PURCHASE AGREEMENT
Exhibit 10.55
THIS PURCHASE AGREEMENT (“Agreement”) is made as of the day of ,
2008, by and between Cytocore, Inc., a Delaware corporation (the “Company”), and the
Investor set forth on the signature page affixed hereto (an “Investor”).
Recitals
A. The Company and the Investor are executing and delivering this Agreement in reliance upon
the exemption from securities registration afforded by the provisions of Regulation D
(“Regulation D”), as promulgated by the U.S. Securities and Exchange Commission (the “SEC”) under
the Securities Act of 1933, as amended (the “Securities Act”); and
B. The Investor wishes to purchase from the Company, and the Company wishes to sell and issue
to the Investors, upon the terms and conditions stated in this Agreement and the attached Summary
of Terms dated January 24, 2008, Units, each Unit comprising (i) 2 shares (the “Shares”) of the
Company’s Common Stock, par value $0.00 1 per share (together with any Securities into which such
shares may be reclassified the “Common Stock”), and (ii) one warrant to purchase one share of
Common Stock (subject to adjustment) at an exercise price of $2.00 per share (subject to
adjustment) in the form attached hereto as Exhibit A (the “Warrants”). The number of Units
the Investor is purchasing from the Company is set forth on the Subscription Agreement executed by
the Investor and delivered with this Agreement (the “Subscription Agreement”). The purchase price
of the Units is $4.00 per Unit.
C. Contemporaneous with the sale of the Units, the parties hereto will execute and deliver a
Registration Rights Agreement, in the form attached hereto as Exhibit B (the “Registration
Rights Agreement”), pursuant to which the Company will agree to provide certain registration rights
under the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder,
and applicable state securities laws. Among other things, the Registration Rights Agreement
provides (i) that the Company shall file a registration statement under the Securities Act (the
“Registration Statement”) registering the shares into which the Warrants are exercisable as soon as
possible after the Final Closing, but in no case later than 120 days after the Final Closing; (ii)
the Company will use it best efforts to cause the Registration Statement to be declared effective
as soon as possible after it is filed; and (iii) if the Company fails to file the Registration
Statement within that time frame, or if it does not use its reasonable best efforts to have the
Registration Statement declared effective as soon as possible after it is filed, it will issue each
warrant holder Additional Warrants equivalent to two Additional Warrants for each four Warrants
owned by the Holder. The Additional Warrants will be substantially similar to the Warrants, will be
exercisable for three years at an exercise price of the lower of the market price of the Common
Stock on the date the Registration Statement should have been filed (or should have been declared
effective) or $2.00 per share.
D. This Agreement is one of several purchase agreements containing the same terms
entered into by the Company and investors (the Investor executing this Agreement and
investors
executing other Agreements are referred to herein as the “Investors”), pursuant to the offering
(the “Offering”) by the Company of the Units through Bathgate Capital Partners, LLC (the
“Finder”).
In consideration of the mutual promises made herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
1. Definitions. In addition to those terms defined above and elsewhere in this
Agreement, for the purposes of this Agreement, the following terms shall have the
meanings set forth below:
“Affiliate” means, with respect to any Person, any other Person which directly or
indirectly through one or more intermediaries Controls, is controlled by, or is under common
control with, such Person.
“Business Day” means a day, other than a Saturday or Sunday, on which banks in San
Francisco are open for the general transaction of business.
“Company’s Knowledge” means the actual knowledge of the executive officers (as
defined in Rule 405 under the 0000 Xxx) of the Company, after due inquiry.
“Confidential Information” means trade secrets, confidential information and
know-how (including but not limited to ideas, formulae, compositions, processes, procedures and
techniques, research and development information, computer program code, performance
specifications, support documentation, drawings, specifications, designs, business and
marketing plans, and customer and supplier lists and related information).
“Control” (including the terms “controlling”, “controlled by” or “under common
control with”) means the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of a Person, whether through the ownership of voting
Securities, by contract or otherwise.
“Material Adverse Effect” means a material adverse effect on (i) the assets,
liabilities, results of operations, condition (financial or otherwise), business, or
prospects of the Company and its Subsidiaries taken as a whole, or (ii) the ability of the
Company to perform its obligations under the Transaction Documents.
“Person” means an individual, corporation, partnership, limited liability company,
trust, business trust, association, joint stock company, joint venture, sole proprietorship,
unincorporated organization, governmental authority or any other form of entity not
specifically listed herein.
“Purchase Price” means $4.00 per Unit.
“Registration Statement” has the meaning set forth in the Registration Rights
Agreement.
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“SEC Filings” has the meaning set forth in Section 6.6.
“Securities” means the Units, the Shares, the Warrants, and the Warrant Shares.
“Subsidiary” of any Person means another Person, an amount of the voting Securities,
other voting ownership or voting partnership interests of which is sufficient to elect at least a
majority of its Board of Directors or other governing body (or, if there are no such voting
interests, 50% or more of the equity interests of which) is owned directly or indirectly by such
first Person.
“Transaction Documents” means this Agreement, the Warrants, the Subscription
Agreement, and the Registration Rights Agreement.
“Warrant Shares” means the shares of Common Stock issuable upon the exercise of
the Warrants.
“1933 Act” means the Securities Act of 1933, as amended, or any successor statute,
and the rules and regulations promulgated thereunder.
“1934 Act” means the Securities Exchange Act of 1934, as amended, or any
successor statute, and the rules and regulations promulgated thereunder.
2. Purchase and Sale of the Units. Subject to the terms and conditions of
this Agreement, on the Closing Date (as defined below), each of the Investors shall purchase, and
the Company shall sell and issue to each Investor, the Units in the respective amounts set forth
opposite the Investor’s name on the signature page of the Subscription Agreements in exchange for
the Purchase Price.
3. Escrow Account. The proceeds from the sale of at least the first 250,000
Units ($1,000,000) in the Offering shall be promptly deposited in an escrow account (“Escrow
Account”) entitled “Cytocore, Inc. Escrow Account” with Front Range Bank (the “Escrow Agent”)
pursuant to an agreement between the Escrow Agent, the Finder, and the Company. The proceeds from
any sale of Units after the First Closing (hereinafter defined) may continue to be deposited to the
Escrow Account.
4. Subscription Acceptance. The acceptance of subscriptions for Units tendered by
Investors will be conditional upon (i) the tendering of Subscriptions and receipt of payment
for such Subscriptions for at least 250,000 Units (“Minimum Subscriptions”) by February 29, 2008
(which date may be extended by the Company and the Finder) to March 31, 2008)(the “Escrow Date”)
and (ii) the receipt, on the First Closing Date, of the net proceeds from subscribers for the
Minimum Subscriptions (“Minimum Payments”) less the Finder’s Fees due the Finder as described
below. If subscriptions are received for more than 1,750,000 Units, the Company may (i) accept one
subscription over another (ii) accept subscriptions for up to an additional 125,000 Units, and/or
(iii) allocate available Units among subscribers as it deems appropriate. If the Minimum
Subscriptions and/or Minimum Payments are not received by the Escrow Date, all proceeds will be
returned to Investors, without deduction and without interest.
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5. Payment. Payment for Units sold shall be made by the Escrow Agent to the
Company at such place and at such time and date as may be fixed by agreement between the Company
and the Finder, which in no case shall be later than five (5) business days after the Escrow Date.
The delivery of the Units against payment therefore is defined as the “Closing” and the time and
date thereof are defined as the “Closing Date.” The first Closing will be held when the Minimum
Payments are received (“First Closing”). It is anticipated that there may be additional Closings as
additional funds are received, and the final Closing will be referred to as the “Final Closing.”
The Final Closing could also be the First Closing in the event that no Units are sold after the
First Closing. As soon as practicable after each Closing Date, the Company shall deliver by mail to
each Investor a certificate for the Shares and Warrants that have been purchased and which contains
a legend conforming to the requirements of Rule 502(d)(3) under the Act.
6. Representations and Warranties of the Company. The Company hereby
represents and warrants to the Investor that, except as set forth in the SEC Filings:
6.1 Organization, Good Standing and Qualification. Each of the Company and its
Subsidiaries is a corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation and has all requisite corporate power and authority to
carry on its business as now conducted and to own its properties. Each of the Company and its
Subsidiaries is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or leasing of property makes such
qualification or leasing necessary unless the failure to so qualify has not and could not
reasonably be expected to have a Material Adverse Effect. The Company’s Subsidiaries are listed in
the SEC Filings.
6.2 Authorization. The Company has full power and authority and, except for the
filing of such securities filings relating to the offer, sale and issuance of the Securities
with the relevant authorities, has taken all requisite action on the part of the Company, its
officers, directors and stockholders necessary for (i) the authorization, execution and delivery of
the Transaction Documents, (ii) the authorization of the performance of all obligations of the
Company hereunder or thereunder, and (iii) the authorization, issuance (or reservation for
issuance) and delivery of the Securities. The Transaction Documents constitute the legal, valid and
binding obligations of the Company, enforceable against the Company in accordance with their terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws
of general applicability, relating to or affecting creditors’ rights generally.
6.3 Capitalization. The capitalization of the Company is described in the SEC
Filings. All of the issued and outstanding shares of the Company’s capital stock have been
duly authorized and validly issued and are fully paid, nonassessable and free of pre-emptive rights
and were issued in full compliance with applicable state and federal securities law and any rights
of third parties. All of the issued and outstanding shares of capital stock of each Subsidiary have
been duly authorized and validly issued and are fully paid, nonassessable and free of pre-emptive
rights, were issued in full compliance with applicable state and federal securities law and any
rights of third parties and are owned by the Company, beneficially and of record, subject to no
lien, encumbrance or other adverse claim. No Person is entitled to pre-emptive or similar statutory
or contractual rights with respect to any securities of the Company. Except as described in the SEC
Filings, there are no outstanding warrants, options, convertible securities or other rights,
agreements or arrangements of
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any character under which the Company or any of its Subsidiaries is or may be obligated to issue
any equity securities of any kind and except as contemplated by this Agreement, and neither the
Company nor any of its Subsidiaries is currently in negotiations for the issuance of any equity
securities of any kind. Except as described in the SEC Filings and except for the Registration
Rights Agreement, there are no voting agreements, buy-sell agreements, option or right of first
purchase agreements or other agreements of any kind among the Company and any of the
securityholders of the Company relating to the Securities of the Company held by them. Except as
described in the SEC Filings and except as provided in the Registration Rights Agreement, no Person
has the right to require the Company to register any securities of the Company under the 1933 Act,
whether on a demand basis or in connection with the registration of securities of the Company for
its own account or for the account of any other Person.
The issuance and sale of the Securities hereunder will not obligate the Company to issue
shares of Common Stock or other securities to any other Person (other than the Investors and the
Finder) and will not result in the adjustment of the exercise, conversion, exchange or reset
price of any outstanding security.
Except as described in the SEC Filings, the Company does not have outstanding stockholder
purchase rights or “poison pill” or any similar arrangement in effect giving any Person the right
to purchase any equity interest in the Company upon the occurrence of certain events.
6.4 Valid Issuance. The Securities have been duly and validly authorized and,
when issued and paid for pursuant to this Agreement, will be validly issued, fully paid and
nonassessable, and shall be free and clear of all encumbrances and restrictions (other than those
created by the Investors), except for restrictions on transfer set forth in the Transaction
Documents or imposed by applicable securities laws. The Warrants have been duly and validly
authorized, and when issued will be valid and enforceable under their terms. Upon the due exercise
of the Warrants, the Warrant Shares will be validly issued, fully paid and non-assessable free and
clear of all encumbrances and restrictions, except for restrictions on transfer set forth in the
Transaction Documents or imposed by applicable securities laws and except for those created by the
Investors. The Company has reserved a sufficient number of shares of Common Stock for issuance upon
the exercise of the Warrants, free and clear of all encumbrances and restrictions, except for
restrictions on transfer set forth in the Transaction Documents or imposed by applicable securities
laws and except for those created by the Investors.
6.5 Consents. The execution, delivery and performance by the Company of the
Transaction Documents and the offer, issuance and sale of the Securities require no consent
of, action by or in respect of, or filing with, any Person, governmental body, agency, or official
other than filings that have been made pursuant to applicable state securities laws and post-sale
filings pursuant to applicable state and federal securities laws, which the Company undertakes to
file within the applicable time periods. Subject to the accuracy of the representations and
warranties of each Investor set forth in Subscription Agreements, the Company has taken all action
necessary to exempt (i) the issuance and sale of the Securities, (ii) the issuance of the Warrant
Shares upon due exercise of the Warrants, and (iii) the other transactions contemplated by the
Transaction Documents from the provisions of any stockholder rights plan or other “poison pill”
arrangement, any anti-takeover, business combination or control share law or statute binding on the
Company or to which the
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Company or any of its assets and properties may be subject and any provision of the Company’s
Certificate of Incorporation or By-laws that is or could reasonably be expected to become
applicable to the Investors as a result of the transactions contemplated hereby, including without
limitation, the issuance of the Securities and the ownership, disposition or voting of the
Securities by the Investors or the exercise of any right granted to the Investors pursuant to this
Agreement or the other Transaction Documents.
6.6 Delivery of SEC Filings; Business. The Company has made available to the
Investors through the XXXXX system, true and complete copies of the Company’s most recent
Annual Report on Form 10-K for the fiscal year ended December 31, 2006 (the “10-K”), and all other
reports filed by the Company pursuant to the 1934 Act since the filing of the 10-K and prior to the
date hereof (collectively, the “SEC Filings”). The SEC Filings are the only filings required of the
Company pursuant to the 1934 Act for such period. The Company and its Subsidiaries are engaged in
all material respects only in the business described in the SEC Filings and the SEC Filings contain
a complete and accurate description in all material respects of the business of the Company and its
Subsidiaries, taken as a whole.
6.7 Use of Proceeds. The net proceeds of the sale of the Units hereunder shall be
used by the Company for working capital and general corporate purposes.
6.8 No Material Adverse Change. Since September 30, 2007, except as identified
and described in the SEC Filings, there has not been:
(i) any change in the consolidated assets, liabilities, financial condition or operating
results of the Company from that reflected in the financial statements included in the Company’s
Quarterly Report on Form 10-Q for the quarter ended September 30, 2007, except for changes in the
ordinary course of business which have not had and could not reasonably be expected to have a
Material Adverse Effect, individually or in the aggregate;
(ii) any declaration or payment of any dividend, or any authorization or payment of any
distribution, on any of the capital stock of the Company, or any redemption or repurchase of any
securities of the Company;
(iii) any material damage, destruction or loss, whether or not covered by insurance to any
assets or properties of the Company or its Subsidiaries;
(iv) any waiver, not in the ordinary course of business, by the Company or any Subsidiary of a
material right or of a material debt owed to it;
(v) any satisfaction or discharge of any lien, claim or encumbrance or payment of any
obligation by the Company or a Subsidiary, except in the ordinary course of business and which is
not material to the assets, properties, financial condition, operating results or business of the
Company and its Subsidiaries taken as a whole (as such business is presently conducted and as it
is proposed to be conducted);
(vi) any change or amendment to the Company’s Certificate of Incorporation or Bylaws, or
material change to any material contract or arrangement by which the
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Company or any Subsidiary is bound or to which any of their respective assets or properties
is subject;
(vii) any material labor difficulties or labor union organizing activities with respect to
employees of the Company or any Subsidiary;
(viii) any material transaction entered into by the Company or a Subsidiary other than in the
ordinary course of business;
(ix) the loss of the services of any key employee, or material change in the composition or
duties of the senior management of the Company or any Subsidiary;
(x) the loss or threatened loss of any customer which has had or could reasonably be
expected to have a Material Adverse Effect; or
(xi) any other event or condition of any character that has had or could
reasonably be expected to have a Material Adverse Effect.
6.9
SEC Filings. At the time of filing thereof, the SEC Filings complied as to
form in all material respects with the requirements of the 1934 Act and did not contain any
untrue statement of a material fact or omit to state any material fact necessary in order to
make the statements made therein, in the light of the circumstances under which they were made,
not misleading.
6.10 No Conflict, Breach, Violation or Default. The execution, delivery and
performance of the Transaction Documents by the Company and the issuance and sale of the
Securities will not conflict with or result in a breach or violation of any of the terms and
provisions of, or constitute a default under (i) the Company’s Certificate of Incorporation or the
Company’s Bylaws, both as in effect on the date hereof (true and complete copies of which have been
made available to the Investors through the XXXXX system), or (ii)(a) any statute, rule, regulation
or order of any governmental agency or body or any court, domestic or foreign, having jurisdiction
over the Company, any Subsidiary or any of their respective assets or properties, or (b) any
agreement or instrument to which the Company or any Subsidiary is a party or by which the Company
or a Subsidiary is bound or to which any of their respective assets or properties is subject.
6.11 Tax Matters. Except as described in the SEC Filings: the Company and each
Subsidiary has timely prepared and filed all tax returns required to have been filed by the
Company or such Subsidiary with all appropriate governmental agencies and timely paid all taxes
shown thereon or otherwise owed by it; the charges, accruals and reserves on the books of the
Company in respect of taxes for all fiscal periods are adequate in all material respects, and there
are no material unpaid assessments against the Company or any Subsidiary nor, to the Company’s
Knowledge, any basis for the assessment of any additional taxes, penalties or interest for any
fiscal period or audits by any federal, state or local taxing authority except for any assessment
which is not material to the Company and its Subsidiaries, taken as a whole; all taxes and other
assessments and levies that the Company or any Subsidiary is required to withhold or to collect for
payment have been duly withheld and collected and paid to the proper governmental entity or third
party when due; and there
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are no tax liens or claims pending or, to the Company’s Knowledge, threatened against the Company
or any Subsidiary or any of their respective assets or property. There are no outstanding tax
sharing agreements or other such arrangements between the Company and any Subsidiary or other
corporation or entity.
6.12 Title to Properties. Except as disclosed in the SEC Filings, the Company and each
Subsidiary has good and marketable title to all real properties and all other properties and assets
owned by it, in each case free from liens, encumbrances and defects that would materially affect
the value thereof or materially interfere with the use made or currently planned to be made thereof
by them; and except as disclosed in the SEC Filings, the Company and each Subsidiary holds any
leased real or personal property under valid and enforceable leases with no exceptions that would
materially interfere with the use made or currently planned to be made thereof by them.
6.13 Certificates, Authorities and Permits. The Company and each Subsidiary possess
adequate certificates, authorities or permits issued by appropriate governmental agencies or bodies
necessary to conduct the business now operated by it, and neither the Company nor any Subsidiary
has received any notice of proceedings relating to the revocation or modification of any such
certificate, authority or permit that, if determined adversely to the Company or such Subsidiary,
could reasonably be expected to have a Material Adverse Effect, individually or in the aggregate.
6.14 Labor Matters.
(a) The Company is not a party to or bound by any collective bargaining agreements or other
agreements with labor organizations. The Company has not violated in any material respect any
laws, regulations, orders or contract terms, affecting the collective bargaining rights of
employees, labor organizations or any laws, regulations or orders affecting employment
discrimination, equal opportunity employment, or employees’ health, safety, welfare, wages and
hours.
(b) (i) There are no labor disputes existing, or to the Company’s Knowledge, threatened,
involving strikes, slow-downs, work stoppages, job actions, disputes, lockouts or any other
disruptions of or by the Company’s employees, (ii) there are no unfair labor practices or petitions
for election pending or, to the Company’s Knowledge, threatened before the National Labor Relations
Board or any other federal, state or local labor commission relating to the Company’s employees,
(iii) no demand for recognition or certification heretofore made by any labor organization or group
of employees is pending with respect to the Company and (iv) to the Company’s Knowledge, the
Company enjoys good labor and employee relations with its employees and labor organizations.
(c) The Company is in compliance in all material respects with all applicable laws respecting employment (including laws relating to classification of employees
and independent contractors) and employment practices, terms and conditions of employment, wages
and hours, and immigration and naturalization. There no claims are pending against the Company
before the Equal Employment Opportunity Commission or any other administrative body or in any court
asserting any violation of Title VII of the Civil Rights Act of 1964, the Age Discrimination Act
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of 1967, 42 U.S.C. §§ 1981 or 1983 or any other federal, state or local Law, statute or
ordinance barring discrimination in employment.
(d) Except as disclosed in the SEC Filings, the Company is not a party to, or bound by, any
employment or other contract or agreement that contains any severance, termination pay or change
of control liability or obligation, including, without limitation, any “excess parachute payment,”
as defined in Section 2806(b) of the Internal Revenue Code.
(e) Each of the Company’s employees is a Person who is either a United States citizen or a
permanent resident entitled to work in the United States. To the Company’s Knowledge, the Company
has no liability for the improper classification by the Company of such employees as independent
contractors or leased employees prior to the Closing.
6.15 Environmental Matters. Neither the Company nor any Subsidiary is in violation of
any statute, rule, regulation, decision or order of any governmental agency or body or any court,
domestic or foreign, relating to the use, disposal or release of hazardous or toxic substances or
relating to the protection or restoration of the environment or human exposure to hazardous or
toxic substances (collectively, “Environmental Laws”), owns or operates any real property
contaminated with any substance that is subject to any Environmental Laws, is liable for any
off-site disposal or contamination pursuant to any Environmental Laws, or is subject to any claim
relating to any Environmental Laws, which violation, contamination, liability or claim has had or
could reasonably be expected to have a Material Adverse Effect, individually or in the aggregate;
and there is no pending or, to the Company’s Knowledge, threatened investigation that might lead to
such a claim.
6.16 Litigation. Except as disclosed in the SEC Filings, there are no pending actions,
suits or proceedings against or affecting the Company, its Subsidiaries or any of its or their
properties; and to the Company’s Knowledge, no such actions, suits or proceedings are threatened or
contemplated.
6.17 Financial Statements. The financial statements included in each SEC Filing
present fairly, in all material respects, the consolidated financial position of the Company as of
the dates shown and its consolidated results of operations and cash flows for the periods shown,
and such financial statements have been prepared in conformity with United States generally
accepted accounting principles applied on a consistent basis (“GAAP”) (except as may be disclosed
therein or in the notes thereto, and, in the case of quarterly financial statements, as permitted
by Form 10-Q under the 1934 Act). Except as set forth in the financial statements of the Company
included in the SEC Filings filed prior to the date hereof, neither the Company nor any of its
Subsidiaries has incurred any liabilities, contingent or otherwise, except those incurred in the
ordinary course of business, consistent (as to amount and nature) with past practices since the
date of such financial statements, none of which, individually or in the aggregate, have had or
could reasonably be expected to have a Material Adverse Effect.
6.18 Insurance Coverage. The Company and each Subsidiary maintains in full force and
effect insurance coverage that is customary for comparably situated companies for the business
being conducted and properties owned or leased by the Company and each Subsidiary, and
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the Company reasonably believes such insurance coverage to be adequate against all
liabilities, claims and risks against which it is customary for comparably situated companies
to insure.
6.19 Brokers and Finders. Except for the Finder, no Person will have, as a result of
the transactions contemplated by the Transaction Documents, any valid right, interest or claim
against or upon the Company, any Subsidiary or an Investor for any commission, fee or other
compensation pursuant to any agreement, arrangement or understanding entered into by or on behalf
of the Company.
6.20 No Directed Selling Efforts or General Solicitation. Neither the Company nor any
Person acting on its behalf has conducted any general solicitation or general advertising (as those
terms are used in Regulation D) in connection with the offer or sale of any of the Securities.
6.21 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
Company security or solicited any offers to buy any security, under circumstances that would
adversely affect reliance by the Company on Section 4(2) for the exemption from registration for
the transactions contemplated hereby or would require registration of the Securities under the 1933
Act.
6.22 Private Placement. The offer and sale of the Securities to the Investors as
contemplated hereby is exempt from the registration requirements of the 1933 Act.
6.23 Questionable Payments. Neither the Company nor any of its Subsidiaries nor, to
the Company’s Knowledge, any of their respective current or former stockholders, directors,
officers, employees, agents or other Persons acting on behalf of the Company or any Subsidiary, has
on behalf of the Company or any Subsidiary or in connection with their respective businesses: (a)
used any corporate funds for unlawful contributions, gifts, entertainment or other unlawful
expenses relating to political activity; (b) made any direct or indirect unlawful payments to any
governmental officials or employees from corporate funds; (c) established or maintained any
unlawful or unrecorded fund of corporate monies or other assets; (d) made any false or fictitious
entries on the books and records of the Company or any Subsidiary; or (e) made any unlawful bribe,
rebate, payoff, influence payment, kickback or other unlawful payment of any nature.
6.24 Transactions with Affiliates. Except as disclosed in the SEC Filings, none of
the officers or directors of the Company and, to the Company’s Knowledge, none of the employees of
the Company is presently a party to any transaction with the Company or any Subsidiary (other than
as holders of stock options and/or warrants, and for services as employees, officers and
directors), including any contract, agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the Company’s
Knowledge, any entity in which any officer, director, or any such employee has a substantial
interest or is an officer, director, trustee or partner.
6.25 Internal Controls. Except as described in the SEC Filings: the Company is in
material compliance with the provisions of the Xxxxxxxx-Xxxxx Act of 2002 currently applicable to
the Company; the Company and the Subsidiaries maintain a system of internal accounting controls
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sufficient to provide reasonable assurance that (i) transactions are executed in accordance with
management’s general or specific authorizations, (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with GAAP and to maintain asset
accountability, (iii) access to assets is permitted only in accordance with management’s general or
specific authorization, and (iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken with respect to any
differences; and, the Company has established disclosure controls and procedures (as defined in
1934 Act Rules 13a-14 and 15d-14) for the Company and designed such disclosure controls and
procedures to ensure that material information relating to the Company, including the Subsidiaries,
is made known to the certifying officers by others within those entities, particularly during the
period in which the Company’s most recently filed period report under the 1934 Act, as the case may
be, is being prepared. The Company maintains and will continue to maintain a standard system of
accounting established and administered in accordance with GAAP and the applicable requirements of
the 0000 Xxx.
6.26 Disclosures. Neither the Company nor any Person acting on its behalf has
provided the Investors or their agents or counsel with any information that constitutes or
might constitute material, non-public information. The written materials delivered to the
Investors in connection with the transactions contemplated by the Transaction Documents do not
contain any untrue statement of a material fact or omit to state a material fact necessary in
order to make the statements contained therein, in light of the circumstances under which they
were made, not misleading.
7. Representations and Warranties of the Investors. The Investor hereby
represents and warrants to the Company that representations and warranties it has made in the
Subscription Agreement are accurate. Those representations are incorporated by reference herein.
8. Conditions to Closing.
8.1 Conditions to the Investor’ Obligations. The obligation of the Investor to
purchase the Units at the Closing is subject to the fulfillment to such Investor’s
satisfaction, on or prior to the Closing Date, of the following conditions, any of which may be
waived by such Investor (as to itself only):
(a) The representations and warranties made by the Company in Section 6
hereof qualified as to materiality shall be true and correct at all times prior to and on the
Closing Date, except to the extent any such representation or warranty expressly speaks as of an
earlier date, in which case such representation or warranty shall be true and correct as of such
earlier date, and, the representations and warranties made by the Company in Section 6 hereof not
qualified as to materiality shall be true and correct in all material respects at all times prior
to and on the Closing Date, except to the extent any such representation or warranty expressly
speaks as of an earlier date, in which case such representation or warranty shall be true and
correct in all material respects as of such earlier date. The Company shall have performed in all
material respects all obligations and conditions herein required to be performed or observed by it
on or prior to the Closing Date.
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(b) The Company shall have obtained any and all consents, permits, approvals, registrations
and waivers necessary or appropriate for consummation of the purchase and sale of the Shares and
the Warrants and the consummation of the other transactions contemplated by the Transaction
Documents to be consummated on or prior to the Closing Date, all of which shall be in full force
and effect.
(c) The Company shall have executed and delivered the Registration Rights Agreement.
(d) No judgment, writ, order, injunction, award or decree of or by any court, or judge,
justice or magistrate, including any bankruptcy court or judge, or any order of or by any
governmental authority, shall have been issued, and no action or proceeding shall have been
instituted by any governmental authority, enjoining or preventing the consummation of the
transactions contemplated hereby or in the other Transaction Documents.
(e) The Company shall have delivered a Certificate, executed on behalf of the Company by its
Chief Executive Officer or its Chief Financial Officer, dated as of the Closing Date, certifying to
the fulfillment of the conditions specified in subsections (a), (b), (d), (e) and (g) of this
Section 8.1.
(f) The Company shall have delivered a Certificate, executed on behalf of the Company by its
Secretary, dated as of the Closing Date, certifying the resolutions adopted by the Board of
Directors of the Company approving the transactions contemplated by this Agreement and the other
Transaction Documents, and the issuance of the Securities, certifying the current versions of the
Certificate of Incorporation and Bylaws of the Company and certifying as to the signatures and
authority of Persons signing the Transaction Documents and related documents on behalf of the
Company.
(g) No stop order or suspension of trading shall have been imposed by the SEC or any other
governmental or regulatory body with respect to public trading in the Common Stock.
8.2 Conditions to Obligations of the Company. The Company’s obligation to sell
and issue the Shares and the Warrants at the Closing is subject to the fulfillment to the
satisfaction of the Company on or prior to the Closing Date of the following conditions, any of
which may be waived by the Company:
(a) The representations and warranties made by the Investors in the Subscription Agreements
shall be true and correct in all material respects when made, and shall be true and correct in all
material respects on the Closing Date with the same force and effect as if they had been made on
and as of said date. The Investors shall have performed in all material respects all obligations
and conditions herein required to be performed or observed by them on or prior to the Closing Date.
(b) The Investors shall have executed and delivered the Registration Rights Agreement.
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(c) The Investors shall have delivered the Purchase Price to the Company.
8.3 Termination of Obligations to Effect Closing; Effects. The obligations of the
Company, on the one hand, and the Investors, on the other hand, to effect the Closing shall
terminate as follows:
(i) Upon the mutual written consent of the Company and the Investors;
(ii) By the Company if any of the conditions set forth in Section 8.2 shall have become
incapable of fulfillment, and shall not have been waived by the Company; or
(iii) By an Investor (with respect to itself only) if any of the conditions set
forth in Section 6.1 shall have become incapable of fulfillment, and shall not have been
waived by the Investor;
provided, however, that, except in the case of clause (i) above, the party seeking to terminate
its obligation to effect the Closing shall not then be in breach of any of its representations,
warranties, covenants or agreements contained in this Agreement or the other Transaction
Documents if such breach has resulted in the circumstances giving rise to such party’s seeking
to terminate its obligation to effect the Closing.
9. Covenants and Agreements of the Company.
9.1 Reservation of Common Stock. The Company shall at all times reserve and
keep available out of its authorized but unissued shares of Common Stock, solely for the
purpose of providing for the exercise of the Warrants, such number of shares of Common Stock as
shall from time to time equal the number of shares sufficient to permit the exercise of the
Warrants issued pursuant to this Agreement in accordance with their respective terms.
9.2 No Conflicting Agreements. The Company will not take any action, enter into any
agreement or make any commitment that would conflict or interfere in any material respect with the
Company’s obligations to the Investors under the Transaction Documents.
9.3 Listing of Underlying Shares and Related Matters. If the Company applies to
have its Common Stock or other securities traded on any stock exchange or market, it shall
include in such application the Shares and the Warrant Shares and will take such other action as is
necessary to cause such Common Stock to be so listed.
9.4 Removal of Legends. Upon the earlier of (i) (A) the registration for resale
pursuant to the Registration Rights Agreement and (B) receipt of a written certification from
an Investor that Shares have been sold in accordance with the Plan of Distribution contained in the
Registration Statement and that such Investor has delivered or intends to deliver a current
prospectus in compliance with the prospectus delivery requirements of the 1933 Act or (ii) Rule
144(k) becoming available the Company shall, upon an Investor’s written request, promptly cause
certificates evidencing the Shares sold (in the case of clause (i)) or the Investor’s Securities
(in the case of clause (ii)) to be replaced with certificates which do not bear such restrictive
legends, and Warrant Shares subsequently issued upon due exercise of the Warrants shall not bear
such restrictive
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legends provided the provisions of either clause (i) or clause (ii) above, as applicable, are
satisfied with respect to such Warrant Shares.
10. Survival and Indemnification.
10.1 Survival. The representations, warranties, covenants and agreements
contained in this Agreement shall survive the Closing of the transactions contemplated by
this Agreement for one year after the Closing.
10.2 Indemnification. The Company agrees to indemnify and hold harmless each Investor
and its Affiliates and their respective directors, officers, employees and agents from and against
any and all losses, claims, damages, liabilities and expenses (including without limitation
reasonable attorney fees and disbursements and other expenses incurred in connection with
investigating, preparing or defending any action, claim or proceeding, pending or threatened and
the costs of enforcement thereof) (collectively, “Losses”) to which such Person may become subject
as a result of any breach of representation, warranty, covenant or agreement made by or to be
performed on the part of the Company under the Transaction Documents, and will reimburse any such
Person for all such amounts as they are incurred by such Person.
10.3 Conduct of Indemnification Proceedings. Promptly after receipt by any Person (the
“Indemnified Person”) of notice of any demand, claim or circumstances which would or might give
rise to a claim or the commencement of any action, proceeding or investigation in respect of which
indemnity may be sought pursuant to Section 10.2, such Indemnified Person shall promptly notify the
Company in writing and the Company shall assume the defense thereof, including the employment of
counsel reasonably satisfactory to such Indemnified Person, and shall assume the payment of all
fees and expenses; provided, however, that the failure of any Indemnified Person so to notify the
Company shall not relieve the Company of its obligations hereunder except to the extent that the
Company is materially prejudiced by such failure to notify. In any such proceeding, any Indemnified
Person shall have the right to retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Person unless: (i) the Company and the Indemnified
Person shall have mutually agreed to the retention of such counsel; or (ii) in the reasonable
judgment of counsel to such Indemnified Person representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests between them. The Company
shall not be liable for any settlement of any proceeding effected without its written consent,
which consent shall not be unreasonably withheld, but if settled with such consent, or if there be
a final judgment for the plaintiff, the Company shall indemnify and hold harmless such Indemnified
Person from and against any loss or liability (to the extent stated above) by reason of such
settlement or judgment. Without the prior written consent of the Indemnified Person, which consent
shall not be unreasonably withheld, the Company shall not effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Person is or could have been a party and
indemnity could have been sought hereunder by such Indemnified Party, unless such settlement
includes an unconditional release of such Indemnified Person from all liability arising out of such
proceeding.
11. Miscellaneous.
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11.1 Successors and Assigns. This Agreement may not be assigned by a party hereto
without the prior written consent of the Company or the Investor, as applicable, provided, however,
that (i) an Investor may assign its rights and delegate its duties hereunder in whole or in part to
an Affiliate or to a third party acquiring some or all of its Securities in a private transaction
without the prior written consent of the Company or the other Investors, after notice duly given by
such Investor to the Company provided, that no such assignment or obligation shall affect the
obligations of such Investor hereunder, and (ii) the Company may assign its rights and delegate its
duties hereunder to any surviving or successor corporation in connection with a merger or
consolidation of the Company with another corporation, or a sale, transfer or other disposition of
all or substantially all of the Company’s assets to another corporation, without the prior written
consent of the Investors. The provisions of this Agreement shall inure to the benefit of and be
binding upon the respective permitted successors and assigns of the parties. Nothing in this
Agreement, express or implied, is intended to confer upon any party other than the parties hereto
or their respective successors and assigns any rights, remedies, obligations, or liabilities under
or by reason of this Agreement, except as expressly provided in this Agreement.
11.2 Counterparts; Faxes. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. This Agreement may also be executed via facsimile, which
shall be deemed an original.
11.3 Titles and Subtitles. The titles and subtitles used in this Agreement are used
for convenience only and are not to be considered in construing or interpreting this Agreement.
11.4 Notices. Unless otherwise provided, any notice required or permitted under this
Agreement shall be given in writing and shall be deemed effectively given as hereinafter described
(i) if given by personal delivery, then such notice shall be deemed given upon such delivery, (ii)
if given by telex or telecopier, then such notice shall be deemed given upon receipt of
confirmation of complete transmittal, (iii) if given by mail, then such notice shall be deemed
given upon the earlier of (A) receipt of such notice by the recipient or (B) three days after such
notice is deposited in first class mail, postage prepaid, and (iv) if given by an internationally
recognized overnight air courier, then such notice shall be deemed given one Business Day after
delivery to such carrier. All notices shall be addressed to the party to be notified at the address
as follows, or at such other address as such party may designate by ten days’ advance written
notice to the other party:
If to the Company:
Cytocore, Inc.
000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. XxXxxxxxxx Xx., CEO, CFO
Fax: 000-000-0000
000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. XxXxxxxxxx Xx., CEO, CFO
Fax: 000-000-0000
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If to the Investors:
to the addresses set forth on the signature pages hereto.
11.5 Expenses. The parties hereto shall pay their own costs and expenses in connection
herewith. In the event that legal proceedings are commenced by any party to this Agreement against
another party to this Agreement in connection with this Agreement or the other Transaction
Documents, the party or parties which do not prevail in such proceedings shall severally, but not
jointly, pay their pro rata share of the reasonable attorneys’ fees and other reasonable
out-of-pocket costs and expenses incurred by the prevailing party in such proceedings.
11.6 Amendments and Waivers. Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively), only with the written consent of the Company
and the Investors. Any amendment or waiver effected in accordance with this paragraph shall be
binding upon each holder of any Securities purchased under this Agreement at the time outstanding,
each future holder of all such Securities, and the Company.
11.7 Publicity. Except as set forth below, no public release or announcement
concerning the transactions contemplated hereby shall be issued by the Company or the Investors
without the prior consent of the Company (in the case of a release or announcement by the
Investors) or the Investors (in the case of a release or announcement by the Company) (which
consents shall not be unreasonably withheld), except as such release or announcement may be
required by law or the applicable rules or regulations of any securities exchange or securities
market, in which case the Company or the Investors, as the case may be, shall allow the Investors
or the Company, as applicable, to the extent reasonably practicable in the circumstances,
reasonable time to comment on such release or announcement in advance of such issuance. Promptly
following the Closing Date, the Company shall issue a press release disclosing the consummation of
the transactions contemplated by this Agreement and file a Current Report on Form 8-K attaching the
press release described in the foregoing sentence as well as copies of the Transaction Documents.
In addition, the Company will make such other filings and notices in the manner and time required
by the SEC. Notwithstanding the foregoing, the Company shall not publicly disclose the name of any
Investor, or include the name of any Investor in any filing with the SEC (other than the
Registration Statement and any exhibits to filings made in respect of this transaction in
accordance with periodic filing requirements under the 0000 Xxx) or any regulatory agency, without
the prior written consent of such Investor, except to the extent such disclosure is required by law
or trading market regulations, in which case the Company shall provide the Investors with prior
notice of such disclosure.
11.8 Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining provisions hereof but
shall be interpreted as if it were written so as to be enforceable to the maximum extent
permitted by applicable law, and any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other jurisdiction. To the
extent permitted by applicable law, the parties hereby waive any provision of law which renders
any provision hereof prohibited or unenforceable in any respect.
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11.9 Entire Agreement. This Agreement, including the Exhibits, and the other
Transaction Documents constitute the entire agreement among the parties hereof with respect to
the subject matter hereof and thereof and supersede all prior agreements and understandings, both
oral and written, between the parties with respect to the subject matter hereof and thereof.
11.10 Further Assurances. The parties shall execute and deliver all such further
instruments and documents and take all such other actions as may reasonably be required to carry
out the transactions contemplated hereby and to evidence the fulfillment of the agreements
herein contained.
11.11 Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. This Agreement
shall be governed by, and construed in accordance with, the internal laws of the State of Illinois
without regard to the choice of law principles thereof. Each of the parties hereto irrevocably
submits to the exclusive jurisdiction of the courts of the State of Illinois located in Chicago and
the United States District Court for the Northern District of Illinois for the purpose of any suit,
action, proceeding or judgment relating to or arising out of this Agreement and the transactions
contemplated hereby. Service of process in connection with any such suit, action or proceeding may
be served on each party hereto by the same methods as are specified for the giving of notices under
this Agreement. Each of the parties hereto irrevocably consents to the jurisdiction of any such
court in any such suit, action or proceeding and to the laying of venue in such court. Each party
hereto irrevocably waives any objection to the laying of venue of any such suit, action or
proceeding brought in such courts and irrevocably waives any claim that any such suit, action or
proceeding brought in any such court has been brought in an inconvenient forum. EACH OF THE PARTIES
HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT
AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.
11.12 Independent Nature of Investors’ Obligations and Rights. The obligations of each
Investor under any Transaction Document are several and not joint with the obligations of any other
Investor, and no Investor shall be responsible in any way for the performance of the obligations of
any other Investor under any Transaction Document. The decision of each Investor to purchase
Securities pursuant to the Transaction Documents has been made by such Investor independently of
any other Investor. Nothing contained herein or in any Transaction Document, and no action taken by
any Investor pursuant thereto, shall be deemed to constitute the Investors as a partnership, an
association, a joint venture or any other kind of entity, or create a presumption that the
Investors are in any way acting in concert or as a group with respect to such obligations or the
transactions contemplated by the Transaction Documents. Each Investor acknowledges that no other
Investor has acted as agent for such Investor in connection with making its investment hereunder
and that no Investor will be acting as agent of such Investor in connection with monitoring its
investment in the Securities or enforcing its rights under the Transaction Documents. Each Investor
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 Investor to be joined as an additional party in any proceeding for
such purpose. The Company acknowledges that each of the Investors has been provided with the same
Transaction Documents for the purpose of closing a transaction with multiple Investors and not
because it was required or requested to do so by any Investor.
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[signature page follows]
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IN WITNESS WHEREOF, the parties have executed this Agreement or caused their duly authorized
officers to execute this Agreement as of the date first above written.
| The Company: | CYTOCORE, INC. |
||||
| By: | |||||
| Name: | |||||
| Title: | |||||
| The Investor: |
|||||
| Individuals: | Entities: | ||||
| Print Name | Print Name of Entity |
||||
| By: | |||||
| Signature | Signature | ||||
| Name: | |||||
| Title: | |||||
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