SECURITIES PURCHASE AGREEMENT
Exhibit
10.1
THIS
SECURITIES PURCHASE AGREEMENT, dated as of ______, 2006, is entered into by
and
between Zynex
Medical Holdings, Inc.,
a
Nevada corporation, with headquarters located at 0000 Xxxxxxxxx Xxx, Xxxxx
X-0,
Xxxxxxxxx, XX 00000 (the “Company”), and _________ or his designee (the
“Purchaser”).
R
E C I T A L S :
WHEREAS,
the
Company and the Purchaser are executing and delivering this Agreement in
accordance with and in reliance upon the exemption from securities registration
for offers and sales to accredited investors afforded, inter alia, by Rule
506
under Regulation D (“Regulation D”) as promulgated by the United States
Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933,
as amended (the “1933 Act”), and/or Section 4(2) of the 1933 Act;
and
WHEREAS,
the
Company wishes to sell to the Purchaser and the Purchaser wishes to buy from
the
Company shares of the Company’s Common Stock, $.001 par value, of the Company
(the “Common Stock”), together with a warrant exercisable for the purchase of
shares of the Company’s Common Stock (the “Warrant”);
NOW
THEREFORE,
in
consideration of the premises and the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which
are
hereby acknowledged, the parties agree as follows:
AGREEMENT
TO PURCHASE; PURCHASE PRICE.
a. Purchase.
(i) Subject
to the terms and conditions of this Agreement and the other Transaction
Agreements (as defined below), the Purchaser hereby agrees to pay to the Company
a purchase price of $0.32 per share of Common Stock for
__________________________ (______________) shares (the “Shares”), for a total
purchase price of _____________________ Dollars ($____________) (the “Purchase
Price”). The Company shall issue Certificates (as defined below) representing
the Shares and the Warrant.
(ii) The
Company agrees to issue to the Purchaser on the Closing Date a Warrant for
the
purchase of a number of shares equal to 80% of the number of Shares issued
on
the Closing Date with an exercise price of $0.39 per share. The Warrants will
expire on June 30, 2011 or earlier as described in the Warrant. The Warrant
shall be in the form annexed hereto as Annex III.
(iii) The
Purchase Price shall be payable at the Closing Date (as defined below) in United
States Dollars.
b. Certain
Definitions.
As used
herein, each of the following terms has the meaning set forth below, unless
the
context otherwise requires:
-
1
-
(i) “1934
Act” means the Securities Exchange Act of 1934, as amended.
(ii) “Affiliate”
means, with respect to a specific Person referred to in the relevant provision,
another Person who or which controls or is controlled by or is under common
control with such specified Person.
(iii) “Broker”
means Chicago Investment Group, L.L.C.
(iv) “Certificates”
means certificates representing the Shares and the Warrants, each duly executed
by the Company and issued on the Closing Date in the name of the
Purchaser.
(v) “Closing
Date” means the date of the closing of the purchase and sale of the Shares and
the Warrant as mutually agreed by the Company and the Purchaser.
(vi) “Company
Control Person” means each director, executive officer, promoter, and such other
Persons as may be deemed in control of the Company pursuant to Rule 405 under
the 1933 Act or Section 20 of the 1934 Act.
(vii) “Material
Adverse Effect” means an event or combination of events, which individually or
in the aggregate, would reasonably be expected to (w) adversely affect the
legality, validity or enforceability of the Securities or any of the Transaction
Agreements, (x) have or result in a material adverse effect on the results
of
operations, assets, prospects, or condition (financial or otherwise) of the
Company and its subsidiaries, taken as a whole, (y) adversely impair the
Company’s ability to perform fully on a timely basis its obligations under any
of the Transaction Agreements or the transactions contemplated thereby, or
(z)
materially and adversely affect the value of the rights granted to the Purchaser
in the Transaction Agreements.
(viii) “Person”
means any living person or any entity, such as, but not necessarily limited
to,
a corporation, partnership or trust.
(ix) “Principal
Trading Market” means The OTC Bulletin Board; provided, however, that if the
Company lists its Common Stock for trading on the NASDAQ National Market, the
NASDAQ Capital Market or the American Stock Exchange, “Principal Trading Market”
shall mean such exchange or automated quotation system.
(x) “Purchaser
Control Person” means each director, executive officer, promoter, and such other
Persons as may be deemed in control of the relevant Purchaser pursuant to Rule
405 under the 1933 Act or Section 20 of the 1934 Act.
-
2
-
(xi) “Registration
Rights Agreement” means the Registration Rights Agreement in the form attached
hereto as Annex I, as executed by each Purchaser and the Company simultaneously
with the execution of this Agreement.
(xii) “Securities”
means the Shares, the Warrants and the Warrant Shares.
(xiii) “State
of
Incorporation” means Nevada.
(xiv) “Trading
Day” means any day during which the Principal Trading Market shall be open for
business.
(xv) “Transaction
Agreements” means this Securities Purchase Agreement, the Registration Rights
Agreement and the Warrant and includes all ancillary documents referred to
in
those agreements.
(xvi) “Warrant
Shares” means the shares of Common Stock issuable upon exercise of the
Warrant.
c. Form
of Payment; Delivery of Certificates.
(i) On
the
Closing Date, the Purchaser shall pay the Purchase Price by delivering
immediately available good funds in United States Dollars to the Company. There
shall be no minimum amount that the Company is required to raise prior to
closing this transaction.
(ii) No
later
than five business days after the Closing Date, but in any event promptly
following payment by the Purchaser to the Company of the Payment, the Company
shall deliver the Certificates representing the Shares and the Warrant, each
duly executed on behalf of the Company and issued in the name of the Purchaser,
to the Purchaser.
d. Method
of Payment.
Payment
shall be made by via cashiers check or wire transfer to:
Cashiers
Check:
Zynex
Medical Holdings, Inc.
0000
Xxxxxxxxx Xxx, Xxxxx X-0
Xxxxxxxxx,
XX 00000
Attn:
Xxxxx X. Xxxxxxx
Wire
transfer Instructions:
Guaranty
Bank & Trust
Denver,
CO
Zynex
Medial Holdings, Inc.
Routing
Number: 000000000
Account
Number: 1300011996
-
3
-
PURCHASER
REPRESENTATION AND WARRANTIES.
The
Purchaser represents and warrants to, and covenants and agrees with, the Company
as follows:
e. Without
limiting Purchaser’s right to sell the Shares pursuant to the Registration
Statement or otherwise to sell any of the Securities in compliance with the
1933
Act, the Purchaser is purchasing the Securities and will be acquiring the
Securities for its own account for investment only and not with a view towards
the public sale or distribution thereof and not with a view to or for sale
in
connection with any distribution thereof.
f. The
Purchaser is (i) an “accredited investor” as that term is defined in Rule 501 of
the General Rules and Regulations under the 1933 Act by reason of Rule
501(a)(3), (ii) experienced in making investments of the kind described in
this
Agreement and the related documents, (iii) able, by reason of the business
and
financial experience of its officers (if an entity) and professional advisors
(who are not affiliated with or compensated in any way by the Company or any
of
its Affiliates or selling agents), to protect its own interests in connection
with the transactions described in this Agreement, and the related documents,
and (iv) able to afford the loss of the entire Purchase Price.
g. All
subsequent offers and sales of the Securities by the Purchaser shall be made
pursuant to registration of the Securities under the 1933 Act or pursuant to
an
exemption from registration.
h. The
Purchaser understands that the Securities are being offered and sold to it
in
reliance on specific exemptions from the registration requirements of the 1933
Act and state securities laws and that the Company is relying upon the truth
and
accuracy of, and the Purchaser’s compliance with, the representations,
warranties, agreements, acknowledgments and understandings of the Purchaser
set
forth herein in order to determine the availability of such exemptions and
the
eligibility of the Purchaser to acquire the Securities.
i. The
Purchaser and its advisors, if any, had the opportunity to obtain and to review
the Company’s filings on XXXXX for the last twelve months listed on Annex II
hereto (the documents listed on such Annex II, collectively, the “Company’s SEC
Documents”). The Purchaser and its advisors, if any, have had an opportunity to
request additional materials relating to the business, finances and operations
of the Company and additional materials relating to the offer and sale of the
Securities and the Purchaser and its advisors, if any, have been furnished
any
such materials which have been requested by the Purchaser. The Purchaser and
its
advisors, if any, have been afforded the opportunity to ask questions of the
Company and have received complete and satisfactory answers to any such
inquiries.
-
4
-
j. The
Purchaser understands that its investment in the Securities involves a high
degree of risk.
k. The
Purchaser hereby represents that, in connection with its purchase of the
Securities, it has not relied on any statement or representation by the Company
or any of its officers, directors and employees or any of its attorneys or
agents, except as specifically set forth herein.
l. The
Purchaser understands that no United States federal or state agency or any
other
government or governmental agency has passed on or made any recommendation
or
endorsement of the Securities.
m. This
Agreement and the other Transaction Agreements to which the Purchaser is a
party, and the transactions contemplated thereby, have been duly and validly
authorized, executed and delivered on behalf of the Purchaser and are valid
and
binding agreements of the Purchaser enforceable in accordance with their
respective terms, subject as to enforceability to general principles of equity
and to bankruptcy, insolvency, moratorium and other similar laws affecting
the
enforcement of creditors’ rights generally.
n. The
Purchaser has taken no action which would give rise to any claim by any Person
for brokerage commission other than Broker’s fees. The Company shall have no
obligation with respect to such fees or with respect to any claims made by
or on
behalf of other Persons for fees of a type contemplated in this paragraph that
may be due in connection with the transactions contemplated hereby. The
Purchaser shall indemnify and hold harmless each of the Company, its employees,
officers, directors, agents, and partners, and their respective Affiliates,
from
and against all claims, losses, damages, costs (including the costs of
preparation and attorney’s fees) and expenses suffered in respect of any such
claimed or existing fees, as and when incurred.
o. The
Purchaser hereby covenants and warrants that, between the Closing Date and
the
date on which he or she no longer holds any of the Securities, Purchaser will
not engage in any hedging transactions or shorting transactions in any
securities of the Company, including the Securities.
p. The
Purchaser hereby covenants and warrants that he or she is not acting as a
“group” for purposes of Section 13 of the Securities Exchange Act of 1934 in
regard to any securities of the Company.
COMPANY
REPRESENTATIONS AND WARRANTIES.
The
Company represents and warrants to the Purchaser as of the date hereof and
as of
the Closing Date that, except as otherwise provided in the Company’s SEC
Documents:
q. Rights
of Others Affecting the Transactions.
There
are no preemptive rights of any shareholder of the Company, as such, to acquire
the
-
5
-
Securities.
No party has a currently exercisable right of first refusal which would be
applicable to any or all of the transactions contemplated by the Transaction
Agreements.
-
6
-
r. Status.
The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Incorporation and has the requisite corporate
power to own its properties and to carry on its business as now being conducted.
The Company is duly qualified as a foreign corporation to do business and is
in
good standing in each jurisdiction where the nature of the business conducted
or
property owned by it makes such qualification necessary, other than those
jurisdictions in which the failure to so qualify would not have or result in
a
Material Adverse Effect. The Company has registered its stock pursuant Section
12 or Section 15(d) of Securities Exchange Act of 1934, as amended (the “1934
Act”). The Common Stock is listed and quoted on the Principal Trading Market.
The Company has received no notice, either oral or written, with respect to
the
continued eligibility of the Common Stock for such listing and quotation on
the
Principal Trading Market, and the Company has maintained all requirements on
its
part for the continuation of such listing and quotation.
s. Authorized
Shares.
The
authorized capital stock of the Company consists of (i) 100,000,000 shares
of
Common Stock, of which approximately 23,244,000 shares are outstanding as of
April 30, 2006, and (ii) 10,000,000 shares of Preferred Stock, $.001 par value
per share, of which no shares are outstanding as of the date hereof. The Company
has reserved 3,000,000 shares of Company Common Stock for issuance pursuant
to
Company equity incentive plans. All issued and outstanding shares of Common
Stock have been duly authorized and validly issued and are fully paid. The
Company has sufficient authorized and unissued shares of Common Stock as may
be
necessary to effect the issuance of the Securities. The Securities have been
duly authorized and, when issued, in accordance with their terms, will be duly
and validly issued, fully paid and non-assessable.
t. Transaction
Agreements.
This
Agreement and each of the other Transaction Agreements, and the transactions
contemplated thereby, have been duly and validly authorized by the Company,
this
Agreement has been duly executed and delivered by the Company and this Agreement
is, and the Certificates and each of the other Transaction Agreements, when
executed and delivered by the Company, will be, valid and binding agreements
of
the Company enforceable in accordance with their respective terms, subject
as to
enforceability to general principles of equity and to bankruptcy, insolvency,
moratorium, and other similar laws affecting the enforcement of creditors’
rights generally.
-
7
-
u. Non-contravention.
The
execution and delivery of this Agreement and each of the other Transaction
Agreements by the Company, the issuance of the Securities, and the consummation
by the Company of the other transactions contemplated by this Agreement, the
Certificates and the other Transaction Agreements do not and will not conflict
with or result in a breach by the Company of any of the terms or provisions
of,
or constitute a default under (i) the certificate of incorporation or by-laws
of
the Company, each as currently in effect, (ii) any indenture, mortgage, deed
of
trust, or other material agreement or instrument to which the Company is a
party
or by which it or any of its properties or assets are bound, or (iii) to its
knowledge, any existing applicable law, rule, or regulation or any applicable
decree, judgment, or order of any court, United States federal or state
regulatory body, administrative agency, or other governmental body having
jurisdiction over the Company or any of its properties or assets, except where
such conflict, breach or default which would not have or result in a Material
Adverse Effect.
v. Approvals.
No
authorization, approval or consent of any court, governmental body, regulatory
agency, self-regulatory organization, or stock exchange or market or the
shareholders of the Company is required to be obtained by the Company for the
issuance and sale of the Securities to the Purchaser as contemplated by this
Agreement, except such authorizations, approvals and consents that have been
obtained.
w. Filings.
None of
the Company’s SEC Documents contained, at the time they were filed, any untrue
statement of a material fact or omitted to state any material fact required
to
be stated therein or necessary to make the statements made therein in light
of
the circumstances under which they were made, not misleading. Since April 1,
2006, to the date of this Agreement the Company has timely filed all requisite
forms, reports and exhibits thereto required to be filed by the Company with
the
SEC.
x. Absence
of Litigation.
There
is no action, suit, proceeding, inquiry or investigation before or by any court,
public board or body pending or, to the knowledge of the Company, threatened
against or affecting the Company before or by any governmental authority or
nongovernmental department, commission, board, bureau, agency or instrumentality
or any other person, wherein an unfavorable decision, ruling or finding would
have a Material Adverse Effect or which would adversely affect the validity
or
enforceability of, or the authority or ability of the Company to perform its
obligations under, any of the Transaction Agreements.
y. Absence
of Certain Company Control Person Actions or Events.
None of
the following has occurred during the past five (5) years with respect to a
Company Control Person:
-
8
-
(i) A
petition under the federal bankruptcy laws or any state insolvency law was
filed
by or against, or a receiver, fiscal agent or similar officer was appointed
by a
court for the business or property of such Company Control Person, or any
partnership in which he was a general partner at or within two years before
the
time of such filing, or any corporation or business association of which he
was
an executive officer at or within two years before the time of such
filing;
(ii) Such
Company Control Person was convicted in a criminal proceeding or is a named
subject of a pending criminal proceeding (excluding traffic violations and
other
minor offenses);
(iii) Such
Company Control Person was the subject of any order, judgment or decree, not
subsequently reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining him from, or otherwise
limiting, the following activities:
(1) acting,
as an investment advisor, underwriter, broker or dealer in securities, or as
an
affiliated person, director or employee of any investment company, bank, savings
and loan association or insurance company, as a futures commission merchant,
introducing broker, commodity trading advisor, commodity pool operator, floor
broker, any other Person regulated by the Commodity Futures Trading Commission
or engaging in or continuing any conduct or practice in connection with such
activity;
(2) engaging
in any type of business practice; or
(3) engaging
in any activity in connection with the purchase or sale of any security or
commodity or in connection with any violation of federal or state securities
laws or federal commodities laws;
(iv) Such
Company Control Person was the subject of any order, judgment or decree, not
subsequently reversed, suspended or vacated, of any federal or state authority
barring, suspending or otherwise limiting for more than 60 days the right of
such Company Control Person to engage in any activity described in paragraph
(3)
of this item, or to be associated with Persons engaged in any such activity;
or
(v) Such
Company Control Person was found by a court of competent jurisdiction in a
civil
action or by the SEC to have violated any federal or state securities law,
and
the judgment in such civil action or finding by the SEC has not been
subsequently reversed, suspended, or vacated.
z. Prior
Issues.
During
the twelve (12) months preceding the date hereof, the Company has not issued
any
stock option grants, convertible securities or any shares of its Common Stock,
except as provided in the
Company’s SEC Documents and except for shares or warrants issued to
consultants after December 31, 2005.
-
9
-
aa. No
Undisclosed Liabilities or Events.
The
Company has no liabilities or obligations other than those disclosed in the
Transaction Agreements or the Company’s SEC Documents or those incurred in the
ordinary course of the Company’s business since December 31, 2005, or which
individually or in the aggregate, do not or would not have a Material Adverse
Effect. No event or circumstances has occurred or exists with respect to the
Company or its properties, business, operations, condition (financial or
otherwise), or results of operations, which, under applicable law, rule or
regulation, including the 1934 Act, requires public disclosure or announcement
prior to the date hereof by the Company but which has not been so publicly
announced or disclosed. There are no proposals currently under consideration
by
the Board of Directors or the executive officers of the Company which proposal
would (X) change the certificate of incorporation or other charter document
or
by-laws of the Company, each as currently in effect, with or without shareholder
approval, which change would reduce or otherwise adversely affect the rights
and
powers of the shareholders of the Common Stock or (Y) materially or
substantially change the business, assets or capital of the Company, including
its interests in subsidiaries.
bb. No
Default.
Neither
the Company nor any of its subsidiaries is in default in the performance or
observance of any material obligation, agreement, covenant or condition
contained in any material indenture, mortgage, deed of trust or other material
instrument or agreement to which it is a party or by which it or its property
is
bound.
cc. Fees
to Brokers, and Others.
Except
for payment of fees and commissions to the Broker and payments to another
investment banker, payment of which is the sole responsibility of the Company,
the Company has taken no action which would give rise to any claim by any Person
for brokerage commission, Broker’s fees or similar payments by Purchaser
relating to this Agreement or the transactions contemplated hereby. Purchaser
shall have no obligation with respect to such fees or with respect to any claims
made by or on behalf of other Persons for fees of a type contemplated in this
paragraph that may be due in connection with the transactions contemplated
hereby. The Company shall indemnify and hold harmless each Purchaser, its
employees, officers, directors, agents, and partners, and their respective
Affiliates, from and against all claims, losses, damages, costs (including
the
costs of preparation and attorney’s fees) and expenses suffered in respect of
any such claimed or existing fees, as and when incurred.
-
10
-
CERTAIN
COVENANTS AND ACKNOWLEDGMENTS.
dd. Transfer
Restrictions.
The
Purchaser acknowledges that (1) the Securities have not been and are not being
registered under the provisions of the 1933 Act and, except as provided in
the
Registration Rights Agreement or otherwise included in an effective registration
statement, the Securities have not been and are not being registered under
the
1933 Act, and may not be transferred unless (A) subsequently registered
thereunder or (B) the Purchaser shall have delivered to the Company an opinion
of counsel, reasonably satisfactory in form, scope and substance to the Company,
to the effect that the Securities to be sold or transferred may be sold or
transferred pursuant to an exemption from such registration; (2) any sale of
the
Securities made in reliance on Rule 144 promulgated under the 1933 Act may
be
made only in accordance with the terms of said Rule and further, if said Rule
is
not applicable, any resale of such Securities under circumstances in which
the
seller, or the Person through whom the sale is made, may be deemed to be an
underwriter, as that term is used in the 1933 Act, may require compliance with
some other exemption under the 1933 Act or the rules and regulations of the
SEC
thereunder; and (3) neither the Company nor any other Person is under any
obligation to register the Securities (other than pursuant to the Registration
Rights Agreement) under the 1933 Act or to comply with the terms and conditions
of any exemption thereunder.
ee. Restrictive
Legend.
The
Purchaser acknowledges and agrees that, until such time as the Common Stock
has
been registered under the 1933 Act as contemplated by the Registration Rights
Agreement and sold in accordance with an effective Registration Statement or
otherwise in accordance with another effective registration statement, the
certificates and other instruments representing any of the Securities (including
the Warrant Shares) shall bear a restrictive legend in substantially the
following form (and a stop-transfer order may be placed against transfer of
any
such Securities):
THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OFFERED
FOR
SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
OR
AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
ff. Filings.
The
Company undertakes and agrees to make all necessary filings in connection with
the sale of the Securities to the Purchaser under any United States laws and
regulations applicable to the Company, or by any domestic securities exchange
or
trading market, and, upon request, to provide a copy thereof to the
Purchaser.
-
11
-
gg. Reporting
Status.
So long
as the Purchaser beneficially owns any of the Securities, the Company shall
use
its commercially reasonable efforts to file all reports required to be filed
with the SEC pursuant to Section 13 or 15(d) of the 1934 Act and shall take
all
reasonable action under its control to ensure that adequate current public
information with respect to the Company, as required in accordance with Rule
144(c)(2) of the 1933 Act, is publicly available, even if the 1934 Act or the
rules and regulations thereunder would permit such termination. At least through
the date which is thirty (30) days after the later of the date on which all
of
the Warrants have been exercised or have expired, the Company will take all
commercially reasonable action under its control to maintain the continued
listing and quotation and trading of its Common Stock (including, without
limitation, the shares and the Warrant shares) on the Principal Trading Market
and, to the extent applicable to it, will comply in all material respects with
the Company’s reporting, filing and other obligations under the by-laws or rules
of the Principal Trading Market
hh. Use
of
Proceeds.
The
Company shall use the proceeds received hereunder as follows:
(i) payment
of certain fees as described below in Section 4(h); and
(ii) the
remainder shall be used for general corporate purposes.
ii. Available
Shares.
The
Company shall have at all times authorized and reserved for issuance, free
from
preemptive rights, a number of shares at least equal to the number of shares
issuable upon exercise of all outstanding Warrants held by all
Purchasers.
jj. Publicity,
Filings, Releases, Etc.
The
Purchaser agrees that it will not disseminate any information relating to the
Transaction Agreements or the transactions contemplated thereby, including
issuing any press releases, holding any press conferences or other forums,
or
filing any reports (collectively, “Publicity”), without giving the Company
reasonable advance notice and an opportunity to comment on the contents thereof.
Purchaser will not include in any such Publicity any statement or statements
or
other material to which the other party reasonably objects. The Purchaser hereby
consents to the inclusion of the text of the Transaction Agreements in filings
made with the SEC and a description of the Transaction Agreement in such
filings.
kk. Broker
Fees.
The
Company shall pay to the Broker a commission in the form of cash equal in value
to nine percent (9%) of the gross proceeds from the sale of the Common Stock
under this Agreement, one percent (1% ) unaccountable, as well as nine percent
(9%) in common stock. Such commission
is more fully described in the Placement Agent Agreement between the Company
and
the Broker on May 1, 2006.
-
12
-
ll. Attorneys’
Fees.
The
Company shall bear its legal fees and expenses incurred in connection with
the
preparation and negotiation of the documents contemplated by this transaction.
Other than the amounts contemplated in the immediately preceding section, each
party shall pay the fees and expenses of its advisers, 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
mm. Certain
New Transactions.
For
purposes of this Agreement, “New Transaction” means the offer or sale of new
common stock in a capital raising or other financing transaction by or on behalf
of the Company to a new investor in a transaction offered or consummated after
the date hereof; provided, however, that it is specifically understood that
the
term “New Transaction” does not include (i) the sale of the Securities to the
Purchaser, (ii) the issuance of Common Stock upon the exercise or conversion
of
options, warrants, or convertible securities outstanding at the date hereof,
(iii) the issuance of options or warrants hereafter granted to employees or
consultants for compensatory purposes or the issuance of Common Stock upon
the
exercise of such options or warrants, (iv) the issuance of Common Stock or
securities exercisable for or convertible into Common Stock in connection with
a
merger, acquisition or other business combination or a strategic partnering
or
joint venture transaction or the exercise or conversion of such securities,
(v)
the issuance of Common Stock or securities exercisable for or convertible into
Common Stock in connection with the settlement of claims which are the subject
of law suits, arbitrations and similar proceedings or the conversion or exercise
of such securities, and (vi) the issuance of warrants to equipment lessors
in
connection with capital lease transactions or the exercise of such warrants.
If
prior to the later of (i) 180 days after the Closing Date or (ii) 90
days after the effective date of the Shelf Registration Statement described
in
the Registration Rights Agreement, the Company consummates a New Transaction
in
which it sells or is deemed to sell Common Stock or securities exercisable
for
or convertible into Common Stock at a lower price than the Shares, or issues
warrants with an exercise price lower than the Warrants, then the Company shall
issue additional shares of Common Stock so that the effective price per share
for the Shares equals the price of the new shares and if the Company issues
Warrants, the Warrants will be amended to lower the exercise price of the
Warrants to the price of the new warrants.
-
13
-
TRANSFER
AGENT INSTRUCTIONS.
nn. The
Company warrants that, with respect to the Securities, other than the stop
transfer instructions to give effect to Section 4(a) hereof, it will give its
transfer agent no instructions inconsistent with instructions to issue Common
Stock from time to time, including upon exercise of the Warrants in such amounts
as specified from time to time by the Company to the transfer agent, it being
understood that Common Stock issued upon the exercise of the Warrants will
bear
the restrictive legend specified in Section 4(b) of this Agreement, Registered
in the name of the Purchaser or its nominee and in such denominations to be
specified by the Purchaser in connection with each exercise of the Warrants.
Except as so provided, the Shares shall otherwise be freely transferable on
the
books and records of the Company as and to the extent provided in this Agreement
and the Registration Rights Agreement. Nothing in this Section shall affect
in
any way the Purchaser’s obligations and agreement to comply with all applicable
securities laws upon resale of the Securities. If the Purchaser provides the
Company with an opinion of counsel reasonably satisfactory to the Company that
registration of a resale by the Purchaser of any of the Securities in accordance
with clause (1)(B) of Section 4(a) of this Agreement is not required under
the
1933 Act, the Company shall (except as provided in clause (2) of Section 4(a)
of
this Agreement) permit the transfer of the Securities and, in the case of the
Warrant Shares, promptly instruct the Company’s transfer agent to issue one or
more certificates for Common Stock without legend in such name and in such
denominations as specified by the Purchaser.
oo. Subject
to the provisions of this Agreement, the Company will permit the Purchaser
to
exercise its right to exercise the Warrant in the manner contemplated by the
Warrant.
pp. In
the
case of a transfer in lieu of delivering physical certificates representing
the
Securities, provided the Company’s transfer agent is participating in the
Depository Trust Company Fast Automated Securities Transfer program, upon
request of the transferee and its compliance with the provisions contained
in
this paragraph, so long as the certificates therefore do not bear a legend
and
the transferee is not obligated to return such certificate for the placement
of
a legend thereon, the Company shall use its commercially reasonable efforts
to
cause its transfer agent to electronically transmit the Common Stock issuable
to
the transferee by crediting the account of the transferee’s.
-
14
-
INDEMNIFICATION.
qq. The
Company agrees to indemnify and hold harmless each Purchaser and its officers,
directors, employees, and agents, and each Purchaser Control Person from and
against any losses, claims, damages, liabilities or expenses incurred
(collectively, “Damages”), and any action in respect thereof to which Purchaser,
its partners, Affiliates, officers, directors, employees, and duly authorized
agents, and any such Purchaser Control Person becomes subject to, resulting
from, arising out of or relating to any misrepresentation, breach of warranty
or
nonfulfillment of or failure to perform any covenant or agreement on the part
of
Company contained in this Agreement, as such Damages are incurred, except to
the
extent such Damages result primarily from Purchaser’s failure to perform any
covenant or agreement contained in this Agreement or Purchaser’s or its
officers’, directors’, employees’, agents’ or Purchaser Control Persons’
negligence, recklessness or bad faith in performing its obligations under this
Agreement.
rr. The
Purchaser agrees to indemnify and hold harmless the Company and its officers,
directors, employees, and agents, and each person deemed in control of the
Company pursuant to Rule 405 under the 1933 Act, or section 20 of the 1934
Act,
from and against any Damages, and any action in respect thereof to which the
Company, its partners, Affiliates, officers, directors, employees, and duly
authorized agents, and any such control person becomes subject to, resulting
from, arising out of or relating to any misrepresentation, breach of warranty
or
nonfulfillment of or failure to perform any covenant or agreement on the part
of
Purchaser contained in this Agreement, as such Damages are incurred, except
to
the extent such Damages result primarily from the Company’s failure to perform
any covenant or agreement contained in this Agreement or the Company or its
officers’, directors’, employees’, agents’ or such control persons’ negligence,
recklessness or bad faith in performing its obligations under this
Agreement.
JURY
TRIAL WAIVER.
The
Company and the Purchaser hereby waive a trial by jury in any action, proceeding
or counterclaim brought by either of the Parties hereto against the other in
respect of any matter arising out or in connection with the Transaction
Agreements.
GOVERNING
LAW: MISCELLANEOUS.
ss. This
Agreement shall be governed by and interpreted in accordance with the laws
of
the State of Colorado for contracts to be wholly performed in such state and
without giving effect to the principles thereof regarding the conflict of laws.
The Company and each Purchaser hereby submit to the jurisdiction of any state
court of competent jurisdiction in and for Arapahoe County, Colorado, or in
the
United States District Court for Colorado sitting at Arapahoe County, Colorado
in any action or proceeding arising out of or relating to this Agreement and
agree that all claims in respect of the action or proceeding may be heard and
determined in any such court; agree not to bring any action or proceeding
arising out of or relating to this Agreement in any other court; waive any
defense of inconvenient forum to the maintenance of any action
or
proceeding so brought and waive any bond, surety, or other security that might
be required of any other party with respect thereto; and agree that a final
judgment in any action or proceeding so brought shall be conclusive and may
be
enforced by suit on the judgment or in any other manner provided by law or
in
equity.
-
15
-
tt. Failure
of any party to exercise any right or remedy under this Agreement or otherwise,
or delay by a party in exercising such right or remedy, shall not operate as
a
waiver thereof.
uu. This
Agreement shall inure to the benefit of and be binding upon the successors
and
assigns of each of the parties hereto.
vv. All
pronouns and any variations thereof refer to the masculine, feminine or neuter,
singular or plural, as the context may require.
ww. A
facsimile transmission of this signed Agreement shall be legal and binding
on
all parties hereto.
xx. This
Agreement may be signed in one or more counterparts, each of which shall be
deemed an original.
yy. The
headings of this Agreement are for convenience of reference and shall not form
part of, or affect the interpretation of, this Agreement.
zz. If
any
provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement or the validity or
enforceability of this Agreement in any other jurisdiction.
aaa. This
Agreement may be amended only by an instrument in writing signed by the party
to
be charged with enforcement thereof.
bbb. This
Agreement supersedes all prior agreements and understandings among the parties
hereto with respect to the subject matter hereof.
NOTICES.
Any
notice required or permitted hereunder shall be given in writing (unless
otherwise specified herein) and shall be deemed effectively given on the
earliest of:
ccc. the
date
delivered, if delivered by personal delivery as against written receipt
therefore or by confirmed facsimile transmission,
ddd. the
seventh business day after deposit, postage prepaid, in the United States Postal
Service by registered or certified mail, or
eee. the
third
business day after mailing by domestic or international express courier, with
delivery costs and fees prepaid,
in
each
case, addressed to each of the other parties thereunto entitled at the following
addresses (or at such other addresses as such party may designate by ten (10)
days’ advance written notice similarly given to each of the other parties
hereto):
-
16
-
Company: Zynex
Medical Holdings, Inc.
0000
Xxxxxxxxx Xxx, Xxxxx X-0
Xxxxxxxxx,
XX 00000
Attn:
Xxxxx X. Xxxxxxx
Fax:
(000) 000-0000
with
a
copy to:
Holland
& Xxxx LLP
000
Xxxxxxxxxxx Xxxxxx
Xxxxx
0000
Xxxxxx,
XX 00000
Attn:
Xxxx X. Xxxx
Fax:
(000) 000-0000
Purchaser: To
the
addresses set forth on the signature page to this Agreement
with
a
copy to:
Chicago
Investment Group, L.L.C.
000
Xxxxx
Xx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxx,
XX 00000
Attention:
Xxxxxx Xxxxx
SURVIVAL
OF REPRESENTATIONS AND WARRANTIES.
The
Company’s and the Purchaser’ representations and warranties herein shall survive
the execution and delivery of this Agreement and the delivery of the
Certificates and the payment of the Purchase Price, and shall inure to the
benefit of the Purchaser and the Company and their respective successors and
assigns.
[BALANCE
OF PAGE INTENTIONALLY LEFT BLANK]
-
17
-
IN
WITNESS WHEREOF,
this
Securities Purchase Agreement has been duly executed by the Purchaser as of
the
date set forth below.
|
|
By:
_______________________________
|
|
Name:_____________________________
|
|
Title:
______________________________
|
|
Address::
__________________________
|
|
|
|
|
__________________________________
|
|
__________________________________
|
|
__________________________________
|
|
__________________________________
|
|
__________________________________
|
|
__________________________________
|
|
As
of the
date set forth below, the undersigned hereby accepts this Agreement and
represents that the foregoing statements are true and correct and that it has
caused this Securities Purchase Agreement to be duly executed on its
behalf.
ZYNEX
MEDICAL HOLDINGS, INC.
By:
____________________________________
Name:__________________________________
Title:____________________________________
-
18 -