Published on August 16, 2010
EXECUTION
COPY
COMMON
STOCK PURCHASE AGREEMENT
COMMON STOCK PURCHASE
AGREEMENT (the “Agreement”), dated as of November 5, 2008, by
and between NEOGENOMICS,
INC., a Nevada corporation (the “Company”), and FUSION CAPITAL FUND II, LLC,
an Illinois limited liability company (the “Buyer”). Capitalized
terms used herein and not otherwise defined herein are defined in Section 10
hereof.
WHEREAS:
Subject to the terms and conditions set
forth in this Agreement, the Company wishes to sell to the Buyer, and the Buyer
wishes to buy from the Company, up to Eight Million Dollars ($8,000,000) of the
Company's common stock, par value $.001 per share (the “Common
Stock”). The shares of Common Stock to be purchased hereunder are
referred to herein as the "Purchase Shares."
NOW THEREFORE, the Company and
the Buyer hereby agree as follows:
1. PURCHASE
OF COMMON STOCK.
Subject to the terms and conditions set
forth in this Agreement, the Company has the right to sell to the Buyer, and the
Buyer has the obligation to purchase from the Company, Purchase Shares as
follows:
(a) Commencement of Purchases of
Common Stock. The purchase and sale of Purchase Shares
hereunder shall occur from time to time upon written notices by the Company to
the Buyer on the terms and conditions as set forth herein following the
satisfaction of the conditions (the “Commencement”) as set forth in Sections 6
and 7 below (the date of satisfaction of such conditions, the
"Commencement Date").
(b) The Company’s Right to
Require Purchases. Any time on or after the Commencement Date,
the Company shall have the right but not the obligation to direct the Buyer by
its delivery to the Buyer of Base Purchase Notices from time to time to buy
Purchase Shares (each such purchase a “Base Purchase”) in any amount up to Fifty
Thousand Dollars ($50,000) per Base Purchase Notice (the “Base Purchase Amount”)
at the Purchase Price on the Purchase Date. The Company may deliver
multiple Base Purchase Notices to the Buyer so long as at least four (4)
Business Days have passed since the most recent Base Purchase was
completed. Notwithstanding the forgoing, any time on or after the
Commencement Date, the Company shall also have the right but not the obligation
by its delivery to the Buyer of Block Purchase Notices from time to time to
direct the Buyer to buy Purchase Shares (each such purchase a “Block Purchase”)
in any amount up to One Million Dollars ($1,000,000) per Block Purchase Notice
at the Block Purchase Price (as defined below) on the Purchase Date as provided
herein. For a Block Purchase Notice to be valid the following
conditions must be met: (1) the Block Purchase Amount shall not exceed One
Hundred Thousand Dollars ($100,000) per Block Purchase Notice, (2) the Company
must deliver the Purchase Shares before 11:00 a.m. eastern time on the Purchase
Date and (3) the Sale Price of the Common Stock must not be below $0.75 (subject
to equitable adjustment for any reorganization, recapitalization, non-cash
dividend, stock split or other similar transaction) during the Purchase Date,
the date of the delivery of the Block Purchase Notice and during the Business
Day prior to the delivery of the Block Purchase Notice. The Block
Purchase Amount may be increased to up to Two Hundred Fifty Thousand Dollars
($250,000) per Block Purchase Notice if the Sale Price of the Common Stock is
not below $1.20 (subject to equitable adjustment for any reorganization,
recapitalization, non-cash dividend, stock split or other similar transaction)
during the Purchase Date, the date of the delivery of the Block Purchase Notice
and during the Business Day prior to the delivery of the Block Purchase
Notice. The Block Purchase Amount may be increased to up to Five
Hundred Thousand Dollars ($500,000) per Block Purchase Notice if the Sale Price
of the Common Stock is not below $2.40 (subject to equitable adjustment for any
reorganization, recapitalization, non-cash dividend, stock split or other
similar transaction) during the Purchase Date, the date of the delivery of the
Block Purchase Notice and during the Business Day prior to the delivery of the
Block Purchase Notice. The Block Purchase Amount may be increased to
up to One Million Dollars ($1,000,000) per Block Purchase Notice if the Sale
Price of the Common Stock is not below $5.00 (subject to equitable adjustment
for any reorganization, recapitalization, non-cash dividend, stock split or
other similar transaction) during the Purchase Date, the date of the delivery of
the Block Purchase Notice and during the Business Day prior to the delivery of
the Block Purchase Notice. As used herein, the term “Block Purchase
Price” shall mean the lesser of (i) the lowest Sale Price of the Common Stock on
the Purchase Date or (ii) the lowest Purchase Price during the previous seven
(7) Business Days prior to the date that the valid Block Purchase Notice was
received by the Buyer. However, if at any time during the Purchase
Date, the date of the delivery of the Block Purchase Notice or during the
Business Day prior to the delivery of the Block Purchase Notice, the Sale Price
of the Common Stock is below the applicable Block Purchase threshold price, such
Block Purchase shall be void and the Buyer’s obligations to buy Purchase Shares
in respect of that Block Purchase Notice shall be
terminated. Thereafter, the Company shall again have the right to
submit a Block Purchase Notice as set forth herein by delivery of a new Block
Purchase Notice only if the Sale Price of the Common Stock is above the
applicable Block Purchase threshold price during the date of the delivery of the
Block Purchase Notice and during the Business Day prior to the delivery of the
Block Purchase Notice. The Company may deliver multiple Block
Purchase Notices to the Buyer so long as at least two (2) Business Days have
passed since the most recent Block Purchase was completed.
(c) Payment for Purchase
Shares. The Buyer shall pay to the Company an amount equal to
the Purchase Amount with respect to such Purchase Shares as full payment for
such Purchase Shares via wire transfer of immediately available funds on the
same Business Day that the Buyer receives such Purchase Shares if they are
received by the Buyer before 11:00 a.m. eastern time or if received by the Buyer
after 11:00 a.m. eastern time, the next Business Day. The Company
shall not issue any fraction of a share of Common Stock upon any
purchase. If the issuance would result in the issuance of a fraction
of a share of Common Stock, the Company shall round such fraction of a share of
Common Stock up or down to the nearest whole share. All payments made
under this Agreement shall be made in lawful money of the United States of
America or wire transfer of immediately available funds to such account as the
Company may from time to time designate by written notice in accordance with the
provisions of this Agreement. Whenever any amount expressed to be due
by the terms of this Agreement is due on any day that is not a Business Day, the
same shall instead be due on the next succeeding day that is a Business
Day.
(d) Purchase Price
Floor. The Company and the Buyer shall not effect any sales
under this Agreement on any Purchase Date where the Purchase Price for any
purchases of Purchase Shares would be less than the Floor
Price. “Floor Price” means $0.45, which shall be appropriately
adjusted for any reorganization, recapitalization, non-cash dividend, stock
split or other similar transaction.
(e) Records of
Purchases. The Buyer and the Company shall each maintain
records showing the remaining Available Amount at any give time and the dates
and Purchase Amounts for each purchase or shall use such other method,
reasonably satisfactory to the Buyer and the Company.
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(f) Taxes. The
Company shall pay any and all transfer, stamp or similar taxes that may be
payable with respect to the issuance and delivery of any shares of Common Stock
to the Buyer made under this Agreement.
2.
BUYER'S REPRESENTATIONS AND WARRANTIES.
The Buyer
represents and warrants to the Company that as of the date hereof and as of the
Commencement Date:
(a) Investment
Purpose. The Buyer is entering into this Agreement and
acquiring the Commitment Shares (as defined in Section 4(e) hereof) and the
Purchase Shares (the Purchase Shares and the Commitment Shares are collectively
referred to herein as the "Securities"), for its own account for investment only
and not with a view towards, or for resale in connection with, the public sale
or distribution thereof; provided however, by making the representations herein,
the Buyer does not agree to hold any of the Securities for any minimum or other
specific term other than as set forth in Section 4(e) with respect to the
Commitment Shares.
(b) Accredited Investor
Status. The Buyer is an "accredited investor" as that term is
defined in Rule 501(a)(3) of Regulation D.
(c) Reliance on
Exemptions. The Buyer understands that the Securities are
being offered and sold to it in reliance on specific exemptions from the
registration requirements of United States federal and state securities laws and
that the Company is relying in part upon the truth and accuracy of, and the
Buyer's compliance with, the representations, warranties, agreements,
acknowledgments and understandings of the Buyer set forth herein in order to
determine the availability of such exemptions and the eligibility of the Buyer
to acquire the Securities.
(d) Information. The
Buyer has been furnished with all materials relating to the business, finances
and operations of the Company and materials relating to the offer and sale of
the Securities that have been reasonably requested by the Buyer, including,
without limitation, the SEC Documents (as defined in Section 3(f)
hereof). The Buyer understands that its investment in the Securities
involves a high degree of risk. The Buyer (i) is able to bear the
economic risk of an investment in the Securities including a total loss, (ii)
has such knowledge and experience in financial and business matters that it is
capable of evaluating the merits and risks of the proposed investment in the
Securities and (iii) has had an opportunity to ask questions of and receive
answers from the officers of the Company concerning the financial condition and
business of the Company and others matters related to an investment in the
Securities. Neither such inquiries nor any other due diligence
investigations conducted by the Buyer or its representatives shall modify, amend
or affect the Buyer's right to rely on the Company's representations and
warranties contained in Section 3 below. The Buyer has sought such
accounting, legal and tax advice as it has considered necessary to make an
informed investment decision with respect to its acquisition of the
Securities.
(e) No Governmental
Review. The Buyer understands that no United States federal or
state agency or any other government or governmental agency has passed on or
made any recommendation or endorsement of the Securities or the fairness or
suitability of the investment in the Securities nor have such authorities passed
upon or endorsed the merits of the offering of the Securities.
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(f) Transfer or
Sale. The Buyer understands that except as provided in the
Registration Rights Agreement (as defined in Section 4(a) hereof): (i) the
Securities have not been and are not being registered under the 1933 Act or any
state securities laws, and may not be offered for sale, sold, assigned or
transferred unless (A) subsequently registered thereunder or (B) an exemption
exists permitting such Securities to be sold, assigned or transferred without
such registration; (ii) any sale of the Securities made in reliance on Rule 144
may be made only in accordance with the terms of Rule 144 and further, if Rule
144 is not applicable, any resale of the Securities under
circumstances in which the seller (or the person through whom the sale is made)
may be deemed to be an underwriter (as that term is defined in the 1933 Act) may
require compliance with some other exemption under the 1933 Act or the rules and
regulations of the SEC thereunder; and (iii) neither the Company nor any other
person is under any obligation to register the Securities under the 1933 Act or
any state securities laws or to comply with the terms and conditions of any
exemption thereunder.
(g) Validity;
Enforcement. This Agreement has been duly and validly
authorized, executed and delivered on behalf of the Buyer and is a valid and
binding agreement of the Buyer enforceable against the Buyer in accordance with
its terms, subject as to enforceability to general principles of equity and to
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and
other similar laws relating to, or affecting generally, the enforcement of
applicable creditors' rights and remedies.
(h) Residency. The
Buyer is a resident of the State of Illinois.
(i) No Prior Short
Selling. The Buyer represents and warrants to the Company that
at no time prior to the date of this Agreement has any of the Buyer, its agents,
representatives or affiliates engaged in or effected, in any manner whatsoever,
directly or indirectly, any (i) "short sale" (as such term is defined in Section
242.200 of Regulation SHO of the Securities Exchange Act of 1934, as amended
(the "1934 Act")) of the Common Stock or (ii) hedging transaction, which
establishes a net short position with respect to the Common Stock.
3. REPRESENTATIONS
AND WARRANTIES OF THE COMPANY.
The
Company represents and warrants to the Buyer that as of the date hereof and as
of the Commencement Date:
(a) Organization and
Qualification. The Company and its "Subsidiaries" (which for
purposes of this Agreement means any entity in which the Company, directly or
indirectly, owns 50% or more of the voting stock or capital stock or other
similar equity interests) are corporations duly organized and validly existing
in good standing under the laws of the jurisdiction in which they are
incorporated, and have the requisite corporate power and authority to own their
properties and to carry on their business as now being
conducted. Each of the Company and its Subsidiaries is duly qualified
as a foreign corporation to do business and is in good standing in every
jurisdiction in which its ownership of property or the nature of the business
conducted by it makes such qualification necessary, except to the extent that
the failure to be so qualified or be in good standing could not reasonably be
expected to have a Material Adverse Effect. As used in this
Agreement, "Material Adverse Effect" means any material adverse effect on any
of: (i) the business, properties, assets, operations, results of operations or
financial condition of the Company and its Subsidiaries, if any, taken as a
whole, or (ii) the authority or ability of the Company to perform its
obligations under the Transaction Documents (as defined in Section 3(b)
hereof). The Company has no Subsidiaries except as set forth on
Schedule 3(a).
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(b) Authorization; Enforcement;
Validity. (i) The Company has the requisite corporate power
and authority to enter into and perform its obligations under this Agreement,
the Registration Rights Agreement and each of the other agreements
entered into by the parties on the Commencement Date and attached hereto as
exhibits to this Agreement (collectively, the "Transaction Documents"), and to
issue the Securities in accordance with the terms hereof and thereof, (ii) the
execution and delivery of the Transaction Documents by the Company and the
consummation by it of the transactions contemplated hereby and thereby,
including without limitation, the issuance of the Commitment Shares and the
reservation for issuance and the issuance of the Purchase Shares issuable under
this Agreement, have been duly authorized by the Company's Board of Directors
and no further consent or authorization is required by the Company, its Board of
Directors or its shareholders, (iii) this Agreement has been, and each other
Transaction Document shall be on the Commencement Date, duly executed and
delivered by the Company and (iv) this Agreement constitutes, and each other
Transaction Document upon its execution on behalf of the Company, shall
constitute, the valid and binding obligations of the Company enforceable against
the Company in accordance with their terms, except as such enforceability may be
limited by general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally, the enforcement of creditors' rights and
remedies. The Board of Directors of the Company has approved the
resolutions (the “Signing Resolutions”) substantially in the form as set forth
as Exhibit C-1
attached hereto to authorize this Agreement and the transactions contemplated
hereby. The Signing Resolutions are valid, in full force and effect
and have not been modified or supplemented in any respect other than by the
resolutions set forth in Exhibit C-2 attached
hereto regarding the registration statement referred to in Section 4
hereof. The Company has delivered to the Buyer a true and correct
copy of a certificate of the Secretary of the Company certifying that the
Signing Resolutions were duly adopted at a meeting of the Board of Directors of
the Company. No other approvals or consents of the Company’s Board of
Directors and/or shareholders is necessary under applicable laws and the
Company’s Articles of Incorporation and/or Bylaws to authorize the execution and
delivery of this Agreement or any of the transactions contemplated hereby,
including, but not limited to, the issuance of the Commitment Shares and the
issuance of the Purchase Shares.
(c) Capitalization. As
of October 22, 2008, the authorized capital stock of the Company consists of (i)
100,000,000 shares of Common Stock, of which 31,707,212 shares were issued and
outstanding; 3,869,357 shares are reserved for future issuance pursuant to the
Company's stock option plans of which only approximately 579,231 shares remain
available for future option grants and 6,237,838 shares are issuable and
reserved for issuance pursuant to securities (other than stock options issued
pursuant to the Company's stock option plans) exercisable or exchangeable for,
or convertible into, shares of Common Stock and (ii) 10,000,000 shares of
Preferred Stock, $0.001 par value, of which as of the date hereof no
shares are issued and outstanding. All of such outstanding shares
have been, or upon issuance will be, validly issued and are fully paid and
nonassessable. Except as disclosed in Schedule 3(c), (i) no shares of
the Company's capital stock are subject to preemptive rights or any other
similar rights or any liens or encumbrances suffered or permitted by the
Company, (ii) there are no outstanding debt securities, (iii) other than as
listed in the first sentence of this paragraph, there are no outstanding
options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into, any
shares of capital stock of the Company or any of its Subsidiaries, or contracts,
commitments, understandings or arrangements by which the Company or any of its
Subsidiaries is or may become bound to issue additional shares of capital stock
of the Company or any of its Subsidiaries or options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, any shares of capital stock of the
Company or any of its Subsidiaries, (iv) there are no agreements or arrangements
under which the Company or any of its Subsidiaries is obligated to register the
sale of any of their securities under the 1933 Act (except the Registration
Rights Agreement, the Amended and Restated Registration Rights Agreement dated
March 23, 2005 among the Company, Aspen Select Healthcare, LP, John Elliot,
Steven Jones, Larry Kunert and Michael T. Dent, M.D., and the Registration
Rights Agreement dated March 30, 2006 among the Company, Aspen Select
Healthcare, LP and Steven C. Jones), (v) there are no outstanding securities or
instruments of the Company or any of its Subsidiaries which contain any
redemption or similar provisions, and there are no contracts, commitments,
understandings or arrangements by which the Company or any of its Subsidiaries
is or may become bound to redeem a security of the Company or any of its
Subsidiaries, (vi) there are no securities or instruments containing
anti-dilution or similar provisions that will be triggered by the issuance of
the Securities as described in this Agreement and (vii) the Company does not
have any stock appreciation rights or "phantom stock" plans or agreements or any
similar plan or agreement. The Company has furnished to the Buyer
true and correct copies of the Company's Articles of Incorporation, as amended
and as in effect on the date hereof (the "Articles of Incorporation"), and the
Company's By-laws, as amended and as in effect on the date hereof (the
"By-laws"), and summaries of the terms of all securities convertible into or
exercisable for Common Stock, if any, and copies of any documents containing the
material rights of the holders thereof in respect thereto.
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(d) Issuance of
Securities. The Commitment Shares have been duly authorized
and, upon issuance in accordance with the terms hereof, the Commitment Shares
shall be (i) validly issued, fully paid and non-assessable and (ii) free from
all taxes, liens and charges with respect to the issue thereof. [3,000,000]
shares of Common Stock have been duly authorized and reserved for issuance upon
purchase under this Agreement. Upon issuance and payment therefor in
accordance with the terms and conditions of this Agreement, the Purchase Shares
shall be validly issued, fully paid and nonassessable and free from all taxes,
liens and charges with respect to the issue thereof, with the holders being
entitled to all rights accorded to a holder of Common Stock.
(e) No
Conflicts. Except as disclosed in Schedule 3(e), the
execution, delivery and performance of the Transaction Documents by the Company
and the consummation by the Company of the transactions contemplated hereby and
thereby (including, without limitation, the reservation for issuance and
issuance of the Purchase Shares) will not (i) result in a violation of the
Articles of Incorporation, any Certificate of Designations, Preferences and
Rights of any outstanding series of preferred stock of the Company or the
By-laws or (ii) conflict with, or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, any
agreement, indenture or instrument to which the Company or any of its
Subsidiaries is a party, or result in a violation of any law, rule, regulation,
order, judgment or decree (including federal and state securities laws and
regulations and the rules and regulations of the Principal Market applicable to
the Company or any of its Subsidiaries) or by which any property or asset of the
Company or any of its Subsidiaries is bound or affected, except in the case of
conflicts, defaults, terminations, amendments, accelerations, cancellations and
violations under clause (ii), which could not reasonably be expected to result
in a Material Adverse Effect. Except as disclosed in Schedule 3(e),
neither the Company nor its Subsidiaries is in violation of any term of or in
default under its Articles of Incorporation, any Certificate of Designation,
Preferences and Rights of any outstanding series of preferred stock of the
Company or By-laws or their organizational charter or by-laws,
respectively. Except as disclosed in Schedule 3(e), neither the
Company nor any of its Subsidiaries is in violation of any term of or is in
default under any material contract, agreement, mortgage, indebtedness,
indenture, instrument, judgment, decree or order or any statute, rule or
regulation applicable to the Company or its Subsidiaries, except for possible
conflicts, defaults, terminations or amendments which could not reasonably be
expected to have a Material Adverse Effect. The business of the
Company and its Subsidiaries is not being conducted, and shall not be conducted,
in violation of any law, ordinance, regulation of any governmental entity,
except for possible violations, the sanctions for which either individually or
in the aggregate could not reasonably be expected to have a Material Adverse
Effect. Except as specifically contemplated by this Agreement and as
required under the 1933 Act or applicable state securities laws, the Company is
not required to obtain any consent, authorization or order of, or make any
filing or registration with, any court or governmental agency or any regulatory
or self-regulatory agency in order for it to execute, deliver or perform any of
its obligations under or contemplated by the Transaction Documents in accordance
with the terms hereof or thereof. Except as disclosed in Schedule
3(e), all consents, authorizations, orders, filings and registrations which the
Company is required to obtain pursuant to the preceding sentence shall be
obtained or effected on or prior to the Commencement Date. Except as
listed in Schedule 3(e), since October 1, 2007, the Company has not received nor
delivered any notices or correspondence from or to the Principal
Market. The Principal Market has not commenced any delisting
proceedings against the Company.
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(f)
SEC Documents; Financial
Statements. Except as disclosed in Schedule 3(f), since January 1, 2007,
the Company has timely filed all reports, schedules, forms, statements and other
documents required to be filed by it with the SEC pursuant to the reporting
requirements of the 1934 Act (all of the foregoing filed prior to the date
hereof and all exhibits included therein and financial statements and schedules
thereto and documents incorporated by reference therein being hereinafter
referred to as the "SEC Documents"). As of their respective dates
(except as they have been correctly amended), the SEC Documents complied in all
material respects with the requirements of the 1934 Act and the rules and
regulations of the SEC promulgated thereunder applicable to the SEC Documents,
and none of the SEC Documents, at the time they were filed with the SEC (except
as they may have been properly amended), contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. As of their
respective dates (except as they have been properly amended), the financial
statements of the Company included in the SEC Documents complied as to form in
all material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto. Such financial
statements have been prepared in accordance with generally accepted accounting
principles, consistently applied, during the periods involved (except (i) as may
be otherwise indicated in such financial statements or the notes thereto or (ii)
in the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly present in all
material respects the financial position of the Company as of the dates thereof
and the results of its operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments). Except as listed in Schedule 3(f), the Company has
received no notices or correspondence from the SEC since October 1, 2007. The SEC has not
commenced any enforcement proceedings against the Company or any of its
subsidiaries.
(g) Absence of Certain
Changes. Except as disclosed in Schedule 3(g), since June 30,
2008, there has been no material adverse change in the business, properties,
operations, financial condition or results of operations of the Company or its
Subsidiaries. The Company has not taken any steps, and does not
currently expect to take any steps, to seek protection pursuant to any
Bankruptcy Law nor does the Company or any of its Subsidiaries have any
knowledge or reason to believe that its creditors intend to initiate involuntary
bankruptcy or
insolvency proceedings. The Company is financially solvent and is
generally able to pay its debts as they become due.
(h) Absence of
Litigation. There is no action, suit, proceeding, inquiry or
investigation before or by any court, public board, government agency,
self-regulatory organization or body pending or, to the knowledge of the Company
or any of its Subsidiaries, threatened against or affecting the Company, the
Common Stock or any of the Company's Subsidiaries or any of the Company's or the
Company's Subsidiaries' officers or directors in their capacities as such, which
could reasonably be expected to have a Material Adverse
Effect. A description of each action, suit, proceeding, inquiry
or investigation before or by any court, public board, government agency,
self-regulatory organization or body which, as of the date of this Agreement, is
pending or threatened in writing against or affecting the Company, the Common
Stock or any of the Company's Subsidiaries or any of the Company's or the
Company's Subsidiaries' officers or directors in their capacities as such, is
set forth in Schedule 3(h).
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(i) Acknowledgment Regarding
Buyer's Status. The Company acknowledges and agrees that the
Buyer is acting solely in the capacity of arm's length purchaser with respect to
the Transaction Documents and the transactions contemplated hereby and
thereby. The Company further acknowledges that the Buyer is not
acting as a financial advisor or fiduciary of the Company (or in any similar
capacity) with respect to the Transaction Documents and the transactions
contemplated hereby and thereby and any advice given by the Buyer or any of its
representatives or agents in connection with the Transaction Documents and the
transactions contemplated hereby and thereby is merely incidental to the Buyer's
purchase of the Securities. The Company further represents to the
Buyer that the Company's decision to enter into the Transaction Documents has
been based solely on the independent evaluation by the Company and its
representatives and advisors.
(j) No General
Solicitation. Neither the Company, nor any of its affiliates,
nor any person acting on its or their behalf, has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D under
the 1933 Act) in connection with the offer or sale of the
Securities.
(k) Intellectual Property
Rights. The Company and its Subsidiaries own or possess
adequate rights or licenses to use all material trademarks, trade names, service
marks, service mark registrations, service names, patents, patent rights,
copyrights, inventions, licenses, approvals, governmental authorizations, trade
secrets and rights necessary to conduct their respective businesses as now
conducted. Except as set forth on Schedule 3(k), none of the
Company's material trademarks, trade names, service marks, service mark
registrations, service names, patents, patent rights, copyrights, inventions,
licenses, approvals, government authorizations, trade secrets or other
intellectual property rights have expired or terminated, or, by the terms and
conditions thereof, could expire or terminate within two years from the date of
this Agreement. The Company and its Subsidiaries do not have any
knowledge of any infringement by the Company or its Subsidiaries of any material
trademark, trade name rights, patents, patent rights, copyrights, inventions,
licenses, service names, service marks, service mark registrations, trade secret
or other similar rights of others, or of any such development of similar or
identical trade secrets or technical information by others and, except as set
forth on Schedule 3(k), there is no claim, action or proceeding being made or
brought against, or to the Company's knowledge, being threatened against, the
Company or its Subsidiaries regarding trademark, trade name, patents, patent
rights, invention, copyright, license, service names, service marks, service
mark registrations, trade secret or other infringement, which could reasonably
be expected to have a Material Adverse Effect.
(l) Environmental
Laws. The Company and its Subsidiaries (i) are in compliance
with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants (“Environmental Laws”), (ii) have received all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where, in each of the
three foregoing clauses, the failure to so comply could not reasonably be
expected to have, individually or in the aggregate, a Material Adverse
Effect.
(m) Title. The
Company and its Subsidiaries have good and marketable title in fee simple to all
real property and good and marketable title to all personal property owned by
them which is material to the business of the Company and its Subsidiaries, in
each case free and clear of all liens, encumbrances and defects except such as
are described in Schedule 3(m) or liens on equipment securing purchase
money-indebtedness of the Company or such as do not materially affect the value
of such property and do not interfere with the use made and proposed to be made
of such property by the Company and any of its Subsidiaries. Any real
property and facilities held under lease by the Company and any of its
Subsidiaries are held by them under valid, subsisting and enforceable leases
with such exceptions as are not material and do not interfere with the use made
and proposed to be made of such property and buildings by the Company and its
Subsidiaries.
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(n) Insurance. The
Company and each of its Subsidiaries are insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts as
management of the Company believes to be prudent and customary in the businesses
in which the Company and its Subsidiaries are engaged. Neither the
Company nor any such Subsidiary has been refused any insurance coverage sought
or applied for and neither the Company nor any such Subsidiary has any reason to
believe that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business at a cost that would not materially
and adversely affect the condition, financial or otherwise, or the earnings,
business or operations of the Company and its Subsidiaries, taken as a
whole.
(o) Regulatory
Permits. The Company and its Subsidiaries possess all material
certificates, authorizations and permits issued by the appropriate federal,
state or foreign regulatory authorities necessary to conduct their respective
businesses, and neither the Company nor any such Subsidiary has received any
notice of proceedings relating to the revocation or modification of any such
certificate, authorization or permit.
(p) Tax
Status. The Company and each of its Subsidiaries has made or
filed all federal and state income and all other material tax returns, reports
and declarations required by any jurisdiction to which it is subject (unless and
only to the extent that the Company and each of its Subsidiaries has set aside
on its books provisions reasonably adequate for the payment of all unpaid and
unreported taxes) and has paid all taxes and other governmental assessments and
charges that are material in amount, shown or determined to be due on such
returns, reports and declarations, except those being contested in good faith
and has set aside on its books provision reasonably adequate for the payment of
all taxes for periods subsequent to the periods to which such returns, reports
or declarations apply. There are no unpaid taxes in any material
amount claimed to be due by the taxing authority of any jurisdiction, and the
officers of the Company know of no basis for any such claim.
(q) Transactions With
Affiliates. Except as set forth on Schedule 3(q) and other
than the grant or exercise of stock options disclosed on Schedule 3(c), none of
the officers, directors, or employees of the Company is presently a party to any
transaction with the Company or any of its Subsidiaries (other than 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 knowledge
of the Company, any corporation, partnership, trust or other entity in which any
officer, director, or any such employee has an interest or is an officer,
director, trustee or partner.
(r) Application of Takeover
Protections. The Company and its board of directors have taken
or will take prior to the Commencement Date 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 Articles of Incorporation or
the laws of the state of its incorporation which is or could become applicable
to the Buyer as a result of the transactions contemplated by this Agreement,
including, without limitation, the Company's issuance of the Securities and the
Buyer's ownership of the Securities.
-9-
(s) Foreign Corrupt
Practices. Neither the Company, nor any of its Subsidiaries,
nor any director, officer, agent, employee or other person acting on behalf of
the Company or any of its Subsidiaries has, in the course of its actions for, or
on behalf of, the Company, used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expenses relating to
political activity; made any direct or indirect unlawful payment to any foreign
or domestic government official or employee from corporate funds; violated or is
in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977,
as amended; or made any unlawful bribe, rebate, payoff, influence payment,
kickback or other unlawful payment to any foreign or domestic government
official or employee.
4. COVENANTS.
(a) Filing of Form 8-K and
Registration Statement. The Company agrees that it shall,
within the time required under the 1934 Act, disclose this Agreement and the
transactions contemplated hereby. The Company shall also file within thirty (30)
Business Days from the date hereof a new registration statement covering the
sale of the Commitment Shares, the Signing Shares (as defined in Section 5
hereof) and 3,000,000 Purchase Shares in accordance with the terms of the
Registration Rights Agreement between the Company and the Buyer, dated as of the
date hereof (“Registration Rights Agreement”). The Company shall not
be required to register any additional Purchase Shares beyond the 3,000,000
unless the Company elects to sell more than 3,000,000 Purchase Shares
hereunder.
(b) Blue Sky. The Company
shall take such action, if any, as is reasonably necessary in order to obtain an
exemption for or to qualify (i) the initial sale of the Commitment Shares and
any Purchase Shares to the Buyer under this Agreement and (ii) any subsequent
resale of the Commitment Shares and any Purchase Shares by the Buyer, in each
case, under applicable securities or "Blue Sky" laws of the states of the United
States in such states as is reasonably requested by the Buyer from time to time,
and shall provide evidence of any such action so taken to the
Buyer.
(c) Listing. The
Company shall promptly secure the listing of all of the Purchase Shares and
Commitment Shares upon each national securities exchange and automated quotation
system, if any, upon which shares of Common Stock are then listed (subject to
official notice of issuance) and shall maintain, so long as any other shares of
Common Stock shall be so listed, such listing of all such securities from time
to time issuable under the terms of the Transaction Documents. The
Company shall maintain the Common Stock's authorization for quotation on the
Principal Market. Neither the Company nor any of its Subsidiaries
shall take any action that would be reasonably expected to result in the
delisting or suspension of the Common Stock on the Principal
Market. The Company shall pay all fees and expenses in connection
with satisfying its obligations under this Section.
(d) Limitation on Short Sales
and Hedging Transactions. The Buyer agrees that beginning on
the date of this Agreement and ending on the date of termination of this
Agreement as provided in Section 11(k), the Buyer and its agents,
representatives and affiliates shall not in any manner whatsoever enter into or
effect, directly or indirectly, any (i) "short sale" (as such term is defined in
Section 242.200 of Regulation SHO of the 1934 Act) of the Common Stock or (ii)
hedging transaction, which establishes a net short position with respect to the
Common Stock.
(e) Issuance of Commitment
Shares; Limitation on Sales of Commitment Shares. Immediately
upon the execution of this Agreement, the Company shall issue to the Buyer as
consideration for the Buyer entering into this Agreement 400,000 shares of
Common Stock (the "Commitment Shares"). The Commitment Shares shall
be issued in certificated form and (subject to Section 5 hereof) shall bear the
following restrictive legend:
-10-
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS, UNLESS SOLD PURSUANT TO: (1) RULE 144 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR (2) AN OPINION OF HOLDER’S COUNSEL,
IN A CUSTOMARY FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
APPLICABLE STATE SECURITIES LAWS.
The
Buyer agrees that the Buyer shall not pledge, transfer or sell the Commitment
Shares until the earlier of 600 Business Days (30 Monthly Periods) from the date
hereof or the date on which this Agreement has been terminated, provided,
however, that such restrictions shall not apply: (i) in connection with any
transfers to or among affiliates (as defined in the 1934 Act), (ii) in the event
that the Commencement does not occur on or before March 31, 2009, due to the
failure of the Company to satisfy the conditions set forth in Section 7, or
(iii) if an Event of Default has occurred, or any event which, after notice
and/or lapse of time, would become an Event of Default, including any failure by
the Company to timely issue Purchase Shares under this
Agreement. Notwithstanding the forgoing, the Buyer may transfer
Commitment Shares to a third party in order to settle a sale made by the Buyer
where the Buyer reasonably expects the Company to deliver Purchase Shares to the
Buyer under this Agreement so long as the Buyer maintains ownership of the same
overall number of shares of Common Stock by "replacing" the Commitment Shares so
transferred with Purchase Shares when the Purchase Shares are actually issued by
the Company to the Buyer.
(f) Due
Diligence. The Buyer shall have the right, from time to time
as the Buyer may reasonably deem appropriate, to perform reasonable due
diligence on the Company during normal business hours. The Company
and its officers and employees shall provide information and reasonably
cooperate with the Buyer in connection with any reasonable request by the Buyer
related to the Buyer's due diligence of the Company, including, but not limited
to, any such request made by the Buyer in connection with (i) the filing of the
registration statement described in Section 4(a) hereof and (ii) the
Commencement. Each party hereto agrees not to disclose any
Confidential Information of the other party to any third party and shall not use
the Confidential Information for any purpose other than in connection with, or
in furtherance of, the transactions contemplated hereby. Each party
hereto acknowledges that the Confidential Information shall remain the property
of the disclosing party and agrees that it shall take all reasonable measures to
protect the secrecy of any Confidential Information disclosed by the other
party.
-11-
5.
TRANSFER AGENT INSTRUCTIONS.
Immediately
upon the execution of this Agreement, the Company shall deliver to the Transfer
Agent a letter in the form as set forth as Exhibit E attached
hereto with respect to the issuance of the Commitment Shares. On the Commencement
Date, the Company shall cause any restrictive legend on the Commitment Shares
and the 17,500 shares of Common Stock issued to the Buyer upon signing that
certain Term Sheet between the Buyer and the Company and dated as of October 10,
2008 (the “Signing Shares”) to be removed and all of the Purchase Shares to be
issued under this Agreement shall be issued without any restrictive legend
unless the Buyer expressly consents otherwise. The Company shall
issue irrevocable instructions to the Transfer Agent, and any subsequent
transfer agent, to issue Purchase Shares in the name of the Buyer for the
Purchase Shares (the "Irrevocable Transfer Agent Instructions"). The
Company warrants to the Buyer that no instruction other than the Irrevocable
Transfer Agent Instructions referred to in this Section 5, will be given by the
Company to the Transfer Agent with respect to the Purchase Shares and that the
Commitment Shares, Signing Shares and the Purchase Shares shall otherwise be
freely transferable on the books and records of the Company as and to the extent
provided in this Agreement and the Registration Rights Agreement subject to the
provisions of Section 4(e) in the case of the Commitment Shares.
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6.
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CONDITIONS
TO THE COMPANY'S RIGHT TO COMMENCE
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SALES
OF SHARES OF COMMON STOCK UNDER THIS AGREEMENT.
The right
of the Company hereunder to commence sales of the Purchase Shares is subject to
the satisfaction of each of the following conditions on or before the
Commencement Date (the date that the Company may begin sales):
(a) The
Buyer shall have executed each of the Transaction Documents and delivered the
same to the Company;
(b) A
registration statement covering the sale of all of the Commitment Shares, Signing Shares and Purchase Shares
shall have been declared effective under the 1933 Act by the SEC and no stop
order with respect to the registration statement shall be pending or threatened
by the SEC.
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7.
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CONDITIONS
TO THE BUYER'S OBLIGATION TO MAKE
|
PURCHASES
OF SHARES OF COMMON STOCK.
The
obligation of the Buyer to buy Purchase Shares under this Agreement is subject
to the satisfaction of each of the following conditions on or before the
Commencement Date (the date that the Company may begin sales) and once such
conditions have been initially satisfied, there shall not be any ongoing
obligation to satisfy such conditions after the Commencement has
occurred:
(a) The
Company shall have executed each of the Transaction Documents and delivered the
same to the Buyer;
(b) The
Company shall have issued to the Buyer the Commitment Shares and shall have
removed the restrictive transfer legend from the certificate representing the
Commitment Shares and Signing Shares;
(c) The
Common Stock shall be authorized for quotation on the Principal Market, trading
in the Common Stock shall not have been within the last 365 days suspended by
the SEC or the Principal Market and the Purchase Shares and the Commitment
Shares shall be approved for listing upon the Principal Market;
-12-
(d) The
Buyer shall have received the opinions of the Company's legal counsel dated as
of the Commencement Date substantially in the form of Exhibit
A attached hereto;
(e) The
representations and warranties of the Company shall be true and correct in all
material respects (except to the extent that any of such representations and
warranties is already qualified as to materiality in Section 3 above, in which
case, such representations and warranties shall be true and correct without
further qualification) as of the date when made and as of the Commencement Date
as though made at that time (except for representations and warranties that
speak as of a specific date) and the Company shall have performed, satisfied and
complied with the covenants, agreements and conditions required by the
Transaction Documents to be performed, satisfied or complied with by the Company
at or prior to the Commencement Date. The Buyer shall have received a
certificate, executed by the CEO, President or CFO of the Company, dated as of
the Commencement Date, to the foregoing effect in the form attached hereto as
Exhibit
B;
(f) The
Board of Directors of the Company shall have adopted resolutions in the form
attached hereto as Exhibit
C which shall be in full force and effect without any amendment or
supplement thereto as of the Commencement Date;
(g) As
of the Commencement Date, the Company shall have reserved out of its authorized
and unissued Common Stock, solely for the purpose of effecting purchases of
Purchase Shares hereunder, 3,000,000 shares of Common Stock;
(h) The
Irrevocable Transfer Agent Instructions, in form acceptable to the Buyer shall
have been delivered to and acknowledged in writing by the Company and the
Company's Transfer Agent;
(i) The
Company shall have delivered to the Buyer a certificate evidencing the
incorporation and good standing of the Company in the State of Nevada issued by
the Secretary of State of the State of Nevada as of a date within ten (10)
Business Days of the Commencement Date;
(j) The
Company shall have delivered to the Buyer a certified copy of the Articles of
Incorporation as certified by the Secretary of State of the State of Nevada
within ten (10) Business Days of the Commencement Date;
(k) The
Company shall have delivered to the Buyer a secretary's certificate executed by
the Secretary of the Company, dated as of the Commencement Date, in the form
attached hereto as Exhibit
D;
(l) A
registration statement covering the sale of all of the Commitment Shares, Signing Shares and Purchase
Shares shall have been declared effective under the 1933 Act by the SEC and no
stop order with respect to the registration statement shall be pending or
threatened by the SEC. The Company shall have prepared and delivered
to the Buyer a final and complete form of prospectus, dated and current as of
the Commencement Date, to be used by the Buyer in connection with any sales of
any Commitment Shares, Signing Shares or any Purchase Shares, and to be filed by
the Company one Business Day after the Commencement Date. The Company shall have
made all filings under all applicable federal and state securities laws
necessary to consummate the issuance of the Commitment Shares, Signing Shares and the
Purchase Shares pursuant to this Agreement in compliance with such
laws;
-13-
(m) No
Event of Default has occurred, or any event which, after notice and/or lapse of
time, would become an Event of Default has occurred;
(n) On
or prior to the Commencement Date, the Company shall take all necessary action,
if any, and such actions as reasonably requested by the Buyer, in order to
render inapplicable any control share acquisition, business combination,
shareholder rights plan or poison pill (including any distribution under a
rights agreement) or other similar anti-takeover provision under the Articles of
Incorporation or the laws of the state of its incorporation which is or could
become applicable to the Buyer as a result of the transactions contemplated by
this Agreement, including, without limitation, the Company's issuance of the
Securities and the Buyer's ownership of the Securities; and
(o) The
Company shall have provided the Buyer with the information requested by the
Buyer in connection with its due diligence requests made prior to, or in
connection with, the Commencement, in accordance with the terms of Section 4(g)
hereof.
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8.
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INDEMNIFICATION.
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In
consideration of the Buyer's execution and delivery of the Transaction Documents
and acquiring the Securities hereunder and in addition to all of the Company's
other obligations under the Transaction Documents, the Company shall defend,
protect, indemnify and hold harmless the Buyer and all of its affiliates,
shareholders, officers, directors, employees and direct or indirect investors
and any of the foregoing person's agents or other representatives (including,
without limitation, those retained in connection with the transactions
contemplated by this Agreement) (collectively, the "Indemnitees") from and
against any and all actions, causes of action, suits, claims, losses, costs,
penalties, fees, liabilities and damages, and expenses in connection therewith
(irrespective of whether any such Indemnitee is a party to the action for which
indemnification hereunder is sought), and including reasonable attorneys' fees
and disbursements (the "Indemnified Liabilities"), incurred by any Indemnitee as
a result of, or arising out of, or relating to (a) any misrepresentation or
breach of any representation or warranty made by the Company in the Transaction
Documents or any other certificate, instrument or document contemplated hereby
or thereby, (b) any breach of any covenant, agreement or obligation of the
Company contained in the Transaction Documents or any other certificate,
instrument or document contemplated hereby or thereby, or (c) any cause of
action, suit or claim brought or made against such Indemnitee and arising out of
or resulting from the execution, delivery, performance or enforcement of the
Transaction Documents or any other certificate, instrument
or document contemplated hereby or thereby, other than with respect
to Indemnified Liabilities which directly and primarily result from the gross
negligence or willful misconduct of the Indemnitee. To the extent
that the foregoing undertaking by the Company may be unenforceable for any
reason, the Company shall make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities which is permissible under
applicable law.
-14-
9.
EVENTS OF DEFAULT.
An "Event
of Default" shall be deemed to have occurred at any time as any of the following
events occurs:
(a) while
any registration statement is required to be maintained effective pursuant to
the terms of the Registration Rights Agreement, the effectiveness of such
registration statement lapses for any reason (including, without limitation, the
issuance of a stop order) or is unavailable to the Buyer for sale of all of the
Registrable Securities (as defined in the Registration Rights Agreement) in
accordance with the terms of the Registration Rights Agreement, and such lapse
or unavailability continues for a period of twenty (20) consecutive Business
Days or for more than an aggregate of sixty (60) Business Days in any 365-day
period;
(b) the
suspension from trading or failure of the Common Stock to be listed on the
Principal Market for a period of three (3) consecutive Business
Days;
(c) the
delisting of the Company’s Common Stock from the Principal Market, provided,
however, that the Common Stock is not immediately thereafter trading on the New
York Stock Exchange, the Nasdaq Global Market, the Nasdaq Global Select Market,
the Nasdaq Capital Market or the American Stock Exchange;
(d) the
failure for any reason by the Transfer Agent to issue Purchase Shares to the
Buyer within five (5) Business Days after the applicable Purchase Date which the
Buyer is entitled to receive;
(e) the
Company breaches any representation, warranty, covenant or other term or
condition under any Transaction Document if such breach could have a Material
Adverse Effect and except, in the case of a breach of a covenant which is
reasonably curable, only if such breach continues for a period of at least five
(5) Business Days;
(f) if
any Person commences a proceeding against the Company pursuant to or within the
meaning of any Bankruptcy Law ;
(g) if
the Company pursuant to or within the meaning of any Bankruptcy Law; (A)
commences a voluntary case, (B) consents to the entry of an order for relief
against it in an involuntary case, (C) consents to the appointment of a
Custodian of it or for all or substantially all of its property, (D) makes a
general assignment for the benefit of its creditors, (E) becomes insolvent, or
(F) is generally unable to pay its debts as the same become due;
(h) a
court of competent jurisdiction enters an order or decree under any Bankruptcy
Law that (A) is for relief against the Company in an involuntary case, (B)
appoints a Custodian of the Company or for all or substantially all of its
property, or (C) orders the liquidation of the Company or any Subsidiary;
or
(i) a
material adverse change in the business, properties, operations, financial
condition or results of operations of the Company and its Subsidiaries taken as
a whole.
-15-
In
addition to any other rights and remedies under applicable law and this
Agreement, including the Buyer termination rights under Section 11(k) hereof, so
long as an Event of Default has occurred and is continuing, or if any event
which, after notice and/or lapse of time, would become an Event of Default, has
occurred and is continuing, or so long as the Purchase Price is below the
Purchase Price Floor, the Buyer shall not be permitted or obligated to purchase
any shares of Common Stock under this Agreement. If pursuant to or
within the meaning of any Bankruptcy Law, the Company commences a voluntary case
or any Person commences a proceeding against the Company, a Custodian is
appointed for the Company or for all or substantially all of its property, or
the Company makes a general assignment for the benefit of its creditors, (any of
which would be an Event of Default as described in Sections 9(f), 9(g) and
9(h) hereof) this
Agreement shall automatically terminate without any liability or payment to the
Company without further action or notice by any Person. No such
termination of this Agreement under Section 11(k)(i) shall affect the Company's
or the Buyer's obligations under this Agreement with respect to pending
purchases and the Company and the Buyer shall complete their respective
obligations with respect to any pending purchases under this
Agreement.
10. CERTAIN
DEFINED TERMS.
For
purposes of this Agreement, the following terms shall have the following
meanings:
(a) “1933
Act” means the Securities Act of 1933, as amended.
(b) “Available
Amount” means initially Eight Million Dollars ($8,000,000) in the aggregate
which amount shall be reduced by the Purchase Amount each time the Buyer
purchases shares of Common Stock pursuant to Section 1 hereof.
(c) “Bankruptcy
Law” means Title 11, U.S. Code, or any similar federal or state law for the
relief of debtors.
(d) “Base
Purchase Notice” shall mean an irrevocable written notice from the Company to
the Buyer directing the Buyer to buy up to the Base Purchase Amount in Purchase
Shares as specified by the Company therein at the applicable Purchase Price on
the Purchase Date.
(e) “Block
Purchase Amount” shall mean such Block Purchase Amount as specified by the
Company in a Block Purchase Notice subject to Section 1(b) hereof.
(f) “Block
Purchase Notice” shall mean an irrevocable written notice from the Company to
the Buyer directing the Buyer to buy the Block Purchase Amount in Purchase
Shares as specified by the Company therein at the Block Purchase Price as of the
Purchase Date subject to Section 1 hereof.
(d) “Business
Day” means any day on which the Principal Market is open for trading including
any day on which the Principal Market is open for trading for a period of time
less than the customary time.
(e) “Closing
Sale Price” means, for any security as of any date, the last closing trade price
for such security on the Principal Market as reported by the
Principal Market, or, if the Principal Market is not the principal securities
exchange or trading market for such security, the last closing trade price of
such security on the principal securities exchange or trading market where such
security is listed or traded as reported by the Principal
Market.
-16-
(f) “Confidential
Information” means any information disclosed by either party to the other party,
either directly or indirectly, in writing, orally or by inspection of tangible
objects (including, without limitation, documents, prototypes, samples, plant
and equipment), which is designated as "Confidential," "Proprietary" or some
similar designation. Information communicated orally shall be considered
Confidential Information if such information is confirmed in writing as being
Confidential Information within ten (10) Business Days after the initial
disclosure. Confidential Information may also include information disclosed to a
disclosing party by third parties. Confidential Information shall not, however,
include any information which (i) was publicly known and made generally
available in the public domain prior to the time of disclosure by the disclosing
party; (ii) becomes publicly known and made generally available after disclosure
by the disclosing party to the receiving party through no action or inaction of
the receiving party; (iii) is already in the possession of the receiving party
at the time of disclosure by the disclosing party as shown by the receiving
party’s files and records immediately prior to the time of disclosure; (iv) is
obtained by the receiving party from a third party without a breach of such
third party’s obligations of confidentiality; (v) is independently developed by
the receiving party without use of or reference to the disclosing party’s
Confidential Information, as shown by documents and other competent evidence in
the receiving party’s possession; or (vi) is required by law to be disclosed by
the receiving party, provided that the receiving party gives the disclosing
party prompt written notice of such requirement prior to such disclosure and
assistance in obtaining an order protecting the information from public
disclosure.
(g) “Custodian”
means any receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.
(h) “Maturity
Date” means the date that is 600 Business Days (30 Monthly Periods) from the
Commencement Date.
(i) “Monthly
Period” means each successive 20 Business Day period commencing with the
Commencement Date.
(j) “Person”
means an individual or entity including any limited liability company, a
partnership, a joint venture, a corporation, a trust, an unincorporated
organization and a government or any department or agency thereof.
(k) “Principal
Market” means the OTC Bulletin Board; provided however, that in the
event the Company’s Common Stock is ever listed or traded on the Nasdaq Global
Market, the Nasdaq Global Select Market, the Nasdaq Capital Market, the New York
Stock Exchange or the American Stock Exchange, then the “Principal Market” shall
mean such other market or exchange on which the Company’s Common Stock is then
listed or traded.
(l) “Purchase
Amount” means, with respect to any particular purchase made hereunder, the
portion of the Available Amount to be purchased by the Buyer pursuant to Section
1 hereof as set forth in a valid Base Purchase Notice or a valid Block Purchase
Notice which the Company delivers to the Buyer.
(m) “Purchase
Date” means with respect to any particular purchase made hereunder, the Business
Day after receipt by the Buyer of a valid Base Purchase Notice or a valid Block
Purchase Notice that the Buyer is to buy Purchase Shares pursuant to Section 1
hereof.
(n)
“Purchase Price” means the lower of the (A) the lowest Sale Price of the Common
Stock on the Purchase Date and (B) the arithmetic average of the three (3)
lowest Closing Sale Prices for the Common Stock during the twelve (12)
consecutive Business Days ending on the Business Day immediately preceding such
Purchase Date (to be appropriately adjusted for any reorganization,
recapitalization, non-cash dividend, stock split or other similar
transaction).
-17-
(o) “Sale
Price” means, any trade price for the shares of Common Stock on the Principal
Market as reported by the Principal Market.
(q) “SEC”
means the United States Securities and Exchange Commission.
(r) “Transfer
Agent” means the transfer agent of the Company as set forth in Section 11(f)
hereof or such other person who is then serving as the transfer agent for the
Company in respect of the Common Stock.
11. MISCELLANEOUS.
(a) Governing Law; Jurisdiction;
Jury Trial. The corporate laws of the State of Nevada shall
govern all issues concerning the relative rights of the Company and its
shareholders. All other questions concerning the construction, validity,
enforcement and interpretation of this Agreement and the other Transaction
Documents shall be governed by the internal laws of the State of Illinois,
without giving effect to any choice of law or conflict of law provision or rule
(whether of the State of Illinois or any other jurisdictions) that would cause
the application of the laws of any jurisdictions other than the State of
Illinois. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of Chicago, for
the adjudication of any dispute hereunder or under the other Transaction
Documents or in connection herewith or therewith, or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably waives, and
agrees not to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such suit, action
or proceeding is brought in an inconvenient forum or that the venue of such
suit, action or proceeding is improper. Each party hereby irrevocably
waives personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof to such party at the
address for such notices to it under this Agreement and agrees that such service
shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way
any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES
ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT
OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
(b) Counterparts. This
Agreement may be executed in two or more identical counterparts, all of which
shall be considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party;
provided that a facsimile signature shall be considered due execution and shall
be binding upon the signatory thereto with the same force and effect as if the
signature were an original, not a facsimile signature.
(c) Headings. The
headings of this Agreement are for convenience of reference and shall not form
part of, or affect the interpretation of, this Agreement.
(d) Severability. If
any provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement in that jurisdiction or the
validity or enforceability of any provision of this Agreement in any other
jurisdiction.
-18-
(e) Entire
Agreement. With the exception of the Mutual Nondisclosure
Agreement between the parties dated as of October 15, 2008, this Agreement
supersedes all other prior oral or written agreements between the Buyer, the
Company, their affiliates and persons acting on their behalf with respect to the
matters discussed herein, and this Agreement, the other Transaction Documents
and the instruments referenced herein contain the entire understanding of the
parties with respect to the matters covered herein and therein and, except as
specifically set forth herein or therein, neither the Company nor the Buyer
makes any representation, warranty, covenant or undertaking with respect to such
matters. The Company acknowledges and agrees that is has not relied
on, in any manner whatsoever, any representations or statements, written or
oral, other than as expressly set forth in this Agreement.
(f) Notices. Any
notices, consents or other communications required or permitted to be given
under the terms of this Agreement must be in writing and will be deemed to have
been delivered: (i) upon receipt when delivered personally; (ii) upon receipt
when sent by facsimile (provided confirmation of transmission is mechanically or
electronically generated and kept on file by the sending party); or (iii) one
Business Day after deposit with a nationally recognized overnight delivery
service, in each case properly addressed to the party to receive the same. The
addresses and facsimile numbers for such communications shall be:
If to the
Company:
NeoGenomics,
Inc.
12701
Commonwealth Drive, Suite 9
Forty
Myers, FL 33913
Telephone: 239-768-0600
Facsimile:
239-768-1672
Attention:
Chief Financial Officer
With a
copy to:
K&L
Gates LLP
Wachovia
Financial Center
200 South
Biscayne Boulevard, Suite 3900
Miami,
Florida 33131
Telephone: 305-539-3300
Facsimile:
305-358-7095
Attention:
Clayton E. Parker, Esq.
If to the
Buyer:
Fusion
Capital Fund II, LLC
222
Merchandise Mart Plaza, Suite 9-112
Chicago,
IL 60654
Telephone: 312-644-6644
Facsimile:
312-644-6244
Attention: Steven
G. Martin
If to the
Transfer Agent:
Standard
Registrar & Transfer Company
12528 South
1840
East
Draper, Utah 84020
Telephone:
(801) 571-8844
Facsimile: (801)
571-2551
Attention:
Ronald Harrington, President
-19-
or at
such other address and/or facsimile number and/or to the attention of such other
person as the recipient party has specified by written notice given to each
other party three (3) Business Days prior to the effectiveness of such
change. Written confirmation of receipt (A) given by the recipient of
such notice, consent or other communication, (B) mechanically or electronically
generated by the sender's facsimile machine containing the time, date, and
recipient facsimile number or (C) provided by a nationally recognized overnight
delivery service, shall be rebuttable evidence of personal service, receipt by
facsimile or receipt from a nationally recognized overnight delivery service in
accordance with clause (i), (ii) or (iii) above, respectively.
(g) Successors and
Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and
assigns. The Company shall not assign this Agreement or any rights or
obligations hereunder without the prior written consent of the Buyer, including
by merger or consolidation. The Buyer may not assign its rights or
obligations under this Agreement.
(h) No Third Party
Beneficiaries. This Agreement is intended for the benefit of
the parties hereto and their respective permitted successors and assigns, and is
not for the benefit of, nor may any provision hereof be enforced by, any other
person.
(i) Publicity. The
Buyer shall have the right to approve before issuance any press release, SEC
filing or any other public disclosure made by or on behalf of the Company
whatsoever with respect to, in any manner, the Buyer, its purchases hereunder or
any aspect of this Agreement or the transactions contemplated hereby; provided,
however, that the Company shall be entitled, without the prior approval of the
Buyer, to make any press release or other public disclosure (including any
filings with the SEC) with respect to such transactions as is required by
applicable law and regulations so long as the Company and its counsel consult
with the Buyer in connection with any such press release or other public
disclosure at least two (2) Business Days prior to its release or such other
period of time which is mutually agreed upon by the Company and the
Buyer. The Buyer must be provided with a copy thereof at least two
(2) Business Days prior to any release or use by the Company thereof or such
other period of time which is mutually agreed upon by the Company and the
Buyer. The Buyer agrees that once the language required for any SEC
disclosures, press releases, or other public disclosures is agreed upon between
the parties, the Company is authorized to use such language in any subsequent
SEC disclosures, press releases or other public disclosures without consulting
with the Buyer so long as the language used does not materially differ from the
original language agreed upon other than any updates to the number of securities
sold under this Agreement.
(j) Further
Assurances. Each party shall do and perform, or cause to be
done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
(k) Termination. This
Agreement may be terminated only as follows:
(i) By
the Buyer any time an Event of Default exists without any liability or payment
to the Company. However, if pursuant to or within the meaning of any
Bankruptcy Law, the Company commences a voluntary case or any Person commences a
proceeding against the Company, a Custodian is appointed for the Company or for
all or substantially all of its property, or the Company makes a general
assignment for the benefit of its creditors, (any of which would be an Event of
Default as described in Sections 9(f), 9(g) and 9(h) hereof) this Agreement
shall automatically terminate without any liability or payment to the Company
without further action or notice by any Person. No such termination
of this Agreement under this Section 11(k)(i) shall affect the Company's or the
Buyer's obligations under this Agreement with respect to pending purchases and
the Company and the Buyer shall complete their respective obligations with
respect to any pending purchases under this Agreement.
-20-
(ii) In
the event that the Commencement shall not have occurred, the Company shall have
the option to terminate this Agreement for any reason or for no reason without
any liability whatsoever of any party to any other party under this
Agreement.
(iii) In
the event that the Commencement shall not have occurred on or before March 31,
2009, due to the failure to satisfy the conditions set forth in Sections 6 and 7
above with respect to the Commencement, the non-breaching party shall have the
option to terminate this Agreement at the close of business on such date or
thereafter without liability of any party to any other party.
(iv)
At any time after the Commencement Date, the Company shall have the option to
terminate this Agreement for any reason or for no reason by delivering notice (a
“Company Termination Notice”) to the Buyer electing to terminate this Agreement
without any liability whatsoever of any party to any other party under this
Agreement. The Company Termination Notice shall not be effective
until one (1) Business Day after it has been received by the Buyer.
(v) This
Agreement shall automatically terminate on the date that the Company sells and
the Buyer purchases the full Available Amount as provided herein, without any
action or notice on the part of any party and without any liability whatsoever
of any party to any other party under this Agreement.
(vi) If
by the Maturity Date for any reason or for no reason the full Available Amount
under this Agreement has not been purchased as provided for in Section 1 of this
Agreement, this Agreement shall automatically terminate on the Maturity Date,
without any action or notice on the part of any party and without any liability
whatsoever of any party to any other party under this Agreement.
Except as
set forth in Sections 11(k)(i) (in respect of an Event of Default under Sections
9(f), 9(g) and 9(h)) and 11(k)(vi), any termination of this Agreement pursuant
to this Section 11(k) shall be effected by written notice from the Company to
the Buyer, or the Buyer to the Company, as the case may be, setting forth the
basis for the termination hereof. The representations and warranties
of the Company and the Buyer contained in Sections 2, 3 and 5 hereof, the
indemnification provisions set forth in Section 8 hereof and the agreements and
covenants set forth in Section 11, shall survive the
Commencement and any termination of this Agreement. No termination of
this Agreement shall affect the Company's or the Buyer's rights or obligations
(i) under the Registration Rights Agreement which shall survive any such
termination or (ii) under this Agreement with respect to pending purchases and
the Company and the Buyer shall complete their respective obligations with
respect to any pending purchases under this Agreement.
(l) No Financial Advisor,
Placement Agent, Broker or Finder. The Company
represents and warrants to the Buyer that it has not engaged any financial
advisor, placement agent, broker or finder in connection with the transactions
contemplated hereby. The Buyer represents and warrants to the Company
that it has not engaged any financial advisor, placement agent, broker or finder
in connection with the transactions contemplated hereby. The Company
shall be responsible for the payment of any fees or commissions, if any, of any
financial advisor, placement agent, broker or finder relating to or arising out
of the transactions contemplated hereby. The Company shall pay, and
hold the Buyer harmless against, any liability, loss or expense (including,
without limitation, attorneys' fees and out of pocket expenses) arising in
connection with any such claim.
-21-
(m) No Strict
Construction. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any
party.
(n)
Remedies, Other Obligations,
Breaches and Injunctive Relief. The Buyer’s remedies provided
in this Agreement shall be cumulative and in addition to all other remedies
available to the Buyer under this Agreement, at law or in equity (including a
decree of specific performance and/or other injunctive relief), no remedy of the
Buyer contained herein shall be deemed a waiver of compliance with the
provisions giving rise to such remedy and nothing herein shall limit the Buyer's
right to pursue actual damages for any failure by the Company to comply with the
terms of this Agreement. The Company acknowledges that a breach by it
of its obligations hereunder will cause irreparable harm to the Buyer and that
the remedy at law for any such breach may be inadequate. The Company
therefore agrees that, in the event of any such breach or threatened breach, the
Buyer shall be entitled, in addition to all other available remedies, to an
injunction restraining any breach, without the necessity of showing economic
loss and without any bond or other security being required.
(o) Enforcement
Costs. If: (i) this Agreement is placed by the Buyer in the
hands of an attorney for enforcement or is enforced by the Buyer through any
legal proceeding; or (ii) an attorney is retained to represent the Buyer in any
bankruptcy, reorganization, receivership or other proceedings affecting
creditors' rights and involving a claim under this Agreement; or (iii) an
attorney is retained to represent the Buyer in any other proceedings whatsoever
in connection with this Agreement, then the Company shall pay to the Buyer, as
incurred by the Buyer, all reasonable costs and expenses including attorneys'
fees incurred in connection therewith, in addition to all other amounts due
hereunder.
(p) Failure or Indulgence Not
Waiver. No failure or delay in the exercise of any power,
right or privilege hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such power, right or privilege preclude other
or further exercise thereof or of any other right, power or
privilege.
* * * * *
-22-
IN WITNESS WHEREOF, the Buyer
and the Company have caused this Common Stock Purchase Agreement to be duly
executed as of the date first written above.
|
THE COMPANY:
|
|
|
NEOGENOMICS,
INC.
|
|
|
By:
|
/s/ Robert P. Gasparini
|
|
Name:
Robert P. Gasparini
|
|
|
Title:
President
|
|
|
BUYER:
|
|
|
FUSION
CAPITAL FUND II, LLC
|
|
|
BY:
FUSION CAPITAL PARTNERS, LLC
|
|
|
BY:
ROCKLEDGE CAPITAL CORPORATION
|
|
|
By:
|
Joshua B.
Scheinfeld
|
|
Name:
Joshua B. Scheinfeld
|
|
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Title:
President
|
|
-23-
SCHEDULES
|
Schedule
3(a)
|
Subsidiaries
|
|
Schedule
3(c)
|
Capitalization
|
|
Schedule
3(e)
|
Conflicts
|
|
Schedule
3(f)
|
1934
Act Filings
|
|
Schedule
3(g)
|
Material
Changes
|
|
Schedule
3(h)
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Litigation
|
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Schedule
3(k)
|
Intellectual
Property
|
|
Schedule
3(m)
|
Liens
|
|
Schedule
3(q)
|
Certain
Transactions
|
EXHIBITS
|
Exhibit
A
|
Form
of Company Counsel Opinion
|
|
Exhibit
B
|
Form
of Officer’s Certificate
|
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Exhibit
C
|
Form
of Resolutions of Board of Directors of the Company
|
|
Exhibit
D
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Form
of Secretary’s Certificate
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Exhibit
E
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Form
of Letter to Transfer Agent
|
DISCLOSURE
SCHEDULES
Schedule 3(a) –
Subsidiaries
NeoGenomics, Inc., a Florida
Corporation, dba “NeoGenomics Laboratories”
Schedule 3(c) –
Capitalization
|
1.
|
Debt
Securities
|
The Company purchased a convertible
debenture (the “Power3
Debenture”) in the principal amount of $200,000 from Power 3 Medical
Products, Inc., a New York Corporation (“Power3”) on April 17,
2007. The debenture has a term of two years and a 6% per annum
interest rate which is payable quarterly on the last calendar day of each
quarter. The debenture is convertible into shares of Power3 at the
Company’s option.
|
2.
|
Other
outstanding equity or equity-linked securities or understandings
therefor:
|
The
Company has a preliminary agreement to issue 300,000 shares of common stock as
part of an agreement to purchase certain laboratory equipment and satisfy other
accounts payable. A definitive agreement for this asset
purchase has not been executed as of yet, but is expected to be once a contract
for Dr. Fernandez’s services has been agreed upon. The estimated
completion date is November 2008 and the final agreements are subject to Board
approval.
Up to 1.0% of the Company’s Adjusted
Diluted Shares Outstanding (as defined below) may be sold pursuant to rights
granted under the Company’s Employee Stock Purchase Plan, dated October 31,
2006. As of October 22, 2008, rights to purchase [______] shares of
the Company’s common stock granted under the ESPP are outstanding. For purposes of the ESPP,
“Adjusted Diluted
Shares Outstanding” means on any given measurement date, the basic common
shares outstanding plus that number of shares that would be issued if all
convertible debt, convertible preferred equity securities and warrants were
assumed to be converted into common stock on the measurement date.
3.
Registration Rights Agreements
The Company is a party to certain
Investor Registration Rights Agreements (the “Investor Registration Rights
Agreement”) in the form filed as an exhibit to the Company’s Registration
Statement on Form SB-2 filed with the SEC on July 6, 2007. The shares
subject to such Investor Registration Rights Agreement were registered pursuant
to the Company’s Registration Statement on Form SB-2 on Form S-1/A which was
declared effective by the SEC on July 1, 2008. The Company has a
continuing obligation to maintain the effectiveness of such registration
statement until all of the Registrable Securities (as defined in the Investor
Registration Rights Agreement) have been sold; provided, however, that in no
event will the Company be required to maintain the effectiveness of such
registration statement for longer than two years from the date of the Investor
Registration Rights Agreement.
The Company issued Warrants dated
August 16, 2007 to each of 1837 Partners, Ltd., 1837 Partners QP, LP, 1837
Partners, LP, Ridgecrest, Ltd., A. Scott Logan Revocable Living Trust, u/t/d
12/15/98, Mark Egan, William J. Robison, Leonard Samuels, Leviticus Partners,
LP, Mosaic Partners Fund, Mosaic Partners Fund (US), LP, James R. Rehak and
Joann M. Rehak, Ridgecrest Partners QP, LP and Ridgecrest, LP to purchase an
aggregate of 423,487 shares of the Company’s common stock (the “August
Warrants”). The exercise price of the August Warrants is $1.50
per share. Each of the August Warrants include the following
provisions:
Piggy-Back
Registration. Subject to the terms and conditions of this
Warrant, the Company shall notify the holder of Registrable Securities (as
defined below) in writing at least ten (10) days prior to the filing of any
registration statement under the Securities Act for purposes of a public
offering of securities of the Company (including, but not limited to,
registration statements relating to secondary offerings of securities of the
Company, but excluding any registration statement relating to any employee
benefit plan or with respect to any corporate reorganization or other
transaction under Rule 145 of the Securities Act ) and will afford each such
holder an opportunity to include in such registration statement all or part of
such Registrable Securities held by such holder. Each holder of
Registrable Securities desiring to include in any such registration statement,
all of part of the Registrable Securities held by it shall, within ten (10)
days after the above-described notice from the Company, so notify the Company in
writing. Such notice shall state the intended method of disposition
of the Registrable Securities held by such holder. In the event the
Company determines in its sole discretion, that market factors require a
limitation of the number of securities to be included in such registration
statement (including the Registrable Securities), then the Company shall so
advise the Warrant Holder and the number of shares that may be included in such
registration statement shall be allocated among holders of warrants on a pro
rata basis (including the Registrable Securities). If a holder
decides not to include all of its Registrable Securities in the registration
statement thereafter filed by the Company or any Registrable Securities were
excluded by the Company pursuant to the immediately preceding sentence, such
holder shall nevertheless continue to have the right to include any Registrable
Securities in any subsequent registration statement or registration statements
as may be filed by the Company with respect to offerings of its securities, all
upon the terms and conditions set forth herein. “Registrable
Securities” means the Shares of Common Stock issuable to the Warrant
Holder pursuant to the terms of this Warrant.
Demand
Registration. In the event that the Company has not offered to
the holder of the Warrant an opportunity to include its Registrable Securities
in a registration statement pursuant to the terms of Section 10.1 herein with
twelve (12) months from the issuance date of the Warrant, the holder of the
Warrant shall have the ability, on a one-time basis, to demand that the Company
file a registration statement for the resale of the Registrable
Securities. Subject to the terms and conditions of the terms and
conditions of this Warrant, the Company shall prepare and file, no later than
ninety (90) days from the date of such demand by the holder of the Warrant with
the United States Securities and Exchange Commission (the “SEC”), a registration
statement under the Securities Act for the resale of the Registrable
Securities. The Company shall use its best efforts to cause the
registration statement to remain effective until all of the Registrable
Securities have been sold; provided, however, that in no event will the Company
be required to maintain the effectiveness of the registration statement for
longer than two (2) years from the date of its being declared effective by the
SEC.
Following the transfer of certain of
the August Warrants, the Company issued Re-Issue Warrants (the “Transfer Warrants”)
to each of 1837 Partners QP, LP, 1837 Partners, LP, 1837 Partners Ltd., Blair R.
Haarlow Trust and Frances E. Tuite, IRA to purchase an aggregate of 50,000
shares of the Company’s common stock. The terms of the Transfer
Warrants are substantially similar to the August Warrants.
On August, 16, 2007, Aspen Select
Healthcare, LP (“Aspen”) issued
warrants to purchase an aggregate of 400,000 shares of the Company’s common
stock owned by Aspen to each of 1837 Partners, Ltd., 1837 Partners QP, LP, 1837
Partners, LP, LAM Opportunity Fund, LP, Lewis Opportunity Fund, LP and Mark G.
Egan (the “Aspen
Warrants”). The exercise price of the Aspen Warrants is $1.50
per share. The Company is a party to the Aspen Warrants solely with
respect to Section 10 thereof, which reads as follows:
Piggy-Back
Registration. Subject to the terms and conditions of this
Warrant, NeoGenomics shall notify the holder of Registrable Securities (as
defined below) in writing at least ten (10) days prior to the filing of any
registration statement under the Securities Act for purposes of a public
offering of securities of NeoGenomics (including, but not limited to,
registration statements relating to secondary offerings of securities of
NeoGenomics, but excluding any registration statement relating to any employee
benefit plan or with respect to any corporate reorganization or other
transaction under Rule 145 of the Securities Act ) and will afford each such
holder an opportunity to include in such registration statement all or part of
such Registrable Securities held by such holder. Each holder of
Registrable Securities desiring to include in any such registration statement,
all of part of the Registrable Securities held by it shall, within ten (10)
days after the above-described notice from NeoGenomics, so notify NeoGenomics in
writing. Such notice shall state the intended method of disposition
of the Registrable Securities held by such holder. In the event
NeoGenomics determines, in its sole discretion, that market factors require a
limitation of the number of securities to be included in such registration
statement (including the Registrable Securities), then NeoGenomics shall so
advise the Warrant Holder and the number of shares that may e included in such
registration statement shall be allocated among holders of warrants on a pro
rata basis (including the Registrable Securities). If a holder
decides not to include all of its Registrable Securities in the registration
statement thereafter filed by NeoGenomics or any Registrable Securities were
excluded by NeoGenomics pursuant to the immediately preceding sentence, such
holder shall nevertheless continue to have the right to include any Registrable
Securities in any subsequent registration statement or registration statements
as may be filed by NeoGenomics with respect to offerings of its securities, all
upon the terms and conditions set forth herein. “Registrable
Securities” means the Shares of Common Stock issuable to the Warrant
Holder pursuant to the terms of this Warrant.
Schedule 3(e) - No
Conflicts
None
Schedule 3(f) - 1934 Act
Filings
The Company’s Current Report on Form
8-K was filed on June 7, 2007 with the Securities and Exchange Commission (the
“SEC”), which
was after the date it was due.
Correspondence from the SEC related to
a previous registration statement and the Company’s Form 10-KSB/A for the fiscal
year ended December 31, 2006 copies of which have been provided to the
Buyer.
Schedule 3(g) - Absence of
Certain Changes
None
Schedule 3(h) -
Litigation
Dr. Peter Kohn Litigation
- - On January 12, 2005, the Company received a complaint filed
in the Circuit Court for Seminole County, Florida by its former Laboratory
Director, Dr. Peter Kohn. On March 5, 2007, the Company received an
amended complaint filed in the Circuit Court for Seminole County, Florida by Dr.
Kohn. The amended complaint alleges the following (a) that Dr. Kohn
is owed $12,600 for 22 unused vacation days and 4 unused sick days resulting
from his first contract from October 2002 to September 2003; (b) that Dr. Kohn
is owed $14,054 for 25 unused vacation days and four unused sick days (at a rate
of $484.64/day), (c) that Dr. Kohn is owed $10,664 for thirty days of notice
time from October 7, 2004 to November 5, 2004 and $917 for rent reimbursement
and $442 for meal and auto expense, and (d) that Dr. Kohn is entitled to recoup
legal fees.
Schedule 3(k) - Intellectual
Property Rights
Threatened Trademark Infringement
Litigation – In March 2003, the Company received a certified letter from
the law firm of McLeod, Moyne & Reilly, P.C., dated March 18, 2003, which
stated that they represented NeoGen Corporation, a Lansing, Michigan
manufacturer of products dedicated to food and animal safety, on intellectual
property matters. This letter claimed that the Company’s use of the
name NeoGenomics, Inc. infringed upon their client’s rights in its trademark
name, “Neogen” and demanded that the Company cease using the name,
“NeoGenomics”. The Company believed that it had strong defenses to
the claims in the letter and, thus, the Company did not comply with the demands
of this letter.
In
February 2008, the Company received a letter from the law firm of Frasier,
Trebilcock, Davis & Dunlap, P.C., dated February 18, 2008, which stated that
they represented NeoGen Corporation. Similar to the 2003 letter, this
letter claimed that the Company’s use of the name NeoGenomics, Inc infringed
upon their client’s rights in its trademark name, “Neogen” and demanded that the
Company cease using the trademark, “NeoGenomics”. The Company
concluded that similar to the 2003 letter, the claims were without
merit. The Company was awarded a registered trademark for the name
“NeoGenomics” in 2007 and NeoGen Corporation undertook no actions to oppose such
award. As of the date hereof, the Company has not heard anything
further on this matter from NeoGen Corporation.
Schedule 3(m) -
Title
See that certain Revolving Credit and
Security Agreement dated February 1, 2008, among the Company, NeoGenomics, Inc.,
a Florida corporation, and CapitalSource Finance LLC (“Capital Source”)
pursuant to which the Company granted Capital Source a security interest in
certain collateral described therein.
Schedule 3(q) - Transactions
with Affiliates
On September 30, 2008, the Company
entered into a sale/leaseback agreement with Gulf Pointe Capital, LLC (“Gulf
Pointe”) to sell certain previously purchased laboratory and information
technology equipment to Gulf Pointe as part of a sale/leaseback transaction. The
lease portion of this agreement was structured as an operating lease with a 30
month term. Monthly lease payments are $5,154.88/month and the FMV
end-of-lease purchase option is capital at 15% of the original sale price to
Gulf Pointe. In conjunction with this transaction, the Company also
issued a warrant to Gulf Ponite to purchase 32,475 shares at a strike price of
$1.08/share. Gulf Pointe Capital is a wholly-owned subsidiary of the
Aspen Opportunity Fund, LP. Steven Jones, a Director and the
Company’s acting CFO, and Peter Peterson, a Director, are two of three managing
members of the general partner of Aspen Opportunity Fund. Mr. Jones
and Mr. Peterson recused themselves from both sides of this transaction and were
not involved in any negotiations with respect to this transaction.
On March 11, 2005, the Company entered
into an agreement with HCSS, LLC and eTelenext, Inc. to enable NeoGenomics to
use eTelenext, Inc’s Accessioning Application, AP Anywhere Application and CMQ
Application. HCSS, LLC is a holding company created to build a small
laboratory network for the 50 small commercial genetics laboratories in the
United States. HCSS, LLC is owned 66.7% by Dr. Michael T. Dent, the
Company’s Chairman. Under the terms of the agreement, the Company
paid $22,500 over three months to customize this software and will pay an annual
membership fee of $6,000 per year and monthly transaction fees of between $2.50
- - $10.00 per completed test, depending on the volume of tests
performed.
Steven C. Jones, a director of the
Company, performs paid consulting work for the Company in connection with his
duties as the Company’s Acting Principal Financial Officer.
George O’Leary, a director of the
Company, performs paid consulting work for the Company from time to
time.
EXHIBIT
A
FORM
OF COMPANY COUNSEL OPINION
Capitalized terms used herein but not
defined herein, have the meaning set forth in the Common Stock Purchase
Agreement. Based on the foregoing, and subject to the assumptions and
qualifications set forth herein, we are of the opinion that:
1. The
Company is a corporation existing and in good standing under the laws of the
State of Nevada. The Company is qualified to do business as a foreign
corporation and is in good standing in the State of Florida.
2. The
Company has the corporate power to execute and deliver, and perform its
obligations under, each Transaction Document to which it is a
party. The Company has the corporate power to conduct its business
as, to the best of our knowledge, it is now conducted, and to own and use the
properties owned and used by it.
3. The
execution, delivery and performance by the Company of the Transaction Documents
to which it is a party have been duly authorized by all necessary corporate
action on the part of the Company. The execution and delivery of the
Transaction Documents by the Company, the performance of the obligations of the
Company thereunder and the consummation by it of the transactions contemplated
therein have been duly authorized and approved by the Company's Board of
Directors and no further consent, approval or authorization of the Company, its
Board of Directors or its stockholders is required. The Transaction
Documents to which the Company is a party have been duly executed and delivered
by the Company and are the valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms except as such
enforceability may be limited by general principles of equity or applicable
bankruptcy, insolvency, liquidation or similar laws relating to, or affecting
creditor’s rights and remedies.
4. The
execution, delivery and performance by the Company of the Transaction Documents,
the consummation by the Company of the transactions contemplated thereby
including the offering, sale and issuance of the Commitment Shares, and the
Purchase Shares in accordance with the terms and conditions of the Common Stock
Purchase Agreement, and fulfillment and compliance with terms of the Transaction
Documents, does not and shall not: (i) conflict with, constitute a breach
of or default (or an event which, with the giving of notice or lapse of time or
both, constitutes or could constitute a breach or a default), under (a) the
Articles of Incorporation or the Bylaws of the Company, (b) any material
agreement, note, lease, mortgage, deed or other material instrument to which to
our knowledge the Company is a party or by which the Company or any of its
assets are bound, (ii) result in any violation of any statute, law, rule or
regulation applicable to the Company, or (iii) to our knowledge, violate any
order, writ, injunction or decree applicable to the Company or any of its
subsidiaries.
5. The
issuance of the Signing Shares pursuant to the terms of the that certain
Confidential Term Sheet dated as of October 10, 2007 between the Company and the
Buyer and the issuance of the Purchase Shares and Commitment Shares pursuant to
the terms and conditions of the Transaction Documents has been duly authorized
and the Signing Shares and Commitment Shares are validly issued, fully paid and
non-assessable, to our knowledge, free of all taxes, liens, charges,
restrictions, rights of first refusal and preemptive rights. [______]
shares of Common Stock have been properly reserved for issuance under the Common
Stock Purchase Agreement. When issued and paid for in accordance with
the Common Stock Purchase Agreement, the Purchase Shares shall be validly
issued, fully paid and non-assessable, to our knowledge, free of all taxes,
liens, charges, restrictions, rights of first refusal and preemptive
rights. To our knowledge, the
execution and delivery of the Registration Rights Agreement do not, and the
performance by the Company of its obligations thereunder shall not, give rise to
any rights of any other person for the registration under the 1933 Act of any
shares of Common Stock or other securities of the Company which have not been
waived.
6. As
of the date hereof, the authorized capital stock of the Company consists of
100,000,000 shares of common stock, par value $0.001 per share, of which to our
knowledge [______] shares are issued and outstanding and 10,000,000 shares of
Preferred Stock, $0.001 par value, of which as of the date hereof [no] shares
are issued and outstanding. Except as set forth on Schedule 3(c) of
the Common Stock Purchase Agreement, to our knowledge, there are no outstanding
shares of capital stock or other securities convertible into or exchangeable or
exercisable for shares of the capital stock of the Company.
7. Assuming
the accuracy of the representations and your compliance with the covenants made
by you in the Transaction Documents, the offering, sale and issuance of the
Commitment Shares to you pursuant to the Transaction Documents is exempt from
registration under the 1933 Act and the securities laws and regulations of the
States of Illinois, Florida and Nevada.
8. Other
than that which has been obtained and completed prior to the date hereof, no
authorization, approval, consent, filing or other order of any federal or state
governmental body, regulatory agency, or stock exchange or market, or any court,
or, to our knowledge, any third party is required to be obtained by the Company
to enter into and perform its obligations under the Transaction Documents or for
the Company to issue and sell the Purchase Shares as contemplated by the
Transaction Documents.
9. To our
knowledge, since October 1, 2007, the Company has not received any written
notice from the Principal Market stating that the Company has not been in
compliance with any of the rules and regulations (including the requirements for
continued listing) of the Principal Market.
We
further advise you that to our knowledge, except as disclosed on Schedule 3(h)
in the Common Stock Purchase Agreement, there is no action, suit, proceeding,
inquiry or investigation before or by any court, public board or body, any
governmental agency, any stock exchange or market, or self-regulatory
organization, which has been threatened in writing or which is currently pending
against the Company, any of its subsidiaries, any officers or directors of the
Company or any of its subsidiaries or any of the properties of the Company or
any of its subsidiaries.
In addition, we have participated in
the preparation of the Registration Statement (SEC File #________) covering the
sale of the Purchase Shares, the Commitment Shares including the prospectus
dated ____________, contained therein and in conferences with officers and other
representatives of the Company (including the Company’s independent auditors)
during which the contents of the Registration Statement and related matters were
discussed and reviewed and, although we are not passing upon and do not assume
any responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement, on the basis of the information that
was developed in the course of the performance of the services referred to
above, considered in the light of our understanding of the applicable law,
nothing came to our attention that caused us to believe that the Registration
Statement (other than the financial statements and schedules and the other
financial and statistical data included therein, as to which we express no
belief), as of their dates, contained any untrue statement of a material fact or
omitted to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
EXHIBIT
B
FORM
OF OFFICER’S CERTIFICATE
This
Officer’s Certificate (“Certificate”) is being
delivered pursuant to Section 7(e) of that certain Common Stock Purchase
Agreement dated as of _________, (“Common Stock Purchase
Agreement”), by and between NEOGENOMICS, INC., a Nevada
corporation (the “Company”), and FUSION CAPITAL FUND II, LLC
(the “Buyer”). Terms used
herein and not otherwise defined shall have the meanings ascribed to them in the
Common Stock Purchase Agreement.
The
undersigned, ___________, ______________ of the Company, hereby certifies as
follows:
1. I
am the _____________ of the Company and make the statements contained in this
Certificate;
2. The
representations and warranties of the Company are true and correct in all
material respects (except to the extent that any of such representations and
warranties is already qualified as to materiality in Section 3 of the Common
Stock Purchase Agreement, in which case, such representations and warranties are
true and correct without further qualification) as of the date when made and as
of the Commencement Date as though made at that time (except for representations
and warranties that speak as of a specific date);
3. The
Company has performed, satisfied and complied in all material respects with
covenants, agreements and conditions required by the Transaction Documents to be
performed, satisfied or complied with by the Company at or prior to the
Commencement Date.
4. The
Company has not taken any steps, and does not currently expect to take any
steps, to seek protection pursuant to any Bankruptcy Law nor does the Company or
any of its Subsidiaries have any knowledge or reason to believe that its
creditors intend to initiate involuntary bankruptcy or insolvency proceedings.
The Company is financially solvent and is generally able to pay its debts as
they become due.
IN
WITNESS WHEREOF, I have hereunder signed my name on this ___ day of
___________.
______________________
Name:
Title:
The
undersigned as Secretary of ________, a ________ corporation, hereby certifies
that ___________ is the duly elected, appointed, qualified and acting ________
of _________ and that the signature appearing above is his genuine
signature.
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Secretary
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EXHIBIT
C-1
FORM
OF COMPANY RESOLUTIONS
FOR
SIGNING PURCHASE AGREEMENT
RESOLUTIONS
OF THE BOARD OF DIRECTORS OF
NEOGENOMICS,
INC.
WHEREAS, there has been presented to
the Board of Directors of the Corporation a draft of the Common Stock Purchase
Agreement (the “Purchase Agreement”) by and between the Corporation and Fusion
Capital Fund II, LLC (“Fusion”), providing for the purchase by Fusion of up to
Eight Million Dollars ($8,000,000) of the Corporation’s common stock, par value
$0.001 (the “Common Stock”); and
WHEREAS, after careful consideration of
the Purchase Agreement, the documents incident thereto and other factors deemed
relevant by the Board of Directors, the Board of Directors has determined that
it is advisable and in the best interests of the Corporation to engage in the
transactions contemplated by the Purchase Agreement, including, but not limited
to, the issuance of 400,000 shares of Common Stock to Fusion as a commitment fee
(the “Commitment Shares”) and the sale of shares of Common Stock to Fusion up to
the available amount under the Purchase Agreement (the "Purchase
Shares").
Transaction
Documents
NOW,
THEREFORE, BE IT RESOLVED, that the transactions described in the Purchase
Agreement are hereby approved and Robert P. Gasparini and Steven C. Jones (the
“Authorized Officers”) are severally authorized to execute and deliver the
Purchase Agreement, and any other agreements or documents contemplated thereby
including, without limitation, a registration rights agreement (the
“Registration Rights Agreement”) providing for the registration of the shares of
the Company’s Common Stock issuable in respect of the Purchase Agreement on
behalf of the Corporation, with such amendments, changes, additions and
deletions as the Authorized Officers may deem to be appropriate and approve on
behalf of, the Corporation, such approval to be conclusively evidenced by the
signature of an Authorized Officer thereon; and
FURTHER
RESOLVED, that the terms and provisions of the Registration Rights Agreement by
and among the Corporation and Fusion are hereby approved and the Authorized
Officers are authorized to execute and deliver the Registration Rights Agreement
(pursuant to the terms of the Purchase Agreement), with such amendments,
changes, additions and deletions as the Authorized Officer may deem appropriate
and approve on behalf of, the Corporation, such approval to be conclusively
evidenced by the signature of an Authorized Officer thereon; and
FURTHER
RESOLVED, that the terms and provisions of the Form of Transfer Agent
Instructions (the “Instructions”) are hereby approved and the Authorized
Officers are authorized to execute and deliver the Instructions (pursuant to the
terms of the Purchase Agreement), with such amendments, changes, additions and
deletions as the Authorized Officers may deem appropriate and approve on behalf
of, the Corporation, such approval to be conclusively evidenced by the signature
of an Authorized Officer thereon; and
Execution of Purchase
Agreement
FURTHER
RESOLVED, that the Corporation be and it hereby is authorized to execute and
deliver the Purchase Agreement providing for the purchase of common stock of the
Corporation having an aggregate value of up to $8,000,000; and
Issuance of Common
Stock
FURTHER
RESOLVED, that the Corporation was authorized to issue 17,500 shares of Common
Stock to Fusion pursuant to the Confidential Term Sheet between the Company and
Fusion dated as of October 10, 2008 (“Signing Shares”) and that upon issuance of
the Signing Shares, the Signing Shares have been duly authorized, validly
issued, fully paid and nonassessable with no personal liability attaching to the
ownership thereof; and
FURTHER
RESOLVED, that the Corporation is hereby authorized to issue 400,000 shares of
Common Stock to Fusion as Commitment Shares and that upon issuance of the
Commitment Shares pursuant to the Purchase Agreement, the Commitment Shares
shall be duly authorized, validly issued, fully paid and nonassessable with no
personal liability attaching to the ownership thereof; and
FURTHER
RESOLVED, that the Corporation is hereby authorized to issue shares of Common
Stock upon the purchase of Purchase Shares up to the available amount under the
Purchase Agreement in accordance with the terms of the Purchase Agreement and
that, upon issuance of the Purchase Shares pursuant to the Purchase Agreement,
the Purchase Shares will be duly authorized, validly issued, fully paid and
nonassessable with no personal liability attaching to the ownership thereof;
and
FURTHER
RESOLVED, that the Corporation shall initially reserve 3,000,000 shares of
Common Stock for issuance as Purchase Shares under the Purchase
Agreement.
Approval of
Actions
FURTHER
RESOLVED, that, without limiting the foregoing, the Authorized Officers are, and
each of them hereby is, authorized and directed to proceed on behalf of the
Corporation and to take all such steps as deemed necessary or appropriate, with
the advice and assistance of counsel, to cause the Corporation to consummate the
agreements referred to herein and to perform its obligations under such
agreements; and
FURTHER
RESOLVED, that the Authorized Officers be, and each of them hereby is,
authorized, empowered and directed on behalf of and in the name of the
Corporation, to take or cause to be taken all such further actions and to
execute and deliver or cause to be executed and delivered all such further
agreements, amendments, documents, certificates, reports, schedules,
applications, notices, letters and undertakings and to incur and pay all such
fees and expenses as in their judgment shall be necessary, proper or desirable
to carry into effect the purpose and intent of any and all of the foregoing
resolutions, and that all actions heretofore taken by any officer or director of
the Corporation in connection with the transactions contemplated by the
agreements described herein are hereby approved, ratified and confirmed in all
respects.
EXHIBIT
C-2
FORM
OF COMPANY RESOLUTIONS APPROVING REGISTRATION STATEMENT
RESOLUTIONS
OF THE BOARD OF DIRECTORS OF
NEOGENOMICS,
INC.
WHEREAS, there has been presented to
the Board of Directors of the Corporation a Common Stock Purchase Agreement (the
“Purchase Agreement”) by and among the Corporation and Fusion Capital Fund II,
LLC (“Fusion”), providing for the purchase by Fusion of up to Eight Million
Dollars ($8,000,000) of the Corporation’s common stock, par value $0.001 (the
“Common Stock”); and
WHEREAS, after careful consideration of
the Purchase Agreement, the documents incident thereto and other factors deemed
relevant by the Board of Directors, the Board of Directors has approved the
Purchase Agreement and the transactions contemplated thereby and the Company has
executed and delivered the Purchase Agreement to Fusion; and
WHEREAS,
in connection with the transactions contemplated pursuant to the Purchase
Agreement, the Company has agreed to file a registration statement with the
Securities and Exchange Commission (the “Commission”) registering the Commitment
Shares (as defined in the Purchase Agreement), the Signing Shares (as defined in
the Purchase Agreement) and the Purchase Shares (as herein defined in the
Purchase Agreement) and to list the Commitment Shares and Purchase Shares as may
be required;
WHEREAS,
the management of the Corporation has prepared an initial draft of a
Registration Statement on Form ___ (the “Registration Statement”) in
order to register the sale of the Purchase Shares, Signing Shares and the
Commitment Shares (collectively, the “Shares”); and
WHEREAS,
the Board of Directors has determined to approve the Registration Statement and
to authorize the appropriate officers of the Corporation to take all such
actions as they may deem appropriate to effect the offering.
NOW,
THEREFORE, BE IT RESOLVED, that the officers and directors of the Corporation
be, and each of them hereby is, authorized and directed, with the assistance of
counsel and accountants for the Corporation, to prepare, execute and file with
the Commission the Registration Statement, which Registration Statement shall be
filed substantially in the form presented to the Board of Directors, with such
changes therein as the Chief Executive Officer of the Corporation or any Vice
President of the Corporation shall deem desirable and in the best interest of
the Corporation and its shareholders (such officer’s execution thereof including
such changes shall be deemed to evidence conclusively such determination);
and
FURTHER
RESOLVED, that the officers of the Corporation be, and each of them hereby is,
authorized and directed, with the assistance of counsel and accountants for the
Corporation, to prepare, execute and file with the Commission all amendments,
including post-effective amendments, and supplements to the Registration
Statement, and all certificates, exhibits, schedules, documents and other
instruments relating to the Registration Statement, as such officers shall deem
necessary or appropriate (such officer’s execution and filing thereof shall be
deemed to evidence conclusively such determination); and
FURTHER
RESOLVED, that the execution of the Registration Statement and of any amendments
and supplements thereto by the officers and directors of the Corporation be, and
the same hereby is, specifically authorized either personally or by the
authorized officers as such officer’s or director’s true and lawful
attorneys-in-fact and agents; and
FURTHER
RESOLVED, that the authorized officers are hereby designated as “Agent for
Service” of the Corporation in connection with the Registration Statement and
the filing thereof with the Commission, and the authorized officers hereby are
authorized to receive communications and notices from the Commission with
respect to the Registration Statement; and
FURTHER
RESOLVED, that the officers of the Corporation be, and each of them hereby is,
authorized and directed to pay all fees, costs and expenses that may be incurred
by the Corporation in connection with the Registration Statement;
and
FURTHER
RESOLVED, that it is desirable and in the best interest of the Corporation that
the Shares be qualified or registered for sale in various states; that the
officers of the Corporation be, and each of them hereby is, authorized to
determine the states in which appropriate action shall be taken to qualify or
register for sale all or such part of the Shares as they may deem advisable;
that said officers be, and each of them hereby is, authorized to perform on
behalf of the Corporation any and all such acts as they may deem necessary or
advisable in order to comply with the applicable laws of any such states, and in
connection therewith to execute and file all requisite papers and documents,
including, but not limited to, applications, reports, surety bonds, irrevocable
consents, appointments of attorneys for service of process and resolutions; and
the execution by such officers of any such paper or document or the doing by
them of any act in connection with the foregoing matters shall conclusively
establish their authority therefor from the Corporation and the approval and
ratification by the Corporation of the papers and documents so executed and the
actions so taken; and
FURTHER
RESOLVED, that if, in any state where the securities to be registered or
qualified for sale to the public, or where the Corporation is to be registered
in connection with the public offering of the Shares, a prescribed form of
resolution or resolutions is required to be adopted by the Board of Directors,
each such resolution shall be deemed to have been and hereby is adopted, and the
Secretary is hereby authorized to certify the adoption of all such resolutions
as though such resolutions were now presented to and adopted by the Board of
Directors; and
FURTHER
RESOLVED, that the officers of the Corporation with the assistance of counsel
be, and each of them hereby is, authorized and directed to take all necessary
steps and do all other things necessary and appropriate to effect the listing of
the Shares on the OTC Bulletin Board, if any.
Approval of
Actions
FURTHER
RESOLVED, that, without limiting the foregoing, the authorized officers are, and
each of them hereby is, authorized and directed to proceed on behalf of the
Corporation and to take all such steps as are deemed necessary or appropriate,
with the advice and assistance of counsel, to cause the Corporation to take all
such action referred to herein and to perform its obligations incident to the
registration, listing and sale of the Shares; and
FURTHER RESOLVED, that the authorized
officers be, and each of them hereby is, authorized, empowered and directed on
behalf of and in the name of the Corporation, to take or cause to be taken all
such further actions and to execute and deliver or cause to be executed and
delivered all such further agreements, amendments, documents, certificates,
reports, schedules, applications, notices, letters and undertakings and to incur
and pay all such fees and expenses as in their judgment shall be necessary,
proper or desirable to carry into effect the purpose and intent of any and all
of the foregoing resolutions, and that all actions heretofore taken by any
officer or director of the Corporation in connection with the transactions
contemplated by the agreements described herein are hereby approved, ratified
and confirmed in all respects.
EXHIBIT
D
FORM
OF SECRETARY’S CERTIFICATE
This Secretary’s Certificate
(“Certificate”) is being delivered pursuant to Section 7(k) of that certain
Common Stock Purchase Agreement dated as of November 5, 2008, (“Common Stock
Purchase Agreement”), by and between NEOGENOMICS, INC., a Nevada
corporation (the “Company”) and FUSION CAPITAL FUND II, LLC
(the “Buyer”), pursuant to which the Company may sell to the Buyer up to Eight
Million Dollars ($8,000,000) of the Company's Common Stock, par value $0.001 per
share (the "Common Stock"). Terms used herein and not otherwise
defined shall have the meanings ascribed to them in the Common Stock Purchase
Agreement.
The undersigned, Jerome Dvonch,
Secretary of the Company, hereby certifies as follows:
1. I
am the Secretary of the Company and make the statements contained in this
Secretary’s Certificate.
2. Attached
hereto as Exhibit
A and Exhibit
B are true, correct and complete copies of the Company’s bylaws
(“Bylaws”) and Articles of Incorporation (“Articles”), in each case, as amended
through the date hereof, and no action has been taken by the Company, its
directors, officers or shareholders, in contemplation of the filing of any
further amendment relating to or affecting the Bylaws or Articles.
3. Attached
hereto as Exhibit
C are true, correct and complete copies of the resolutions duly adopted
by the Board of Directors of the Company on November 5, 2008, at which a quorum
was present and acting throughout. Such resolutions have not been
amended, modified or rescinded and remain in full force and effect and such
resolutions are the only resolutions adopted by the Company’s Board of
Directors, or any committee thereof, or the shareholders of the Company relating
to or affecting (i) the entering into and performance of the Common Stock
Purchase Agreement, or the issuance, offering and sale of the Purchase Shares
and the Commitment Shares and (ii) and the performance of the Company of its
obligation under the Transaction Documents as contemplated therein.
4. As
of the date hereof, the authorized, issued and reserved capital stock of the
Company is as set forth on Exhibit D
hereto.
IN WITNESS WHEREOF, I have
hereunder signed my name on this 5th day of November.
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/s/
Jerome Dvonch
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Secretary
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The
undersigned as Secretary of Neogenomics, Inc., a public corporation,
hereby certifies that he is the duly elected, appointed, qualified and acting
Secretary of Neogenomics, Inc., and that the signature appearing above is his
genuine signature.
___________________________________
EXHIBIT
E
FORM
OF LETTER TO THE TRANSFER AGENT FOR THE ISSUANCE OF THE
COMMITMENTS
SHARES AT SIGNING OF THE PURCHASE AGREEMENT
[COMPANY
LETTERHEAD]
[DATE]
[TRANSFER
AGENT]
__________________
__________________
__________________
Re:
Issuance of Common Shares to Fusion Capital Fund II, LLC
Dear
________,
On behalf
of NEOGENOMICS, INC.,
(the “Company”), you are hereby instructed to issue as soon
as possible 400,000 shares of our
common stock in the name of Fusion
Capital Fund II, LLC. The share certificate should be dated
[DATE OF THE COMMON STOCK PURCHASE AGREEMENT]. I have included a true
and correct copy of the resolutions of the Board of Directors of the Company
approving the issuance of these shares. The shares should be issued
subject to the following restrictive legend:
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS, UNLESS SOLD PURSUANT TO: (1) RULE 144 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR (2) AN OPINION OF HOLDER’S COUNSEL,
IN A CUSTOMARY FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
APPLICABLE STATE SECURITIES LAWS.
The share
certificate should be sent as soon
as possible via overnight mail to the following address:
Fusion
Capital Fund II, LLC
222
Merchandise Mart Plaza, Suite 9-112
Chicago,
IL 60654
Attention:
Steven Martin
Thank you
very much for your help. Please call me at ______________ if you have
any questions or need anything further.
NEOGENOMICS,
INC.
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BY:
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[name]
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[title]
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