Attached files
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EX-4.3 - InsPro Technologies Corp | v206453_ex4-3.htm |
EX-4.2 - InsPro Technologies Corp | v206453_ex4-2.htm |
EX-3.1 - InsPro Technologies Corp | v206453_ex3-1.htm |
EX-4.1 - InsPro Technologies Corp | v206453_ex4-1.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of
the
Securities Exchange Act of 1934
Date of
report (Date of earliest event reported): December 22,
2010
InsPro Technologies
Corporation
(Exact
name of registrant as specified in charter)
Delaware
|
333-123081
|
98-0438502
|
(State
or other jurisdiction of incorporation)
|
(Commission
File
Number)
|
(IRS
Employer
Identification
No.)
|
150
N. Radnor-Chester Road
Suite
B-101
Radnor,
Pennsylvania 19087
(Address
of principal executive offices)
(484)
654-2200
(Registrant's
telephone number, including area code)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General
Instruction A.2 below):
¨
|
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|
¨
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
¨
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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¨
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item 1.01.
Entry into a Material Definitive Agreement
Note
Conversion
On December 22, 2010, InsPro
Technologies Corporation, a Delaware corporation (the “Company”), entered
into and completed a note conversion (the “Note Conversion”)
with The Co-Investment Fund II, L.P. (“Co-Investment”), in
which the Company issued an aggregate of 797,378 shares (each, a “Preferred Share”) of
its Series B Convertible Preferred Stock, par value $0.001 per share (“Preferred Stock”),
and warrants (“Warrants”) to
purchase 7,973,780 shares of its Common Stock, par value $0.001 (“Common Stock”), as
full repayment of all outstanding principal and interest under the Loan
Agreement and Secured Promissory Note, dated December 22, 2009 and amended on
June 15, 2010, between the Company and Co-Investment, pursuant to the terms of a
note conversion agreement (the “Conversion
Agreement”).
Pursuant to the Conversion Agreement,
the Company agreed to issue to Co-Investment 797,378 investment units (each, a
“Unit”) in the
Note Conversion at a per Unit conversion price equal to $3.00. Each Unit issued
in the Note Conversion consisted of one share of Preferred Stock and a Warrant
to purchase ten shares of Common Stock at an initial exercise price of $0.15 per
share, subject to adjustment. The closing of the Note Conversion was
subject to customary closing conditions.
The Preferred Stock is entitled to vote
as a single class with the holders of the Company’s Common Stock, with each
Preferred Share having the right to 20 votes. Upon the liquidation,
sale or merger of the Company, each Preferred Share is entitled to receive an
amount equal to the greater of (A) a liquidation preference equal to the
Preferred Stock original issue price, subject to certain customary adjustments,
or (ii) the amount such Preferred Share would receive if it participated pari passu with the holders of
Common Stock on an as-converted basis. Each Preferred Share is
convertible into 20 shares of Common Stock (the “Shares”). For
so long as any Preferred Shares are outstanding, the vote or consent of the
Holders of at least two-thirds of the Preferred Shares is required to approve
(Y) any amendment to the Company’s certificate of incorporation or bylaws that
would adversely alter the voting powers, preferences or special rights of the
Preferred Stock or (Z) any amendment to the Company’s certificate of
incorporation to create any shares of capital stock that rank senior to the
Preferred Stock. In addition to the voting rights described above,
for so long as 1,000,000 Preferred Shares are outstanding, the vote or consent
of the holders of at least two-thirds of the Preferred Shares is required to
effect or validate any merger, sale of substantially all of the assets of the
Company or other fundamental transaction, unless such transaction, when
consummated, will provide the holders of Preferred Stock with an amount per
share equal to the Preferred Stock original issue price plus any declared but
unpaid dividends.
The Warrants provide that the holder
thereof shall have the right at any time prior to the earlier of (i) ten
business days’ after the Company has properly provided written notice to all
such holders of a Call Event (as defined below) and (ii) December 22, 2015, to
acquire up to a total of 7,973,780 shares of Common Stock of the Company (each a
“Warrant
Share”) upon the payment of $0.15 per Warrant Share (the “Exercise
Price”). The Company also has the right, at any point after
which the volume weighted average trading price per share of the Preferred Stock
for a minimum of 20 consecutive trading days is equal to at least eight times
the Exercise Price per share, provided that certain other conditions have been
satisfied, to call the outstanding Warrants (a “Call Event”), in
which case such Warrants will expire if not exercised within ten business days
thereafter. The Warrants also include full ratchet anti-dilution
adjustment provisions for issuances of securities below $0.15 per share of
Common Stock during the period from the date of issuance of the Warrants until
September 30, 2012, subject to customary exceptions.
In connection with the signing of the
Conversion Agreement, the Company and Co-Investment also entered into a
registration rights agreement (the “Registration Rights
Agreement”). Under the terms of the Registration Rights Agreement, the
Company agreed to prepare and file with the SEC, within 30 days following
the receipt of a demand notice of a holder of Registrable Securities, a
registration statement on Form S-1 (the “Registration
Statement”) covering the resale of the Shares and the Warrant Shares
(collectively, the “Registrable
Securities”). Subject to limited exceptions, the Company also agreed to
use its reasonable best efforts to cause the Registration Statement to be
declared effective under the Securities Act of 1933, as amended (the “Securities Act”), as
soon as practicable but, in any event, no later than 60 days following the
date of the filing of the Registration Statement (or 120 days following the
date of the filing of the Registration Statement in the event the Registration
Statement is subject to review by the SEC), and agreed to use its reasonable
best efforts to keep the Registration Statement effective under the Securities
Act until the date that all of the Registrable Securities covered by the
Registration Statement have been sold or may be sold without volume restrictions
pursuant to Rule 144(b)(i) promulgated under the Securities Act. In
addition, if the Company proposes to register any of its securities under the
Securities Act in connection with the offering of such securities for cash, the
Company shall, at such time, promptly give each holder of Registrable Securities
notice of such intent, and such holders shall have the option to register their
Registrable Securities on such additional registration statement. The
Registration Rights Agreement also provides for payment of partial damages to
Co-Investment under certain circumstances relating to failure to file or obtain
or maintain effectiveness of the Registration Statement, subject to
adjustment.
The Company also agreed, pursuant to
the terms of the Conversion Agreement, that for a period of 90 days after the
effective date of the Conversion Agreement, the Company shall not, subject to
certain exceptions, offer, sell, grant any option to purchase, or otherwise
dispose of any equity securities or equity equivalent securities, including
without limitation, any debt, preferred stock, rights, options, warrants or
other instrument that is at any time convertible into or exchangeable for, or
otherwise entitles the holder thereof to receive, capital stock and other
securities of the Company.
The Conversion Agreement also provides
for a customary participation right for Co-Investment, subject to certain
exceptions and limitations, which grants Co-Investment the right to participate
in any future capital raising financings of the Company occurring prior to
September 30, 2012. Co-Investment may participate in such financings
at a level based on Co-Investment’s ownership percentage of the Company on a
fully-diluted basis prior to such financing.
The foregoing is a summary of the terms
of the Conversion Agreement, the Registration Rights Agreement and the Warrants,
and does not purport to be complete. This summary is qualified in its entirety
by reference to the full text of each of the Conversion Agreement, the
Registration Rights Agreement and a form of the Warrants, which are attached
hereto as Exhibits 4.1, 4.2 and 4.3, respectively, and are incorporated by
reference herein.
Item 3.02 Unregistered Sales of
Equity Securities.
The description of the Conversion
Agreement, the Registration Rights Agreement and the Warrants in Item 1.01
of this Report are hereby incorporated into this Item 3.02 by
reference.
The Preferred Stock and Warrants are
being issued to an institutional investor without registration under the
Securities Act or any state securities laws. The Company is relying on the
exemption from the registration requirements of the Securities Act by virtue of
Section 4(2) thereof and Regulation D promulgated thereunder. Each of
the certificates representing shares of Preferred Stock to be issued in the Note
Conversion and each of the Warrants contain restrictive legends preventing the
sale, transfer or other disposition of such Preferred Shares and Warrants, as
the case may be, unless registered under the Securities Act or sold pursuant to
an exemption therefrom. As described in Item 1.01 of this current report,
the Company has agreed to file a Registration Statement for the resale of the
Shares and the Warrant Shares. This current report is not an offer to sell or
the solicitation of an offer to buy shares of Preferred Stock or other
securities of the Company.
Item
5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
Year.
In connection with the Note Conversion,
on December 22, 2010, the Company filed a Certificate of Amendment to the
Certificate of Designation of Series B Convertible Preferred Stock (the “Certificate of
Amendment”) with the Secretary of State of the State of Delaware. The
Certificate of Amendment was approved by the Company’s Board of Directors on
December 20, 2010 and became effective upon filing. The Certificate of Amendment
increases the number of authorized shares of Preferred Stock from 2,250,000 to
5,000,000.
The Certificate of Amendment is
attached hereto as Exhibit 3.1 and is incorporated herein by
reference.
Item 9.01 Financial Statements
and Exhibits.
(c)
Exhibits.
Exhibit Number
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Description of Exhibit
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3.1
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Certificate
of Amendment to Certificate of Designation with respect to shares of
Series B Convertible Preferred Stock
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4.1
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Note
Conversion Agreement, dated December 22, 2010, by and between InsPro
Technologies Corporation and The Co-Investment Fund II,
L.P.
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4.2
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Registration
Rights Agreement, dated December 22, 2010, by and between InsPro
Technologies Corporation and The Co-Investment Fund II,
L.P.
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4.3
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Form
of Warrant
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
INSPRO
TECHNOLOGIES CORPORATION
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Date:
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December
23, 2010
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By:
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/s/
Anthony R. Verdi
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Name:
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Anthony
R. Verdi
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|||
Title:
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Acting
Chief Executive Officer, Chief
Financial
Officer and Chief Operating
Officer
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Exhibit
Index
Exhibit Number
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Description of Exhibit
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3.1
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Certificate
of Amendment to Certificate of Designation with respect to shares of
Series B Convertible Preferred Stock
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4.1
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Note
Conversion Agreement, dated December 22, 2010, by and between InsPro
Technologies Corporation and The Co-Investment Fund II,
L.P.
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4.2
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Registration
Rights Agreement, dated December 22, 2010, by and between InsPro
Technologies Corporation and The Co-Investment Fund II,
L.P.
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4.3
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Form
of Warrant
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