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EXHIBIT
10.1
NOTE PURCHASE
AGREEMENT
THIS NOTE PURCHASE
AGREEMENT (the “ Agreement ”), dated as of
the 18th day of October, 2007, is made by and between VICIS
CAPITAL MASTER FUND (the “ Purchaser ”), and
Medical Solutions Management Inc., a Nevada corporation (the
“ Company ”).
Article I
SALE OF
NOTE
1.1 Sale of Note . The
Company has authorized the sale to the Purchaser of a convertible
note in the original principal amount of $1,500,000 (the “
Note ”) in the form attached hereto as Exhibit
A .
1.2 Purchase Price .
Subject to the terms and conditions hereof and on the basis of the
representations and warranties hereinafter set forth, the Company
hereby agrees to issue and sell to the Purchaser, and the Purchaser
agrees to purchase from the Company, at the Closing (as defined in
Section 1.3 hereof), the Note. This offer is only being made
to the Purchaser as an “accredited investor” (as
defined in Rule 501 under the Securities Act of 1933, as amended
(the “ Securities Act ”)) in reliance upon an
exemption from registration under Section 4(2) of the
Securities Act and/or Regulation D promulgated thereunder, and on
similar exemptions under applicable state laws.
1.3 Closing . The
closing of the transactions contemplated hereunder (the “
Closing ”) shall be deemed to occur at the offices of
Bingham McCutchen LLP, 150 Federal Street, Boston, MA 02110, or at
such other place as shall be mutually agreeable to the parties, at
5:00 p.m., Boston Time, on October 18, 2007 or such other date
as be mutually agreeable to the parties (the “ Closing
Date ”).
1.4 Closing Matters .
At the Closing the following actions shall be taken:
(a) The Purchaser shall
deliver $1,500,000 (the “ Purchase Price ”) to
the Company in immediately available United States funds;
and
(b) The Company shall deliver
the Note to the Purchaser.
(c) The Purchaser
acknowledges and agrees that the Purchase Price will be deposited
in an account maintained by the Company and that there is no escrow
of funds and all funds may be utilized by the Company upon
acceptance. There is no “minimum” sale amount and funds
may be released to the Company and closings held, from time to
time, as determined by the Company.
(d) The Company intends to
use the proceeds derived from this sale to satisfy its working
capital requirements. Management reserves the right to utilize the
net proceeds of the sale in a manner in the best interests of the
Company. The amount of the net proceeds that will be invested in
particular areas of the Company’s business will depend upon
future economic conditions and business opportunities. To the
extent that the Company continues to incur losses from operations,
such losses will be funded from its general funds, including the
net proceeds of this sale.
1.5 Convertible Debt
Financing. The Purchaser acknowledges and understands the
Company intends to consummate a subsequent financing of convertible
secured debentures and warrants (which amount includes the
$1,500,000 Purchase Price received by the Company in exchange for
the Note being sold hereunder) (such financing, the “
Convertible Debt Financing ”). The Purchaser further
acknowledges and understands that upon the consummation of the
Convertible Debt Financing, the Note issued pursuant to this
Agreement will be converted into the securities issuable in such
Convertible Debt Financing.
Article II
REPRESENTATIONS AND
WARRANTIES OF COMPANY
The Company hereby represents
and warrants to the Purchaser as of the date of this Agreement as
follows:
(A) The Company owns,
directly or indirectly, all of the capital stock of each material
subsidiary of the Company (a “ Subsidiary ”)
free and clear of any and all liens, other than restrictions on
transfer under applicable securities laws, and all the issued and
outstanding shares of capital stock of each Subsidiary are validly
issued and are fully paid, non-assessable and free of preemptive
and similar rights. The Company and Subsidiary is duly organized,
validly existing and in good standing under the laws of its state
of incorporation, with all requisite power and authority to own,
lease, license, and use its properties and assets and to carry out
the business in which it is engaged, except where the failure to
have or be any of the foregoing may not be expected to have a
material adverse effect on the Company’s presently conducted
businesses. Neither the Company nor any Subsidiary is in violation
of any of the provisions of its respective certificate or articles
of incorporation, bylaws or other organizational or charter
documents. The Company and each Subsidiary is duly qualified to
transact the business in which it is engaged and is in good
standing as a foreign corporation in every jurisdiction in which
its ownership, leasing, licensing or use of property or assets or
the conduct of its business make such qualification necessary,
except where the failure to be so qualified or in good standing, as
the case may be, could not, individually or in the aggregate, have
or reasonably be expected to result in (i) a material and
adverse effect on the legality, validity or enforceability of this
Agreement or the Note, (ii) a material and adverse effect on
the results of operations, assets, prospects, business or condition
(financial or otherwise) of the Company and the Subsidiaries, taken
as a whole, or (iii) an adverse impairment to the
Company’s ability to perform on a timely basis its
obligations hereunder (any of (i), (ii) or (iii), a “
Material Adverse Effect ”).
(B) The Company is authorized
to issue 100,000,000 shares of Common Stock, $0.0001 par value per
share (the “ Common Stock ”), and 5,000,0000
shares of Preferred Stock, $0.0001 par value per share. Except as
set forth in that certain Amended and Restated Investor Rights
Agreement dated as of June 28, 2006, by and among the Company,
and the Investors, Founders and others party thereto, no securities
of the Company are entitled to preemptive or similar rights, and no
entity or person has any right of first refusal, preemptive right,
right of participation, or any similar right to participate in the
transactions contemplated by this Agreement unless any such rights
have been waived. Except as set forth on Schedule II(B) (and
other than as a result of the purchase and sale of the Note), there
are no outstanding options, warrants, scrip rights to subscribe to,
calls or commitments of any character whatsoever relating to, or
securities, rights or obligations convertible into or exchangeable
for, or giving any entity or person any right to subscribe for or
acquire, any shares of Common Stock, or contracts, commitments,
understandings or arrangements by which the Company or any
Subsidiary is or may become bound to issue additional shares of
Common Stock, or securities or rights convertible or exchangeable
into shares of Common Stock. The issue and sale of the Note will
not (except pursuant to their terms thereunder), immediately or
with the passage of time, obligate the Company to issue shares of
Common Stock or other securities to any entity or person and will
not result in a right of any holder of Company securities to adjust
the exercise, conversion, exchange or reset price under such
securities.
(C) The Company has the
requisite corporate power and authority to enter into, deliver and
consummate the transactions contemplated by this Agreement, to
issue, sell and deliver the Note, and otherwise to carry out its
obligations hereunder. The execution and delivery of this Agreement
and the consummation by it of the transactions contemplated thereby
have been duly authorized by the Company and no further action is
required by the Company in connection therewith. When executed and
delivered by the Company, this Agreement will constitute the legal,
valid and binding obligation of the Company, enforceable as to the
Company in accordance with its terms, except as enforcement may be
limited by bankruptcy, insolvency, reorganization, arrangement,
fraudulent conveyance or transfer,
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moratorium or other laws or court
decisions, now or hereinafter in effect, relating to or affecting
the rights of creditors generally and as may be limited by general
principles of equity and the discretion of the court having
jurisdiction in an enforcement action (regardless of whether such
enforceability is considered in a proceeding in equity or at
law).
(D) No consent,
authorization, approval, order, license, certificate or permit of
or from, or declaration or filing with, any federal, state, local
or other governmental authority or any court or any other tribunal
is required by the Company for the execution, delivery or
performance by the Company of this Agreement or the execution,
issuance, sale or delivery of the Note.
(E) Neither the Company nor
any Subsidiary is 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 or entity in
connection with the execution, delivery and performance by the
Company of this Agreement or the issuance, sale or delivery of the
Note other than (i) any filings required by state securities
laws, (ii) the filing of a Notice of a Sale of Securities on
Form D with the Commission under Regulation D of the Securities
Act, and (iii) those that have been made or obtained prior to
or contemporaneously with the date of this Agreement.
(F) The execution, delivery
and performance of this Agreement by the Company and the
consummation by the Company of the transactions contemplated hereby
do not and will not: (i) conflict with or violate any
provision of the Company’s or any Subsidiary’s
certificate or articles of incorporation, bylaws or other
organizational or charter documents, or (ii) violate, conflict
with, or constitute a default or breach (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 or Subsidiary debt or otherwise) or other
understanding to which the Company or any Subsidiary is a party or
by which any property or asset of the Company or any Subsidiary is
bound or affected, 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 or a Subsidiary is subject (including federal and state
securities laws and regulations), or by which any property or asset
of the Company or a Subsidiary is bound or affected; except in the
case of each of clauses (ii) and (iii), such as could not,
individually or in the aggregate, have or reasonably be expected to
result in a Material Adverse Effect.
(G) The Note has been duly
authorized and, when issued and paid for in accordance with this
Agreement, will be duly and validly issued, fully paid and
nonassessable, will not be issued in violation of any preemptive or
other rights of stockholders, and will be issued free and clear of
all liens and encumbrances, other than restrictions on transfer
under applicable securities laws.
(H) Since December 30,
2006, the Company has filed all reports required to be filed by it
under the Securities Act of 1933, as amended (the “
Securities Act ”), and the Exchange Act of 1934, as
amended (the “ Exchange Act ”), including
pursuant to Section 13(a) or 15(d) thereof, for the period
from December 30, 2006 and ending as of the date hereof (or
such shorter period as the Company was required by law to file such
reports) (the foregoing materials filed during such period being
collectively referred to herein as the “ SEC Reports
”) on a timely basis or has timely filed a valid extension of
such time of filing and has filed any such SEC Reports prior to the
expiration of any such extension. As of their respective dates, 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. The financial statements of the Company included in
the SEC Reports comply in all material respects with applicable
accounting requirements and the rules and regulations of the
Commission with respect thereto as in effect at the time of filing.
Such financial statements have been prepared in accordance with
generally accepted
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accounting principles in the United
States applied on a consistent basis during the periods involved
(“ GAAP ”), except as may be otherwise specified
in such financial statements or the notes thereto, and fairly
present in all material respects the financial position of the
Company and its consolidated Subsidiaries as of and for the dates
thereof and the results of operations and cash flows for the
periods then ended, subject, in the case of unaudited statements,
to normal, immaterial, year-end audit adjustments.
Article III
REPRESENTATIONS AND
WARRANTIES OF PURCHASER
By signing this Agreement,
the Purchaser hereby represents and warrants to the Company as
follows as an inducement to the Company to accept the subscription
of the Purchaser:
(A) The Purchaser
acknowledges and agrees that (i) the offering and sale of the
Note is intended to be exempt from registration under the
Securities Act by virtue of Section 4(2) of the Securities Act
and/or Regulation D promulgated thereunder, (ii) the Note has
not been registered under the Securities Act and (iii) that
the Company has represented to the Purchaser (assuming the veracity
of the representations of the Purchaser made herein) that the Note
has been offered and sold by the Company in reliance upon an
exemption from registration provided in Section 4(2) of the
Securities Act and Regulation D thereunder. In accordance therewith
and in furtherance thereof, the Purchaser represents and warrants
to and agrees with the Company that it is an accredited investor
(as defined in Rule 501 promulgated under the Securities
Act).
(B) The Purchaser hereby
represents and warrants that the Purchaser is acquiring the Note
hereunder for its own account for investment and not with a view to
distribution, and with no present intention of distributing the
Note or selling the Note for distribution. The Purchaser
understands that the Note is being sold to the Purchaser in a
transaction which is exempt from the registration requirements of
the Securities Act. Accordingly, the Purchaser acknowledges that it
has been advised that the Note has not been registered under the
Securities Act and are being sold by the Company in reliance upon
the veracity of the Purchaser’s representations contained
herein and upon the exemption from the registration requirements
provided by the Securities Act and the securities laws of all
applicable states. The Purchaser’s acquisition of the Note
shall constitute a confirmation of the foregoing representation and
warranty and understanding thereof.
(C) The Purchaser has such
knowledge and experience in financial and business matters as is
required for evaluating the merits and risks of making this
investment, and the Purchaser has received such information
requested by the Purchaser concerning the business, management and
financial affairs of the Company in order to evaluate the merits
and risks of making this investment. Further, the Purchaser
acknowledges that the Purchaser has had the opportunity to ask
questions of, and receive answers from, the officers of the Company
concerning the terms and conditions of this investment and to
obtain information relating to the organization, operation and
business of the Company and of the Company’s contracts,
agreements and obligations or needed to verify the accuracy of any
information contained herein or any other information about the
Company. Except as set forth in this Agreement, no representation
or warranty is made by the Company to induce the Purchaser to make
this investment, and any representation or warranty not made herein
or therein is specifically disclaimed and no information furnished
to the Purchaser or the Purchaser’s advisor(s) in connection
with the sale were in any way inconsistent with the information
stated herein. The Purchaser further understands and acknowledges
that no person has been authorized by the Company to make any
representations or warranties concerning the Company, including as
to the accuracy or completeness of the information contained in
this Agreement.
(D) The Purchaser is making
the foregoing representations and warranties with the intent that
they may be relied upon by the Company in determining the
suitability of the sale of the Note to the Purchaser for purposes
of federal and state securities laws. Accordingly, the Purchaser
represents and warrants that the information stated herein is true,
accurate and complete, and agrees to notify and supply
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corrective information promptly to the
Company as provided above if any of such information becomes
inaccurate or incomplete. The Purchaser has completed this
Agreement, has delivered it herewith and represents and warrants
that it is accurate and true in all respects and that it accurately
and completely sets forth the financial condition of the Purchaser
on the date hereof. The Purchaser has no reason to expect there
will be any material adverse change in its financial condition and
will advise the Company of any such changes occurring prior to the
Closing.
(E) The Purchaser is not
subscribing for the Note as a result of or subsequent to any
advertisement, article, notice or other communication published in
any newspaper, magazine or similar media or broadcast over
television or radio, any seminar or meeting, or any solicitation of
a subscription by a person not previously known to the Purchaser in
connection with investments in the Note generally.
(F) The Purchaser has
received certain information regarding the Company, including this
Agreement, and other accompanying documents of the Company receipt
of which is hereby acknowledged. The Purchaser has carefully
reviewed all information provided to it and has carefully evaluated
and understands the risks described therein related to the Company
and an investment in the Company, and understands and has relied
only on the information provided to it in writing by the Company
relating to this investment. No agent prepared any of the
information to be delivered to prospective investors in connection
with this transaction. The Purchaser is advised to conduct its own
review of the business, properties and affairs of the Company
before subscribing to purchase the Note.
(G) The Purchaser also
understands and agrees that, although the Company will use its best
efforts to keep the information provided in this Agreement strictly
confidential, the Company or its counsel may present this Agreement
and the information provided in answer to it to such parties as
they may deem advisable if called upon to establish the
availability under any federal or state securities laws of an
exemption from registration of the private placement or if the
contents thereof are relevant to any issue in any action, suit or
proceeding to which the Company or its affiliates is a party, or by
which they are or may be bound or as otherwise required by law or
regulatory authority.
(H) The individual signing
below on behalf of any entity hereby warrants and represents that
he/she is authorized to execute this Agreement on behalf of such
entity. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly
authorized by all requisite action, if any, in respect thereof on
the part of the Purchaser and no other proceedings on the part of
the Purchaser are necessary to consummate the transactions
contemplated hereby. This Agreement has been duly and validly
executed and delivered by the Purchaser and constitutes a valid and
binding obligation of the Purchaser, enforceable against the
Purchaser in accordance with its terms (subject to applicable
bankruptcy, insolvency and similar laws affecting creditors’
rights generally and subject, as to enforceability, to general
principles of equity (whether applied in a proceeding in equity or
at law)).
(I) The purchase of the Note
involves risks which the Purchaser has evaluated, and the Purchaser
is able to bear the economic risk of the purchase of such Note and
the loss of its entire investment. The undersigned
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