THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS AND
HAVE BEEN TAKEN FOR INVESTMENT PURPOSES ONLY AND NOT WITH A VIEW TO OR FOR SALE
IN CONNECTION WITH ANY DISTRIBUTION THEREOF. THEY MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION AND QUALIFICATION WITHOUT,
EXCEPT UNDER CERTAIN SPECIFIC LIMITED CIRCUMSTANCES, AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION AND QUALIFICATION
ARE NOT REQUIRED.
THE SALE OF THE SECURITIES THAT ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN
QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND
THE ISSUANCE OF THE SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE
CONSIDERATION THEREFOR PRIOR TO THE QUALIFICATION IS UNLAWFUL, UNLESS THE SALE
OF SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF
THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT
ARE EXPRESSLY CONDITIONED UPON THE QUALIFICATION BEING OBTAINED, UNLESS THE SALE
IS SO EXEMPT.
SUBSCRIPTION AGREEMENT
Neurobiological Technologies, Inc.
0000 Xxxxxx Xxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attn: Chief Executive Officer
Gentlemen:
1. Subscription.
(a) The undersigned is hereby purchasing from Neurobiological Technologies,
Inc., a Delaware corporation (the "Company"), _____ units (the "Units"), each
consisting of (i) five shares (the "Shares") of the Company's Common Stock,
$0.001 par value (the "Common Stock"); and (ii) a Common Stock Purchase Warrant,
in the form of EXHIBIT A (the "Warrant"), to purchase two shares of Common
Stock. The Shares and the Warrants are referred to herein as the "Securities."
The undersigned understands and agrees that the Company is only offering the
Shares and the Warrants together as a Unit, and that the Shares and Warrants may
only be purchased as a Unit. The purchase price of each Unit shall be $4.00 for
an aggregate purchase price of $________ (the "Purchase Price").
(b) This subscription is submitted to the undersigned in accordance with
and subject to the terms and conditions described in this Subscription Agreement
relating to the offering of up to ________ Units; with a minimum subscription of
687,500 Units required to consummate the offering. The Company reserves the
right to amend, modify and/or withdraw all or a portion of the offering and to
increase or decrease the number of Units to be offered hereby.
2. (a) PURCHASE PRICE. The undersigned has tendered, together with this
Subscription Agreement, the Purchase Price by electronic wire transfer in
accordance with the following instructions:
Bank Name Xxxxx Fargo Bank
Bank Address: 000 Xxxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
ABA#: 000000000
WFB Account #: 4159 427 152
For further credit to Acct
Neurobiological Technologies, Inc.
Attn: Xxxxx Xxxx
or by delivery of a bank check or certified check made payable to
Neurobiological Technologies, Inc. against delivery to the undersigned of a
certificate representing the Securities.
(b) Closing. The closing of the sale and purchase of the Securities
shall occur on the date hereof or on such other date as shall be selected by the
Company (the "Closing Date"). The Securities subscribed for under this
Subscription Agreement shall not be deemed issued to, or owned by, the
undersigned until the Closing Date has occurred.
(c) Acceptance or Rejection. The undersigned understands and agrees
that the Company reserves the right, in its absolute discretion, to reject this
subscription for the Securities in whole or in part, at any time prior to the
Closing Date. In the event of rejection of this subscription, or in the event
the sale of the Securities is not consummated for any reason within 20 days
after the date of this Subscription Agreement (in which event this Subscription
Agreement shall be deemed to be rejected), the Company shall cause the return to
the undersigned of this Subscription Agreement and the Purchase Price tendered
by the undersigned, and this Subscription Agreement thereafter shall be of no
force or effect.
2
3. Representations and Warranties of the Company. To induce the undersigned
to enter into this Subscription Agreement and to purchase the Securities, the
Company hereby represents and warrants to the undersigned the following:
(a) Organization, Standing, Etc. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has the requisite corporate power and authority to own or lease its
properties and to carry on its business as it is now being conducted. The
Company has the requisite corporate power and authority to issue the Securities
and to perform its obligations under this Subscription Agreement.
(b) Valid Issuance. The Securities, when issued and delivered pursuant
to the terms of this Subscription Agreement, will be duly authorized, validly
issued, fully paid and nonassessable. The shares of Common Stock issuable upon
exercise of the Warrants (the "Underlying Securities"), when issued and
delivered pursuant to the terms of the Warrants, will be duly authorized,
validly issued, fully paid and nonassessable.
(c) Corporate Acts and Proceedings. This Subscription Agreement has
been duly authorized by all necessary corporate action on behalf of the Company,
has been duly executed and delivered by an authorized officer of the Company, is
a valid and binding agreement on the part of the Company and is enforceable
against the Company in accordance with its terms. All corporate actions
necessary to the authorization, creation, issuance and delivery of the Shares,
Warrants and the Underlying Securities have been taken by the Company.
(d) Compliance With Applicable Laws and Other Instruments. Neither the
execution nor delivery of, nor the performance of or compliance with this
Subscription Agreement, the issuance of the Shares, the Warrants and the
Underlying Securities nor the consummation of the transactions contemplated
hereby will, with or without the giving of notice or passage of time, result in
any breach of, or constitute a default under, or result in the imposition of any
lien or encumbrance upon any asset or property of the Company pursuant to, any
material agreement or other material instrument to which the Company is a party
or by which it or any of its properties, assets or rights is bound or affected,
and will not violate the Company's Certificate of Incorporation or Bylaws.
(e) Securities Laws. Based in part upon the representations of the
undersigned in Section 5, no consents, authorization, approval, permit or order
of or filing with any governmental or regulatory authority is required under
current laws and regulations in connection with the execution and delivery of
this Subscription Agreement
3
or the offer, issuance, sale or delivery of the Shares, the Warrants and the
Underlying Securities, other than the filing of a Form D pursuant to Regulation
D under the Securities Act of 1933 (the "Act"), the filing of a notice on Form
25102(f) with the State of California and a similar notice with any other state
whose laws require such filing, and the qualification thereof, if required,
under other applicable state laws which qualification has been or will be
effected as a condition of this transaction. Under the circumstances
contemplated by this Subscription Agreement, the offer, issuance, sale and
delivery of the Shares, the Warrants and the Underlying Securities will not,
under current laws and regulations, require compliance with the prospectus
delivery or registration requirements of the Act.
(f) Capital Stock. Except as set forth on SCHEDULE A attached hereto,
the authorized and issued capital stock of the Company is correctly set forth in
the audited financial statements of the Company for the fiscal year ended June
30, 1999. All of the outstanding shares of the Company's capital stock are duly
authorized and validly issued and are fully paid and nonassessable. Except as
described in the Company's Annual Report on Form 10-KSB for the fiscal year
ended June 30, 1999 as filed with the Securities and Exchange Commission (the
"Commission"), or as set forth on SCHEDULE A, there are no outstanding
subscriptions, options, warrants, calls, contracts, demands, commitments,
convertible securities or other agreements or arrangements of any character or
nature whatever, other than this Subscription Agreement, pursuant to which the
Company is obligated to issue any securities of any kind representing an
ownership interest in the Company.
(g) Company Sec Filings. The Company has furnished, or made available
through the XXXXX Internet web site of the Commission, to the undersigned true
and complete copies of its Annual Report on Form 10-KSB for the fiscal year
ended June 30, 1999 as filed with the Commission (the "SEC Filing"). As of its
filing date, the SEC Filing complied in all material respects with the
applicable requirements of the Exchange Act of 1934, as amended (the "Exchange
Act"), and the SEC Filing contained no untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading.
(h) Repayment of Xxxx Loans. The Company has given notice to Xxxx +
Co. GmbH & Co. ("Xxxx") that it will repay outstanding loans from Xxxx in the
aggregate principal amount of $1,200,000 plus accrued interest from the proceeds
of this offering.
4
4. Transfer Restrictions.
(a) The undersigned realizes that the Shares, the Warrants and the
Underlying Securities are not registered under the Act, or any foreign or state
securities laws. The undersigned agrees that the Shares, the Warrants and the
Underlying Securities will not be sold, offered for sale, pledged, hypothecated,
or otherwise transferred (collectively, a "Transfer") except in compliance with
the Act, if applicable, and applicable foreign and state securities laws. The
undersigned understands that the undersigned can only Transfer the Shares, the
Warrants and the Underlying Securities pursuant to registration under the Act or
pursuant to an exemption therefrom. The undersigned understands that to Transfer
the Shares, the Warrants and the Underlying Securities may require in some
jurisdictions specific approval by the appropriate governmental agency or
commission in such jurisdiction.
(b) To enable the Company to enforce the transfer restrictions
contained in Section 4(a), the undersigned hereby consents to the placing of
legends upon, and stop-transfer orders with the transfer agent of the Common
Stock with respect to, the Shares, the Warrants and the Underlying Securities.
5. Representations and Warranties. To induce the Company to accept the
undersigned's subscription, the undersigned hereby represents and warrants to
the Company that:
(a) the undersigned, if an individual, has reached the age of majority
in the jurisdiction in which he/she resides, is a bona fide resident of the
jurisdiction contained in the address set forth on the signature page of this
Subscription Agreement; is legally competent to execute this Subscription
Agreement; and does not intend to change residence to another jurisdiction;
(b) the undersigned, if an entity, is duly authorized to execute this
Subscription Agreement and this Subscription Agreement, when executed and
delivered by the undersigned, will constitute a legal, valid, and binding
obligation enforceable against the undersigned in accordance with its terms; and
the execution, delivery, and performance of this Subscription Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all requisite corporate or other necessary action on the part of the
undersigned;
(c) the Shares, Warrants and Underlying Securities subscribed for
hereby are being acquired by the undersigned for investment purposes only, for
the account of the undersigned and not with the view to any resale or
distribution thereof, and the undersigned is not participating, directly or
indirectly, in a distribution of such Shares, Warrants and Underlying Securities
and will not take, or cause to be taken, any action that would cause the
undersigned to be deemed an "underwriter" of such Shares, Warrants and
Underlying Securities as defined in Section 2(11) of the Act;
5
(d) the undersigned has had access to all materials, books, records,
documents, and information relating to the Company, including (i) the SEC
Filings and (ii) the Proxy Statement relating to the Company's 1998 annual
meeting;
(e) the undersigned acknowledges and understands that investment in
the Securities involves a high degree of risk, including without limitation the
risks set forth in the SEC Filing under the captions "Risks Associated with
Product Development," "Management's Discussion and Analysis of Financial
Condition and Results of Operations," and elsewhere in the Company's Form
10-KSB;
(f) the undersigned acknowledges that the undersigned has been offered
an opportunity to ask questions of, and receive answers from, officers of the
Company concerning all material aspects of the Company and its business, and
that any request for such information has been fully complied with to the extent
the Company possesses such information or can acquire it without unreasonable
effort or expense;
(g) the undersigned has such knowledge and experience in financial and
business matters that the undersigned is capable of evaluating the merits and
risks of an investment in the Company and can afford a complete loss of his
investment in the Company;
(h) the undersigned has never been notified by the Internal Revenue
Service that the undersigned is subject to backup withholding;
(i) the undersigned recognizes that no governmental agency has passed
upon the issuance of the Shares or made any finding or determination as to the
fairness of this investment;
(j) if the undersigned is purchasing the Securities subscribed for
hereby in a representative or fiduciary capacity, the representations and
warranties contained herein shall be deemed to have been made on behalf of the
person or persons for whom such Securities are being purchased;
(k) the undersigned has not entered into any agreement to pay
commissions to any persons with respect to the purchase or sale of the
Securities, except commissions for which the undersigned will be responsible;
and
(l) the undersigned is an "Accredited Investor" as that term is
defined in Section 501(a) of Regulation D promulgated under the Act.
Specifically the undersigned is (check appropriate item(s)):
6
[ ] (i) a bank as defined in Section 3(a)(2) of the Act, or a savings
and loan association or other institution as defined in Section
3(a)(5)(A) of the Act whether acting in its individual or fiduciary
capacity; a broker or dealer registered pursuant to Section 15 of the
Exchange Act; an insurance company as defined in Section 2(13) of the
Act; an investment company registered under the Investment Company Act
of 1940 or a business development company as defined in Section
2(a)(48) of that Act; a Small Business Investment Company licensed by
the U.S. Small Business Administration under Section 301(c) or (d) of
the Small Business Investment Act of 1958; a plan established and
maintained by a state, its political subdivisions, or any agency or
instrumentality of a state or its political subdivisions, for the
benefit of its employees, if such plan has total assets in excess of
$5,000,000, an employee benefit plan within the meaning of the
Employment Retirement Income Security Act of 1974, if the investment
decision is made by a plan fiduciary, as defined in Section 3(21) of
such act, which is either a bank, savings and loan association,
insurance company, or registered investment advisor, or if the
employee benefit plan has total assets in excess of $5,000,000, or if
a self-directed plan, with investment decisions made solely by persons
that are Accredited Investors;
[ ] (ii) a private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940;
[ ] (iii) an organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended, corporation, Massachusetts
or similar business trust, or partnership, not formed for the specific
purpose of acquiring Shares, with total assets in excess of
$5,000,000;
[ ] (iv) a director or executive officer of the Company;
[ ] (v) a natural person whose individual net worth, or joint net
worth with that person's spouse, at the time of his or her purchase
exceeds $1,000,000;
[ ] (vi) a natural person who had an individual income (not including
his or her spouse's income) in excess of $200,000 in 1997 and 1998 or
joint income with his or her spouse in excess of $300,000 in each of
those years and has a reasonable expectation of reaching such income
level in 1999;
[ ] (vii) a trust, with total assets in excess of $5,000,000, not
formed for the specific purpose of acquiring Shares, whose purchase is
directed by a person having such knowledge and experience in financial
and business matters that he or she is capable of evaluating the
merits and risks entailed in the purchase of Shares; or
7
[ ] (viii) an entity in which all of the equity owners are Accredited
Investors. (If this alternative is checked, the undersigned must
identify each equity owner and provide statements signed by each
demonstrating how each is qualified as an Accredited Investor.)
6. Registration of Shares. On or before a date that is 30 days after the
Closing Date, the Company shall file with the Securities and Exchange Commission
a registration statement on Form S-3 to register for resale pursuant to Section
5 of the Act the Shares and the Underlying Securities sold and issued to the
undersigned in accordance with this Subscription Agreement. The Company will use
its best efforts to cause such registration statement to be declared effective
and to remain available for the resale of such shares and securities for a
period of 12 months from the effective date, provided, however, that the Company
may suspend the use of the prospectus constituting part of the registration
statement for up to two periods of 60 days each in the event the Company
determines, in its sole judgment, that such prospectus is incomplete, inaccurate
or omits to disclose any information required to be included therein, and
provided further, that the period during which the registration statement will
remain available shall be extended by any period in which the Company invoked
its right to suspend the use of the prospectus. In the event of any such
suspension, the Company will promptly notify the undersigned subscriber of the
suspension and use its best efforts to amend or supplement the registration
statement, and the prospectus constituting a part thereof, within said 60-day
period to enable the use of the amended or supplemented prospectus for the
resale of the shares and securities covered thereby. The Company will provide
the undersigned with such copies of the prospectus, or any amended or
supplemented prospectus, as the undersigned may reasonably request. The
undersigned agrees to cooperate with the Company in preparing and filing the
aforesaid registration statement, and any amendment or supplement thereto, and
to provide the Company with such information and documentation as the Company
may reasonably request. Notwithstanding anything to the contrary contained
herein, the Company shall not be obligated to maintain the effectiveness of any
registration statement, or to update, amend or supplement such registration
statement or any prospectus constituting a part thereof, after the undersigned
shall become eligible to sell all of his shares, or remaining shares, under Rule
144 of the Act within any three-month period without volume limitations.
7. Further Documents. The undersigned agrees that it will execute such
other documents as may be necessary or desirable in connection with the
transactions contemplated hereby.
8. Modification. Neither this Subscription Agreement nor any provisions
hereof shall be waived, modified, discharged, or terminated except by an
instrument in writing signed by the party against whom any such waiver,
modification, discharge, or termination is sought.
8
9. Notices. Any notice or other communication required or permitted to be
given hereunder shall be in writing and shall be mailed by certified mail,
return receipt requested, or by Federal Express, Express Mail or similar
overnight delivery or courier service and delivered (in person or by telecopy,
telex or similar telecommunications equipment) against receipt to the party to
whom it is to be given, (i) if to the Company, at its address set forth on the
first page hereof, (ii) if to the undersigned, at its address set forth on the
signature page hereto, or (iii) in either case, to such other address as the
party shall have furnished in writing in accordance with the provisions of this
Section 9. Notice to the estate of any party shall be sufficient if addressed to
the party as provided in this Section. Any notice or other communication given
by certified mail shall be deemed given at the time of certification thereof,
except for a notice changing a party's address which shall be deemed given at
the time of receipt thereof. Any notice given by other means permitted by this
Section 9 shall be deemed given at the time of receipt thereof.
10. Counterparts. This Subscription Agreement may be executed through the
use of separate signature pages or in any number of counterparts, and each such
counterpart shall, for all purposes, constitute one agreement binding on all
parties, notwithstanding that all parties are not signatories to the same
counterpart.
11. Entire Agreement. This Subscription Agreement contains the entire
agreement of the parties with respect to the subject matter hereof and there are
not representations, covenants or other agreements except as stated or referred
to herein.
12. Severability. Each provision of this Subscription Agreement is intended
to be severable from every other provision, and the invalidity or illegality of
any portion hereof shall not affect the validity or legality of the remainder
hereof.
13. Assignability. This Subscription Agreement is not transferable or
assignable by the undersigned.
14. Applicable Law. This Subscription Agreement has been negotiated and
consummated in the State of California and shall be governed by and construed in
accordance with the laws of the State of California, without giving effect to
conflict of laws.
15. Choice of Jurisdiction. Any action or proceeding arising, directly,
indirectly, or otherwise, in connection with, out of or from this Subscription
Agreement, any breach hereof or any transaction covered hereby shall be resolved
within San Francisco, California. Accordingly, the parties consent and submit to
the jurisdiction of the United States federal and state courts located within
San Francisco, California.
16. Taxpayer Identification Number. The undersigned verifies under
penalties of perjury that any Taxpayer Identification Number or Social Security
Number shown on the signature page hereto is true, correct, and complete.
17. Pronouns. Any personal pronoun shall be considered to mean the
corresponding masculine, feminine, or neuter personal pronoun, as the context
requires.
9
IN WITNESS WHEREOF, the undersigned has executed this Subscription
Agreement this __ day of ___________, 1999.
Number of Units Subscribed for: ________ Units
INDIVIDUAL SUBSCRIBER: ENTITY SUBSCRIBER:
------------------------------------ ------------------------------------
(Signature of Subscriber) (Print Name of Subscriber)
By:
------------------------------------ ------------------------------------
(Typed or Printed Name) Name:
------------------------------
Title:
-----------------------------
------------------------------------ ------------------------------------
(Residence Address) (Address)
------------------------------------ ------------------------------------
(City, State and Zip Code) (City, State and Zip Code)
------------------------------------ ------------------------------------
(Telephone Number) (Telephone Number)
------------------------------------ ------------------------------------
(Telecopier Number) (Telecopier Number)
------------------------------------ ------------------------------------
(Tax I.D. or Social Security Number) (Tax I.D. or Social Security Number)
ACCEPTED:
NEUROBIOLOGICAL TECHNOLOGIES, INC.
By:
--------------------------------
Name: Xxxx Xxxxxxx
Title: Chief Executive Officer and President
Date: _________, 1999
10
