Exhibit 10.1
NOTE REPURCHASE AGREEMENT
THIS NOTE REPURCHASE AGREEMENT (this “Agreement”) to repurchase VaxGen, Inc.
51/2% Convertible Senior Subordinated Notes Due April 1, 2010 is made as of
July 1, 2008, by and between Alexandra Global Master Fund Ltd., a British Virgin
Islands International Business Company (“Holder”), on the one hand, and VaxGen,
Inc., a Delaware corporation (“Company”), on the other hand.
W I T N E S S E T H:
WHEREAS, the Holder is the owner and holder of those certain 51/2% Convertible
Senior Subordinated Notes Due April 1, 2010 (the “Notes”) identified on
Schedule A hereto, issued under an Indenture, dated as of April 5, 2005 (the
“Indenture”), between the Company and U.S. Bank National Association, as trustee
(the “Trustee”);
WHEREAS, the Notes, to date, have not matured; and
WHEREAS, the Holder, desiring to sell the Notes, approached the Company with
respect thereto, and the Company in turn desires to repurchase the Notes.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the Holder and the Company hereby agree as
follows:
1. Sale of Notes. Subject to the terms and conditions of this Agreement, the
Company agrees to purchase from the Holder, and the Holder agree to sell to the
Company, the Notes identified on Schedule A hereto, in the aggregate principal
amount and for an aggregate purchase price set forth on Schedule A hereto. The
purchase and sale of the Notes shall take place at the offices of Cooley Godward
Kronish, 3175 Hanover Street, Palo Alto, California 94304 at 9:00 A.M. (local
time), on July 8, 2008 (which time and place are designated as the “Closing” and
the date thereof the “Settlement Date”). At the Closing, the Holder shall
deliver to the Company the Notes, duly endorsed or accompanied by an assignment
duly endorsed and in a form acceptable to the Trustee, against payment of the
aggregate purchase price described on Schedule A hereto (the “Purchase Price”),
by wire transfer in the amounts and using the wire transfer instructions to be
provided separately to the Company by Holder. Upon receipt by the Holder of the
Purchase Price, the Company shall become the legal and beneficial owner of the
Notes and of all rights and interest therein or related thereto and to the
monies due and to become due under the terms of the Notes. The Holder hereby
agrees that upon receipt of the Purchase Price, the Notes shall be cancelled and
the Company shall have no further obligation to the Holder thereunder.
2. Representations and Warranties of the Holder. The Holder hereby represents
and warrants to the Company with respect to the Notes issued to such Holder
that:
2.1 Ownership of Notes. The Holder has, and at the Closing will have, good and
marketable right, title and interest (legal and beneficial) in and to the Notes,
free and clear of all liens, pledges, security interests, charges, contractual
obligations, claims or encumbrances of any kind. Upon payment for the Notes in
accordance with this Agreement, the Holder will convey the Notes to the Company
free and clear of all liens, pledges, security interests, charges, contractual
obligations, claims or encumbrances of any kind.

 

 

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2.2 Organization; Authorization. The Holder has full power and authority to
enter into this Agreement. The execution, delivery and performance by the Holder
of this Agreement has been duly authorized by all requisite action by the Holder
and this Agreement constitutes a valid and binding obligation of the Holder,
enforceable against the Holder in accordance with its terms, except as
enforcement may be limited by general principles of equity and by bankruptcy,
insolvency and similar laws affecting creditors’ rights and remedies generally.
2.3 No Consent Required. No consent, authorization, approval, order, license,
certificate or permit or act of or from, or declaration or filing with, any
foreign, federal, state, local or other governmental authority or regulatory
body or any court or other tribunal or any party to any contract, agreement,
instrument, lease or license to which the Holder is a party, is required for the
execution, delivery or performance by the Holder of this Agreement or any of the
other agreements, instruments and documents being or to be executed and
delivered hereunder or in connection herewith or for the consummation of the
transactions contemplated hereby.
2.4 Disclosure of Information. The Holder has received all the information it
considers necessary or appropriate to determine whether to sell the Notes to the
Company pursuant to this Agreement. The Holder acknowledges (i) the Company has
not made any representation or warranty, express or implied, except as set forth
herein, regarding any aspect of the sale and purchase of the Notes, the
operation or financial condition of the Company or the value of the Notes,
(ii) that it is not relying upon the Company in making its decision to sell the
Notes to the Company pursuant to this Agreement and (iii) that the Company is
relying upon the truth of the representations and warranties in this Section 2
in connection with the purchase of the Notes hereunder.
2.5 Tax Consequences. The Holder has had an opportunity to review the federal,
state and local tax consequences of the sale of the Notes to the Company and the
transactions contemplated by this Agreement with its own tax advisors. The
Holder is relying solely on such advisors and not on any statements or
representations of the Company.
2.6 No Conflict. Neither the execution and delivery of this Agreement or the
consummation of any of the transactions contemplated hereby nor compliance with
or fulfillment of the terms, conditions and provisions hereof or thereof will
conflict with, result in a breach of the terms, conditions or provisions of, or
constitute a default (with or without notice or lapse of time, or both), or an
event creating rights of acceleration, termination or cancellation or a loss of
rights under (i) any material note, instrument, agreement, mortgage, lease,
license, franchise, permit or other authorization, right, restriction or
obligation to which the Holder is a party or by which the Holder or any of its
properties is bound, (ii) any judgment or decree applicable to, or affecting,
the Holder or (iii) any statute, law or rule to which the Holder is subject.

 

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2.7 No Solicitation. The Holder has made no general solicitation in connection
with the sale of the Notes, acknowledges that it independently approached the
Company regarding the transactions contemplated hereby and that the Company did
not initiate or attempt to initiate the transactions contemplated hereby.
3. Representations and Warranties of the Company. The Company hereby represents
and warrants to the Holder that:
3.1 Organization; Authorization. The Company has full power and authority to
enter into this Agreement. The execution, delivery and performance by the
Company of this Agreement has been duly authorized by all requisite action by
the Company and this Agreement constitutes a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except as
enforcement may be limited by general principles of equity and by bankruptcy,
insolvency and similar laws affecting creditors’ rights and remedies generally.
3.2 No Consent Required. No consent, authorization, approval, order, license,
certificate or permit or act of or from, or declaration or filing with, any
foreign, federal, state, local or other governmental authority or regulatory
body or any court or other tribunal or any party to any contract, agreement,
instrument, lease or license to which the Company is a party, is required for
the execution, delivery or performance by the Company of this Agreement or any
of the other agreements, instruments and documents being or to be executed and
delivered hereunder or in connection herewith or for the consummation of the
transactions contemplated hereby.
3.3 No Conflict. Neither the execution and delivery of this Agreement or the
consummation of any of the transactions contemplated hereby nor compliance with
or fulfillment of the terms, conditions and provisions hereof or thereof will
conflict with, result in a breach of the terms, conditions or provisions of, or
constitute a default (with or without notice or lapse of time, or both), or an
event creating rights of acceleration, termination or cancellation or a loss of
rights under (i) any material note, instrument, agreement, mortgage, lease,
license, franchise, permit or other authorization, right, restriction or
obligation to which the Company is a party or by which the Company or any of its
properties is bound, (ii) any judgment or decree applicable to, or affecting,
the Company or (iii) any statute, law or rule to which the Company is subject.
3.4 No Litigation. There is no action, suit, proceeding, judgment, claim or
investigation pending or, to the knowledge of the Company, threatened against
the Company which could reasonably be expected in any manner to challenge or
seek to prevent, enjoin, alter or materially delay any of the transactions
contemplated by this Agreement.
4. Securities Act; Transfer Restrictions. The Company hereby acknowledges that
the (i) securities are not registered pursuant to the Securities Act of 1933, as
amended, and (ii) the Notes and the common stock underlying the Notes may only
be disposed of in compliance with Federal and State securities laws.

 

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5. Miscellaneous.
5.1 Governing Law. This Agreement shall be governed by and construed under the
laws of the State of New York, without regard to its choice of law provisions.
The parties hereto hereby agree that any action brought under this Agreement or
related to the transactions contemplated hereby shall be brought in a Federal or
State court located in the County of San Francisco in the State of California.
5.2 Counterparts. This Agreement may be executed in two or more counterparts and
by facsimile or electronic signature, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument.
5.3 Publicity. The Holder will use reasonable commercial efforts to keep the
terms and existence of this transaction confidential, provided that the Holder
may share the details of this transaction in confidence with its attorneys,
investors and financial and tax advisors, and may advise other potential
purchasers of the Notes that the Notes have been repurchased by the Company. The
Holder shall not be prohibited from referring communications with any other
party regarding the transactions contemplated hereby to the Company.
5.4 Titles and Subtitles. The titles and subtitles used in this Agreement are
used for convenience only and are not to be considered in construing or
interpreting this Agreement.
5.5 Notices. All notices and other communications given or made pursuant hereto
shall be in writing and shall be deemed effectively given: (i) upon personal
delivery to the party to be notified, (ii) when sent by confirmed facsimile if
sent during the normal business hours of the recipient; if not, then on the next
business day, (iii) five (5) days after having been sent by registered or
certified mail, return receipt requested, postage prepaid or (iv) one (1) day
after deposit with a nationally-recognized overnight courier, specifying
next-day delivery, with written verification of receipt. All communications
shall be sent to the respective parties at the addresses set forth on the
signature pages attached hereto (or at such other addresses as shall be
specified by notice given in accordance with this Section 5.5).
5.6 Amendment and Waivers. Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of Holder and the Company.
5.7 Further Assurances. Each party hereby agrees to execute any additional
documents and take any additional actions as may be reasonably necessary to
carry out the terms of this Agreement.

 

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5.8 Severability. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, such provision shall be excluded from this
Agreement and the balance of this Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.
5.9 Entire Agreement. This Agreement and the documents referred to herein
constitute the entire agreement among the parties and no party shall be liable
or bound to any other party in any manner by any warranties, representations or
covenants except as specifically set forth herein or therein.
[signature page follows]

 

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IN WITNESS WHEREOF, the Holder and the Company have executed this Agreement
effective as of the date and year first above written.
ALEXANDRA GLOBAL MASTER
FUND LTD.
By: ALEXANDRA INVESTMENT
MANAGEMENT, LLC, as
Investment Advisor

         
By:
  /s/ Mikhail Filimonov    
 
       
 
  Name: Mikhail Filimonov
Title: Chairman and Chief Executive Officer    

Address for notices:
Alexandra Global Master Fund Ltd.
c/o Alexandra Investment Management, LLC
767 Third Avenue
39th Floor
New York, New York 10017
Phone No: (212) 301-1800
Facsimile No.: (212) 301-1810
VAXGEN, INC.

         
By:
  /s/ James P. Panek    
 
       
 
  Name: James P. Panek
Title: President and Chief Executive Officer    

Address for notices:
VaxGen, Inc.
349 Oyster Point Boulevard
South San Francisco, CA 94080
Attn: Mr. James Panek
Facsimile No.: (650) 624-1001

 

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SCHEDULE A
to
Note Repurchase Agreement
dated as of July 1, 2008
by and between
ALEXANDRA GLOBAL MASTER FUND LTD.
and
VAXGEN, INC.

Title of Securities:  
5 1/2% Convertible Senior Subordinated Notes due April 1 2010 (the “Notes”)

Aggregate Principal Amount of Notes:  
$11,000,000.00

Purchase Price:  
$820 for each $1,000 principal amount of Notes plus accrued and unpaid interest
thereon to the Settlement Date.

Accrued Interest:  
$163,013.88 plus an additional $1,680.56 per day in the event that the
Settlement Date is extended to a later date by mutual agreement of the parties.

Aggregate Purchase Price:  
$9,183,013.88 plus an additional $1,680.56 per day in the event that the
Settlement Date is extended to a later date by mutual agreement of the parties.

Settlement Date:  
July 8, 2008

 

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