EQUITY PURCHASE AGREEMENT
This equity purchase agreement is entered into as of November 14, 2018 (this
"Agreement"), by and between Parallax Health Sciences, Inc., a Nevada corporation (the
"Company"), and Peak One Opportunity Fund, L.P., a Delaware limited partnership (the
"Investor").
WHEREAS, the parties desire that, upon the terms and subject to the conditions
contained herein, the Company shall issue and sell to the Investor, from time to time as
provided herein, and the Investor shall purchase up to Ten Million Dollars ($10,000,000.00) of
the Company’s Common Stock (as defined below);
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
Section 1.1 DEFINED TERMS. As used in this Agreement, the following terms shall
have the following meanings specified or indicated (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"Agreement" shall have the meaning specified in the preamble hereof.
“Average Daily Trading Value” shall mean the average trading volume of the
Company’s Common Stock in the ten (10) Trading Days immediately preceding the respective
Put Date multiplied by the lowest closing bid price of the Company’s Common Stock in the
ten (10) Trading Days immediately preceding the respective Put Date.
“Bankruptcy Law” means Title 11, U.S. Code, or any similar federal or state law for
the relief of debtors.
"Claim Notice" shall have the meaning specified in Section 9.3(a).
“Clearing Costs” shall mean all of the Investor’s brokerage firm, clearing firm,
Transfer Agent fees, and attorney fees, with respect to the deposit of the Put Shares.
“Clearing Date” shall be the date on which the Investor receives the Put Shares in its
brokerage account.
"Closing" shall mean one of the closings of a purchase and sale of shares of
Common Stock pursuant to Section 2.3.
"Closing Certificate" shall mean the closing certificate of the Company in the form
of Exhibit B hereto.
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“Closing Date” shall mean the date of any Closing hereunder.
“Commitment Shares” shall mean the 800,000 shares of the Company’s common
stock as a commitment fee hereunder (400,000 of which shall be issued to the Investor and
400,000 of which shall be issued to Peak One Investments, LLC (“Investments”)).
"Commitment Period" shall mean the period commencing on the Execution Date,
and ending on the earlier of (i) the date on which the Investor shall have purchased Put Shares
pursuant to this Agreement equal to the Maximum Commitment Amount, (ii) 24 months after
the initial effectiveness of the Registration Statement, (iii) written notice of termination by the
Company to the Investor (which shall not occur during any Valuation Period or at any time
that the Investor holds any of the Put Shares), (iv) the Registration Statement is no longer
effective, or (v) the date that, pursuant to or within the meaning of any Bankruptcy Law, the
Company commences a voluntary case or any Person commences a proceeding against the
Company, a Custodian is appointed for the Company or for all or substantially all of its
property or the Company makes a general assignment for the benefit of its creditors; provided,
however, that the provisions of Articles III, IV, V, VI, IX and the agreements and covenants of
the Company and the Investor set forth in Article X shall survive the termination of this
Agreement.
"Common Stock" shall mean the Company's common stock, $0.001 par value per
share, and any shares of any other class of common stock whether now or hereafter
authorized, having the right to participate in the distribution of dividends (as and when
declared) and assets (upon liquidation of the Company).
“Common Stock Equivalents” means any securities of the Company or the
Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock,
including, without limitation, any debt, preferred stock, right, option, warrant or other
instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise
entitles the holder thereof to receive, Common Stock.
"Company" shall have the meaning specified in the preamble to this Agreement.
“Custodian” means any receiver, trustee, assignee, liquidator or similar official
under any Bankruptcy Law.
"Damages" shall mean any loss, claim, damage, liability, cost and expense
(including, without limitation, reasonable attorneys' fees and disbursements and costs and
expenses of expert witnesses and investigation).
"Dispute Period" shall have the meaning specified in Section 9.3(a).
“DTC” shall mean The Depository Trust Company, or any successor performing
substantially the same function for the Company.
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“DTC/FAST Program” shall mean the DTC’s Fast Automated Securities Transfer
Program.
“DWAC” shall mean Deposit Withdrawal at Custodian as defined by the DTC.
“DWAC Eligible” shall mean that (a) the Common Stock is eligible at DTC for full
services pursuant to DTC’s Operational Arrangements, including, without limitation, transfer
through DTC’s DWAC system, (b) the Company has been approved (without revocation) by
the DTC’s underwriting department, (c) the Transfer Agent is approved as an agent in the
DTC/FAST Program, (d) the Commitment Shares or Put Shares, as applicable, are otherwise
eligible for delivery via DWAC, and (e) the Transfer Agent does not have a policy prohibiting
or limiting delivery of the Commitment Shares or Put Shares, as applicable, via DWAC.
“DWAC Shares” means shares of Common Stock that are (i) issued in electronic
form, (ii) freely tradable and transferable and without restriction on resale and (iii) timely
credited by the Company to the Investor’s or its designee’s specified DWAC account with
DTC under the DTC/FAST Program, or any similar program hereafter adopted by DTC
performing substantially the same function.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
“Exchange Cap” shall have the meaning set forth in Section 7.1(c).
"Execution Date" shall mean the date of this Agreement.
"FINRA" shall mean the Financial Industry Regulatory Authority, Inc.
"Investment Amount" shall mean the Put Shares referenced in the Put Notice
multiplied by the Purchase Price minus the Clearing Costs.
"Indemnified Party" shall have the meaning specified in Section 9.2.
"Indemnifying Party" shall have the meaning specified in Section 9.2.
"Indemnity Notice" shall have the meaning specified in Section 9.3(e).
“Initial Purchase Price” shall mean 88% of the lowest closing bid price of the
Company’s Common Stock on the Trading Day immediately preceding the respective Put
Date.
"Investor" shall have the meaning specified in the preamble to this Agreement.
“Lien” means a lien, charge, pledge, security interest, encumbrance, right of first
refusal, preemptive right or other restriction.
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"Market Price" shall mean the lesser of the (i) lowest closing bid price of the
Common Stock on the Principal Market on the Trading Day immediately preceding the
respective Put Date, or (ii) lowest closing bid price of the Common Stock on the Principal
Market for any Trading Day during the Valuation Period.
"Material Adverse Effect" shall mean any effect on the business, operations,
properties, or financial condition of the Company and the Subsidiaries that is material and
adverse to the Company and the Subsidiaries and/or any condition, circumstance, or situation
that would prohibit or otherwise materially interfere with the ability of the Company to enter
into and perform its obligations under any Transaction Document.
"Maximum Commitment Amount" shall mean Ten Million Dollars
($10,000,000.00).
"Person" shall mean an individual, a corporation, a partnership, an association, a
trust or other entity or organization, including a government or political subdivision or an
agency or instrumentality thereof.
"Principal Market" shall mean any of the national exchanges (i.e. NYSE, NYSE
AMEX, Nasdaq), or principal quotation systems (i.e. OTCQX, OTCQB, OTC Pink, the OTC
Bulletin Board), or other principal exchange or recognized quotation system which is at the
time the principal trading platform or market for the Common Stock.
"Purchase Price" shall mean 88% of the Market Price on such date on which the
Purchase Price is calculated in accordance with the terms and conditions of this Agreement.
"Put" shall mean the right of the Company to require the Investor to purchase shares
of Common Stock, subject to the terms and conditions of this Agreement.
"Put Date" shall mean any Trading Day during the Commitment Period that a Put
Notice is deemed delivered pursuant to Section 2.2(b).
"Put Notice" shall mean a written notice, substantially in the form of Exhibit A
hereto, to Investor setting forth the Put Shares which the Company intends to require Investor
to purchase pursuant to the terms of this Agreement.
"Put Shares" shall mean all shares of Common Stock issued, or that the Company
shall be entitled to issue, per any applicable Put Notice in accordance with the terms and
conditions of this Agreement.
"Registration Statement" shall have the meaning specified in Section 6.4.
"Regulation D" shall mean Regulation D promulgated under the Securities Act.
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“Required Minimum” shall mean, as of any date, the maximum aggregate number of
shares of Common Stock then issued or potentially issuable in the future pursuant to the
Transaction Documents, including any Commitment Shares.
"Rule 144" shall mean Rule 144 under the Securities Act or any similar provision
then in force under the Securities Act.
"SEC" shall mean the United States Securities and Exchange Commission.
“SEC Documents” shall have the meaning specified in Section 4.5.
“Securities" means, collectively, the Put Shares and Commitment Shares.
"Securities Act" shall mean the Securities Act of 1933, as amended.
“Short Sales” shall mean all “short sales” as defined in Rule 200 of Regulation
SHO under the Exchange Act.
“Subsidiary” means any Person the Company wholly-owns or controls, or in which
the Company, directly or indirectly, owns a majority of the voting stock or similar voting
interest, in each case that would be disclosable pursuant to Item 601(b)(21) of Regulation S-K
promulgated under the Securities Act.
"Third Party Claim" shall have the meaning specified in Section 9.3(a).
“Trading Day” shall mean a day on which the Principal Market shall be open for
business.
“Transaction Documents” shall mean this Agreement, the registration rights
agreement of even date, and all schedules and exhibits hereto and thereto.
"Transfer Agent" shall mean Action Stock Transfer Corporation, the current transfer
agent of the Company, with a mailing address of 0000 X. Xxxx Xxxxx Xxxx., Xxxxx 000, Xxxx
Xxxx Xxxx, XX 00000, and any successor transfer agent of the Company.
"Valuation Period" shall mean the period of seven (7) Trading Days immediately
following the Clearing Date associated with the applicable Put Notice during which the
Purchase Price of the Common Stock is valued. The Valuation Period shall begin on the first
Trading Day following the Clearing Date.
ARTICLE II
PURCHASE AND SALE OF COMMON STOCK
Section 2.1
PUTS. Upon the terms and conditions set forth herein (including,
without limitation, the provisions of Article VII), the Company shall have the right, but not the
obligation, to direct the Investor, by its delivery to the Investor of a Put Notice from time to time,
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to purchase Put Shares (i) in a minimum amount not less than $20,000.00 and (ii) in a maximum
amount up to the lesser of (a) $250,000.00 or (b) 200% of the Average Daily Trading Value.
Section 2.2 MECHANICS.
(a)
PUT NOTICE. At any time and from time to time during the
Commitment Period, except as provided in this Agreement, the Company may deliver a Put
Notice to Investor, subject to satisfaction of the conditions set forth in Section 7.2 and
otherwise provided herein. The initial price per share identified in the respective Put Notice
shall be equal to the Initial Purchase Price, subject to adjustment during the Valuation Period
as provided in this Agreement. The Company shall deliver, or cause to be delivered, the Put
Shares as DWAC Shares to the Investor within two (2) Trading Days following the Put Date.
(b)
DATE OF DELIVERY OF PUT NOTICE. A Put Notice shall be
deemed delivered on (i) the Trading Day it is received by email by the Investor if such notice
is received on or prior to 9:00 a.m. New York time or (ii) the immediately succeeding Trading
Day if it is received by email after 9:00 a.m. New York time on a Trading Day or at any time
on a day which is not a Trading Day. The Company shall not deliver another Put Notice to the
Investor within ten (10) Trading Days of a prior Put Notice.
Section 2.3
CLOSINGS. At the end of the Valuation Period, the Purchase Price for
the respective Put Shares shall be established as provided in this Agreement. If the value of the
Put Shares delivered to the Investor causes the Company to exceed the Maximum Commitment
Amount, then immediately after the Valuation Period the Investor shall return to the Company
the surplus amount of Put Shares associated with such Put and the Purchase Price with respect to
such Put shall be reduced by any Clearing Costs related to the return of such Put Shares. The
Closing of a Put shall occur within three (3) Trading Days following the end of the Valuation
Period, whereby the Investor shall deliver the Investment Amount by wire transfer of
immediately available funds to an account designated by the Company.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF INVESTOR
The Investor represents and warrants to the Company that:
Section 3.1
INTENT. The Investor is entering into this Agreement for its own
account and the Investor has no present arrangement (whether or not legally binding) at any
time to sell the Securities to or through any Person in violation of the Securities Act or any
applicable state securities laws; provided, however, that the Investor reserves the right to
dispose of the Securities at any time in accordance with federal and state securities laws
applicable to such disposition.
Section 3.2
NO LEGAL ADVICE FROM THE COMPANY. The Investor
acknowledges that it has had the opportunity to review this Agreement and the transactions
contemplated by this Agreement with its own legal counsel and investment and tax advisors.
The Investor is relying solely on such counsel and advisors and not on any statements or
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representations of the Company or any of its representatives or agents for legal, tax or
investment advice with respect to this investment, the transactions contemplated by this
Agreement or the securities laws of any jurisdiction.
Section 3.3
ACCREDITED INVESTOR. The Investor is an accredited investor
as defined in Rule 501(a)(3) of Regulation D, and the Investor has such experience in business
and financial matters that it is capable of evaluating the merits and risks of an investment in
the Securities. The Investor acknowledges that an investment in the Securities is speculative
and involves a high degree of risk.
Section 3.4
AUTHORITY. The Investor has the requisite power and authority to
enter into and perform its obligations under this Agreement and the other Transaction
Documents and to consummate the transactions contemplated hereby and thereby. The
execution and delivery of this Agreement and the other Transaction Documents and the
consummation by it of the transactions contemplated hereby and thereby have been duly
authorized by all necessary action and no further consent or authorization of the Investor is
required. Each Transaction Document to which it is a party has been duly executed by the
Investor, and when delivered by the Investor in accordance with the terms hereof, will
constitute the valid and binding obligation of the Investor enforceable against it in accordance
with its terms, subject to applicable bankruptcy, insolvency, or similar laws relating to, or
affecting generally the enforcement of, creditors' rights and remedies or by other equitable
principles of general application.
Section 3.5
NOT AN AFFILIATE. The Investor is not an officer, director or
"affiliate" (as that term is defined in Rule 405 of the Securities Act) of the Company.
Section 3.6
ORGANIZATION AND STANDING. The Investor is an entity duly
incorporated or formed, validly existing and in good standing under the laws of the jurisdiction
of its incorporation or formation with full right, corporate, partnership, limited liability
company or similar power and authority to enter into and to consummate the transactions
contemplated by this Agreement and the other Transaction Documents.
Section 3.7
ABSENCE OF CONFLICTS. The execution and delivery of this
Agreement and the other Transaction Documents, and the consummation of the transactions
contemplated hereby and thereby and compliance with the requirements hereof and thereof,
will not (a) violate any law, rule, regulation, order, writ, judgment, injunction, decree or award
binding on the Investor, (b) violate any provision of any indenture, instrument or agreement to
which the Investor is a party or is subject, or by which the Investor or any of its assets is
bound, or conflict with or constitute a material default thereunder, (c) result in the creation or
imposition of any lien pursuant to the terms of any such indenture, instrument or agreement, or
constitute a breach of any fiduciary duty owed by the Investor to any third party, or (d) require
the approval of any third-party (that has not been obtained) pursuant to any material contract,
instrument, agreement, relationship or legal obligation to which the Investor is subject or to
which any of its assets, operations or management may be subject.
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Section 3.8
DISCLOSURE; ACCESS TO INFORMATION. The Investor had
an opportunity to review copies of the SEC Documents filed on behalf of the Company and
has had access to all publicly available information with respect to the Company.
Section 3.9
MANNER OF SALE. At no time was the Investor presented with or
solicited by or through any leaflet, public promotional meeting, television advertisement or
any other form of general solicitation or advertising.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Investor that, except as disclosed in the
SEC Documents or except as set forth in the disclosure schedules hereto:
Section 4.1
ORGANIZATION OF THE COMPANY. The Company and each
of the Subsidiaries is an entity duly incorporated or otherwise organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation or organization, with
the requisite power and authority to own and use its properties and assets and to carry on its
business as currently conducted. Neither the Company nor any Subsidiary is in violation nor
default of any of the provisions of its respective certificate or articles of incorporation, bylaws
or other organizational or charter documents. Each of the Company and the Subsidiaries is
duly qualified to conduct business and is in good standing as a foreign corporation or other
entity in each jurisdiction in which the nature of the business conducted or property owned by
it makes such qualification necessary, except where the failure to be so qualified or in good
standing, as the case may be, could not have or reasonably be expected to result in a Material
Adverse Effect and no proceeding has been instituted in any such jurisdiction revoking,
limiting or curtailing or seeking to revoke, limit or curtail such power and authority or
qualification.
Section 4.2
AUTHORITY. The Company has the requisite corporate power and
authority to enter into and perform its obligations under this Agreement and the other
Transaction Documents. The execution and delivery of this Agreement and the other
Transaction Documents by the Company and the consummation by it of the transactions
contemplated hereby and thereby have been duly authorized by all necessary corporate action
and no further consent or authorization of the Company or its Board of Directors or
stockholders is required. Each of this Agreement and the other Transaction Documents has
been duly executed and delivered by the Company and constitutes a valid and binding
obligation of the Company enforceable against the Company in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy, insolvency, or similar
laws relating to, or affecting generally the enforcement of, creditors' rights and remedies or by
other equitable principles of general application.
Section 4.3
CAPITALIZATION. Except as set forth on Schedule 4.3, the
Company has not issued any capital stock since its most recently filed periodic report under
the Exchange Act, other than pursuant to the exercise of employee stock options under the
Company’s stock option plans, the issuance of shares of Common Stock to employees
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pursuant to the Company’s employee stock purchase plans and pursuant to the conversion
and/or exercise of Common Stock Equivalents outstanding as of the date of the most recently
filed periodic report under the Exchange Act. No Person has any right of first refusal,
preemptive right, right of participation, or any similar right to participate in the transactions
contemplated by the Transaction Documents. Except as set forth on Schedule 4.3 and except
as a result of the purchase and sale of the Securities, there are no outstanding options,
warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities, rights or obligations convertible into or exercisable or exchangeable
for, or giving any Person any right to subscribe for or acquire any shares of Common Stock, or
contracts, commitments, understandings or arrangements by which the Company or any
Subsidiary is or may become bound to issue additional shares of Common Stock or Common
Stock Equivalents. The issuance and sale of the Securities will not obligate the Company to
issue shares of Common Stock or other securities to any Person (other than the Investor) and
will not result in a right of any holder of Company securities to adjust the exercise,
conversion, exchange or reset price under any of such securities. There are no stockholders
agreements, voting agreements or other similar agreements with respect to the Company’s
capital stock to which the Company is a party or, to the knowledge of the Company, between
or among any of the Company’s stockholders.
Section 4.4
LISTING AND MAINTENANCE REQUIREMENTS.
The
Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the
Company has taken no action designed to, or which to its knowledge is likely to have the
effect of, terminating the registration of the Common Stock under the Exchange Act nor has
the Company received any notification that the SEC is contemplating terminating such
registration. The Company has not, in the twelve (12) months preceding the date hereof,
received notice from the Principal Market on which the Common Stock is or has been listed or
quoted to the effect that the Company is not in compliance with the listing or maintenance
requirements of such Principal Market. The Company is, and has no reason to believe that it
will not in the foreseeable future continue to be, in compliance with all such listing and
maintenance requirements.
Section 4.5
SEC DOCUMENTS; DISCLOSURE. Except as set forth on
Schedule 4.5, the Company has filed all reports, schedules, forms, statements and other
documents required to be filed by the Company under the Securities Act and the Exchange
Act, including pursuant to Section 13(a) or 15(d) thereof, for the one (1) year preceding the
date hereof (or such shorter period as the Company was required by law or regulation to file
such material) (the foregoing materials, including the exhibits thereto and documents
incorporated by reference therein, being collectively referred to herein as the “SEC
Documents”) on a timely basis or has received a valid extension of such time of filing and has
filed any such SEC Documents prior to the expiration of any such extension. As of their
respective dates, the SEC Documents complied in all material respects with the requirements
of the Securities Act and the Exchange Act, as applicable, and other federal laws, rules and
regulations applicable to such SEC Documents, and none of the SEC Documents when filed
contained any untrue statement of a material fact or omitted to state a material fact required to
be stated therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The financial statements of the
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Company included in the SEC Documents comply as to form and substance in all material
respects with applicable accounting requirements and the published rules and regulations of
the SEC or other applicable rules and regulations with respect thereto. Such financial
statements have been prepared in accordance with generally accepted accounting principles
applied on a consistent basis during the periods involved (except (a) as may be otherwise
indicated in such financial statements or the notes thereto or (b) in the case of unaudited
interim statements, to the extent they may not include footnotes or may be condensed or
summary statements) and fairly present in all material respects the financial position of the
Company as of the dates thereof and the results of operations and cash flows for the periods
then ended (subject, in the case of unaudited statements, to normal, immaterial, year-end audit
adjustments). Except with respect to the material terms and conditions of the transactions
contemplated by the Transaction Documents, the Company confirms that neither it nor any
other Person acting on its behalf has provided the Investor or its agents or counsel with any
information that it believes constitutes or might constitute material, non-public information.
The Company understands and confirms that the Investor will rely on the foregoing
representation in effecting transactions in securities of the Company.
Section 4.6
VALID ISSUANCES. The Securities are duly authorized and, when
issued and paid for in accordance with the applicable Transaction Documents, will be duly and
validly issued, fully paid, and non-assessable, free and clear of all Liens imposed by the
Company other than restrictions on transfer provided for in the Transaction Documents.
Section 4.7
NO CONFLICTS. The execution, delivery and performance of this
Agreement and the other Transaction Documents by the Company and the consummation by
the Company of the transactions contemplated hereby and thereby, including, without
limitation, the issuance of the Put Shares and the Commitment Shares, do not and will not: (a)
result in a violation of the Company’s or any Subsidiary’s certificate or articles of
incorporation, by-laws or other organizational or charter documents, (b) conflict with, or
constitute a material default (or an event that with notice or lapse of time or both would
become a material default) under, result in the creation of any Lien upon any of the properties
or assets of the Company or any Subsidiary, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture, instrument or any
"lock-up" or similar provision of any underwriting or similar agreement to which the
Company or any Subsidiary is a party, or (c) result in a violation of any federal, state or local
law, rule, regulation, order, judgment or decree (including federal and state securities laws and
regulations) applicable to the Company or any Subsidiary or by which any property or asset of
the Company or any Subsidiary is bound or affected (except for such conflicts, defaults,
terminations, amendments, accelerations, cancellations and violations as would not,
individually or in the aggregate, have a Material Adverse Effect) nor is the Company
otherwise in violation of, conflict with or in default under any of the foregoing. The business
of the Company is not being conducted in violation of any law, ordinance or regulation of any
governmental entity, except for possible violations that either singly or in the aggregate do not
and will not have a Material Adverse Effect. The Company is not required under federal, state
or local law, rule or regulation 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 the other Transaction Documents
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(other than any SEC, FINRA or state securities filings that may be required to be made by the
Company subsequent to any Closing or any registration statement that may be filed pursuant
hereto); provided that, for purposes of the representation made in this sentence, the Company
is assuming and relying upon the accuracy of the relevant representations and agreements of
Investor herein.
Section 4.8
NO MATERIAL ADVERSE CHANGE. No event has occurred that
would have a Material Adverse Effect on the Company that has not been disclosed in
subsequent SEC filings.
Section 4.9
LITIGATION AND OTHER PROCEEDINGS. Except as disclosed
in the SEC Documents or as set forth on Schedule 4.9, there are no actions, suits,
investigations, inquiries or proceedings pending or, to the knowledge of the Company,
threatened against or affecting the Company, any Subsidiary or any of their respective
properties, nor has the Company received any written or oral notice of any such action, suit,
proceeding, inquiry or investigation, which would have a Material Adverse Effect. No
judgment, order, writ, injunction or decree or award has been issued by or, to the knowledge
of the Company, requested of any court, arbitrator or governmental agency which would have
a Material Adverse Effect. There has not been, and to the knowledge of the Company, there is
not pending or contemplated, any investigation by the SEC involving the Company, any
Subsidiary or any current or former director or officer of the Company or any Subsidiary.
Section 4.10
REGISTRATION RIGHTS. Except as set forth on Schedule 4.10,
no Person (other than the Investor) has any right to cause the Company to effect the
registration under the Securities Act of any securities of the Company or any Subsidiary.
ARTICLE V
COVENANTS OF INVESTOR
Section 5.1
COMPLIANCE WITH LAW; TRADING IN SECURITIES. The
Investor's trading activities with respect to shares of Common Stock will be in compliance
with all applicable state and federal securities laws and regulations and the rules and
regulations of FINRA and the Principal Market.
Section 5.2
SHORT SALES AND CONFIDENTIALITY. Neither the Investor,
nor any affiliate of the Investor acting on its behalf or pursuant to any understanding with it,
will execute any Short Sales during the period from the date hereof to the end of the
Commitment Period. For the purposes hereof, and in accordance with Regulation SHO, the
sale after delivery of a Put Notice of such number of shares of Common Stock reasonably
expected to be purchased under a Put Notice shall not be deemed a Short Sale. The Investor
shall, until such time as the transactions contemplated by this Agreement are publicly
disclosed by the Company in accordance with the terms of this Agreement, maintain the
confidentiality of the existence and terms of this transaction and the information included in
the Transaction Documents.
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ARTICLE VI
COVENANTS OF THE COMPANY
Section 6.1
[Intentionally Omitted.]
Section 6.2
LISTING OF COMMON STOCK. The Company shall promptly
secure the listing of all of the Put Shares and Commitment Shares to be issued to the Investor
hereunder on the Principal Market (subject to official notice of issuance) and shall use
commercially reasonable best efforts to maintain, so long as any shares of Common Stock
shall be so listed, the listing of all such Put Shares and Commitment Shares from time to time
issuable hereunder. The Company shall use its commercially reasonable efforts to continue
the listing and trading of the Common Stock on the Principal Market (including, without
limitation, maintaining sufficient net tangible assets) and will comply in all respects with the
Company's reporting, filing and other obligations under the bylaws or rules of FINRA and the
Principal Market.
Section 6.3
OTHER EQUITY LINES. So long as this Agreement remains in
effect, the Company covenants and agrees that it will not, without the prior written consent of
the Investor, enter into any other equity line of credit agreement with any other party. For the
avoidance of doubt, nothing contained in the Transaction Documents shall restrict, or require
the Investor's consent for, any agreement providing for the issuance or distribution of any
equity securities of the Company pursuant to any agreement or arrangement that is not covered
in this Section 6.3.
Section 6.4
FILING OF CURRENT REPORT AND REGISTRATION
STATEMENT. The Company agrees that it shall file a Current Report on Form 8-K, including
the Transaction Documents as exhibits thereto, with the SEC within the time required by the
Exchange Act, relating to the transactions contemplated by, and describing the material terms
and conditions of, the Transaction Documents (the “Current Report”). The Company shall
permit the Investor to review and comment upon the final pre-filing draft version of the
Current Report at least one (1) Trading Day prior to its filing with the SEC, and the Company
shall give reasonable consideration to all such comments. The Investor shall use its reasonable
best efforts to comment upon the final pre-filing draft version of the Current Report within one
(1) Trading Day from the date the Investor receives it from the Company. The Company shall
also file with the SEC, within thirty (30) calendar days from the date hereof, a new registration
statement (the “Registration Statement”) covering only the resale of the Put Shares and the
Commitment Shares. The Company shall use its reasonable best efforts to have the
Registration Statement declared effective by the SEC within ninety (90) calendar days from
the date hereof (or at the earliest possible date if prior to ninety (90) calendar days from the
date hereof).
ARTICLE VII
CONDITIONS TO DELIVERY OF
PUT NOTICES AND CONDITIONS TO CLOSING
12
Section 7.1
CONDITIONS PRECEDENT TO THE RIGHT OF THE COMPANY
TO ISSUE AND SELL PUT SHARES. The right of the Company to issue and sell the Put
Shares to the Investor is subject to the satisfaction of each of the conditions set forth below:
(a)
ACCURACY OF INVESTOR'S REPRESENTATIONS AND
WARRANTIES. The representations and warranties of the Investor shall be true and correct in
all material respects as of the date of this Agreement and as of the date of each Closing as
though made at each such time.
(b)
PERFORMANCE BY INVESTOR. Investor shall have performed,
satisfied and complied in all respects with all covenants, agreements and conditions required
by this Agreement to be performed, satisfied or complied with by the Investor at or prior to
such Closing.
(c)
PRINCIPAL MARKET REGULATION. The Company shall not issue
any Put Shares, and the Investor shall not have the right to receive any Put Shares, if the
issuance of such Put Shares would exceed the aggregate number of shares of Common Stock
which the Company may issue without breaching the Company’s obligations under the rules
or regulations of the Principal Market (the “Exchange Cap”).
Section 7.2
CONDITIONS PRECEDENT TO THE OBLIGATION OF
INVESTOR TO PURCHASE PUT SHARES. The obligation of the Investor hereunder to
purchase Put Shares is subject to the satisfaction of each of the following conditions:
(a)
EFFECTIVE REGISTRATION STATEMENT. The Registration
Statement, and any amendment or supplement thereto, shall remain effective for the resale by
the Investor of the Put Shares and the Commitment Shares and (i) neither the Company nor the
Investor shall have received notice that the SEC has issued or intends to issue a stop order with
respect to such Registration Statement or that the SEC otherwise has suspended or withdrawn
the effectiveness of such Registration Statement, either temporarily or permanently, or intends
or has threatened to do so and (ii) no other suspension of the use of, or withdrawal of the
effectiveness of, such Registration Statement or related prospectus shall exist.
(b)
ACCURACY OF THE COMPANY'S REPRESENTATIONS AND
WARRANTIES. The representations and warranties of the Company shall be true and correct
in all material respects as of the date of this Agreement and as of the date of each Closing
(except for representations and warranties specifically made as of a particular date).
(c)
PERFORMANCE BY THE COMPANY. The Company shall have
performed, satisfied and complied in all material respects with all covenants, agreements and
conditions required by this Agreement to be performed, satisfied or complied with by the
Company.
(d)
NO INJUNCTION. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or adopted by any
court or governmental authority of competent jurisdiction that prohibits or directly and
13
materially adversely affects any of the transactions contemplated by the Transaction
Documents, and no proceeding shall have been commenced that may have the effect of
prohibiting or materially adversely affecting any of the transactions contemplated by the
Transaction Documents.
(e)
ADVERSE CHANGES. Since the date of filing of the Company's most
recent SEC Document, no event that had or is reasonably likely to have a Material Adverse
Effect has occurred.
(f)
NO SUSPENSION OF TRADING IN OR DELISTING OF COMMON
STOCK. The trading of the Common Stock shall not have been suspended by the SEC, the
Principal Market or FINRA, or otherwise halted for any reason, and the Common Stock shall
have been approved for listing or quotation on and shall not have been delisted from the
Principal Market. In the event of a suspension, delisting, or halting for any reason, of the
trading of the Common Stock, as contemplated by this Section 7.2(f), the Investor shall have
the right to return to the Company any remaining amount of Put Shares associated with such
Put, and the Purchase Price with respect to such Put shall be reduced accordingly.
(g)
BENEFICIAL OWNERSHIP LIMITATION. The number of Put
Shares then to be purchased by the Investor shall not exceed the number of such shares that,
when aggregated with all other shares of Common Stock then owned by the Investor
beneficially or deemed beneficially owned by the Investor, would result in the Investor
owning more than the Beneficial Ownership Limitation (as defined below), as determined in
accordance with Section 16 of the Exchange Act and the regulations promulgated thereunder.
For purposes of this Section 7.2(g), in the event that the amount of Common Stock
outstanding, as determined in accordance with Section 16 of the Exchange Act and the
regulations promulgated thereunder, is greater on a Closing Date than on the date upon which
the Put Notice associated with such Closing Date is given, the amount of Common Stock
outstanding on such Closing Date shall govern for purposes of determining whether the
Investor, when aggregating all purchases of Common Stock made pursuant to this Agreement,
would own more than the Beneficial Ownership Limitation following such Closing Date. The
“Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common
Stock outstanding immediately after giving effect to the issuance of shares of Common Stock
issuable pursuant to a Put Notice.
(h)
PRINCIPAL MARKET REGULATION. The issuance of the Put
Shares shall not exceed the Exchange Cap.
(i)
NO KNOWLEDGE. The Company shall have no knowledge of any
event more likely than not to have the effect of causing the Registration Statement to be
suspended or otherwise ineffective (which event is more likely than not to occur within the
fifteen (15) Trading Days following the Trading Day on which such Put Notice is deemed
delivered).
14
(j)
NO
VIOLATION
OF
SHAREHOLDER
APPROVAL
REQUIREMENT. The issuance of the Put Shares shall not violate the shareholder approval
requirements of the Principal Market.
(k)
OFFICER’S CERTIFICATE. On the date of delivery of each Put Notice,
the Investor shall have received the Closing Certificate executed by an executive officer of the
Company and to the effect that all the conditions to such Closing shall have been satisfied as
of the date of each such certificate.
(l)
DWAC ELIGIBLE. The Common Stock must be DWAC Eligible and
not subject to a “DTC chill.”
(m)
SEC DOCUMENTS. All reports, schedules, registrations, forms,
statements, information and other documents required to have been filed by the Company with
the SEC pursuant to the reporting requirements of the Exchange Act shall have been filed with
the SEC within the applicable time periods prescribed for such filings under the Exchange
Act.
(n)
RESERVE. The Company shall have reserved 300% of the Required
Minimum for the Investor’s benefit under this Agreement, and satisfied the reserve
requirements with respect to all other contracts between the Company and Investor.
(o)
MINIMUM PRICING. The lowest traded price of the Common Stock in
the ten (10) Trading Days immediately preceding the respective Put Date must exceed $0.01
per share (the “Minimum Pricing”).
ARTICLE VIII
LEGENDS
Section 8.1
NO RESTRICTIVE STOCK LEGEND. No restrictive stock legend
shall be placed on the share certificates representing the Put Shares.
Section 8.2
INVESTOR'S COMPLIANCE. Nothing in this Article VIII shall
affect in any way the Investor's obligations hereunder to comply with all applicable securities
laws upon the sale of the Common Stock.
ARTICLE IX
NOTICES; INDEMNIFICATION
Section 9.1
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 (a) personally served, (b) deposited in the mail, registered
or certified, return receipt requested, postage prepaid, (c) delivered by reputable air courier
service with charges prepaid, or (d) transmitted by hand delivery, telegram, or email as a PDF,
addressed as set forth below or to such other address as such party shall have specified most
15
recently by written notice given in accordance herewith. Any notice or other communication
required or permitted to be given hereunder shall be deemed effective (i) upon hand delivery
or delivery by email at the address 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 (ii) on the second business day following the date of mailing
by express courier service or on the fifth business day after deposited in the mail, in each case,
fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever
shall first occur.
The addresses for such communications shall be:
If to the Company:
Parallax Health Sciences, Inc.
0000 Xxxxx Xxxxxx, Xxxxx X
Xxxxx Xxxxxx, XX 00000
Email: xxxx@xxxxxxxxxxxxxxxxxxxxxx.xxx
Attention: Xxxx Xxxxx
If to the Investor:
Peak One Opportunity Fund, L.P.
000 Xxxxx Xxxxxxxx Xxxxx
Xxxxx Xxxxx, XX 00000
E-mail: XXxxxxxxxx@XxxxXxxXxxxxxxxxxx.xxx
Attention: Xxxxx Xxxxxxxxx
Either party hereto may from time to time change its address or email for notices under this
Section 9.1 by giving at least ten (10) days' prior written notice of such changed address to the
other party hereto.
Section 9.2
INDEMNIFICATION. Each party (an “Indemnifying Party”) agrees
to indemnify and hold harmless the other party along with its officers, directors, employees,
and authorized agents, and each Person or entity, if any, who controls such party within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (an
“Indemnified Party”) from and against any Damages, joint or several, and any action in
respect thereof to which the Indemnified Party becomes subject to, resulting from, arising out
of or relating to (i) any misrepresentation, breach of warranty or nonfulfillment of or failure to
perform any covenant or agreement on the part of the Indemnifying Party contained in this
Agreement, (ii) any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement or any post-effective amendment thereof or supplement thereto,
or the omission or alleged omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading, (iii) any untrue statement or alleged
untrue statement of a material fact contained in any preliminary prospectus or contained in the
16
final prospectus (as amended or supplemented, if the Company files any amendment thereof or
supplement thereto with the SEC) or the omission or alleged omission to state therein any
material fact necessary to make the statements made therein, in the light of the circumstances
under which the statements therein were made, not misleading, or (iv) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any state securities law or
any rule or regulation under the Securities Act, the Exchange Act or any state securities law,
as such Damages are incurred, except to the extent such Damages result primarily from the
Indemnified Party's failure to perform any covenant or agreement contained in this Agreement
or the Indemnified Party's negligence, recklessness or bad faith in performing its obligations
under this Agreement; provided, however, that the foregoing indemnity agreement shall not
apply to any Damages of an Indemnified Party to the extent, but only to the extent, arising out
of or based upon any untrue statement or alleged untrue statement or omission or alleged
omission made by an Indemnifying Party in reliance upon and in conformity with written
information furnished to the Indemnifying Party by the Indemnified Party expressly for use in
the Registration Statement, any post-effective amendment thereof or supplement thereto, or
any preliminary prospectus or final prospectus (as amended or supplemented).
Section 9.3
METHOD OF ASSERTING INDEMNIFICATION CLAIMS. All
claims for indemnification by any Indemnified Party under Section 9.2 shall be asserted and
resolved as follows:
(a)
In the event any claim or demand in respect of which an Indemnified
Party might seek indemnity under Section 9.2 is asserted against or sought to be collected
from such Indemnified Party by a Person other than a party hereto or an affiliate thereof (a
"Third Party Claim"), the Indemnified Party shall deliver a written notification, enclosing a
copy of all papers served, if any, and specifying the nature of and basis for such Third Party
Claim and for the Indemnified Party's claim for indemnification that is being asserted under
any provision of Section 9.2 against an Indemnifying Party, together with the amount or, if not
then reasonably ascertainable, the estimated amount, determined in good faith, of such Third
Party Claim (a "Claim Notice") with reasonable promptness to the Indemnifying Party. If the
Indemnified Party fails to provide the Claim Notice with reasonable promptness after the
Indemnified Party receives notice of such Third Party Claim, the Indemnifying Party shall not
be obligated to indemnify the Indemnified Party with respect to such Third Party Claim to the
extent that the Indemnifying Party's ability to defend has been prejudiced by such failure of
the Indemnified Party. The Indemnifying Party shall notify the Indemnified Party as soon as
practicable within the period ending thirty (30) calendar days following receipt by the
Indemnifying Party of either a Claim Notice or an Indemnity Notice (as defined below) (the
"Dispute Period") whether the Indemnifying Party disputes its liability or the amount of its
liability to the Indemnified Party under Section 9.2 and whether the Indemnifying Party
desires, at its sole cost and expense, to defend the Indemnified Party against such Third Party
Claim.
(i)
If the Indemnifying Party notifies the Indemnified Party within the
Dispute Period that the Indemnifying Party desires to defend the Indemnified Party with
respect to the Third Party Claim pursuant to this Section 9.3(a), then the Indemnifying Party
shall have the right to defend, with counsel reasonably satisfactory to the Indemnified Party, at
17
the sole cost and expense of the Indemnifying Party, such Third Party Claim by all appropriate
proceedings, which proceedings shall be vigorously and diligently prosecuted by the
Indemnifying Party to a final conclusion or will be settled at the discretion of the Indemnifying
Party (but only with the consent of the Indemnified Party in the case of any settlement that
provides for any relief other than the payment of monetary damages or that provides for the
payment of monetary damages as to which the Indemnified Party shall not be indemnified in
full pursuant to Section 9.2). The Indemnifying Party shall have full control of such defense
and proceedings, including any compromise or settlement thereof; provided, however, that the
Indemnified Party may, at the sole cost and expense of the Indemnified Party, at any time prior
to the Indemnifying Party's delivery of the notice referred to in the first sentence of this clause
(i), file any motion, answer or other pleadings or take any other action that the Indemnified
Party reasonably believes to be necessary or appropriate to protect its interests; and provided,
further, that if requested by the Indemnifying Party, the Indemnified Party will, at the sole cost
and expense of the Indemnifying Party, provide reasonable cooperation to the Indemnifying
Party in contesting any Third Party Claim that the Indemnifying Party elects to contest. The
Indemnified Party may participate in, but not control, any defense or settlement of any Third
Party Claim controlled by the Indemnifying Party pursuant to this clause (i), and except as
provided in the preceding sentence, the Indemnified Party shall bear its own costs and
expenses with respect to such participation. Notwithstanding the foregoing, the Indemnified
Party may takeover the control of the defense or settlement of a Third Party Claim at any time
if it irrevocably waives its right to indemnity under Section 9.2 with respect to such Third
Party Claim.
(ii)
If the Indemnifying Party fails to notify the Indemnified Party
within the Dispute Period that the Indemnifying Party desires to defend the Third Party Claim
pursuant to Section 9.3(a), or if the Indemnifying Party gives such notice but fails to prosecute
vigorously and diligently or settle the Third Party Claim, or if the Indemnifying Party fails to
give any notice whatsoever within the Dispute Period, then the Indemnified Party shall have
the right to defend, at the sole cost and expense of the Indemnifying Party, the Third Party
Claim by all appropriate proceedings, which proceedings shall be prosecuted by the
Indemnified Party in a reasonable manner and in good faith or will be settled at the discretion
of the Indemnified Party(with the consent of the Indemnifying Party, which consent will not
be unreasonably withheld). The Indemnified Party will have full control of such defense and
proceedings, including any compromise or settlement thereof; provided, however, that if
requested by the Indemnified Party, the Indemnifying Party will, at the sole cost and expense
of the Indemnifying Party, provide reasonable cooperation to the Indemnified Party and its
counsel in contesting any Third Party Claim which the Indemnified Party is contesting.
Notwithstanding the foregoing provisions of this clause (ii), if the Indemnifying Party has
notified the Indemnified Party within the Dispute Period that the Indemnifying Party disputes
its liability or the amount of its liability hereunder to the Indemnified Party with respect to
such Third Party Claim and if such dispute is resolved in favor of the Indemnifying Party in
the manner provided in clause (iii) below, the Indemnifying Party will not be required to bear
the costs and expenses of the Indemnified Party's defense pursuant to this clause (ii) or of the
Indemnifying Party's participation therein at the Indemnified Party's request, and the
Indemnified Party shall reimburse the Indemnifying Party in full for all reasonable costs and
expenses incurred by the Indemnifying Party in connection with such litigation. The
18
Indemnifying Party may participate in, but not control, any defense or settlement controlled by
the Indemnified Party pursuant to this clause (ii), and the Indemnifying Party shall bear its
own costs and expenses with respect to such participation.
(iii)
If the Indemnifying Party notifies the Indemnified Party that it does
not dispute its liability or the amount of its liability to the Indemnified Party with respect to
the Third Party Claim under Section 9.2 or fails to notify the Indemnified Party within the
Dispute Period whether the Indemnifying Party disputes its liability or the amount of its
liability to the Indemnified Party with respect to such Third Party Claim, the amount of
Damages specified in the Claim Notice shall be conclusively deemed a liability of the
Indemnifying Party under Section 9.2 and the Indemnifying Party shall pay the amount of
such Damages to the Indemnified Party on demand. If the Indemnifying Party has timely
disputed its liability or the amount of its liability with respect to such claim, the Indemnifying
Party and the Indemnified Party shall proceed in good faith to negotiate a resolution of such
dispute; provided, however, that if the dispute is not resolved within thirty (30) days after the
Claim Notice, the Indemnifying Party shall be entitled to institute such legal action as it deems
appropriate.
(b)
In the event any Indemnified Party should have a claim under Section
9.2 against the Indemnifying Party that does not involve a Third Party Claim, the Indemnified
Party shall deliver a written notification of a claim for indemnity under Section 9.2 specifying
the nature of and basis for such claim, together with the amount or, if not then reasonably
ascertainable, the estimated amount, determined in good faith, of such claim (an "Indemnity
Notice") with reasonable promptness to the Indemnifying Party. The failure by any
Indemnified Party to give the Indemnity Notice shall not impair such party's rights hereunder
except to the extent that the Indemnifying Party demonstrates that it has been irreparably
prejudiced thereby. If the Indemnifying Party notifies the Indemnified Party that it does not
dispute the claim or the amount of the claim described in such Indemnity Notice or fails to
notify the Indemnified Party within the Dispute Period whether the Indemnifying Party
disputes the claim or the amount of the claim described in such Indemnity Notice, the amount
of Damages specified in the Indemnity Notice will be conclusively deemed a liability of the
Indemnifying Party under Section 9.2 and the Indemnifying Party shall pay the amount of such
Damages to the Indemnified Party on demand. If the Indemnifying Party has timely disputed
its liability or the amount of its liability with respect to such claim, the Indemnifying Party and
the Indemnified Party shall proceed in good faith to negotiate a resolution of such dispute;
provided, however, that if the dispute is not resolved within thirty (30) days after the Claim
Notice, the Indemnifying Party shall be entitled to institute such legal action as it deems
appropriate.
(c)
The Indemnifying Party agrees to pay the Indemnified Party, promptly
as such expenses are incurred and are due and payable, for any reasonable legal fees or other
reasonable expenses incurred by them in connection with investigating or defending any such
Claim.
19
(d)
The indemnity provisions contained herein shall be in addition to (i)
any cause of action or similar rights of the Indemnified Party against the Indemnifying Party
or others, and (ii) any liabilities the Indemnifying Party may be subject to.
ARTICLE X
MISCELLANEOUS
Section 10.1
GOVERNING LAW; JURISDICTION. This Agreement shall be
governed by and interpreted in accordance with the laws of the State of Nevada without regard
to the principles of conflicts of law. Each of the Company and the Investor hereby submits to
the exclusive jurisdiction of the United States federal and state courts located in Florida,
County of Miami-Dade, with respect to any dispute arising under the Transaction Documents
or the transactions contemplated thereby.
Section 10.2
[Intentionally Omitted.]
Section 10.3
ASSIGNMENT. This Agreement shall be binding upon and inure
to the benefit of the Company and the Investor and their respective successors. Neither this
Agreement nor any rights of the Investor or the Company hereunder may be assigned by either
party to any other Person.
Section 10.4
NO THIRD PARTY BENEFICIARIES. This Agreement is intended
for the benefit of the Company and the Investor and their respective successors, and is not for
the benefit of, nor may any provision hereof be enforced by, any other Person, except as set
forth in Section 9.3.
Section 10.5
TERMINATION. The Company may terminate this Agreement at
any time by written notice to the Investor, except during any Valuation Period or at any time
that the Investor holds any of the Put Shares. In addition, this Agreement shall automatically
terminate at the end of the Commitment Period.
Section 10.6
ENTIRE AGREEMENT. The Transaction Documents, together
with the exhibits and schedules thereto, contain the entire understanding of the Company and
the Investor with respect to the matters covered herein and therein and supersede all prior
agreements and understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and schedules.
Section 10.7
FEES AND EXPENSES. Except as expressly set forth in the
Transaction Documents or any other writing to the contrary, each party shall pay the fees and
expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution, delivery and
performance of this Agreement. The Company shall pay all Transfer Agent fees (including,
without limitation, any fees required for same-day processing of any instruction letter
delivered by the Company), stamp taxes and other taxes and duties levied in connection with
the delivery of any Securities to the Investor. Upon execution of this Agreement, the
Company shall issue the Commitment Shares (400,000 of which shall be issued to Investor
20
and 400,000 of which shall be issued to Investments) for its commitment to enter into this
Agreement. The Commitment Shares shall be earned in full upon the execution of this
Agreement, and the Commitment Shares are not contingent upon any other event or condition,
including but not limited to the effectiveness of the Registration Statement or the Company’s
submission of a Put Notice to the Investor.
Section 10.8
COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which may be executed by less than all of the parties and shall be
deemed to be an original instrument which shall be enforceable against the parties actually
executing such counterparts and all of which together shall constitute one and the same
instrument. This Agreement may be delivered to the other parties hereto by email of a copy of
this Agreement bearing the signature of the parties so delivering this Agreement.
Section 10.9
SEVERABILITY. In the event that any provision of this
Agreement becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect without said
provision; provided that such severability shall be ineffective if it materially changes the
economic benefit of this Agreement to any party.
Section 10.10
FURTHER ASSURANCES. Each party shall do and perform, or
cause to be done and performed, all such further acts and things, and shall execute and deliver
all such other agreements, certificates, instruments and documents, as the other party may
reasonably request in order to carry out the intent and accomplish the purposes of this
Agreement and the consummation of the transactions contemplated hereby.
Section 10.11
NO STRICT CONSTRUCTION. The language used in this
Agreement will be deemed to be the language chosen by the parties to express their mutual
intent, and no rules of strict construction will be applied against any party.
Section 10.12
EQUITABLE RELIEF. The Company recognizes that in the event
that it fails to perform, observe, or discharge any or all of its obligations under this Agreement,
any remedy at law may prove to be inadequate relief to the Investor. The Company therefore
agrees that the Investor shall be entitled to temporary and permanent injunctive relief in any
such case without the necessity of proving actual damages.
Section 10.13
TITLE AND SUBTITLES. The titles and subtitles used in this
Agreement are used for the convenience of reference and are not to be considered in
construing or interpreting this Agreement.
Section 10.14
AMENDMENTS; WAIVERS. No provision of this Agreement may
be amended or waived by the parties from and after the date that is one (1) Trading Day
immediately preceding the initial filing of the Registration Statement with the SEC. Subject to
the immediately preceding sentence, (i) no provision of this Agreement may be amended other
than by a written instrument signed by both parties hereto and (ii) no provision of this Agreement
may be waived other than in a written instrument signed by the party against whom enforcement
of such waiver is sought. No failure or delay in the exercise of any power, right or privilege
21
hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such
power, right or privilege preclude other or further exercise thereof or of any other right, power or
privilege.
Section 10.15
PUBLICITY. The Company and the Investor shall consult with
each other in issuing any press releases or otherwise making public statements with respect to
the transactions contemplated hereby and no party shall issue any such press release or
otherwise make any such public statement, other than as required by law, without the prior
written consent of the other parties, which consent shall not be unreasonably withheld or
delayed, except that no prior consent shall be required if such disclosure is required by law, in
which such case the disclosing party shall provide the other party with prior notice of such
public statement. Notwithstanding the foregoing, the Company shall not publicly disclose the
name of the Investor without the prior written consent of the Investor, except to the extent
required by law. The Investor acknowledges that this Agreement and all or part of the
Transaction Documents may be deemed to be "material contracts," as that term is defined by
Item 601(b)(10) of Regulation S-K, and that the Company may therefore be required to file
such documents as exhibits to reports or registration statements filed under the Securities Act
or the Exchange Act. The Investor further agrees that the status of such documents and
materials as material contracts shall be determined solely by the Company, in consultation
with its counsel.
[Signature Page Follows]
22
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
by their respective officers thereunto duly authorized as of the day and year first above written.
THE COMPANY:
PARALLAX HEALTH SCIENCES, INC.
By:______________________
Name: Xxxx Xxxxx
Title: Chief Executive Officer
INVESTOR:
PEAK ONE OPPORTUNITY FUND, L.P.
By: Peak One Investments, LLC,
General Partner
By: ___________________________________
Name: Xxxxx Xxxxxxxxx
Title: Managing Member
[Signature Page to equity purchase agreement]
23
DISCLOSURE SCHEDULES TO
Schedule 4.3 – Capitalization
None.
Schedule 4.5 – SEC Documents
None.
Schedule 4.9 – Litigation
None.
Schedule 4.10 – Registration Rights
None.
EXHIBIT A
FORM OF PUT NOTICE
TO: PEAK ONE OPPORTUNITY FUND, L.P.
DATE: ____________________
We refer to the equity purchase agreement, dated November 14, 2018 (the
“Agreement”), entered into by and between Parallax Health Sciences, Inc. and you.
Capitalized terms defined in the Agreement shall, unless otherwise defined herein, have the
same meaning when used herein.
We hereby:
1) Give you notice that we require you to purchase
Put Shares at an initial
purchase price per share of ____________; and
2) Certify that, as of the date hereof, the conditions set forth in Section 7.2 of the Agreement
are satisfied.
PARALLAX HEALTH SCIENCES, INC.
By: _______________________
Name: Xxxx Xxxxx
Title: Chief Executive Officer
EXHIBIT B
FORM OF OFFICER’S CERTIFICATE
OF PARALLAX HEALTH SCIENCES, INC.
Pursuant to Section 7.2(k) of that certain equity purchase agreement, dated
November 14, 2018 (the “Agreement”), by and between Parallax Health Sciences, Inc. (the
“Company”) and Peak One Opportunity Fund, L.P. (the “Investor”), the undersigned, in his
capacity as Chief Executive Officer of the Company, and not in his individual capacity, hereby
certifies, as of the date hereof (such date, the “Condition Satisfaction Date”), the following:
1.
The representations and warranties of the Company are true and correct in
all material respects as of the Condition Satisfaction Date as though made on the Condition
Satisfaction Date (except for representations and warranties specifically made as of a
particular date) with respect to all periods, and as to all events and circumstances occurring or
existing to and including the Condition Satisfaction Date, except for any conditions which
have temporarily caused any representations or warranties of the Company set forth in the
Agreement to be incorrect and which have been corrected with no continuing impairment to
the Company or the Investor; and
2.
All of the conditions precedent to the obligation of the Investor to
purchase Put Shares set forth in the Agreement, including but not limited to Section 7.2 of the
Agreement, have been satisfied as of the Condition Satisfaction Date.
Capitalized terms used herein shall have the meanings set forth in the Agreement
unless otherwise defined herein.
IN WITNESS WHEREOF, the undersigned has hereunto affixed his hand as of the
________, 20__.
By: _______________________
Name: Xxxx Xxxxx
Title: Chief Executive Officer