Exhibit 10.24
FORM OF SUBSCRIPTION AGENT
AGREEMENT
THIS SUBSCRIPTION AGENT AGREEMENT
(“ Agreement ”) between Pro-Pharmaceuticals,
Inc., a Nevada corporation (the “ Company ”),
and Continental Stock Transfer & Trust Company, a New York
corporation (“ Continental ”), is dated as of
[ ],
2008.
1. Appointment .
(a) The Company is making an offer
(the “ Rights Offering ”) to its stockholders of
record at the close of business on November
[ ], 2008 (the “ Record Date
”), of non-transferable subscription rights (the “
Rights ”) to purchase up to an aggregate of
[ ]
shares of the Company’s common stock, par value $0.001 per
share (the “ Common Stock ”) and transferable
[ ]
Series C common stock purchase warrants to purchase an additional
[ ]
shares of Common Stock (the “ Warrants ”) at a
purchase price of
$[ ]
per Right (the “ Subscription Price ”). The term
“ Subscribed ” shall mean submitted for purchase
from the Company by a stockholder in accordance with the terms of
the Rights Offering, and the term “ Subscription
” shall mean any such submission. The Warrants will be
governed by a Warrant Agreement between the Company and
Continental, as Warrant Agent.
(b) The Rights Offering will expire
on December [ ], 2008 at 5:00 p.m. New York
City Time (the “ Expiration Time ”), unless the
Company shall have extended the period of time for which the Rights
Offering is open, in its sole discretion for up to 45 days, in
which event the term “Expiration Time” shall mean the
latest time and date at which the Rights Offering, as so extended
by the Company from time to time, shall expire.
(c) The Company filed a Registration
Statement on Form S-1 (File No.
333- )
relating to the Rights Offering with the United States Securities
and Exchange Commission (the “ SEC ”) under the
Securities Act of 1933, as amended, on November
[ ], 2008 (the “ Registration
Statement ”). The terms of the Rights Offer are more
fully described in the Prospectus (the “ Prospectus
”) forming part of the Registration Statement as such
Registration Statement may be declared effective by the SEC. A copy
of the Prospectus is attached hereto as Exhibit 1 . All
terms used and not defined herein shall have the same meaning as in
the Prospectus. Promptly after the Record Date, the Company will
provide Continental with a list of holders of Common Stock as of
the Record Date (the “ Record Stockholders List
”)
(d) The Company hereby appoints
Continental to act as subscription agent (the “
Subscription Agent ”) for the Rights Offering in
accordance with and subject to the following terms and
conditions.
2. Subscription of Rights
.
(a) The Rights are evidenced by
subscription rights certificates (the “ Certificates
”), a copy of the form of which is attached hereto as
Exhibit 2 . The Certificates entitle the holders to
subscribe, upon payment of the Subscription Price, for
(i) shares of Common Stock at the rate of one share per Right
evidenced by a Certificate and (ii) Warrants at a rate of one
Warrant per Right evidenced by a Certificate (the “ Basic
Subscription Right ”). No fractional shares will be
issued.
(b) The Rights Offering includes an
over-subscription right entitling the subscribing stockholders who
exercise their Basic Subscription Right in full to subscribe and
pay the Subscription Price for additional Rights representing up to
an additional amount equal to up to 400% of the shares and warrants
for which such holder was otherwise entitled to subscribe (the
“ Over-Subscription Right ”). Reference is made
to the Prospectus for a complete description of the Basic
Subscription Right and the Over-Subscription Right and the
allocation thereof.
3. Duties of Subscription
Agent . As Subscription Agent, Continental is authorized and
directed to:
(a) Issue the Certificates in
accordance with this Agreement in the names of the holders of the
Common Stock of record or other nominees on the Record Date, keep
such records as are necessary for the purpose of recording such
issuance, and furnish a copy of such records to the Company. The
Certificates may be signed on behalf of the Subscription Agent by
the manual or facsimile signature of a Vice President or Assistant
Vice President of the Subscription Agent, or by the manual
signature of any of its other authorized officers.
(b) Promptly after Continental
receives the Record Stockholders List, Continental
shall:
(i) mail or cause to be mailed, by
first class mail, or deliver (which delivery may be done
electronically through the facilities of the Depository Trust
Company (“ DTC ”) or otherwise) to each holder
of Common Stock of record on the Record Date whose address of
record is within the United States and Canada, (i) a
Certificate evidencing the Rights to which such stockholder is
entitled under the Rights Offering, (ii) a copy of the
Prospectus and (iii) a return envelope addressed to the
Subscription Agent; and
(ii) mail or cause to be mailed, by
air mail, to each holder of Common Stock of record on the Record
Date whose address of record is outside the United States and
Canada, or is an A.P.O. or F.P.O. address, a copy of the
Prospectus. Continental shall refrain from mailing Certificates
issuable to any holder of Common Stock of record on the Record Date
whose address of record is outside the United States and Canada, or
is an A.P.O. or F.P.O. address, and hold such Certificates for the
account of such stockholder subject to such stockholder making
satisfactory arrangements with the Subscription Agent for the
exercise of the Rights evidenced thereby, and follow the
instructions of such stockholder for the exercise of such Rights if
such instructions are received at or before 11:00 a.m., New York
City Time, on
.
(c) Mail or deliver (which delivery
may be done electronically through the facilities of DTC or
otherwise) a copy of the Prospectus with certificates for shares of
Common Stock and Warrants when such are issued to persons other
than the registered holder of the Certificate.
(d) Accept Subscriptions upon the
due exercise (including payment of the Subscription Price) on or
prior to the Expiration Time of Rights in accordance with the terms
of the Certificates and the Prospectus.
(e) Subject to the next sentence,
accept Subscriptions from stockholders whose Certificates are
alleged to have been lost, stolen or destroyed upon receipt by
Continental
2
of an affidavit of theft, loss or
destruction and a bond of indemnity in form and substance
reasonably satisfactory to Continental, accompanied by payment of
the Subscription Price for the total number of Rights Subscribed
for. Upon receipt of such affidavit and bond of indemnity and
compliance with any other applicable requirements, stop orders
shall be placed on said Certificates and Continental shall withhold
delivery of the Rights Subscribed for until after the Certificates
have expired and it has been determined that the Rights evidenced
by the Certificates have not otherwise been purported to have been
exercised or otherwise surrendered.
(f) Accept Subscriptions, without
further authorization or direction from the Company, without
procuring supporting legal papers or other proof of authority to
sign (including without limitation proof of appointment of a
fiduciary or other person acting in a representative capacity), and
without signatures of co-fiduciaries, co-representatives or any
other person:
(i) if the Certificate is registered
in the name of a fiduciary and is executed by, and the Rights are
to be issued in the name of, such fiduciary;
(ii) if the Certificate is
registered in the name of joint tenants and is executed by one of
the joint tenants, provided the certificate representing the Rights
is issued in the names of, and is to be delivered to, such joint
tenants;
(iii) if the Certificate is
registered in the name of a corporation and is executed by a person
in a manner which appears or purports to be done in the capacity of
an officer, or agent thereof, provided the Rights are to be issued
in the name of such corporation; or
(iv) if the Certificate is
registered in the name of an individual and is executed by a person
purporting to act as such individual’s executor,
administrator or personal representative, provided, the Rights are
to be registered in the name of the subscriber as executor or
administrator of the estate of the deceased registered holder and
there is no evidence indicating the subscriber is not the duly
authorized representative that he purports to be.
(g) Accept Subscriptions not
accompanied by Certificates if submitted by a firm having
membership in the New York Stock Exchange or another national
securities exchange or by a commercial bank or trust company having
an office in the United States and accompanied by proper payment
for the total number of Rights Subscribed for.
(h) Refer to the Company, for
specific instructions as to acceptance or rejection, Subscriptions
received after the Expiration Time, Subscriptions not authorized to
be accepted, and Subscriptions otherwise failing to comply with the
requirements of the Prospectus and the terms and conditions of the
Certificates.
4. Acceptance of
Subscriptions . Upon acceptance of a Subscription, Continental
shall from time to time during the offering:
(a) Hold all monies received in a
dedicated, non-interest bearing account for the benefit of the
Company. Promptly following the Expiration Time, Continental shall
distribute to the Company the funds from exercise of the Basic
Subscription Rights and Over-Subscription Rights in such account
and following the Expiration Date issue (in physical form or
electronically through the facilities of DTC, in each case in a
manner approved by the Company) certificates for shares of Common
Stock and
3
Warrants issuable with respect to
Subscriptions that have been accepted. Continental will not be
obligated to calculate or pay interest to any holder or any other
party claiming through a holder or otherwise. It is hereby agreed
immediately following the effective date of the Subscription,
immediately available funds, represented by certified check, money
order, or wire transfer but not personal check, will be deposited
with Continental.
(b) Advise the Company daily by
facsimile transmission and confirm by letter to the attention of
[Anthony Squeglia] (the “ Company Representative
”) as to the total number of shares of Common Stock and
Warrants Subscribed for, the total number of Rights partially
Subscribed for and the amount of funds received, with cumulative
totals for each; and in addition advise the Company Representative,
by telephone at (617) 559-0033, confirmed by facsimile
transmission, of the amount of funds received identified in
accordance with (a) above, deposited, available or transferred
in accordance with (a) above, with cumulative totals;
and
(c) As promptly as possible but in
any event on or before 3:30 p.m., New York City Time, on the first
full business day following the Expiration Time, advise the Company
Representative in accordance with (b) above of the number of
shares Subscribed for and the number of shares of Common Stock and
Warrants unsubscribed for.
5. Completion of Rights
Offering . Upon completion of the Rights Offering:
(a) Continental shall issue (in
physical form or electronically through the facilities of DTC, in
each case in a manner approved by the Company) certificates for the
Common Stock and Warrants for which Subscriptions have been
received.
(b) The Certificates may be physical
certificates but may, as instructed by the Company be issued
electronically through the facilities of DTC. The Company shall
appoint and have in office at all times a Transfer Agent and
Registrar for the Certificates, which may be Continental and which
shall keep books and records of the registration and transfers and
exchanges of Certificates (such books and
