EXHIBIT 4.1
ALL INFORMATION IN THIS AGREEMENT WILL BE TREATED CONFIDENTIALLY. HOWEVER, IT IS
UNDERSTOOD THAT THIS AGREEMENT MAY BE PRESENTED TO APPROPRIATE PARTIES TO
ESTABLISH THAT THE OFFERING IS EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR MEETS THE REQUIREMENTS OF APPLICABLE STATE SECURITIES
LAWS.2
NOVA BIOGENETICS, INC
SUBSCRIPTION AGREEMENT
Nova BioGenetics, Inc
c/o Xx. Xxx Xxxxx
0000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Ladies and Gentlemen:
You have been informed the undersigned ("Subscriber") that: Nova
BioGenetics, Inc is a corporation organized and existing under the laws of
Delaware (the "Company"); the Company operates as described in the Private
Placement Memorandum of the Company dated February 2, 2005, (including all
attachments and supplements thereto, if any, the "Memorandum") that has been
furnished to Subscriber with or prior to Subscriber's receipt of this
Subscription Agreement (this "Agreement"); the Company is currently offering to
"accredited investors" a maximum of 100 units ("Units") at a purchase price of
$10,000 per Unit (the "Offering"); each Unit consists of 20,000 shares of the
Company's common stock, no par value $.0001 ("Common Stock") at a purchase price
equal to $0.50 and one warrant to purchase 20,000 common at $.50; and any shares
of Common Stock issued pursuant to the Private placement will be subject to
substantial restrictions on transfer, including restrictions under the federal
and state securities laws; and the minimum investment pursuant to the Offering
is currently $10,000 for one Unit.
Since an investor's holding period under U.S. securities laws will not
begin to run until the common stock of Nova is fully subscribed, the Company has
agreed to provide piggyback registration rights to investors.
INSTRUCTIONS FOR COMPLETING THIS SUBSCRIPTION AGREEMENT ARE INCLUDED IN BLOCKS
WHERE APPROPRIATE. PLEASE FOLLOW THESE INSTRUCTIONS CAREFULLY -- THIS AGREEMENT
MUST BE COMPLETED FULLY AND ACCURATELY BEFORE A SUBSCRIPTION TO PURCHASE UNITS
MAY BE ACCEPTED.
1. SUBSCRIPTION. Subject to the terms and conditions hereof, Subscriber
hereby subscribes for and agrees to purchase the number of Units indicated on
the signature page of this Agreement and agrees to pay therefore $10,000 per
Unit (the "Purchase Price"). Subscriber hereby tenders this Agreement to the
Company together with a duly executed Internal Revenue Service Form W-9.
Subscriber has paid the entire Purchase Price by enclosing a check payable to
"Nova BioGenetics, Inc."
2. ACKNOWLEDGMENTS AND AGREEMENTS OF SUBSCRIBER. Subscriber hereby
acknowledges and agrees with and for the benefit of the Company and its
affiliates and agents as follows:
(a) The issuance of the Unit Securities will be registered
under the federal Securities Act of 1933, as amended ("1933 Act"), or qualified
under the securities laws of any state that would require registration or
qualification absent an exemption, in reliance upon exemptions from registration
and qualification contained in the 1933 Act and those laws, and the Company's
reliance upon such exemptions is based in part upon the undersigned's
representations, warranties and agreements contained in this Agreement.
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(b) This subscription may be accepted or rejected in whole or
in part in the sole discretion of the Company.
(c) Subject to any applicable rescission rights under state
law disclosed in the Memorandum, this subscription is and shall be irrevocable,
except that Subscriber shall have no obligation hereunder in the event that this
subscription is not accepted or if the Offering is terminated for any reason.
(d) A legend in substantially the following form will appear
on the Unit Warrants and any Warrant Shares, and Subscriber understands that the
Company may refuse to permit transfers of the Unit Securities:
THESE SECURITIES AND THE SHARES ISSUABLE UPON EXERCISE HEREOF HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR ANY STATE SECURITIES LAWS, INCLUDING IN PARTICULAR, SECTION
10-5-9(13) OF THE GEORGIA SECURITIES ACT OF 1973, AS AMENDED AND
NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD,
PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED UNLESS (1) A REGISTRATION
STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE ACT AND ANY
APPLICABLE STATE SECURITIES LAWS, OR (2) THE COMPANY RECEIVES AN
OPINION OF COUNSEL TO THE HOLDER OF SUCH SECURITIES, WHICH COUNSEL AND
OPINION ARE REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH
SECURITIES MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR TRANSFERRED IN
THE MANNER CONTEMPLATED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE ACT OR APPLICABLE STATE SECURITIES LAWS.
(e) The Company has incurred net losses to date; the Units are
speculative investments that involve a substantial degree of risk of loss by
Subscriber of his entire investment in the Company.
(f) No federal or state agency has made any finding or
determination regarding the fairness of the Offering or the terms of the Units,
or made any recommendation or endorsement of the Offering or the terms of the
Units.
(g) There are substantial restrictions on the transferability
of the Unit Securities. There is no public market for the Units and it is not
expected that any such market will develop in the future. There can be no
assurance that a market for the Common Stock will develop.
(h) The provisions of Rule 144 under the 1933 Act are not
currently available to permit resale of Unit Securities, and there can be no
assurance that the conditions necessary to permit sales of Common Stock under
Rule 144 will ever be satisfied
(i) Except as set forth in Section 5 below, the Company is
under no obligation to register resale of the Unit Securities, to comply with
the conditions of Rule 144 or take any other action necessary in order to make
available any exemption for the sale of Unit Securities without registration.
(j) The tax effects that may be expected by the Company are
not susceptible of absolute prediction, and new developments and rulings of the
Internal Revenue Service, audit adjustments, court decisions or legislative
changes may have an adverse effect on one or more of the tax consequences sought
by the Company. Subscriber has consulted with Subscriber's own legal, accounting
or other tax advisers with respect to both the potential tax risks of investment
in the Company generally and the particular federal, state and local tax risks
and consequences to Subscriber of such investment based on Subscriber's
particular circumstances.
(k) None of the following has been represented, guaranteed, or
warranted to Subscriber by the Company, its agents or employees, or any other
person, expressly or by implication:
(i) The profit or loss (including tax write-offs
and/or tax benefits) to be realized, if any, as a result of
this investment; or
(ii) That the past performance or experience of the
Company or any of its officers, agents or employees or any
other person will in any way indicate predictable results of
an investment in the Company.
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For further risks associated with this offering, please refer to the Memorandum.
3. REPRESENTATIONS AND WARRANTIES OF SUBSCRIBER. Subscriber hereby represents
and warrants to and for the benefit of the Company, and its affiliates and
agents as follows:
(a) The address set forth below is Subscriber's true and
correct principal residence, and he has no present intention of becoming a
resident of any other state or jurisdiction.
(b) Subscriber has at no time been solicited with respect to
investment in the Company by a public promotional meeting, newspaper, magazine,
radio or television article or advertisement, or other form of general
solicitation or general advertising.
(c) Subscriber has received, has carefully read and is
familiar with the Memorandum and this Agreement (collectively, the "Offering
Materials") and, to the extent deemed necessary, has discussed with counsel the
representations, warranties and agreements that Subscriber makes by signing this
Agreement. No representation or warranty with respect to the Company or
Subscriber's investment in the Company has been made to Subscriber by the
Company, or any agent, employee or affiliate of the Company other than as set
forth in the Offering Materials, and Subscriber understands and agrees that any
such representation, warranty or agreement made other than as set forth in the
Offering Materials may not be relied upon as authorized by the Company.
Subscriber has had an opportunity to review the Company's annual, quarterly and
special reports, proxy statements and other information on file with the U.S.
Securities and Exchange Commission.
(d) Subscriber confirms that all documents, records and books
requested by Subscriber in addition to the Offering Materials and pertaining to
Subscriber's investment in the Company have been made available or delivered to
Subscriber and Subscriber's advisers, and that Subscriber and Subscriber's
advisers have been given the opportunity to ask questions of, and have received
answers from, the Company concerning the Company and the Offering as necessary
to verify the accuracy of the information contained in the Offering Materials
and as the undersigned desired in order to evaluate investment in the Company
and investment in the Units (such additional documents, records and books and
other information, the "Additional Information"). Subscriber is purchasing the
Units without relying on any literature, prospectus or other oral or written
information or statement other than the Offering Materials and the Additional
Information. The Additional Information is consistent with and does not
contradict the Offering Materials in any material respect.
(e) Subscriber is purchasing the Units for Subscriber's own
account, with Subscriber's own funds and with the intention of holding the Units
for investment. Subscriber has no present intention of dividing or allowing
others to participate in this investment or of reselling or otherwise
participating, directly or indirectly, in a distribution of Units or any
beneficial interest therein.
(f) Subscriber's overall commitment to investments which are
not readily marketable is not disproportionate to Subscriber's net worth, and
Subscriber's investment in the Company will not cause such overall commitment to
become excessive
(g) Subscriber, if an individual, has adequate means of
providing for his or her current needs and possible personal and family
contingencies and has no need for liquidity in this investment in the Company.
(h) Subscriber is financially able to bear the economic risk
of this investment, including the ability to afford holding Units for an
indefinite period or to afford a complete loss of this investment.
(i) If Subscriber has appointed a Purchaser Representative,
such Purchaser Representative has advised Subscriber regarding the merits and
risks of an investment in the Company in general and the suitability of the
investment for Subscriber in particular. Such Purchaser Representative has
disclosed to Subscriber in writing any relationship between such Purchaser
Representative or its affiliates and the Company or its affiliates and any
compensation received or to be received as a result of such relationship, and
has completed and delivered the Purchaser Representative Questionnaire attached
to the Subscription Package as Exhibit 1.
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(j) Subscriber personally, or together with Subscriber's duly
appointed and qualified Purchaser Representative, has such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of an investment in the Company and to protect Subscriber's
interests in connection with investment in the Company.
(k) Subscriber, or Subscriber's duly appointed and qualified
Purchaser Representative, has evaluated the risks of investing in the Company.
Subscriber understands that an investment in the Company involves risks and has
taken full cognizance of and understands such risks, including those set forth
under the caption "Certain Risk Factors" and elsewhere in the Memorandum.
(l) Subscriber is an "accredited investor" because the
indicated alternative(s) below apply:
PLEASE INITIAL EACH ITEM BELOW THAT APPLIES:
___ Subscriber is an individual who either (a) has a net worth, including
assets held jointly with Subscriber's spouse, if appropriate, of not less
than $1,000,000, and/or (b) has had individual income in excess of
$100,000 in each of the two most recent years, or has had joint income
with such person's spouse in excess of $300,000 in each of those years,
and has a reasonable expectation of reaching the same income level in the
current year.
___ Subscriber is a bank as defined in Section 3(a)(2) of the Securities Act
of 1933.
___ Subscriber is a savings and loan association as defined in Section
3(a)(5)(A) of the Securities Act of 1933.
___ Subscriber is an insurance company as defined in Section 2(13) of the
Securities Act of 1933.
___ Subscriber is an investment company registered under the Investment
Company Act of 1940.
___ Subscriber is a business development company as defined in Section
2(a)(48) of the Investment Company Act of 1940.
___ Subscriber is 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.
___ Subscriber is an employee benefit plan within the meaning of Title I of
the Employee Retirement Income Security Act of 1974, and one of the
following applies [check one]: (a)_the investment decision is being made
by a plan fiduciary, as defined in Section 3(21) of such Act, which is
either a bank, insurance company or registered investment advisor, or (b)_
Subscriber has total assets in excess of $5,000,000, or (c)_if a
self-directed plan, Subscriber's investment decisions are made solely by
accredited investors.
___ Subscriber is a private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940.
___ Subscriber(a) has total assets in excess of $5,000,000, and (b) was not
formed for the specific purpose of acquiring Unit(s), and (c) is one of
[check one]:_an organization described in Section 501(c)(3) of the
Internal Revenue Code (tax exempt organization), or_a corporation, or a_
Massachusetts or similar business trust, or_a Company or limited liability
company.
___ Subscriber(a) is a trust with total assets in excess of $5,000,000, and
(b) was not formed for the specific purpose of acquiring a Unit, and (c)
Subscriber's purchases are directed by a person who has such knowledge and
experience in financial and business matters that he is capable of
evaluating the merits and risks of investment in the Company.
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___ If Subscriber is an entity, each owner of an equity interest in Subscriber
is an accredited entity under one of the alternatives listed above in this
Section 3(l).
(m) If Subscriber is a corporation, partnership, trust,
limited liability company or other entity, the person signing on behalf of
Subscriber below certifies that Subscriber has full power and authority to enter
into and perform its obligations under this Agreement, and that his or her
execution and delivery of this Agreement on behalf of Subscriber is within his
or her authority and has been duly authorized.
IN SUPPORT OF THE FOLLOWING ALTERNATIVE, EACH EQUITY OWNER MUST COMPLETE
A SEPARATE SUPPLEMENTAL QUESTIONNAIRE PROVIDED BY THE COMPANY.
4. INDEMNIFICATION. Subscriber acknowledges that certain
representations made in this Agreement are made for the purpose of qualifying
Subscriber as an "accredited investor" (as that term is defined by the
Securities and Exchange Commission) for the purpose of inducing a sale of
securities to Subscriber, and Subscriber represents that all such information
provided herein is true and correct in all respects. Subscriber understands that
a false representation may constitute a violation of law, and that any person
who suffers damage as a result of a false representation may have a claim
against Subscriber for damages. Subscriber further acknowledges that he or she
understands the meaning and legal consequences of the acknowledgments and
agreements contained in Paragraph 2 hereof and the representations and
warranties contained in Paragraph 3 hereof, and Subscriber hereby agrees to
indemnify and hold harmless the Company and each of its officers, agents,
directors and affiliates, from and against any and all loss, damage, expense
(including without limitation attorneys' fees) or liability due to or arising
out of breach of any agreement, representation or warranty of Subscriber
contained in this Agreement or the inaccuracy of information provided by
Subscriber herein.
5. REGISTRATION RIGHTS.
(a) If and when the Company is required to use its best
efforts to effect or cause the registration of any shares under the 1933 Act as
provided in this Paragraph, the Company shall, at its expense (other than any
underwriters' or selling discount with respect to shares offered by shareholders
hereunder), as expeditiously as possible:
(i) prepare and file with the SEC a registration
statement with respect to such shares and use its best efforts to cause such
registration statement to become effective;
(ii) prepare and file with the SEC such amendments
and supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration statement
effective and such prospectus current during the required offering period;
(iii) furnish to each seller of such shares such
number of copies of such registration statement and each such amendment and
supplement thereto (in each case including all exhibits), such number of copies
of the prospectus included in such registration statement (including each
preliminary prospectus), in conformity with the requirements of the 1933 Act,
and such other documents as such seller may reasonably request in order to
facilitate the disposition of the shares owned by such seller;
(iv) use its reasonable efforts to register or
qualify such shares covered by such registration statement under such State Acts
as each seller reasonably requests, and do any and all other acts and things
which may be reasonably necessary or advisable to enable such seller to
consummate the disposition in such jurisdictions of the shares owned by such
seller, except that the Company shall not for any such purpose be required to
qualify to do business as a foreign corporation in any jurisdiction, or to
consent to general service of process in any such jurisdiction; and
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(v) during the required offering period, notify each
seller of any such securities covered by such registration statement, at any
time when a prospectus relating thereto is required to be delivered under the
1933 Act or upon the happening of any event as a result of which the prospectus
included in such registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing, and promptly prepare and furnish to
such seller a reasonable number of copies of a supplement to or an amendment of
such prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such securities, such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make statements therein not misleading in the
light of the circumstances then existing.
(b)
(i) The Company shall indemnify and hold harmless
each holder of any shares included in the Company's registration statement
pursuant to this Paragraph, and each person, if any, who controls such holder
within the meaning of Section 15 of the 1933 Act, from and against all losses,
claims, damages, expenses and liabilities (including reasonable attorneys' fees)
caused by any untrue statement of a material fact contained in any such
registration statement, or contained in a prospectus furnished thereunder, or in
any amendment or supplement thereto, or caused by any omission to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading (provided, however, that the foregoing indemnification and agreement
to hold harmless shall not apply insofar as such losses, claims, damages,
expenses, and liabilities are caused by any such untrue statement or omission
which is based upon information furnished in writing to the Company by any such
holder expressly for use in any registration statement or prospectus).
(ii) Promptly after receipt by any holder of any
shares included in the Company's registration statement pursuant to this
Paragraph of notice of the commencement of any action, said holder shall, if a
claim in respect thereof is to be made against the Company under this Paragraph,
notify the Company in writing of the commencement thereof; but the omission so
to notify the Company shall not relieve it from any liability which it may have
to them under this Paragraph. In case any such action is brought against any
holder of any shares registered pursuant to this Paragraph and the Company is
notified of the commencement thereof as provided herein, the Company shall be
entitled to participate in, and, to the extent that it may wish, to assume the
defense thereof, with counsel reasonably satisfactory to such holder, and after
notice from the Company to such holder of the Company's election so to assume
the defense thereof, the Company shall not be liable under this Paragraph for
any legal or other expense subsequently incurred by such holder in connection
with the defense thereof other than reasonable costs of investigation.
(iii) Each holder of any shares registered pursuant
to this Paragraph agrees to cooperate fully with the Company in effecting
registration and qualification of the Shares (or the Common Stock into which it
has been converted) and of such distribution, and shall indemnify and hold
harmless the Company and each person who may control the Company within the
meaning of Section 15 of the 1933 Act, each director of the Company, and each
officer who signed any registration statement, from and against all losses,
claims, damages, expenses, and liabilities (including reasonable attorneys'
fees) caused by any untrue statement of a material fact contained in any such
registration statement, or contained in a prospectus furnished thereunder, or
any amendment or supplement thereto, or caused by any omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, to the extent that such untrue statement or omission was made in
reliance upon information furnished to the Company by any such holder for
inclusion therein.
(c) The Company may suspend the use of any prospectus for
valid business reasons (not including avoidance of the Company's obligations
hereunder), including the acquisition or divestiture of assets, public filings
with the SEC, pending corporate developments and similar events, provided, that
the Company promptly thereafter complies with the requirements of subparagraph
5(c)(v) hereof, if applicable.
(d) The Company reserves the right to determine, in its sole
discretion, the number of Registrable Shares to so register.
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6. REAFFIRMATION. Except as separately disclosed to the Company in a
signed writing, Subscriber agrees that each representation, warranty and
agreement stated in or made pursuant to this Agreement shall be remade and true
and correct as of the date of any exercise of Unit Warrants by Subscriber after
the date of this Agreement.
7. TRANSFERABILITY. Subscriber agrees not to transfer or assign this
Agreement, or any interest herein.
8. TERMINATION OF AGREEMENT. If Subscriber's subscription pursuant to
this Agreement is not accepted by the Company for any reason, then and in any
such event this Agreement shall be null and void and of no further force and
effect, and no party hereto shall have any rights against any other party
hereunder; provided, however, and it is expressly agreed, that the indemnity and
hold harmless agreement of Subscriber set forth in Paragraph 4 hereof shall
survive any such termination of this Agreement.
9. SUBSCRIPTION INFORMATION. (a) Please indicate the manner in which
title is to be held (please check ONE and complete as otherwise indicated):
1. [ ] Individual
2. [ ] Joint Tenants with Right of Survivorship
3. [ ] Community Property
4. [ ] Tenants in Common
5. [ ] Corporation/Company/Limited Liability Company established:
_______________, 19____
6. [ ] XXX
7. [ ] Xxxxx
8. [ ] Trust/Estate/Pension or Profit Sharing Plan - Date Opened:
_____________________, 19____
9. [ ] As a Custodian For:
______________________________
Under the Uniform Gift to Minors Act of the State of:
10. [ ] Married with Separate Property
11. [ ] Other:__________________________
(b) Please provide the following information:
Employer(s) _________________________________________
Occupation(s) _________________________________________
Business _________________________________________
Address(es) _________________________________________
_________________________________________
Principal Residence _________________________________________
Address _________________________________________
_________________________________________
Social security # / EIN# _________________________________________
Send Mail to ____ Home ____ Office (Please Check One)
Business Telephone (_________)
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Are there any other states in which you ___ maintain a residence, ___ pay state
income taxes, ___ hold a driver's license, ___ are registered to vote?
If so, please explain:
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
10. MISCELLANEOUS.
(a) All notices or other communications given or made
hereunder shall be in writing and shall be delivered or mailed by registered or
certified mail, return receipt requested, postage prepaid, to Subscriber at his
address set forth above and to Xxxxxxx X. Xxxxx at the address of the Company.
(b) Notwithstanding the place where this Agreement may be
executed by any of the parties hereto, the parties expressly agree that all the
terms and provisions hereof shall be construed in accordance with and governed
by the laws of Georgia applicable to contracts entered into and performed
exclusively within said state.
(c) The Company and Subscriber each irrevocably consent to the
jurisdiction of the courts of the State of Delaware and such State in connection
with any action or proceeding arising out of or relating to this Agreement, the
Warrant Shares, any document or instrument delivered pursuant to, in connection
with or simultaneously with this Agreement or the Unit Securities, or a breach
of any such document or instrument.
(d) This Agreement constitutes the entire agreement between
the parties hereto with respect to the subject matter hereof and may be amended
only by a writing executed by all parties.
(e) The headings at the beginning of the Paragraphs hereof are
solely for convenience of reference and are not part of this Agreement. As used
herein, each gender includes each other gender, the singular includes the plural
and vice versa. All references to Paragraphs are intended to refer to Paragraphs
of this Agreement, except as otherwise indicated.
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ALL SUBSCRIBERS MUST COMPLETE THE FOLLOWING:
IN WITNESS WHEREOF, the undersigned has executed this Subscription Agreement as
of the ___ day of _______, 2005.
Please indicate the number of Units subscribed for:__________________ (Minimum
of one Unit)
and
the aggregate Purchase Price: $_______________________ (at $10,000 per Unit)
SUBSCRIBERS THAT ARE NATURAL PERSONS SIGN BELOW:
________________________________________________________
Exact Name(s) In Which Title Is To Be Held (Please Print
Siginature
________________________________________________________
SUBSCRIBERS THAT ARE ENTITIES (CORPORATION, COMPANY, TRUST, ETC.) SIGN BELOW:
Signature(s)
__________________________________________
Name of Entity (Please Print)
__________________________________________
By
__________________________________________
Name
ALL SUBSCRIBERS MUST HAVE THEIR SIGNATURES ABOVE WITNESSED BELOW:
Attest (If Entity is Corporation)
Executed in the presence of:
__________________________________________
Signature
__________________________________________
Printed Name
ACCEPTED as of the ___ day of ______________, 2005 on behalf of Nova
BioGenetics, Inc
By:_____________________________
Xxxxxxx X. Xxxxx
COO / Sr. V.P.
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