SECURITIES PURCHASE AGREEMENT
Exhibit 4.7
THIS SECURITIES PURCHASE AGREEMENT (“Agreement”) is made as of the __ day of August, 2010 by
and between CryoPort, Inc., a Nevada corporation (the “Company”), and ____________________________
(the “Investor”).
Recitals
A. The Company and the Investor are executing and delivering this Agreement in reliance upon
the exemption from securities registration afforded by the provisions of Regulation D (“Regulation
D”), as promulgated by the U.S. Securities and Exchange Commission (the “SEC”) under the Securities
Act of 1933, as amended; and
B. The Investor wishes to purchase from the Company, and the Company wishes to sell and issue
to the Investor, upon the terms and conditions stated in this Agreement, an aggregate of __________
(_________) units (the “Units”), each Unit consisting of (i) one share of the Company’s common
stock, par value $0.001 per share (the “Common Stock”), and (ii) a warrant to purchase one share of
Common Stock (subject to adjustment) at an exercise price of $_____ per whole share (subject to
adjustment) in the form attached hereto as Exhibit A (the “Unit Warrant”); and
C. The purchase price per Unit is $0.70; and
D. Investors purchasing Units who were also investors in connection with the Company’s
underwritten public offering registered on Form S-1 (File No. 333-162350), which was declared
effective by the SEC on February 25, 2010 (the “Public Offering”), will each receive an additional
warrant (the “Additional Warrant”), in the form attached hereto as Exhibit A, to purchase
additional shares of Common Stock, as more fully described in Section 2.2 below; and
D. Contemporaneous with the sale of the Common Stock and Warrants, the parties hereto and
other investors which are parties to similar Securities Purchase Agreements will execute and
deliver a Registration Rights Agreement, in the form attached hereto as Exhibit B (the
“Registration Rights Agreement”), pursuant to which the Company will agree to provide certain
registration rights under the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder, and applicable state securities laws; and
E. The Company has engaged Maxim Group LLC and Emergent Financial Group, Inc. as its
non-exclusive placement agents (a “Placement Agent” and collectively the “Placement Agents”) for
the offering of Shares and the Warrants on a “best efforts” basis to generate gross proceeds to the
Company of approximately $5,000,000.
In consideration of the mutual promises made herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Definitions. In addition to those terms defined above and elsewhere in this
Agreement, for the purposes of this Agreement, the following terms shall have the meanings set
forth below:
“Additional Warrant” means the warrant issued pursuant to Section 2.2 below.
“Additional Warrant Shares” means the shares of Common Stock issuable upon the
exercise of the Additional Warrant.
“Affiliate” means, with respect to any Person, any other Person which directly or
indirectly through one or more intermediaries Controls, is controlled by, or is under common
control with, such Person.
“Business Day” means a day, other than a Saturday or Sunday, on which banks in New
York City are open for the general transaction of business.
“Closing” has the meaning set forth in Section 3.
“Closing Date” has the meaning set forth in Section 3.
“Company’s Knowledge” means the actual knowledge of the executive officers (as defined
in Rule 405 under the 0000 Xxx) of the Company, after due inquiry.
“Confidential Information” means trade secrets, confidential information and know-how
(including but not limited to ideas, formulae, compositions, processes, procedures and techniques,
research and development information, computer program code, performance specifications, support
documentation, drawings, specifications, designs, business and marketing plans, and customer and
supplier lists and related information).
“Control” (including the terms “controlling”, “controlled by” or “under common control
with”) means the possession, direct or indirect, of the power to direct or cause the direction of
the management and policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.
“Intellectual Property” means all of the following: (i) patents, patent applications,
patent disclosures and inventions (whether or not patentable and whether or not reduced to
practice); (ii) trademarks, service marks, trade dress, trade names, corporate names, logos,
slogans and Internet domain names, together with all goodwill associated with each of the
foregoing; (iii) copyrights and copyrightable works; (iv) registrations, applications and renewals
for any of the foregoing; and (v) proprietary computer software (including but not limited to data,
data bases and documentation).
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“Material Adverse Effect” means a material adverse effect on (i) the assets,
liabilities, results of operations, condition (financial or otherwise), business, or prospects of
the Company and its Subsidiaries taken as a whole, or (ii) the ability of the Company to perform
its obligations under the Transaction Documents.
“Person” means an individual, corporation, partnership, limited liability company,
trust, business trust, association, joint stock company, joint venture, sole proprietorship,
unincorporated organization, governmental authority or any other form of entity not specifically
listed herein.
“Purchase Price” means the aggregate amount of $____________, which represents the
amount which is $0.70 multiplied by the aggregate of ________ Units set forth opposite the
Investor’s name on the signature page attached hereto.
“Registration Statement” has the meaning set forth in the Registration Rights
Agreement.
“SEC Filings” has the meaning set forth in Section 4.6.
“Securities” means the Shares, the Unit Warrant, the Unit Warrant Shares, the
Additional Warrant and the Additional Warrant Shares.
“Shares” means the ________ shares of Common Stock being purchased by the Investor
hereunder.
“Subsidiary” of any Person means another Person, an amount of the voting securities,
other voting ownership or voting partnership interests of which is sufficient to elect at least a
majority of its Board of Directors or other governing body (or, if there are no such voting
interests, 50% or more of the equity interests of which) is owned directly or indirectly by such
first Person.
“Transaction Documents” means this Agreement, the Warrant and the Registration Rights
Agreement.
“Unit Warrant” means the instrument in the form attached hereto as Exhibit A with
respect to the purchase of the Unit Warrant Shares.
“Unit Warrant Shares” means the shares of Common Stock issuable upon the exercise of
the Unit Warrant.
“Warrants” means Unit Warrant and the Additional Warrant, if any.
“Warrant Shares” means the Unit Warrant Shares and the Additional Warrant Shares, if
any.
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“1933 Act” means the Securities Act of 1933, as amended, or any successor statute, and
the rules and regulations promulgated thereunder.
“1934 Act” means the Securities Exchange Act of 1934, as amended, or any successor
statute, and the rules and regulations promulgated thereunder.
2. Purchase and Sale of Securities.
2.1 Purchase and Sale of the Shares and Unit Warrants. Subject to the terms and
conditions of this Agreement, on the Closing Date, the Investor shall purchase, and the Company
shall sell and issue to the Investor, the Shares and the Unit Warrant, as provided herein and set
forth opposite the Investor’s name on the signature page attached hereto in exchange for the
Purchase Price.
2.2 Additional Warrants. In the event that the Investor was also an investor in the
Public Offering, such Investor shall receive an additional warrant (the “Additional Warrant”) to
purchase that number of shares of Common stock equal to two times (2x) the number of shares
underlying the warrant purchased by the Investor in connection with the Public Offering with the
number of shares underlying the Additional Warrant adjusted on a pro-rata basis (e.g., increased or
decreased) to the extent that Purchase Price is greater or less than the purchase price paid by the
Investor for the units acquired in the Public Offering. To illustrate the foregoing, if the
Investor purchased $450,000 of units in the Public Offering (for which the Investor would have
acquired 150,000 shares of Common Stock and a warrant to purchase 150,000 shares of Common Stock),
and (i) the Investor’s Purchase Price pursuant to this Agreement is $450,000, the Investor will
receive an Additional Warrant to purchase 300,000 shares of Common Stock, or (ii) the Investor’s
Purchase Price pursuant to this Agreement is $300,000, the Investor will receive an Additional
Warrant to purchase 200,000 shares of Common Stock (e.g., $300,000/$450,000 = 66.67%, 66.67% x
300,000 shares = 200,000 shares). The terms of the Warrant (including, without limitation,
exercise price) issued pursuant to this Section 2.2 shall be identical to the terms of the Warrant
issued pursuant to Section 2.1.
2.3 Adjustment to Shares Purchased Pursuant to Section 2.1. If at any time during the
eighteen (18) month period following the Closing, the Company consummates an equity, or
equity-linked financing transaction at a price that is less than the Purchase Price (subject to
adjustment for stock splits, combinations, recapitalizations or similar events) (the “Transaction
Price”), then, simultaneously with the closing of such equity or equity-linked financing, the
Company shall be obligated to issue to the Investor, for no additional consideration, a number of
shares equal to the difference between the number of Shares acquired by the Investor at Closing and
the number of shares that the Investor would have acquired at the Closing if the purchase price was
equal to the Transaction Price. This provision shall not apply to issuances of equity or equity
linked securities under the equity incentive plans, to consultants or other service providers in
exchange for bona fide services or in connection with any merger, acquisition or strategic
transaction where the price per share is equal to or greater than the five (5) day volume weighted
average price of the Company’s common stock immediately prior to the close of such merger,
acquisition or strategic transaction.
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3. Closing. Subject to the satisfaction (or written waiver) the other conditions to
closing specified herein, the date and time of the issuance and sale of the Shares and the Warrants
pursuant to Section 2 of this Agreement (the “Closing Date”) shall be simultaneous with the
execution and delivery of this Agreement by the parties, or such other mutually agreed upon time.
The closing of the purchase and sale of the Shares and the Warrants (the “Closing”) shall take
place at the offices of Xxxxx & Xxxxxx L.L.P., 000 Xxxxx Xxxxxxxxx, Xxxxx 0000, Xxxxx Xxxx,
Xxxxxxxxxx 00000, or at such other as the Company and the Investor shall mutually agree.
Effective on the Closing Date, Investor shall pay the Purchase Price for the Shares and the
Warrants to be issued and sold to it at the Closing by check or wire transfer of immediately
available funds to the Company, in accordance with the Company’s written wiring instructions
attached hereto as Exhibit C, and the Company shall deliver the certificate evidencing the
Shares and the Warrants, exercisable for the Warrant Shares.
4. Representations and Warranties of the Company. The Company hereby represents and
warrants to the Investor and the Placement Agents that, except as set forth in the schedules
delivered herewith (collectively, the “Disclosure Schedules”) and except as set forth in the
Company’s Annual Report on 10-K for the Year Ended March 31, 2010:
4.1 Organization, Good Standing and Qualification. Each of the Company and its
Subsidiaries is a corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation and has all requisite corporate power and authority to
carry on its business as now conducted and to own its properties. Each of the Company and its
Subsidiaries is duly qualified to do business as a foreign corporation and is in good standing in
each jurisdiction in which the conduct of its business or its ownership or leasing of property
makes such qualification or leasing necessary unless the failure to so qualify has not had and
could not reasonably be expected to have a Material Adverse Effect.
4.2 Authorization. The Company has full power and authority and has taken all
requisite action on the part of the Company, its officers, directors and stockholders necessary for
(i) the authorization, execution and delivery of the Transaction Documents, (ii) the authorization
of the performance of all obligations of the Company hereunder or thereunder, and (iii) the
authorization, issuance (or reservation for issuance) and delivery of the Securities. The
Transaction Documents constitute the legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general applicability, relating
to or affecting creditors’ rights generally and to general equitable principles.
4.3 Capitalization. Schedule 4.3 sets forth as of the date hereof (a) the
authorized capital stock of the Company; (b) the number of shares of capital stock issued and
outstanding; (c) the number of shares of capital stock issuable pursuant to the Company’s stock
incentive plans; and (d) the number of shares of capital stock issuable and reserved for issuance
pursuant to securities (other than the Shares and the Warrant) exercisable for, or convertible into
or exchangeable for any shares of capital stock of the Company. All of the issued and outstanding
shares of the Company’s capital stock have been duly authorized and validly issued
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and are fully paid, nonassessable and free of pre-emptive rights and were issued in compliance with
applicable state and federal securities law and any rights of third parties. All of the issued and
outstanding shares of capital stock of each Subsidiary have been duly authorized and validly issued
and are fully paid, nonassessable and free of pre-emptive rights, were issued in compliance with
applicable state and federal securities law and any rights of third parties and are owned by the
Company, beneficially and of record, subject to no lien, encumbrance or other adverse claim. No
Person is entitled to pre-emptive or similar statutory or contractual rights with respect to any
securities of the Company. Except as described on Schedule 4.3, there are no outstanding
warrants, options, convertible securities or other rights, agreements or arrangements of any
character under which the Company or any of its Subsidiaries is or may be obligated to issue any
equity securities of any kind and except as contemplated by this Agreement, neither the Company nor
any of its Subsidiaries is currently in negotiations for the issuance of any equity securities of
any kind. Except for the Registration Rights Agreement, there are no voting agreements, buy-sell
agreements, or option or right of first purchase agreements among the Company and any of the
security holders of the Company relating to the securities of the Company held by them. Except as
described on Schedule 4.3 and except as provided in the Registration Rights Agreement, no
Person has the right to require the Company to register any securities of the Company under the
1933 Act, whether on a demand basis or in connection with the registration of securities of the
Company for its own account or for the account of any other Person.
The issuance and sale of the Securities hereunder will not obligate the Company to issue
shares of Common Stock or other securities to any other Person and will not result in the
adjustment of the exercise, conversion, exchange or reset price of any outstanding security.
The Company does not have outstanding stockholder purchase rights or “poison pill” or any
similar arrangement in effect giving any Person the right to purchase any equity interest in the
Company upon the occurrence of certain events.
4.4 Valid Issuance. The Shares have been duly and validly authorized and, when issued
and paid for pursuant to this Agreement, will be validly issued, fully paid and nonassessable, and
shall be free and clear of all encumbrances and restrictions (other than those created by the
Investor), except for restrictions on transfer set forth in the Transaction Documents or imposed by
applicable securities laws. The Warrants have been duly and validly authorized. Upon the due
exercise of the Warrants and receipt of the exercise price therefor, the Warrant Shares will be
validly issued, fully paid and non-assessable free and clear of all encumbrances and restrictions,
except for restrictions on transfer set forth in the Transaction Documents or imposed by applicable
securities laws and except for those created by the Investor. The Company has reserved a
sufficient number of shares of Common Stock for issuance upon the exercise of the Warrants, free
and clear of all encumbrances and restrictions, except for restrictions on transfer set forth in
the Transaction Documents or imposed by applicable securities laws and except for those created by
the Investor.
4.5 Consents. The execution, delivery and performance by the Company of the
Transaction Documents and the offer, issuance and sale of the Securities require no consent of,
action by or in respect of, or filing with, any Person, governmental body, agency, or official
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other than filings that have been made pursuant to applicable state securities laws and post-sale
filings pursuant to applicable state and federal securities laws which the Company undertakes to
file within the applicable time periods. Subject to the accuracy of the representations and
warranties of each Investor set forth in Section 5 hereof, the Company has taken all action
necessary to exempt (i) the issuance and sale of the Securities, (ii) the issuance of the Warrant
Shares upon due exercise of the Warrants, and (iii) the other transactions contemplated by the
Transaction Documents from the provisions of any stockholder rights plan or other “poison pill”
arrangement, any anti-takeover, business combination or control share law or statute binding on the
Company or to which the Company or any of its assets and properties may be subject and any
provision of the Company’s Amended and Restated Articles of Incorporation or Bylaws that is or
could reasonably be expected to become applicable to the Investor as a result of the transactions
contemplated hereby, including without limitation, the issuance of the Securities and the
ownership, disposition or voting of the Securities by the Investor or the exercise of any right
granted to the Investor pursuant to this Agreement or the other Transaction Documents.
4.6 Delivery of SEC Filings; Business. The Company has made available to the Investor
through the XXXXX system, true and complete copies of the Company’s most recent Annual Report on
Form 10-K for the fiscal year ended March 31, 2010 (the “10-K”), and all other reports filed by the
Company pursuant to the 1934 Act since the filing of the 10-K and prior to the date hereof
(collectively, the “SEC Filings”). The SEC Filings are the only filings required of the Company
pursuant to the 1934 Act for such period. The Company and its Subsidiaries are engaged in all
material respects only in the business described in the SEC Filings and the SEC Filings contain a
complete and accurate description in all material respects of the business of the Company and its
Subsidiaries, taken as a whole.
4.7 Use of Proceeds. The net proceeds of the sale of the Shares and the Warrants
hereunder shall be used by the Company for working capital and general corporate purposes.
4.8 No Material Adverse Change. Since March 31, 2010, there has not been:
(a) any change in the consolidated assets, liabilities, financial condition or operating
results of the Company from that reflected in the financial statements included in the Company’s
SEC Filings, except for changes in the ordinary course of business which have not had and could not
reasonably be expected to have a Material Adverse Effect, individually or in the aggregate;
(b) any declaration or payment of any dividend, or any authorization or payment of any
distribution, on any of the capital stock of the Company, or any redemption or repurchase of any
securities of the Company;
(c) any material damage, destruction or loss, whether or not covered by insurance to any
assets or properties of the Company or its Subsidiaries;
(d) any waiver, not in the ordinary course of business, by the Company or any Subsidiary of a
material right or of a material debt owed to it;
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(e) any satisfaction or discharge of any lien, claim or encumbrance or payment of any
obligation by the Company or a Subsidiary, except in the ordinary course of business and which is
not material to the assets, properties, financial condition, operating results or business of the
Company and its Subsidiaries taken as a whole (as such business is presently conducted and as it is
proposed to be conducted);
(f) any change or amendment to the Company’s Amended and Restated Articles of Incorporation or
Bylaws, or material change to any material contract or arrangement by which the Company or any
Subsidiary is bound or to which any of their respective assets or properties is subject;
(g) any material labor difficulties or labor union organizing activities with respect to
employees of the Company or any Subsidiary;
(h) any material transaction entered into by the Company or a Subsidiary other than in the
ordinary course of business;
(i) the loss of the services of any key employee, or material change in the composition or
duties of the senior management of the Company or any Subsidiary;
(j) the loss or threatened loss of any customer which has had or could reasonably be expected
to have a Material Adverse Effect; or
(k) any other event or condition of any character that has had or could reasonably be expected
to have a Material Adverse Effect.
4.9 SEC Filings.
(a) At the time of filing thereof, the SEC Filings complied as to form in all material
respects with the requirements of the 1934 Act and did not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not misleading.
(b) Each registration statement and any amendment thereto filed by the Company since September
1, 2009 pursuant to the 1933 Act and the rules and regulations thereunder, as of the date such
statement or amendment became effective, complied as to form in all material respects with the 1933
Act and did not contain any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements made therein not
misleading; and each prospectus filed pursuant to Rule 424(b) under the 1933 Act, as of its issue
date and as of the closing of any sale of securities pursuant thereto did not contain any untrue
statement of a material fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements made therein, in the light of the circumstances under
which they were made, not misleading.
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4.10 No Conflict, Breach, Violation or Default. The execution, delivery and
performance of the Transaction Documents by the Company and the issuance and sale of the Securities
will not conflict with or result in a breach or violation of any of the terms and provisions of, or
constitute a default under (i) the Company’s Amended and Restated Articles of Incorporation or the
Company’s Bylaws, both as in effect on the date hereof (true and complete copies of which have been
made available to the Investor through the XXXXX system), or (ii)(a) any statute, rule, regulation
or order of any governmental agency or body or any court, domestic or foreign, having jurisdiction
over the Company, any Subsidiary or any of their respective assets or properties, where such
conflict, breach, violation or default is reasonably expected to have a Material Adverse Effect, or
(b) any agreement or instrument to which the Company or any Subsidiary is a party or by which the
Company or a Subsidiary is bound or to which any of their respective assets or properties is
subject, where such conflict, breach, violation or default is reasonably expected to have a
Material Adverse Effect.
4.11 Tax Matters. The Company and each Subsidiary has timely prepared and filed all
tax returns required to have been filed by the Company or such Subsidiary with all appropriate
governmental agencies and timely paid all taxes shown thereon or otherwise owed by it. The
charges, accruals and reserves on the books of the Company in respect of taxes for all fiscal
periods are adequate in all material respects, and there are no material unpaid assessments against
the Company or any Subsidiary nor, to the Company’s Knowledge, any basis for the assessment of any
additional taxes, penalties or interest for any fiscal period or audits by any federal, state or
local taxing authority except for any assessment which is not material to the Company and its
Subsidiaries, taken as a whole. All taxes and other assessments and levies that the Company or any
Subsidiary is required to withhold or to collect for payment have been duly withheld and collected
and paid to the proper governmental entity or third party when due. There are no tax liens or
claims pending or, to the Company’s Knowledge, threatened against the Company or any Subsidiary or
any of their respective assets or property. There are no outstanding tax sharing agreements or
other such arrangements between the Company and any Subsidiary or other corporation or entity.
4.12 Title to Properties. Except as described on Schedule 4.12, the Company
and each Subsidiary has good and marketable title to all real properties and all other properties
and assets owned by it, in each case free from liens, encumbrances and defects that would
materially affect the value thereof or materially interfere with the use made or currently planned
to be made thereof by them; and the Company and each Subsidiary holds any leased real or personal
property under valid and enforceable leases with no exceptions that would materially interfere with
the use made or currently planned to be made thereof by them.
4.13 Certificates, Authorities and Permits. The Company and each Subsidiary possess
adequate certificates, authorities or permits issued by appropriate governmental agencies or bodies
necessary to conduct the business now operated by it, and neither the Company nor any Subsidiary
has received any notice of proceedings relating to the revocation or modification of any such
certificate, authority or permit that, if determined adversely to the Company or such Subsidiary,
could reasonably be expected to have a Material Adverse Effect, individually or in the aggregate.
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4.14 Labor Matters.
(a) The Company is not a party to or bound by any collective bargaining agreements or other
agreements with labor organizations. The Company has not violated in any material respect any
laws, regulations, orders or contract terms, affecting the collective bargaining rights of
employees, labor organizations or any laws, regulations or orders affecting employment
discrimination, equal opportunity employment, or employees’ health, safety, welfare, wages and
hours.
(b) (i) There are no labor disputes existing, or to the Company’s Knowledge, threatened,
involving strikes, slow-downs, work stoppages, job actions, disputes, lockouts or any other
disruptions of or by the Company’s employees, (ii) there are no unfair labor practices or petitions
for election pending or, to the Company’s Knowledge, threatened before the National Labor Relations
Board or any other federal, state or local labor commission relating to the Company’s employees,
(iii) no demand for recognition or certification heretofore made by any labor organization or group
of employees is pending with respect to the Company and (iv) to the Company’s Knowledge, the
Company enjoys good labor and employee relations with its employees and labor organizations.
(c) The Company is, and at all times has been, in compliance in all material respects with all
applicable laws respecting employment (including laws relating to classification of employees and
independent contractors) and employment practices, terms and conditions of employment, wages and
hours, and immigration and naturalization. There are no claims pending against the Company before
the Equal Employment Opportunity Commission or any other administrative body or in any court
asserting any violation of Title VII of the Civil Rights Act of 1964, the Age Discrimination Act of
1967, 42 U.S.C. §§ 1981 or 1983 or any other federal, state or local Law, statute or ordinance
barring discrimination in employment.
(d) Except as described on Schedule 4.14, the Company is not a party to, or bound by,
any employment or other contract or agreement that contains any severance, termination pay or
change of control liability or obligation, including, without limitation, any “excess parachute
payment,” as defined in Section 280G(b) of the Internal Revenue Code.
(e) Each of the Company’s employees is a Person who is either a United States citizen or a
permanent resident entitled to work in the United States. To the Company’s Knowledge, the Company
has no liability for the improper classification by the Company of such employees as independent
contractors or leased employees prior to the Closing.
4.15 Intellectual Property.
(a) All Intellectual Property of the Company and its Subsidiaries is currently in compliance
with all legal requirements (including timely filings, proofs and payments of fees) and is valid
and enforceable. No Intellectual Property of the Company or its Subsidiaries which is necessary
for the conduct of Company’s and each of its Subsidiaries’ respective businesses as currently
conducted or as currently proposed to be conducted has been
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or is now involved in any cancellation, dispute or litigation, and, to the Company’s Knowledge, no
such action is threatened. To the Company’s Knowledge, no patent of the Company or its
Subsidiaries has been or is now involved in any interference, reissue, re-examination or opposition
proceeding.
(b) All of the licenses and sublicenses and consent, royalty or other agreements concerning
Intellectual Property which are necessary for the conduct of the Company’s and each of its
Subsidiaries’ respective businesses as currently conducted or as currently proposed to be conducted
to which the Company or any Subsidiary is a party or by which any of their assets are bound (other
than generally commercially available, non-custom, off-the-shelf software application programs
having a retail acquisition price of less than $10,000 per license) (collectively, “License
Agreements”) are valid and binding obligations of the Company or its Subsidiaries that are parties
thereto and, to the Company’s Knowledge, the other parties thereto, enforceable in accordance with
their terms, except to the extent that enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or other similar laws affecting the
enforcement of creditors’ rights generally, and to the Company’s Knowledge, there exists no event
or condition which will result in a material violation or breach of or constitute (with or without
due notice or lapse of time or both) a default by the Company or any of its Subsidiaries under any
such License Agreement.
(c) The Company and its Subsidiaries own or have the valid right to use all of the
Intellectual Property that is necessary for the conduct of the Company’s and each of its
Subsidiaries’ respective businesses as currently conducted or as currently proposed to be conducted
and for the ownership, maintenance and operation of the Company’s and its Subsidiaries’ properties
and assets, free and clear of all liens, encumbrances, adverse claims or obligations to license all
such owned Intellectual Property and Confidential Information, other than licenses entered into in
the ordinary course of the Company’s and its Subsidiaries’ businesses. To the Company’s Knowledge,
the Company and its Subsidiaries have a valid and enforceable right to use all third party
Intellectual Property and Confidential Information used or held for use in the respective
businesses of the Company and its Subsidiaries.
(d) To the Company’s Knowledge, the conduct of the Company’s and its Subsidiaries’ businesses
as currently conducted does not infringe or otherwise impair or conflict with (collectively,
“Infringe”) any Intellectual Property rights of any third party or any confidentiality obligation
owed to a third party, and, to the Company’s Knowledge, the Intellectual Property and Confidential
Information of the Company and its Subsidiaries which are necessary for the conduct of Company’s
and each of its Subsidiaries’ respective businesses as currently conducted or as currently proposed
to be conducted are not being Infringed by any third party. There is no litigation or order
pending or outstanding or, to the Company’s Knowledge, threatened or imminent, that seeks to limit
or challenge or that concerns the ownership, use, validity or enforceability of any Intellectual
Property or Confidential Information of the Company and its Subsidiaries and the Company’s and its
Subsidiaries’ use of any Intellectual Property or Confidential Information owned by a third party,
and, to the Company’s Knowledge, there is no valid basis for the same.
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(e) The consummation of the transactions contemplated hereby and by the other Transaction
Documents will not result in the alteration, loss, impairment of or restriction on the Company’s or
any of its Subsidiaries’ ownership or right to use any of the Intellectual Property or Confidential
Information which is necessary for the conduct of Company’s and each of its Subsidiaries’
respective businesses as currently conducted or as currently proposed to be conducted.
(f) The Company and its Subsidiaries have taken reasonable steps to protect the Company’s and
its Subsidiaries’ rights in their Intellectual Property and Confidential Information. Each current
employee, consultant and contractor who has had access to Confidential Information which is
necessary for the conduct of Company’s and each of its Subsidiaries’ respective businesses as
currently conducted or as currently proposed to be conducted has executed an agreement to maintain
the confidentiality of such Confidential Information and has executed appropriate agreements that
are substantially consistent with the Company’s standard forms thereof. Except under
confidentiality obligations, to the Company’s Knowledge, there has been no material disclosure of
any of the Company’s or its Subsidiaries’ Confidential Information to any third party.
4.16 Environmental Matters. To the Company’s Knowledge, neither the Company nor any
Subsidiary is in violation of any statute, rule, regulation, decision or order of any governmental
agency or body or any court, domestic or foreign, relating to the use, disposal or release of
hazardous or toxic substances or relating to the protection or restoration of the environment or
human exposure to hazardous or toxic substances (collectively, “Environmental Laws”), owns or
operates any real property contaminated with any substance that is subject to any Environmental
Laws, is liable for any off-site disposal or contamination pursuant to any Environmental Laws, or
is subject to any claim relating to any Environmental Laws, which violation, contamination,
liability or claim has had or could reasonably be expected to have a Material Adverse Effect,
individually or in the aggregate; and there is no pending or, to the Company’s Knowledge,
threatened investigation that might lead to such a claim.
4.17 Litigation. Except as described on Schedule 4.17, there are no pending
actions, suits or proceedings against or affecting the Company, its Subsidiaries or any of its or
their properties; and to the Company’s Knowledge, no such actions, suits or proceedings are
threatened or contemplated. Neither the Company nor any Subsidiary, nor any director or officer
thereof, is or since March 31, 2010, has been the subject of any action involving a claim of
violation of or liability under federal or state securities laws or a claim of breach of fiduciary
duty. There has not been, and to the Company’s Knowledge, there is not pending or contemplated,
any investigation by the SEC involving the Company or any current or former director or officer of
the Company. The SEC has not issued any stop order or other order suspending the effectiveness of
any registration statement filed by the Company or any Subsidiary under the 1933 Act or the 1934
Act.
4.18 Financial Statements. The financial statements included in each SEC Filing
present fairly, in all material respects, the consolidated financial position of the Company as of
the dates shown and its consolidated results of operations and cash flows for the periods shown,
and such financial statements have been prepared in conformity with United States
-12-
generally accepted accounting principles applied on a consistent basis (“GAAP”) (except as may be
disclosed therein or in the notes thereto, and, in the case of quarterly financial statements, as
permitted by Form 10-Q under the 1934 Act). Except as set forth in the financial statements of the
Company included in the SEC Filings filed prior to the date hereof or as described on Schedule
4.18, neither the Company nor any of its Subsidiaries has incurred any liabilities, contingent
or otherwise, except those incurred in the ordinary course of business, consistent (as to amount
and nature) with past practices since the date of such financial statements, none of which,
individually or in the aggregate, have had or could reasonably be expected to have a Material
Adverse Effect.
4.19 Insurance Coverage. The Company and each Subsidiary maintains in full force and
effect insurance coverage that is customary for comparably situated companies for the business
being conducted and properties owned or leased by the Company and each Subsidiary, and the Company
reasonably believes such insurance coverage to be adequate against all liabilities, claims and
risks against which it is customary for comparably situated companies to insure.
4.20 [reserved]
4.21 Brokers and Finders. No Person will have, as a result of the transactions
contemplated by the Transaction Documents, any valid right, interest or claim against or upon the
Company, any Subsidiary or the Investor for any commission, fee or other compensation pursuant to
any agreement, arrangement or understanding entered into by or on behalf of the Company, other than
as described in Schedule 4.21.
4.22 No Directed Selling Efforts or General Solicitation. Neither the Company nor any
Person acting on its behalf has conducted any general solicitation or general advertising (as those
terms are used in Regulation D) in connection with the offer or sale of any of the Securities.
4.23 No Integrated Offering. Neither the Company nor any of its Affiliates, nor any
Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any
Company security or solicited any offers to buy any security, under circumstances that would
adversely affect reliance by the Company on Section 4(2) for the exemption from registration for
the transactions contemplated hereby or would require registration of the Securities under the 1933
Act.
4.24 Private Placement. Assuming the accuracy of the Investment Representations (as
defined in Section 6.2(a) of this Agreement), the offer and sale of the Securities to the Investor
as contemplated hereby is exempt from the registration requirements of the 1933 Act.
4.25 Questionable Payments. Neither the Company nor any of its Subsidiaries nor, to
the Company’s Knowledge, any of their respective current or former directors, officers, employees,
agents or other Persons acting on behalf of the Company or any Subsidiary, has on behalf of the
Company or any Subsidiary or in connection with their respective businesses: (a)
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used any corporate funds for unlawful contributions, gifts, entertainment or other unlawful
expenses relating to political activity; (b) made any direct or indirect unlawful payments to any
governmental officials or employees from corporate funds; (c) established or maintained any
unlawful or unrecorded fund of corporate monies or other assets; (d) made any false or fictitious
entries on the books and records of the Company or any Subsidiary; or (e) made any unlawful bribe,
rebate, payoff, influence payment, kickback or other unlawful payment of any nature.
4.26 Transactions with Affiliates. Except as disclosed on Schedule 4.26, none
of the officers or directors of the Company and, to the Company’s Knowledge, none of the employees
of the Company is presently a party to any transaction with the Company or any Subsidiary (other
than as holders of stock options and/or warrants, and 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 Company’s
Knowledge, any entity in which any officer, director, or any such employee has a substantial
interest or is an officer, director, trustee or partner.
4.27 Internal Controls. The Company is in material compliance with the provisions of
the Xxxxxxxx-Xxxxx Act of 2002 currently applicable to the Company. The Company and the
Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with management’s general or specific
authorizations, (ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is
permitted only in accordance with management’s general or specific authorization, and (iv) the
recorded accountability for assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. The Company has established
disclosure controls and procedures (as defined in 1934 Act Rules 13a-15(e) and 15d-15(e)) for the
Company and designed such disclosure controls and procedures to ensure that material information
relating to the Company, including the Subsidiaries, is made known to the certifying officers by
others within those entities, particularly during the period in which the Company’s most recently
filed periodic report under the 1934 Act, as the case may be, is being prepared. The Company’s
certifying officers have evaluated the effectiveness of the Company’s controls and procedures as of
the end of the period covered by the most recently filed periodic report under the 1934 Act (such
date, the “Evaluation Date”). The Company presented in its most recently filed periodic report
under the 1934 Act the conclusions of the certifying officers about the effectiveness of the
disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the
Evaluation Date, there have been no significant changes in the Company’s internal controls (as such
term is defined in Item 308 of Regulation S-K), to the Company’s Knowledge, in other factors that
could significantly affect the Company’s internal controls. The Company maintains and will
continue to maintain a standard system of accounting established and administered in accordance
with GAAP and the applicable requirements of the 0000 Xxx.
4.28 Disclosures. Neither the Company nor any Person acting on its behalf has
provided the Investor or its agent with any information that constitutes or might constitute
material, non-public information, other than the terms of the transactions contemplated hereby.
-14-
The written materials delivered to the Investor in connection with the transactions contemplated by
the Transaction Documents do not contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements contained therein, in light of the
circumstances under which they were made, not misleading.
5. Representations and Warranties of the Investor. The Investor hereby represents and
warrants to the Company that:
5.1 Organization and Existence. The Investor is a validly existing corporation and
has all requisite corporate, partnership or limited liability company power and authority to invest
in the Securities pursuant to this Agreement.
5.2 Authorization. The execution, delivery and performance by the Investor of the
Transaction Documents to which the Investor is a party have been duly authorized and each will
constitute the valid and legally binding obligation of the Investor, enforceable against the
Investor in accordance with their respective terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability, relating to or
affecting creditors’ rights generally.
5.3 Purchase Entirely for Own Account. The Securities to be received by the Investor
hereunder will be acquired for the Investor’s own account and not for the account of others or as
nominee or agent, and not with a view to, or for, resale, distribution, syndication, or
fractionalization thereof, and the Investor has no present intention of selling, granting any
participation in, or otherwise distributing the same in violation of the 1933 Act without
prejudice, however, to the Investor’s right at all times to sell or otherwise dispose of all or any
part of the Securities in compliance with applicable federal and state securities laws. Nothing
contained herein shall be deemed a representation or warranty by the Investor to hold the
Securities for any period of time. The Investor is not a broker-dealer registered with the SEC
under the 1934 Act or an entity engaged in a business that would require it to be so registered.
5.4 Investment Experience. The Investor acknowledges that it can bear the economic
risk and complete loss of its investment in the Securities and has such knowledge and experience in
financial or business matters that it is capable of evaluating the merits and risks of the
investment contemplated hereby.
5.5 Disclosure of Information. The Investor has had an opportunity to receive all
information related to the Company requested by it and to ask questions of and receive answers from
the Company regarding the Company, its business and the terms and conditions of the offering of the
Securities. The Investor acknowledges receipt of copies of the SEC Filings. Neither such
inquiries nor any other due diligence investigation conducted by the Investor shall modify, limit
or otherwise affect the Investor’s right to rely on the Company’s representations and warranties
contained in this Agreement.
5.6 Restricted Securities. The Investor understands that the Securities are
characterized as “restricted securities” under the U.S. federal securities laws inasmuch as they
are being acquired from the Company in a transaction not involving a public offering and that
-15-
under such laws and applicable regulations such securities may be resold without registration under
the 1933 Act only in certain limited circumstances.
5.7 Legends. It is understood that, except as provided below, certificates evidencing
the Securities may bear the following or any similar legend:
(a) “THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES OR AN OPINION OF COUNSEL OR OTHER EVIDENCE
ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.”
(b) If required by the authorities of any state in connection with the issuance of sale of the
Securities, the legend required by such state authority.
5.8 Accredited Investor. The Investor is an accredited investor as defined in Rule
501(a) of Regulation D, as amended, under the 0000 Xxx.
5.9 No General Solicitation. The Investor did not learn of the investment in the
Securities as a result of any general solicitation or general advertising.
5.10 Brokers and Finders. No Person will have (other than the Placement Agents), as a
result of the transactions contemplated by the Transaction Documents, any valid right, interest or
claim against or upon the Company, any Subsidiary or the Investor for any commission, fee or other
compensation pursuant to any agreement, arrangement or understanding entered into by or on behalf
of the Investor.
5.11 Prohibited Transactions. Since the earlier of (a) such time as the Investor was
first contacted by the Company or any other Person acting on behalf of the Company regarding the
transactions contemplated hereby or (b) thirty (30) days prior to the date hereof, neither the
Investor nor any Affiliate of the Investor which (x) had knowledge of the transactions contemplated
hereby, (y) has or shares discretion relating to the Investor’s investments or trading or
information concerning the Investor’s investments, including in respect of the Securities, or (z)
is subject to the Investor’s review or input concerning such Affiliate’s investments or trading
(collectively, “Trading Affiliates”) has, directly or indirectly, effected or agreed to effect any
short sale, whether or not against the box, established any “put equivalent position” (as defined
in Rule 16a-1(h) under the 0000 Xxx) with respect to the Common Stock, granted any other right
(including, without limitation, any put or call option) with respect to the Common Stock or with
respect to any security that includes, relates to or derived any significant part of its value from
the Common Stock or otherwise sought to hedge its position in the Securities (each, a “Prohibited
Transaction”).
-16-
6. Conditions to Closing.
6.1 Conditions to the Investor’s Obligations. The obligation of the Investor to
purchase the Shares and the Warrants at the Closing is subject to the fulfillment to the Investor’s
satisfaction, on or prior to the Closing Date, of the following conditions, any of which may be
waived by the Investor:
(a) The representations and warranties made by the Company in Section 4 hereof qualified as to
materiality shall be true and correct at all times prior to and on the Closing Date, except to the
extent any such representation or warranty expressly speaks as of an earlier date, in which case
such representation or warranty shall be true and correct as of such earlier date, and, the
representations and warranties made by the Company in Section 4 hereof not qualified as to
materiality shall be true and correct in all material respects at all times prior to and on the
Closing Date, except to the extent any such representation or warranty expressly speaks as of an
earlier date, in which case such representation or warranty shall be true and correct in all
material respects as of such earlier date. The Company shall have performed in all material
respects all obligations and covenants herein required to be performed by it on or prior to the
Closing Date.
(b) The Company shall have obtained any and all consents, permits, approvals, registrations
and waivers necessary or appropriate for consummation of the purchase and sale of the Securities
and the consummation of the other transactions contemplated by the Transaction Documents, all of
which shall be in full force and effect.
(c) The Company shall have executed and delivered the Registration Rights Agreement.
(d) No judgment, writ, order, injunction, award or decree of or by any court, or judge,
justice or magistrate, including any bankruptcy court or judge, or any order of or by any
governmental authority, shall have been issued, and no action or proceeding shall have been
instituted by any governmental authority, enjoining or preventing the consummation of the
transactions contemplated hereby or in the other Transaction Documents.
(e) No stop order or suspension of trading shall have been imposed by the OTC Bulletin Board,
the SEC or any other governmental or regulatory body with respect to public trading in the Common
Stock.
6.2 Conditions to Obligations of the Company. The Company’s obligation to sell and
issue the Shares and the Warrants at the Closing is subject to the fulfillment to the satisfaction
of the Company on or prior to the Closing Date of the following conditions, any of which may be
waived by the Company:
(a) The representations and warranties made by the Investor in Section 5 hereof, other than
the representations and warranties contained in Sections 5.3, 5.4, 5.5, 5.6, 5.7, 5.8 and 5.9 (the
“Investment Representations”), shall be true and correct in all material
-17-
respects when made, and shall be true and correct in all material respects on the Closing Date with
the same force and effect as if they had been made on and as of said date. The Investment
Representations shall be true and correct in all respects when made, and shall be true and correct
in all respects on the Closing Date with the same force and effect as if they had been made on and
as of said date. The Investor shall have performed in all material respects all obligations and
covenants herein required to be performed by them on or prior to the Closing Date.
(b) The Investor shall have executed and delivered the Registration Rights Agreement.
(c) The Investor shall have delivered the Purchase Price to the Company.
6.3 Termination of Obligations to Effect Closing; Effects.
(a) The obligations of the Company, on the one hand, and the Investor, on the other hand, to
effect the Closing shall terminate as follows:
(i) Upon the mutual written consent of the Company and the Investor;
(ii) By the Company if any of the conditions set forth in Section 6.2 shall have become
incapable of fulfillment, and shall not have been waived by the Company;
(iii) By the Investor if any of the conditions set forth in Section 6.1 shall have become
incapable of fulfillment, and shall not have been waived by the Investor; or
(iv) By either the Company or the Investor if the Closing has not occurred on or prior to the
date thirty days after the date hereof;
provided, however, that, except in the case of clause (i) above, the party seeking to terminate its
obligation to effect the Closing shall not then be in breach of any of its representations,
warranties, covenants or agreements contained in this Agreement or the other Transaction Documents
if such breach has resulted in the circumstances giving rise to such party’s seeking to terminate
its obligation to effect the Closing.
7. Covenants and Agreements of the Company.
7.1 Reservation of Common Stock. The Company shall at all times reserve and keep
available out of its authorized but unissued shares of Common Stock, solely for the purpose of
providing for the exercise of the Warrants, such number of shares of Common Stock as shall from
time to time equal the number of shares sufficient to permit the exercise of the Warrants issued
pursuant to this Agreement in accordance with its respective terms.
-18-
7.2 Reports. The Company will furnish to the Investor and/or its assignee such
information relating to the Company and its Subsidiaries as from time to time may reasonably be
requested by the Investor and/or their assignees; provided, however, that the Company shall not
disclose material nonpublic information to the Investor, or to any advisor to or representative of
the Investor, unless prior to disclosure of such information the Company identifies such
information as being material nonpublic information and provides the Investor, such advisor and
representative with the opportunity to accept or refuse to accept such material nonpublic
information for review and the Investor wishing to obtain such information enters into an
appropriate confidentiality agreement with the Company with respect thereto.
7.3 No Conflicting Agreements. The Company will not take any action, enter into any
agreement or make any commitment that would conflict or interfere in any material respect with the
Company’s obligations to the Investor under the Transaction Documents.
7.4 Insurance. The Company shall not materially reduce the insurance coverages
described in Section 4.19.
7.5 Compliance with Laws. The Company will comply in all material respects with all
applicable laws, rules, regulations, orders and decrees of all governmental authorities.
7.6 [reserved]
7.7 Termination of Covenants. The provisions of Sections 7.2 through 7.5 shall
terminate and be of no further force and effect on the date on which the Company’s obligations
under the Registration Rights Agreement to register or maintain the effectiveness of any
registration covering the Registrable Securities (as such term is defined in the Registration
Rights Agreement) shall terminate.
7.8 Removal of Legends. In connection with any sale or disposition of the Securities
by the Investor pursuant to Rule 144 or pursuant to any other exemption under the 1933 Act such
that the purchaser acquires freely tradable shares and upon compliance by the Investor with the
requirements of this Agreement, the Company shall or, in the case of Common Stock, shall cause the
transfer agent for the Common Stock (the “Transfer Agent”) to issue replacement certificates
representing the Securities sold or disposed of without restrictive legends. Upon the earlier of
(i) registration for resale pursuant to the Registration Rights Agreement or (ii) the Shares
becoming freely tradable by a non-affiliate pursuant to Rule 144, the Company shall (A) deliver to
the Transfer Agent irrevocable instructions that the Transfer Agent shall reissue a certificate
representing shares of Common Stock without legends upon receipt by such Transfer Agent of the
legended certificates for such shares, together with either (1) a customary representation by the
Investor that Rule 144 applies to the shares of Common Stock represented thereby or (2) a statement
by the Investor that the Investor has sold the shares of Common Stock represented thereby in
accordance with the Plan of Distribution contained in the Registration Statement, and (B) cause its
counsel to deliver to the Transfer Agent one or more blanket opinions to the effect that the
removal of such legends in such circumstances may be effected under the 1933 Act. From and after
the earlier of such dates, upon the Investor’s
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written request, the Company shall promptly cause certificates evidencing the Investor’s Securities
to be replaced with certificates which do not bear such restrictive legends, and Warrant Shares
subsequently issued upon due exercise of the Warrants shall not bear such restrictive legends
provided the provisions of either clause (i) or clause (ii) above, as applicable, are satisfied
with respect to such Warrant Shares.
8. Survival and Indemnification.
8.1 Survival. The representations, warranties, covenants and agreements contained in
this Agreement shall survive the Closing of the transactions contemplated by this Agreement.
8.2 Indemnification. The Company agrees to indemnify and hold harmless the Investor
and its Affiliates and their respective directors, officers, employees and agents from and against
any and all losses, claims, damages, liabilities and expenses (including without limitation
reasonable attorney fees and disbursements and other expenses incurred in connection with
investigating, preparing or defending any action, claim or proceeding, pending or threatened and
the costs of enforcement thereof) (collectively, “Losses”) to which such Person may become subject
as a result of any breach of representation, warranty, covenant or agreement made by or to be
performed on the part of the Company under the Transaction Documents, and will reimburse any such
Person for all such amounts as they are incurred by such Person; provided, however, that such
indemnifiable Losses shall not exceed the amount of the Purchase Price.
8.3 Conduct of Indemnification Proceedings. Any person entitled to indemnification
hereunder shall (i) give prompt notice to the indemnifying party of any claim with respect to which
it seeks indemnification and (ii) permit such indemnifying party to assume the defense of such
claim with counsel reasonably satisfactory to the indemnified party; provided that any
person entitled to indemnification hereunder shall have the right to employ separate counsel and to
participate in the defense of such claim, but the fees and expenses of such counsel shall be at the
expense of such person unless (a) the indemnifying party has agreed to pay such fees or expenses,
or (b) the indemnifying party shall have failed to assume the defense of such claim and employ
counsel reasonably satisfactory to such person or (c) in the reasonable judgment of any such
person, based upon written advice of its counsel, a conflict of interest exists between such person
and the indemnifying party with respect to such claims (in which case, if the person notifies the
indemnifying party in writing that such person elects to employ separate counsel at the expense of
the indemnifying party, the indemnifying party shall not have the right to assume the defense of
such claim on behalf of such person); and provided, further, that the failure of
any indemnified party to give notice as provided herein shall not relieve the indemnifying party of
its obligations hereunder, except to the extent that such failure to give notice shall materially
adversely affect the indemnifying party in the defense of any such claim or litigation. It is
understood that the indemnifying party shall not, in connection with any proceeding in the same
jurisdiction, be liable for fees or expenses of more than one separate firm of attorneys at any
time for all such indemnified parties. No indemnifying party will, except with the consent of the
indemnified party, consent to entry of any judgment or enter into any settlement that does not
include as an unconditional term thereof the giving by the claimant or
-20-
plaintiff to such indemnified party of a release from all liability in respect of such claim
or litigation.
9. Miscellaneous.
9.1 Successors and Assigns. This Agreement may not be assigned by a party hereto
without the prior written consent of the Company or the Investor, as applicable; provided, however,
that the Investor may assign its rights and delegate its duties hereunder in whole or in part to an
Affiliate or to a third party acquiring some or all of the Securities in a transaction complying
with applicable securities laws without the prior written consent of the Company. The provisions
of this Agreement shall inure to the benefit of and be binding upon the respective permitted
successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended
to confer upon any party other than the parties hereto or their respective successors and assigns
any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.
9.2 Counterparts; Faxes. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall constitute one and the
same instrument. This Agreement may also be executed via facsimile, which shall be deemed an
original.
9.3 Titles and Subtitles. The titles and subtitles used in this Agreement are used
for convenience only and are not to be considered in construing or interpreting this Agreement.
9.4 Notices. Unless otherwise provided, any notice required or permitted under this
Agreement shall be given in writing and shall be deemed effectively given as hereinafter described
(i) if given by personal delivery, then such notice shall be deemed given upon such delivery, (ii)
if given by telex or telecopier, then such notice shall be deemed given upon receipt of
confirmation of complete transmittal, (iii) if given by mail, then such notice shall be deemed
given upon the earlier of (A) receipt of such notice by the recipient or (B) three days after such
notice is deposited in first class mail, postage prepaid, and (iv) if given by an internationally
recognized overnight air courier, then such notice shall be deemed given one Business Day after
delivery to such carrier. All notices shall be addressed to the party to be notified at the
address as follows, or at such other address as such party may designate by ten days’ advance
written notice to the other party:
If to the Company:
CryoPort, Inc.
00000 Xxxxxxx Xxx Xxxxxx
Xxxx Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
00000 Xxxxxxx Xxx Xxxxxx
Xxxx Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
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with a copy to (which copy shall not be deemed notice):
Xxxx X. Xxxxxxx
Xxxxx & Xxxxxx L.L.P.
000 Xxxxx Xxxxxxxxx
Xxxxx 0000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Xxxxx & Xxxxxx L.L.P.
000 Xxxxx Xxxxxxxxx
Xxxxx 0000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
If to the Investor:
to the address set forth on the signature page hereto.
9.5 Expenses. The parties hereto shall pay their own costs and expenses in connection
herewith.
9.6 Amendments and Waivers. Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively), only with the written consent of the Company
and the Investor. Any amendment or waiver effected in accordance with this paragraph shall be
binding upon each holder of any Securities purchased under this Agreement at the time outstanding,
each future holder of all such Securities, and the Company.
9.7 Publicity. If the sales of Securities under this Agreement would require the
Company to report sales of unregistered securities under Item 3.02 of Form 8-K, then no later than
the fourth trading day following the Closing that triggers such filing requirement the Company
shall (i) issue a press release disclosing the consummation of the transactions contemplated by
this Agreement and (ii) file a Current Report on Form 8-K attaching the press release as well as
copies of the Transaction Documents. The Company will make such other filings and notices in the
manner and time required by the SEC.
9.8 Severability. Any provision of this Agreement that is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions hereof but shall be
interpreted as if it were written so as to be enforceable to the maximum extent permitted by
applicable law, and any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction. To the extent
permitted by applicable law, the parties hereby waive any provision of law which renders any
provision hereof prohibited or unenforceable in any respect.
9.9 Entire Agreement. This Agreement, including the Exhibits and the Disclosure
Schedules, and the other Transaction Documents constitute the entire agreement between the parties
hereof with respect to the subject matter hereof and thereof and supersede all prior agreements and
understandings, both oral and written, between the parties with respect to the subject matter
hereof and thereof.
-22-
9.10 Further Assurances. The parties shall execute and deliver all such further
instruments and documents and take all such other actions as may reasonably be required to carry
out the transactions contemplated hereby and to evidence the fulfillment of the agreements herein
contained.
9.11 Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. This Agreement
shall be governed by, and construed in accordance with, the internal laws of the State of New York
without regard to the choice of law principles thereof. Each of the parties hereto irrevocably
submits to the exclusive jurisdiction of the courts of the State of New York located in New York
County and the United States District Court for the Southern District of New York for the purpose
of any suit, action, proceeding or judgment relating to or arising out of this Agreement and the
transactions contemplated hereby. Service of process in connection with any such suit, action or
proceeding may be served on each party hereto anywhere in the world by the same methods as are
specified for the giving of notices under this Agreement. Each of the parties hereto irrevocably
consents to the jurisdiction of any such court in any such suit, action or proceeding and to the
laying of venue in such court. Each party hereto irrevocably waives any objection to the laying of
venue of any such suit, action or proceeding brought in such courts and irrevocably waives any
claim that any such suit, action or proceeding brought in any such court has been brought in an
inconvenient forum. EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY
LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED
SPECIFICALLY AS TO THIS WAIVER.
[signature pages follow]
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IN WITNESS WHEREOF, the parties have executed this Agreement or caused their duly authorized
officers to execute this Agreement as of the date first above written.
| The Company: | CryoPort, Inc. |
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| By: | ||||
| Name: | Xxxxx X. Xxxxxxxxx | |||
| Title: | Chief Executive Officer | |||
Signature Page to Securities Purchase Agreement
| The Investor: | [INVESTOR]. |
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| By: | ||||
| Name: | ||||
| Title: | ||||
Aggregate Purchase Price:
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Number of Shares:
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Number of Unit Warrant Shares:
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Number of Additional Warrant Shares:
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Address for Notice:
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Signature Page to Securities Purchase Agreement
DISCLOSURE SCHEDULE OF CRYOPORT, INC.
This Disclosure Schedule is delivered pursuant to the Securities Purchase Agreement (the
“Agreement”) dated as of August __, 2010 by and between CryoPort, Inc. (the “Company”), and
[Investor]. Capitalized terms used herein and not otherwise defined shall have the meaning
ascribed to such terms in the Agreement.
SCHEDULE 4.3
As of August __, 2010,
(a) The Company is authorized to issue 250,000,000 shares of Common Stock, $0.001 par value
per share.
(b) There are 8,150,255 shares of Common Stock issued and outstanding.
(c) There are 8,276,519 additional shares of common stock reserved for issuance as
follows:
| Number of Shares of Common Stock | ||||
| Issuable or Reserved For Issuance | ||||
Common stock issuable upon
conversion of outstanding
convertible debentures |
1,076,856 | |||
Common stock issuable upon exercise
of outstanding warrants |
5,540,532 | |||
Common stock issuable upon exercise
of outstanding options or
reserved for future incentive awards
under stock incentive plans |
1,659,131 | |||
Total |
8,276,519 | |||
SCHEDULE 4.8
None.
SCHEDULE 4.12
In connection with the issuance of convertible debentures to certain institutional investors in
October 2007 and May 2008, the Company granted a first priority security interest in substantially
all of its assets, including intellectual property, to the purchasers to secure the Company’s
repayment obligations under the debentures.
The Company has invested cash in a one year restricted certificate of deposit, with a balance of
$90,404 as of March 31, 2010, which serves as collateral for borrowings under a line of credit
agreement.
SCHEDULE 4.14
Pursuant to Xx. Xxxxx Xxxxxxxxx’x employment agreement dated August 31, 2009, if the Company
terminates Xx. Xxxxxxxxx’x employment other than “for cause” (as defined in the agreement) or Xx.
Xxxxxxxxx terminates his employment due to a “constructive discharge” (as defined in the
agreement), then, subject to Xx. Xxxxxxxxx’x signing of a general release, Xx. Xxxxxxxxx will
receive a severance payment equal to (i) six months’ base salary, if such termination occurs during
the first twelve months of his employment, or (ii) twelve months’ base salary if such termination
occurs following the first twelve months of his employment, and, in either instance, health care
insurance coverage for one year.
Pursuant to Xx. Xxxx Xxxxxxxxx’x employment agreement dated February 1, 2008, in the event
that the Company terminates Xx. Xxxxxxxxx’x employment without “cause” or in connection with a
“change in control” (each as defined in the employment agreement), then upon such termination, the
Company is obligated to pay to Xx. Xxxxxxxxx as xxxxxxxxx an amount equal to six months of his
current base salary.
SCHEDULE 4.17
None.
SCHEDULE 4.21
In connection with the offering, the Company has engaged Maxim Group LLC and Emergent
Financial Group, Inc. as its placement agents for the offering of the Shares and the Warrant on a
“best efforts” basis. The Company will pay the applicable Placement Agents a 7% commission,
payable in cash, of offering proceeds subscribed for through the solicitation efforts of the
respective Placement Agents. The Company will pay Maxim Group LLC and a 1% non-accountable expense
allowance. Additionally, the applicable Placement Agent will receive Common Stock equal to 7% of
the total number of shares of Common Stock underlying the Securities (excluding the Additional
Warrant Shares) issued at each closing with respect to subscriptions solicited by the Placement
Agent. The Company will also reimburse the Placement Agent in a timely manner for all
expenses reasonably incurred relating to the offering, including, the legal fees incurred by the
Placement Agent in connection with the Offering with a limitation of up to $50,000 with respect to
Maxim Group LLC and $5,000 with respect to Emergent Financial Group, Inc..
SCHEDULE 4.26
None.
EXHIBIT A —FORM OF WARRANT
EXHIBIT B — REGISTRATION RIGHTS AGREEMENT
EXHIBIT C — WIRING INSTRUCTIONS
Wiring Instructions are as follows:
XX XXXXXX CHASE BANK
ABA # 021 000 021
ABA # 021 000 021
ACCT # 323-838685
ACCT NAME: AMERICAN STOCK TRANSFER & TRUST COMPANY LLC
AS AGENT FOR CRYOPORT INC. FBO CLIENT/INVESTOR’S NAME.
TOTAL Wire Amount(s): $__________________
