Exhibit 10.1

 

 

 

 

AVAX TECHNOLOGIES, INC.

 

 

Up to $1,000,000

 

Aggregate Principal Amount

 

of

 

5% Convertible Notes due May 17, 2004

 

 

NOTE PURCHASE AGREEMENT

 

 

Dated as of November 17, 2003

 

 

 

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AVAX TECHNOLOGIES, INC.

 

5% Convertible Notes Due May 17, 2004

 

NOTE PURCHASE AGREEMENT

 

November 17, 2003

 

To the Purchasers Listed on the Signature Pages Hereto:

 

 

Ladies and Gentlemen:

 

AVAX Technologies, Inc., a Delaware corporation (the “Company”), proposes,
subject to the terms and conditions contained herein, to sell to the Purchasers
listed on the signature pages hereto (individually, a “Purchaser” and
collectively the “Purchasers”), up to $1,000,000 aggregate principal amount of
the Company’s 5% Convertible Notes Due May 17, 2004 (individually, a “Note” and
collectively, the “Notes”) and the warrants to purchase up to 7,692,300 fully
paid and non-assessable shares of common stock, par value $.004 per share, of
the Company (the “Common Stock”) for $0.143 per share (individually a “Warrant”
and collectively, the “Warrants”).  The Notes will be convertible into shares of
Common Stock or other securities of the Company, as more fully described
therein.

 

The sale of the Note and Warrant to the Purchasers will be made without
registration of the Note or Warrant under the Securities Act in reliance upon an
exemption from the registration requirements of the Securities Act.

 

Section 1.              Purchase of Company Note and Warrant.

 

1.1          Purchase and Sale of the Note and Warrant.  Subject to the terms
and conditions of this Agreement, the Company will issue and sell to the
Purchasers, and the Purchasers will purchase from the Company the Notes and the
Warrants at a purchase price of 100% of the principal amount of the Note
purchased by each Purchaser (the “Purchase Price”).  The principal amount of the
Note to be issued to and purchased by each Purchaser is set forth on that
Purchaser’s signature page, and the number of shares of Common Stock subject to
the Warrant issued to each Purchaser is set forth on the signature page for that
Purchaser.

 

Section 2.              Closing.  The closing (the “Closing”) of the purchase
and sale of each Note and the Warrant (the “Transaction”) will take place by
telephone, facsimile and express mail on such date as each Purchaser and the
Company may agree, provided that no Notes or Warrants may be issued by the
Company pursuant to this Agreement after December 1, 2003, or for an aggregate
principal amount of Notes in excess of $1,000,000.  The date of the Closing for
each Purchaser is referred to as the “Closing Date.”  At the Closing, the
Company will issue and deliver to the Purchaser the Note and the Warrant
purchased by the Purchaser, against payment of the Purchaser’s Purchase Price
reflected on the signature page by wire transfer of immediately available United
States funds payable to the Company’s account pursuant to the wire transfer
instructions provided by the Company to each Purchaser.

 

Section 3.              Conditions to the Obligations of Purchaser at Closing. 
The obligation of each Purchaser to purchase and pay for the Note and the
Warrant at Closing is subject to the satisfaction on or prior to the Closing
Date of the following conditions, each of which may be waived by a Purchaser:

 

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3.1          Opinion of Counsel to the Company.  Each Purchaser will have
received from Gilmore & Bell, P.C., securities counsel for the Company, its
opinion dated the Closing Date in the form of Exhibit A.

 

3.2          Representations and Warranties.  The representations and warranties
of the Company contained in Section 6 must be true and correct in all material
respects on and as of the Closing Date except to the extent that the
representations and warranties relate to an earlier date in which case the
representations and warranties must be true and correct in all material respects
on and as of such earlier date.

 

3.3          Performance of Covenants.  The Company will have performed or
complied in all material respects with all covenants and agreements required to
be performed by it on or prior to the Closing pursuant to this Agreement.

 

3.4          No Injunctions; etc.  No court or governmental injunction, order or
decree prohibiting the purchase and sale of the Note and Warrant will be in
effect.  There will not be in effect any law, rule or regulation prohibiting or
restricting the sale or requiring any consent or approval of any person that has
not been obtained which prohibits the consummation of any of the transactions
contemplated by this Agreement.

 

3.5          Closing Documents.  The Company will have delivered to the
Purchaser (a) a certificate of the Secretary of the Company, dated as of the
first Closing Date, certifying (i) the attached are true and complete copies of
the Articles of Incorporation and Bylaws of the Company, as in effect on the
date of such certification; and (ii) the attached are true and complete copies
of the resolutions of the Board of Directors of the Company authorizing the
execution, delivery and performance of this Agreement as in effect on the date
of such certification.

 

3.6          Waivers and Consents.  The Company will have obtained all consents
and waivers necessary to execute and deliver this Agreement and all related
documents and agreements and to issue and deliver the Note and the Warrant, and
all consents and waivers will be in full force and effect.

 

3.7          Satisfaction of Purchaser.  All proceedings to be taken in
connection with the Transaction are to be consummated at or prior to the
Closing, and all documents incidental thereto shall be reasonably satisfactory
in form and substance to Purchaser and its counsel, and Purchaser and its
counsel shall have received copies of all documents and information which it may
have reasonably requested in connection with the Transaction and of all
corporate proceedings in connection therewith, in form and substance reasonably
satisfactory to Purchaser and its counsel.

 

Section 4.              Conditions to the Obligations of the Company at
Closing.  The obligation of the Company to issue and sell the Note and the
Warrant to the Purchaser at Closing is subject to the satisfaction on or prior
to the Closing Date of the following conditions, each of which may be waived by
the Company:

 

4.1          Representations and Warranties.  The representations and warranties
of the Purchaser contained in this Agreement must be true and correct in all
material respects as of the Closing Date.

 

4.2          No Injunctions.  No court or governmental injunction, order or
decree prohibiting the purchase or sale of the Note and Warrant will be in
effect.

 

Section 5.              Representations and Warranties of Purchaser.  Each
Purchaser represents and warrants to the Company that:

 

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5.1          Accredited Investor.  Purchaser is an “accredited investor” as
defined in Rule 501(a) of Regulation D under the Securities Act of 1933, as
amended (the “Securities Act”).  Purchaser is acquiring the Note and the Warrant
for its own account and not with a present view to, or for sale in connection
with, any distribution thereof in violation of the registration requirements of
the Securities Act.

 

5.2          Authority, etc.  Purchaser has the power and authority to execute
and deliver this Agreement and to perform its obligations hereunder.  The
execution and delivery by Purchaser of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by all necessary
corporate or other action on the part of Purchaser.  If Purchaser is an
individual, Purchaser has the legal capacity to enter into this Agreement.  This
Agreement constitutes a legal, valid and binding obligation of Purchaser,
enforceable against Purchaser in accordance with its terms, subject to laws of
general application relating to bankruptcy, insolvency and the relief of debtors
and rules of law governing specific performance, injunctive relief or other
equitable remedies, and to limitations of public policy.

 

5.3          Access to Information.  Purchaser acknowledges that it has been
afforded (i) the opportunity to ask the questions it deemed necessary of, and to
receive answers from, representatives of the Company concerning the Company and
the terms and conditions of the Transaction; and (ii) the opportunity to request
such additional information concerning the Company as the Company possesses or
can acquire without unreasonable effort or expense.

 

5.4          No General Solicitation.  Purchaser is not purchasing the Note and
the Warrant as a result of any advertisement, article, notice or other
communication published in a newspaper or magazine or similar media or broadcast
over television or radio, whether closed circuit, or generally available, or any
seminar, meeting or other conference whose attendees were invited by any general
solicitation or general advertising.

 

Section 6.              Representations and Warranties of the Company.  The
Company represents and warrants to each Purchaser that as of the date hereof and
the Closing Date:

 

6.1          Organization, Good Standing and Qualification; Subsidiaries.  The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware.  The Company has full corporate power
and authority to own and hold its properties and to conduct its business.  The
Company is duly licensed or qualified to do business, and in good standing, in
each jurisdiction in which the nature of its business requires licensing,
qualification or good standing, except for any failure to be so licensed or
qualified or in good standing that would not have a material adverse effect on
the Company or its business, properties, prospects, results of operations,
assets, condition (financial or otherwise), or on its ability to perform its
obligations under this Agreement.

 

6.2          Corporate Power, Authorization; Enforceability.  (a) The Company
has full corporate power and authority to execute, deliver and enter into this
Agreement and to consummate the transactions contemplated hereby.  All action on
the part of the Company, its directors or stockholders necessary for the
authorization, execution, delivery and performance of this Agreement by the
Company, the authorization, sale, issuance and delivery of the Note and the
Warrant contemplated hereby and the performance of the Company’s obligations
hereunder has been taken.  Each of the Note and the Warrant to be purchased on
the Closing Date has been duly authorized and, when issued in accordance with
this Agreement, will constitute a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms and will
not be subject to any preemptive rights or other similar rights of stockholders
of the Company.  This Agreement has been duly executed and delivered by the
Company and constitutes a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, subject to laws of
general application relating to bankruptcy,

 

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insolvency and the relief of debtors and rules of law governing specific
performance, injunctive relief or other equitable remedies, and to limitations
of public policy.

 

(b)           When the Note and the Warrant are delivered and paid for pursuant
to this Agreement on the Closing Date, the Note will be convertible into Common
Stock or other securities of the Company in accordance with its terms and the
Warrant will be exercisable for shares of Common Stock in accordance with its
terms; the Common Stock initially issuable upon conversion of the Note and upon
exercise of the Warrant has been duly authorized and reserved for issuance upon
such conversion or exercise and, when and if issued upon such conversion of the
Note or exercise of the Warrant, will be validly issued, fully paid and
nonassessable; and the stockholders of the Company have no preemptive rights
with respect to the Note, the Warrant or the Common Stock issuable upon
conversion of the Note or exercise of the Warrant.

 

6.3          Financial Statements and SEC Documents.  (a) Included in the
Company’s Form 10-KSB for the year ended December 31, 2002, are true and
complete copies of the audited consolidated balance sheet (the “Balance Sheet”)
of the Company as of December 31, 2002, and the related audited consolidated
statements of operations, stockholders’ equity and cash flows for the years
ended December 31, 2002 and 2001 and for the period from January 12, 1990
(incorporation) to December 31, 2002 (the “Audited Financial Statements”),
accompanied by the report of Ernst & Young LLP with respect to the years ended
December 31, 2002 and 2001.  The Company’s Quarterly Reports on Form 10-QSB for
the quarters ended March 31, 2003, June 30, 2003 and September 30, 2003, are
available to the Purchaser on the Securities and Exchange Commission’s (the
“SEC”) EDGAR System.  Included in the Quarterly Reports are the requisite
unaudited consolidated balance sheets of the Company and the related unaudited
consolidated statements of operations and statements of cash flows (the
“Unaudited Financial Statements,” and together with the “Audited Financial
Statements,” the “Financial Statements”).  The Financial Statements have been
prepared in accordance with generally accepted accounting principles, applied
consistently with the past practices of the Company (except as may be indicated
in the notes thereto), and as of their respective dates, fairly present, in all
material respects, the financial position of the Company and the results of its
operations as of the time and for the periods indicated therein.

 

(b)           A copy of each report, schedule, effective registration statement
and definitive proxy statement filed by the Company with the SEC since
January 1, 2003 (as the documents may have been amended since the time of their
filing, the “SEC Documents”), has also been made available to the Purchaser via
the SEC’s EDGAR System.  As of their respective filing dates, each SEC Document
complied in all material respects with the requirements of the Securities Act or
the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as
applicable, and the rules and regulations of the SEC thereunder applicable to
the SEC Document.  The SEC Documents, taken as a whole, neither contain any
untrue statement of a material fact nor omit to state any material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.

 

6.4          Material Misstatements.  Theo information contained in the SEC
Documents, including the Financial Statements, does not contain an untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements made herein and therein, in light of the
circumstances under which they were made, not misleading.

 

6.5          No Integration.  Neither the Company, nor any of its affiliates,
nor any person acting on their behalf, has directly or indirectly made any
offers or sales of any security or solicited any offers to buy any security
under circumstances that would prevent the parties hereto from consummating the
transactions contemplated hereby pursuant to an exemption from registration
under the Securities Act pursuant to the provisions of Regulation D.  The
transactions contemplated hereby are exempt from the

 

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registration requirements of the Securities Act, assuming the accuracy of the
representations and warranties herein contained of Purchaser to the extent
relevant for such determination.  The issuance of the Note and the Warrant to
the Purchaser will not be integrated with any other issuance of the Company’s
securities (past or current) that requires stockholder or that would result in a
violation of the Securities Act.

 

6.6          Litigation.  Except as set forth in the SEC Documents and updates
provided by the Company to the Purchaser, there is no action, suit, proceeding,
inquiry or investigation before or by any court, public board, governmental
agency or authority, or self-regulatory organization or body pending or
threatened against or affecting the Company or any of its directors or officers
in their capacities as such.

 

6.7          No Anti-dilution.  The issuance of the Note and the Warrant does
not constitute an anti-dilution event for any existing security holders of the
Company, pursuant to which such security holders would be entitled to additional
securities or a reduction in the applicable conversion price or exercise price
of any securities.

 

Section 7.              Covenants of the Company.  The Company covenants and
agrees as follows:

 

7.1          Reporting Status.  So long as the Company is subject to the
reporting requirements of the Exchange Act, the Company will use its best
efforts to file timely all reports required to be filed with the SEC pursuant to
the Exchange Act.

 

7.2          Form D.  The Company will file a Form D within 15 days of the
Closing Date with respect to the Note and the Warrant with the SEC as required
under Regulation D under the Securities Act, and will provide a copy thereof to
the Purchaser.

 

7.3          Integration.  The Company will insure that the issuance of the Note
and the Warrant to the Purchaser will not be integrated with any other issuance
of the Company’s securities in the future, which requires stockholder approval
or which would result in a violation of the Securities Act.

 

7.4          Special Meeting of Stockholders.  The Company will use its
reasonable efforts to call a special meeting of its stockholders by December 31,
2003, to consider a proposal to either (i) increased the authorized number of
shares of Common Stock, or (ii) effect a reverse stock split of the Common
Stock.

 

7.5          Offering of Securities.  The Company will use its reasonable
efforts to close an offering of securities on or before May 17, 2004, in which
the gross proceeds to the Company are not less than $1,000,000 (the
“Offering”).  Upon the closing of the Offering, the Note will automatically
convert into shares of Common Stock or the other securities issued in the
Offering, in accordance with the terms of the Note.

 

Section 8.              Survival of Representations and Warranties. 
Notwithstanding any investigation made by any party to this Agreement, all
representations and warranties made by the Company and the Purchaser herein and
in the Note and the Warrant delivered pursuant hereto, shall survive for a
period of one year after the Closing Date and shall thereupon expire together
with the associated right to indemnification pursuant to Section 10(a)(iv),
unless a claim for indemnification (whether or not fixed as to liability or
liquidated as to amount) shall be made with respect thereto prior to the end of
such period, in which case such representation or warranty with respect to which
such claim has been made, and the associated right to indemnification shall
survive until such claim is satisfied, settled or dismissed.

 

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Section 9.              Piggyback Registration Rights.  In connection with the
Offering, the Company anticipates filing a registration statement on Form S-3 to
register for reoffering and resale the securities sold by the Company in the
Offering.  Upon completion of the Offering, the Purchaser shall have the right,
upon the same terms as the investors in the Offering, to include in any
registration statement of the Company under the Securities Act filed in
connection therewith, all of the Registrable Securities held by the Purchaser. 
For the purposes of this Agreement, “Registrable Securities” means the Common
Stock or other securities of the Company issuable upon conversion of the Note
and the Common Stock issuable upon exercise of the Warrant.  If the Purchaser
decides not to include the Registrable Securities in the registration statement
filed in connection with the Offering, the Purchaser’s piggyback registration
rights granted pursuant to this Section will terminate.

 

Section 10.            Indemnification.  (a) The Company will indemnify, to the
extent permitted by law, the Purchaser and each director, officer or controlling
person of the Purchaser within the meaning of Section 15 of the Securities Act
against all losses, claims, damages, liabilities and expenses, (or action in
respect thereof), including any of the foregoing incurred in settlement of any
litigation, commenced or threatened, arising out of or based on (i) any untrue
statement or alleged untrue statement of a material fact contained in, or
information incorporated by reference into, any registration statement or
prospectus (or any amendment or supplement thereto) or any preliminary
prospectus prepared in connection with the registration contemplated by Section
9, (ii) 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, (iii) any failure by the Company to fulfill and perform any
agreement, covenant or undertaking herein, or (iv) any failure or breach of the
representations and warranties of the Company set forth in Section 6 to be
accurate as of the date hereof and as of the Closing Date, and will promptly
reimburse the Purchaser and each director, officer or controlling person of the
Purchaser for reasonable legal and other expenses incurred in connection with
investigating or defending any claim, loss, damage, liability or action as
incurred; provided however, that the Company will not be liable in any such case
to the extent that any such loss, claim, damage, liability or action arises
directly out of or is based upon an untrue statement or alleged untrue statement
or by any omission or alleged omission made in such registration statement or
prospectus made in reliance upon and in conformity with written information
furnished by the Purchaser specifically for use in the preparation of the
registration statement or prospectus, provided further, however, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage, liability or action arises directly out of or is based primarily
upon an untrue statement or omission made in any preliminary prospectus or final
prospectus if (i) the Purchaser failed to send or deliver a copy of the final
prospectus or prospectus supplement with or prior to the delivery of written
confirmation of the sale of the Registrable Securities, and (ii) the final
prospectus or prospectus supplement would have corrected such untrue statement
or omission.  The indemnification obligation of the Company with respect to
clause (iv) above, will survive for a period ending on the first anniversary of
the Closing Date, unless a claim for indemnification (whether or not fixed as to
liability or liquidated as to amount) is made with respect hereto prior to the
end of such period, in which case the right to indemnification shall survive
until such claim is satisfied, settled or dismissed.

 

(b)           In connection with the shelf registration statement in which the
Purchaser may participate, the Purchaser will furnish to the Company in writing
the information as is reasonably requested by the Company for use in the shelf
registration statement or prospectus and will indemnify, to the extent permitted
by law, the Company, its directors and officers and each person or entity, if
any, who controls the Company within the meaning of Section 15 of the Securities
Act, against any losses, claims, damages, liabilities and expenses resulting
from any untrue statement or alleged untrue statement of a material fact or any
omission or alleged omission of a material fact required to be stated in the
shelf registration statement or prospectus or any amendment thereof or
supplement thereto or necessary to make the statements therein not misleading,
but only to the extent the losses, claims, damages, liabilities or expenses are
caused by an untrue statement or alleged untrue statement or by an omission or
alleged

 

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omission made in reliance upon and in conformity with the written information
specifically furnished by the Purchaser to the Company for use in connection
with the preparation of the shelf registration statement or prospectus; provided
however, that the indemnity will not apply to the extent that the loss, claim,
damage, liability or expense arises out of or is based upon a violation of this
Agreement by the Company.  If the offering pursuant to any registration is made
through underwriters, the Purchaser agrees to enter into an underwriting
agreement in customary form with the underwriters and to indemnify the
underwriters, their officers and directors, if any, and each person or entity
who controls the underwriters within the meaning of the Securities Act to the
same extent as hereinabove provided with respect to indemnification by the
Purchaser.  Notwithstanding the foregoing or any other provision of this
Agreement, in no event will the Purchaser be liable for any losses, claims,
damages, liabilities or expenses in excess of the net proceeds received by
Purchaser upon the disposition of Registrable Securities pursuant to the
registration statement giving rise to such claim.

 

(c)           Promptly after receipt by an indemnified party under Section 10(a)
or (b) of notice of any claim as to which indemnity may be sought, including the
commencement of any action or proceeding, the indemnified party will, if a claim
in respect thereof may be made against the indemnifying party under this
Section, promptly notify the indemnifying party in writing of the commencement
thereof; provided that the failure of the indemnified party to so notify the
indemnifying party will not relieve the indemnifying party from its obligations
under this Section except to the extent that the indemnifying party is adversely
affected by the failure. In case any action or proceeding is brought against any
indemnified party, and it notifies the indemnifying party of the commencement
thereof, the indemnifying party and its counsel will conduct the defense of any
action with counsel approved by the indemnified party (which approval will not
be unreasonably withheld or delayed) although the indemnified party will be
entitled to participate therein at the indemnified party’s expense, and after
notice from the indemnifying party to the indemnified party of its election to
so assume the defense thereof, the indemnifying party will not be liable to the
indemnified party under that Section for any legal or any other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof (other than reasonable costs of investigation) unless incurred at the
written request of the indemnifying party. Notwithstanding the above, the
indemnified party will have the right to employ counsel of its own choice in any
action or proceeding (and be reimbursed by the indemnifying party for the
reasonable fees and expenses of the counsel and other reasonable costs of the
defense) if representation of the indemnified party by the counsel retained by
the indemnifying party would be inappropriate due to actual or potential
differing interests or conflicts between the indemnified party and any other
party represented by the counsel in the action or proceeding or counsel to the
indemnified party is of the opinion that it would not be desirable for the same
counsel to represent both the indemnifying party and the indemnified party
because the representation might result in a conflict of interest; provided,
however, that the indemnifying party will not in connection with any one action
or proceeding or separate but substantially similar actions or proceedings
arising out of the same general allegations, be liable for the reasonable fees
and expenses of more than one separate firm of attorneys at any time for all
indemnified parties, except to the extent that local counsel, in addition to
regular counsel, is required in order to effectively defend against the action
or proceeding.  An indemnifying party will not be liable to any indemnified
party for any settlement or entry of judgment concerning any action or
proceeding effected without the consent of the indemnifying party.

 

(d)           If the indemnification provided for in Section 10(a) or (b) is
held by a court of competent jurisdiction to be unavailable under applicable law
to an indemnified party in respect of any losses, claims, damages or liabilities
referred to therein, then each applicable indemnifying party, in lieu of
indemnifying the indemnified party, will contribute to the amount paid or
payable by the indemnified party as a result of the losses, claims, damages or
liabilities in the proportion as is appropriate to reflect the relative fault of
the Company on the one hand and of the indemnified party on the other in
connection with the statements or omissions which resulted in the losses,
claims, damages, or liabilities, as well as

 

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any other relevant equitable considerations including the relative benefits to
the parties.  The relative fault of the Company on the one hand and of the
indemnified party on the other will be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the Company
or by the indemnified party and the parties’ relative intent, knowledge, access
to information and opportunity to correct or prevent the statement or omission. 
The amount paid or payable by a party as a result of the losses, claims, damages
and liabilities referred to above will be deemed to include, subject to the
limitations set forth in Section 10(c), any legal or other fees or expenses
reasonably incurred by the party in connection with investigating or defending
any action or claim.  No person or entity guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) will be entitled to
contribution from any person or entity that is not guilty of fraudulent
misrepresentation.

 

Section 11.            Miscellaneous.

 

11.1        Notices.  Any notice or other communication given hereunder will be
deemed sufficient if in writing and sent by registered or certified mail, return
receipt requested, or delivered by hand against written receipt therefor, or
sent by confirmed facsimile, addressed to:

 

If to the Company:

 

AVAX Technologies, Inc.

9200 Indian Creek Parkway, Suite 200

Overland Park, Kansas  66210

Attn:       Richard P. Rainey

Facsimile:  (913) 693-8497

 

With a copy to:

 

Gilmore & Bell, P.C.

2405 Grand Boulevard, Suite 1100

Kansas City, Missouri  64108

Attn:       Richard M. Wright

Facsimile:  (816) 221-1018

 

If to the Purchaser:

 

To the name and address or facsimile number of the Purchaser on the signature
page hereto.

 

Notices will be deemed to have been given or delivered on the date of mailing,
except notices of change of address, which will be deemed to have been given or
delivered when received.

 

11.2        Successors and Assigns.  This Agreement will be binding upon and
inure to the benefit of the parties hereto and to their respective heirs, legal
representatives, successors and assigns.

 

11.3        Entire Agreement.  This Agreement, the Note and the Warrant
collectively set forth the entire agreement and understanding among the parties
as to the subject matter hereof and merges and supersedes all prior discussions,
agreements and understandings of any and every nature among them.  This
Agreement may be amended only by mutual written agreement of the Company and the
Purchasers holding a majority of the principal amount of Notes issued under this
Agreement.

 

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11.4        Governing Law.  The terms and provisions hereof will be construed in
accordance with and governed by the laws of the State of Delaware without regard
to that State’s conflicts of law principles.

 

11.5        Severability.  The holding of any provision of this Agreement to be
invalid or unenforceable by a court of competent jurisdiction will not affect
any other provision of this Agreement, which will remain in full force and
effect.  If any provision of this Agreement is declared by a court of competent
jurisdiction to be invalid, illegal or incapable of being enforced in whole or
in part, the provision will be interpreted so as to remain enforceable to the
maximum extent permissible consistent with applicable law and the remaining
conditions and provisions or portions thereof will nevertheless remain in full
force and effect and enforceable to the extent they are valid, legal and
enforceable, and no provisions will be deemed dependent upon any other covenant
or provision unless so expressed herein.

 

11.6        No Waiver.  A waiver by either party of a breach of any provision of
this Agreement will not operate, or be construed, as a waiver of any subsequent
breach by that same party.

 

11.7        Further Assurances.  The parties agree to execute and deliver all
further documents, agreements and instruments and take further action as may be
necessary or appropriate to carry out the purposes and intent of this
Agreement.  Any documentary, stamp tax or similar issuance or transfer taxes due
as a result of the conveyance, transfer or sale of the Note and the Warrant
between the Purchaser (or any permitted transferee), on the one hand, and the
Company, on the other hand, pursuant to this Agreement will be borne by the
Company.

 

11.8        Counterparts.  This Agreement may be executed in two or more
counterparts, each of which will be deemed an original, but all of which will
together constitute the same instrument.

 

11.9        No Third Party Beneficiaries.  Nothing in this Agreement creates in
any person not a party to this Agreement any legal or equitable right, remedy or
claim under this Agreement, and this Agreement is for the exclusive benefit of
the parties hereto.  The parties expressly recognize that this Agreement is not
intended to create a partnership, joint venture or other similar arrangement
between any of the parties or their respective affiliates.

 

10

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IN WITNESS WHEREOF, the undersigned have duly executed this Note Purchase
Agreement as of the date first above written.

 

[NAME OF PURCHASER]

 

AVAX TECHNOLOGIES, INC.

 

 

 

 

 

 

By:

 

 

By:

 

 

Name:

 

 

 

Richard P. Rainey

 

Title:

 

 

 

President

 

 

 

 

Dated:                       , 2003

 

Dated:                     , 2003

 

 

 

Address:

 

 

 

 

 

Facsimile:

 

 

Tax Id No.:

 

 

 

Principal Amount of Notes Purchased:

 

$                        

 

 

Warrants to purchase                    shares
of Common Stock

 

Purchase Price:  $                        

 

 

Closing Date:                                    , 2003

 

11

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