NOTE AND STOCK PURCHASE AGREEMENT
THIS NOTE AND STOCK PURCHASE AGREEMENT dated as of April 10, 2003, is by
and among Patient Infosystems, Inc. (the "Issuer") and those investors listed on
Schedule A hereto (each sometimes referred to as a "Holder" and collectively as
the "Holders").
RECITALS
A. The Issuer has requested that the Holders purchase certain notes and stock
of Issuer on the terms and conditions set forth herein.
B. The Holders have agreed to purchase such notes and stock on the terms and
conditions set forth therein.
ACCORDINGLY, the parties hereto hereby agree as follows:
ARTICLE I DEFINITIONS
"Amendment" has the meaning set forth in Section 2.02(c).
"Additional Investor" has the meaning set forth in Section 2.01(d).
"Asset Purchase Agreement" means the Asset Purchase Agreement by and among
the Issuer, American CareSource Corporation, certain stockholders of the
Issuer and certain stockholders of American CareSource Corporation dated as
of September 23, 2002, as further amended on April 10, 2003.
"Certificate of Designations" has the meaning set forth in Section 2.01(b).
"Collateral" has the meaning set forth in Section 2.02.
"Collateral Agent" has the meaning set forth in ARTICLE VI.
"Commitments" has the meaning set forth in Section 3.15.
"Closing Date" means the date on which all of the conditions set forth in
ARTICLE V shall first have been satisfied.
"Common Stock" means the Common Stock, par value $.01 per share of the
Issuer.
"Contractual Obligation" means any provision of any security issued by the
Issuer or of any agreement, instrument or other undertaking to which the
Issuer is a party or by which it or any of its property is bound.
"Event of Default" has the meaning set forth in ARTICILE VII.
"Governmental Authority" means any nation, government, state or other
political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of, or
pertaining to, government.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), or preference,
priority or other security agreement or preferential arrangement of any
kind or nature whatsoever.
"Lien Subordination Agreement" means the Lien Subordination Agreement by
and among the Holders, Equity Dynamics, Inc., Xxxxx Fargo Bank Iowa, N.A.,
Xxxx Xxxxxxxxx, Xxxxxx Xxxxxxxx, the Issuer and any Additional Investor of
even date herewith.
"Material Adverse Effect" means a material adverse effect on (i) the
business, operations, property, condition (financial or otherwise) or
prospects of the Issuer, (ii) the ability of the Issuer to perform its
obligations under the Purchase Documents, or (iii) the validity or
enforceability of the Purchase Documents or the rights or remedies of the
Holders hereunder or thereunder.
"Meeting" has the meaning set forth in Section 2.01(c).
"Notes" means the notes issued under this Purchase Agreement.
"Person" means an individual, partnership, corporation, business trust,
joint stock company, limited liability company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of
whatever nature.
"Proxy Statement" has the meaning set forth in Section 2.01(c).
"Purchase Agreement" means this agreement as modified from time to time.
"Purchase Documents" means the documents listed in Section 5.01.
"Required Holders" means Holders holding Notes with 50% or more of the
aggregate principal amounts then outstanding under all the Notes.
"Required Shareholder Approval" has the meaning set forth in Section
2.01(c).
"Requirements of Laws" means as to any Person, the organizational or
governing documents of such Person, and any law, treaty, rule or regulation
or determination of an arbitrator or a court or other Governmental
Authority, in each case applicable or binding upon such Person or any of
its property or to which such Person or any of its material property is
subject.
"Responsible Officer" means the chief executive officer, president, vice
president or chief financial officer of the Issuer.
"SEC" means the Securities and Exchange Commission.
"Segregated Bank Account" means an insured money market account maintained
by Issuer at Citbank, account number 226045172, the proceeds of which shall
be the funds loaned to Issuer by the Holders under the Purchase Agreement
and any proceeds collected by the Issuer from American CareSource
Corporation under the Credit Agreement by and between the Issuer and
American CareSource Corporation of even date herewith.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Agreement" means the Security Agreement by and between the Issuer
and the Holders of even date herewith.
"Series D Preferred Stock" means Series D 9% Cumulative Convertible
Preferred Stock, par value $0.01 per share of the Issuer.
"Stock" means shares of Series D Convertible Preferred Stock, par value
$0.01 per share of the Issuer issued under this Purchase Agreement.
"Warrant" shall mean the Warrant to purchase shares of Common Stock of ACS
granted to Issuer by ACS on April 10, 2003.
ARTICLE II PURCHASE OF CONVERTIBLE NOTES AND STOCK
2.01 Sale and Purchase of Notes and Stock.
(a) Subject to the terms and conditions hereof and for the consideration and in
the amounts listed on Schedule 2.01, the Issuer agrees to issue and sell,
and each Holder hereby agrees, severally and not jointly, to purchase the
Notes and the Stock as set forth on Schedule 2.01. All proceeds received by
Issuer from Holders shall be deposited in the Segregated Bank Account and
will only be used by Issuer to fund the loans to American CareSource
Corporation described in Section 2.02, subject to the exceptions set forth
in Section 2.07 hereof.. The Notes shall be substantially in the form
annexed hereto as Exhibit 2.01(a).
(b) Prior to the Closing Date, the Issuer shall have filed a Certificate of
Designation, Powers, Preferences and Relative, Participating, Optional and
Other Special Rights and the Qualifications, Limitations or Restrictions
Thereof of the Series D Preferred Stock of Patient Infosystems, Inc. (the
"Certificate of Designation") setting forth, among other things, the terms,
designations, powers, preferences, and relative, participating, optional,
and other special rights, and the qualifications, limitations and
restrictions of the Series D Preferred Stock, in the form attached hereto
as Exhibit 2.01(b). The Series D Preferred Stock shall have the terms set
forth in the Certificate of Designation.
(c) The Issuer shall submit to the stockholders of the Issuer for approval at
either its next annual meeting of shareholders or a special meeting (the
"Meeting") to be called and held as promptly as practicable after the date
hereof, among other things, an amendment of its Certificate of
Incorporation in order to increase its authorized common stock to
80,000,000 shares, necessary to allow for the issuance of the Common Stock
upon conversion of the Stock (the "Amendment"). In connection with such
Meeting, the Issuer shall prepare and file with the SEC a preliminary proxy
statement (the "Proxy Statement") by which the Issuer's shareholders will
be asked to approve the Amendment referred to herein (the "Required
Shareholder Approval"). The Issuer shall use its best efforts to respond to
any comments of the SEC, and to cause the Proxy Statement to be mailed to
the Issuer's shareholders at the earliest practicable time. The Issuer will
notify Holders promptly of the receipt of any comments from the SEC or its
staff and of any request by the SEC or its staff or any other government
officials for amendments or supplements to the Proxy Statement or for
additional information and will supply Holders with copies of all
correspondence between the Issuer or any of its representatives, on the one
hand, and the SEC, or its staff or any other government officials, on the
other hand, with respect to the Proxy Statement. The Proxy Statement shall
comply in all material respects with all applicable requirements of law.
Holders shall provide the Issuer with all information about Holders
required to be included or incorporated by reference in the Proxy Statement
and shall otherwise cooperate with the Issuer in taking the actions
described in this paragraph. Whenever any event occurs which is required to
be set forth in an amendment or supplement to the Proxy Statement, the
Issuer or Holders, as the case may be, shall promptly inform the other
party of such occurrence and cooperate in filing with the SEC or its staff
or any other government officials, and/or mailing to shareholders of the
Issuer, such amendment or supplement. The Proxy Statement shall include the
recommendation of the Board of Directors of the Issuer that the
shareholders of the Issuer vote in favor of and approve the Amendments;
provided, however, that the Board of Directors may withdraw or modify its
recommendation in a manner adverse to the Holders only in the event that
the Board of Directors determines in good faith, after consultation with
and after considering the advice of outside counsel, that in order to
comply with its fiduciary duties to stockholders under applicable law, it
is necessary for the Board of Directors to so withdraw or modify its
recommendation.
(d) The Issuer and the Holders agree that this Purchase Agreement shall be
amended to provide for the issuance of additional notes and shares of
Series D Preferred Stock to additional investors as contemplated hereby
under the terms and conditions of this Purchase Agreement up to the maximum
amount set forth in Schedule 2.01 and, without obtaining the signature,
consent or permission of any of the Holders, such additional investors
shall become parties to this Purchase Agreement and the other Purchase
Documents (as applicable) by executing counterpart signature pages to such
agreements. Upon and after the closing of any such additional investments,
the term "Stock" under this Purchase Agreement shall be deemed to include
the shares so issued, the term "Notes" under this Purchase Agreement shall
be deemed to be include any notes issued for such additional investments
and the term "Holder" shall include any such additional investor.
2.02 Collateral Security.
The obligations of the Issuer under this Purchase Agreement and the Notes
are secured by a first priority perfected lien and security interest in a note
or series of notes issued to Issuer under the terms of the Credit Agreement by
and between the Issuer and American CareSource Corporation of even date
herewith, the proceeds thereof, the Warrant issued to Issuer by ACS, all rights
of Issuer under the Credit Agreement and the related security agreement by and
between the Issuer and American CareSource Corporation and the proceeds of the
Notes issued to Issuer by Holders as maintained in the Segregated Bank Account
(the "Collateral").
2.03 Conversion of Notes.
Each Holder shall have the right to convert the Notes into Series D
Preferred Stock of the Issuer plus accrued but unpaid interest at the rate equal
to the purchase price of such Series D Preferred Stock upon consummation of the
private placement of such Series D Preferred Stock as contemplated by the Asset
Purchase Agreement or at such other time as agreed upon by the parties.
2.04 Sale of Securities by Issuer.
The proceeds of any sale of stock, debt or other securities of the Issuer
will be applied towards repayment of the Notes on a pro rata basis among the
Holders, unless, as to each respective Holder, such Holder agrees to another use
in writing.
2.05 Prepayment of Notes.
The Notes may be prepaid in whole or in part, on a pro rata basis at any
time, without premium or penalty with respect to each Note, with the written
consent of the Holders.
2.06 Segregated Bank Account.
Issuer hereby agrees to keep all proceeds from the Purchase Agreement and
Notes in a Segregated Bank Account.
2.07 Distribution of Funds.
Issuer hereby agrees that distribution of funds from the Segregated Bank
Account shall be made only to, or for the benefit of, American CareSource
Corporation. Notwithstanding the foregoing, (i) the Issuer may at any time
withdraw $2,500 from the Segregated Bank Account (such amount representing
Issuer's funds used to open such Segregated Bank Account), (ii) all accrued
interest from funds deposited into the Segregated Bank Account shall be property
of the Issuer and shall be used by the Issuer at its sole discretion and (iii)
up to $250,000 to be applied by the Issuer for working capital purposes of
Issuer.
2.08 Limitation on Loans with Citibank.
Issuer shall not enter into any loan, credit agreement or other financing
arrangement with Citibank as long as there are funds in the Segregated Bank
Account.
ARTICLE III REPRESENTATIONS AND WARRANTIES OF ISSUER
To induce the Holders to enter into this Purchase Agreement and to purchase
the Notes and Stock, the Issuer hereby makes the following representations and
warranties to the Holders.
3.01 Organization, Good Standing, Power, Etc.
The Issuer (a) is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, (b) is not required to be
qualified or authorized to do business as a foreign corporation in any other
jurisdiction by reason of the nature of the business conducted by it or the
properties owned or leased or operated by it, and (c) has all requisite
corporate power and authority, licenses, permits and franchises to own or lease
and operate its properties and carry on its business as presently being
conducted. The Issuer has no operating subsidiaries.
3.02 Certificate of Incorporation and By-Laws.
The Issuer has furnished the Holders with a complete and correct copy of
(a) the Issuer's Certificate of Incorporation, as amended to date, certified by
the Secretary of State of the State of Delaware, and (b) the Issuer's By-Laws,
as amended to date, certified by the Secretary of the Issuer. The Issuer's
Certificate of Incorporation and By-Laws are in full force and effect, and the
Issuer is not in violation of any of the provisions thereof.
3.03 Capitalization.
The Issuer's authorized capitalization is as disclosed on Schedule 4.1.7(a)
of the Asset Purchase Agreement. The Stock when issued and delivered as herein
provided, will be validly issued, fully paid and non-assessable. The Issuer
agrees that, subject to receiving the Required Shareholder Approval, it will at
all times have authorized and reserved for the purposes of issuance, upon
exercise of the conversion rights of the Stock a sufficient number of shares of
its Common Stock to provide for the exercise of all such conversion rights. All
outstanding shares of the Issuer are validly issued, fully paid and
non-assessable.
3.04 Agreements Relating to Capital Stock.
To the best knowledge of the Issuer, other than as provided for in the
Asset Purchase Agreement, there are no agreements or understandings with any
person with respect to the voting of any shares of the Issuer's capital stock on
any matter and the Issuer is not a party to any agreement which imposes any
obligation on the Issuer, or creates any rights in any person, with respect to
capital stock or any other securities of the Issuer.
3.05 Options, Warrants, Rights, Etc.
Other than as set forth in Schedule 3.05, the Issuer does not have
outstanding any option, warrant, or other right to purchase or convert any
obligation into any of its capital stock.
3.06 Authorization of Agreement.
The Issuer has the full corporate power and authority to enter into this
Purchase Agreement and to perform its obligations hereunder and the execution,
delivery and performance of this Purchase Agreement and all other transactions
contemplated hereby have been duly authorized by the Issuer. This Purchase
Agreement constitutes a legal, valid and binding obligation of the Issuer,
enforceable in accordance with its terms, except as such enforcement may be
limited by bankruptcy, insolvency, moratorium or other similar enforcement of
creditors' rights generally.
3.07 Effect of Agreement, Etc.
The execution, delivery and performance of this Purchase Agreement by the
Issuer, and consummation of the transactions contemplated hereby will not, with
or without the giving of notice and the lapse of time, or both (a) violate any
provision of law, statute, rule or regulation to which the Issuer is subject,
(b) violate any judgment, order, writ or decree of any court applicable to the
Issuer, or (c) result in the breach of, or conflict with, any term, covenant,
condition or provision of, result in the modification or termination of,
constitute a default under, or result in the creation or imposition of any lien,
security interest, charge or encumbrance upon, any of the properties or assets
of the Issuer pursuant to any corporate charter, by-laws, commitment, contract
or other agreement or instrument, to which the Issuer is a party or by which any
of its assets or properties is or may be bound or affected.
3.08 Government and Other Consents.
No consent, authorization or approval of, or exemption by, any governmental
or public body or authority is required in connection with the execution,
delivery and performance by the Issuer of this Purchase Agreement, or to the
taking by the Issuer of any action herein contemplated.
3.09 Financial Statements.
The Issuer has delivered to the Holders the financial statements of the
Issuer as of and for the fiscal year ended December 31, 2002, including the
Balance Sheet ("Balance Sheet"), the related statements of income, retained
earnings and stockholders' equity for the fiscal year then ended (the "Balance
Sheet Date") audited by Deloitte & Touche, LLP, independent certified public
accountants, including the related schedules and notes. The foregoing financial
statements (the "Financial Statements") have been prepared in accordance with
generally accepted accounting principles consistently applied, are correct and
complete in all material respects and fairly present in all material respects
the financial position and results of operations of the Issuer as of said dates
and for the periods indicated.
3.10 Absence of Undisclosed Liabilities.
The Financial Statements make full and adequate provision for all material
obligations, liabilities and commitments (fixed and contingent) of the Issuer as
of the dates thereof and the Issuer had no material obligations, liabilities or
commitments (fixed or contingent) which were required to be set forth or
reserved in the Financial Statements in accordance with generally accepted
accounting principles which were not so set forth or reserved.
3.11 Absence of Certain Changes or Events.
Except as set forth in Schedule 3.11, since the Balance Sheet Date, the
Issuer has not:
(a) incurred any obligation or liability (fixed or contingent) except (i) trade
or business obligations incurred in the ordinary course of business, none
of which is materially adverse, and (ii) obligations and liabilities under
the Commitments set forth in Schedule 3.15,
(b) suffered any material adverse change in its financial condition, results of
operations, properties, business or business relationships;
(c) suffered the occurrence of any events which, individually or in the
aggregate, have had, or might reasonably be expected to have, a material
adverse effect on its financial condition, results of operations,
properties, business or business relationships;
(d) discharged or satisfied any lien or encumbrance or incurred or paid any
obligation or liability (fixed and contingent), except (i) current
obligations and liabilities fully reflected in the Balance Sheet, (ii)
current obligations and liabilities incurred since the Balance Sheet Date
in the ordinary course of business, and (iii) obligations and liabilities
incurred in carrying out the transactions contemplated by this Purchase
Agreement;
(e) sold, transferred or leased any of its assets or properties or entered into
any transaction other than in the ordinary course of business;
(f) suffered any loss not in the ordinary course of business; or
(g) declared any dividend or made any payment or distribution to its
stockholders or purchased or redeemed any of its capital stock.
3.12 Tax Matters.
The Issuer has prepared and filed with the appropriate United States, state
and local government agencies, all tax returns required to be filed; the Issuer
has paid all taxes shown on such tax returns to be payable or which have come
due pursuant to any assessment, deficiency notice, 30-day letter or similar
notice received by it except for taxes reflected in the Balance Sheet; and the
provisions for income taxes payable in the Balance Sheet are sufficient for all
accrued and unpaid taxes, whether or not disputed and for all periods to and
including the Balance Sheet Date. The Federal income tax liability of the Issuer
has not been examined and reported on by the Internal Revenue Service for any
fiscal year(s). The Issuer has not executed or filed with the Internal Revenue
Service or any other taxing authority any agreement extending the period for
assessment or collection of any income taxes or is a party to any pending action
or proceeding by any governmental authority for assessment or collection of
taxes, and no claims for assessment or collection of taxes has been asserted
against the Issuer.
3.13 Title to Properties; Absence of Liens and Encumbrances, Etc.
Except as indicated on Schedule 3.13, the Issuer has good and marketable
title to all of its assets (tangible and intangible) (including without
limitation the assets reflected in the Balance Sheet, except as since sold or
otherwise disposed of, in the ordinary course of business), free and clear of
all mortgages, claims, liens, charges and encumbrances, except (i) as referred
to in the Balance Sheet or disclosed in the notes thereto, (ii) the lien of
taxes not yet due and payable or being contested in good faith by appropriate
proceedings, (iii) such imperfections of title and encumbrances, if any, which
do not materially detract from the value, or interfere with the use, of the
properties of the Issuer or otherwise materially impair its business operations.
The fixed assets of the Issuer referred to in the Balance Sheet are all located
on real property leased by the Issuer. The leases and other agreements or
instruments under which the Issuer holds, leases or is entitled to the use of
any real or personal property are in full force and effect and all rentals,
royalties or other payments accruing thereunder prior to the date hereof have
been duly paid. The Issuer has not received notice of violation of any
applicable law, ordinance, regulation, order or requirement relating to its
operations, or its owned or leased properties.
3.14 Condition of Equipment, Etc.
The equipment owned, operated, or leased by the Issuer is in good condition
and repair (ordinary wear and tear which are not such as to affect adversely the
operation of its business excepted) and suitable for the uses for which
intended.
3.15 Agreements, Plans, Arrangements, Etc.
Except as set forth in Schedule 3.15, the Issuer is not a party to, nor are
the Issuer or any of its properties or assets bound or affected by, any written
or oral
(a) material lease agreement (whether as lessor or lessee) for an aggregate
amount of more than $25,000 per year relating to real or personal property;
(b) license agreement, assignment or contract (whether as licensor or licensee,
assignor or assignee) for an aggregate amount of more than $25,000 per year
relating to trademarks, patents or copyrights (or applications therefor),
unpatented designs or styles, trade secrets, proprietary software programs
and systems, know-how or technical assistance including agreements with
customers of the Issuer granting licenses to use proprietary software
programs and systems other than third party software licenses agreed to in
the ordinary course of the Issuer's business;
(c) employment agreement not terminable without liability to the employer upon
notice to the employee of not more than 30 days, or employment agreement
providing compensation of more than $25,000 per year (including all salary,
bonuses and commissions) to any employee;
(d) agreement, other than any customer contract, in excess of $100,000 for the
purchase or sale of goods, materials, supplies, services, machinery or
capital assets;
(e) agreement with any labor union;
(f) policy of insurance (including surety bonds) in force with respect to such
corporation or any of its properties, assets, executive officers, agents or
employees;
(g) agreement with any distributor, dealer, sales agent or representative;
(h) agreement guaranteeing, indemnifying or otherwise becoming liable for the
obligations or liabilities of another other than obligations or liabilities
for patent, copyright and trademark infringement arising out of the
Issuer's standard sales agreements;
(i) agreement for borrowing or lending of money;
(j) agreement with any bank, finance company or similar organization which
acquires from such corporation consumer paper or contracts for the sale of
merchandise on credit;
(k) agreement granting any person a lien, security interest or mortgage on any
property or asset of such corporation, including, without limitation, any
factoring agreement or agreement for the assignment of accounts receivable;
(l) bonus, deferred compensation, profit sharing, pension, retirement, stock
option, stock purchase, insurance (other than medical insurance for
employees) or other plan, arrangement or practice providing employee or
executive benefits;
(m) advertising agreement with any newspaper, magazine or radio or television
station;
(n) agreement which restricts it from doing business anywhere in the world;
(o) agreements with any consultant in an aggregate amount of more than $50,000
per year; or
(p) other material agreements affecting the Issuer or its assets or business.
Correct and complete copies of all such agreements, plans, policies and
arrangements and such other instruments referred to in the foregoing Section
3.15(a) through (p) (or, where they are oral, true and complete written
summaries thereof) (collectively referred to herein as the "Commitments") have
been made available for inspection at the offices of the Issuer. Each of the
Commitments is now valid, in full force and effect and enforceable in accordance
with its terms, and the Issuer has fulfilled, or taken all action reasonably
necessary to enable it to fulfill when due, all of its material obligations
under the Commitments. There has not occurred any default by the Issuer, or any
event caused by the Issuer or any of its employees or agents which with the
lapse of time or the election of any person other than the Issuer, will become a
default, nor to the knowledge of the Issuer has there occurred any default by
others or any event which with the lapse of time or the election of the Issuer
will become a default under any of the Commitments, except defaults, if any,
which will not result in any material loss to or liability of the Issuer.
Neither the Issuer, nor, to the knowledge of the Issuer, any other party, is in
arrears in respect of the performance or satisfaction of the terms or conditions
on its part to be performed or satisfied under any of the Commitments and no
wavier or indulgence has been granted by any of the parties thereto.
3.16 Patents, Trademarks, Copyrights, Proprietary Software Products.
(a) To the knowledge of the Issuer, the Issuer owns or possesses adequate
licenses or other valid rights to use (without the making of any payment to
others or the obligation to grant rights to others in exchange) all
patents, patent rights, trademarks, trademark rights, trade names, trade
name rights, copy rights, know-how, proprietary software programs and other
proprietary information necessary to the conduct of its business as
presently being or proposed to be conducted; and
(b) the validity of such items and the title thereto of the Issuer have not
been questioned in any litigation to which the Issuer is a party, nor, to
the knowledge of the Issuer, the conduct of the business of the Issuer as
now operated does not conflict with valid patents, patent rights,
proprietary rights, licenses, trademarks, trademark rights, trade names,
trade name rights or copyrights of others in any way likely to affect
adversely in any material manner the business, assets or condition,
financial or otherwise, of the Issuer. No material infringement of any
proprietary right owned or licensed by the Issuer is known to the Issuer.
All patents, patent applications and rights to inventions or proprietary
software products heretofore owned or held by any officer or shareholder of
the Issuer and relating to its business in any manner have been duly and
effectively transferred to the Issuer.
3.17 Permits, Licenses, Etc.
To the knowledge of the Issuer, the Issuer does not require any permits,
licenses, orders and approvals of federal, state, local or governmental and
regulatory bodies in order to carry on its businesses as presently conducted.
3.18 Litigation.
There is no claim, action, suit, proceeding, arbitration, investigation or
inquiry pending before any federal, state, municipal, or other court or
governmental or administrative body or agency, or any private arbitration
tribunal, or, to the knowledge of the Issuer, threatened against, relating to or
affecting the Issuer or any of its assets or properties, or the transactions
contemplated by this Purchase Agreement; nor to the knowledge of the Issuer is
there any basis for any such claim, action, suit, proceeding, arbitration,
investigation or inquiry which may have any material adverse effect upon the
assets, properties or business of the Issuer, or the transactions contemplated
by this Purchase Agreement. Neither the Issuer nor any officer, director, or
employee of the Issuer has been permanently or temporarily enjoined by order,
judgment or decree of any court or other tribunal or any agency from engaging in
or continuing any conduct or practice in connection with the business engaged in
by the Issuer. There is not in existence any order, judgment or decree of any
court or other tribunal or any agency enjoining or requiring the Issuer to take
any action of any kind or to which the Issuer, its business, properties or
assets are subject or bound. The Issuer is not in default under any order,
license, regulation or demand of any federal, state or municipal or other
governmental agency or with respect to any order, writ, injunction or decree of
any court.
3.19 No Interest in Competitors, Etc.
Neither the Issuer, nor any affiliate of any of the foregoing, directly or
indirectly, owns any interest in or controls or is an employee, officer,
director, or partner of or participant in or consultant to any corporation,
partnership, limited partnership, joint venture, association, or other entity
which is a competitor, supplier, customer, landlord or tenant of the Issuer.
3.20 Loans with Citibank.
The Issuer has no loans, credit agreements or other financing arrangements
with Citibank.
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF HOLDERS
Each Holder hereby represents and warrants to the Issuer, the following
facts and understandings:
4.01 Opportunity to Speak to Issuer.
Each Holder acknowledges that it has had a full and complete opportunity to
make inquiries as to the Issuer's plan of operations and that it fully
understands the risks involved in the Issuer.
4.02 Opportunity to Speak to Tax Advisor.
Each Holder has been advised by the Issuer to consult with his own personal
tax advisor to determine the effect of an investment in the Notes and Stock on
his Federal income tax status.
4.03 Opportunity to Review Issuer's Documents, Records and Books.
All documents, records and books pertaining to this investment have been
made available for inspection by each Holder or, if applicable, each Holder's
attorney and/or accountant; and each Holder understands that the books and
records of the Issuer will be available during reasonable business hours at its
principal place of business.
4.04 Risk of Investment.
Each Holder understands that operation of the Issuer's business is subject
to numerous risks. Each Holder is able to bear the economic risk of the
investment (i.e., he can afford a complete loss of his investment). Each Holder
is familiar with the nature of and risks incident to investment in securities,
and has determined (either alone or if need be on the basis of consultation with
his business and tax advisors) that the purchase of the Notes and Stock is
consistent with his investment objectives and income prospects.
4.05 Securities Acquired for Investment.
The Notes and shares of Stock acquired by each Holder will be acquired for
investment and not with a view to the resale or distribution of such securities;
and such securities are being acquired by each Holder for his own account and
with his own funds and no person, other than the Holder, has a direct or
indirect beneficial interest in such securities. Each Holder further understands
that holding the investment for any pre-defined period of time does not
constitute holding for investment or an agreement to hold the securities for
investment and not with a view to resale or distribution. Each Holder has
adequate means of providing for his current needs and foreseeable personal
contingencies, has no need for liquidity in this investment, and anticipates no
need now or in the foreseeable future to sell any of the securities which he
hereby purchases.
4.06 Accredited Investor.
Each Holder qualifies as one of the following:
(a) Any bank as defined in Section 3(a)(2) of the Securities Act or any savings
and loan association or other institution as defined in Section 3(a)(5)(A)
of the Securities Act whether acting in its individual or fiduciary
capacity; any broker or dealer registered pursuant to Section 15 of the
Securities Exchange Act of 1934; any insurance company as defined in
Section 2(13) of the Securities Act; any investment company registered
under the Investment Company Act of 1940 or a business development company
as defined in Section 2(a)(48) of the Investment Company Act of 1940; any
Small Business Investment Company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business Investment
Act of 1958; any plan established and maintained by a state, its political
subdivisions, or any agency or instrumentality of a state or its political
subdivisions, for the benefit of its employees, if such plan has total
assets in excess of $5,000,000; any employee benefit plan within the
meaning of Title I of the Employment Retirement Income Security Act of 1974
("ERISA"), if the investment decision is made by a plan fiduciary, as
defined in Section 3(21) of ERISA, which is either a bank, a savings and
loan association, insurance company or registered investment advisor, or if
the employee benefit plan has total assets in excess of $5,000,000, or, if
a self-directed plan, with investment decisions made solely by persons that
are accredited investors;
(b) Any private business development company as defined in Section 202(a)(22)
of the Investment Advisors Act of 1940;
(c) Any organization described in Section 501(c)(3) of the Internal Revenue
Code, corporation, Massachusetts or similar business trust, or partnership,
not formed for the specific purpose of acquiring the securities offered,
with total assets in excess of $5,000,000;
(d) Any director or executive officer of the Issuer;
(e) Any natural person whose individual net worth, or joint net worth with that
person's spouse, at the time of his or her purchase, exceeds $1,000,000;
(f) Any natural person who had an individual income in excess of $200,000 in
each of the two most recent years or joint income with that person's spouse
in excess of $300,000 in each of those years and has a reasonable
expectation of reaching the same income level in the current year;
(g) Any trust, with total assets in excess of $5,000,000 not formed for the
specific purpose of acquiring the securities offered, whose purchase is
directed by a sophisticated person as described in Rule 506 of Regulation
D; or
(h) Any entity in which all of the equity owners are accredited investors.
4.07 Resale of Stock
Each Holder understands that the Notes and Stock have not been registered
under the Securities Act, in reliance on an exemption for private offerings.
Because the Issuer has no obligation to effect such registration, each Holder
may have to continue to bear the economic risk of each Holder's investment in
the Notes and Stock for an indefinite period; and each Holder will not be
permitted to transfer the Notes or any shares of Stock in the absence of an
opinion of counsel satisfactory to counsel for the Issuer that registration is
not required under the Securities Act or under applicable state securities laws.
Each Holder understands that this offering of the Notes and Stock has not been
registered with securities agencies of any State in which they are offered in
reliance upon exemptions from registration as a private placement. The offering
of the Notes and Stock has not been approved or disapproved by federal of state
security authorities.
ARTICLE V CONDITIONS
The effectiveness of this Purchase Agreement is subject to the satisfaction
on or prior to the Closing Date, of the following conditions precedent:
5.01 Purchase Documents.
The Holders shall have received the following documents executed and
delivered by a Responsible Officer of the Issuer:
(a) this Purchase Agreement;
(b) the Notes;
(c) the Security Agreement
(d) certificates representing the Stock;
(e) the Lien Subordination Agreement; and
(f) Registration Rights Agreement in the form attached as Exhibit 5.01 hereto.
5.02 Lien in favor of Collateral Agent.
The Collateral Agent shall have first priority perfected security interests
in the Collateral.
5.03 Proceedings and Certificates.
The Holders shall have received a copy of the resolutions, in form and
substance satisfactory to the Holders, of the Boards of Directors of the Issuer
authorizing (i) the execution, delivery and performance of this Purchase
Agreement, the Notes and any other Purchase Document, (ii) the issuance of the
Stock and (iii) the borrowings contemplated hereunder certified by the Secretary
of the Issuer as of the Closing Date, which certificate shall state that the
resolutions thereby certified have not been amended, modified, revoked or
rescinded and shall be in form and substance satisfactory to the Holders.
5.04 Amendment to Asset Purchase Agreement
American CareSource Corporation and the Issuer shall have executed an
amendment to the Asset Purchase Agreement including, but not limited to,
modifications of the provisions regarding (i) control of the Board of Directors
of the Issuer after closing, (ii) extension of the repayment of debt to Xxxx
Xxxxxx and his affiliates, (iii) termination of the Asset Purchase Agreement
based on the filing date of the proxy statement of the Issuer with the
Securities and Exchange Commission and (iv) employment agreements with certain
officers of American CareSource Corporation.
5.05 Certificate of Designation
The Issuer shall have filed with the Secretary of State of the State of
Delaware the Certificate of Designations in the form attached as Exhibit
2.01(b).
ARTICLE VI COLLATERAL AGENT
6.01 Collateral Agent
(a) Equity Dynamics, Inc. shall act as Collateral Agent as contemplated herein
and in the Security Agreement.
(b) The Required Holders shall have the right to direct the Collateral Agent,
from time to time, to consent to any amendment, modification or supplement
to or waiver of any provision of the Security Agreement and to release any
Collateral from any lien or security interest held by the Collateral Agent;
provided, however, that (i) no such direction shall require the Collateral
Agent to consent to the modification of any provision or portion thereof
which (in the sole judgment of the Collateral Agent) is intended to benefit
the Collateral Agent, (ii) the Collateral Agent shall have the right to
decline to follow any such direction if the Collateral Agent shall
determine in good faith that the directed action is not permitted by the
terms of the Security Agreement or may not lawfully be taken, and (iii) no
such direction shall waive or modify any provision of the Security
Agreement the waiver or modification of which requires the consent of all
Holders. The Collateral Agent may rely on any such direction given to it by
the Required Holders and shall be fully protected in relying thereon, and
shall under no circumstances be liable to any Holder or any other Person
for taking or refraining from taking action in accordance with any
direction or otherwise in accordance with the Security Agreement.
6.02 Duties of Collateral Agent
(a) The Collateral Agent shall have and may exercise such powers under the
Security Agreement as are specifically delegated to the Collateral Agent by
the terms hereof and thereof, together with such powers as are reasonably
incidental thereto. The Collateral Agent shall not have any implied duties
or any obligations to take any action under the Security Agreement.
(b) The Collateral Agent shall be required to act or to refrain from acting
(and shall be fully protected in so acting or refraining from acting) upon
the written instructions, and the furnishing of a deposit in accordance
with Section 6.06 hereof, of the Required Holders and such instructions
shall be binding upon all the Holders; provided that the Collateral Agent
shall not be required to take any action which the Collateral Agent in good
faith believes (i) could reasonably be expected to expose it to personal
liability or (ii) is contrary to applicable law.
(c) Absent written instructions from Required Holders to the contrary at a time
when an Event of Default shall have occurred and be continuing, the
Collateral Agent may take, but shall have no obligation to take, any and
all actions under the Security Agreement or otherwise as it shall deem to
be in the best interests of the Holders.
(d) The relationship between the Collateral Agent and the Holders is and shall
be only to the extent explicitly provided for herein that of agent and
principal and nothing herein contained shall be construed to impose on the
Collateral Agent duties and obligations other than those expressly provided
for herein. Without limiting the generality of the foregoing, neither the
Collateral Agent nor any of its employees, partners or agents shall
(i) be responsible to the Holders for any recitals, representations or
warranties contained in, or for the execution, validity, genuineness,
perfection, effectiveness or enforceability of, the Security Agreement
(it being expressly understood that any determination of the foregoing
is the responsibility of the Issuer),
(ii) be responsible to the Holders for the validity, genuineness,
perfection, effectiveness, enforceability, existence, value or
enforcement of any security interest in the Collateral (it being
expressly understood that any determination of the foregoing is the
responsibility of each Holder),
(iii)be under any duty to inquire into or pass upon any of the foregoing
matters, or to make any inquiry concerning the performance by any
Person of its or their obligations under the Security Agreement (it
being expressly understood that any determination of the foregoing is
the responsibility of the Issuer),
(iv) be deemed to have knowledge of the occurrence of an Event of Default,
unless it shall have received written notice thereof from either a
Holder or the Issuer,
(v) be responsible or liable for any shortage, discrepancy, damage, loss
or destruction of any part of the Collateral wherever the same may be
located regardless of the cause thereof unless the same shall happen
solely through the gross negligence or willful misconduct of the
Collateral Agent as shall have been determined in a final
nonappealable judgment of a court of competent jurisdiction,
(vi) have any liability for any error or omission or action or failure to
act of any kind made in the settlement, collection or payment in
connection with the Security Agreement or any of the Collateral or any
instrument received in payment therefor or for any damage resulting
therefrom other than as a sole result of its own gross negligence or
willful misconduct as shall have been determined in a final
nonappealable judgment of a court of competent jurisdiction, and
(vii)in any event, be liable as such for any action taken or omitted by it,
absent, in each case described in this Section, its gross negligence
or willful misconduct as shall have been determined in a final
nonappealable judgment of a court of competent jurisdiction.
6.03 Agents, Partners and Employees of Collateral Agent.
The Collateral Agent may execute any of its duties under the Security
Agreement by or through its agents, partners or employees. Neither the
Collateral Agent nor any of its agents, partners or employees shall be liable
for any action taken or omitted to be taken by it or them in good faith, be
responsible for the consequence of any oversight or error of judgment or
answerable for any loss unless any of the foregoing shall happen through its or
their gross negligence or willful misconduct as shall have been determined in a
final nonappealable judgment of a court of competent jurisdiction.
6.04 Reliance on Certain Documents.
The Collateral Agent shall be entitled to rely on any communication,
instrument or document believed by it to be genuine and correct and to have been
signed or sent by the proper Person or Persons, and with respect to all legal
matters shall be entitled to rely on the advice of legal advisors selected by it
concerning all matters relating to the Security Agreement and its duties
hereunder and thereunder and otherwise shall rely on such experts as it deems
necessary or desirable, and shall not be liable to any Holder or any other
Person for the consequences of such reliance.
6.05 Collateral Agent May Have Separate Relationship with Obligation Parties.
The Collateral Agent may, notwithstanding the fact that it is the
Collateral Agent, generally engage in any kind of business with any such party
in the same manner and to the same effect as though it were not the Collateral
Agent; and such business shall not constitute a breach of any obligation of the
Collateral Agent to the other Holders.
6.06 Indemnification of Collateral Agent.
Each of the Holders agrees to indemnify the Collateral Agent for any and
all liabilities, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind and nature whatsoever that may be imposed
on, incurred by or asserted against the Collateral Agent in its capacity as the
Collateral Agent, in any way relating to or arising out of the Security
Agreement or the transactions contemplated hereby or thereby or the enforcement
of any of the terms hereof or thereof or of any such other documents, provided
that no Holder shall be liable for any of the foregoing to the extent they arise
from gross negligence or willful misconduct on the part of the Collateral Agent
as shall have been determined in a final nonappealable judgment of a court of
competent jurisdiction. This Section 6.06 shall survive the termination of this
Purchase Agreement. Prior to taking any action hereunder as Collateral Agent,
the Collateral Agent may require each Holder to deposit with it sufficient sums
as it determines in good faith is necessary to protect the Collateral Agent for
costs and expenses associated with taking of action, and the Collateral Agent
shall have no liability hereunder for failure to take such action unless the
Holders promptly deposit such sums.
ARTICLE VII EVENTS OF DEFAULT
7.01 Bankruptcy, etc.
If the Issuer shall commence any case, proceeding or other action (i) under
any existing or future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an
order for relief entered with respect to it, or seeking to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect
to it or its debts, or (ii) seeking appointment of a receiver, trustee,
custodian or other similar official for it or for all or any substantial part of
its assets, or the Issuer shall make a general assignment for the benefit of its
creditors; or (iii) there shall be commenced against the Issuer any case,
proceeding or other action of a nature referred to in clause (i) or (ii) above
which (a) results in the entry of an order for relief or any such adjudication
or appointment or (b) remains undismissed, undischarged or unbonded for a period
of 60 days; or (iv) there shall be commenced against the Issuer any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial part of
its assets which results in the entry of an order for any such relief which
shall not have been vacated, discharged, or stayed or bonded pending appeal
within 60 days from the entry thereof; or (v) the Issuer shall take any action
in furtherance of, or indicating its consent to, approval of, or acquiescence
in, any of the acts set forth in clause (i), (ii), (iii), or (iv) above; the
Notes (with accrued interest thereon as provided in the Notes) and all other
amounts owing under this Purchase Agreement and the Notes shall immediately
become due and payable without the need for any notice or other action by
Holders.
7.02 Other Events.
If any of the following events shall occur and be continuing:
(a) The Issuer shall fail to pay (i) any principal of the Notes when due in
accordance with the terms thereof, or (ii) interest on the Notes or any fee
or other amount payable hereunder within 5 business days when due in
accordance with the terms thereof or hereof; or
(b) Any representation or warranty made by the Issuer herein or in any other
Purchase Document or which is contained in any certificate, document or
financial or other statement furnished at any time under or in connection
with this Purchase Agreement or other Purchase Document shall prove to have
been incorrect and the subject of that breach of representation or warranty
has a Material Adverse Effect on or as of the date made or deemed made; or
(c) The Issuer shall default in the observance or performance of any agreement
contained in this Purchase Agreement or the Notes which agreement, by its
nature, may not be cured; or
(d) The Issuer shall default in the observance or performance of any other
agreement contained in this Purchase Agreement or any other Purchase
Documents (other than as provided in paragraphs (a) through (c) of this
Section), and such default shall continue unremedied for a period of 30
days;
(e) There shall have occurred an Event of Default under the Security Agreement
by and between the Issuer and the Holders of even date; or
(f) There shall have occurred an Event of Default by ACS under the Credit
Agreement or Security Agreement whether or not declared by the Issuer, or
any default under or termination of the Asset Purchase Agreement by and
among the Issuer, ACS and the stockholders signatory thereto, dated as of
September 23, 2002, as amended and restated on April 10, 2003;
then, and in any such event, the Required Holders may by notice of default
to the Issuers, declare the Notes (with accrued interest thereon as provided in
the Notes) and all other amounts owing under this Purchase Agreement and the
Notes to be due and payable forthwith, whereupon the same shall immediately
become due and payable.
7.03 Waivers of Presentment, etc.
Except as expressly provided above in this Section, presentment, demand,
protest and all other notices of any kind are hereby expressly waived.
ARTICLE VIII MISCELLANEOUS
8.01 Amendments and Waivers.
No provision of this Purchase Agreement, the Notes or the Purchase
Documents may be waived, modified or amended without the prior written agreement
of Holders and the Issuer. No such waiver, modification or amendment shall
extend to or affect any obligation not expressly waived, modified or amended.
8.02 Notices.
All notices, requests and demands to or upon the respective parties hereto
to be effective shall be in writing, and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made when delivered by hand,
or, in the case of telecopy notice, when received, or, in the case of a
nationally recognized courier service, one business day after delivery to such
courier service, addressed as follows in the case of the Issuer and the Holders
or to such other address as may be hereafter notified by the respective parties
hereto and any future holders of the Notes:
The Issuer: Patient Infosystems, Inc.
00 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxxx
The Holders: To the addresses indicated on Schedule A hereto.
----------
8.03 No Waiver; Cumulative Remedies.
No failure to exercise and no delay in exercising, on the part of any
Holder, any right, remedy, power or privilege hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.
8.04 Survival of Representations and Warranties.
Unless otherwise provided herein, all representations and warranties made
hereunder or under any other Purchase Document and in any document, certificate
or statement delivered pursuant hereto or in connection herewith shall survive
for a period of two years following the execution and delivery of this Purchase
Agreement and the Notes and Stock.
8.05 Payment of Expenses, Taxes and Brokers' Fees.
The Issuer agrees that on the Closing Date it shall (i) pay or reimburse
the Holders for all their out-of-pocket costs and expenses incurred in
connection with the development, preparation and execution of, and any
amendment, supplement or modification to, this Purchase Agreement, the Notes,
and the other Purchase Documents and any other documents prepared in connection
herewith or therewith, and the consummation and administration of the
transactions contemplated hereby and thereby, provided that any legal fees of
the Holders shall be limited to the reasonable fees and disbursements of counsel
to the Holders, (ii) pay or reimburse each Holder for all its costs and expenses
incurred in connection with the enforcement or preservation of any rights under
this Purchase Agreement, the Notes, the other Purchase Documents and any such
other documents, (iii) pay, indemnify, and hold each Holder harmless from, any
and all recording and filing fees and any and all liabilities with respect to,
or resulting from any delay in paying, stamp, excise and other taxes, if any,
which may be payable or determined to be payable in connection with the
execution and delivery of, or consummation or administration of any of the
transactions contemplated by, or any amendment, supplement or modification of,
or any waiver or consent under or in respect of, this Purchase Agreement, the
Notes, the other Purchase Documents and any such other documents, and (iv) the
Issuer shall be solely responsible for the payment of any brokerage or similar
fees which may become due as the result of the consummation of the transactions
contemplated by this Purchase Agreement.
8.06 Counterparts.
This Purchase Agreement may be executed by one or more of the parties to
this Purchase Agreement on any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
8.07 Severability.
Any provision of this Purchase Agreement which 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, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
8.08 Integration.
This Purchase Agreement and the other Purchase Documents represent the
agreement of the Issuer and the Holders with respect to the subject matter
hereof, and there are no promises, undertakings, representations or warranties
by the Holders relative to subject matter hereof not expressly set forth or
referred to herein or in the other Purchase Documents.
8.09 GOVERNING LAW.
THE PUCHASE DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER
THE PURCHASE DOCUMENTS SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF IOWA WITHOUT GIVING EFFECT TO THE
CONFLICT OF LAWS RULES THEREOF.
8.10 WAIVERS OF JURY TRIAL.
THE ISSUER AND ANY HOLDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE
TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THE PURCHASE
DOCUMENTS AND FOR ANY COUNTERCLAIM THEREIN.
IN WITNESS WHEREOF, the parties hereto have caused this Purchase Agreement
to be duly executed and delivered by their proper and duly authorized officers
as of the day and year first above written.
Patient Infosystems, Inc.
By: /s/Xxxxx Xxxxxxxxxxxx
----------------------------------------
Name: Xxxxx Xxxxxxxxxxxx
Title: President
Principal Life Insurance Company
By: /s/Xxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Portfolio Manager
By: /s/Xxxxxxx X. Xxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Counsel
/s/Xxxx Xxxxxxxxx
----------------------------------------
Xxxx Xxxxxxxxx, Individually
Xxxxx Fargo Bank IA N.A. trustee of the
Xxx Xxxxxxxxx Inter Vivos Trust
By: /s/Xxxxxxxx X. Xxxxxxx
----------------------------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: Vice President
Pappajohn Xxxxxxx Xxxx Xxxxxxx PC Profit Sharing Plan FBO
Xxxxxxxx X. Xxxxxxxxx
By: /s/Xxxxxxxx X. Xxxxxxxxx
----------------------------------------
Name: Xxxxxxxx X. Xxxxxxxxx
Title: Trustee
Exhibit 2.01(a)
NOTE
DUE September 30, 2003
$(insert)
Patient Infosystems, Inc., a corporation duly formed under the laws of the
State of Delaware, (the "Issuer"), for value received, hereby jointly and
severally promise to pay to (insert) or registered assigns (the "Holder") the
principal sum of (insert) ($(insert)), together with interest, in the manner
provided herein. This Note (this "Note") was issued pursuant to that certain
Note and Stock Purchase Agreement dated April __, 2003 between the Issuer and
the investors listed on Schedule A thereto (the "Purchase Agreement"), and is
entitled to the benefits of the Purchase Agreement. Except as to those terms
otherwise defined in this Note, all capitalized terms used in this Note shall
have the respective meanings ascribed to them in the Purchase Agreement.
1. Payments.
All principal amounts then outstanding and unpaid under this Note shall be
paid in full on September 30, 2003 (the "Maturity Date").
2. Interest.
Interest shall accrue on the Prime Rate plus 3% per annum, computed on the
basis of a 360-day year counting the actual number of days elapsed. The Prime
Rate means the prime rate as published from time to time by the Wall Street
Journal. Interest shall be payable upon the Maturity Date or sooner upon the
occurrence of certain events as set forth in the Purchase Agreement.
3. Conversion.
This Note may be convertible at the option of the Holder into shares of
Series D Convertible Preferred Stock of the Issuer upon consummation of the
private placement of such Series D Convertible Preferred Stock as contemplated
by the Asset Purchase Agreement by and among the Issuer, American CareSource
Corporation and certain of their stockholders dated as of September 23, 2002, as
amended on April ___, 2003. Upon conversion, the Holder shall receive such
number of shares of Series D Convertible Preferred Stock of the Issuer as shall
equal the outstanding balance of principal and interest due outstanding upon
this Note on the date of conversion. The Issuer has the option to refuse to
issue fractional shares of Series D Convertible Preferred Stock in which case
the Holder shall receive cash in lieu of such fractional shares.
4. Default.
In case an Event of Default shall occur and be continuing, the entire
unpaid principal and interest accrued to the date of payment of this Note may
become due and payable in the manner and with the effect provided in the
Purchase Agreement. The Issuer further agrees to pay the Holders fees and
expenses as provided for in the Purchase Agreement.
5. Prepayment.
This Note may be prepaid, in whole or in part, at any time, without premium
or penalty with the written consent of the Holders.
6. Miscellaneous.
(a) The Issuer will pay to the Holder, in immediately available funds to such
account as the Holder may specify in writing, all amounts payable to the
Holder in respect of the principal, interest or other amounts due under
this Note, without any presentation of this Note. Each such payment, when
paid, shall be applied first to the fees and charges due under this Note,
second to the payment of interest accrued and unpaid on this Note, and
third to the payment of the principal hereof. All payments hereunder shall
be made at the Holder's principal offices. All calculations and
applications of amounts due on any date, whether by acceleration or
otherwise, will be made by the Holder, and the Issuer agree that all such
calculations and applications will be conclusive and binding absent
manifest error.
(b) This Note is secured by the Collateral and other assets, property rights
and interests as described in the Purchase Agreement.
(c) The Issuer and all sureties, indorsers and guarantors of this Note, to the
extent not prohibited by applicable law or regulation, hereby waive as to
this debt or any renewal, modification, extension or refinancing thereof:
(a) demand, presentment, notice of non-payment, protest, notice of protest,
notice of dishonor, all other notice, suit against any party, diligence in
collection of this Note, the release of any party primarily or secondarily
liable thereon or any collateral pledged as security, and all other
requirements necessary to hold Issuer liable hereunder; and (b) agree and
consent to any one or more extensions or postponements of time of payment
of this Note or any other indulgences with respect hereto, without notice
thereof to any of them, and without release of liability as to Issuer or
any of them.
(d) This Note has been issued and is to be performed in the State of Iowa and
shall be governed by and construed and enforced in accordance with the laws
of the State of Iowa without regard to principles of conflicts of laws. If
any provision hereof is in conflict with any statute or rule of law of the
State of Iowa or any other state, or is otherwise unenforceable for any
reason whatsoever, then such provision shall be deemed separable from and
shall not invalidate any other provision of this Note.
(e) THE ISSUER WAIVES ANY AND ALL RIGHTS THAT IT MAY NOW OR HEREAFTER HAVE
UNDER THE LAWS OF THE UNITED STATES OF AMERICA OR ANY STATE, TO A TRIAL BY
JURY OF ANY AND ALL ISSUES ARISING EITHER DIRECTLY OR INDIRECTLY IN ANY
ACTION OR PROCEEDING BETWEEN THE ISSUER AND THE HOLDER OR ITS SUCCESSORS
AND ASSIGNS, OUT OF OR IN ANY WAY CONNECTED WITH THIS NOTE AND THE OTHER
PURCHASE DOCUMENTS. IT IS INTENDED THAT SAID WAIVER SHALL APPLY TO ANY AND
ALL DEFENSES, RIGHTS, AND/OR COUNTERCLAIMS IN ANY ACTION OR PROCEEDINGS.
THIS SECTION IS A MATERIAL INDUCEMENT TO THE HOLDER TO ENTER INTO THE
TRANSACTIONS CONTEMPLATED BY THE PURCHASE AGREEMENT.
IN WITNESS WHEREOF, the Issuer has caused this Note to be duly executed and
delivered.
DATED: _____________, 2003 PATIENT INFOSYSTEMS, INC.
By: Exhibit do not sign
Exhibit 2.01(b)
CERTIFICATE OF DESIGNATIONS, POWERS, PREFERENCES AND
RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL
RIGHTS, AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS THEREOF
OF THE
SERIES D PREFERRED STOCK
OF
PATIENT INFOSYSTEMS, INC.
Exhibit 5.01
PATIENT INFOSYSTEMS, INC.
SERIES D CONVERTIBLE PREFERRED STOCK
REGISTRATION RIGHTS AGREEMENT
Schedule A
Holder and Address of Holder
Principal Life Insurance Company
Attention: Xxxxxx Xxxxxx
C/o Principal Global Investors, LLC
000 Xxxxx Xxxxxx
Xxx Xxxxxx, Xxxx 00000
Xxxx Xxxxxxxxx
c/o Equity Dynamics, Inc.
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxx, Xxxx 00000
Xxx Xxxxxxxxx Inter Vivos Trust
C/o Equity Dynamics, Inc.
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxx, Xxxx 00000
Pappajohn Xxxxxxx Xxxx Xxxxxxx PC Profit Sharing Plan FBO
Xxxxxxxx X. Xxxxxxxxx
c/o Xxxxxxxx Xxxxxxxxx
000 Xxxx Xxxxx Xxxxxx
X.X. Xxx 0000 Xxxxx Xxxx, Xxxx 00000-0000
Schedule 2.01
Sale and Purchase of Notes and Stock.
Allocation of Notes and Shares of Stock to Holders
Holder and Address of Holder Note Amount Shares of Stock
Principal Life Insurance Company
Attention: Xxxxxx Xxxxxx
C/o Principal Global Investors, LLC
000 Xxxxx Xxxxxx
Xxx Xxxxxx, Xxxx 00000 $1,500,000.00 106,989
Xxxx Xxxxxxxxx
c/o Equity Dynamics, Inc.
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxx, Xxxx 00000 $900,000.00 84,007
Xxx Xxxxxxxxx Inter Vivos Trust
C/o Equity Dynamics, Inc.
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxx, Xxxx 00000 $50,000.00 3,566
Pappajohn Xxxxxxx Xxxx Xxxxxxx PC Profit
Sharing Plan FBO Xxxxxxxx X. Xxxxxxxxx
c/o Xxxxxxxx Xxxxxxxxx
000 Xxxx Xxxxx Xxxxxx
X.X. Xxx 0000 Xxxxx Xxxx, Xxxx 00000-0000
$50,000.00 3,566
---------- -----
Total $2,500,000.00 198,128
============= =======
