COMMON STOCK AND WARRANT PURCHASE
AGREEMENT
DATED AS OF DECEMBER 6, 2006
BY AND AMONG
QUANTRX BIOMEDICAL CORPORATION
AND
THE PURCHASERS LISTED ON EXHIBIT A
TABLE OF CONTENTS
Page
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ARTICLE I PURCHASE AND SALE OF COMMON STOCK AND WARRANTS................1
Section 1.1 Purchase and Sale of Common Stock and Warrants................1
Section 1.2 Purchase Price and Closing....................................1
ARTICLE II REPRESENTATIONS AND WARRANTIES................................2
Section 2.1 Representations and Warranties of the Company.................2
Section 2.2 Representations and Warranties of the Purchasers.............13
ARTICLE III COVENANTS....................................................15
Section 3.1 Securities Compliance........................................15
Section 3.2 Registration and Listing.....................................16
Section 3.3 Inspection Rights............................................16
Section 3.4 Compliance with Laws.........................................16
Section 3.5 Keeping of Records and Books of Account......................16
Section 3.6 Reporting Requirements.......................................16
Section 3.7 Other Agreements.............................................17
Section 3.8 Use of Proceeds..............................................17
Section 3.9 Reporting Status; Eligibility to Use Form SB-2...............17
Section 3.10 Disclosure of Transaction....................................17
Section 3.11 Disclosure of Material Information...........................17
Section 3.12 Form D.......................................................18
Section 3.13 No Integrated Offerings......................................18
Section 3.14 Pledge of Securities.........................................18
Section 3.15 Confidentiality..............................................18
Section 3.16 Reasonable Best Efforts......................................18
ARTICLE IV CONDITIONS...................................................18
Section 4.1 Conditions Precedent to the Obligation of the
Company to Close and to Sell the Securities..................18
Section 4.2 Conditions Precedent to the Obligation of the
Purchasers to Close and to Purchase the Securities...........19
ARTICLE V CERTIFICATE LEGEND...........................................21
Section 5.1 Legend.......................................................21
ARTICLE VI INDEMNIFICATION..............................................22
Section 6.1 General Indemnity............................................22
Section 6.2 Indemnification Procedure....................................22
ARTICLE VII MISCELLANEOUS................................................23
Section 7.1 Fees and Expenses............................................23
Section 7.2 Specific Performance; Consent to Jurisdiction; Venue.........24
Section 7.3 Entire Agreement; Amendment..................................24
Section 7.4 Notices......................................................24
Section 7.5 Waivers......................................................25
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TABLE OF CONTENTS
(Continued)
Page
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Section 7.6 Headings.....................................................26
Section 7.7 Successors and Assigns.......................................26
Section 7.8 No Third Party Beneficiaries.................................26
Section 7.9 Governing Law................................................26
Section 7.10 Survival.....................................................26
Section 7.11 Counterparts.................................................26
Section 7.12 Publicity....................................................26
Section 7.13 Severability.................................................26
Section 7.14 Further Assurances...........................................26
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COMMON STOCK AND WARRANT PURCHASE AGREEMENT
This COMMON STOCK AND WARRANT PURCHASE AGREEMENT this ("Agreement"), dated
as of December 6, 2006 by and among QuantRx Biomedical Corporation, a Nevada
corporation (the "Company"), and the purchasers listed on Exhibit A hereto (each
a "Purchaser" and collectively, the "Purchasers"), for the purchase and sale of
shares of the Company's common stock, par value $0.01 per share (the "Common
Stock"), by the Purchasers.
The parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE OF COMMON STOCK AND WARRANTS
Section 1.1 Purchase and Sale of Common Stock and Warrants.
(a) Upon the following terms and conditions, the Company shall
issue and sell to the Purchasers, and the Purchasers shall purchase from the
Company, Two Million Forty Thousand (2,040,000) shares of Common Stock (the
"Shares") at a price per share of $1.00 (the "Per Share Purchase Price") for an
aggregate purchase price of $2,040,000 (the "Purchase Price"). Each Purchaser
shall pay the portion of the Purchase Price set forth opposite its name on
Exhibit A hereto. The Company and the Purchasers are executing and delivering
this Agreement in accordance with and in reliance upon the exemption from
securities registration afforded by Section 4(2) of the U.S. Securities Act of
1933, as amended, and the rules and regulations promulgated thereunder (the
"Securities Act"), including Regulation D ("Regulation D"), and/or upon such
other exemption from the registration requirements of the Securities Act as may
be available with respect to any or all of the investments to be made hereunder.
(b) Upon the following terms and conditions and for no additional
consideration, each of the Purchasers shall be issued Warrants, in substantially
the form attached hereto as Exhibit B (the "Warrants"), to purchase the number
of shares of Common Stock equal to thirty percent (30%) of the number of Shares
purchased by each Purchaser pursuant to the terms of this Agreement, as set
forth opposite such Purchaser's name on Exhibit A hereto. The Warrants shall
expire three (3) years from the Closing Date and shall have an exercise price
per share equal to the Warrant Price (as defined in the Warrant). Any shares of
Common Stock issuable upon exercise of the Warrants (and such shares when
issued) are herein referred to as the "Warrant Shares". The Shares, the Warrants
and the Warrant Shares are sometimes collectively referred to herein as the
"Securities".
Section 1.2 Purchase Price and Closing. In consideration of and in
express reliance upon the representations, warranties, covenants, terms and
conditions of this Agreement, the Company agrees to issue and sell to the
Purchasers and, in consideration of and in express reliance upon the
representations, warranties, covenants, terms and conditions of this Agreement,
the Purchasers, severally but not jointly, agree to purchase the number of
Shares and Warrants, in each case, set forth opposite their respective names on
Exhibit A. The Company shall be entitled
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to issue and sell such number of Shares and Warrants to Purchasers at one or
more closings (each, a "Closing") consummated prior to the filing of the
registration statement providing for the resale of the Shares and the Warrants
Shares, in each case pursuant to the terms of this Agreement and provided that
each such Purchaser executes a signature page hereto and to each of the other
Transaction Documents (as defined in Section 2.1(b) hereof) to which the
Purchasers are a party, and thereby agrees to be bound by and subject to the
terms and conditions hereof and thereof Each date on which a Closing takes place
under the terms of this Agreement shall be deemed to be a "Closing Date". Each
Closing shall take place at the offices of Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP,
0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 at such time and on such
date as the Purchasers and the Company may agree upon but in no event later than
February 15, 2007, provided, that all of the conditions set forth in Article IV
hereof and applicable to each Closing shall have been fulfilled or waived in
accordance herewith. At each Closing, the Company shall deliver or cause to be
delivered to each Purchaser (i) a certificate registered in the name of the
Purchaser representing the number of Shares as is set forth opposite the name of
such Purchaser on Exhibit A, (ii) a Warrant to purchase such number of shares of
Common Stock as is set forth opposite the name of such Purchaser on Exhibit A
and (iii) any other deliveries as required by Article IV. At each Closing, each
Purchaser shall deliver its portion of the Purchase Price by wire transfer to an
account designated by the Company.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1 Representations and Warranties of the Company. The
Company hereby represents and warrants to the Purchasers as follows, as of the
date hereof and the Closing Date, except as set forth on the Schedule of
Exceptions attached hereto and as disclosed in the Form 10-KSB (as defined in
Section 2.1(f)) and the Form 10-QSB for the fiscal quarter ended June 30, 2006,
with each numbered Schedule corresponding to the section number herein:
(a) Organization, Good Standing and Power. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Nevada and has the requisite corporate power to own, lease
and operate its properties and assets and to conduct its business as it is now
being conducted. The Company does not have any Subsidiaries (as defined in
Section 2.1(g)) or own securities of any kind in any other entity except as set
forth on Schedule 2.1(g) hereto. The Company is duly qualified to do business as
a foreign corporation and is in good standing in every jurisdiction in which the
nature of the business conducted or property owned by it makes such
qualification necessary except for any jurisdiction(s) (alone or in the
aggregate) in which the failure to be so qualified will not have a Material
Adverse Effect. For the purposes of this Agreement, "Material Adverse Effect"
means any effect on the business, results of operations, prospects, assets or
condition (financial or otherwise) of the Company that is material and adverse
to the Company and/or any condition, circumstance, or situation that would
prohibit or otherwise materially interfere with the ability of the Company from
entering into and performing any of its obligations under the Transaction
Documents (as defined below) in any material respect.
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(b) Authorization; Enforcement. The Company has the requisite
corporate power and authority to enter into and perform this Agreement, the
Warrants and that certain Registration Rights Agreement by and among the Company
and the Purchasers, dated as of the date hereof, substantially in the form of
Exhibit C attached hereto (the "Registration Rights Agreement"), the Escrow
Agreement by and among the Company, the Purchasers and the escrow agent, dated
as of the date hereof, substantially in the form of Exhibit D attached hereto
(the "Escrow Agreement" and, together with this Agreement, the Registration
Rights Agreement and the Warrants, the "Transaction Documents") and to issue and
sell the Securities in accordance with the terms hereof and to complete the
transactions contemplated by the Transaction Documents. The execution, delivery
and performance of the Transaction Documents by the Company and the consummation
by it of the transactions contemplated thereby have been duly and validly
authorized by all necessary corporate action, and no further consent or
authorization of the Company, its Board of Directors or stockholders is
required. When executed and delivered by the Company, each of the Transaction
Documents shall constitute a valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, reorganization,
moratorium, liquidation, conservatorship, receivership or similar laws relating
to, or affecting generally the enforcement of, creditors' rights and remedies or
by other equitable principles of general application.
(c) Capitalization. The authorized capital stock of the Company
as of the date hereof is set forth on Schedule 2.1(c) hereto. All of the
outstanding shares of the Common Stock and any other outstanding security of the
Company have been duly and validly authorized and validly issued, fully paid and
nonassessable and were issued in accordance with the registration or
qualification provisions of the Securities Act, or pursuant to valid exemptions
therefrom. Except as set forth in this Agreement and as set forth on Schedule
2.1(c) hereto, no shares of Common Stock or any other security of the Company
are entitled to preemptive rights, registration rights, rights of first refusal
or similar rights and there are no outstanding options, warrants, scrip, rights
to subscribe to, call or commitments of any character whatsoever relating to, or
securities or rights convertible into, any shares of capital stock of the
Company. Furthermore, except as set forth in this Agreement and as set forth on
Schedule 2.1(c) hereto, there are no contracts, commitments, understandings, or
arrangements by which the Company is or may become bound to issue additional
shares of the capital stock of the Company or options, securities or rights
convertible into shares of capital stock of the Company. Except for customary
transfer restrictions contained in agreements entered into by the Company in
order to sell restricted securities or as provided on Schedule 2.1(c) hereto,
the Company is not a party to or bound by any agreement or understanding
granting registration or anti-dilution rights to any person with respect to any
of its equity or debt securities. Except as set forth on Schedule 2.1(c), the
Company is not a party to, and it has no knowledge of, any agreement or
understanding restricting the voting or transfer of any shares of the capital
stock of the Company. Except as disclosed on Schedule 2.1(c), (i) there are no
outstanding debt securities, or other form of material debt of the Company, (ii)
there are no contracts, commitments, understandings, agreements or arrangements
under which the Company is required to register the sale of any of their
securities under the Securities Act, (iii) there are no outstanding securities
of the Company which contain any redemption or similar provisions, and there are
no contracts, commitments, understandings, agreements or arrangements by which
the Company is or may become bound to redeem a security of the Company, (iv)
there are no securities or
3
instruments containing anti-dilution or similar provisions that will be
triggered by the issuance of the Securities, (v) the Company does not have any
stock appreciation rights or "phantom stock" plans or agreements, or any similar
plan or agreement and (vi) as of the date of this Agreement, except as set forth
in filings made with the Commission, to the Company's knowledge, no Person (as
defined below) or group of related Persons beneficially owns (as determined
pursuant to Rule 13d-3 promulgated under the Exchange Act) or has the right to
acquire by agreement with or by obligation binding upon the Company, beneficial
ownership of in excess of 5% of the Common Stock. Any Person with any right to
purchase securities of the Company that would be triggered as a result of the
transactions contemplated hereby or by any of the other Transaction Documents
has waived such rights or the time for the exercise of such rights has passed,
except where failure of the Company to receive such waiver would not have a
Material Adverse Effect. Except as set forth on Schedule 2.1(c), there are no
options, warrants or other outstanding securities of the Company (including,
without limitation, any equity securities issued pursuant to any Company Plan)
the vesting of which will be accelerated by the transactions contemplated hereby
or by any of the other Transaction Documents. Except as set forth in Schedule
2.1(c), none of the transactions contemplated by this Agreement or by any of the
other Transaction Documents shall cause, directly or indirectly, the
acceleration of vesting of any options issued pursuant the Company's stock
option plans.
(d) Issuance of Securities. The Shares and the Warrants to be
issued at the Closing have been duly authorized by all necessary corporate
action and, when paid for and issued in accordance with the terms hereof and the
Warrants, respectively, the Shares and the Warrant Shares will be validly
issued, fully paid and nonassessable and free and clear of all liens,
encumbrances and rights of refusal of any kind and the holders shall be entitled
to all rights accorded to a holder of Common Stock.
(e) No Conflicts. The execution, delivery and performance of the
Transaction Documents by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby do not and will not (i) violate any
provision of the Company's Articles of Incorporation (the "Articles") or Bylaws
(the "Bylaws"), each as amended to date, (ii) conflict with, or constitute a
default (or an event which with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement, mortgage, deed of trust,
indenture, note, bond, license, lease agreement, instrument or obligation to
which the Company is a party or by which the Company `s properties or assets are
bound, or (iii) result in a violation of any federal, state, local or foreign
statute, rule, regulation, order, judgment or decree (including federal and
state securities laws and regulations) applicable to the Company or by which any
property or asset of the Company is bound or affected, except, in all cases,
other than violations pursuant to clauses (i) or (iii) (with respect to federal
and state securities laws) above, except, for such conflicts, defaults,
terminations, amendments, acceleration, cancellations and violations as would
not, individually or in the aggregate, have a Material Adverse Effect. The
Company is not required under federal, state, foreign or local law, rule or
regulation to obtain any consent, authorization or order of, or make any filing
or registration with, any court or governmental agency in order for it to
execute, deliver or perform any of its obligations under the Transaction
Documents or issue and sell the Securities in accordance with the terms hereof
(other than any filings, consents and approvals which may be required to be made
by the Company under applicable
4
state and federal securities laws, rules or as may be required for the Company
to carry out its obligations under the Registration Rights Agreement).
(f) Commission Documents, Financial Statements. The Common Stock
of the Company is registered pursuant to Section 12(b) or 12(g) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the
Company has timely filed all reports, schedules, forms, statements and other
documents required to be filed by it with the Securities and Exchange Commission
(the "Commission") pursuant to the reporting requirements of the Exchange Act,
including pursuant to Sections 13, 14 or 15(d) thereof (all of the foregoing and
all exhibits included therein and financial statement and schedules thereto,
including filings incorporated by reference therein being referred to herein as
the "Commission Documents"). At the times of their respective filings, the Form
10-QSB for the fiscal quarters ended June 30, 2006 and March 31, 2006
(collectively, the "Form 10-QSB") and the Form 10-KSB for the fiscal year ended
December 31, 2005 (the "Form 10-KSB") complied in all material respects with the
requirements of the Exchange Act and the rules and regulations of the Commission
promulgated thereunder, and the Form 10-QSB and Form 10-KSB at the time of their
respective filings did not contain any untrue statement of a material fact or
omit 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. As of their respective dates, the financial
statements of the Company included in the Commission Documents were complete and
correct in all material respects and complied with applicable accounting
requirements and the published rules and regulations of the Commission or other
applicable rules and regulations with respect thereto. Such financial statements
have been prepared in accordance with accounting principles generally accepted
in the United States ("GAAP") applied on a consistent basis during the periods
involved (except (i) as may be otherwise indicated in such financial statements
or the Notes thereto or (ii) in the case of unaudited interim statements, to the
extent they may not include footnotes or may be condensed or summary
statements), and fairly present in all material respects the financial position
of the Company as of the dates thereof and the results of operations and cash
flows for the periods then ended (subject, in the case of unaudited statements,
to normal year-end audit adjustments).
(g) Subsidiaries. Schedule 2.1(g) hereto sets forth each
Subsidiary of the Company, showing the jurisdiction of its incorporation or
organization and showing the percentage of each person's ownership of the
outstanding stock or other interests of such Subsidiary. For the purposes of
this Agreement, "Subsidiary" shall mean any corporation or other entity of which
at least a majority of the securities or other ownership interest having
ordinary voting power (absolutely or contingently) for the election of directors
or other persons performing similar functions are at the time owned directly or
indirectly by the Company and/or any of its other Subsidiaries. All of the
outstanding shares of capital stock of each Subsidiary have been duly authorized
and validly issued, and are fully paid and nonassessable. There are no
outstanding preemptive, conversion or other rights, options, warrants or
agreements granted or issued by or binding upon any Subsidiary for the purchase
or acquisition of any shares of capital stock of any Subsidiary or any other
securities convertible into, exchangeable for or evidencing the rights to
subscribe for any shares of such capital stock. Neither the Company nor any
Subsidiary is subject to any obligation (contingent or otherwise) to repurchase
or otherwise acquire or retire any shares of the capital stock of any Subsidiary
or any convertible securities, rights, warrants or options of the type described
in the preceding sentence. Neither
5
the Company nor any Subsidiary is party to, nor has any knowledge of, any
agreement restricting the voting or transfer of any shares of the capital stock
of any Subsidiary.
(h) No Material Adverse Change. Since December 31, 2005, the
Company has not experienced or suffered any Material Adverse Effect.
(i) No Undisclosed Liabilities. Since December 31, 2005, the
Company has not incurred any liabilities, obligations, claims or losses (whether
liquidated or unliquidated, secured or unsecured, absolute, accrued, contingent
or otherwise) other than those incurred in the ordinary course of the Company's
business or which, individually or in the aggregate, are not reasonably likely
to have a Material Adverse Effect. Since December 31, 2005, except as disclosed
in Commission Documents, the Company has not participated in any transaction
material to the condition of the Company which is outside of the ordinary course
of its business.
(j) No Undisclosed Events or Circumstances. Since December 31,
2005, no event or circumstance has occurred or exists with respect to the
Company or its respective businesses, properties, operations or financial
condition, which, under applicable law, rule or regulation, requires public
disclosure or announcement by the Company but which has not been so publicly
announced or disclosed.
(k) Indebtedness. Schedule 2.1(k) hereto sets forth as of the
date hereof all outstanding secured and unsecured Indebtedness of the Company ,
or for which the Company has commitments. For the purposes of this Agreement,
"Indebtedness" shall mean (a) any liabilities for borrowed money or amounts owed
in excess of $300,000 (other than trade accounts payable incurred in the
ordinary course of business), (b) all guaranties, endorsements and other
contingent obligations in respect of liabilities for borrowed money of others in
excess of $100,000, whether or not the same are or should be reflected in the
Company's balance sheet (or the notes thereto), except guaranties by endorsement
of negotiable instruments for deposit or collection or similar transactions in
the ordinary course of business; and (c) the present value of any lease payments
in excess of $25,000 due under leases required to be capitalized in accordance
with GAAP. The Company is not in default with respect to any Indebtedness.
(l) Title to Assets. The Company has good and valid title to all
of its real and personal property reflected in the Commission Documents, free
and clear of any mortgages, pledges, charges, liens, security interests or other
encumbrances, except for those that, individually or in the aggregate, do not
cause a Material Adverse Effect. All said leases of the Company are valid and
subsisting and in full force and effect.
(m) Actions Pending. There is no action, suit, claim,
investigation, arbitration, alternate dispute resolution proceeding or other
proceeding pending or, to the knowledge of the Company, threatened against the
Company which questions the validity of this Agreement or any of the other
Transaction Documents or any of the transactions contemplated hereby or thereby
or any action taken or to be taken pursuant hereto or thereto. Except as set
forth on Schedule 2.1(m) hereto, there is no action, suit, claim, investigation,
arbitration, alternate dispute resolution proceeding or other proceeding pending
or, to the knowledge of the Company, threatened against or involving the
Company, or any of its properties or assets, which individually or in the
aggregate, could reasonably be expected to have a Material
6
Adverse Effect. There are no outstanding orders, judgments, injunctions, awards
or decrees of any court, arbitrator or governmental or regulatory body against
the Company or any officers or directors of the Company in their capacities as
such, which individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect.
(n) Compliance with Law. The business of the Company has been and
is presently being conducted in accordance with all applicable federal, state
and local governmental laws, rules, regulations and ordinances, except as set
forth on Schedule 2.1(n) hereto or such that, individually or in the aggregate,
the noncompliance therewith could not reasonably be expected to have a Material
Adverse Effect. The Company has all franchises, permits, licenses, consents and
other governmental or regulatory authorizations and approvals necessary for the
conduct of its business as now being conducted by it unless the failure to
possess such franchises, permits, licenses, consents and other governmental or
regulatory authorizations and approvals, individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect.
(o) Taxes. Except as set forth on Schedule 2.1(o) hereto, the
Company has accurately prepared and filed all federal, state and other tax
returns required by law to be filed by it, has paid all taxes shown to be due
and all additional assessments, and adequate provisions have been and are
reflected in the financial statements of the Company for all current taxes and
other charges to which the Company is subject and which are not currently due
and payable. None of the federal income tax returns of the Company has been
audited by the Internal Revenue Service. The Company has no knowledge of any
additional assessments, adjustments or contingent tax liability (whether federal
or state) of any nature whatsoever, whether pending or threatened against the
Company for any period, nor of any basis for any such assessment, adjustment or
contingency.
(p) Certain Fees. Except as set forth on Schedule 2.1(p) hereto,
the Company has not employed any broker or finder or incurred any liability for
any brokerage or investment banking fees, commissions, finders' structuring
fees, financial advisory fees or other similar fees in connection with the
Transaction Documents.
(q) Disclosure. Neither this Agreement or the Schedules hereto
nor any other documents, certificates or instruments furnished to the Purchasers
by or on behalf of the Company in connection with the transactions contemplated
by this Agreement contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements made herein or
therein, in the light of the circumstances under which they were made herein or
therein, not misleading.
(r) Operation of Business. The Company owns or possesses the
rights to use all patents, trademarks, domain names (whether or not registered)
and any patentable improvements or copyrightable derivative works thereof,
websites and intellectual property rights relating thereto, service marks, trade
names, copyrights, licenses and authorizations which are necessary for the
conduct of its business as now conducted without, to the knowledge of the
Company, any conflict or infringement with the rights of others.
7
(s) Environmental Compliance. The Company has obtained all
material approvals, authorization, certificates, consents, licenses, orders and
permits or other similar authorizations of all governmental authorities, or from
any other person, that are required under any Environmental Laws. "Environmental
Laws" shall mean all applicable laws relating to the protection of the
environment including, without limitation, all requirements pertaining to
reporting, licensing, permitting, controlling, investigating or remediating
emissions, discharges, releases or threatened releases of hazardous substances,
chemical substances, pollutants, contaminants or toxic substances, materials or
wastes, whether solid, liquid or gaseous in nature, into the air, surface water,
groundwater or land, or relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of hazardous
substances, chemical substances, pollutants, contaminants or toxic substances,
material or wastes, whether solid, liquid or gaseous in nature. The Company has
all necessary governmental approvals required under all Environmental Laws and
used in its business, except for such instances as would not individually or in
the aggregate have a Material Adverse Effect. The Company is also in compliance
with all other limitations, restrictions, conditions, standards, requirements,
schedules and timetables required or imposed under all Environmental Laws.
Except for such instances as would not individually or in the aggregate have a
Material Adverse Effect, there are no past or present events, conditions,
circumstances, incidents, actions or omissions relating to or in any way
affecting the Company that violate or would be reasonably likely to violate any
Environmental Law after the Closing or that would be reasonably likely to give
rise to any environmental liability, or otherwise form the basis of any claim,
action, demand, suit, proceeding, hearing, study or investigation (i) under any
Environmental Law or (ii) based on or related to the manufacture, processing,
distribution, use, treatment, storage (including, without limitation,
underground storage tanks), disposal, transport or handling, or the emission,
discharge, release or threatened release of any hazardous substance.
(t) Books and Records; Internal Accounting Controls. The records
and documents of the Company accurately reflect in all material respects the
information relating to the business of the Company, the location and collection
of their assets, and the nature of all transactions giving rise to the
obligations or accounts receivable of the Company. The Company maintains 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, (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate actions are taken with respect to any
differences and (v) accounts, notes and other receivables and inventory are
recorded accurately, and proper and adequate procedures are implemented to
effect the collection thereof on a current and timely basis. There are no
significant deficiencies or material weaknesses in the design or operation of
internal controls over financial reporting that would reasonably be expected to
adversely affect the Company's ability to record, process, summarize and report
financial information, and there is no fraud, whether or not material, that
involves management or, to the knowledge of the Company, other employees who
have a significant role in the Company's internal controls and the Company has
provided to the Purchaser copies of any written materials relating to the
foregoing.
8
(u) Material Agreements. Except for the Transaction Documents
(with respect to clause (i) only) or as set forth on Schedule 2.1(u) hereto, or
as would not be reasonably likely to have a Material Adverse Effect, (i) the
Company has performed all obligations required to be performed by them to date
under any written or oral contract, instrument, agreement, commitment,
obligation, plan or arrangement, filed or required to be filed with the
Commission (the "Material Agreements"), (ii) the Company has not received any
notice of default under any Material Agreement and, (iii) to the Company's
knowledge, the Company is not in default under any Material Agreement.
(v) Transactions with Affiliates. Except as set forth on Schedule
2.1(v) hereto, there are no loans, leases, agreements, contracts, royalty
agreements, management contracts or arrangements or other continuing
transactions between (a) the Company or any of its customers or suppliers on the
one hand, and (b) on the other hand, any officer, employee, consultant or
director of the Company, or any person owning any capital stock of the Company
or any member of the immediate family of such officer, employee, consultant,
director or stockholder or any corporation or other entity controlled by such
officer, employee, consultant, director or stockholder, or a member of the
immediate family of such officer, employee, consultant, director or stockholder
which, in each case, is required to be disclosed in the Commission Documents or
in the Company's most recently filed definitive proxy statement on Schedule 14A,
that is not so disclosed in the Commission Documents or in such proxy statement.
(w) Securities Act of 1933. Subject to the accuracy and
completeness of the representations and warranties of the Purchasers contained
in Section 2.2 hereof, the Company has complied and will comply with all
applicable federal and state securities laws in connection with the offer,
issuance and sale of the Securities hereunder. Neither the Company nor anyone
acting on its behalf, directly or indirectly, has or will sell, offer to sell or
solicit offers to buy any of the Securities or similar securities to, or solicit
offers with respect thereto from, or enter into any negotiations relating
thereto with, any person, or has taken or will take any action so as to bring
the issuance and sale of any of the Securities under the registration provisions
of the Securities Act and applicable state securities laws, and neither the
Company nor any of its affiliates, nor any person acting on its or 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 any of the Securities.
(x) Governmental Approvals. Except for the filing of any notice
prior or subsequent to the Closing that may be required under applicable state
and/or federal securities laws (which if required, shall be filed on a timely
basis), no authorization, consent, approval, license, exemption of, filing or
registration with any court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, is or will be necessary
for, or in connection with, the execution or delivery of the Securities, or for
the performance by the Company of its obligations under the Transaction
Documents.
(y) Employees Labor Relations. The Company has no collective
bargaining arrangements or agreements covering any of its employees. Except as
set forth on Schedule 2.1(y) hereto or disclosed in the Commission Documents,
the Company has no employment contract, agreement regarding proprietary
information, non-competition agreement, non-
9
solicitation agreement, confidentiality agreement, or any other similar contract
or restrictive covenant, relating to the right of any officer, employee or
consultant to be employed or engaged by the Company required to be disclosed in
the Commission Documents that is not so disclosed. Since December 31, 2005, no
officer, consultant or key employee of the Company whose termination, either
individually or in the aggregate, would be reasonably likely to have a Material
Adverse Effect, has terminated or, to the knowledge of the Company, has any
present intention of terminating his or her employment or engagement with the
Company. Except as could not reasonably be expected to have a Material Adverse
Effect, (i) the Company is not engaged in any unfair labor practice, (ii) there
is no strike, labor dispute, slowdown or stoppage pending or, to the knowledge
of the Company, threatened against the Company , and (iii) the Company is not a
party to any collective bargaining agreement or contract.
(z) Absence of Certain Developments. Except as provided on
Schedule 2.1(z) hereto, since December 31, 2005, the Company has not:
(i) issued any stock, bonds or other corporate securities
or any right, options or warrants with respect thereto;
(ii) borrowed any amount in excess of $300,000 or incurred
or become subject to any other liabilities in excess of $100,000 (absolute or
contingent) except current liabilities incurred in the ordinary course of
business which are comparable in nature and amount to the current liabilities
incurred in the ordinary course of business during the comparable portion of its
prior fiscal year, as adjusted to reflect the current nature and volume of the
business of the Company;
(iii) discharged or satisfied any lien or encumbrance in
excess of $250,000 or paid any obligation or liability (absolute or contingent)
in excess of $250,000, other than current liabilities paid in the ordinary
course of business;
(iv) declared or made any payment or distribution of cash or
other property to stockholders with respect to its stock, or purchased or
redeemed, or made any agreements so to purchase or redeem, any shares of its
capital stock, in each case in excess of $50,000 individually or $100,000 in the
aggregate;
(v) sold, assigned or transferred any other tangible
assets, or canceled any debts or claims, in each case in excess of $100,000,
except in the ordinary course of business;
(vi) sold, assigned or transferred any patent rights,
trademarks, trade names, copyrights, trade secrets or other intangible assets or
intellectual property rights in excess of $250,000, or disclosed any proprietary
confidential information to any person except to customers in the ordinary
course of business or to the Purchasers or their representatives;
(vii) suffered any material losses or waived any rights of
material value, whether or not in the ordinary course of business, or suffered
the loss of any material amount of prospective business;
10
(viii)made any changes in employee compensation except in
the ordinary course of business and consistent with past practices;
(ix) made capital expenditures or commitments therefor that
aggregate in excess of $100,000;
(x) entered into any material transaction, whether or not
in the ordinary course of business;
(xi) made charitable contributions or pledges in excess of
$10,000;
(xii) suffered any material damage, destruction or casualty
loss, whether or not covered by insurance;
(xiii)experienced any material problems with labor or
management in connection with the terms and conditions of their employment; or
(xiv) entered into an agreement, written or otherwise, to
take any of the foregoing actions.
(aa) ERISA. No liability to the Pension Benefit Guaranty
Corporation has been incurred with respect to any Plan by the Company which is
or would be materially adverse to the Company. The execution and delivery of
this Agreement and the issuance and sale of the Securities will not involve any
transaction which is subject to the prohibitions of Section 406 of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") or in connection
with which a tax could be imposed pursuant to Section 4975 of the Internal
Revenue Code of 1986, as amended, provided that, if any of the Purchasers, or
any person or entity that owns a beneficial interest in any of the Purchasers,
is an "employee pension benefit plan" (within the meaning of Section 3(2) of
ERISA) with respect to which the Company is a "party in interest" (within the
meaning of Section 3(14) of ERISA), the requirements of Sections 407(d)(5) and
408(e) of ERISA, if applicable, are met. As used in this Section 2.1(z), the
term "Plan" shall mean an "employee pension benefit plan" (as defined in Section
3 of ERISA) which is or has been established or maintained, or to which
contributions are or have been made, by the Company or by any trade or business,
whether or not incorporated, which, together with the Company, is under common
control, as described in Section 414(b) or (c) of the Code.
(bb) Anti-takeover Device. The Company has no outstanding
shareholder rights plan or "poison pill" or any similar arrangement. There are
no provisions of any anti-takeover or business combination statute applicable to
the Company, the Articles and the Bylaws which would preclude the issuance and
sale of the Securities, the reservation for issuance of the Warrant Shares and
the consummation of the other transactions contemplated by this Agreement or any
of the other Transaction Documents.
(cc) Independent Nature of Purchasers. The Company acknowledges
that the obligations of each Purchaser under the Transaction Documents are
several and not joint with
11
the obligations of any other Purchaser, and no Purchaser shall be responsible in
any way for the performance of the obligations of any other Purchaser under the
Transaction Documents and the Company shall not be excused from performance of
its obligations to any Purchaser under the Transaction Documents as a result of
nonperfoilluance or breach by any other Purchaser. The Company acknowledges that
the decision of each Purchaser to purchase Securities pursuant to this Agreement
has been made by such Purchaser independently of any other purchaser and
independently of any information, materials, statements or opinions as to the
business, affairs, operations, assets, properties, liabilities, results of
operations, condition (financial or otherwise) or prospects of the Company which
may have made or given by any other Purchaser or by any agent or employee of any
other Purchaser, and no Purchaser or any of its agents or employees shall have
any liability to any Purchaser (or any other person) relating to or arising from
any such information, materials, statements or opinions. The Company
acknowledges that nothing contained herein, or in any Transaction Document, and
no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to
constitute the Purchasers as a partnership, an association, a joint venture or
any other kind of entity, or create a presumption that the Purchasers are in any
way acting in concert or as a group with respect to such obligations or the
transactions contemplated by the Transaction Documents. The Company acknowledges
that each Purchaser shall be entitled to independently protect and enforce its
rights, including without limitation, the rights arising out of this Agreement
or out of the other Transaction Documents, and it shall not be necessary for any
other Purchaser to be joined as an additional party in any proceeding for such
purpose. The Company acknowledges that the Purchasers have retained their own
individual counsel with respect to the transactions contemplated hereby. The
Company acknowledges that it has elected to provide all Purchasers with the same
terms and Transaction Documents for the convenience of the Company and not
because it was required or requested to do so by the Purchasers.
(dd) No Integrated Offering. Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf, has directly or
indirectly made any offers or sales of any security or solicited any offers to
buy any security under circumstances that would cause the offering of the
Securities pursuant to this Agreement to be integrated with prior offerings by
the Company for purposes of the Securities Act which would prevent the Company
from selling the Securities pursuant to Regulation D and Rule 506 thereof under
the Securities Act, or any applicable exchange-related stockholder approval
provisions, nor will the Company or any of its affiliates or subsidiaries take
any action or steps that would cause the offering of the Securities to be
integrated with other offerings if such other offering, if integrated, would
cause the offer and sale of the Securities not to be exempt from registration
pursuant to Regulation D and Rule 506 thereof under the Securities Act. The
Company does not have any registration statement pending before the Commission
or currently under the Commission's review and since March 1, 2006, the Company
has not offered or sold any of its equity securities or debt securities
convertible into shares of Common Stock.
(ee) 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 Commission thereunder.
(ff) Xxxxxxxx-Xxxxx Act. The Company is in compliance with the
applicable provisions of the Xxxxxxxx-Xxxxx Act of 2002 (the "Xxxxxxxx-Xxxxx
Act"), and the rules and
12
regulations promulgated thereunder, that are effective and for which compliance
by the Company is required as of the date hereof and intends to comply with
other applicable provisions of the Xxxxxxxx-Xxxxx Act, and the rules and
regulations promulgated thereunder, upon the effectiveness of such provisions or
the date by which compliance therewith by the Company is required.
Section 2.2 Representations and Warranties of the Purchasers. Each
of the Purchasers hereby represents and warrants to the Company with respect
solely to itself and not with respect to any other Purchaser as follows as of
the date hereof and as of the Closing Date:
(a) Organization and Standing of the Purchasers. If the Purchaser
is an entity, such Purchaser is a corporation, Iimited liability company or
partnership duly incorporated or organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
organization. If the Purchaser is an individual, such Purchaser is a bona fide
resident and domiciliary (not a temporary or transient resident) of the state or
other jurisdiction indicated on Exhibit A, and such Purchaser has no present
intention of becoming a resident of any other state or jurisdiction.
(b) Authorization and Power. Such Purchaser has the requisite
power and authority to enter into and perform the Transaction Documents and to
purchase the Securities being sold to it hereunder. The execution, delivery and
performance of the Transaction Documents by such Purchaser and the consummation
by it of the transactions contemplated hereby have been duly authorized by all
necessary corporate, partnership or other action, and no further consent or
authorization of such Purchaser or its Board of Directors, stockholders,
partners or members, as the case may be, is required. When executed and
delivered by the Purchasers, the other Transaction Documents shall constitute
valid and binding obligations of such Purchaser enforceable against such
Purchaser in accordance with their terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation, conservatorship, receivership or similar laws relating to, or
affecting generally the enforcement of, creditor's rights and remedies or by
other equitable principles of general application.
(c) No Conflict. The execution, delivery and performance of the
Transaction Documents by such Purchaser and the consummation by such Purchaser
of the transactions contemplated thereby and hereby do not and will not (i)
violate any provision of such Purchaser's charter or organizational documents,
(ii) conflict with, or constitute a default (or an event which with notice or
lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, any
agreement, mortgage, deed of trust, indenture, note, bond, license, lease
agreement, instrument or obligation to which such Purchaser is a party or by
which such Purchaser's respective properties or assets are bound, or (iii)
result in a violation of any federal, state, local or foreign statute, rule,
regulation, order, judgment or decree (including federal and state securities
laws and regulations) applicable to such Purchaser or by which any property or
asset of such Purchaser are bound or affected, except, in all cases, other than
violations pursuant to clauses (i) or (iii) (with respect to federal and state
securities laws) above, for such conflicts, defaults, terminations, amendments,
accelerations, cancellations and violations as would not,
13
individually or in the aggregate, materially and adversely affect such
Purchaser's ability to perform its obligations under the Transaction Documents.
(d) Acquisition for Investment. Such Purchaser is purchasing the
Shares and Warrants and will purchase any Warrant Shares solely for its own
account and not with a view to or for sale in connection with distribution. Such
Purchaser does not have a present intention to sell any of the Shares, Warrants
or Warrant Shares, nor a present arrangement (whether or not legally binding) or
intention to effect any distribution of any of the Shares, the Warrants or the
Warrant Shares to or through any person or entity; provided, however, that by
making the representations herein, such Purchaser does not agree to hold the
Shares, the Warrants or the Warrant Shares for any minimum or other specific
term and reserves the right to dispose of the Shares, the Warrants or the
Warrant Shares at any time in accordance with Federal and state securities laws
applicable to such disposition. Such Purchaser acknowledges that it (i) has such
knowledge and experience in financial and business matters such that Purchaser
is capable of evaluating the merits and risks of Purchaser's investment in the
Company, (ii) is able to bear the financial risks associated with an investment
in the Securities and (iii) has been given full access to such records of the
Company and to the officers of the Company as it has deemed necessary or
appropriate to conduct its due diligence investigation.
(e) Rule 144. Such Purchaser understands that the Securities must
be held indefinitely unless such Securities are registered under the Securities
Act or an exemption from registration is available. Such Purchaser acknowledges
that such person is familiar with Rule 144 of the rules and regulations of the
Commission, as amended, promulgated pursuant to the Securities Act ("Rule 144"),
and that such Purchaser has been advised that Rule 144 permits resales only
under certain circumstances. Such Purchaser understands that to the extent that
Rule 144 is not available, such Purchaser will be unable to sell any Securities
without either registration under the Securities Act or the existence of another
exemption from such registration requirement.
(f) General. Such Purchaser understands that the Securities are
being offered and sold in reliance on a transactional exemption from the
registration requirements of federal and state securities laws and the Company
is relying upon the truth and accuracy of the representations, warranties,
agreements, acknowledgments and understandings of such Purchaser set forth
herein in order to determine the applicability of such exemptions and the
suitability of such Purchaser to acquire the Securities. Such Purchaser
understands that no United States federal or state agency or any government or
governmental agency has passed upon or made any recommendation or endorsement of
the Securities.
(g) No General Solicitation. Such Purchaser acknowledges that the
Securities were not offered to such Purchaser by means of any form of general or
public solicitation or general advertising, or publicly disseminated
advertisements or sales literature, including (i) any advertisement, article,
notice or other communication published in any newspaper, magazine, or similar
media, or broadcast over television or radio, or (ii) any seminar or meeting to
which such Purchaser was invited by any of the foregoing means of
communications. Such Purchaser, in making the decision to purchase the
Securities, has relied upon independent investigation made by it and the
representations, warranties and agreements set forth in the
14
Transaction Documents and has not relied on any information or representations
made by third parties.
(h) Accredited Investor. Such Purchaser is an "accredited
investor" (as defined in Rule 501 of Regulation D), and such Purchaser has such
experience in business and financial matters that it is capable of evaluating
the merits and risks of an investment in the Securities. Such Purchaser is not
required to be registered as a broker-dealer under Section 15 of the Exchange
Act and such Purchaser is not a broker-dealer. Such Purchaser acknowledges that
an investment in the Securities is speculative and involves a high degree of
risk. Such Purchaser has completed or caused to be completed the Investor
Questionnaire Certification attached hereto as Exhibit E certifying as to its
status as an "accredited investor" and understands that the Company is relying
upon the truth and accuracy of such information set forth therein to determine
the suitability of such Purchaser to acquire the Securities.
(i) Certain Fees. The Purchasers have not employed any broker or
finder or incurred any liability for any brokerage or investment banking fees,
commissions, finders' structuring fees, financial advisory fees or other similar
fees in connection with the Transaction Documents.
(j) Independent Investment. No Purchaser has agreed to act with
any other Purchaser for the purpose of acquiring, holding, voting or disposing
of the Securities purchased hereunder for purposes of Section 13(d) under the
Exchange Act, and each Purchaser is acting independently with respect to its
investment in the Securities.
(k) Short Sales. No Purchaser has engaged in any short sales of
the Common Stock or instructed any third parties to engage in any short sales of
the Common Stock on its behalf prior to the Closing Date. Each Purchaser
covenants and agrees that it will not be in a net short position with respect to
the shares of Common Stock. For purposes of this Section 2.2(k), a "net short
position" means a sale of Common Stock by a Purchaser that is marked as a short
sale and that is made at a time when there is no equivalent offsetting long
position in Common Stock held by such Purchaser.
(l) Independent Advice. Each Purchaser understands that the
Company urges the Purchaser to seek independent advice from professional
advisors relating to the suitability for the Purchaser of an investment in the
Company in view of the Purchaser's overall financial needs and with respect to
legal and tax implications of such an investment.
ARTICLE III
COVENANTS
The Company covenants with each Purchaser as follows, which covenants are
for the benefit of each Purchaser and their respective permitted assignees.
Section 3.1 Securities Compliance. The Company shall notify the
Commission in accordance with its rules and regulations, of the transactions
contemplated by any of the Transaction Documents and shall take all other
necessary action and proceedings as
15
may be required and permitted by applicable law, rule and regulation, for the
legal and valid issuance of the Securities to the Purchasers, or their
respective subsequent holders.
Section 3.2 Registration and Listing. The Company shall cause its
Common Stock to continue to be registered under Sections 12(b) or 12(g) of the
Exchange Act, to comply in all respects with its reporting and filing
obligations under the Exchange Act, to comply with all requirements related to
any registration statement filed pursuant to this Agreement, and to not take any
action or file any document (whether or not permitted by the Securities Act or
the rules promulgated thereunder) to terminate or suspend such registration or
to terminate or suspend its reporting and filing obligations under the Exchange
Act or Securities Act, except as permitted herein. The Company will take all
action necessary to continue the listing or trading of its Common Stock on the
OTC Bulletin Board or any successor market.
Section 3.3 Inspection Rights. The Company shall permit, during
normal business hours and upon reasonable request and reasonable notice, each
Purchaser or any employees, agents or representatives thereof, so long as such
Purchaser shall be obligated hereunder to purchase the Shares or shall
beneficially own any Shares or Warrant Shares, for purposes reasonably related
to such Purchaser's interests as a stockholder to examine and make reasonable
copies of the records and books of account of, and visit and inspect the
properties, assets, operations and business of the Company, and to discuss the
affairs, finances and accounts of the Company with any of its officers,
consultants, directors, and key employees; provided, however, that any such
access or furnishing of information shall be conducted at the Purchaser's
expense, under the supervision of the Company's personnel and in such manner as
not to interfere with the normal operations of the Company's business.
Section 3.4 Compliance with Laws. The Company shall comply with all
applicable laws, rules, regulations and orders, noncompliance with which would
be reasonably likely to have a Material Adverse Effect.
Section 3.5 Keeping of Records and Books of Account. The Company
shall keep adequate records and books of account, in which complete entries will
be made in accordance with GAAP consistently applied, reflecting all financial
transactions of the Company.
Section 3.6 Reporting Requirements. If the Commission ceases making
the Company's periodic reports available via the Internet without charge, then
the Company shall, promptly after filing with the Commission, furnish the
following to each Purchaser so long as such Purchaser shall be obligated
hereunder to purchase the Securities or shall beneficially own Shares or Warrant
Shares:
(a) Quarterly Reports filed with the Commission on Form 10-QSB;
(b) Annual Reports filed with the Commission on Form 10-KSB; and
(c) Copies of all notices, information and proxy statements in
connection with any meetings, that are, in each case, provided to holders of
shares of Common Stock, contemporaneously with the delivery of such notices or
information to such holders of Common Stock.
16
Section 3.7 Other Agreements. The Company shall not enter into any
agreement in which the terms of such agreement would restrict or impair the
right or ability of the Company to perform its obligations under any Transaction
Document.
Section 3.8 Use of Proceeds. The net proceeds from the sale of the
Shares will be used by the Company for working capital and general corporate
purposes and not to redeem any Common Stock or securities convertible, exercise
or exchangeable into Common Stock or to settle any outstanding litigation.
Section 3.9 Reporting Status; Eligibility to Use Form SB-2. So long
as a Purchaser beneficially owns any of the Securities, the Company shall timely
file all reports required to be filed with the Commission pursuant to the
Exchange Act, and the Company shall not terminate its status as an issuer
required to file reports under the Exchange Act even if the Exchange Act or the
rules and regulations thereunder would permit such termination. Subject to the
terms of the Transaction Documents, the Company further covenants that it will
take such further action as the Purchasers may reasonably request, all to the
extent required from time to time to enable the Purchasers to sell the
Securities without registration under the Securities Act within the limitation
of the exemptions provided by Rule 144 promulgated under the Securities Act.
Upon the request of the Purchasers, the Company shall deliver to the Purchasers
a written certification of a duly authorized officer as to whether it has
complied with such requirements. The Company currently meets the "registrant
eligibility" and transaction requirements set forth in the general instructions
to Form SB-2 applicable to "resale" registrations on Form SB-2 and the Company
shall file all reports required to be filed by the Company with the Commission
in a timely manner.
Section 3.10 Disclosure of Transaction. The Company shall issue a
press release describing the material terms of the transactions contemplated
hereby (the "Press Release") as soon as practicable after each Closing but in no
event later than four hours after the applicable Closing; provided, however,
that if the Closing occurs after 4:00 P.M. Eastern Time on any Trading Day (as
defined below), the Company shall issue the Press Release no later than 9:00
A.M. Eastern Time on the first Trading Day following the Closing Date. The
Company shall also file with the Commission a Current Report on Form 8-K (the
"Form 8-K") describing the material terms of the transactions contemplated
hereby (and attaching as exhibits thereto this Agreement, the Registration
Rights Agreement, the form of Warrant and the Press Release) as soon as
practicable following each Closing Date but in no event more than two (2)
Trading Days following the applicable Closing Date, which Press Release and Form
8-K shall be subject to prior review and comment by the Purchasers. "Trading
Day" means any day during which the OTC Bulletin Board (or other principal
exchange on which the Common Stock is traded) shall be open for trading.
Section 3.11 Disclosure of Material Information. The Company
covenants and agrees that neither it nor any other person acting on its behalf
has provided or will provide any Purchaser or its agents or counsel with any
information that the Company believes constitutes material non-public
information, unless prior thereto such Purchaser shall have executed a written
agreement regarding the confidentiality and use of such information. The Company
understands and confirms that each Purchaser shall be relying on the foregoing
representations in effecting transactions in securities of the Company.
17
Section 3.12 Form D. The Company agrees to file a Form D with
respect to the Securities as required by Rule 506 under Regulation D and, upon a
Purchaser's request, to provide a copy thereof to the Purchasers promptly after
such filing.
Section 3.13 No Integrated Offerings. The Company shall not make any
offers or sales of any security (other than the Securities being offered or sold
hereunder) under circumstances that would require registration of the Securities
being offered or sold hereunder under the Securities Act.
Section 3.14 Pledge of Securities. The Company acknowledges and
agrees that the Securities may be pledged by a Purchaser in connection with a
bona fide margin agreement or other loan or financing arrangement that is
secured by the Common Stock. The pledge of Common Stock shall not be deemed to
be a transfer, sale or assignment of the Common Stock hereunder, and no
Purchaser effecting a pledge of Common Stock shall be required to provide the
Company with any notice thereof or otherwise make any delivery to the Company
pursuant to this Agreement or any other Transaction Document; provided that a
Purchaser and its pledgee shall be required to comply with the provisions of
Article V hereof in order to effect a sale, transfer or assignment of Common
Stock to such pledgee. At the Purchasers' expense, the Company hereby agrees to
execute and deliver such documentation as a pledgee of the Common Stock may
reasonably request in connection with a pledge of the Common Stock to such
pledgee by a Purchaser.
Section 3.15 Confidentiality. Each party agrees that it will not
disclose and it will cause its officers, directors, employees, representatives,
agents, and advisers not to disclose, any Confidential Information (as
hereinafter defined) with respect to the other party furnished, at any time or
in any manner, provided that (i) any disclosure of such information may be made
to which the Company and Purchaser consent in writing; and (ii) such information
may be disclosed if so required by law or regulatory authority. "Confidential
Information" means information or knowledge obtained in any due diligence or
other investigation relating to the negotiation and execution of this Agreement,
information relating to the terms of the transactions contemplated hereby and
any information identified as confidential in writing from one party to the
other; provided, however, that Confidential Information shall not include
information or knowledge that (a) becomes generally available to the public
absent any breach of this Section 3.15, (b) was available on a non-confidential
basis to a party prior to its disclosure pursuant to this Agreement, or (c)
becomes available on a non-confidential basis from a third party who is not
bound to keep such information confidential.
Section 3.16 Reasonable Best Efforts. Each of the parties hereto
shall use its reasonable best efforts to satisfy each of the conditions to be
satisfied by it as provided in Sections 4.1 and 4.2 of this Agreement.
ARTICLE IV
CONDITIONS
Section 4.1 Conditions Precedent to the Obligation of the Company
to Close and to Sell the Securities. The obligation hereunder of the Company to
close and issue and sell
18
the Securities to the Purchasers is subject to the satisfaction or waiver, at or
before each Closing, of the conditions set forth below. These conditions are for
the Company's sole benefit and may be waived by the Company at any time in its
sole discretion.
(a) Accuracy of the Purchasers' Representations and Warranties.
The representations and warranties of each Purchaser shall be true and correct
in all material respects as of the date when made and as of each Closing Date as
though made at that time, except for representations and warranties that are
expressly made as of a particular date, which shall be true and correct in all
material respects as of such date.
(b) Performance by the Purchasers. Each Purchaser shall have
performed, satisfied and complied in all material respects with all covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by such Purchaser at or prior to the Closing Date.
(c) No Injunction. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction which
prohibits the consummation of any of the transactions contemplated by this
Agreement.
(d) Delivery of Purchase Price. The Purchasers shall have
delivered to the escrow agent the Purchase Price for the Shares to be purchased
by each Purchaser.
(e) Delivery of Transaction Documents. The Transaction Documents
shall have been duly executed and delivered by the Purchasers and, with respect
to the Escrow Agreement, the escrow agent, to the Company.
Section 4.2 Conditions Precedent to the Obligation of the Purchasers
to Close and to Purchase the Securities. The obligation hereunder of each
Purchaser to purchase the Securities and consummate the transactions
contemplated by this Agreement is subject to the satisfaction or waiver, at or
before the applicable Closing Date, of each of the conditions set forth below.
These conditions are for the Purchaser's sole benefit and may be waived by the
Purchaser at any time in its sole discretion.
(a) Accuracy of the Company's Representations and Warranties.
Each of the representations and warranties of the Company in this Agreement and
the other Transaction Documents shall be true and correct in all material
respects (except for those representations and warranties that are qualified by
materiality or Material Adverse Effect, which shall be true and correct in all
respects) as of the date when made and as of each Closing Date as though made at
that time, except for representations and warranties that are expressly made as
of a particular date, which shall be true and correct in all material respects
(except for those representations and warranties that are qualified by
materiality or Material Adverse Effect, which shall be true and correct in all
respects) as of such date.
(b) Performance by the Company. The Company shall have performed,
satisfied and complied in all material respects with all covenants, agreements
and conditions required by this Agreement to be performed, satisfied or complied
with by the Company at or prior to the Closing Date.
19
(c) No Suspension, Etc. Trading in the Common Stock shall not
have been suspended by the Commission or the OTC Bulletin Board (except for any
suspension of trading of limited duration agreed to by the Company, which
suspension shall be terminated prior to the applicable Closing), and, at any
time prior to the Closing Date, trading in securities generally as reported by
Bloomberg Financial Markets ("Bloomberg") shall not have been suspended or
limited, or minimum prices shall not have been established on securities whose
trades are reported by Bloomberg, or on the New York Stock Exchange, nor shall a
banking moratorium have been declared either by the United States or New York
State authorities.
(d) No Injunction. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction which
prohibits the consummation of any of the transactions contemplated by this
Agreement.
(e) No Proceedings or Litigation. No action, suit or proceeding
before any arbitrator or any governmental authority shall have been commenced,
and no investigation by any governmental authority shall have been threatened,
against the Company, or any of the officers, directors or affiliates of the
Company seeking to restrain, prevent or change the transactions contemplated by
this Agreement, or seeking damages in connection with such transactions.
(f) Opinion of Counsel. The Purchasers shall have received an
opinion of counsel to the Company, dated the date of such Closing, substantially
in the form of Exhibit F hereto, with such exceptions and limitations as shall
be reasonably acceptable to counsel to the Purchasers.
(g) Shares and Warrants. The Company shall have delivered to the
Purchasers certificates representing the Shares (in such denominations as each
Purchaser may request) and the Warrants (in such denominations as each Purchaser
may request) duly executed by the Company, in each case, being acquired by the
Purchasers at the Closing.
(h) Secretary's Certificate. The Company shall have delivered to
the Purchasers a secretary's certificate, dated as of the Closing Date, as to
(i) the resolutions adopted by the Board of Directors approving the transactions
contemplated hereby, (ii) the Articles, (iii) the Bylaws, each as in effect at
the Closing, and (iv) the authority and incumbency of the officers of the
Company executing the Transaction Documents and any other documents required to
be executed or delivered in connection therewith.
(i) Officer's Certificate. On the Closing Date, the Company shall
have delivered to the Purchasers a certificate signed by an executive officer on
behalf of the Company, dated as of the Closing Date, confirming the accuracy of
the Company's representations, warranties and its compliance with covenants as
of the Closing Date and confirming the compliance by the Company with the
conditions precedent set forth in paragraphs (b)-(e) of this Section 4.2 as of
the Closing Date (provided that, with respect to the matters in paragraphs (d)
and (e) of this Section 4.2, such confirmation shall be based on the knowledge
of the executive officer).
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(j) Registration Rights Agreement. As of the Closing Date, the
Company shall have duly executed and delivered the Registration Rights Agreement
in the form of Exhibit C attached hereto.
(k) Escrow Agreement. At the Closing, the Company and the escrow
agent shall have executed and delivered the Escrow Agreement in the form of
Exhibit D attached hereto to each Purchaser.
(l) Material Adverse Effect. No Material Adverse Effect shall
have occurred at or before the Closing Date.
ARTICLE V
CERTIFICATE LEGEND
Section 5.1 Legend. Each certificate representing the Securities
shall be stamped or otherwise imprinted with a legend substantially in the
following form (in addition to any legend required by applicable state
securities or "blue sky" laws):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE (THE "SECURITIES") HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE
SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR THE
COMPANY SHALL HAVE RECEIVED AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY THAT REGISTRATION OF SUCH SECURITIES UNDER
THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE
SECURITIES LAWS IS NOT REQUIRED.
The Company agrees to reissue certificates representing any of the Shares
and the Warrant Shares, without the legend set forth above if at such time,
prior to making any transfer of any such Shares or Warrant Shares, such holder
thereof shall give written notice to the Company describing the manner and terms
of such transfer and removal as the Company may reasonably request. Such
proposed transfer and removal will not be effected until: (a) either (i) the
Company has received an opinion of counsel reasonably satisfactory to the
Company, to the effect that the registration of the Shares or Warrant Shares
under the Securities Act is not required in connection with such proposed
transfer, (ii) a registration statement under the Securities Act covering such
proposed disposition has been filed by the Company with the Commission and has
become and remains effective under the Securities Act, (iii) the Company has
received other evidence reasonably satisfactory to the Company that such
registration and qualification under the Securities Act and state securities
laws are not required, or (iv) the holder provides the Company with reasonable
assurances that such security can be sold pursuant to Rule 144 under the
Securities Act; and (b) either (i) the Company has received an opinion of
counsel reasonably satisfactory to the Company, to the effect that registration
or qualification under the securities or "blue sky" laws of any state is not
required in connection with such proposed
21
disposition, or (ii) compliance with applicable state securities or "blue sky"
laws has been effected or a valid exemption exists with respect thereto. The
Company will respond to any such notice from a holder within three (3) Trading
Days. In the case of any proposed transfer under this Section 5.1, the Company
will use reasonable efforts to comply with any such applicable state securities
or "blue sky" laws, but shall in no event be required, (x) to qualify to do
business in any state where it is not then qualified, or (y) to take any action
that would subject it to tax or to the general service of process in any state
where it is not then subject. The restrictions on transfer contained in this
Section 5.1 shall be in addition to, and not by way of limitation of, any other
restrictions on transfer contained in any other section of this Agreement.
Whenever a certificate representing the Shares or Warrant Shares is required to
be issued to a Purchaser without a legend, in lieu of delivering physical
certificates representing the Shares or Warrant Shares, provided the Company's
transfer agent is participating in the Depository Trust Company ("DTC") Fast
Automated Securities Transfer program, the Company shall cause its transfer
agent to electronically transmit the Shares or Warrant Shares to a Purchaser by
crediting the account of such Purchaser's Prime Broker with DTC through its
Deposit Withdrawal Agent Commission ("DWAC") system (to the extent not
inconsistent with any provisions of this Agreement).
ARTICLE VI
INDEMNIFICATION
Section 6.1 General Indemnity. The Company agrees to indemnify and
hold harmless the Purchasers (and their respective directors, officers, agents,
managers, partners, members, affiliates, successors and assigns) from and
against any and all losses, liabilities, deficiencies, costs, damages and
expenses (including, without limitation, reasonable attorneys' fees, charges and
disbursements) incurred by the Purchasers and their directors, officers, agents,
managers, partners, members, shareholders, affiliates, successors and assigns as
a result of any inaccuracy in or breach of the representations, warranties or
covenants made by the Company herein. Each Purchaser severally but not jointly
agrees to indemnify and hold harmless the Company and its directors, officers,
affiliates, agents, successors and assigns from and against any and all losses,
liabilities, deficiencies, costs, damages and expenses (including, without
limitation, reasonable attorneys' fees, charges and disbursements) incurred by
the Company and its directors, officers, affiliates, agents, successors and
assigns as a direct result of any inaccuracy in or breach of the
representations, warranties or covenants made by such Purchaser herein. The
maximum aggregate liability of each Purchaser pursuant to its indemnification
obligations under this Article VI shall not exceed the portion of the Purchase
Price paid by such Purchaser hereunder.
Section 6.2 Indemnification Procedure. Any party entitled to
indemnification under this Article VI (an "indemnified party") will give written
notice to the indemnifying party of any matters giving rise to a claim for
indemnification; provided, that the failure of any indemnified party to give
notice as provided herein shall not relieve the indemnifying party of its
obligations under this Article VI except to the extent that the indemnifying
party is actually prejudiced by such failure to give notice. In case any such
action, proceeding or claim is brought against an indemnified party in respect
of which indemnification is sought hereunder, the indemnifying party shall be
entitled to participate in and, unless in the reasonable judgment of
22
the indemnifying party a conflict of interest between it and the indemnified
party exists with respect to such action, proceeding or claim (in which case the
indemnifying party shall be responsible for the reasonable fees and expenses of
one separate counsel for the indemnified parties), to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. In the event that
the indemnifying party advises an indemnified party that it will not contest
such a claim for indemnification hereunder, or fails, within thirty (30) days of
receipt of any indemnification notice to notify, in writing, such person of its
election to defend, settle or compromise, at its sole cost and expense, any
action, proceeding or claim (or discontinues its defense at any time after it
commences such defense), then the indemnified party may, at its option, defend,
settle or otherwise compromise or pay such action or claim. In any event, unless
and until the indemnifying party elects in writing to assume and does so assume
the defense of any such claim, proceeding or action, the indemnified party's
costs and expenses arising out of the defense, settlement or compromise of any
such action, claim or proceeding shall be losses subject to indemnification
hereunder. The indemnified party shall cooperate fully with the indemnifying
party in connection with any negotiation or defense of any such action or claim
by the indemnifying party and shall furnish to the indemnifying party all
information reasonably available to the indemnified party which relates to such
action or claim. The indemnifying party shall keep the indemnified party fully
apprised at all times as to the status of the defense or any settlement
negotiations with respect thereto. If the indemnifying party elects to defend
any such action or claim, then the indemnified party shall be entitled to
participate in such defense with counsel of its choice at its sole cost and
expense. The indemnifying party shall not be liable for any settlement of any
action, claim or proceeding effected without its prior written consent which
consent shall not be unreasonably withheld. Notwithstanding anything in this
Article VI to the contrary, the indemnifying party shall not, without the
indemnified party's prior written consent, settle or compromise any claim or
consent to entry of any judgment in respect thereof which imposes any future
obligation on the indemnified party or which does not include, as an
unconditional term thereof, the giving by the claimant or the plaintiff to the
indemnified party of a release from all liability in respect of such claim. The
indemnification required by this Article VI shall be made by periodic payments
of the amount thereof during the course of investigation or defense, as and when
bills are received or expense, loss, damage or liability is incurred, so long as
the indemnified party irrevocably agrees to refund such moneys if it is
ultimately determined by a court of competent jurisdiction that such party was
not entitled to indemnification. The indemnity agreements contained herein shall
be in addition to (a) any cause of action or similar rights of the indemnified
party against the indemnifying party or others, and (b) any liabilities the
indemnifying party may be subject to pursuant to the law.
ARTICLE VII
MISCELLANEOUS
Section 7.1 Fees and Expenses. Each party shall pay the fees and
expenses of its advisors, counsel, accountants and other experts, if any, and
all other expenses, incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this Agreement, provided
that the Company shall pay all actual attorneys' fees and expenses (including
disbursements and out-of-pocket expenses) for one counsel to the Purchasers
incurred by the Purchasers in connection with (i) the preparation, negotiation,
execution and delivery of
23
this Agreement and the other Transaction Documents and the transactions
contemplated thereunder, which payment shall be made at each Closing and shall
not exceed $20,000 (exclusive of disbursements and out-of-pocket expenses)
at each Closing, (ii) the review of the Registration Statement (as defined in
the Registration Rights Agreement) in accordance with the Section 4(iv) of the
Registration Rights Agreement, which payment of $7,500 shall be made at Closing
and held in escrow until such fees, if any, are incurred, and (iii) any
amendments, modifications or waivers of this Agreement or any of the other
Transaction Documents. In addition, the Company shall pay all reasonable fees
and expenses incurred by the Purchasers in connection with the enforcement of
this Agreement or any of the other Transaction Documents, including, without
limitation, all reasonable attorneys' fees and expenses.
Section 7.2 Specific Performance; Consent to Jurisdiction; Venue.
(a) The Company and the Purchasers acknowledge and agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement or the other Transaction Documents are not performed in accordance
with their specific terms or are otherwise breached. It is accordingly agreed
that the parties shall be entitled to an injunction or injunctions to prevent or
cure breaches of the provisions of this Agreement or the other Transaction
Documents and to enforce specifically the terms and provisions hereof or
thereof, this being in addition to any other remedy to which any of them may be
entitled by law or equity.
(b) The parties agree that venue for any dispute arising under
this Agreement will lie exclusively in the state or federal courts located in
New York County, New York, and the parties irrevocably waive any right to raise
forum non conveniens or any other argument that New York is not the proper
venue. The parties irrevocably consent to personal jurisdiction in the state and
federal courts of the state of New York. The Company and each Purchaser consent
to process being served in any such suit, action or proceeding by mailing a copy
thereof to such party at the address in effect for notices to it under this
Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing in this Section 7.2 shall affect
or limit any right to serve process in any other manner permitted by law. The
Company and the Purchasers hereby agree that the prevailing party in any suit,
action or proceeding arising out of or relating to the Securities, this
Agreement or the Registration Rights Agreement, shall be entitled to
reimbursement for reasonable legal fees from the non-prevailing party.
Section 7.3 Entire Agreement; Amendment. This Agreement and the
Transaction Documents contain the entire understanding and agreement of the
parties with respect to the matters covered hereby and, except as specifically
set forth herein or in the other Transaction Documents, neither the Company nor
any Purchaser make any representation, warranty, covenant or undertaking with
respect to such matters, and they supersede all prior understandings and
agreements with respect to said subject matter, all of which are merged herein.
Following the Closing, no provision of this Agreement may be waived or amended
other than by a written instrument signed by the Company and the Purchasers
holding at least a majority of all Shares then held by the Purchasers. Any
amendment or waiver effected in accordance with this Section 7.3 shall be
binding upon each Purchaser (and their permitted assigns) and the Company.
24
Section 7.4 Notices. Any notice, demand, request, waiver or other
communication required or permitted to be given hereunder shall be in writing
and shall be effective (a) upon hand delivery by telecopy or facsimile at the
address or number designated below (if delivered on a business day during normal
business hours where such notice is to be received), or the first business day
following such delivery (if delivered other than on a business day during normal
business hours where such notice is to be received) or (b) on the second
business day following the date of mailing by express courier service, fully
prepaid, addressed to such address, or upon actual receipt of such mailing,
whichever shall first occur. The addresses for such communications shall be:
If to the Company: QuantRx Biomedical Corporation
000 X. Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxxxx
Tel. No.: (000) 000-0000
Fax No.: (000) 000-0000
with copies (which copies
shall not constitute notice
to the Company) to: Xxxxxxxxx Traurig, LLP
The Met Life Building
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Tel. No.: (000) 000-0000
Fax No.: (000) 000-0000
If to any Purchaser: At the address of such Purchaser set forth on
Exhibit A to this Agreement, with copies to such
Purchaser's counsel (which copies shall not
constitute notice to such Purchaser) as set
forth on Exhibit A or as specified in writing by
such Purchaser.
with copies to: Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxxxx X. Xxxxxxx
Tel No.: (000) 000-0000
Fax No.: (000) 000-0000
Any party hereto may from time to time change its address for notices by
giving written notice of such changed address to the other parties hereto.
Section 7.5 Waivers. No waiver by any party 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 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 accruing to it thereafter.
25
Section 7.6 Headings. The article, section and subsection headings
in this Agreement are for convenience only and shall not constitute a part of
this Agreement for any other purpose and shall not be deemed to limit or affect
any of the provisions hereof.
Section 7.7 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties and their successors and assigns.
After the Closing, the assignment by a party to this Agreement of any rights
hereunder shall not affect the obligations of such party under this Agreement.
Subject to Section 5.1 hereof, the Purchasers may assign the Securities and its
rights under this Agreement and the other Transaction Documents and any other
rights hereto and thereto without the consent of the Company.
Section 7.8 No Third Party Beneficiaries. This Agreement is
intended for the benefit of the parties hereto and their respective permitted
successors and assigns and is not for the benefit of, nor may any provision
hereof be enforced by, any other person.
Section 7.9 Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York, without
giving effect to any of the conflicts of law principles which would result in
the application of the substantive law of another jurisdiction. This Agreement
shall not be interpreted or construed with any presumption against the party
causing this Agreement to be drafted.
Section 7.10 Survival. The representations and warranties of the
Company and the Purchasers shall survive the execution and delivery hereof and
the Closing.
Section 7.11 Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument and shall become effective when counterparts have been signed by
each party and delivered to the other parties hereto, it being understood that
all parties need not sign the same counterpart.
Section 7.12 Publicity. The Company agrees that it will not
disclose, and will not include in any public announcement, the names of the
Purchasers without the consent of the Purchasers, which consent shall not be
unreasonably withheld or delayed, or unless and until such disclosure is
required by law, rule or applicable regulation, and then only to the extent of
such requirement.
Section 7.13 Severability. The provisions of this Agreement are
severable and, in the event that any court of competent jurisdiction shall
determine that any one or more of the provisions or part of the provisions
contained in this Agreement shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision or part of a provision of
this Agreement and this Agreement shall be reformed and construed as if such
invalid or illegal or unenforceable provision, or part of such provision, had
never been contained herein, so that such provisions would be valid, legal and
enforceable to the maximum extent possible.
Section 7.14 Further Assurances. From and after the date of this
Agreement, upon the reasonable request of the Purchasers or the Company, the
Company and each Purchaser shall execute and deliver such instruments, documents
and other writings as may be reasonably
26
necessary or desirable to confirm and carry out and to effectuate fully the
intent and purposes of this Agreement, the Warrants and the Registration Rights
Agreement.
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In witness whereof, the parties hereto have executed or caused this
Agreement to be duly executed by their respective authorized officers as of the
date first above written.
QUANTRX BIOMEDICAL CORPORATION
By: /s/ Xxxxxx Xxxxxxxxx
----------------------------------
Name: Xxxxxx Xxxxxxxxx
Its: President and CEO
PURCHASERS
By: /s/ Purchasers
----------------------------------
Name:
Its: