Exhibit
10.1
PURCHASE AGREEMENT
This Purchase Agreement (this
“ Agreement ”) is entered into as of September3,
2008, by and between Comprehensive Care Corporation, a Delaware
corporation (the “ Company ”), and Harry Ross
(the “ Purchaser ”), with respect to the
following facts:
FACTS
WHEREAS , the Company desires to issue, and the
Purchaser desires to purchase Shares of Company Common Stock, and a
convertible promissory note convertible into Shares of Common
Stock, in the aggregate amount of $250,000, on the terms and
conditions set forth in this Agreement.
WHEREAS , the Company and the Purchaser are executing
and delivering this Agreement in reliance upon the exemption from
securities registration afforded by Section 4(2) of the
Securities Act of 1933, as amended (the “ Securities
Act ”), and Rule 506 of Regulation D (“
Regulation D ”) as promulgated by the United States
Securities and Exchange Commission under the Securities
Act.
AGREEMENT
NOW THEREFORE
, in consideration of, and
incorporating the facts set forth above, the representations,
warranties, conditions and covenants contained herein, and for
other good and valuable consideration, the receipt and sufficiency
of which are acknowledged, the parties agree as follows:
ARTICLE I
PURCHASE
1.1 Purchase . Purchaser
hereby agrees to purchase 200,000 shares of common stock, and a
Convertible Promissory Note (the “ Note ”) in
the principal sum of $200,000, in the form attached hereto as
Exhibit A . The Purchaser shall pay to the Company $250,000
(the “ Purchase Price ”), and the Company shall
issue and deliver the Shares and the original Note.
1.2 Deliveries .
(a) On the date hereof, the Company
shall issue, deliver or cause to be delivered to the Purchaser the
following:
(i) This Agreement, duly executed by
the Company;
(ii) A stock certificate
representing 200,000 Shares of Common Stock, or an irrevocable
instruction to the Transfer Agent to issue such Shares;
and
(iii) The Note, duly executed by the
Company.
(b) The Purchaser shall deliver or
cause to be delivered to the Company the following:
(i) This Agreement, duly executed by
the Purchaser; and
(ii) The Purchase Price as set forth
in Section 1.1 , in United States Dollars and in
immediately available funds, by bank check or wire transfer to an
account designated in writing by the Company for such
purpose.
ARTICLE II
REPRESENTATIONS AND
WARRANTIES
2.1 Representations and
Warranties of the Company . The Company hereby represents and
warrants to the Purchaser that, except as set forth in the SEC
Reports (as defined below):
(a) Organization and
Qualification . The Company is an entity validly existing and
in good standing under the laws of the State of Delaware, and is
duly qualified to conduct business and is in good standing as a
foreign corporation in each jurisdiction in which the nature of the
business conducted or property owned by it makes such qualification
necessary or appropriate, except where the failure to be so
qualified or in good standing, as the case may be, individually or
in the aggregate, have not and could not reasonably be expected to
result in (i) a material and adverse effect on the legality,
validity or enforceability of any Transaction Document, (ii) a
material and adverse effect on the results of operations, assets,
prospects, business or financial condition of the Company, or
(iii) a material and adverse impairment to the Company’s
ability to perform on a timely basis its obligations under any
Transaction Document (a “ Material Adverse Effect
”).
(b) Authorization;
Enforcement . The Company has the requisite corporate power and
authority to enter into and to consummate the transactions
contemplated by each of the Transaction Documents to which it is a
party and otherwise to carry out its obligations hereunder and
thereunder. The execution and delivery of each of the Transaction
Documents by the Company and the consummation by it of the
transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate action on the part of the
Company and no further corporate action is required by the Company,
its Board of Directors or its stockholders. Each Transaction
Document to which it is a party has been (or upon delivery will
have been) duly executed by the Company and, when delivered in
accordance with the terms hereof, will constitute the valid and
legally binding obligation of the Company enforceable against the
Company in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating
to, or affecting generally the enforcement of, creditors’
rights and remedies or by other equitable principles of general
application.
(c) No Conflicts . The
execution, delivery and performance of the Transaction Documents by
the Company and the consummation by the Company of the transactions
contemplated hereby or thereby do not and will not
(i) conflict with or violate any provision of
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the Company’s certificate of incorporation
or bylaws, (ii) conflict with, or constitute a default (or an
event that 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 (with or without notice,
lapse of time or both) of, any agreement, credit facility, debt or
other instrument (evidencing a Company debt or otherwise) or other
understanding to which the Company is a party or by which any
property or asset of the Company is bound, except to the extent
that such conflict, default, termination, amendment, acceleration
or cancellation right could not reasonably be expected to have a
Material Adverse Effect, or (iii) result in a violation of any
law, rule, regulation, order, judgment, injunction, decree or other
restriction of any court or governmental authority to which the
Company is subject (including federal and state securities laws and
regulations and the rules and regulations, assuming the correctness
of the representations and warranties made by the Purchaser herein,
of any self-regulatory organization to which the Company or its
securities are subject, or by which any property or asset of the
Company is bound, except to the extent that such violation could
not reasonably be expected to have a Material Adverse
Effect).
(d) Filings, Consents and
Approvals . The Company is not required to obtain any consent,
waiver, authorization or order of, give any notice to, or make any
filing or registration with, any court or other federal, state,
local or other governmental authority or other Person in connection
with the execution, delivery and performance by the Company of the
Transaction Documents, other than (i) filings required by
applicable state securities laws, (ii) the filing of a Notice
of Sale of Securities on Form D with the Commission under
Regulation D of the Securities Act, (iii) the filing of any
requisite notices or applications to any applicable Trading Market
for the issuance and sale of the Shares and the listing of the
Shares for trading or quotation, as the case may be, thereon in the
time and manner required thereby, and (iv) those that have
been made or obtained prior to the date of this
Agreement.
(e) Issuance of the Shares .
The Shares, when issued pursuant to this Agreement or upon the
conversion of the Note, as applicable, in accordance with the terms
of the Transaction Documents, are or will be duly and validly
issued, fully paid and nonassessable, free and clear of all liens
other than restrictions on transfer provided for in the Transaction
Documents or imposed by applicable securities laws and shall not be
subject to preemptive or similar rights of stockholders. Assuming
the accuracy of the representations and warranties of the
Purchaser, the Shares will be issued in compliance with all
applicable federal and state securities laws.
(f) SEC Reports . The Company
has filed all reports required to be filed by it under the Exchange
Act, including pursuant to Section 13(a) or 15(d) thereof,
since the end of Company’s most recent fiscal year (the
foregoing materials being collectively referred to herein as the
“ SEC Reports ” and together with this
Agreement, the “ Disclosure Materials ”). As of
their respective dates, or to the extent corrected by a subsequent
restatement, the SEC Reports complied in all material respects with
the requirements of the Securities Act and the Exchange Act and the
rules and regulations of the Commission promulgated thereunder, and
none of the SEC Reports, when filed, contained any untrue statement
of a material fact or omitted to state a material fact required to
be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made,
not misleading.
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(g) Litigation . There is no
pending action which adversely affects or challenges the legality,
validity or enforceability of any of the Transaction Documents or
the Purchased Securities.
(h) Private Placement .
Assuming the accuracy of the Purchaser’s representations and
warranties set forth herein, no registration under the Securities
Act is required for the transaction pursuant to the Transaction
Documents.
(i) No Directed Selling Efforts
or General Solicitation . Neither the Company, nor any of its
Affiliates, nor any Person acting on its or their behalf has
conducted any “general solicitation” or “general
advertising” (as those terms are used in Regulation D) in
connection with the offer or sale of the Purchased
Securities.
(j) Investment Company . The
Company is not required to be registered as, and is not an
Affiliate of, and immediately following the Closing will not be
required to register as, an “investment company” within
the meaning of the Investment Company Act of 1940, as
amended.
2.2 Representations and
Warranties of the Purchaser . The Purchaser represents and
warrants to the Company as follows:
(a) Organization; Authority .
The Purchaser is an individual with the requisite capacity and
authority to enter into and to consummate the transactions
contemplated by the applicable Transaction Documents and otherwise
to carry out Purchaser’s obligations hereunder and
thereunder. Each of this Agreement and the Transaction Documents
has been duly executed by the Purchaser, and when delivered by the
Purchaser in accordance with terms hereof, will constitute the
valid and legally binding obligation of the Purchaser, enforceable
against Purchaser in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating
to, or affecting generally the enforcement of, creditors’
rights and remedies or by other equitable principles of general
application.
(b) Investment Intent . The
Purchaser understands that the Shares are “restricted
securities” and have not been registered under the Securities
Act or any applicable state securities law and is acquiring the
Shares as principal for Purchaser’s own account for
investment purposes only and not with a view to or for distributing
or reselling such Shares or any part thereof, without prejudice,
however, to the Purchaser’s right, subject to the provisions
of this Agreement, at all times to sell or otherwise dispose of all
or any part of such Shares under the Securities Act or under an
exemption from such registration and in compliance with applicable
federal and state securities laws. Subject to the immediately
preceding sentence, nothing contained herein shall be deemed a
representation or warranty by the Purchaser to hold the Shares for
any period of time. The Purchaser is acquiring the Shares hereunder
in the ordinary course of business. The Purchaser does not have any
agreement, plan or understanding, directly or indirectly, with any
Person to distribute any of the Shares.
(c) Purchaser Status . At the
time the Purchaser was offered the Purchased Securities, it was,
and at the date hereof it is, an “Accredited Investor”
as defined in Rule 501(a) under the Securities Act. The Purchaser
is not a registered broker-dealer under Section 15 of the
Exchange Act.
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(d) Experience of the
Purchaser . The Purchaser, either alone or together with
Purchaser’s representatives, has such knowledge,
sophistication and experience in business and financial matters so
as to be capable of evaluating the merits and risks of the
prospective investment in the Purchased Securities, and has so
evaluated the merits and risks of such investment. The Purchaser is
able to bear the economic risk of an investment in the Purchased
Securities and, at the present time, is able to afford a complete
loss of such investment.
(e) Access to Information .
The Purchaser acknowledges that Purchaser reviewed the Disclosure
Materials and has been afforded (i) the opportunity to ask
such questions as Purchaser has deemed necessary of, and to receive
answers from, representatives of the Company concerning the terms
and conditions of the offering of the Purchased Securities and the
merits and risks of investing in the Purchased Securities;
(ii) access to information about the Company and its financial
condition, results of operations, business, properties, management
and prospects sufficient to enable it to evaluate its investment;
and (iii) the opportunity to obtain such additional
information that the Company possesses or can acquire without
unreason
