SUBSCRIPTION AGREEMENT
This
Subscription Agreement (this “Agreement”)
is
entered into as of August 30, 2006 by and among Patient Safety Technologies,
Inc., a Delaware corporation (together with its successors and permitted
assigns, the “Issuer”),
and
the undersigned investors (each, together with its successors and permitted
assigns, the “Investor”
and
collectively, together with their successors and permitted assigns, the
“Investors”).
Subject
to the terms and conditions of this Agreement, the Investors desire to subscribe
for and purchase, and the Issuer desires to issue and sell to the Investors,
certain shares of the Issuer’s common stock, par value $.33 per share (the
“Common
Stock”),
to
purchase shares of Common Stock. The Issuer is offering One Hundred Twenty
Five
Thousand ($125,000) in shares of Common Stock, in a private placement to
the Investors at a purchase price of One Dollar and Twenty-Five ($1.25) per
share and on the other terms and conditions contained in this Agreement (the
“Offering”)
and
the terms of the Company’s 10-K’s and 10-Q’s incorporated by reference,
provided
that the
Issuer reserves the right to issue and sell a lesser or greater number of
shares.
In
consideration of the mutual representations and warranties, covenants and
agreements contained herein, the parties hereto agree as follows:
1.1 Subscription
and Issuance of Common Stock.
Subject
to the terms and conditions of this Agreement, the Issuer shall issue and sell
to each Investor, and each Investor subscribes for and shall purchase from
the
Issuer, that number of shares of Common Stock set forth on such Investor’s
counterpart signature page hereof (the “Shares”
or
“Securities”)
for
the aggregate purchase price set forth on such counterpart signature page,
which
aggregate purchase price shall be equal to the product of the number of Shares
subscribed for by such Investor multiplied by the per share purchase price
specified in the above Recitals to this Agreement (the “Purchase
Price”).
1.2 Legends.
(a) Any
certificate or certificates representing the Shares shall bear the following
legend, in addition to any legend that may be required by any Requirements
of
Law:
THE
SHARES REPRESENTED BY THIS CERTIFICATE ARE BEING ISSUED TO PURCHASE ADDITIONAL
SHARES OF COMMON STOCK OF THE ISSUER PURSUANT TO A SUBSCRIPTION AGREEMENT WITH
THE ISSUER DATED AS OF AUGUST 30, 2006, A COPY OF WHICH IS ON FILE WITH THE
ISSUER. THE SHARES REPRESENTED BY THIS CERTIFICATE ISSUED HEREWITH UNDER SUCH
SUBSCRIPTION AGREEMENT WILL NOT BE SEPARATELY TRANSFERABLE.
IN
ADDITION, THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD,
TRANSFERRED, OR OTHERWISE DISPOSED OF BY THE HOLDER EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT FILED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND IN COMPLIANCE WITH APPLICABLE SECURITIES LAWS OF ANY STATE WITH
RESPECT THERETO OR IN ACCORDANCE WITH AN OPINION OF COUNSEL IN FORM AND
SUBSTANCE SATISFACTORY TO THE ISSUER THAT AN EXEMPTION FROM SUCH REGISTRATION
IS
AVAILABLE AND ALSO MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT
IN COMPLIANCE WITH ANY APPLICABLE RULES OF THE SECURITIES AND EXCHANGE
COMMISSION.
| 2. |
2.1 Closing.
The
closing of the transactions contemplated herein (the “Closing”)
shall
take place simultaneously upon execution of this Agreement at the offices of
Issuer located 0000 Xxxxxxx Xxxx Xxxx, Xxxxx 000, Xxx Xxxxxxx, XX 00000. At
the
Closing: (i) each Investor participating in such Closing shall pay to the
Issuer, by wire transfer of immediately available funds to an account designated
in writing by the Issuer, the Purchase Price for the Shares being purchased
by
such Investor hereunder; (ii) the Issuer shall issue to each such Investor
the
Shares being purchased by the Investor hereunder and shall deliver or cause
to
be delivered to such Investor a certificate or certificates representing such
Shares duly registered in the name of such Investor, as specified on the
signature pages hereto; and (iii) all other actions referred to in this
Agreement which are required to be taken at such Closing shall be taken and
all
other agreements and documents referred to in this Agreement that are required
for such Closing shall be executed and delivered.
As
a
material inducement to the Issuer to enter into this Agreement and issue the
Securities, each Investor represents, warrants, and covenants to the Issuer
as
follows:
3.1 Power
and Authority.
Such
Investor, if other than a natural person, is an entity duly organized, validly
existing and in good standing under the laws of the state of its incorporation
or formation. Such Investor has the corporate, partnership or other power (or,
in the case of a natural person, legal capacity) and authority under applicable
law to execute and deliver this Agreement and consummate the transactions
contemplated hereby, and has all necessary authority to execute, deliver and
perform its obligations under this Agreement and to consummate the transactions
contemplated hereby. Such Investor has taken all necessary action to authorize
the execution, delivery and performance of this Agreement and the transactions
contemplated hereby.
2
3.2 No
Violation.
The
execution and delivery by such Investor of this Agreement, the consummation
of
the transactions contemplated hereby, and the compliance by such Investor with
the terms and provisions hereof, will not: (i) result in a default under (or
give any other party the right, with the giving of notice or the passage of
time
(or both), to declare a default or accelerate any obligation under) any Contract
to which such Investor is a party or by which it or its properties or assets
are
bound (except to the extent such defaults or accelerations, individually or
in
the aggregate, would not reasonably be expected to have a Material Adverse
Effect on such Investor); (ii) violate any Requirement of Law applicable to
such
Investor; or (iii) if such Investor is other than a natural person, violate
any
charter, bylaws or similar documents of such Investor. At or prior to the
Closing, such Investor will have complied with all Requirements of Law
applicable to it in connection with the Offering and at all times thereafter
such Investor will comply with all Requirements of Law applicable to it in
connection with any resale or transfer by such Investor of any Securities
acquired by such Investor pursuant to this Agreement.
3.3 Consents/Approvals.
No
consents, filings, authorizations or actions of any Governmental Authority
are
required for such Investor’s execution, delivery and performance of this
Agreement. No consent, approval, waiver or other actions by any Person under
any
Contract to which such Investor is a party or by which such Investor or any
of
its properties or assets are bound is required or necessary for the execution,
delivery and performance by such Investor of this Agreement and the consummation
of the transactions contemplated hereby.
3.4 Enforceability.
This
Agreement has been duly executed and delivered by such Investor and (assuming
it
has been duly authorized, executed, and delivered by the Issuer) constitutes
a
legal, valid and binding obligation of such Investor, enforceable against such
Investor in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, fraudulent conveyances,
reorganization, moratorium or similar laws from time to time in effect affecting
the enforcement of creditor’s rights generally, and general equitable
principles, regardless of whether enforceability is considered in a proceeding
at law or in equity, and except for the indemnity provisions of Article
7 of
this
Agreement, which may not be enforceable based upon public policy
considerations.
3.5 Investment
Intent.
Buyer
is
acquiring the Shares for its own account, for investment purposes only and
not
with a view to resale or other distribution thereof, nor with the intention
of
selling, transferring or otherwise disposing of all or any part of such Shares,
or any interest therein, for any particular price, or at any particular time,
or
upon the happening of any particular event or circumstances, except selling,
transferring, or disposing of such Shares made in full compliance with all
applicable provisions of the Securities Act of 1993 (the "Securities Act")
and
the Securities Exchange Act of 1934, and the Rules and Regulations promulgated
by the Securities and Exchange Commission thereunder, all as
amended.
3.6 Accredited
Investor.
Such
Investor is an “accredited investor” as such term is defined in Rule 501(a) of
Regulation D under the Securities Act. Without limiting the foregoing
representation, such Investor confirms that it has reviewed the partial
definition of an “Accredited Investor” which is attached hereto as Exhibit
A
(which
is not a complete definition of the term, but which includes the most likely
categories of qualification) to confirm the accuracy of such representation,
and
such Investor has noted by paragraph number, on its signature page hereto,
the
category(ies) pursuant to which such Investor qualifies as an “Accredited
Investor” according to the definition set forth in Exhibit
A.
Such
Investor has not been formed for the purpose of acquiring the Securities. Such
Investor is not an officer, director, employee, investment advisor, promoter,
general partner, Affiliate or member of the advisory board of the
Issuer.
3
3.7 Adequate
Information.
Such
Investor has received from the Issuer, and has reviewed, such information as
such Investor considers necessary or appropriate to evaluate the risks and
merits of an investment in, and make an informed investment decision with
respect to, the Securities, including, without limitation, the documents listed
on Exhibit
B,
which
have been received by such Investor as part of an informational packet of
materials from the Issuer (the “Disclosure
Documents”).
Such
Investor acknowledges that each of the SEC Reports, including the risk factors
contained therein, are specifically incorporated herein by reference and form
an
integral part of this Agreement. Such Investor also acknowledges that the
additional risk factors set forth and contained in the Disclosure Documents
are
specifically incorporated herein by reference and form an integral part of
this
Agreement.
3.8 Opportunity
to Question.
Such
Investor has had the opportunity to question, and has questioned, to the extent
deemed necessary or appropriate, representatives of the Issuer so as to receive
answers from the Issuer’s representatives regarding the terms and conditions of
an investment in the Securities and to verify information obtained in such
Investor’s examination of the Issuer, including, without limitation, the
information that such Investor received and reviewed as referenced in
Section
4.7
in
relation to its investment in the Securities.
3.9 No
Other Representations.
No oral
or written representations have been made to such Investor in connection with
such Investor’s acquisition of the Securities which were in any way inconsistent
with the information reviewed by such Investor. Such Investor acknowledges
that,
in deciding whether to enter into this Agreement and to acquire the Securities
hereunder, it has not relied on any representations or warranties of any type
or
description made by the Issuer or any of its representatives with regard to
the
Issuer or its business, property or prospects of the investment contemplated
herein, other than the representations and warranties of the Issuer set forth
in
Article
3
hereof.
3.10 Knowledge
and Experience.
Such
Investor understands that an investment in the Securities involves substantial
risk. Such Investor has such knowledge and experience in financial, tax and
business matters, including substantial experience in evaluating and investing
in common stock and other securities (including the common stock and other
securities of speculative companies), so as to enable such Investor to utilize
the information referred to in Section
4.7
hereof
and any other information made available by the Issuer to such Investor in
order
to evaluate the merits and risks of an investment in the Securities and to
make
an informed investment decision with respect thereto.
3.11 Independent
Decision.
Such
Investor is not relying on the Issuer or on any legal or other opinion in the
materials reviewed by such Investor with respect to the financial or tax
considerations of such Investor relating to its investment in the Securities.
Such Investor has relied solely on the representations and warranties, covenants
and agreements of the Issuer in this Agreement (including the exhibits and
schedules hereto) and on its examination and independent investigation in making
its decision to acquire the Securities.
4
In
the
event the Issuer files a registration statement pursuant to the Securities
Act
of 1933, as amended, the Securities shall be included for resale in such
registration statement; provided.
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5.1 Indemnification
by the Issuer.
The
Issuer will indemnify and hold harmless each Holder or Selling Stockholder
of
Shares covered by a Registration Statement pursuant to the provisions of
Article
6,
any
Person who controls such Holder or Selling Stockholder within the meaning of
the
Securities Act, and any officer, director, investment adviser, employee, agent,
partner, member or Affiliate of such Holder or Selling Stockholder (each, a
“Holder/Selling
Stockholder Indemnified Party”),
from
and against, and will reimburse each such Holder/Selling Stockholder Indemnified
Party with respect to, any and all claims, actions, demands, losses, damages,
liabilities, costs and expenses to which such Holder/Selling Stockholder or
any
such Holder/Selling Stockholder Indemnified Party may become subject under
the
Securities Act or otherwise, insofar as such claims, actions, demands, losses,
damages, liabilities, costs or expenses arise out of or are based upon: (a)
any
untrue statement or alleged untrue statement of any material fact contained
in
such registration statement, any prospectus contained therein or any amendment
or supplement thereto; (b) the omission or alleged omission to state therein
a
material fact required to be stated therein or necessary to make the statements
therein (in the case of any preliminary prospectus or prospectus, in light
of
the circumstances under which they were made) not misleading; or (c) any
materially inaccurate representation or breach of any material warranty,
agreement or covenant of the Issuer contained herein; provided
that the
Issuer will not be liable in any such case to the extent that any such claim,
action, demand, loss, damage, liability, cost or expense arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission (i) made in reliance on and conformity with information
furnished by any Holder/Selling Stockholder in writing specifically for use
in
the preparation thereof or (ii) which was cured in an amendment or supplement
to
the prospectus (or any amendment or supplement thereto) delivered to the
Holder/Selling Stockholder on a timely basis to permit proper delivery thereof
prior to the date on which any Shares were transferred or sold.
5.2 Indemnification
by the Holder or Selling Stockholder.
Each
Holder and each Selling Stockholder of Shares covered by a Registration
Statement pursuant to the provisions of Article
6
will
indemnify and hold harmless the Issuer, any Person who controls the Issuer
within the meaning of the Securities Act, and any officer, director, employee,
agent, partner, member or Affiliate of the Issuer (each, an “Issuer
Indemnified Party”)
from
and against, and will reimburse the Issuer Indemnified Parties with respect
to,
any and all claims, actions, demands, losses, damages, liabilities, costs or
expenses to which such Issuer Indemnified Parties may become subject under
the
Securities Act or otherwise, insofar as such losses, damages, liabilities,
costs
or expenses arise out of or are based upon: (a) any untrue or alleged untrue
statement of any material fact contained in such Registration Statement, any
prospectus contained therein or any amendment or supplement thereto; or (b)
the
omission or the alleged omission to state therein a material fact required
to be
stated therein or necessary to make the statements therein, (in the case of
any
preliminary prospectus or prospectus, in light of the circumstances under which
they were made) not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission
or
alleged omission was so made in reliance on and conformity with written
information furnished by such Holder or Selling Stockholder specifically for
use
in the preparation thereof; provided
that the
liability of any Holder or Selling Stockholder pursuant to this Section
7.2
shall be
limited to an amount not to exceed the net proceeds received by such Holder
or
Selling Stockholder from the sale of Registrable Securities pursuant to the
Registration Statement which gives rise to such obligation to
indemnify.
5
5.3 Procedures.
Promptly after receipt by a party indemnified pursuant to the provisions of
Section
5.1
or
Section
5.2
of
notice of the commencement of any action involving the subject matter of the
foregoing indemnity provisions, such indemnified party will, if a claim thereof
is to be made against the indemnifying party pursuant to the provisions of
Section
5.1
or
Section
5.2,
notify
the indemnifying party of the commencement thereof; provided
the
omission to so notify the indemnifying party will not relieve it from any
liability which it may have to an indemnified party otherwise than under this
Article
7,
and
shall not relieve the indemnifying party from liability under this Article
7,
except
to the extent that such indemnifying party is materially prejudiced by such
omission. In case such action is brought against any indemnified party and
it
notifies the indemnifying party of the commencement thereof, the indemnifying
party shall have the right to participate in, and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel reasonably satisfactory to such indemnified
party, and after notice from the indemnifying party to such indemnified party
of
its election to assume the defense thereof, the indemnifying party will not
be
liable to such indemnified party pursuant to the provisions of Section
5.1
or
Section
5.2
for any
legal or other expense subsequently incurred by such indemnified party in
connection with the defense thereof. No indemnifying party shall be liable
to an
indemnified party for any settlement of any action or claim without the consent
of the indemnifying party. No indemnifying party will consent to entry of any
judgment or enter into any settlement which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such indemnified party
of an unconditional release from all liability in respect to such action, claim
or litigation.
| 6. |
6.1 Defined
Terms.
As used
herein the following terms shall have the following meanings:
(a) “Affiliate”
has
the
meaning ascribed to it in Rule 12b-2 of the General Rules and Regulations under
the Exchange Act, as in effect on the date hereof.
(b) “Agreement”
has
the
meaning specified in the preamble to this Agreement.
(c) “AMEX”
has
the
meaning specified in Section
3.5
of this
Agreement.
(d) “Business
Day”
means
any day except Saturday, Sunday and any day which shall be a federal legal
holiday or a day on which either (i) the SEC or (ii) banking institutions in
the
State of New York are authorized or required by law or other governmental action
to close.
6
(e) “Bylaws”
means
the Bylaws of the Issuer, as the same may be supplemented, amended, or restated
from time to time.
(f) “Certificate
of Incorporation”
means
the Issuer’s Certificate of Incorporation, as the same may be supplemented,
amended or restated from time to time.
(g) “Closing”
has
the
meaning specified in Section
2.1 of
this
Agreement.
(h) “Common
Stock”
has
the
meaning specified in the Recitals to this Agreement.
(i) “Confidential
Information”
has
the
meaning specified in Section
6.13
of this
Agreement.
(j) “Contract”
means
any indenture, lease, sublease, loan agreement, mortgage, note, restriction,
commitment, obligation or other contract, agreement or instrument.
(k) “Disclosure
Documents”
has
the
meaning specified in Section
3.7
of this
Agreement and in Exhibit C.
(l) “Exchange
Act”
means
the Securities Exchange Act of 1934, as amended.
(m) “GAAP”
means
generally accepted accounting principles in effect in the United States of
America.
(n) “Governmental
Authority”
means
any nation or government, any state or other political subdivision thereof,
and
any entity or official exercising executive, legislative, judicial, regulatory
or administrative functions of or pertaining to government.
(o) “Holder/Selling
Stockholder Indemnified Party”
has
the
meaning specified in Section
5.1
of this
Agreement.
(p) “Investor”
has
the
meaning specified in the preamble to this Agreement.
(q) “Issuer”
means
Patient Safety Technologies, Inc., a Delaware corporation.
(r) “Issuer
Indemnified Party”
has
the
meaning specified in Section
5.2
of this
Agreement.
(s) “Knowledge”
means,
with respect to the Issuer, the actual knowledge of Xxxxxx “Xxxx” Xxxx
III.
(t) “Material
Adverse Effect”
means
a
material and adverse change in, or effect on, the financial condition,
properties, assets, liabilities, rights, obligations, operations or business,
of
a Person.
7
(u) “Notice
and Questionnaire”
has
the
meaning specified in Exhibit
D
of this
Agreement.
(v) “Offering”
has
the
meaning specified in the Recitals to this Agreement.
(w) “Permit”
means
any permit, certificate, consent, approval, authorization, order, license,
variance, franchise or other similar indicia of authority issued or granted
by
any Governmental Authority.
(x) “Person”
means
a
natural person, partnership, corporation, limited liability company, business
trust, joint stock company, estate, trust, unincorporated association, joint
venture, Governmental Authority or other entity, of whatever
nature.
(y) “Purchase
Price”
has
the
meaning specified in Section
1.1 of
this
Agreement.
(z) “Rule
144”
means
Rule 144 promulgated under the Securities Act, or any successor
thereto.
(aa) “SEC”
means
the Securities and Exchange Commission.
(bb) “Securities”
has
the
meaning specified in Section
1.2
of this
Agreement.
(cc) “Securities
Act”
means
the Securities Act of 1933, as amended.
(dd) “Shares”
has
the
meaning specified in Section
1.1
of this
Agreement.
(a) All
terms
defined in this Agreement shall have the defined meanings when used in any
certificates, reports or other documents made or delivered pursuant hereto
or
thereto, unless the context otherwise requires.
(b) Terms
defined in the singular shall have a comparable meaning when used in the plural,
and vice versa.
(c) All
accounting terms shall have a meaning determined in accordance with
GAAP.
(d) The
words
“hereof,” “herein” and “hereunder,” and words of similar import, when used in
this Agreement shall refer to this Agreement as a whole (including any exhibits
and schedules hereto) and not to any particular provision of this
Agreement.
6.3 Notices.
All
notices, requests, demands, claims, and other communications hereunder shall
be
in writing and shall be delivered by certified or registered mail (first class
postage pre-paid), guaranteed overnight delivery, or facsimile transmission if
such transmission is confirmed by delivery by certified or registered mail
(first class postage pre-paid) or guaranteed overnight delivery, to the
following addresses and telecopy numbers (or to such other addresses or telecopy
numbers which such party shall subsequently designate in writing to the other
party):
8
|
(a)
|
if
to the Issuer to:
|
c/o
Xxxxxx “Xxxx” Xxxx III
0000
Xxxxxxx Xxxx Xxxx, Xxxxx 000
Xxxxx
000
Xxx
Xxxxxxx, XX 00000
Facsimile:
(000) 000-0000
(b) if
to an
Investor, to the address set forth next to such Investor’s name on such
Investor’s counterpart signature page hereto.
Each
such
notice or other communication shall for all purposes of this Agreement be
treated as effective or having been given when delivered if delivered by hand,
by messenger or by courier, or if sent by facsimile, upon confirmation of
receipt.
6.4 Entire
Agreement.
This
Agreement (including the exhibits and schedules attached hereto) and other
documents delivered at the Closing pursuant hereto, contain the entire
understanding of the parties in respect of its subject matter and supersede
all
prior agreements and understandings between the parties with respect to such
subject matter.
6.5 Expenses;
Taxes.
Except
as otherwise provided in this Agreement, the parties shall pay their own fees
and expenses, including their own counsel fees, incurred in connection with
this
Agreement or any transaction contemplated hereby; provided
that the
Issuer shall pay at the Closing the reasonable legal fees (up to a maximum
of
$20,000) of a single special counsel to the Investors. Any sales tax, stamp
duty, deed transfer or other tax (except taxes based on the income of the
Investors) arising out of the issuance of the Securities (but not with respect
to subsequent transfers) by the Issuer to the Investors and consummation of
the
transactions contemplated by this Agreement shall be paid by the
Issuer.
6.6 Amendment;
Waiver.
This
Agreement may not be modified, amended, supplemented, canceled or discharged,
except by written instrument executed by the parties to this Agreement. No
failure to exercise, and no delay in exercising, any right, power or privilege
under this Agreement shall operate as a waiver, nor shall any single or partial
exercise of any right, power or privilege hereunder preclude the exercise of
any
other right, power or privilege. No waiver of any breach of any provision shall
be deemed to be a waiver of any preceding or succeeding breach of the same
or
any other provision, nor shall any waiver be implied from any course of dealing
between the parties. No extension of time for performance of any obligations
or
other acts hereunder or under any other agreement shall be deemed to be an
extension of the time for performance of any other obligations or any other
acts. The rights and remedies of the parties under this Agreement are in
addition to all other rights and remedies, at law or equity, that they may
have
against each other.
6.7 Binding
Effect; Assignment.
The
rights and obligations of this Agreement shall bind and inure to the benefit
of
the parties and their respective successors and legal assigns. The rights and
obligations of the Issuer pursuant to this Agreement may not be assigned to
any
third party without the prior written consent of the Holders of a majority
of
the Registrable Securities.
9
6.8 Counterparts;
Facsimile Signature.
This
Agreement may be executed by facsimile signature and in any number of
counterparts, each of which shall be an original but all of which together
shall
constitute one and the same instrument.
6.9 Headings.
The
headings contained in this Agreement are for convenience of reference only
and
are not to be given any legal effect and shall not affect the meaning or
interpretation of this Agreement.
6.10 Governing
Law; Interpretation.
This
Agreement shall be construed in accordance with and governed for all purposes
by
the laws of the State of California applicable to contracts executed and to
be
wholly performed within such state.
6.11 Severability.
The
parties stipulate that the terms and provisions of this Agreement are fair
and
reasonable as of the date of this Agreement. However, any provision of this
Agreement shall be determined by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated. If, moreover,
any of those provisions shall for any reason be determined by a court of
competent jurisdiction to be unenforceable because excessively broad or vague
as
to duration, activity or subject, it shall be construed by limiting, reducing
or
defining it, so as to be enforceable.
6.12 Further
Assurances.
Each of
the parties hereto shall execute and deliver such additional instruments and
other documents and shall take such further actions as may be reasonably
necessary or appropriate to effectuate, carry out and comply with all of the
terms of this Agreement and the transactions contemplated hereby. Each of the
Investors and the Issuer shall make on a prompt and timely basis all
governmental or regulatory notifications and filings required to be made by
it
with or to any Governmental Authority in connection with the consummation of
the
transactions contemplated hereby. The Issuer and the Investors agree to
cooperate with one another in the preparation and filing of all forms,
notifications, reports and information, if any, required or reasonably deemed
advisable pursuant to any Requirement of Law or AMEX rules in connection with
the transactions contemplated by this Agreement and to use their respective
commercially reasonable efforts to agree jointly on a method to overcome any
objections by any Governmental Authority to any such transactions.
10
6.13 Confidential
Information.
Each
Investor confirms that it has entered into a confidentiality agreement with
the
Issuer, pursuant to which such Investor has agreed to keep confidential certain
information relating to the Issuer that has been disclosed by the Issuer to
the
Investor in connection with such Investor’s investment in the Securities, and
that such Investor shall continue to be bound by such confidentiality agreement
after the Closing. In addition, each Investor agrees that no portion of the
Confidential Information (as defined below) shall be disclosed to third parties,
except as may be required by law, without the prior express written consent
of
the Issuer; provided
that
each Investor may share such information with such of its officers and
professional advisors as may need to know such information to assist such
Investor in its evaluation thereof, on the condition that such parties agree
to
be bound by the terms of this Section
5.4.
“Confidential
Information”
means
the existence and terms of this Agreement, the transactions contemplated hereby,
and the disclosures and other information contained herein, excluding any
disclosures or other information that is publicly available.
[REMAINDER
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11
IN
WITNESS WHEREOF, the parties hereto have caused this Subscription Agreement
to
be duly executed and delivered as of the date set forth below.
|
ISSUER:
By:_______________________
Name:_____________________
Title:______________________
|
[INVESTOR
COUNTERPART SIGNATURE PAGE]
|
NAME
OF INVESTOR
(please print)
_________________________
|
ADDRESS
FOR NOTICE
(please print)
_________________________
_________________________
_________________________
Attention:_____________________
Tax
Identification #:______________
|
|
SIGNATURE
By:__________________________
Name:________________________
Title:_________________________
Date:_________________________
|
|
|
Exact
name to appear on stock certificate:
_________________________
|
Number
of Shares subscribed for:
_________________________
|
|
Aggregate
Purchase Price (see Section 1.1):
$__________________________
|
Categories
pursuant to which Investor qualifies as an Accredited Investor as
defined
in Exhibit B
to
this Agreement (please indicate the applicable section numbers noted
on
Exhibit
B
to
this Agreement):
__________________________
|
EXHIBIT
A
DEFINITION
OF “ACCREDITED INVESTOR”
“Accredited
Investor”
shall
mean any person who comes within any of the following categories, or who the
Issuer reasonably believes comes within any of the following categories, at
the
time of the sale of the Securities to that person:
1. Any
bank
as defined in section 3(a)(2) of the Act, or any savings and loan association
or
other institution as defined in section 3(a)(5)(A) of the Act whether acting
in
its individual or fiduciary capacity; any broker or dealer registered pursuant
to section 15 of the Securities Exchange Act of 1934; any insurance company
as
defined in section 2(13) of the Act; any investment company registered under
the
Investment Company Act of 1940 or a business development company as defined
in
section 2(a)(48) of that Act; any Small Business Investment Company licensed
by
the U.S. Small Business Administration under section 301(c) or (d) of the Small
Business Investment Act of 1958; any plan established and maintained by a state,
its political subdivisions, or any agency or instrumentality of a state or
its
political subdivisions, for the benefit of its employees, if such plan has
total
assets in excess of $5,000,000; any employee benefit plan within the meaning
of
the Employee Retirement Income Security Act of 1974 if the investment decision
is made by a plan fiduciary, as defined in section 3(21) of such act, which
is
either a bank, savings and loan association, insurance company, or registered
investment adviser, or if the employee benefit plan has total assets in excess
of $5,000,000 or, if a self-directed plan, with investment decisions made solely
by persons that are Accredited Investors;
2. Any
private business development company as defined in section 202(a)(22) of the
Investment Advisers Act of 1940;
3. Any
organization described in section 501(c)(3) of the Internal Revenue Code,
corporation, Massachusetts or similar business trust, or partnership, not formed
for the specific purpose of acquiring the securities offered, with total assets
in excess of $5,000,000;
4. Any
director, executive officer, or general partner of the Issuer, or any director,
executive officer, or general partner of a general partner of the
Issuer;
5. Any
natural person whose individual net worth, or joint net worth with that person’s
spouse, at the time of his purchase exceeds $1,000,000;
6. Any
natural person who had an individual income in excess of $200,000 in each of
the
two most recent years or joint income with that person’s spouse in excess of
$300,000 in each of those years and has a reasonable expectation of reaching
the
same income level in the current year;
7. Any
trust, with total assets in excess of $5,000,000, not formed for the specific
purpose of acquiring the Securities, whose purchase is directed by a
sophisticated person as described in 230.506(b)(2)(ii); and
8. Any
entity in which all of the equity owners are Accredited Investors.
EXHIBIT
B
The
undersigned beneficial holder of Registrable Securities of Patient Safety
Technologies, Inc. (the “Issuer”)
understands that the Issuer has filed or intends to file with the Securities
and
Exchange Commission (the “SEC”)
a
Registration Statement under the Securities Act of 1933, as amended (the
“Securities
Act”),
for
the registration and resale of the Registrable Securities in accordance with
the
terms of the Subscription Agreement, dated as of August __, 2006 (the
“Subscription
Agreement”),
by
and among the Issuer and the purchasers of the Issuer’s securities thereunder.
The Subscription Agreement is available from the Issuer upon request at the
address set forth below. All capitalized terms used but not otherwise defined
herein shall have the respective meanings given to them in the Subscription
Agreement.
Each
beneficial owner of Registrable Securities that has agreed to be bound by
certain provisions of the Subscription Agreement is entitled to the benefits
of
the Subscription Agreement under such provisions. In order to sell or otherwise
dispose of any Registrable Securities pursuant to the Registration Statement,
a
beneficial owner of Registrable Securities generally will be required to be
named as a selling securityholder in the related prospectus, deliver a
prospectus to purchasers of Registrable Securities and be bound by those
provisions of the Subscription Agreement applicable to such beneficial owner
(including certain indemnification provisions as described below). Beneficial
owners that do not complete this Notice and Questionnaire and deliver it to
the
Issuer as provided below will not be named as selling securityholders in the
prospectus and therefore will not be permitted to sell any Registrable
Securities pursuant to the Registration Statement.
Certain
legal consequences may arise from being named as selling securityholders in
the
Registration Statement and the related prospectus. Accordingly, holders and
beneficial owners of Registrable Securities are advised to consult their own
securities law counsel regarding the consequences of being named or not being
named as a selling securityholder in the Registration Statement and the related
prospectus.
The
undersigned beneficial owner (the “Selling
Stockholder”)
of
Registrable Securities hereby requests that the Issuer include in the
Registration Statement the Registrable Securities beneficially owned by it
and
listed below in Item 3 (unless otherwise specified under Item 3) pursuant to
the
Registration Statement. The undersigned Selling Stockholder, by signing and
returning this Notice and Questionnaire, understands that it will be bound
by
the terms and conditions of this Notice and Questionnaire and the Subscription
Agreement.
The
undersigned Selling Stockholder hereby provides the following information to
the
Issuer and represents and warrants that such information is accurate and
complete:
Questionnaire
| 1. (a) |
Full
Legal Name of Selling Stockholder:
|
|
(b)
|
Full
legal name of registered holder (if not the same as (a) above) through
which Registrable Securities listed in (3) below are
held:
|
|
(c)
|
Full
legal name of broker-dealer or other third party through which Registrable
Securities listed in (3) below are
held:
|
|
(d)
|
Full
legal name of DTC participant (if applicable and if not the same
as (b) or
(c) above) through which Registrable Securities listed in (3) below
are
held:
|
| 2. |
Address
for Notices to Selling Stockholder:
|
|
Telephone:
|
|
|
Fax:
|
|
|
Contact
Person:
|
| 3. |
Beneficial
ownership of Registrable Securities:
|
Unless
otherwise indicated in the space provided below, all shares of common stock
listed in response to Item (3) above will be included in the Registration
Statement. If the undersigned does not wish all such shares of common stock
to
be so included, please indicate below the principal amount or the number of
shares to be included:
| 4. |
Beneficial
Ownership of the Issuer’s securities owned by the
Selling
|
|
Stockholder:
|
Except
as set forth below in this Item (4), the undersigned is not the beneficial
or
registered owner of any securities of the Issuer other than the Registrable
Securities listed above in Item (3).
|
(a)
|
Type and amount of other securities beneficially owned by the Selling Stockholder: | |
|
(b)
|
CUSIP No(s). of such other securities beneficially owned: | |
|
5.
|
Relationship with the Issuer: |
Except
as set forth below, neither the undersigned nor any of its Affiliates, directors
or principal equity holders (5% or more) has held any position or office or
has
had any other material relationship with the Issuer (or its predecessors or
Affiliates) during the past three years.
| State any exceptions to the foregoing here: |
The
undersigned Selling Stockholder acknowledges that it understands its obligation
to comply with the provisions of the Exchange Act, and the rules thereunder
relating to stock manipulation, particularly Regulation M thereunder (or any
successor rules or regulations) and the provisions of the Securities Act
relating to prospectus delivery, in connection with any offering of Registrable
Securities pursuant to the Registration Statement. The undersigned Selling
Stockholder agrees that neither it nor any person acting on its behalf will
engage in any transaction in violation of such provisions.
The
Selling Stockholder hereby acknowledges its obligations under the Subscription
Agreement to indemnify and hold harmless certain persons set forth therein.
Pursuant to the Subscription Agreement, the Issuer has agreed under certain
circumstances to indemnify the Selling Stockholders against certain
liabilities.
In
accordance with the undersigned Selling Stockholder’s obligation under the
Subscription Agreement to provide such information as maybe required by law
for
inclusion in the Registration Statement, the undersigned Selling Stockholder
agrees to promptly notify the Issuer of any inaccuracies or changes in the
information provided herein that may occur subsequent to the date hereof at
any
time while the Registration Statement remains effective. All notices hereunder
and pursuant to the Subscription Agreement shall be made in writing at the
address set forth below.
In
the
event any Selling Stockholder transfers all or any portion of the Registrable
Securities listed in Item (3) above after the date on which such information
is
provided to the Issuer, the Selling Stockholder will notify the transferees
at
the time of transfer of its rights and obligations under this Notice and
Questionnaire and the Subscription Agreement.
By
signing below, the undersigned Selling Stockholder consents to the disclosure
of
the information contained herein in its answers to items (1) through (5) above
and the inclusion of such information in the Registration Statement and any
related prospectus. The undersigned Selling Stockholder understands that such
information will be relied upon by the Issuer without independent investigation
or inquiry in connection with the preparation or amendment of the Registration
Statement and any related prospectus.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
| Selling Stockholder: | |||
| By: ________________ | |||
|
Name:
|
|||
|
Title:
|
|||
| Dated:________________ |
PLEASE
RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE
TO:
c/o
Xxxxxx “Xxxx” Xxxx III
0000
Xxxxxxx Xxxx Xxxx
Xxxxx
000
Xxx
Xxxxxxx, XX 00000