COMMON STOCK PURCHASE AGREEMENT
Exhibit
10.36
Execution
Copy
This
Common Stock Purchase Agreement (this “Agreement”) is made
as of July 24, 2009, by and between NeoGenomics, Inc., a Nevada corporation (the
“Company”), and
Xxxxxx Laboratories, an Illinois corporation (“Abbott”).
WITNESSETH
WHEREAS, subject to the terms
and conditions set forth in this Agreement, the Company desires to issue and
sell to Abbott, and Abbott desires to purchase from the Company, 3,500,000
shares (the “Shares”) of common
stock of the Company, $0.001 par value per share (the “Common
Stock”).
NOW, THEREFORE, in
consideration of the mutual covenants contained in this Agreement, and for other
good and valuable consideration the receipt and adequacy of which are hereby
acknowledged, the Company and Abbott agree as follows:
Section
1.
Definitions
In
addition to the terms defined elsewhere in this Agreement, for all purposes of
this Agreement, the following terms have the meanings indicated in this Section
1:
“Commission” means the
Securities and Exchange Commission.
“Common Stock” shall
have the meaning set forth in the Recital hereto.
“Disclosure Schedules”
means the disclosure schedules of the Company delivered concurrently
herewith.
“Environmental Laws”
shall have the meaning set forth in Section 4.11 of this
Agreement.
“Exchange Act” means
the Securities Exchange Act of 1934, as amended.
“Indemnified
Liabilities” shall have the meaning set forth in Section 7 of this
Agreement.
“Indemnitees” shall
have the meaning set forth in Section 7 of this
Agreement.
“Person” means an
individual or corporation, partnership, trust, incorporated or unincorporated
association, joint venture, limited liability company, joint stock company,
government (or an agency or subdivision thereof) or other entity of any
kind.
“Registration Rights
Agreement” means the Registration Rights Agreement of even date herewith
between the Company and Abbott.
1
“SEC” means the United
States Securities and Exchange Commission.
“SEC Reports” shall
have the meaning set forth in Section 4.6
hereto.
“Securities Act” means
the Securities Act of 1933, as amended.
“Subsidiary” means any
corporation, partnership, limited liability company, joint venture or other
legal entity of which the Company owns, directly or indirectly, 50% or more of
the stock or other equity interests.
“Transaction
Documents” means this Agreement and the Registration Rights
Agreement.
Section
2.
Sale and Purchase of
Stock
Subject
to the terms and conditions of this Agreement, Abbott agrees to purchase and the
Company agrees to sell and issue to Abbott the Shares for an aggregate purchase
price of $4,767,000 (the “Purchase
Price”).
Section
3.
Closing
3.1. Closing. The
purchase, sale and issuance of the Shares shall take place at a closing (the
“Closing”) to
be held at the offices of K&L Gates, LLP, 000 X. Xxxxxxxx Xxxx., Xxxxx 0000,
Xxxxx, Xxxxxxx, 00000 at 10:00 a.m., Eastern time, on the date hereof, or at
such other place, time and/or date as may be jointly designated by the Company
and Abbott (the “Closing
Date”).
3.2. Deliveries.
The Purchase Price for the Shares shall
be paid by Abbott to the Company at the Closing by wire transfer of immediately
available funds to an account or accounts to be designated by the
Company. Within three (3) business days following the Closing, the
Company will deliver to Abbott a certificate registered in Xxxxxx’x name
representing the Shares.
Section
4. Representations and
Warranties of the Company
Except as
set forth under the corresponding section of the Disclosure Schedules, which
Disclosure Schedules shall be deemed a part hereof, the Company hereby makes the
representations and warranties set forth below to Abbott:
4.1.
Organization and
Qualification. The
Company and each of its 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 (as applicable), with the
requisite power and authority to own and use its properties and assets and to
carry on its business as currently conducted. Each of the Company
and its 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 reasonably be expected to result in (i)
a material adverse effect on the legality, validity or enforceability of any
Transaction Document or the authority or ability of the Company to perform its
obligations under any Transaction Document, or (ii) a material adverse effect on
the operations, results of operations, assets, business, properties or financial
condition of the Company and its Subsidiaries, taken as a whole (any of (i) or
(ii), a “Material
Adverse Effect”). The Company has no Subsidiaries other than
as set forth on Schedule 4.1 of the
Disclosure Schedule.
2
4.2. Authorization;
Enforcement. The Company has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by each
of the Transaction Documents and otherwise to carry out its obligations
thereunder. The execution and delivery of each of the Transaction
Documents by the Company and the consummation by it of the transactions
contemplated thereby have been duly authorized by all necessary action on the
part of the Company. Each Transaction Document has been (or upon
delivery will have been) duly executed by the Company and, when delivered in
accordance with the terms hereof, will constitute the valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms except (i) as limited by general equitable principles and applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors’ rights generally, (ii) as
limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies and (iii) insofar as indemnification and
contribution provisions may be limited by applicable law.
4.3. Capitalization. As
of July 16, 2009, the authorized capital stock of the Company consists of (i)
100,000,000 shares of Common Stock, of which 33,077,424 shares were issued and
outstanding and (ii) 10,000,000 shares of Preferred Stock, $0.001 par value, of
which no shares were issued and outstanding. All such outstanding
shares have been, or upon issuance will be, validly issued and are fully paid
and nonassessable. Except as disclosed on Schedule 4.3 of the
Disclosure Schedule, (i) no shares of the Company’s capital stock are subject to
preemptive rights or any other similar rights or any liens or encumbrances
suffered or permitted by the Company, (ii) there are no outstanding debt
securities, (iii) there are no outstanding options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, any shares of capital stock of the
Company or any of its Subsidiaries, or contracts, commitments, understandings or
arrangements by which the Company or any of its Subsidiaries is or may become
bound to issue additional shares of capital stock of the Company or any of its
Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, any shares of capital stock of the Company or any of its
Subsidiaries, (iv) there are no agreements or arrangements under which the
Company or any of its Subsidiaries is obligated to register the sale of any of
their securities under the Securities Act (except the Registration Rights
Agreement, the Registration Rights Agreement dated November 5, 2008 between the
Company and Fusion Capital Fund II, LLC, the Amended and Restated Registration
Rights Agreement dated March 23, 2005 among the Company, Aspen Select
Healthcare, LP, Xxxx Xxxxxx, Xxxxxx Xxxxx, Xxxxx Xxxxxx and Xxxxxxx X. Xxxx,
M.D., and the Registration Rights Agreement dated March 30, 2006 among the
Company, Aspen Select Healthcare, LP and Xxxxxx X. Xxxxx), (v) there are no
outstanding securities or instruments of the Company or any of its Subsidiaries
which contain any redemption or similar provisions, and there are no contracts,
commitments, understandings or arrangements by which the Company or any of its
Subsidiaries is or may become bound to redeem a security of the Company or any
of its Subsidiaries, (vi) there are no securities or instruments containing
anti-dilution or similar provisions that will be triggered by the issuance of
the Securities as described in this Agreement and (vii) the Company does not
have any stock appreciation rights or "phantom stock" plans or agreements or any
similar plan or agreement. The Company has furnished or otherwise
made available to Abbott true and correct copies of the Company's articles of
incorporation, as amended and as in effect on the date hereof, and the Company's
by-laws, as amended and as in effect on the date hereof, and copies of any
documents containing the material rights of the holders of securities
convertible into or exercisable for Common Stock (or forms of such
documents). Upon issuance and payment therefor in accordance with the
terms and conditions of this Agreement, the Shares shall be validly issued,
fully paid and nonassessable and free from all taxes, liens and charges with
respect to the issue thereof.
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4.4. No
Conflicts. The
execution, delivery and performance of the Transaction Documents by the Company
and the consummation by the Company of the transactions contemplated thereby do
not and will not (i) conflict with or violate any material provision of the
Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws
or other organizational or charter documents, (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 to which
the Company or any of its Subsidiaries is a party, or (iii) conflict with or
result in a violation of any law, rule, regulation, order, judgment, injunction,
decree or other restriction of any court or governmental authority to which the
Company or a Subsidiary is subject, or by which any property or asset of the
Company or a Subsidiary is bound or affected, except in the case of clause (ii)
or (iii), such as could not reasonably be expected to result in a Material
Adverse Effect.
4.5. Brokers’
Fees. The Company has no liability or obligation to pay any
fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement.
4.6. SEC
Reports. The Company has made available to Abbott, including
through the SEC XXXXX system, complete and accurate copies of each report and
registration statement filed by the Company with the SEC between January 1, 2007
and the date of this Agreement (the “SEC
Reports”). At the time it was filed with the SEC (or, if
amended or superseded by a filing prior to the date of this Agreement, then on
the date of such filing) each of the SEC Reports complied in all material
respects with the applicable requirements of the Exchange Act or the Securities
Act, as applicable.
4.7. No Material
Changes. Since
June 30, 2009, except as specifically disclosed in the SEC Reports, there has
been no event, occurrence or development that has had or that would reasonably
be expected to result in a Material Adverse Effect, except as has been
reasonably cured by the Company.
4.8. Litigation. Except
as disclosed on Schedule 4.8 of the
Disclosure Schedule, there is no action, suit or proceeding pending or, to the
knowledge of the Company, threatened against or affecting the Company, any
Subsidiary or any of their respective properties before or by any court,
arbitrator, governmental or administrative agency or regulatory authority which
(i) adversely affects or challenges the legality, validity or enforceability of
any of the Transaction Documents or the Shares or (ii) could reasonably be
expected to result in a Material Adverse Effect.
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4.9 Tax
Status. The Company and each of its Subsidiaries has made or
filed all federal and state income and all other material tax returns, reports
and declarations required by any jurisdiction to which it is subject (unless and
only to the extent that the Company and each of its Subsidiaries has set aside
on its books provisions reasonably adequate for the payment of all unpaid and
unreported taxes) and has paid all taxes and other governmental assessments and
charges that are material in amount, shown or determined to be due on such
returns, reports and declarations, except those being contested in good faith
and has set aside on its books provision reasonably adequate for the payment of
all taxes for periods subsequent to the periods to which such returns, reports
or declarations apply. There are no unpaid taxes in any material
amount claimed to be due by the taxing authority of any jurisdiction, and the
officers of the Company know of no basis for any such claim.
4.10.
Intellectual Property
Rights. The Company and its Subsidiaries own or possess adequate rights
or licenses to use all material trademarks, trade names, service marks, service
xxxx registrations, service names, patents, patent rights, copyrights,
inventions, licenses, approvals, governmental authorizations, trade secrets and
other similar rights necessary to conduct their respective businesses as now
conducted. None of the Company's material trademarks, trade names,
service marks, service xxxx registrations, service names, patents, patent
rights, copyrights, inventions, licenses, approvals, government authorizations,
trade secrets or other intellectual property rights have expired or terminated,
or, by the terms and conditions thereof, will expire or terminate within two (2)
years from the date of this Agreement. The Company and its Subsidiaries do not
have any knowledge of any infringement by the Company or its Subsidiaries of any
material trademark, trade name rights, patents, patent rights, copyrights,
inventions, licenses, service names, service marks, service xxxx registrations,
trade secret or other similar rights of others, or of any such development of
similar or identical trade secrets or technical information by others and,
except as set forth on Schedule 4.10 of the
Disclosure Schedule or in the SEC Reports, there is no claim, action or
proceeding being made or brought against, or to the Company's knowledge, being
threatened against, the Company or its Subsidiaries regarding trademark, trade
name, patents, patent rights, invention, copyright, license, service names,
service marks, service xxxx registrations, trade secret or other similar rights,
which could reasonably be expected to have a Material Adverse
Effect.
4.11. Environmental Laws.
The Company and its Subsidiaries (i) are in compliance with any and all
applicable foreign, federal, state and local laws and regulations relating to
the protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants (“Environmental Laws”),
(ii) have received all permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct their respective businesses and
(iii) are in compliance with all terms and conditions of any such permit,
license or approval, except where, in each of the three foregoing clauses, the
failure to so comply could not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect.
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4.12. Title. The Company
and its Subsidiaries have good and marketable title in fee simple to all real
property and good and marketable title to all personal property owned by them
which is material to the business of the Company and its Subsidiaries, in each
case free and clear of all liens, encumbrances and defects except such as are
described in Schedule
4.12 of the Disclosure Schedule or liens on equipment securing purchase
money-indebtedness of the Company or such as do not materially affect the value
of such property and do not interfere with the use made and proposed to be made
of such property by the Company and any of its Subsidiaries. Any real property
and facilities held under lease by the Company and any of its Subsidiaries are
held by them under valid, subsisting and enforceable leases with such exceptions
as are not material and do not interfere with the use made and proposed to be
made of such property and buildings by the Company and its
Subsidiaries.
4.13. Insurance. The
Company and each of its Subsidiaries are insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts as
management of the Company believes to be prudent and customary in the businesses
in which the Company and its Subsidiaries are engaged. Neither the Company nor
any such Subsidiary has been refused any insurance coverage sought or applied
for and neither the Company nor any such Subsidiary has any reason to believe
that it will not be able to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage from similar insurers as may
be necessary to continue its business at a cost that would not materially and
adversely affect the condition, financial or otherwise, or the earnings,
business or operations of the Company and its Subsidiaries, taken as a
whole.
4.14.
Regulatory
Permits. The Company and its Subsidiaries possess all material
certificates, authorizations and permits issued by the appropriate federal,
state or foreign regulatory authorities necessary to conduct their respective
businesses, and neither the Company nor any such Subsidiary has received any
notice of proceedings relating to the revocation or modification of any such
certificate, authorization or permit.
4.15 Foreign Corrupt
Practices. Neither the Company, nor any of its Subsidiaries, nor any
director, officer, agent, employee or other person acting on behalf of the
Company or any of its Subsidiaries has, in the course of its actions for, or on
behalf of, the Company, used any corporate funds for any unlawful contribution,
gift, entertainment or other unlawful expenses relating to political activity;
made any direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; violated or is in
violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as
amended; or made any unlawful bribe, rebate, payoff, influence payment, kickback
or other unlawful payment to any foreign or domestic government official or
employee.
4.16. Transactions With
Affiliates. Except as set forth on Schedule 4.16 of the
Disclosure Schedule and other than the grant or exercise of stock options
disclosed on Schedule
4.3 of the Disclosure Schedule, none of the officers, directors, or
employees of the Company is presently a party to any transaction with the
Company or any of its Subsidiaries (other than for services as employees,
officers and directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of real
or personal property to or from, or otherwise requiring payments to or from any
officer, director or such employee or, to the knowledge of the Company, any
corporation, partnership, trust or other entity in which any officer, director,
or any such employee has an interest or is an officer, director, trustee or
partner.
6
4.17.
Compliance
with Laws. The Company and each Subsidiary are in compliance with all
laws applicable to their respective businesses, operations or assets except
where the failure to be in compliance could not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse
Effect. Neither the Company nor any Subsidiary is in default under or
violation of any applicable law, and neither has received any notice of or been
charged with the violation of any laws, which default or violation could,
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect. To the knowledge of the Company, neither the Company
nor any Subsidiary is under investigation with respect to the violation of any
laws, other than those the outcome of which, individually or in the aggregate,
would not reasonably be expected to result in a Material Adverse
Effect.
Section
5. Representations and
Warranties of Xxxxxx
Xxxxxx
hereby represents and warrants to the Company as follows:
5.1. Authorization;
Enforcement. Abbott
has the requisite corporate power and authority to enter into and to consummate
the transactions contemplated by each of the Transaction Documents and otherwise
to carry out its obligations thereunder. The execution and delivery
of each of the Transaction Documents by Abbott and the consummation by it of the
transactions contemplated thereby have been duly authorized by all necessary
action on the part of Abbott. Each Transaction Document has been (or
upon delivery will have been) duly executed by Abbott and, when delivered in
accordance with the terms hereof, will constitute the valid and binding
obligation of Abbott enforceable against Abbott in accordance with its terms
except (i) as limited by general equitable principles and applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as limited by laws
relating to the availability of specific performance, injunctive relief or other
equitable remedies and (iii) insofar as indemnification and contribution
provisions may be limited by applicable law.
5.2. No
Registration. Abbott
understands that the Shares are being offered and sold to it in reliance on
specific exemptions from the registration requirements of United States federal
and state securities laws and that the Company is relying in part upon the truth
and accuracy of, and Xxxxxx'x compliance with, the representations, warranties,
agreements, acknowledgments and understandings of Abbott set forth herein in
order to determine the availability of such exemptions and the eligibility of
Abbott to acquire the Shares.
5.3. Investment
Intent. Abbott
is acquiring the Shares for investment for its own account, not as a nominee or
agent, and not with the view to, or for resale in connection with, any
distribution thereof, and Abbott has no present intention of selling, granting
any participation in, or otherwise distributing the same. Abbott
further represents that it does not have any contract, undertaking, agreement or
arrangement with any person or entity to sell, transfer or grant participation
to such person or entity or to any third person or entity with respect to any of
the Shares.
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5.4. Investment
Experience. Abbott
has sufficient experience in evaluating and investing in private placement
transactions of securities in companies similar to the Company and acknowledges
that Abbott can protect its own interests. Abbott has such knowledge
and experience in financial and business matters so that Abbott is capable of
evaluating the merits and risks of its investment in the Company.
5.5. Speculative Nature of
Investment. Abbott
can bear the economic risk of its investment and is able, without impairing its
financial condition, to hold the Shares for an indefinite period of time and to
suffer a complete loss of its investment. Abbott acknowledges that
the Shares must be held indefinitely unless subsequently registered under the
Securities Act or an exemption from such registration is available.
5.6. Access to
Data. Abbott has had an opportunity to review the SEC Reports
and to ask questions of, and receive answers from, the officers of the Company
concerning the Company’s business, management and financial affairs, which
questions were answered to its satisfaction. Abbott believes that it
has received all the information it considers necessary or appropriate for
deciding whether to purchase the Shares. Abbott acknowledges that it
is relying solely on its own counsel and not on any statements or
representations of the Company or its agents for legal advice with respect to
this investment or the transactions contemplated by the Transaction
Documents.
5.7. Accredited
Investor. Abbott is an “accredited investor” within the
meaning of Regulation D, Rule 501(a), promulgated by the SEC under the
Securities Act.
5.8. No Governmental
Review. Abbott understands that no United States federal or
state agency or any other government or governmental agency has passed on or
made any recommendation or endorsement of the Shares or the fairness or
suitability of the investment in the Shares nor have such authorities passed
upon or endorsed the merits of the offering of the Shares.
5.9. Brokers’
Fees. Abbott has no liability or obligation to pay any fees or
commissions to any broker, finder, or agent with respect to the transactions
contemplated by this Agreement.
5.10. Tax
Advisors. Abbott has reviewed with its own tax advisors the
U.S. federal, state, local and foreign tax consequences of this investment and
the transactions contemplated by the Transaction Documents. With
respect to such matters, Abbott relies solely on such advisors and not on any
statements or representations of the Company or any of its agents, written or
oral. Abbott understands that it (and not the Company) shall be
responsible for its own tax liability that may arise as a result of this
investment or the transactions contemplated by the Transaction
Documents.
5.11.
No
Prior Short Selling. At no time prior to the date of this
Agreement has any of Abbott, its agents, representatives or affiliates engaged
in or effected, in any manner whatsoever, directly or indirectly, any (i) "short
sale" (as such term is defined in Section 242.200 of Regulation SHO of the
Exchange Act) of the Common Stock or (ii) hedging transaction, which establishes
a net short position with respect to the Common Stock.
8
5.12.
Legend. Abbott
understands and agrees that the certificates evidencing the Shares or any other
securities issued in respect of the Shares upon any stock split, stock dividend,
recapitalization, merger, consolidation or similar event, shall bear the
following legends (in addition to any legend required under applicable state
securities laws):
THE SHARES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SUCH ACT
AND/OR APPLICABLE STATE SECURITIES LAWS, OR UNLESS THE COMPANY HAS RECEIVED AN
OPINION OF COUNSEL OR OTHER EVIDENCE, REASONABLY SATISFACTORY TO THE COMPANY AND
ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.
THE
SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE DUE TO A LOCK-UP PERIOD UNTIL JANUARY 20,
2010.
Section
6. Lock-Up
Abbott
hereby agrees that Abbott shall not sell or otherwise transfer, make any short
sale of, grant any option for the purchase of, or enter into any hedging or
similar transaction with the same economic effect as a sale, of any of the
Shares on the Closing Date or during the one hundred eighty (180) day period
following the Closing Date. The Company may impose stop-transfer
instructions and may stamp each certificate evidencing any of the Shares with
the second legend set forth in Section 5.12
hereof until the end of such one hundred eighty (180) day period.
Section
7. Indemnification
In
consideration of Xxxxxx’x execution and delivery of the Transaction Documents
and acquiring the Shares hereunder and in addition to all of the Company's other
obligations under the Transaction Documents, the Company shall defend, protect,
indemnify and hold harmless Abbott and all of its affiliates, shareholders,
officers, directors, employees and direct or indirect investors and any of the
foregoing person's agents or other representatives (including, without
limitation, those retained in connection with the transactions contemplated by
this Agreement) (collectively, the "Indemnitees") from
and against any and all actions, causes of action, suits, claims, losses, costs,
penalties, fees, liabilities and damages, and expenses in connection therewith
(irrespective of whether any such Indemnitee is a party to the action for which
indemnification hereunder is sought), and including reasonable attorneys' fees
and disbursements (the "Indemnified
Liabilities"), incurred by any Indemnitee as a result of, or arising out
of, or relating to (a) any misrepresentation or breach of any representation or
warranty made by the Company in the Transaction Documents or any other
certificate, instrument or document contemplated hereby or thereby, (b) any
breach of any covenant, agreement or obligation of the Company contained in the
Transaction Documents or any other certificate, instrument or document
contemplated hereby or thereby, or (c) any cause of action, suit or claim
brought or made against such Indemnitee and arising out of or resulting from the
execution, delivery, performance or enforcement of the Transaction Documents or
any other certificate, instrument or document contemplated hereby or thereby,
other than with respect to Indemnified Liabilities which directly and primarily
result from the gross negligence or willful misconduct of the Indemnitee. To the
extent that the foregoing undertaking by the Company may be unenforceable for
any reason, the Company shall make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities which is permissible under
applicable law.
9
Section
8. Miscellaneous.
8.1. Assignment. This Agreement shall inure to the
benefit of and be binding upon and enforceable by the parties and their
successors and permitted assigns. However, neither party may assign or delegate
any of its rights or obligations under this Agreement without the prior written
consent of the other party.
8.2. Severability. If any part of this Agreement is
declared invalid or unenforceable by any court of competent jurisdiction,
such declaration shall not
affect the remainder of the Agreement and the invalidated provision shall be
revised in a manner that will render such provision valid while preserving the
parties’ original intent to the maximum extent
possible.
8.3. Entire
Agreement. This Agreement and the Registration
Rights Agreement constitute the entire agreement between the parties relating to
the subject matter hereof and all previous agreements or arrangements between
the parties, written or oral, relating to the subject matter hereof are
superseded.
8.4. No
Amendment. No amendment, alteration or modification
of any of the provisions of this Agreement will be binding unless made in
writing and signed by each of the parties hereto.
8.5. Compliance with
Laws. In performing this Agreement, each party shall comply with all
applicable laws, rules and regulations and shall not be required to perform or
omit to perform any act required or permitted under this Agreement if such
performance or omission would violate the provisions of any such law, rule or
regulation.
8.6. Counterparts. This Agreement may be executed in two
counterparts, each of which shall be deemed an original but both of which
together shall constitute one and the same instrument.
8.7. Governing
Law. This Agreement shall be
governed by and construed
in accordance with the laws of the State of Nevada, without regard to its conflicts of
laws principles.
8.8. Notices. All notices required or permitted under
this Agreement must be in writing and sent to the address or facsimile number
identified below. Notices
must be given: (a) by personal delivery, with receipt acknowledged; (b) by
facsimile followed by hard copy delivered by the methods under (c) or (d); (c)
by prepaid certified or registered mail, return receipt requested; or (d) by
prepaid reputable overnight delivery
service. Notices will be effective upon receipt. Either party may change its
notice address by providing the other party written notice of such change.
Notices shall be delivered as follows:
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|
|
If to
Abbott:
|
Xxxxxx Molecular
Inc.
|
Attention: Senior Director, Business
Development & Licensing
0000 Xxxx Xxxxx
Xxxxxx
Xxx Xxxxxxx, Xxxxxxxx 00000-0000
Fax: (000) 000-0000
|
|
with a copy
to:
|
Xxxxxx
Laboratories
|
Attention: VP, Associate Gen. Counsel,
Corporate Transactions
000 Xxxxxx Xxxx Xxxx
Xxxx. 000, Xxxx. XX0X-0
Xxxxxx Xxxx, Xxxxxxxx 00000-0000
Fax: (000) 000-0000
|
|
If to the
Company:
|
NeoGenomics,
Inc.
|
Attention: Xxxxxx Xxxxxxxxx,
President
00000 Xxxxxxxxxxxx Xxxxx, Xxxxx
0
Xxxx Xxxxx, Xxxxxxx 00000
Fax: (000) 000-0000
|
|
copy to:
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K&L Gates
LLP
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Attention: Xxxxxxx X. Xxxxxx,
Esq.
000 Xxxxx Xxxxxxxx Xxxxxxxxx, Xxxxx
0000
Xxxxx, Xxxxxxx 00000-0000
Fax: (000) 000-0000
8.9. Expenses. All costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party which shall have
incurred the same, and the other party shall have no liability
thereto.
8.10. Headings. The titles of the Articles and Sections
contained in this Agreement
are for convenience only and shall not be considered in construing this
Agreement.
8.11.
Parties in
Interest. Nothing
in this Agreement is intended to provide any rights or remedies to any Person
other than the parties hereto.
8.12.
Waiver. No
failure on the part of either party hereto to exercise any power, right,
privilege or remedy under this Agreement, and no delay on the part of either
party hereto in exercising any power, right, privilege or remedy under this
Agreement, shall operate as a waiver thereof; and no single or partial exercise
of any such power, right, privilege or remedy shall preclude any other or
further exercise thereof or of any other power, right, privilege or
remedy.
8.13. Survival. The
representations, warranties, covenants and agreements made in this Agreement
shall survive any investigation made by any party hereto and the closing of the
transactions contemplated hereby for one (1) year from the Closing
Date.
11
8.14.
Interpretation of
Agreement.
(a) Each
party hereto acknowledges that it has participated in the drafting of this
Agreement, and any applicable rule of construction to the effect that
ambiguities are to be resolved against the drafting party shall not be applied
in connection with the construction or interpretation of this
Agreement.
(b) Whenever
required by the context hereof, the singular number shall include the plural,
and vice versa; the masculine gender shall include the feminine and neuter
genders; and the neuter gender shall include the masculine and feminine
genders.
(c) As
used in this Agreement, the words “include” and “including,” and variations
thereof, shall not be deemed to be terms of limitation, and shall be deemed to
be followed by the words “without limitation.”
(d) References
herein to “Sections” are intended to refer to Sections of this
Agreement.
12
IN
WITNESS WHEREOF, the parties hereto have caused this Common Stock Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
| Xxxxxx Laboratories | NeoGenomics, Inc. | ||||
|
By:
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/s/ Xxxxxx X.
Xxxxxxx
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By:
|
/s/ Xxxxxxx
XxxXxxx
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||
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Name: Xxxxxx X.
Xxxxxxx
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Name: Xxxxxxx
XxxXxxx
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||||
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Title:
Executive Vice President, Finance and Chief Financial
Officer
|
Title: Chairman and Chief
Executive Officer
|
||||
13
DISCLOSURE
SCHEDULES
These
Disclosure Schedules are furnished by NeoGenomics, Inc., a Nevada corporation
(the “Company”), pursuant
to Section 4 of the Common Stock Purchase Agreement dated as of July 24,
2009 (the “Agreement”) by and
between the Company, and Xxxxxx Laboratories, an Illinois corporation (“Abbott”). All
capitalized terms used but not defined herein shall have the meanings given to
them in the Agreement, unless otherwise provided. The section numbers
below correspond to the section numbers of the representations and warranties in
the Agreement.
Nothing
in these Disclosure Schedules is intended to broaden the scope of any
representation or warranty contained in the Agreement or to create any
covenant. Inclusion of any item in these Disclosure Schedules
(1) does not represent a determination that such item is material or
establish a standard of materiality, (2) does not represent a determination
that such item did not arise in the ordinary course of business, (3) does
not represent a determination that the transactions contemplated by the
Agreement require the consent of third parties, and (4) shall not
constitute, or be deemed to be, an admission to any third party concerning such
item. These Disclosure Schedules include brief descriptions or
summaries of certain agreements and instruments, copies of which are available
upon reasonable request. Such descriptions do not purport to be
comprehensive, and are qualified in their entirety by reference to the text of
the documents described.
Section 4.1–Organization and
Qualification.
Subsidiaries
NeoGenomics Laboratories, Inc., a
Florida corporation (the “Florida
Subsidiary”)
NeoGenomics California Laboratories,
LLC, a California limited liability company
Section
4.3–Capitalization.
Debt
Securities
Credit Facility with CapitalSource
Finance, LLC
The Company, the Florida Subsidiary and
CapitalSource Finance LLC (as agent for CapitalSource Bank) (the “Lender”) are parties
to that certain Revolving Credit and Security Agreement dated February 1, 2008,
as amended (the “Credit
Agreement”), which allows
the Florida
Subsidiary to borrow up to
$3,000,000 based on a formula which is tied to its eligible accounts receivable that are
aged less than 150 days. As of June 30, 2009, the Florida
Subsidiary had approximately $1,858,000 outstanding on this credit
facility. Such credit facility is secured by all of the Florida
Subsidiary’s accounts receivable and related collateral as more fully described
in the Credit Agreement.
14
Leases
The Company enters into capital and
operating leases in the ordinary course of business. As of June 30,
2009, the Company had approximately $2.4 million of outstanding balances under
such leases.
Options
and Warrants
As of July 16 2009, warrants to
purchase 6,512,755 shares of common stock of the Company, $0.001 par value
per share (“Common
Stock”), were outstanding.
As of July 16, 2009, options to
purchase 5,034,666 shares of Common Stock were outstanding.
Fusion
Capital
On
November 5, 2008, the Company and Fusion Capital Fund II, LLC, an Illinois
limited liability company (“Fusion Capital”),
entered into a Common Stock Purchase Agreement (the “Purchase Agreement”),
and a Registration Rights Agreement. Under the Purchase Agreement,
Fusion Capital is obligated, under certain conditions, to purchase shares of
Common Stock from the Company in an aggregate amount of $8.0 million from time
to time over a thirty (30) month period.
Employee
Stock Purchase Plan
Up to
1.0% of the Company’s Adjusted Diluted Shares Outstanding (as defined below) may
be sold pursuant to rights granted under the Company’s Employee Stock Purchase
Plan, dated October 31, 2006 (the “ESPP”). For
purposes of the ESPP, “Adjusted Diluted Shares
Outstanding” means on any given measurement date, the basic common shares
outstanding plus that number of shares that would be issued if all convertible
debt, convertible preferred equity securities and warrants were assumed to be
converted into Common Stock on the measurement date.
Amended
and Restated Equity Incentive Plan
On March 3, 2009, the Company’s Board
of Directors approved the Amended and Restated Equity Incentive Plan (the “Amended Plan”), which
amends and restates the NeoGenomics, Inc. Equity Incentive Plan, originally
effective as of October 14, 2003, and amended and restated effective as of
October 31, 2006. The Amended Plan allows for the award of equity
incentives, including stock options, stock appreciation rights, restricted stock
awards, stock bonus awards, deferred stock awards, and other stock-based awards
to certain employees, directors, or officers of, or key advisers or consultants
to, the Company or its subsidiaries. The maximum aggregate number of
shares of Common Stock reserved and available for issuance under the Amended
Plan is 6,500,000 shares.
15
Registration
Rights
The
Company is a party to certain Investor Registration Rights Agreements (the
“Investor Registration
Rights Agreement”) in the form filed as an exhibit to the Company’s
Registration Statement on Form SB-2 filed with the SEC on July 6,
2007. The shares subject to such Investor Registration Rights
Agreement were registered pursuant to the Company’s Registration Statement on
Form SB-2 on Form S-1/A which was declared effective by the SEC on July 1,
2008. The Company has a continuing obligation to maintain the
effectiveness of such registration statement until all of the Registrable
Securities (as defined in the Investor Registration Rights Agreement) have been
sold; provided, however, that in no event will the Company be required to
maintain the effectiveness of such registration statement for longer than two
years from the date of the Investor Registration Rights Agreement.
The Company issued Warrants dated
August 16, 2007 to each of 1837 Partners, Ltd., 1837 Partners QP, LP, 1837
Partners, LP, A. Xxxxx Xxxxx Revocable Living Trust, u/t/d 12/15/98, Xxxx Xxxx
Rollover XXX, Xxxxxxx X. Xxxxxxx, Xxxxxxx Xxxxxxx, Leviticus Partners, LP, Xxxxx
Opportunity Fund, LP, XXX Opportunity Fund, Ltd, Mosaic Partners Fund, Mosaic
Partners Fund (US), LP, Xxxxx X. Xxxxx and Xxxxx X. Xxxxx, Ridgecrest Ltd.,
Ridgecrest Partners QP, LP and Ridgecrest, LP to purchase an aggregate of
533,334 shares of the Company’s Common Stock (the “August
Warrants”). The exercise price of the August Warrants is $1.50
per share. Each of the August Warrants include the following
provisions:
“Piggy-Back
Registration. Subject to the terms and conditions of this
Warrant, the Company shall notify the holder of Registrable Securities (as
defined below) in writing at least ten (10) days prior to the filing of any
registration statement under the Securities Act for purposes of a public
offering of securities of the Company (including, but not limited to,
registration statements relating to secondary offerings of securities of the
Company, but excluding any registration statement relating to any employee
benefit plan or with respect to any corporate reorganization or other
transaction under Rule 145 of the Securities Act ) and will afford each such
holder an opportunity to include in such registration statement all or part of
such Registrable Securities held by such holder. Each holder of
Registrable Securities desiring to include in any such registration statement,
all or part of the Registrable Securities held by it shall, within ten (10)
days after the above-described notice from the Company, so notify the Company in
writing. Such notice shall state the intended method of disposition
of the Registrable Securities held by such holder. In the event the
Company determines in its sole discretion, that market factors require a
limitation of the number of securities to be included in such registration
statement (including the Registrable Securities), then the Company shall so
advise the Warrant Holder and the number of shares that may be included in such
registration statement shall be allocated among holders of warrants on a pro
rata basis (including the Registrable Securities). If a holder
decides not to include all of its Registrable Securities in the registration
statement thereafter filed by the Company or any Registrable Securities were
excluded by the Company pursuant to the immediately preceding sentence, such
holder shall nevertheless continue to have the right to include any Registrable
Securities in any subsequent registration statement or registration statements
as may be filed by the Company with respect to offerings of its securities, all
upon the terms and conditions set forth herein. “Registrable
Securities” means the Shares of Common Stock issuable to the Warrant
Holder pursuant to the terms of this Warrant.
16
Demand
Registration. In the event that the Company has not offered to
the holder of the Warrant an opportunity to include its Registrable Securities
in a registration statement pursuant to the terms of Section 10.1 herein with
twelve (12) months from the issuance date of the Warrant, the holder of the
Warrant shall have the ability, on a one-time basis, to demand that the Company
file a registration statement for the resale of the Registrable
Securities. Subject to the terms and conditions of this Warrant, the
Company shall prepare and file, no later than ninety (90) days from the date of
such demand by the holder of the Warrant with the United States Securities and
Exchange Commission (the “SEC”), a registration
statement under the Securities Act for the resale of the Registrable
Securities. The Company shall use its best efforts to cause the
registration statement to remain effective until all of the Registrable
Securities have been sold; provided, however, that in no event will the Company
be required to maintain the effectiveness of the registration statement for
longer than two (2) years from the date of its being declared effective by the
SEC.”
Following the transfer of certain of
the August Warrants, the Company issued Re-Issue Warrants (the “Transfer Warrants”)
to each of 1837 Partners QP, LP, 1837 Partners, LP, 1837 Partners Ltd., Xxxxx X.
Xxxxxxx Trust and Xxxxxxx X. Xxxxx, XXX to purchase an aggregate of 50,000
shares of the Company’s Common Stock. The terms of the Transfer
Warrants are substantially similar to the August Warrants.
On August, 16, 2007, Aspen Select
Healthcare, LP (“Aspen”) issued
warrants to purchase an aggregate of 400,000 shares of Common Stock owned by
Aspen to each of 1837 Partners, Ltd., 1837 Partners QP, LP, 1837 Partners, LP,
XXX Opportunity Fund, LP, Xxxxx Opportunity Fund, LP and Xxxx X. Xxxx (the
“Aspen
Warrants”). The exercise price of the Aspen Warrants is $1.50
per share. The Company is a party to the Aspen Warrants solely with
respect to Section 10 thereof, which reads as follows:
“Piggy-Back
Registration. Subject to the terms and conditions of this
Warrant, NeoGenomics shall notify the holder of Registrable Securities (as
defined below) in writing at least ten (10) days prior to the filing of any
registration statement under the Securities Act for purposes of a public
offering of securities of NeoGenomics (including, but not limited to,
registration statements relating to secondary offerings of securities of
NeoGenomics, but excluding any registration statement relating to any employee
benefit plan or with respect to any corporate reorganization or other
transaction under Rule 145 of the Securities Act ) and will afford each such
holder an opportunity to include in such registration statement all or part of
such Registrable Securities held by such holder. Each holder of
Registrable Securities desiring to include in any such registration statement,
all of part of the Registrable Securities held by it shall, within ten (10)
days after the above-described notice from NeoGenomics, so notify NeoGenomics in
writing. Such notice shall state the intended method of disposition
of the Registrable Securities held by such holder. In the event
NeoGenomics determines, in its sole discretion, that market factors require a
limitation of the number of securities to be included in such registration
statement (including the Registrable Securities), then NeoGenomics shall so
advise the Warrant Holder and the number of shares that may be included in such
registration statement shall be allocated among holders of warrants on a pro
rata basis (including the Registrable Securities). If a holder
decides not to include all of its Registrable Securities in the registration
statement thereafter filed by NeoGenomics or any Registrable Securities were
excluded by NeoGenomics pursuant to the immediately preceding sentence, such
holder shall nevertheless continue to have the right to include any Registrable
Securities in any subsequent registration statement or registration statements
as may be filed by NeoGenomics with respect to offerings of its securities, all
upon the terms and conditions set forth herein. “Registrable
Securities” means the Shares of Common Stock issuable to the Warrant
Holder pursuant to the terms of this Warrant.”
17
On January 21, 2006, the Company
entered into a subscription agreement (the “Subscription”) with
SKL Limited Family Partnership, LP (“SKL”), whereby SKL
purchased 2,000,000 shares (the “SKL Subscription Shares”)
of Common Stock at a purchase price of $0.20 per share for $400,000. Under the
terms of the Subscription, the SKL Subscription Shares are restricted for a
period of 24 months and then carry piggyback registration rights to the extent
that exemptions under Rule 144 are not available to SKL.
Section
4.8–Litigation.
FCCI
Litigation
A civil lawsuit is currently pending
between the Company and its liability insurer, FCCI Commercial Insurance Company
("FCCI") in the 20th Judicial Circuit Court in and for Xxx County, Florida (Case
No. 07-CA-017150). FCCI filed the suit on December 12, 2007 in
response to the Company's demands for insurance benefits with respect to an
underlying action involving US Labs (a settlement agreement has since been
reached in the underlying action, and thus that case has now
concluded). Specifically, the Company maintains that the underlying
plaintiff's allegations triggered the subject insurance policy's personal and
advertising injury coverage. In the lawsuit, FCCI seeks a court
judgment that it owes no obligation to the Company regarding the underlying
action (FCCI does not seek monetary damages). The Company has
counterclaimed against FCCI for breach of the subject insurance policy, and
seeks recovery of defense costs incurred in the underlying matter, amounts paid
in settlement thereof, and fees and expenses incurred in litigating with
FCCI. The court previously denied a motion by FCCI for judgment on
the pleadings, rejecting FCCI's contention that the underlying complaint did not
trigger the insurer's duty to defend as a matter of law. A motion for
summary judgment is currently pending.
18
Threatened Trademark Infringement
Litigation
In March 2003, the Company received a
certified letter from the law firm of XxXxxx, Xxxxx & Xxxxxx, P.C., dated
March 18, 2003, which stated that they represented NeoGen Corporation, a
Lansing, Michigan manufacturer of products dedicated to food and animal safety,
on intellectual property matters. This letter claimed that the
Company’s use of the name NeoGenomics, Inc. infringed upon their client’s rights
in its trademark name, “Neogen” and demanded that the Company cease using the
name, “NeoGenomics”. The Company did not comply with the demands of
this letter.
In February 2008, the Company received
a letter from the law firm of Frasier, Trebilcock, Xxxxx & Xxxxxx, P.C.,
dated February 18, 2008, which stated that they represented NeoGen
Corporation. Similar to the 2003 letter, this letter claimed that the
Company’s use of the name NeoGenomics, Inc. infringed upon their client’s rights
in its trademark name, “Neogen” and demanded that the Company cease using the
name, “NeoGenomics”. The Company was awarded a registered trademark
for the name “NeoGenomics” in 2007 and NeoGen Corporation undertook no actions
to oppose such award. As of the date hereof, the Company has not
heard anything further on this matter from NeoGen Corporation.
Section 4.10–Intellectual
Property Rights.
See the description of threatened
trademark infringement litigation in Section 4.8 of these Disclosure
Schedules.
Section
4.12–Title.
See the description of the Credit
Agreement set forth under Section 4.3 of these Disclosure
Schedules.
Section 4.16–Transactions
with Affiliates.
On March
11, 2005, the Company entered into an agreement with Healthcare Computer Systems
and Support, LLC d/b/a Bridge Labs (“HCSS”) and eTelenext,
Inc. (“eTelenext”) to enable
the Company to use eTelenext’s Accessioning Application, AP Anywhere Application
and CMQ Application. HCSS is a holding company created to build a
small laboratory network for the 50 small commercial genetics laboratories in
the United States. HCSS is owned 66.7% by Xx. Xxxxxxx X. Xxxx, a
member of the Company’s Board of Directors. Under the terms of the
agreement, the Company paid $22,500 over three months to customize this software
and will pay an annual membership fee of $6,000 per year and monthly transaction
fees of between $2.50 - $10.00 per completed test, depending on the volume of
tests performed. The eTelenext system is an elaborate laboratory
information system (LIS) that is in use at many larger
laboratories.
On June
17, 2009, the Company entered into a revised license agreement with HCSS and
eTelenext to migrate the Company’s existing AP Anywhere application to a new
APvX application with substantially improved features. Under the
terms of this new licensing agreement, the Company will pay HCSS and eTelenext
approximately $75,000 to migrate the existing application to the new APvX
platform and then monthly licensing fees that start at $8,000/month and increase
to $12,000/month over the five year term of the license.
19
The
Company, Xxxxxxx Xxxx, Aspen, Xxxx Xxxxxx, Xxxxxx Xxxxx and Xxxxx Xxxxxxx are
parties to the Amended and Restated Shareholders’ Agreement dated March 21,
2005, as amended (the “Shareholders
Agreement”), that, among other provisions, gives Aspen the right to elect
three out of the eight directors authorized for the Company’s Board of
Directors, and to nominate one mutually acceptable independent
director. In addition, Xxxxxxx Xxxx and the executive management of
the Company has the right to elect one director for the Company’s Board of
Directors, until the earlier of (i) Xx. Xxxx’x resignation as an officer or
director of the Company or (ii) the sale by Xx. Xxxx of 50% or more
of the number of shares of Common Stock that he held on March 21,
2005.
On January 18, 2006, the Company and
Aspen entered into a letter agreement that, among other things, (i) granted
Aspen five year warrants to purchase 150,000 shares of Common Stock at an
exercise price of $0.26 per share in exchange for the waiver of certain
preemptive rights, (ii) granted Aspen the right (which was subsequently
exercised) to purchase 1,000,000 shares of Common Stock for $0.20 per share and
to receive a five year warrant to purchase 450,000 shares of Common Stock at an
exercise price of $0.26 per share, (iii) granted Aspen a five year warrant to
purchase up to 450,000 shares of Common Stock with an exercise price of $0.26
per share, and (iv) provided that existing warrants held by Aspen to
purchase 2,500,000 shares of common stock were fully vested and the exercise
price per share was reset to $0.31 per share.
During
the period from January 18 through January 21, 2006, the Company entered into
agreements with four shareholders who are parties to the Shareholders Agreement,
to exchange five year warrants to purchase an aggregate of 150,000 shares of
stock at a purchase price of $0.26 per share for such stockholders’ waiver of
their pre-emptive rights under the Shareholders Agreement. Such
pre-emptive rights subsequently expired on March 23, 2007.
On May
14, 2007, the Board of Directors approved the grant of 100,000 warrants to each
non-employee director. There has not been any definitive agreement as
to the terms but 25% will vest immediately and the remaining warrants will vest
an additional 25% over each of the next three years. The Board of
Directors also approved an increase in its per board meeting fees for
non-employee director’s from $600 to $1,000 for each meeting.
In
consideration for its services and assistance with the sale in a private
placement of 2,666,667 shares of Common Stock during the period from May 31,
2007 through June 6, 2007, Aspen Capital Advisors, LLC received: (i)
warrants to purchase 250,000 shares of Common Stock, and (ii) a cash fee equal
to $52,375. The warrants have a five-year term, an exercise price
equal to $1.50 per share, cashless exercise provisions, customary anti-dilution
provisions and the same other terms, conditions, rights and preferences as those
shares sold to the investors in the private placement. Mr. Xxxxxx
Xxxxx, a director of the Company, is a Managing Director of Aspen Capital
Advisors.
20
On
September 30, 2008, the Company entered into a master lease agreement (the
“Master Lease”)
with Gulf Pointe Capital, LLC (“Gulf Pointe”) after
it was determined that the Company’s other lessors would not lease finance
certain used and other equipment and software. Such Master Leases
allows the Company to obtain lease capital from time to time up to an aggregate
of $130,000 of lease financing. Three members of the Company’s Board
of Directors: Xxxxxx Xxxxx, Xxxxx Xxxxxxxx and Xxxxxx Xxxxx, are affiliated with
Gulf Pointe and recused themselves from both sides of all negotiations
concerning this transaction. In consideration for entering into the
Master Lease with Gulf Pointe, the Company issued 32,475 warrants to Gulf Pointe
with an exercise price of $1.08 and a five year term. Such warrants
vest 25% on issuance and then on a pro rata basis as amounts are drawn under the
Master Lease. On February 9, 2009, the Company amended its
Master Lease with GulfPointe to increase the maximum size of the facility to
$250,000. As part of this amendment, the Company terminated the
original warrant agreement, dated September 30, 2008, and replaced it with a new
warrant to purchase 83,333 shares of Common Stock. Such new warrants
have a five-year term, an exercise price of $0.75 per share and the same vesting
schedule as the original warrant.
Xxxxxx
X. Xxxxx, a director of the Company, performs paid consulting work for the
Company in connection with his duties as the Company’s Acting Principal
Financial Officer.
Xxxxxx
X’Xxxxx, a director of the Company, performs paid consulting work for the
Company from time to time.
On March 16, 2009, the Company and the
Xxxxxxx X. XxxXxxx Living Trust entered into the XxxXxxx Subscription Agreement
pursuant to which the Xxxxxxx X. XxxXxxx Living Trust purchased the XxxXxxx
Subscription Shares. Xxxxxxx X. XxxXxxx is Chairman of the Company
Board of Directors and Executive Chairman and interim Chief Executive Officer of
the Company. The XxxXxxx Subscription Shares are subject to a
two-year lock-up that restricts the transfer of the XxxXxxx Subscription Shares;
provided, however, that such lock-up shall expire in the event that the Company
terminates Xx. XxxXxxx’x employment. The XxxXxxx Subscription
Agreement also provides for certain piggyback registration rights with respect
to the XxxXxxx Subscription Shares.
On March
16, 2009, the Company and Xx. XxxXxxx entered into a Warrant Agreement (the
“Warrant
Agreement”) pursuant to which Xx. XxxXxxx, subject to the vesting
schedule described below, may purchase up to 625,000 shares of Common Stock at
an exercise price of $1.05 per share (the “Warrant
Shares”). The Warrant Shares vest based on the following
vesting schedule:
|
(i)
|
20%
of the Warrant Shares vest immediately,
|
|
|
(ii)
|
20%
of the Warrant Shares will be deemed to be vested on the first day on
which the closing price per share of the Common Stock has reached or
exceeded $3.00 per share for 20 consecutive trading
days,
|
|
|
(iii)
|
20%
of the Warrant Shares will be deemed to be vested on the first day on
which the closing price per share of the Common Stock has reached or
exceeded $4.00 per share for 20 consecutive trading
days,
|
|
|
(iv)
|
20%
of the Warrant Shares will be deemed to be vested on the first day on
which the closing price per share of the Common Stock has reached or
exceeded $5.00 per share for 20 consecutive trading days
and
|
|
|
(v)
|
20%
of the Warrant Shares will be deemed to be vested on the first day on
which the closing price per share of the Common Stock has reached or
exceeded $6.00 per share for 20 consecutive trading
days.
|
21
In the
event of a change of control of the Company in which the consideration payable
to each common stockholder of the Company in connection with such change of
control has a deemed value of at least $4.00 per share, then the Warrant Shares
shall immediately vest in full. In the event that Xx. XxxXxxx resigns
his employment with the Company or the Company terminates Xx. XxxXxxx’x
employment for “cause” at any time prior to the time when all Warrant Shares
have vested, then the rights under the Warrant Agreement with respect to the
unvested portion of the Warrant Shares as of the date of termination will
immediately terminate.
22
