SUBSCRIPTION AGREEMENT
Exhibit
99.1
SUBSCRIPTION
AGREEMENT (this “Agreement”) made as of the last date set forth on the signature
page hereof between Healthcare Providers Direct Inc., a Nevada corporation (the
“Company”), and the undersigned (the “Subscriber”).
1.1 Subject
to the terms and conditions set forth herein, the Subscriber hereby irrevocably
subscribes for and agrees to purchase from the Company, and the Company agrees
to sell to the Subscriber, such aggregate principal amount of the Debentures as
is set forth on the signature page hereof. The purchase price is
payable by wire transfer, to be held in escrow until the Minimum Offering is
achieved, to:
Citibank
New York, NY
A/C of Sichenzia Xxxx Xxxxxxxx Xxxxxxx
LLP
A/C#:
ABA#:
SWIFT Code:
REMARK: HEALTHCARE
PROVIDERS/[PURCHASERNAME]
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1.2 Offering Period;
Maximum. The Securities will be offered for sale until the
earlier of (i) the closing on the Maximum Offering or (ii) July 31, 2008, (the
“Termination Date”), subject to the right of the Company to extend the
Termination Date for up to 30 additional days. The Offering is being
conducted on a best-efforts basis.
1.3 Closings. The
Company may hold an initial closing (“Initial Closing”) at any time after the
receipt of accepted subscriptions for the Minimum Offering prior to the
Termination Date. After the Initial Closing, subsequent closings with
respect to additional Securities may take place at any time prior to the
Termination Date as determined by the Company, with respect to subscriptions
accepted prior to the Termination Date (each such closing, together with the
Initial Closing, being referred to as a “Closing”). The last Closing
of the Offering, occurring on or prior to the Termination Date, shall be
referred to as the “Final Closing”. Any subscription documents or
funds received after the Final Closing will be returned, without interest or
deduction. In the event that the any Closing does not occur prior to
the Termination Date, all amounts paid by the Subscriber shall be returned to
the Subscriber, without interest or deduction.
1.4 The
Subscriber recognizes that the purchase of the Securities involves a high degree
of risk including, but not limited to, the following: (a) the Company has
limited operating history and requires substantial funds in addition to the
proceeds of the Offering; (b) an investment in the Company is highly
speculative, and only investors who can afford the loss of their entire
investment should consider investing in the Company and the Securities; (c) the
Subscriber may not be able to liquidate its investment; (d) transferability of
the Securities is extremely limited; (e) in the event of a disposition, the
Subscriber could sustain the loss of its entire investment; and (f) the Company
has not paid any dividends since its inception and does not anticipate paying
any dividends. Without limiting the generality of the representations
set forth in Section 1.5 below, the Subscriber represents that the Subscriber
has carefully reviewed the Company’s Form 10-KSB for the fiscal year ended
December 31, 2007, including the section captioned “Risk Factors.”
1.5 The
Subscriber represents that the Subscriber is an “accredited investor” as such
term is defined in Rule 501 of Regulation D (“Regulation D”) promulgated under
the Securities Act, as indicated by the Subscriber’s responses to the questions
contained in Article VII hereof, and that the Subscriber is able to bear the
economic risk of an investment in the Securities.
1.6 The
Subscriber hereby acknowledges and represents that (a) the Subscriber has
knowledge and experience in business and financial matters, prior investment
experience, including investment in securities that are non-listed, unregistered
and/or not traded on a national securities exchange nor on the National
Association of Securities Dealers, Inc. (the “NASD”) automated quotation system
(“NASDAQ”), or the Subscriber has employed the services of a “purchaser
representative” (as defined in Rule 501 of Regulation D), attorney and/or
accountant to read all of the documents furnished or made available by the
Company both to the Subscriber and to all other prospective investors in the
Securities to evaluate the merits and risks of such an investment on the
Subscriber’s behalf; (b) the Subscriber recognizes the highly speculative nature
of this investment; and (c) the Subscriber is able to bear the economic risk
that the Subscriber hereby assumes.
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1.7 The
Subscriber hereby acknowledges receipt and careful review of this Agreement, the
Warrant and the Debenture (as defined below), and any documents which may have
been made available upon request as reflected therein (collectively referred to
as the “Offering Materials”) and hereby represents that the Subscriber has been
furnished by the Company during the course of the Offering with all information
regarding the Company, the terms and conditions of the Offering and any
additional information that the Subscriber has requested or desired to know, and
has been afforded the opportunity to ask questions of and receive answers from
duly authorized officers or other representatives of the Company concerning the
Company and the terms and conditions of the Offering; provided, however that no
investigation performed by or on behalf of the Subscriber shall limit or
otherwise affect its right to rely on the representations and warranties of the
Company contained herein.
1.8 (a) In
making the decision to invest in the Securities the Subscriber has relied solely
upon the information provided by the Company in the Offering
Materials. To the extent necessary, the Subscriber has retained, at
its own expense, and relied upon appropriate professional advice regarding the
investment, tax and legal merits and consequences of this Agreement and the
purchase of the Securities hereunder. The Subscriber disclaims
reliance on any statements made or information provided by any person or entity
in the course of Subscriber’s consideration of an investment in the Securities
other than the Offering Materials.
(b) The
Subscriber represents that (i) the Subscriber was contacted regarding the sale
of the Securities by the Company (or another person whom the Subscriber believed
to be an authorized agent or representative thereof) with whom the Subscriber
had a prior substantial pre-existing relationship and (ii) it did not learn of
the offering of the Securities by means of any form of general solicitation or
general advertising, and in connection therewith, the Subscriber did not (A)
receive or review any advertisement, article, notice or other communication
published in a newspaper or magazine or similar media or broadcast over
television or radio, whether closed circuit, or generally available; or (B)
attend any seminar meeting or industry investor conference whose attendees were
invited by any general solicitation or general advertising.
1.9 The
Subscriber hereby acknowledges that the Offering has not been reviewed by the
United States Securities and Exchange Commission (the “SEC”) nor any state
regulatory authority since the Offering is intended to be exempt from the
registration requirements of Section 5 of the Securities Act, pursuant to
Regulation D. The Subscriber understands that the Securities have not
been registered under the Securities Act or under any state securities or “blue
sky” laws and agrees not to sell, pledge, assign or otherwise transfer or
dispose of the Securities unless they are registered under the Securities Act
and under any applicable state securities or “blue sky” laws or unless an
exemption from such registration is available.
1.10 The
Subscriber understands that the Securities have not been registered under the
Securities Act by reason of a claimed exemption under the provisions of the
Securities Act that depends, in part, upon the Subscriber’s investment
intention. In this connection, the Subscriber hereby represents that
the Subscriber is purchasing the Securities for the Subscriber’s own account for
investment and not with a view toward the resale or distribution to others;
provided, however, that nothing contained herein shall constitute an agreement
by the Subscriber to hold the Securities for any particular length of time and
the Company acknowledges that the Subscriber shall at all times retain the right
to dispose of its property as it may determine in its sole discretion, subject
to any restrictions imposed by applicable law. The Subscriber, if an
entity, further represents that it was not formed for the purpose of purchasing
the Securities.
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1.11 The
Subscriber understands that the Common Stock issuable upon conversion of the
Debentures (the “Conversion Shares”) and upon exercise of the Warrants (the
“Warrant Shares” and collectively with the Conversion Shares, the “Common
Shares”) is quoted on the OTC Bulletin Board and that there is a limited market
for the Common Stock. The Subscriber understands that even if a
public market develops for the Common Shares, Rule 144 (“Rule 144”) promulgated
under the Securities Act requires for non-affiliates, among other conditions, a
six month holding period prior to the resale of securities acquired in a
non-public offering without having to satisfy the registration requirements
under the Securities Act. The Subscriber understands and hereby
acknowledges that the Company is under no obligation to register any of the
Securities or the Common Shares under the Securities Act or any state securities
or “blue sky” laws other than as set forth in Article V.
1.12 The
Subscriber consents to the placement of a legend on any certificate or other
document evidencing the Securities and the Common Shares that such securities
have not been registered under the Securities Act or any state securities or
“blue sky” laws and setting forth or referring to the restrictions on
transferability and sale thereof contained in this Agreement. The
Subscriber is aware that the Company will make a notation in its appropriate
records with respect to the restrictions on the transferability of such
Securities. The legend to be placed on each certificate shall be in form
substantially similar to the following:
“THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR ANY STATE SECURITIES OR “BLUE
SKY LAWS,” AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR
HYPOTHECATED ABSENT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR
COMPLIANCE WITH RULE 144 PROMULGATED UNDER SUCH ACT, OR UNLESS THE COMPANY HAS
RECEIVED AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY AND ITS
COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.”
1.13 It is
agreed that the Company, at its sole discretion, reserves the unrestricted
right, without further documentation or agreement on the part of the Subscriber,
to reject or limit any subscription, to accept subscriptions for fractional
Shares and to close the Offering to the Subscriber at any time and that the
Company will issue stop transfer instructions to its transfer agent with respect
to such Securities.
1.14 The
Subscriber hereby represents that the address of the Subscriber furnished by
Subscriber on the signature page hereof is the Subscriber’s principal residence
if Subscriber is an individual or its principal business address if it is a
corporation or other entity.
1.15 The
Subscriber represents that the Subscriber has full power and authority
(corporate, statutory and otherwise) to execute and deliver this Agreement and
to purchase the Securities. This Agreement constitutes the legal,
valid and binding obligation of the Subscriber, enforceable against the
Subscriber in accordance with its terms.
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1.16 If the
Subscriber is a corporation, partnership, limited liability company, trust,
employee benefit plan, individual retirement account, Xxxxx Plan, or other
tax-exempt entity, it is authorized and qualified to invest in the Company and
the person signing this Agreement on behalf of such entity has been duly
authorized by such entity to do so.
1.17 The
Subscriber acknowledges that if he or she is a Registered Representative of an
NASD member firm, he or she must give such firm the notice required by the
NASD’s Rules of Fair Practice, receipt of which must be acknowledged by such
firm in Section 7.4 below.
1.18 The
Subscriber acknowledges that at such time, if ever, as the Securities or the
Common Shares are registered (as such term is defined in Article V hereof),
sales of the Securities and the Common Shares will be subject to state
securities laws.
1.19 The
Subscriber agrees not to issue any public statement with respect to the
Subscriber’s investment or proposed investment in the Company or the terms of
any agreement or covenant between them and the Company without the Company’s
prior written consent, except such disclosures as may be required under
applicable law or under any applicable order, rule or regulation.
The
Company hereby represents and warrants to the Subscriber that:
2.1 Organization, Good Standing
and Qualification. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Nevada and has full corporate power and authority to own and use its properties
and its assets and conduct its business as currently conducted. Each
of the Company’s subsidiaries (the “Subsidiaries”) is an entity duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation with the requisite corporate power and authority to own and use
its properties and assets and to conduct its business as currently conducted.
Neither the Company, nor any of its Subsidiaries is in violation of any of the
provisions of their respective articles of incorporation, by-laws or other
organizational or charter documents, including, but not limited to the Charter
Documents (as defined below). Each of the Company and its Subsidiaries is duly
qualified to conduct business and is in good standing as a foreign corporation
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, would not result in a
direct and/or indirect (i) material adverse effect on the legality,
validity or enforceability of any of the Securities and/or this Agreement,
(ii) material adverse effect on the results of operations, assets,
business, condition (financial and other) or prospects of the Company and its
Subsidiaries, taken as a whole, or (iii) material adverse effect on the
Company’s ability to perform in any material respect on a timely basis its
obligations under this Agreement and the Offering Materials.
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2.2 Capitalization and Voting
Rights. The authorized, issued and outstanding capital stock
of the Company is as set forth in Schedule 2.2
hereto. Except as set forth in Schedule 2.2 hereto,
(i) there are no outstanding securities of the Company or any of its
Subsidiaries which contain any preemptive, redemption or similar provisions, nor
is any holder of securities of the Company or any Subsidiary entitled to
preemptive or similar rights arising out of any agreement or understanding with
the Company or any Subsidiary by virtue of any of the Transaction Documents, 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; (ii) neither the Company nor any
Subsidiary has any stock appreciation rights or "phantom stock" plans or
agreements or any similar plan or agreement; and (iii) there are no outstanding
options, warrants, agreements, convertible securities, preemptive rights or
other rights to subscribe for or to purchase or acquire, any shares of capital
stock of the Company or any Subsidiary or contracts, commitments,
understandings, or arrangements by which the Company or any Subsidiary is or may
become bound to issue any shares of capital stock of the Company or any
Subsidiary, or securities or rights convertible or exchangeable into shares
of capital stock of the Company or any Subsidiary. Except as set
forth in Schedule
2.2 and as otherwise required by law, there are no restrictions upon the
voting or transfer of any of the shares of capital stock of the Company pursuant
to the Company’s Charter Documents, Bylaws or other governing documents or any
agreement or other instruments to which the Company is a party or by which the
Company is bound. All of the issued and outstanding shares of capital
stock of the Company are validly issued, fully paid and nonassessable and the
shares of capital stock of the Subsidiaries are owned by the Company, free and
clear of any mortgages, pledges, liens, claims, charges, encumbrances or other
restrictions (collectively, “Encumbrances”) except as set forth on Schedule 2.2. All of
such outstanding capital stock has been issued in compliance with applicable
federal and state securities laws. Except as set forth on Schedule 2.2, the
issuance and sale of the Securities or the Common Shares as contemplated hereby
will not obligate the Company to issue shares of Common Stock or other
securities to any other person (other than the Subscribers) 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.
2.3 Authorization;
Enforceability. 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
hereunder and thereunder. The execution and delivery of each of the
Transaction Documents by the Company and the consummation by it of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary action on the part of the Company and no further action is required by
the Company, the Board of Directors or the Company’s stockholders in connection
therewith. Each Transaction Document to which it is a party has been
(or upon delivery will have been) duly executed by the Company and, when
delivered in accordance with the terms hereof and thereof, 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.
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2.4 No Conflict; Governmental
Consents. The execution, delivery and performance by the
Company of the Transaction Documents and the consummation by it to which it is a
party of the other transactions contemplated hereby and thereby do not and will
not: (i) conflict with or violate any provision of the Company’s or any
Subsidiary’s certificate or articles of incorporation, bylaws or other
organizational or charter documents, or (ii) conflict with, or constitute a
default (or an event that with notice or lapse of time or both would become a
default) under, result in the creation of any Lien upon any of the properties or
assets of the Company or any Subsidiary, or give to others any rights of
termination, amendment, acceleration or cancellation (with or without notice,
lapse of time or both) of, any agreement, credit facility, debt or other
instrument (evidencing a Company or Subsidiary debt or otherwise) or other
understanding to which the Company or any Subsidiary is a party or by which any
property or asset of the Company or any Subsidiary is bound or affected, or
(iii) subject to the Required Approvals, 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 (including federal and state securities laws and
regulations), or by which any property or asset of the Company or a Subsidiary
is bound or affected; except in the case of each of clauses (ii) and (iii), such
as could not have or reasonably be expected to result in a Material Adverse
Effect.
2.5 Consents of Third
Parties. No vote, approval or consent of any holder of capital
stock of the Company or any other third parties is required or necessary to be
obtained by the Company in connection with the authorization, execution, deliver
and performance of this Agreement and the other Transaction Documents or in
connection with the authorization, issue and sale of the Securities and the
Common Shares, except as previously obtained, each of which is in full force and
effect.
2.6 Licenses. Except
as otherwise set forth in the SEC Reports (as defined below), the Company and
its Subsidiaries have sufficient licenses, permits and other governmental
authorizations currently required for the conduct of their respective businesses
or ownership of properties and is in all material respects in compliance
therewith.
2.7 Litigation. Except
as set forth in the SEC Reports (as defined below), the Company knows of no
pending or threatened legal or governmental proceedings against the Company or
any Subsidiary which could materially adversely affect the business, property,
financial condition or operations of the Company and its Subsidiaries, taken as
a whole, or which materially and adversely questions the validity of this
Agreement or the other Transaction Documents or the right of the Company to
enter into this Agreement and the other Transaction Documents, or to perform its
obligations hereunder and thereunder. Neither the Company nor any Subsidiary is
a party or subject to the provisions of any order, writ, injunction, judgment or
decree of any court or government agency or instrumentality which could
materially adversely affect the business, property, financial condition or
operations of the Company and its Subsidiaries taken as a whole. There is no
action, suit, proceeding or investigation by the Company or any Subsidiary
currently pending in any court or before any arbitrator or that the Company or
any Subsidiary intends to initiate. Neither the Company nor any
Subsidiary, nor any director or officer thereof, is or since February 7, 2007
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 federal securities laws.
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2.8 Disclosure. The
information set forth in the Offering Materials as of the date hereof and as of
the date of each Closing contains no untrue statement of a material fact nor
omits 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.
2.9 Investment
Company. The Company is not an “investment company” within the
meaning of such term under the Investment Company Act of 1940, as amended, and
the rules and regulations of the SEC thereunder.
2.10 Sales
Commissions. The Company may pay a sales commission of up to
8% of the gross proceeds of the sale of the Securities in cash and issue such
number of Warrants equal to 8% of the aggregate amount of Securities Subscribed
for (including shares of common stock issuable upon conversion of the Debentures
and exercise of the Warrants) to registered broker-dealers or others to whom
such commissions may legally be paid.
2.11 Intellectual
Property. the Company and the Subsidiaries have, or have rights to use,
all patents, patent applications, trademarks, trademark applications, service
marks, trade names, trade secrets, inventions, copyrights, licenses and other
intellectual property rights and similar rights as described in the SEC Reports
(as defined below) as necessary or material for use in connection with their
respective businesses and which the failure to so have could have a Material
Adverse Effect (collectively, the “Intellectual Property
Rights”). Neither the Company nor any Subsidiary has received
a notice (written or otherwise) that any of the Intellectual Property Rights
used by the Company or any Subsidiary violates or infringes upon the rights of
any Person. To the knowledge of the Company, all such Intellectual Property
Rights are enforceable and there is no existing infringement by another Person
of any of the Intellectual Property Rights. The Company and its
Subsidiaries have taken reasonable security measures to protect the secrecy,
confidentiality and value of all of their intellectual properties, except where
failure to do so could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
2.12 Title to Properties and
Assets; Liens, Etc. Except as described in the SEC Reports (as
defined below), the Company has good and marketable title to its properties and
assets, including the properties and assets reflected in the most recent balance
sheet included in the Company’s financial statements, and good title to its
leasehold estates, in each case subject to no Encumbrances, other than (a) those
resulting from taxes which have not yet become delinquent; and (b) Encumbrances
which do not materially detract from the value of the property subject thereto
or materially impair the operations of the Company; and (c) those that have
otherwise arisen in the ordinary course of business, none of which are
material. The Company is in compliance with all material terms of
each lease to which it is a party or is otherwise bound.
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2.13 Obligations to Related
Parties. Except as described in the SEC Reports (as defined
below), there are no obligations of the Company to officers, directors,
stockholders, or employees of the Company other than (a) for payment of salary
or other compensation for services rendered, (b) reimbursement for reasonable
expenses incurred on behalf of the Company and (c) for other standard employee
benefits made generally available to all employees (including stock option
agreements outstanding under any stock option plan approved by the Board of
Directors of the Company). Except as disclosed in the SEC Reports (as
defined below), 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.
2.14 SEC Reports; Financial
Statements. The Company has filed all reports required to be
filed by it under the Securities Act and Securities Exchange Act of 1934 (the
“Exchange Act”), including pursuant to Section 13(a) or 15(d) thereof, for the
twelve months preceding the date hereof (or such shorter period as the Company
was required by law to file such reports) (the foregoing materials being
collectively referred to herein as the "SEC Reports" and, together with the
Schedules to this Agreement (if any), the "Disclosure Materials") on a timely
basis or has timely filed a valid extension of such time of filing and has filed
any such SEC Reports prior to the expiration of any such
extension. As of their respective dates, the SEC Reports complied in
all material respects with the requirements of the Securities Act and the
Exchange Act and the rules and regulations of the SEC promulgated thereunder,
and none of the SEC Reports, when filed, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The
financial statements of the Company included in the SEC Reports comply in all
material respects with applicable accounting requirements and the rules and
regulations of the SEC with respect thereto as in effect at the time of
filing. Such financial statements have been prepared in accordance
with generally accepted accounting principles applied on a consistent basis
during the periods involved, except as may be otherwise specified in such
financial statements or the footnotes thereto, and fairly present in all
material respects the financial position of the Company and its consolidated
Subsidiaries as of and for the dates thereof and the results of operations and
cash flows for the periods then ended, subject, in the case of unaudited
statements, to normal, immaterial, year-end audit adjustments.
2.15 Material
Changes. Since the date of the latest audited financial
statements included within the SEC Reports, except as specifically disclosed in
the SEC Reports, (i) there has been no event, occurrence or development that has
had or that could reasonably be expected to result in a material adverse effect,
(ii) the Company has not incurred any liabilities (contingent or otherwise)
other than (A) trade payables, accrued expenses and other liabilities incurred
in the ordinary course of business consistent with past practice and (B)
liabilities not required to be reflected in the Company's financial statements
pursuant to generally accepted accounting principles or required to be disclosed
in filings made with the SEC, (iii) the Company has not altered its method of
accounting or the identity of its auditors, (iv) the Company has not declared or
made any dividend or distribution of cash or other property to its stockholders
or purchased, redeemed or made any agreements to purchase or redeem any shares
of its capital stock, and (v) the Company has not issued any equity securities
to any officer, director or affiliate, except pursuant to existing Company stock
option plans. The Company does not have pending before the SEC any request for
confidential treatment of information.
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2.16 Labor
Relations. No material labor dispute exists or, to the
knowledge of the Company, is imminent with respect to any of the employees of
the Company.
2.17 Compliance. The
Company is in compliance with all effective requirements of the Xxxxxxxx-Xxxxx
Act of 2002, as amended, and the rules and regulations thereunder, that are
applicable to it, except where such noncompliance could not have or reasonably
be expected to result in a material adverse effect.
2.18 Insurance. The
Company and the Subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent
and customary in the businesses in which the Company and the Subsidiaries are
engaged. The Company has no reason to believe that it will not be
able to renew its and the Subsidiaries’ 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 on terms consistent with market for the
Company’s and such Subsidiaries’ respective lines of business.
2.19 Regulatory
Permits. The Company and the Subsidiaries possess all
certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their
respective businesses as described in the SEC Reports, except where the failure
to possess such permits could not reasonably be expected to result in a Material
Adverse Effect (“Material Permits”),
and neither the Company nor any Subsidiary has received any notice of
proceedings relating to the revocation or modification of any Material
Permit.
2.20 Internal Accounting
Controls. The Company is in material compliance with all
provisions of the Xxxxxxxx-Xxxxx Act of 2002 which are applicable to it as of
the Closing Date. 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
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and designed such
disclosure controls and procedures to ensure that information required to be
disclosed by the Company in the reports it files or submits under the Exchange
Act is recorded, processed, summarized and reported, within the time periods
specified in the Commission’s rules and forms. The Company’s
certifying officers have evaluated the effectiveness of the Company’s disclosure
controls and procedures as of the end of the period covered by the Company’s
most recently filed periodic report under the Exchange Act (such date, the
“Evaluation
Date”). The Company presented in its most recently filed
periodic report under the Exchange 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 changes in the Company’s internal control over
financial reporting (as such term is defined in the Exchange Act) that has
materially affected, or is reasonably likely to materially affect, the Company’s
internal control over financial reporting.
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2.21 Listing and Maintenance
Requirements. Except as specified in the SEC Reports, the
Company has not, in the two years preceding the date hereof, received notice
from any trading market to the effect that the Company is not in compliance with
the listing or maintenance requirements thereof. The Company is, and
has no reason to believe that it will not in the foreseeable future continue to
be, in compliance with the listing and maintenance requirements for continued
listing or quotation of the Common Stock on the trading market on which the
Common Stock is currently listed or quoted. The issuance and sale of
the Securities and/or the issuance of the Common Shares under the Agreement does
not contravene the rules and regulations of the trading market on which the
Common Stock is currently listed or quoted, and no approval of the shareholders
of the Company thereunder is required for the Company to issue and deliver to
the Subscribers the Securities and Common Shares contemplated by this
Agreement.
2.22 No General
Solicitation.
None of the Company, its Subsidiaries, any of their affiliates, and any person
acting on their behalf, has engaged in any form of general solicitation or
general advertising (within the meaning of Regulation D under the
Securities Act) in connection with the offer or sale of the
Securities.
2.23 No Integrated
Offering. None of
the Company, its Subsidiaries, any of their affiliates, and any person acting on
their behalf has, directly or indirectly, made any offers or sales of any
security or solicited any offers to buy any security, under circumstances that
would require registration of any of the Securities under the Securities Act or
cause this offering of the Securities to be integrated with prior offerings by
the Company for purposes of the Securities Act or any applicable stockholder
approval provisions, including without limitation, under the rules and
regulations of any exchange or automated quotation system on which any of the
securities of the Company are listed or designated. None of the Company, its
Subsidiaries, their affiliates and any person acting on their behalf will take
any action or steps referred to in the preceding sentence that would require
registration of any of the Securities under the Securities Act or cause the
offering of the Securities to be integrated with other offerings.
2.24 Application of Takeover
Protections. The Company has taken all necessary action, if
any, in order to render inapplicable any control share acquisition, business
combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Company's Charter Documents
or the laws of its state of incorporation that is or could become applicable to
the Subscribers as a result of the Subscribers and the Company fulfilling their
obligations or exercising their rights under this Agreement, including, without
limitation, the Company's issuance of the Securities and the Subscribers'
ownership of the Securities.
11
2.25 Privacy. The
Company agrees not to disclose the names, addresses or any other information
about the Subscribers, except as required by law; provided, that the Company may
use the name of the Subscriber in any registration statement filed pursuant to
Article V in which the Subscriber’s Securities are included.
2.26 No Additional
Agreements. The Company does not have any agreement or
understanding with any Subscribers with respect to the transactions contemplated
by this Agreement other than as specified in this Agreement.
2.27 Taxes. Each of the
Company and its subsidiaries has filed all U.S. federal, state, local and
foreign tax returns which are required to be filed by each of them and all such
returns are true and correct in all material respects, except for such failures
to file which could not reasonably be expected to have a Material Adverse
Effect. The Company and each subsidiary has paid all taxes pursuant
to such returns or pursuant to any assessments received by any of them or by
which any of them are obligated to withhold from amounts owing to any employee,
creditor or third party. The Company and each subsidiary has properly accrued
all taxes required to be accrued and/or paid, except where the failure to accrue
would not have a Material Adverse Effect. To the knowledge of the
Company, the tax returns of the Company and its subsidiaries are not currently
being audited by any state, local or federal authorities. Neither the
Company nor any subsidiary has waived any statute of limitations with respect to
taxes or agreed to any extension of time with respect to any tax assessment or
deficiency. The Company has set aside on its books adequate provision
for the payment of any unpaid taxes.
3.1 All funds
shall be submitted directly to the Company’s account identified in Section 1.1
hereof.
3.2 The
Debentures and Warrants purchased by the Subscriber pursuant to this Agreement
will be prepared for delivery to the Subscriber as soon as practicable following
the Closing at which such purchase takes place. The Subscriber hereby authorizes
and directs the Company to deliver the Debentures and Warrants purchased by the
Subscriber pursuant to this Agreement directly to the Subscriber’s residential
or business or brokerage house address indicated on the signature page
hereto.
4.1 The
Subscriber’s obligation to purchase the Securities at the Closing at which such
purchase is to be consummated is subject to the fulfillment on or prior to such
Closing of the following conditions, which conditions may be waived at the
option of each Subscriber to the extent permitted by law:
12
(a) Representations and
Warranties; Covenants. The representations and warranties made
by the Company in Section 3 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 3 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. All covenants,
agreements and conditions contained in this Agreement to be performed by the
Company on or prior to the date of such Closing shall have been performed or
complied with in all material respects.
(b) No Legal Order
Pending. There shall not then be in effect any legal or other
order enjoining or restraining the transactions contemplated by this
Agreement.
(c) No Law Prohibiting or
Restricting Such Sale. There shall not be in effect any law,
rule or regulation prohibiting or restricting such sale or requiring any consent
or approval of any person, which shall not have been obtained, to issue the
Securities (except as otherwise provided in this Agreement).
(d) Required
Consents. 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.
(e) Adverse
Changes. Since the date of execution of this Agreement, no
event or series of events shall have occurred that reasonably could have or
result in a Material Adverse Effect.
(f) No Suspensions of Trading in
Common Stock; Listing. Trading in the Common Stock shall not
have been suspended by the SEC or any trading market (except for any suspensions
of trading of not more than one trading day solely to permit dissemination of
material information regarding the Company) at any time since the date of
execution of this Agreement, and the Common Stock shall have been at all times
since such date listed for trading on a trading market.
(g) Blue
Sky. The Company shall have completed qualification for the
Securities and the Common Shares under applicable Blue Sky laws.
If at any
time within 150 days of the Final Closing the Company shall determine to file
with the Securities and Exchange Commission a Registration Statement relating to
an offering for its own account or the account of others under the Securities
Act of 1933, as amended (the “Securities Act”), of any of its equity securities
(other than (i) the amendment of a Registration Statement previously filed or
the filing of a Registration Statement that was previously filed and withdrawn
or (ii) on Form X-0, Xxxx X-0 or their then equivalents relating to equity
securities to be issued solely in connection with any acquisition of any entity
or business or equity securities issuable in connection with stock option or
other bona fide, employee benefit plans), the Company shall use its best efforts
to include in such Registration Statement all of the shares issuable upon
conversion of the securities sold pursuant to the terms of this Agreement; provided, however, that it
shall be within Company’s sole discretion to reduce or eliminate the number of
securities that are included in a Registration Statement to the extent necessary
to satisfy the Securities and Exchange Commission’s requirements pursuant to
Rule 415 under the Securities Act.
13
6.1 Integration. The
Company shall not, and shall ensure that no affiliate of the Company shall,
sell, offer for sale or solicit offers to buy or otherwise negotiate in respect
of any security (as defined in Section 2 of the Securities Act) that would be
integrated with the offer or sale of the Securities in a manner that would
require the registration under the Securities Act of the sale of the Securities
to the Subscribers, or that would be integrated with the offer or sale of the
Securities for purposes of the rules and regulations of any trading market in a
manner that would require stockholder approval of the sale of the securities to
the Subscribers.
6.2 Listing of
Securities. The Company agrees, (i) if the Company applies to
have the Common Stock traded on any other trading market, it will include in
such application the Registrable Securities, and will take such other action as
is necessary or desirable to cause the Registrable Securities to be listed on
such other trading market as promptly as possible, and (ii) it will take all
action reasonably necessary to continue the listing and trading of its Common
Stock on a trading market and will comply in all material respects with the
Company’s reporting, filing and other obligations under the bylaws or rules of
the trading market.
6.3 Reservation of
Shares. The Company shall at all times while the Securities
are outstanding maintain a reserve from its duly authorized shares of Common
Stock of a number of shares of Common Stock sufficient to allow for the issuance
of all Conversion Shares and Warrant Shares.
6.4 Conversion and Exercise
Procedures. The conversion procedures described in and the
form of Notice of Conversion included in the Debentures set forth the totality
of the procedures required by the Subscribers in order to convert the
Shares. The exercise procedures described in and the form of Form of
Subscription included in the Warrant set forth the totality of the procedures
required by the Subscribers in order to exercise the warrants. The
Company shall honor conversions of Shares and exercises of Warrants and shall
deliver Common Stock in accordance with the terms, conditions and time periods
set forth in this Agreement and the Certificate of Designation or Warrant (as
applicable).
6.5 Rescission and Withdrawal
Right. Notwithstanding anything to the contrary contained in
(and without limiting any similar provisions of) this Agreement, whenever any
Subscriber exercises a right, election, demand or option under this Agreement
and the Company does not timely perform its related obligations within the
periods therein provided, then such Subscriber may rescind or withdraw, in its
sole discretion from time to time upon written notice to the Company, any
relevant notice, demand or election in whole or in part without prejudice to its
future actions and rights.
14
6.6 Replacement of
Securities. If any certificate or instrument evidencing any
Securities is mutilated, lost, stolen or destroyed, the Company shall issue or
cause to be issued in exchange and substitution for and upon cancellation
thereof, or in lieu of and substitution therefor, a new certificate or
instrument, but only upon receipt of evidence reasonably satisfactory to the
Company of such loss, theft or destruction and customary and reasonable
indemnity, if requested. The applicants for a new certificate or
instrument under such circumstances shall also pay any reasonable third-party
costs associated with the issuance of such replacement Securities. If
a replacement certificate or instrument evidencing any Securities is requested
due to a mutilation thereof, the Company may require delivery of such mutilated
certificate or instrument as a condition precedent to any issuance of a
replacement.
6.7 Right of
Participation. For a period of 6 months from the Final
Closing, except in connection with the issuance of securities associated with
(i) shares issued to officers, directors or employees of or consultants of the
Company pursuant to any compensation agreement, plan or arrangement (ii) the
issuance of Common Stock upon the exercise of any such options or warrants,
provided such securities were issued prior to the date hereof, (iii) pursuant to
a stock option plan that was approved by the board of directors and/or the
stockholders of the Company or; (iv) issued for consideration other than cash
pursuant to a merger, consolidation, acquisition, or similar business
combination approved by the Company’s Board of Directors; (“Excepted
Issuances”), the holders of the Debentures, shall have a pro-rata right
(determined on an as-converted basis) to participate in subsequent issuances by
the Company of debt, equity or other securities (the “Right of
Participation”). The Company shall give holders of the Debentures not
less than five (5) business days prior written notice of any proposed sale by
the Company of its Common Stock or other securities or debt
obligations. The holders of the Debentures who exercise their rights
pursuant to this Right of Participation shall have the right during the five (5)
business days following receipt of the notice to purchase such offered equity,
debt or other securities in accordance with the terms and conditions set forth
in the notice of sale in the same proportion to each other outstanding at that
time. In the event such terms and conditions are modified during the
notice period, the Company shall give holders of the Debentures prompt notice of
such modification and shall have the right during the five (5) business days
following the notice of modification to exercise such right. If a
holder of Debentures elects to not participate in such financing, then the
remaining holders shall have the right to participate in that holder’s
allocation on a pro rata basis. An election by a holder not to
exercise its Right of Participation with respect to a security issuance shall
not effect such holder’s Right of Participation with respect to any other
security issuance.
6.8 Indemnification.
(a) The
Company agrees to indemnify and hold harmless the Subscriber, its affiliates and
their respective officers, directors, employees, agents and controlling persons
(collectively, the “Indemnified
Parties”) from and against , any and all loss, liability, damage or
deficiency suffered or incurred by any Indemnified Party by reason of any
misrepresentation or breach of warranty by the Company or nonfulfillment of any
covenant or agreement to be performed or complied with by the Company under this
Agreement, the Transaction Documents; and will promptly reimburse the
Indemnified Parties for all expenses (including reasonable fees and expenses of
legal counsel) as incurred in connection with the investigation of, preparation
for or defense of any pending or threatened claim related to or arising in any
manner out of any of the foregoing, or any action or proceeding arising
therefrom (collectively, “Proceedings”),
whether or not such Indemnified Party is a formal party to any such
Proceeding.
15
(b) If for
any reason (other than a final non-appealable judgment finding any Indemnified
Party liable for losses, claims, damages, liabilities or expenses for its gross
negligence or willful misconduct) the foregoing indemnity is unavailable to an
Indemnified Party or insufficient to hold an Indemnified Party harmless, then
the Company shall contribute to the amount paid or payable by an Indemnified
Party as a result of such loss, claim, damage, liability or expense in such
proportion as is appropriate to reflect not only the relative benefits received
by the Company on the one hand and the Advisor on the other, but also the
relative fault by the Company and the Indemnified Party, as well as any relevant
equitable considerations.
6.9 Removal of
Legends. Upon the earlier of (i) registration for resale
pursuant to Section V or (ii) Rule 144(b)(1)(i) becoming available the Company
shall use best efforts (A) deliver to the transfer agent for the Common Stock
(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 Subscriber that Rule
144 applies to the shares of Common Stock represented thereby or (2) a statement
by the Subscriber that such Subscriber 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 Securities
Act. From and after the earlier of such dates, upon an Subscriber’s
written request, the Company shall promptly cause certificates evidencing the
Subscriber’s Securities to be replaced with certificates which do not bear such
restrictive legends, and Common Shares subsequently issued upon due conversion
of the Debentures or 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 Common
Shares.
6.10 Most Favored Nation
Provision. From the date hereof until such time that the
Debentures are no longer outstanding, if the Company effects a Subsequent
Financing, each Purchaser may elect, in its sole discretion, to exchange all or
some of the Debentures then held by such Purchaser for any securities issued in
a Subsequent Financing on a $1.00 for $1.00 basis based on the outstanding
principal amount of such Debentures, along with any liquidated damages and other
amounts owing thereon, and the effective price at which such securities are to
be sold in such Subsequent Financing; provided, however, that this
Section 6.10 shall not apply with respect to (i) an Exempt Issuance or (ii) an
underwritten public offering of Common Stock.
16
|
VII.
|
7.1 Any
notice or other communication given hereunder shall be deemed sufficient if in
writing and sent by registered or certified mail, return receipt requested, or
delivered by hand against written receipt therefor, addressed as
follows:
if to the
Company, to it at:
Healthcare
Providers Direct, Inc.
0000
Xxxxx Xxx, Xxxxx 000
Xxxxxxxxxxxxx,
Xxx Xxxxxx 00000
Attn: Xxxxxx
Xxxxxx, CEO
With a
copy to (which shall not constitute notice):
Sichenzia
Xxxx Xxxxxxxx Xxxxxxx LLP
00
Xxxxxxxx, 00xx
Xxxxx
Xxx Xxxx,
XX 00000
Attn: Xxxxxxx
X. Xxxxxxxx, Esq.
if to the
Subscriber, to the Subscriber’s address indicated on the signature page of this
Agreement.
Notices
shall be deemed to have been given or delivered on the date of
receipt.
7.2 No
provision of this Agreement may be waived, modified, supplemented or amended
except in a written instrument signed, in the case of an amendment, by the
Company and the Subscriber holding at least 51% in interest of the Securities
then outstanding or, in the case of a waiver, by the party against whom
enforcement of any such waived provision is sought. No waiver of any
default with respect to any provision, condition or requirement of this
Agreement shall be deemed to be a continuing waiver in the future or a waiver of
any subsequent default or a waiver of any other provision, condition or
requirement hereof, nor shall any delay or omission of any party to exercise any
right hereunder in any manner impair the exercise of any such
right. This Agreement shall be binding upon and inure to the benefit
of the parties hereto and to their respective heirs, legal representatives,
successors and assigns. This Agreement sets forth the entire
agreement and understanding between the parties as to the subject matter hereof
and merges and supersedes all prior discussions, agreements and understandings
of any and every nature among them.
7.3 Upon the
execution and delivery of this Agreement by the Subscriber and the Company, this
Agreement shall become a binding obligation of the Subscriber with respect to
the purchase of Securities as herein provided, subject, however, to the right
hereby reserved by the Company to enter into the same agreements with other
subscribers and to reject any subscription, in whole or in part, provided the
Company returns to Subscriber any funds paid by Subscriber with respect to such
rejected subscription or portion thereof, without interest or
deduction.
17
7.4 NOTWITHSTANDING
THE PLACE WHERE THIS AGREEMENT MAY BE EXECUTED BY ANY OF THE PARTIES HERETO, THE
PARTIES EXPRESSLY AGREE THAT ALL THE TERMS AND PROVISIONS HEREOF SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO SUCH STATE’S PRINCIPLES OF CONFLICTS OF LAW. IN THE
EVENT THAT A JUDICIAL PROCEEDING IS NECESSARY, THE SOLE FORUM FOR RESOLVING
DISPUTES ARISING OUT OF OR RELATING TO THIS AGREEMENT IS THE COURTS STATE OF NEW
YORK IN AND FOR THE COUNTY OF NEW YORK OR THE FEDERAL COURTS FOR SUCH STATE AND
COUNTY, AND ALL RELATED APPELLATE COURTS, THE PARTIES HEREBY IRREVOCABLY CONSENT
TO THE JURISDICTION OF SUCH COURTS AND AGREE TO SAID VENUE.
7.5 In order
to discourage frivolous claims the parties agree that unless a claimant in any
proceeding arising out of this Agreement succeeds in establishing his claim and
recovering a judgment against another party (regardless of whether such claimant
succeeds against one of the other parties to the action), then the other party
shall be entitled to recover from such claimant all of its/their reasonable
legal costs and expenses relating to such proceeding and/or incurred in
preparation therefor.
7.6 The
holding of any provision of this Agreement to be invalid or unenforceable by a
court of competent jurisdiction shall not affect any other provision of this
Agreement, which shall remain in full force and effect. If any
provision of this Agreement shall be declared by a court of competent
jurisdiction to be invalid, illegal or incapable of being enforced in whole or
in part, such provision shall be interpreted so as to remain enforceable to the
maximum extent permissible consistent with applicable law and the remaining
conditions and provisions or portions thereof shall nevertheless remain in full
force and effect and enforceable to the extent they are valid, legal and
enforceable, and no provisions shall be deemed dependent upon any other covenant
or provision unless so expressed herein.
7.7 It is
agreed that a waiver by either party of a breach of any provision of this
Agreement shall not operate, or be construed, as a waiver of any subsequent
breach by that same party.
7.8 The
Company agrees to execute and deliver all such further documents, agreements and
instruments and take such other and further action as may be necessary or
appropriate to carry out the purposes and intent of this Agreement.
7.9 This
Agreement may be executed in two or more counterparts each of which shall be
deemed an original, but all of which shall together constitute one and the same
instrument.
7.10 Nothing
in this Agreement shall create or be deemed to create any rights in any person
or entity not a party to this Agreement.
18
7.11 Remedies. In
addition to being entitled to exercise all rights provided herein or granted by
law, including recovery of damages, each of the Subscribers and the Company will
be entitled to specific performance under this Agreement. The parties
agree that monetary damages may not be adequate compensation for any loss
incurred by reason of any breach of obligations described in the foregoing
sentence and hereby agrees to waive in any action for specific performance of
any such obligation the defense that a remedy at law would be
adequate.
7.12 Independent Nature of
Subscribers' Obligations and Rights. The obligations of each
Subscriber under this Agreement are several and not joint with the obligations
of any other Subscriber, and no Subscriber shall be responsible in any way for
the performance of the obligations of any other Subscriber under this
Agreement. The decision of each Subscriber to purchase Securities
pursuant to this Agreement has been made by such Subscriber independently of any
other Subscriber. Nothing contained herein, and no action taken by
any Subscriber pursuant thereto, shall be deemed to constitute the Subscribers
as a partnership, an association, a joint venture or any other kind of entity,
or create a presumption that the Subscribers are in any way acting in concert or
as a group with respect to such obligations or the transactions contemplated
herein. Each Subscriber acknowledges that no other Subscriber has
acted as agent for such Subscriber in connection with making its investment
hereunder and that no Subscriber will be acting as agent of such Subscriber in
connection with monitoring its investment in the Securities or enforcing its
rights under this Agreement. Each Subscriber shall be entitled to
independently protect and enforce its rights, including without limitation the
rights arising out of this Agreement, and it shall not be necessary for any
other Subscriber to be joined as an additional party in any proceeding for such
purpose. The Company acknowledges that each of the Subscribers has
been provided with this same Agreement for the purpose of closing a transaction
with multiple Subscribers and not because it was required or requested to do so
by any Subscriber.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
19
AGGREGATE
FACE AMOUNT OF THE DEBENTURE = $_________ (the “Purchase Price”)
| Signature | Signature (if purchasing jointly) | ||
| Name Typed or Printed | Name Typed or Printed | ||
| Title (if Subscriber is an Entity) | Title (if Subscriber is an Entity) | ||
| Entity Name (if applicable) | Entity Name (if applicable | ||
| Xxxxxxx | Xxxxxxx | ||
| Xxxx, Xxxxx xxx Xxx Xxxx | Xxxx, Xxxxx and Zip Code | ||
| Telephone-Business | Telephone-Business | ||
| Telephone-Residence | Telephone-Residence | ||
| Facsimile-Business | Facsimile-Business | ||
| Facsimile-Residence | Facsimile-Residence | ||
| Tax ID # or Social Security # | Tax ID # or Social Security # | ||
Name in
which securities should be
issued: _________________________________
Blocker
Provision Election: Please choose from one of the two options
below:
(check
one)
□ My
Warrant and Debenture shall contain a 4.99% blocker provision.
□ My
Warrant and Debenture shall contain a 9.99% blocker provision.
Dated: _______
, 2008
This
Subscription Agreement is agreed to and accepted as of ________________ ,
2008.
| HEALTHCARE PROVIDERS DIRECT INC. | |||
|
|
By:
|
/s/ | |
| Xxxxxx Xxxxxx | |||
| Chief Executive Officer | |||
20
CERTIFICATE
OF SIGNATORY
(To be
completed if Securities are
being
subscribed for by an entity)
I,
____________________________, am the ____________________________ of
__________________________________________ (the “Entity”).
I certify
that I am empowered and duly authorized by the Entity to execute and carry out
the terms of the Subscription Agreement and to purchase and hold the Debentures,
and certify further that the Subscription Agreement has been duly and validly
executed on behalf of the Entity and constitutes a legal and binding obligation
of the Entity.
_______________________________________
(Signature)
21
Exhibit
A
CONFIDENTIAL INVESTOR
QUESTIONNAIRE
The
Subscriber represents and warrants that he, she or it comes within one category
marked below, and that for any category marked, he, she or it has truthfully set
forth, where applicable, the factual basis or reason the Subscriber comes within
that category. ALL INFORMATION IN RESPONSE TO THIS SECTION WILL BE
KEPT STRICTLY CONFIDENTIAL. The undersigned agrees to furnish any
additional information which the Company deems necessary in order to verify the
answers set forth below.
|
Category
A
|
The
undersigned is an individual (not a partnership, corporation, etc.) whose
individual net worth, or joint net worth with his or her spouse, presently
exceeds $1,000,000.
|
Explanation. In
calculating net worth you may include equity in personal property and real
estate, including your principal residence, cash, short-term investments, stock
and securities. Equity in personal property and real estate should be
based on the fair market value of such property less debt secured by such
property.
|
Category
B
|
The
undersigned is an individual (not a partnership, corporation, etc.) who
had an income in excess of $200,000 in each of the two most recent years,
or joint income with his or her spouse in excess of $300,000 in each of
those years (in each case including foreign income, tax exempt income and
full amount of capital gains and losses but excluding any income of other
family members and any unrealized capital appreciation) and has a
reasonable expectation of reaching the same income level in the current
year.
|
|
Category
C
|
The
undersigned is a director or executive officer of the Company which is
issuing and selling the Securities.
|
|
Category
D
|
The
undersigned is a bank; a savings and loan association; insurance company;
registered investment company; registered business development company;
licensed small business investment company (“SBIC”); or employee benefit
plan within the meaning of Title 1 of ERISA and (a) the investment
decision is made by a plan fiduciary which is either a bank, savings and
loan association, insurance company or registered investment advisor, or
(b) the plan has total assets in excess of $5,000,000 or (c) is a self
directed plan with investment decisions made solely by persons that are
accredited investors. (describe
entity)
|
|
Category
E
|
The
undersigned is a private business development company as defined in
section 202(a)(22) of the Investment Advisors Act of 1940. (describe
entity)
|
22
|
Category
F
|
The
undersigned is either a corporation, partnership, Massachusetts business
trust, or non-profit organization within the meaning of Section 501(c)(3)
of the Internal Revenue Code, in each case not formed for the specific
purpose of acquiring the Securities and with total assets in excess of
$5,000,000. (describe entity)
|
|
Category
G
|
The
undersigned is a trust with total assets in excess of $5,000,000, not
formed for the specific purpose of acquiring the Securities, where the
purchase is directed by a “sophisticated investor” as defined in
Regulation 506(b)(2)(ii) under the
Act.
|
|
Category
H
|
The
undersigned is an entity (other than a trust) in which all of the equity
owners are “accredited investors” within one or more of the above
categories. If relying upon this Category alone, each equity
owner must complete a separate copy of this
Agreement. (describe
entity)
|
|
Category
I
|
The
undersigned is not within any of the categories above and is therefore not
an accredited investor.
|
The
undersigned agrees that the undersigned will notify the Company at any time on
or prior to the Closing in the event that the representations and warranties in
this Agreement shall cease to be true, accurate and complete.
SUITABILITY (please
answer each question)
(a) For
an individual Subscriber, please describe your current employment, including the
company by which you are employed and its principal business:
(b) For
an individual Subscriber, please describe any college or graduate degrees held
by you:
(c) For
all Subscribers, please list types of prior investments:
(d) For
all Subscribers, please state whether you have participated in other private placements
before:
23
YES_______ NO_______
(e) If
your answer to question (d) above was “YES”, please indicate frequency of such
prior participation in private placements
of:
|
Public
Companies
|
Private
Companies
|
Public
or Private Companies
with
no, or insignificant,
assets and operations
|
|
|
Frequently
|
|||
|
Occasionally
|
|||
(f) For
individual Subscribers, do you expect your current level of income to
significantly decrease in the foreseeable future:
YES_______ NO_______
(g) For
trust, corporate, partnership and other institutional Subscribers, do you expect
your total assets to significantly decrease in the foreseeable
future:
YES_______ NO_______
(h) For
all Subscribers, do you have any other investments or contingent liabilities
which you reasonably anticipate could cause you to need sudden cash requirements
in excess of cash readily available to you:
YES_______ NO_______
(i) For
all Subscribers, are you familiar with the risk aspects and the non-liquidity of
investments such as the securities for which you seek to subscribe?
YES_______ NO_______
(j)
For all Subscribers, do you understand that there is no guarantee of financial
return on this investment and that you run the risk of losing your entire
investment?
YES_______ NO_______
24
MANNER IN WHICH TITLE IS TO
BE HELD. (circle one)
(a) Individual
Ownership
(b)
CommSharey Property
(c) Joint
Tenant with Right of
Survivorship (both
parties
must sign)
(d) Partnership*
(e) Tenants
in Common
(f)
Company*
(g) Trust*
(h) Other*
*If
Securities are being subscribed for by an entity, the attached Certificate of
Signatory must also be completed.
7.13 NASD
AFFILIATION.
Are you
affiliated or associated with an NASD member firm (please check
one):
Yes
_________ No
__________
If Yes,
please describe:
_____________________________________________________________________________________
_____________________________________________________________________________________
_____________________________________________________________________________________
*If
Subscriber is a Registered Representative with an NASD member firm, have the
following acknowledgment signed by the appropriate party:
The
undersigned NASD member firm acknowledges receipt of the notice required by
Article 3, Sections 28(a) and (b) of the Rules of Fair Practice.
_________________________________
Name of
NASD Member Firm
By:
______________________________
Authorized Officer
Date:
____________________________
The undersigned is informed of the
significance to the Company of the foregoing representations and answers
contained in this Confidential Investor Questionnaire contained herein and such
answers have been provided under the assumption that the Company will rely on
them.
Date:
______________________ By:
____________________________________
Printed Name:__________________________________
25