convertible
Debentures.
(4) CERTAIN COVENANTS AND ACKNOWLEDGMENTS.
(a) Transfer Restrictions. The Purchaser acknowledges that (1) the
Securities have not been and are not being registered under the provisions of
the 1933 Act and, except as provided in the Registration Rights Agreement or
otherwise included in an effective registration statement, the Shares have not
been and are not being registered under the 1933 Act, and may not be transferred
unless (A) subsequently registered thereunder or (B) the Purchaser shall have
delivered to the Company an opinion of counsel, reasonably satisfactory in form,
scope and substance to the Company, to the effect that the Securities to be sold
or transferred may be sold or transferred pursuant to an exemption from such
registration; (2) any sale of the Securities made in reliance on Rule 144
promulgated under the 1933 Act may be made only in accordance with the terms of
said Rule and further, if said Rule is not applicable, any resale of such
Securities under circumstances in which the seller, or the Person through whom
the sale is made, may be deemed to be an underwriter, as that term is used in
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the 1933 Act, may require compliance with some other exemption under the 1933
Act or the rules and regulations of the SEC thereunder; and (3) neither the
Company nor any other Person is under any obligation to register the Securities
(other than pursuant to the Registration Rights Agreement) under the 1933 Act or
to comply with the terms and conditions of any exemption thereunder.
(b) Restrictive Legend. The Purchaser acknowledges and agrees that, until
such time as the Common Stock has been registered under the 1933 Act as
contemplated by the Registration Rights Agreement and sold in accordance with an
effective Registration Statement or otherwise in accordance with another
effective registration statement, the certificates and other instruments
representing any of the Securities (including the Warrant Shares) shall bear a
restrictive legend in substantially the following form (and a stop-transfer
order may be placed against transfer of any such Securities):
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OFFERED
FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES OR AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED.
(c) Filings. The Company undertakes and agrees to make all necessary
filings in connection with the sale of the Securities to the Purchaser under any
United States laws and regulations applicable to the Company, or by any domestic
securities exchange or trading market, and to provide a copy thereof to the
Purchaser promptly after such filing.
(d) Reporting Status. So long as the Purchaser beneficially owns any of the
Securities, the Company shall file all reports required to be filed with the SEC
pursuant to Section 13 or 15(d) of the 1934 Act, shall take all reasonable
action under its control to ensure that adequate current public information with
respect to the Company, as required in accordance with Rule 144(c)(2) of the
1933 Act, is publicly available, and shall not terminate its status as an issuer
required to file reports under the 1934 Act even if the 1934 Act or the rules
and regulations thereunder would permit such termination. The Company will take
all reasonable action under its control to maintain the continued listing and
quotation and trading of its Common Stock (including, without limitation, all
Registrable Securities) on the Principal Trading Market or a listing on the
NASDAQ/Small Cap or National Markets and, to the extent applicable to it, will
comply in all material respects with the Company's reporting, filing and other
obligations under the by-laws or rules of the Principal Trading Market and/or
the National Association of Securities Dealers, Inc., as the case may be, at
least through the date which is thirty (30) days after the later of the date on
which all of the Warrants have been exercised or have expired.
(e) Use of Proceeds. The Company shall use the proceeds received hereunder
as follows:
(i) Two Hundred and Eight Thousand Three Hundred and Thirty Three Dollars
($208,333) of each Installment Payment shall be used to redeem the Company's 8%
12
Convertible Debentures, with a principal amount of Five Hundred Thousand Dollars
($500,000) and a premium amount of One Hundred Twenty Five Thousand Dollars
($125,000);
(ii) payment of certain fees to the Finder as described below in Section
4(i); and
(iii) the remainder shall be used for general corporate purposes.
(f) Warrants. The Company agrees to issue to the Purchaser on each
Installment Payment Date transferable warrants (the "Warrants") for the purchase
of a number of shares equal to the number of Shares issued on each Installment
Payment Date, each Warrant with an exercise price of $1.00. The Warrants will
expire on the date which is the fifth annual anniversary of each Installment
Payment Date. Each of the Warrants shall be in the form annexed hereto as Annex
VIII, and shall have registration rights as provided in the Registration Rights
Agreement.
(g) Available Shares. The Company shall have at all times authorized and
reserved for issuance, free from preemptive rights, a number of shares (the
"Minimum Available Shares") at least equal to the number of shares issuable upon
exercise of all outstanding Warrants held by all Holders.
(h) Publicity, Filings, Releases, Etc. Each of the parties agrees that it
will not disseminate any information relating to the Transaction Agreements or
the transactions contemplated thereby, including issuing any press releases,
holding any press conferences or other forums, or filing any reports
(collectively, "Publicity"), without giving the other party reasonable advance
notice and an opportunity to comment on the contents thereof. Neither party will
include in any such Publicity any statement or statements or other material to
which the other party reasonably objects. Notwithstanding the foregoing, each of
the parties hereby consents to the inclusion of the text of the Transaction
Agreements in filings made with the SEC.
(i) Finder Fees. The Company shall pay to the Finder a commission in the
form of cash and restricted stock equal in value to ten percent (10%) of the
gross proceeds from the sale of the Common Stock under this Agreement. Such
commission is more fully described in the Broker Commission Agreement between
the Company and the Broker of even date herewith.
j. Attorneys' Fees. The Company shall reimburse the Purchaser for its legal
fees and expenses incurred in connection with the preparation and negotiation of
the documents contemplated by this transaction by paying an aggregate of $15,000
to A.I. International Corporate Holdings Ltd. Other than the amounts
contemplated in the immediately preceding sentence, each party shall pay the
fees and expenses of its advisers, counsel, accountants, and other experts, if
any, and all other expenses incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this Agreement
(5) TRANSFER AGENT INSTRUCTIONS.
(a) The Company warrants that, with respect to the Securities, other than
the stop transfer instructions to give effect to Section 4(a) hereof, it will
give its transfer agent no instructions inconsistent with instructions to issue
13
Common Stock from time to time, including upon exercise of the Warrants in such
amounts as specified from time to time by the Company to the transfer agent,
bearing the restrictive legend specified in Section 4(b) of this Agreement prior
to registration of the Shares under the 1933 Act, registered in the name of the
Purchaser or its nominee and in such denominations to be specified by the
Purchaser in connection with each exercise of the Warrants. Except as so
provided, the Shares shall otherwise be freely transferable on the books and
records of the Company as and to the extent provided in this Agreement and the
Registration Rights Agreement. Nothing in this Section shall affect in any way
the Purchaser's obligations and agreement to comply with all applicable
securities laws upon resale of the Securities. If the Purchaser provides the
Company with an opinion of counsel reasonably satisfactory to the Company that
registration of a resale by the Purchaser of any of the Securities in accordance
with clause (1)(B) of Section 4(a) of this Agreement is not required under the
1933 Act, the Company shall (except as provided in clause (2) of Section 4(a) of
this Agreement) permit the transfer of the Securities and, in the case of the
Warrant Shares, promptly instruct the Company's transfer agent to issue one or
more certificates for Common Stock without legend in such name and in such
denominations as specified by the Purchaser.
(b) Subject to the provisions of this Agreement, the Company will permit
the Purchaser to exercise its right to exercise the Warrants in the manner
contemplated by the Warrants.
(c) In lieu of delivering physical certificates representing the
Securities, provided the Company's transfer agent is participating in the
Depository Trust Company ("DTC") Fast Automated Securities Transfer program,
upon request of the Holder and its compliance with the provisions contained in
this paragraph, so long as the certificates therefor do not bear a legend and
the Holder thereof is not obligated to return such certificate for the placement
of a legend thereon, the Company shall use its best efforts to cause its
transfer agent to electronically transmit the Common Stock issuable to the
Holder by crediting the account of Holder's Prime Broker with DTC through its
Deposit Withdrawal Agent Commission system.
(6) CLOSING DATE.
(a) The Closing Date shall occur on the date which is the first Trading Day
after each of the conditions contemplated by Sections 7 and 8 hereof shall have
either been satisfied or been waived by the party in whose favor such conditions
run. The first Installment Payment Date will occur simultaneously with the
Closing Date, as provided in Annex I.
(b) Notwithstanding anything to the contrary contained herein, the Escrow
Agent will be authorized to release the Escrow Funds to the Company and to
others and to release the other Escrow Property on the Closing Date and on each
subsequent Installment Payment Date upon satisfaction of the conditions set
forth in Sections 7 and 8 hereof and as provided in the Joint Escrow
Instructions.
(7) CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
14
The Purchaser understands that the Company's obligation to sell the Shares
to the Purchaser pursuant to this Agreement on the Closing Date and on each
subsequent Installment Payment Date is conditioned upon:
(a) The execution and delivery of this Agreement, the Joint Escrow
Instructions, the Investor Questionnaire attached hereto as Annex IX and the
Registration Rights Agreement by the Purchaser;
(b) Delivery by the Purchaser to the Escrow Agent of good funds as payment
in full of an amount equal to the Installment Payment due for the Shares in
accordance with Annex I of this Agreement;
(c) The accuracy on each Installment Payment Date of the representations
and warranties of the Purchaser contained in this Agreement, each as if made on
such date, and the performance by the Purchaser on or before such date of all
covenants and agreements of the Purchaser required to be performed on or before
such date; and
(d) There shall not be in effect any law, rule or regulation prohibiting or
restricting the transactions contemplated hereby, or requiring any consent or
approval which shall not have been obtained.
(8) CONDITIONS TO THE PURCHASER'S OBLIGATION TO PURCHASE.
The Company understands that the Purchaser's obligation to purchase the
Shares on the Closing Date and on each subsequent Installment Payment Date is
conditioned upon:
(a) The execution and delivery of this Agreement and the other Transaction
Agreements by the Company;
(b) Delivery by the Company to the Escrow Agent of the Certificates in
accordance with this Agreement;
(c) The accuracy in all material respects on each Installment Payment Date
of the representations and warranties of the Company contained in this
Agreement, each as if made on such date, and the performance by the Company on
or before such date of all covenants and agreements of the Company required to
be performed on or before such date;
(d) On the Closing Date and on each subsequent Installment Payment Date,
the Registration Rights Agreement shall be in full force and effect and the
Company shall not be in default thereunder;
(e) On the Closing Date, the Purchaser shall have received an opinion of
counsel for the Company, dated as of the Closing Date (provided, however, that
such counsel shall advise the Escrow Agent in writing after the Closing Date if
the opinion issued on the Closing Date would not be issued on any subsequent
Installment Payment Date), in form, scope and substance reasonably satisfactory
to the Purchaser, substantially to the effect set forth in Annex V attached
hereto;
15
(f) There shall not be in effect any law, rule or regulation prohibiting or
restricting the transactions contemplated hereby, or requiring any consent or
approval which shall not have been obtained; and
(g) From and after the date hereof to and including the Closing Date, each
of the following conditions will remain in effect: (i) the trading of the Common
Stock shall not have been suspended by the SEC or on the Principal Trading
Market; (ii) trading in securities generally on the Principal Trading Market
shall not have been suspended or limited; and (iii) no minimum prices shall been
established for securities traded on the Principal Trading Market.
(9) OPTION.
The Purchasers are hereby granted an option (the "Option") to purchase up to an
additional One Million Three Hundred Thirty Three Thousand Three Hundred and
Thirty Three (1,333,333) shares on the same terms and conditions as provided
herein, including the attachment of warrants to the shares and registration
rights. Such Option shall terminate at 5:00 p.m. New York City time on the date
which is the six month anniversary of the final Installment Payment Date.
Notwithstanding the foregoing, the Option shall terminate earlier if any changes
are made to any law, rule or regulation that would prohibit or restrict the
transactions contemplated by the Option, or requiring any consent or approval
which shall not have been obtained.
(10) INDEMNIFICATION.
The Company agrees to indemnify and hold harmless each Purchaser and its
officers, directors, employees, and agents, and each Purchaser Control Person
from and against any losses, claims, damages, liabilities or expenses incurred
(collectively, "Damages"), joint or several, and any action in respect thereof
to which Purchaser, its partners, Affiliates, officers, directors, employees,
and duly authorized agents, and any such Purchaser Control Person becomes
subject to, resulting from, arising out of or relating to any misrepresentation,
breach of warranty or nonfulfillment of or failure to perform any covenant or
agreement on the part of Company contained in this Agreement, as such Damages
are incurred, except to the extent such Damages result primarily from
Purchaser's failure to perform any covenant or agreement contained in this
Agreement or Purchaser's or its officers', directors', employees', agents' or
Purchaser Control Persons' negligence, recklessness or bad faith in performing
its obligations under this Agreement.
(11) JURY TRIAL WAIVER. The Company and the Purchaser hereby waive a trial by
jury in any action, proceeding or counterclaim brought by either of the Parties
hereto against the other in respect of any matter arising out or in connection
with the Transaction Agreements.
(12) GOVERNING LAW: MISCELLANEOUS.
(a) This Agreement shall be governed by and interpreted in accordance with
the laws of the State of New York for contracts to be wholly performed in such
state and without giving effect to the principles thereof regarding the conflict
of laws. The Company and each Purchaser hereby submit to the jurisdiction of any
state court of competent jurisdiction in and for New York County, New York, or
in the United States District Court for the Southern District of New York
sitting at New York City in any action or proceeding arising out of or relating
16
to this Agreement and agree that all claims in respect of the action or
proceeding may be heard and determined in any such court; agree not to bring any
action or proceeding arising out of or relating to this Agreement in any other
court; waive any defense of inconvenient forum to the maintenance of any action
or proceeding so brought and waive any bond, surety, or other security that
might be required of any other party with respect thereto; and agree that a
final judgment in any action or proceeding so brought shall be conclusive and
may be enforced by suit on the judgment or in any other manner provided by law
or in equity.
(b) Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.
(c) This Agreement shall inure to the benefit of and be binding upon the
successors and assigns of each of the parties hereto.
(d) All pronouns and any variations thereof refer to the masculine,
feminine or neuter, singular or plural, as the context may require.
(e) A facsimile transmission of this signed Agreement shall be legal and
binding on all parties hereto.
(f) This Agreement may be signed in one or more counterparts, each of which
shall be deemed an original.
(g) The headings of this Agreement are for convenience of reference and
shall not form part of, or affect the interpretation of, this Agreement.
(h) If any provision of this Agreement shall be invalid or unenforceable in
any jurisdiction, such invalidity or unenforceability shall not affect the
validity or enforceability of the remainder of this Agreement or the validity or
enforceability of this Agreement in any other jurisdiction.
(i) This Agreement may be amended only by an instrument in writing signed
by the party to be charged with enforcement thereof.
(j) This Agreement supersedes all prior agreements and understandings among
the parties hereto with respect to the subject matter hereof.
(13) NOTICES. Any notice required or permitted hereunder shall be given in
writing (unless otherwise specified herein) and shall be deemed effectively
given on the earliest of:
i) the date delivered, if delivered by personal delivery as against
written receipt therefor or by confirmed facsimile transmission,
ii) the seventh business day after deposit, postage prepaid, in the
United States Postal Service by registered or certified mail, or
17
iii) the third business day after mailing by domestic or international
express courier, with delivery costs and fees prepaid,
in each case, addressed to each of the other parties thereunto entitled at the
following addresses (or at such other addresses as such party may designate by
ten (10) days' advance written notice similarly given to each of the other
parties hereto):
Company: PROVECTUS PHARMACEUTICALS, INC.
at its address at the head of this Agreement
Attn: Xxx Xxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
with a copy to:
Xxxxx Xxxxxx
Baker, Donelson, Bearman, Xxxxxxxx & Xxxxxxxxx, P.C.
000 Xxxxxxxxxxx Xxxx
Xxxx Xxxxxx Xxx 0000 XXX
Xxxxxxx Xxxx, XX 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Purchaser: To the addresses set forth on the Investor Questionnaires
attached hereto as Annex IX.
with a copy to:
Xxxxx Xxxxxx
FCIM Corp.
000 X. 00xx Xxxxxx, Xxxxx 00X
Xxx Xxxx, XX 00000
Telephone No.: (000) 000-0000
Escrow Agent: XxXxxxxxxx & Xxxxx, LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
(14) SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The Company's and the
Purchasers' representations and warranties herein shall survive the execution
and delivery of this Agreement and the delivery of the Certificates and the
18
payment of the Purchase Price, and shall inure to the benefit of the Purchaser
and the Company and their respective successors and assigns.
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]
19
IN WITNESS WHEREOF, this Securities Purchase Agreement has been duly
executed by the Purchasers as of the date set forth below.
A.I. International Corporate Holdings,
Ltd.
Date: June 25 , 2004 By: /s/ Xxxx Xxxxx
-------------------- ------------------------------------
Its: Director
-----------------------------------
American Equity Consulting Services,
Inc.
Date: June 28 , 2004 By: /s/ Xxx Xxxx
--------------------- ------------------------------------
Its: President
-----------------------------------
Castlerigg Master Investments, Ltd.
Date: June 25 , 2004 By: /s/ Xxx X'Xxxxx
--------------------- ------------------------------------
Its: CFO of Xxxxxxx Asset Management
Corporation as Advisor to
Castlerigg Master Investments, Ltd.
-----------------------------------
As of the date set forth below, the undersigned hereby accepts this Agreement
and represents that the foregoing statements are true and correct and that it
has caused this Securities Purchase Agreement to be duly executed on its behalf.
PROVECTUS PHARMACEUTICALS, INC.
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------
Title: President
---------------------------------
Date: June 25 , 2004
-------------------
20
ANNEX I
PAYMENT SCHEDULE
First Installment Payment Date................. June 25, 2004
Second Installment Payment Date................ July 16, 2004
Third Installment Payment Date................. August 9, 2004
ANNEX I
ANNEX II
FORM OF COMMON STOCK CERTIFICATE
ANNEX II
ANNEX III
JOINT ESCROW INSTRUCTIONS
June 25, 2004
Xxxxxx X. Xxxxxxxx
XxXxxxxxxx & Xxxxx, LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Dear Xx. Xxxxxxxx:
As Escrow Agent for Provectus Pharmaceuticals, Inc., a Nevada corporation (the
"Company"); the "Purchasers" as that term is defined in the Securities Purchase
Agreement (the "Purchase Agreement") dated as of June 25, 2004, to which a copy
of these Joint Escrow Instructions is attached as Annex III; and the "Holders,"
as that term is defined in the Securities Redemption Agreement dated as of June
25, 2004 (the "Redemption Agreement"), to which a copy of these Joint Escrow
Instructions is attached as Annex II, you are hereby authorized and directed to
hold the documents delivered to you pursuant to the terms of the Purchase
Agreement and the Redemption Agreement, in accordance with the instructions set
forth below. All terms not defined herein shall have the meanings ascribed to
them in the Purchase Agreement and the Redemption Agreement.
(15) On the Closing Date, you are directed to:
(a) Accept via wire transfer from the Purchasers the first Installment
Payment of Three Hundred Thirty Three Thousand Three Hundred Thirty
Two Dollars ($333,332) in the following amounts:
Purchaser Amount
A.I. International Corporate Holdings, Ltd. $166,666
("A.I. International")
Castlerigg Master Investments, Ltd. $166,666
("Castlerigg")
(b) Accept the Debentures from the Holders;
(c) Upon receiving all outstanding Debentures, wire transfer the first
Redemption Installment Payment in the amount of Two Hundred Eight
Thousand Three Hundred Thirty Three Dollars ($208,333) to the Holders
pursuant to the following wire instructions:
ANNEX III
Holder Wiring Instructions Amount
------ ------------------- ------
Xxxxxx Xxxxx Bank: M&T Bank $31,250
Xxxxxx, XX 00000
ABA #: 022-000046
Account #: 9830661378
Huberfeld Family, LLC Bank: HSBC Bank $31,250
New York, NY
ABA #: 000000000
Account #: 134035364
M/S Family Foundation Bank: Sovereign Bank $20,833
Lakewood, NJ
ABA #: 000000000
Account #: 0381129152
Xxxxxxx Xxxxxxxxx Bank: Wachovia Bank $20,833
Lakewood, NJ
ABA #: 000000000
Account #: 1010083515051
Platinum Partners Value Bank: HSBC $104,167
Arbitrage LP New York, NY
ABA #: 000000000
Account #: 134734149
ATTN: Joann
(d) Wire transfer the cash portion of the Commission in the amount of
Sixteen Thousand Six Hundred Sixty Six Dollars ($16,666) to Xxxxx
Consulting, Inc. pursuant to the following wire instructions:
Bank of America Swift Code XXXXXX0X
00 Xxxxxx Xxx Xxxxxxx # 000000000
Xxxxxx, XX 00000-0000 Account # 0745201038
(000) 000-0000
(e) Wire transfer the attorney's fees in the amount of Fifteen Thousand
Dollars ($15,000) to A.I. International pursuant to the following wire
instructions:
XX Xxxxxx Chase, New York
ABA # 000000000
In favor of Banque de la Mediteranee (Suisse) sa, Geneva
Account # 000-0-00000
Swift Code XXXXXX00
For further credit to: A.I. International Corporate Holdings, Ltd.
Account # 0000000
ANNEX III
(f) Wire transfer the remaining amount of Ninety Three Thousand Three
Hundred Thirty Three Dollars ($93,333) to the Company pursuant to the
following wire instructions:
First Tennessee Bank - Memphis, Tennessee
Branch: Xxxxx, Tennessee
ABA # 000000000
Account # 100777125
(g) Upon receiving confirmation from the Company that the wire transfer
Ninety Three Thousand Three Hundred Thirty Three Dollars ($93,333) has
been received, deliver to the Purchasers the Common Stock Certificates
and Warrants representing the Common Stock of the Company as follows:
Number of
Purchaser Amount of Shares Warrants
A.I. International 222,222 222,222
Castlerigg 222,222 222,222
(16) On the second scheduled Installment Payment Date, you are directed to:
(a) Accept via wire transfer from the Purchasers the second Installment
Payment of Three Hundred Thirty Three Thousand Three Hundred Thirty
Three Dollars ($333,333) in the following amounts:
Purchaser Amount
A.I. International $111,111
Castlerigg $111,111
American Equity Consulting Services, Inc. $111,111
("American Equity")
(b) Wire transfer the second Redemption Installment Payment in the amount
of Two Hundred Eight Thousand Three Hundred Thirty Three Dollars
($208,333) to the Holders pursuant to the following wire instructions:
Holder Wiring Instructions Amount
Xxxxxx Xxxxx Bank: M&T Bank $31,250
Xxxxxx, XX 00000
ABA #: 022-000046
Account #: 9830661378
ANNEX III
Huberfeld Family, LLC Bank: HSBC Bank $31,250
New York, NY
ABA #: 000000000
Account #: 134035364
M/S Family Foundation Bank: Sovereign Bank $20,833
Lakewood, NJ
ABA #: 000000000
Account #: 0381129152
Xxxxxxx Xxxxxxxxx Bank: Wachovia Bank $20,833
Lakewood, NJ
ABA #: 000000000
Account#: 1010083515051
Platinum Partners Value Bank: HSBC $104,167
Arbitrage LP New York, NY
ABA #: 000000000
Account #: 134734149
ATTN: Joann
(c) Wire transfer the cash portion of the Commission in the amount of
Sixteen Thousand Six Hundred Sixty Seven Dollars ($16,667) to Xxxxx
Consulting, Inc. pursuant to the wire instructions in Section 1(d);
(d) Wire transfer the remaining amount of One Hundred Eight Thousand Three
Hundred Thirty Three Dollars ($108,333) to the Company pursuant to the
wire instructions in Section 1(e); and
(e) Upon receiving confirmation from the Company that the wire transfer of
$108,333 has been received, deliver to the Purchasers the Common Stock
Certificates and Warrants representing the Common Stock of the Company
as follows:
Number of
Purchaser Amount of Shares Warrants
A.I. International 148,148 148,148
Castlerigg 148,148 148,148
American Equity 148,148 148,148
(17) On the third scheduled Installment Payment Date, you are directed to:
ANNEX III
(a) Accept via wire transfer from the Purchasers the third Installment
Payment of Three Hundred Thirty Three Thousand Three Hundred Thirty
Two Dollars ($333,332) in the following amounts:
Purchaser Amount
A.I. International $55,555
Castlerigg $55,555
American Equity Consulting Services, Inc.
("American Equity") $222,222
(b) Wire transfer the third Redemption Installment Payment in the amount
of Two Hundred Eight Thousand Three Hundred Thirty Four Dollars
($208,334) to the Holders pursuant to the following wire instructions:
Holder Wiring Instructions Amount
Xxxxxx Xxxxx Bank: M&T Bank $31,250
Xxxxxx, XX 00000
ABA #: 022-000046
Account #: 9830661378
Huberfeld Family, LLC Bank: HSBC Bank $31,250
New York, NY
ABA #: 000000000
Account #: 134035364
M/S Family Foundation Bank: Sovereign Bank $20,834
Lakewood, NJ
ABA #: 000000000
Account #: 0381129152
Xxxxxxx Xxxxxxxxx Bank: Wachovia Bank $20,834
Lakewood, NJ
ABA #: 000000000
Account #: 1010083515051
Platinum Partners Value Bank: HSBC $104,166
Arbitrage LP New York, NY
ABA #: 000000000
Account #: 134734149
ATTN: Joann
(c) Wire transfer the cash portion of the Commission in the amount of
Sixteen Thousand Six Hundred Sixty Six Dollars ($16,666) to Xxxxx
Consulting, Inc. pursuant to the wire instructions in Section 1(d);
ANNEX III
(d) Wire transfer the remaining amount of One Hundred Eight Thousand Three
Hundred Thirty One Dollars ($108,331) to the Company pursuant to the
wire instructions in Section 1(e);
(e) Upon receiving confirmation from the Company that the wire transfer of
$108,331 has been received, deliver to the Purchasers the Common Stock
Certificates and Warrants representing the Common Stock of the Company
as follows:
Number of
Purchaser Amount of Shares Warrants
A.I. International 74,074 74,074
Castlerigg 74,074 74,074
American Equity 296,296 296,296
(f) Deliver the Debentures to the Company for cancellation.
(18) You are directed to retain the Debentures in your possession between
the Closing Date and the third scheduled Installment Payment Date. In the event
that the Company does not receive either of the second or third Installment
Payments, you are directed to:
(a) Deliver the Debentures to the Company for cancellation;
(b) Accept from the Company reissued debentures in amounts according to
that portion of the debentures for which payment has not been made,
pro rata according to each Holder's interest in the Debentures
immediately prior to the Surrender;
(c) Deliver such reissued Debentures to the Holders.
(19) In the event that the Purchasers elect to exercise the Option set
forth in Section 9 of the Purchase Agreement, the Purchasers will give to the
Company and you a written notice specifying the time for a closing thereunder.
Such written notice of exercise shall be received by the Company and you at
least fifteen (15) days in advance of the specified closing.
(20) This escrow shall terminate upon the performance in full of the
Agreement.
(21) Your duties hereunder may be altered, amended, modified or revoked
only by a writing signed by all of the parties hereto.
ANNEX III
(22) You shall be obligated only for the performance of such duties as are
specifically set forth herein and may rely and shall be protected in relying or
refraining from acting on any instrument reasonably believed by you to be
genuine and to have been signed or presented by the proper party or parties. You
shall not be personally liable for any act you may do or omit to do hereunder as
Escrow Agent while acting in good faith and in the exercise of your own good
judgment, and any act done or omitted by you pursuant to the advice of your own
attorneys shall be conclusive evidence of such good faith.
(23) You are hereby expressly authorized to disregard any and all warnings
given by any of the parties hereto or by any other person or corporation,
excepting only orders or process of courts of law, and are hereby expressly
authorized to comply with and obey orders, judgments or decrees of any court. In
case you obey or comply with any such order, judgment or decree of any court,
you shall not be liable to any of the parties hereto or to any other person,
firm or corporation by reason of such compliance, notwithstanding any such
order, judgment or decree being subsequently reversed, modified, annulled, set
aside, vacated or found to have been entered without jurisdiction.
(24) You shall not be liable in any respect on account of the identity,
authorities or rights of the parties executing or delivering or purporting to
execute or deliver the Agreement or any documents or papers deposited or called
for hereunder.
(25) If you reasonably require other or further instruments in connection
with these Joint Escrow Instructions or obligations in respect hereto, the
necessary parties hereto shall join in furnishing such instruments.
(26) It is understood and agreed that should any dispute arise with respect
to the delivery and/or ownership or right of possession of the securities held
by you hereunder, you are authorized and directed to retain in your possession
without liability to anyone all or any part of said securities until such
dispute shall have been settled either by mutual written agreement of the
parties concerned or by a final order, decree or judgment of a court of
competent jurisdiction after the time for appeal has expired and no appeal has
been perfected, but you shall be under no duty whatsoever to institute or defend
any such proceedings.
(27) Any notice required or permitted hereunder shall be given in writing
and shall be deemed effectively given upon personal delivery including delivery
by express courier, or four (4) days after deposit in the United States Post
Office, by registered or certified mail with postage and fees prepaid, addressed
to each of the other parties entitled to such notice at the following addresses,
or at such other addresses as a party may designate by ten (10) days' advance
written notice to each of the other parties hereto.
ANNEX III
COMPANY:
PROVECTUS PHARMACEUTICALS, INC.
0000 Xxx Xxxxx Xxxxxxx, Xxxxx X
Xxxxxxxxx, XX 00000
Attn: Xxx Xxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
with a copy to:
Xxxxx Xxxxxx
Baker, Donelson, Bearman, Xxxxxxxx & Xxxxxxxxx, P.C.
000 Xxxxxxxxxxx Xxxx
Xxxx Xxxxxx Xxx 0000 XXX
Xxxxxxx Xxxx, XX 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Purchasers: To the notice addresses on Exhibit A hereto.
with a copy to: Xxxxx Xxxxxx
FCIM Corp.
000 X. 00xx Xxxxxx, Xxxxx 00X
Xxx Xxxx, XX 00000
Telephone No.: (000) 000-0000
Holders: To the notice addresses on Exhibit B hereto.
Escrow Agent: XxXxxxxxxx & Xxxxx, LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
(28) Each party hereto agrees to reimburse you for all actual expenses
incurred by you in acting hereunder and to indemnify you and to hold you
harmless against any loss, liability and expense incurred without gross
negligence or bad faith on your part arising out of or in connections with the
acceptance or administration by you of your duties hereunder, including the
costs and expenses of defending yourself against any claim of liability
hereunder.
(29) By signing these Joint Escrow Instructions, you become a party hereto
only for the purpose of said Joint Escrow Instructions; you do not become a
party to the Purchase Agreement or the Redemption Agreement.
ANNEX III
(30) This instrument shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns.
17. This Agreement shall be governed by and interpreted and determined in
accordance with the laws of the State of Tennessee, as such laws are applied by
Tennessee courts to contracts made and to be performed entirely in Tennessee by
residents of that state.
IN WITNESS WHEREOF, these Joint Escrow Instructions have been duly executed by
the Company, the Escrow Agent and the Purchasers as of the date set forth below.
PROVECTUS PHARMACEUTICALS, INC.
By:
-----------------------------------------
Title:
--------------------------------------
Date: , 2004
-----------------------------
ESCROW AGENT:
-----------------------------------------
Xxxxxx X. Xxxxxxxx
Date: , 2004
-----------------------------
A.I. International Corporate Holdings,
Ltd.
Date: , 2004 By:
------------------- ---------------------------------------
Its:
--------------------------------------
American Equity Consulting Services,
Inc.
Date: , 2004 By:
------------------- ---------------------------------------
Its:
--------------------------------------
Castlerigg Master Investments, Ltd.
Date: , 2004 By:
-------------------- ---------------------------------------
Its:
--------------------------------------
ANNEX III
IN WITNESS WHEREOF, these Joint Escrow Instructions have been duly executed by
the Holders as of the date set forth below.
Xxxxxx Xxxxx
Date: , 2004
--------------------- --------------------------------------
Xxxxxxx Xxxxxxxxx
Date: , 2004
---------------------- --------------------------------------
Huberfeld Family, LLC
Date: , 2004 By:
---------------------- -----------------------------------
Name:
---------------------------------
Title:
--------------------------------
Platinum Partners Value Arbitrage Fund
LP
Date: , 2004 By:
---------------------- -----------------------------------
Name:
---------------------------------
Title:
--------------------------------
M/S Family Foundation
Date: , 2004 By:
---------------------- -----------------------------------
Name:
---------------------------------
Title:
--------------------------------
ANNEX III
EXHIBIT A
---------
Purchase Notice Addresses
Purchaser Notice Address
--------- --------------
A.I. International Corporate Holdings, Ltd. Arawak Xxxxxxxx
Sea Meadow House
Blackburne Highway
Roadtown, Tortola
British Virgin Islands
American Equity Consulting Services, Inc. 0000 Xxxxx 000 # 000
Xxxx Xxxxxxxxx Xxxxxxx, XX 00000
Castlerigg Master Investments, Ltd. 0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
ANNEX III
EXHIBIT B
---------
Holder Notice Addresses
Holder Notice Address
------ --------------
Xxxxxx Xxxxx 0 Xxxxxxxxxxx Xxxx
Xxxxxx, XX 00000
Huberfeld Family, LLC 000 X. 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Platinum Partners Value Arbitrage Fund LP 000 X. 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
M/S Family Foundation 000 0xx Xxxxxx
Xxxxxxxx, XX 00000
Xxxxxxx Xxxxxxxxx 000 Xxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
ANNEX III
ANNEX IV
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and entered
into as of June 25, 2004 (the "Effective Date"), among PROVECTUS
PHARMACEUTICALS, INC., a Nevada corporation (the "Company") and A.I.
INTERNATIONAL CORPORATE HOLDINGS, LTD.; AMERICAN EQUITY CONSULTING SERVICES,
INC.; AND CASTLERIGG MASTER INVESTMENTS, LTD. (the "Purchasers"). Capitalized
terms not otherwise herein defined shall have the meanings ascribed to them in
the Securities Purchase Agreement between the Company and the Purchasers dated
June 25, 2004 (the "Purchase Agreement").
RECITALS
A. The Purchasers have entered into a Subscription Agreement with the
Company pursuant to which the Purchasers have agreed to purchase Common Stock in
the amount set forth in such Subscription Agreements. Pursuant to the Purchase
Agreement, the Company has agreed to issue Warrants to the Purchasers in the
amount set forth in the Purchase Agreement.
B. As a condition to the purchase of the Common Stock and the potential
exercise of Warrants by the Purchasers, the parties have agreed to enter into
this Agreement.
AGREEMENT
THEREFORE, the parties hereto, in consideration of the foregoing, the
mutual covenants and agreements hereinafter set forth, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, agree as follows:
(1) Definitions and Interpretation
(a) Certain Definitions
As used in this Agreement, the following capitalized terms shall have the
following meanings:
(i) "Prospectus" means the prospectus included in any Registration Statement,
including any preliminary prospectus, and any amendment or supplement thereto
and all material incorporated by reference therein.
(ii) "Purchase Price" means the aggregate purchase price paid by the Purchasers
for the Common Stock issued to the Purchasers pursuant to the Subscription
Agreements. Notwithstanding the foregoing, the Purchase Price shall exclude the
value of any shares sold or otherwise disposed of by the Purchasers prior the
Required Filing Date.
(iii) "Registrable Securities" means the Shares and the Warrants and any shares
or other securities of the Company issued or issuable with respect thereto upon
any stock split, stock dividend, recapitalization or similar event, excluding
shares or other securities sold or transferred pursuant to an effective
registration statement,sold or otherwise transferred pursuant to Rule 144 under
the 1933 Act, sold or otherwise transferred pursuant to a transfer not requiring
ANNEX IV
registration under the 1933 Act, held by a Purchaser who at such time is not an
Affiliate of the Company and that are eligible for sale pursuant to Rule 144(k)
under the 1933 Act, and held by a Purchaser who at such time is an Affiliate of
the Company if all of such shares or other securities are eligible for sale
pursuant to Rule 144 under the 1933 Act and could be sold in one transaction in
accordance with the volume limitations contained in Rule 144(e)(1)(i) under the
0000 Xxx.
(iv) "Registration Expenses" means any and all expenses incident to performance
of or compliance with this Agreement, including all applicable registration and
filing fees imposed by the SEC and any securities exchange or market on which
the Registrable Securities are required to be listed and/or quoted, as the case
may be, all fees and expenses incurred in connection with compliance with state
securities or "blue sky" laws (including reasonable fees and disbursements of
counsel in connection with qualification of any of the Registrable Securities
under any state securities or blue sky laws and the preparation of a blue sky
memorandum) and compliance with the rules of the National Association of
Securities Dealers, Inc. ("NASD"), all expenses of any Persons in preparing or
assisting in preparing, word processing, printing and distributing the
Registration Statement, any Prospectus, certificates and other documents
relating to the performance of and compliance with this Agreement, all fees and
expenses incurred in connection with the listing, if any, of any of the
Registrable Securities on any securities exchange or exchanges, and the fees and
disbursements of counsel for the Company and of the independent public
accountants of the Company. Registration Expenses shall specifically exclude
underwriting discounts and commissions, the fees and disbursements of counsel
representing Purchaser or any underwriter or agent acting on behalf of Purchaser
(other than the Broker), and transfer taxes, if any, relating to the sale or
disposition of Registrable Securities by Purchaser, all of which shall be borne
by Purchaser in all cases.
(v) "Registration Statement" means a registration statement of the Company (and
any other entity required to be a registrant pursuant to the requirements of the
0000 Xxx) covering all or a part of the Registrable Securities under the 1933
Act for which the Company is eligible, including all amendments (including
post-effective amendments), exhibits and materials incorporated by reference
therein.
(vi) "SEC" means the United States Securities and Exchange Commission.
(vii) "Shelf Registration Statement" shall mean a Registration Statement on Form
S-3 (or any successor form) filed pursuant to Rule 415 of Regulation C
promulgated under the 1933 Act (or any successor rule).
(b) Rules of Interpretation
(i) Each term defined in the singular form in Section or elsewhere in this
Agreement means the plural thereof whenever the plural form is used, and each
term defined in the plural form means the singular thereof whenever the singular
form is used. The use of a pronoun of any gender is applicable to all genders.
ANNEX IV
(ii) Unless otherwise specified therein, all terms defined in this Agreement
have the meanings as so defined herein when used in any other certificate,
report or document made or delivered pursuant hereto.
(iii) A reference to any agreement, document or instrument refers to the
agreement, document or instrument as amended or modified and in effect from time
to time in accordance with the terms thereof and as permitted herein.
(iv) Except as otherwise specified, a reference to any applicable law refers to
the law as amended, modified, codified, replaced or reenacted, in whole or in
part, and in effect from time to time, and to any rules and regulations
promulgated thereunder; and a reference to any section or other provision of any
applicable law refers to that provision of the law from time to time in effect
and constituting the substantive amendment, modification, codification,
replacement or reenactment of the referenced section or other provision.
(v) All accounting terms not specifically defined herein shall be construed in
accordance with GAAP. All terms used in Article 9 of the Uniform Commercial Code
as enacted in the State of Nevada and not specifically defined herein are used
herein as defined therein.
(c) Construction
The headings preceding the text of the sections of this Agreement and the
exhibits hereto are for convenience only and shall not be deemed part of this
Agreement. The language used in this Agreement shall be deemed to be the
language chosen by the parties to this Agreement to express their mutual intent,
and no rule of strict construction shall be applied against any party.
(2) Required Registration
(a) Required Registration
Within forty-five (45) days after the final Installment Payment made
pursuant to the payment schedule set forth in Annex I of the Purchase Agreement
(the "Final Installment Payment") is received by the Company (the "Required
Filing Date"), the Company shall be required to file a Registration Statement to
register the Registrable Securities (a "Required Registration") and shall use
its best efforts to cause such Registration Statement to be declared effective
by the SEC within one-hundred and five (105) days after the receipt by the
Company of the Final Installment Payment (the "Required Effectiveness Date").
The Company may elect, at its option, to file such Registration Statement as a
shelf registration pursuant to Rule 415 of Regulation C promulgated under the
1933 Act (or any successor rule). Thereafter, the Company may elect to include
in such registration additional Common Stock to be issued by the Company. The
Company represents that as of the date of this agreement, it will be required to
register approximately Three Million Seven Hundred Thousand (3,700,000) shares
on the Registration Statement, including the Registrable Securities.
(b) Exercise of Option
If the Purchasers exercise all or any part of the Option provided in
Section 9 of the Purchase Agreement prior to the time that the Registration
Statement is declared effective by the SEC, the Company will amend the
ANNEX IV
Registration Statement to include the shares being purchased pursuant to the
exercise of the Option and the shares underlying the warrants related thereto.
(c) Effective Registration and Expenses
The Company shall promptly notify the Purchasers of the date and time of
declaration of effectiveness of such Registration Statement. In a registration
initiated as a Required Registration, the Company shall pay the Registration
Expenses incurred in connection therewith.
(d) Penalties
(i) If the Registration Statement covering the Registrable Securities is not
filed with the SEC by the Required Filing Date, or if the Registration Statement
covering the Registrable Securities is not declared effective by the SEC by the
Required Effectiveness Date, the Company shall pay penalties (the "Penalties"
and respectively the "Filing Penalty" and the "Effectiveness Penalty") as
described below. Such Penalties shall be paid in shares of Common Stock valued
at $.75 per share (the "Penalty Shares") and a warrant identical to the Warrant
for the purchase of a number of shares equal to the number of Penalty Shares.
(ii) If the Registration Statement covering the Registrable Securities is not
filed with the SEC by the Required Filing Date, the Filing Penalty to be paid by
the Company to the Purchaser shall be determined as of each Filing Computation
Date (as defined below) and such amount shall be equal to the Filing Penalty
Percentage (as defined below) of the Purchase Price for the period from the date
following the Required Filing Date to the first relevant Filing Computation
Date, and thereafter to each subsequent Filing Computation Date (prorated on a
daily basis if such period is less than thirty (30) days). The "Filing Penalty
Percentage" means (A) two percent (2%) of the Purchase Price for the first
Filing Computation Date after the Required Filing Date and (B) two percent (2%)
of the Purchase Price for each Filing Computation Date thereafter. By way of
illustration and not in limitation, if the Registration Statement is not filed
before the Required Filing Date but is instead filed 60 days after the Required
Filing Date, the Filing Penalty will be an aggregate of four percent (4%) of the
Purchase Price for the Shares (2% for the first 30 days after the Required
Filing Date and 2% for the second 30 days after the Required Filing Date).
(iii) If the Registration Statement covering the Registrable Securities is not
declared effective by the SEC by the Required Effectiveness Date, the
Effectiveness Penalty to be paid by the Company to the Purchaser shall be
determined as of each Effectiveness Computation Date (as defined below) and such
amount shall be equal to the Effectiveness Penalty Percentage (as defined below)
of the Purchase Price for the period from the date following the Required
Effectiveness Date to the first relevant Effectiveness Computation Date, and
thereafter to each subsequent Effectiveness Computation Date (prorated on a
daily basis if such period is less than thirty (30) days). The "Effectiveness
Penalty Percentage" means (A) two percent (2%) of the Purchase Price for the
first Effectiveness Computation Date after the Required Effectiveness Date and
(B) two percent (2%) of the Purchase Price for each Effectiveness Computation
Date thereafter.
ANNEX IV
(iv) "Filing Computation Date" means (A) the date which is thirty (30) days
after the Required Filing Date, and (B) each date which is thirty (30) days
after the previous Filing Computation Date.
(v) "Effectiveness Computation Date" means (A) the date which is thirty (30)
days after the Required Effectiveness Date, and (B) each date which is thirty
(30) days after the previous Effectiveness Computation Date.
(vi) Notwithstanding the foregoing, the amounts payable by the Company pursuant
to this provision shall not be payable to the extent any delay in the filing or
effectiveness of the Registration Statement occurs because of an act of, or a
failure to act or to act timely by the Purchasers or their counsel.
(3) Registration Procedures
(a) Obligations of Company
In connection with the obligations of the Company with respect to the
registration of the Registrable Securities contemplated herein, the Company
shall:
(i) prepare and file with the SEC such amendments and supplements (including
required periodic reporting filings under the 0000 Xxx) to such Registration
Statement and Prospectus included therein as may be necessary to keep such
Registration Statement effective for the applicable period; cause the Prospectus
to be amended or supplemented as required and to be filed as required by Rule
424 or any similar rule that may be adopted under the 1933 Act; respond as
promptly as practicable to any comments received from the SEC with respect to
the Registration Statement or any amendment thereto; and comply with the
provisions of the 1933 Act with respect to the disposition of all securities
covered by such Registration Statement during the applicable period in
accordance with the intended method or methods of distribution by the selling
Purchasers thereof. The Company shall keep the Registration Statement effective
at all times during the period continuing until the earlier of (i) the date when
the Purchasers may sell all Registrable Securities under Rule 144 without volume
or other restrictions or limits or (ii) the date the Purchasers no longer own
any of the Registrable Securities. Notwithstanding anything to the contrary
contained herein, the Company shall not be required to take any of the actions
described in the sentence above (i) to the extent that the Company is in
possession of material non-public information (such that it has been advised by
counsel that a failure to disclose such information would constitute a material
omission from the prospectus) and it delivers written notice to each such
Purchaser of Registrable Securities to the effect that such selling Purchaser
may not make offers or sales under the Registration Statement for a period not
to exceed 30 days from the date of such notice, or has executed a letter of
intent for a material merger, acquisition or disposition transaction and it
delivers written notice to each such Purchaser of Registrable Securities to the
effect that such selling Purchaser may not make offers or sales under the
Registration Statement for a period not to exceed 60 days from the date of such
notice; provided, however, that the Company may deliver only two such notices
ANNEX IV
within any 12-month period, or (ii) to the extent that such registration would
require initial or continuing disclosure of events or proceedings yet unreported
that, in the opinion of the Board of Directors of the Company, would not be in
the best interests of the Company and its stockholders and such disclosure is
not otherwise required under applicable law (including applicable securities
laws), and the Company delivers written notice to each such Purchaser of
Registrable Securities to the effect that such selling Purchaser may not make
offers or sales for a period not to exceed 60 days from the date of such notice;
provided, however, that the Company may deliver only one such notice within any
365-day period. The Purchasers shall promptly provide to the Company such
information as the Company reasonably requests in order to identify such
Purchaser and the method of distribution in a post-effective amendment to the
Registration Statement or a supplement to the Prospectus. Such Purchaser also
shall notify the Company in writing upon completion of such offer or sale or at
such time as such Purchaser no longer intends to make offers or sales under the
Registration Statement;
(ii) use its best efforts to register or qualify the Registrable Securities by
the time the Registration Statement is declared effective by the SEC under all
applicable state securities or blue sky laws of such jurisdictions in the United
States and its territories and possessions as any Purchaser of Registrable
Securities covered by the Registration Statement shall reasonably request in
writing and keep each such registration or qualification effective during the
period such Registration Statement is required to be kept effective or during
the period offers or sales are being made by a Purchaser that has delivered a
Registration Notice to the Company, whichever is shorter; provided, however,
that in connection therewith, the Company shall not be required to qualify as a
foreign corporation to do business or to register as a broker or dealer in any
such jurisdiction where it would not otherwise be required to qualify or
register, subject itself to taxation in any such jurisdiction, or file a general
consent to service of process in any such jurisdiction;
(iii) notify each selling Purchaser of Registrable Securities promptly and, if
requested by such Purchaser, confirm in writing, when the Registration Statement
and any post-effective amendments thereto have become effective, when any
amendment or supplement to the Prospectus has been filed with the SEC, of the
issuance by the SEC or any state securities authority of any stop order
suspending the effectiveness of the Registration Statement or any part thereof
or the initiation of any proceedings for that purpose, if the Company receives
any notification with respect to the suspension of the qualification of the
Registrable Securities for offer or sale in any jurisdiction or the initiation
of any proceeding for such purpose, and of the happening of any event during the
period the Registration Statement is effective as a result of which such
Registration Statement contains any untrue statement of a material fact or omits
to state any material fact required to be stated therein or necessary to make
the statements therein not misleading or the Prospectus as then amended or
supplemented contains any untrue statement of a material fact or omits to state
any material fact necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading; provided, however,
that the Company shall not be obligated to prepare and furnish any prospectus
supplements or amendments relating to any material nonpublic information at any
such time as the Board of Directors of the Company has determined that, for good
business reasons, the disclosure of such material nonpublic information at that
time would be materially detrimental to the Company in the circumstances and is
not otherwise required under applicable law (including applicable securities
laws); provided, further, that the Company may only delay its obligations
pursuant to the aforementioned proviso for a period of 60 days in any 180-day
period;
ANNEX IV
(iv) use its best efforts to obtain the withdrawal of any order suspending the
effectiveness of the Registration Statement or any part thereof as promptly as
possible;
(v) cooperate with the selling Purchasers of Registrable Securities to
facilitate the timely preparation and delivery of unlegended certificates
representing Registrable Securities to be sold; and enable unlegended
certificates for such Registrable Securities to be issued for such numbers of
shares and registered in such names as the selling Purchasers may reasonably
request at least two business days prior to any sale of Registrable Securities;
(vi) use its best efforts to maintain the listing of the Common Stock on the
securities market on which the Common Stock are now listed or on another
national securities exchange or national market system, as those terms are used
under the 1934 Act;
(vii) use its best efforts to cause all Registrable Securities to be listed on
any securities market or exchange on which similar securities issued by the
Company are then listed; and
(viii) provide a transfer agent and registrar for all Registrable Securities
registered hereunder and a CUSIP number for all Registrable Securities, not
later than the effective date of the Registration Statement.
(ix) permit a single firm of counsel designated by the Purchasers to review the
Registration Statement and all amendments and supplements thereto a reasonable
period of time (but not less than three (3) business days) prior to their filing
with the SEC, and not file any document in a form to which such counsel
reasonably objects (a "Disputed Document"); provided, however, that if
Purchaser's counsel objects to such a Disputed Document, the Required Filing
Date and the Required Effectiveness Date provided in Section 2.01 above shall be
extended for such period of time as it requires for the Company's counsel and
Purchaser's counsel to agree on changes to such Disputed Document. The Company
shall be responsible for payment of legal fees to the Purchaser's counsel for
review of the Registration Statement in a maximum amount of $2,000.
(b) Information to be Provided
The Company may require each Purchaser of Registrable Securities to furnish
to the Company in writing such information regarding the proposed distribution
by such Purchaser of such Registrable Securities as the Company may from time to
time reasonably request in writing.
(c) Duties of Purchaser
In connection with and as a condition to the Company's obligations with
respect to any Registration Statement, each Purchaser covenants and agrees that:
(i) it will not offer or sell any Registrable Securities under the Registration
Statement until it has received notice from the Company that the Registration
Statement and any post-effective amendments thereto have become effective;
(ii) upon receipt of any notice from the Company contemplated by Section 3.01(a)
or (c), such Purchaser shall not offer or sell any Registrable Securities
pursuant to the Registration Statement until, in the sole discretion of the
ANNEX IV
Company, the event no longer precludes sale or such Purchaser receives copies of
the supplemented or amended Prospectus contemplated by Section 3.01(c) and
receives notice that any post-effective amendment has become effective, and, if
so directed by the Company, such Purchaser will deliver to the Company (at the
expense of the Company) all copies in its possession, other than permanent file
copies then in such Purchaser's possession, of the Prospectus as amended or
supplemented at the time of receipt of such notice; and
(iii) the Purchaser and any of its officers, directors or affiliates, if any,
shall comply with the provisions of Regulation M under the 1934 Act, or any
successor regulations, as applicable to them in connection with sales of
Registrable Securities pursuant to the Registration Statement and shall enter
into such written agreements as the Company shall request to ensure compliance
with this Section.
(4) Indemnification; Contribution
(a) Indemnification by the Company
The Company agrees to indemnify and hold harmless each Purchaser and its
officers and directors and each Person, if any, who controls any Purchaser
within the meaning of Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage and expense whatsoever,
as incurred, to which such Purchaser, officer, director or controlling Person
may become subject under the 1933 Act or otherwise that arise out of or are
based upon any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement or any amendment thereto, or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading or
that arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in any Prospectus or any amendment or
supplement thereto, or the omission or alleged omission to state therein a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense whatsoever,
as incurred, to the extent of the aggregate amount paid in settlement of any
litigation, or incurred in connection with any investigation or proceeding by
any governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or alleged untrue statement or
any omission or alleged omission contained in any Registration Statement, if
such settlement is effected with the written consent of the Company; and
(iii) subject to the limitations set forth in Section 4.01(e), against any and
all expense whatsoever, as incurred (including reasonable fees and disbursements
of counsel), reasonably incurred in investigating, preparing or defending
against any litigation, or investigation or proceeding by any governmental
agency or body, commenced or threatened, in each case whether or not a party, or
any claim whatsoever based upon any such untrue statement or alleged untrue
statement or omission or alleged omission, to the extent that any such expense
is not paid under Sections or;
ANNEX IV
(iv) any violation by the Company of any rule or regulation promulgated under
the 1933 Act applicable to the Company in connection with any registration,
qualification, or compliance of the Registrable Securities or any other capital
stock of the Company;
(v) provided, however, that the indemnity provided pursuant to this Section
shall not apply to any amounts paid in settlement of any such loss, liability,
claim, damage or expense if such settlement is effected without the consent of
the Company (which consent shall not be unreasonably delayed or withheld), or to
any Purchaser with respect to any of the foregoing in this Section that arises
out of or is based upon any untrue statement or alleged untrue statement or
omission or alleged omission made in reliance upon and in conformity with
written information furnished to the Company by such Purchaser expressly for use
in any Registration Statement or any amendment thereto or the Prospectus or any
amendment or supplement thereto, or the Purchaser's or an underwriter's failure
to deliver a copy of any Registration Statement or Prospectus or any amendments
or supplements thereto after the Company has furnished the Purchaser or
underwriter with the requested number of copies of the same.
(b) Indemnification by Purchasers
Each Purchaser severally agrees to indemnify and hold harmless the Company
and the other selling Purchasers, and each of their respective directors and
officers (including each director and officer of the Company who signed the
Registration Statement), and each Person, if any, who controls the Company or
any other selling Purchaser within the meaning of Section 15 of the 1933 Act, to
the same extent as the indemnity contained in Section 4.01, but only insofar as
such loss, liability, claim, damage or expense arises out of or is based upon
any untrue statement or alleged untrue statement or omission or alleged omission
made in any Registration Statement or any amendment thereto or the Prospectus or
any amendment or supplement thereto in reliance upon and in conformity with
written information furnished to the Company by such selling Purchaser for use
therein relating to the Purchaser's status as a selling security Purchaser,
Purchaser's failure to deliver a copy of any Registration Statement or
Prospectus or any amendments or supplements thereto, to the extent such delivery
is required to be made by Purchaser and after the Company has furnished
Purchaser with the requested number of copies of the same, or the breach of any
covenant contained in Section 3.03.
(c) Conduct of Indemnification Proceedings
Each indemnified party shall give reasonably prompt notice to each
indemnifying party of any action or proceeding commenced against the indemnified
party in respect of which indemnity may be sought hereunder, but failure to so
notify an indemnifying party shall not relieve it from any liability which it
may have under the indemnity agreement provided in Sections 4.01 or 4.02, unless
and to the extent it did not otherwise learn of such action and the lack of
notice by the indemnified party materially prejudices the indemnifying party or
results in the forfeiture by the indemnifying party of substantial rights and
defenses and shall not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided under Sections 4.01 or 4.02. After receipt of such notice, the
indemnifying party shall be entitled to participate in and, at its option,
jointly with any other indemnifying party so notified, to assume the defense of
such action or proceeding at such indemnifying party's own expense with counsel
chosen by such indemnifying party and approved by the indemnified party, which
approval shall not be unreasonably withheld; provided, however, that, if the
ANNEX IV
defendants in any such action or proceeding include both the indemnified party
and the indemnifying party and the indemnified party reasonably determines, upon
advice of counsel, that a conflict of interest exists or that there may be legal
defenses available to it or other indemnified parties that are different from or
in addition to those available to the indemnifying party, then the indemnified
party shall be entitled to one separate counsel, the reasonable fees and
expenses of which shall be paid by the indemnifying party. If the indemnifying
party does not assume the defense of any such action or proceeding, after having
received the notice referred to in the first sentence of this paragraph, the
indemnifying party will pay the reasonable fees and expenses of counsel (which
shall be limited to a single law firm) for the indemnified party. In such event,
however, the indemnifying party will not be liable for any settlement effected
without the written consent of such indemnifying party. If the indemnifying
party assumes the defense of any such action or proceeding in accordance with
this paragraph, such indemnifying party shall not be liable for any fees and
expenses of counsel for the indemnified party incurred thereafter in connection
with such action or proceeding except as set forth in the proviso in the second
sentence of this Section 4.03.
(d) Contribution
(i) In order to provide for just and equitable contribution in circumstances in
which the indemnity agreement provided for in this Section 4 is for any reason
held to be unenforceable although applicable in accordance with its terms, the
Company and the selling Purchasers shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by such
indemnity agreement incurred by the Company and the selling Purchasers, in such
proportion as is appropriate to reflect the relative fault of and benefits to
the Company on the one hand and the selling Purchasers on the other (in such
proportions that the selling Purchasers are severally, not jointly, responsible
for the balance), in connection with the statements or omissions which resulted
in such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative benefits to the indemnifying
party and indemnified parties shall be determined by reference to, among other
things, the total proceeds received by the indemnifying party and indemnified
parties in connection with the offering to which such losses, claims, damages,
liabilities or expenses relate. The relative fault of the indemnifying party and
indemnified parties shall be determined by reference to, among other things,
whether the action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact, has
been made by, or relates to information supplied by, such indemnifying party or
the indemnified parties, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action.
(ii) Notwithstanding the foregoing, no Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 0000 Xxx) shall be
entitled to contribution from any Person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 4.04(b), each Person, if any,
who controls a Purchaser within the meaning of Section 15 of the 1933 Act and
directors and officers of a Purchaser shall have the same rights to contribution
as such Purchaser, and each director of the Company, each officer of the Company
who signed the Registration Statement and each Person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act shall have the same
rights to contribution as the Company.
ANNEX IV
(e) Survival of Provisions
The obligations of the Company and Purchasers under this Section shall
survive completion of any offering of Registrable Securities in a registration
statement and the termination of this agreement. No indemnifying party, in the
defense of any such claim or litigation, shall, except with the consent of each
indemnified party, consent to entry of any judgment or enter into any settlement
which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such indemnified party of a release from all liability
in respect to such claim or litigation.
(5) Rule 144 Reporting
With a view to making available to each Purchaser the benefits of certain
rules and regulations of the SEC which may permit the sale of the Registrable
Securities to the public without registration, the Company agrees to use its
best efforts to:
(i) make and keep public information available, as those terms are understood
and defined in SEC Rule 144 or any similar or analogous rule promulgated under
the 1933 Act;
(ii) file with the SEC, in a timely manner, all reports and other documents
required of the Company under the 1934 Act; and
(iii) so long as a Purchaser owns any Registrable Securities, furnish to such
Purchaser forthwith upon request a copy of the most recent annual and/or
quarterly report of the Company and such other reports and documents as a
Purchaser reasonably may request in availing itself of any rule or regulation of
the SEC allowing it to sell any such securities without registration.
(6) Transfer of Shares
(a) Restrictions
(i) Purchaser agrees not to make any disposition of all or any portion of the
Common Stock or Registrable Securities unless and until:
(1) there is then in effect a registration statement under the 1933
Act covering such proposed disposition and such disposition is made in
accordance with such registration statement; or
(2) the Purchaser shall have notified the Company of the proposed
disposition and furnished the Company with a statement of the circumstances
surrounding the proposed disposition, and if reasonably requested by the
Company, an opinion of counsel reasonably satisfactory to the Company and
its counsel that such disposition will not require registration of such
Registrable Securities under the 1933 Act.
(ii) The Purchaser agrees to not engage in hedging activities or engage in short
sales of the Company's Common Stock for so long as Purchaser owns any
Registrable Securities.
ANNEX IV
(b) Legends
(i) Unless otherwise permitted by the provisions of this Agreement, each
certificate representing Common Stock or Registrable Securities shall be stamped
or otherwise imprinted with a legend substantially similar to the following (the
"Private Placement Legend"), in addition to any legend required under applicable
state securities laws:
[Neither the Warrant represented hereby nor the shares issuable upon the
exercise of this Warrant have] [The Shares represented by this Certificate
have not] been registered under the 1933 Act of 1933, as amended (the "1933
Act"), and may not be offered, sold or otherwise transferred, pledged or
hypothecated unless and until such shares are registered under the 1933 Act
or an opinion of counsel reasonably satisfactory to the Company is obtained
to the effect that such registration is not required.
(ii) Upon the exchange or replacement of Shares or Registrable Securities
bearing the Private Placement Legend, the Company shall deliver only Shares or
Registrable Securities, as applicable, that bear the Private Placement Legend,
unless: such transfer or exchange is effected pursuant to an effective
registration statement under the 1933 Act; or in the case of Shares, such Shares
were acquired pursuant to an effective registration statement under the 1933
Act; or there is delivered to the Company an opinion of counsel reasonably
satisfactory to the Company and its counsel that such disposition will not
require registration of such Shares under the 1933 Act..
(iii) Any legend endorsed on an instrument pursuant to applicable state
securities laws and the stop-transfer instructions with respect to such
securities shall be removed upon receipt by the Company of an order of the
appropriate blue sky authority authorizing such removal.
(c) Transfer of Rights to Subsequent Purchasers
Subject to the foregoing restrictions, the Company and the Purchaser hereby
agree that any transferee and/or subsequent Purchaser of Registrable Securities
shall be entitled to all benefits and subject to all obligations hereunder as a
Purchaser of Registrable Securities. By its acceptance of any Shares or
Registrable Securities bearing the Private Placement Legend, each Purchaser
acknowledges the restrictions on transfer of the Common Stock and Registrable
Securities, as applicable, set forth in this Agreement and agrees that it shall
transfer the Common Stock or Registrable Securities, as applicable, only as
provided in this Agreement.
(7) General Provisions
(a) Amendments and Waivers
The provisions of this Agreement, including the provisions of this
sentence, may not be amended, modified, supplemented or waived, nor may consent
to departures therefrom be given, without the written consent of the Company and
the Purchasers of a majority of the outstanding Registrable Securities (treating
for the purpose of such computation the Purchasers of Warrants as the Purchasers
ANNEX IV
of Registrable Securities issuable upon exercise of the Warrants). Notice of any
such amendment, modification, supplement, waiver or consent adopted in
accordance with this Section shall be provided by the Company to each Purchaser
of Registrable Securities at least 30 days prior to the effective date of such
amendment, modification, supplement, waiver or consent.
(b) Successors and Assigns
This Agreement shall inure to the benefit of and be binding upon the
successors, assigns and transferees of each of the parties, including subsequent
Purchasers without the need for an express assignment. If any successor,
assignee or transferee of any Purchaser shall acquire Registrable Securities, in
any manner, whether by operation of law or otherwise, such Registrable
Securities shall be held subject to all of the terms of this Agreement, and by
taking and holding Registrable Securities such Person shall be conclusively
deemed to have agreed to be bound by all of the terms and provisions hereof.
(c) Specific Performance
The parties hereto acknowledge that there would be no adequate remedy at
law if any party fails to perform any of its obligations hereunder, and
accordingly agree that each party, in addition to any other remedy to which it
may be entitled at law or in equity, shall be entitled to compel specific
performance of the obligations of any other party under this Agreement in
accordance with the terms and conditions of this Agreement.
(d) Notices
All notices, requests, consents and other communications hereunder shall be
in writing and shall be deemed to have been made (x) upon actual receipt, when
given by hand or confirmed facsimile or electronic mail transmission, (y) one
day after delivery to the carrier, when given by overnight delivery service or
(z) two days after mailing, when given by first-class registered or certified
mail, postage prepaid, return receipt requested; in any case to the following
address, or to such other address as a party, by notice to the other parties
given pursuant to this Section , may designate from time to time:
(a) If to Purchasers, to the addresses set forth in Exhibit A attached
hereto, with a copy to Xxxxx Xxxxxx, as representative for the Purchasers,
at the address set forth in the Purchase Agreement.
ANNEX IV
(b) If to the Company, to: With a copy to:
Provectus Pharmaceuticals, Inc. Baker, Donelson, Bearman, Xxxxxxxx &
Xxxxxxxxx, PC
Attention: President Attention: Xxxxx Xxxxxx
0000 Xxx Xxxxx Xxxxxxx, Xxxxx X 000 Xxxxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000 XX Xxx 0000 CRS
Facsimile: 865.539.9654 Xxxxxxx Xxxx, XX 00000
Facsimile: (000) 000-0000
(e) Governing Law; Venue of Actions
(i) This Agreement shall be governed and construed in accordance with the
internal laws of the State of New York as applied to contracts made and
performed within the State of New York, without regard to the principles thereof
regarding resolution of conflicts of law.
(ii) The Company and each Purchaser hereby submit to the jurisdiction of any
state court of competent jurisdiction in and for New York County, New York, or
in the United States District Court for the Southern District of New York
sitting at New York in any action or proceeding arising out of or relating to
this Agreement and agree that all claims in respect of the action or proceeding
may be heard and determined in any such court; agree not to bring any action or
proceeding arising out of or relating to this Agreement in any other court;
waive any defense of inconvenient forum to the maintenance of any action or
proceeding so brought and waive any bond, surety, or other security that might
be required of any other Party with respect thereto; and agree that a final
judgment in any action or proceeding so brought shall be conclusive and may be
enforced by suit on the judgment or in any other manner provided by law or in
equity.
(f) Entire Agreement
This Agreement is intended by the parties as a final expression of their
agreement and intended to be a complete and exclusive statement of the agreement
and understanding of the parties hereto in respect of the subject matter
contained herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
(g) Severability
In the event one or more of the provisions of this Agreement should, for
any reason, be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality, or unenforceability shall not affect any other
provisions of this Agreement, and this Agreement shall be construed as if such
invalid, illegal or unenforceable provision had never been contained herein.
(h) Counterparts
This Agreement may be executed in any number of counterparts and by the
parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement.
* signatures appear on following page *
ANNEX IV
Signatures
IN WITNESS WHEREOF, the Company and the Purchasers have executed this
Agreement to be as of the Effective Date.
PROVECTUS PHARMACEUTICALS, INC., a
Nevada corporation
By:
Name:
Title:
IN WITNESS WHEREOF, this Registration Rights Agreement has been duly executed by
the Purchasers as of the date set forth below.
A.I. International Corporate Holdings,
Ltd.
Date: , 2004 By:
---------------------- -----------------------------------
Its:
----------------------------------
American Equity Consulting Services,
Inc.
Date: , 2004 By:
---------------------- -----------------------------------
Its:
----------------------------------
Castlerigg Master Investments, Ltd.
Date: , 2004 By:
---------------------- -----------------------------------
Its:
----------------------------------
ANNEX IV
EXHIBIT A
---------
PURCHASERS
Purchaser Notice Address
--------- --------------
A.I. International Corporate Holdings, Ltd. Arawak Xxxxxxxx
Sea Meadow House
Blackburne Highway
Roadtown, Tortola
British Virgin Islands
American Equity Consulting Services, Inc. 0000 Xxxxx 000 # 000
Xxxx Xxxxxxxxx Xxxxxxx, XX 00000
Castlerigg Master Investments, Ltd. 0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
ANNEX IV
ANNEX V
OPINION OF COUNSEL
ANNEX V
ANNEX VI
COMPANY DISCLOSURE MATERIALS
None.
ANNEX VI
ANNEX VII
COMPANY'S SEC DOCUMENTS AVAILABLE ON XXXXX
10QSB 05/17/2004
DEF 14A 04/29/2004
S-2/A 04/07/2004
10KSB/A 03/30/2004
10KSB 03/30/2004
8-K/A 03/25/2004
4 03/10/2004
4 03/01/2004
4 03/01/2004
4 03/01/2004
3 02/25/2004
S-2 02/12/2004
RW 02/11/2004
S-3 01/16/2004
8-K 12/15/2003
4 12/10/2003
REGDEX 12/04/2003
8-K 12/02/2003
10QSB 11/14/2003
S-8 10/01/2003
10QSB 08/14/2003
8-K 06/26/2003
4 06/18/2003
4 06/02/2003
4 05/30/2003
4 05/30/2003
4 05/30/2003
4 05/30/2003
8-K 05/22/2003
10QSB 05/09/2003
DEF 14A 04/30/2003
PRER14A 04/21/2003
10KSB 04/15/2003
PRE 14A 04/08/2003
NT 10-K 03/27/2003
8-K/A 01/09/2003
8-K 01/03/2003
8-K 12/20/2002
8-K 12/10/2002
8-K 11/27/2002
10QSB 11/15/2002
S-8 09/17/2002
10QSB/A 09/03/2002
8-K 08/20/2002
10QSB/A 08/15/2002
10-Q 08/14/2002
ANNEX VII
ANNEX VIII
FORM OF WARRANT
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE
SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES OR AN OPINION OF COUNSEL OR OTHER EVIDENCE
ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
PROVECTUS PHARMACEUTICALS, INC.
COMMON STOCK PURCHASE WARRANT
1. Issuance; Certain Definitions. In consideration of good and valuable
consideration, the receipt of which is hereby acknowledged by PROVECTUS
PHARMACEUTICALS, INC., a Nevada corporation (the "Company"),
_____________________________ or registered assigns (the "Holder") is hereby
granted the right to purchase at any time until 5:00 p.m., New York City time,
on ___________________2004, ________________________ (______) fully paid and
nonassessable shares of the Company's Common Stock, $0.001 par value per share
(the "Common Stock"), at an initial exercise price per share (the "Exercise
Price") of $1.00 per share, subject to further adjustment as set forth herein.
Capitalized terms not otherwise herein defined shall have the meanings ascribed
to them in the Securities Purchase Agreement between the Company and the Holder
dated June 25, 2004 (the "Agreement").
2. Exercise of Warrants.
2.1 Method of Exercise.
(a) This Warrant is exercisable in whole or in part at any time and from
time to time. Such exercise shall be effectuated by submitting to the
Company (either by delivery to the Company or by facsimile
transmission as provided in Section 8 hereof) a completed and duly
executed Notice of Exercise (substantially in the form attached to
this Warrant) as provided in this paragraph. The date such Notice of
Exercise is faxed to the Company shall be the "Exercise Date,"
provided that the Holder of this Warrant tenders this Warrant
Certificate to the Company within five (5) business days thereafter.
The Notice of Exercise shall be executed by the Holder of this Warrant
and shall indicate the number of shares then being purchased pursuant
to such exercise. Upon surrender of this Warrant Certificate, together
with appropriate payment of the Exercise Price for the shares of
Common Stock purchased, the Holder shall be entitled to receive a
certificate or certificates for the shares of Common Stock so
purchased.
ANNEX VIII
(b) If the Notice of Exercise form elects a "cashless" exercise, the
Holder shall thereby be entitled to receive a number of shares of
Common Stock equal to (x) the excess of the Current Market Value (as
defined below) over the total cash exercise price of the portion of
the Warrant then being exercised, divided by (y) the Market Price of
the Common Stock as of the trading day immediately prior to the
Exercise Date. For the purposes of this Warrant, the terms (Q)
"Current Market Value" shall be an amount equal to the Market Price of
the Common Stock as of the trading day immediately prior to the
Exercise Date, multiplied by the number of shares of Common Stock
specified in such Notice of Exercise Form, and (R) "Market Price of
the Common Stock" shall be the closing price of the Common Stock as
reported by the Reporting Service for the relevant date. The holder
may not elect a "cashless" exercise until one year from the date
hereof or any time when there is a currently effective Registration
Statement for the shares of Common Stock underlying the warrants.
(c) If the Notice of Exercise form elects a "cash" exercise, the Exercise
Price per share of Common Stock for the shares then being exercised
shall be payable in cash or by certified or official bank check.
(d) The Holder shall be deemed to be the holder of the shares issuable to
it in accordance with the provisions of this Section 2.1 on the
Exercise Date
2.2 Limitation on Exercise. Notwithstanding the provisions of this Warrant,
the Agreement or of the other Transaction Agreements, in no event (except (i) as
specifically provided in this Warrant as an exception to this provision, (ii)
while there is outstanding a tender offer for any or all of the shares of the
Company's Common Stock, or (iii) at the Holder's option, on at least sixty-five
(65) days' advance written notice from the Holder) shall the Holder be entitled
to exercise this Warrant, or shall the Company have the obligation to issue
shares upon such exercise of all or any portion of this Warrant to the extent
that, after such exercise the sum of (1) the number of shares of Common Stock
beneficially owned by the Holder and its affiliates (other than shares of Common
Stock which may be deemed beneficially owned through the ownership of the
unexercised portion of the Warrants or other rights to purchase Common Stock),
and (2) the number of shares of Common Stock issuable upon the exercise of the
Warrants with respect to which the determination of this proviso is being made,
would result in beneficial ownership by the Holder and its affiliates of more
than 9.99% of the outstanding shares of Common Stock (after taking into account
the shares to be issued to the Holder upon such exercise). For purposes of the
proviso to the immediately preceding sentence, beneficial ownership shall be
determined in accordance with Section 13(d) of the Securities Exchange Act of
1934, as amended (the "1934 Act"), except as otherwise provided in clause (1) of
such sentence. The Holder, by its acceptance of this Warrant, further agrees
that if the Holder transfers or assigns any of the Warrants, such assignment
shall be made subject to the transferee's or assignee's specific agreement to be
bound by the provisions of this Section 2.2 as if such transferee or assignee
were the original Holder hereof.
ANNEX VIII
3. Reservation of Shares. The Company hereby agrees that at all times during the
term of this Warrant there shall be reserved for issuance upon exercise of this
Warrant such number of shares of its Common Stock as shall be required for
issuance upon exercise of this Warrant (the "Warrant Shares").
4. Mutilation or Loss of Warrant. Upon receipt by the Company of evidence
satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant, and (in the case of loss, theft or destruction) receipt of reasonably
satisfactory indemnification, and (in the case of mutilation) upon surrender and
cancellation of this Warrant, the Company will execute and deliver a duplicate
Warrant and any such lost, stolen, destroyed or mutilated Warrant shall
thereupon become void.
5. Rights of the Holder. The Holder shall not, by virtue hereof, be entitled to
any rights of a stockholder in the Company, either at law or equity, and the
rights of the Holder are limited to those expressed in this Warrant and are not
enforceable against the Company except to the extent set forth herein.
6. Protection Against Dilution and Other Adjustments.
6.1 Adjustment Mechanism. If an adjustment of the Exercise Price is
required pursuant to this Section 6, the Holder shall be entitled to purchase
such number of additional shares of Common Stock as will cause (i) the total
number of shares of Common Stock Holder is entitled to purchase pursuant to this
Warrant, multiplied by (ii) the adjusted Exercise Price per share, to equal
(iii) the dollar amount of the total number of shares of Common Stock Holder is
entitled to purchase before adjustment multiplied by the total Exercise Price
immediately before adjustment.
6.2 Capital Adjustments. In case of any stock split or reverse stock split,
stock dividend, reclassification of the Common Stock, recapitalization, merger
or consolidation, or like capital adjustment affecting the Common Stock of the
Company prior to the exercise of this Warrant or its applicable portion, the
provisions of this Section 6 shall be applied as if such capital adjustment
event had occurred immediately prior to the exercise date of this Warrant and
the original Exercise Price had been fairly allocated to the stock resulting
from such capital adjustment; and in other respects the provisions of this
Section shall be applied in a fair, equitable and reasonable manner so as to
give effect, as nearly as may be, to the purposes hereof.
6.3 Spin Off. If, for any reason, prior to the exercise of this Warrant in
full, the Company spins off or otherwise divests itself of a part of its
business or operations or disposes all or of a part of its assets in a
transaction (the "Spin Off") in which the Company does not receive compensation
for such business, operations or assets, but causes securities of another entity
to be issued to security holders of the Company, then the Company shall notify
the Holder at least thirty (30) days prior to the record date with respect to
such Spin-Off.
7. Transfer to Comply with the Securities Act; Registration Rights.
ANNEX VIII
7.1 Transfer. This Warrant has not been registered under the Securities Act
of 1933, as amended, (the "Act") and has been issued to the Holder for
investment and not with a view to the distribution of either the Warrant or the
Warrant Shares. Except for transfers to officers, employees and affiliates of
the Holder, neither this Warrant nor any of the Warrant Shares or any other
security issued or issuable upon exercise of this Warrant may be sold,
transferred, pledged or hypothecated in the absence of an effective registration
statement under the Act relating to such security or an opinion of counsel
satisfactory to the Company that registration is not required under the Act.
Each certificate for the Warrant, the Warrant Shares and any other security
issued or issuable upon exercise of this Warrant shall contain a legend on the
face thereof, in form and substance satisfactory to counsel for the Company,
setting forth the restrictions on transfer contained in this Section.
7.2 Registration Rights. Reference is made to the Registration Rights
Agreement. The Company's obligations under the Registration Rights Agreement and
the other terms and conditions thereof with respect to the Warrant Shares,
including, but not necessarily limited to, the Company's commitment to file a
registration statement including the Warrant Shares, to have the registration of
the Warrant Shares completed and effective, and to maintain such registration,
are incorporated herein by reference.
8. Notices. Any notice or other communication required or permitted hereunder
shall be in writing and shall be delivered personally, telegraphed, sent by
facsimile transmission or sent by certified, registered or express mail, postage
pre-paid. Any such notice shall be deemed given when so delivered personally,
telegraphed, telexed or sent by facsimile transmission, or, if mailed, four days
after the date of deposit in the United States mails, as follows:
If to the Company, to:
PROVECTUS PHARMACEUTICALS, INC.
0000 Xxx Xxxxx Xxxxxxx, Xxxxx X,
Xxxxxxxxx, XX 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
with a copy to:
Xxxxx Xxxxxx
Baker, Donelson, Bearman, Xxxxxxxx & Xxxxxxxxx, P.C.
000 Xxxxxxxxxxx Xxxx
XX Xxx 0000 XXX
Xxxxxxx Xxxx, Xxxxxxxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
ANNEX VIII
If to the Holder, to:
A.I International Corporate Holdings, Ltd.
Arawak Xxxxxxxx
Sea Meadow House
Blackburne Highway
Roadtown, Tortola
British Virgin Islands
Any party may give notice in accordance with this Section to designate to
another address or person for receipt of notices hereunder.
9. Supplements and Amendments; Whole Agreement. This Warrant may be amended or
supplemented only by an instrument in writing signed by the parties hereto. This
Warrant contains the full understanding of the parties with respect to the
subject matter hereof and thereof and there are no representations, warranties,
agreements or understandings other than expressly contained herein and therein.
10. Governing Law. This Warrant shall be deemed to be a contract made under the
laws of the State of Tennessee. The Company and each Purchaser hereby submit to
the jurisdiction of any state court of competent jurisdiction in and for Xxxx
County, Tennessee, or in the United States District Court for the Eastern
District of Tennessee sitting at Knoxville in any action or proceeding arising
out of or relating to this Agreement and agree that all claims in respect of the
action or proceeding may be heard and determined in any such court;
agree not to bring any action or proceeding arising out of or relating to this
Agreement in any other court; waive any defense of inconvenient forum to the
maintenance of any action or proceeding so brought and waive any
bond, surety, or other security that might be required of any other Party with
respect thereto; and agree that a final judgment in any action or proceeding so
brought shall be conclusive and may be enforced by suit on the judgment or in
any other manner provided by law or in equity.
11. Jury Trial Waiver. The Company and the Holder hereby waive a trial by jury
in any action, proceeding or counterclaim brought by either of the parties
hereto against the other in respect of any matter arising out or in connection
with this Warrant.
12. Counterparts. This Warrant may be executed in any number of counterparts and
each of such counterparts shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute but one and the same
instrument.
13. Descriptive Headings. Descriptive headings of the several Sections of this
Warrant are inserted for convenience only and shall not control or affect the
meaning or construction of any of the provisions hereof.
ANEX VIII
IN WITNESS WHEREOF, the Company has executed this Warrant as of the 16th
day of July, 2004.
PROVECTUS PHARMACEUTICALS, INC.
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
ANNEX VIII
ANNEX IX
INVESTOR QUESTIONNAIRE
FORM OF INVESTOR QUESTIONNAIRE
PART I. INVESTOR IDENTIFICATION
1. Name of Investor:
--------------------------------------------------------
2. Number of shares of Common Stock Investor wishes to purchase:
--------------
3. Total Investment Amount: $
-------------------------------------------------
($___ multiplied by the number of shares)
4. Manner in which title is to be held (please check one):
Individual Partnership or LLC Corporation Trust
------ ----- ----- -------
5. Address: Telephone Numbers:
-------------------------------------- Home (_____) _____-_______________
Street
-------------------------------------- Business (_____) _____-__________
City State Zip Code
6. Investor is a resident or domiciliary of the State of: ____________________
PART II. INVESTOR SUITABILITY REPRESENTATIONS
The Investor understands that the Common Stock (the "Securities") offered
by the Company will not be registered under the Securities Act of 1933, as
amended (the "1933 Act"), or any state securities laws.
The Investor understands that the Company will sell the Securities only to
persons whom it believes to be "accredited investors," as defined by Regulation
D promulgated by the Securities and Exchange Commission under the 1933 Act
("Accredited Investors"). The Investor understands that he, she, or it must,
therefore, provide information to the Company which will enable the Company to
determine whether the Investor qualifies as an Accredited Investor.
The Investor represents and warrants to the Company that the Investor is an
Accredited Investor for the following reason (Please xxxx the appropriate
paragraph; only one paragraph need be marked):
_______ 1. Individual Net Worth Suitability:
The Investor's individual net worth or joint net worth with his spouse
exceeds $1,000,000. (Note: This suitability requirement may be
selected only by a natural person, and NOT by a corporation,
partnership, limited liability company, trust, estate, unincorporated
association or other entity.
OR
_______ 2. Individual Net Income Suitability:
The Investor's individual net income was in excess of $200,000 in each
of the two most recent years, or his or her joint income with his
spouse was in excess of $300,000 in each of those years, and he
reasonably expects his net income or joint net income with his spouse
to reach such level in the current year. (Note: This suitability
requirement may be selected only by a natural person, and NOT by a
corporation, partnership, limited liability company, trust, estate,
unincorporated association or other entity.
OR
_______ 3. Certain Qualified Organizations:
The Investor is (check one):
_____ a. A corporation, partnership, limited liability company,
business trust or an organization described in Section
501(c)(3) of the Internal Revenue Code (tax exempt
organization), not formed for the specific purpose of
acquiring the securities offered, having total assets in
excess of $5,000,000.
5
_____ b. A trust, with total assets in excess of $5,000,000, not
formed for the specific purpose of acquiring the Securities,
whose purchase is directed by a Sophisticated Investor who
has such knowledge and experience in financial and business
matters that he or she is capable of evaluating the merits
and risks of an investment in the Securities.
_____ c. A bank, savings and loan association or other similar
institution (as defined in Sections 3(a)(2) and 3(a)(5)(A)
of the 1933 Act).
_____ d. An insurance company (as defined in Section 2(13) of the
1933 Act).
_____ e. An investment company registered under the Investment
Company Act of 1940.
_____ f. A business development company as defined in Section
2(a)(48) of the Investment Company Act of 1940 or private
business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940.
_____ g. A Small Business Investment Company licensed by the U.S.
Small Business Administration under Sections 301(c) or (d)
of the Small Business Investment Act of 1958.
OR
_______ 4. Other Entity Suitability:
The Investor is a corporation, a partnership, a limited liability
company, an unincorporated association or other similar entity,
and that each owner of an equity interest in the entity satisfies
the suitability requirements of paragraph (1), (2) or (3) above.
[Remainder of page is blank]
6
SIGNATURE PAGE
Investor represents and warrants that (a) all the information contained
herein is complete and accurate and contains no material omissions and may be
relied upon by the Company, and (b) Investor will notify the Company in writing
immediately of any change in any of such information.
IN WITNESS WHEREOF, Investor has executed this Subscription Agreement on
the date set forth below.
Dated: April , 2000
-----------
SIGNATURE FOR INDIVIDUALS SIGNATURE FOR ENTITIES
(if filing a joint investment execute
signature lines for each investor)
-------------------------------------- --------------------------------
(Signature) (Print Name of Entity)
-------------------------------------- By:
(Print Name of Individual) -----------------------------
(Signature)
--------------------------------
(Print Name of Person Signing)
--------------------------------------
(Signature)
Its:
----------------------------
(Title)
-------------------------------------- Address:
(Print Name of Individual) ------------------------
------------------------
Address:
-----------------------------
-----------------------------
-----------------------------
7
ANNEX IX
AMENDMENT TO
SECURITIES PURCHASE AGREEMENT
American Equity Consulting Services, Inc. ("American Equity"), a Purchaser as
that term is defined in the Securities Purchase Agreement dated as of June 25,
2004, has failed to remit its portion of the second Installment Payment of One
Hundred Eleven Thousand One Hundred Eleven Dollars ($111,111) and has indicated
that it will not remit its portion of the third Installment Payment in the
amount of Two Hundred Twenty Two Thousand Two Hundred Twenty Two Dollars
($222,222). Castlerigg Master Investments, Ltd. ("Castlerigg") has agreed to
purchase the shares and warrants which would have been purchased by American
Equity pursuant to the Securities Purchase Agreement, according to the schedule
set forth in the Second Amended Joint Escrow Instructions dated of an even date
herewith. As such, Section 1(a)(i) and Annex I of the Securities Purchase
Agreement are hereby amended in their entirety as of the date below to read as
follows:
(8) AGREEMENT TO PURCHASE; PURCHASE PRICE.
(a) Purchase.
(i) Subject to the terms and conditions of this Agreement and the
other Transaction Agreements (as defined below), the Purchasers hereby
agree to pay to the Company a purchase price of $.75 per share of
Common Stock for One Million Three Hundred Thirty Three Thousand Three
Hundred and Thirty Three (1,333,333) shares (the "Shares"), for a
total purchase price of One Million Dollars ($1,000,000) (the
"Purchase Price"). The Purchase Price shall be paid in four
installments, with all funds due within forty-five (45) days of the
Closing Date (as defined below). Each installment payment (each an
"Installment Payment") shall be made pursuant to the payment schedule
attached hereto as Annex I, with each payment date constituting a
"Installment Payment Date." The Company shall issue Certificates (as
defined below) representing the Shares, and each Share shall have a
Warrant attached, as provided below. The Certificates for the Shares
shall be in substantially the same form as attached hereto as Annex
II.
ANNEX I
PAYMENT SCHEDULE
Amount
First Installment Payment Date......... June 25, 2004 $333,333
Second Installment Payment Date........ July 16, 2004 $222,222
Third Installment Date................. August 4, 2004 $111,111
Fourth Installment Payment Date........ August 9, 2004 $333,333
1
[Signatures appear on the following page]
PROVECTUS PHARMACEUTICALS, INC.
By: /s/ H. Xxxxx Xxxx
-----------------------------------------
Title: CEO
--------------------------------------
Date: August 4 , 2004
------------------------
A.I. International Corporate Holdings,
Ltd.
Date: August 3 , 2004 By: /s/ Xxxx Xxxxx
------------------- ---------------------------------------
Its: Director
---------------------------------------
Castlerigg Master Investments, Ltd.
Date: , 2004 By: /s/ Xxxxxx X. Xxxxxxx
-------------------- ---------------------------------------
Its: CEO of Xxxxxxx Asset Management
Advisor to Castlerigg Master
Investments, Ltd.
--------------------------------------
