EXHIBIT 10.28
January 15, 2005
Molecular Diagnostics, Inc.
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
This Subscription Agreement (the "Agreement") sets forth the agreements
and understandings between the undersigned ("Subscriber") and Molecular
Diagnostics, Inc., a corporation organized under the laws of Delaware (the
"Company"), relating to Subscriber's subscription for, and purchase of, the
number of shares of common stock, par value $.001 per share (the "Common
Stock"), of the Company set forth on the signature page hereto (the "Shares").
1. Terms of Subscription; Warrants.
(a) Subscriber understands and agrees that Subscriber's
subscription, purchase and ownership of the Shares and acquisition of the
Warrant (as defined below) are subject to acceptance by the Company, and that
such purchase and acquisition will be made only in accordance with the terms of
this Agreement.
(b) In consideration for Subscriber's purchase of the Shares,
at the Closing the Company shall issue to Subscriber a warrant (the "Warrant")
to purchase the number of shares of Common Stock, rounded down to the nearest
whole number, equal to the product of (x) .25 and (y) the number of Shares
purchased by Subscriber (such shares subject to the Warrant, the "Warrant
Shares"). The Warrant will be exercisable until December 31, 2008 at an exercise
price equal to $.10 per share.
2. Conditions to Subscription Acceptance and Closing. Subscriber
understands and agrees that this subscription and the closing of the
transactions contemplated hereby (the "Closing") is made subject to the
following terms and conditions:
(a) The Company has the right to accept or reject this
subscription in whole or in part. Unless this subscription is rejected by the
Company by April 30, 2005 (which date may be extended to May 25, 2005 by the
Company in its sole discretion without notice to or approval by Subscriber),
this subscription shall be deemed accepted in whole.
(b) On or prior to the date of the Closing, Subscriber shall
have furnished the Company with such information, documents, certificates and
opinions as the Company may reasonably require to evidence the accuracy,
completeness or satisfaction of the representations, warranties, covenants,
agreements and conditions herein contained or as the Company otherwise may
reasonably require.
3. Subscriber Representations and Warranties. In connection with
Subscriber's subscription for, and purchase of, the Shares and the issuance of
the Warrant, Subscriber represents and warrants to the Company that:
(a) If Subscriber is a natural person, Subscriber (i) is a
bona fide resident of the state or jurisdiction set forth on the signature page
of this Agreement as Subscriber's home address, and has no present intention of
becoming a resident of any other state or jurisdiction; (ii) is at least 21
years of age; and (iii) is legally competent to execute this Agreement and any
other documents and instruments required in connection herewith (the
"Transaction Documents"). If Subscriber is an entity, the person signing this
Agreement and the Transaction Documents on behalf of the entity is duly
authorized to execute and deliver this Agreement and the Transaction Documents
on behalf of Subscriber. This Agreement and the Transaction Documents constitute
the legal, valid and binding obligations of Subscriber, enforceable in
accordance with their terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency or similar laws relating to or affecting
generally the enforcement of creditors' rights and remedies or by other
equitable principles.
(b) The execution and delivery of this Agreement and the
Transaction Documents by Subscriber do not, and the performance of the terms
hereof and thereof will not, contravene any material law, rule, regulation,
order, writ, judgment, injunction, decree, determination or award applicable to
Subscriber, or of the charter, bylaws, operating agreement, partnership
agreement or other governing agreements of Subscriber (if applicable), and will
not conflict with, or result in any breach of, the terms, conditions or
provisions of, or constitute a default under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in or permit
the creation or imposition of any lien, charge or encumbrance upon any of the
assets of Subscriber pursuant to any indenture, mortgage or other agreement or
instrument or any judgment, decree, order or decision to which Subscriber is a
party or by which Subscriber is bound.
(c) Under existing law, no approval, authorization, license,
permit or other action by or filing with any Federal, state, municipal or other
governmental commission, board or agency is required on the part of Subscriber
in connection with the execution and delivery by Subscriber of this Agreement or
the Transaction Documents, or the consummation of the transactions contemplated
hereby or thereby.
(d) There are no actions, suits or proceedings existing,
pending or, to the knowledge of Subscriber, threatened against or affecting
Subscriber before any court, arbitrator or governmental or administrative body
or agency that would affect the validity or enforceability of this Agreement or
the Transaction Documents, or that would have a material adverse affect on the
ability of Subscriber to perform Subscriber's obligations hereunder and
thereunder.
(e) Subscriber has such knowledge and experience in financial
and business matters so as to be capable of evaluating and understanding, and
has evaluated and understood, the merits and risks of an investment in the
Company and the purchase of the Shares and acquisition of the Warrant, and
Subscriber has been given the opportunity (i) to obtain information and to
examine all documents relating to the Company and the Company's business, (ii)
to ask questions of, and to receive answers from, the Company concerning the
Company, the Company's business and the terms and conditions of this investment,
and (iii) to obtain any additional information, to the extent the Company
possesses such information or could acquire such information without
unreasonable effort or expense, necessary to verify the accuracy of any
information previously furnished. All such questions have been answered to
Subscriber's full satisfaction, and all information and documents, records and
books pertaining to this investment which Subscriber has requested have been
made available to Subscriber.
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(f) Subscriber is able to bear the substantial economic risks
of Subscriber's investment in the Company and the purchase of the Shares and
acquisition of the Warrant in that, among other factors, Subscriber can afford
to hold the Shares, the Warrant and any Warrant Shares issued upon exercise of
the Warrant for an indefinite period and can afford a complete loss of
Subscriber's investment in the Company.
(g) No material adverse change in Subscriber's financial
condition has taken place during the past twelve (12) months, and Subscriber
will have sufficient liquidity with respect to Subscriber's net worth for an
adequate period of time to provide for Subscriber's needs and contingencies.
(h) Subscriber is relying solely on Subscriber's own decision
and/or the advice of Subscriber's own adviser(s) with respect to an investment
in the Company and the purchase of the Shares and acquisition of the Warrant,
and has neither received nor relied on any communication from the Company or its
officers or agents regarding any legal, investment or tax advice relating to an
investment in the Company.
(i) Subscriber has had an opportunity to read and understand
the provisions of this Agreement and the Transaction Documents, to consult with
Subscriber's adviser(s) or counsel regarding the operation and consequences of
those provisions, and has considered the effect of those provisions on
Subscriber.
(j) Subscriber recognizes that an investment in the Company
involves substantial risks in that, among other factors: (i) successful
operation of the Company depends on factors beyond the control of the Company,
and the Company has not had profitable operations from its inception to date;
(ii) investment in the Company is a speculative investment and involves a high
degree of risk of loss; (iii) the Company is engaged in an industry which is
highly competitive and subject to substantial risks; (iv) the Company has a very
limited amount of working capital available to it; and (v) neither the Shares
nor the Warrant or any Warrant Shares will be registered under applicable
federal and state securities laws except as set forth in the Transaction
Documents and, accordingly, it may not be possible to liquidate an investment in
the Company in case of immediate need of funds or any other emergency, if at
all. Subscriber has taken full cognizance of, and understands, such risks and
has obtained sufficient information to evaluate the merits and risks of an
investment in the Company and the purchase of the Shares and acquisition of the
Warrant.
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(k) Subscriber confirms that none of the Company's officers
nor any of the Company's agents have made any representations or warranties
concerning an investment in the Company, including, without limitation, any
representations or warranties concerning anticipated financial results, or the
likelihood of success of the operations, of the Company.
(l) Subscriber is acquiring the Shares and the Warrant
(including any Warrant Shares issuable upon the exercise thereof) for
Subscriber's own account, for investment and not with a view to, or in
connection with, any public offering or distribution of the same and without any
present intention to sell the same at any particular event or circumstance.
Subscriber has no agreement or other arrangement with any person to sell,
transfer or pledge any part of the Shares, the Warrant or any Warrant Shares
which would guarantee Subscriber any profit or protect against any loss with
respect to the Shares or Warrant.
(m) Subscriber understands that no U.S. Federal or state or
international agency has passed on or made any recommendation or endorsement of
an investment in the Shares.
(n) Subscriber understands that neither the Shares nor the
Warrant (or any Warrant Shares issuable upon exercise thereof) have been
registered under the Securities Act of 1933, as amended (the "Act"), or
applicable U.S. state securities laws or any securities laws of any other
jurisdiction, and are being offered and sold under an exemption from
registration provided by such laws and the rules and regulations thereunder.
Further, Subscriber understands that the Company is under no obligation to
register the Shares or the Warrant (or any Warrant Shares issuable upon exercise
thereof) or to comply with any exemption under any applicable securities laws
with respect thereto or any other ownership interest in the Company except as
set forth in the Transaction Documents. Subscriber may therefore be required to
bear the economic risks of an investment in the Company for an indefinite period
of time because the Shares and the Warrant (and any Warrant Shares issuable upon
exercise thereof) cannot be resold unless registered under applicable securities
laws or unless an exemption from such registration is available. Subscriber also
understands that (i) the exemption provided by Rule 144 under the Act may not be
available because of the conditions and limitations of such rule, and that in
the absence of the availability of such rule, any disposition by Subscriber of
any securities of the Company may require compliance with some other exemption
under the Act; and, (ii) the Company is under no obligation and does not plan to
take any action in furtherance of making Rule 144 or any other exemption so
available.
(o) If Subscriber is required in the future to file a Form 144
with the Securities and Exchange Commission in connection with sales of Shares
or the Warrant (or any Warrant Shares issuable upon exercise thereof) or any
other ownership interest in the Company pursuant to Rule 144 under the Act,
Subscriber will deliver a copy of such form to the Company at the same time and
each time Subscriber is required to file a copy with the Securities and Exchange
Commission.
(p) Subscriber is an "accredited investor" as such term is
defined in Rule 501(a) promulgated under the Act. Subscriber will execute and
deliver the Confidential Accredited Investor Questionnaire attached hereto as
Exhibit A simultaneously with the execution and delivery of this Agreement.
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(q) Subscriber agrees that the foregoing representations and
warranties will survive the sale of the Shares and issuance of the Warrant to
Subscriber, as well as any investigation made by any party relying on same.
(r) Except as Subscriber shall have clearly and expressly
disclosed to the Company, Subscriber has not authorized any underwriter, broker,
dealer, agent or finder to act on Subscriber's behalf (nor does Subscriber have
any knowledge of any broker, dealer, agent or finder purporting to act on
Subscriber's behalf) with respect to Subscriber's purchase of the Shares or
acquisition of the Warrant and that Subscriber has not paid directly or
indirectly any commission or similar remuneration with respect to such
acquisition. Subscriber hereby agrees to indemnify and hold harmless the Company
and its directors, officers and agents from and against any cost, expense,
claim, liability or damage arising out of or resulting from a breach of such
representation and warranty.
4. General Provisions.
(a) This Agreement will be governed by and construed in
accordance with the substantive laws of the State of Delaware without regard to
rules thereof relating to conflicts of laws.
(b) This Agreement and the Transaction Documents together
constitute the entire agreement between the parties with respect to the subject
matter hereof and thereof and supersede any prior subscription agreement for
Shares executed by Subscriber. This Agreement may be amended only by a writing
executed by the parties.
(c) The Shares and the Warrant (and any Warrant Shares
issuable upon exercise thereof) will be assigned or transferred only in
accordance with applicable law and the terms of this Agreement and the
Transaction Documents.
(d) This Agreement will survive Subscriber's death or
dissolution and will be binding upon Subscriber's successors, heirs, assignees,
representatives and distributees.
(Signatures appear on next page.)
* * * * * *
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IN WITNESS WHEREOF, Subscriber has hereby executed this Agreement as of
the date set forth above.
SUBSCRIBER:
If an Individual: If an Entity:
Name of Entity: _________________________
__________________________ By: ____________________________________
[Name] Name:
Title:
Mailing Address:
____________________________________
____________________________________
____________________________________
E-Mail Address: ____________________________________
Social Security Number/U.S. Employer Identification Number: ____________________
Number of Shares for which Subscription is tendered:
Purchase Price: ____________________________________
Aggregate Consideration: ____________________________________
Warrants Issued: ____________________________________
ACCEPTED:
Molecular Diagnostics, Inc.,
a Delaware corporation
By: _________________________________
Name:
Title:
Date of Acceptance: ____________________________________
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EXHIBIT A
Confidential Accredited Investor Questionnaire
The undersigned represents and warrants that he, she or it comes within
one of the categories marked below, and that for any category marked, he, she or
it has truthfully set forth the factual basis or reason the undersigned comes
within that category. ALL INFORMATION IN RESPONSE TO THIS QUESTIONNAIRE WILL BE
KEPT STRICTLY CONFIDENTIAL. The undersigned agrees to furnish such additional
information as is reasonably necessary in order to verify the answers set forth
below.
Please xxxx next to each applicable paragraph:
_____ a. The undersigned is an individual (not a partnership,
corporation, etc.) whose individual net worth, or joint net
worth with his or her spouse, presently exceeds $1,000,000.
Explanation. In calculating net worth, you may
include equity in personal property and real estate,
including your principal residence, cash, short-term
investments, stock and securities. Equity in personal
property and real estate should be based on the
appraised fair market value of such property, less
debt secured by such property.
_____ b. The undersigned is an individual (not a partnership,
corporation, etc.) who had an income in excess of $200,000 in
each of the two most recent years, or joint income with his or
her spouse in excess of $300,000 in each of those years (in
each case including foreign income, tax exempt income and the
full amount of capital gains and losses, but excluding any
income of other family members and any unrealized capital
appreciation), and has a reasonable expectation of reaching
the same income level in the current year.
_____ c. The undersigned is a director or executive officer of
Molecular Diagnostics, Inc. or a subsidiary thereof.
_____ d. The undersigned is (i) a bank or a savings and loan
association, (ii) a registered broker dealer, (iii) an
insurance company, (iv) a registered investment company or
business development company, (v) a licensed small business
investment company, (vi) a plan established and maintained by
a state, its political subdivisions, or any agency or
instrumentality of a state or its political subdivisions (or
any agency or instrumentality thereof), for the benefit of its
employees, if such plan has total assets in excess of
$5,000,000, (vii) an employee benefit plan within the meaning
of Title I of ERISA, if the investment decision is made by a
plan fiduciary which is either a bank, savings and loan
association, insurance company or registered investment
adviser or if the plan has total assets in excess of
$5,000,000 or is a self-directed plan with investment
decisions made solely by persons that are accredited
investors.
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Describe entity. ____________________________________________
______________________________________________________________
_____ e. The undersigned is a private business development company
as defined in Section 202(a)(22) of the Investment Advisers
Act of 1940, as amended.
Describe entity. ____________________________________________
______________________________________________________________
_____ f. The undersigned is a corporation, partnership, business
trust or non-profit organization within the meaning of Section
501(c)(3) of the Internal Revenue Code, as amended, in each
case not formed for the specific purpose of potentially making
an investment in connection herewith and with total assets in
excess of $5,000,000.
Describe entity. ____________________________________________
______________________________________________________________
_____ g. The undersigned is a trust (not formed for the specific
purpose of potentially making an investment in connection
herewith) with total assets in excess of $5,000,000, where the
purchase is directed by a person with the knowledge and
experience in financial and business matters to capably
evaluate the merits and risks of the prospective investment,
as set forth in Rule 506(b)(2)(ii) promulgated under the
Securities Act of 1933, as amended.
_____ h. The undersigned is an entity all the equity owners of which
are "accredited investors" within one or more of the above
categories.
Describe entity. ____________________________________________
______________________________________________________________
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The undersigned is aware of the significance of the foregoing
representations. The undersigned is also aware that the above representations
made by him, her or it will be relied upon in connection with any investment
made in Molecular Diagnostics, Inc. pursuant to the accompanying document or
documents.
Date: ____________________ _______________________________________
Signature
_______________________________________
Print name
_______________________________________
Address:
