Exhibit 10.8
SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (this "Agreement") is dated as of
the date on the signature page of this Agreement, by and between HEALTH
DISCOVERY CORPORATION, a Texas corporation (the "Company"), and the undersigned
(the "Purchaser").
WHEREAS, the Company and the Purchaser are executing and delivering
this Agreement in reliance upon the exemption from securities registration
afforded under Regulation S as promulgated by the United States Securities and
Exchange Commission (the "Commission") under Section 5 of the Securities Act of
1933, as amended (the "Securities Act"); and
WHEREAS, subject to the terms and conditions set forth in this
Agreement, the Company desires to issue and sell to the Purchaser, and the
Purchaser desires to purchase from the Company, shares of common stock of the
Company, no par value (the "Common Stock").
NOW, THEREFORE, in consideration of the promises and mutual covenants
and agreements herein, the Company and the Purchaser hereby agree as follows:
DEFINITIONS
1. Definitions. In addition to the terms defined in the introductory
paragraph, the following terms used herein shall have the following meanings:
"Directed Selling Efforts" means any activity undertaken for the
purpose of, or that could reasonably be expected to have the effect of,
conditioning the market in the United States for any of the Common Stock. Such
activity includes placement of an advertisement in a publication with a general
circulation in the United States that refers to the offering of securities being
made in reliance upon Regulation S.
"Distributor" means any underwriter, dealer or other person who
participates, pursuant to a contractual arrangement, in the distribution of
shares of Common Stock.
"Person" means an individual or corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof)
or other entity of any kind.
"Private Placement Memorandum" shall mean that certain memorandum,
dated April 10, 2005 and delivered to Purchaser.
"Regulation S" means Regulation S promulgated by the United States
Securities and Exchange Commission under the Securities Act.
"Restricted Period" means a period that commences on the later of
the date upon which the Shares were first offered to persons other than
Distributors in reliance upon Regulation S or the Closing Date and expires one
year thereafter.
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"Securities Act" mans the United States Securities Act of 1933, as
amended.
"U.S. Person" means:
a. Any natural person resident in the United States;
b. Any partnership or corporation organized or incorporated
under the laws of the United States;
c. Any estate or which any executor or administrator is a
U.S. Person;
d. Any trust of which any trustee is a U.S. Person;
e. Any agency or branch of a foreign entity located in the
United States;
f. Any non-discretionary account or similar account (other
than an estate or trust) held by a dealer or other fiduciary for
the benefit or account of a U.S. Person;
g. Any discretionary account or similar account (other than
an estate or trust) held by a dealer or other fiduciary organized,
incorporated, or (if an individual) resident in the United States;
and
h. Any partnership or corporation if: (A) organized or
incorporated under the laws of any foreign jurisdiction; and (B)
formed by a U.S. Person principally for the purpose of investing
in securities not registered under the Securities Act, unless it
is organized or incorporated, and owned, by "accredited investors"
(as defined in Rule 501(a) under the Securities Act) who are not
natural persons, estates or trusts.
Notwithstanding the above:
a. Any discretionary account or similar account (other than
an estate or trust) held for the benefit or account of a non-U.S.
Person by a dealer or other professional fiduciary organized,
incorporated, or (if an individual) resident in the United States
shall not be deemed a "U.S. Person."
b. Any estate of which any professional fiduciary acting as
executor or administrator is a U.S. Person shall not be deemed a
U.S. Person if:
(i) An executor or administrator of the estate who
is not a U.S. Person has sole or shared
investment discretion with respect to the
assets of the estate; and
(ii) The estate is governed by foreign law.
c. Any trust of which any professional fiduciary acting as
trustee is a U.S. Person shall not be deemed a U.S. Person if a
trustee who is not a U.S. Person has sole or shared investment
discretion with respect to the trust assets, and no beneficiary of
the trust (and no settlor if the trust is revocable) is a U.S.
Person.
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d. An employee benefit plan established and administered in
accordance with the law of a country other than the United States
and customary practices and documentation of such country shall
not be deemed a U.S. Person.
e. Any agency or branch of a U.S. Person located outside the
United States shall not be deemed a "U.S. Person" if:
(i) The agency or branch operates for valid business
reasons; and
(ii) The agency or branch is engaged in the business of
insurance or banking and is subject to substantive
insurance or banking regulation, respectively, in
the jurisdiction where located.
The International Monetary Fund, the International Bank for
Reconstruction and Development, the Inter-American Development
Bank, the Asian Development Bank, the African Development Bank,
the United Nations, and their agencies, affiliates and pension
plans, and any other similar international organizations, their
agencies, affiliates and pension plans also shall not be deemed
"U.S. Persons."
"United States" means the United States of America, its
territories and possessions, any state of the United States, and the District of
Columbia.
PURCHASE AND SALE
Purchase and Sale.
Subject to the terms and conditions set forth herein, the
Company shall issue and sell to the Purchaser, and the Purchaser shall purchase
from the Company, _________ shares of Common Stock (the "Shares"). The purchase
price for the Shares shall be $0.32 per share, and the aggregate purchase price
shall be ____________ (the "Purchase Price").
Closing.
a. The Closing. The closing (the "Closing") of the purchase
and sale of the Shares shall take place on the day (the "Closing Date") upon
which the Company receives (at the Company's address listed on the signature
page of this Agreement) and accepts the following:
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(i) two (2) copies of this Agreement, each duly executed by the Purchaser, and
(ii) the Purchase Price by personal check, wire transfer, bank check or money
order.
b. Delivery of the Securities. Upon Closing, the Company shall deliver, as soon
as reasonably practicable, to the Purchaser (at the Purchaser's address listed
on the signature page of this Agreement):
(i) one (1) copy of this Agreement, duly executed by the Company, and
(ii) a certificate evidencing the Shares, registered in the books and records of
the Company in the name of the Purchaser.
c. Rejection of the Purchase and Sale. The Company reserves the absolute right
to reject this Agreement for any reason, including, but not limited to, the
Company's determination, in its sole discretion, that this Agreement was not
properly executed by the Purchaser or that the Purchase Price was not properly
delivered, or if the Company's acceptance may, in the opinion of its counsel, be
unlawful. If for any reason this Agreement is not accepted by the Company, the
Purchase Price will be returned to the Purchaser's address as soon as reasonably
possible, without any interest thereon. After the Purchaser executes this
Agreement and delivers the Purchase Price to the Company, the Purchaser may not
revoke or rescind acceptance of this Agreement without the written consent of
the Company.
REPRESENTATIONS AND WARRANTIES
Representations and Warranties of the Company. The Company represents
and warrants to the Purchaser that, to its knowledge, the statements contained
in this Section 3.1 are true, correct and complete, in all material respects, as
of the date of this Agreement, and will be true correct and complete, in all
material respects, as of the Closing Date.
a. Offshore Transaction.
(i) At the time the buy order for the Shares was
originated, the Company and/or its agent reasonable believed that the
Purchaser was outside of the United States, was not a U.S. Person and
was not acquiring the Shares for the account or benefit of a U.S.
Person.
(ii) The Company has no reason to believe that the
resale of any of the Shares has been prearranged with a purchaser in the
United States.
(iii) The sale of the Shares by the Company is not a
transaction that is part of
any plan or scheme to evade the registration provisions of the Securities Act.
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b. No Directed Selling Efforts. Neither the Company or any
affiliate of the Company, nor any person acting on behalf of the Company or any
affiliate of the Company, has engaged in any Directed Selling Efforts in the
United States.
c. General Representations.
(i) Organization and Qualification. The Company is duly incorporated,
validly existing and in good standing under the laws of the State of Texas, with
the requisite corporate power and authority to carry on its business as
currently conducted. The Company is duly qualified as a foreign corporation to
do business and is in good standing as a foreign corporation in each
jurisdiction in which the nature of the business conducted or property owned by
it makes such qualification necessary, except where the failure to be so
qualified or in good standing, as the case may be, would not, individually or in
the aggregate, (x) adversely affect the legality, validity or enforceability of
this Agreement or any of the transactions contemplated hereby, (y) have or
result in a material adverse effect on the results of operations, assets, or
financial condition of the Company, taken as a whole, or (z) impair the
Company's ability to perform fully on a timely basis its obligations hereunder
(any of (x), (y) or (z), being a "Material Adverse Effect"). The Company has
made available to the Purchaser true and correct copies of the Company's
Articles of Incorporation, as in effect on the date of this Agreement (the
"Articles of Incorporation"), and the Company's Bylaws, as in effect on the date
of this Agreement (the "Bylaws").
(ii) Authorization; Enforcement. The Company has the requisite
corporate power and authority to enter into and to consummate the transactions
contemplated by this Agreement and otherwise to carry out its obligations
hereunder. The execution and delivery of this Agreement by the Company and the
consummation by it of the transactions contemplated hereby have been duly
authorized by all necessary corporate action by the Company. This Agreement has
been duly executed by the Company and when delivered in accordance with the
terms hereof will constitute the valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally the enforcement of, creditors' rights and remedies or by
other equitable principles of general application and except that rights to
indemnification and contribution may be limited by federal or state securities
laws or public policy relating thereto.
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(iii) Capitalization. As of the date of this Agreement, except for
equity securities issued or to be issued in connection with the Company's
warrant funding activities, the authorized capital stock of the Company consists
of [200,000,000] shares of Common Stock, of which [66,582,127] shares are issued
and outstanding and options to acquire [8,600,000] shares have been granted. All
of such outstanding shares of capital stock have been, or upon issuance will be,
validly authorized and issued, fully paid and nonassessable. The issuance and
sale of the Shares will not obligate the Company to issue shares of Common Stock
or other securities to any Person (other than the Purchaser) and will not result
in a right of any holder of Company securities to adjust the exercise,
conversion, exchange or reset price under such securities.
(iv) Authorization and Validity; Issuance of Shares. The Shares are and
will at all times hereafter continue to be duly authorized and, when issued and
paid for in accordance with this Agreement, will be validly issued, fully paid
and non-assessable, free and clear of all liens.
(v) No Conflicts. The execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated hereby do not and will not (i) conflict with or violate any
provision of the Articles of Incorporation, Bylaws or other organizational
documents of the Company, (ii) subject to obtaining the consents referred to in
Section 3.1(vi), conflict with, or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, any
agreement, indenture, patent, patent license or instrument to which the Company
is a party or by which any property or asset of the Company is bound or
affected, except where such conflict or violation has not resulted or would not
reasonably be expected to result, individually or in the aggregate, in a
Material Adverse Effect, or (iii) result in a violation of any law, rule,
regulation, order, judgment, injunction, decree or other restriction of any
court or governmental authority to which the Company is subject or by which any
material property or asset of the Company is bound, except where such conflict
has not resulted or would not reasonably be expected to result, individually or
in the aggregate, in a Material Adverse Effect.
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(vi) Consents and Approvals. The Company is not required to obtain any
consent, waiver, authorization or order of, give any notice to, or make any
filing or registration with, any court or other federal, state, local or other
governmental authority, regulatory or self regulatory agency, or other Person in
connection with the execution, delivery and performance by the Company of this
Agreement, other than (i) the application(s) or any letter(s) acceptable to the
Over-the-Counter Bulletin Board ("OTCBB"), and (ii) any filings, notices or
registrations under applicable federal or state securities laws (the "Required
Approvals"), except where failure to do so has not resulted or would not
reasonably result, individually, or in the aggregate, in a Material Adverse
Effect.
(vii) Litigation; Proceedings. Except as specifically set forth on in
the SEC Documents (hereinafter defined) there is no action, suit, notice of
violation, proceeding or investigation pending or threatened against or
affecting the Company or any of its subsidiaries or any of their respective
properties before or by any court, governmental or administrative agency or
regulatory authority (collectively, an "Action") which (i) adversely affects or
challenges the legality, validity or enforceability of any of this Agreement, or
(ii) would reasonably be expected to, individually or in the aggregate, have a
Material Adverse Effect. There has not been, and there is not pending or
contemplated, any investigation by the Commission involving the Company or any
current or former director that was a director of the Company at any time during
the last three years or officer of the Company. The Commission has not issued
any stop order or other order suspending the effectiveness of any registration
statement filed by the Company or any subsidiary under the Exchange Act or the
Securities Act.
(viii) No Default or Violation. The Company (i) is not in default under
or in violation of any indenture, loan or other 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 and which is required to be included as an exhibit to any
SEC Document, (ii) is in violation of any order of any court, arbitrator or
governmental body applicable to it, (iii) is in violation of any statute, rule
or regulation of any governmental authority to which it is subject, (iv) is in
default under or in violation of its Articles of Incorporation, Bylaws or other
organizational documents, respectively in the case of (i), (ii) and (iii),
except where such violations have not resulted or would not reasonably result,
individually or in the aggregate, in a Material Adverse Effect.
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(ix) SEC Documents; Financial Statements. Since November 2001, the
Company has filed all reports, schedules, forms, statements and other documents
required to be filed by it (including relevant amendments), with the Commission,
pursuant to Section 13, 14 or 15(d) of the Exchange Act (collectively referred
to herein as the "SEC Documents"). As of their respective dates, the SEC
Documents complied in all material respects with the requirements of the
Securities Act and the Exchange Act and the rules and regulations of the
Commission promulgated thereunder, and none of the SEC Documents, when filed,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The financial statements of the Company included in the SEC
Documents comply in all material respects with applicable accounting
requirements and the rules and regulations of the Commission with respect
thereto as in effect at the time of filing. Such financial statements fairly
present in all material respects the financial position of the Company and its
consolidated subsidiaries as of and for the dates thereof and the results of
operations and cash flows for the periods then ended, subject, in the case of
unaudited statements, to normal, immaterial, year-end audit adjustments.
(x) Material Changes. Since the date of the latest audited financial
statements included within the SEC Documents, except as specifically disclosed
in the SEC Documents or in the Private Placement Memorandum, (i) there has been
no event, occurrence or development that has had or that could result in a
Material Adverse Effect, (ii) the Company has not incurred any liabilities other
than (A) trade payables and accrued expenses incurred in the ordinary course of
business consistent with past practice, and (B) liabilities not required to be
reflected in the Company's financial statements pursuant to GAAP or required to
be disclosed in filings made with the Commission, (iii) the Company has not
altered its method of accounting or the identity of its auditors, and (iv) the
Company has not declared or made any dividend or distribution of cash or other
property to its shareholders or purchased, redeemed or made any agreements to
purchase or redeem any shares of its capital stock.
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(xi) Listing and Maintenance Requirements. The Company has not, in the
two years preceding the date of this Agreement, received notice from the OTCBB
or any other exchange or market on which the Common Stock is or has been listed
or quoted to the effect that the Company is not in compliance with the listing
or maintenance requirements of such exchange or market. The Company is, and has
no reason to believe that it will not in the foreseeable future continue to be,
in compliance with all such listing and maintenance requirements of the OTCBB.
The issuance and sale of the Shares and Warrant hereunder does not contravene
the rules and regulations of the OTCBB and approval of the shareholders of the
Company is not required for the Company to issue and deliver to the Purchaser
the number of Shares and Warrant Shares contemplated by this Agreement.
(xii) Broker's Fees. The Purchaser shall have no obligation with
respect to any fees or with respect to any claims made by or on behalf of other
Persons for fees of a type that may be due in connection with the transactions
contemplated by this Agreement.
(xiii) Disclosure. All disclosure provided to the Purchaser regarding
the Company, its business, and the transactions contemplated hereby, contained
in this Agreement or in the Private Placement Memorandum, are true and correct
and do not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein, in light
of the circumstances under which they were made, not misleading.
Representations and Warranties of the Purchaser. The Purchaser hereby
represents and warrants to the Company as follows:
a. Offshore Transaction; Offering Restrictions; Resale
Restrictions.
(i) The Purchaser is not, at the time the offer to
purchase the Shares was made to the Purchaser was not, and on the
Closing Date will not be, a U.S. Person.
(ii) The purchase by the Purchaser of the Shares
hereunder has been duly authorized by all necessary action on the part
of the Purchaser. This Agreement has been duly executed and delivered
by the Purchaser and constitutes the valid and legally binding
obligation of the Purchaser, enforceable against the Purchaser in
accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights
generally and to general principles of equity and except that rights to
indemnification and contribution may be limited by federal or state
securities laws or public policy relating thereto.
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(iii) At the time the buy order for the Shares was
originated, the Purchaser was outside the United States and is outside
of the United States as of the date of the execution and delivery of
this Agreement.
(iv) No resale of any of the Shares has been
pre-arranged with a purchaser in the United States.
(v) The Purchaser is not a Distributor and is not
purchasing the Shares with the intent of distributing the Shares on
behalf of the Company or a Distributor or any of their affiliates.
(vi) The Purchaser is purchasing the Shares for its
own account (and/or for the account of other non-U.S. Persons who are
outside of the United States) and not for the account or benefit of any
U.S. Person.
(vii) The Purchaser hereby covenants and agrees to
resell any of the Shares only in accordance with the provisions of
Regulation S, pursuant to registration of the Shares under the
Securities Act or pursuant to an available exemption from registration
under the Securities Act.
(viii) The certificates representing the Shares will
bear a legend substantially as follows:
THE SHARES OF COMMON STOCK REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED OR SOLD
EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER THE
SECURITIES ACT. THE ISSUER WILL REFUSE TO REGISTER ANY TRANSFER OF
SUCH SHARES NOT MADE IN ACCORDANCE WITH THE PROVISIONS OF
REGULATION S AND WILL REQUIRE, AS A CONDITION TO ANY REGISTRATION
OF TRANSFER, AN OPINION OF COUNSEL, A CERTIFICATE OR SUCH OTHER
EVIDENCE AS MAY BE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT
THE TRANSFER HAS BEEN MADE IN ACCORDANCE WITH REGULATION S,
PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT, OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM REGISTRATION PROMULGATED UNDER THE
SECURITIES ACT.
(ix) Prior to reselling any of the Shares during the
Restricted Period, the Purchaser will send a notice to the potential
purchaser that such potential purchaser may be subject to the
restrictions of Regulation S during the Restricted Period.
(x) Neither the Purchaser nor any entity controlled
by the Purchaser has a short position in the Common Stock nor will have
a short position in the Common Stock at any time prior to the
expiration of the Restricted Period.
(xi) The purchase of the Shares by the Purchaser is
not a transaction that is part of any plan or scheme to evade the
registration provisions of the Securities Act.
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b. Independent Investigation; Access to Information
(i) The Purchaser can bear the economic risk of
losing its entire investment in the Company.
(ii) The Purchaser has the knowledge, experience and
skill in financial and business matters to be capable of evaluating the
merits and risks of the investment in the Company.
(iii) The Purchaser has had an adequate opportunity
to ask questions of and receive answers from the Company and its
officers concerning the terms and conditions of this investment, to
inspect and copy all material documents relating to the Company, and to
obtain any additional information that is necessary to verify the
accuracy of the information the Purchaser has received. The Purchaser
has not received any information from nor has the Purchaser relied upon
the name or reputation of any law firm or accounting firm that the
Company or any persons acting on its behalf may have mentioned as being
involved in this sale or as being the Company's legal counsel or
accounting firm.
(iv) The Purchaser acknowledges that an investment in
the Company involves high risks, and has taken full cognizance of and
understands all of the risk factors related to an investment in the
Company, including, but not limited to the following:
c. The Purchaser acknowledges that the Company has limited
operating history upon which an evaluation of the Company's performance could be
based. There can be no assurance that the Company will be able to sell its
products or services or that operations will be profitable. The likelihood of
success of the Company is speculative and the Purchaser is familiar with the
many problems, difficulties, complications and delays frequently encountered in
the operation and development of new and expanding businesses.
d. The Purchaser acknowledges that the Company has no firm
orders for its products or services and may not have profits or revenues in the
foreseeable futures.
(i) The Purchaser has discussed the suitability of
the investment in the Company for its particular tax and financial
situation with its legal, tax, and financial advisors to the extent the
Purchaser deems appropriate, and has neither received nor relied upon
any advice of the Company or any person or persons acting for or on
behalf of the Company.
(ii) The Purchaser acknowledges and is aware that the
trading market for the Common Stock is limited and no assurance can be
given that a liquid trading market for the Common Stock will develop in
the foreseeable future.
(iii) No one has represented to the Purchaser or
promised expressly or by implication any of the following: (a) the
amount or type of profit, or loss (including tax write-offs and/or tax
benefits) to be realized, if any, as a result of investment in the
Shares; and (b) that the past performance or experience of the existing
or proposed officers and/or directors of the Company or any affiliate,
their associates, agents, or employees or of any other person gives any
assurance that the Company will be successful in its business
operations.
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(iv) All of the representations and information
provided in this Agreement and any additional information that the
Purchaser has furnished to the Company with respect to the Purchaser
are accurate and complete as of the date of the Agreement, and the
Company may rely on such information in determining the suitability of
the Purchaser to purchase the Shares. If there should be any material
adverse change in any such representations or information prior to the
issuance of the Shares to the Purchaser, the Purchaser will immediately
furnish accurate and complete information concerning any such material
change to the Company. The Company may rely on the representations and
warranties of the Purchaser now and after the Purchaser has received
the Shares.
OTHER AGREEMENTS
Transfer Restrictions. The Company hereby covenants and agrees that it
will refuse to register any transfer of any of the Shares not made in accordance
with the provisions of Regulation S and this Agreement. The Purchaser hereby
acknowledges that the requirement that the Company refuse the transfer of Shares
contained in this Section has been included for the benefit of the Company and
the Purchaser and that, prior to any registration of transfer and as a condition
to such registration, the Company shall have the right to request an opinion of
counsel, a certificate or such other evidence as may be satisfactory to the
Company to the effect that the transfer has been made in accordance with
Regulation S and this Agreement.
Furnishing of Information. As long as the Purchaser owns the Shares,
the Company covenants to timely file (or obtain extensions in respect thereof
and file within the applicable grace period) all reports required to be filed by
the Company after the date of this Agreement pursuant to the Exchange Act. As
long as the Purchaser owns the Shares, if the Company is not required to file
reports pursuant to such laws, it will prepare and furnish to the Purchaser, and
make publicly available in accordance with Rule 144(c), such information as is
required for the Purchaser to sell the Shares under Rule 144.
Integration. The Company shall not and shall use its best efforts to
ensure that no affiliate of the Company shall sell, offer for sale or solicit
offers to buy or otherwise negotiate in respect of any security (as defined in
Section 2 of the Securities Act) that would be integrated with the offer or sale
of the shares of Common Stock hereunder in a manner that would require the
registration under the Securities Act of the sale of the shares Common Stock to
the Purchaser.
Non-Public Information. Except for information regarding the
transaction contemplated by this Agreement and the terms and conditions hereof,
the Company covenants and agrees that neither it nor any other Person acting on
its behalf will provide the Purchaser or its agents or counsel with any
information that the Company believes constitutes material non-public
information, unless prior thereto the Purchaser shall have executed a written
agreement regarding the confidentiality and use of such information. The Company
understands and confirms that the Purchaser shall be relying on the foregoing
representations in effecting transactions in securities of the Company.
Notwithstanding anything to the contrary herein, the Purchaser shall not engage
in any trading activity in the Company's securities in violation of Regulation M
of the Exchange Act.
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Use of Proceeds. The Company shall use the net proceeds from the sale
of the Shares for working capital purposes.
Best Efforts. Both of the parties hereto shall use its best efforts to
satisfy each of the conditions to be satisfied by it as provided in Article IV
of this Agreement.
CONDITIONS
Closing.
a. Conditions Precedent to the Obligation of the Company to Sell the Shares. The
obligation of the Company to sell the Shares is subject to the satisfaction or
waiver by the Company, at or before the Closing Date, of each of the following
conditions:
(i) the representations and warranties of the Purchaser in this Agreement shall
be true and correct in all material respects as of the date when made and as of
the Closing Date;
(ii) the Purchaser shall have performed, satisfied and complied in all material
respects with all covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by the Purchaser at or
before the Closing Date; and
(iii) no statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by any
court or governmental authority of competent jurisdiction which prohibits the
consummation of any of the transactions contemplated by this Agreement.
b. Conditions Precedent to the Obligation of the Purchaser to Purchase the
Shares. The obligation of the Purchaser hereunder to acquire and pay for the
Shares at the Closing is subject to the satisfaction or waiver by the Purchaser,
at or before the Closing Date, of each of the following conditions:
(i) the representations and warranties of the Company set forth in this
Agreement shall be true and correct in all respects as of the date when made and
as of the Closing Date;
(ii) the Company shall have performed, satisfied and complied in all respects
with all covenants, agreements and conditions required by this Agreement to be
performed, satisfied or complied with by the Company at or before the Closing
Date;
(iii) no statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by any
court or governmental authority of competent jurisdiction which prohibits the
consummation of any of the transactions contemplated by this Agreement; and
(iv) all Required Approvals shall have been obtained.
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INDEMNIFICATION
Indemnification.
a. By the Company. The Company will indemnify and hold the Purchaser harmless
from any and all losses, liabilities, obligations, claims, contingencies,
damages, costs and expenses, including all judgments, amounts paid in
settlements, court costs and reasonable attorneys' fees and costs of
investigation that the Purchaser may suffer or incur as a result of or relating
to any misrepresentation, breach or inaccuracy, or any allegation by a third
party that, if true, would constitute a breach or inaccuracy, of any of the
representations, warranties, covenants or agreements made by the Company in this
Agreement; provided, however, that any and all payments, in the aggregate, made
or due by the Company as a result of the obligations of this Section 6.1 shall
be limited to, and in no case shall exceed, the Purchase Price paid by the
Purchaser, as stated in Section 2.1 herein.
b. By the Purchaser. The Purchaser will indemnify and hold the Company harmless
from any and all losses, liabilities, obligations, claims, contingencies,
damages, costs and expenses, including all judgments, amounts paid in
settlements, court costs and reasonable attorneys' fees and costs of
investigation that the Company may suffer or incur as a result of or relating to
any misrepresentation, breach or inaccuracy, or any allegation by a third party
that, if true, would constitute a breach or inaccuracy, of any of the
representations, warranties, covenants or agreements made by the Purchaser in
this Agreement.
MISCELLANEOUS
Entire Agreement. This Agreement contains the entire understanding of
the parties with respect to the subject matter hereof and supersedes all prior
agreements and understandings, oral or written, with respect to such matters.
Notices. Whenever it is provided herein that any notice, demand,
request, consent, approval, declaration or other communication shall or may be
given to any of the parties by another, or whenever any of the parties desires
to give another any such communication with respect to this Agreement, each such
notice, demand, request, consent, approval, declaration or other communication
shall be in writing, and shall be delivered in person with receipt acknowledged
or by registered or certified mail, return receipt requested, postage prepaid,
or by telecopy and confirmed by telecopy answerback addressed as follows:
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If to the Company: With a Copy to:
Health Discovery Corporation Xxxxxx Xxxxxxxxx LLP
0000 Xxxxx Xxx Xxxxxx Xxxx One Atlantic Center
Xxxxxx, Xxxxx 00000 Fourteenth Floor
Attn: Xxxxxx X. Xxxxxxxx XX 0000 Xxxx Xxxxxxxxx Xxxxxx, XX
Facsimile: (000) 000-0000 Xxxxxxx, Xxxxxxx 00000
Attn: Xxxx Xxxx, Esq.
Facsimile: (000) 000-0000
If to the Purchaser:
To the address listed on the signature
page of this Agreement
or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in writing
by the party entitled to receive such notice. Every notice, demand, request,
consent, approval, declaration or other communication hereunder shall be deemed
to have been duly given and effective on the earliest of (a) the date of
transmission, if such notice or communication is delivered via facsimile prior
to 6:30 p.m. (New York City time) on a business day, (b) the next business day
after the date of transmission, if such notice or communication is delivered via
facsimile on a day that is not a business day or later than 6:30 p.m. (New York
City time) on any business day, (c) the business day following the date of
mailing, if sent by a U.S. nationally recognized overnight courier service, or
(d) upon actual receipt by the party to whom such notice is required to be
given. As used herein, a "business day" means any day except Saturday, Sunday or
a day which is a federal legal holiday or a day on which banking institutions in
the State of New York are authorized or required by law or other governmental
action to close.
Amendments; Waivers. No provision of this Agreement may be waived or
amended except in a written instrument signed, in the case of an amendment, by
both the Company and the Purchaser or, in the case of a waiver, by the party
against whom enforcement of any such waiver is sought. No waiver of any default
with respect to any provision, condition or requirement of this Agreement shall
be deemed to be a continuing waiver in the future or a waiver of any other
provision, condition or requirement hereof, nor shall any delay or omission of
either party to exercise any right hereunder in any manner impair the exercise
of any such right accruing to it thereafter.
Headings. The headings herein are for convenience only, do not
constitute a part of this Agreement, and shall not be deemed to limit or affect
any of the provisions hereof.
Successors and Assigns; Assignability; No Third-Party Beneficiaries.
Neither this Agreement nor any right, remedy, obligation or liability arising
hereunder, or by reason hereof, shall be assignable by the Purchaser without the
prior written consent of the Company. In the event that this Agreement is
assigned, all covenants contained herein shall bind and inure to the benefit of
the parties hereto and their respective successors and assigns. This Agreement
is intended for the benefit of the parties hereto and their respective permitted
successors and assigns and is not for the benefit of, nor may any provision
hereof be enforced by, any other Person.
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Governing Law; Waiver of Jury Trial. All questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by and construed and enforced in accordance with the internal laws
of the State of Georgia, without regard to the principles of conflicts of law
thereof. Each party agrees that all proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by this Agreement
(whether brought against a party hereto or its respective affiliates, directors,
officers, shareholders, employees or agents) (each a "Proceeding") shall be
commenced exclusively in the state and federal courts sitting in the Atlanta,
Georgia. Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the Atlanta, Georgia for
the adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any Proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such Proceeding
is improper. Each party hereto hereby irrevocably waives personal service of
process and consents to process being served in any such Proceeding by mailing a
copy thereof via registered or certified mail or overnight delivery (with
evidence of delivery) to such party at the address in effect for notices to it
under this Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein shall
be deemed to limit in any way any right to serve process in any manner permitted
by law. Each party hereto hereby irrevocably waives, to the fullest extent
permitted by applicable law, any and all right to trial by jury in any legal
proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby. If either party shall commence a Proceeding to enforce any
provisions of this Agreement, then the prevailing party in such Proceeding shall
be reimbursed by the other party for its attorneys fees and other costs and
expenses incurred with the investigation, preparation and prosecution of such
Proceeding.
Survival. The representations, warranties, agreements and covenants
contained herein shall survive following the Closing.
Counterparts; Execution. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original and all of
which together shall be deemed to be one and the same instrument. In the event
that any signature is delivered by facsimile transmission, such signature shall
create a valid and binding obligation of the party executing (or on whose behalf
such signature is executed) with the same force and effect as if such facsimile
signature page were an original thereof.
Publicity. The Purchaser shall not issue any press release or make any
public disclosure regarding the transactions contemplated hereby unless such
press release or public disclosure is approved by the Company in advance.
Notwithstanding the foregoing, each of the parties hereto may, in documents
required to be filed by it with the SEC or other regulatory bodies, make such
statements with respect to the transactions contemplated hereby as each may be
advised by counsel is legally necessary or advisable, and may make such
disclosure as it is advised by its counsel is required by law.
Severability. In case any one or more of the provisions of this
Agreement shall be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Agreement shall not
in any way be affected or impaired thereby and the parties will attempt to agree
upon a valid and enforceable provision which shall be a reasonable substitute
thereof, and upon so agreeing, shall incorporate such substitute provision in
this Agreement.
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Further Assurances. Each party shall do and perform, or cause to be
done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
Remedies. In addition to being entitled to exercise all rights provided
herein or granted by law, including recovery of damages, the Purchaser and the
Company will be entitled to specific performance under this Agreement. The
parties agree that monetary damages may not be adequate compensation for any
loss incurred by reason of any breach of obligations described in the foregoing
sentence and hereby agrees to waive in any action for specific performance of
any such obligation the defense that a remedy at law would be adequate.
Fees and Expenses. Except as provided herein, each Party shall pay the
fees and expenses of its own advisers, accountants and other experts.
[Remainder of Page Left Blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Securities
Purchase Agreement to be duly executed by their respective authorized persons as
of the day and year below.
HEALTH DISCOVERY CORPORATION
By:________________________________________
Name:________________________________
Title:_______________________________
Date: ______________________, 2005
IN MAKING AN INVESTMENT DECISION, THE PURCHASER MUST RELY ON ITS OWN EXAMINATION
OF THE COMPANY AND THE TERMS OF THE SALE OF THE SHARES, INCLUDING THE MERITS AND
RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR
STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING
AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS
DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
PURCHASER
___________________________________________
Name:______________________________________
Date: ______________________, 2005
Address:
___________________________________________
___________________________________________
___________________________________________
Resident and citizen of____________________
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