SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) June 28, 2000
EPIGEN, INC.
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(Exact name of Registrant as Specified in Charter)
Delaware 1-11055 04-3120712
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(State or other Commission File No. (IRS Employer
jurisdiction Identification
of incorporation) Number)
69 North Tower Hill Road, Box L, Millbrook, NY 12545
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (914) 677-5317
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Item 5. Other
Pursuant to an Amendment No. 1 to Security and Intercreditor Agreement
dated as of June 7, 2000 (the "Amendment") between Registrant, Biofund, Inc.,
Donald C. Fresne, the Company's Chairman of the Board, President and Chief
Executive Officer and the shareholders of Biofund, Inc. ("Biofund"), Registrant
and such persons modified their arrangements regarding Biofund's provision of a
guarantee of certain loans to Registrant as set forth in that certain Security
and Intercreditor Agreement dated as of November 1, 1999 as security for a loan
from the Bank of Millbrook, New York.
Pursuant to such Amendment, the shareholders of Biofund agreed, on an
individual basis, to invest additional funds in Registrant for the purpose of
allowing Registrant to repay such loan and to acquire additional securities of
Registrant. A copy of the Amendment is attached hereto as Exhibit 1.
Included among the shareholders of Biofund are Mr. Fresne, W. James
Tozer, members of his family and business associates, and certain other current
shareholders of Registrant.
Pursuant to the Amendment, an aggregate of $920,000 was invested by the
shareholders of Biofund in Registrant to repay such loan. Such shareholders were
assigned Biofund's warrant to purchase Common Stock of Registrant, exercisable
upon repayment of such loan. Such warrant was exercised immediately upon
repayment of such loan which occurred on of about June 28, 2000.
As a result of such additional investment and exercise of such warrant
assignment, an aggregate of 5,776,680 shares of Registrant's Common Stock was
issued, including 313,950 shares to Mr. Fresne and 1,305,800 shares to Mr.
Tozer. The other persons acquiring shares of Registrant's Common Stock are set
forth on Exhibits B and C to the Amendment, except that Mr. Tozer acquired the
50,000 shares of Common Stock set forth opposite the name of Farran Tozer Brown
set forth on Exhibit C to the Amendment.
In addition to the foregoing issuances of Registrant's Common Stock,
Registrant agreed to issue an aggregate of 225,000 shares of its Series B
Preferred Stock, at a price of $1.00 per share, 75,000 shares each being
purchased by Mr. Tozer, David C. Clapp and Lionel Goldfrank III. A copy of the
Amended Certificate of Designation, Preferences and Rights of Series B Preferred
Stock, as signed with the Secretary of State of Delaware on June 9, 2000, is
attached as Exhibit D to the Amendment.
Mr. Fresne agreed to contribute an aggregate of $1,387,165.20 in debt
owed to him by Registrant to the capital of Registrant in exchange for 1,387,165
shares of Regitrant's Series A Preferred Stock. A copy of the Amended
Certificate of Designation, Preferences and Rights of Series A Preferred Stock,
as signed with the Secretary of State of Delaware on June 9, 2000, is attached
as Exhibit 2 hereto.
Registrant owes Mr. Fresne an additional $356,213.63. Registrant issued
to Mr. Fresne its promissory note for such amount, with interest thereon at the
rate of nine percent (9%) per
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annum, payable over three years (the "Company Note"). Of the principal amount of
such note, $156,213.63 shall be repaid in three equal annual installments
principal, plus accrued interest thereon, and $200,000 shall be payable on
demand by Mr. Fresne and shall continue to be subject to the security agreement
granted to Fresne pursuant to the Agreement dated as of May 1, 1995 between
Fresne and Epigen (the "1995 Agreement"), a copy of which is incorporated by
reference from Registrant's Form 10-KSB for the period ended December 1, 1995. A
copy of the form of such note as signed is attached as Exhibit E to the
Amendment.
In addition, Mr. Fresne is indebted to Epigen in the amount of
$156,213.63. Mr. Fresne issued to the Company his promissory note for such
amount payable out of the proceeds received by him from Registrant pursuant to
the Company Note. A copy of the form of such note as signed is attached as
Exhibit F to the Amendment.
Mr. Fresne also agreed that from and after April 30, 2000, any salary
owed to him by Registrant which is unpaid because Registrant lacks the funds to
make such payment shall accrue without interest accruing thereon, any provision
to the contrary in the 1995 Agreement to the contrary notwithstanding.
Mr. Fresne further agrees that, notwithstanding any provision to the
contrary in the 1995 Agreement to the contrary, he may convert all or any
portion of $200,000 of principal amount of the Company Note only into shares of
Epigen's Common Stock at the rate of $.50 per share.
Each of Mr. Fresne and Mr. Tozer also agreed permanently to waive their
respective antidilution rights, in the case of Fresne pursuant to that certain
Amended and Restated Employment Agreement with Epigen dated as of November 1,
1999, and, in the case of Tozer, pursuant to that certain letter agreement dated
as of May 4, 1998, solely with respect to the issuances of the Series B
Preferred Stock.
To the best of Registrant's knowledge, none of the shareholders of
Biofund acquiring shares of Registrant's Common Stock as described herein are
acting as a group with respect to the voting of such shares or otherwise.
Item 7. Financial Statements, Pro Forma Financial Statements and Exhibits.
EXHIBIT 3.14 - Amended Certificate of Designation, Preferences and
Rights of Series A Preferred Stock of Epigen, Inc. Filed With the
Delaware Secretary on June 12, 2000.
EXHIBIT 3.15 - Certificate of Amendment of Designation, Preferences
and Rights of Series B Preferred Stock of Epigen, Inc. Filed With the
Delaware Secretary on June 12, 2000.
EXHIBIT 10.36 - Amendment No. 1 to Security and Intercreditor
Agreement dated as of June 7, 2000.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
EPIGEN, INC.
By: /s/ Donald C. Fresne
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Donald C. Fresne, President
and Chief Executive Officer
Date: July 7, 2000
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