EXHIBIT 10.34
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
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THIS COMMON STOCK AND WARRANT PURCHASE AGREEMENT ("Agreement") is made
as of the 17th day of August, 2007 by and among INTRAOP MEDICAL CORPORATION, a
Nevada corporation (the "Company"), and the other Persons set forth on the
Schedule of Purchasers attached hereto (each an "Investor" and collectively the
"Investors").
Recitals
A. The Company and the Investors are executing and delivering
this Agreement in reliance upon the exemption from securities registration
afforded by the provisions of Regulation D ("Regulation D"), as promulgated by
the Securities and Exchange Commission (the "SEC") under the Securities Act of
1933, as amended, and the rules and regulations promulgated thereunder (the
"Securities Act");
B. The Investors wish to purchase from the Company, and the
Company wishes to sell and issue to the Investors, at the First Closing (as
defined below) and upon the terms and subject to the conditions set forth in
this Agreement, an aggregate of 42,081,556 shares (the "Initial Shares") of the
Company's common stock, par value $0.001 per share (the "Common Stock"), and
warrants to purchase an aggregate of 165,589,736 shares of Common Stock, in
substantially the form of Appendix A (the "Investor Warrants"), for an aggregate
purchase price of $3,766,524.48 (the "Initial Purchase Price");
C. The Investors wish to purchase from the Company, and the
Company wishes to sell and issue to the Investors, at the Second Closing (as
defined below) and upon the terms and subject to the conditions set forth in
this Agreement, an aggregate of 20,418,444 shares (the "Additional Shares" and,
together with the Initial Shares, the "Shares") of Common Stock for an aggregate
purchase price of $1,633,475.52 (the "Additional Purchase Price");
D. Contemporaneous with the First Closing, the parties hereto
will execute and deliver a Rights Agreement, in substantially the form of
Appendix B (the "Rights Agreement"), pursuant to which the Company will agree to
provide certain registration rights under the Securities Act, certain rights of
participation and certain covenants regarding the nomination of candidates for
election to the board of directors of the Company (the "Board"); and
E. This Agreement shall be binding upon the Company and the
Investors only upon delivery of the signatures pages hereto by the Company and
the Investors.
Agreement
In consideration of the mutual promises made herein and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. Definitions. In addition to those terms defined above and elsewhere
in this Agreement, for the purposes of this Agreement, the following terms shall
have the meanings set forth below:
"Affiliate" means, with respect to any Person, any other
Person which directly or indirectly through one or more intermediaries controls,
is controlled by, or is under common control with, such Person.
"Business Day" means a day, other than a Saturday or Sunday,
on which banks in New York City are open for the general transaction of
business.
"Company Warrant Repricing Agreement" means the agreement, in
substantially the form of Appendix C, dated the First Closing Date by and among
the Company and the holders of the Company Warrants pursuant to which the
exercise price of such warrants is adjusted to $0.08 per share of Common Stock.
"Company Warrants" means those warrants held by the holders
listed on Exhibit A to the Company Warrant Repricing Agreement.
"Confidential Information" means trade secrets, confidential
information and know-how (including but not limited to ideas, formulae,
compositions, processes, procedures and techniques, research and development
information, performance specifications, support documentation, drawings,
specifications, designs, business and marketing plans, and supplier lists and
related information).
"Debenture Conversion and Purchase and Warrant Cancellation
Agreement" means the agreement, in substantially the form of Appendix D, dated
the First Closing Date by and among the Company, the Investors and the Debenture
Holders pursuant to which (i) the Debenture Holders will agree to convert those
certain 7% convertible debentures dated August 31, 2005, October 25, 2005,
October 31, 2005 and November 4, 2005 set forth on Exhibit A thereof into the
Debenture Shares in complete satisfaction of all outstanding principal and
interest on such debentures, (ii) the Investors will agree to purchase
10,178,571 shares of Common Stock held by the Debenture Holders on the First
Closing Date for an aggregate purchase price of $1,280,000, (iii) the Existing
Investors will agree to terminate an aggregate of 9,576,531 warrants held by
them as of the First Closing Date and set forth on Exhibit C thereof in exchange
for the Debenture Warrants and (iv) the holders of the Debenture Warrants will
agree to exercise such warrants in full at the Second Closing.
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"Debenture Holders" means holders of the 7% convertible
debentures dated August 31, 2005, October 25, 2005 and November 4, 2005 issued
by the Company set forth on Exhibit A to the Debenture Conversion and Purchase
and Warrant Cancellation Agreement.
"Debenture Shares" means an aggregate of 20,178,571 shares of
the Company's Common Stock issuable upon conversion of the Debentures.
"Debenture Warrants" means the warrants to purchase an
aggregate of 21,656,663 shares of Common Stock issued to the Debenture Holders
pursuant to the Debenture Conversion and Purchase and Warrant Cancellation
Agreement.
"Equity Incentive Plan" means the Company's 2005 Equity
Incentive Plan.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Existing Investors" means the January Noteholders and the
Debenture Holders.
"▇▇▇▇▇▇▇▇▇ Warrant" means the warrant to purchase 9,530,732
shares issued to ▇▇▇▇▇▇▇▇▇ Capital LLC.
"Insider Indebtedness" means certain indebtedness and payables
of the Company set forth on Exhibit A to the Insider Indebtedness Conversion
Agreement.
"Insider Indebtedness Conversion Agreement" means the
agreement, in substantially the form of Appendix E, dated the First Closing Date
by and among the Company and the Insiders pursuant to which the Insiders will
agree to retire the Insider Indebtedness in exchange for the Insider Warrants in
complete satisfaction of all outstanding principal and interest on such
indebtedness.
"Insider Warrants" means the warrants to purchase 19,933,388
shares of Common Stock issued to the Insiders pursuant to the Insider
Indebtedness Conversion Agreement.
"Insiders" means the holders of certain indebtedness and
payables of the Company as set forth on Exhibit A to the Insider Indebtedness
Conversion Agreement.
"Intellectual Property" means all of the following: (i)
patents, patent applications, patent disclosures and inventions (whether or not
patentable and whether or not reduced to practice); (ii) trademarks, service
marks, trade dress, trade names, corporate names, logos, slogans and Internet
domain names, together with all goodwill associated with each of the foregoing;
(iii) copyrights and copyrightable works; and (iv) registrations, applications
and renewals for any of the foregoing.
"January Bridge Note Conversion and Warrant Purchase
Agreement" means the agreement, in substantially the form of Appendix F, dated
the First Closing Date by and among the Company and the January Noteholders
pursuant to which (i) the January Noteholders will agree to retire those certain
debentures dated January 10, 2007 set forth on Exhibit A thereto in exchange for
an aggregate payment of $400,000 and the January Bridge Note Warrants in
complete satisfaction of all outstanding principal and interest on such
debentures.
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"January Bridge Note Warrants" means the warrants to purchase
5,000,000 shares of Common Stock issued to the January Noteholders pursuant to
the January Bridge Note Conversion Agreement.
"January Noteholders" means the holders of certain debentures
dated January 10, 2007 set forth on Exhibit A to the January Bridge Note
Conversion and Warrant Purchase Agreement.
"Knowledge" means the actual knowledge of the officers and
directors of the Company, provided that such persons shall have made due and
diligent inquiry of all relevant employees of the Company whom such executive
officers and directors should reasonably believe would have actual knowledge of
the matters represented.
"Material Adverse Effect" means an event, change or occurrence
that, individually or together with any other event, change or occurrence, has a
material adverse impact on the financial position, business, results of
operations or prospects of the Company and its Subsidiaries, taken as a whole.
"MCR Capital Warrant" means the warrant to purchase 1,250,000
shares of Common Stock issued to MCR Capital Corp.
"Nasdaq" means The Nasdaq Stock Market, Inc.
"Officer and Director Warrant Purchase Agreement" means the
agreement, in substantially the form of Appendix G, dated the First Closing Date
by and among the Company and the Officers and Directors pursuant to which the
Officers and Directors will agree to purchase, and the Company will agree to
issue, the Officer and Director Warrants for an aggregate purchase price of
$92,000.
"Officer and Director Warrants" means the warrants to purchase
1,150,000 shares of Common Stock issued to the Officers and Directors pursuant
to the Officer and Director Warrant Purchase Agreement.
"Officers and Directors " means ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. Goer and ▇▇▇▇▇▇ ▇▇▇▇.
"Other Warrants" means (i) the January Bridge Note Warrants,
(ii) the Debenture Warrants, (iii) the Insider Warrants, (iv) the Officer and
Director Warrants, (v) the ▇▇▇▇▇▇▇▇▇ Warrant and (vi) the MCR Capital Warrant,
each of which shall be substantially in the form of Appendix H.
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"Permitted Liens" means (i) mechanics', carriers', or
workmen's, repairmen's or similar liens arising or incurred in the ordinary
course of business, (ii) liens for taxes, assessments and other governmental
charges that are not due and payable or which may hereafter be paid without
penalty or which are being contested in good faith by appropriate proceedings,
and (iii) other imperfections of title or encumbrances, if any, that do not,
individually or in the aggregate, materially impair the use or value of the
property to which they relate.
"Person" means an individual, corporation, partnership,
limited liability company, trust, business trust, association, joint stock
company, joint venture, sole proprietorship, unincorporated organization,
governmental authority or any other form of entity not specifically listed
herein.
"Registration Statement" has the meaning set forth in the
Rights Agreement.
"Securities" means the Shares, the Investor Warrants and the
Warrant Shares.
"Transaction Documents" means (i) this Agreement, (ii) the
Rights Agreement, (iii) the Investor Warrants, (iv) the January Bridge Note
Conversion and Warrant Purchase Agreement, (v) the Debenture Conversion and
Purchase and Warrant Cancellation Agreement, (vi) the Insider Indebtedness
Conversion Agreement, (vii) the Officer and Director Warrant Purchase Agreement,
(viii) the Company Warrant Repricing Agreement and (ix) the Other Warrants.
"Warrant Shares" mean the shares of Common Stock issuable upon
exercise of the Investor Warrants.
2. Purchase and Sale of the Shares and the Investor Warrants.
2.1 Initial Shares and Investor Warrants. Upon the terms and
subject to the conditions set forth in this Agreement, at the First Closing,
each of the Investors shall, severally and not jointly, purchase, and the
Company shall sell and issue to the Investors, the Initial Shares and the
Investor Warrants in the respective amounts and at the respective purchase
prices set forth on the Schedule of Purchasers attached hereto (the "Schedule of
Purchasers").
2.2 Additional Shares. Upon the terms and subject to the
conditions set forth in this Agreement, at the Second Closing, each of the
Investors shall, severally and not jointly, purchase, and the Company shall sell
and issue to the Investors, the Additional Shares in the respective amounts and
at the respective purchase prices set forth on the Schedule of Purchasers.
3. Closings.
3.1 First Closing. The purchase and sale of the Initial Shares
and the Investor Warrants pursuant to Section 2.1 (the "First Closing") shall
take place at the offices of ▇▇▇▇▇▇ Godward Kronish LLP, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Cooley") on the date hereof,
or at such other location and on such other date as the Company and the
Investors shall mutually agree (such date is hereinafter referred to as the
"First Closing Date").
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3.2 Second Closing. The purchase and sale of the Additional
Shares pursuant to Section 2.2 (the "Second Closing" and, together with the
First Closing, the "Closings") shall take place at the offices at Cooley at any
time on or before the seventh day following the satisfaction of the conditions
set forth in Section 6.2 hereof, or at such other location and on such other
date as the Company and the Investors shall mutually agree (such date is
hereinafter referred to as the "Second Closing Date").
4. Representations and Warranties of the Company. The Company hereby
represents and warrants to the Investors that, except as set forth in the
schedules delivered herewith (collectively, the "Disclosure Schedules"):
4.1 Organization, Good Standing and Qualification.
(a) The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Nevada and
has all requisite corporate power and authority to carry on its business as now
conducted and to own its properties. The Company is duly qualified to do
business as a foreign corporation and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or leasing of property
makes such qualification necessary, except where the failure to so qualify,
individually or in the aggregate, would not have a Material Adverse Effect. To
the Company's Knowledge, no proceeding has been instituted in any jurisdiction
revoking, limiting or curtailing or seeking to revoke, limit or curtail, such
power and authority or qualification.
(b) Each subsidiary of the Company (each a
"Subsidiary" and collectively the "Subsidiaries") is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all requisite corporate power and
authority to carry on its business as now conducted and to own its properties.
Each Subsidiary is duly qualified to do business as a foreign corporation and is
in good standing in each jurisdiction in which the conduct of its business or
its ownership or leasing of property makes such qualification necessary, except
where the failure to so qualify, individually or in the aggregate, would not
have a Material Adverse Effect. To the Company's Knowledge, no proceeding has
been instituted in any jurisdiction revoking, limiting or curtailing or seeking
to revoke, limit or curtail, such power and authority or qualification.
4.2 Authorization. The Company has full corporate power and
authority and has taken all requisite action on the part of the Company, its
officers, directors and stockholders necessary for (i) the authorization,
execution and delivery of the Transaction Documents to which it is a party, (ii)
the authorization of the performance of all obligations of the Company hereunder
or thereunder and (iii) the authorization, issuance, sale and delivery of the
Securities. The Transaction Documents to which it is a party constitute the
legal, valid and binding obligations of the Company, enforceable against the
Company in accordance with their respective terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights generally.
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4.3 Capitalization.
(a) Schedule 4.3 sets forth as of the date hereof (a)
the authorized capital stock of the Company; (b) the number of shares of capital
stock issued and outstanding; (c) the number of shares of capital stock
available for issuance pursuant to the Company's stock plans; and (d) the number
of shares of capital stock issuable and reserved for issuance pursuant to
securities exercisable for, or convertible into or exchangeable for any shares
of capital stock of the Company. Schedule 4.3 also identifies the warrants to
purchase shares of Common Stock and indebtedness of the Company that are
outstanding as of the date hereof and that will remain outstanding immediately
following the First Closing and the application of the proceeds received in
connection therewith. All of the issued and outstanding shares of the Company's
capital stock have been duly authorized and validly issued and are fully paid,
nonassessable and free of preemptive rights. No Person is entitled to preemptive
or similar statutory or contractual rights with respect to any securities of the
Company. There are no outstanding warrants, options, convertible securities or
other rights, agreements or arrangements under which the Company is obligated to
issue equity securities. Except as contemplated under this Agreement, there are
no contracts, commitments, understandings or arrangements by which the Company
is bound to issue additional shares of capital stock of the Company or options,
securities or rights convertible into shares of capital stock of the Company.
Except as provided in the Rights Agreement, no Person has the right to require
the Company to register any securities of the Company under the Securities Act,
whether on a demand basis or in connection with the registration of securities
of the Company for its own account or for the account of any other Person. The
issue and sale of the Securities will not result in the right of any holder of
Company securities to adjust the exercise, conversion or exchange price under
such securities.
(b) The Company owns all of the outstanding capital
stock of each Subsidiary free from liens, encumbrances and defects. All of the
issued and outstanding shares of capital stock of each Subsidiary are validly
issued and are fully paid, non-assessable and free of preemptive rights. No
Person is entitled to preemptive or similar statutory or contractual rights with
respect to any securities of any Subsidiary. There are no outstanding warrants,
options, convertible securities or other rights, agreements or arrangements
under which (i) any Subsidiary is obligated to issue additional shares of its
capital stock or options, securities or rights convertible into shares of
capital stock of such Subsidiary or (ii) the Company is obligated to sell or
otherwise dispose of shares of any Subsidiary's capital stock held by it.
4.4 Valid Issuance. The Securities have been duly and validly
authorized. The Shares, when issued and paid for pursuant to this Agreement (and
subject, in the case of the Additional Shares, to stockholder approval and
filing of an amendment to the Company's Amended and Restated Articles of
Incorporation authorizing an increase in the number of shares of Common Stock
issuable by the Company to 500,000,000 (as adjusted for stock splits,
combinations or other similar transactions)), will be validly issued, fully paid
and nonassessable, and will be free of encumbrances and restrictions (other than
those created by the Investors), except for restrictions on transfer set forth
in the Transaction Documents or imposed by applicable securities laws. The
Warrant Shares have been reserved for issuance, subject to stockholder approval
and filing of an amendment to the Company's Amended and Restated Articles of
Incorporation authorizing an increase in the number of shares of Common Stock
issuable by the Company to 500,000,000 (as adjusted for stock splits,
combinations or other similar transactions), and, upon issuance pursuant to the
Warrants, will be validly issued, fully paid and nonassessable.
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4.5 Consents. The execution, delivery and performance by the
Company of the Transaction Documents to which it is a party and the offer,
issuance and sale of the Securities requires no consent of, action by or in
respect of, or filing with, any Person, governmental body, agency, or official
other than filings that have been made pursuant to applicable state securities
laws and post-sale filings pursuant to applicable state and federal securities
laws which the Company undertakes to file within the applicable time periods.
4.6 Delivery of SEC Filings. The Company has made available to
the Investors, through the ▇▇▇▇▇ system, true and complete copies of (a) the
Company's Annual Report on Form 10-KSB filed with the SEC on December 22, 2006,
including all exhibits thereto and documents incorporated by reference therein,
(b) the Company's Quarterly Reports on Form 10-QSB for the quarters ended
December 31, 2006 and March 31, 2007, filed with the SEC, respectively, on
February 14, 2007 and May 14, 2007, including all exhibits thereto and documents
incorporated by reference therein and (c) the Company's Current Reports on Form
8-K filed with the SEC on October 6, 2006, November 2, 2006, November 15, 2006,
January 10, 2007, February 1, 2007, February 2, 2007, March 20, 2007 and April
13, 2007, including all exhibits thereto and documents incorporated by reference
therein (together, the "SEC Filings"). The SEC Filings are the only periodic
filings required of the Company pursuant to the Exchange Act from September 30,
2006, through the date hereof.
4.7 Use of Proceeds. The net proceeds of the sale of the
Shares and the Investor Warrants hereunder shall be used by the Company for
general working capital purposes, including, but not limited to, the purposes
set forth on Schedule 4.3.
4.8 No Material Adverse Change. Since March 31, 2007,
there has not been:
(a) any change in the consolidated assets,
liabilities, financial condition or operating results of the Company or any
Subsidiary from that reflected in the financial statements included in the
Company's Quarterly Report on Form 10-QSB for the quarter ended March 31, 2007,
except for changes in the ordinary course of business which would not have,
individually or in the aggregate, a Material Adverse Effect;
(b) any declaration or payment of any dividend, or
any authorization or payment of any distribution, on any of the capital stock of
the Company or any Subsidiary, or any redemption or repurchase of any securities
of the Company or any Subsidiary (other than in connection with a termination of
employment);
(c) any material damage, destruction or loss to any
assets or properties of the Company or any Subsidiary;
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(d) any waiver, not in the ordinary course of
business, by the Company or any Subsidiary of a material right or of a material
debt owed to it;
(e) any change or amendment to the Articles of
Incorporation or similar organizational documents, as applicable, or Bylaws of
the Company or any Subsidiary, or change to any material contract or arrangement
by which the Company or any Subsidiary is bound or to which its assets or
properties is subject;
(f) any material labor difficulties or labor union
organizing activities with respect to employees of the Company or any
Subsidiary;
(g) any transaction entered into by the Company or
any Subsidiary other than in the ordinary course of business;
(h) the loss of the services of any key employee, or
material change in the composition or duties of the senior management of the
Company or any Subsidiary; or
(i) any other event or condition of any character
that has had or would reasonably be expected to have a Material Adverse Effect.
4.9 SEC Filings. At the time of filing thereof, the SEC
Filings complied as to form in all material respects with the requirements of
the Exchange Act and did 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 the light of the circumstances under which they were made, not
misleading.
4.10 No Conflict, Breach, Violation or Default. Neither the
execution, delivery and performance by the Company of the Transaction Documents
to which it is a party nor the consummation of any of the transactions
contemplated hereby (including, without limitation, the issuance and sale of the
Securities in conformance with the Transaction Documents) will conflict with or
result in violation of any of the terms and provisions of the Articles of
Incorporation or similar organizational documents, as applicable, or Bylaws of
the Company or any Subsidiary, both as in effect on the date hereof or will give
rise to the right to terminate or accelerate the due date of any payment under
or conflict with or result in a breach of any term or provision of, or
constitute a default (or any event which with notice or lapse of time or both
would constitute a default) under, or require any consent or waiver under or
result in the execution or imposition of any lien, charge or encumbrance upon
the properties or assets of the Company or any Subsidiary pursuant to the terms
of any indenture, mortgage, deed of trust or other agreement or instrument to
which the Company or any Subsidiary is a party or by which the Company or any
Subsidiary is bound or to which any of its assets or properties is subject or
any license, permit, statute, rule, regulation, judgment, decree or order of any
governmental agency or body or any court, domestic or foreign, having
jurisdiction over the Company or any Subsidiary or any of its assets or
properties, other than a conflict, breach or default that would not have a
Material Adverse Effect.
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4.11 Tax Matters. Each of the Company and each Subsidiary has
timely prepared and filed all tax returns required to have been filed by it with
all appropriate governmental agencies and timely paid all taxes shown thereon or
otherwise owed by it, except as would not have a Material Adverse Effect. The
charges, accruals and reserves on the books of the Company and each Subsidiary
in respect of taxes for all fiscal periods are adequate in all material
respects, and there are no material unpaid assessments against the Company or
any Subsidiary. All taxes and other assessments and levies that the Company or
any Subsidiary are required to withhold or to collect for payment have been duly
withheld and collected and paid to the proper governmental entity or third party
when due. There are no tax liens or claims pending or, to the Company's
Knowledge, threatened against the Company or any Subsidiary or any of their
respective assets or property, other than Permitted Liens. There are no tax
audits or investigations pending, which if adversely determined would result in
a Material Adverse Effect. There are no outstanding tax sharing agreements or
other such arrangements between the Company or any Subsidiary and any other
Person. Neither the Company nor any Subsidiary has any deferred compensation
arrangements or has paid (or is required to pay) any deferred compensation which
would be subject to Section 409A of the Internal Revenue Code.
4.12 Title to Properties. Each of the Company and each
Subsidiary has good and marketable title to all properties and assets owned by
it, in each case free from liens, encumbrances and defects, other than Permitted
Liens. The Company and each Subsidiary hold any leased real or personal property
under valid and enforceable leases. Neither the Company nor any Subsidiary owns
any real property.
4.13 Certificates, Authorities and Permits. Each of the
Company and each Subsidiary possesses adequate certificates, approvals,
authorities or permits ("Permits") issued by governmental agencies or bodies
necessary to own, lease and license its assets and properties and conduct the
business now operated by it, all of which are valid and in full force and
effect, except where the lack of such Permits, individually or in the aggregate,
would not have a Material Adverse Effect. Each of the Company and each
Subsidiary has performed in all material respects all of its material
obligations with respect to such Permits and no event has occurred that allows,
or after notice or lapse of time, would allow, revocation or termination
thereof. Neither the Company nor any Subsidiary has received any written notice
of proceedings relating to the revocation or modification of any such
certificate, authority or permit that, if determined adversely to the Company or
such Subsidiary, would, individually or in the aggregate, have a Material
Adverse Effect.
4.14 Labor Matters.
(a) Neither the Company nor any Subsidiary is a party
to or bound by any collective bargaining agreement. Neither the Company nor any
Subsidiary has violated in any material respect any laws, regulations, orders or
contract terms, affecting the collective bargaining rights of employees, labor
organizations or any laws, regulations or orders affecting employment
discrimination, equal opportunity employment or employees' health, safety,
welfare, wages and hours.
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(b) (i) There are no labor disputes existing, or to
the Company's Knowledge, threatened, involving strikes, slow-downs, work
stoppages, job actions, disputes, lockouts or any other disruptions of or by the
employees of the Company or any Subsidiary, (ii) there are no unfair labor
practices or petitions for election pending or, to the Company's Knowledge,
threatened before the National Labor Relations Board or any other federal, state
or local labor commission relating to the employees of the Company or any
Subsidiary, (iii) no demand for recognition or certification heretofore made by
any labor organization or group of employees is pending with respect to the
Company or any Subsidiary and (iv) to the Company's Knowledge, each of the
Company and each Subsidiary enjoys good labor and employee relations with its
employees.
(c) Each of the Company and each Subsidiary is in
compliance in all material respects with applicable laws respecting employment
(including laws relating to classification of employees and independent
contractors) and employment practices, terms and conditions of employment, wages
and hours, and immigration and naturalization. No claims are pending against the
Company or any Subsidiary before the Equal Employment Opportunity Commission or
any other administrative body or in any court asserting any violation of Title
VII of the Civil Rights Act of 1964, the Age Discrimination Act of 1967, 42
U.S.C. ▇▇.▇▇. 1981 or 1983 or any other federal, state or local law, statute or
ordinance barring discrimination in employment.
(d) Neither the Company nor any Subsidiary is a party
to, or bound by, any employment or other contract or agreement that contains any
severance, termination pay or change of control liability or obligation,
including, without limitation, any "excess parachute payment," as defined in
Section 280G(b) of the Internal Revenue Code of 1986, as amended.
4.15 Intellectual Property.
(a) All Intellectual Property of the Company is valid
and enforceable. No Intellectual Property owned or licensed by the Company or
any Subsidiary that is necessary for the conduct of the business of the Company
and the Subsidiaries as currently conducted or as proposed to be conducted as
described in the SEC Filings is involved in any cancellation, dispute or
litigation, and, to the Company's Knowledge, no such action is threatened. No
issued patent owned by the Company or any Subsidiary is involved in any
interference, reissue, re-examination or opposition proceeding.
(b) All of the in-bound licenses and sublicenses and
consent, royalty or other agreements concerning Intellectual Property that are
necessary for the conduct of the business of the Company and the Subsidiaries as
currently conducted and as proposed to be conducted as described in the SEC
Filings to which the Company or any Subsidiary is a party (other than generally
commercially available, non-custom, off-the-shelf software application programs
having a retail acquisition price of less than $50,000 per license)
(collectively, "In-Bound License Agreements") are valid and binding obligations
on the Company or such Subsidiary, as applicable, and, to the Company's
Knowledge, the other parties thereto, enforceable in accordance with their
terms, except to the extent that enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
other similar laws affecting the enforcement of creditors' rights generally, and
neither the Company nor any Subsidiary is in material breach of any of its
obligations under any such In-Bound License Agreements.
11
(c) Each of the Company and each Subsidiary owns or
has the valid right to use all of the Intellectual Property that is necessary
for the conduct of its business as currently conducted and as proposed to be
conducted as described in the SEC Filings and for the ownership, maintenance and
operation of the Company's properties and assets, free and clear of all liens,
encumbrances, adverse claims (in each case, other than Permitted Liens) or, with
respect to Intellectual Property owned by the Company or any Subsidiary,
obligations to license such Intellectual Property, other than licenses of the
Intellectual Property owned by the Company or such Subsidiary that are entered
into in the ordinary course of its business. To the Company's Knowledge, each of
the Company and each Subsidiary has a valid and enforceable right to use all
third party Intellectual Property and Confidential Information used or held for
use in its business.
(d) The conduct of the business of the Company and
the Subsidiaries as currently conducted or as proposed to be conducted as
described in the SEC Filings, the use or exploitation of any Intellectual
Property owned by the Company or any Subsidiary, or to the Company's Knowledge,
the use or exploitation of any Intellectual Property licensed by the Company or
any Subsidiary does not infringe, misappropriate or otherwise materially impair
or conflict with (collectively, "Infringe") any Intellectual Property rights of
any third party and the Intellectual Property owned by the Company or any
Subsidiary which is necessary for the conduct of the business of the Company and
the Subsidiaries as currently conducted or as proposed to be conducted as set
forth in the SEC Filings is not being Infringed by any third party. There is no
litigation, court order, claim or assertion pending or outstanding or, to the
Company's Knowledge, threatened, that seeks to limit or challenge the ownership,
use, validity or enforceability of any Intellectual Property owned or licensed
by the Company or any Subsidiary or their respective use of any Intellectual
Property owned by a third party.
(e) The consummation of the transactions contemplated
hereby and by the other Transaction Documents will not result in the (i) loss,
material impairment of or material restriction on any of the Intellectual
Property or Confidential Information owned by the Company or any Subsidiary
which is necessary for the conduct of its business as currently conducted or as
proposed to be conducted as set forth in the SEC Filings or (ii) material breach
of any In-Bound License Agreement.
(f) Each of the Company and each Subsidiary has taken
reasonable steps to protect its respective rights in its Intellectual Property
and Confidential Information. Each employee and consultant who has access to the
Confidential Information of the Company or any Subsidiary necessary for the
conduct of its business as currently conducted has executed an agreement to
maintain the confidentiality of such Confidential Information. To the Company's
Knowledge, and except pursuant to non-disclosure agreements entered into between
the Company or a Subsidiary and third parties in the ordinary course of
business, there has been no disclosure of the Intellectual Property or
Confidential Information of the Company or any Subsidiary to any third party. To
the Company's Knowledge, there have been no misappropriations or infringements
by any Person of any Intellectual Property used in the conduct or operation of
the business of the Company or any Subsidiary.
12
4.16 Environmental Matters. Neither the Company nor any
Subsidiary is in violation of any statute, rule, regulation, decision or order
of any governmental agency or body or any court, domestic or foreign, relating
to the use, disposal or release of hazardous or toxic substances or relating to
the protection or restoration of the environment or human exposure to hazardous
or toxic substances (collectively, "Environmental Laws"). Neither the Company
nor any Subsidiary owns or operates any real property contaminated with any
substance that is subject to any Environmental Laws, is liable for any off-site
disposal or contamination pursuant to any Environmental Laws, or is subject to
any claim relating to any Environmental Laws, which violation, contamination,
liability or claim would reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect. There is no pending or, to the Company's
Knowledge, threatened investigation that might lead to such a claim.
4.17 Litigation. There are no pending or, to the Company's
Knowledge, threatened actions, suits, proceedings, inquiries or investigations
against or affecting the Company or any Subsidiary or any of their properties or
any of the Company's or any Subsidiary's officers and directors in their
capacities as such.
4.18 Financial Statements. The financial statements included
in each SEC Filing present fairly, in all material respects, the financial
position of the Company as of the dates shown and its results of operations and
cash flows for the periods shown, and such financial statements have been
prepared in conformity with United States generally accepted accounting
principles applied on a consistent basis ("GAAP") (except as may be disclosed
therein or in the notes thereto, and, in the case of quarterly financial
statements, as permitted by Form 10-QSB under the Exchange Act). Except as set
forth in the financial statements of the Company included in the SEC Filings
filed prior to the date hereof, the Company has not incurred any liabilities,
contingent or otherwise, except those incurred in the ordinary course of
business, consistent with past practices since the date of such financial
statements, none of which, individually or in the aggregate, would reasonably be
expected to have a Material Adverse Effect.
4.19 Insurance Coverage. Each of the Company and each
Subsidiary maintains in full force and effect insurance coverage that is
customary for comparably situated companies for the business being conducted and
properties owned or leased by the Company and the Subsidiaries.
4.20 Compliance with OTC Bulletin Board Continued Eligibility
Requirements. The Company is in compliance with applicable OTC Bulletin Board
continued eligibility requirements. The Company has not received any written
notice with respect to the ineligibility of the Common Stock from trading on the
OTC Bulletin Board.
4.21 Brokers and Finders. No Person will have, as a result of
the transactions contemplated by the Transaction Documents, any valid right,
interest or claim for any commission, fee or other compensation pursuant to any
agreement, arrangement or understanding entered into by or on behalf of the
Company.
13
4.22 No Directed Selling Efforts or General Solicitation.
Neither the Company nor any Person acting on its behalf has conducted any
general solicitation or general advertising (as those terms are used in
Regulation D under the Securities Act) in connection with the offer or sale of
the Securities.
4.23 No Integrated Offering. Neither the Company nor any
Person acting on its behalf has, directly or indirectly, made any offers or
sales of any Company security or solicited any offers to buy any security, under
circumstances that would adversely affect reliance by the Company on Section
4(2) of the Securities Act for the exemption from registration for the
transactions contemplated hereby or would require registration of the Securities
under the Securities Act or would be integrated under the Nasdaq Marketplace
Rules.
4.24 Private Placement. Subject to the accuracy of each
Investor's representations in Section 5 hereof, the offer and sale of the
Securities to the Investors as contemplated hereby is exempt from the
registration requirements of the Securities Act.
4.25 Questionable Payments. Neither the Company nor any
Subsidiary nor, to the Company's Knowledge, any of their directors, officers,
employees, agents or other Persons acting on behalf of the Company or any
Subsidiary, has on behalf of the Company or any Subsidiary or in connection with
its business: (a) used any corporate funds for unlawful contributions, gifts,
entertainment or other unlawful expenses relating to political activity; (b)
made any direct or indirect unlawful payments to any governmental officials or
employees from corporate funds; (c) established or maintained any unlawful or
unrecorded fund of corporate monies or other assets; (d) made any false or
fictitious entries on the books and records of the Company or any Subsidiary; or
(e) made any unlawful bribe, rebate, payoff, influence payment, kickback or
other unlawful payment of any nature.
4.26 Transactions with Affiliates. None of the officers or
directors of the Company or any Subsidiary and, to the Company's Knowledge, none
of the employees of the Company or any Subsidiary is presently a party to any
transaction with the Company or any Subsidiary (other than as holders of stock
options and/or warrants, and for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the Company's Knowledge, any entity in which
any officer, director, or any such employee has a substantial interest or is an
officer, director, trustee or partner.
4.27 Internal Controls. The Company is in material compliance
with the provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 currently applicable to
the Company. Each of the Company and each Subsidiary maintains a system of
internal accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
asset accountability, (iii) access to assets is permitted only in accordance
with management's general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. The
Company has established disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15 and 15d-15) for the Company and designed such
disclosure controls and procedures to ensure that material information relating
to the Company and each Subsidiary is made known to the certifying officers by
others within those entities. The Company's certifying officers have evaluated
the effectiveness of the Company's controls and procedures as of the end of the
period covered by the most recently filed periodic report under the Exchange Act
(such date, the "Evaluation Date"). The Company presented in its most recently
filed periodic report under the Exchange Act the conclusions of the certifying
officers about the effectiveness of the disclosure controls and procedures based
on their evaluations as of the Evaluation Date. Since the Evaluation Date, there
have been no significant changes in the internal controls (as such term is
defined in Item 307(b) of Regulation S-B) of the Company or any Subsidiary or,
to the Company's Knowledge, in other factors that could significantly affect
such internal controls. The books, records and accounts of the Company and each
Subsidiary accurately and fairly reflect, in all material respects, the
transactions in, and dispositions of, the assets of, and the results of
operations of, the Company and each Subsidiary. Each of the Company and each
Subsidiary maintains and will continue to maintain a standard system of
accounting established and administered in accordance with GAAP and the
applicable requirements of the Exchange Act.
14
4.28 Independent Accountants. PMB ▇▇▇▇▇ ▇▇▇▇▇▇▇, LLP is the
Company's independent registered public accounting firm as required by the
Exchange Act, and the rules and regulations of the SEC thereunder.
4.29 Investment Company. The Company is not and, after giving
effect to the offering and sale of the Securities, will not be an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.
4.30 Regulatory Compliance. Neither the Company nor any
Subsidiary is in violation of any applicable statute, rule, regulation, order or
restriction of any domestic or foreign government or any instrumentality or
agency thereof in respect of the conduct of its business or the ownership of its
properties, except as would not have a Material Adverse Effect. No governmental
orders, permissions, consents, approvals or authorizations are required to be
obtained and no registrations or declarations are required to be filed in
connection with the execution and delivery of this Agreement or the issuance of
the Shares or the Warrant Shares, except such as have been duly and validly
obtained or filed, or with respect to any filings that must be made after the
applicable Closing, as will be filed in a timely manner.
4.31 Market Stabilization. The Company has not taken, nor will
it take, directly or indirectly, any action designed to or that might reasonably
be expected to cause or result in, or that has constituted or that might
reasonably be expected to constitute, the stabilization or manipulation of the
price of the Common Stock or any security of the Company to facilitate the sale
or resale of any of the Securities.
15
4.32 Material Contracts. All material documents, contracts or
other agreements of the Company and any Subsidiary required to be filed with the
SEC have been filed with the SEC and are included in the exhibits to the SEC
Filings. The description of the contracts, documents or other agreements
contained in the SEC Filings (as the case may be) reflect in all material
respects the terms of the underlying contract, document or other agreement. Each
such contract, document or other agreement is in full force and effect and is
valid and enforceable by and against the Company or the applicable Subsidiary,
as applicable, in accordance with its terms. Neither the Company nor any
Subsidiary is in default in the observance or performance of any term or
obligation to be performed by it under any such agreement, and no event has
occurred which with notice or lapse of time or both would constitute such a
default, in any such case which default or event, individually or in the
aggregate, would result in a Material Adverse Effect.
4.33 Application of Takeover Protections. The Company and the
Board have taken all necessary action, if any, in order to render inapplicable
any control share acquisition, business combination, poison pill (including any
distribution under a rights agreement) or other similar anti-takeover provision
under the Company's Articles of Incorporation or the laws of the State of Nevada
that are or could become applicable to the Investors as a result of the
Investors and the Company fulfilling their obligations or exercising their
rights under the Transaction Documents, including without limitation as a result
of the Company's issuance of the Securities and the Investors' ownership of the
Securities.
4.34 FDA. As to each product subject to the jurisdiction of
the U.S. Food and Drug Administration ("FDA") under the Federal Food, Drug and
Cosmetic Act, as amended, and the regulations thereunder ("FDCA") that is
manufactured, packaged, labeled, tested, distributed, sold, and/or marketed by
the Company or any Subsidiary (each such product, a "Pharmaceutical Product"),
such Pharmaceutical Product is being manufactured, packaged, labeled, tested,
distributed, sold and/or marketed by the Company in compliance with all
applicable requirements under FDCA and similar laws, rules and regulations
relating to registration, investigational use, premarket clearance, licensure,
or application approval, good manufacturing practices, good laboratory
practices, good clinical practices, product listing, quotas, labeling,
advertising, record keeping and filing of reports, except where the failure to
be in compliance would not have a Material Adverse Effect. There is no pending,
completed or, to the Company's Knowledge, threatened, action (including any
lawsuit, arbitration, or legal or administrative or regulatory proceeding,
charge, complaint, or investigation) against the Company or any Subsidiary, and
neither the Company nor any Subsidiary has received any notice, warning letter
or other communication from the FDA or any other governmental entity, which (i)
contests the premarket clearance, licensure, registration, or approval of, the
uses of, the distribution of, the manufacturing or packaging of, the testing of,
the sale of, or the labeling and promotion of an Pharmaceutical Product, (ii)
withdraws its approval of, requests the recall, suspension, or seizure of, or
withdraws or orders the withdrawal of advertising of sales promotional materials
relating to, any Pharmaceutical Product, (iii) imposes a clinical hold on any
clinical investigation by the Company or any Subsidiary, (iv) enjoins production
at any facility of the Company or any Subsidiary, (v) enters or proposes to
enter into a consent decree of permanent injunction with the Company or any
Subsidiary, or (vi) otherwise alleges any violation of any laws, rules or
regulations by the Company or any Subsidiary, and which, either individually or
in the aggregate, would have a Material Adverse Effect. The properties, business
and operations of the Company have been and are being conducted in all material
respects in accordance with all applicable laws, rules and regulations of the
FDA. Neither the Company nor any Subsidiary has been informed by the FDA that
the FDA will prohibit the marketing, sale, license or use in the United States
of any product proposed to be developed, produced or marketed by the Company or
any Subsidiary nor has the FDA expressed any concern as to approving or clearing
for marketing any product being developed or proposed to be developed by the
Company or any Subsidiary.
16
5. Representations and Warranties of the Investors. Each of the
Investors hereby, severally and not jointly, represents and warrants to the
Company that:
5.1 Organization and Existence. Such Investor is a validly
existing corporation, limited partnership or limited liability company and has
all requisite corporate, partnership or limited liability company power and
authority to invest in the Securities pursuant to this Agreement.
5.2 Authorization. The execution, delivery and performance by
such Investor of the Transaction Documents to which it is a party have been duly
authorized. Each Transaction Document to which it is a party has been duly
executed by such Investor, and when delivered by such Investor in accordance
with the terms hereof, will constitute the valid and legally binding obligations
of such Investor, enforceable against such Investor in accordance with their
respective terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability, relating
to or affecting creditors' rights generally.
5.3 Purchase Entirely for Own Account. The Securities to be
received by such Investor hereunder will be acquired for such Investor's own
account, not as nominee or agent, and not with a view to the resale or
distribution of any part thereof in violation of the Securities Act, and such
Investor has no present intention of selling, granting any participation in, or
otherwise distributing the same in violation of the Securities Act.
5.4 Investment Experience. Such Investor acknowledges that it
can bear the economic risk and complete loss of its investment in the Securities
and has such knowledge and experience in financial or business matters that it
is capable of evaluating the merits and risks of the investment in the
Securities contemplated hereby.
5.5 Disclosure of Information. Such Investor has had an
opportunity to receive all information related to the Company requested by it
and to ask questions of and receive answers from the Company regarding the
Company, its business and the terms and conditions of the offering of the
Securities. Such Investor acknowledges receipt of copies of the SEC Filings.
5.6 Restricted Securities. Such Investor understands that the
Securities are characterized as "restricted securities" under the U.S. federal
securities laws inasmuch as they are being acquired from the Company in a
transaction not involving a public offering and that under such laws and
applicable regulations such securities may be resold without registration under
the Securities Act only in certain limited circumstances.
17
5.7 Legends. It is understood that, except as provided below,
certificates evidencing the Securities may bear the following or any similar
legend:
(a) "THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR ANY STATE SECURITIES LAWS. THE SECURITIES REPRESENTED HEREBY MAY NOT BE
TRANSFERRED UNLESS (I) SUCH SECURITIES HAVE BEEN REGISTERED FOR SALE PURSUANT TO
THE SECURITIES ACT, (II) SUCH SECURITIES MAY BE SOLD PURSUANT TO RULE 144(K), OR
(III) THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO
IT THAT SUCH TRANSFER MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE
SECURITIES ACT OR QUALIFICATION UNDER APPLICABLE STATE SECURITIES LAWS."
(b) If required by the authorities of any state in connection
with the issuance of sale of the Securities, the legend required by such state
authority.
5.8 Accredited Investor. Such Investor is an accredited
investor as defined in Rule 501(a) of Regulation D under the Securities Act.
5.9 No General Solicitation. Such Investor did not learn of
the investment in the Securities as a result of any public advertising or
general solicitation.
5.10 Brokers and Finders. No Person will have, as a result of
the transactions contemplated by the Transaction Documents, any valid right,
interest or claim against or upon the Company or an Investor for any commission,
fee or other compensation pursuant to any agreement, arrangement or
understanding entered into by or on behalf of such Investor.
6. Conditions to the Closings.
6.1 Conditions to the First Closing.
(a) Conditions to the Investors' Obligations. The
obligation of each Investor to purchase the Initial Shares and the Investor
Warrants at the First Closing is subject to the satisfaction, on or prior to the
First Closing Date, of the following conditions, any of which may be waived by
such Investor (as to itself only):
(i) The representations and warranties made
by the Company in Section 4 hereof shall be true and correct on the date hereof
and on the First Closing Date (except to the extent any such representation or
warranty expressly speaks as of a specific date, in which case such
representation or warranty shall be true and correct as of such date). The
Company shall have performed all obligations and covenants herein required to be
performed by it on or prior to the First Closing Date. The Company shall have
delivered a certificate, executed on behalf of the Company by its Chief
Executive Officer or its Chief Financial Officer, dated as of the First Closing
Date, certifying to the fulfillment of the condition specified in this Section
6.1(a)(i).
18
(ii) The Company shall have obtained any and
all consents, permits, approvals, registrations and waivers necessary or
appropriate for the purchase and sale of the Initial Shares and the Investor
Warrants and the consummation of the other transactions contemplated by the
Transaction Documents to be consummated on or prior to the First Closing Date,
including, without limitation, any necessary stockholder consent, all of which
shall be in full force and effect.
(iii) The Company, the Existing Investors,
the Insiders, and the Officers and Directors shall have executed and delivered
the Transaction Documents to which they are a party and performed all actions
required to be taken by them prior to the First Closing pursuant to the
Transaction Documents, and each of the Transaction Documents shall be in full
force and effect.
(iv) No judgment, writ, order, injunction,
award or decree of or by any court, or judge, justice or magistrate, including
any bankruptcy court or judge, or any order of or by any governmental authority,
shall have been issued, and no action or proceeding shall have been instituted
by any governmental authority, enjoining or preventing the consummation of the
transactions contemplated by the Transaction Documents.
(v) The Company shall have delivered a
certificate, executed on behalf of the Company by its Secretary, dated as of the
First Closing Date, certifying the resolutions adopted by the Board approving
the transactions contemplated by the Transaction Documents, certifying the
current versions of the Articles of Incorporation and Bylaws of the Company and
certifying as to the signatures and authority of Persons signing the Transaction
Documents and related documents on behalf of the Company.
(vi) The Investors shall have received an
opinion from ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇, LLP, dated as of the First
Closing Date, in substantially the form of Appendix I.
(vii) No stop order or suspension of trading
shall have been imposed by Nasdaq, the OTC Bulletin Board, the SEC or any other
governmental or regulatory body with respect to public trading in the Common
Stock. The Company shall not have received notice of the ineligibility of the
Common Stock for trading on the OTC Bulletin Board or that it is violation of
any Nasdaq, OTC Bulletin Board or SEC rule, regulation or interpretation which
could lead to such ineligibility.
(viii) The Company shall have delivered (i)
to its transfer agent irrevocable instructions to issue and deliver to each
Investor (or in such nominee name(s) as designated by such Investor in writing)
certificates evidencing such number of Initial Shares as set forth on the
signature pages to this Agreement and (ii) duly executed Investor Warrants to
the Investors.
19
(ix) All agreements that require the Company
to register any securities of the Company under the Securities Act shall have
been terminated, which shall include those certain Registration Rights
Agreements dated August 31, 2005, October 25, 2005 and January 10, 2007 by and
among the Company and the other parties thereto.
(x) Subject to the occurrence of the First
Closing, the Board shall have been reconstituted such that it is comprised of
the following members: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇.
(xi) Subject to the occurrence of the First
Closing, the Board shall have adopted resolutions to set the size of the Board
at seven, which resolutions shall remain in full force and effect.
(b) Conditions to Obligations of the Company. The
Company's obligation to sell and issue the Initial Shares and the Investor
Warrants at the First Closing is subject to the satisfaction on or prior to the
First Closing Date of the following conditions, any of which may be waived by
the Company:
(i) The representations and warranties made
by the Investors in Section 5 hereof shall be true and correct in all material
respects when made and as of the First Closing Date with the same force and
effect as if they had been made on and as of said date (except to the extent any
such representation or warranty expressly speaks as of a specific date, in which
case such representation or warranty shall be true and correct in all material
respects as of such specific date).
(ii) The Company shall have obtained any and
all consents, permits, approvals, registrations and waivers necessary or
appropriate for the purchase and sale of the Initial Shares and the Investor
Warrants and the consummation of the other transactions contemplated by the
Transaction Documents to be consummated on or prior to the First Closing Date,
including, without limitation, any necessary stockholder consent, all of which
shall be in full force and effect.
(iii) The Investors shall have executed and
delivered this Agreement and the Rights Agreement.
(iv) No judgment, writ, order, injunction,
award or decree of or by any court, or judge, justice or magistrate, including
any bankruptcy court or judge, or any order of or by any governmental authority,
shall have been issued, and no action or proceeding shall have been instituted
by any governmental authority, enjoining or preventing the consummation of the
transactions contemplated by the Transaction Documents.
(v) The Investors shall have delivered the
Initial Purchase Price to the Company.
20
(vi) The Investors shall have purchased
10,178,571 Debenture Shares from the Existing Investors in accordance with the
terms of the Debenture Conversion and Purchase and Warrant Cancellation
Agreement.
6.2 Conditions to the Second Closing.
(a) Conditions to the Investors' Obligations. The
obligation of each Investor to purchase the Additional Shares at the Second
Closing is subject to the satisfaction, on or prior to the Second Closing Date,
of the following conditions, any of which may be waived by such Investor (as to
itself only):
(i) The representations and warranties made
by the Company in Section 4 hereof shall be true and correct in all material
respects on the date hereof and on the Second Closing Date (except to the extent
any such representation or warranty expressly speaks as of a specific date, in
which case such representation or warranty shall be true and correct as of such
date). The Company shall have performed all obligations and covenants herein
required to be performed by it on or prior to the Second Closing Date. The
Company shall have delivered a certificate, executed on behalf of the Company by
its Chief Executive Officer or its Chief Financial Officer, dated as of the
Second Closing Date, certifying to the fulfillment of the condition specified in
this Section 6.2(a)(i).
(ii) The Company shall have obtained any and
all consents, permits, approvals, registrations and waivers necessary or
appropriate for the purchase and sale of the Additional Shares and the
consummation of the other transactions contemplated by the Transaction Documents
to be consummated on or prior to the Second Closing Date, including, without
limitation, any necessary stockholder consent, all of which shall be in full
force and effect.
(iii) The Company, the Existing Investors,
the Insiders and the Officers and Directors shall have performed all actions
required to be taken by them prior to the Second Closing pursuant to the
Transaction Documents, and each of the Transaction Documents shall be in full
force and effect.
(iv) No judgment, writ, order, injunction,
award or decree of or by any court, or judge, justice or magistrate, including
any bankruptcy court or judge, or any order of or by any governmental authority,
shall have been issued, and no action or proceeding shall have been instituted
by any governmental authority, enjoining or preventing the consummation of the
transactions contemplated by the Transaction Documents.
(v) The Company shall have delivered a
certificate, executed on behalf of the Company by its Secretary, dated as of the
Second Closing Date, certifying the resolutions adopted by the Board approving
the transactions contemplated by the Transaction Documents, certifying the
current versions of the Articles of Incorporation and Bylaws of the Company and
certifying as to the signatures and authority of Persons signing the Transaction
Documents and related documents on behalf of the Company.
21
(vi) The Investors shall have received an
opinion from ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, Marcus, ▇▇▇▇▇▇ & ▇▇▇▇, LLP, dated as of the
Second Closing Date, in substantially the form of Appendix I.
(vii) No stop order or suspension of trading
shall have been imposed by Nasdaq, the OTC Bulletin Board, the SEC or any other
governmental or regulatory body with respect to public trading in the Common
Stock. The Company shall not have received notice of the ineligibility of the
Common Stock for trading on the OTC Bulletin Board or that it is violation of
any Nasdaq, OTC Bulletin Board or SEC rule, regulation or interpretation which
could lead to such ineligibility.
(viii) The Company shall have delivered to
its transfer agent irrevocable instructions to issue and deliver to each
Investor (or in such nominee name(s) as designated by such Investor in writing)
certificates evidencing such number of Additional Shares as set forth on the
signature pages to this Agreement.
(ix) The Company shall have approved an
increase in the shares available for grant under the Equity Incentive Plan by a
total of 22,062,664 shares of Common Stock, such that the available pool under
its the Equity Incentive Plan immediately following the Second Closing shall
equal 25,659,664 shares of Common Stock.
(x) The stockholders of the Company shall
have approved an increase in number of shares of Common Stock authorized under
the Company's Articles of Incorporation to 500,000,000 shares (as adjusted for
stock splits, combinations or other similar transactions).
(xi) Since the First Closing Date, there
shall have been no Material Adverse Effect.
(b) Conditions to Obligations of the Company. The
Company's obligation to sell and issue the Additional Shares at the Second
Closing is subject to the satisfaction on or prior to the Second Closing Date of
the following conditions, any of which may be waived by the Company:
(i) The representations and warranties made
by the Investors in Section 5 hereof shall be true and correct in all material
respects when made and as of the Second Closing Date with the same force and
effect as if they had been made on and as of said date (except to the extent any
such representation or warranty expressly speaks as of a specific date, in which
case such representation or warranty shall be true and correct in all material
respects as of such specific date).
(ii) The Company shall have obtained any and
all consents, permits, approvals, registrations and waivers necessary or
appropriate for the purchase and sale of the Additional Shares and the
consummation of the other transactions contemplated by the Transaction Documents
to be consummated on or prior to the Second Closing Date, including, without
limitation, any necessary stockholder consent, all of which shall be in full
force and effect.
22
(iii) No judgment, writ, order, injunction,
award or decree of or by any court, or judge, justice or magistrate, including
any bankruptcy court or judge, or any order of or by any governmental authority,
shall have been issued, and no action or proceeding shall have been instituted
by any governmental authority, enjoining or preventing the consummation of the
transactions contemplated by the Transaction Documents.
(iv) The Investors shall have delivered the
Additional Purchase Price to the Company.
6.3 Termination of Obligations to Effect the Second
Closing; Effects. The obligation of the Company, on the one hand, and the
Investors, on the other hand, to effect the Second Closing shall terminate as
follows:
(a) Upon the mutual written consent of the Company
and the Investors;
(b) By the Company if any of the conditions set forth
in Section 6.2(b) shall have become incapable of fulfillment and shall not have
been waived by the Company;
(c) By an Investor (with respect to itself only) if
any of the conditions set forth in Section 6.2(a) shall have become incapable of
fulfillment and shall not have been waived by the Investor; or
(d) By either the Company or any Investor (with
respect to itself only) if the Second Closing has not occurred prior to the
earlier of (i) October 31, 2007 and (ii) the seventh day following the
satisfaction of the conditions set forth in Section 6.2;
provided, however, that, except in the case of clause (a) above, the party
seeking to terminate its obligation to effect the Second Closing shall not then
be in breach of any of its representations, warranties, covenants or agreements
contained in this Agreement if such breach has resulted in the circumstances
giving rise to such party's seeking to terminate its obligation to effect the
Second Closing.
7. Covenants and Agreements.
7.1 Proxy Statement. Within ten (10) days after the First
Closing Date, the Company will prepare, distribute and file with the SEC a proxy
statement to solicit the necessary stockholder approval to increase the number
of shares of Common Stock authorized under the Company's Articles of
Incorporation to 500,000,000 shares (as adjusted for stock splits, combinations
or other similar transactions).
7.2 No Conflicting Agreements. The Company shall not take any
action, enter into any agreement or make any commitment that would conflict or
interfere in any material respect with the Company's obligations under the
Transaction Documents.
23
7.3 Insurance. The Company shall not materially reduce
the insurance coverages described in Section 4.19.
7.4 Compliance with Laws. The Company shall comply in all
material respects with all applicable laws, rules, regulations, orders and
decrees of all governmental authorities.
7.5 Listing of Underlying Shares and Related Matters. The
Company shall use commercially reasonable efforts to continue the eligibility
and trading of its Common Stock on the OTC Bulletin Board and, in accordance,
therewith, shall use commercially reasonable efforts to comply in all respects
with the Company's reporting, filing and other obligations under the bylaws or
rules of such market.
7.6 Termination of Covenants. The provisions of Sections 7.2
through 7.4 shall terminate and be of no further force and effect on the date on
which the Company's obligations under the Rights Agreement to register or
maintain the effectiveness of any registration covering the Registrable
Securities (as such term is defined in the Rights Agreement) shall terminate.
7.7 Removal of Legends. Any legend referred to in Section 5.7
hereof stamped on a certificate evidencing the Shares or the Warrant Shares and
the stock transfer instructions and record notations with respect to such Shares
and Warrant Shares shall be removed and the Company shall issue a certificate
without such legend to the holder of such Shares and/or Warrant Shares upon the
written request of such holder if (i) a Registration Statement covering the
resale of the Securities and Warrant Shares is effective under the Securities
Act and such request includes a representation by the holder that the Shares or
Warrant Shares at issue have been sold pursuant to such Registration Statement,
(ii) such holder provides the Company with an opinion of counsel reasonably
acceptable to the Company to the effect that a public sale or transfer of such
securities may be made without registration under the Securities Act or (iii)
such holder provides the Company with reasonable assurances in writing (which
shall not include an opinion of counsel) that such securities can be sold
pursuant to Section (k) of Rule 144 under the Securities Act. Following the
receipt by the Company of such request for legend removal under clause (i)
above, an opinion under clause (ii) above or reasonable assurances under clause
(iii) above, the Company shall, promptly following the receipt by the Company of
a legended certificate representing such securities, deliver or cause to be
delivered to such holder a certificate representing such securities that is free
from all restrictive and other legends.
7.8 Termination of Registration Statements. The Company shall
terminate registration statement nos. 333-134927, 333-134149 and 333-131281
filed with the SEC and withdraw registration statement no. 333-143021 filed with
the SEC on or about November 30, 2007.
24
8. Survival and Indemnification.
8.1 Survival. The representations, warranties, covenants and
agreements contained in this Agreement shall survive until the date that is two
years after the later of the First Closing Date and the Second Closing Date,
except as otherwise expressly provided in this Agreement.
8.2 Indemnification. The Company agrees to indemnify and hold
harmless each Investor and its Affiliates and their respective directors,
officers, employees and agents and each person who controls an Investor within
the meaning of the Securities Act from and against any and all actual losses,
claims, damages, liabilities and expenses arising from an action by a third
party (including without limitation reasonable attorneys' fees and disbursements
and other expenses incurred in connection with investigating, preparing or
defending any action, claim or proceeding, pending or threatened and the costs
of enforcement thereof) (collectively, "Losses") incurred by such Person as a
result of any breach of representation, warranty, covenant or agreement made by
or to be performed on the part of the Company under the Transaction Documents.
Each Investor agrees, severally and not jointly, to indemnify and hold harmless
the Company and its directors, officers, employees and agents from and against
any and all Losses to incurred by such Person as a result of any breach of
representation, warranty, covenant or agreement made by or to be performed on
the part of such Investor under the Transaction Documents.
8.3 Conduct of Indemnification Proceedings. Any Person
entitled to indemnification hereunder shall (i) give prompt notice to the
indemnifying party of any claim with respect to which it seeks indemnification
and (ii) permit such indemnifying party to assume the defense of such claim with
counsel reasonably satisfactory to the indemnified party; provided that any
Person entitled to indemnification hereunder shall have the right to employ
separate counsel and to participate in the defense of such claim, but the fees
and expenses of such counsel shall be at the expense of such Person unless (a)
the indemnifying party has agreed to pay such fees or expenses, or (b) the
indemnifying party shall have failed to assume the defense of such claim within
ten (10) Business Days after written notice thereof and employ counsel
reasonably satisfactory to such Person or (c) in the reasonable judgment of any
such Person, considering the advice of counsel, a conflict of interest exists
between such Person and the indemnifying party with respect to such claims (in
which case, if the Person notifies the indemnifying party in writing that such
Person elects to employ separate counsel at the expense of the indemnifying
party, the indemnifying party shall not have the right to assume the defense of
such claim on behalf of such Person); and provided, further, that the failure of
any indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations hereunder, except to the extent that such
failure to give notice shall materially adversely affect the indemnifying party
in the defense of any such claim or litigation, but the omission so to deliver
notice to the indemnifying party shall not relieve it of any liability that it
may have to any indemnified party otherwise than under this Section 8. It is
understood that the indemnifying party shall not, in connection with any
proceeding in the same jurisdiction, be liable for fees or expenses of more than
one additional firm of attorneys at any time for all such indemnified parties.
No indemnifying party shall, except with the consent of the indemnified party,
which consent shall not be unreasonably withheld or delayed, consent to entry of
any judgment or enter into any settlement that does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect of such claim or
litigation.
25
9. Miscellaneous.
9.1 Successors and Assigns. This Agreement may not be assigned
by a party hereto without the prior written consent of the Company or the
Investors, as applicable, provided, however, that an Investor may assign its
rights and delegate its duties hereunder in whole or in part to an Affiliate
(provided that such Affiliate shall not be a direct competitor of the Company in
the medical device industry) acquiring some or all of its Shares or Warrant
Shares after notice duly given by such Investor to the Company, provided that no
such assignment or obligation shall affect the obligations of such Investor
hereunder. The provisions of this Agreement shall inure to the benefit of and be
binding upon the respective permitted successors and assigns of the parties.
Nothing in this Agreement, express or implied, is intended to confer upon any
party other than the parties hereto or their respective successors and assigns
any rights, remedies, obligations, or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement.
9.2 Counterparts; Faxes. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. This Agreement may
also be executed via facsimile or PDF, which shall be deemed an original.
9.3 Titles and Subtitles. The titles and subtitles used in
this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
9.4 Notices. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given as hereinafter described (i) if given by personal delivery,
then such notice shall be deemed given upon such delivery, (ii) if given by
facsimile or electronic mail, then such notice shall be deemed given upon
receipt of confirmation of complete transmittal, (iii) if given by mail, then
such notice shall be deemed given upon the earlier of (A) receipt of such notice
by the recipient or (B) three (3) days after such notice is deposited in first
class mail, postage prepaid, and (iv) if given by an internationally recognized
overnight air courier, then such notice shall be deemed given one (1) Business
Day after delivery to such carrier. All notices shall be addressed to the party
to be notified at the address as follows, or at such other address as such party
may designate by ten (10) days' advance written notice to the other party:
If to the Company:
Intraop Medical Corporation
▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
26
With a copy to:
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Investors, to the addresses set forth on
the Schedule of Purchasers, with a copy to:
▇▇▇▇▇▇ Godward Kronish LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
9.5 Expenses. The parties hereto shall pay their own costs and
expenses in connection herewith. In the event that legal proceedings are
commenced by any party to this Agreement against another party to this Agreement
in connection with this Agreement or the other Transaction Documents, the party
or parties that do not prevail in such proceedings shall severally, but not
jointly, pay their pro rata share of the reasonable attorneys' fees and other
reasonable out-of-pocket costs and expenses incurred by the prevailing party in
such proceedings.
9.6 Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or prospectively)
only with the written consent of the Company and the Investors. Any amendment or
waiver effected in accordance with this paragraph shall be binding upon each
holder of any Securities purchased under this Agreement at the time outstanding,
each future holder of all such Securities and the Company.
9.7 Publicity. Except as set forth below, no public release or
announcement concerning the transactions contemplated hereby shall be issued by
the Company or the Investors without the prior consent of the Company (in the
case of a release or announcement by the Investors) or the Investors (in the
case of a release or announcement by the Company) (which consents shall not be
unreasonably withheld or delayed), except as such release or announcement may be
required by law or the applicable rules or regulations of Nasdaq, the OTC
Bulletin Board or the Securities Act. Notwithstanding the foregoing, not later
than three (3) trading days immediately following the date hereof, the Company
shall issue a press release disclosing the transactions contemplated by this
Agreement. The Company will timely file a Current Report on Form 8-K describing
the Transaction Documents and attaching the press release described in the
foregoing sentence. In addition, the Company will make such other filings
(including filing the Transaction Documents with the SEC) and notices in the
manner and time required by the SEC, Nasdaq or the OTC Bulletin Board.
27
9.8 Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof but shall be interpreted as if it
were written so as to be enforceable to the maximum extent permitted by
applicable law, and any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by applicable law, the parties hereby
waive any provision of law which renders any provision hereof prohibited or
unenforceable in any respect.
9.9 Entire Agreement. This Agreement, including the exhibits
and the Disclosure Schedules, and the other Transaction Documents constitute the
entire agreement among the parties hereof with respect to the subject matter
hereof and thereof and supersede all prior agreements and understandings, both
oral and written, between the parties with respect to the subject matter hereof
and thereof.
9.10 Further Assurances. The parties shall execute and deliver
all such further instruments and documents and take all such other actions as
may reasonably be required to carry out the transactions contemplated hereby and
to evidence the fulfillment of the agreements herein contained.
9.11 Governing Law; Consent to Jurisdiction; Waiver of Jury
Trial. This Agreement shall be governed by, and construed in accordance with,
the internal laws of the State of Delaware without regard to the choice of law
principles thereof. Each of the parties hereto irrevocably submits to the
exclusive jurisdiction of the courts of the State of California located in Santa
▇▇▇▇▇ County and the United States District Court for the Northern District of
California for the purpose of any suit, action, proceeding or judgment relating
to or arising out of this Agreement and the transactions contemplated hereby.
Service of process in connection with any such suit, action or proceeding may be
served on each party hereto anywhere in the world by the same methods as are
specified for the giving of notices under this Agreement. Each of the parties
hereto irrevocably consents to the jurisdiction of any such court in any such
suit, action or proceeding and to the laying of venue in such court. Each party
hereto irrevocably waives any objection to the laying of venue of any such suit,
action or proceeding brought in such courts and irrevocably waives any claim
that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum. EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO
REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT AND
REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.
(Signature pages follow)
28
IN WITNESS WHEREOF, the parties have executed this Common
Stock and Warrant Purchase Agreement as of the date first above written.
The Company: INTRAOP MEDICAL CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. Goer
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. Goer
Title: President and CEO
IN WITNESS WHEREOF, the parties have executed this Common Stock and
Warrant Purchase Agreement as of the date first above written.
The Investors: LACUNA VENTURE FUND LLLP
By: Lacuna Ventures GP LLLP
Its General Partner
By: Lacuna, LLC
Its General Partner
By: /s/ ▇▇ ▇▇▇▇▇▇▇
-------------------------------------
▇▇ ▇▇▇▇▇▇▇, Managing Director
LACUNA HEDGE FUND LLLP
By: Lacuna Hedge GP LLLP
Its General Partner
By: Lacuna, LLC
Its General Partner
By: /s/ ▇▇ ▇▇▇▇▇▇▇
-------------------------------------
▇▇ ▇▇▇▇▇▇▇, Managing Director
[OTHER SIGNATURE PAGES TO FOLLOW]
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇ and ▇▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
JTWROS
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
PRECEPT CAPITAL MASTER FUND, G.P.
By: /s/ D. ▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
Name: D. ▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
Its: Managing Member
------------------------------------
ELLERPHUND VENTURES II, LP
By: /s/ ▇▇▇▇ Ever
-------------------------------------
Name: ▇▇▇▇ Ever
-----------------------------------
Its: Managing Member
------------------------------------
SANDOR CAPITAL MASTER FUND, L.P.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
Its: Manager
------------------------------------
VMG HOLDINGS II, LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
Its: Principal
------------------------------------
THE ▇▇▇ AND ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
2000 LIVING TRUST
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇, Trustee
E.U. CAPITAL VENTURE, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Its: Managing Director
------------------------------------
SCHEDULE OF PURCHASERS
First Closing
-------------
Cash Shares
---- ------
Total Cash Shares Purchase Purchased
---------- ------ -------- ---------
Purchase Cash Purchase Purchased Price to from
-------- ------------- --------- -------- ----
Price at Price to the from the Existing Existing
-------- ------------ -------- -------- ---------
Investors First Closing Company Company Investors Investors Warrants
--------- ------------- ------- ------- --------- --------- --------
Lacuna Venture Fund LLLP
c/o Lacuna LLC
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ $1,510,935.47 $1,127,701.94 12,599,269 $ 383,233.53 3,047,477 49,577,765
Lacuna Hedge Fund LLLP
c/o Lacuna LLC
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ $1,193,639.02 $ 890,884.53 9,953,422 $ 302,754.49 2,407,506 39,166,435
Ellerphund Ventures II, LP
▇/▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ $ 528,827.42 $ 394,695.68 4,409,744 $ 134,131.74 1,066,617 17,352,218
Sandor Capital Master
Fund, L.P.
c/o Sandor Advisors LLC
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ $ 377,733.87 $ 281,925.49 3,149,817 $ 95,808.38 761,869 12,394,441
Second Closing
--------------
Shares
------
Cash Purchase Purchased Aggregate Aggregate
------------- --------- --------- ---------
Price to from the Purchase Shares
-------- -------- -------- ------
the Company Company Price Purchased
----------- ------- ----- ---------
Lacuna Venture Fund LLLP
c/o Lacuna LLC
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ $ 489,064.53 6,113,306 $2,000,000.00 71,337,817
Lacuna Hedge Fund LLLP
c/o Lacuna LLC
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ $ 386,360.98 4,829,512 $1,580,000.00 56,356,875
Ellerphund Ventures II, LP
▇/▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ $ 171,172.58 2,139,657 $ 700,000.00 24,968,236
Sandor Capital Master
Fund, L.P.
c/o Sandor Advisors LLC
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ $ 122,266.13 1,528,327 $ 500,000.00 17,834,454
First Closing
-------------
Cash Shares
---- ------
Total Cash Shares Purchase Purchased
---------- ------ -------- ---------
Purchase Cash Purchase Purchased Price to from
-------- ------------- --------- -------- ----
Price at Price to the from the Existing Existing
-------- ------------ -------- -------- ---------
Investors First Closing Company Company Investors Investors Warrants
--------- ------------- ------- ------- --------- --------- --------
Precept Capital Master
Fund, G.P.
c/o Precept Capital
Management
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ $ 377,733.87 $ 281,925.49 3,149,817 $ 95,808.38 761,869 12,394,441
VMG Holdings II, LLC
c/o VMG Health
Three Galleria Tower
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ $ 423,061.93 $ 315,756.54 3,527,795 $ 107,305.39 853,293 13,881,775
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
c/▇ ▇▇▇▇▇▇▇▇▇ Capital
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ $ 151,093.55 $ 112,770.20 1,259,927 $ 38,323.35 304,748 4,957,777
The ▇▇▇ and ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ 2000 Living Trust
c/o ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇ $ 113,320.16 $ 84,577.65 944,945 $ 28,742.51 228,561 3,718,332
Second Closing
--------------
Shares
------
Cash Purchase Purchased Aggregate Aggregate
------------- --------- --------- ---------
Price to from the Purchase Shares
-------- -------- -------- ------
the Company Company Price Purchased
----------- ------- ----- ---------
Precept Capital Master
Fund, G.P.
c/o Precept Capital
Management
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ $ 122,266.13 1,528,327 $ 500,000.00 17,834,454
VMG Holdings II, LLC
c/o VMG Health
Three Galleria Tower
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ $ 136,938.07 1,711,726 $ 560,000.00 19,974,589
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
c/▇ ▇▇▇▇▇▇▇▇▇ Capital
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ $ 48,906.45 611,331 $ 200,000.00 7,133,783
The ▇▇▇ and ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ 2000 Living Trust
c/o ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇ $ 36,679.84 458,498 $ 150,000.00 5,350,336
First Closing
-------------
Cash Shares
---- ------
Total Cash Shares Purchase Purchased
---------- ------ -------- ---------
Purchase Cash Purchase Purchased Price to from
-------- ------------- --------- -------- ----
Price at Price to the from the Existing Existing
-------- ------------ -------- -------- ---------
Investors First Closing Company Company Investors Investors Warrants
--------- ------------- ------- ------- --------- --------- --------
▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ $ 94,433.47 $ 70,481.37 787,454 $ 23,952.10 190,467 3,098,610
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ $ 75,546.77 $ 56,385.09 629,963 $ 19,161.68 152,374 2,478,888
▇▇▇▇▇▇ ▇▇▇▇▇
c/o Naples Center for
Dermatology
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ $ 75,546.77 $ 56,385.09 629,963 $ 19,161.68 152,374 2,478,888
▇▇. ▇▇▇▇ and ▇▇▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, JTWROS
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ $ 18,886.69 $ 14,096.27 157,491 $ 4,790.42 38,093 619,722
E.U. Capital Venture, Inc.
c/o ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ $ 98,210.81 $ 73,300.63 818,953 $ 24,910.18 198,086 3,222,555
Second Closing
--------------
Shares
------
Cash Purchase Purchased Aggregate Aggregate
------------- --------- --------- ---------
Price to from the Purchase Shares
-------- -------- -------- ------
the Company Company Price Purchased
----------- ------- ----- ---------
▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ $ 30,566.53 382,082 $ 125,000.00 4,458,613
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ $ 24,453.23 305,665 $ 100,000.00 3,566,890
▇▇▇▇▇▇ ▇▇▇▇▇
c/o Naples Center for
Dermatology
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ $ 24,453.23 305,665 $ 100,000.00 3,566,890
▇▇. ▇▇▇▇ and ▇▇▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, JTWROS
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ $ 6,113.31 76,416 $ 25,000.00 891,722
E.U. Capital Venture, Inc.
c/o ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ $ 31,789.19 397,365 $ 130,000.00 4,636,959
First Closing
-------------
Cash Shares
---- ------
Total Cash Shares Purchase Purchased
---------- ------ -------- ---------
Purchase Cash Purchase Purchased Price to from
-------- ------------- --------- -------- ----
Price at Price to the from the Existing Existing
-------- ------------ -------- -------- ---------
Investors First Closing Company Company Investors Investors Warrants
--------- ------------- ------- ------- --------- --------- --------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
c/o Radiation Oncology Dept.
The ▇▇▇▇▇▇▇▇ Hospital
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ $ 7,554.68 $ 5,638.51 62,996 $ 1,916.17 15,237 247,889
----------- ----------- ------ ----------- ------ -------
Totals $5,046,524.48 $3,766,524.48 42,081,556 $1,280,000.00 10,178,571 165,589,736
------
Second Closing
--------------
Shares
------
Cash Purchase Purchased Aggregate Aggregate
------------- --------- --------- ---------
Price to from the Purchase Shares
-------- -------- -------- ------
the Company Company Price Purchased
----------- ------- ----- ---------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
c/o Radiation Oncology Dept.
The ▇▇▇▇▇▇▇▇ Hospital
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ $ 2,445.32 30,567 $ 10,000.00 356,689
----------- ------ ----------- -------
$1,633,475.52 20,418,444 $6,680,000.00 238,268,307
