SECURITIES PURCHASE AGREEMENT

 

---

---

 

Exhibit 10.1

 SECURITIES PURCHASE AGREEMENT

 

THIS SECURITIES PURCHASE AGREEMENT, dated as of ______, 2006, is entered into by and between Zynex Medical Holdings, Inc., a Nevada corporation, with headquarters located at 8100 Southpark Way, Suite A-9, Littleton, CO 80120 (the “Company”), and _________ or his designee (the “Purchaser”).

 

 

WHEREAS, the Company and the Purchaser are executing and delivering this Agreement in accordance with and in reliance upon the exemption from securities registration for offers and sales to accredited investors afforded, inter alia, by Rule 506 under Regulation D (“Regulation D”) as promulgated by the United States Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the “1933 Act”), and/or Section 4(2) of the 1933 Act; and

 

WHEREAS, the Company wishes to sell to the Purchaser and the Purchaser wishes to buy from the Company shares of the Company’s Common Stock, $.001 par value, of the Company (the “Common Stock”), together with a warrant exercisable for the purchase of shares of the Company’s Common Stock (the “Warrant”);

 

NOW THEREFORE, in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

 

 

a. Purchase.

 

(i) Subject to the terms and conditions of this Agreement and the other Transaction Agreements (as defined below), the Purchaser hereby agrees to pay to the Company a purchase price of $0.32 per share of Common Stock for __________________________ (______________) shares (the “Shares”), for a total purchase price of _____________________ Dollars ($____________) (the “Purchase Price”). The Company shall issue Certificates (as defined below) representing the Shares and the Warrant.

 

(ii) The Company agrees to issue to the Purchaser on the Closing Date a Warrant for the purchase of a number of shares equal to 80% of the number of Shares issued on the Closing Date with an exercise price of $0.39 per share. The Warrants will expire on June 30, 2011 or earlier as described in the Warrant. The Warrant shall be in the form annexed hereto as Annex III.

 

(iii) The Purchase Price shall be payable at the Closing Date (as defined below) in United States Dollars.

 

b. Certain Definitions. As used herein, each of the following terms has the meaning set forth below, unless the context otherwise requires:

 

(i) “1934 Act” means the Securities Exchange Act of 1934, as amended.

 

(ii) “Affiliate” means, with respect to a specific Person referred to in the relevant provision, another Person who or which controls or is controlled by or is under common control with such specified Person.

 

(iii) “Broker” means Chicago Investment Group, L.L.C. 

 

(iv) “Certificates” means certificates representing the Shares and the Warrants, each duly executed by the Company and issued on the Closing Date in the name of the Purchaser.

 

(v) “Closing Date” means the date of the closing of the purchase and sale of the Shares and the Warrant as mutually agreed by the Company and the Purchaser.

 

(vi) “Company Control Person” means each director, executive officer, promoter, and such other Persons as may be deemed in control of the Company pursuant to Rule 405 under the 1933 Act or Section 20 of the 1934 Act.

 

(vii) “Material Adverse Effect” means an event or combination of events, which individually or in the aggregate, would reasonably be expected to (w) adversely affect the legality, validity or enforceability of the Securities or any of the Transaction Agreements, (x) have or result in a material adverse effect on the results of operations, assets, prospects, or condition (financial or otherwise) of the Company and its subsidiaries, taken as a whole, (y) adversely impair the Company’s ability to perform fully on a timely basis its obligations under any of the Transaction Agreements or the transactions contemplated thereby, or (z) materially and adversely affect the value of the rights granted to the Purchaser in the Transaction Agreements.

 

(viii) “Person” means any living person or any entity, such as, but not necessarily limited to, a corporation, partnership or trust.

 

(ix) “Principal Trading Market” means The OTC Bulletin Board; provided, however, that if the Company lists its Common Stock for trading on the NASDAQ National Market, the NASDAQ Capital Market or the American Stock Exchange, “Principal Trading Market” shall mean such exchange or automated quotation system.

 

(x) “Purchaser Control Person” means each director, executive officer, promoter, and such other Persons as may be deemed in control of the relevant Purchaser pursuant to Rule 405 under the 1933 Act or Section 20 of the 1934 Act.

 

(xi) “Registration Rights Agreement” means the Registration Rights Agreement in the form attached hereto as Annex I, as executed by each Purchaser and the Company simultaneously with the execution of this Agreement.

 

(xii) “Securities” means the Shares, the Warrants and the Warrant Shares.

 

(xiii) “State of Incorporation” means Nevada.

 

(xiv) “Trading Day” means any day during which the Principal Trading Market shall be open for business.

 

(xv) “Transaction Agreements” means this Securities Purchase Agreement, the Registration Rights Agreement and the Warrant and includes all ancillary documents referred to in those agreements.

 

(xvi) “Warrant Shares” means the shares of Common Stock issuable upon exercise of the Warrant.

 

c. Form of Payment; Delivery of Certificates.

 

(i) On the Closing Date, the Purchaser shall pay the Purchase Price by delivering immediately available good funds in United States Dollars to the Company. There shall be no minimum amount that the Company is required to raise prior to closing this transaction.

 

(ii) No later than five business days after the Closing Date, but in any event promptly following payment by the Purchaser to the Company of the Payment, the Company shall deliver the Certificates representing the Shares and the Warrant, each duly executed on behalf of the Company and issued in the name of the Purchaser, to the Purchaser.

 

d. Method of Payment. Payment shall be made by via cashiers check or wire transfer to:

 

Zynex Medical Holdings, Inc.

8100 Southpark Way, Suite A-9

Littleton, CO 80120

Attn: Peter J. Leveton

Guaranty Bank & Trust

Denver, CO

Zynex Medial Holdings, Inc.

Routing Number: 102000966

Account Number: 1300011996

 

The Purchaser represents and warrants to, and covenants and agrees with, the Company as follows:

 

e. Without limiting Purchaser’s right to sell the Shares pursuant to the Registration Statement or otherwise to sell any of the Securities in compliance with the 1933 Act, the Purchaser is purchasing the Securities and will be acquiring the Securities for its own account for investment only and not with a view towards the public sale or distribution thereof and not with a view to or for sale in connection with any distribution thereof.

 

f. The Purchaser is (i) an “accredited investor” as that term is defined in Rule 501 of the General Rules and Regulations under the 1933 Act by reason of Rule 501(a)(3), (ii) experienced in making investments of the kind described in this Agreement and the related documents, (iii) able, by reason of the business and financial experience of its officers (if an entity) and professional advisors (who are not affiliated with or compensated in any way by the Company or any of its Affiliates or selling agents), to protect its own interests in connection with the transactions described in this Agreement, and the related documents, and (iv) able to afford the loss of the entire Purchase Price.

 

g. All subsequent offers and sales of the Securities by the Purchaser shall be made pursuant to registration of the Securities under the 1933 Act or pursuant to an exemption from registration.

 

h. The Purchaser understands that the Securities are being offered and sold to it in reliance on specific exemptions from the registration requirements of the 1933 Act and state securities laws and that the Company is relying upon the truth and accuracy of, and the Purchaser’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Purchaser set forth herein in order to determine the availability of such exemptions and the eligibility of the Purchaser to acquire the Securities.

 

i. The Purchaser and its advisors, if any, had the opportunity to obtain and to review the Company’s filings on EDGAR for the last twelve months listed on Annex II hereto (the documents listed on such Annex II, collectively, the “Company’s SEC Documents”). The Purchaser and its advisors, if any, have had an opportunity to request additional materials relating to the business, finances and operations of the Company and additional materials relating to the offer and sale of the Securities and the Purchaser and its advisors, if any, have been furnished any such materials which have been requested by the Purchaser. The Purchaser and its advisors, if any, have been afforded the opportunity to ask questions of the Company and have received complete and satisfactory answers to any such inquiries.

 

j. The Purchaser understands that its investment in the Securities involves a high degree of risk.

 

k. The Purchaser hereby represents that, in connection with its purchase of the Securities, it has not relied on any statement or representation by the Company or any of its officers, directors and employees or any of its attorneys or agents, except as specifically set forth herein.

 

l. The Purchaser 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.

 

m. This Agreement and the other Transaction Agreements to which the Purchaser is a party, and the transactions contemplated thereby, have been duly and validly authorized, executed and delivered on behalf of the Purchaser and are valid and binding agreements of the Purchaser enforceable in accordance with their respective terms, subject as to enforceability to general principles of equity and to bankruptcy, insolvency, moratorium and other similar laws affecting the enforcement of creditors’ rights generally.

 

n. The Purchaser has taken no action which would give rise to any claim by any Person for brokerage commission other than Broker’s fees. The Company shall have no obligation with respect to such fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this paragraph that may be due in connection with the transactions contemplated hereby. The Purchaser shall indemnify and hold harmless each of the Company, its employees, officers, directors, agents, and partners, and their respective Affiliates, from and against all claims, losses, damages, costs (including the costs of preparation and attorney’s fees) and expenses suffered in respect of any such claimed or existing fees, as and when incurred.

 

o. The Purchaser hereby covenants and warrants that, between the Closing Date and the date on which he or she no longer holds any of the Securities, Purchaser will not engage in any hedging transactions or shorting transactions in any securities of the Company, including the Securities.

 

p. The Purchaser hereby covenants and warrants that he or she is not acting as a “group” for purposes of Section 13 of the Securities Exchange Act of 1934 in regard to any securities of the Company.

 

q. Rights of Others Affecting the Transactions. There are no preemptive rights of any shareholder of the Company, as such, to acquire the

 

Securities. No party has a currently exercisable right of first refusal which would be applicable to any or all of the transactions contemplated by the Transaction Agreements.

 

 

r. Status. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Incorporation and has the requisite corporate power to own its properties and to carry on its business as now being conducted. The Company is duly qualified as a foreign corporation to do business and is in good standing in each jurisdiction where the nature of the business conducted or property owned by it makes such qualification necessary, other than those jurisdictions in which the failure to so qualify would not have or result in a Material Adverse Effect. The Company has registered its stock pursuant Section 12 or Section 15(d) of Securities Exchange Act of 1934, as amended (the “1934 Act”). The Common Stock is listed and quoted on the Principal Trading Market. The Company has received no notice, either oral or written, with respect to the continued eligibility of the Common Stock for such listing and quotation on the Principal Trading Market, and the Company has maintained all requirements on its part for the continuation of such listing and quotation.

 

s. Authorized Shares. The authorized capital stock of the Company consists of (i) 100,000,000 shares of Common Stock, of which approximately 23,244,000 shares are outstanding as of April 30, 2006, and (ii) 10,000,000 shares of Preferred Stock, $.001 par value per share, of which no shares are outstanding as of the date hereof. The Company has reserved 3,000,000 shares of Company Common Stock for issuance pursuant to Company equity incentive plans. All issued and outstanding shares of Common Stock have been duly authorized and validly issued and are fully paid. The Company has sufficient authorized and unissued shares of Common Stock as may be necessary to effect the issuance of the Securities. The Securities have been duly authorized and, when issued, in accordance with their terms, will be duly and validly issued, fully paid and non-assessable.

 

t. Transaction Agreements. This Agreement and each of the other Transaction Agreements, and the transactions contemplated thereby, have been duly and validly authorized by the Company, this Agreement has been duly executed and delivered by the Company and this Agreement is, and the Certificates and each of the other Transaction Agreements, when executed and delivered by the Company, will be, valid and binding agreements of the Company enforceable in accordance with their respective terms, subject as to enforceability to general principles of equity and to bankruptcy, insolvency, moratorium, and other similar laws affecting the enforcement of creditors’ rights generally.

 

 

u. Non-contravention. The execution and delivery of this Agreement and each of the other Transaction Agreements by the Company, the issuance of the Securities, and the consummation by the Company of the other transactions contemplated by this Agreement, the Certificates and the other Transaction Agreements do not and will not conflict with or result in a breach by the Company of any of the terms or provisions of, or constitute a default under (i) the certificate of incorporation or by-laws of the Company, each as currently in effect, (ii) any indenture, mortgage, deed of trust, or other material agreement or instrument to which the Company is a party or by which it or any of its properties or assets are bound, or (iii) to its knowledge, any existing applicable law, rule, or regulation or any applicable decree, judgment, or order of any court, United States federal or state regulatory body, administrative agency, or other governmental body having jurisdiction over the Company or any of its properties or assets, except where such conflict, breach or default which would not have or result in a Material Adverse Effect.

 

v. Approvals. No authorization, approval or consent of any court, governmental body, regulatory agency, self-regulatory organization, or stock exchange or market or the shareholders of the Company is required to be obtained by the Company for the issuance and sale of the Securities to the Purchaser as contemplated by this Agreement, except such authorizations, approvals and consents that have been obtained.

 

w. Filings. None of the Company’s SEC Documents contained, at the time they were filed, any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements made therein in light of the circumstances under which they were made, not misleading. Since April 1, 2006, to the date of this Agreement the Company has timely filed all requisite forms, reports and exhibits thereto required to be filed by the Company with the SEC.

 

x. Absence of Litigation. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board or body pending or, to the knowledge of the Company, threatened against or affecting the Company before or by any governmental authority or nongovernmental department, commission, board, bureau, agency or instrumentality or any other person, wherein an unfavorable decision, ruling or finding would have a Material Adverse Effect or which would adversely affect the validity or enforceability of, or the authority or ability of the Company to perform its obligations under, any of the Transaction Agreements.

 

y. Absence of Certain Company Control Person Actions or Events. None of the following has occurred during the past five (5) years with respect to a Company Control Person:

 

 

(i) A petition under the federal bankruptcy laws or any state insolvency law was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such Company Control Person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing;

 

(ii) Such Company Control Person was convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);

 

(iii) Such Company Control Person was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities:

 

(1) acting, as an investment advisor, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, any other Person regulated by the Commodity Futures Trading Commission or engaging in or continuing any conduct or practice in connection with such activity;

 

(2) engaging in any type of business practice; or

 

(3) engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of federal or state securities laws or federal commodities laws;

 

(iv) Such Company Control Person was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any federal or state authority barring, suspending or otherwise limiting for more than 60 days the right of such Company Control Person to engage in any activity described in paragraph (3) of this item, or to be associated with Persons engaged in any such activity; or

 

(v) Such Company Control Person was found by a court of competent jurisdiction in a civil action or by the SEC to have violated any federal or state securities law, and the judgment in such civil action or finding by the SEC has not been subsequently reversed, suspended, or vacated.

 

z. Prior Issues. During the twelve (12) months preceding the date hereof, the Company has not issued any stock option grants, convertible securities or any shares of its Common Stock, except as provided in the

 

Company’s SEC Documents and except for shares or warrants issued to consultants after December 31, 2005.

 

 

aa. No Undisclosed Liabilities or Events. The Company has no liabilities or obligations other than those disclosed in the Transaction Agreements or the Company’s SEC Documents or those incurred in the ordinary course of the Company’s business since December 31, 2005, or which individually or in the aggregate, do not or would not have a Material Adverse Effect. No event or circumstances has occurred or exists with respect to the Company or its properties, business, operations, condition (financial or otherwise), or results of operations, which, under applicable law, rule or regulation, including the 1934 Act, requires public disclosure or announcement prior to the date hereof by the Company but which has not been so publicly announced or disclosed. There are no proposals currently under consideration by the Board of Directors or the executive officers of the Company which proposal would (X) change the certificate of incorporation or other charter document or by-laws of the Company, each as currently in effect, with or without shareholder approval, which change would reduce or otherwise adversely affect the rights and powers of the shareholders of the Common Stock or (Y) materially or substantially change the business, assets or capital of the Company, including its interests in subsidiaries.

 

bb. No Default. Neither the Company nor any of its subsidiaries is in default in the performance or observance of any material obligation, agreement, covenant or condition contained in any material indenture, mortgage, deed of trust or other material instrument or agreement to which it is a party or by which it or its property is bound.

 

cc. Fees to Brokers, and Others. Except for payment of fees and commissions to the Broker and payments to another investment banker, payment of which is the sole responsibility of the Company, the Company has taken no action which would give rise to any claim by any Person for brokerage commission, Broker’s fees or similar payments by Purchaser relating to this Agreement or the transactions contemplated hereby. Purchaser shall have no obligation with respect to such fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this paragraph that may be due in connection with the transactions contemplated hereby. The Company shall indemnify and hold harmless each Purchaser, its employees, officers, directors, agents, and partners, and their respective Affiliates, from and against all claims, losses, damages, costs (including the costs of preparation and attorney’s fees) and expenses suffered in respect of any such claimed or existing fees, as and when incurred.

dd. Transfer Restrictions. The Purchaser acknowledges that (1) the Securities have not been and are not being registered under the provisions of the 1933 Act and, except as provided in the Registration Rights Agreement or otherwise included in an effective registration statement, the Securities have not been and are not being registered under the 1933 Act, and may not be transferred unless (A) subsequently registered thereunder or (B) the Purchaser shall have delivered to the Company an opinion of counsel, reasonably satisfactory in form, scope and substance to the Company, to the effect that the Securities to be sold or transferred may be sold or transferred pursuant to an exemption from such registration; (2) any sale of the Securities made in reliance on Rule 144 promulgated under the 1933 Act may be made only in accordance with the terms of said Rule and further, if said Rule is not applicable, any resale of such 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 used 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 (3) neither the Company nor any other Person is under any obligation to register the Securities (other than pursuant to the Registration Rights Agreement) under the 1933 Act or to comply with the terms and conditions of any exemption thereunder.

 

ee. Restrictive Legend. The Purchaser acknowledges and agrees that, until such time as the Common Stock has been registered under the 1933 Act as contemplated by the Registration Rights Agreement and sold in accordance with an effective Registration Statement or otherwise in accordance with another effective registration statement, the certificates and other instruments representing any of the Securities (including the Warrant Shares) shall bear a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of any such Securities):

 

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES OR AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

 

ff. Filings. The Company undertakes and agrees to make all necessary filings in connection with the sale of the Securities to the Purchaser under any United States laws and regulations applicable to the Company, or by any domestic securities exchange or trading market, and, upon request, to provide a copy thereof to the Purchaser.

 

 

gg. Reporting Status. So long as the Purchaser beneficially owns any of the Securities, the Company shall use its commercially reasonable efforts to file all reports required to be filed with the SEC pursuant to Section 13 or 15(d) of the 1934 Act and shall take all reasonable action under its control to ensure that adequate current public information with respect to the Company, as required in accordance with Rule 144(c)(2) of the 1933 Act, is publicly available, even if the 1934 Act or the rules and regulations thereunder would permit such termination. At least through the date which is thirty (30) days after the later of the date on which all of the Warrants have been exercised or have expired, the Company will take all commercially reasonable action under its control to maintain the continued listing and quotation and trading of its Common Stock (including, without limitation, the shares and the Warrant shares) on the Principal Trading Market and, to the extent applicable to it, will comply in all material respects with the Company’s reporting, filing and other obligations under the by-laws or rules of the Principal Trading Market

 

hh. Use of Proceeds. The Company shall use the proceeds received hereunder as follows:

 

(i) payment of certain fees as described below in Section 4(h); and

 

(ii) the remainder shall be used for general corporate purposes.

 

ii. Available Shares. The Company shall have at all times authorized and reserved for issuance, free from preemptive rights, a number of shares at least equal to the number of shares issuable upon exercise of all outstanding Warrants held by all Purchasers.

 

jj. Publicity, Filings, Releases, Etc. The Purchaser agrees that it will not disseminate any information relating to the Transaction Agreements or the transactions contemplated thereby, including issuing any press releases, holding any press conferences or other forums, or filing any reports (collectively, “Publicity”), without giving the Company reasonable advance notice and an opportunity to comment on the contents thereof. Purchaser will not include in any such Publicity any statement or statements or other material to which the other party reasonably objects. The Purchaser hereby consents to the inclusion of the text of the Transaction Agreements in filings made with the SEC and a description of the Transaction Agreement in such filings.

 

kk. Broker Fees. The Company shall pay to the Broker a commission in the form of cash equal in value to nine percent (9%) of the gross proceeds from the sale of the Common Stock under this Agreement, one percent (1% ) unaccountable, as well as nine percent (9%) in common stock. Such commission is more fully described in the Placement Agent Agreement between the Company and the Broker on May 1, 2006.

 

 

 

ll. Attorneys’ Fees. The Company shall bear its legal fees and expenses incurred in connection with the preparation and negotiation of the documents contemplated by this transaction. Other than the amounts contemplated in the immediately preceding section, each party shall pay the fees and expenses of its advisers, counsel, accountants, and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement

 

mm. Certain New Transactions. For purposes of this Agreement, “New Transaction” means the offer or sale of new common stock in a capital raising or other financing transaction by or on behalf of the Company to a new investor in a transaction offered or consummated after the date hereof; provided, however, that it is specifically understood that the term “New Transaction” does not include (i) the sale of the Securities to the Purchaser, (ii) the issuance of Common Stock upon the exercise or conversion of options, warrants, or convertible securities outstanding at the date hereof, (iii) the issuance of options or warrants hereafter granted to employees or consultants for compensatory purposes or the issuance of Common Stock upon the exercise of such options or warrants, (iv) the issuance of Common Stock or securities exercisable for or convertible into Common Stock in connection with a merger, acquisition or other business combination or a strategic partnering or joint venture transaction or the exercise or conversion of such securities, (v) the issuance of Common Stock or securities exercisable for or convertible into Common Stock in connection with the settlement of claims which are the subject of law suits, arbitrations and similar proceedings or the conversion or exercise of such securities, and (vi) the issuance of warrants to equipment lessors in connection with capital lease transactions or the exercise of such warrants. If prior to the later of (i) 180 days after the Closing Date or (ii) 90 days after the effective date of the Shelf Registration Statement described in the Registration Rights Agreement, the Company consummates a New Transaction in which it sells or is deemed to sell Common Stock or securities exercisable for or convertible into Common Stock at a lower price than the Shares, or issues warrants with an exercise price lower than the Warrants, then the Company shall issue additional shares of Common Stock so that the effective price per share for the Shares equals the price of the new shares and if the Company issues Warrants, the Warrants will be amended to lower the exercise price of the Warrants to the price of the new warrants.

 

nn. The Company warrants that, with respect to the Securities, other than the stop transfer instructions to give effect to Section 4(a) hereof, it will give its transfer agent no instructions inconsistent with instructions to issue Common Stock from time to time, including upon exercise of the Warrants in such amounts as specified from time to time by the Company to the transfer agent, it being understood that Common Stock issued upon the exercise of the Warrants will bear the restrictive legend specified in Section 4(b) of this Agreement, Registered in the name of the Purchaser or its nominee and in such denominations to be specified by the Purchaser in connection with each exercise of the Warrants. Except as so provided, the 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. Nothing in this Section shall affect in any way the Purchaser’s obligations and agreement to comply with all applicable securities laws upon resale of the Securities. If the Purchaser provides the Company with an opinion of counsel reasonably satisfactory to the Company that registration of a resale by the Purchaser of any of the Securities in accordance with clause (1)(B) of Section 4(a) of this Agreement is not required under the 1933 Act, the Company shall (except as provided in clause (2) of Section 4(a) of this Agreement) permit the transfer of the Securities and, in the case of the Warrant Shares, promptly instruct the Company’s transfer agent to issue one or more certificates for Common Stock without legend in such name and in such denominations as specified by the Purchaser.

 

oo. Subject to the provisions of this Agreement, the Company will permit the Purchaser to exercise its right to exercise the Warrant in the manner contemplated by the Warrant.

 

pp. In the case of a transfer in lieu of delivering physical certificates representing the Securities, provided the Company’s transfer agent is participating in the Depository Trust Company Fast Automated Securities Transfer program, upon request of the transferee and its compliance with the provisions contained in this paragraph, so long as the certificates therefore do not bear a legend and the transferee is not obligated to return such certificate for the placement of a legend thereon, the Company shall use its commercially reasonable efforts to cause its transfer agent to electronically transmit the Common Stock issuable to the transferee by crediting the account of the transferee’s.

 

 

qq. The Company agrees to indemnify and hold harmless each Purchaser and its officers, directors, employees, and agents, and each Purchaser Control Person from and against any losses, claims, damages, liabilities or expenses incurred (collectively, “Damages”), and any action in respect thereof to which Purchaser, its partners, Affiliates, officers, directors, employees, and duly authorized agents, and any such Purchaser Control Person becomes subject to, resulting from, arising out of or relating to any misrepresentation, breach of warranty or nonfulfillment of or failure to perform any covenant or agreement on the part of Company contained in this Agreement, as such Damages are incurred, except to the extent such Damages result primarily from Purchaser’s failure to perform any covenant or agreement contained in this Agreement or Purchaser’s or its officers’, directors’, employees’, agents’ or Purchaser Control Persons’ negligence, recklessness or bad faith in performing its obligations under this Agreement.

 

rr. The Purchaser agrees to indemnify and hold harmless the Company and its officers, directors, employees, and agents, and each person deemed in control of the Company pursuant to Rule 405 under the 1933 Act, or section 20 of the 1934 Act, from and against any Damages, and any action in respect thereof to which the Company, its partners, Affiliates, officers, directors, employees, and duly authorized agents, and any such control person becomes subject to, resulting from, arising out of or relating to any misrepresentation, breach of warranty or nonfulfillment of or failure to perform any covenant or agreement on the part of Purchaser contained in this Agreement, as such Damages are incurred, except to the extent such Damages result primarily from the Company’s failure to perform any covenant or agreement contained in this Agreement or the Company or its officers’, directors’, employees’, agents’ or such control persons’ negligence, recklessness or bad faith in performing its obligations under this Agreement.

 

 

 

ss. This Agreement shall be governed by and interpreted in accordance with the laws of the State of Colorado for contracts to be wholly performed in such state and without giving effect to the principles thereof regarding the conflict of laws. The Company and each Purchaser hereby submit to the jurisdiction of any state court of competent jurisdiction in and for Arapahoe County, Colorado, or in the United States District Court for Colorado sitting at Arapahoe County, Colorado in any action or proceeding arising out of or relating to this Agreement and agree that all claims in respect of the action or proceeding may be heard and determined in any such court; agree not to bring any action or proceeding arising out of or relating to this Agreement in any other court; waive any defense of inconvenient forum to the maintenance of any action or proceeding so brought and waive any bond, surety, or other security that might be required of any other party with respect thereto; and agree that a final judgment in any action or proceeding so brought shall be conclusive and may be enforced by suit on the judgment or in any other manner provided by law or in equity.

 

 

tt. Failure of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising such right or remedy, shall not operate as a waiver thereof.

 

uu. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties hereto.

 

vv. All pronouns and any variations thereof refer to the masculine, feminine or neuter, singular or plural, as the context may require.

 

ww. A facsimile transmission of this signed Agreement shall be legal and binding on all parties hereto.

 

xx. This Agreement may be signed in one or more counterparts, each of which shall be deemed an original.

 

yy. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement.

 

zz. 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 or the validity or enforceability of this Agreement in any other jurisdiction.

 

aaa. This Agreement may be amended only by an instrument in writing signed by the party to be charged with enforcement thereof.

 

bbb. This Agreement supersedes all prior agreements and understandings among the parties hereto with respect to the subject matter hereof.

 

 

ccc. the date delivered, if delivered by personal delivery as against written receipt therefore or by confirmed facsimile transmission,

 

ddd. the seventh business day after deposit, postage prepaid, in the United States Postal Service by registered or certified mail, or

 

eee. the third business day after mailing by domestic or international express courier, with delivery costs and fees prepaid,

 

in each case, addressed to each of the other parties thereunto entitled at the following addresses (or at such other addresses as such party may designate by ten (10) days’ advance written notice similarly given to each of the other parties hereto):

Company:        Zynex Medical Holdings, Inc.

8100 Southpark Way, Suite A-9

Littleton, CO 80120

Attn: Peter J. Leveton

Fax: (800) 495-6695

with a copy to:

Holland & Hart LLP

555 Seventeenth Street

Suite 3200

Denver, CO 80202

Attn: Mark R. Levy

Fax: (303) 295-8261

Purchaser: To the addresses set forth on the signature page to this Agreement

with a copy to:

Chicago Investment Group, L.L.C.

190 South La Salle Street, Suite 850

Chicago, IL 60603

Attention: Stuart Fuchs   

 

 

 

 

[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]

 

 

 

 

IN WITNESS WHEREOF, this Securities Purchase Agreement has been duly executed by the Purchaser as of the date set forth below.

	By: _______________________________
	Name:_____________________________
	Title: ______________________________
	Address:: __________________________

 

	__________________________________
	__________________________________
	__________________________________
	__________________________________
	__________________________________
	__________________________________

As of the date set forth below, the undersigned hereby accepts this Agreement and represents that the foregoing statements are true and correct and that it has caused this Securities Purchase Agreement to be duly executed on its behalf.

By: ____________________________________

 

Name:__________________________________       

Title:____________________________________

 

 

---

---