EXHIBIT 99.2
SUBSCRIPTION AGREEMENT
OF
BIOFIELD CORP.
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Gentlemen:
You have advised me that Biofield Corp., a Delaware
corporation, is accepting subscriptions for the purchase of the Company's
promissory notes ("Notes") and shares of its common stock, $.001, par value per
share (the "Common Stock", and together with the Notes, the "Units"). Each Unit
shall consist of a $50,000 promissory note and 250,000 shares of Common Stock.
The Memorandum and the other documents which are attached to or accompany the
Memorandum are sometimes collectively called the "Offering Documents". The Units
are being offered for sale on the terms and conditions set forth in the
Memorandum. The Units will be offered in increments of $50,000 per Unit, with
the purchase of fractional Units permitted at the sole discretion of the
Company. The minimum amount of the offering will be $300,000 (six Units) and the
maximum amount of the offering will be $700,000 (14 Units). The offering of the
Units is sometimes referred to herein as "Offering".
Accordingly, I am writing to advise you of the following terms
and conditions under which I hereby offer to subscribe ("Offer") to one or more
Units in the Company, as set forth herein.
1. Subscription. Subject to the terms and conditions of
the Offering Documents, I hereby offer to purchase Unit(s) [SUBSCRIBER TO FILL
IN NUMBER OF UNITS SUBSCRIBED FOR]. Unless other arrangements are made that are
satisfactory to the Company, I shall pay in immediately available funds the
entire purchase price of the Units which I have subscribed for by delivering
herewith to the Company a check made payable to the Company in the principal sum
of such purchase price.
2. Conditions to Offer. The Company shall have the right
to accept or reject my Offer, in whole or in part, for any reason whatsoever.
The Offer shall be deemed to be accepted by the Company only when this
Subscription Agreement is signed by the Company and a counterpart is delivered
to me ("Closing Date"). Until such execution and delivery, I understand that my
Offer has not been accepted and no sale of a Unit to me has occurred.
3. Representations and Warranties of the Undersigned.
The undersigned, in order to induce the Company to accept this Offer, hereby
warrants and represents to the Company as follows:
(A) (i) If I am an individual, I am over the age of
twenty-one (21) years, reside at the address set forth below and have
no present intention of becoming a resident of any other jurisdiction.
(Street Address)
(City, State or Country
of residency, Zip Code)
(ii) If I am a partnership, corporation or other entity,
my principal business address, is:
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(Street Address)
(City, State, Zip Code)
(B) I have not authorized any person or institution to
act as my purchaser representative in connection with this transaction. I am
experienced in investment and business matters. I have such knowledge and
experience in financial and business matters that I am capable of evaluating the
merits and risks of my prospective investment in the Company on the terms and
conditions set forth in the Offering Documents, which I have read and
understand.
(C) In particular, and not in limitation of the
representations and warranties contained herein, I have taken full cognizance of
and understand:
(i) the Offering Documents;
(ii) that the Units are speculative investments which
involve a high degree of risk of loss of my entire investment;
(iii) that there are substantial restrictions on the
transferability of the Units; that the Notes are non-transferable, and unless
and until a registration statement is filed with the Securities and Exchange
Commission ("SEC") and declared effective, I will only be able to sell my shares
in the public market pursuant to the provisions of SEC Rule 144. Accordingly, I
may have to hold my Units indefinitely; and that it may not be possible for me
to liquidate at any time my investment in the Company;
(D) I:
(i) have adequate means of providing for my current needs
and possible personal contingencies, and have no need for liquidity of my
proposed investment in the Company; and
(ii) can afford (a) to hold unregistered securities for an
indefinite period of time; and (b) sustain a complete loss of the entire amount
of my proposed investment in the Company and, at the same time, bear any tax
liability which may result if such investment in the Company is lost.
(E) I have been:
(i) furnished with a copy of the Offering Documents, and
such other information and documentation in connection with the offering as has
been requested; and
(ii) afforded the opportunity to ask questions of, and
receive answers from, the Company or persons acting on its behalf concerning the
terms and conditions of the offering and to obtain any additional information,
to the extent such persons possess such information or can acquire it without
unreasonable effort or expense, necessary to verify the information furnished;
and have availed myself of such opportunity to the extent I consider it
appropriate in order to permit me to evaluate the merits and risks of my
proposed investment.
(F) I further acknowledge that I have relied solely upon
the representations, warranties, covenants and agreements made by the Company
herein and that I have not relied upon any other representations or other
information (whether oral or written and including any projections or
supplemental data) made or supplied by or on behalf of the Company or any
affiliate, employee, agent or other representative of the Company.
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(G) I further acknowledge that I am aware that the
offering has not been passed upon or the merits thereof endorsed or approved by
any state or Federal authorities.
(H) The Units being subscribed for are being acquired
solely for my account for investment and not with a view to, or for resale in
connection with, any distribution. By such representation, I mean that no other
person, except as indicated below, has or will have a beneficial interest in the
Units subscribed for hereunder, and that no other person, except as indicated
below, has furnished or will furnish, directly or indirectly, any part of the
consideration being paid to the Company in connection therewith.
(I) If this Subscription Agreement is executed and
delivered on behalf of a partnership, corporation, trust or other entity, the
undersigned has been duly authorized to execute and deliver this Subscription
Agreement and all other instruments executed and delivered on behalf of such
partnership, corporation, trust or other entity in connection with the purchase
of the Units, the signature of the undersigned is binding upon such partnership,
corporation, trust or other entity and the undersigned has delivered herewith
the underlying partnership agreement, corporate charter documents or trust
agreement of such entity and such other evidence of the ability of such
partnership, corporation, trust or other entity to purchase the Units as may be
requested by the Company.
I hereby certify that each of the foregoing representations
and warranties are true and will continue to be true as of the Closing Date and
shall survive such date. If, in any respect, such representations and warranties
shall not be true, I shall give written notice of such fact to the Company
specifying which representations and warranties are not true and the reasons
therefor.
It is understood that all documents, records and books
pertaining to the offering have been made available for my inspection, and that
such documents, records and books will continue to be available upon reasonable
notice for inspection during reasonable business hours prior to the Closing
Date.
4. Representation and Warranties of the Company. The Company
hereby warrants and represents to me as follows:
(A) Organization. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
The Company has full corporate power and authority to execute, deliver and
perform this Agreement and consummate the transactions contemplated hereby;
(B) Authorization; Enforceability; Third Party Consents. The
execution, delivery and performance of this Agreement and the transactions
contemplated hereby by the Company have been duly and validly authorized by the
Company and by all other necessary corporate action on the part of the Company.
This Agreement constitutes the legal, valid and binding obligations of the
Company, enforceable against the Company in accordance with its respective
terms. To the Company's knowledge, no consent, approval, order or authorization
of, or declaration, filing or registration with, any person or governmental
authority is required to be made or obtained by the Company in connection with
the authorization, execution, delivery or performance of this Agreement or the
transactions contemplated hereby.
(C) Securities and Exchange Commission Filings. With respect to
all reports which have been publicly filed by the Company with the Securities
and Exchange Commission pursuant to the requirements of the Securities Act of
1933, as amended (the "Securities Act"), or the Securities and Exchange Act of
1934, as amended, none of these reports contains any untrue statement of a
material fact or omits to state a material fact necessary to make the statements
contained therein in light of the circumstances in which they are made, not
misleading.
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(D) No Misrepresentation. The Offering Documents do not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements contained herein or therein in light of the
circumstances in which they were made, not misleading.
5. FDA Filing. The Company undertakes to file a 510(k)
application and such additional documents as may be required under the
application (the "Application") with the Food and Drug Administration ("FDA") in
respect of its Biofield Diagnostic System ("Application"). If the Company does
not file the Application within 180 days of the closing of the Minimum Offering,
the Company shall issue additional shares of Common Stock to the holders of the
Notes equal to 25,000 shares of Common Stock for each Unit purchased and for
each thirty (30) days of delay until the Application is filed with the FDA.
6. Registration Rights.
(A) Within sixty (60) days from the final closing of the
Offering (the "Filing Deadline"), the Company shall prepare and file with the
SEC a registration statement under the Securities Act (the "Registration
Statement") covering the Common Stock purchased by me pursuant to the Offering
and still owned by me (the "Registrable Shares"). The Company agrees to use its
best efforts to cause the Registration Statement to become effective as
expeditiously as possible and to use commercially reasonably efforts to maintain
the effectiveness of such Registration Statement, subject to the provisions of
Section 6(B), for twenty-four (24) months from the date the Registration
Statement is declared effective by the SEC. The Company may require me to
furnish in writing to the Company such information regarding me, the plan of
distribution of the Registrable Shares and other information as the Company may
from time to time reasonably request or as may be legally required in connection
with such registration. I shall make best efforts to furnish the Company such
information in a timely manner. The registration statement shall include the
shares of common stock (i) included in the Units, (ii), issuable in the event
the Notes are not paid on the maturity date, and (iii) issuable upon exercise of
the warrants issuable to the Placement Agent. The registration statement shall
also include additional shares common stock shares of common stock issuable for
a period of six months (a) in the event the registration statement is not
declared effective within the time prescribed in subsection (C) below, and (b)
in the event the Company's FDA application is not filed within the time provided
in Section 5, above.
(B)(i) The Company may defer the filing (but not the
preparation) of the registration statement or suspend the Company's obligation
to cause such Registration Statement to become and remain effective if (1) at
any time prior to the filing of such Registration Statement with the SEC the
Company is engaged in confidential negotiations or other confidential business
activities, disclosure of which, in the Company's reasonable opinion, would be
required in such Registration Statement and would not be required if such
registration statement were not filed, and the Company's board of directors
determines in good faith based upon the written advice of counsel that such
disclosure would be materially detrimental to the Company and its stockholders
or would have a material adverse effect on any such confidential negotiations or
other confidential business activities, or (2) the Company is actively engaged
in discussions with underwriters with respect to a registered underwritten
public offering of the Company's securities for the Company's account and is
proceeding with reasonable diligence to effect such offering. If, after a
Registration Statement filed under Section 6 becomes effective, the Company
advises me that the Company considers it appropriate for the Registration
Statement to be amended, I shall suspend any further sales of my registered
shares until the Company advises me that the Registration Statement has been
amended.
(ii) A deferral of the filing or suspension of a
Registration Statement pursuant to this Section shall be lifted if, in the case
of a deferral pursuant to clause (1) of this Section 6, the negotiations or
other activities are disclosed or terminated or, in the case of a deferral
pursuant to clause (2) of this Section 6, the proposed registration for the
Company's account is completed or abandoned. During the deferral or suspension
of the filing, the Company's obligations pursuant to Section 6(A) and Section
6(C) shall be suspended and for each day of deferral or suspension, and an extra
day shall be added to Filing Deadline until the lifting of such deferral or
suspension.
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(iii) In order to defer the filing of a registration
statement or suspend the Company's obligation to cause such registration
statement to become and remain effective pursuant to this Section 6, the Company
shall promptly (but in any event within five (5) business days), upon
determining to seek such deferral or suspension, deliver to me a certificate
signed by an executive officer of the Company stating that the Company is
deferring such filing pursuant to this Section 6 and a general statement of the
reason for such deferral and an approximation of the anticipated delay. The
certificate shall be accompanied by the written advice of counsel referred to in
Section 6(B)(i), above. I hereby agree to keep confidential any information
disclosed to me in any such certificate (including the fact that such
certificate was delivered); provided that this provision shall not prevent
disclosures by me to its accountants and attorneys upon their agreement to be
bound by the confidentiality and trading restriction provisions of this
Agreement set forth in this Section 6. I further agree, whether directly or
indirectly, not to trade or otherwise engage in trading activities relating to
the Company's securities, and not to enter into loans, exchanges of securities,
or other similar arrangements relating to derivative instruments tied to the
value of the Company's securities, during such deferral or suspension.
(iv) Notwithstanding the foregoing, no deferral of the
filing of the registration statement or suspension of the registration statement
shall relieve the Company of any obligation it may have to issue shares to the
undersigned within the time and in the manner provided for under this Agreement
or any other agreement between the Company and the undersigned.
(C) If the Registration Statement is not declared
effective prior to the expiration of ninety (90) days of the Filing Deadline and
it is not primarily due to my failure to provide information or related to the
accuracy or completeness of the information I have provided to the Company, the
Company hereby agrees to issue additional shares of Common Stock to the holders
of record of the Common Stock at such time, equal to 25,000 shares of Common
Stock for each thirty (30) days of delay until the Registration Statement is
declared effective by the SEC.
(D) Piggy-back Registration Rights. If following
twenty-four (24) months after the Registration Statement has been declared
effective by the SEC, the Company proposes to register any of it securities
under the Securities Act for sale to the public, whether for its own account or
for the account of other security holders or both (except with respect to
registration statements on Form X-0, X-0 or another form not available for
registering the Registrable Shares for sale to the public), provided that I
still own shares of the Common Stock purchased by me pursuant to the Offering,
it shall give written notice to me, of its intention to do so. Upon my written
request, received by the Company within 30 days after the giving of any such
notice by the Company, to register any of my Registrable Shares, the Company
will use its best efforts to cause the Registrable Shares as to which
registration shall have been so requested to be included in the securities to be
covered by the registration statement proposed to be filed by the Company, all
to the extent requisite to permit the sale or other disposition by me of such
Registrable Shares so registered. In the event that any registration pursuant to
this Section 6(D) shall be, in whole or in part, an underwritten public offering
of Common Stock, the number of shares of Registrable Shares to be included in
such underwriting may be reduced (pro rata among the requesting holders based
upon the number of shares of shares of Common Stock purchased pursuant to the
Offering and owned by such holders) if and to the extent that the managing
underwriter shall be of the opinion that such inclusion would adversely affect
the marketing of the securities to be sold by the Company therein.
Notwithstanding the foregoing provisions, the Company may withdraw any
registration statement referred to in this Section 6(D) without thereby
incurring any liability to me or any holders of shares of Common Stock purchased
pursuant to the Offering.
(E) Restrictions on Resale of Registrable Shares
Following Effectiveness. For twelve (12) months following the declaration of
effectiveness of any registration statement covering Registrable Shares, I
hereby covenant and agree that I shall not, in any given calendar month,
publicly sell such shares (except if such Registrable Shares are covered as part
of an effective registration statement in an underwritten public offering
effective at the time of such sale), in excess of twenty percent (20%) of the
average trading volume of the Company's shares of Common Stock for the prior
calendar month.
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7. Survival of Representations, Warranties and
Covenants. All representations and warranties contained in or made pursuant to
this Agreement shall survive the execution and delivery of this Agreement,
acceptance by the Company of the subscription and delivery of the Units.
8. Indemnification. I understand that the Common Stock
are being offered without registration under the Securities Act of 1933 (as
amended) in reliance upon the exemption pursuant to Section 4(2) of that Act for
transactions by an issuer not involving any public offering, and, in various
states, pursuant to exemptions from registration; that the availability of such
exemptions is in part dependent upon the truthfulness and accuracy of the
representations made by me herein and in my Investor Questionnaire; that the
Company will rely on such representations in accepting my Offer and that the
Company, any agent retained by the Company to sell the Units and the Company may
(but shall not be required to) take such steps as they consider reasonable to
verify the accuracy and truthfulness of such representations in advance of
accepting or rejecting my Offer. Irrespective of any such investigation, I
hereby agree to indemnify and hold harmless the Company and all of its officers,
directors, employees, agents (including, without limitation, any agent retained
by the Company to sell the Units) and affiliates from any and all damages,
losses, expenses or costs (including reasonable attorney's fees) which they may
incur by reason of my failure to fulfill all of the terms and conditions of this
Subscription Agreement or by reason of my breach of any of the representations,
warranties or agreements contained in this Subscription Agreement or my Investor
Questionnaire.
9. Revocation. I agree that I shall not cancel,
terminate or revoke this Subscription Agreement (except to the extent as may be
permitted by applicable law) or any agreement made by me hereunder, and that
this Subscription Agreement shall survive my death, disability or insolvency.
10. Termination of Subscription Agreement. I acknowledge
having been advised that the Company may elect to terminate the offering or to
cancel this Subscription Agreement for any reason and at any time prior to the
Closing Date without liability other than to return to me, with any interest
earned, my subscription.
11. Registration of Ownership. I wish to own my Units as
follows:
a. _____Individual ownership.
b. _____Joint tenants with rights of
survivorship. (Both parties must sign all
required documents, unless subscriber's
attorney advises that one signature is
sufficient.)
c. _____Tenants in common. (Both parties must
sign all required documents.)
d. _____Trust. (Include name of trust, name of
trustee and date trust was formed.)
e. _____Partnership. (Include copy of
Partnership Agreement authorizing
signature.)
f. _____Other. (Indicate:)
12. Certification. I certify that I have read this entire
Subscription Agreement and every statement set forth herein is true and
complete.
13. Miscellaneous. (A) All notices or other
communications permitted or required to be given hereunder shall be in writing
and shall be deemed to be duly given if given personally with receipt
acknowledged or sent, by registered or certified mail, return receipt requested,
by facsimile or by overnight courier for next day delivery, to me at my address
set forth in question 3(A) above and to the Company at 0000 Xxxx Xxxxx Xxxxx,
0
Xxxxx X, Xxxxxxxxxx, Xxxxxxx 00000, unless notice is given of a change of
address in the manner set forth herein, in which case notices shall be sent to
the new address so designated. Notice of change of address shall be deemed given
when actually received; all other notices shall be deemed given and received on
the earlier of (a) when actually received or upon refusal to accept delivery
thereof, or (b) on the date when personally delivered, one (1) day after being
sent by facsimile or overnight courier and three (3) days after mailing, as
aforesaid.
(B) This Subscription Agreement constitutes the
entire agreement among the parties with respect to the subject matter hereof and
may be amended only by a writing executed by the party against which it is to be
enforced.
(C) This Subscription Agreement shall be
governed by and construed in accordance with the laws of the State of Georgia.
IN WITNESS WHEREOF, the Subscriber has executed this
Subscription Agreement on the date below.
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SUBSCRIBER SIGN HERE CO-SUBSCRIBER SIGN HERE
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Social Security Number Social Security Number
or or
Taxpayer Identification Taxpayer Identification
Number Number
ACCEPTED AND AGREED TO
as of this __ day of _________, 2003
BIOFIELD CORP.
By:
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