Exhibit 10.57
SERIES
A-2 PREFERRED STOCK
AND COMMON STOCK PURCHASE
AGREEMENT
This Series A-2
Preferred Stock and Common Stock Purchase Agreement (this “
Agreement ”) is entered into as of December 19, 2006
by and among Ercole Biotech, Inc., a Delaware corporation (the
“ Ercole ”), and AVI BioPharma, Inc. (“
AVI ”).
WHEREAS, Ercole
and AVI are parties to that certain Collaboration and License
Agreement, dated of even date herewith (the “
Collaboration Agreement ”);
WHEREAS, in
connection with entering into the Collaboration Agreement with
Ercole, AVI desires to acquire shares of Ercole’s Series A-2
Preferred Stock, par value $0.001 per share (the “ Series
A-2 Preferred ”); and Ercole desires to sell such shares
of Series A-2 Preferred upon the terms set forth herein;
and
WHEREAS, AVI has
agreed to issue to Ercole, as consideration to be paid for the
Series A-2 Preferred, shares of freely tradeable common stock of
AVI, par value $.0001 per share (the “ AVI Common
Stock ”), which shares have been registered in a shelf
offering registration on a Form S-3 registration statement declared
effective by the SEC and currently in effect, SEC No. 333-109015
(the “ Shelf Registration ”), pursuant to the
terms set forth herein.
NOW, THEREFORE, in
consideration of the mutual promises, representations, warranties,
covenants and conditions set forth in this Agreement, Ercole and
AVI mutually agree as follows:
1.
Authorization and Sale of Stock .
1.1
Authorization . Ercole has authorized the issuance and
sale of up to an aggregate of Six Hundred Twenty-Five Thousand
(625,000) shares of the Series A-2 Preferred (the “ Ercole
Shares ”).
1.2
Sale and Payment for Ercole Shares . Subject to the
terms and conditions of this Agreement, Ercole hereby agrees to
issue and sell to AVI and AVI hereby agrees to purchase from Ercole
all of the Ercole Shares for an aggregate purchase price of
$675,000 (the “ Purchase Price ”) consisting of
one hundred ninety-two thousand, eight hundred fifty-seven
(192,857) registered and freely tradeable shares of AVI Common
Stock (the “ AVI Shares ”).
1.3
Sale of AVI Shares by Ercole . Ercole may sell the AVI
Shares at its discretion, provided, however, that Ercole shall sell
in any single trading day no more than 60,000 shares and no single
trade shall involve the sale of more than 20,000 shares.
2.
Closing; Delivery .
2.1
Closing . The closing of the sale and issuance of the
Ercole Shares to AVI and of the AVI Shares to Ercole (the “
Closing ”), shall take place at 10:00 a.m. (ET) on
December 22, 2006, or such earlier date as mutually agreed by the
parties (the “ Closing Date ”),
at the offices of
Hutchison Law Group PLLC, 5410 Trinity Road, Suite 400, Raleigh,
North Carolina 27607 by electronic transmission or hand delivery of
documents, or at such other time and place as Ercole and AVI
agree.
2.2
Delivery . At the Closing, subject to the terms and
conditions hereof, Ercole will deliver to AVI a certificate, in
such denomination and registered in such name or names as AVI may
designate by notice to Ercole prior to the Closing, representing
the Ercole Shares to be purchased by AVI from Ercole at the
Closing, dated the date of the Closing against delivery of the AVI
Shares. AVI will deliver or cause to be delivered via DWAC or
other common means of electronic share transfer to Ercole’s
designated brokerage account the AVI Shares registered in such name
or names as Ercole may designate by notice to AVI prior to
Closing.
3.
Representations and Warranties of Ercole . Subject to
and except as disclosed by Ercole in the Schedule of Exceptions
attached hereto and incorporated herein by reference (the “
Ercole Schedule of Exceptions ”), Ercole represents
and warrants to AVI that:
3.1
Organization and Standing . Ercole is a corporation
duly organized, validly existing, and in good standing under the
laws of its state of incorporation, and has all requisite corporate
power and authority to own, lease and operate its properties and
assets and to carry on its business as now conducted and as
currently proposed to be conducted. Ercole is duly qualified
and authorized to do business, and is in good standing as a foreign
corporation, in each jurisdiction where the nature of its
activities and of its properties (both owned and leased) makes such
qualification necessary, except where the failure to be so
qualified would not have a material adverse effect upon the
business, financial condition or results of operation (a “
Material Adverse Effect ”) of Ercole.
3.2
Capitalization . The authorized capital of Ercole
immediately prior to the Closing is as set forth on Schedule
3.1 .
3.3
Corporate
Power . Ercole has the requisite corporate power and
authority to execute, deliver and perform its obligations under
this Agreement, including without limitation, to issue the Ercole
Shares.
3.4
Authorization . All corporate action on the part of
Ercole and its officers, directors and stockholders necessary for
the authorization, execution and delivery of this Agreement and the
Certificate (as defined in Section 5.5), the performance of all of
Ercole’s obligations thereunder, and the authorization,
issuance, sale and delivery of the Ercole Shares and the securities
issuable upon the conversion of the Ercole Shares (collectively,
the “ Securities ”) has been or will be taken
prior to Closing. This Agreement when executed by Ercole and
the parties hereto shall constitute a valid and legally binding
obligation of Ercole enforceable in accordance with its terms,
subject to laws of general application relating to bankruptcy,
insolvency and the relief of debtors, rules and laws governing
specific performance, injunctive relief and other equitable
remedies.
3.5
Valid
Issuance of Securities . The Ercole Shares, when issued,
sold and delivered in accordance with the terms of this Agreement
and the Certificate of Incorporation, as amended (the “
Certificate of Incorporation ”), will be duly and
validly issued, fully paid and
nonassessable and free
of restrictions on transfer other than restrictions on transfer
under applicable state and federal securities laws. The
Securities issuable upon conversion of the Ercole Shares have been
duly and validly reserved for issuance, and upon issuance in
accordance with the Certificate of Incorporation, will be duly and
validly issued, fully paid and nonassessable and free of
restrictions on transfer other than restrictions on transfer under
applicable federal and state securities laws.
3.6
Governmental Consent . All consents, approvals, orders
or authorizations of, or registrations, qualifications,
designations, declarations or filings with any federal or state
governmental authority on the part of Ercole required in connection
with the valid execution and delivery of this Agreement the offer,
sale or issuance of the Ercole Shares or the consummation of any
other transaction contemplated hereby have been obtained, except
for notices which may be required to be filed with certain state
and federal securities commissions after the sale or issuance of
the Ercole Shares, and a Form D to be filed pursuant to Rule 503
under the Securities Act of 1933, as amended, (the “ 1933
Act ”), which notices will be filed on a timely
basis.
3.7
Compliance with Laws . To its knowledge, Ercole is not
in violation of any applicable statute, rule, regulation, order or
restriction of any domestic or foreign government or any
instrumentality or agency thereof in respect of the conduct of its
business or the ownership of its properties, the violation of which
would have a Material Adverse Effect.
3.8
Compliance with Other Instruments . Ercole is not in
violation or default of any term of its Certificate of
Incorporation or bylaws, or of any provision of any mortgage,
indenture or material contract to which it is a party and by which
it is bound or of any judgment, decree, order or writ, other than
such violation(s) that would not have a Material Adverse Effect on
Ercole. The execution, delivery and performance of this Agreement,
the issuance of the Ercole Shares and the consummation of the
transactions contemplated hereby will not result in any such
violation or be in conflict with, or constitute, with or without
the passage of time and giving of notice, either a default under
any such provision, instrument, judgment, decree, order or writ or
an event that results in the creation of any lien, charge or
encumbrance upon any assets of Ercole or the suspension,
revocation, impairment, forfeiture, or nonrenewal of any material
permit, license, authorization or approval applicable to Ercole,
its business or operations or any of its assets or
properties. Without limiting the foregoing, Ercole has
obtained all waivers reasonably necessary with respect to any
preemptive rights, rights of first refusal or similar rights,
including any notice or offering periods provided for as part of
any such rights, in order for Ercole to consummate the transactions
contemplated hereunder without any third party obtaining any rights
to cause Ercole to offer or issue any securities of Ercole as a
result of the consummation of the transactions contemplated
hereunder.
3.9
Offering . Based in part on the accuracy of the
representations and warranties of AVI contained in
Section 4.10 hereof, and subject to such filings with the
Securities and Exchange Commission (“ SEC ”) and
any applicable state securities commissions as may be required in
connection therewith, the offer, issue and sale of the Ercole
Shares are and will be exempt from the registration and prospectus
delivery requirements of the 1933 Act, and have been registered or
qualified (or are exempt from registration and qualification) under
the registration, permit or qualification requirements of all
applicable state securities laws.
3.10
Litigation
. Except as set forth on Schedule 3.10 to the Ercole
Schedule of Exceptions, there is no claim, action, suit,
proceeding, arbitration, complaint, charge or investigation pending
or to its knowledge, threatened against Ercole. Neither
Ercole nor any of its officers or directors is a party to or is
named as subject to the provisions of any order, writ, injunction,
judgment or decree of any court or government agency or
instrumentality. There is no action, suit, proceeding or
investigation by Ercole and pending or proceedings which Ercole
intends to initiate. The foregoing includes, without
limitation, actions, suits, proceedings or investigations pending
or threatened in writing involving the use by any of Ercole’s
former employees, in the course of performing services as an
employee for Ercole, of any information or techniques allegedly
proprietary to any of such employees, former employers, or their
obligations under any agreements with prior employers.
3.11
Intellectual
Property . Other than the Collaboration and License
Agreement (the “ Isis CLA ”) between Ercole and
Isis Pharmaceuticals, Inc. effective May 16, 2003, and the License
Agreement (the “ UNC License ”) between Ercole
and The University of North Carolina at Chapel Hill effective
October 15, 2001, there are no agreements between Ercole and any
third parties which would preclude or otherwise limit
Ercole’s ability to conduct its tasks and obligations under
Collaboration and License Agreement entered into between the
parties concurrent with the execution of this Agreement. The
Isis CLA and the UNC License are in full force and effect, and the
copies provided to AVI are accurate and complete. Ercole has
not received any communications alleging that it has violated or,
by conducting its business as proposed, would violate any of the
patents, trademarks, service marks, trade names, domain names,
copyrights, trade secrets or other proprietary rights or processes
of any other person or entity, except, in either case, for standard
end-user, object code, internal-use software license and
support/maintenance agreements. To Ercole’s knowledge,
no employee is obligated under any contract (including licenses,
covenants or commitments of any nature) or other agreement, or
subject to any judgment, decree or order of any court or
administrative agency, that would interfere with the use of such
employee’s best efforts to promote the interest of Ercole or
that would conflict with its business. Ercole does not
believe it is or will be necessary to use any inventions of any of
its employees made prior to or outside the scope of their
employment by Ercole, except for any such
inventions licensed to Ercole under the UNC
License.
3.12
Material
Liabilities . Ercole has no material liability or
obligation, and to its knowledge, no contingent liability or
obligation (individually or in the aggregate) that is not disclosed
in its financial statements as of and for the year ended December
31, 2005 (the “ Financial Statements ”), copies
of which have been provided to AVI, except (i) obligations and
liabilities incurred in the ordinary course of business subsequent
to the date of the Financial Statements that are not materially
adverse, individually or in the aggregate, (ii) obligations and
liabilities identified in Section 3.12 of the Ercole
Schedule of Exceptions, and (iii) obligations under contracts made
in the ordinary course of business that would not be required to be
reflected in financial statements prepared in accordance with
generally accepted accounting principles.
3.13
Corporate
Documents . The Second Amended and Restated Certificate
of Incorporation and Bylaws of Ercole are in the form provided to
AVI. The minute books of the Company contain minutes of all
meetings of directors and stockholders and all actions by written
consent without a meeting by the directors and stockholders since
the date of incorporation and
accurately reflect in
all material respects all actions by the directors (and any
committee of directors) and stockholders with respect to all
transactions referred to in such minutes.
3.14
Disclo
