Exhibit 10.29
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STOCK PURCHASE AND SALE AGREEMENT
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THIS STOCK PURCHASE AND SALE AGREEMENT (the "Agreement") is made and
entered into this 3rd day of August, 2004, by and among PARADIGM MEDICAL
INDUSTRIES, INC., a Delaware corporation ("Seller"), XXXXXXX XXXXX, a resident
of New York ("Purchaser"), and the law firm of CLEARY, GOTTLIEB, XXXXX &
XXXXXXXX, acting as escrow agent ("Escrow Agent").
W I T N E S S E T H :
WHEREAS, Purchaser desires to purchase from Seller, and Seller desires
to sell, shares of common stock of International Bio-Immune Systems, Inc.
("International Bio-Immune Systems"), par value $.02 per share, under the terms
and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and of the respective
representations, warranties, covenants, agreements and conditions contained
herein, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. Purchase and Sale of Shares. Subject to the terms and conditions of
this Agreement, Seller hereby agrees to sell to Purchaser, and Purchaser agrees
to purchase from Seller (a) a total of two million six hundred fifty seven
thousand eight hundred two (2,657,802) shares of restricted common stock of
International Bio-Immune Systems, $.02 par value per share (the "Shares"), and
(b) common stock purchase warrants (the "Warrants") for the purchase of
1,200,000 shares of common stock of International Bio-Immune Systems at an
exercise price of $2.50 per share, for an aggregate purchase price (the
"Purchase Price") of Five Hundred Thirty-one Thousand Five Hundred Sixty and
40/100 Dollars ($531,560.40). Of the Purchase Price, one dollar is allocated to
the Warrants and the balance to the Shares.
2. Payment of Purchase Price; Delivery of Certificate. As soon as
reasonably practicable following the receipt of an executed copy of this
Agreement, Seller shall deliver to Cleary, Gottlieb, Xxxxx & Xxxxxxxx, acting as
Escrow Agent at Xxx Xxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, a stock certificate
in the form prescribed by applicable law representing the Shares and all rights
attaching thereto, and a warrant certificate in the form prescribed by
applicable law representing the Warrants and all rights attaching thereto.
Escrow Agent is hereby directed to deliver the stock certificate representing
the Shares and the warrant certificate representing the Warrants to Purchaser
upon receipt by Seller of wire transfer funds or certified funds payable to
Seller in an amount equal to the total Purchase Price. It is hereby understood
and agreed that the Shares and Warrants will be transferred to the name of
Purchaser as indicated above. Escrow Agent shall have no liability for any act
of omission hereunder while acting in good faith in the exercise of its own
judgment, and Seller and Purchaser hereby agree to defend, indemnify and hold
harmless Escrow Agent from and against any and all claims, damages, liabilities,
losses, costs and expenses (including without limitation reasonable attorney's
fees) asserted against or suffered or incurred by the Escrow Agent in connection
with its activities hereunder, except to the extent attributable to the bad
faith of Escrow Agent. Seller acknowledges that the Escrow Agent serves as legal
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counsel to Purchaser, and Seller agrees that Escrow Agent shall not be prevented
from representing Purchaser in this matter or in any future matter (including
any litigation between Seller and Purchaser) by virtue of Escrow Agent's service
as escrow agent hereunder.
3. Representations and Warranties of Seller. Except as otherwise set
forth in this Agreement, Seller hereby represents and warrants to the Purchaser
as follows:
3.1 Organization and Standing. Seller is a corporation duly
organized and validly existing under, and by virtue of, the laws of the State of
Delaware, and is in good standing under the laws of said state.
3.2 Corporate Power. Seller has all requisite legal and corporate
power and authority to execute this Agreement, to sell and transfer the Shares
and transfer the Warrants to Purchaser, and to carry out and perform its
obligations under the terms of this Agreement.
3.3 Authorization. All corporate action on the part of the
Company, its directors and shareholders necessary for the authorization,
execution, delivery and performance of this Agreement by Seller, the
authorization, sale, and delivery of the Shares, the authorization, transfer and
delivery of the Warrants, and the performance of all of Seller's obligations
hereunder has been or will be taken prior to Seller's execution of this
Agreement.
3.4 Title to Stock. Seller owns all the Shares and Warrants free
and clear of all liens, security interests, pledges, claims, demands,
encumbrances or restrictions of any kind whatsoever.
3.5 Consents. No approvals or consents of any persons other than
as set forth herein are necessary for Seller to enter into and perform this
Agreement.
3.6 Access to Information. Seller has discussed business,
management and financial affairs of International Bio-Immune Systems with the
officers, directors and/or employees of International Bio-Immune Systems as it
deemed necessary or appropriate, and has reviewed, as requested by Seller, the
books and records of International Bio-Immune Systems, and has obtained such
information as Seller has considered relevant and important in making a decision
to sell the Shares and transfer the Warrants as provided herein. Seller has
concluded that it has sufficient information upon which to base a decision to
sell the Shares and transfer the Warrants. Seller has had full access to all
information it deems relevant concerning the Company and its prospects in
connection with entering into this Agreement and determining the Purchase Price.
Without limitation, Seller acknowledges receipt from Purchaser of the materials
distributed to stockholders at the meeting of stockholders of the Company held
on July 27, 2004.
4. Representations and Warranties of the Purchaser. Purchaser hereby
represents and warrants to Seller with respect to Purchaser's purchase and
acquisition of the Shares and acquisition of the Warrants, as follows:
4.1 Experience. Purchaser understands that the purchase of the
Shares and acquisition of the Warrants is highly speculative. Purchaser or
Purchaser's financial advisors or representatives have substantial experience in
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evaluating and investing in private sales of securities (such as in
International Bio-Immune Systems) such that Purchaser (or Purchaser along with
Purchaser's financial advisors and representatives) is capable of evaluating the
merits and risks of the investment in the Shares and Warrants, and has the
capacity to protect its own interests and to bear the economic risk of the
investment in the Shares and Warrants. Purchaser is aware of the several and
various risks presented to a business such as International Bio-Immune Systems
and of the risks associated with International Bio-Immune Systems in particular.
Purchaser (or Purchaser along with Purchaser's financial advisors and
representatives) has conducted all of the due diligence and investigation on
International Bio-Immune Systems, its officers, directors, shareholders, markets
and prospects that Purchaser deems necessary or proper in evaluating whether to
purchase and acquire the Shares and acquire the Warrants as provided herein.
4.2 Investment. Purchaser is purchasing and acquiring the Shares
and acquiring the Warrants for investment purposes for Purchaser's own account,
not as a nominee or agent, and not with the view to, or for resale in connection
with, any distribution thereof. Purchaser understands that the Shares and the
shares issuable upon the exercise of the Warrants have not been registered under
the Securities Act of 1933, as amended (the "Securities Act"), by reason of an
exemption from the registration provisions of the Securities Act, the
availability of which exemption depends upon, among other things, the bona fide
nature of the investment intent and the accuracy of Purchaser's representations
and warranties as expressed herein.
4.3 Rule 144. Purchaser acknowledges that the Shares and the
shares issuable upon the exercise of the Warrants are "restricted securities"
(as that term is defined in the Securities Act), and, therefore, must be held
indefinitely unless subsequently registered under the Securities Act or unless
an exemption from such registration is then-available. Purchaser is aware of the
provisions of Rule 144 promulgated under the Securities Act, which rule permits
limited resales of securities purchased in private placement transactions,
subject to the satisfaction of certain conditions, including, in case a
purchaser has held the securities to be sold less than two years, (a) the
availability of certain current public information about the issuer, (b) the
resale occurring not less than one year after Purchaser purchased and paid for
the securities to be sold, (c) the sale being effected through a "broker's
transaction" or in a transaction directly with a "market maker" and (d) the
number of shares being sold during any three month period not exceeding certain
specified limitations.
4.4 Access to Information. Purchaser has discussed business,
management and financial affairs of International Bio-Immune Systems with the
officers, directors and/or employees of International Bio-Immune Systems as it
deemed necessary or appropriate, and has reviewed, if requested by Purchaser,
the books and records of International Bio-Immune Systems, and has obtained such
information as Purchaser has considered relevant and important in making a
decision to purchase and acquire the Shares and acquire the Warrants as provided
herein. Purchaser has concluded that it has sufficient information upon which to
base a decision to purchase and acquire the Shares and acquire the Warrants.
5. Restrictive Legend. The certificate representing the Shares and the
shares issuable upon the exercise of the Warrants and any other securities
issued in respect thereto upon any stock split, stock dividend,
recapitalization, merger, consolidation or similar event, shall be stamped or
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otherwise imprinted with a legend in substantially the following form (in
addition to any legend(s) required under applicable state securities or "blue
sky" laws, rules or regulations):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE SHARES REPRESENTED BY
THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD,
TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THESE SHARES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR AN OPINION OF COUNSEL THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT.
6. Seller's Indemnification of Bayern. Seller acknowledges the efforts
and involvement of Xxxxxx X. Bayern ("Bayern") in assisting in the negotiations
between Purchaser and Seller concerning the terms and conditions of the purchase
and sale of the Shares and transfer of the Warrants, and agrees to indemnify
Bayern and hold him harmless from and against all claims, demands, expenses,
causes of action or other liability or obligations of any kind, whether known or
unknown, asserted or unasserted, by Seller and any officer, director,
shareholder, employee or agent of Seller, on account of or arising out of
Bayern's efforts and involvement in said negotiations and consummation of the
transactions contemplated hereby.
7. Purchaser's Indemnification of Bayern. Purchaser acknowledges the
efforts and involvement of Bayern in assisting in the negotiations between
Purchaser and Seller concerning the terms and conditions of the purchase and
sale of the Shares and transfer of the Warrants, and agrees to indemnify Bayern
and hold him harmless from and against all claims, demands, expenses, causes of
action or other liability or obligations of any kind, whether known or unknown,
asserted or unasserted, by Purchaser and any officer, director, shareholder,
employee or agent of Purchaser, on account of or arising out of Bayern's efforts
and involvement in assisting in said negotiations and the consummation of the
transactions contemplated hereby.
8. Confidential Agreement. Seller agrees that Seller will keep
confidential and will not, during or after this Agreement, disclose, divulge,
furnish or make accessible to any person, firm, corporation or other business
entity, any information concerning the terms and conditions of this Agreement,
including, but not limited to, the name of the Purchaser, the number of shares
purchased by the Purchaser, and the price per share of the purchase, without
prior written consent of Purchaser, except where required under the federal and
state securities laws when disclosing information in federal and state
securities filings, including, but not limited to, Form 10-KSB reports, Form
10-QSB reports and Form 8-K reports.
9. Approval by Seller's Board of Directors. This Agreement and the
transactions contemplated thereby, shall have been approved and adopted by the
affirmative vote or written consent of the Board of Directors of Seller.
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10. Miscellaneous.
10.1 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, applicable to
contracts entered into and to be performed entirely within such state.
10.2 Successors and Assigns. Except as otherwise provided herein,
the provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto.
10.3 Entire Agreement; Amendment. This Agreement constitutes the
full and entire understanding and agreement between the parties hereto with
respect to the subject matter hereof, and supersedes all prior understandings
and agreements with respect to the subject matter hereof, whether written or
oral. No party hereto shall be liable or bound to any other person or entity in
any manner by any representations, warranties or covenants except as
specifically set forth herein. Neither this Agreement nor any term hereof may be
amended, modified, waived, discharged or terminated other than by a written
instrument signed by the party against whom enforcement of any such amendment,
modification, waiver, discharge or termination is sought.
10.4 Counterparts. This Agreement may be executed by facsimile and
in any number of counterparts, each of which shall be deemed an original,
enforceable against the parties actually executing such counterparts, and all of
such counterparts, when taken together, shall constitute one and the same
instrument.
10.5 Receipt of Certificate. Contemporaneously with the execution
and delivery hereof, Seller will deliver to Purchaser a certificate, in form
reasonably acceptable to Purchaser, that shall be executed by an officer of
Seller, to the effect that (a) execution, delivery and performance of this
Agreement has been duly authorized by Seller (such certificate to contain the
text of Seller's authorizing Board resolution), and (b) the individual who
actually executes this Agreement for Seller is authorized so to sign (such
certificate shall also certify as to a specimen signature of the person
executing this Agreement on behalf of Seller).
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the dates indicated below effective as of the date first-above
written.
Seller:
PARADIGM MEDICAL INDUSTRIES, INC.
By: /s/ Xxxx X. Xxxx
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Xxxx X. Xxxx
President and Chief Executive Officer
DATED: August ___, 2004
Purchaser:
/s/ Xxxxxxx Xxxxx
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Xxxxxxx Xxxxx
DATED: August ___, 2004
Escrow Agent:
CLEARY, GOTTLIEB, XXXXX & XXXXXXXX
By: /s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx, a Partner
DATED: August ___, 2004
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