Exhibit 10.1
SECURITIES PURCHASE AGREEMENT
AVAX Technologies, Inc.
2000 Hamilton Street
Suite 204
Philadelphia, PA 19130
Ladies &
Gentlemen:
The
undersigned (the “Investor”), hereby confirms its
agreement with you as follows:
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1.
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This Securities
Purchase Agreement (the “Agreement”) is made effective
as of March 4, 2005, between AVAX Technologies, Inc., a Delaware
corporation (the “Company”), and the
Investor.
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2.
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The Company has
authorized, subject to adjustment by the Company’s Board of
Directors, the issuance and sale of shares of common stock of the
Company, $0.004 par value per share (the “Common
Stock”), and warrants to purchase shares of Common Stock (the
“Warrant”), with an exercise price of $0.41 and $0.48
per share for the Series 2005A Warrants and the Series 2005B
Warrants, respectively, pursuant to the forms of Warrants delivered
simultaneously with this Agreement, to certain investors in a
private placement (the “Offering”). For every 6.6667
shares of Common Stock purchased by the Investor in this Offering,
such Investor shall be entitled to receive one Series 2005A Warrant
and one Series 2005B Warrant to purchase one share of Common Stock.
The purchase price for the Common Stock and the associated Warrants
will be $0.34 (“Price Per Share”) for each share of
Common Stock. The purchase price is allocated as follows: $0.31 per
share of Common Stock, $0.01 per Series 2005A Warrant and $0.02 per
Series 2005B Warrant purchased.
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3.
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The Company and
the Investor agree that the Investor will purchase from the Company
and the Company will issue and sell to the Investor the number of
shares of Common Stock set forth on the signature page for a Price
Per Share of $0.34 per share of Common Stock, or an aggregate
purchase price set forth on the signature page, pursuant to the
Terms and Conditions for Purchase of Common Stock and Warrants
attached hereto as Annex I and incorporated herein by
reference as if fully set forth herein. Unless otherwise requested
by the Investor, certificates representing the Common Stock and
Warrants purchased by the Investor will be registered in the
Investor’s name and address as set forth below.
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4.
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To subscribe
for shares of Common Stock and Warrants, each Investor must fully
and completely answer each of the following questions:
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A.
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In the past
three years, has Investor or any person affiliated with Investor
had any position, office or other material relationship with the
AVAX Technologies, Inc. or any of its affiliates?
YES ____ NO
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If YES, please
describe that position, office or other material
relationship:
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B.
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Does Investor
or any group of which Investor is a member or to which it is
related, beneficially own (including the right to acquire or vote)
any securities of the AVAX Technologies, Inc.?
YES ____ NO
____
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If YES, please
list the number and type of securities of AVAX Technologies, Inc.
owned by Investor or any members of that group:
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C.
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Is Investor
directly or indirectly affiliated or associated with any member of
the U.S. National Association of Securities Dealers?
YES ____ NO
____
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If YES, please
list the NASD members with which Investor is affiliated or
associated:
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D.
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Name or natural
person or persons (not companies or entities) who are the ultimate
controlling persons of Investor. The ultimate controlling person or
persons, if any, are the natural person or persons who have the
controlling stock or voting position, if any, in Investor or the
ultimate parent entity of Investor. If the stock of Investor or
Investor’s ultimate parent corporation is publicly traded on
any U.S., European, Japanese or other stock exchange or market,
then Investor may not have an ultimate controlling natural person.
In that case, please list the name of the ultimate parent entity
whose stock is publicly traded on any market or stock
exchange.
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Natural
Person(s) who Controls Investor:
_______________________________________
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Parent entity
of Investor whose stock is publicly traded:
________________________________
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(If the answer
is none for either question, write “none.”
“None” is not an acceptable answer to both questions
without further information being provided to AVAX Technologies to
explain those answers.)
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[SIGNATURE PAGES TO SECURITIES PURCHASE
AGREEMENT]
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Please
confirm that the foregoing correctly sets forth the agreement
between us by signing in the space provided below for that
purpose.
___________________________________________________________________________
“INVESTOR”
By: ________________________________________________________________________
(Signature)
Print
Name: __________________________________________________________________
Title: _______________________________________________________________________
Address: ____________________________________________________________________
___________________________________________________________________________
Tax ID
No.:__________________________________________________________________
Contact
Name: _______________________________________________________________
Telephone: __________________________________________________________________
Facsimile: __________________________________________________________________
Name in which shares should be registered (if
different):________________________________________________
U.S. Dollar Amount Invested:
$______________________________________________
Number of shares of Common
Stock:__________________________________________
Number of Series 2005A
Warrants: ___________________________________________
Number of Series 2005B
Warrants:___________________________________________
Date:_________________________, 2005
AGREED AND ACCEPTED:
AVAX Technologies, Inc.
______________________________________________________________
By: Richard P. Rainey
Title: President
Date: ________________, 2005
[SIGNATURE PAGES TO SECURITIES PURCHASE
AGREEMENT]
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If
Investor is a Registered Representative with a NASD member firm,
have the following acknowledgment signed by the appropriate
party:
The undersigned NASD member firm
acknowledges receipt of the notice required by Article 3, Sections
28(a) and (b) of the Rules of Fair Practice.
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By:_______________________________________________________
Name of NASD Member
Firm
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By:_______________________________________________________
Authorized Officer
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[SIGNATURE PAGES TO SECURITIES PURCHASE
AGREEMENT]
4
ANNEX I
TERMS AND CONDITIONS FOR PURCHASE OF COMMON
STOCK AND WARRANTS
1.
Authorization and Sale of the Common Stock and Warrants .
Subject to the terms and conditions of this Agreement, the Company
has authorized the sale of up to 26,470,588 shares of Common Stock,
and the issuance of Series 2005A Warrants to purchase up to
3,970,588 shares of Common Stock and Series 2005B Warrants to
purchase up to 3,970,588 shares of Common Stock. The Company
reserves the right to increase or decrease these
numbers.
2.
Agreement to Sell and Purchase the Common Stock and Warrants;
Subscription Date .
2.1
At the Closing (as defined in Section 3 ), the Company will
sell to the Investor, and the Investor will purchase from the
Company, upon the terms and conditions hereinafter set forth, the
number of shares of Common Stock and Warrants set forth on the
signature page hereto at the purchase price set forth on such
signature page.
2.2
The Company is entering into this same form of Securities Purchase
Agreement with certain other investors (the “Other
Investors”) effective as of the date hereof (the
“Subscription Date”) and expects to complete sales of
Common Stock and Warrants to them. (The Investor and the Other
Investors are hereinafter sometimes collectively referred to as the
“Investors,” and this Agreement and the Securities
Purchase Agreements executed by the Other Investors are hereinafter
sometimes collectively referred to as the
“Agreements.”)
3.
Delivery of the Securities at Closing . The completion of
the purchase and sale of the Common Stock and Warrants (the
“Closing”) shall occur (the “Closing Date”)
on the third business day after the Subscription Date (or upon such
earlier date as the Company and the Investors shall agree), at the
offices of the Company’s counsel. At the Closing, each
Investor will wire transfer to the Company (in accordance with the
wire transfer instructions attached hereto as Exhibit A )
the full amount of the purchase price for the Common Stock and
Warrants being purchased hereunder as set forth on the signature
page hereto and the Company shall deliver to the Investor the
certificates representing such shares of Common Stock and the
Warrants set forth on the signature page hereto, each such
certificate to be registered in the name of the Investor or, if so
indicated on the signature page hereto, in the name of a nominee
designated by the Investor. The Company’s obligation to issue
the Common Stock and Warrants to the Investor shall be subject to
the following conditions, any one or more of which may be waived by
the Company: (a) receipt of a wire transfer of funds (in accordance
with the wire transfer instructions attached hereto as Exhibit
A ) in the full amount of the purchase price for the Common
Stock and Warrants being purchased hereunder as set forth on the
signature page hereto; (b) completion of the purchases and sales
under the Agreements with the Other Investors such that a minimum
of $2,000,000 aggregate Purchase Price of shares of Common Stock
and Warrants are sold pursuant to the Agreements; and (c) the
accuracy of the representations and warranties made by the
Investors and the fulfillment of those undertakings of the
Investors to be fulfilled prior to the Closing. The
Investor’s obligation to purchase the Common Stock and
Warrants shall be subject to the following conditions, any one or
more of which may be waived by the Investor: (a) receipt by the
Investor or its authorized agent of one or more certificates
representing the number of shares of Common Stock and Warrants set
forth on the signature page hereto; (b) receipt by the Investor of
an opinion letter, dated as of the Closing Date, from Gilmore &
Bell, P.C., counsel to the Company, in form reasonably satisfactory
to the Investor; (c) the accuracy of the representations and
warranties when made by the Company and as if made by the Company
at the Closing and the fulfillment of those undertakings of the
Company to be fulfilled prior to the Closing; (d) on the Closing
Date, no legal action, suit or proceeding shall be pending or
threatened which seeks to
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restrain or prohibit the
transactions contemplated by the Agreements; (e) the Company shall
have delivered to the Investors its certificate, dated the Closing
Date, duly executed by its Chief Executive Officer to the effect
set forth in clause (c) above; (f) the receipt by the Investors of
a certificate, dated the Closing Date, of the Secretary or
Assistant Secretary of the Company certifying as to (i) the
accuracy of the certificate of incorporation and bylaws of the
Company as in effect on the Closing Date (which shall be attached
to such certificate as an exhibit), (ii) the accuracy of all
resolutions of the board of directors (and committees thereof) of
the Company relating to the Agreements and the transactions
contemplated thereby (which shall be attached to such certificate
as an exhibit) and (iii) the incumbency and signatures of all
officers of the Company executing the Agreements and any other
agreement or document contemplated thereby.
4.
Representations, Warranties and Covenants of the Company .
Except as otherwise described in the Company’s SEC Documents
(as defined in Section 4.4 ) or in the Confidential Private
Placement Memorandum dated January 21, 2005, as supplemented or
amended and including all exhibits attached thereto and
incorporated by reference therein (the “Memorandum”),
which qualify the following representations, warranties and
covenants in their entirety, the Company hereby represents and
warrants to, and covenants with, the Investor, as
follows:
4.1
Organization . Each of the Company and its Subsidiaries is
duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization. Each of the Company
and its Subsidiaries (as defined in Rule 405 under the Securities
Act of 1933, as amended (the “Securities Act”)) has
full power and authority to own, operate and occupy its properties
and to conduct its business as presently conducted and is
registered or qualified to do business and in good standing in each
jurisdiction in which it owns or leases property or transacts
business and where the failure to be so qualified would have a
material adverse effect upon the financial condition or business,
operations or assets of the Company and its Subsidiaries,
considered as one enterprise, and no proceeding has been instituted
in any such jurisdiction, revoking, limiting or curtailing, or
seeking to revoke, limit or curtail, such power and authority or
qualification, other than the winding down or dissolution of
certain Subsidiaries no actively longer used in the operation of
the Company’s business.
4.2
Due Authorization . The Company has all requisite power and
authority to execute, deliver and perform its obligations under the
Agreements, and the Agreements have been duly authorized and
validly executed and delivered by the Company and constitute legal,
valid and binding agreements of the Company enforceable against the
Company in accordance with their terms, except as rights to
indemnity and contribution may be limited by state or federal
securities laws or the public policy underlying such laws, except
as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
creditors’ and contracting parties’ rights generally
and except as enforceability may be subject to general principles
of equity (regardless of whether such enforceability is considered
in a proceeding in equity or at law).
4.3
Non-Contravention . The execution and delivery of the
Agreements, the issuance and sale of the Common Stock and Warrants
to be sold by the Company under the Agreements, the fulfillment of
the terms of the Agreements and the consummation of the
transactions contemplated thereby will not (A) conflict with or
constitute a violation of, or default (with or without the giving
of notice or the passage of time or both) under, (i) any material
bond, debenture, note or other evidence of indebtedness, or under
any material lease, indenture, mortgage, deed of trust, loan
agreement, joint venture or other agreement or instrument to which
the Company or any Subsidiary is a party or by which it or any of
its Subsidiaries or their respective properties are bound, (ii) the
charter, by-laws or other organizational documents of the Company
or any Subsidiary, or (iii) any law, administrative regulation,
ordinance or order of any court or governmental agency, arbitration
panel or authority applicable to the Company or any Subsidiary or
their respective properties, except where such conflict, violation
or default
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would not have a material adverse
effect on the financial condition or results of operations of the
Company and Subsidiaries taken as one enterprise, (B) result in the
creation or imposition of any lien, encumbrance, claim, security
interest or restriction whatsoever upon any of the material
properties or assets of the Company or any Subsidiary or an
acceleration of indebtedness pursuant to any obligation, agreement
or condition contained in any material bond, debenture, note or any
other evidence of indebtedness or any material indenture, mortgage,
deed of trust or any other agreement or instrument to which the
Company or any Subsidiary is a party or by which any of them is
bound or to which any of the property or assets of the Company or
any Subsidiary is subject. No consent, approval, authorization or
other order of, or registration, qualification or filing with, any
regulatory body, administrative agency, self-regulatory
organization, stock exchange or market, or other governmental body
in the United States is required for the execution and delivery of
the Agreements and the valid issuance and sale of the Common Stock
and Warrants to be sold pursuant to the Agreements, other than such
as have been made or obtained, and except for any securities
filings required to be made under federal or state securities
laws.
4.4
Reporting Status . The Company has filed in a timely manner
all documents that the Company was required to file under the
Securities Exchange Act of 1934, as amended (the “Exchange
Act”), during the 12 months preceding the date of this
Agreement. The following documents complied in all material
respects with the Securities and Exchange Commission’s
(“SEC”) requirements as of their respective filing
dates, and the information contained therein as of the date thereof
did not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein in light of the circumstances under
where they were made not misleading, except to the extent that
information contained in any such document has been revised or
superseded by a later filed SEC Document (as defined
below):
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(i)
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the Company’s Annual Report
on Form 10-KSB for the year ended December 31, 2003, including
the exhibits thereto (the “Form 10-KSB”);
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(ii)
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the prospectus dated November 22,
2004, forming a part of the Company’s registration statement
on Form SB-2 filed with the SEC on November 8, 2004; and
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(iii)
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all other documents, including
the exhibits thereto, filed by the Company with the SEC since
December 31, 2003, pursuant to the reporting requirements of
the Exchange Act (together with the Form 10-KSB, the “SEC
Documents”).
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Investor acknowledges that the
prospectus dated November 22, 2004, is provided for information
purposes only, and no offer or sale of any securities, including
without limitation the securities subject to that prospectus, is
made or deemed to be made by virtue of delivery of that prospectus
to Investor.
4.5
Capitalization . As of the date hereof, the authorized
capital stock of the Company consists of 150,000,000 shares of
Common Stock and 5,000,000 shares of preferred stock, par value
$0.004 per share, of the Company (the “Preferred
Stock”). As of January 21, 2005, there were approximately (i)
37,202,343 shares of Common Stock issued and outstanding, (ii)
3,834,283 shares of Common Stock reserved for issuance under the
Company’s stock option plans, including 2,408,889 shares
issuable upon exercise of outstanding stock options issued by the
Company to current or former employees, consultants and directors
of the Company and its Subsidiaries, (iii) 232,786 shares issuable
upon exercise of outstanding stock options issued by the Company to
current or former employees, consultants and directors of the
Company and its Subsidiaries and (iii) 11,913,397 shares issuable
upon exercise of warrants to acquire shares of Common Stock. All
outstanding shares of Common Stock are duly authorized, validly
issued, fully paid and nonassessable, free from any liens or any
other encumbrances created by the Company with respect to the
issuance and delivery thereof and not subject
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to preemptive rights. Other than
as disclosed in the SEC Documents or the Memorandum, there are no
outstanding rights, options, warrants, preemptive rights, rights of
first refusal agreements, commitments or similar rights for the
purchase or acquisition from the Company of any securities of the
Company. The Common Stock and Warrants to be sold pursuant to the
Agreements have been duly authorized, and when issued and paid for
in accordance with the terms of the Agreements will be duly and
validly issued, fully paid and nonassessable, free and clear of all
pledges, liens, encumbrances and other restrictions (other than
those arising under federal or state securities laws as a result of
the private placement of the Common Stock and Warrants to the
Investors). Other than with respect to the conversion rights for
the outstanding bridge notes described in the Memorandum, no
preemptive right, co-sale right, right of first refusal or other
similar right exists with respect to the Common Stock and Warrants
or the issuance and sale thereof. No further approval or
authorization of any stockholder, the Board of Directors of the
Company or others is required for the issuance and sale of the
Common Stock and Warrants. Except as set forth in the SEC Documents
and the registration rights of the holders of the bridge notes
described in the SEC Documents and the Memorandum, no holder of any
of the securities of the Company has any rights
(“demand,” “piggyback” or otherwise) to
have such securities registered by reason of the intention to file,
filing or effectiveness of a Registration Statement (as defined in
Section 7.1 hereof). The Company has agreed to include the
shares of Common Stock issuable to the holders of the bridge notes
in the Registration Statement.
4.6
Legal Proceedings . There is no material legal or
governmental proceeding pending or, to the knowledge of the
Company, threatened to which the Company or any Subsidiary or any
officer or director of the Company or any Subsidiary in their
capacity as such officer or director is or may be a party or of
which the business or property of the Company or any Subsidiary is
subject that is not disclosed in the SEC Documents. There is no
action, suit, proceeding, inquiry or investigation before or by any
court, public board or body (including, without limitation, the
SEC) pending or, to the knowledge of the Company, threatened
against or affecting the Company or any of its Subsidiaries wherein
an unfavorable decision, ruling or fording could adversely affect
the validity or enforceability of, or the authority or ability of
the Company to perform its obligations under the
Agreements.
4.7
No Violations . Neither the Company nor any Subsidiary is in
violation of its charter, bylaws, or other organizational document,
or in violation of any law, administrative regulation, ordinance or
order of any court or governmental agency, arbitration panel or
authority applicable to the Company or any Subsidiary, including
the rules, regulations and policies of the SEC and the Food and
Drug Administration of the U.S. Department of Health and Human
Services (the “FDA”) and which violation, individually
or in the aggregate, would be reasonably likely to have a material
adverse effect on the business, operations, assets or financial
condition of the Company and its Subsidiaries, considered as one
enterprise, or is in default (and there exists no condition which,
with or without the passage of time or giving of notice or both,
would constitute a default) in any material respect in the
performance of any bond, debenture, note or any other evidence of
indebtedness in any indenture, mortgage, deed of trust or any other
material agreement or instrument to which the Company or any
Subsidiary is a party or by which the Company or any Subsidiary is
bound or by which the properties of the Company or any Subsidiary
are bound, which would be reasonably likely to have a material
adverse effect upon the business, operations, assets or financial
condition of the Company and its Subsidiaries, considered as one
enterprise.
4.8
Governmental Permits, Etc . With the exception of the
matters which are dealt with separately in Section 4.1, 4.4,
4.13 and 4.14 , each the Company and it Subsidiaries has
all necessary franchises, licenses, certificates and other
authorizations from any foreign, federal, state or local government
or governmental agency, department, or body that are currently
necessary for the operation of the business of the Company and its
Subsidiaries as currently conducted, except where the failure to
currently possess could not reasonably be expected to have a
material adverse effect upon the business, operations, assets or
financial condition of the Company and its Subsidiaries, considered
as one enterprise.
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4.9
Intellectual Property . Each of the Company and its
Subsidiaries owns or possesses sufficient rights to use all
patents, patent rights, trademarks, copyrights, licenses,
inventions, trade secrets, trade names and know-how (collectively,
“Intellectual Property”) that are necessary for the
conduct of its business as now conducted, and as proposed to be
conducted in the SEC Documents, except where the failure to
currently own or possess could not reasonably be expected to have a
material adverse effect on the financial condition or business of
the Company and its Subsidiaries considered as one enterprise.
Except as set forth in the SEC Documents, (i) neither the Company
nor any of its Subsidiaries has received any notice of, or has any
knowledge of, any infringement of asserted rights of a third party
with respect to any Intellectual Property that, individually or in
the aggregate, would have a material adverse effect on the
financial condition or business, operations or assets of the
Company and its Subsidiaries considered as one enterprise and (ii)
neither the Company nor any of its Subsidiaries has received any
notice of any infringement rights by a third party with respect to
any Intellectual Property that, individually or in the aggregate,
would have a material adverse effect upon the business, operations,
assets or financial condition of the Company and its Subsidiaries,
considered as one enterprise.
4.10
Environmental Matters . The Company and its Subsidiaries (i)
are in compliance in all material respects with any and all
applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants
or contaminants (“Environmental Laws”), (ii) have
received all material permits, licenses or other approvals required
of them under applicable Environmental Laws to conduct their
respective businesses, and (iii) are in compliance with all terms
and conditions of any permit, license or approval, except where
such noncompliance with Environmental Laws, failure to receive
required permits, licenses or other approvals or failure to comply
with the terms and conditions of such permits, licenses or
approvals would not, singly or in the aggregate, have a material
adverse effect on the Company and its Subsidiaries taken as a
whole.
4.11
Financial Statements . The financial statements of the
Company and the related notes thereto included in the SEC Documents
present fairly in all material respects, in accordance with
generally accepted accounting principles, the financial position of
the Company and its Subsidiaries as of the dates indicated, and the
results of its operations and cash flows for the periods therein
specified. Such consolidated financial statements (including the
related notes) have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis
throughout the periods therein specified, except as set forth in
the SEC Documents and subject, in the case of unaudited financial
statements, to normal year-end audit adjustments.
4.12
No Material Adverse Change . Except as disclosed in the SEC
Documents, since December 31, 2003, there has not been (i) any
material adverse change in the financial condition or earnings of
the Company and its Subsidiaries considered as one enterprise nor
has any material adverse event occurred to the Company or its
Subsidiaries, (ii) any material adverse event affecting the Company
or any of its Subsidiaries, (iii) any obligation, direct or
contingent, that is material to the Company and its Subsidiaries
considered as one enterprise, incurred by the Company, except
obligations incurred in the ordinary course of business, (iv) any
dividend or distribution of any kind declared, paid or made on the
capital stock of the Company or any of its Subsidiaries, or (v) any
loss or damage (whether or not insured) to the physical property of
the Company which has been sustained which has a material adverse
effect on the condition (financial or otherwise), earnings,
operations or business of the Company and its Subsidiaries
considered as one enterprise. Except as disclosed in the SEC
Documents, neither the Company nor any of its Subsidiaries has (i)
sold, assigned, transferred, abandoned, mortgaged, pledged or
subjected to lien any of its material properties, tangible or
intangible, or rights under any material contract, permit, license,
franchise or other agreement or (ii) waived or cancelled any
material indebtedness or other obligations owed to the Company or
any such Subsidiary.
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4.13
No Manipulation of Stock . The Company has not taken and
will not, in violation of applicable law, take, any action designed
to or that might reasonably be expected to cause or result in
stabilization or manipulation of the price of the Common Stock to
facilitate the sale or resale of the Common Stock and the Common
Stock issuable upon exercise of the Warrants.
4.14
Insurance . The Company maintains and will continue to
maintain insurance against loss or damage by fire or other casualty
and such other insurance, including, but not limited to, product
liability insurance, in such amounts and covering such risks as is
reasonably adequate consistent with industry practice for the
conduct of its business and the value of its properties, all of
which insurance is in full force and effect.
4.15
Tax Matters. The Company has filed all material federal,
state and local income and franchise and other tax returns required
to be filed and has paid or accrued all taxes due in accordance
therewith, and no tax deficiency has been determined adversely to
the Company which has had (nor does the Company have any knowledge
of any tax deficiency which, if determined adversely to the
Company, might have) a material adverse effect on the condition
(financial or otherwise), earnings, operations or business of the
Company and its Subsidiaries considered as one
enterprise.
4.16
Investment Company . The Company is not an “investment
company” within the meaning of such term under the Investment
Company Act of 1940 and the rules and regulations of the SEC
thereunder and will not become an investment company upon the
receipt and application of the net proceeds of this
offering.
4.17
No Registration . Assuming the accuracy of the
representations and warranties made by, and compliance with the
covenants of, the Investors in Section 5 hereof, no
registration of the Common Stock and Warrants under the Securities
Act of 1933, as amended (the “Securities Act”), is
required in connection with the offer and sale of the Common Stock
and Warrants by the Company to the Investors as
contemplated
