EXHIBIT 4.1
SECURITIES PURCHASE AGREEMENT
THIS SECURITIES
PURCHASE AGREEMENT,
dated as of _______________, 2004, is
entered into by and between PROVECTUS PHARMACEUTICALS,
INC.,
a Nevada
corporation, with headquarters located at 7327 Oak Ridge Highway, Suite A,
Knoxville, TN 37931 (the "Company"), and
_______________(the "Purchaser").
R E C I T A L S :
WHEREAS,
the Company and the
Purchaser 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 Purchaser and the Purchaser 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 Purchaser hereby agrees to pay to
the Company a purchase price of $.75 per
share of Common Stock for the number of
shares indicated on the signature page hereto (the "Shares"), for the total
purchase price indicated on the signature
page hereto (the
"Purchase Price").
The Purchase Price shall be within five (5)
days of the Closing Date (as defined
below) (the "Payment Date"). The payment shall be made pursuant
to the payment
schedule attached hereto as Annex I. 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.
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(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 1934 Act.
(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 Venture Catalyst, LLC.
(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.
(xv)
"Piggyback
Notice" shall have the meaning described in Section 9
hereof.
(xvi) "Principal
Trading Market" means The Over the Counter Bulletin Board.
(xvii) "Purchase
Price" shall have the meaning described in Section 1(a)(i)
hereof.
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(xviii)
"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.
(xix)
"Registrable
Securities" means the Shares, the Warrants, the Warrant
Shares 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 registration under the 1933 Act,
held by a Holder 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 Holder 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 1933 Act.
(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 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 the
Payment Date,
the Purchaser shall pay the Purchase
Price by
delivering immediately available good funds in United States Dollars to the
Escrow Agent.
(ii) No later
than the Payment Date,
but in any event
promptly following
payment by the Purchaser to the Escrow Agent of
the Payment, the
Company shall
deliver the Certificate, each duly executed on behalf of
the Company and issued
in the name of the Purchaser, to the
Purchaser. The Common
Stock Certificate on
the Payment Date shall be for the number of
shares indicated
on the signature
page hereto.
(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.
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d. Method of
Payment. Payment
shall be made by wire
transfer of funds
or
via check to:
Provectus Pharmaceuticals, Inc.
7327 Oak Ridge Highway
Knoxville, TN 37931
Attn: Peter R.
Culpepper
pursuant to the wiring instructions
provided in the Joint Escrow Instructions.
2. PURCHASER
REPRESENTATIONS,
WARRANTIES,
ETC.; ACCESS TO INFORMATION;
INDEPENDENT INVESTIGATION.
The Purchaser represents and warrants to, and covenants and
agrees with,
the Company as follows:
a. Without
limiting Purchaser's right 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 V hereto. The Purchaser and its advisors,
if any, have been
afforded the
opportunity to ask questions of the Company and have
received complete and
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 EDGAR listed on Annex
VI hereto (the
documents
listed on such Annex VI, to the extent
available on EDGAR or otherwise provided
to the Purchaser as indicated on said Annex
VI, collectively, the "Company's SEC
Documents").
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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 Purchaser
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 V hereto or
in the Company's SEC Documents:
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.
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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 15,489,472 shares are outstanding as of September 30,
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 September 30, 2004, there
were 19,902,078 shares of Common Stock
outstanding on a fully diluted basis. 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.
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.
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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
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.
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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:
(i) 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;
(ii) engaging in
any type of business practice; or
(iii)
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 V hereto or the
Company's SEC Documents.
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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
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 March 30, 2004, 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.
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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
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 Purchaser, (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 Closing
Date, 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
