Exhibit 10.56
SUBSCRIPTION AGREEMENT
Interferon Sciences, Inc.
000 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxx Xxxxxx 00000
Attn.: Chief Executive Officer
Gentlemen:
1. Subscription. The undersigned is hereby purchasing from Interferon
Sciences, Inc., a Delaware corporation (the "Company"), the number of shares
(the "Shares") of common stock, par value $.01 per share (the "Common Stock"),
of the Company set forth on the signature page hereto, for a purchase price (the
"Purchase Price") of $6.00 per Share.
2. Closing. Payment of the Purchase Price is being made by electronic
wire transfer in accordance with the following instructions:
Account Name: Interferon Sciences, Inc.
Bank Name: Summit Bank
Bank Address: 000 Xxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx
ABA#: 0000-0000-0
Account #: 1910855005
or by delivery of a bank check or certified check made payable to "Interferon
Sciences, Inc." against delivery to the undersigned of a certificate
representing the Shares.
3. Transfer Restrictions.
(a) The undersigned realizes that the Shares are not registered under
the Securities Act of 1933, as amended (the "Act"), or any foreign or state
securities laws. The undersigned agrees that the Shares will not be sold,
offered for sale, transferred, pledged, hypothecated, or otherwise disposed of
(collectively, "Disposed Of") except in compliance with the Act, if applicable,
and applicable foreign and state securities laws. Purchasers of Shares can only
Dispose Of the Shares pursuant to registration under the Act or pursuant to an
exemption therefrom. The undersigned understands that to Dispose Of the Shares
may require in some jurisdictions specific approval by the appropriate
governmental agency or commission in such jurisdiction. The undersigned has been
advised that, except as set forth in Section 5, the Company has no obligation,
and does not intend, to cause the Shares to be registered under the Act or the
securities law of any other jurisdiction or to comply with the requirements for
any exemption under the Act, including but not limited to those provided by Rule
144 and Rule 144A promulgated under the Act, or under the securities law of any
other jurisdiction.
(b) To enable the Company to enforce the transfer restrictions
contained in Section 3(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.
4. 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 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 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 and
will not take, or cause to be taken, any action that would cause the undersigned
to be deemed an "underwriter" of such Shares as defined in Section 2(11) of the
Act;
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(d) the undersigned has had access to all materials, books, records,
documents, and information relating to the Company, including (i) the Prospectus
dated February 11, 1997 (the "February Prospectus"), (ii) the Annual Report on
Form 10-K for the year ended December 31, 1996, (iii) the Quarterly Report on
Form 10-Q for the quarter ended March 31, 1997, and (iv) the Proxy Statement
dated April 30, 1997, and has been able to verify the accuracy of the
information contained therein;
(e) the undersigned acknowledges and understands that the Company may
sell as many as 2.5 million shares of Common Stock on the same terms and
conditions as set forth herein, although there can be no assurance that the
Company will sell any such additional shares;
(f) the undersigned acknowledges and understands that investment in the
Shares involves a high degree of risk, including the risks set forth in the
February Prospectus under the caption "Risk Factors";
(g) 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;
(h) 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;
(i) the undersigned has never been notified by the Internal Revenue
Service that the undersigned is subject to backup withholding;
(j) 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;
(k) if the undersigned is purchasing the Shares 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 Shares are being purchased;
(l) the undersigned has not entered into any agreement to pay
commissions to any persons with respect to the purchase or sale of the Shares,
except commissions for which the undersigned will be responsible;
(m) the undersigned acknowledges that (i) the Company will issue to
Sunrise Securities Corp. ("Sunrise"), as a commission with respect to the sale
of the Shares by the Company to the undersigned, (A) a number shares of Common
Stock equal to 6% of the number of Shares being purchased by the undersigned
hereunder and (B) five-year warrants to purchase, at a purchase price of $7.20
per share, a number shares of Common Stock equal to 5% of the number of Shares
being purchased by the undersigned hereunder, and (ii) the Company will issue to
Sunrise, as an unaccountable expense allowance, a number shares of Common Stock
equal to 2% of the number of Shares being purchased by the undersigned hereunder
or, at the option of Sunrise, cash in an amount equal to the product of such
number of Shares and the Purchase Price.
(n) 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 items(s)):
[ ] (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 Securities Exchange
Act of 1934; 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 Employee 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 adviser, 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;
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[ ] (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 1994 and 1995 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 1996;
[ ] (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
[ ] (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.)
5. Registration of Shares under the Act.
(a) The Company shall, at its expense, (i) not later than ten business
days after the date hereof, file a registration statement (the "Registration
Statement") to register under the Act the resale by the undersigned of the
Shares, (ii) take all commercially reasonable actions to cause the Registration
Statement to become effective under the Act, and (iii) after the Registration
Statement is declared effective under the Act, furnish the undersigned with such
number of copies of the prospectus (the "Prospectus") included in the
Registration Statement as the undersigned may reasonably request to facilitate
the resale of the Shares.
(b) If at any time during the period that the undersigned owns any
Shares an event (an "Event") shall have occurred that has caused the Prospectus
to contain an untrue statement of a material fact or to omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances under which they were made,
the Company shall (i) give the undersigned a notice (the "No-Sell Notice") that
an Event has occurred, (ii) promptly (or, if in the reasonable judgment of the
Company disclosure of the Event would be detrimental to the Company, promptly
after disclosure of the Event would not be detrimental to the Company) take all
commercially reasonable efforts to cause the Registration Statement not to
contain an untrue statement of a material fact or to omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances under which they were made, and
(iii) give the undersigned a notice (the "Sell Notice") when the Registration
Statement does not contain an untrue statement of a material fact or to omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances under which they
were made. The undersigned shall not sell any Shares pursuant to the
Registration Statement after it has received a No-Sell Notice until it has
received a subsequent Sell Notice.
(c) In connection with the Registration Statement, the undersigned
shall furnish to the Company such information as the Company shall reasonably
request.
6. Indemnification. The undersigned understands the meaning and legal
consequences of the representations and warranties made by the undersigned in
this Agreement, and agrees to indemnify and hold harmless the Company and each
of the Company's directors, officers, stockholders, employees, counsel, agents,
successors, and assigns, if any, from and against any and all loss, damage,
liability, or expense (including, without limitation, attorneys' fees), as and
when incurred, due to or arising out of (in each case in whole or in part) any
breach of any representation or warranty made by the undersigned set forth
herein or in any other agreement or other document furnished by the undersigned
to any of the foregoing in connection with this transaction, any failure by the
undersigned to fulfill any of its covenants or agreements set forth herein or
therein, or arising out of the resale or distribution by the undersigned of the
Shares or any portion thereof in violation of the Act or any applicable foreign
or state securities or "blue sky" law.
7. Further Documents. The undersigned agrees that he will execute such
other documents as may be necessary or desirable in connection with the
transactions contemplated hereby.
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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.
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 or 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 his 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 9. 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
no 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 New York and shall be governed by and construed in
accordance with the laws of the State of New York, 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 the City of Xxx Xxxx, Xxxxx xx Xxx Xxxx, Xxxxxx Xxxxxx of America.
Accordingly, the parties consent and submit to the jurisdiction of the United
States federal and state courts located within the City of Xxx Xxxx, Xxxxx xx
Xxx Xxxx, Xxxxxx Xxxxxx of America.
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.
IN WITNESS WHEREOF, the undersigned has executed this Subscription
Agreement, this ____ day of ______, 1997.
Number of Shares Subscribed for: _________ Shares
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INDIVIDUAL SUBSCRIBER: ENTITY SUBSCRIBER:
----------
------------------------------ -------------------------
(Signature of Subscriber) (Print Name of Subscriber
By: ------
----------------------------- -------------------------
(Typed or Printed Name) Name:
Title:
------------------------------
(Residence Address) -------------------------
Address
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(City, State and Zip Code) -------------------------
(City, State and Zip code)
------------------------------
(Telephone Number) -------------------------
(Telephone Number)
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(Telecopier Number) -------------------------
(Telephone Number)
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(Tax I.D. or Social Security Number) ----------------------------------
(Tax I.D. or Social Security Number
ACCEPTED:
Interferon Sciences, Inc.
By:_____________________________
Name:
Title:
Date: __________, 1997
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