EXHIBIT 99.5
A-FEM MEDICAL CORPORATION
PREFERRED STOCK AND WARRANT
PURCHASE AGREEMENT
Certain investors (each an "Investor" and collectively, the
"Investors") acting through their agent, Capital Consultants LLC ("CCL"), have
agreed to purchase an aggregate of 86,805 shares of Series A Convertible
Preferred Stock (the "Shares"), $.01 par value per share, of A-Fem Medical
Corporation, a Nevada corporation (the "Company"), and warrants to purchase
79,861 shares of such Series A Convertible Preferred Stock in the form attached
as Exhibit A (the "Warrants") in consideration of the payment of the sum of
$166,665.60 (the "Consideration"). The Shares and Warrants are sometimes
hereafter referred to collectively as the "Securities." Delivery and payment for
the Securities shall occur as set forth in paragraph I.
I. CLOSING. Closing of the transaction will occur when this Agreement is
executed. At closing, the Company will cause certificates for the Shares and the
Warrants to be delivered to CCL as agent for the Investors against payment of
the Consideration.
II. INVESTOR REPRESENTATIONS. CCL, individually and, to CCL's reasonable
belief, on behalf of each of the Investors, represents, warrants, acknowledges
and agrees that the following are true as of the date first below written:
2.1 The Securities are not being registered under the Securities Act of
1933, as amended (the "Act"), and applicable state securities laws in reliance
upon exemptions from registration and cannot be sold, transferred or otherwise
disposed of by the Investor unless they are subsequently registered under the
Act and applicable state securities laws or an exemption from such registration
is available at the time of the desired sale. Therefore, the Investor must bear
the economic risk of an investment in such Securities for an indefinite period.
The Investor's right to require registration under federal or state securities
laws of such Securities is set forth in the Registration Rights Agreement
attached hereto as Exhibit B. The Investor will under no circumstances attempt
to assign or otherwise transfer all or any portion of such Securities except in
accordance with federal and state securities laws;
2.2 No state or federal agency or instrumentality has made any finding or
determination as to the fairness of the terms of the offering or the investment
in the Securities, nor has any state or federal agency or instrumentality made
any recommendation with respect to any purchase or investment in the Securities;
2.3 The Company has not paid and will not pay any commission or similar
remuneration directly or indirectly to any person in connection with the
acquisition of the Securities by the Investor, and no dealer, salesman, or any
other person (other than officers of the Company) has been authorized to give
any information or to make any representations in connection with the
offer and sale of the Securities, and if given or made, such other information
or representation must not have been relied upon as having been authorized by
the Company;
2.4 The Company will rely materially upon the representations, warranties,
covenants, and agreements of the Investor set forth herein for the purpose of
offering and selling the Securities to the Investor;
2.5 The Investor is acquiring such Securities solely for investment for
its own account and has no agreement, understanding or arrangement to subdivide,
sell, assign, transfer or otherwise dispose of all or any part of such
Securities to any other persons;
2.6 The Investor and CCL have such substantial knowledge and experience in
financial and business matters in general, and in similar investments in
particular, that they are capable of reading and understanding information about
the Company and evaluating the merits and risks of an investment in the Company
and the merits and risks of the acquisition of the Securities;
2.7 The Investor is familiar with the nature of and risk attending
investments having the special characteristics of common stock interests in the
Company and has determined on the basis of its own familiarity and knowledge of
such investments that the purchase of the Securities is consistent with its
investment objectives and income prospects and is making such an investment
based on its own independent investigation;
2.8 Investment in the Securities involves a degree of risk of loss by the
Investor of the entire investment and there is no assurance, and the Investor
has received no assurance, of any income from the investment in the Securities;
2.9 The Investor is aware that the Securities being offered have not been
approved or disapproved by the SEC or any state securities agency, nor has any
such regulatory body reviewed any information with respect to the offer and sale
of such Securities;
2.10 CCL and the Investor understand that no private placement memorandum
has been prepared for this investment offering, but CCL and the Investor have
received and read information with regard to this investment and the Company, as
required by applicable securities laws and as required to allow CCL and the
Investor to adequately evaluate the investment and its related merits and risks.
CCL and the Investor have the capability to determine what documents and
information are necessary for CCL and the Investor to adequately evaluate the
Company and this investment, and CCL and the Investor also have the capability
to request, review and evaluate the necessary information;
2.11 CCL and the Investor have had the opportunity to (i) examine and have
examined sources of information that they have deemed necessary or appropriate
to reach an informed investment decision concerning the purchase of the
Securities, including, without limitation, the physical facilities, financial
statements, books, records and files of the Company, and (ii) had reasonable
opportunity to meet with representatives of the Company and questioned the
directors, shareholders and officers of the Company to the extent that they have
deemed necessary or appropriate so as to receive answers and to verify the
accuracy of the information
obtained in the above examination. CCL and the Investor acknowledge receipt of:
a registration statement on Form S-2, filed with the SEC on June 22, 2000
relating to common stock of the Company; the Company's annual report to the
Securities and Exchange Commission (the "SEC") on Form 10-KSB for the year ended
December 31, 1999; the Company's quarterly reports on Form 10-QSB for the
quarters ended March 31, 2000 and June 30, 2000; the proxy statement relating to
the Company's 1997 Annual Meeting; and the proxy statement relating to a Special
Meeting of the Company's shareholders held on December 12, 1997. CCL and the
Investor acknowledge that the Company continues to lose money, that it will
require additional financing in both the short and long term if it is to stay in
business and that the failure to obtain additional financing would likely result
in the cessation of business;
2.12 The Investor is an "accredited investor" as defined in Securities and
Exchange Commission Rule 501(a) of Regulation D (17 CFR 230.501(a)) and is a
resident of one of the jurisdictions identified on Schedule 1;
2.13 The financial condition of the Investor is such that the Investor is
under no present need to dispose of any portion of the Securities to satisfy any
existing or contemplated indebtedness;
2.14 Each certificate representing the Securities shall be endorsed with
the following legend together with any other legends required by law:
"The securities evidenced by this Certificate have not been
registered under the Securities Act of 1933, as amended (the "Act"),
or any applicable state law, and no interest therein may be sold,
distributed, assigned, offered, pledged or otherwise transferred
unless (a) there is an effective registration statement under such
Act and applicable state securities laws covering any such
transaction involving said securities or (b) this corporation
receives an opinion of legal counsel for the holder of these
securities (concurred in by legal counsel for this corporation)
stating that such transaction is exempt from registration or this
corporation otherwise satisfies itself that such transaction is
exempt from registration. Neither the offering of the securities nor
any offering materials have been reviewed by an administrator under
the Act or any applicable state law."
The Company need not effect a transfer of the Securities, unless the conditions
specified in the aforementioned legend is satisfied. The Company shall also make
a notation on its stock transfer books of the foregoing restrictions on
transferability and will instruct its transfer agent, if one is appointed, not
to register the transfer of any of such Securities unless the conditions
specified in the foregoing legend are satisfied;
2.15 CCL has full power and authority to execute and deliver this
Agreement. This Agreement has been duly and validly executed and delivered by
CCL on behalf of the Investors and constitutes a legal, valid and binding
obligation of CCL and the Investors enforceable in accordance with its terms,
subject to bankruptcy, insolvency, reorganization, and other similar laws
affecting the rights and remedies of creditors generally and general principles
of equity; and
2.16 The execution and delivery of this Agreement, and the terms,
conditions, and provisions of this Agreement will not conflict with, or result
in the breach of any term of, any corporate charter, partnership agreement, or
trust agreement, or any indenture, mortgage, deed of trust, or other material
agreement or instrument to which the Investor is a party, and will not
constitute an event that, with the giving of notice, lapse of time or any other
action by a third party, could result in any default under any of the foregoing
that will result in the creation of any lien, charge, encumbrance, or security
interest upon the Securities.
2.17 CCL represents the holders of 7,405,330 shares of Series A Convertible
Preferred Stock ("Series A") and the holders of Warrants to purchase 1,124,151
shares of Series A and is authorized to consent on behalf of such holders to the
issuance of the Shares, the Warrants, and the Series A issuable on exercise of
the Warrants, and to waive the provisions of Section 3.2.2(b) of the Company's
Certificate of Designation dated August 28, 1998, as amended, with respect to
such issuance, and hereby consents to such issuance and waives such provisions.
III. REPRESENTATIONS AND WARRANTIES OF A-FEM. The Company represents and
warrants to the Investors and to CCL that:
3.1 The Company is a corporation duly organized, validly existing and in
good standing under the laws of Nevada and has the requisite corporate power and
authority necessary to own, lease and operate the properties it purports to own,
operate or lease and to carry on its business as it is now being conducted. The
Company is duly qualified or licensed as a foreign corporation to do business,
and is in good standing, in each jurisdiction where the character of the
properties owned, leased or operated by it or the nature of its activities makes
such qualification or licensing necessary, except for such failures to be so
duly qualified or licensed and in good standing that would not, either
individually or in the aggregate, have a Material Adverse Effect. The term
"Material Adverse Effect" means any change or effect that is or is reasonably
likely to be materially adverse to the business, assets (including intangible
assets), financial condition, results of operations, or prospects of the Company
taken as a whole.
3.2 The Company has all necessary corporate power and authority to execute
and deliver this Agreement and to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by the Company and the consummation of the transactions
contemplated hereby have been duly and validly authorized by all necessary
corporate action on the part of the Company and no other corporate proceedings
on the part of the Company are necessary to authorize this Agreement or to
consummate the transactions so contemplated. This Agreement has been duly and
validly executed and delivered by the Company and, assuming the due
authorization, execution and delivery by CCL on behalf of the Investors,
constitutes a legal, valid and binding obligation of the Company.
3.3 The execution and delivery of this Agreement by the Company does not,
and the performance of this Agreement by the Company shall not, (i) conflict
with or violate the Articles of Incorporation or Bylaws of the Company, (ii)
conflict with or violate any law, rule, regulation, order, judgment or decree
applicable to the Company, or (iii) result in any breach of or constitute a
default under, or impair the Company's rights, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or encumbrance on
any of the properties or assets of the Company pursuant to, any material note,
bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which the Company is a party or
by which the Company or its properties are bound or affected, except for any
such breaches, defaults or other occurrences that would not, individually or in
the aggregate, have a Material Adverse Effect.
3.4 The Company has filed all forms, reports and documents required to be
filed with the SEC since June 30, 1993, and has heretofore delivered to CCL in
the form filed with the SEC, Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1999, and a Quarterly Reports on Form 10-QSB for the fiscal
quarters ended March 31, 2000 and June 30, 2000 (the "SEC Reports"). The SEC
Reports as amended (i) were prepared in accordance with the requirements of the
Act or the Securities Exchange Act of 1934, as amended, as the case may be, and
(ii) did not at the time they were filed (or if amended or superseded by a
filing prior to the date of this Agreement, then on the date of such filing)
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 the light of the circumstances under which they were made, not
misleading. Except as previously disclosed to CCL, since June 30, 2000, the
Company has conducted its business only in the ordinary course of business and
in a manner consistent with past practice and, since such date, there has not
been (i) any change in the financial condition, results of operations or
business of the Company having a Material Adverse Effect or, to the knowledge of
the Company, any development that could reasonably be expected to have a
Material Adverse Effect, other than as disclosed in the SEC Reports, (ii) any
damage, destruction or loss (whether or not covered by insurance) with respect
to any assets of the Company having a Material Adverse Effect; or (iii) any
declaration, payment, or setting aside for payment of any dividends. There are
no actions, suits, or proceedings pending or, to the knowledge of the Company,
threatened against the Company, nor is the Company subject to any order,
judgment, or decree that would have a Material Adverse Effect.
3.5 The Securities, when issued, sold and delivered in accordance with the
terms hereof for the consideration expressed herein, will be duly and validly
issued, fully paid and nonassessable and free of any liens or encumbrances
created by the Company and free of any restrictions imposed under the Nevada
Control Share Acquisition Act and the issuance of the Securities is not a
prohibited transaction under the Nevada Business Combination Act. The issuance
of the Securities will not constitute a change in control under any agreement
applicable to the Company, including an agreement between the Company and
Xxxxxxx & Xxxxxx.
IV. SUPERSEDES PRIOR NEGOTIATION. This Purchase Agreement supersedes in its
entirety prior negotiations with CCL concerning an investment in the Company.
V. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, and each such counterpart shall be deemed to be an original
instrument. All such counterparts together shall constitute one agreement.
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IN WITNESS WHEREOF, the Investor and the Company have executed this Purchase
Agreement dated effective as of September 21, 2000.
CAPITAL CONSULTANTS LLC
as Agent for the Investors
By:
Its:
Address:
A-FEM MEDICAL CORPORATION
By: Xxxxxx X. Xxxxxxx
Its: Chief Executive Officer
Address: A-FEM Medical Corporation
Suite J-5
00000 X.X. Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Rider A
A-FEM MEDICAL CORPORATION
SCHEDULE 1
Per Section 2.12 of the A-Fem Medical Corporation Preferred Stock and Warrant
Purchase Agreement dated September 21, 2000, Capital Consultants LLC represents
that each Investor is a resident of one of the following jurisdictions:
Oregon
Washington
Idaho
Texas
New Mexico
Arizona
Colorado
Nevada
