SPECTRUMDNA, INC. SUBSCRIPTION AGREEMENT
The
undersigned (hereinafter “Subscriber”) hereby confirms his/her/its subscription
for the purchase of Units (the “Units”) of SpectrumDNA, Inc., a Delaware
corporation (the “Company”), with each Unit consisting of one million
(1,000,000) shares of Common Stock, par value $.001 per share (the “Common
Stock”), of the Company, and one million (1,000,000) Common Stock Purchase
Warrants (individually, the “Warrant”, and collectively, the “Warrants”). Each
Warrant will entitle the holder thereof to purchase at any time from the final
closing of the Private Placement (as hereinafter defined) through five (5) years
thereafter one share of Common Stock at a price of twenty five cents
($0.25) per share. (The Units, Common Stock, Warrants and Common Stock
underlying the Warrants are sometimes herein collectively referred to as the
“Securities”).
In
connection with this subscription, the Subscriber and the Company agree as
follows:
1. Sale and Purchase of
Securities.
(a) The
Company hereby agrees to sell to the Subscriber and the Subscriber hereby agrees
to purchase from the Company the number of Units of the Company set forth on the
signature page hereof. The Subscriber has hereby delivered and paid concurrently
herewith the purchase price (the “Purchase Price”) set forth on the signature
page hereof required to purchase the Units subscribed for hereunder which amount
has been paid in U.S. Dollars by wire transfer or check, subject to
collection.
(b) The
Subscriber understands and acknowledges that this subscription is part of a
proposed placement (the “Private Placement”) by the Company of up to twenty (20)
Units at a purchase price of one hundred thousand dollars ($100,000) per Unit,
subject to an over-allotment of up to an additional five (5) Units, with each
Unit consisting of one million (1,000,000) shares of Common Stock and one
million (1,000,000) Common Stock Purchase Warrants, which offering is being made
on a “best efforts minimum/maximum” basis, meaning fifteen (15) Units
($1,500,000) must be sold, and that upon acceptance of subscriptions totaling at
least fifteen (15) Units a closing will occur and the funds net of expenses will
be immediately available to the Company. Thereafter, additional
closings may occur until the maximum number of Units is fully subscribed for
during the offering period or until the offering is terminated. The
Subscriber understands that until payment for at least fifteen (15) Units
($1,500,000) has been received, all moneys paid by investors for the Units will
be promptly deposited in a non-interest bearing escrow account. If
fifteen (15) Units are not sold and paid for within ninety (90) days from the
date of the Private Placement Memorandum (the “Private Placement Memorandum”)
delivered with this Subscription Agreement, which period may be extended for an
additional thirty (30) days by mutual consent of the Company and the Placement
Agent, all funds received from investors will be promptly returned to investors
in full, without interest thereon or deduction therefrom. During the
period of escrow, investors will have no right to demand return of any amounts
paid for the Units.
2. Representations and Warranties of
Subscriber. The Subscriber represents and warrants to the Company as
follows:
(a) The
Subscriber is an “accredited investor” as defined by Rule 501 under the
Securities Act of 1933, as amended (the “Act”), and the Subscriber is capable of
evaluating the merits and risks of the Subscriber’s investment in the Company
and has the capacity to protect the Subscriber’s own interests.
(b) The
Subscriber understands that the Securities to be purchased have not been, and
will not be, registered under the Act or the securities laws of any state by
reason of a specific exemption from the registration provisions of the Act and
the applicable state securities laws, the availability of which depends upon,
among other things, the bona fide nature of the investment intent and the
accuracy of the Subscriber’s representations as expressed herein.
(c) Subscriber
acknowledges and understands that the Securities are being purchased for
investment purposes and not with a view to distribution or resale, nor with the
intention of selling, transferring or otherwise disposing of all or any part of
the Securities for any particular price, or at any particular time, or upon the
happening of any particular event or circumstances, except selling,
transferring, or disposing the Securities made in full compliance with all
applicable provisions of the Act, the rules and regulations promulgated by the
Securities and Exchange Commission (“SEC”) thereunder, and applicable state
securities laws; and that the Securities are not liquid investments. The Company
has no obligation or intention to register the Securities for resale at this
time, nor has the Company made any representations, warranties, or covenants
regarding the registration of the Securities or compliance with Regulation A or
some other exemption under the Act.
(d) The
Subscriber acknowledges that the Securities must be held indefinitely unless
subsequently registered under the Act or unless an exemption from such
registration is available. The Subscriber is aware of the provisions of Rule 144
promulgated under the Act which permit investors who have satisfied a certain
holding period to resell under certain conditions such securities or a portion
of such securities purchased in a private placement. The Subscriber acknowledges
that the Subscriber is not relying on the Company in any way to satisfy the
conditions precedent for resale of securities pursuant to Rule 144 under the
Act.
(e) The
Subscriber acknowledges that the Subscriber has had the opportunity to ask
questions of, and receive answers from the Company or any person acting on its
behalf concerning the Company and its business and to obtain any additional
information, to the extent possessed by the Company (or to the extent it could
have been required by the Company without unreasonable effort or expense)
necessary to verify the accuracy of the information received by the Subscriber.
In connection therewith, the Subscriber acknowledges that the Subscriber has had
the opportunity to discuss the Company’s business, management and financial
affairs with the Company’s management or any person acting on its behalf. The
Subscriber has received and reviewed the Private Placement Memorandum, and all
the information, both written and oral, that it desires. Without limiting the
generality of the foregoing, the Subscriber has been furnished with or has had
the opportunity to acquire, and to review, (i) copies of the Company’s most
recent Annual Report on Form 10-K filed with the SEC and any Form 10-Q and Form
8-K filed thereafter, and other publicly available documents, and (ii) all
information, both written and oral, that it desires with respect to the
Company’s business, management, financial affairs and prospects. In determining
whether to make this investment, the Subscriber has relied solely on the
Subscriber’s own knowledge and understanding of the Company and its business
based upon the Subscriber’s own due diligence investigations and the information
furnished pursuant to this paragraph. The Subscriber understands that no person
has been authorized to give any information or to make any representations which
were not furnished pursuant to this paragraph and the Subscriber has not relied
on any other representations or information.
(f) The
Subscriber has all requisite legal and other power and authority to execute and
deliver this Subscription Agreement and to carry out and perform the
Subscriber’s obligations under the terms of this Subscription Agreement. This
Subscription Agreement constitutes a valid and legally binding obligation of the
Subscriber, enforceable in accordance with its terms, and subject to laws of
general application relating to bankruptcy, insolvency and the relief of debtors
and rules of law governing specific performance, injunctive relief or other
general principals of equity, whether such enforcement is considered in a
proceeding in equity or law.
(g) The
Subscriber has not, and will not, incur, directly or indirectly, as a result of
any action taken by the Subscriber, any liability for brokerage or finders’ fees
or agents’ commissions or any similar charges in connection with this
Subscription Agreement.
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(h) To
the extent the Subscriber deems necessary, the Subscriber has reviewed with the
Subscriber’s own tax advisors the federal, state, local and foreign tax
consequences of this investment and the transactions contemplated by this
Agreement. The Subscriber relies solely on such advisors and not on any
statements or representations of the Company or any of its agents. The
Subscriber understands that the Subscriber (and not the Company) shall be
responsible for the Subscriber’s own tax liability that may arise as a result of
this investment or the transactions contemplated by this Subscription
Agreement.
(i) This
Subscription Agreement does not contain any untrue statement of a material fact
concerning the Subscriber.
(j) There
are no actions, suits, proceedings or investigations pending against the
Subscriber or the Subscriber’s properties before any court or governmental
agency (nor, to the Subscriber’s knowledge, is there any threat thereof) which
would impair in any way the Subscriber’s ability to enter into and fully perform
the Subscriber’s commitments and obligations under this Agreement or the
transactions contemplated hereby.
(k) The
execution, delivery and performance of and compliance with this Subscription
Agreement, and the issuance of the Securities will not result in any material
violation of, or conflict with, or constitute a material default under, any of
Subscriber’s articles of incorporation or bylaws, if applicable, or
any of the Subscriber’s material agreements nor result in the creation of any
mortgage, pledge, lien, encumbrance or charge against any of the assets or
properties of the Subscriber or the Securities.
(l) Subscriber
acknowledges that the Securities are speculative and involve a high degree of
risk and that the Subscriber can bear the economic risk of the purchase of the
Securities, including a total loss of his/her/its investment. Subscriber
acknowledges that he/she/it has carefully reviewed and considered the risk
factors discussed in the Private Placement Memorandum under the caption “Risk
Factors”, as well as the risks and uncertainties described in the Company’s
Annual Report on Form 10-K for the year ended December 31, 2008 in Part I, Item
1A “Risk Factors”.
(m)
The Subscriber recognizes that no federal, state or foreign agency has
recommended or endorsed the purchase of the Securities.
(n) Subscriber
is aware that the Securities are and will be, when issued, “restricted
securities” as that term is defined in Rule 144 of the general rules and
regulations under the Act.
(o)
Subscriber understands that any and all certificates representing the Securities
and any and all securities issued in replacement thereof or in exchange
therefore shall bear the following legend, or one substantially similar thereto,
which Subscriber has read and understands:
“The
securities represented by this certificate have not been registered under the
Securities Act of 1933. The securities have been acquired for investment and may
not be sold, transferred or assigned in the absence of an effective registration
statement for these securities under the Securities Act of 1933 or an opinion of
the Company’s counsel that registration is not required under said
Act.”
(p) In
addition, the certificates representing the Securities, and any and all
securities issued in replacement thereof or in exchange therefore, shall bear
such legend as may be required by the securities laws of the jurisdiction in
which the Subscriber resides.
(q) Because
of the restrictions imposed on resale, Subscriber understands that the Company
shall have the right to note stop-transfer instructions in its stock transfer
records, and Subscriber has been informed of the Company’s intention to do so.
Any sales, transfers, or any other dispositions of the Securities by Subscriber,
if any, will be in compliance with the Act.
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(r) Subscriber
acknowledges that Subscriber has such knowledge and experience in financial and
business matters that he/she/it is capable of evaluating the merits and risks of
an investment in the Securities and of making an informed investment
decision.
(s) Subscriber
represents that (i) Subscriber is able to bear the economic risks of an
investment in the Securities and to afford the complete loss of the investment;
and (ii) (a) Subscriber could be reasonably assumed to have the capacity to
protect his/her/its own interests in connection with this subscription; or (b)
Subscriber has a pre-existing personal or business relationship with either the
Company or an affiliate thereof of such duration and nature as would enable a
reasonably prudent purchaser to be aware of the character, business acumen and
general business and financial circumstances of the Company or such affiliate
and is otherwise personally qualified to evaluate and assess the risks, nature
and other aspects of this subscription.
(t) Subscriber
further represents that the address set forth below is his/her principal
residence (or, if the Subscriber is a corporation, partnership or other entity,
the address of its principal place of business); that Subscriber is purchasing
the Securities for Subscriber’s own account and not, in whole or in part, for
the account of any other person; Subscriber is purchasing the Securities for
investment and not with a view to public resale or distribution; and that
Subscriber has not formed any entity for the purpose of purchasing the
Securities.
(u) Subscriber
understands that the Company and the Placement Agent shall have the
unconditional right to accept or reject this subscription, in whole or in part,
for any reason or without a specific reason (even after receipt and clearance of
Subscriber’s funds). This Subscription Agreement is not binding upon the Company
until accepted by an authorized officer of the Company (the “Acceptance Date”).
In the event that the subscription is rejected, then Subscriber’s subscription
funds will be returned without interest thereon or deduction
therefrom.
(v) The
Subscriber represents that Subscriber has not received any general solicitation
or general advertising regarding the purchase of the Securities.
(w) The
Subscriber represents that he/she/it has accurately completed the Purchaser
Questionnaire.
(x) The
Subscriber represents and warrants that Subscriber has: (i) not distributed or
reproduced the Private Placement Memorandum, in whole or in part, at any time,
without the prior written consent of the Company and the Placement Agent, and
(ii) kept confidential the existence of the Private Placement Memorandum and the
information contained therein or made available in connection with any further
investigation of the Company.
3. Representations and Warranties of the
Company. The Company represents and warrants to the Subscriber as
follows:
(a) The
Company has been duly organized and is validly existing as a corporation in good
standing under the laws of the State of Delaware.
(b) The
Company has all such corporate power and authority to enter into, deliver and
perform this Subscription Agreement.
(c) At
or prior to the Acceptance Date, all necessary corporate action will have been
duly and validly taken by the Company to authorize the execution, delivery and
performance of this Subscription Agreement by the Company, and the issuance and
sale of the Securities to be sold by the Company pursuant to this Subscription
Agreement, and this Agreement shall have been duly and validly authorized,
executed and delivered by the Company and shall constitute the legal, valid and
binding obligation of the Company enforceable against the Company in accordance
with its terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors’ rights generally and by general
equitable principles.
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4.
Indemnification.
The
Subscriber agrees to indemnify and hold harmless the Company, its officers,
directors, employees, shareholders and affiliates, and any person acting on
behalf of the Company, from and against any and all damage, loss, liability,
cost and expense (including reasonable attorneys’ fees) which any of them may
incur by reason of the failure by the Subscriber to fulfill any of the terms and
conditions of this Subscription Agreement, or by reason of any breach of the
representations and warranties made by the Subscriber herein, or in any other
document provided by the Subscriber to the Company. All representations,
warranties and covenants of each of the Subscriber and the Company contained
herein shall survive the acceptance of this subscription.
5. Miscellaneous.
(a) The
Subscriber agrees not to transfer or assign this Subscription Agreement, or any
of the Subscriber’s interest herein, and further agrees that the transfer or
assignment of the Securities acquired pursuant hereto shall be made only in
accordance with all applicable laws.
(b) The
Subscriber agrees that the Subscriber cannot cancel, terminate, or revoke this
Subscription Agreement or any agreement of the Subscriber made hereunder, and
this Subscription Agreement shall survive the death or legal disability of the
Subscriber and shall be binding upon the Subscriber’s heirs, executors,
administrators, successors, and permitted assigns.
(c) The
Subscriber has read and has accurately completed this entire Subscription
Agreement.
(d) This
Subscription Agreement constitutes the entire agreement among the parties hereto
with respect to the subject matter hereof and may be amended only by a written
execution by all parties.
(e) This
Subscription Agreement shall be enforced, governed and construed in all respects
in accordance with the laws of the State of Delaware.
(f)
Subscriber acknowledges that it has been advised to consult with his/her/its own
attorney regarding this subscription and Subscriber has done so to the extent
that Subscriber deems appropriate.
(g) This
Subscription Agreement may be executed simultaneously in counterparts, each of
which shall be deemed an original, but all of which shall constitute one and the
same instrument.
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IN WITNESS WHEREOF, the
Subscriber has caused this Subscription Agreement to be executed as of the date
indicated below.
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Individuals:
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||
|
Number
of Units
|
Purchase
Price
|
|
|
Print
or Type Name
|
Print
or Type Name
|
|
|
Signature
|
Signature
|
|
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Date
|
Date
|
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Soc.
Sec. No. (if applicable)
|
Soc.
Sec. No. (if applicable)
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Address
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||
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E-mail
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Fax
|
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______
Joint
Tenancy
|
______
|
Tenants in Common |
Partnerships,
Corporations or Other Entities:
|
Number
of Units
|
Purchase
Price
|
|
|
Print
or Type Name
|
||
|
Address
|
||
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E-mail
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Fax
|
|
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Taxpayer
I.D. No. (if applicable)
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Date
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Signature
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Print
or Type Name and Indicate
Title
or Position with
Entity
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* * * * *
* * *
Disposition
of Subscription Agreement
IN WITNESS WHEREOF, the
Company has caused this Subscription Agreement to be executed,
and the foregoing subscription accepted, as of the date indicated
below.
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By:
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Name
and Title of Authorized Officer
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