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Exhibit
10.6
CONVERSION
AGREEMENT
BETWEEN
BIOVEST INTERNATIONAL,
INC.
AND
ACCENTIA
BIOPHARMACEUTICALS, INC.
This Conversion Agreement (this
“Conversion Agreement”) effective as of
February 5, 2008, by and between BIOVEST INTERNATIONAL,
INC. , a Delaware corporation (“BIOVEST”) and
ACCENTIA BIOPHARMACEUTICALS, INC ., a Florida corporation,
(“ACCENTIA”) (collectively the
“Parties”).
WITNESSETH:
Whereas, BIOVEST and ACCENTIA are
Parties to certain Secured Demand Promissory Notes (the
“Notes”) and other accruals of indebtedness from
Biovest to Accentia, copies of which Notes and a current schedule
of this debt are attached as Exhibit A (the “Inter-Company
Debt”);
Whereas, ACCENTIA wishes to obtain an
option to convert sums due pursuant to the Inter-Company Debt into
common stock of Biovest; and
Whereas, BIOVEST and ACCENTIA wish to
memorialize their agreement as to the terms of such option to
convert the Inter-Company Debt into common stock of
Biovest;
NOW, THEREFORE, in consideration of the
Accentia’s agreement to continue the Inter-Company Debt
without demand for repayment thereof, together with the various
promises and undertakings set forth herein, the Parties agree as
follows:
1. RIGHT TO CONVERT : At any time
after the Effective Date hereof until the balance due from Biovest
to Accentia pursuant to certain outstanding Demand Promissory
Notes, including any additional sums which may become due from
Biovest to Accentia and any interest which may accrue thereupon
(collectively the “Inter-Company Debt”) is no longer
outstanding, this Inter-Company Debt shall be convertible, in whole
or in part, into shares of Biovest Common Stock at the option of
Accentia. Accentia shall effect conversions by delivering to
Biovest a Notice of Conversion, the form of which is attached
hereto as Annex A (a “ Notice of Conversion
”), specifying therein the principal amount of this
Inter-Company Debt to be converted and the date on which such
conversion shall be effected (such date, the “ Conversion
Date ”). If no Conversion Date is specified in a Notice
of Conversion, the Conversion Date shall be the date that such
Notice of Conversion is deemed delivered hereunder. To effect
conversions hereunder, Accentia shall not be required to physically
surrender the Notes representing the Inter-Company Debt to the
Company unless the entire principal amount of this Inter-Company
Debt, plus all accrued and unpaid interest thereon, has been so
converted. Conversions hereunder shall have the effect of lowering
the outstanding principal amount of this Inter-Company Debt in an
amount equal to the applicable conversion. Accentia and Biovest
shall maintain records showing the principal amount(s) converted
and the date of such conversion(s). Biovest may deliver an
objection to any Notice of Conversion within 1 Business Day of
delivery of such Notice of Conversion.
a) Conversion Price .
The conversion price shall be equal to $1.10 (subject to
adjustment herein) (the “ Conversion Price
”).
b) Mechanics of
Conversion .
i. Conversion Shares
Issuable Upon Conversion of Principal Amount . The number of
shares of Common Stock issuable upon a conversion hereunder shall
be determined by the quotient obtained by dividing (x) the
outstanding principal amount of this Inter-Company Debt to be
converted by (y) the Conversion Price.
2. Delivery of Certificate Upon
Conversion . Not later than three Trading Days after a Notice
of Conversion is received from Accentia, Biovest shall deliver, or
cause to be delivered, to Accentia a certificate or certificates
representing the Conversion Shares.
3. Reservation of Shares Issuable
Upon Conversion . Biovest covenants that it will at all times
reserve and keep available out of its authorized and unissued
shares of Common Stock for the sole purpose of issuance upon
conversion of this Inter-Company Debt free from preemptive rights
or any other actual contingent purchase rights of Persons other
than Accentia not less than such aggregate number of shares of the
Common Stock as shall be issuable upon the conversion of the
outstanding principal amount of this Inter-Company Debt. Biovest
covenants that all shares of Common Stock that shall be so issuable
shall, upon issue, be duly authorized, validly issued, fully paid
and nonassessable.
4. Reclassifications; Adjustment.
In case of any reclassification of the Biovest Common Stock or any
compulsory share exchange pursuant to which the Biovest Common
Stock is converted into other securities, cash or property,
Accentia shall have the right thereafter to exchange the then
outstanding principal amount of this Inter-Company Debt, together
with all accrued but unpaid interest and any other amounts then
owing hereunder in respect of this Inter-Company Debt into the
shares of stock and other securities, cash and property receivable
upon or deemed to be held by holders of the Biovest Common Stock
following such reclassification or share exchange, and Accentia
shall be entitled upon such event to receive such amount of
securities, cash or propert
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