AGREEMENT AND WAIVER
AGREEMENT AND WAIVER ("Agreement") made this 23rd day of December, 1996 by
and among VIMRx Pharmaceuticals Inc., a Delaware corporation ("VIMRx"), Innovir
Laboratories, Inc., a Delaware corporation ("Innovir"), The Aries Fund, A Cayman
Island Trust ("Aries I"), and The Aries Domestic Fund, L.P. , a Delaware limited
partnership ("Aries II" and, together with Aries I, "The Aries Funds").
R E C I T A L S
WHEREAS, The Aries Funds and Innovir entered into that certain Stock and
Warrant Purchase Agreement dated as of August 30, 1996 (the "Aries/Innovir
Agreement") pursuant to which The Aries Funds collectively purchased from
Innovir 4,000,000 shares of the common stock, par value $.013 per share ("Common
Stock"), of Innovir, Class C Warrants to purchase an additional 4,000,000 shares
of Innovir's Common Stock, and options ("Unit Purchase Options") to purchase
2,000,000 units, each unit consisting of one share of Innovir Common Stock and
one Class C Warrant to purchase one share of Innovir's Common Stock ("Purchase
Option Warrant"); and
WHEREAS, The Aries Funds have acquired an additional 6,000,000 shares of
Innovir's Common Stock through the exercise in whole or in part of the Class C
Warrants and the Unit Purchase Options; and
WHEREAS, on the terms and conditions set forth in that certain Agreement
dated November 21, 1996 by and among VIMRx and the Aries Funds (the "Aries/VIMRx
Agreement"), VIMRx, concurrently herewith is acquiring 9,500,000 of the
10,000,000 shares of Innovir's Common Stock owned by The Aries Funds; and
WHEREAS, in consideration of, and as a condition to, the consummation of
the transactions contemplated by the Aries/VIMRx Agreement. The Aries Funds
agree to waive compliance by Innovir with certain covenants set forth in the
Aries/Innovir Agreement and Innovir agrees to perform certain covenants, all as
hereinafter set forth;
NOW, THEREFORE, VIMRx, Innovir and The Aries Funds hereby agree as follows:
1. Waiver. (a) The Aries Funds hereby irrevocably waive compliance by
Innovir with the following provisions of the Aries/Innovir Agreement:
i) Section 5.18 (a);
ii) Sections 7.1 and 7.2;
iii) the second sentence of Section 7.4;
iv) Sections 7.5 through 7.11 inclusive
v) Sections 7.13 through 7.15 inclusive
vi) Section 7.17
vii) Sections 7.19 through 7.22 inclusive
viii) Section 7.23(c);
ix) Sections 7.24. through 7.26; and
x) the last sentence of Section 11.4.
(b) The Aries Funds hereby waive compliance by Innovir with the provisions
of Section 11.2 of the Aries/Innovir Agreement to the extent, and only to the
extent, such provisions relate to the preparation, negotiation, execution and
delivery of this Agreement.
2. Amendments to the Aries/Innovir Agreement. Effective the date hereof,
the Aries/Innovir Agreement is hereby amended as follows:
(a) Section 7.3 is hereby amended to read in full as follows:
"7.3 Certificates of Compliance. The Company covenants that promptly
after the occurrence of any default hereunder, it will deliver to
Purchasers an Officer's Certificate specifying in reasonable detail the
nature and period of existence thereof, and what actions the Company
has taken and proposes to take with respect thereto."
(b) Section 7.12 is hereby amended to read in full as follows:
"7.12 Amendment of the Certificate of Incorporation and By-Laws.
Innovir will not amend its Certificate of Incorporation or By-Laws so
as to adversely affect the rights of Purchasers under this Agreement,
the Warrants, the Purchase Option Warrants or the Purchase Option."
3. Acknowledgement. The Aries Funds acknowledge that contemporaneously with
the closing of the Aries/VIMRx Agreement, Innovir will issue to VIMRx 8,666,666
shares of its Class B Convertible Preferred Stock, together with warrants to
purchase 1,000,000 shares of Common Stock of Innovir at $1.00 per share and
warrants to purchase 1,000,000 shares of Common Stock of Innovir at $2.00 per
share, in consideration of the assignment to Innovir of all the issued and
outstanding shares of VIMRx Holdings, Ltd., a Delaware corporation, all as
contemplated by that certain Agreement dated November 21, 1996 by and between
VIMRx and Innovir (the "VIMRx/Innovir Agreement"). The Aries Funds agree that
notwithstanding any provision of the Class C Warrants, the Unit Purchase Options
or the Purchase Option Warrants,
2
and without prejudice to their rights to adjustment resulting from any future
transactions, no adjustment shall be made to the Purchase Price (as defined in
the Unit Purchase Options), the Per Share Exercise Price (as defined in the
Class C Warrants) or the number and/or kind of securities purchasable on
exercise of the Unit Purchase Options and/or the Class C Warrants by reason of
the consummation of the transactions contemplated by the VIMRx/Innovir
Agreement.
4. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to principles
of conflicts of laws.
5. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument.
6. Headings. The headings of the paragraphs of this Agreement are inserted
for the sake of convenience only and shall not constitute a part hereof.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
THE ARIES FUND, A CAYMAN ISLAND TRUST
By: its Investment Manager,
PARAMOUNT CAPITAL ASSET
MANAGEMENT, INC.
By: /s/ LINDSAY A. ROSENWALD
-------------------------------------
Lindsay A. Rosenwald, M.D.,
President
THE ARIES DOMESTIC FUND, L.P.
By: its General Partner,
PARAMOUNT CAPITAL ASSET
MANAGEMENT, INC.
By: /s/ LINDSAY A. ROSENWALD
-------------------------------------
Lindsay A. Rosenwald, M.D.,
President
3
VIMRx PHARMACEUTICALS INC.
By: /s/ FRANCIS M. O'CONNELL
------------------------------------
Francis M. O'Connell
Chief Financial Officer
INNOVIR LABORATORIES, INC.
By: /s/ ALLAN R. GOLDBERG
------------------------------------
Allan R. Goldberg,
President
4