Form of Subscription Agreement


 Exhibit 10.1 
 EXHIBIT A 
 SUBSCRIPTION AGREEMENT 
 THIS SUBSCRIPTION AGREEMENT (this “Agreement”) dated as of July     , 2006, by and among VIRAGEN
INTERNATIONAL, INC., a Delaware corporation (the “Company”), and the subscribers identified on the signature page hereto (each a “Subscriber” and collectively “Subscribers”).  
 WHEREAS, the Company and the Subscribers are executing and delivering this Agreement in reliance upon an exemption from securities registration
afforded by the provisions of Section 4(2), Section 4(6) and/or Regulation D (“Regulation D”) as promulgated by the United States Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933,
as amended (the “1933 Act”). 
 WHEREAS, the parties desire that, upon the terms and subject to the conditions contained
herein, the Company shall issue and sell (the “Offering”) to the Subscribers, as provided herein, and the Subscribers, in the aggregate, shall purchase up to One Million Eight Hundred Thousand Dollars ($1,800,000) of Units each Unit
consisting of one share of Series C 24% Cumulative Preferred Stock of the Company (“Preferred Stock”) at a stated value of $100.00 per Unit (the “Purchase Price”) and 200 shares of Viragen International, Inc. Common Stock, $.01
par value (the “Common Stock”), subject to the rights and preferences described in the form of Certificate of Designation, Preferences and Rights (“Certificate of Designation”) attached as an exhibit to the Confidential Term
Sheet, (the “Units”). The Preferred Stock and shares of Common Stock are collectively sometimes referred to herein as the “Securities”; and 
 WHEREAS, the aggregate proceeds of the sale of the Preferred Stock and Common Stock contemplated hereby shall be held in escrow pursuant to the terms of an Agreement to be executed by the parties (the
“Escrow Agreement”). 
 NOW, THEREFORE, in consideration of the mutual covenants and other agreements contained in this
Agreement the Company and the Subscribers hereby agree as follows: 
 1. Closing. Subject to the satisfaction or waiver of the terms
and conditions of this Agreement, on the “Closing Date” (as defined in Section 2 hereof), each Subscriber shall purchase and the Company shall sell to each Subscriber the Units in the amount set forth on the signature page hereto. The
aggregate amount of the Units to be purchased by the Subscribers on the Closing Date shall not exceed $1,800,000. 
 2. Closing. The
consummation of the transactions contemplated herein shall take place at the offices of Dawson James Securities, Inc. (“Dawson James”), 925 South Federal Highway, 6th Floor, Boca Raton, Florida 33432, the placement agent for the Offering, upon the satisfaction of all conditions to Closing (“Closing Date”) as
established by Dawson James the Placement Agent for this offering. There may be one or more Closing Dates. The conditions to closing are annexed hereto as Schedule 1. 
 3. Subscriber’s Representations and Warranties. Each Subscriber hereby represents and warrants to and agrees with the Company only as to such Subscriber that: 
 (a) Organization and Standing of the Subscribers. If the Subscriber is an entity, such Subscriber is a corporation, partnership or other entity
duly incorporated or organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization. 
 (b) Authorization and Power. Each Subscriber has the requisite power and authority to enter into and perform this Agreement and to purchase the Units being sold to it hereunder. The execution, delivery and performance of this
Agreement by such Subscriber and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary entity action, and no 






 further consent or authorization of such Subscriber or its Board of Directors, stockholders, partners, members, or other
persons as the case may be, is required. This Agreement has been duly authorized, executed and delivered by each Subscriber and constitutes, or shall constitute when executed and delivered, a valid and binding obligation of the Subscriber
enforceable against the Subscriber in accordance with the terms thereof. 
 (c) No Conflicts. The execution, delivery and performance
of this Agreement and the consummation by each Subscriber of the transactions contemplated hereby or relating hereto do not and will not (i) result in a violation of such Subscriber’s charter documents or bylaws or other organizational
documents or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of any
agreement, indenture or instrument or obligation to which such Subscriber is a party or by which its properties or assets are bound, or result in a violation of any law, rule, or regulation, or any order, judgment or decree of any court or
governmental agency applicable to such Subscriber or its properties (except for such conflicts, defaults and violations as would not, individually or in the aggregate, have a material adverse effect on such Subscriber). Such Subscriber is not
required to obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental agency in order for it to execute, deliver or perform any of its obligations under this Agreement or to purchase the
Preferred Stock or the Common Stock in accordance with the terms hereof, provided that for purposes of the representation made in this sentence, such Subscriber is assuming and relying upon the accuracy of the relevant representations and agreements
of the Company herein. 
 (d) Information on Company. The Subscriber has had access at the EDGAR Website of the Commission to the
Company’s Form 10-K for the year ended June 30, 2005 and all the periodic and current reports as filed with the Commission (hereinafter referred to as the “Reports”). In addition, Subscriber has received in writing from the
Company such other information concerning its operations, financial condition and other matters as the Subscriber has requested in writing (such other information is collectively, the “Other Written Information”), and considered all
factors Subscriber deems material in deciding on the advisability of investing in the Securities. 
 (e) Information on Subscriber.
The Subscriber is, an “accredited investor”, as such term is defined in Regulation D promulgated by the Commission under the 1933 Act, is experienced in investments and business matters, has made investments of a speculative nature and has
purchased securities of United States publicly-owned companies in private placements in the past and, with its representatives, has such knowledge and experience in financial, tax and other business matters as to enable the Subscriber to utilize the
information made available by the Company to evaluate the merits and risks of and to make an informed investment decision with respect to the proposed purchase, which represents a speculative investment. The Subscriber has the authority and is duly
and legally qualified to purchase and own the Securities. The Subscriber is able to bear the risk of such investment for an indefinite period and to afford a complete loss of the entire investment. The information set forth on the signature page
hereto regarding the Subscriber is accurate. 
 (f) Purchase of Preferred Stock and Common Stock. On the Closing Date, the Subscriber
will purchase the Units as principal for its own account for investment only and not with a view toward, or for resale in connection with, the public sale or any distribution thereof. 
 (g) Compliance with Securities Act. The Subscriber understands that the Units are “Restricted Securities” and have not been registered
under the Securities Act or any applicable state securities law and is acquiring the Units as principal for its own account for investment and not with a view to, or for sale in connection with, any distribution of such Units or any part thereof,
has no present intention of distributing any of such Units (including the underlying securities) and has no arrangement or understanding with any other persons regarding the distribution of such Units (including the underlying securities). The
Subscriber is acquiring the Units hereunder in the ordinary course of its business. The Subscriber does not have any agreement or understanding, directly or indirectly, with any Person to distribute any of the Units. The 
  

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 Subscriber is not purchasing the Units as a result of any advertisement, article, notice or other communication regarding
the Units published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general solicitation or general advertisement. 
 (h) Common Stock Legend. The Common Stock shall bear the following or similar legend: 
 “THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THESE SHARES MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAW OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO VIRAGEN INTERNATIONAL, INC. THAT
SUCH REGISTRATION IS NOT REQUIRED.” 
 (i) Preferred Stock Legend. The Preferred Stock shall bear the following or similar
legend: 
 “THIS PREFERRED STOCK HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS PREFERRED STOCK MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THESE PREFERRED STOCK UNDER SAID ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO VIRAGEN INTERNATIONAL, INC. THAT SUCH REGISTRATION
IS NOT REQUIRED.” 
 (j) Communication of Offer. The offer to sell the Securities was directly communicated to the Subscriber by
the Company. At no time was the Subscriber presented with or solicited by any leaflet, newspaper or magazine article, radio or television advertisement, or any other form of general advertising or solicited or invited to attend a promotional meeting
otherwise than in connection and concurrently with such communicated offer. 
 (k) Authority; Enforceability. This Agreement and
other agreements delivered together with this Agreement or in connection herewith have been duly authorized, executed and delivered by the Subscriber and are valid and binding agreements enforceable in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights generally and to general principles of equity; and Subscriber has full power and
authority necessary to enter into this Agreement and such other agreements and to perform its obligations hereunder and under all other agreements entered into by the Subscriber relating hereto. 
 (l) Restricted Securities. Subscriber understands that the Securities have not been registered under the 1933 Act and such Subscriber will not
sell, offer to sell, assign, pledge, hypothecate or otherwise transfer any of the Securities unless pursuant to an effective registration statement under the 1933 Act or appropriate exemption thereunder. Notwithstanding anything to the contrary
contained in this Agreement, such Subscriber may transfer (without restriction and without the need for an opinion of counsel) the Securities to its Affiliates (as defined below) provided that each such Affiliate is an “accredited
investor” under Regulation D and such Affiliate agrees to be bound by the terms and conditions of this Agreement. For the purposes of this Agreement, an “Affiliate” of any person or entity means any other person or entity directly or
indirectly controlling, controlled by or under direct or indirect common control with such person or entity. 
  

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 Affiliate includes each subsidiary of the Company. For purposes of this definition, “control”
means the power to direct the management and policies of such person or firm, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise. 
 (m) No Governmental Review. Each Subscriber understands that no United States federal or state agency or any other governmental or state agency
has passed on or made recommendations or endorsement of the Securities or the suitability of the investment in the Securities nor have such authorities passed upon or endorsed the merits of the offering of the Securities. 
 (n) Correctness of Representations. Each Subscriber represents as to such Subscriber that the foregoing representations and warranties are true
and correct as of the date hereof and, unless a Subscriber otherwise notifies the Company prior to the Closing Date shall be true and correct as of the Closing Date. 
 (o) Access to Information. The Subscriber has been afforded the opportunity to ask questions of, and receive answers from the officers and/or directors of the Company acting on its behalf concerning the terms
and conditions of this transaction and to obtain any additional information, to the extent that the Company possesses such information or can acquire it without unreasonable effort or expense, necessary to verify the accuracy of the information
furnished; and has availed himself of such opportunity to the extent the undersigned considers appropriate in order to permit the undersigned to evaluate the merits and risks of an investment in the Company. It is understood that all documents,
records and books pertaining to this investment have been made available for inspection, and that the books and records of the Company will be available upon reasonable notice for inspection by investors during reasonable business hours at its
principal place of business or other mutually agreeable location. 
 (p) Survival. The foregoing representations and warranties shall
survive until three years after the Closing Date. 
 4. Company Representations and Warranties. The Company represents and warrants to
and agrees with each Subscriber that except as set forth in the Reports and as otherwise qualified in the Transaction Documents as hereinafter defined. 
 (a) Due Incorporation. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has the requisite corporate power to own its properties and
to carry on its business as disclosed in the Reports. The Company is duly qualified to do business and is in good standing in each jurisdiction where the nature of the business conducted or property owned by it makes such qualification necessary,
other than those jurisdictions in which the failure to so qualify would not have a Material Adverse Effect. For purpose of this Agreement, a “Material Adverse Effect” shall mean a material adverse effect on the financial condition, results
of operations, properties or business of the Company and its subsidiaries taken as a whole. For purposes of this Agreement, “Subsidiary” means, with respect to any entity at any date, any corporation, limited or general partnership,
limited liability company, trust, estate, association, joint venture or other business entity of which more than 50% of (i) the outstanding capital stock having (in the absence of contingencies) ordinary voting power to elect a majority of
the board of directors or other managing body of such entity, (ii) in the case of a partnership or limited liability company, the interest in the capital or profits of such partnership or limited liability company or (iii) in the case of a
trust, estate, association, joint venture or other entity, the beneficial interest in such trust, estate, association or other entity business is, at the time of determination, owned or controlled directly or indirectly through one or more
intermediaries, by such entity. All the Company’s Subsidiaries as of the Closing Date are set forth in the Reports. 
 (b)
Outstanding Stock. All issued and outstanding shares of capital stock of the Company have been duly authorized and validly issued and are fully paid and nonassessable. 
  

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 (c) Authority; Enforceability. This Agreement, the Preferred Stock, Certificate of Designation,
the Escrow Agreement, and any other agreements delivered together with this Agreement or in connection herewith (collectively “Transaction Documents”) have been duly authorized, executed and delivered by the Company and are valid and
binding agreements enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights generally and
to general principles of equity. The Company has full corporate power and authority necessary to enter into and deliver the Transaction Documents and to perform its obligations thereunder. 
 (d) Consents. No consent, approval, authorization or order of any court, governmental agency or body or arbitrator having jurisdiction over the
Company, or any of its Affiliates, any Principal Market (as defined in Section 7(b) of this Agreement), nor the Company’s stockholders is required for the execution by the Company of the Transaction Documents and compliance and performance
by the Company of its obligations under the Transaction Documents, including, without limitation, the issuance and sale of the Securities. The Offering and Transaction Documents have been approved by the Company’s Board of Directors.

 (e) No Violation or Conflict. Assuming the representations and warranties of the Subscribers in Section 3 are true and
correct, neither the issuance and sale of the Securities nor the performance of the Company’s obligations under this Agreement and all other agreements entered into by the Company relating thereto by the Company will: 
 (i) violate, conflict with, result in a breach of, or constitute a default (or an event which with the giving of notice or the lapse of time or both
would be reasonably likely to constitute a default in any material respect) of a material nature under (A) the certificate of incorporation or bylaws of the Company, (B) to the Company’s knowledge, any decree, judgment, order, law,
treaty, rule, regulation or determination applicable to the Company of any court, governmental agency or body, or arbitrator having jurisdiction over the Company or over the properties or assets of the Company or any of its Affiliates, (C) the
terms of any bond, debenture, note or any other evidence of indebtedness, or any agreement, stock option or other similar plan, indenture, lease, mortgage, deed of trust or other instrument to which the Company or any of its Affiliates is a party,
by which the Company or any of its Affiliates is bound, or to which any of the properties of the Company or any of its Affiliates is subject, or (D) the terms of any “lock-up” or similar provision of any underwriting or similar
agreement to which the Company, or any of its Affiliates is a party except the violation, conflict, breach, or default of which would not have a Material Adverse Effect; or to the Company’s knowledge 
 (ii) result in the creation or imposition of any lien, charge or encumbrance upon the Securities or any of the assets of the Company or any of its
Affiliates; or 
 (iii) result in the activation of any anti-dilution rights or a reset or repricing of any debt or security instrument of
any other creditor or equity holder of the Company, nor result in the acceleration of the due date of any obligation of the Company; or 
 (iv) result in the activation of any piggy-back registration rights of any person or entity holding securities or debt of the Company or having the right to receive securities of the Company. 
 (f) The Securities. The Securities upon issuance: 
 (i) are, or will be, free and clear of any security interests, liens, claims or other encumbrances, subject to restrictions upon transfer under the 1933 Act and any applicable state securities laws; 
  

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 (ii) have been, or will be, duly and validly authorized and on the date of issuance of the Securities,
will be duly and validly issued, fully paid and nonassessable or if registered pursuant to the 1933 Act, and resold pursuant to an effective registration statement, will be free trading and unrestricted; 
 (iii) will not have been issued or sold in violation of any preemptive or other similar rights of the holders of any securities of the Company;

 (iv) will not subject the holders thereof to personal liability by reason of being such holders, provided Subscriber’s
representations herein are true and accurate and Subscribers take no actions or fail to take any actions required for their purchase of the Securities to be in compliance with all applicable laws and regulations; and 
 (v) will not result in a violation of Section 5 under the 1933 Act. 
 (g) Litigation. There is no pending or, to the best knowledge of the Company, threatened action, suit, proceeding or investigation before any court, governmental agency or body, or arbitrator having
jurisdiction over the Company, or any of its Affiliates that would affect the execution by the Company or the performance by the Company of its obligations under the Transaction Documents. Except as disclosed in the Reports, there is no pending or,
to the best knowledge of the Company, basis for or threatened action, suit, proceeding or investigation before any court, governmental agency or body, or arbitrator having jurisdiction over the Company, or any of its Affiliates which litigation if
adversely determined would have a Material Adverse Effect. 
 (h) Reporting Company. The Company is a publicly-held company subject
to reporting obligations pursuant to Section 13(a) and 15(d) of the Securities Exchange Act of 1934 (the “1934 Act”) and has a class of common shares registered pursuant to Section 12(b) of the 1934 Act. Pursuant to the
provisions of the 1934 Act, the Company has timely filed all reports and other materials required to be filed thereunder with the Commission during the preceding twelve months. 
 (i) No Market Manipulation. The Company and its Affiliates have not taken, and will not take, directly or indirectly, any action designed to, or
that might reasonably be expected to, cause or result in stabilization or manipulation of the price of the Common Stock to facilitate the sale or resale of the Securities or affect the price at which the Securities may be issued or resold, provided,
however, that this provision shall not prevent the Company from engaging in investor relations/public relations activities consistent with past practices. 
 (j) Information Concerning Company. The Reports, as amended, contain all material information relating to the Company and its subsidiaries and their operations and financial condition and other information, as
of their respective dates required to be disclosed therein. Since the last day of the fiscal year of the most recent annual audited financial statements included in the Reports (“Latest Financial Date”), and except as modified in the Other
Written Information, there has been no Material Adverse Event relating to the Company’s business, financial condition or affairs not disclosed in the Reports. The Reports do not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances when made. 
 (k) Stop Transfer. The Company will not issue any stop transfer order or other order impeding the sale, resale or delivery of any of the Securities, except as may be required by any applicable federal or state securities laws and
unless contemporaneous notice of such instruction is given to the Subscriber. 
 (l) Defaults. The Company is not in violation of its
certificate or articles of incorporation or bylaws. The Company, to the best of its knowledge, is (i) not in default under or in violation of any material agreement or instrument to which it is a party or by which it or any of its properties
are bound 
  

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 or affected, which default or violation would have a Material Adverse Effect, (ii) not in default with respect to
any order of any court, arbitrator or governmental body or subject to or party to any order of any court or governmental authority arising out of any action, suit or proceeding under any statute or other law respecting antitrust, monopoly, restraint
of trade, unfair competition or similar matters, or (iii) not in violation of any statute, rule or regulation of any governmental authority which violation would have a Material Adverse Effect. 
 (m) Not an Integrated Offering. Neither the Company, nor any of its Affiliates, nor any person acting on its or 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 cause the offer of the Securities pursuant to this Agreement to be integrated with prior offerings by the Company for
purposes of the 1933 Act or any applicable stockholder approval provisions, including, without limitation, under the rules of any Principal Market [as defined in Section 7(b)] which would impair the exemptions relied upon in this offering or
the Company’s ability to timely comply with its obligations hereunder. Nor will the Company or any of its Affiliates take any action or steps that would cause the offer or issuance of the Securities to be integrated with other offerings which
would impair the exemptions relied upon in this offering or the Company’s ability to timely comply with its obligations hereunder. The Company and its Affiliates will not conduct any offering other than the transactions contemplated hereby that
will be integrated with the offer or issuance of the Securities, which would impair the exemptions relied upon in this offering or the Company’s ability to timely comply with its obligations hereunder. 
 (n) No General Solicitation. Neither the Company, nor any of its Affiliates, nor to its knowledge, any person acting on its or their behalf, has
engaged in any form of general solicitation or general advertising (within the meaning of Regulation D under the 1933 Act) in connection with the offer or sale of the Securities. 
 (o) Quotation. The Common Stock is included for quotation on the Over-the-Counter Market. Except as disclosed in the Reports, the Company has not
received any oral or written notice that the Common Stock is not eligible, nor will become ineligible for trading on the Over-the-Counter Market, nor that its Common Stock does not meet all requirements for the continuation of such inclusion.

 (p) No Undisclosed Liabilities. The Company has no liabilities or obligations which are material, individually or in the
aggregate, which are not disclosed in the Reports and Other Written Information, other than those incurred in the ordinary course of the Company’s businesses since the Latest Financial Date and which, individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect. 
 (q) No Undisclosed Events or Circumstances. Since the Latest Financial
Date, no event or circumstance has occurred or exists with respect to the Company or its businesses, properties, operations or financial condition, that, under applicable law, rule or regulation, requires public disclosure or announcement prior to
the date hereof by the Company but which has not been so publicly announced or disclosed in the Reports. 
 (r) Capitalization. The
authorized and outstanding capital stock of the Company as of the date of this Agreement and the Closing Date (not including the securities included in the Units) are set forth in the Confidential Term Sheet. Except as set forth therein, there are
no options, warrants, or rights to subscribe to, securities, rights or obligations convertible into or exchangeable for or giving any right to subscribe for any shares of capital stock of the Company or any of its Subsidiaries. All of the
outstanding shares of Common Stock of the Company have been duly and validly authorized and issued and are fully paid and nonassessable. 
 (s) No Disagreements with Accountants and Lawyers. There are no disagreements of any kind during the two fiscal years preceding the date of this Agreement, presently existing, or reasonably anticipated by the Company to arise,
between the Company and the accountants and lawyers formerly or presently employed by the Company, including but not limited to disputes or conflicts over payment owed to such accountants and lawyers. 
  

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 (t) Internal Accounting Controls. The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization and (iv) the
recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. 
 (u) Correctness of Representations. The Company represents that the foregoing representations and warranties are true and correct as of the date hereof in all material respects, and, unless the Company
otherwise notifies the Subscribers prior to the Closing Date, shall be true and correct in all material respects as of the Closing Date. 
 (v) Survival. The foregoing representations and warranties shall survive until three years after the Closing Date. 
 5.
Regulation D Offering. The offer and issuance of the Securities to the Subscribers is being made pursuant to the exemption from the registration provisions of the 1933 Act afforded by Section 4(2) or Section 4(6) of the 1933 Act
and/or Rule 506 of Regulation D promulgated thereunder. 
 6 Concerning the Preferred Stock. 
 (a) No Interest. Nothing contained herein or in any document referred to herein or delivered in connection herewith shall be deemed to establish
or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable law. In the event that the rate of interest or dividends required to be paid or other charges hereunder exceed the maximum permitted by
such law, any payments in excess of such maximum shall be credited against amounts owed by the Company to the Subscriber and thus refunded to the Company. 
 (b) Redemption. The Preferred Stock shall not be redeemable or callable except as described in the Certificate of Designation. 
 7. Covenants of the Company. The Company covenants and agrees with the Subscribers to use its best efforts in good faith as follows: 
 (a) Stop Orders. The Company will advise the Subscribers, within four hours after the Company receives notice of issuance by the Commission, any
state securities commission or any other regulatory authority of any stop order or of any order preventing or suspending any offering of any securities of the Company, or of the suspension of the qualification of the Common Stock of the Company for
offering or sale in any jurisdiction, or the initiation of any proceeding for any such purpose. 
 (b) Over-the-Counter Market. The Company
will continue the inclusion for the quotation of its Common Stock in the Over-the-Counter Market (the “Principal Market”), and will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or
rules of the Principal Market, as applicable. As of the date of this Agreement, the Over-the-Counter Market is the Principal Market. 
 (c)
Market Regulations. The Company shall notify the Commission, the Principal Market and applicable state authorities, in accordance with their requirements, of the transactions 
  

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 contemplated by this Agreement, and shall take all other necessary action and proceedings as may be required and
permitted by applicable law, rule and regulation, for the legal and valid issuance of the Securities to the Subscribers. 
 (d) Filing
Requirements. From the date of this Agreement and until the sooner of (i) two (2) years after the Closing Date, or (ii) until all the Common Stock have been resold or transferred by all the Subscribers pursuant to the Registration
Statement or pursuant to Rule 144, without regard to volume limitations, the Company will (A) comply in all respects with its reporting and filing obligations under the 1934 Act, (B) cause its Common Stock to continue to be registered
under Section or 12(g) of the 1934 Act, and (C) comply with all requirements related to any registration statement filed pursuant to this Agreement. The Company will use its best efforts not to take any action or file any document (whether or
not permitted by the 1933 Act or the 1934 Act or the rules thereunder) to terminate or suspend such registration or to terminate or suspend its reporting and filing obligations under said acts until two (2) years after the Closing Date. Until
the earlier of the resale of the Common Stock by each Subscriber , the Company will use its best efforts to continue the quotation of the Common Stock on a Principal Market and will comply in all respects with the Company’s reporting, filing
and other obligations under the bylaws or rules of the Principal Market. The Company agrees to timely file a Form D with respect to the Securities if required under Regulation D. 
 (e) Use of Proceeds. The proceeds of the Offering will be employed by the Company for the purposes set forth in the Confidential Term Sheet to
which this is annexed as Exhibit A. 
 (f) Taxes. From the date of this Agreement and until the sooner of (i) two (2) years
after the Closing Date, or (ii) until all the Preferred Stock is no longer outstanding and Common Stock has been resold or transferred by all the Subscribers pursuant to the Registration Statement or pursuant to Rule 144, without regard to
volume limitations, the Company will promptly pay and discharge, or cause to be paid and discharged, when due and payable, all lawful taxes, assessments and governmental charges or levies imposed upon the income, profits, property or business of the
Company; provided, however, that any such tax, assessment, charge or levy need not be paid if the validity thereof shall currently be contested in good faith by appropriate proceedings and if the Company shall have set aside on its books adequate
reserves with respect thereto, and provided, further, that the Company will pay all such taxes, assessments, charges or levies forthwith upon the commencement of proceedings to foreclose any lien which may have attached as security therefore.

 (g) Insurance. From the date of this Agreement and until the sooner of (i) two (2) years after the Closing Date, or
(ii) until all the Preferred Stock is no longer outstanding and Common Stock has been resold or transferred by all the Subscribers pursuant to the Registration Statement or pursuant to Rule 144, without regard to volume limitations, the Company
will keep its assets which are of an insurable character insured by financially sound and reputable insurers against loss or damage by fire, explosion and other risks customarily insured against by companies in the Company’s line of business,
in amounts sufficient to prevent the Company from becoming a co-insurer and not in any event less than one hundred percent (100%) of the insurable value of the property insured; and the Company will maintain, with financially sound and
reputable insurers, insurance against other hazards and risks and liability to persons and property to the extent and in the manner customary for companies in similar businesses similarly situated and to the extent available on commercially
reasonable terms. 
 (h) Books and Records. From the date of this Agreement and until the sooner of (i) two (2) years after
the Closing Date, or (ii) until all the Preferred Stock is no longer outstanding and Common Stock has been resold or transferred by all the Subscribers pursuant to the Registration Statement or pursuant to Rule 144, without regard to volume
limitations, the Company will keep true records and books of account in which full, true and correct entries will be made of all dealings or transactions in relation to its business and affairs in accordance with generally accepted accounting
principles applied on a consistent basis. 
  

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 (i) Governmental Authorities. From the date of this Agreement and until the sooner of
(i) two (2) years after the Closing Date, or (ii) until all the Preferred Stock is no longer outstanding and Common Stock has been resold or transferred by all the Subscribers pursuant to the Registration Statement or pursuant to Rule
144, without regard to volume limitations, the Company shall duly observe and conform in all material respects to all valid requirements of governmental authorities relating to the conduct of its business or to its properties or assets. 

(j) Intellectual Property. From the date of this Agreement and until the sooner of (i) two (2) years after the Closing Date, or
(ii) until all the Preferred Stock is no longer outstanding and Common Stock has been resold or transferred by all the Subscribers pursuant to the Registration Statement or pursuant to Rule 144, without regard to volume limitations, the Company
shall maintain in full force and effect its corporate existence, rights and franchises and all licenses and other rights to use intellectual property owned or possessed by it and reasonably deemed to be necessary to the conduct of its business,
unless it is sold for value. 
 k) Properties. From the date of this Agreement and until the sooner of (i) two (2) years
after the Closing Date, or (ii) until all the Preferred Stock is no longer outstanding and Common Stock has been resold or transferred by all the Subscribers pursuant to the Registration Statement (as defined in Section 9.1(iv) hereof) or
pursuant to Rule 144, without regard to volume limitations, the Company will keep its properties in good repair, working order and condition, reasonable wear and tear excepted, and from time to time make all necessary and proper repairs, renewals,
replacements, additions and improvements thereto; and the Company will at all times comply with each provision of all leases to which it is a party or under which it occupies property if the breach of such provision could reasonably be expected to
have a Material Adverse Effect. 
 (l) Non-Public Information. The Company covenants and agrees that neither it nor any other person
acting on its behalf will provide any Subscriber or its agents or counsel with any information that the Company believes constitutes material non-public information, unless prior thereto such Subscriber shall have agreed in writing to receive such
information. The Company understands and confirms that each Subscriber shall be relying on the foregoing representations in effecting transactions in securities of the Company. 
 8. Covenants of the Company and Subscriber Regarding Indemnification. 
 (a) The Company agrees to indemnify, hold harmless, reimburse and defend the Subscribers, the Subscribers’ officers, directors, agents, Affiliates,
control persons, and principal shareholders or other equity holders against any claim, cost, expense, liability, obligation, loss or damage (including reasonable legal fees and expenses) of any nature, incurred by or imposed upon the Subscriber or
any such person which results, arises out of or is based upon (i) any misrepresentation by Company or breach of any warranty by Company in this Agreement or in any Exhibits attached hereto, or other agreement delivered pursuant hereto; or
(ii) after any applicable notice and/or cure periods, any breach or default in performance by the Company of any covenant or undertaking to be performed by the Company hereunder, or any other agreement entered into by the Company and Subscriber
relating hereto. 
 (b) Each Subscriber agrees to indemnify, hold harmless, reimburse and defend the Company and each of the Company’s
officers, directors, agents, Affiliates, control persons against any claim, cost, expense, liability, obligation, loss or damage (including reasonable legal fees and expenses) of any nature, incurred by or imposed upon the Company or any such person
which results, arises out of or is based upon (i) any material misrepresentation by such Subscriber in this Agreement or in any Exhibits or Schedules attached hereto, or other agreement delivered pursuant hereto; or (ii) after any
applicable notice and/or cure periods, any breach or default in performance by such Subscriber of any covenant or undertaking to be performed by such Subscriber hereunder, or any other agreement entered into by the Company and Subscribers, relating
hereto. 
  

 10 







 (c) In no event shall the liability of any Subscriber or permitted successor hereunder or under any
Transaction Document or other agreement delivered in connection herewith be greater in amount than the dollar amount of the net proceeds actually received by such Subscriber upon the sale of Registrable Securities (as defined herein). 
 (d) The procedures set forth in Section 9.6 shall apply to the indemnification set forth in Sections 8(a) and 8(b) above. 
 9. Registration Rights. 
 9.1. The
Company hereby grants the following registration rights to holders of the Common Stock issued in this offering. 
 (i) On one occasion, for a
period commencing one hundred and fifty-one (151) days after the Closing Date, but not later than two (2) years after the Closing Date, upon a written request therefore from any record holder or holders of more than 50% of the Common Stock
shares issued pursuant to this Agreement (“Registrable Securities”), the Company shall prepare and file with the Commission a registration statement under the 1933 Act registering the Registrable Securities, as defined hereafter, hereof,
which are the subject of such request for unrestricted public resale by the holder thereof. For purposes of Sections 9.1(i) and 9.1(ii), Registrable Securities shall not include Securities which are (A) registered for resale in an effective
registration statement, (B) included for registration in a pending registration statement, or (C) which have been issued without further transfer restrictions after a sale or transfer pursuant to Rule 144 under the 1933 Act. Upon the
receipt of such request, the Company shall promptly give written notice to all other record holders of the Registrable Securities that such registration statement is to be filed and shall include in such registration statement Registrable Securities
for which it has received written requests within ten (10) days after the Company gives such written notice. Such other requesting record holders shall be deemed to have exercised their demand registration right under this Section 9.1(i).

 (ii) If the Company at any time proposes to register any of its securities under the 1933 Act for sale to the public, whether for its own
account or for the account of other security holders or both, except with respect to registration statements on Forms S-4, S-8 or another form not available for registering the Registrable Securities for sale to the public, provided the Registrable
Securities are not otherwise registered for resale by the Subscribers or Holder pursuant to an effective registration statement, each such time it will give at least fifteen (15) days’ prior written notice to the record holder of the
Registrable Securities of its intention so to do. Upon the written request of the holder, received by the Company within ten (10) days after the giving of any such notice by the Company, to register any of the Registrable Securities not
previously registered, the Company will cause such Registrable Securities as to which registration shall have been so requested to be included with the securities to be covered by the registration statement proposed to be filed by the Company, all
to the extent required to permit the sale or other disposition of the Registrable Securities so registered by the holder of such Registrable Securities (the “Seller” or “Sellers”). In the event that any registration pursuant to
this Section 9.1(ii) shall be, in whole or in part, an underwritten public offering of common stock of the Company, the number of shares of Registrable Securities to be included in such an underwriting may be reduced by the managing underwriter
if and to the extent that the Company and the underwriter shall reasonably be of the opinion that such inclusion would adversely affect the marketing of the securities to be sold by the Company therein; provided, however, that the Company shall
notify the Seller in writing of any such reduction. Notwithstanding the foregoing provisions, or Section 9.4 hereof, the Company may withdraw or delay or suffer a delay of any registration statement referred to in this Section 9.1(ii)
without thereby incurring any liability to the Seller. 
 (iii) If, at the time any written request for registration is received by the
Company pursuant to Section 9.1(i), the Company has determined to proceed with the actual preparation and filing of a registration statement under the 1933 Act in connection with the proposed offer and sale for cash of any of its securities for
the Company’s own account and the Company actually does file such other registration statement, 
  

 11 







 such written request shall be deemed to have been given pursuant to Section 9.1(ii) rather than Section 9.1(i),
and the rights of the holders of Registrable Securities covered by such written request shall be governed by Section 9.1(ii). 
 (iv)
The Company shall file with the Commission a Form S-1 registration statement (the “Registration Statement”) (or such other form that it is eligible to use) in order to register the Registrable Securities for resale and distribution under
the 1933 Act within ninety (90) calendar days after the Closing Date (the “Filing Date”), and cause to be declared effective not later than ninety (90) calendar days after the Filing Date (the “Effective Date”). The
Company will register not less than a number of shares of common stock in the aforedescribed registration statement that is equal to 100% of the Common Stock shares issuable pursuant to this Agreement. (the “Registrable Securities”). The
Registrable Securities shall be reserved and set aside exclusively for the benefit of each Subscriber and Warrant holder, pro rata, and not issued, employed or reserved for anyone other than each such Subscriber and Warrant holder. The
Registration Statement will immediately be amended or additional registration statements will be immediately filed by the Company as necessary to register additional shares of Common Stock to allow the public resale of all Common Stock included in
and issuable by virtue of the Registrable Securities. 
 The Company shall not be obligated to file the registration statement at a time
when such filing would, in the good faith determination of the board of directors of the Company in consultation with its counsel, cause the integration of the transactions contemplated by this Agreement with any other offering. In such event, the
registration statement shall be filed on the first day following which such integration will not occur, and the 90-day period described in this paragraph shall commence on such date. 
 9.2. Registration Procedures. If and whenever the Company is required by the provisions of this Section to effect the registration of any
Registrable Securities under the 1933 Act, the Company will, as expeditiously as possible: 
 (a) subject to the timelines provided in this
Agreement, prepare and file with the Commission a registration statement required by Section 9, with respect to such securities and use its best efforts to cause such registration statement to become and remain effective for the period of the
distribution contemplated thereby (determined as herein provided), promptly provide to the holders of the Registrable Securities copies of all filings and Commission letters of comment and notify Dawson James Securities, Inc. (by telecopier or by
email ) on or before 6:00 PM EST not later than the first business day after the Company receives notice that (i) the Commission has no comments or no further comments on the Registration Statement, and (ii) the registration statement has
been declared effective (failure to timely provide notice as required by this Section 9.2(a) shall be a material breach of the Company’s obligation and an Event of Default as defined in the Preferred Stock and a Non-Registration Event as
defined in Section 9.4 of this Agreement); 
 (b) prepare and file with the Commission such amendments and supplements to such
registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective until such registration statement has been effective for a period of two (2) years, and comply with the
provisions of the 1933 Act with respect to the disposition of all of the Registrable Securities covered by such registration statement in accordance with the Sellers’ intended method of disposition set forth in such registration statement for
such period; 
 (c) furnish to the Sellers, at the Company’s expense, such number of copies of the registration statement and the
prospectus included therein (including each preliminary prospectus) as such persons reasonably may request in order to facilitate the public sale or their disposition of the securities covered by such registration statement or make them
electronically available; 
 (d) use its commercially reasonable best efforts to register or qualify the Registrable Securities covered by
such registration statement under the securities or “blue sky” laws of New York and such jurisdictions as the Sellers shall request in writing, provided, however, that the Company shall not for any such purpose be required to qualify
generally to transact business as a foreign corporation in any jurisdiction where it is not so qualified or to consent to general service of process in any such jurisdiction; 
  

 12 







 (e) if applicable, list the Registrable Securities covered by such registration statement with any
securities exchange on which the Common Stock of the Company is then listed; and 
 (f) notify the Subscribers of the Company’s
becoming aware that a prospectus relating thereto is required to be delivered under the 1933 Act, of the happening of any event of which the Company has knowledge as a result of which the prospectus contained in such registration statement, as then
in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing or which becomes
subject to a Commission, state or other governmental order suspending the effectiveness of the registration statement covering any of the Shares. 
 9.3. Provision of Documents. In connection with each registration described in this Section 9, each Seller will furnish to the Company in writing such information and representation letters with respect to itself and the
proposed distribution by it as reasonably shall be necessary in order to assure compliance with federal and applicable state securities laws. 
 9.4. Non-Registration Events. The Company and the Subscribers agree that the Sellers will suffer damages if the Registration Statement is not filed by the Filing Date and not declared effective by the Commission by the Effective
Date, and any registration statement required under Section 9.1(i) or 9.1(ii) is not filed within 90 days after written request and declared effective by the Commission within 180 days after such request, and maintained in the manner and within
the time periods contemplated by Section 9 hereof, and it would not be feasible to ascertain the extent of such damages with precision. Accordingly, if (A) the Registration Statement is not filed on or before the Filing Date, (B) is
not declared effective on or before the Effective Date, (C) due to the action or inaction of the Company the Registration Statement is not declared effective within three (3) business days after receipt by the Company or its attorneys of a
written or oral communication from the Commission that the Registration Statement will not be reviewed or that the Commission has no further comments, (D) any registration statement described in Sections 9.1(i), 9.1(ii) or 9.1(iv) is filed and
declared effective but shall thereafter cease to be effective without being succeeded within fifteen (15) business days by an effective replacement or amended registration statement or for a period of time which shall exceed 20 days in the
aggregate per year (defined as a period of 365 days commencing on the Actual Effective Date (each such event referred to in clauses (A) through (D) of this Section 9.4 is referred to herein as a “Non-Registration Event”),
then the Company shall deliver to the holder of Registrable Securities, as Liquidated Damages, an amount equal to one and one half percent (1.5%) for each thirty (30) days or part thereof of the Purchase Price of the Units owned of record
by such holder which are subject to such Non-Registration Event. The Company must pay the Liquidated Damages in cash. The Liquidated Damages must be paid within twenty (20) days after the end of each thirty (30) day period or shorter part
thereof for which Liquidated Damages are payable. In the event a Registration Statement is filed by the Filing Date but is withdrawn prior to being declared effective by the Commission, then such Registration Statement will be deemed to have not
been filed. All oral or written comments received from the Commission relating to the Registration Statement must be satisfactorily responded to within ten (20) business days after receipt of comments from the Commission. Failure to timely
respond to Commission comments is a Non-Registration Event for which Liquidated Damages shall accrue and be payable by the Company to the holders of Registrable Securities at the same rate set forth above. Notwithstanding the foregoing, the Company
shall not be liable to the Subscriber under this Section 9.4 for any events or delays occurring as a consequence of the acts or omissions of the Subscribers contrary to the obligations undertaken by Subscribers in this Agreement. Liquidated
Damages will not accrue nor be payable pursuant to this Section 9.4 nor will a Non-Registration Event be deemed to have occurred for times during which Registrable Securities are transferable by the holder of Registrable Securities pursuant to
Rule 144(k) under the 1933 Act. 
  

 13 







 9.5. Expenses. All expenses incurred by the Company in complying with Section 9, including,
without limitation, all registration and filing fees, printing expenses (if required), fees and disbursements of counsel and independent public accountants for the Company, fees and expenses (including reasonable counsel fees) incurred in connection
with complying with state securities or “blue sky” laws, fees of the National Association of Securities Dealers, Inc., transfer taxes, and fees of transfer agents and registrars, are called “Registration Expenses.” All
underwriting discounts and selling commissions applicable to the sale of Registrable Securities are called “Selling Expenses.” The Company will pay all Registration Expenses in connection with the registration statement under
Section 9. Selling Expenses in connection with each registration statement under Section 9 shall be borne by the Seller and may be apportioned among the Sellers in proportion to the number of shares sold by the Seller relative to the
number of shares sold under such registration statement or as all Sellers thereunder may agree. 
 9.6. Indemnification and
Contribution. 
 (a) In the event of a registration of any Registrable Securities under the 1933 Act pursuant to Section 9, the
Company will, to the extent permitted by law, indemnify and hold harmless the Seller, each officer of the Seller, each director of the Seller, each underwriter of such Registrable Securities thereunder and each other person, if any, who controls
such Seller or underwriter within the meaning of the 1933 Act, against any losses, claims, damages or liabilities, joint or several, to which the Seller, or such underwriter or controlling person may become subject under the 1933 Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any registration statement under which such
Registrable Securities was registered under the 1933 Act pursuant to Section 9, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereof, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances when made, and will subject to the provisions of Section 9.6(c) reimburse the
Seller, each such underwriter and each such controlling person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the
Company shall not be liable to the Seller to the extent that any such damages arise out of or are based upon an untrue statement or omission made in any preliminary prospectus if (i) the Seller failed to send or deliver a copy of the final
prospectus delivered by the Company to the Seller with or prior to the delivery of written confirmation of the sale by the Seller to the person asserting the claim from which such damages arise, (ii) the final prospectus would have corrected
such untrue statement or alleged untrue statement or such omission or alleged omission, or (iii) to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission so made in conformity with information furnished by any such Seller, or any such controlling person in writing specifically for use in such registration statement or prospectus. 
 (b) In the event of a registration of any of the Registrable Securities under the 1933 Act pursuant to Section 9, each Seller severally but not
jointly will, to the extent permitted by law, indemnify and hold harmless the Company, and each person, if any, who controls the Company within the meaning of the 1933 Act, each officer of the Company who signs the registration statement, each
director of the Company, each underwriter and each person who controls any underwriter within the meaning of the 1933 Act, against all losses, claims, damages or liabilities, joint or several, to which the Company or such officer, director,
underwriter or controlling person may become subject under the 1933 Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the registration statement under which such Registrable Securities were registered under the 1933 Act pursuant to Section 9, any preliminary prospectus or final prospectus contained therein, or any
amendment or supplement thereof, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse the
Company and each such officer, director, underwriter and controlling person for any legal or other expenses reasonably incurred by 
  

 14 







 them in connection with investigating or defending any such loss, claim, damage, liability or action, provided, however,
that the Seller will be liable hereunder in any such case if and only to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in
reliance upon and in conformity with information pertaining to such Seller, as such, furnished in writing to the Company by such Seller specifically for use in such registration statement or prospectus, and provided, further, however, that the
liability of the Seller hereunder shall be limited to the net proceeds actually received by the Seller from the sale of Registrable Securities covered by such registration statement. 
 (c) Promptly after receipt by an indemnified party hereunder of notice of the commencement of any action, such indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party hereunder, notify the indemnifying party in writing thereof, but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to such
indemnified party other than under this Section 9.6(c) and shall only relieve it from any liability which it may have to such indemnified party under this Section 9.6(c), except and only if and to the extent the indemnifying party is
prejudiced by such omission. In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate in and, to the extent
it shall wish, to assume and undertake the defense thereof with counsel reasonably satisfactory to such indemnified party, and, after notice from the indemnifying party to such indemnified party of its election so to assume and undertake the defense
thereof, the indemnifying party shall not be liable to such indemnified party under this Section 9.6(c) for any legal expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of
investigation and of liaison with counsel so selected, provided, however, that, if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there
may be reasonable defenses available to it which are different from or additional to those available to the indemnifying party or if the interests of the indemnified party reasonably may be deemed to conflict with the interests of the indemnifying
party, the indemnified parties, as a group, shall have the right to select one separate counsel and to assume such legal defenses and otherwise to participate in the defense of such action, with the reasonable expenses and fees of such separate
counsel and other expenses related to such participation to be reimbursed by the indemnifying party as incurred. 
 10. Miscellaneous.

 (a) Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be
in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with
charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice. Any notice or other communication required
or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on
a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or
(b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall
be: (i) if to the Company, to: Viragen International, Inc., 865 S.W. 78th Avenue, Suite 100, Plantation,
Florida 33324, telecopier: (954) 233-1414, and (ii) if to the Subscriber, to: the one or more addresses and telecopier numbers indicated on the signature pages hereto. The Company may change its address for notices but only to an address
and fax number located in the United States. 
 (b) Entire Agreement; Assignment. This Agreement and other documents delivered in
connection herewith represent the entire agreement between the parties hereto with respect to the 
  

 15 







 subject matter hereof and may be amended only by a writing executed by both parties. Neither the Company nor the
Subscribers have relied on any representations not contained or referred to in this Agreement and the documents delivered herewith. No right or obligation of the Company shall be assigned without prior notice to and the written consent of the
Subscribers. 
 (c) Counterparts/Execution. This Agreement may be executed in any number of counterparts and by the different
signatories hereto on separate counterparts, each of which, when so executed, shall be deemed an original, but all such counterparts shall constitute but one and the same instrument. This Agreement may be executed by facsimile signature and
delivered by facsimile transmission. 
 (d) Law Governing this Agreement. This Agreement and all disputes arising therefrom and the
transaction contemplated thereby shall be governed by and construed in accordance with the laws of the State of Florida without regard to conflicts of laws principles that would result in the application of the substantive laws of another
jurisdiction. Any action brought by any party against another party concerning this Agreement or any of the transactions contemplated by this Agreement shall be brought only in the civil or state courts of Florida or in the federal courts located in
Broward County, Florida. The parties and the individuals executing this Agreement and other agreements referred to herein or delivered in connection herewith on behalf of the Company agree to submit to the personal jurisdiction of such courts for
such purposes and hereby waive trial by jury in any such action or proceeding. The prevailing party shall be entitled to recover from the adverse party its reasonable attorney’s fees, costs and expenses. In the event that any provision of
this Agreement or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be
deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement. 
 (e) Specific Enforcement, Consent to Jurisdiction. The Company and Subscriber acknowledge and agree that irreparable damage may occur in the
event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to seek one or more preliminary and final
injunctions to prevent or cure breaches of the provisions of this Agreement and to enforce specifically the terms and provisions hereof, this being in addition to any other remedy to which any of them may be entitled by law or equity. Subject to
Section 10(d) hereof, each of the Company, Subscriber and any signator hereto in his personal capacity hereby waives, and agrees not to assert in any such suit, action or proceeding, any claim that it is not personally subject to the
jurisdiction in Florida of such court, that the suit, action or proceeding is brought in an inconvenient forum or that the venue of the suit, action or proceeding is improper. Nothing in this Section shall affect or limit any right to serve process
in any other manner permitted by law. 
 (f) Independent Nature of Subscribers. The Company acknowledges that the obligations of each
Subscriber under the Transaction Documents are several and not joint with the obligations of any other Subscriber, and no Subscriber shall be responsible in any way for the performance of the obligations of any other Subscriber under the Transaction
Documents. The Company acknowledges that each Subscriber has represented that the decision of each Subscriber to purchase Securities has been made by such Subscriber independently of any other Subscriber and independently of any information,
materials, statements or opinions as to the business, affairs, operations, assets, properties, liabilities, results of operations, condition (financial or otherwise) or prospects of the Company which may have been made or given by any other
Subscriber or by any agent or employee of any other Subscriber, and no Subscriber or any of its agents or employees shall have any liability to any Subscriber (or any other person) relating to or arising from any such information, materials,
statements or opinions. The Company acknowledges that nothing contained in any Transaction Document, and no action taken by any Subscriber pursuant hereto or thereto (including, but not limited to, the (i) inclusion of a Subscriber in the
Registration Statement and (ii) review by, and consent to, such Registration Statement by a Subscriber) shall be deemed to constitute the Subscribers as a partnership, an association, a joint venture or any other kind of entity, or create a
presumption that the Subscribers are in any 
  

 16 







 way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction
Documents. The Company acknowledges that each Subscriber shall be entitled to independently protect and enforce its rights, including without limitation, the rights arising out of the Transaction Documents, and it shall not be
necessary for any other Subscriber to be joined as an additional party in any proceeding for such purpose. The Company acknowledges that it has elected to provide all Subscribers with the same terms and Transaction Documents for the convenience
of the Company and not because Company was required or requested to do so by the Subscribers. The Company acknowledges that such procedure with respect to the Transaction Documents in no way creates a presumption that the Subscribers are in any
way acting in concert or as a group with respect to the Transaction Documents or the transactions contemplated thereby. 
 (g) As used
in the Agreement, “consent of the Subscribers” or similar language means the consent of holders of not less than 70% of the total of the outstanding Preferred Stock owned by Subscribers on the date consent is requested. 
 (h) No consideration shall be offered or paid to any person to amend or consent to a waiver or modification of any provision of the Transaction
Documents unless the same consideration is also offered to all the parties to the Transaction Documents. 
 [THIS SPACE INTENTIONALLY LEFT
BLANK] 
  

 17 







 SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT (A) 
 Please acknowledge your acceptance of the foregoing Subscription Agreement by signing and returning a copy to the undersigned whereupon it shall become a
binding agreement between us. 
  

			
	VIRAGEN INTERNATIONAL, INC.
	a Delaware corporation
		
	By:	 	 /s/ Dennis W. Healey

	Name:	 	Dennis W. Healey
	Title:	 	Executive Vice President/CFO
	
	Dated: July     , 2006


  

					
	 SUBSCRIBER
	  	 PURCHASE
 PRICE AND STATED VALUE
 OF PREFERRED STOCK
	  	 COMMON
 SHARES

	 [NAME]
 [Address]
  
 Fax:
  
  
	  		  	
	 (Signature)
	  		  	
	 By:
	  		  	







 SCHEDULE 1 
 1.1. Deliveries. 
 (a) On the Closing Date, the Company shall deliver or cause to be delivered to each Subscriber the following:

 (i) this Agreement duly executed by the Company; 
 (ii) a legal opinion of Company Counsel, in the form of Exhibit A attached hereto; 
 (iii) certificates registered in the name of the Subscriber representing the number of shares of Series C Preferred Stock being sold to
such Subscriber hereunder as set forth opposite such Subscriber’s name on the signature page hereto; 
 (iv) certificates
registered in the name of the Subscriber representing the number of shares of Common Stock being sold to such Subscriber hereunder as set forth opposite such Subscriber’s name on the signature page hereto; 
 (v) a certificate evidencing the incorporation (or other organization) and good standing of the Company and each of its Subsidiaries in
such entity’s state of incorporation or organization and, as to the Company, in the State of Florida, as of a date within ten (10) days of the Closing Date; 
 (vi) a certified copy of the Corporation’s Certificate of Incorporation as amended, including the Certificate of Designation with
respect to the Series C Preferred Stock, as certified by the Secretary of State of the State of Delaware as of a date within ten days of the Closing Date; and 
 (vii) a certificate of the chief executive officer and chief financial officer of the Company to the effect of compliance with
Section 1.2 (b)(i), (ii), (iv) and (v). 
 (b) On the Closing Date, each Subscriber shall deliver or cause to be delivered to the
Company the following: 
 (i) this Agreement duly executed by such Subscriber; and 
 (ii) such Subscriber’s Purchase Price for the Units being purchased, which amount has been previously deposited in escrow with
Sterling Bank by wire transfer to the account specified in writing by the Company. 
 1.2. Closing Conditions. 
 (a) The obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met: 
 (i) the accuracy in all respects when made and on the Closing Date of the representations and warranties of the Subscribers contained
herein; 
 (ii) all obligations, covenants and agreements of the Subscribers required to be performed at or prior to the
Closing Date shall have been performed; and 






 (iii) the delivery by the Subscribers of the items set forth in Section 1.1(b) of
this Agreement. 
 (b) The respective obligations of the Subscribers hereunder in connection with the Closing are subject to the following
conditions being met: 
 (i) the accuracy in all respects on the date hereof and on the Closing Date of the representations
and warranties of the Company contained herein; 
 (ii) all obligations, covenants and agreements of the Company required to
be performed at or prior to the Closing Date shall have been performed; 
 (iii) the delivery by the Company of the items set
forth in Section 2.1(a) of this Agreement; 
 (iv) there shall have been no Material Adverse Effect with respect to the
Company since the date hereof; and 
 (v) from the date hereof to the Closing Date, trading in the Common Stock shall not have
been suspended by the Commission, and, at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg Financial Markets shall not have been suspended or limited, or minimum prices shall not have been established on
securities whose trades are reported by such service, or on any Trading Market, nor shall a banking moratorium have been declared either by the United States or Florida or New York State authorities nor shall there have occurred any material
outbreak or escalation of hostilities or other national or international calamity of such magnitude in its effect on, or any material adverse change in, any financial market which, in each case, in the reasonable judgment of each Subscriber, makes
it impracticable or inadvisable to purchase the Units at the Closing.