Date__________
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. 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
__________ (which date may be extended to __________ 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.
2. SUBSCRIBER REPRESENTATIONS AND WARRANTIES. In connection with
Subscriber's subscription for, and purchase of, the Shares, 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, if any (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 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.
(f) Subscriber is able to bear the substantial economic risks of
Subscriber's investment in the Company and the purchase of the Shares in that,
among other factors, Subscriber can afford to hold the Shares for an indefinite
period and can afford a complete loss of Subscriber's investment in the Company.
2
(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 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) the Shares may not be registered under
applicable federal and state securities laws 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.
(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 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 which would guarantee Subscriber any profit or protect against any loss
with respect to the Shares.
3
(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 the Shares have not 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 to comply with
any exemption under any applicable securities laws with respect thereto or any
other ownership interest in the Company. 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 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 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.
(q) Subscriber agrees that the foregoing representations and
warranties will survive the sale of the Shares 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 and
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
3. 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 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.)
* * * * * *
5
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 per Share: $0.025
-------
Aggregate Consideration:
----------------------------
ACCEPTED:
Molecular Diagnostics, Inc.,
a Delaware corporation
By:
---------------------------------
Name:
Title:
Date of Acceptance:
---------------------
6
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.
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.
----------------------------------------------------------
----------------------------------------------------------
8
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:
--------------------------------
------------------------------------------
