Exhibit 12(b)
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SUBSCRIPTION AGREEMENT
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THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED ("ACT"), NOR UNDER THE SECURITIES LAWS OF ANY STATE OR THE
DISTRICT OF COLUMBIA. THESE SECURITIES ARE BEING OFFERED IN RELIANCE ON
EXEMPTIONS FROM FEDERAL REGISTRATION REQUIREMENTS PROVIDED BY THE ACT, AND ON
EXEMPTIONS FROM STATE REGISTRATION AND QUALIFICATION REQUIREMENTS AVAILABLE
UNDER STATE LAWS AND REGULATIONS. THESE SECURITIES MAY NOT BE SOLD, ASSIGNED,
TRANSFERRED OR OTHERWISE DISPOSED OF BY THE SUBSCRIBER IN THE ABSENCE OF
REGISTRATION UNDER THE ACT AND APPLICABLE STATE SECURITIES ACTS OR AN EXEMPTION
FROM SUCH REGISTRATION REQUIREMENTS.
TO: Bio-Magnetic Therapy Systems, Inc. ("BMTS")
a Virginia corporation
1. Subscription. The undersigned hereby irrevocably subscribes to purchase from
BMTS 5,700,000 shares of the common stock of BMTS, par value $0.01 per share
("Shares") for a purchase price of US$ 0.32 per share for a total consideration
of US$ 1,824,000 immediately upon the execution of this Agreement. In addition,
the undersigned hereby irrevocably subscribes to purchase from BMTS 8,362,500
Shares for a purchase price of US$ 0.32 per share for a total consideration of
US$ 2,676,000, immediately upon amendment of the BMTS Charter to increase the
number of authorized shares to a sufficient number to allow the issuance
thereof.
2. Shares Subscribed For; Method of Payment. The undersigned, by subscribing for
the number of Shares indicated above agrees to pay for such Shares by wire
transfer to BMTS, into an account specified by BMTS
3. General Information.
a. Basic Subscriber Information:
Name: DuraVest Inc.
Social Security or Tax ID No.: 00-0000000
Date of Birth or Creation of Entity: August 5, 1980
b. Registered Name(s) as it (they) should appear on legal documents:
DuraVest Inc.
c. Principal Office Address (other than Post Office Box):
00 Xxxxx XxXxxxx Street, 5th Floor
City Chicago State Illinois Zip 00000-0000
Telephone No.:(000) 000-0000
d. Mailing Address (if different from above address:)
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City __________________________ State ____________ Zip _________
Telephone No.:(_______)_________________________________________
4. Representations.
In connection with the Subscriber's subscription for Shares and becoming a
holder of Shares, the Subscriber hereby represents, warrants, acknowledges,
covenants and agrees as follows:
a. Analysis of Investment. The undersigned has (i) analyzed and reviewed
the investment, and (ii) had an opportunity to ask questions of and receive
answers from BMTS officers and directors concerning subscription, and to obtain
any additional information which BMTS possesses or can acquire that is necessary
to verify the accuracy of the information furnished. In particular, the
Subscriber acknowledges and agrees that the Subscriber has been given access to,
or has been furnished with, all material books and records of BMTS and all
material contracts and documents. All questions have been answered, and all
additional information has been provided, all to the full satisfaction of the
undersigned.
b. Accredited Investor. The Subscriber is an Accredited Investor as defined
under Rule 501 of Regulation D of the Act
c. Subscriber Knowledge. The undersigned has sufficient knowledge and
experience in business and financial matters to evaluate the merits and risks of
this investment.
d. Suitability. The Subscriber represents and warrants that (1)
Subscriber's overall commitment to investments which are not readily marketable,
including this investment in the Shares, is reasonable in relation to the
Subscriber's net worth, (2) the Subscriber does not anticipate that this
investment will be a principal source of income, (3) the Subscriber is able to
bear the substantial economic and tax risks of an investment in the Shares, and
(4) the Subscriber can afford a complete loss of the Subscriber's investment in
Shares.
e. No Other Representations. No representations or warranties, oral or
otherwise, have been made to the undersigned by BMTS, or any officer, director,
representative, agent, employee or affiliate of BMTS, or any other person.
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f. Restrictions on Transfer. The undersigned understands that the
undersigned must bear the economic risk of this investment for an indefinite
period of time because the Shares are not registered under the Act or any state
securities laws, and there is no market for the Shares.
g. Entity Representations. The Subscriber hereby represents and warrants
that (1) the Subscriber is duly organized and validly existing, and has the
power, authority and capacity to enter into this Subscription Agreement and to
consummate the transactions contemplated hereby, (2) all necessary actions have
been taken, and all necessary approvals and consents have been given, to
authorize the execution, delivery and performance of this Subscription Agreement
by the Subscriber, (3) this Subscription Agreement has been duly executed and
delivered by the Subscriber and constitutes the valid and legally binding
obligation of the Subscriber, fully enforceable against the Subscriber in
accordance with its terms, and (4) the execution and delivery of this
Subscription Agreement by the Subscriber, and the Subscriber's performance of
its obligations hereunder, will not conflict with the charter, bylaws, trust
agreement or other organizational document(s) of the Subscriber, will not
violate or result in default under any contract or other agreement to which the
Subscriber is a party or is otherwise bound, and will not conflict with or
result in a breach of any judgment, order or other decree of any court or of any
governmental authority binding on the Subscriber.
h. Acquisition for Investment. The undersigned is acquiring the Shares for
which the undersigned has subscribed for the undersigned's own account for
investment purposes only, and not with a view to or for the sale or other
distribution thereof, in whole or in part.
i. Risk of Loss. The Subscriber recognizes that an investment in the Shares
is highly speculative and involves a substantial risk of loss of the entire
investment, and involves significant and material risks.
j. Accuracy of Representations. All of the representations, warranties,
covenants, agreements, acknowledgements and information provided by the
undersigned in this Subscription Agreement and any additional information and
documents which the undersigned has furnished, or hereafter furnishes, with
respect to the undersigned's financial position and financial, business and
investment experience, qualification and authority, are true, accurate and
complete in all respects as of the date hereof and as of the date of the closing
at which this Subscription Agreement is accepted, and shall survive closing.
5. Further Consideration. As further consideration for this Subscription, BMTS
and the undersigned acknowledge and agree that if the undersigned, acting alone,
together, or with or through BMTS and others, propose to sell or otherwise
transfer, directly or indirectly, more than 50% of the then outstanding Shares
in a public offering, a private placement, or any transaction that would change
control of BMTS, or otherwise be considered an exit from BMTS, or BMTS and/or
the undersigned, acting alone or together, propose to sell or transfer,
substantially all the assets of BMTS, to any person or group of persons, then
Xx. Xxxxxxx Xxxxxxx and Xx. Xxxxxxxxx Xxxxxx-Xxxxxxx shall be entitled to
participate, from time to time, in any such transactions to the extent of 17.74%
(on a fully diluted basis), notwithstanding their or the undersigned's current
ownership of Shares. The undersigned and BMTS shall notify Xx. Xxxxxxx Xxxxxxx
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and Xx. Xxxxxxxxx Xxxxxx-Xxxxxxx of any such proposed transaction and the terms
thereof sufficiently in advance and with adequate detail to allow Xx. Xxxxxxx
Xxxxxxx and Xx. Xxxxxxxxx Xxxxxx-Xxxxxxx to have sufficient time and information
to make an informed decision. As used in this Section, fully diluted assumes any
subsequent issuance of any BMTS securities, and the issuance and/or exercise of
all options, warrants and rights to purchase BMTS securities and the conversion
of all outstanding securities convertible into shares.
6. Legal Representation. The undersigned acknowledges that Shulman, Rogers,
Gandal, Pordy & Xxxxx, P.A. (the "Law Firm") represents BMTS and Xx. Xxxxxxx
Xxxxxxx and Xx. Xxxxxxxxx Xxxxxx-Xxxxxxx, as well as certain affiliates of BMTS
(the "Clients"). The undersigned further acknowledges that such representation
may give rise to potential conflicts of interest. Upon consideration of the
disclosures set forth in this Section 7, the undersigned hereby consents to the
representation by the Law Firm of the Clients.
7. Miscellaneous.
a. This Subscription Agreement shall be governed by and enforced,
determined and construed in accordance with the laws of the Commonwealth of
Virginia applicable to contracts entered into and to be performed therein,
without giving effect to the principles of choice of law.
b. This Subscription Agreement contains the entire agreement between
the parties with respect to the subscription for Shares. The provisions of this
Subscription Agreement may not be amended, modified or waived except by an
instrument in writing signed by the party against which enforcement of the
amendment, modification or waiver is sought.
c. The headings of this Subscription Agreement are for convenient
reference only, and they shall not limit or otherwise affect the interpretation
of any term or provisions hereof. All terms and words in this Subscription
Agreement, regardless of the number and gender in which they are used, shall be
deemed and construed to include any other number, singular or plural, and any
other gender, masculine, feminine or neuter, as the context or sense of this
Subscription Agreement or any paragraph or clause herein may require, as if such
words had been fully and properly written in the appropriate number and gender.
d. This Subscription Agreement shall bind and inure to the benefit of
the heirs, executors, administrators, legal and personal representatives,
successors and assigns of the parties hereto.
e. The Subscriber may not transfer this Subscription Agreement, or any
of the Subscriber's rights or obligations under this Subscription Agreement,
without the written consent of BMTS.
f. This Subscription Agreement shall survive the bankruptcy,
insolvency, dissolution or cessation of business of the undersigned.
IN WITNESS WHEREOF, the undersigned, whose address is set forth above,
hereby executes this Subscription Agreement as of 25th day of November, 2005.
DuraVest Inc.
By: /s/ Xxxx Xxxxx
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Xxxx Gurel, MD
SUBSCRIPTION ACCEPTED:
Bio-Magnetic Therapy Systems, Inc.
By: /s/ Xxxxxxx Xxxxxxx
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Xxxxxxx Xxxxxxx, MD
Date:
