SUBSCRIPTION AGREEMENT
EXHIBIT
10.4
THIS
SUBSCRIPTION AGREEMENT (the "Agreement") is by and between BioBalance
LLC, a Delaware limited liability company (the "Company"), and Xxxx
Xxxxxxxx, the purchaser signatory hereto ("Subscriber"), who is
subscribing hereby for the membership interests of the Company set forth on
the
signature page hereto (the "Membership Interests"), pursuant to that
certain Settlement Agreement, of even date herewith (the “Settlement
Agreement”), among Emerald Asset Management, Inc., a Delaware corporation,
Xxxx Xxxxxxxx, an individual, New York Health Care, Inc., a New York
corporation, and The BioBalance Corporation, a Delaware corporation, subject
to
the terms and conditions set forth herein.
In
consideration of the representations, warranties and covenants made herein,
which are deemed adequate and sufficient consideration in all respects, the
undersigned Subscriber and the Company agree as follows:
1. Subscription.
The
Subscriber hereby subscribes for the Membership Interests for the consideration
set forth in the Settlement Agreement.
2. Representations
and Warranties of Subscriber.
The
Subscriber hereby represents and warrants to the Company that:
(a) Subscriber
is aware that investment in the Company involves a high degree of risk and
should not be made unless the Subscriber is prepared to, and can afford to,
lose
its entire investment;
(b) Subscriber
(i) has sufficient knowledge, sophistication and experience in business and
finance to capably evaluate information concerning an investment in the Company,
(ii) has had an opportunity to ask detailed questions and receive
satisfactory answers from representatives of the Company, (iii) has had
adequate opportunity to request and review any and all documents and other
information relevant to Subscriber's consideration of investment in the Company,
(iv) has obtained from the Company sufficient information, in Subscriber's
sole
determination, to fully evaluate the merits and risks of an investment in the
Company, (v) has independently considered and discussed such prospective
investment with the Subscriber’s business, legal, tax and financial advisers as
to the suitability of such investment with respect to the Subscriber’s
particular financial situation, and (vi) on the basis of the foregoing, the
Subscriber has determined that investment in the Membership Interests is a
suitable investment;
(c) The
Subscriber acknowledges that (i) on prior notice to Subscriber, the Company
may
make additional offerings of Membership Interests in the future which may cause
the Subscriber and other members of the Company to experience dilution of their
respective percentage ownership of the Company, and any such Membership
Interests subsequently offered may have rights, preferences or privileges senior
to those of the Subscriber, (ii) on prior notice to Subscriber, the Company
may
determine that it is necessary to incur indebtedness to finance its operations,
which could restrict the Company's operations, and (iii) there can be no
assurance that any required additional equity or debt financing will be
available on terms favorable to the Company, if at all;
(d) The
Subscriber acknowledges that neither the U.S. Securities and Exchange Commission
(the "SEC")
nor
any state securities commission has approved the Membership Interests offered
or
passed upon or endorsed the merits of this offering; the Subscriber understands
and agrees that the Membership Interests have not been registered (i) under
the
Securities Act of 1933, as amended (the "Securities
Act"),
with
the SEC in reliance upon the exemption from such registration requirements
afforded by Rule 701, or by Section 4(2) and Rule 506, of the Securities Act,
or
(ii) with any state securities commission. Subscriber understands that
Subscriber is subject to further restrictions imposed pursuant to the terms
of
the Company’s operating agreement (the “Operating
Agreement”),
which
the Subscriber will be required to execute as a condition to the sale of
Membership Interests. The Subscriber acknowledges that the Company has no
obligation to cause the registration of the Membership Interests;
(e) The
Subscriber acknowledges that, in addition to the terms of the Operating
Agreement, unless and until the Membership Interests are registered, there
are
substantial restrictions on the transferability of the Membership Interests;
that the Subscriber must bear the economic risk of an investment in the
Membership Interests, in each case because the Membership Interests have not
been registered under the Securities Act or under the securities laws of certain
states and, therefore, cannot be sold, transferred, assigned, hypothecated,
pledged, or otherwise disposed of unless they are registered under the
Securities Act and under the applicable securities laws of such states, or
an
exemption from such registration is available, and Subscriber further
understands it has no right to require that the Membership Interests be
registered under the Securities Act;
(f) The
Membership Interests for which the Subscriber hereby subscribes are being
acquired solely for its own account and for investment only; the Membership
Interests are not being purchased with a view to or for the resale,
distribution, subdivision or fractionalization thereof and the Subscriber has
no
plans to enter into any contract, undertaking, agreement or arrangement for
any
such purpose;
(g) The
Subscriber acknowledges that the Membership Interests, if certificated, will
bear a restrictive legend prohibiting transfers thereof except in compliance
with the Securities Act, other applicable state securities laws and the
Operating Agreement and will not be transferred of record except in compliance
therewith or exemption therefrom;
(h) Subscriber
represents to the Company that Subscriber is an “accredited investor” as defined
in Rule 501 under the Securities Act.
(i) The
Subscriber’s address set forth on the signature page of this Subscription
Agreement is the Subscriber's true and correct residence address;
and
(j) The
foregoing representations and warranties are true and accurate as of the date
hereof, shall be true and accurate as of the date of the acceptance hereof
by
the Company and shall survive thereafter. If such representations and warranties
shall not be true and accurate in any respect, the Subscriber will, prior to
such acceptance by the Company, give written notice of such fact to the Company
specifying which representations and warranties are not true and accurate and
the reasons therefor.
3. Indemnification.
The
Subscriber acknowledges that it understands the meaning and legal consequences
of the terms, conditions, representations and warranties contained herein and
that the Company is expressly relying upon the foregoing, and the Subscriber
hereby agrees to indemnify and hold harmless the Company and any and all of
its
officers, employees, registered representatives, directors, or control persons
of any such entity who was or is a party or is threatened to be made a party
to
any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of or arising from any
actual or alleged misrepresentation or misstatement of facts or omission to
represent or state facts made by the Subscriber to the Company concerning,
without limitation, Subscriber, Subscriber's status as represented hereunder
or
Subscriber’s financial position in connection with the offering or sale of the
Membership Interests, against losses, liabilities, claims, damages and expenses
for which the Company or any of its officers, employees, registered
representatives, directors, or control persons of any such entity have not
otherwise been reimbursed (including attorneys’ fees, judgments, fines and
amounts paid in settlement) as actually and reasonably incurred by such person
or entity in connection with such action, suit, or proceeding. The indemnity
provided hereunder shall extend to any and all loss, liability, claim, damage
and expense whatsoever (including, but not limited to, any and all expenses
whatsoever reasonably incurred in investigating, preparing or defending against
any litigation commenced or threatened or any claim whatsoever, and any and
all
reasonable attorneys’ fees, charges and disbursements in connection therewith)
arising out of or based upon any false representation or warranty or breach
or
failure by the Subscriber to comply with any covenant or agreement made by
the
Subscriber herein or in any other document furnished by the Subscriber to any
of
the foregoing in connection with this Subscription Agreement.
4. Conditions.
(a) Subscriber's
ownership interest in the Company shall be governed solely in accordance with
the Delaware Limited Liability Company Law, and the Operating Agreement, each
as
currently in effect and as may be amended from time to time.
(b) Except
as
provided in this Subscription Agreement and the Operating Agreement, the
Subscriber agrees not to transfer or assign this Subscription Agreement, or
any
interest herein or in the Company, and further agrees that the assignment and
transferability of the Membership Interests acquired pursuant hereto shall
be
allowed only in accordance the Operating Agreement and applicable
law.
5. Miscellaneous.
(a) All
notices or other communications given or made hereunder shall be in writing
and
shall be delivered or mailed by first class mail or similar delivery service
to
the Subscriber at its address set forth below and to the Company at its address
written above.
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(b)
The
validity, performance, construction and effect of this Agreement shall be
governed by the substantive laws of the State of New York, without regard to
the
provisions for choice of law thereunder, except to the extent that the internal
limited liability laws of the State of Delaware apply. The parties
(i) agree that any legal suit, action or proceeding arising out of or
relating to this Agreement shall be instituted exclusively in a State or Federal
Court in the City of New York, County of New York, (ii) waive any objection
which they may have now or hereafter to the laying of the venue of any such
suit, action or proceeding, and (iii) irrevocably submit to the
jurisdiction of any such court in any such suit, action, or
proceeding.
(c) This
Subscription Agreement, together with the other agreements and documents
referenced herein, 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.
(d) If
the
Subscriber consists of one or more persons or entities, each of the obligations
of Subscriber hereunder shall be joint and several.
(e) This
Subscription Agreement may be severable and the invalidity or illegality of
any
portion hereof shall not affect the validity or legality of the remainder
hereof.
(f) This
Subscription Agreement may be executed in one or more counterparts, each of
with
together shall constitute one and the same original instrument.
(g) This
Subscription Agreement, including without limitation the representations,
warranties, acknowledgements, undertakings and indemnities given by Subscriber,
shall survive the Closing.
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IN
WITNESS WHEREOF, the Subscriber has executed this Subscription Agreement as
of
the 12th
day of
August, 2008, to be effective as of July 25, 2008.
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Membership
Interests:
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SUBSCRIBER:
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Print
exact legal name:
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Xxxx
Xxxxxxxx
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__________________________
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Social
Security Number(s) or other
Taxpayer
Identification Number
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Signature:
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__________________________
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If
Subscriber is more than one natural person with joint ownership interests
(e.g., joint rights of survivorship) please provide below the legal
name
and taxpayer ID numbers for all such persons:
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Address:
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___________________________________
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Subscription
Accepted and Agreed as of this 12th
day of
August 2008:
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By:
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/s/Xxxxx Xxxxxxx |
| Xxxxx Xxxxxxx | |
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Title:
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Chief Executive Officer |
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