SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (the "Agreement") is made as of the
23rd day of September, 1998, by and among PC Quote, Inc., a Delaware
corporation (the "Company"), PICO Holdings, Inc., a California corporation
("PICO") and Physicians Insurance Company of Ohio, an Ohio corporation
("Physicians," and together with PICO, the "Investors").
WHEREAS, Physicians currently is the holder of a Subordinated Convertible
Debenture dated November 14, 1996, as amended (the "Debenture"), in the
principal amount of $2,500,000, plus accrued interest in the amount of $423,123
as of the date hereof, plus interest accruing at the rate of $651 per day
following the date hereof (such principal and all accrued interest through the
Closing Date, the "Debenture Balance").
WHEREAS, the Company is currently indebted to PICO in the principal amount
of $3,290,000, plus accrued interest in the amount of $377,742 as of the date
hereof, plus interest accruing at the rate of $1,262 per day following the date
hereof (such principal and all accrued interest through the Closing Date, the
"PICO Indebtedness").
WHEREAS, PICO is the holder of three Common Stock Purchase Warrants to
purchase an aggregate of 949,032 shares of Common Stock of the Company (the
"Existing Warrants"), each of which expires on April 30, 2000.
WHEREAS, the Company and the Investors wish to provide for the purchase of
Series A Preferred Stock by Physicians through the conversion of the Debenture
and for the purchase of Series B Convertible Preferred Stock by PICO in
consideration for the cancellation of the PICO Indebtedness, all pursuant to the
terms contained herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:
1. PURCHASE AND SALE OF PREFERRED STOCK.
1.1 SALE AND ISSUANCE OF SERIES A AND SERIES B PREFERRED STOCK.
(a) The Company shall file with the Secretary of State of the
State of Delaware on or before the Closing (as defined below) the Certificate of
Designations for Series A and Series B Preferred Stock in the form attached
hereto as EXHIBIT A (the "Certificate").
(b) Subject to the terms and conditions of this Agreement,
Physicians agrees to purchase at the Closing and the Company agrees to issue to
Physicians at the Closing the number of shares of Series A Preferred Stock into
which the Debenture Balance shall be convertible as of the Closing. For
reference purposes, the Debenture provides that the Debenture Balance as of the
Closing Date shall be convertible into the number of shares of Series A
Preferred Stock of the Company determined by dividing the following by one
hundred: the number calculated from the division of the Debenture Balance by the
lowest of the following numbers (i) 1.5625, (ii) the closing sale price of the
Company's Common Stock as reported by
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the American Stock Exchange ("AMEX") one day prior to the Closing Date (the
"AMEX Closing Price") or (iii) the average AMEX Closing Price of the Company's
Common Stock over the twenty-day period immediately preceding the Closing Date
(the "Average AMEX Price"). The lowest of (i), (ii) or (iii) above is
hereinafter referred to as the "Series A Closing Price." The shares of Series A
Preferred Stock issued to Physicians pursuant to this Agreement are hereinafter
referred to as the "Series A Preferred." The Series A Preferred and the Common
Stock issuable upon conversion of the Series A Preferred are hereinafter
referred to as the "Series A Securities."
(c) Subject to the terms and conditions of this Agreement, PICO
agrees to purchase at the Closing and the Company agrees to sell and issue to
PICO at the Closing the number of shares of Series B Preferred Stock determined
by dividing the following by one hundred: the number calculated from the
division of the PICO Indebtedness as of the Closing Date by the lower of the
following numbers: (i) 1.3125, (ii) the AMEX Closing Price or (iii) the Average
AMEX Closing Price, at a purchase price per share equal to the lowest of (i),
(ii) and (iii) (the "Series B Closing Price"). The shares of Series B Preferred
Stock issued to PICO pursuant to this Agreement are hereinafter referred to as
the "Series B Preferred." The Series B Preferred and the Common Stock issuable
upon conversion of the Series B Preferred are hereinafter referred to as the
"Series B Securities." The Series A Preferred and Series B Preferred are
hereinafter referred to collectively as the "Preferred Stock," and the Preferred
Stock and the Common Stock issuable upon conversion of the Preferred Stock are
hereinafter referred to collectively as the "Securities."
1.2 PURCHASE AND SALE OF WARRANTS.
(a) Subject to the terms and conditions of this Agreement, the
Company shall issue to PICO a warrant (the "Warrant") to purchase the number of
shares of Common Stock of the Company equal to the following (i) the Debenture
Balance, divided by the Series B Closing Price, multiplied by .10, PLUS (ii) the
PICO Indebtedness, divided by the Series B Closing Price, at an exercised price
of 120% of the Series B Closing Price per share, which Warrant shall be
substantially in the form attached as EXHIBIT B.
(b) At the Closing, the Company and PICO shall enter into
Amendments of the Existing Warrants to extend the term of the Existing Warrants
until April 30, 2005, which amendments shall be substantially in the form
attached hereto as EXHIBITS C-1, C-2 AND C-3 (the "Warrant Amendments").
1.3 CLOSING; DELIVERY.
(a) The purchase and sale of the Preferred Stock and the Warrant
shall take place at the offices of Xxxx Xxxx Xxxx & Freidenrich, at 10:00 a.m.
PST, on the date that is five (5) days from the date of fulfillment or waiver of
all conditions to Closing contained in Section 7 and 8 herein, or such other
date as may be mutually agreed to by the Company and the Investors, orally or in
writing (which time and place are designated as the "Closing" and which date is
the "Closing Date").
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(b) At the Closing: (i) the Company shall deliver to Physicians
and PICO certificates representing the Series A Preferred and Series B Preferred
being purchased hereby by them against payment of the purchase price therefor by
conversion of the Debenture and cancellation of the PICO Indebtedness, and (ii)
Physicians shall deliver the original Debenture to the Company and PICO shall
deliver the original promissory note and all amendments thereto representing the
PICO Indebtedness to the Company.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. As used in this
Section 2, the term the "Company" shall include the Company and each of its
subsidiaries (entities in which the Company owns securities constituting 50% or
more of the voting power). Except as specifically set forth in the Schedule of
Exceptions attached hereto as EXHIBIT D, the Company hereby makes the following
representations and warranties to each of PICO and Physicians as of the date
hereof, which representations and warranties shall be deemed to have been made
again as of Closing.
2.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of its incorporation and has all requisite corporate power and
authority to carry on its business as now conducted. The Disclosure Schedule
sets forth a list of all subsidiaries of the Company and the jurisdiction in
which they are incorporated. The Company is duly qualified as a foreign
corporation and is in good standing in each jurisdiction in which its ownership
of assets or conduct of business makes such qualification necessary, except
where the failure so to qualify would not have a material adverse effect on its
business or properties.
2.2 CAPITALIZATION. Except as to changes between the date hereof and
the Closing Date as the result of (i) issuances of Common Stock by the Company
as the result of the exercise of conversion of securities of the Company
outstanding as of the date hereof convertible into Common Stock of the Company
or (ii) purchases of Common Stock by employees of the Company pursuant to the
Purchase Plan (as defined below), upon the filing of the Certificate, the
authorized capital of the Company consists, or will consist, immediately prior
to the Closing of:
(a) 5,000,000 shares of Preferred Stock, the number of which
shares of Preferred Stock have been designated Series A Preferred as are
necessary to complete the sale and issuance of the Series A Preferred as
provided in Section 1(b) herein, none of which are issued and outstanding
immediately prior to the Closing, and the number of which shares of Preferred
Stock have been designated Series B Preferred as are necessary to complete the
sale and issuance of the Series B Preferred as provided in Section 1(c) herein,
none of which are issued and outstanding immediately prior to the Closing.
(b) 50,000,000 shares of Common Stock, 13,297,781 shares of
which are issued and outstanding immediately prior to the Closing. All of the
outstanding shares of Common Stock have been duly authorized, fully paid and are
nonassessable and issued in compliance with all applicable federal and state
securities laws.
(c) The Company has reserved 2,000,000 shares of Common Stock
for issuance to officers, directors, employees and consultants of the Company
pursuant to its
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Incentive Stock Option Plan (the "Option Plan") and 500,000 shares of Common
Stock for issuance to employees of the Company pursuant to its Employee Stock
Purchase Plan (the "Purchase Plan"). Of such reserved shares of Common Stock,
options to purchase 1,397,950 shares have been granted and are currently
outstanding, 602,050 shares of Common Stock remain available for issuance to
officers, directors, employees and consultants pursuant to the Option Plan,
271,650 shares have been purchased by the employees of the Company under the
Purchase Plan and 228,350 shares of Common Stock remain available for purchase
pursuant to the Purchase Plan. All of the outstanding securities of the Company
were issued in compliance with all applicable federal and state securities laws.
(d) Except for (i) the Warrant, (ii) the Existing Warrants,
(iii) the conversion privileges of the Preferred Stock, and (iv) the outstanding
options issued pursuant to the Option Plan, and except as set forth in the
Registration Rights Agreement (as defined below), there are no outstanding
options, warrants, rights (including conversion or preemptive rights and rights
of first refusal or similar rights) or agreements, orally or in writing, for the
purchase or acquisition from the Company of any shares of its capital stock.
2.3 AUTHORIZATION. All corporate action on the part of the Company,
its officers, directors, and shareholders necessary to file and perform its
obligations under the Certificate and for the authorization, execution and
delivery of this Agreement, the Registration Rights Agreement in the form
attached hereto as EXHIBIT E (the "Registration Rights Agreement"), the Warrant
and the Warrant Amendments, (this Agreement, the Registration Rights Agreement,
the Warrant and the Warrants Amendments are collectively hereinafter referred to
as the "Agreements"), the performance of all obligations of the Company
hereunder and thereunder and the authorization, issuance and delivery of the
Securities has been taken or will be taken prior to the Closing, and the
Agreements, when executed and delivered by the Company, will constitute valid
and legally binding obligations of the Company, enforceable against the Company
in accordance with their terms except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance, and other laws of
general applications affecting enforcement of creditors' rights generally, as
limited by laws relating to the availability of specific performance, injunctive
relief, or other equitable remedies, or (ii) to the extent the indemnification
provisions contained in the Registration Rights Agreement may be limited by
applicable federal or state securities laws.
2.4 VALID ISSUANCE OF SECURITIES. The Preferred Stock and the
Warrant that are being issued to the Investors hereunder, 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 restrictions on transfer other than restrictions on transfer under this
Agreement, the Registration Rights Agreement and applicable state and federal
securities laws. Based in part upon the representations of the Investors in
this Agreement and subject to the provisions of Section 2.5 below, the Preferred
Stock and the Warrant will be issued in compliance with all applicable federal
and state securities laws. The Common Stock issuable upon conversion of the
Preferred Stock and exercise of the Warrant has been duly and validly reserved
for issuance, and upon issuance in accordance with the terms of the Certificate
and the Warrant, will be duly and validly issued, fully paid and nonassessable
and free of restrictions on
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transfer other than restrictions on transfer under this Agreement, the
Registration Rights Agreement and applicable federal and state securities laws
and will be issued in compliance with all applicable federal and state
securities laws.
2.5 GOVERNMENT CONSENT. No consent, approval, order or authorization
of, or registration, qualification, designation or filing with, any federal,
state or local governmental authority on the part of the Company is required in
connection with the consummation of the transactions contemplated by the
Agreements, except for filings pursuant to Section 25102(f) of the California
Corporate Securities Law of 1968, as amended, and the rules thereunder, other
applicable state securities laws, and the Securities Act of 1933, as amended
(the "Securities Act"), and the rules thereunder, which filings will be made in
a timely manner.
2.6 LITIGATION. There is no action, suit, proceeding or
investigation pending or, to the Company's knowledge, currently threatened
against the Company that questions the validity of the Agreements or the right
of the Company to enter into them, or to consummate the transactions
contemplated hereby or thereby, or that might result, either individually or in
the aggregate, in any material adverse changes in the assets, condition or
affairs of the Company, financially or otherwise, nor is the Company aware that
there is any basis for the foregoing. The Company is not a party or subject to
the provisions of any order, writ, injunction, judgment or decree of any court
or government agency or instrumentality. The foregoing includes, without
limitation, actions involving the prior employment of any of the Company's
employees, their use in connection with the Company's business of any
information or techniques allegedly proprietary to any of their former
employees, or their obligations under agreements with prior employers. There is
no action, suit, proceedings or investigation by the Company currently pending
or which the Company intends to initiate.
2.7 INTELLECTUAL PROPERTY. The Company owns or possesses sufficient
legal rights to all patents, trademarks, service marks, tradenames, copyrights,
trade secrets, licenses, information and proprietary rights necessary for its
business as now conducted without any conflict with, or infringement of, the
rights of others. The Company has not received any communication alleging that
the Company has violated or, by conducting its business, would violate any of
the patents, trademarks, service marks, tradenames, copyrights, trade secrets or
other proprietary rights of any other person or entity. The Company is not
aware that any of its employees are obligated under any contract (including
licenses, covenants or commitments of any nature) or other agreement, or subject
to any judgment, decree or order of any court or administrative agency, that
would interfere with the use of such employee's best efforts to promote the
interest of the Company or that would conflict with the Company's business.
Neither the execution or delivery of this Agreement, nor the carrying on of the
Company's business as now conducted by the employees of the Company, will, to
the Company's knowledge, conflict with or result in a breach of the terms,
conditions, or provisions of, or constitute a default under, any contract,
covenant or instrument under which any such employee is now obligated. The
Company does not believe it is or will be necessary to use any inventions of any
of its employees (or persons it currently intends to hire) made prior to their
employment by the Company. To the Company's knowledge, its officers and
employees are not making
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improper use of any confidential information or trade secrets of others,
including those of any former employer.
2.8 COMPLIANCE WITH OTHER INSTRUMENTS. The Company is not in
violation or default of any provisions of its Articles of Incorporation or
Bylaws or in violation or default of any instrument, judgment, order, writ,
decree, contract or agreement to which it is a party or by which it is bound or
of any provision of any federal or state statue, rule or regulation applicable
to the Company, the effect of which would have a material adverse effect on the
Company. To the Company's knowledge, all parties to material contracts and
commitments with the Company are in compliance therewith in all material
respects. The execution, delivery and performance of the Agreements and the
consummation of the transactions contemplated hereby or thereby will not result
in any such violation or be in conflict with or constitute, with or without the
passage of time and giving of notice, either a default under any such provision,
instrument, judgment, order, writ, decree, contract or agreement or an event
which results in the creation of any lien, charge or encumbrance upon any assets
of the Company.
2.9 SEC DOCUMENTS; FINANCIAL STATEMENTS. Since December 31, 1995,
the Company has timely filed all reports, schedules, forms, statements and other
documents required to be filed by it with the U.S. Securities and Exchange
Commission (the "SEC") pursuant to the reporting requirements of the Exchange
Act of 1934, as amended (the "1934 Act") (all of the foregoing filed prior to
the date hereof and all exhibits included therein and financial statements and
schedules thereto and documents (other than exhibits) incorporated by reference
therein, being hereinafter referred to herein as the "SEC Documents"). The
Company has delivered or made available to the Investors true and complete
copies of the SEC Documents, except for such exhibits and incorporated
documents. As of their respective dates, the SEC Documents complied in all
material respects with the requirement of the 1934 Act and the rules and
regulations of the SEC promulgated thereunder applicable to the SEC Documents,
and none of the SEC Documents, at the time they were filed with the SEC,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they have been, required to
be amended or updated under applicable law (except for such statements as have
been amended or updated in subsequent filings prior to the date hereof). As of
the respective dates, the financial statements of the Company included in the
SEC Documents (the "Financial Statements") complied as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto. The Financial Statements have been
prepared in accordance with United States generally accepted accounting
principles ("GAAP"), consistently applied, during the periods involved (except
(i) as may be otherwise indicated in the Financial Statements or the notes
thereto, or (ii) in the case of unaudited interim statements, to the extent they
may not include footnotes or may be condensed or summary statements) and fairly
present in all material respects the consolidated financial position of the
Company as of the dates thereof and the consolidated results of its operations
and cash flows for the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments). Except as set forth in the
Financial Statements, the Company has no liabilities, contingent or otherwise,
other than (i) liabilities incurred in the ordinary course of business
subsequent to December 31, 1997 and (ii) obligations under contracts and
commitments
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incurred in the ordinary course of business and not required under generally
accepted accounting principles GAAP to be reflected in such financial
statements, which, individually or in the aggregate, are not material to the
financial condition or operating results of the Company.
2.10 NO CONFLICT OF INTEREST. Other than with respect to the
Investors, the Company is not indebted, directly or indirectly, to any of its
officers or directors, to their respective spouses or children, in any amount
whatsoever other than in connection with expenses or advances of expenses
incurred in the ordinary course of business or relocation expenses of employees.
Other than with respect to the Investors, none of the Company's officers or
directors, or any members of their immediate families, are, directly or
indirectly, indebted to the Company (other than in connection with purchases of
the Company's stock) or, to the Company's knowledge, have any direct or indirect
ownership interest in any firm or corporation with which the Company is
affiliated or with which the Company has a business relationship, or any firm or
corporation that competes with the Company except that officers, directors
and/or shareholders of the Company may own stock in (but not exceeding two
percent of the outstanding capital stock of) any publicly traded company that
may compete with the Company. Other than with respect to the Investors, the
Company's knowledge, none of the Company's officers or directors or any members
of their immediate families are, directly or indirectly, interested in any
material contract with the Company. The Company is not a guarantor or
indemnitor of any indebtedness of any other person, firm or corporation.
2.11 RIGHTS OF REGISTRATION AND VOTING RIGHTS. Except as contemplated
in the Registration Rights Agreement, the Company has not granted or agreed to
grant any registration rights, including piggyback rights, to any person or
entity other than the Investors. To the Company's knowledge, no shareholder of
the Company has entered into any agreements with respect to the voting capital
shares of the Company.
2.12 TITLE TO PROPERTY AND ASSETS. The Company owns its property and
assets free and clear of all mortgages, liens, loans and encumbrances, except
such encumbrances and liens which arise in the ordinary course of business and
do not materially impair the Company's ownership or use of such property or
assets. With respect to the property and assets it leases, the Company is in
compliance with such leases and, to its knowledge, holds a valid leasehold
interest free of any liens, claims, or encumbrances.
2.13 CHANGES. Since December 31, 1997 there has not been:
(a) any change in the assets, liabilities, financial condition
or operating results of the Company from that reflected in the Financial
Statements, except (i) changes as reported in the Company's reports on Form 10-Q
for the fiscal periods ended March 31, 1998 and June 30, 1998 and (ii) changes
in the ordinary course of business that have not been, in the aggregate,
materially adverse;
(b) any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the business (as such business is
presently conducted and as it is proposed to be conducted), properties,
prospects, or financial condition of the Company;
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(c) any waiver or compromise by the Company of a valuable right
or of a material debt owed to it;
(d) any satisfaction or discharge of any lien, claim, or
encumbrance or payment of any obligation by the Company, except in the ordinary
course of business and that is not material to the business (as such business is
presently conducted and as it is proposed to be conducted), properties,
prospects or financial condition of the Company;
(e) any material change to a material contract or agreement by
which the Company or any of its assets is bound or subject;
(f) any material change in any compensation arrangement or
agreement with any employee, officer, director or stockholder;
(g) any resignation or termination of employment of any key
officer of the Company; and the Company, to its knowledge, does not know of any
impending resignation or termination of employment of any such officer;
(h) receipt of notice that there has been a loss of, or material
order cancellation by, any major customer of the Company;
(i) any sale or assignment of any patents, trademarks,
copyrights, trade secrets or other intangible assets;
(j) any mortgage, pledge, transfer of a security interest in, or
lien, created by the Company, with respect to any of its material properties or
assets, except liens for taxes not yet due or payable;
(k) any loans or guarantees made by the Company to or for the
benefit of its employees, officers or directors, or any members of their
immediate families, other than travel advances and other advances made in the
ordinary course of its business;
(l) any declaration, setting aside or payment or other
distribution in respect to any of the Company's capital stock, or any direct or
indirect redemption, purchase, or other acquisition of any of such stock by the
Company;
(m) to the Company's knowledge, any other event or condition of
any character that might materially and adversely affect the business (as such
business is presently conducted and as it is proposed to be conducted),
properties, prospects or financial condition of the Company; or
(n) any arrangement or commitment by the Company to do any of
the things described in this Section 2.13.
2.14 TAX RETURNS AND PAYMENTS. The Company has filed all tax returns
and reports as required by law. These returns and reports are true and correct
in all material respects. The Company has paid all taxes and other assessments
due.
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2.15 LABOR AGREEMENTS AND ACTIONS. The Company is not bound by or
subject to (none of its assets or properties is bound by or subject to) any
written or oral, express or implied, contract, commitment or arrangement with
any labor union, and no labor union has requested or, to the knowledge of the
Company, has sought to represent any of the employees, representatives or agents
of the Company. There is no strike or other labor dispute involving the Company
pending, or to the knowledge of the Company, threatened, which could have a
material adverse effect on the assets, properties, financial condition,
operating results, or business of the Company, nor is the Company aware of any
labor organization activity involving its employees. The employment of each
officer and employee of the Company is terminable at the will of the Company.
To its knowledge, the Company has complied in all material respects with all
applicable state and federal equal employment opportunity laws and with other
laws related to employment. The employment of each officer and employee of the
Company is terminable at the will of the Company.
2.16 PERMITS. The Company has all franchises, permits, licenses and
any similar authority necessary for the conduct of its business, the lack of
which could materially and adversely affect the business, properties, prospects,
or financial condition of the Company. The Company is not in default in any
material respect under any of such franchises, permits, licenses or other
similar authority.
2.17 CORPORATE DOCUMENTS. The Articles of Incorporation and the
Bylaws of the Company are in the form made available to counsel for the
Investors. The copy of the minute book of the Company provided to counsel for
the Investors contains minutes of all meetings of the directors and shareholders
of the Company and all actions by written consent without a meeting by the
directors and shareholders of the Company since the date of incorporation and
reflects all actions by the directors and shareholders with respect to all
transactions referred to in such minutes, accurately in all material respects.
2.18 DISCLOSURE. The Company has fully provided the Investors with
all the information which the Investors have requested for deciding whether to
acquire the Preferred Stock and all information which the Company believes is
reasonably necessary to enable the Investors to make such a decision. No
representation or warranty of the Company contained in this Agreement and the
exhibits attached hereto, or any certificate furnished or to be furnished to
Investors at the Closing, contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements
contained herein or therein not misleading in light of the circumstances under
which they were made. No event or circumstance has occurred or exists with
respect to the Company or its business, properties, prospects, operations or
financial conditions, which, under applicable law, rule or regulation, requires
public disclosure or announcement by the Company but which has not been so
publicly announced or disclosed.
2.19 INSURANCE. The Company holds and maintains valid policies
covering such casualties and contingencies and of such types and amounts as is
customary for companies similarly situated. The Company has no reason to
believe that it will not be able to renew its existing insurance coverage as and
when such coverage expires or obtain similar coverage from
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similar insurers as may be necessary to continue its business at a cost that
would not have a material adverse effect.
2.20 OFFERING OF THE PREFERRED STOCK. Neither the Company nor any
person authorized or employed by the Company as agent, broker, dealer or
otherwise in connection with the offering or sale of the Preferred Stock or any
security of the Company similar to the Preferred Stock has offered the Preferred
Stock or any such similar security for sale to, or solicited any offer to buy
the Preferred Stock or any such similar security from, or otherwise approached
or negotiated with respect thereto with, any person or persons, and neither the
Company nor any person acting on its behalf has taken or will take any other
action (including, without limitation, any offer, issuance or sale of any
security of the Company under circumstances which might require the integration
of such security with Preferred Stock under the Securities Act or the rules and
regulations of the Commission thereunder), in either case so as to subject the
offering, issuance or sale of the Preferred Stock to the registration provisions
of the Securities Act.
2.21 NO BROKERS. The Company has taken no action which would give
rise to any claim by any person for brokerage commissions, finder's fees or
similar payments relating to this Agreement or the transactions contemplated
hereby.
2.22 ENVIRONMENT AND SAFETY LAWS. The Company is not in violation of
any applicable statute, law, or regulation relating to the environment or
occupational health and safety, and no material expenditures are or will be
required in order to comply with any such existing statute, law or regulation.
2.23 EMPLOYEE BENEFIT PLANS. The Company does not have any Employee
Benefit Plans as defined in Employment Retirement Income Security Act of 1974
("ERISA") other than those set forth on the Disclosure Schedule (each an
"Employee Plan"). Each Employee Plan has been administered to date or
terminated, as the case may be, in compliance with the requirements of the
Internal Revenue Code and ERISA, where applicable each Employee Plan is fully
funded on a termination basis, and all reports required by any government agency
with respect to such Employee Plans have been timely filed, and notwithstanding
anything to the contrary contained in such Employee Plans all benefits,
liabilities and obligations of the Company to date under such Employee Plans has
been fully accrued and reflected on the Financial Statements.
2.24 PRINCIPAL EXCHANGE/MARKET. The principal market on which the
Common Stock of the Company is currently traded is the AMEX. The Company has
obtained all approvals and consents of the AMEX, if any, required to enter into
and deliver the Agreements and to consummate the transactions contemplated
thereby.
2.25 FORM S-3. The Company is eligible to file a Registration
Statement (as defined in the Registration Rights Agreement) on Form S-3 under
the Securities Act and rules promulgated thereunder, and Form S-3 is permitted
to be used for the resale by the investors to the public of the Registrable
Securities (as defined in the Registration Rights Agreement) under the
Securities Act and rules promulgated thereunder.
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3. REPRESENTATIONS AND WARRANTIES OF THE INVESTORS. PICO and Physicians,
severally, and not jointly, each hereby makes the following representations and
warranties to the Company as of the date hereof, which representations and
warranties shall be deemed to have been made again as of Closing.
3.1 AUTHORIZATION. Each of the Investors has full power and
authority to enter into this Agreement. The Agreements, when executed and
delivered by the Investors, will constitute valid and legally binding
obligations of the Investors, enforceable in accordance with their terms, except
(a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance, and any other laws of general application affecting
enforcement of creditors' rights generally, and as limited by laws relating to
the availability of a specific performance, injunctive relief, or other
equitable remedies, or (b) to the extent the indemnification provisions
contained in the Registration Rights Agreement may be limited by applicable
federal or state securities laws.
3.2 PURCHASE ENTIRELY FOR OWN ACCOUNT. This Agreement is made with
the Investors in reliance upon the Investors' representation to the Company,
which by the Investors' execution of this Agreement the Investors hereby
confirm, that the Securities to be acquired by the Investors will be acquired
for investment for the Investors' own account, not as a nominee or agent, and
not with a view to the resale or distribution of any part thereof, and that the
Investors have no present intention of selling, granting any participation in,
or otherwise distributing the same. By executing this Agreement, the Investors
further represents that the Investors do not presently have any contract,
undertaking, agreement or arrangement with any person to sell, transfer or grant
participation to such person or to any third person, with respect to any of the
Securities. The Investors have not been formed for the specific purpose of
acquiring the Securities.
3.3 DISCLOSURE OF INFORMATION. The Investors have had an opportunity
to discuss the Company's business, management, financial affairs and the terms
and conditions of the offering of the Preferred Stock with the Company's
management and have had an opportunity to review the Company's facilities. The
Investors understand that such discussions, as well as any written information
delivered by the Company to the Investors, were intended to describe the aspects
of the Company's business which the Company believes to be material. The
foregoing, however, does not limit or modify the representations and warranties
of the Company in Section 2 of this Agreement or the right of the Investors to
rely thereon.
3.4 RESTRICTED SECURITIES. The Investors understand that except as
provided in the Registration Rights Agreement, the Securities have not been
registered under the Securities Act, by reason of a specific exemption from the
registration provisions of the Securities Act which depends upon, among other
things, the bona fide nature of the investment intent and the accuracy of the
Investors' representations as expressed herein. The Investors understand that
the Securities are "restricted securities" under applicable U.S. federal and
state securities laws and that, pursuant to these laws, the Investors must hold
the Securities indefinitely unless they are registered with the SEC and
qualified by state authorities, or an exemption from such registration and
qualification requirements is available. The Investors acknowledge that the
Company has no
11
obligation to register or qualify the Securities for resale except as set forth
in the Registration Rights Agreement.
3.5 LEGENDS. The Investors understand that until such time as the
securities may be registered, the Securities, and any securities issued in
respect thereof or exchange therefor, may bear one or all of the following
legends:
(a) "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO , OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A
FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER
THE SECURITIES ACT OF 1933."
(b) Any legend set forth in the other Agreements.
(c) Any legend required by the laws of any state regarding the
sale of securities to the extent such laws are applicable to the shares
represented by the certificate so legended.
3.6 ACCREDITED INVESTOR. Each Investor is an "accredited investor"
as defined in Rule 501(a) of Regulation D promulgated under the Securities Act.
4. COVENANTS OF THE COMPANY PENDING CLOSING. The Company covenants and
agrees that from the date hereof until the completion of the Closing:
4.1 GOOD STANDING. The Company shall maintain its and each of its
subsidiaries' corporate existence and good standing in its jurisdiction of
incorporation and maintain qualification in each jurisdiction in which the
failure to so qualify could have a Material Adverse Effect. "Material Adverse
Effect" means a material adverse effect on (i) the business operations or
condition (financial or otherwise) of the Company and its subsidiaries taken as
a whole or (ii) the ability of the Company to perform its obligations under this
Agreement. The Company shall maintain, and shall cause each of its subsidiaries
to maintain, to the extent consistent with prudent management of the Company's
business, in force all licenses, approvals and agreements, the loss of which
could have a Material Adverse Effect.
4.2 GOVERNMENT COMPLIANCE. The Company shall meet, and shall cause
each subsidiary to meet, the minimum funding requirements of ERISA with respect
to any employee benefit plans subject to ERISA. The Company shall comply, and
shall cause each subsidiary to comply, with all statutes, laws, ordinances and
government rules and regulations to which it is subject, noncompliance with
which could have a Material Adverse Effect.
12
4.3 OPERATION IN THE ORDINARY COURSE. The Company shall continue to
carry on its business and keep its books and accounts, records and files in the
usual and ordinary manner in which the business has been conducted in the past.
4.4 REPRESENTATIONS AND WARRANTIES. The Company shall give detailed
written notice to the Investors promptly upon learning any fact which would
render untrue any of the Company's representations or warranties contained in
this Agreement or in any of the other Agreements.
4.5 BEST EFFORTS. The Company shall use its best efforts to fulfill
and perform all conditions and obligations on its part to be fulfilled and
performed under this Agreement and cause the transactions contemplated by this
Agreement to be fully carried out.
4.6 PROXY STATEMENT. Within fourteen (14) days of the date hereof,
the Company shall cause a proxy statement to be prepared and filed with the SEC
soliciting approval from the shareholders of the Company, as of the soonest
practicable date, of the transactions contemplated by this Agreement. The proxy
statement shall be prepared and filed in compliance with the provisions of the
1934 Act and the rules and regulations promulgated thereunder. Prior to filing,
such proxy statement shall have been reviewed by and be reasonably acceptable to
the Investors and counsel to the Investors. The Company shall provide such
proxy statement to each of its stockholder and the Company shall use its best
efforts to solicit its stockholders' approval of the issuance of the Securities
as described in this Agreement and cause the Board of Directors of the Company
to recommend to the stockholders that they approve such proposal.
4.7 NEGATIVE COVENANTS. Without the prior written consent of the
Investors, the Company will not:
(a) Convey, sell, lease, transfer or otherwise dispose of
(collectively, a "Transfer"), or permit any of its subsidiaries to Transfer, all
or any part of its business or property, other than: (i) Transfers of
non-exclusive licenses and similar arrangements for the use of the property of
the Company or its subsidiaries; or (ii) Transfers of worn-out or obsolete
equipment.
(b) Engage in any business, or permit any of its subsidiaries to
engage in any business, other than the businesses currently engaged in by the
Company and any business substantially similar or related thereto (or incidental
thereto).
(c) Issue any capital stock of the Company or other securities
convertible into or exchangeable for capital stock of the Company other than
(i) securities issued pursuant to the Option Plan or the Purchase Plan,
(ii) capital stock or securities issued in connection with the exercise or
conversion of securities of the Company issued and outstanding prior to the date
hereof or (iii) securities issued, or to be issued, to Xxx X. Xxxxxx pursuant to
the exercise of options granted to Xx. Xxxxxx prior to the date hereof by the
Company's Board of Directors, to purchase up to 6.88% of the outstanding Common
Stock of the Company.
13
(d) Merge or consolidate, or permit any of its subsidiaries to
merge or consolidate, with or into any other business organization, or acquire,
or permit any of its subsidiaries to acquire, all or substantially all of the
capital stock or property of another entity.
(e) Create, incur, assume or suffer to exist any lien or
encumbrance with respect to any of its property, or assign or otherwise convey
any right to receive income, including the sale of any accounts, or permit any
of its subsidiaries so to do, except for an existing blanket lien in favor of
Lakeside Bank on all personal property of the Company and a blanket lien in
favor of PICO, on all personal property of the Company.
(f) Pay any dividends or make any other distribution or payment
on account of or in redemption, retirement or purchase of any capital stock.
(g) Directly or indirectly acquire or own, or make any
investment in or to any entity, or permit any of its subsidiaries so to do,
other than Permitted Investments (as defined in the Loan and Security Agreement
dated May 4, 1997, as amended, between the Company, as borrower, and PICO as
lender).
(h) Directly or indirectly enter into or permit to exist any
material transaction with any affiliate of the Company except for transactions
that are in the ordinary course of the Company's business, upon fair and
reasonable terms that are no less favorable to the Company than would be
obtained in an arm's length transaction with a non-affiliated party.
(i) Become an "investment company" controlled by an "investment
company," within the meaning of the Investment Company Act of 1940, or become
principally engaged in, or undertake as one of its important activities, the
business of extending credit for the purpose of purchasing or carrying margin
stock.
(j) Fail to meet the minimum funding requirements of ERISA,
permit a Reportable Event or Prohibited Transaction, as defined in ERISA, to
occur, fail to comply with the Federal Fair Labor Standards Act or violate any
law or regulation, which violation could have a Material Adverse Effect, or
permit any of its subsidiaries to do any of the foregoing.
5. TRANSFER AGENT INSTRUCTIONS. The Company shall issue irrevocable
instructions to its transfer agent, and any subsequent transfer agent, to issue
certificates, registered in the name of each Investor or its respective
nominee(s), for the Common Stock issuable on conversion of the Preferred Stock
and the exercise of the Warrant (collectively, the "Conversion Shares") in such
amounts as specified from time to time by each Investor to the Company upon
conversion of the Preferred Stock and exercise of the Warrant (the "Irrevocable
Transfer Agent Instructions"). Prior to registration of the Conversion Shares
under the Securities Act, all such certificates shall bear the restrictive
legend specified in Section 3.5 of this Agreement. The Company warrants that no
instruction other than the Irrevocable Transfer Agent Instructions referred to
in this Section 5 will be given by the Company to its transfer agent and that
the Securities 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. If an Investor
14
provides the Company with an opinion of counsel, in generally acceptable form,
that registration of a resale by such Investor of any of such Securities is not
required under the Securities Act, the Company shall permit the transfer, and,
in the case of the Conversion Shares, promptly instruct its transfer agent to
issue one or more certificates in such name and in such denominations as
specified by such Investor and without any restrictive legends. The Company
acknowledges that a breach by it of its obligations hereunder will cause
irreparable harm to the Investors by vitiating the intent and purpose of the
transaction contemplated hereby. Accordingly, the Company acknowledges that the
remedy at law for a breach of its obligations under this Section 5 will be
inadequate and agrees, in the event of a breach or threatened breach by the
Company of the provisions of this Section 5, that the Investors shall be
entitled, in addition to all other available remedies, to an injunction
restraining any breach and requiring immediate issuance and transfer, without
the necessity of showing economic loss and without any bond or other security
being required.
6. LISTING. Promptly following the Closing Date, but in no event later
than 20 days after the Closing Date, the Company shall secure the listing of all
of the Registrable Securities (as defined in the Registration Rights Agreement)
upon each national securities exchange and automated quotation system (including
the AMEX), if any, upon which shares of Common Stock of the Company are then
listed (subject to official notice of issuance) and shall maintain, so long as
any other shares of Common Stock shall be so listed, such listing of all
Registrable Securities from time to time issuable under the terms of the
Documents and the Certificate. The Company shall maintain the Common Stock's
authorization for listing on the AMEX, The Nasdaq SmallCap Market, the Nasdaq
National Market, or The New York Stock Exchange, Inc. ("NYSE"), as applicable.
Neither the Company nor any of its subsidiaries shall take any action which may
result in the delisting or suspension of the Common Stock on the AMEX, The
Nasdaq SmallCap Market, the Nasdaq National Market or NYSE (other than to switch
listings from the AMEX, to The Nasdaq SmallCap Market or to the Nasdaq National
Market or to the NYSE). The Company shall promptly provide to each Investor
copies of any notices it receives from the AMEX, The Nasdaq SmallCap Market, the
Nasdaq National Market or NYSE regarding the continued eligibility of the Common
Stock for listing on such automated quotation system or securities exchange.
The Company shall pay all fees and expenses in connection with satisfying its
obligations under this Section 6.
7. CONDITIONS TO THE INVESTORS' OBLIGATIONS AT CLOSING. The obligations
of each of PICO and Physicians to the Company under this Agreement are subject
to the fulfillment by the Company, on or before the Closing, of each of the
following conditions, unless otherwise waived by PICO and Physicians:
7.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company contained in Section 2 shall be true and correct in
all material respects on and as of the Closing with the same effect as though
such representations and warranties had been made on and as of the date of the
Closing.
15
7.2 PERFORMANCE. The Company shall have performed and complied with
all covenants, agreements, obligations and conditions contained in the Agreement
that are required to be performed or complied with by it on or before the
Closing.
7.3 COMPLIANCE CERTIFICATE. The President of the Company shall
deliver to the Investors at the Closing a certificate certifying that the
conditions specified in Sections 7.1 and 7.2 have been fulfilled.
7.4 BOARD RESOLUTIONS. The Investors shall have received resolutions
of the Board of Directors of the Company duly authorizing the execution and
delivery of the Agreements and the performance of the Company's obligations
thereunder, certified by the Secretary of the Company as being in full force and
effect as of the Closing.
7.5 QUALIFICATIONS. All authorizations, approvals or permits, if
any, of any governmental authority or regulatory body of the United States or of
any state that are required in connection with the lawful issuance and sale of
the Preferred Stock pursuant to this Agreement shall be obtained and effective
as of the Closing.
7.6 SHAREHOLDER APPROVAL. The matters specified in the Proxy
Statement for approval of the Shareholders as contemplated by Section 4.6 of
this Agreement shall have been approved by the shareholders of the Company.
7.7 DELIVERY OF STOCK CERTIFICATES. The Company shall have duly
executed and delivered the certificates representing the shares of Preferred
Stock being purchased by the Investors hereunder.
7.8 OPINION OF COMPANY COUNSEL. The Investors shall have received
from counsel for the Company, an opinion dated as of the Closing in
substantially the form of EXHIBIT F.
7.9 REGISTRATION RIGHTS AGREEMENT. The Company and each Investor
shall have executed and delivered the Registration Rights Agreement in
substantially the form attached as EXHIBIT E.
7.10 THE CERTIFICATE. The Company shall have filed the Certificate
with the Secretary of State of Delaware on or prior to the Closing Date, which
shall continue to be in full force and effect as of the Closing Date.
7.11 GOOD STANDING. The Company shall have delivered to the Investors
a certificate evidencing the incorporation and good standing of the Company and
each of its subsidiaries in such corporation's state of incorporation issued by
the Secretary of State of such state of incorporation as of a date within 10
days prior to the Closing Date.
7.12 PROCEEDINGS AND DOCUMENTS. All corporate and other proceedings
in connections with the transactions contemplated at the Closing and all
documents incident thereto shall be reasonably satisfactory in form and
substance to the Investor's counsel, and the
16
Investor's counsel shall have received all such counterpart original and
certified or other copies of such documents as it may reasonably request.
7.13 FEES OF INVESTORS' COUNSEL. The Company shall have made
arrangements for the payment, in accordance with Section 9.8, the fees and
disbursements of the Investors' counsel invoiced at the Closing.
7.14 WARRANT AND AMENDMENTS. The Company shall have executed and
delivered the Warrant and the Amendments.
8. CONDITIONS TO THE COMPANY'S OBLIGATIONS AT CLOSING. The obligations
of the Company to the Investors under this Agreement are subject to the
fulfillment by the Investors, on or before the Closing, of each of the following
conditions, unless otherwise waived by the Company:
8.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Investors contained in Section 3 shall be true and correct in
all material respects on and as of the Closing with the same effect as though
such representations and warranties had been made on and as of the Closing.
8.2 PERFORMANCE. All covenants, agreements and conditions contained
in this Agreement to be performed by the Investors on or prior to the Closing
shall have been performed or complied with in all material respects.
8.3 COMPLIANCE CERTIFICATE. The President of each of PICO and
Physicians shall deliver to the Company at the Closing a certificate certifying
that the conditions specified in Sections 8.1 and 8.2 have been fulfilled.
8.4 BOARD RESOLUTIONS. The Company shall have received resolutions
of the Board of Directors of PICO and Physicians duly authorizing the execution
and delivery of the Agreements and the performance of the Investors' obligations
thereunder, certified by the Secretary of PICO and Physicians as being in full
force and effect as of the Closing
8.5 QUALIFICATIONS. All authorizations, approvals or permits, if
any, of any governmental authority or regulatory body of the United States or of
any state that are required in connection with the lawful issuance and sale of
the Preferred Stock pursuant to this Agreement shall be obtained and effective
as of the Closing.
8.6 THE CERTIFICATE. The Company shall have filed the Certificate
with the Secretary of State of Delaware on or prior to the Closing Date, which
shall continue to be in full force and effect as of the Closing Date.
9. MISCELLANEOUS.
9.1 TERMINATION OF AGREEMENT. This Agreement may be terminated on or
prior to the Closing Date:
17
(a) At any time by the mutual consent of the Company and the
Investors;
(b) Following fourteen (14) business days after the date hereof,
by the Investors if the proxy statement referred to in Section 4.6 herein has
not been filed with the SEC;
(c) Following December 31, 1998, by the Investors if the Company
has not yet obtained shareholder approval for the matters contained in the proxy
statement described in Section 4.6 herein; PROVIDED, HOWEVER, that if the proxy
statement described in Section 4.6 herein does not receive full review by the
SEC, the date for termination under this Section 9.1((c)) shall be November 30,
1998.
(d) By the Company or the Investors if the other party breaches
in any material respect any of its representations, warranties, covenants,
obligations or agreements contained in this Agreement and such breach has not
been cured within thirty (30) days of the date that notice of breach is received
by the breaching party, PROVIDED, HOWEVER, that no notice of intent to terminate
this Agreement pursuant to this Section 9.1((d)) may be served by the party
that is itself a material breach of the Agreement at the time of such notice;
(e) On or after December 31, 1998, by either the Company or the
Investors if the Closing has not taken yet place by such date;
(f) By the Investors, on or after the date when it becomes
reasonably likely that the Company will be unable to satisfy any of the
conditions set forth in Section 7, and By the Company on or after the date when
it becomes reasonably likely that the Investors will be unable to satisfy any of
the conditions set forth in Section 8.
A termination pursuant to this Section 9.1 shall not relieve any party of any
liability it otherwise has for breach of this Agreement.
9.2 SURVIVAL OF WARRANTIES. Unless otherwise set forth in this
Agreement, the warranties, representations and covenants of the Company and the
Investors contained in or made pursuant to this Agreement shall survive the
execution and delivery of this Agreement and the Closing for a period of two (2)
years following the Closing, provided, however, that the representations,
warranties and covenants of the Company contained in Section 6 hereof shall
survive until the later of (i) the exercise or termination of the Warrant or
(ii) the first date on which no Preferred Stock remains outstanding.
9.3 TRANSFER; SUCCESSORS AND ASSIGNS. The terms and conditions of
this Agreement shall inure to the benefit of and be binding upon the respective
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.
18
9.4 GOVERNING LAW. This Agreement and all acts and transactions
pursuant hereto and the rights and obligations of the parties hereto shall be
governed, construed and interpreted in accordance with the laws of the State of
California, without giving effect to principles of conflicts of law.
9.5 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.
9.6 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.
9.7 NOTICES. Any notice required or permitted by this Agreement
shall be in writing and shall be deemed sufficient upon delivery, when delivered
personally or by overnight courier or sent by telecopier, or forty-eight (48)
hours after being deposited in the U.S. mail, as certified or registered mail,
with postage prepaid, addressed to the party to be notified at such party's
address as set forth on the signature page hereto, or as subsequently modified
by written notice, and (a) if to the Company, with a copy to Wildman, Harrold,
Xxxxx & Xxxxx, 000 Xxxx Xxxxxx Xxxxx, 00xx Xxxxx, Xxxxxxx, XX 00000-0000 Attn:
Xxxxxx X. Xxxxxxxx, Esq., or (b) if to the Investors, with a copy to Xxxx Xxxx
Xxxx & Freidenrich, 0000 Xxxxxxxxx Xxxxx, Xxxxx 0000, Xxx Xxxxx, XX 00000 Attn:
Xxxxxx X. Xxxxxx, Esq.
9.8 FEES AND EXPENSES. At the Closing, the Company shall pay the
reasonable fees and expenses incurred by the Investors in conjunction with the
transactions contemplated hereby, including but not limited to the reasonable
fees and expenses of counsel for the Investors, provided such fees and expenses
do not exceed $30,000.
9.9 ATTORNEY'S FEES. If any action at law or in equity (including
arbitration) is necessary to enforce or interpret the terms of any of the
Agreements, the prevailing party shall be entitled to reasonable attorney's
fees, costs and necessary disbursements in addition to any other relief to which
such party may be entitled.
9.10 AMENDMENTS AND WAIVERS. Prior to the Closing, any term of this
Agreement may be amended or waived only with the written consent of the Company
and the Investors. Following the Closing, any term of this Agreement may be
amended or waived only with the written consent of the Company and the holders
of at least a majority of the Preferred Stock purchased hereunder. Any
amendment or waiver effected in accordance with this Section 9.10 shall be
binding upon the Investors and each transferee of the Securities, each future
holder of all such Securities, and the Company.
9.11 SEVERABILITY. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, the parties agree to renegotiate
such provision in good faith. In the event that the parties cannot reach a
mutually agreeable and enforceable replacement for such provision, then (a) such
provision shall be excluded from this Agreement, (b) the balance of
19
the Agreement shall be interpreted as if such provision were so excluded and (c)
the balance of the Agreement shall be enforceable in accordance with its terms.
9.12 DELAYS OR OMISSIONS. No delay or omission to exercise any right,
power or remedy accruing to any party under this Agreement, upon any breach or
default of any other party under this Agreement, shall impair any such right,
power or remedy of such non-breaching or non-defaulting party nor shall it be
construed to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or default thereafter occurring; nor
shall any waiver of any single breach or default be deemed a waiver of any other
breach or default theretofore or thereafter occurring. Any waiver, permit,
consent or approval of any kind or character on the part of any party of any
breach or default under this Agreement, or any waiver on the part of any party
of any provisions or conditions of this Agreement, must be in writing and shall
be effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement or by law or otherwise afforded to any
party, shall be cumulative and not alternative.
9.13 ENTIRE AGREEMENT. This Agreement and the documents referred to
herein constitute the entire agreement between the parties hereto pertaining to
the subject matter hereof, and any and all other written or oral agreements
relating to the subject matter hereof existing between the parties hereto are
expressly canceled.
9.14 CORPORATE SECURITIES LAW. THE SALE OF THE SECURITIES WHICH ARE
THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF
CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF THE SECURITIES OR
THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO THE
QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM THE
QUALIFICATION BY SECTIONS 25100, 25102, OR 25105 OF THE CALIFORNIA CORPORATIONS
CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED
UPON THE QUALIFICATION BEING OBTAINED UNLESS THE SALE IS NOT EXEMPT.
9.15 CONFIDENTIALITY. Each party hereto agrees that, except with the
prior written permission of the other party or as required by applicable law, it
shall at all times keep confidential and not divulge, furnish or make accessible
to anyone any confidential information, knowledge or data concerning or relating
to the business or financial affairs of the other parties to which such party
has been or shall become privy by reason of this Agreement, discussions or
negotiations relating to this Agreement, the performance of its obligations
hereunder or the ownership of the Securities purchased hereunder. The
provisions of this Section 9.15 shall be in addition to, and not in substitution
for, the provisions of any separate nondisclosure agreement executed by the
parties hereto with respect to the transactions contemplated hereby.
[Signature Pages Follow]
20
The parties have executed this Securities Purchase Agreement as of the date
first written above.
COMPANY:
PC QUOTE, INC.
By:
--------------------------------------
Xxx X. Xxxxxx, Chief Executive Officer
Address: 000 Xxxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
INVESTORS:
PICO HOLDINGS, INC.
By:
-------------------------------------
Xxxx X. Xxxx, President
Address: 000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xx Xxxxx, XX 00000
PHYSICIANS INSURANCE COMPANY OF OHIO
By:
------------------------------------
Xxxx X. Xxxx, President
Address: 000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xx Xxxxx, XX 00000
EXHIBITS
Exhibit A - Form of Certificate of Designations
Exhibit B - Form of Warrant
Exhibit C - Forms of Amendments to Warrants
Exhibit D - Schedule of Exceptions to Representations and Warranties
Exhibit E - Form of Registration Rights Agreement
Exhibit F - Form of Legal Opinion of Company Counsel
