Exhibit 10.74
PATIENT INFOSYSTEMS, INC.
COMMON STOCK PURCHASE AGREEMENT
This Common Stock Purchase Agreement (this "Agreement") is made and entered
into as of June ___, 2004, by and among PATIENT INFOSYSTEMS, INC., a Delaware
corporation (the "Company"), and each of the purchasers listed on Exhibit A
attached hereto (collectively, the "Purchasers" and individually, a
"Purchaser").
RECITALS
WHEREAS, the Company desires to sell to the Purchasers, and the Purchasers
desire to purchase from the Company, shares of common stock, par value $0.01 per
share, of the Company (the "Common Stock") on the terms and conditions set forth
this Agreement;
WHEREAS, the Company and each Purchaser are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by the provisions of Regulation D ("Regulation D"), as promulgated by the United
States Securities and Exchange Commission (the "SEC") under the Securities Act
of 1933, as amended (the "Securities Act");
NOW, THEREFORE, in consideration of the foregoing, the mutual promises
hereinafter set forth, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. AGREEMENT TO PURCHASE AND SELL STOCK.
(a) Authorization. The Company's Board of Directors has authorized the
issuance, pursuant to the terms and conditions of this Agreement, of up to
3,710,000 shares of Common Stock (the "Purchased Shares").
(b) Agreement to Purchase and Sell Securities. Subject to the terms and
conditions of this Agreement, each Purchaser severally and not jointly
agrees to purchase, and the Company agrees to sell and issue to each
Purchaser, at the Closing (as defined below), that number of Purchased
Shares set forth opposite such Purchaser's name on Exhibit A attached
hereto. The purchase price of each Purchased Share (the "Per Share Price")
shall be $1.68.
(c) Use of Proceeds. The Company intends to apply the net proceeds from the
sale of the Purchased Shares for general corporate purposes.
2. CLOSING. The purchase and sale of the Purchased Shares shall take place at
the offices of XxXxxxxx & English, LLP, counsel to the Company, 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx, at 10:00 a.m. Eastern time, on June 14, 2004,
or at such other time and place as the Company and Purchasers that
represent at least a majority of the Purchased Shares mutually agree upon
(which time and place are referred to in this Agreement as the "Closing").
At the Closing, the Company shall authorize its transfer agent to issue to
each Purchaser, against delivery of payment for the Purchased Shares by
wire transfer of immediate available funds in accordance with the Company's
instructions, one or more stock certificates (the "Certificates")
registered in the name of each Purchaser (or in such nominee name(s) as
designated by such Purchaser in the Stock Certificate Questionnaire
attached hereto as Appendix I), representing the number of shares set forth
opposite the appropriate Purchaser's name on Exhibit A hereto, and bearing
the legend set forth in Section 4(k) herein. Closing documents may be
delivered by facsimile with original signature pages sent by overnight
courier. The date of the Closing is referred to herein as the Closing Date.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to each Purchaser that the statements in this
Section 3 are true and correct, except as set forth in the SEC Documents
(as defined below) or in the Disclosure Letter on Exhibit C attached hereto
delivered to the Purchasers concurrently herewith:
(a) 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 Delaware and has all corporate power
and authority required to (i) carry on its business as presently
conducted and (ii) enter into this Agreement and the other agreements,
instruments and documents contemplated hereby, and to consummate the
transactions contemplated hereby and thereby. The Company is qualified
to do business and is in good standing in each jurisdiction in which
the failure to so qualify would have a Material Adverse Effect. As
used in this Agreement, "Material Adverse Effect" means a material
adverse effect on, or a material adverse change in, or a group of such
effects on or changes in, the business, operations, prospects,
financial condition, results of operations, assets or liabilities of
the Company and its subsidiaries, taken as a whole.
(b) Capitalization. The capitalization of the Company, without listing the
Purchased Shares to be issued pursuant to this Agreement, is as
follows:
(i) The authorized capital stock of the Company consists of
80,000,000 shares of Common Stock and 20,000,000 shares of
Preferred Stock, of which 500,000 shares are designated Series C
Convertible Preferred Stock and 1,000,000 shares are designated
as Series D Convertible Preferred Stock.
(ii) As of June 14, 2004, the issued and outstanding capital stock of
the Company consisted of 6,206,799 shares of Common Stock, par
value $0.01 per share, of the Company ("Common Stock"), 75,000
shares of Series C Convertible Preferred Stock and 840,118 shares
of Series D Convertible Preferred Stock. The shares of issued and
outstanding capital stock of the Company have been duly
authorized and validly issued, are fully paid and nonassessable
and have not been issued in violation of or are not otherwise
subject to any preemptive or other similar rights.
(iii)As of June 14, 2004, the Company had 1,518,827 shares of Common
Stock reserved for issuance upon exercise of outstanding options
granted under the Company's Amended and Restated Stock Option
Plan.
(iv) As of June 14, 2004, the Company had 95,000 shares of Common
Stock reserved for issuance upon the exercise of outstanding
warrants to purchase Common Stock.
(v) As of June 14, 2004, the Company had 47,500 shares of Series D
Convertible Preferred Stock reserved for issuance upon the
exercise of outstanding warrants to purchase Series D Convertible
Preferred Stock.
(vi) As of June 14, 2004, the Company had 750,000 shares of Common
Stock reserved for issuance upon the conversion of Series C
Convertible Preferred Stock.
(vii)As of June 14, 2004, the Company had 8,876,180 shares of Common
Stock reserved for issuance upon the conversion of Series D
Convertible Preferred Stock.
With the exception of the foregoing in this Section 3(b), there are no
outstanding subscriptions, options, warrants, convertible or
exchangeable securities or other rights granted to or by the Company
to purchase shares of Common Stock or other securities of the Company
and there are no commitments, plans or arrangements to issue any
shares of Common Stock or any security convertible into or
exchangeable for Common Stock.
(c) Subsidiaries. Except as otherwise disclosed in the Disclosure Letter,
the Company does not have any subsidiaries, nor does the Company own
any capital stock of, assets comprising the business of, obligations
of, or any other interest (including any equity or partnership
interest) in, any person or entity.
(d) Due Authorization. All corporate actions on the part of the Company
necessary for the authorization, execution, delivery of, and the
performance of all obligations of the Company under this Agreement and
the authorization, issuance, reservation for issuance and delivery of
all of the Purchased Shares being sold under this Agreement have been
taken, no further consent or authorization of the Company or the Board
of Directors or its stockholders is required, and this Agreement
constitutes the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except
(i) as may be limited by (1) applicable bankruptcy, insolvency,
reorganization or others laws of general application relating to or
affecting the enforcement of creditors' rights generally and (2) the
effect of rules of law governing the availability of equitable
remedies and (ii) as rights to indemnity or contribution may be
limited under federal or state securities laws or by principles of
public policy thereunder.
(e) Valid Issuance of Stock.
(i) Valid Issuance. The Purchased Shares will be, upon payment
therefor by the Purchasers in accordance with this Agreement,
duly authorized, validly issued, fully paid and non-assessable
free from all taxes, liens, claims, encumbrances with respect to
the issuance of such shares and will not be subject to any
pre-emptive rights or similar rights.
(ii) Compliance with Securities Laws. Subject to the accuracy of the
representations made by the Purchasers in Section 4 hereof, the
Purchased Shares (assuming no change in applicable law and no
unlawful distribution of Purchased Shares by the Purchasers or
other parties) will be issued to the Purchasers in compliance
with applicable exemptions from (1) the registration and
prospectus delivery requirements of the Securities Act and (2)
the registration and qualification requirements of all applicable
securities laws of the states of the United States.
(f) Governmental Consents. No consent, approval, order or authorization
of, or registration, qualification, designation, declaration or filing
with, or notice to, any federal, state or local governmental authority
or self regulatory agency on the part of the Company is required in
connection with the issuance of the Purchased Shares to the
Purchasers, or the consummation of the other transactions contemplated
by this Agreement, except (i) such filings as have been made prior to
the date hereof and (ii) such additional post-Closing filings as may
be required to comply with applicable state and federal securities
laws.
(g) Non-Contravention. The execution, delivery and performance of this
Agreement by the Company, and the consummation by the Company of the
transactions contemplated hereby (including, without limitation,
issuance of the Purchased Shares), will not (i) contravene or conflict
with the Certificate of Incorporation or Bylaws of the Company (ii)
constitute a material violation of any provision of any federal,
state, local or foreign law, rule, regulation, order or decree binding
upon or applicable to the Company or (iii) constitute a default or
require any consent under, give rise to any right of termination,
cancellation or acceleration of, or to a loss of any material benefit
to which the Company is entitled under, or result in the creation or
imposition of any lien, claim or encumbrance on any assets of the
Company under, any material contract to which the Company is a party
or any material permit, license or similar right relating to the
Company or by which the Company may be bound or affected.
(h) Litigation. Except as set forth in the SEC Documents or in the
Disclosure Letter, there is no action, suit, proceeding, claim,
arbitration or investigation ("Action") pending or, to the Company's
knowledge, threatened in writing: (i) against the Company, its
activities, properties or assets, or any officer, director or employee
of the Company in connection with such officer's, director's or
employee's relationship with, or actions taken on behalf of, the
Company, that is reasonably likely to have a Material Adverse Effect
on the Company or (ii) that seeks to prevent, enjoin, alter, challenge
or delay the transactions contemplated by this Agreement (including,
without limitation, issuance of the Purchased Shares). The Company is
not a party to or subject to the provisions of, any order, writ,
injunction, judgment or decree of any court or government agency or
instrumentality. No Action by the Company is currently pending nor
does the Company intend to initiate any Action that is reasonably
likely to have a Material Adverse Effect on the Company.
(i) Compliance with Law and Charter Documents. The Company is not in
violation or default of any provisions of its Certificate of
Incorporation or Bylaws, each as amended. The Company has complied in
all respects and is currently in compliance with all applicable
statutes, laws, rules, regulations and orders of the United States of
America and all states thereof, foreign countries and other
governmental bodies and agencies having jurisdiction over the
Company's business or properties, except for any instance of
non-compliance that has not had, and would not reasonably be expected
to have, a Material Adverse Effect.
(j) Material Non-Public Information. To the Company's knowledge, except as
set forth in the Disclosure Letter, it has not provided to the
Purchasers any material non-public information other than information
related to the transactions contemplated by this Agreement.
(k) SEC Documents.
(1) Reports. The Company has filed in a timely manner all reports,
schedules, forms, statements and other documents required to be
filed by it with the SEC pursuant to the reporting requirements
of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the rules and regulations promulgated thereunder. The
Company has made or will make available to the Purchasers prior
to the date hereof copies of its Annual Report on Form 10-KSB for
the fiscal year ended December 31, 2003 (the "Form 10-KSB") its
Quarterly Report on Form 10-QSB for the three-month period ended
March 31, 2004 (the "Form 10-QSB") and each other report filed
with the SEC subsequent to the filing of the Form 10-QSB and
prior to the date of Closing pursuant to the Exchange Act
(referred to herein as the "SEC Documents"). The SEC Documents,
as of the respective date thereof (or if amended or superseded by
a filing prior to the Closing Date, then on the date of such
filing), did not contain any untrue statement of a material fact
or omit to state a material fact necessary in order to make the
statements made therein, in light of the circumstances under
which they were made, not misleading. The SEC Documents, as they
may have been subsequently amended by filings made by the Company
with the SEC prior to the date hereof, complied in all material
respects with the requirements of the Exchange Act and the rules
and regulations of the SEC promulgated thereunder applicable to
such SEC Document.
(2) Financial Statements. The financial statements of the Company in
the SEC Documents present fairly, in accordance with U.S.
generally accepted accounting principles ("GAAP"), consistently
applied, the financial position of the Company as of the dates
indicated, and the results of its operations and cash flows for
the period therein specified, subject, in the case of unaudited
financial statements for interim periods, to normal year-end
audit adjustments.
(l) Absence of Certain Changes Since Balance Sheet Date. Except as
otherwise disclosed in the SEC Documents or the Disclosure Letter,
since March 31, 2004, the business and operations of the Company have
been conducted in the ordinary course consistent with past practice,
and there has not been:
(i) any declaration, setting aside or payment of any dividend or
other distribution of the assets of the Company with respect to
any shares of capital stock of the Company or any repurchase,
redemption or other acquisition by the Company or any subsidiary
of the Company of any outstanding shares of the Company's capital
stock;
(ii) any damage, destruction or loss in respect of the assets of the
Company or any subsidiary, whether or not covered by insurance,
except for such occurrences, individually or in the aggregate,
that have not had, and would not reasonably be expected to have,
a Material Adverse Effect;
(iii)any waiver by the Company of a material right or of a material
debt owed to it, except for such waivers, individually or in the
aggregate, that have not had, and would not reasonably be
expected to have, a Material Adverse Effect; (iv) any material
change or amendment to, or any waiver of any material right under
a material contract or arrangement by which the Company or any of
its assets or properties is bound or subject, except for changes,
amendments or waivers that are expressly provided for or
disclosed in this Agreement; (v) any change by the Company in its
accounting principles, methods or practices or in the manner in
which it keeps its accounting books and records, except any such
change required by a change in GAAP or by the SEC; or
(vi) any other event or condition of any character of the type or
nature that would be required to be disclosed by the Company in a
filing with the SEC under the Exchange Act, except for such
events and conditions that have not resulted, and are not
expected to result, either individually or in the aggregate, in a
Material Adverse Effect.
(m) Intellectual Property. The Company owns or possesses adequate rights
to use all patents, patent rights, inventions, trade secrets,
know-how, trademarks, service marks, trade names, copyrights or other
information (collectively, "Intellectual Property"), which are
necessary to conduct its businesses as currently conducted, except
where the failure to currently own or possess such Intellectual
Property would not reasonably be expected to result, either
individually or in the aggregate, in a Material Adverse Effect. The
Company has not received any written notice of, and has no actual
knowledge of, any infringement of or conflict with asserted rights of
others with respect to any Intellectual Property which, singly or in
the aggregate, if the subject of an unfavorable decision, ruling or
finding, would reasonably be expected to have a Material Adverse
Effect, and to the Company's knowledge, none of the patent rights
owned or licensed by the Company are unenforceable or invalid.
(n) Registration Rights. Except as set forth in the Disclosure Letter or
as provided in Section 5 herein, effective upon the Closing, the
Company is not currently subject to any agreement providing any person
or entity any rights (including piggyback registration rights) to have
any securities of the Company registered with the SEC or registered or
qualified with any other governmental authority.
(o) Title to Property and Assets. The properties and assets of the Company
are owned by the Company free and clear of all mortgages, deeds of
trust, liens, charges, encumbrances and security interests except for
(i) statutory liens for the payment of current taxes that are not yet
delinquent and (ii) liens, encumbrances and security interests that
arise in the ordinary course of business (including the security
interest granted under the Company's credit agreement as disclosed in
the Disclosure Letter) and do not in any material respect affect the
properties and assets of the Company. With respect to the property and
assets it leases, the Company is in compliance with such leases in all
material respects.
(p) Taxes. The Company has filed all necessary federal, state, and foreign
income and franchise tax returns due prior to the date hereof and has
paid or accrued all taxes shown as due thereon, and the Company has no
knowledge of any material tax deficiency which has been or might be
asserted or threatened against it.
(q) Insurance. The Company maintains insurance of the types and in the
amounts that the Company reasonably believes is prudent and adequate
for its business, all of which insurance is in full force and effect.
(r) General Solicitation. Neither the Company nor any other person or
entity authorized by the Company to act on its behalf has engaged in a
general solicitation or general advertising (within the meaning of
Regulation D of the Securities Act) of investors with respect to
offers or sales of the Purchased Shares.
(s) No Integrated Offering. Neither the Company, nor any Affiliate (as
hereafter defined) of the Company, nor any person acting on its or
their behalf has, directly or indirectly, made any offers or sales of
any security or solicited any offers to buy any security, under
circumstances that would cause this offering of the Purchased Shares
to be integrated with prior offerings by the Company for purposes of
the Securities Act which would cause the exemptions from SEC
registration upon which the Company is relying for the sale of the
Purchased Shares to be unavailable, any applicable state securities
laws or any applicable stockholder approval provisions, including,
without limitation, under the rules and regulations of any national
securities exchange or automated quotation system on which any of the
securities of the Company are listed or designated, nor will the
Company take any action or steps that would cause the offering of the
Purchased Shares to be integrated with other offerings.
(t) Xxxxxxxx-Xxxxx Act of 2002. The Company is in material compliance with
all provisions of the Xxxxxxxx-Xxxxx Act of 2002 which are applicable
to it as of the Closing Date. The Company and its subsidiaries
maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation of
financial statements in conformity with GAAP and to maintain asset
accountability, (iii) access to assets is permitted only in accordance
with management's general or specific authorization and (iv) the
recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences. The Company has established disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) for the Company and designed such disclosure controls
and procedures to ensure that material information relating to the
Company, including its subsidiaries, is made known to the certifying
officers by others within those entities. The Company's certifying
officers have evaluated the effectiveness of the Company's controls
and procedures as of the date prior to the filing date , as stated in
such report, of the most recently filed periodic report under the
Exchange Act (such date, the "Evaluation Date"). The Company presented
in its most recently filed periodic report under the Exchange Act the
conclusions of the certifying officers about the effectiveness of the
Company's disclosure controls and procedures based on their
evaluations as of the Evaluation Date. Since the Evaluation Date,
there have been no significant changes in the Company's disclosure
controls or procedures or internal controls over financial reporting
(as such term is defined in Exchange Act Rule 13(a)-15(f)) or, to the
Company's knowledge, in other factors that could significantly affect
the Company's internal controls. (u) Investment Company. The Company
is not, and after giving effect to the offering and sale of the
Purchased Shares and the application of the proceeds thereof will not
be, required to register as, an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended.
4. COVENANTS, REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS. Each Purchaser
hereby agrees and represents and warrants to the Company, severally and not
jointly, that:
(a) Organization Good Standing and Qualification. Such Purchaser has all
corporate, limited liability company or partnership power and
authority required to enter into this Agreement and the other
agreements, instruments and documents contemplated hereby, and to
consummate the transactions contemplated hereby and thereby.
(b) Authorization. The execution of this Agreement has been duly
authorized by all necessary corporate, limited liability company or
partnership action on the part of such Purchaser. This Agreement
constitutes such Purchaser's legal, valid and binding obligation,
enforceable in accordance with its terms, except (i) as may be limited
by (1) applicable bankruptcy, insolvency, reorganization or other laws
of general application relating to or affecting the enforcement of
creditors' rights generally and (2) the effect of rules of law
governing the availability of equitable remedies and (ii) as rights to
indemnity or contribution may be limited under federal or state
securities laws or by principles of public policy thereunder.
(c) Litigation. There is no Action pending to which such Purchaser is a
Party that seeks to prevent, enjoin, alter or delay the transactions
contemplated by this Agreement.
(d) Purchase for Own Account. The Purchased Shares are being acquired for
investment for such Purchaser's own account, not as a nominee or
agent, and not with a view to the public resale or distribution
thereof within the meaning of the Securities Act without prejudice,
however, to such Purchaser's right at all times to sell or otherwise
dispose of all or any part of such securities in compliance with
applicable federal and state securities laws and as otherwise
contemplated by this Agreement. Such Purchaser also represents that it
has not been formed for the specific purpose of acquiring the
Purchased Shares. Such Purchaser does not have any agreement or
understanding, direct or indirect, with any other person or entity, to
sell or otherwise distribute the Purchased Shares.
(e) Investment Experience. Such Purchaser understands that the purchase of
the Purchased Shares, involves substantial risk. Such Purchaser has
experience as an investor in securities of companies and acknowledges
that it can bear the economic risk of its investment in the Purchased
Shares and has such knowledge and experience in financial or business
matters that it is capable of evaluating the merits and risks of this
investment in the Purchased Shares and protecting its own interests in
connection with this investment.
(f) Accredited Purchaser Status. The Purchaser is an "accredited investor"
within the meaning of Regulation D promulgated under the Securities
Act, as described in Appendix II, attached hereto and incorporated by
reference herein.
(g) Reliance Upon Purchaser's Representations. The Purchaser understands
that the issuance and sale of the Purchased Shares to it will not be
registered under the Securities Act on the ground that such issuance
and sale will be exempt from registration under the Securities Act
pursuant to Section 4(2) thereof, and that the Company's reliance on
such exemption is based on each Purchaser's representations set forth
herein.
(h) Receipt of Information. The Purchaser has received from the Company or
obtained independently copies of its filings with the SEC on Form
10-KSB for the year ended December 31, 2003 and on Form 10-QSB for the
three month period ended March 31, 2004. The Purchaser has had an
opportunity to ask questions and receive answers from the Company
regarding the terms and conditions of the issuance and sale of the
Purchased Shares and the business, properties, prospects and financial
condition of the Company and to obtain any additional information
requested and has received and considered all information it deems
relevant to make an informed decision to purchase the Purchased
Shares.
(i) Restricted Securities. The Purchaser understands that the Purchased
Shares have not been registered under the Securities Act and will not
sell, offer to sell, assign, pledge, hypothecate or otherwise transfer
(or solicit any offers to buy, purchase or otherwise acquire or take a
pledge of) any of the Purchased Shares except in compliance with the
Securities Act and the rules and regulations promulgated thereunder
("Rules and Regulations").
(j) Resales of Shares. (i) The Purchaser hereby covenants with the Company
not to make any sale of the Purchased Shares without satisfying the
requirements of the Securities Act and the Rules and Regulations,
including, in the event of any resale of the Purchased Shares under
the Registration Statement (as defined in Section 5(a)(ii) below), the
prospectus delivery requirements under the Securities Act. The
Purchaser acknowledges and agrees that the Purchased Shares are not
transferable on the books of the Company pursuant to a resale under
the Registration Statement unless the certificate submitted to the
transfer agent evidencing the Purchased Shares is accompanied by a
separate officer's certificate:
(1) in the form of Appendix III to this Agreement;
(2) executed by an officer of, or other authorized person designated
by, the Purchaser; and
(3) to the effect that (A) the Purchased Shares have been sold in
accordance with the Registration Statement and (B) the
requirement of delivering a current prospectus has been satisfied
(but only to the extent that the Company has made such a current
prospectus available to such Purchaser).
Notwithstanding anything to the contrary contained in this Agreement,
including but not limited to in Section 5(c)(i) below, the Purchaser
may transfer (without restriction and without the need for an opinion
of counsel) the Purchased Shares to its affiliates provided that such
affiliate is an "accredited investor" under Regulation D and such
affiliate agrees to be bound by the terms and conditions of this
Agreement. (ii) The Purchaser further covenants to notify the Company
promptly of the sale of any of its Purchased Shares, other than sales
pursuant to a Registration Statement contemplated in Section 5 of this
Agreement or sales by non-affiliates of the Company pursuant to Rule
144(k) promulgated under the Securities Act.
(k) Legends. The Purchaser agrees that the certificates for the Purchased
Shares shall bear the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR WITH ANY
STATE SECURITIES COMMISSION, AND MAY NOT BE TRANSFERRED OR
DISPOSED OF BY THE HOLDER IN THE ABSENCE OF A REGISTRATION
STATEMENT WHICH IS EFFECTIVE UNDER THE SECURITIES ACT OF
1933 AND APPLICABLE STATE LAWS AND RULES, OR, UNLESS SUCH
TRANSFER MAY BE EFFECTED WITHOUT VIOLATION OF THE SECURITIES
ACT OF 1933 AND OTHER APPLICABLE STATE LAWS AND RULES."
The Company agrees that the foregoing legend shall be removed from any
such certificates at the request of the Purchaser (i) upon any sale
pursuant to an effective registration statement under the Securities
Act, (ii) upon any sale pursuant to Rule 144 under the Securities Act
or (iii) at such time as they become eligible for sale under Rule
144(k) under the Securities Act.
In addition, the Purchaser agrees that the Company may place stop
transfer orders with its transfer agents with respect to such
certificates in order to implement the restrictions on transfer set
forth in this Agreement. The appropriate portion of the legend and the
stop transfer orders will be removed promptly upon delivery to the
Company of such satisfactory evidence as reasonably may be required by
the Company that such legend or stop orders are not required to ensure
compliance with the Securities Act.
(l) Questionnaires. The Purchaser has completed or caused to be completed
the Stock Certificate Questionnaire and the Registration Statement
Questionnaire, attached to this Agreement as Appendices I and II, for
use in preparation of the Registration Statement, and the answers to
such Questionnaires are true and correct as of the date of this
Agreement and will be true and correct as of the effective date of the
Registration Statement; provided that the Purchasers shall be entitled
to update such information by providing written notice thereof to the
Company before the effective date of such Registration Statement.
(m) Purchasers Not Acting in Concert. The Purchaser represents and
warrants that it has made an independent decision to purchase the
Purchased Shares and that it intends to continue to make independent
investment decisions with respect to the Purchased Shares. The
Purchaser further represents and warrants that it has not acted
together with any of the other Purchasers in a manner that could be
deemed to create a "group" pursuant to Rule 13d-5(b) promulgated under
the Exchange Act.
(n) Restrictions on Short Sales. The Purchaser represents and warrants
that, during the period beginning on the date on which X.X. Xxxxxxxxx,
Towbin, a financial advisor to the Company, first contacted such
Purchaser regarding a transaction contemplated by this Agreement (and
involving the Company) and ending on the Closing Date, neither it nor
any Affiliate (as defined below) of such Purchaser has engaged in any
"short sales"(as such term is defined in Rule 3b-3 promulgated under
the Exchange Act) of the Common Stock. The Purchaser further agrees
that neither Purchaser nor any Affiliate of such Purchaser shall
engage in any "short sales" of the Common Stock on or before the
Closing Date. The restrictions in this Section 4(n) shall not apply to
any Affiliate of the Purchaser to the extent that such Affiliate is
acting in the capacity of a broker-dealer executing unsolicited third
party transactions.
For the purposes of this Agreement, an "Affiliate" of any specified
Purchaser means any other person or entity directly or indirectly
controlling, controlled by or under direct or indirect common control
with such specified Purchaser. For the purposes of this definition,
"control" means the power to direct the management and policies of
such person or firm, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise.
(o) Each Purchaser represents and warrants, severally and not jointly,
solely as to itself, that it has acted independently from each other
Purchaser in entering into this Agreement, that it has not relied upon
any representations or statements of any Purchaser and that it is not
acting as an agent for, or on behalf of, any other Purchaser.
5. FORM D FILING; REGISTRATION; COMPLIANCE WITH THE SECURITIES ACT.
(a) Form D Filing; Registration of Purchased Shares. The Company hereby
agrees that it shall:
(i) file in a timely manner a Form D relating to the sale of the
Purchased Shares under this Agreement, pursuant to Regulation D
promulgated under the Securities Act;
(ii) prepare and file with the SEC as soon as practicable and in no
event later than thirty (30) days following the Closing, a
registration statement on Form S-1 or SB-2 (or Form S-3 to the
extent the Company is eligible to use such form) (the
"Registration Statement"), to enable the resale of the Purchased
Shares (collectively, the "Registrable Shares", including any
shares of Common Stock issued as a dividend or other distribution
with respect to (or in exchange for, or in replacement of) the
Purchased Shares) by the Purchasers from time to time on the
Over-The-Counter Bulletin Board or any public market and use all
commercially reasonable efforts to cause such Registration
Statement to be declared effective as promptly as possible after
filing, but in any event, within one hundred twenty (120) days
after the Closing Date and to remain continuously effective until
the earlier of (1) the second anniversary of the effective date
of the Registration Statement, (2) the date on which all
Registrable Shares purchased by the Purchasers pursuant to this
Agreement have been sold thereunder and (3) the date on which the
Registrable Shares can be sold by non-affiliates of the Company
pursuant to Rule 144(k) promulgated under the Securities Act (the
"Registration Period"). The Company shall convert such
Registration Statement to Form S-3, or file a replacement
registration statement on Form S-3, as soon as practicable after
the first date on which it meets the eligibility requirements for
such form;
(iii)prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to the Registration
Statement and the prospectus used in connection therewith as may
be necessary to keep the Registration Statement effective at all
times until the end of the Registration Period and to comply with
the provisions of the Securities Act;
(iv) furnish to the Purchasers with respect to the Registrable Shares
registered under the Registration Statement such reasonable
number of copies of any prospectus in conformity with the
requirements of the Securities Act and such other documents as
the Purchaser may reasonably request, in order to facilitate the
public sale or other disposition of all or any of the Registrable
Shares by the Purchasers;
(v) use its commercially reasonable efforts to file documents
required of the Company for normal blue sky clearance in states
specified in writing by the Purchasers; provided, however, that
the Company shall not be required to qualify to do business or
consent to service of process in any jurisdiction in which it is
not now so qualified or has not so consented;
(vi) promptly notify the Purchasers in writing when the Registration
Statement has been declared effective; (vii) furnish to each
Purchaser upon written request, from the date of this Agreement
until the end of the Registration Period, one copy of its
periodic reports filed with the SEC pursuant to the Exchange Act
and the rules and regulations promulgated thereunder;
(viii) bear all expenses in connection with the procedures described
in paragraphs (i) through (vii) of this Section 5(a) and the
registration of the Registrable Shares pursuant to the
Registration Statement other than fees and expenses, if any, of
legal counsel or other advisers to the Purchasers or underwriting
discounts, brokerage fees and commissions incurred by the
Purchasers, if any.
It shall be a condition precedent to the obligations of the Company to
take any action pursuant to this Section 5(a) with respect to
Registrable Shares held by a Purchaser that such Purchaser shall
timely furnish to the Company a completed Registration Statement
Questionnaire on or before the Closing Date and such other written
information regarding itself, the Registrable Shares to be sold by
such Purchaser, and the intended method of disposition of the
Registrable Shares as shall be required to effect the registration of
the Registrable Shares.
(b) Liquidated Damages.
(i) Delay in Effectiveness of Registration Statement. In the event
that the Registration Statement is not declared effective by the
date that is one hundred fifty (150) days, excluding any days
during which a Black Out, defined below, has been imposed,
following the Closing Date, the Company shall pay to each
Purchaser liquidated damages in an amount equal to one percent
(1%) of the total purchase price of the Purchased Shares
purchased by such Purchaser pursuant to this Agreement for each
thirty day period (or portion thereof) thereafter until the
Registration Statement is declared effective. Such amount shall
be payable, at the election of the Company, (1) in cash or (2) in
that number of shares of Common Stock equal to the amount owed in
liquidated damages under this Section 5(b)(i) divided by the Per
Share Price (rounding up to the nearest whole share).
(ii) Lapse in Effectiveness of Registration Statement. Other than in
the case of a Black Out, in the event that the Registration
Statement is filed and declared effective but, during the
Registration Period, shall thereafter cease to be effective or
useable or the prospectus included in the Registration Statement
(the "Prospectus", as amended or supplemented by any prospectus
supplement and by all other amendments thereto and all material
incorporated by reference in such Prospectus) ceases to be
usable, in either case, in connection with resales of Registrable
Shares, without such lapse being cured within ten (10) business
days (the "Cure Period") by a post-effective amendment to the
Registration Statement, a supplement to the Prospectus or a
report filed with the SEC pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act that cures such lapse, then the Company
shall pay to each Purchaser who at such time still owns
Registrable Shares, other than in circumstances described in
Section 5(c)(ii) and (iii) below, liquidated damages, for the
period from and including the first day following the expiration
of the Cure Period until, but excluding, the earlier of (1) the
date on which such failure is cured and (2) the date on which the
Registration Period expires, at a rate equal to one percent (1%)
per annum (pro rata on a 365 day basis) of the total purchase
price of the Purchased Shares purchased by such Purchaser
pursuant to this Agreement and still owned by the Purchaser at
such time. Such liquidated damages shall be payable monthly, at
the election of the Company, (x) in cash or (y) in that number of
shares of Common Stock equal to the amount owed to such Purchaser
in liquidated damages under this Section 5(b)(ii) divided by the
Per Share Price (rounding up to the nearest whole share).
(iii)The Company shall include in the Registration Statement any
additional shares of Common Stock issued by the Company under
this Section 5(b), and such shares of Common Stock shall be
deemed Registrable Shares for purposes of this Agreement.
(c) Transfer of Registrable Shares After Registration; Suspension.
(i) The Purchasers agree that they will not offer to sell or make any
sale, assignment, pledge, hypothecation or other transfer with
respect to the Registrable Shares that would constitute a sale
within the meaning of the Securities Act except pursuant to
either (1) the Registration Statement, (2) Rule 144 of the
Securities Act or (3) any other exemption from registration under
the Securities Act, and that they will promptly notify the
Company of any changes in the information set forth in the
Registration Statement after it is prepared regarding the
Purchaser or its plan of distribution to the extent required by
applicable law.
(ii) In addition to any suspension rights under paragraph (iii) below,
the Company, upon the happening of any pending corporate
development, public filing with the SEC or similar event, that,
in the judgment of Company's Board of Directors, renders it
advisable to suspend use of the prospectus or efforts to make the
Registration Statement effective, may, for no more than
forty-five (45) days in the aggregate in any one suspension,
suspend use of the prospectus or efforts to make the Registration
Statement effective (a "Black Out"), on written notice to each
Purchaser (which notice will not disclose the content of any
material non-public information and will indicate the date of the
beginning and end of the intended period of suspension, if
known), in which case each Purchaser shall discontinue
disposition of Registrable Shares pursuant to the Registration
Statement or prospectus until copies of a supplemented or amended
prospectus are distributed to the Purchasers or until the
Purchasers are advised in writing by the Company that sales of
Registrable Shares under the applicable prospectus may be resumed
and have received copies of any additional or supplemental
filings that are incorporated or deemed incorporated by reference
in any such prospectus. The suspension and notice thereof
described in this Section 5(c)(ii) shall be held in strictest
confidence and shall not be disclosed by the Purchasers. The
Company may not utilize the suspension described in this Section
5(c)(ii) more than two (2) times in the aggregate.
(iii)Subject to paragraph (iv) below, in the event of: (1) any
request by the SEC or any other federal or state governmental
authority during the period of effectiveness of the Registration
Statement for amendments or supplements to a Registration
Statement or related prospectus or for additional information,
(2) the issuance by the SEC or any other federal or state
governmental authority of any stop order suspending the
effectiveness of a Registration Statement or the initiation of
any proceedings for that purpose, (3) the receipt by the Company
of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the
Registrable Shares for sale in any jurisdiction or the initiation
of any proceeding for such purpose, or (4) any event or
circumstance which necessitates the making of any changes in the
Registration Statement or Prospectus, or any document
incorporated or deemed to be incorporated therein by reference,
so that, neither will contain any untrue statement of a material
fact or any omission to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they
were made, not misleading, then the Company shall deliver a
certificate in writing to the Purchasers (the "Suspension
Notice") to the effect of the foregoing (which notice will not
disclose the content of any material non-public information and
will indicate the date of the beginning and end of the intended
period of suspension, if known), and, upon receipt of such
Suspension Notice, the Purchasers will discontinue disposition of
Registrable Shares pursuant to the Registration Statement or
prospectus (a "Suspension") until the Purchasers' receipt of
copies of a supplemented or amended prospectus prepared and filed
by the Company, or until the Purchasers are advised in writing by
the Company that the current prospectus may be used, and have
received copies of any additional or supplemental filings that
are incorporated or deemed incorporated by reference in any such
prospectus. In the event of any Suspension, the Company will use
its commercially reasonable efforts to cause the use of the
prospectus so suspended to be resumed as soon as possible after
delivery of a Suspension Notice to the Purchasers. The Suspension
and Suspension Notice described in this Section 5(c)(iii) shall
be held in strictest confidence and shall not be disclosed by the
Purchasers.
(iv) Provided that a Suspension is not then in effect, the Purchasers
may sell Registrable Shares under the Registration Statement,
provided that the selling Purchaser arranges for delivery of a
current prospectus to the transferee of such Registrable Shares
to the extent such delivery is required by applicable law.
(v) In the event of a sale of Registrable Shares by a Purchaser, such
Purchaser must also deliver to the Company's transfer agent, with
a copy to the Company, a certificate of subsequent sale
reasonably satisfactory to the Company, so that ownership of the
Registrable Shares may be properly transferred. The Company will
cooperate to facilitate the timely preparation and delivery of
certificates (unless otherwise required by applicable law)
representing Registrable Shares sold.
(d) Indemnification. For the purpose of this Section 5(d), the term
"Registration Statement" shall include any preliminary or final
prospectus, exhibit, supplement or amendment included in or relating
to the Registration Statement referred to in Section 5(a).
(i) Indemnification by the Company. The Company agrees to indemnify
and hold harmless each of the Purchasers and each person, if any,
who controls any Purchaser within the meaning of the Securities
Act, to the fullest extent permitted by law, against any and all
losses, claims, damages, liabilities or expenses, joint or
several, to which such Purchasers or such controlling person may
become subject, under the Securities Act, the Exchange Act or any
other federal or state statutory law or regulation, or at common
law or otherwise (including in settlement of any litigation, if
such settlement is effected with the written consent of the
Company, which consent shall not be unreasonably withheld),
insofar as such losses, claims, damages, liabilities or expenses
(or actions in respect thereof as contemplated below) arise out
of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Registration
Statement, the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or
alleged omission to state in any of them a material fact required
to be stated therein or necessary to make the statements in any
of them, in light of the circumstances under which they were made
(in the case of the Prospectus), not misleading, and will
reimburse each Purchaser and each such controlling person for any
legal and other expenses as such expenses are reasonably incurred
by such Purchaser or such controlling person in connection with
investigating, defending, settling, compromising or paying any
such loss, claim, damage, liability, expense or action; provided,
however, that the Company will not be liable in any such case to
the extent that any such loss, claim, damage, liability, expense
or action arises out of or is based upon (1) an untrue statement
or alleged untrue statement or omission or alleged omission made
in the Registration Statement, the Prospectus or any amendment to
or supplement of the Registration Statement or Prospectus made in
reliance upon and in conformity with written information
furnished to the Company by or on behalf of the Purchaser
expressly for use in the Registration Statement or the
Prospectus, (2) the failure of such Purchaser to comply with the
covenants and agreements contained in this Agreement respecting
resale of the Purchased Shares, or (3) any untrue statement or
omission of a material fact required to make such statement, in
light of the circumstances under which they were made, not
misleading in any Prospectus that is corrected in any subsequent
Prospectus that was delivered to the Purchaser before the
pertinent sale or sales by the Purchaser.
(ii) Indemnification by the Purchaser. Each Purchaser will severally
and not jointly indemnify and hold harmless the Company, each of
its directors, each of its officers who signed the Registration
Statement and each person, if any, who controls the Company
within the meaning of the Securities Act, against any losses,
claims, damages, liabilities or expenses to which the Company,
its directors, its officers who signed the Registration Statement
and any controlling persons may become subject, under the
Securities Act, the Exchange Act, or any other federal or state
statutory law or regulation, or at common law or otherwise
(including in settlement of any litigation, if such settlement is
effected with the written consent of such Purchaser, which
consent shall not be unreasonably withheld) insofar as such
losses, claims, damages, liabilities or expenses (or actions in
respect thereof as contemplated below) arise out of or are based
upon (1) any failure on the part of such Purchaser to comply with
the covenants and agreements contained in this Agreement
respecting the sale of the Purchased Shares or (2) any untrue or
alleged untrue statement of any material fact contained in the
Registration Statement, the Prospectus, or any amendment or
supplement to the Registration Statement or Prospectus, or arise
out of or are based upon 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 the
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 made in the Registration
Statement, the Prospectus, or any amendment or supplement
thereto, in reliance upon and in conformity with written
information furnished to the Company by or on behalf of such
Purchaser expressly for use therein, and the Purchaser will
reimburse the Company, each of its directors, each of its
officers who signed the Registration Statement, and any
controlling persons for any legal and other expense reasonably
incurred by the Company, its directors, its officers who signed
the Registration Statement, and any controlling persons, in
connection with investigating, defending, settling, compromising
or paying any such loss, claim, damage, liability, expense or
action; provided, however, that the Purchaser shall not be liable
for any such untrue or alleged untrue statement or omission or
alleged omission with respect to which the Purchaser has
delivered to the Company in writing a correction before the
occurrence of the event from which such loss was incurred.
Notwithstanding the provisions of this Section 5(d), each
Purchaser shall not be liable for any indemnification obligation
under this Agreement in excess of the aggregate amount of net
proceeds received by each Purchaser from the sale of the
Registrable Shares pursuant to the Registration Statement.
(iii) Indemnification Procedure.
(1) Promptly after receipt by an indemnified party under this
Section 5(d) of notice of the threat or commencement of any
action, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party under
this Section 5(d), promptly notify the indemnifying party in
writing of the claim; but the omission so to notify the
indemnifying party will not relieve it from any liability
which it may have to any indemnified party for contribution
or otherwise under the indemnity agreement contained in this
Section 5(d) or otherwise, to the extent it is not
prejudiced as a result of such failure.
(2) In case any such action is brought against any indemnified
party and such indemnified party seeks or intends to seek
indemnity from an indemnifying party, the indemnifying party
will be entitled to participate in, and, to the extent that
it may wish, jointly with all other indemnifying parties
similarly notified, to assume the defense thereof with
counsel reasonably satisfactory to such indemnified party;
provided, however, if the defendants in any such action
include both the indemnified party and the indemnifying
party and the indemnified party shall have reasonably
concluded that there may be a conflict between the positions
of the indemnifying party and the indemnified party in
conducting the defense of any such action or that there may
be legal defenses available to it or other indemnified
parties that are different from or additional to those
available to the indemnifying party, the indemnified party
or parties shall have the right to select separate counsel
to assume such legal defenses and to otherwise participate
in the defense of such action on behalf of such indemnified
party or parties. Upon receipt of notice from the
indemnifying party to such indemnified party of its election
so to assume the defense of such action and approval by the
indemnified party of counsel, the indemnifying party will
not be liable to such indemnified party under this Section
5(d) for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense
thereof unless:
a) the indemnified party shall have employed such counsel
in connection with the assumption of legal defenses in
accordance with the proviso to the preceding sentence
(it being understood, however, that the indemnifying
party shall not be liable for the expenses of more than
one separate counsel, approved by such indemnifying
party, representing all of the indemnified parties who
are parties to such action); or
b) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable
time after notice of commencement of the action against
the indemnified party,
in each of which cases the reasonable fees and expenses of
counsel for the indemnified party shall be at the expense of
the indemnifying party.
(iv) Contribution. If the indemnification provided for in this Section
5(d) is required by its terms but is for any reason held to be
unavailable to, or is otherwise insufficient to hold harmless, an
indemnified party under this Section 5(d) with respect to any
losses, claims, damages, liabilities or expenses referred to in
this Agreement, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result
of any losses, claims, damages, liabilities or expenses referred
to in this Agreement:
(1) in such proportion as is appropriate to reflect the relative
faults of the Company and the Purchaser in connection with
the statements or omissions or inaccuracies in the
representations and warranties in this Agreement that
resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable
considerations, or
(2) if the allocation provided by clause (1) above is not
permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative faults referred
to in clause (1) above but the relative benefits received by
the Company and the Purchaser from the placement of Common
Stock.
The respective relative benefits received by the Company on the
one hand and each Purchaser on the other shall be deemed to be in
the same proportion as the amount to which the consideration paid
by such Purchaser to the Company pursuant to this Agreement for
the Purchased Shares purchased by such Purchaser that were sold
pursuant to the Registration Statement bears to the difference
(the "Difference") between the amount such Purchaser paid for the
Purchased Shares that were sold pursuant to the Registration
Statement and the amount received by such Purchaser from such
sale. The relative fault of the Company and each Purchaser shall
be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact or the
inaccurate or the alleged inaccurate material fact relates to
information supplied by the Company or by such Purchaser and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The
amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall
be deemed to include, subject to the limitations set forth in
Section 5(d)(iii), any legal or other fees or expenses reasonably
incurred by such party in connection with investigating or
defending any action or claim. The provisions set forth in
Section 5(d)(iii) with respect to the notice of the threat or
commencement of any threat or action shall apply if a claim for
contribution is to be made under this Section 5(d)(iv); provided,
however, that no additional notice shall be required with respect
to any threat or action for which notice has been given under
Section 5(d)(iii) for purposes of indemnification. The Company
and each Purchaser agree that it would not be just and equitable
if contribution pursuant to this Section 5(d)(iv) were determined
solely by pro rata allocation (even if the Purchasers were
treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable
considerations referred to in this paragraph. Notwithstanding the
provisions of this Section 5(d)(iv), no Purchaser shall be
required to contribute any amount in excess of the amount by
which the Difference exceeds the amount of any damages that such
Purchaser has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall
be entitled to contribution from any person who is not guilty of
such fraudulent misrepresentation. The Purchasers' obligations to
contribute pursuant to this Section 5(d)(iv) are several and not
joint.
(e) Rule 144 Information. For two years after the date of this Agreement,
the Company shall file in a timely manner all reports required to be
filed by it under the Securities Act and the Exchange Act and the
rules and regulations promulgated thereunder and shall take such
further action to the extent required to enable the Purchasers to sell
the Purchased Shares pursuant to Rule 144 under the Securities Act (as
such rule may be amended from time to time).
6. ADVISORY FEE.
The Purchasers acknowledge that the Company intends to pay to X.X.
Xxxxxxxxx, Towbin, a financial advisor, a fee in respect of the sale of the
Purchased Shares. Each of the parties to this Agreement hereby represents that,
on the basis of any actions and agreements by it, there are no other brokers or
finders entitled to compensation in connection with the sale of the Purchased
Shares to the Purchasers. The Company shall indemnify and hold harmless the
Purchasers from and against all fees, commissions or other payments owing by the
Company to X.X. Xxxxxxxxx, Towbin or any other person or firm acting on behalf
of the Company hereunder.
7. CONDITIONS TO THE PURCHASER'S OBLIGATIONS AT CLOSING.
The obligations of the Purchasers under Section 1(b) of this Agreement are
subject to the fulfillment or waiver, on or before the Closing, of each of the
following conditions:
(a) Representations and Warranties True. Each of the representations and
warranties of the Company contained in Section 3 shall be true and
correct in all material respects on and as of the date hereof and on
and as of the date of the Closing, except as set forth in the
Disclosure Letter or the SEC Documents, with the same effect as though
such representations and warranties had been made as of the Closing.
(b) Performance. The Company shall have performed and complied in all
material respects with all agreements, obligations and conditions
contained in this Agreement that are required to be performed or
complied with by it on or before the Closing and shall have obtained
all approvals, consents and qualifications necessary to complete the
purchase and sale described herein.
(c) Compliance Certificate. The Company will have delivered to the
Purchasers a certificate signed on its behalf by its Chief Executive
Officer or Chief Financial Officer certifying that the conditions
specified in Sections 7(a) and 7(b) hereof have been fulfilled.
(d) Agreement. The Company shall have executed and delivered to the
Purchasers this Agreement.
(e) Securities Exemptions. The offer and sale of the Purchased Shares to
the Purchasers pursuant to this Agreement shall be exempt from the
registration requirements of the Securities Act and the registration
and/or qualification requirements of all applicable state securities
laws.
(f) Good Standing Certificates. The Company shall have delivered to the
Purchasers a certificate of the Secretary of State of the State of
Delaware, dated as of a date within five days of the date of the
Closing, with respect to the good standing of the Company.
(g) Secretary's Certificate. The Company shall have delivered to the
Purchasers a certificate of the Company executed by the Company's
Secretary attaching and certifying to the truth and correctness of (1)
the Company's Certificate of Incorporation, (2) the Company's Bylaws
and (3) the resolutions adopted by the Company's Board of Directors in
connection with the transactions contemplated by this Agreement.
(h) Opinion of Company Counsel. The Purchasers will have received an
opinion on behalf of the Company, dated as of the date of the Closing,
from XxXxxxxx & English, LLP, counsel to the Company, in the form
attached as Exhibit B.
(i) No Statute or Rule Challenging Transaction. No statute, rule,
regulation, executive order, decree, ruling, injunction, action,
proceeding or interpretation shall have been enacted, entered,
promulgated, endorsed or adopted by any court or governmental
authority of competent jurisdiction or any self-regulatory
organization or the staff of any of the foregoing, having authority
over the matters contemplated hereby which questions the validity of,
or challenges or prohibits the consummation of, any of the
transactions contemplated by this Agreement.
(j) Other Actions. The Company shall have executed such certificates,
agreements, instruments and other documents, and taken such other
actions as shall be customary or reasonably requested by the
Purchasers in connection with the transactions contemplated hereby.
(k) Amount Invested. The Purchasers under this Agreement shall have
tendered at Closing at least $5,000,000 in the aggregate for the
Purchased Shares. 8. CONDITIONS TO THE COMPANY'S OBLIGATIONS AT
CLOSING. The obligations of the Company to the Purchasers under this
Agreement are subject to the fulfillment or waiver, on or before the
Closing, of each of the following conditions:
(a) Representations and Warranties True. The representations and
warranties of the Purchasers contained in Section 4 shall be true
and correct in all material respects on and as of the date hereof
and on and as of the date of the Closing with the same effect as
though such representations and warranties had been made as of
the Closing.
(b) Performance. The Purchasers shall have performed and complied in
all material respects with all agreements, obligations and
conditions contained in this Agreement that are required to be
performed or complied with by it on or before the Closing and
shall have obtained all approvals, consents and qualifications
necessary to complete the purchase and sale described herein.
(c) Agreement. The Purchasers shall have executed and delivered to
the Company this Agreement (and Appendix II hereto).
(d) Securities Exemptions. The offer and sale of the Purchased Shares
to the Purchasers pursuant to this Agreement shall be exempt from
the registration requirements of the Securities Act and the
registration and/or qualification requirements of all applicable
state securities laws.
(e) Payment of Purchase Price. The Purchasers shall have delivered to
the Company by wire transfer of immediately available funds, full
payment of the purchase price for the purchased shares as
specified in Section 1(b).
(f) Other Actions. The Purchasers shall have executed such
certificates, agreements, instruments and other documents, and
taken such other actions as shall be customary or reasonably
requested by the Company in connection with the transactions
contemplated hereby.
(g) No Statute or Rule Challenging Transaction. No statute, rule,
regulation, executive order, decree, ruling, injunction, action,
proceeding or interpretation shall have been enacted, entered,
promulgated, endorsed or adopted by any court or governmental
authority of competent jurisdiction or any self-regulatory
organization or the staff of any of the foregoing, having
authority over the matters contemplated hereby which questions
the validity of, or challenges or prohibits the consummation of,
any of the transactions contemplated by this Agreement.
(h) Amount Invested. The Purchasers under this Agreement shall have
tendered at Closing at least $5,000,000 in the aggregate for the
Purchased Shares.
9. MISCELLANEOUS.
(a) Successors and Assigns. The terms and conditions of this Agreement
will inure to the benefit of and be binding upon the respective
successors and permitted assigns of the parties. Any Purchaser may
assign its rights under this Agreement to any person to whom the
Purchaser assigns or transfers any Purchased Shares, provided that
such transferee agrees in writing to be bound by the terms and
provisions of this Agreement, and such transfer is in compliance with
the terms and provisions of this Agreement and permitted by federal
and state securities laws.
(b) Governing Law. This Agreement will be governed by and construed under
the internal laws of the State of New York, without reference to
principles of conflict of laws or choice of laws. EACH PARTY HEREBY
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A
JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY.
(c) Survival. The, representations and warranties of the Company and the
Purchasers contained in Sections 3 and 4 of this Agreement shall
survive until the first (1st) anniversary of the Closing Date, except
for covenants, representations and warranties contained in Sections
4(d) through 4(l) which shall survive until the statute of limitations
for any applicable securities registration requirement has expired.
(d) Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original, but all of
which together will constitute one and the same instrument.
(e) Headings. The headings and captions used in this Agreement are used
for convenience only and are not to be considered in construing or
interpreting this Agreement. All references in this Agreement to
sections, paragraphs, exhibits and schedules will, unless otherwise
provided, refer to sections and paragraphs hereof and exhibits and
schedules attached hereto, all of which exhibits and schedules are
incorporated herein by reference.
(f) Notices. Any notices and other communications required or permitted
under this Agreement shall be in writing and shall be delivered (i)
personally by hand or by courier, (ii) mailed by United States
first-class mail, postage prepaid or (iii) sent by facsimile or e-mail
directed (A) if to the a Purchaser, at such Purchaser's address,
facsimile number or e-mail set forth on the signature page hereto
executed by such Purchaser, or at such address, facsimile number or
e-mail as such Purchaser may designate by giving at least ten (10)
days' advance written notice to the Company or (B) if to the Company,
to its address or facsimile number set forth below, or at such other
address or facsimile number as the Company may designate by giving at
least ten (10) days' advance written notice to the Purchaser. All such
notices and other communications shall be deemed given upon (i)
receipt or refusal of receipt, if delivered personally or by e-mail,
(ii) three days after being placed in the mail, if mailed, or (iii)
confirmation of facsimile transfer, if sent via fascimile.
The address of the Company for the purpose of this Section 9(f) is as
follows:
Patient Infosystems, Inc.
00 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxx
Tel No.: (000) 000-0000
Telecopier No.: (000) 000-0000
with a copy to:
--------------
XxXxxxxx & English, LLP
Four Gateway Center
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esquire
Tel No.: (000) 000-0000
Telecopier: (000) 000-0000
(g) Amendments and Waivers. This Agreement may be amended and the
observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the
holders of Purchased Shares representing at least a majority of the
total aggregate number of Purchased Shares then outstanding. Any
amendment or waiver effected in accordance with this Section 9(g) will
be binding upon the Purchasers, the Company and their respective
successors and assigns.
(h) Severability. If any provision of this Agreement is held to be
unenforceable under applicable law, such provision will be excluded
from this Agreement and the balance of the Agreement will be
interpreted as if such provision were so excluded and will be
enforceable in accordance with its terms.
(i) Entire Agreement. This Agreement, together with all exhibits and
schedules hereto and thereto constitutes the entire agreement and
understanding of the parties with respect to the subject matter hereof
and supersedes any and all prior negotiations, correspondence,
agreements, understandings, duties or obligations between the parties
with respect to the subject matter hereof.
(j) Further Assurances. From and after the date of this Agreement, upon
the request of the Company or the Purchasers, the Company and the
Purchasers will execute and deliver such instruments, documents or
other writings, and take such other actions, as may be reasonably
necessary or desirable to confirm and carry out and to effectuate
fully the intent and purposes of this Agreement.
(k) Meaning of Include and Including. Whenever in this Agreement the word
"include" or "including" is used, it shall be deemed to mean "include,
without limitation" or "including, without limitation," as the case
may be, and the language following "include" or "including" shall not
be deemed to set forth an exhaustive list.
(l) Fees, Costs and Expenses. Except as otherwise provided for in this
Agreement, all fees, costs and expenses (including attorneys' fees and
expenses) incurred by any party hereto in connection with the
preparation, negotiation and execution of this Agreement and the
exhibits and schedules hereto and the consummation of the transactions
contemplated hereby and thereby (including the costs associated with
any filings with, or compliance with any of the requirements of, any
governmental authorities), shall be the sole and exclusive
responsibility of such party.
(m) 8-K Filing and Publicity. On or before the second business day
following the Closing Date, the Company shall file a Current Report on
Form 8-K with the SEC describing the terms of the transactions
contemplated by this Agreement and attaching this Agreement and the
press release referred to below as exhibits to such filing (the "8-K
Filing" including all attachments). Neither the Company nor any
Purchaser shall issue any press releases or any other public
statements with respect to the transactions contemplated by this
Agreement; provided, however, that the Company shall be entitled,
without the prior approval of any Purchaser, to make any press release
or other public disclosure with respect to such transactions (i) in
substantial conformity with the 8-K Filing and contemporaneously
therewith and (ii) as is required by applicable law and regulations.
(n) Stock Splits, Dividends and other Similar Events. The provisions of
this Agreement shall be appropriately adjusted to reflect any stock
split, stock dividend, reorganization or other similar event that may
occur with respect to the Company the date hereof and prior to
Closing.
* * *
IN WITNESS WHEREOF, the parties hereto have executed this Common Stock
Purchase Agreement as of the date and year first above written.
PATIENT INFOSYSTEMS, INC.
By:
----------------------------------------------------
Name:
--------------------------------------------------
Title:
-------------------------------------------------
00 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
[PURCHASER SIGNATURE PAGES TO FOLLOW]
SIGNATURE PAGE TO
COMMON STOCK PURCHASE AGREEMENT
DATED AS OF JUNE 14, 2004
BY AND AMONG
PATIENT INFOSYSTEMS, INC.
AND EACH PURCHASER NAMED THEREIN
The undersigned hereby executes and delivers to Patient InfoSystems, Inc.
the Common Stock Purchase Agreement (the "Agreement") to which this Signature
Page is attached effective as of the date of the Agreement, which Agreement and
Signature Page, together with all counterparts of such Agreement and signature
pages of the other Purchasers named in such Agreement, shall constitute one and
the same document in accordance with the terms of such Agreement.
Number of Shares:
-------------------------------------
[PURCHASER]
Signature:
----------------------------------------------
Name:
--------------------------------------------------
Title:
-------------------------------------------------
Address:
-----------------------------------------------
Email:
Facsimile:
---------------------------------------------
Tax ID Number:
----------------------------------------
