<PAGE> 1
Exhibit 10.1
DEVELOPMENT, LICENCE AND
COLLABORATION AGREEMENT
between
(1) ROSLIN INSTITUTE (EDINBURGH), a
company incorporated in Scotland
under the Companies Acts with
registered number 157100 and having
its registered office at Roslin
BioCentre, Roslin, Midlothian EH25
9PS ("Institute")
and
(2) VIRAGEN INC. a Delaware corporation
having a principal place of
business at 865 South West 78th
Avenue, Plantation, Florida 33324,
United States of America
("Viragen")
WHEREAS
(A) The Institute has expertise and knowledge of, INTER ALIA, nuclear
transfer, DNA injection and avian reproduction technologies and Viragen
wishes to collaborate with the Institute in the further development of
these technologies, with particular focus on avian transgenics and the
Institute has agreed to undertake such development work, in order to
further its objectives in a manner consistent with its status as a
research and educational institute and its recognition as a Scottish
charity (number SCO23592);
1
<PAGE> 2
(B) The parties entered into Heads of Agreement dated 19th and 20th October
both 2000 setting out their intentions, among other things in relation
to the research collaboration to be undertaken by them;
(C) In consideration for the Institute undertaking collaborative
development work with Viragen, Viragen shall fund the Project (as
defined below) in addition to issuing 100,000 shares of Viragen common
stock, granting the Institute various stock warrants in respect of
Viragen's shares of common stock, in addition to funding the initial
plans for the construction of a new biopharmaceutical facility for cGMP
poultry production at the Institute's premises; and
(D) In order for the development work to be undertaken, the Institute has
agreed to grant to Viragen a licence of certain patents and certain of
its know-how in respect of novel methods for the use of avian
transgenic technology and methods for production of transgenic chickens
on the terms contained in this Agreement.
NOW IT IS HEREBY Agreed as follows:-
1 DEFINITIONS AND INTERPRETATION
1.1 In this Agreement, including the Recitals unless the context otherwise
requires, the following defined terms shall have the meanings set out
opposite them: -
AGREEMENT means this agreement together with the
schedule hereto;
ASSOCIATED COMPANY means a subsidiary or holding
company of Viragen, or any subsidiary of any
such holding company from time to time
2
<PAGE> 3
(the terms "holding company" and
"subsidiary" having the meanings set out in
sections 736 and 736A of the Companies Act
1985);
BACKGROUND INTELLECTUAL PROPERTY means all and any
Intellectual Property belonging to or used
by either party and which either party is
free to licence other than Foreground
Intellectual Property;
COMMERCIAL EXPLOITATION means that Viragen, in relation
to any Foreground Intellectual Property, has
made reasonable efforts to: (i) licence the
same to a third party, for the purposes of
commercial exploitation and/or further
development; and/or (ii) attract or
otherwise obtain additional finance or
funding for the commercialisation or further
development of the same; and/or (iii) apply
for regulatory approval of the same in a
major market, including the preparation of
any relevant documentation; and/or (iv)
apply for patent protection of the same,
including seeking the advice of patent
agents; and/or (v) either itself or through
subcontractor(s), develop or further develop
Products and/or Services.
3
<PAGE> 4
CONFIDENTIALITY AGREEMENT means the agreement between the Institute
and Viragen, dated 16th October 2000;
EEA shall mean the European Economic Area as
constituted from time to time;
EFFECTIVE DATE means subject to clause 2, 4 December
2000 (or such later date as may be agreed in
writing between the parties pursuant to
clause 2.3);
FIELD means therapeutic and diagnostic protein
production in avian species;
FIRST SALE DATE shall mean the date on which
Viragen or a sub-licensee of Viragen first
puts a Product or Service on the market in
the EEA;
FOREGROUNDINTELLECTUAL means all and any Intellectual Property
PROPERTY which is conceived, first reduced to
practice or writing or developed in the
course of the Project;
HEADS OF AGREEMENT means the document executed by the parties
and dated 19 and 20 October both 2000,
setting out the understanding between the
parties in relation to the collaboration
4
<PAGE> 5
between them, a copy of which is annexed to
this Agreement as Part 4 of the Schedule;
INSTITUTE'S PATENTS means those granted patent(s) and
applications for patents in the Territory
short particulars of which are set out in
Part 1 of the Schedule together with any
patents granted pursuant to such
applications and including any re-issues,
extensions, substitutions, continuation in
part applications and supplementary
protection certificates of the same and all
other rights of a like nature;
INTELLECTUAL PROPERTY means all inventions, discoveries, Know-how
or other know-how, processes, copyright,
design rights, rights to apply for patents,
patents, (including any re-issues,
extensions, substitutions, continuation in
part applications and supplementary
protection certificates and all other rights
of a like nature), applications for patents
and any other intellectual property rights
of a similar nature arising in any part of
the world;
KNOW-HOW means technical or other information which
is not in the public domain including ideas,
concepts, inventions, discoveries, data,
formulae, specifications, drawings, manuals,
5
<PAGE> 6
information, chemical compounds and
derivatives, analogues and precursors,
methods and processes of synthesis,
procedures for experiments and tests and
results of experimenting and testing,
results of research and development
including laboratory records and data
analyses relating to the Technologies which
is secret, substantial and identified;
NET INVOICE PRICE means the total price received by Viragen
on sales of Products and/or Services
invoiced by Viragen less all discounts,
allowances, and returns actually granted
transportation costs, packaging costs,
insurance costs, and taxes or duties based
on directly sale (to the extent to which any
of the foregoing are allowed for or included
in the invoice) PROVIDED THAT in a case
where the Products and/or Services are:
(a) rented, leased, let out or hired or
otherwise disposed of to a customer
by Viragen; or
(b) used by Viragen for its own
commercial purposes; or
6
<PAGE> 7
(c) sold to any Associated Company of
Viragen; or
(d) incorporated in any larger
equipment or apparatus or other
service and supplied by Viragen at
a price which is included in the
price for the larger equipment or
apparatus or other service;
the Net Invoice Price of each such Product,
and/or Service shall be deemed to be
equivalent to the Net Invoice Price which
would have been applicable under this
Agreement had such Product and/or Service
been transferred to an independent arm's
length customer;
PRODUCTS AND/OR SERVICES means any substance, chemical, elements,
material, composition, invention, apparatus,
method, service or product within the Field,
the manufacture, use, sale or provision of
which is obtained or derived directly from
or utilising the Background Intellectual
Property and /or the Foreground Intellectual
Property and/or the Institute's Patents;
7
<PAGE> 8
PROJECT means the research project to be carried out
by the Institute in accordance with the
Project Workplan;
PROJECT COST means the sum set out in Part 5 of the
Schedule or such greater amount as may be
agreed in accordance with clause 5.2 or as
the parties may otherwise agree in writing;
PROJECT DIRECTOR means Dr. Helen Sang or such other person
as the parties may agree in writing in
accordance with clause 4.2;
PROJECT PERIOD means the period of three (3) years
commencing on the Effective Date and
terminating on 30th November 2003 (provided
the Project is not terminated earlier in
accordance with clauses 4.2 or 20); or such
longer period as may arise in accordance
with clause 5.2;
PROJECT SCIENTIFIC means an advisory board consisting of
ADVISORY BOARD representatives of the Institute and
representatives of Viragen whose duties are
as set out in Clauses 4.3 and 5.2
PROJECT WORKPLAN means the workplan for the Project dated of
even date herewith and which forms part of
this Agreement, as the same may be amended
8
<PAGE> 9
from time to time in accordance with
clause 3.1;
RESEARCHERS means those employees of the Biotechnology
and Biological Sciences Research Council
("BBSRC") based at the Institute, including
the Project Director, who have been
allocated to work on the Project;
SCHEDULE means the schedule in 5 parts which is
annexed to and forms part of this Agreement;
SHARES means 100,000 shares of Viragen common
stock;
SUPPLY means to sell, provide, lend, let out on
hire, lease or any other disposal or
provision and Supplied shall be construed
accordingly; and
TECHNOLOGIES means nuclear transfer, DNA injection and
avian reproduction technologies ;
TERRITORY means the world;
WARRANT means the warrant for the purchase of shares
of Viragen common stock and the
9
<PAGE> 10
investment letter both dated of even date
herewith ;and
WARRANTS means warrants to purchase a total of
900,000 shares of Viragen's common stock.
1.2 In this Agreement: -
1.2.1 references to clauses, sub-clauses, Parts and the Schedule are
to clauses, and sub-clauses, Parts and the Schedule to this
Agreement;
1.2.2 headings to Parts, clauses and in the Schedule are for
convenience only and do not affect the interpretation of this
Agreement;
1.2.3 words importing the singular shall include the plural and vice
versa; and
1.2.4 references to any statute or statutory provision includes a
reference to that statute or statutory provision as amended
extended or re-enacted from time to time.
2 COMMENCEMENT AND DURATION
2.1 Subject to clause 2.4, this Agreement is subject to and conditional
upon:-
2.1.1 the Institute being satisfied, at its entire discretion that:
(a) Viragen has the necessary powers to enter into this
Agreement, the Project Workplan, the letter dated of
even date with this Agreement from the Institute to
Viragen regarding the construction of a new
biopharmaceutical facility for cGMP poultry
production ("the Poultry Facility Letter") and the
Warrant;
(b) Viragen has the necessary powers to issue and allot
the Shares, fully paid and non-assessable and to the
issue the Warrants pursuant to the terms of the
Warrant;
10
<PAGE> 11
(c) that the Board of Viragen has approved the terms of
the Agreement, the Workplan, the Warrant and the
Poultry Facility Letter and the issue of the Shares;
(d) that the Board of Viragen has duly authorised Mr
Gerald Smith to execute on its behalf this Agreement,
the Workplan, the Warrant, Poultry Facility Letter
and other ancillary documentation, and that Mr Gerald
Smith is on the date of execution a duly appointed
officer of Viragen; and
(e) and that the resolutions referred to above were
validly passed at a properly convened meeting of the
Board of Viragen and are in full force and effect;
and
2.1.2 Viragen delivering a share certificate for the Shares, fully
paid and non- assessable, in terms entirely satisfactory to
the Institute.
2.2 Notwithstanding the terms of clause 2.1, the Institute shall be
entitled by notice in writing given to Viragen to waive (to such extent
as the Institute may think fit) compliance with the any or all of the
conditions stated in clauses 2.1.
2.3 Viragen shall use its best endeavours to procure that the conditions
stated in -clause 2.1 are fulfilled as soon as practicable and in any
event on or before the Effective Date but if the conditions in clause
2.1 have not been fulfilled or waived by that date (or by such later
date as may be agreed in writing between the parties), then save for
this clause 2.3 and the accrued rights arising in respect of the
operative provisions specified in clause 2.4;
2.3.1 the whole of this Agreement (other than clause 2.3 and those
referred to in clause 2.4);
2.3.2 the Project Workplan and the Warrant; and
2.3.3 the letter dated of even date herewith from the Institute to
Viragen regarding the construction of a new biopharmaceutical
facility for cGMP poultry production shall each thereupon
become null and void ab initio.
11
<PAGE> 12
2.4 Notwithstanding clause 2.1 the following clauses of this Agreement
shall come into force on 15 November 2000 and the remainder of this
Agreement shall come into force on the fulfilment and/or waiver of all
conditions stated in clause 2.1: -
CLAUSES TO COME INTO IMMEDIATE EFFECT
Clause Number Heading
------------- -------
1 Definitions and Interpretation
2 Commencement and Duration
7.1,7.2 and 7.3 Confidentiality and Publication in relation to the
Project
18 Warranties
23 Notices
24 Variations
25 Waivers
26 Assignation
27 Entire Agreement
28 Severability
30 Enticement
31 Further Assurances
32 Announcements
33 Publicity
34 Costs
35 Governing Law
12
<PAGE> 13
2.5 This Agreement shall commence as provided in this clause 2 and shall,
subject to clauses 20 (Termination) and 22 (Force Majeure) continue in
force during the Project Period and thereafter, on a country by country
basis in the Territory, as appropriate, until the later of:-
2.5.1 the last to expire in the relevant country in the Territory of
the Institute's patents or the patents derived from the
Foreground Intellectual Property; or
2.5.2 Know-how, derived from the Foreground Intellectual Property
fifteen(15) years from the Effective Date or (in relation to
countries within the EEA) ten years from the First Sale Date,
whichever is the earlier.
3 PROJECT SCIENTIFIC ADVISORY BOARD
3.1 The parties shall, immediately following the Effective Date, establish
a Project Scientific Advisory Board, to oversee and manage the Project.
In particular, the Project Scientific Advisory Board shall:
3.1.1 set the objectives and timetable of the Project Workplan;
3.1.2 monitor progress against any agreed milestones and the
timetable of the Project Workplan;
3.1.3 advise and assist in the resolution of any scientific or
technical difficulties which are experienced by the
Researchers;
3.1.4 review the results of the Project with a view to identifying
patentable inventions;
3.1.5 consider opportunities for patent filings and publications;
3.1.6 consider issues relating to maintenance and prosecution of
patents; and
3.1.7 subject to Clause 5.2, propose amendments to the Project and
the Project Workplan as may be necessary or desirable to give
effect to this Agreement.
3.2 The Project Scientific Advisory Board shall comprise such number of
members as are agreed between the Institute and Viragen, but shall
always comprise an equal representation from the Institute and Viragen.
For so long as he or she remains an employee of BBSRC working at the
Institute, the Project Director shall be one of the
13
<PAGE> 14
Institute's appointees. The Chairperson of the Project Scientific
Advisory Board shall be the Project Director.
3.3 All members of the Project Scientific Advisory Board shall be given
reasonable notice of meetings unless such requirement is unanimously
waived by such members. The quorum for meetings of the Project
Scientific Advisory Board shall be as agreed between the Institute and
Viragen but as a minimum must comprise of at least one appointee of the
Institute and at least one appointee of Viragen.
3.4 All decisions of the Project Scientific Advisory Board regarding the
Project shall be by simple majority. In the case of an equality of
votes the Chairperson shall have a casting vote.
3.5 Except as otherwise provided in this clause 3, the procedures of the
Project Scientific Advisory Board, the way in which it is conducted and
subject to clause 5.2 the frequency of its meetings shall be determined
by the Project Scientific Advisory Board itself.
3.6 All formal communications between the parties relating to the conduct
of the Project pursuant to this Agreement shall be made through the
Project Scientific Advisory Board.
4 PROJECT WORK
4.1 The Institute shall start work on the Project on the Effective Date and
shall perform the Project in accordance with the terms of this
Agreement and the Project Workplan and shall allocate such Researchers,
resources and equipment as are in the Institute's view necessary for
the proper running of the Project. The Institute and Viragen may at any
time amend the Project Workplan in accordance with clause 5.2.
14
<PAGE> 15
4.2 The Project shall be carried out under the personal direction of the
Project Director, who shall have responsibility for the day-to-day
running, control and management of the Project and whose duties shall
include, but shall not be limited to, the allocation of work to be
undertaken under the Project Workplan (having regard for the relevant
skill and experience of the Researchers) and the promotion of the
performance of the Project Workplan. In the event that the Project
Director becomes unable or unwilling to continue the Project, and a
mutually acceptable substitute is not identified within a period of two
hundred and forty (240) days, either the Institute or Viragen shall have
the option to terminate the Project by serving a further sixty (60) days
written notice to that effect on the other party.
4.3 The Institute and Viragen will co-operate with each other to complete
the Project and to cause it to run as smoothly as possible.
4.4 To the extent related to the Project, the parties shall no later than
the Effective Date provide to each other their respective Background
Intellectual Property as is in or can be rendered into material form
and, during the continuance of this Agreement, the parties shall
promptly disclose to each other any Background Intellectual Property
which they are at liberty to disclose and, Viragen shall, at its own
expense, give such help and assistance to the Institute during the
Project Period as is reasonably required and requested by the Institute
and, further, Viragen shall use its reasonable endeavours, with the
assistance of the Institute and the Project Director, to secure within
one hundred and eighty (180) days of the Effective Date the appointment
by Viragen of a scientist of appropriate scientific standing as
determined by the Project Director to work on the Project with, and in
addition to, the Project Director.
4.5 In the performance of services in relation to the Project the Institute
shall be deemed to be and shall be an independent contractor. Neither
party is authorised to act as agent for the other for any purpose and
shall not on behalf of the other enter into any contract, warranty
15
<PAGE> 16
or representation as to any matter. Save as provided for by the terms
of this Agreement, neither party shall be bound by the acts or conduct
of the other.
4.6 Subject to Clause 4.1, whilst the Institute will use all reasonable
endeavours to ensure the accuracy of the work performed and any
information given in connection with the Project, the Institute makes
no warranty, express or implied, as to the success of the Project and
will not be held responsible for any consequence arising out of any
inaccuracies or omissions unless such inaccuracies or omissions are the
result of any negligent act or wilful default on the part of the
Institute.
5 PROJECT REPORTING
5.1 Written Project reports shall be provided by the Institute to Viragen
every three (3) months, and a final report shall be submitted by the
Institute within six (6) months of the completion of the Project or, if
earlier, termination of the Project.
5.2. At the outset of the Project and during the Project Period, the
Project Scientific Advisory Board will meet at times and places
mutually agreed and in any event at least once in every three (3)
months (with the first such meeting to take place within three (3)
months of the Effective Date) to discuss the progress and results, as
well as the ongoing plans, or changes therein, of the Project Workplan
(including, but without limitation, extension of the Project Period
and increases/decreases to the Project Costs). Viragen shall pay any
travelling, accommodation or other costs reasonably incurred by the
Institute under this clause 5.2. for such meetings during the Project
Period.
5.3. Subject to the terms of clause 4.6, in the event that the Project
Scientific Advisory Board should consider that an aspect of the
research work performed under the Project does not meet the level of
accuracy anticipated by the parties or unnecessary errors have been
16
<PAGE> 17
produced, such work shall be repeated by the Institute at no extra
cost to Viragen, together with any corresponding and necessary
alteration to the Project Period.
5.4 The parties agree that the obligations of the Institute in relation to
the Project shall cease upon delivery of the final report pursuant to
clause 5.1 and that no liability whatsoever, save in the event of
negligence or wilful default by the Institute, shall rest upon the
Institute for the effects of any Products and/or Services or any other
product or process that may be produced or adopted by Viragen or any
other party notwithstanding that the formulation of such products or
process may be based upon the findings of the Project.
6 PROJECT COST
6.1 To enable the Institute to undertake the Project and to provide the
necessary facilities in connection therewith, Viragen shall pay to the
Institute the Project Cost in the manner set out in Part 5 of the
Schedule to an account notified in writing by the Institute to Viragen.
6.2 In the event of termination of the Project before the end of the
Project Period, Viragen shall pay all costs reasonably incurred prior
to the date of said termination and falling due for payment in relation
to the Project up to the date of termination and all expenditure
falling due for payment after the date of termination which arises from
commitments reasonably and necessarily incurred by the Institute, and
which the Institute can reasonably demonstrate that it is unable to
cancel, for the performance of the Project prior to the date of
termination, provided always that in no event shall Viragen be liable
to the Institute in aggregate for payments made under Part 5 of the
Schedule and 6.3 totalling more than the Project Cost.
7 CONFIDENTIALITY AND PUBLICATION IN RELATION TO THE PROJECT
17
<PAGE> 18
7.1 The parties undertake that they shall at all times observe their
respective obligations under the Confidentiality Agreement the terms of
which are incorporated into this Agreement but in the event of any
conflict between the Confidentiality Agreement and this Agreement, this
Agreement shall prevail.. The Institute agrees that it shall, at all
times during and after the term of this Agreement maintain
confidentially in relation to Project except to extent that the
Institute shall be entitled to enter into any licence or sub-licence
pursuant to clause 8.4, subject always to the provisions of this Clause
7.
7.2 Both parties undertake and agree that they shall not (and they shall
procure that their respective employees, consultants, representatives,
sub-contractors and agents do not) disclose or permit to be disclosed
to any third party, nor make use of or permit to be made use of, any
trade secrets or confidential information relating to the disclosing
party's technical and proprietary information, business secrets or
business affairs or finances ("the Confidential Information") and the
recipient party shall at all times during the continuance of this
Agreement and thereafter maintain confidentiality in relation to the
Confidential Information which is disclosed to the recipient party
under this Agreement or any other agreement referred to herein. The
recipient party shall ensure that its respective employees,
consultants, representatives, sub-contractors and agents are made fully
aware of the obligations of confidentiality under this Agreement and
each are bound by conditions of secrecy no less strict than those set
out in this Agreement, which conditions the disclosing party hereby
agrees to enforce.
7.3 The obligations of confidentiality contained in clauses 7.1 and 7.2
shall not extend to Background Intellectual Property of the Institute
or to publication or presentations permitted in accordance with the
provisions of clause 7.4, nor to any information which:-
7.3.1 is, was or has become generally available to the public
otherwise than by reason of breach by the recipient party of
the provisions of this Agreement; or
18
<PAGE> 19
7.3.2 is or was known to the recipient party and is or was at its
free disposal prior to its receipt from the disclosing party
provided that such prior knowledge can be demonstrated by
written evidence; or
7.3.2 is subsequently disclosed to the recipient party without
obligations of confidence by a third party owing no such
obligations in respect thereof to the disclosing party; or
7.3.4 is required to be disclosed to any governmental or other
authority or other regulatory body including, without
limitation, the Ministry of Agriculture Fisheries and Food,
the Biotechnology and Biological Sciences Research Council or
by the rules of any stock exchange ,including US securities
regulations, and as may be required under the National Audit
Act 1983 or otherwise legally required to be disclosed,
provided always that the recipient party shall use its best
endeavours to limit any such disclosure to a minimum,
provided that in using such information the recipient party shall not
take any action which would prevent protection of any Intellectual
Property or Foreground Intellectual Property contained in such
information.
7.4 Viragen acknowledges that it is Institute policy that the results of
the Project be published, and any proposals for publications (including
public presentations) containing any details of work or results
generated from the Project shall be considered for such publication or
presentation by the Project Scientific Advisory Board, who agrees that
the Project Director and/or any Researchers engaged in the Project may
present at seminars, symposia, national or regional professional
meetings, and to publish in journals, theses or dissertations, or
otherwise, methods and results of the Project, provided however that
the Project Scientific Advisory Board shall have been furnished with
copies of any proposed publication and presentation at least two (2)
months in advance of the submission of such proposed publication or
presentation to a journal, editor, or other third party. The Project
19
<PAGE> 20
Scientific Advisory Board shall have one month after receipt of said
copies, to object to such proposed presentation or proposed publication
if in the Project Scientific Advisory Board's reasonable opinion a
delay of publication is necessary in order to protect its commercial
interests, or the commercial use to Viragen of information derived from
the Project or because there is patentable or commercially sensitive
subject matter which needs protection. In the event that the Project
Scientific Advisory Board makes such objection the Project Director or
the Researchers shall refrain from making such publication or
presentation until Viragen has obtained satisfactory protection of such
work or results. In the event that the Project Scientific Advisory
Board in making such objection can reasonably demonstrate that certain
information contained in such proposed presentation or publication if
disclosed would have a detrimental effect on Viragen's commercial
interest, such information shall be removed from the proposed
presentation or publication such that said information may not be
discerned therefrom and be delayed from further publication for a
period of two (2) years from the end of the Project. Every publication
published in accordance with the terms of this clause 7.4 shall
acknowledge the contribution of Viragen to the Project, the text of
such acknowledgments shall be agreed by the Project Scientific Advisory
Board prior to publication.
8 INTELLECTUAL PROPERTY
8.1 Subject to clause 8.2, for the avoidance of doubt, all Background
Intellectual Property used in connection with the Project shall remain
the property of the party introducing the same.
8.2 Viragen grants to the Institute a royalty-free, non-exclusive right and
licence to use the Viragen Background Intellectual Property disclosed
by Viragen to the Institute under clause 4.4 to such extent as is
necessary to enable the Institute to undertake the Project.
20
<PAGE> 21
8.3 As between the Institute and Viragen the Foreground Intellectual
Property shall belong to Viragen, subject to the licence granted to the
Institute in accordance with clause 8.4 and the re-assignation of the
Foreground Intellectual Property in favour of the Institute pursuant to
clause 9.3
8.4 Subject to provisions of confidentiality contained in Clause 7 of this
Agreement and the Confidentiality Agreement, Viragen hereby grants the
Institute a world wide royalty free licence (with the right to
sub-licence) of the Foreground Intellectual Property academic research
and teaching purposes and for the purpose of non commercial
collaboration with other academic parties, charitable, research and
other not for profit organisations, provided always that Viragen shall
have the opportunity to review, the terms of any such sub-licence. In
addition the Institute undertakes that it shall obtain from any such
third party an undertaking of confidentiality on terms no less onerous
than those contained in this Agreement and the Confidentiality
Agreement, and that the Institute shall obtain such undertaking prior
to entering into any discussions or negotiations with such third party.
9 PROTECTION AND EXPLOITATION OF FOREGROUND INTELLECTUAL PROPERTY
9.1 Pursuant to the terms of clause 8.3, the Institute shall promptly
notify Viragen of any Foreground Intellectual Property conceived and/or
made during the Project Period under the Project and Viragen will, if,
in its sole discretion, it should deem it appropriate and with the
assistance in all material respects of the Institute, but at Viragen's
own cost, use all reasonable endeavours to promptly prepare, file and
prosecute any patent application, or application for other intellectual
property protection, in respect of the Foreground Intellectual Property
in those countries where Viragen, in its sole discretion, believes
there is a reasonable prospect of a commercial return. While Viragen
shall be responsible for making decisions regarding the scope and
content of application(s) to be filed and the prosecution thereof, the
Institute shall be given an opportunity to review and provide input
21
<PAGE> 22
thereto. Viragen shall keep the Institute advised as to all
developments with respect to such applications(s) and shall promptly
supply to the Institute copies of all papers received and filed in
connection with the prosecution thereof in sufficient time for the
Institute to comment thereon. Thereafter, Viragen shall, at its own
cost, use all reasonable endeavours to prosecute and maintain such
applications(s) and the resultant patents.
9.2 Provided always that the Institute has made all relevant disclosure to
Viragen and Viragen has not decided to maintain the relevant Foreground
Intellectual Property as Know-how, if Viragen elects not to exercise
its rights to apply for protection of Foreground Intellectual Property
or decides to discontinue the prosecution or maintenance of such
protection, Viragen shall notify the Institute accordingly and the
Institute may require an assignation, free from encumbrances, of the
full right, title and interest in such Foreground Intellectual Property
and in and to any application(s) in respect thereof and the Institute
shall be free to file or continue to prosecute or maintain any such
application(s) and to maintain any protection issuing therefrom at the
Institute's sole expense and for its exclusive benefit.
9.3 Viragen shall have a period of two (2) years or such other period as
may be agreed between the parties in writing from the end of the
Project (whether at the end of the Project Period or earlier if this
Agreement is terminated pursuant to clauses 4.2 and 20 or later if the
Project Period is extended in accordance with clause 5.2) in which to
commence Commercial Exploitation of any Foreground Intellectual
Property. If the Institute does not receive written evidence of such
Commercial Exploitation within that period, the Institute shall be
entitled at any time thereafter, by written notice to Viragen, to
require the assignation free from encumbrances, of the full right,
title and interest in such Foreground Intellectual Property and to any
application(s) in respect thereof. In the event of any dispute arising
between the parties as to whether Commercial Exploitation of the
Foreground Intellectual Property has been achieved by Viragen ,which
dispute is not resolved by the parties within a period of thirty days
(30) from the date of receipt by the Institute of notification by
Viragen , the matter shall be referred to the President from time
22
<PAGE> 23
to time of the Law Society of Scotland, whose decision shall be final.
The costs of such referral shall be borne by the party designated to do
so by the President of the Law Society of Scotland.
10 GRANT OF LICENCE OF THE INSTITUTE'S PATENTS
10.1 The Institute grants to Viragen, subject as provided below, the
exclusive right and licence, with a right to sub-licence, under the
Institute's Patents to research, develop, manufacture, and/or Supply
the Products and/or Services and to commercialise, exploit, market,
import and export and sell the Products and/or Services in the Field
anywhere in the Territory.
10.2 If Viragen requires for the purpose of using or exploiting the
Foreground Intellectual Property or the Institute's Patents access to
Background Intellectual Property owned by the Institute, the Institute
will grant a royalty-free, non-exclusive licence to Viragen to any such
Background Intellectual Property that the Institute is free to licence
for this specific purpose.
10.3 The licence and rights granted to Viragen in clauses 10.1 and 10.2
shall not in any manner prevent the Institute licensing or using in any
way whatsoever its Background Intellectual Property and the Institute's
Patents for its own academic research and teaching purposes and for
non-commercial collaborations or from licensing or using as aforesaid
its Background Intellectual Property and the Institute's Patents
outside the Field. Viragen undertakes not to use the rights granted to
it under clauses 10.1 and 10.2 outside the Field.
10.4 The Institute shall simultaneously upon the execution of this Agreement
grant and enter with Viragen into a licence agreement in respect of the
Institute's Patents in the form or substantially the form set out in
Part 2 of the Schedule which licence shall be registered by
23
<PAGE> 24
Viragen with such Patent Offices in the Territory as it considers
appropriate or as the Institute shall require, all at the expense of
Viragen.
10.5 Nothing in this Agreement shall constitute any representation that the
Institute's Patents (if patent applications) shall proceed to grant or
if granted shall be valid or that the Products and/or Services do not
fall within the scope of any Intellectual Property other than the
Background Intellectual Property, the Institute Patents or the
Foreground Intellectual Property.
11 SUB-LICENSING
11.1 Viragen shall have the right to grant a sub-licence under the rights
and licences granted under clause 10.1 of this Agreement to any person
with respect to the rights and licences granted under this Agreement
PROVIDED THAT:
11.1.1 Viragen shall ensure that there are included in the terms of
any sub-licence the applicable like obligations and
undertakings on the part of the sub-licensee as are contained
in this Agreement (except this clause and the financial terms
set forth in this Agreement) and shall further ensure that all
sub-licensees duly observe and perform the same; and
11.1.2 Viragen shall at all times indemnify and keep indemnified the
Institute against all or any costs, claims, damages or
expenses incurred by the Institute or for which the Institute
may become liable as a result of the default or negligence of
any sub-licensee.
12 VIRAGEN'S OBLIGATIONS UNDER THE LICENCES
24
<PAGE> 25
12.1 Viragen shall use its reasonable endeavours to promote and expand the
Supply of the Products and/or Services throughout the Territory.
12.2 Viragen shall comply in all material respects with the legal
requirements applicable to the manufacture and Supply of the Products
and/or Services.
12.3 Viragen shall in the normal course of reporting progress to the
Institute, advise the Institute of any material regulatory matters
related to the Project and /or the Products and/or Services.
12.4 Save in the event of any negligent act or wilful default on behalf of
the Institute, Viragen shall at all times indemnify and keep
indemnified the Institute against all or any costs or claims damages or
expenses incurred by the Institute or for which the Institute may
become liable with respect to any product liability claim with respect
to all Products and/or Services Supplied or put into use by Viragen or
any of its sub-licensees pursuant to this Agreement.
12.5 Viragen shall, prior to any Products being produced , or any Products
and/or Services being Supplied or put into use by Viragen obtain and
maintain adequate product liability insurance to meet its obligations
to the Institute pursuant to clause 12.4 and shall supply the Institute
with a copy of such insurance policy on request.
13 PATENT INFRINGEMENT AND MISUSE OF CONFIDENTIAL INFORMATION
13.1 Upon the occurrence of any infringement or suspected or threatened
infringement of the Institute's Patents, the Institute and Viragen
shall immediately consult to decide what steps shall be taken to
prevent or terminate such infringement in relation to the Field.
25
<PAGE> 26
13.2 The Institute or Viragen shall take all steps as may be agreed by them
in pursuance of clause 13.1 including the institution of legal
proceedings where necessary in the name of one of the parties in order
to protect Viragen's rights in the Institute's Patents in the Field.
13.3 If the Institute fails within a reasonable period in the circumstances
to take such steps as may be considered necessary or appropriate by
Viragen (unless agreement shall have been reached in pursuance of
clause 13.1) Viragen shall have the right and is hereby authorized by
the Institute to take those steps independently, provided always that
the Institute shall use its reasonable endeavours to ensure that any
other licensees of the Institute's Patents are conjoined in any such
proceedings, under conditions of confidentiality no less onerous than
those contained in this Agreement. In so doing Viragen shall not be
taken to be acting as the agent or in any way on behalf of the
Institute but may file any proceedings in the name of the Institute, as
necessary or in its own name, and the Institute shall give all
reasonable assistance at Viragen's expense to facilitate any
proceedings by Viragen. Viragen shall bear all costs but shall be
entitled to retain for its own absolute benefit any damages, costs or
other expenses awarded or recovered in any such proceedings.
14 MAINTENANCE OF THE INSTITUTE'S PATENTS
14.1 Provided always that the Institute shall notify Viragen of all material
issues, the Institute shall be under no obligation to prosecute or
maintain in force any of the Institute's Patents whether by the payment
of any official fee (including without limitation any renewal fee) or
by defending any action or proceeding in which a claim or counterclaim
is made for the revocation of the Institute's Patents.
14.2 If the Institute in its absolute discretion decides not to prosecute,
maintain or defend any of the Institute's Patents, Viragen shall be
entitled to require the Institute to do so subject to Viragen and any
other sub-licensee of the Institute's Patents jointly indemnifying the
26
<PAGE> 27
Institute and keeping it indemnified to its satisfaction against all
costs and expenses thereby incurred by the Institute.
15 ROYALTIES
15.1 In consideration of the rights granted under clause 9.1, Viragen shall
15.1.1 pay to the Institute a royalty with respect to each Product
and/or Services Supplied by Viragen of three and one half
percent (3.5 %) of the Net Invoice Price of each Productand/or
Service Supplied by Viragen;
15.1.2 pay to the Institute a royalty of seventeen and one half
percent ( 17.5 %) of the gross amounts received by Viragen at
any time from any party in consideration of the grant of a
sub-licence under all or any part of Viragen's rights under
this Agreement (including, without limitation, all royalties,
any up front licence fee and any other consideration
(including equity or other stock) received by Viragen from any
party which can reasonably be regarded as being payable in
relation to a sub-licence) ; and
15.1.3 immediately issue to the Institute the Shares which will be
validly issued, fully paid and non- assessable and the
Warrants. The form of the Warrant is annexed to this Agreement
as Part 4 of the Schedule. Viragen agrees to register the
shares and the shares of common stock underlying the Warrants
under the Securities Act of 1933 at Viragen's cost and
expense. For that purpose, Viragen agrees to use its best
efforts to file a Registration Statement with the Securities
and Exchange Commission relating to the aforementioned
securities within forty five (45) days of the Effective Date.
27
<PAGE> 28
15.2 For the avoidance of doubt, royalties shall become payable by Viragen
under clause 15.1 of this Agreement in respect of each Product and/or
Service:
15.2.1 sold - when Viragen has received payment;
15.2.2 lent, leased, let or hire or sold on hire purchase - when
delivered to the borrower, lessor, lessee or hirer, whichever
first occurs;
15.2.3 disposed of by Viragen to any person otherwise than in
accordance with sub-clauses 15.3.1 or 15.3.2, when delivered
to such person; and
15.2.4 put into use by Viragen or an Associated Company on behalf of
a third party for value - immediately.
28
<PAGE> 29
16 TAXATION
16.1 All sums due under this Agreement:
16.1.1 are exclusive of any value added tax (or similar sales tax)
which shall be payable in addition by Viragen on the rendering
by the Institute of any appropriate value added tax or other
invoice and Viragen shall pay any costs, interest and
penalties due by reason of late payment of any such value
added tax (or similar sales tax);
16.1.2 shall be made in full without deduction of taxes charges and
other duties (including any withholding or other income taxes)
that may be imposed except where Viragen is required by law to
make such deduction or withholding, in which event Viragen
shall:
16.1.2.1 ensure that the deduction or withholding does not
exceed the minimum amount legally required;
16.1.2.2 forthwith pay to the Institute such additional
amount as shall result in the net amount received
by the Institute being equal to the amount which
would have been received by the Institute had no
such deduction or withholding been made ;
16.1.2.3 pay to the applicable taxation or other
authorities within the period for payment
permitted by law the full amount of the deduction
or withholding (including, but without prejudice
to the generality of the foregoing, the full
amount of any deduction or withholding from any
additional amount paid pursuant to this
sub-clause);
29
<PAGE> 30
16.1.2.4 furnish to the Institute, within the period for
payment permitted by law, either (a) an official
receipt of the applicable taxation or other
authorities for all amounts deducted or withheld
as aforesaid or (b) if such receipts are not
issued by the taxation or other authorities
concerned on payment to them of amounts so
deducted or withheld, a certificate of deduction
or equivalent evidence of the relevant deduction
or withholding; and
16.1.2.4 co-operate in all respects necessary to permit the
Institute to take advantage of such double
taxation agreements as may be available.
16.2 If any stamp taxes, registration taxes, turnover taxes, or other taxes,
duties or governmental charges are levied on this Agreement by reason
of its execution or performance, other than those identified in clause
16.1 above, it shall be the responsibility of Viragen to pay all such
taxes when due, provided always that the Institute shall provide
Viragen with all reasonable assistance in relation to the same. Such
taxes shall be in addition to other amounts payable by Viragen and
shall not be set off against any of the amounts due to the Institute
under this Agreement.
16.3 Viragen agrees to release and indemnify the Institute from and against
all liability of whatever nature arising out of Viragen's failure duly
and timeously to pay and discharge any of the above-mentioned taxes.
The Institute shall notify Viragen of any such claim and Viragen shall
control any defence arising from any such claim, provided always that
the Institute has provided Viragen with assistance in all material
respects.
17 OTHER PROVISIONS RELATING TO PAYMENT
30
<PAGE> 31
17.1 Royalties arising under this Agreement shall be paid in sterling within
thirty (30) days of the end of each successive quarterly period of
three months commencing on 1 March, 1 June, 1 September, 1 December in
every year to the credit of a bank account to be designated in writing
by the Institute.
17.2 In the event of any delay in effecting payments due under this
Agreement by the due date specified Viragen shall pay to the Institute
interest (calculated on a daily basis) on the overdue payment from the
date such payment was due to the date of actual payment at a rate of
three per cent (3%) above the base lending rate of Bank of Scotland
from time to time.
17.3 At the same time as payment of any royalties under this Agreement falls
due Viragen shall submit or cause to be submitted to the Institute a
statement in writing recording the calculation of royalty payable under
this Agreement; in particular:
17.3.1 the number of Products and/or Services which have been
Supplied during the previous quarter;
17.3.2 the Net Invoice Price of each Product and/or Service Supplied
during the previous quarter;
17.3.3 the gross income received by Viragen from any sub-licences
granted in accordance with clause 10; and
17.3.4 the amount of royalties due and payable and the amount of any
tax deductible or due to be deducted.
17.4. Viragen shall keep proper records and books of account showing the
description and price of Products and/or Services Supplied under this
Agreement and of the amounts received
31
<PAGE> 32
from any sub-licensees appointed in accordance with this Agreement and
such records shall, upon receipt by Viragen of reasonable notice from
the Institute, be open to inspection by the Institute or its duly
authorised agent or representative who shall be entitled to take copies
of or extracts from the same. In the event that such inspection or
audit should reveal a discrepancy in the royalties paid from those
payable under this Agreement, Viragen shall immediately make up any
shortfall and reimburse the Institute in respect of any professional
charges incurred for such audit or inspection. In the event the
examination determines a discrepancy of 3% or more relative to payments
due the Institute, then all costs of the examination shall be paid by
Viragen. In the event of any dispute arising in relation to such audit,
the matter shall be referred to an independent auditor, chosen by
agreement between the parties or ,failing such agreement within twenty
one (21) days at the request of either party, nominated by the
President from time to time of the Institute of Chartered Accountants
in Scotland, whose decision shall be final. The costs of such
independent audit shall be borne by the party designated to do so by
the independent auditor.
17.5 The provisions of this clause 17 shall continue to apply
notwithstanding termination or expiry of this Agreement until the
settlement of all subsisting claims of the Institute.
17.6 A certificate signed by an independent auditor shall be sufficient to
fix and ascertain any sums due by Viragen under this Agreement and
shall be conclusive of the amount due.
18 WARRANTIES
18.1 Each party represents and warrants to the other party that as at 15
November 2000:-
18.1.1 it has the power and authority to enter into and perform its
obligations under this Agreement and that this Agreement
constitutes a legally valid, binding and enforceable
obligation (subject to remedies provided by law) of the
parties;
32
<PAGE> 33
18.1.2 this Agreement does not and will not:-
(a) contravene any of its law or regulation, directive or
judgement ; or
(b) result in any actual or potential breach of or
default under any obligation, agreement or instrument
to which it is a party or by which it is bound or
which it requires to carry on business; or
(c) contravene any provision of its party's memorandum
and articles of association and/or statutes and/or
constitutional documents.
18.1.3 there is no event which with the giving of notice or lapse of
time may constitute a breach of this Agreement;
18.1.4 no order has been made, petition presented or resolution
passed for the its winding up and no meeting has been convened
for the purpose of its winding up, no steps have been taken
for the appointment of an administrator or receiver (including
an administrative receiver) of all or any part of its assets;
it has not made or proposed any arrangement or composition
with its creditors or any class of its creditors; it is not
insolvent, unable to pay its debts within the meaning of the
insolvency legislation applicable it and it has not stopped
paying its debts as they fall due; no unsatisfied judgement is
outstanding against it and no event analogous to any of the
foregoing has occurred in any jurisdiction;
18.1.5 there are no pending, or to its knowledge (after due and
careful enquiry), threatened actions or legal proceedings
affecting either party which may have a material adverse
effect on its business, assets or financial condition;
33
<PAGE> 34
18.1.6 it is not in breach of or in default under any agreement or
obligation relating to (or analogous to) financial
indebtedness.
18.2 Viragen undertakes to the Institute that:-
18.2.1 so long as any sums or obligations are outstanding due to late
payment under this Agreement, Viragen will provide the
Institute with such financial and other reasonable information
concerning Viragen's business, assets and affairs as the
Institute may reasonably require and not available to the
Institute as disclosed in Viragen's audited accounts
including, but without limitation, quarterly management
accounts which will be delivered to the Institute promptly and
in any event not later than 10 days after the date of filing
of reports with the Securities and Exchange Commission for
each financial quarter of Viragen and annual audited accounts
to be delivered to the Institute not later than sixty days
after the financial year end of Viragen; and
18.2.2 that all current and future mortgages, charges, securities or
other encumbrances or security arrangements of Viragen are or
shall be contained in the annual audited accounts of Viragen.
18.3 The Institute warrants to Viragen that as at 15 November 2000 that
there is no actual or, to the best of its knowledge or belief,
threatened infringement of, or other proceedings relating to, the
Institute's Patents.
19 LIMITATION OF LIABILITY
34
<PAGE> 35
19.1 Each party shall indemnify and hold the other party harmless from and
against any and all claims, actions, damages, losses and expenses
resulting from personal injury to or death of any employee, agent or
representative of the other party engaged in the Project except where
such injury or death is due to the negligent act or omission of the
other party, its employees, agents or representatives.
20 TERMINATION
20.1 This Agreement may be terminated immediately by the Institute by
serving written notice upon Viragen in the event of:-
20.1.1 a failure by Viragen to meet its payment obligations in
respect of the Project and /or any royalties arising under
clause 14 and/or a failure by Viragen to observe or perform
any terms or conditions on its part under this Agreement which
failure is not remedied ninety (90) days after receipt of
written notice specifying the alleged failure and the action
required to remedy it; or
20.1.2 Viragen challenging the validity or contesting the ownership
of the Institute's Patents or the Institute's Background
Intellectual Property.
20.2 This Agreement may be terminated immediately by either party without
notice in the event of:-
20.2.1 the liquidation or bankruptcy of the other party or a similar
officer being appointed over the other party's assets or the
other party ceasing or threatening to cease to carry on
business or the equivalent of any of the foregoing occurring
in respect of the other party in any jurisdiction; or
35
<PAGE> 36
20.2.2 both parties, acting reasonably and in good faith, agreeing
that the Project is unviable due to an insurmountable
technical obstacle.
21 CONSEQUENCES OF TERMINATION
21.1 In the event of expiry or termination of this Agreement howsoever
arising, and subject to any express provisions set out elsewhere in
this Agreement: -
21.1.1 Viragen shall be entitled to Supply any stock of the Products
manufactured prior to the date of termination, but shall not
be entitled to manufacture any further Products;
21.1.2 all outstanding sums payable by Viragen to the Institute shall
immediately become due and payable and Viragen shall remain
due to pay to the Institute any sums which subsequently accrue
as a consequence of clause 21.1.1;
21.1.3 each party shall return to the other any technical
documentation or information received from the other party in
the course of this Agreement and all copies of such material
to the extent such remains confidential ;
21.1.4 any sub-licences of the Institute's Patents granted by Viragen
pursuant to clause 10.1 shall automatically terminate; and
21.1.5 Viragen shall co-operate with the Institute in the
cancellation of all or any licences registered with the
relevant Patent Offices pursuant to this Agreement, and shall
execute any and all such documents and do acts and things as
may be reasonably required in such connection.
21.2 In the event of termination of this Agreement pursuant to clause 4.2,
the Foreground Intellectual Property shall belong to Viragen.
36
<PAGE> 37
21.3 In the event of termination of this Agreement by the Institute pursuant
to clause 20.1 or 20.2.1, the Foreground Intellectual Property shall
belong to the Institute and any sub-licences of the Foreground
Intellectual Property granted by Viragen shall automatically terminate.
21.4 Upon termination or expiry of this Agreement howsoever arising all
rights and licences granted in favour of the Institute or Viragen under
this Agreement shall cease except and to the extent expressly provided
otherwise under the terms of this Agreement.
21.5 Clauses 7, 9.2,12.4, 13, 16.3, and this clause 21 shall survive the
termination of this Agreement howsoever arising.
21.6 Termination of this Agreement shall not affect any rights or
obligations of either party which have accrued prior to the date of
termination and all provisions which are expressed to or by implication
survive the termination of this Agreement shall remain in full force
and effect.
22. FORCE MAJEURE
22.1 Neither party shall be liable for any delay in performing or for
failure to perform its obligations hereunder if the delay or failure
results from any cause or circumstance whatsoever beyond its reasonable
control ("an event of force majeure"), provided the same arises without
fault or negligence of such party. If in the event force majeure
occurs, the date(s) for performance of the obligation affected shall be
postponed for as long as is made necessary by the event of force
majeure, provided that if any event of force majeure continues for a
period of or exceeding six (6) months, the aggrieved party shall have
the right to terminate this Agreement forthwith by written notice to
the other party. Each party shall use its reasonable endeavours to
minimise the effects of an event of force majeure.
37
<PAGE> 38
23. NOTICES
23.1 Notice under this Agreement shall be given by delivery by hand (upon
verification of receipt), pre-paid air mail post, courier or
transmitted by facsimile and addressed as follows:-
In the case of Institute:
Roslin Institute (Edinburgh)
Roslin
Edinburgh
Midlothian EH25 9PS
For the attention of: Assistant Director (Company Secretary)
In the case of Viragen:
Viragen, Inc.
C/o Viragen (Scotland) Limited
Pentlands Science Park
Bush Loan
Penicuik
Midlothian
EH26 0PZ
For the attention of: Dr Magnus Nicolson
38
<PAGE> 39
23.2 If a party changes its address for notification purposes, then it shall
give the other party prior written notice of the new address and the
date on which it shall become effective.
23.3 Any notice will be deemed to be delivered if sent by personal delivery
or courier upon delivery at the address of the relevant party if sent
by pre-paid airmail post fourteen (14) days after the date of posting
and if sent by facsimile upon confirmation of transmission.
24 VARIATIONS
24.1 No variation of or amendment to this Agreement shall bind either party
unless made in writing and signed by both parties hereto. Both parties
shall at all times remain willing to discuss possible contractual
variations that have been prompted by technical or other factors
although neither party shall have any obligation to agree to any such
variation proposed.
25 WAIVERS
25.1 Failure by either party to enforce or exercise, at any time or for any
period, any term of this Agreement, does not constitute, and shall not
be construed as, a waiver of such term and shall not affect the right
later to enforce such term or any other term herein contained.
26 ASSIGNATION
26.1 Neither party may assign, transfer, sub-contract or otherwise dispose
of the benefit or burden of this Agreement to a third party without the
prior consent of the other party such consent not to be unreasonably
withheld or delayed save that:-
39
<PAGE> 40
26.2 the Institute may assign the benefit and burden of this Agreement to
any wholly owned subsidiary of the Institute; and
26.3 Viragen may assign the benefit and burden of this Agreement in
connection with the disposal of all its assets whether by way of sale,
merger or other corporate re-organisation provided in so doing Viragen
shall impose at the date of such disposal and provide to the Institute
a binding and effective continuing contractual obligation on the
assignee in favour of Viragen and the Institute to prohibit the
assignee from using the Background Intellectual Property, the
Foreground Intellectual Property and/or the Institute's Patents to
provide any Products and/or Services or carry out experiments or
research using the same in any country within the Territory which are
illegal under the laws of the United States of America and/or the
United Kingdom of Great Britain and Northern Ireland as at the date on
which the Products and/or Services are provided or which the
experiments are carried out or the research is conducted. Receipt by
the Institute from Viragen of confirmation in terms satisfactory to the
Institute pursuant to this clause 26.2 shall discharge Viragen from any
further obligation in respect of this clause.
27 ENTIRE AGREEMENT
27.1 This Agreement together with the Work Plan, the Confidentiality
Agreement, the Heads of Agreement the Poultry Facility Letter (as
defined in clause 2) and the Warrant constitutes the entire Agreement
and understanding between the parties with respect to the subject
matter hereof and supersedes any prior agreement, understanding or
arrangement between the parties, whether oral or in writing. No
representation, undertaking or promise shall be taken to have been
given or be implied from anything said or written in negotiations
between the parties prior to this Agreement except as expressly stated
in this Agreement. Neither party shall have any remedy in respect of
any untrue statement made to it upon which it has relied in entering
into this Agreement (unless such untrue statement was made
40
<PAGE> 41
fraudulently) and that party's only remedy shall be for breach of
contract as provided in this Agreement.
28 SEVERABILITY
28.1 The invalidity or unenforceability of any term of or any right arising
pursuant to this Agreement shall not adversely affect the validity or
enforceability of the remaining terms and rights.
29 SURVIVAL
29.1 Provisions of this Agreement which either are expressed to survive its
termination or from their nature or context it is contemplated that
they are to survive such termination shall remain in full force and
effect notwithstanding such termination. Any successor or assignee of a
party's interest shall expressly assume in writing the performance of
all the terms and conditions of the Agreement to be performed by said
party and such assignment shall not relieve the assignor of any of its
obligations under this Agreement.
30 ENTICEMENT
30.1 Both parties undertake that they shall not without the the other
party's prior written consent either during or after expiry or
termination of this Agreement for any reason engage, employ or
otherwise solicit for employment any person who during the continuance
of this Agreement was an employee or engaged by or on behalf of the
other party.
41
<PAGE> 42
31 FURTHER ASSURANCES
31.1 The parties shall do and execute all such further acts and things as
are reasonably required to give full effect to the rights given and the
transactions contemplated by this Agreement.
31.2 The Institute shall use its reasonable endeavours to cooperate with
Viragen to obtain any additional licences from Geron Corporation
required to exploit the Products and/or Services in the Field.
32 ANNOUNCEMENTS
32.1 The parties agree that upon entering this Agreement they shall issue a
joint press release concerning this Agreement the timing , content,
wording and distribution of which shall be agreed in writing by the
parties. Viragen shall in advance of any disclosure of any document or
the like falling with the exceptions of clause 7.3.4, and in
particular, before filing any document or the like in connection with
this Agreement with the Securities and Exchange Commission, provide a
copy thereof to the Institute and take into account the Institute's
reasonable comments thereon.
32.2 The Institute shall, at Viragen's cost, provide all reasonable
assistance and co-operation to Viragen on scientific issues relating to
all investor and public relations undertaken by Viragen in relation to
the Project including, but not limited to, interviews, press releases
and scientific meetings but subject always to the availability of
representatives of the Institute.
42
<PAGE> 43
33 PUBLICITY
33.1 Viragen will not use the name of the Institute, or any member of the
Institute's Project staff, including the Project Director, in any
publicity, advertising or news release without the prior written
approval of the Institute and for such purposes, amongst others, the
Project Director may give such approval. The Institute will not use the
name of Viragen, or any employee of Viragen, in any publicity without
the prior written approval of Viragen. Both parties shall agree the
wording of any publicity, advertising or news release.
34 COSTS
34.1 Viragen shall meet all of the Institute's reasonable costs (including
legal fees and expenses) associated with the parties entering into this
Agreement and the Warrant and any ancillary documentation relating
thereto.
43
<PAGE> 44
35 GOVERNING LAW
35.1 This Agreement shall be governed by and construed in accordance with
the law of Scotland and the parties hereby submit to the non exclusive
jurisdiction of the Scottish courts: IN WITNESS WHEREOF these presents
consisting of this and preceding thirty eight pages together with the
Schedule in five parts are executed as follows:-
Subscribed for and on behalf of
ROSLIN INSTITUTE (EDINBURGH)
at Edinburgh
on 15 November 2000
by Grahame Bulfield, Director
--------------------------------
Director
before the following witness:-
------------------------------------
Witness
------------------------------------
Full Name
------------------------------------
Address
------------------------------------
Occupation
------------------------------------
Subscribed for and on behalf of
VIRAGEN INC
at Edinburgh
on 15 November 2000
by Gerald Smith, Chairman and CEO
--------------------------------
Chairman and CEO
and Magnus Nicolson, COO --------------------------------
COO
44
<PAGE> 45
SCHEDULE
This is the schedule referred to in the foregoing Development, Licence and
Collaboration Agreement between (1) Roslin Institute (Edinburgh) and (2) Viragen
Inc dated 15th November 2000.
PART 1
PATENTS
1. MARINER (USE OF MARINER IN THE PRODUCTION OF TRANSGENIC ANIMALS)
Date Country Application Number
International PCT/GB98/02517
2. PERRY (IN VITRO EMBRYO CULTURE TECHNIQUE)
Date Country Application Number
30 April 1991 US 5,011,780
15 December 1993 European 0295964
Perry Patent has also been granted in the following Countries:- Canada, Ireland,
Finland, Israel, Japan, New Zealand, Portugal and South Africa
45
<PAGE> 46
PART 2
SHORT FORM PATENT LICENCE
CONFIRMATORY PATENT LICENCE
AGREEMENT
between
(1) ROSLIN INSTITUTE (EDINBURGH), a
company incorporated in Scotland
under the Companies Acts with
registered number 157100 and having
its registered office at Roslin,
BioCentre Midlothian EH25 9PS
("Institute")
and
(2) VIRAGEN INC. a Delaware corporation
having principal place of business
at 865 South West 78th Avenue,
Plantation, Florida, United States
of America ("Viragen")
WHEREAS
(A) The Institute and Viragen entered into an agreement dated 15th November
2000 ("the Main Agreement") in terms of which the Institute agreed to
grant Viragen a licence under [insert patent details] ("the Institute's
Patents").
(B) Accordingly, the parties have now agreed to enter into this Agreement.
46
<PAGE> 47
NOW IT IS HEREBY AGREED as follows:-
1. Pursuant to clause 10.1 of the Main Agreement, the Institute hereby
grants to Viragen the exclusive right and licence under the Institute's
Patents to manufacture and provide the Products and/ or Services and to
commercialise, exploit, market, import and export and sell the Products
and /or Services in the Field anywhere in the Territory (as those terms
are defined in the Main Agreement for the life of the Institute's
Patents (unless this Agreement is terminated earlier) and subject
always to the provisions of the Main Agreement.
2. This Agreement shall terminate without notice in the event of
termination of the Main Agreement for any reason.
3. For the avoidance of doubt this Agreement is granted pursuant to the
Main Agreement and not in substitution therefor and nothing contained
in this Agreement shall in any way derogate from the Main Agreement
which shall remain in full force and effect.
4. This Agreement shall be governed by and construed in accordance with
the laws of Scotland and the parties hereby submit to the non-exclusive
jurisdiction of the Scottish Courts:
IN WITNESS WHEREOF
47
<PAGE> 48
PART 3
HEADS OF AGREEMENT
48
<PAGE> 49
PART 4
WARRANT
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND MAY NOT BE SOLD, OFFERED FOR SALE, ASSIGNED, TRANSFERRED
OR OTHERWISE DISPOSED OF, UNLESS REGISTERED PURSUANT TO THE PROVISIONS OF THE
SECURITIES ACT OR AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY IS OBTAINED
STATING THAT SUCH DISPOSITION IS IN COMPLIANCE WITH AN AVAILABLE EXEMPTION FROM
SUCH REGISTRATION.
November 15, 2000
VIRAGEN, INC.
(INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE)
WARRANT FOR THE PURCHASE OF SHARES OF COMMON STOCK
FOR VALUE RECEIVED, VIRAGEN, INC. (the "Company"), a Delaware
corporation, having its principal offices at 865 S.W. 78th Avenue, Suite 100,
Plantation, Florida 33324, Fax No. 00 1 954 233 1414 grants to ROSLIN INSTITUTE
(EDINBURGH) a company incorporated in Scotland under the U.K. Companies Act 1985
with registered number 157100 and having its registered office at Roslin,
Midlothian, EH 25 9PS, Fax No. 0131 527 4439 (the "Holder"), the right to
purchase from the Company up to 900,000 fully paid and non-assessable shares of
Common Stock at a price per share (the "Exercise Price"), term and vesting
schedule and conditions hereinafter set forth.
This Warrant is issued pursuant to that certain Development, Licence
and Collaboration Agreement made and entered into as of the date hereof by and
between the Holder and the Company (the "Agreement").
The term "Common Stock" means the Common Stock, par value $.01 per
share, of the Company. The number of shares of Common Stock to be received upon
the exercise of this Warrant may be adjusted from time to time as hereinafter
set forth. The shares of Common Stock deliverable upon such exercise, and as
adjusted from time to time, are hereinafter referred to as "Warrant Stock." The
term "Other Securities" means any other equity or debt securities that may be
issued by the Company in addition thereto or in substitution for the Warrant
Stock. The term "Company" means and includes the corporation named above as well
as (i) any immediate or more
49
<PAGE> 50
remote successor corporation resulting from the merger or consolidation of such
corporation (or any immediate or more remote successor corporation of such
corporation) with another corporation, or (ii) any corporation to which such
corporation (or any immediate or more remote successor corporation of such
corporation) has transferred its property or assets as an entirety or
substantially as an entirety.
The Holder agrees with the Company that this Warrant is issued, and all
the rights hereunder shall be held subject to, all of the conditions,
limitations and provisions of the Agreement to which this Warrant is attached
and as set forth herein.
1. EXERCISE PRICE AND WARRANT VESTING.
Subject to adjustment as hereinafter provided, the Exercise Price of this
Warrant is $1.463 per share (representing the average closing price of the
Company's Common Stock, as published by the American Stock Exchange, over the
thirty (30) trading days prior to the date hereof.
This Warrant is immediately exercisable as to 150,000 shares
of Common Stock and shall vest in equal amounts (150,000 shares) up to the
remaining 750,000 shares of Common Stock (subject to adjustment as described in
Section 8) every six (6) months commencing six months after the date of this
Warrant, provided the Agreement shall be in full force and effect as of the date
of vesting of each subsequent increment.
2. EXERCISE OF WARRANT.
Following vesting, this Warrant may be exercised as to the specified amount of
Warrant Stock, in whole or in part, but if in part, in minimum increments of
50,000 shares at any time, or from time to time during the period commencing on
the vesting date and expiring 5:00 p.m. Eastern Time three (3) years from the
date on which the final increment of shares vests in the Holder (the "Expiration
Date") or, if such day is a day on which banking institutions in New York are
authorized by law to close, then on the next succeeding day that shall not be
such a day, by presentation and surrender of this Warrant to the Company at its
principal office with the Warrant Exercise Form attached hereto duly executed
and accompanied by payment (either in cash or by certified or official bank
check, payable to the order of the Company) of the Exercise Price for the number
of shares specified in such form and instruments of transfer, if appropriate,
duly executed by the Holder or its duly authorized attorney. If this Warrant
should be exercised in part only, the Company shall, upon surrender of this
Warrant for cancellation, execute and deliver a new Warrant evidencing the
rights of the Holder thereof to purchase the balance of the shares purchasable
hereunder. Upon receipt by the Company of this Warrant, together with the
payment of the Exercise Price at its office in proper form for exercise, the
Holder shall be deemed to be the holder of record of the shares of Common Stock
issuable upon such exercise, notwithstanding that the stock transfer books of
the Company shall then be closed or that certificates representing such shares
of Common Stock shall not then be actually delivered to the Holder. The Company
50
<PAGE> 51
shall pay any and all documentary stamp or similar issue or transfer taxes
payable in respect of the issue or delivery of shares of Common Stock on
exercise of this Warrant.
3. CONVERSION OF WARRANT ON A CASHLESS BASIS.
(a) The Holder shall also have the right (the "Conversion
Right") at any time when this Warrant may be exercised to convert all
or any portion of this Warrant into such number of shares (rounded to
the nearest whole share) of Company Common Stock equal to the quotient
obtained by dividing (i) the "Aggregate Warrant Spread" as of the date
the Conversion Right is exercised, by (ii) the "Market Price of the
Common Stock" as of the date the Conversion Right is exercised. The
Conversion Right shall be exercisable, at any time that this Warrant is
exercisable pursuant to Section 1 above, by surrendering this Warrant
with the Conversion Form attached hereto filled in and duly executed by
such Holder or by such Holder's duly authorized attorney to the Company
at its principal office.
(b) For purposes of this Section 3, the "Aggregate Warrant
Spread" of all or a portion of this Warrant as of a particular date
shall equal (i) the Market Price of the Common Stock multiplied by the
number of shares of Common Stock purchasable upon exercise of all or
such portion of this Warrant on such date, minus (ii) the Exercise
Price multiplied by the number of shares of Common Stock purchasable
upon exercise of all or such portion of this Warrant on such date. For
purposes of this Warrant, the "Market Price of the Common Stock" as of
a particular date shall equal: (i) if the Common Stock is traded on an
exchange or is quoted on either the Nasdaq National Market or Small-Cap
Market, then the average of the closing or last sale prices,
respectively, reported for the 10 trading days immediately preceding
such date, or (ii) if the Common Stock is not traded on an exchange,
the Nasdaq National Market, or the Nasdaq Small-Cap Market but is
traded in the local over-the-counter market, then the average of the
mid-points between the highest bid and lowest asked quotations for each
of the 10 trading days immediately preceding such date.
4. REGISTRATION RIGHTS.
(a) Registration. The Company agrees to (i) promptly after the
date hereof and in any event within forty five (45) days after the date
hereof file a registration statement to register under the Securities
Act the Warrant Stock and the 100,000 shares of Common Stock of Viragen
owned by the Holder as issued pursuant to the Development, Licence and
Collaboration Agreement ("the Existing Shares") for resale, (ii)
respond promptly and appropriately to any comments received from the
Securities and Exchange Commission (the "SEC") with respect to the
registration statement and (iii) file such amendments to the
registration statement as the Company deems appropriate in order
51
<PAGE> 52
to have the SEC declare such registration statement effective. The
Company agrees that upon 10 business days' notice prior to any period
in which the Holder intends to engage in offers or sales of the Warrant
Stock or the Existing Shares, the Company shall file such amendments or
supplements to the registration statement and/or prospectus as the
Company considers necessary to keep such registration statement and/or
prospectus current for a period of 30 days. The Holder by its
acceptance hereof agrees (i) to provide the Company in writing with any
information the Company has requested for use in connection with
preparing or filing such registration statement or prospectus, (ii) to
indemnify the Company as provided below, and (iii) not to engage in any
public offering or sale of the Warrant Stock or the Existing Shares
during any period in which such registration statement and/or
prospectus is not current. The Company's obligation under this Section
4 shall expire after the period specified in Rule 144 has elapsed
following the date hereof.
(b) Expenses. With respect to the registration pursuant to
this Section 4, the Company shall bear the following fees, costs, and
expenses: all registration, filing and NASD fees, printing expenses,
fees and disbursements of counsel and accountants for the Company, fees
and disbursements of counsel for the underwriter or underwriters of
such securities, all internal expenses, the premiums and other costs of
policies of insurance against liability arising out of the public
offering, and legal fees and disbursements and other expenses of
complying with state securities laws of any jurisdictions in which the
securities to be offered are to be registered or qualified. Fees and
disbursements of special counsel and accountants for the selling
Holder, underwriting discounts and commissions, and transfer taxes for
selling Holder shall be borne by the selling Holder.
(c) Indemnification. The Company hereby indemnifies the Holder
of this Warrant and of any Warrant Stock and the Existing Shares and
the officers and directors, if any, who control such Holder, within the
meaning of Section 15 of the Securities Act, against all losses,
claims, damages, and liabilities caused by any untrue statement or
alleged untrue statement of a material fact contained in any
Registration Statement or Prospectus (and as amended or supplemented if
the Company shall have furnished any amendments thereof or supplements
thereto), any Preliminary Prospectus or any state securities law
filings or any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages
or liabilities are caused by any untrue statement or omission contained
in information furnished in writing to the Company by the Holder
expressly for use therein; and the Holder by its acceptance hereof
severally agrees that it will indemnify and hold harmless the Company,
each of its officers who signs such Registration Statement, and each
person, if any, who controls the Company, within the meaning of Section
15 of the Securities Act, with respect to losses, claims, damages or
52
<PAGE> 53
liabilities which are caused by any untrue statement or omission
contained in information furnished in writing to the Company by the
Holder expressly for use therein.
5. RESERVATION OF SHARES.
The Company will at all times reserve for issuance and delivery upon exercise of
this Warrant all shares of Common Stock or other shares of capital stock of the
Company (and Other Securities) from time to time receivable upon exercise of
this Warrant. All such shares (and Other Securities) shall be duly authorized
and, when issued upon such exercise, shall be validly issued, fully paid and
non-assessable and free of all preemptive rights.
6. FRACTIONAL SHARES.
No fractional shares or scrip representing fractional shares shall be issued
upon the exercise of this Warrant, but the Company shall pay the holder an
amount equal to the fair market value of such fractional share of Common Stock
in lieu of each fraction of a share otherwise called for upon any exercise of
this Warrant. For purposes of this Section 6, the fair market value of a share
of Common Stock shall be determined as follows:
(a) If the Common Stock is listed on a national securities
exchange or admitted to unlisted trading privileges on such exchange or
listed for trading on the NASDAQ system, the current market value shall
be the last reported sale price of the Common Stock on such exchange or
system on the last business day prior to the date of exercise of this
Warrant or, if no such sale is made on such day, the average of the
closing bid and asked prices for such day on such exchange or system;
or
(b) if the Common Stock is not so listed or admitted to
unlisted trading privileges, the current market value shall be the mean
of the last reported bid and asked prices reported by the National
Quotation Bureau, Inc. on the last business day prior to the date of
the exercise of this Warrant; or
(c) If the Common Stock is not so listed or admitted to
unlisted trading privileges and bid and asked prices are not so
reported, the current market value shall be an amount, not less than
book value thereof as at the end of the most recent fiscal year of the
Company ending prior to the date of the exercise of the Warrant,
determined in such reasonable manner as may be prescribed by the Board
of Directors of the Company.
7. RIGHTS OF THE HOLDER.
Prior to the exercise of this Warrant, the Holder shall not, by virtue hereof,
be entitled to any rights of a stockholder in the Company, either at law or in
equity, and the rights of the Holder are limited to those expressed in this
Warrant.
53
<PAGE> 54
8. ANTI-DILUTION PROVISIONS.
8.1 ADJUSTMENT FOR RECAPITALIZATION. If the Company shall at
any time subdivide its outstanding shares of Common Stock (or Other Securities
at the time receivable upon the exercise of the Warrant) by recapitalization,
reclassification or split-up thereof, or if the Company shall declare a stock
dividend or similar distribution of shares of Common Stock to its stockholders,
the number of shares of Common Stock subject to this Warrant immediately prior
to such subdivision shall be proportionately increased, and the Exercise Price
shall be proportionately decreased, and if the Company shall at any time combine
the outstanding shares of Common Stock by recapitalization, reclassification or
combination thereof, the number of shares of Common Stock subject to this
Warrant immediately prior to such combination shall be proportionately
decreased, and the Exercise Price shall be proportionately increased. Any such
adjustments pursuant to this Section 8.1 shall be effective at the close of
business on the effective date of such subdivision or combination, or if any
adjustment is the result of a stock dividend or distribution, then the effective
date for such adjustment based thereof shall be the record date therefor.
8.2 ADJUSTMENT FOR REORGANIZATION, CONSOLIDATION, MERGER, ETC.
In case of any reorganization of the Company (or any other corporation, the
securities of which are at the time receivable on the exercise of this Warrant),
or in case after such date the Company (or any such other corporation) shall
consolidate with or merge into another corporation or convey all or
substantially all of its assets to another corporation, then, and in each such
case, the Holder of this Warrant upon the exercise thereof as provided in
Section 1 at any time after the consummation of such reorganization,
consolidation, merger or conveyance shall be entitled to receive, in lieu of the
securities and property receivable upon the exercise of this Warrant prior to
such consummation, the securities or property to which such Holder would have
been entitled upon such consummation if such Holder had exercised this Warrant
immediately prior thereto; in each such case, the terms of this Warrant shall be
applicable to the securities or property receivable upon the exercise of this
Warrant after such consummation.
8.3 NOTIFICATION AS TO ADJUSTMENTS. In each case of an
adjustment in the number of shares of Common Stock receivable on the exercise of
the Warrant, the Company at its expense will promptly compute such adjustment in
accordance with the terms of the Warrant and will notify the Holder in writing
of such adjustment within 30 days of the effective date of such adjustment. When
appropriate, notice may be given in advance as part of notices required to be
mailed to the Holder pursuant to Section 8.5 hereof.
8.4 OTHER ISSUANCES. Except as otherwise expressly provided
herein, the issuance by the Company of shares of its capital stock of any class,
or securities convertible into shares of capital stock of any class, either in
connection with a direct sale or upon the exercise of rights or warrants to
subscribe therefor, or upon conversions of shares or obligations of the Company
convertible into such shares or other securities, or as compensation or
otherwise, shall
54
<PAGE> 55
not affect, and no adjustment by reason thereof shall be made with respect to,
the number of or the exercise price of the Shares that remain unexercised under
the Warrant.
Without limiting the generality of the foregoing, the existence of unexercised
Shares under the Warrant shall not affect in any manner the right or power of
the Company to make, authorize or consummate (i) any issuances as described
above, (ii) any or all adjustments, recapitalizations, reorganizations or other
changes in the Company's capital structure or its business; (iii) any merger or
consolidation of the Company; (iv) any issue by the Company of debt securities,
or preferred or preference stock that would rank above the Shares issuable upon
exercise of the Warrant; (v) the dissolution or liquidation of the Company; (vi)
any sale, transfer or assignment of all or any part of the assets or business of
the Company; or (vii) any other corporate act or proceeding, whether of a
similar character or otherwise.
8.5 NOTICES OF RECORD DATE, ETC. In case:
(a) the Company shall take a record of the holders of its
Common Stock (or Other Securities at the time receivable upon the
exercise of the Warrant) for the purpose of entitling them to receive
any dividend (other than a cash dividend at the same rate as the rate
of the last cash dividend theretofore paid) or other distribution, or
any right to subscribe for, purchase or otherwise acquire any shares of
stock of any class or any other securities, or to receive any other
right; or
(b) of any capital reorganization of the Company, any
reclassification of the capital stock of the Company, any consolidation
or merger of the Company with or into another corporation, or any
conveyance of all or substantially all of the assets of the Company to
another corporation; or
(c) of any voluntary or involuntary dissolution, liquidation
or winding up of the Company, then, and in each such case, the Company
shall mail or cause to be mailed to each Holder of the Warrant at the
time outstanding a notice specifying, as the case may be, (i) the date
on which a record is to be taken for the purpose of such dividend,
distribution or right, and stating the amount and character of such
dividend, distribution or right, or (ii) the date on which such
reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding up is to take place, and the time,
if any, is to be fixed, as to which the holders of record of Common
Stock (or such Other Securities at the time receivable upon the
exercise of the Warrant) shall be entitled to exchange their shares of
Common Stock (or such Other Securities) for securities or other
property deliverable upon such reorganization, reclassification,
consolidation, merger, conveyance, dissolution, liquidation or winding
up. Such notice shall be mailed at least 20 days prior to the date
therein specified, and the Warrant may be exercised prior to said date
during the term of the Warrant.
9. TRANSFER TO COMPLY WITH THE SECURITIES ACT.
55
<PAGE> 56
The Warrant Stock or Other Securities may not be sold, transferred, pledged,
hypothecated or otherwise disposed of except as follows: (a) to a person who, in
the opinion of counsel to the Company, is a person to whom this Warrant or the
Warrant Stock or Other Securities may legally be transferred without
registration and then only against receipt of an agreement of such person to
comply with the provisions of this Warrant with respect to any resale or other
disposition of such securities; or (b) to any person upon delivery of a
prospectus then meeting the requirements of the Securities Act relating to such
securities and the offering thereof for such sale or disposition.
10. RULE 144 REQUIREMENTS.
The Company agrees to: (a) make and keep public information available, as those
terms are understood and defined in Rule 144 under the Securities Act; (b) use
its best efforts to file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Securities
Exchange Act of 1934; and (c) furnish to the Holder upon request a written
statement by the Company as to its compliance with the reporting requirements of
said Rule 144, and of the Securities Act and the Securities Exchange Act of
1934, a copy of the most recent annual or quarterly report of the Company and
such other reports and documents of the Company as the Holder may reasonably
request to avail itself of any similar rule or regulation of the SEC allowing it
to sell Warrant Stock, the Existing Shares or Other Securities without
registration.
11. LEGEND. Unless the shares of Warrant Stock or Other Securities have
been registered under the Securities Act, upon exercise of any of the Warrants
and the issuance of any of the shares of Warrant Stock, all certificates
representing shares will bear on the face thereof substantially the following
legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
OFFERED FOR SALE, ASSIGNED, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS
REGISTERED PURSUANT TO THE PROVISIONS OF THAT ACT OR UNLESS AN OPINION
OF COUNSEL ACCEPTABLE TO THE COMPANY IS OBTAINED STATING THAT SUCH
DISPOSITION IS IN COMPLIANCE WITH AN AVAILABLE EXEMPTION FROM SUCH
REGISTRATION.
At such time as the Holder is able to sell the Warrant Stock, the Existing
Shares or Other Securities without restriction under Rule 144(k), the Company
agrees to remove any such legend.
12. NOTICES.
56
<PAGE> 57
All notices required hereunder shall be in writing and shall be deemed given
when faxed, delivered personally or within five days after mailing when mailed
by recognized international overnight courier to the Company or the Holder, as
the case may be, for whom such notice is intended at the address of such party
as set forth on the first page, or at such other address of which the Company or
the Holder has been advised by notice hereunder.
13. APPLICABLE LAW. The Warrant is issued under and shall for all
purposes be governed by and construed in accordance with the laws of the State
of Delaware.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed on
its behalf, in its corporate name, by its duly authorized officer, all as of the
day and year first above written.
VIRAGEN, INC.
By:
-----------------------------------
Name:
---------------------------------
Its:
----------------------------------
57
<PAGE> 58
WARRANT EXERCISE FORM
The undersigned hereby irrevocably elects to exercise the within
Warrant to the extent of purchasing _________ shares of Common Stock at an
exercise price of $________ per share of Common Stock of Viragen, Inc., a
Delaware corporation, and hereby makes payment of $__________ in payment
therefor.
-------------------------------------
Signature
-------------------------------------
Date
INSTRUCTIONS FOR ISSUANCE OF STOCK
(If in a name other than to the registered holder of the within Warrant)
Name
--------------------------------------------------------------------------------
(Please typewrite or print in block letters)
Address:
--------------------------------------------------------------------------------
-----------------------------------------------------------------------
