Exhibit 10.1
SERIES 5-A PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
     THIS SERIES 5-A PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT (the
“Agreement”) is made as of the                      day of
                                        , 2008 by and among Tri-Isthmus Group,
Inc. (f/k/a Vsource, Inc.), a Delaware corporation (the “Company”), and
                                        , a Michigan limited liability company
(the “Purchaser”).
     The parties hereby agree as follows:
1. Authorization and Sale of Shares and Warrants.
     1.1 Authorization. The Company has duly authorized the sale and issuance of
up to 9,000 shares (the “Shares”) of its Series 5-A Convertible Preferred Stock,
par value $0.01 per share (the “Series 5-A Preferred”), and warrants to purchase
up to 5,400,000 shares of the Company’s common stock, par value $0.01 per share
(the “Common Stock”), at an exercise price of $0.50 per share substantially in
the form attached hereto as Exhibit A (the “Warrants”). For purposes of this
Agreement, a “Unit” shall consist of one share of Series 5-A Preferred and one
Warrant to purchase 600 shares of Common Stock.
     1.2 Purchase and Sale. Upon the terms and subject to the conditions herein,
and in reliance on the representations, warranties and covenants set forth
herein, upon Closing Purchaser shall purchase from the Company, and the Company
shall issue and sell to Purchaser,                      Units, for a purchase
price of $                                        , or $1,000.00 per Unit (the
“Purchase Price”).
     1.3 Defined Terms Used in this Agreement. The following terms used in this
Agreement shall be construed to have the meanings set forth below.
          “Affiliate” means with respect to any person or entity (a “Person”),
any Person which, directly or indirectly, controls, is controlled by, or is
under common control with such Person, including, without limitation, any
partner, officer, director, or member of such Person.
          “Balance Sheet” means the Company’s balance sheet as of September 30,
2007 included in the Company’s Annual Report on Form 10-K for the transition
period ended September 30, 2007.
          “Code” means the Internal Revenue Code of 1986, as amended.
          “Exchange Act” means the Securities Exchange Act of 1934, as amended.
          “Material Adverse Effect” means a material adverse effect on the
assets or liabilities of the Company.
          “SEC” means the United States Securities and Exchange Commission.
          “Securities Act” means the Securities Act of 1933, as amended.

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2. Closing; Deliveries.
     2.1 Closing. The purchase and sale of the Units shall occur upon the
Company’s execution of this Agreement and be effective as of the Effective Date
(the “Closing”).
     2.2 Deliveries; Certificate of Designation.
          (a) Shares and Warrants; Purchase Price. At the Closing, the Company
shall deliver to Purchaser certificates representing the Shares and the Warrants
being purchased by Purchaser against payment of the Purchase Price to the
Company.
          (b) Certificate of Designation. The Company has previously filed the
Certificate of Designation of the Company, in the form attached hereto as
Exhibit B (as amended, the “Certificate of Designation”), which establishes the
rights and preferences of the Series 5-A Preferred.
3. Representations and Warranties of the Company. The Company hereby represents
and warrants to Purchaser that the following representations are true and
correct as of the date hereof. For purposes of these representations and
warranties, the phrase “to the Company’s knowledge” shall mean the actual
knowledge of David Hirschhorn or Dennis Smith.
     3.1 Organization, Good Standing, Corporate Power and Qualification. The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has all requisite corporate power
and authority to carry on its business as presently conducted and as proposed to
be conducted. The Company is duly qualified to transact business and is in good
standing in each jurisdiction in which the failure to so qualify would have a
Material Adverse Effect.
     3.2 Capitalization. The authorized capital stock of the Company consists of
(i) 100,000,000 shares of Common Stock, 8,177,629 shares of which are issued and
outstanding, and (ii) 5,000,000 shares of preferred stock, of which (a) 67,600
shares of Series 1-A Preferred Stock, par value $0.01 per share, (b) 3,900
shares of Series 2-A Preferred Stock, par value $0.01 per share, (c) 7,462
shares of Series 5-A Preferred Stock, par value $0.01 per share, and (d) 3,585
shares of Series 6-A Preferred are issued and outstanding. Except as disclosed
on Schedule 3.2 and as contemplated hereby, there are no outstanding
subscriptions, options, warrants, commitments, agreements or arrangements for or
relating to the issuance, or sale of, or outstanding securities convertible into
or exchangeable for, any shares of capital stock of any class or other equity
interests of the Company. As of the Closing, and after giving effect to the
transactions contemplated hereby, all of the outstanding shares of capital stock
of the Company will have been duly and validly authorized and issued and will be
fully paid and non-assessable and will have been offered, issued, sold and
delivered in compliance with applicable federal and state securities laws and
not subject to any preemptive rights. When issued in accordance with the terms
of the Series 5-A Preferred and the Warrants, the shares of Common Stock
issuable upon exercise of Series 5-A Preferred and the Warrants will be validly
issued, fully paid and non-assessable. The terms relating to the Warrants are as
set forth in Exhibit A attached hereto. The relative rights, preferences and
other terms relating to the Series 5-A Preferred are as set forth in Exhibit B
attached hereto. There are no preemptive rights, rights of first refusal, put or
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call rights or obligations or any other purchase or redemption obligations or
anti-dilution rights with respect to the Company’s capital stock or any
interests therein, other than as disclosed on Schedule 3.2 or rights set forth
herein or in the Company’s Certificate of Incorporation or the Certificates of
Designation establishing such capital stock. Other than as set forth herein,
there are no rights to have the Company’s capital stock registered for sale to
the public in connection with the laws of any jurisdiction, and there are no
agreements relating to the voting of the Company’s voting securities or
restrictions on the transfer of the Company’s capital stock.
     3.3 Authorization; No Conflict. The execution, delivery and performance by
the Company of this Agreement, and the consummation by the Company of the
transactions contemplated hereby, have been duly authorized by all necessary
corporate action. This Agreement has been duly executed and delivered by the
Company and constitutes the valid and binding obligation of the Company
enforceable in accordance with its terms. The execution of and performance of
the transactions contemplated by this Agreement and the compliance with its
provisions by the Company will not (a) conflict with or violate any provision of
the Certificate of Incorporation or Bylaws of the Company, (b) conflict with,
result in a breach of, constitute (with or without due notice or lapse of time
or both) a default under, result in the acceleration of, create in any party the
right to accelerate, terminate, modify or cancel, or require any notice, consent
or waiver under, any material contract, lease, sublease, license, sublicense,
franchise, permit, indenture, agreement or mortgage for borrowed money,
instrument of indebtedness, Security Interest (as defined below) or other
arrangement to which the Company is a party or by which the Company is bound or
to which its assets are subject, (c) result in the imposition of any Security
Interest upon any assets of the Company or (d) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to the Company or any
of its properties or assets. For purposes of this Agreement, “Security Interest”
means any mortgage, pledge, security interest, encumbrance, charge, or other
lien (whether arising by contract or by operation of law).
     3.4 Valid Issuance of Shares. The Shares, when issued, sold and delivered
in accordance with the terms and for the consideration set forth in this
Agreement, will be validly issued, fully paid and non-assessable and free of
restrictions on transfer other than restrictions on transfer under applicable
state and federal securities laws and liens or encumbrances created by or
imposed by Purchaser. Assuming the accuracy of the representations of Purchaser
in Section 4 of this Agreement, and subject to the filings described in
Section 3.5 below, the Shares will be issued in compliance with all applicable
federal and state securities laws. The Common Stock issuable upon conversion of
the Shares and exercise of the Warrants has been duly reserved for issuance, and
upon issuance, will be validly issued, fully paid and non-assessable and free of
restrictions on transfer other than restrictions on transfer under applicable
federal and state securities laws and liens or encumbrances created by or
imposed by Purchaser. Based in part upon the representations of Purchaser in
Section 4 of this Agreement, and subject to Section 3.5 below, the Common Stock
issuable upon conversion of the Shares and exercise of the Warrants will be
issued in compliance with all applicable federal and state securities laws.
     3.5 Governmental Consents and Filings. Assuming the accuracy of the
representations made by Purchaser in Section 4 of this Agreement, no consent,
approval, order or authorization of, or registration, qualification,
designation, declaration or filing with, any federal, state or local
governmental authority is required on the part of the Company in connection with
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the consummation of the transactions contemplated by this Agreement, except such
filings as shall have been made prior to and shall be effective on and as of the
Closing and such filings required to be made after the Closing under applicable
federal and state securities laws.
     3.6 Subsidiaries. The Company’s subsidiaries are as set forth in the
Company’s Annual Report on Form 10-K for the transition period ended
September 30, 2007.
     3.7 Compliance with Laws. The Company has complied in all material respects
with all laws, regulations and orders applicable to its present and currently
proposed business and has all material permits and licenses required thereby,
except where the failure to have such permits or licenses would not have a
Material Adverse Effect.
     3.8 Absence of Litigation. Except as disclosed in the Company’s periodic
reports filed with the Securities and Exchange Commission (the “SEC Filings”),
there is no action, suit or proceeding pending or, to the Company’s knowledge,
threatened, against the Company which questions the validity of this Agreement
or the right of the Company to enter into it, or which might result, either
individually or in the aggregate, in a Material Adverse Effect.
     3.9 Absence of Liabilities. The Company does not have any material
liabilities or obligations, whether accrued, absolute, contingent or otherwise,
of the type required to be disclosed on a balance sheet other than (i) such
matters as are specifically and expressly set forth on the Balance Sheet or
(ii) those which have been incurred by the Company in the ordinary course of
business during the period from the date of the Balance Sheet to the date
hereof.
     3.10 Material Contracts and Obligations. Except as disclosed in the
Company’s SEC Filings or as disclosed on Schedule 3.10, the Company is not a
party to, nor is it bound by, any of the following types of agreements: (a) any
agreement which requires future expenditures by the Company in excess of $25,000
or which might result in payments to the Company in excess of $25,000, (b) any
agreement with any current officer or director of the Company, or any
“affiliate” or “associate” of such persons (as such terms are defined in the
rules and regulations promulgated under the Securities Act), including without
limitation any agreement or other arrangement providing for the furnishing of
services by, rental of real or personal property from, or otherwise requiring
payments to, any such Person, (c) any agreement under which the Company is
restricted from carrying on any business or other services anywhere in the
world, (d) any agreement for the disposition of a material portion of the
Company’s assets or (e) any agreement for the acquisition of the business or
shares of another party.
     3.11 Changes. Except as disclosed in the Company’s SEC Filings, and in
Schedule 3.11, since September 30, 2007, there has not been:
          (a) any material change in the assets or liabilities of the Company
from that reflected on the Balance Sheet, except changes in the ordinary course
of business that have not caused, in the aggregate, a Material Adverse Effect;
          (b) any damage, destruction or loss, whether or not covered by
insurance, that would have a Material Adverse Effect;
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          (c) any waiver or compromise by the Company of a valuable right or of
a material debt owed to it;
          (d) any satisfaction or discharge of any lien, claim, or encumbrance
or payment of any obligation by the Company, except in the ordinary course of
business and the satisfaction or discharge of which would not have a Material
Adverse Effect;
          (e) any material change to a material contract or agreement by which
the Company or any of its assets is bound or subject;
          (f) any material change in any compensation arrangement or agreement
with any employee, officer, director or stockholder;
          (g) any mortgage, pledge, transfer of a security interest in, or lien
created by, the Company, with respect to any of its material properties or
assets, except liens for taxes not yet due or payable and liens that arise in
the ordinary course of business and do not materially impair the Company’s
ownership or use of such property or assets;
          (h) any loans or guarantees made by the Company to or for the benefit
of its employees, officers or directors, or any members of their immediate
families, other than travel advances and other advances made in the ordinary
course of its business;
          (i) any declaration, setting aside or payment or other distribution in
respect of any of the Company’s capital stock, or any direct or indirect
redemption, purchase, or other acquisition of any of such stock by the Company;
          (j) to the Company’s knowledge, any other event or condition of any
character, other than events affecting the economy or the Company’s industry
generally, that could reasonably be expected to result in a Material Adverse
Effect; or
          (k) any agreement or commitment by the Company to do any of the
foregoing.
     3.12 Employees. The Company’s only current employees are David Hirschhorn,
Dennis Smith and Karla Soto.
     3.13 Tax Returns and Payments. There are no federal, state, county, local
or foreign taxes due and payable by the Company which have not been timely paid.
There are no accrued and unpaid federal, state, country, local or foreign taxes
of the Company which are due, whether or not assessed or disputed. There have
been no examinations or audits of any tax returns or reports by any applicable
federal, state, local or foreign governmental agency. The Company has duly filed
all federal, state, county, local and foreign tax returns required to have been
filed by it and there are in effect no waivers of applicable statutes of
limitations with respect to taxes for any year.
     3.14 No Stop Order. No stop order suspending or prohibiting the
transactions contemplated by this Agreement has been issued by the SEC or the
regulatory authorities of any
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state and, to the Company’s knowledge, no proceeding for that purpose has been
initiated or is threatened or contemplated by the SEC or the regulatory
authorities of any state.
     3.15 Quotation of Common Stock. The Company’s Common Stock continues to be
quoted on the OTC Bulletin Board under the ticker symbol, “TISG.PK”.
     3.16 Directors and Officer’s Liability Insurance. The Company has made all
payments under its existing policy of directors and officers’ liability
insurance on a timely basis.
4. Representations and Warranties of Purchaser. Purchaser hereby represents and
warrants to the Company that:
     4.1 Authorization. The Purchaser has full power and authority to enter into
this Agreement. This Agreement, when executed and delivered by the Purchaser,
will constitute the valid and legally binding obligation of the Purchaser,
enforceable in accordance with its terms.
     4.2 Purchase for Own Account; Accredited Investor. This Agreement is made
with the Purchaser in reliance upon the Purchaser’s representation to the
Company, which by the Purchaser’s execution of this Agreement, the Purchaser
hereby confirms, that the Shares to be acquired by the Purchaser will be
acquired for investment for the Purchaser’s own account, not as a nominee or
agent, and not with a view to the resale or distribution of any part thereof,
and that the Purchaser has no present intention of selling, granting any
participation in, or otherwise distributing the same. By executing this
Agreement, the Purchaser further represents that the Purchaser does not
presently have any contract, undertaking, agreement or arrangement with any
Person to sell, transfer or grant participations to such Person or to any third
Person, with respect to any of the Shares. The Purchaser has not been formed for
the specific purpose of acquiring the Shares. The Purchaser is an “accredited
investor” as that term is defined in Rule 501(a) of Regulation D promulgated
under the Securities Act.
     4.3 Experience. The Purchaser has carefully reviewed the representations
concerning the Company contained in this Agreement and has made detailed inquiry
concerning the Company, its business and its personnel. The officers of the
Company have made available to the Purchaser any and all information which the
Purchaser has requested and have answered to the Purchaser’s satisfaction all
inquiries made by the Purchaser; and the Purchaser has sufficient knowledge and
experience in finance and business that it is capable of evaluating the risks
and merits of its investment in the Company and the Purchaser is able
financially to bear the risks thereof.
     4.4 Restricted Securities. The Purchaser understands that the issuance of
the Shares and the Warrants and the Common Stock issuable upon conversion of the
Shares and exercise of the Warrants have not been registered under the
Securities Act, by reason of a specific exemption from the registration
provisions of the Securities Act which depends upon, among other things, the
bona fide nature of the investment intent and the accuracy of the Purchaser’s
representations as expressed herein. The Purchaser understands that the Shares,
the Warrants and the Common Stock issuable upon conversion of the Shares and
exercise of the Warrants are “restricted securities” under applicable U.S.
federal and state securities laws and that, pursuant to these laws, the
Purchaser must hold the Shares, the Warrants and such Common Stock indefinitely
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unless the resales of same are registered with the SEC and qualified by state
authorities, or an exemption from such registration and qualification
requirements is available. The Purchaser acknowledges that, except as otherwise
provided herein, the Company has no obligation to register or qualify the resale
of the Shares, the Warrants or the Common Stock issuable upon conversion of the
Shares or exercise of the Warrants for resale. The Purchaser further
acknowledges that if an exemption from registration or qualification is
available, it may be conditioned on various requirements including, but not
limited to, the time and manner of sale, the holding period for the Shares, the
Warrants and the Common Stock issuable upon conversion of the Shares and
exercise of the Warrants, and on requirements relating to the Company which are
outside of the Purchaser’s control, and which the Company is under no obligation
and may not be able to satisfy.
     4.5 Legends. The Purchaser understands that the Shares, the Warrants and
any securities issued in respect of or exchange for the Shares or exercise of
the Warrants, may bear one or all of the following legends:
          (a) “THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. NO SUCH TRANSFER MAY BE EFFECTED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE
SECURITIES ACT OF 1933.”
          (b) Any legend required by the securities laws of any state to the
extent such laws are applicable to the Shares and the Warrants represented by
the certificate so legended.
     5. Directors’ and Officers’ Insurance and Indemnification. From and after
the Closing and for a period of six years, the Company will provide standard and
customary directors’ and officers’ liability insurance coverage commercially
consistent with the then-applicable size of the Company and its operations to
current and former officers and directors of the Company (all such directors and
officers are referred to herein as the “Covered Persons”), including run-off for
past acts. From and after the Closing, the Company will fulfill and honor in all
respects the obligations of the Company pursuant to any indemnification
obligations of the Company with respect to each of the Covered Persons, and any
indemnification provisions under the Company’s Certificate of Incorporation and
Bylaws will contain provisions with respect to exculpation and indemnification
that are at least as favorable to the Covered Persons as those contained in the
Certificate of Incorporation and Bylaws of the Company as in effect on the date
hereof, which provisions will not be amended, repealed or otherwise modified for
a period of six years from the Closing in any manner that would adversely affect
the rights of the Covered Persons, unless such modification is required by law.
This covenant shall be enforceable by the Covered Persons as third party
beneficiaries, and shall be binding on all successors and assigns of the
Company.
6. Registration Rights.
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     6.1 Registration Obligations. Upon demand by holders owning at least Fifty
Percent (50%) of the outstanding Shares, the Company shall include the shares of
Common Stock issuable upon conversion of the Series 5-A Preferred and exercise
of the Warrants (the “Registrable Securities”) in a registration statement
prepared by the Company and filed with the SEC within thirty (30) days of such
demand (the “Registration Statement”); provided, that no demand shall be made
sooner than the six month anniversary of the Closing and the Purchaser shall be
entitled to only one demand to register the resale of the Registrable Securities
pursuant to this Section 6.1. The Registration Statement will be on Form SB-2 or
other appropriate form (as the Company shall determine in its sole discretion)
and will permit the Registrable Securities to be offered on a continuous basis.
The Company shall use its commercially reasonable efforts to cause the
Registration Statement to be declared effective under the Securities Act by the
SEC as promptly as possible after the filing thereof. The Company shall use its
commercially reasonable efforts to keep the Registration Statement continuously
effective under the Securities Act until the date which is the earliest of
(a) the date on which all Registrable Securities have been sold, (b) the date on
which all Registrable Securities may be sold immediately without registration
under the Securities Act and without volume restrictions pursuant to Rule 144(b)
of the Securities Act or (c) two years from the date the Registration Statement
is declared effective by the SEC.
     6.2 Suspension of Registration Obligations. The Company’s obligations under
this Section 8 shall be suspended if (a) the fulfillment of such obligations
would require the Company to make a disclosure that would be detrimental to the
Company, and the Company’s Board of Directors determines that it is in the best
interests of the Company to defer such obligations or (b) the fulfillment of
such obligations would require the Company to prepare financial statements not
required to be prepared by the Company to comply with its obligations under the
Exchange Act at the time the Registration Statement is proposed to be filed (the
period during which either of the preceding conditions is in effect is referred
to as a “Permitted Black-Out Period”). A Permitted Black-Out Period will end, as
applicable, upon the making of the relevant disclosure by the Company (or, if
earlier, when such disclosure would no longer be necessary or detrimental) or as
soon as it would no longer be necessary to prepare such financial statements to
comply with the Securities Act.
     6.3 Expenses; Indemnification. The Company shall pay all costs and expenses
incurred by the Company in connection with the preparation and filing of the
Registration Statement, other than selling commissions and fees which shall be
the sole responsibility of the Purchaser. The Company and Purchaser shall
provide each other with customary indemnification rights in connection with the
Registration Statement prepared and filed with the SEC pursuant to this
Section 6.
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7. Indemnification.
     7.1 Indemnification by the Company. The Company shall indemnify and hold
harmless Purchaser and its officers, directors, agents, Affiliates, principal
shareholders, successors and assigns from and against any and all claims,
demands, liabilities, obligations, damages, costs, and expenses (including
reasonable attorneys’ fees) (collectively, “Losses”) arising out of any breach
of the Company’s representations, warranties, covenants or agreements set forth
herein; provided, however, that (a) the Company shall not indemnify Purchaser
for any Losses resulting from Purchaser’s negligence or intentional misconduct
or any breach of Purchaser’s representations, warranties, covenants or
agreements hereunder; and (b) the Company’s total liability under this
Section 7.1 shall not exceed the aggregate consideration paid to the Company by
Purchaser for the Units issued and sold pursuant to this Agreement.
     7.2 Indemnification by the Purchaser. Purchaser will indemnify and hold
harmless the Company and its officers, directors, agents, Affiliates, principal
shareholders, successors and assigns from and against any and all Losses arising
out of any breach of the Purchaser’s representations, warranties, covenants or
agreements set forth herein; provided, however, that the Purchaser shall not
indemnify the Company for any Losses resulting from the Company’s negligence or
intentional misconduct or any breach of the Company’s representations,
warranties, covenants or agreements hereunder.
8. Miscellaneous.
     8.1 Survival of Representations and Warranties. The representations and
warranties of the Company and the Purchaser contained in or made pursuant to
this Agreement shall survive the execution and delivery of this Agreement and
the Closing for a period of one year following the Closing.
     8.2 Successors and Assigns; No Third Party Beneficiaries. The terms and
conditions of this Agreement shall inure to the benefit of and be binding upon
the respective successors and assigns of the parties. Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.
     8.3 Governing Law. This Agreement shall be governed by and construed in
accordance with the internal substantive laws of the State of Delaware, without
regard to its principles of conflicts of laws.
     8.4 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement may also
be executed and delivered by facsimile signature and in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
     8.5 Notices. All notices and other communications given or made pursuant to
this Agreement shall be in writing and shall be deemed effectively given:
(a) upon personal delivery
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to the party to be notified, (b) when sent by confirmed electronic mail or
facsimile if sent during normal business hours of the recipient, and if not so
confirmed, then on the next business day, (c) five (5) days after having been
sent by registered or certified mail, return receipt requested, postage prepaid,
or (d) one (1) day after deposit with a nationally recognized overnight courier,
specifying next day delivery, with written verification of receipt. All
communications shall be sent to the respective parties at their address as set
forth on the signature page, or to such e-mail address, facsimile number or
address as subsequently modified by written notice given in accordance with this
Section 8.5. If notice is given to the Company, a copy shall also be sent to
Kirkpatrick & Lockhart Preston Gates Ellis LLP, 1717 Main Street, Suite 2800,
Dallas, Texas 75201, Attention: I. Bobby Majumder.
     8.6 No Finder’s Fees. Each party represents that it neither is nor will be
obligated for any finder’s fee or commission in connection with the transactions
contemplated by this Agreement. Purchaser agrees to indemnify and to hold
harmless the Company from any liability for any commission or compensation in
the nature of a finder’s fee arising out of the transactions contemplated hereby
(and the costs and expenses of defending against such liability or asserted
liability) for which Purchaser or any of its officers, employees, or
representatives is responsible. The Company agrees to indemnify and hold
harmless Purchaser from any liability for any commission or compensation in the
nature of a finder’s or broker’s fee arising out of the transactions
contemplated hereby (and the costs and expenses of defending against such
liability or asserted liability) for which the Company or any of its officers,
employees or representatives is responsible.
     8.7 Fees and Expenses. All fees and expenses incurred in connection with
the transactions contemplated by this Agreement shall be paid by the party
incurring such fees or expenses.
     8.8 Amendments and Waivers. Except as otherwise expressly set forth in this
Agreement, any term of this Agreement may be amended, terminated or waived only
with the written consent of the Company and the holders of at least a majority
of the then-outstanding Shares. Any amendment or waiver effected in accordance
with this Section 8.8 shall be binding upon the Purchaser and each transferee of
the Shares (or the Common Stock issuable upon conversion thereof), each future
holder of all such securities, and the Company.
     8.9 Severability. The invalidity or unenforceability of any provision
hereof shall in no way affect the validity or enforceability of any other
provision.
     8.10 Delays or Omissions. No delay or omission to exercise any right, power
or remedy accruing to any party under this Agreement, upon any breach or default
of any other party under this Agreement, shall impair any such right, power or
remedy of such non-breaching or non-defaulting party, nor shall it be construed
to be a waiver of any such breach or default, or an acquiescence therein, or of
or in any similar breach or default thereafter occurring; nor shall any waiver
of any single breach or default be deemed a waiver of any other breach or
default theretofore or thereafter occurring. Any waiver, permit, consent or
approval of any kind or character on the part of any party of any breach or
default under this Agreement, or any waiver on the part of any party of any
provisions or conditions of this Agreement, must be in writing and shall be
effective only to the extent specifically set forth in such writing. All
remedies,
SERIES 5-A PREFERRED STOCK AND
WARRANT PURCHASE AGREEMENT

10

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either under this Agreement or by law or otherwise afforded to any party, shall
be cumulative and not alternative.
     8.11 Acknowledgement. Each party hereto acknowledges that: (a) it has read
this Agreement; (b) it has been represented in the preparation, negotiation and
execution of this Agreement by legal counsel of its own choice or has
voluntarily declined to seek such counsel; and (c) it understands the terms and
consequences of this Agreement and is fully aware of the legal and binding
effect of this Agreement.
     8.12 Entire Agreement. This Agreement (including the Exhibits hereto)
constitutes the full and entire understanding and agreement among the parties
with respect to the subject matter hereof, and any other written or oral
agreement relating to the subject matter hereof existing among the parties is
expressly canceled.
[SIGNATURE PAGES FOLLOW]
SERIES 5-A PREFERRED STOCK AND
WARRANT PURCHASE AGREEMENT

11

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     IN WITNESS WHEREOF, the parties have executed this Series 5-A Preferred
Stock and Warrant Purchase Agreement as of the date first written above.

                  COMPANY:    
 
                TRI-ISTHMUS GROUP, INC.    
 
           
 
  By:        
 
     
 
   
 
      DAVID HIRSCHHORN, CEO    
 
                Address:    
 
                9663 Santa Monica Blvd., #959         Beverly Hills, California
90210    

SERIES 5-A PREFERRED STOCK AND
WARRANT PURCHASE AGREEMENT

12

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                  PURCHASER:    
 
                     
 
           
 
  By:        
 
     
 
   
 
           
 
  Name:        
 
     
 
   
 
           
 
  Title:        
 
     
 
   
 
           
 
  Address:        
 
                     
 
                     
 
                     
 
                     

SERIES 5-A PREFERRED STOCK AND
WARRANT PURCHASE AGREEMENT
[Purchaser Signature Page]

 

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EXHIBIT A
Form of Warrant
EXHIBIT A TO SERIES 5-A PREFERRED STOCK AND
WARRANT PURCHASE AGREEMENT
A-1

 

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EXHIBIT B
Form of Certificate of Designation
EXHIBIT B TO SERIES 5-A PREFERRED STOCK AND
WARRANT PURCHASE AGREEMENT
B-1