Exhibit 10.72
SECURITIES PURCHASE AGREEMENT
between
PATIENT INFOSYSTEMS, INC.
and
[INVESTOR]
Dated as of February 24, 2004
SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (this "Agreement") is dated as of
February 24, 2004, between PATIENT INFOSYSTEMS, INC., a Delaware corporation
(the "Company"), and the PURCHASER named on the signature page hereto
("Purchaser").
Recitals:
1. The Company is offering to Purchaser up to _________ shares (the "Shares")
of common stock of the Company, $0.01 par value per share (the "Common
Stock").
2. The Company and Purchaser agree that Purchaser will purchase from the
Company and the Company will issue and sell to Purchaser ________ Shares,
for a purchase price of $2.00 per share, or an aggregate purchase price of
$_________, (the "Purchase Price") pursuant to the terms of this Securities
Purchase Agreement.
3. The Company intends to offer and sell to other parties additional shares of
Common Stock in amounts not to exceed $5,000,000 in the aggregate,
inclusive of the Shares to be offered and sold to Purchaser.
Agreement:
The Company and Purchaser hereby agree as follows:
Section 1. Purchase of Company Securities. Subject to the terms and conditions
of this Agreement, the Company will issue and sell to Purchaser and Purchaser
will purchase from the Company the number of Shares set forth on the signature
page for Purchaser at the purchase price set forth on the signature page for
Purchaser.
Section 2. Closing. The closing (the "Closing") of the purchase and sale of the
Shares (the "Offering") will take place at the offices of the Company, at 10:00
A.M., local time, on February 24, 2004. The Closing may take place at another
time, place or earlier date as is mutually agreed upon by the Company and
Purchaser. The date of the Closing is referred to as the "Closing Date." Prior
to the Closing, the Company will cause its transfer agent to issue and to
deliver to counsel to the Purchaser stock certificates representing the Shares
purchased by Purchaser, such stock certificates to be held in escrow by counsel
to the Purchaser until payment of Purchaser's Purchase Price by wire transfer of
immediately available United States funds is deposited into the Company's
account pursuant to the wire transfer instructions set forth on Exhibit A. The
Shares will be registered in Purchaser's name or the name of the nominee of
Purchaser pursuant to instructions delivered to the Company not less than two
business days prior to the Closing Date, and certificates that are not delivered
prior to Closing will be delivered to Purchaser within 3 business days after the
Closing Date.
Section 3. Conditions to the Obligations of Purchaser at Closing. The obligation
of Purchaser to purchase and pay for the Shares at Closing is subject to the
satisfaction on or prior to the Closing Date of the following conditions, each
of which may be waived by Purchaser:
3.1 Opinion of Counsel to the Company. Purchaser will have received from
▇▇▇▇▇▇▇▇ & English, LLP, securities counsel for the Company, its opinion
dated the Closing Date in all material respects in the form of Exhibit B.
3.2 Representations and Warranties. The representations and warranties of the
Company contained in Section 6 must be true and correct in all material
respects on and as of the Closing Date except to the extent that the
representations and warranties relate to an earlier date in which case the
representations and warranties must be true and correct in all material
respects on and as of such earlier date.
3.3 Performance of Covenants. The Company will have performed or complied in
all material respects with all covenants and agreements required to be
performed by it on or prior to the Closing pursuant to this Agreement.
3.4 No Injunctions; etc. No court or governmental injunction, order or decree
prohibiting the purchase and sale of the Shares will be in effect. There
will not be in effect any law, rule or regulation prohibiting or
restricting the sale or requiring any consent or approval of any person
that has not been obtained or otherwise complied with which prohibits the
consummation of any of the transactions contemplated by this Agreement.
3.5 Closing Documents. The Company will have delivered to Purchaser the
following:
(a) a certificate of the Secretary of the Company, dated as of the Closing
Date, certifying (i) the attached are true and complete copies of the
Certificate of Incorporation and Bylaws of the Company, as in effect
on the date of such certification; (ii) the attached are true and
complete copies of the resolutions of the Board of Directors of the
Company authorizing the execution, delivery and performance of this
Agreement as in effect on the date of such certification; and (iii) as
to the incumbency and specimen signature of each officer of the
Company executing this Agreement and any other document delivered by
it in connection herewith (such certificate to contain a certification
by another officer of the Company as to the incumbency and signature
of the officer signing the certificate referred to herein).
(b) certificate of the Secretary of State of the State of Delaware, dated
a recent date, to the effect that the Company is in good standing in
the State of Delaware.
3.6 Waivers and Consents. The Company will have obtained any and all consents
and waivers known to the Company to be necessary for it to execute and
deliver this Agreement and all related documents and agreements and to
issue and deliver the Shares, and all such consents and waivers will be in
full force and effect.
3.7 Satisfaction of Purchaser. All proceedings to occur in connection with the
Offering are to be consummated at or prior to the Closing (other than those
contemplated herein to occur after the Closing), and all documents
incidental thereto shall be reasonably satisfactory in form and substance
to Purchaser and its counsel, and Purchaser and its counsel shall have
received copies of all documents and information which it may have
reasonably requested in connection with the transaction and of all
corporate proceedings in connection therewith, in form and substance
reasonably satisfactory to Purchaser and its counsel.
Section 4. Conditions to the Obligations of the Company at Closing. The
obligation of the Company to issue and sell the Shares to Purchaser at Closing
is subject to the satisfaction on or prior to the Closing Date of the following
conditions, each of which may be waived by the Company:
4.1 Representations and Warranties. The representations and warranties of
Purchaser contained in this Agreement must be true and correct in all
material respects as of the Closing Date.
4.2 No Injunctions. No court or governmental injunction, order or decree
prohibiting the purchase or sale of the Shares will be in effect.
4.3 Performance of Covenants. Purchaser will have performed or complied in all
material respects with all covenants and agreements required to be
performed by it on or prior to the Closing pursuant to this Agreement.
Section 5. Representations, Warranties and Covenants of Purchaser. Purchaser
represents and warrants to the Company that:
5.1 Accredited Investor; Investment Representations; State of Sale. Purchaser
is an investment company registered under the Investment Company Act of
1940 and as such qualifies as an "accredited investor" as defined in Rule
501(a) of Regulation D under the Securities Act of 1933, as amended (the
"Securities Act"). Purchaser has such knowledge and experience in financial
and business matters that it is capable of evaluating the merits and risks
of an investment in the Shares. Purchaser can bear the financial risk of an
investment in the Shares. Purchaser was not formed for the purpose of
making an investment in the Shares. Purchaser is acquiring the Shares for
its own account and not with a present view to, or for sale in connection
with, any distribution thereof in violation of the registration
requirements of the Securities Act. Purchaser understands that the Shares
have not been registered under the Act and, therefore, cannot be resold
unless they are registered under the Act or unless an exemption from
registration is available. Purchaser understands that a legend will be
placed on the certificates evidencing the Shares that they have not been so
registered and setting forth or referring to the restrictions on
transferability and sale of the Shares. Purchaser agrees that the offer and
sale of the Shares to Purchaser occurred in the state of New York and/or
the state of Purchaser's address as set forth in the signature page hereof.
5.2 Authority, etc. Purchaser has the power and authority to execute and
deliver this Agreement and to perform its obligations hereunder. The
execution and delivery by Purchaser of this Agreement and the consummation
of the transactions contemplated hereby have been duly authorized by all
necessary corporate or other action on the part of Purchaser. This
Agreement constitutes a legal, valid and binding obligation of Purchaser,
enforceable against Purchaser in accordance with its terms, subject to laws
of general application relating to bankruptcy, insolvency and the relief of
debtors and rules of law governing specific performance, injunctive relief
or other equitable remedies, and to limitations of public policy.
5.3 Access to Information. Purchaser acknowledges that it has been afforded (i)
the opportunity to ask the questions it deemed necessary of, and to receive
answers from, representatives of the Company concerning the Company and the
terms and conditions of the Offering; and (ii) the opportunity to request
such additional information concerning the Company as the Company possesses
or can acquire without unreasonable effort or expense.
5.4 No General Solicitation. Purchaser is not purchasing the Shares as a result
of any advertisement, article, notice or other communication published in a
newspaper or magazine or similar media or broadcast over television or
radio, whether closed circuit, or generally available, or any seminar,
meeting or other conference whose attendees were invited by any general
solicitation or general advertising.
5.5 Additional Information. From time to time, as reasonably requested by the
Company, Purchaser will promptly provide the Company with such information
as necessary for the Company to comply with its obligations pursuant to
applicable law in respect of the source of the funds used for the purchase
of the Shares, and the ownership of the Shares, as required pursuant to
applicable law.
5.6 Underwritten Public Offering. In the event the company undertakes to sell
its securities in an underwritten public offering, the Purchaser shall
enter into and perform its obligations under an underwriting agreement, in
usual and customary form, with the managing underwriter of such offering,
including in connection therewith, agreeing to be bound by any lock-up or
similar agreement requested by the underwriter involved therewith.
Section 6. Representations and Warranties of the Company. The Company represents
and warrants to Purchaser that as of the date hereof and the Closing Date:
6.1 Organization, Good Standing and Qualification; Subsidiaries. The Company is
a corporation organized, existing and in good standing under the laws of
the State of Delaware. The Company has full corporate power and authority
to own and hold its properties and to conduct its business. The Company is
licensed or qualified to do business, and in good standing, in each
jurisdiction in which the nature of its business requires licensing,
qualification or good standing, except for any failure to be so licensed or
qualified or in good standing that would not have a material adverse effect
on the Company or its business, properties, results of operations, assets,
condition (financial or otherwise), or on its ability to perform its
obligations under this Agreement (a "Material Adverse Effect"). The
Company's subsidiaries are listed on Schedule 6.1 hereto.
6.2 Capitalization. As of the date hereof, the authorized capital stock of the
Company consists of 80,000,000 shares of Common Stock, $0.01 par value per
share and 20,000,000 shares of Preferred Stock, $0.01 par value per share.
As of January 31, 2004, (i) 4,960,354 shares of Common Stock were issued
and outstanding, (ii) 940,118 shares of Preferred Stock were issued or
outstanding, and (iii) 3,500,000 shares of Common Stock were reserved for
issuance upon exercise of outstanding options issued or options that may be
issued under the Company's Amended and Restated Stock Option Plan (the
"Plan"). As of January 31, 2004, there were outstanding options under the
Plan to purchase 1,527,160 shares of Common Stock. All the outstanding
shares of Common Stock have been duly authorized and validly issued and are
fully paid and nonassessable and were not issued in violation of, or
subject to any preemptive, subscription or other similar rights of any
shareholder of the Company that are provided for in the Company's
Certificate of Incorporation, its By-laws or in any agreement to which the
Company is a party. Except as set forth in this Section 6.2 or in Schedule
6.2 hereto, there are no other options, warrants or other rights,
convertible debt, agreements, arrangements or commitments of any character
obligating the Company to issue or sell any shares of capital stock of or
other equity interests in the Company. The Company is not obligated to
retire, redeem, repurchase or otherwise reacquire any of its capital stock
or other securities.
6.3 Corporate Power, Authorization; Enforceability. The Company has full
corporate power and authority to execute, deliver and enter into this
Agreement and to consummate the transactions contemplated hereby. All
corporate action on the part of the Company, its directors or shareholders
necessary for the authorization, execution, delivery and performance of
this Agreement by the Company, the authorization, sale, issuance and
delivery of the Shares contemplated hereby and the performance of the
Company's obligations hereunder has been taken. The Shares to be purchased
on the Closing Date have been duly authorized and, when issued in
accordance with this Agreement, will be validly issued, fully paid and
nonassessable and will be free and clear of all liens, adverse claims or
encumbrances imposed by or through the Company (other than those imposed
pursuant to this Agreement) (collectively, "Liens") and will not be subject
to any preemptive rights or other similar rights of shareholders of the
Company, and Purchaser will acquire good and marketable title to the Shares
that are provided for in the Company's Certificate of Incorporation, its
By-laws or in any agreement to which the Company is a party. This Agreement
has been duly executed and delivered by the Company and constitutes a
legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, subject to laws of general
application relating to bankruptcy, insolvency and the relief of debtors
and rules of law governing specific performance, injunctive relief or other
equitable remedies, to limitations of indemnification and contribution
obligations pursuant to applicable securities laws, and to limitations of
public policy. No corporate action is required by the Company under the
rules of the Nasdaq Over-the-Counter Bulletin Board system with respect to
the transactions contemplated by this Agreement, including without
limitation, the issuance of the Shares and the inclusion thereof for
trading on the Nasdaq Over-the-Counter Bulletin Board system.
6.4 Financial Statements and SEC Documents.
(a) Included in the Company's Form 10-K for the year ended December 31,
2002 are true and complete copies of the audited balance sheet (the
"Balance Sheet") of the Company as of December 31, 2001 and 2002, and
the related audited statements of operations, shareholders' equity and
cash flows for the years ended December 31, 2001 and 2002 (the
"Audited Financial Statements"), accompanied by the report of Deloitte
& Touche. The Company's Quarterly Reports on Form 10-QSB for the
quarters ended September 30, 2003, June 30, 2003 and March 31, 2003
are available to Purchaser on the Securities and Exchange Commission's
(the "SEC") ▇▇▇▇▇ System. Included in the Quarterly Reports are the
requisite unaudited balance sheets of the Company and the related
unaudited statements of income and statements of cash flows (the
"Unaudited Financial Statements," and together with the "Audited
Financial Statements," the "Financial Statements"). The Financial
Statements have been prepared in accordance with generally accepted
accounting principles (except with respect to the Unaudited Financial
Statements, to the extent set forth in the notes thereto), applied
consistently with the past practices of the Company (except as may be
indicated in the notes thereto) and as of their respective dates,
fairly present, in all material respects, the financial position of
the Company and the results of its operations as of the time and for
the periods indicated therein.
(b) A copy of each report, schedule, effective registration statement and
definitive proxy statement, as supplemented and amended, filed by the
Company with the SEC since April 1, 2001 required to be filed on the
SEC's ▇▇▇▇▇ System (as the documents may have been amended since the
time of their filing, the "SEC Documents"), has also been made
available to Purchaser via the access by the Purchaser to the SEC's
▇▇▇▇▇ System. By way of such access, the Company has provided to
Purchaser a true and complete copy of each SEC Document that the
Company has filed since April 1, 2001. As of their respective filing
dates, each SEC Document complied in all material respects with the
requirements of the Securities Act or the Securities Exchange Act of
1934, as amended (the "Exchange Act"), as applicable, and the rules
and regulations of the SEC thereunder applicable to the SEC Document.
At the time of filing of each SEC Document, the then filed SEC
Documents, taken as a whole, did not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. As of their
respective filing dates, the financial statements of the Company
included in the SEC Documents complied as to form in all material
respects with then applicable accounting requirements and with the
then published rules and regulations of the SEC with respect thereto,
were prepared in accordance with generally accepted accounting
principles, applied consistently with the past practices of the
Company, and as of their respective dates, fairly presented in all
material respects the financial position of the Company and the
results of its operations as of the time and for the periods indicated
therein (except as may be indicated in the notes thereto or, in the
case of the unaudited statements, as permitted by Form 10-QSB and, to
the extent applicable, Regulations S-B and S-X of the SEC).
6.5 No Material Adverse Changes. Except as set forth in Schedule 6.5 hereto, or
elsewhere in this Agreement and the Schedules hereto, since September 30,
2003, except as disclosed in the SEC Documents filed subsequent to that
date, if any, there has not been any material adverse change in the
business, properties, assets, condition (financial or otherwise), prospects
or operating results of the Company.
6.6 Absence of Certain Developments. Except as described in or contemplated by
this Agreement including on Schedule 6.6 hereto or the SEC Documents, since
December 31, 2003, through the Closing Date, the Company has not (a) issued
any stock, options, bonds or other corporate securities, other than upon
the exercise of options outstanding prior to December 31, 2003; (b)
borrowed any amount or incurred or become subject to any material
liabilities (absolute, accrued or contingent), other than current
liabilities incurred in the ordinary course of business and liabilities
under contracts entered into in the ordinary course of business; (c)
discharged or satisfied any lien or adverse claim or paid any material
obligation or liability (absolute, accrued or contingent), other than
current liabilities shown on the Balance Sheet and current liabilities
incurred in the ordinary course of business; (d) declared or made any
payment or distribution of cash or other property to the shareholders of
the Company or purchased or redeemed any securities of the Company; (e)
mortgaged, pledged or subjected to any lien or adverse claim any of its
material properties or assets, except for liens for taxes not yet due and
payable or otherwise in the ordinary course of business; (f) sold, assigned
or transferred any of its material assets, tangible or intangible, except
in the ordinary course of business; (g) suffered any damages, destruction
or casualty loss, whether or not covered by insurance, affecting any of the
properties or assets of the Company or any other properties or assets of
the Company which could, individually or in the aggregate, have or result
in a Material Adverse Effect; (k) made any material change in the nature or
operations of the business of the Company; or (h) entered into any
agreement or commitment to do any of the foregoing.
6.7 No Conflict; Governmental Consents.
(a) The execution and delivery by the Company of this Agreement and the
consummation of the transactions contemplated hereby will not (i)
result in the violation of any provision of the Certificate of
Incorporation or Bylaws of the Company, (ii) result in any violation
of any law, statute, rule, regulation, order, writ, injunction,
judgment or decree of any court or governmental authority to or by
which the Company is bound, or (iii) conflict with, or result in a
breach or violation of, any of the terms or provisions of, or
constitute (with due notice or lapse of time or both) a default under,
any lease, loan agreement, mortgage, security agreement, trust
indenture or other agreement to which the Company is a party or by
which it is bound or to which any of its properties or assets is
subject, nor result in the creation or imposition of any Lien upon any
of the properties or assets of the Company, in the case of each of the
above subsections, the result of which would have a Material Adverse
Effect.
(b) No consent, approval, license, permit, order or authorization of, or
registration, declaration or filing with, any court, administrative
agency or commission or other governmental authority remains to be
obtained or is otherwise required to be obtained by the Company in
connection with the authorization, execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby,
including, without limitation the issue and sale of the Shares, except
filings as may be required to be made by the Company after the Closing
with (i) the SEC, (ii) Nasdaq and (iii) state blue sky or other
securities regulatory authorities.
6.8 Material Misstatements. Except for the execution and performance of this
Agreement and the transactions contemplated hereby, the company has made
disclosure through its filings under the currently applicable rules and
regulations of the SEC, all material facts (within the meaning of the
federal securities laws of the United States of America) with respect to
the Company except to the extent not required to be disclosed as of the
date hereof pursuant to the applicable rules and regulations of the SEC.
6.9 No General Solicitation. Neither the Company nor, to the Company's
knowledge, any person acting on behalf of the Company has conducted any
"general solicitation," as described in Rule 502(c) under Regulation D
promulgated under the Securities Act ("Regulation D"), with respect to any
of the Shares being offered hereby.
6.10 Registration Form. The Company is eligible to register the resale of the
Shares by Purchaser in a secondary offering on a registration statement on
Form SB-2 under the Securities Act.
6.11 No Integration. Neither the Company, nor any of its affiliates, nor, to the
Company's knowledge, any person acting on 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 prevent the parties
hereto from consummating the transactions contemplated hereby pursuant to
an exemption from registration under the Securities Act pursuant to the
provisions of Regulation D. The transactions contemplated hereby are exempt
from the registration requirements of the Securities Act, assuming the
accuracy of the representations and warranties herein contained of
Purchaser to the extent relevant for such determination. The issuance of
the Shares to Purchaser will not be integrated with any other issuance of
the Company's securities (past or current) that requires shareholder
approval under the rules of Nasdaq or that would result in a violation of
the Securities Act by virtue of the issuance of the Shares. The issuance of
the Shares to Purchaser does not require shareholder approval, including
any approval pursuant to the rules of Nasdaq that are applicable to the
Company.
6.12 No Brokers. Other than as set forth on Schedule 6.12, the Company has taken
no action that would give rise to any claim by any person for brokerage
commissions, finder's fees or similar payments by Purchaser relating to
this Agreement or the transactions contemplated hereby.
6.13 Taxes. The Company has timely filed all requisite United States of America
federal, state and other tax returns or extension requests for all fiscal
periods in which such filings were required to be made. There are no
examinations in progress or claims pending against the Company for United
States of America federal, state and other taxes (including penalties and
interest) for any period or periods prior to and including September 30,
2003, and no notice of any claim for taxes, whether pending or threatened,
has been received. All material taxes due from the Company for any period
ended before the date hereof, including interest and penalties (whether or
not shown on any tax return) have been paid. The amounts shown as accruals
for taxes on the Financial Statements included in the filed SEC Documents
are appropriate under generally accepted accounting principles,
consistently applied. The Company is not and has not during the last five
years been a party to any tax sharing agreement or agreement of similar
effect. The Company is not and has not during the last five years been a
member of any consolidated group. The Company has not received, been
denied, or applied for any private letter ruling during the last five
years.
6.14 Licenses and Permits. The Company has all Permits (as defined below)
required by law or governmental regulations from all applicable courts,
administrative agencies or commissions or other governmental authorities or
instrumentalities, whether in the United States of America (federal, state
or local) or outside of the United States of America that are necessary to
operate such businesses as presently conducted and all such Permits are in
full force and effect, except where the failure to have any such Permits in
full force and effect could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. The Company is
not in default under, or in violation of or noncompliance with, any of such
Permits, except for any such default, violation of or noncompliance which
could not, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect. Upon consummation of the transactions
contemplated by this Agreement, each such Permit will remain in full force
and effect and will not create a right of any other person to terminate or
revoke, modify or condition such Permit based on such consummation.
"Permit" means any permit, certificate, consent, approval, authorization,
order, license, variance, franchise or other similar indicia of authority
issued or granted by any court, administrative agency or commission or
other governmental authority or instrumentality, whether in the United
States of America (federal, state or local) or outside of the United States
of America.
6.15 Litigation. There is no action, suit, proceeding, inquiry or investigation
before or by any court, public board, governmental agency or authority, or
self-regulatory organization or body pending or threatened against or
affecting the Company or, to the Company's knowledge, any of its directors
or officers in their capacities as such, the adverse result of which would
have, individually or in the aggregate, a Material Adverse Effect.
6.16 Investment Company. The Company is not, and after giving effect to the
transactions contemplated herein, will not be an "investment company"
within the meaning of that term under the Investment Company Act of 1940,
as amended, and the rules and regulations of the SEC thereunder.
6.17 No Default or Violation. The Company is not (i) in default under or in
violation of any indenture, loan or credit agreement or any other agreement
or instrument to which it is a party or by which it or any of its
properties is bound or (ii) in violation of any order of any court,
arbitrator or governmental body, the default or violation of which,
individually or in the aggregate would have a Material Adverse Effect.
6.18 Listing and Maintenance Requirements Compliance. The Company has not
received any notice (written or oral) from the Nasdaq Over-the-Counter
Bulletin Board to the effect that the Company is not in compliance with the
continuing listing or maintenance requirements of the Nasdaq
Over-the-Counter Bulletin Board. The Company's Common Stock is registered
under Section 12(g) of the Exchange Act and is listed on the Nasdaq
Over-the-Counter Bulletin Board. The Company is in compliance with all
listing and maintenance requirements of such market, and has not taken any
action designed to terminate registration of its Common Stock or delist the
Common Stock from the Nasdaq Over-the-Counter Bulletin Board.
6.19 Patents and Trademarks. The Company has, or has rights to use, all patents,
patent applications, trademarks, trademark applications, service marks,
trade names, copyrights, licenses and know-how (including trade secrets or
other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures) (collectively, the "Intellectual
Property Rights") that are necessary for use in connection with its
business as presently conducted or that the failure to have would not have
a Material Adverse Effect, and, to the Company's knowledge there is no
existing infringement by another person or entity of any of the
Intellectual Property Rights that are necessary for use in connection with
the Company's business as presently conducted. To the Company's knowledge,
the Company is not infringing on or in conflict with any right of any other
person with respect to any Intellectual Property Rights, nor is there any
claim of infringement made, or to the Company's knowledge threatened by, a
third party against or involving the Company.
6.20 Environmental Matters. The Company has obtained all permits, licenses and
other authorizations that are required under federal, state and local laws
relating to pollution or protection of the environment, including laws
related to emissions, discharges, releases or threatened releases of
pollutants, contaminants or hazardous or toxic material or wastes into
ambient air, surface water, ground water or land, or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants, contaminants or hazardous or
toxic materials or wastes ("Environmental Laws"), except for any failures
to obtain the permits, licenses or authorizations that would not,
individually or in the aggregate, have or result in a Material Adverse
Effect. The Company is in compliance with all terms and conditions of the
required permits, licenses and authorizations and is also in full
compliance with all other limitations, restrictions, conditions and
requirements contained in the Environmental Laws or contained in any plan,
order, judgment, decree or notice, except for any non-compliance which
could not, individually or in the aggregate, have or result in a Material
Adverse Effect. The Company is not aware of, nor has the Company received
notice of, any events, conditions, circumstances, actions or plans which
may interfere with or prevent continued compliance or which would give rise
to any liability under any Environmental Laws, except for any liability
which could not, individually or in the aggregate, have or result in a
Material Adverse Effect.
6.21 No Anti-dilution. The issuance of the Shares does not constitute an
anti-dilution event for any existing security holders of the Company,
pursuant to which such security holders would be entitled to additional
securities or a reduction in the applicable conversion price or exercise
price of any securities.
6.22 No Registration Rights. Other than the rights granted in this Agreement and
to other investors participating in the Offering described in the recitals
to this Agreement and as described on Schedule 6.22, the Company has not
granted or agreed to grant to any person any rights (including "piggy-back"
registration rights) to require the Company to file a registration
statement under the Securities Act with respect to any securities, or to
include such securities with the Shares in any Shelf Registration
Statement, except for such as have been or will be satisfied or waived.
Section 7. Covenants of the Company. The Company covenants and agrees with
Purchaser, for so long as Purchaser holds Shares, the Warrant or Warrant Shares
as follows:
7.1 Reporting Status. So long as the Company is subject to the reporting
requirements of the Exchange Act, the Company will use its best efforts to
file timely all reports required to be filed with the SEC pursuant to the
Exchange Act.
7.2 Form D. The Company will file a Form D within 15 days of the Closing Date
with respect to the Shares with the SEC as required under Regulation D
under the Securities Act, and will provide a copy thereof to Purchaser.
7.3 Information. The Company agrees to provide the following reports to
Purchaser until the earlier of (i) the date on which a Purchaser transfers,
assigns or sells all of its Shares to a non-affiliate of such Purchaser, or
(ii) the third anniversary of the Closing Date: (a) a copy of its Annual
Report to Shareholders and any proxy statements and any other reports or
information delivered to stockholders of the Company generally to the
stockholders of the Company and (b) subject to Regulation FD and any state
or federal securities laws, any information with respect to the Company,
its properties, or its business or Purchaser's investment as Purchaser may
reasonably request; provided, however, that the Company will not be
required to provide Purchaser any material nonpublic information.
7.4 Listing and Maintenance Requirements Compliance. The Company will use its
best efforts to comply in all respects with all requirements to maintain
the quotation of the Company's Common Stock on the Over-the-Counter
Bulletin Board quotation system.
7.5 Integration. The Company will insure that the issuance of the Shares to
Purchaser will not be integrated with any other issuance of the Company's
securities in the future, which requires shareholder approval under the
rules of Nasdaq or which would result in a violation of the Securities Act.
7.6 Participation Right. In the event that the Company effects any private
offering of its Common Stock within 12 months following the Closing, at an
effective price per share of Common Stock that is less than the Purchase
Price (after giving effect to the vesting of any rights to purchase
securities upon the exercise of the Warrants and including in the
calculation of the Purchase Price the average price per share paid for the
Shares and the Warrant Shares that are or could be purchased upon the
exercise of any Warrants that are exerciseable immediately following the
sale of any such shares of Common Stock), Purchaser shall be entitled to
purchase in that private offering a number of securities such that its
percentage ownership of the Company represented by the Shares (and any
capital stock issued in respect of the Shares as a stock dividend or stock
split) after the closing of the private offering is not less than that
immediately before the private offering (taking into account for that
purpose only the dilution caused by the issuance of securities in such
subsequent private offering). This right shall not apply to private
offerings which are pursuant to a stock option, stock bonus or stock
purchase plan or grant for the benefit of employees, directors and
consultants, or issued for the purchase of assets or a business, [to any
lender, or strategic partner,] which is approved by the Company's Board of
Directors. At the request of the Company, the right of Purchaser to
participate in that offering is conditioned on Purchaser entering into
agreements substantially the same as those entered into by the other
purchasers in that offering and Purchaser making truthful representations
substantially the same as those in Sections 5.1 thorough 5.4 hereof. In
connection with the right set forth in this Section 7.6, the Company shall
give five (5) business days notice of the closing of the proposed private
offering of Common Stock to the Purchaser, following which the Company
shall be free to proceed with the private placement if the Purchaser has
not notified the Company in writing of its desire to participate in the
private placement by the end of such five days. The Purchaser must provide
payment for its percentage participation in the private placement at the
same time and in accordance with the same terms and conditions as the other
investors therein.
7.7 Subsequent Issuances of Equity Securities.
(a) If and whenever on or after the Closing Date and until December 31,
2004, the Company issues or sells, or is deemed to have issued or
sold, shares of the Company's common stock, other than shares of the
Company's common stock issued in connection with any Excluded Issuance
(as defined in Section 7.7(b)) for a consideration per share that is
less than $2.00 (the "New Per Share Purchase Price"), then immediately
after such issue or sale, the Company shall issue to each Purchaser,
for no consideration in addition to the Purchase Price previously paid
by such Purchaser at the Closing, a number of additional shares of the
Company's common stock equal to the difference between (x) the
aggregate Purchase Price paid by such Purchaser at the Closing divided
by the New Per Share Purchase Price and (y) the number of shares of
Common Stock issued to such Purchaser in connection with the Closing.
(b) The term "Excluded Issuance" means: (i) the issuance of the Company's
common stock upon the exercise or conversion of any warrants or other
rights to acquire the Company's equity securities outstanding as of
the Closing Date or otherwise described in the Schedules to this
Agreement; (ii) the issuance of the Company's common stock upon
exercise of options issued to employees, officers, directors or
consultants of the Company pursuant to the Plans or (iii) shares
issued in connection with mergers, acquisitions, loan arrangements or
strategic alliances.
7.8 Acquisition. If the Company is acquired through a tender offer of 50% or
more of the Common Stock, merger or sale of substantially all of the assets
of the Company or liquidated prior to December 31, 2004, and the price per
share received by the stockholders of the Company ("Acquisition Price") is
less than $3.00 per share ("Acquisition"), the Company shall issue to
Purchaser a number of shares of the Company's common stock equal to (a) the
difference between (i) the number of shares of Common Stock issued to
Purchaser pursuant to this Agreement multiplied by $3.00 per share and (ii)
the value of such shares assuming a price per share equal to the
Acquisition Price; divided by (b) the Acquisition Price.
7.9 Underwritten Public Offering. In the event of any underwritten public
offering, the Company shall enter into and perform its obligations under an
underwriting agreement, in usual and customary form, with the managing
underwriter of such offering.
7.10 Transaction Costs. The Company will reimburse all reasonable costs up to
$5,000 incurred by Purchaser to complete the purchase of the Shares,
including but not limited to reasonable attorney fees.
Section 8. Survival of Representations and Warranties. Notwithstanding any
investigation made by any party to this Agreement, all representations and
warranties made by the Company and Purchaser herein and in the certificates for
the Shares delivered pursuant hereto, shall survive for a period of one year
after the Closing Date and shall thereupon expire together with the associated
right to indemnification pursuant to Section 10(a)(iv), unless a claim for
indemnification (whether or not fixed as to liability or liquidated as to
amount) shall be made with respect thereto prior to the end of such period, in
which case such representation or warranty with respect to which such claim has
been made, and the associated right to indemnification shall survive until such
claim is satisfied, settled or dismissed.
Section 9. Registration of Common Stock.
9.1 Registrable Securities. For the purposes of this Agreement, "Registrable
Securities" means (a) the Shares, (b) the Warrant Shares and (c) any shares
of Common Stock issued as a distribution with respect to the Shares
referred to in (a) or (b); provided that (i) any shares of Common Stock
will cease to be Registrable Securities, and (ii) the Company will not be
obligated to maintain the effectiveness of the Shelf Registration Statement
(as defined below), and the Company's obligations under this Section 9 will
cease, with respect to a holder's (a "Holder") Registrable Securities
following the earlier of (x) the third anniversary of the Effective Date,
(y) the date on which the Company delivers an opinion of its counsel that
(1) the Holder may sell in a single transaction all Registrable Securities
then held or issuable to the Holder on a registered securities exchange or
Nasdaq market (which may be the Nasdaq Over-the-Counter Bulletin Board or
such other market that may succeed the Nasdaq Over-the-Counter Bulletin
Board) under an applicable exemption from the registration requirements of
the Securities Act (pursuant to Rule 144 under the Securities Act or
otherwise) (which opinion may assume no other sales by Purchaser of
securities of the Company or derivative securities of such securities,
other than Registrable Securities) and (2) all transfer restrictions and
restrictive legends with respect to the Registrable Securities will be
removed upon the consummation of the sale, or (z) Purchaser no longer owns
the Shares or Warrant Shares. The period of time during which the Company
is required to keep the Shelf Registration Statement effective is referred
to as the "Registration Period."
9.2 Registration.
(a) The Company will as soon as practicable following the Closing Date,
but not later than sixty (60) days after the Closing Date (the "Filing
Deadline"), file with the SEC a shelf registration statement on Form
S-B2 or successor form or another form selected by the Company that is
available to it under the Securities Act (the "Shelf Registration
Statement") with respect to the Registrable Securities beneficially
owned by Purchaser following the Closing. The company will use its
best efforts to have the registration statement declared effective as
soon thereafter as practicable. The Shelf Registration Statement shall
contain the Plan of Distribution in substantially the form attached
hereto as Exhibit C.
(b) The Company may not suspend the use of the prospectus forming a part
of the Shelf Registration Statement after it is declared effective for
more than 60 days in any 12-month period during the Registration
Period, pursuant to Section 9.6(a) (excluding any period for which the
Shelf Registration Statement is not effective between the time an
amendment has been filed to the registration statement and the time
the amendment has been declared effective by the SEC or state
securities regulatory body and assuming the Company is acting in good
faith to obtain the effectiveness of that amendment), other than due
to any action by the Holder (or failure to act by the Holder).
9.3 Registration Procedures. In connection with the registration of any
Registrable Securities under the Securities Act as provided in this Section
9, the Company will use its reasonable best efforts:
(a) To provide Purchaser with a copy of the SB-2 filing at least three
days prior to the filing of such SB-2 with the SEC;
(b) To cause the Shelf Registration Statement (and any other related
registrations, qualifications or compliances as may be reasonably
requested and as would permit or facilitate the sale and distribution
of all Registrable Securities until the distribution thereof is
complete) to become effective as soon as practicable following the
filing thereof;
(c) To prepare and file with the SEC the amendments and supplements to the
Shelf Registration Statement and the prospectus used in connection
therewith and take all other actions as may be necessary to keep the
Shelf Registration Statement continuously effective until the
disposition of all securities in accordance with the intended methods
of disposition by the Holder or Holders thereof set forth in the Shelf
Registration Statement will be completed, and to comply with the
provisions of the Securities Act (to the extent applicable to the
Company) with respect to the dispositions;
(d) To furnish to each Holder of Registrable Securities a reasonable
number of copies of the Shelf Registration Statement and of each
amendment and supplement thereto, a number of copies of the prospectus
included in the Shelf Registration Statement (including each
preliminary prospectus), in conformity with the requirements of the
Securities Act, and the other documents (including exhibits to any of
the foregoing), as the Holder may reasonably request, in order to
facilitate the disposition of the Registrable Securities owned by
Holder;
(e) To use its best efforts to register or qualify the Registrable
Securities covered by the Shelf Registration Statement under blue sky
laws of the various states as any Holder reasonably requests (and in
which such registration or qualification shall be possible), and do
any and all other acts and things that may be reasonably necessary or
advisable to enable a Holder to consummate the disposition in those
states, except that the Company will not be required to qualify
generally to do business as a foreign corporation in any jurisdiction
wherein it would not, but for the requirements of this Section 9.3(d)
be obligated to be qualified, to subject itself to taxation in any
jurisdiction, or to consent to general service of process in any
jurisdiction;
(f) To provide a transfer agent and registrar for the Registrable
Securities covered by the Shelf Registration Statement not later than
the effective date of the Shelf Registration Statement;
(g) To notify each Holder of Registrable Securities at any time when a
prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event as a result of which the
prospectus included in the Shelf Registration Statement contains an
untrue statement of a material fact or omits any fact necessary to
make the statements therein, in light of the circumstances under which
they are made, not misleading, and, at the request of any Holder, the
Company will promptly prepare a supplement or amendment to the
prospectus so that, as thereafter delivered to the purchasers of
Registrable Securities, the prospectus will not contain an untrue
statement of a material fact or omit to state any fact necessary to
make the statements therein not misleading;
(h) To cause all Registrable Securities to be listed on each securities
exchange, quotation system, or Nasdaq Over-the-Counter Bulletin Board
on which similar securities issued by the Company are then listed;
(i) To enter into customary agreements (including, in the event the
Holders elect to engage an underwriter in connection with the Shelf
Registration Statement, an underwriting agreement containing customary
terms and conditions) and take all other actions as reasonably
required in order to expedite or facilitate the disposition of
Registrable Securities; provided, however, that, except as provided in
Section 9.4 hereof, the Company will not be liable for any expenses,
including any underwriter's fees, commissions and discounts or counsel
fees (other than its own counsel) with respect to the sale of
Registrable Securities;
(j) With a view to making available to the Holders the benefits of certain
rules and regulations of the SEC that at any time permit the sale of
the Registrable Securities to the public without registration:
(i) to make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act; (ii)
to file with the SEC in a timely manner all reports and other
documents required of the Company under the Exchange Act; and
(iii)so long as a Holder owns any unregistered Registrable Securities,
to furnish to the Holder upon any reasonable request a written
statement by the Company as to its compliance with the public
information requirements of Rule 144 under the Securities Act,
and of the Exchange Act, a copy of the most recent annual and
quarterly report of the Company, and the other SEC reports and
documents of the Company as the Holder may reasonably request in
availing itself of any rule or regulation of the SEC allowing a
Holder to sell any Registrable Securities without registration
(excluding any reports or documents of the Company that the
Company, in its sole discretion, deems confidential).
(k) To make every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of the Shelf Registration Statement at
the earliest possible time.
9.4 Registration and Selling Expenses. All expenses incurred by the Company in
connection with the Company's performance of or compliance with this
Section 9, including (i) all SEC registration and filing fees, (ii)
reasonable blue sky fees and expenses, (iii) all necessary printing and
duplicating expenses, and (iv) all fees and disbursements of counsel and
accountants retained on behalf of the Company (collectively, the
"Registration Expenses"), will be paid by the Company. Each Holder may, at
its election, retain its own counsel and other representatives and advisors
as it chooses at its own expense.
9.5 No Delay. No Holder will have a right to take any action to restrain,
enjoin or otherwise delay any registration pursuant to Section 9.2 hereof
as a result of any dispute, controversy or other matter that may arise with
respect to the interpretation or implementation of this Agreement.
9.6 Certain Obligations of Holders.
(a) The Company may voluntarily suspend the effectiveness of the Shelf
Registration Statement for a limited time, which in no event shall be
longer than 30 days with respect to any single event or more than 60
consecutive or non-consecutive days in any 12-month period, if the
Company has been advised in writing by either counsel or underwriters
to the Company that the offering of the Registrable Securities
pursuant to the Shelf Registration Statement would materially
adversely affect or would be impermissible in the view of (or
impermissible without disclosure in a prospectus), a proposed material
financing, acquisition, merger, reorganization or other similar
transaction involving the Company or the occurrence of any event with
respect to which the disclosure to the public might be material in
light of the sale pursuant to a prospectus but with respect to which
disclosure has not yet been made by the Company.
(b) As a condition to the inclusion of its Registrable Securities, each
Holder will furnish to the Company the information regarding the
Holder and the intended method of distribution of the securities as
the Company may from time to time request or as will be required in
connection with any registration, qualification or compliance referred
to in this Section 9. Each Holder promptly will furnish to the Company
all information required to be disclosed in order to make the
information previously furnished by it to the Company not materially
misleading.
(c) Each Holder hereby covenants to the Company not to make any sale of
the Registrable Securities without effectively causing the prospectus
delivery requirements under the Securities Act to be satisfied and, if
Registrable Securities are to be sold by any method or in any
transaction other than as set forth in the Plan of Distribution in the
prospectus included in the Shelf Registration Statement, to deliver to
the Company an opinion of counsel to the Holder of such Registrable
Securities to the effect that the sale may be effected in accordance
with the Securities Act.
(d) The rights to cause the Company to register Registrable Securities
granted to the Holders by the Company under Section 9.2 may be
assigned in whole or in part by a Holder prior to the effective date
of the Registration Statement relating to the Registrable Securities,
provided, that: (i) the Company is furnished with an opinion of
counsel to the Holder of such Registrable Securities to the effect
that the transfer may be effected in accordance with the Securities
Act; (ii) the transfer involves not less than the lesser of all of the
Holder's Registrable Securities or 25,000 shares of Common Stock (as
adjusted for stock splits, stock dividends, and stock combinations);
(iii) the Holder gives prior written notice to the Company; and (iv)
the transferee agrees to comply with the terms and provisions of this
Agreement in a written instrument satisfactory in form and substance
to the Company and its counsel.
(e) No provision of this Section 9 may be waived by a particular affected
Holder (either generally or in a particular instance, either
retroactively or prospectively and either for a specified period of
time or indefinitely) or amended without the written consent of that
affected Holder.
9.7 Transfer of Shares. Purchaser may transfer all or any part of its Shares to
any person under common management with Purchaser, and the Company will
effect such transfer of restricted certificates and will promptly amend the
prospectus forming a part of the Shelf Registration Statement to add the
transferee to the selling shareholders in the Shelf Registration Statement;
provided, however, that the Company shall not be subject to any penalties
by virtue of the inability of the Purchaser to sell securities pursuant to
the Registration Statement during any period of pendancy of the
effectiveness of any such amendment.
Section 10. Indemnification.
(a) The Company will indemnify, to the extent permitted by law, each Holder of
Registrable Securities and each director, officer or controlling person of
each Holder within the meaning of Section 15 of the Securities Act against
all losses, claims, damages, liabilities and expenses, (or action in
respect thereof), including any of the foregoing incurred in settlement of
any litigation, commenced or threatened, arising out of or based on (i) any
untrue statement or alleged untrue statement of a material fact contained
in, or information incorporated by reference into, any registration
statement or prospectus (or any amendment or supplement thereto) or any
preliminary prospectus prepared in connection with the registration
contemplated by Section 9, (ii) any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading in light of the circumstances under
which any statements are made, (iii) any failure by the Company to fulfill
and perform any material agreement, covenant or undertaking herein (except
to the extent another remedy is specifically provided for herein as the
exclusive remedy), or (iv) any failure or breach of the representations and
warranties of the Company set forth in Section 6 to be accurate as of the
date hereof and as of the Closing Date, and will promptly reimburse each
Holder and each director, officer or controlling person of each Holder for
reasonable legal (no more than one legal counsel in the aggregate) and
other expenses incurred in connection with investigating or defending any
claim, loss, damage, liability or action relating to (i) or (ii) above as
incurred; provided however, that the Company will not be ----------------
liable in any such case to the extent that any such loss, claim, damage,
liability or action arises directly out of or is based upon an untrue
statement or alleged untrue statement or by any omission or alleged
omission made in such registration statement or prospectus made in reliance
upon and in conformity with written information furnished by any Holder
specifically for use in the preparation of the registration statement or
prospectus, provided further, ------------------ however, that the Company
will not be liable in any such case to the extent that any such loss,
------- claim, damage, liability or action arises directly out of or is
based primarily upon an untrue statement or omission made in any
preliminary prospectus or final prospectus if (i) such Holder failed to
send or deliver a copy of the final prospectus or prospectus supplement
with or prior to the delivery of written confirmation of the sale of the
Shares, and (ii) the final prospectus or prospectus supplement would have
corrected such untrue statement or omission. The indemnification obligation
of the Company with respect to clauses (iii) and (iv) above, will survive
for a period ending on the [second] anniversary of the Closing Date, unless
a claim for indemnification (whether or not fixed as to liability or
liquidated as to amount) is made with respect hereto prior to the end of
such period, in which case the right to indemnification as to such claim
shall survive until such claim is satisfied, settled or dismissed.
(b) In connection with the Shelf Registration Statement in which a Holder of
Registrable Securities is participating, each Holder will furnish to the
Company in writing the information as is reasonably requested by the
Company for use in the Shelf Registration Statement or prospectus and will
severally, but not jointly, indemnify, to the extent permitted by law, the
Company, its directors and officers and each person or entity, if any, who
controls the Company within the meaning of Section 15 of the Securities
Act, against any losses, claims, damages, liabilities and expenses
resulting from any untrue statement or alleged untrue statement of a
material fact or any omission or alleged omission of a material fact
required to be stated in the Shelf Registration Statement or prospectus or
any amendment thereof or supplement thereto or necessary to make the
statements therein not misleading, but only to the extent the losses,
claims, damages, liabilities or expenses are caused by an untrue statement
or alleged untrue statement or by an omission or alleged omission made in
reliance upon and in conformity with the written information specifically
furnished by the Holder to the Company for use in connection with the
preparation of the Shelf Registration Statement or prospectus; provided
--------- however, that the indemnity will not apply to the extent that the
loss, claim, damage, ------- liability or expense arises out of or is based
solely upon a violation of this Agreement by the Company. If the offering
pursuant to any registration is made through underwriters, each Holder
agrees to enter into an underwriting agreement in customary form with the
underwriters and to indemnify the underwriters, their officers and
directors, if any, and each person or entity who controls the underwriters
within the meaning of the Securities Act to the same extent as hereinabove
provided with respect to indemnification by the Holder. Notwithstanding the
foregoing or any other provision of this Agreement, in no event will a
Holder of Registrable Securities be liable for any losses, claims, damages,
liabilities or expenses in excess of the net proceeds received by such
Holder upon the disposition of Registrable Securities pursuant to the
registration statement giving rise to such claim.
(c) Promptly after receipt by an indemnified party under Section 10(a) or (b)
of notice of any claim as to which indemnity may be sought, including the
commencement of any action or proceeding, the indemnified party will, if a
claim in respect thereof may be made against the indemnifying party under
this Section, promptly notify the indemnifying party in writing of the
commencement thereof; provided that the failure of the indemnified party to
so notify the indemnifying party will not relieve the indemnifying party
from its obligations under this Section except to the extent that the
indemnifying party is adversely affected by the failure. In case any action
or proceeding is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party and
its counsel will conduct the defense of any action with counsel approved by
the indemnified party (which approval will not be unreasonably withheld or
delayed) although the indemnified party will be entitled to participate
therein at the indemnified party's expense, and after notice from the
indemnifying party to the indemnified party of its election to so assume
the defense thereof, the indemnifying party will not be liable to the
indemnified party under that Section for any legal or any other expenses
subsequently incurred by the indemnified party in connection with the
defense thereof (other than reasonable costs of investigation) unless
incurred at the written request of the indemnifying party. Notwithstanding
the above, the indemnified party will have the right to employ counsel of
its own choice in any action or proceeding (and be reimbursed by the
indemnifying party for the reasonable fees and expenses of the counsel and
other reasonable costs of the defense) if representation of the indemnified
party by the counsel retained by the indemnifying party would be
inappropriate due to actual or potential differing interests or conflicts
between the indemnified party and any other party represented by the
counsel in the action or proceeding or counsel to the indemnified party is
of the opinion that it would not be desirable for the same counsel to
represent both the indemnifying party and the indemnified party because the
representation might result in a conflict of interest; provided, however,
-------- ------- that the indemnifying party will not in connection with
any one action or proceeding or separate but substantially similar actions
or proceedings arising out of the same general allegations, be liable for
the reasonable fees and expenses of more than one separate firm of
attorneys at any time for all indemnified parties, except to the extent
that local counsel, in addition to regular counsel, is required in order to
effectively defend against the action or proceeding. An indemnifying party
will not be liable to any indemnified party for any settlement or entry of
judgment concerning any action or proceeding effected without the consent
of the indemnifying party.
(d) If the indemnification provided for in Section 10(a) or (b) is held by a
court of competent jurisdiction to be unavailable under applicable law to
an indemnified party in respect of any losses, claims, damages or
liabilities referred to therein, then each applicable indemnifying party,
in lieu of indemnifying the indemnified party, will contribute to the
amount paid or payable by the indemnified party as a result of the losses,
claims, damages or liabilities in the proportion as is appropriate to
reflect the relative fault of the Company on the one hand and of the
indemnified party on the other in connection with the statements or
omissions which resulted in the losses, claims, damages, or liabilities, as
well as any other relevant equitable considerations including the relative
benefits to the parties. The relative fault of the Company on the one hand
and of the indemnified party on the other will be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission to state a material fact relates to
information supplied by the Company or by the indemnified party and the
parties' relative intent, knowledge, access to information and opportunity
to correct or prevent the statement or omission. The amount paid or payable
by a party as a result of the losses, claims, damages and liabilities
referred to above will be deemed to include, subject to the limitations set
forth in Section 10(c), any legal or other fees or expenses reasonably
incurred by the party in connection with investigating or defending any
action or claim. No person or entity guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) will be
entitled to contribution from any person or entity that is not guilty of
fraudulent misrepresentation.
Section 11. Miscellaneous.
11.1 Notices. Any notice or other communication given hereunder will be deemed
sufficient if in writing and sent by registered or certified mail, return
receipt requested, overnight delivery against written receipt therefor or
delivered by hand against written receipt therefor, or sent by confirmed
facsimile, addressed to:
If to the Company:
Patient Infosystems, Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇▇ & English, LLP
Four Gateway Center
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▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Purchaser:
To the name and address or facsimile number of Purchaser on
the signature page hereto.
Notices will be deemed to have been given or delivered on the date of
mailing, except notices of change of address, which will be deemed to have been
given or delivered when received.
11.2 Successors and Assigns. Subject to Section 9.6(d), this Agreement will be
binding upon and inure to the benefit of the parties hereto and to their
respective heirs, legal representatives, successors and assigns.
11.3 Entire Agreement. This Agreement (including the Exhibits and Schedules
hereto) sets forth the entire agreement and understanding among the parties
as to the subject matter hereof and merges and supersedes all prior
discussions, agreements and understandings of any and every nature among
them. Subject to Section 9.6(e), this Agreement may be amended with respect
to Purchaser only by mutual written agreement of the Company and Purchaser.
11.4 Governing Law. The terms and provisions hereof will be construed in
accordance with and governed by the laws of the State of Delaware without
regard to that State's conflicts of law principles.
11.5 Severability. The holding of any provision of this Agreement to be invalid
or unenforceable by a court of competent jurisdiction will not affect any
other provision of this Agreement, which will remain in full force and
effect. If any provision of this Agreement is declared by a court of
competent jurisdiction to be invalid, illegal or incapable of being
enforced in whole or in part, the provision will be interpreted so as to
remain enforceable to the maximum extent permissible consistent with
applicable law and the remaining conditions and provisions or portions
thereof will nevertheless remain in full force and effect and enforceable
to the extent they are valid, legal and enforceable, and no provisions will
be deemed dependent upon any other covenant or provision unless so
expressed herein.
11.6 No Waiver. A waiver by either party of a breach of any provision of this
Agreement will not operate, or be construed, as a waiver of any subsequent
breach by that same party.
11.7 Further Assurances. The parties agree to execute and deliver all further
documents, agreements and instruments and take further action as may be
necessary or appropriate to carry out the purposes and intent of this
Agreement. Any documentary, stamp tax or similar issuance or transfer taxes
due as a result of the conveyance, transfer or sale of the Shares by the
Company to any of the Purchasers (or any of their permitted transferees),
pursuant to this Agreement will be borne by the Company.
11.8 Counterparts. This Agreement may be executed in two or more counterparts,
each of which will be deemed an original, but all of which will together
constitute the same instrument.
11.9 No Third Party Beneficiaries. Nothing in this Agreement creates in any
person not a party to this Agreement any legal or equitable right, remedy
or claim under this Agreement, and this Agreement is for the exclusive
benefit of the parties hereto. The parties expressly recognize that this
Agreement is not intended to create a partnership, joint venture or other
similar arrangement between any of the parties or their respective
affiliates.
11.10Publicity Restrictions. No press release or other public disclosure
relating to the transactions contemplated by this Agreement may be issued
or made by or on behalf of any party without prior consultation with the
other parties, except as required by applicable law, court process or
Nasdaq or other stock exchange rules, in which case Purchaser required to
make the disclosure will allow the Company reasonable time (to the extent
practicable) to comment thereon in advance of the issuance. The Company may
issue an initial press release relating to the transactions contemplated by
this Agreement, but shall not identify Purchaser in such press release
unless the disclosure of the Purchaser's identity would otherwise be
required in any filing with the SEC by the Company or the Purchaser either
at the time of the proposed press release or within 60 days thereafter. The
parties acknowledge that neither party has rendered advice to the other
regarding tax structure or tax consequences in connection with the
transactions contemplated by this Agreement. The parties acknowledge that
the Company may file a copy of this Agreement with the SEC as an exhibit to
its filings.
11.11Force Majeure. No party shall be liable for any delay or failure of
performance due to a "Force Majeure Event". For purposes of this Agreement
a Force Majeure Event is an event beyond the reasonable control of a party,
including unexpected and extreme forces of nature, a banking moratorium due
to governmental order, acts of war or terror, or acts of a governmental
body beyond the reasonable control of the party.
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IN WITNESS WHEREOF, the undersigned have duly executed this Securities
Purchase Agreement as of the date first above written.
PATIENT INFOSYSTEMS, INC.
By: __________________________________
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
Title: President and Chief Executive Officer
[INVESTOR]
By: __________________________________
Name:
Title:
Number of Shares Purchased:
Purchase Price: $2.00
Purchaser's Address:
Purchaser's Tax Identification Number:
Shares purchased to be
registered as follows: