NANOVIRICIDES, INC.
Exhibit
10.1
INVESTOR SUBSCRIPTION AGREEMENT (the
"Subscription Agreement") dated ____________, 2008, between NANOVIRICIDES, INC., a Nevada
corporation (the “Company”) and the person or persons executing this Agreement
on the last page (the “Subscriber”). All documents mentioned herein
are incorporated by reference.
1. Description of the
Offering. This Subscription Agreement is for units (the
“Units”) of the Company’s common stock, par value $.001 per share (the “Common
Stock”) and warrants (the “Warrants”) to purchase shares of Common Stock. Each Unit consists 100,000 shares of
Common Stock, par value $0.001 per share plus 50,000 Warrants to purchase Common
Stock at an Exercise Price of $2.00 per share for a purchase price of
$100,000 per Unit. The Company is Offering (the “Offering”) a minimum
of five (5) Units (the “Minimum Offering”) and a maximum of one hundred fifty
(150) Units (the “Maximum Offering”) through the Company only to accredited
investors who qualify as accredited investors pursuant to the suitability
standards for investors described under Regulation D of the Securities Act of
1933, as amended (the “Securities Act”) and who have no need for liquidity in
their investments. The Offering is for a minimum investment of $100,000,
however, the Company reserves the right, in it sole discretion , to accept
fractional subscriptions. he Company may, in its sole discretion,
elect to use the services of a placement agent to sell the Units. It
is anticipated that if a placement agent is used the Company may pay commissions
in the amount of ten percent (10%) for such services.
THE
SECURITIES OFFERED HEREBY ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK AND
SHOULD NOT BE PURCHASED BY ANYONE WHO CANNOT AFFORD THE LOSS OF THEIR ENTIRE
INVESTMENT. THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT, OR THE SECURITIES LAWS OF ANY STATE, OR OTHER
JURISDICTION AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. THESE SECURITIES
MAY NOT BE TRANSFERRED, SOLD, PLEDGED, HYPOTHECATED OR ASSIGNED EXCEPT AS
PERMITTED UNDER SUCH ACT OR SUCH LAWS PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM.
2. Terms of the
Subscription. This Offering is made in connection with a
Private Placement Memorandum (the “Memorandum”) that is incorporated by
reference and made a part of this Subscription Agreement. The subscription is
for Units at a purchase price of $100,000 per Unit. The form of the
Warrant is attached to the Memorandum as Appendix “A”.
3. Other Terms of the
Offering. The execution of this Subscription Agreement shall
constitute an offer by the Subscriber to exercise the Warrants in the amount and
on the terms specified herein. The Subscriber must also complete and
execute the Subscriber Questionnaire attached hereto. The Company
reserves the right, in its sole discretion, to reject in whole or in part, any
subscription offer. If the Subscriber's offer is accepted, the
Company will execute a copy of this Subscription Agreement and return it to
Subscriber. The Company, may at its sole discretion, accept
fractional subscriptions.
4. Subscription
Procedures. Subscribers who wish to subscribe in the Offering,
must deliver to the Company completed and fully executed originals of the
Subscription Agreement and Subscriber Questionnaire along with the subscription
price. The subscription price, which is $100,000 per Unit, will be payable in
full upon acceptance of the subscription. The Company reserves the
right to accept fractional subscriptions.
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5. The Company's Representations and
Warranties. The Company hereby represents and warrants as
follows:
(a)
The Company warrants and covenants that there are no material misstatements or
omissions in this Subscription Agreement or any information provided of the
Offering documents herein;
(b)
The Company is a corporation duly formed and in good standing under the laws of
the State of Nevada with a class of securities pursuant to Section 12(g) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), with full
power and authority to conduct its business as presently contemplated;
and
(c)
The Company has the power to execute, deliver and perform this Subscription
Agreement and any other agreement contemplated herein;
6. Subscriber's Representations,
Warranties and Covenants. The undersigned understands and
acknowledges that the Units are being offered and sold under one or more of the
exemptions from registration provided for in Section 3(b), 4(2) and 4(6) of the
Securities Act of 1933, as amended (the “Securities Act”) including, Regulation
D promulgated thereunder, that the undersigned acknowledges that the Units are
being purchased without the undersigned being offered or furnished any offering
literature, prospectus or other material, financial or otherwise, and that this
action has not been scrutinized by the United States Securities and Exchange
Commission or by any regulatory authority charged with the administration of the
securities laws of any state. The undersigned hereby further
represents and warrants as follows:
(a) The
undersigned confirms that he understands and has fully considered, for purposes
of this investment, the risks of an investment in the Units and understands
that: (i) this investment is suitable only for an investor who is able to bear
the economic consequences or losing his entire investment, (ii) the purchase of
the Units is a speculative investment which involves a high degree of risk of
loss by the undersigned of his entire investment, and (iii) that there will be
no public market for the Units and accordingly, it may not be possible for him
to liquidate his investment in the Units in case of an emergency;
(b) The
Subscriber is an "Accredited Investor" as defined in Rule 501(a) of Regulation D
under the Securities Act. This representation is based on the fact
that the Subscriber, inter alia, is an accredited individual who, together with
the Subscriber’s spouse, have a net worth of at least $1,000,000 or the
Subscriber, individually, has had net income of not less than $200,000 during
the last two years, and reasonably anticipates that the Subscriber will have an
income of at least $200,000 during the present year and the next
year;
(c) If
the Subscriber is a corporation, partnership, trust or any unincorporated
association: (i) the person executing this Subscription Agreement does so with
full right, power and authority to make this investment; (ii) that such entity
was not formed for the specific purpose of making an investment in the Company;
and (iii) that all further representations and warranties made herein are true
and correct with respect to such corporation, partnership, trust and
unincorporated association;
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(d) The
address set forth below is the Subscriber's true and correct residence or place
of business, and the Subscriber has no present intention of becoming a resident
of any other state or jurisdiction;
(e) The
Subscriber understands and agrees that the Company prohibits the investment of
funds by any persons or entities that are acting, directly or indirectly, (i) in
contravention of any U.S. or international laws and regulations, including
anti-money laundering regulations or conventions, (ii) on behalf of terrorists
or terrorist organizations, including those persons or entities that are
included on the List of Specially Designated Nationals and Blocked Persons
maintained by the U.S. Treasury Department's Office of Foreign Assets
Control1 ("OFAC"), as
such list may be amended from time to time, (iii) for a senior foreign political
figure, any member of a senior foreign political figure’s immediate family or
any close associate of a senior foreign political figure2, unless the Company,
after being specifically notified by the Subscriber in writing that it is such a
person, conducts further due diligence, and determines that such investment
shall be permitted, or (iv) for a foreign shell bank3 (such persons or entities
in (i) – (iv) are collectively referred to as "Prohibited
Persons").
(f) The
Subscriber represents, warrants and covenants that: (i) it is not, nor is any
person or entity controlling, controlled by or under common control with the
Subscriber, a Prohibited Person, and (ii) to the extent the Subscriber has any
beneficial owners4,
(a) it has carried out thorough due diligence to establish the identities of
such beneficial owners, (b) based on such due diligence, the Subscriber
reasonably believes that no such beneficial owners are Prohibited Persons, (c)
it holds the evidence of such identities and status and will maintain all such
evidence for at least five years from the date of the Subscriber's complete
withdrawal from the Company, and (d) it will make available such information and
any additional information requested by the Company that is required under
applicable regulations.
_____________________________
1 The
OFAC list may be accessed on the web at
xxxx://xxx.xxxxx.xxx/xxxx.
2 Senior
foreign political figure means a senior official in the executive, legislative,
administrative, military or judicial branches of a foreign government (whether
elected or not), a senior official of a major foreign political party, or a
senior executive of a foreign government-owned corporation. In
addition, a senior foreign political figure includes any corporation, business
or other entity that has been formed by, or for the benefit of, a senior foreign
political figure. The immediate family of a senior foreign political
figure typically includes the political figure’s parents, siblings, spouse,
children and in-laws. A close associate of a senior foreign political
figure is a person who is widely and publicly known internationally to maintain
an unusually close relationship with the senior foreign political figure, and
includes a person who is in a position to conduct substantial domestic and
international financial transactions on behalf of the senior foreign political
figure.
3 Foreign
shell bank means a foreign bank without a physical presence in any country, but
does not include a regulated affiliate. A post office box or
electronic address would not be considered a physical presence. A
regulated affiliate means a foreign shell bank that: (1) is an affiliate of a
depository institution, credit union, or foreign bank that maintains a physical
presence in the United States or a foreign country, as applicable; and (2) is
subject to supervision by a banking authority in the country regulating such
affiliated depository institution, credit union, or foreign
bank.
4 Beneficial
owners will include, but not be limited to: (i) shareholders of a corporation;
(ii) partners of a partnership; (iii) members of a limited liability company;
(iv) investors in a fund-of-funds; (v) the grantor of a revocable or grantor
trust; (vi) the beneficiaries of an irrevocable trust; (vii) the individual who
established an XXX; (viii) the participant in a self-directed pension plan; (ix)
the sponsor of any other pension plan; and (x) any person being represented by
the Subscriber in an agent, representative, intermediary, nominee or similar
capacity. If the beneficial owner is itself an entity, the
information and representations set forth herein must also be given with respect
to its individual beneficial owners. If the Subscriber is a
publicly-traded company, it need not conduct due diligence as to its beneficial
owners.
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(g) If
any of the foregoing representations, warranties or covenants ceases to be true
or if the Company no longer reasonably believes that it has satisfactory
evidence as to their truth, notwithstanding any other agreement to the contrary,
the Company may, in accordance with applicable regulations, freeze the
Subscriber's investment, either by prohibiting additional investments, declining
or suspending any withdrawal requests and/or segregating the assets constituting
the investment, or the Subscriber's investment may immediately be involuntarily
withdrawn by the Company, and the Company may also be required to report such
action and to disclose the Subscriber's identity to OFAC or other
authority. In the event that the Company is required to take any of
the foregoing actions, the Subscriber understands and agrees that it shall have
no claim against the Company, and its respective affiliates, directors, members,
partners, shareholders, officers, employees and agents for any form of damages
as a result of any of the aforementioned actions.
(h) The
Subscriber agrees to indemnify and hold harmless the Company, its respective
affiliates, directors, members, partners, shareholders, officers, employees and
agents from and against any and all losses, liabilities, damages, penalties,
costs, fees and expenses (including legal fees and disbursements) which may
result, directly or indirectly, from any inaccuracy in or breach of any
representation, warranty, covenant or agreement set forth in this
Agreement.
(i) The
Subscriber has received and read or reviewed, is familiar with and fully
understands the documents furnished by the Company. The Subscriber
also fully understands this Subscription Agreement and the risks associated with
this interest and confirms that all documents, records and books pertaining to
the Subscriber’s investment in the Units and requested by the Subscriber have
been made available or delivered to the Subscriber by the Company;
(j) The
Subscriber has had an opportunity to ask questions of and receive answers from,
the Company or a person or persons acting on its behalf, concerning the terms
and conditions of this investment and confirms that all documents, records and
books pertaining to the investment in the Units and requested by the Subscriber
has been made available or delivered to the Subscriber;
(k) The
Subscriber will be acquiring the Common Stock solely for the Subscriber's own
account, for investment and not with a view toward the resale, distribution,
subdivision or fractionalization thereof; and the Subscriber has no present
plans to enter into any such contract, undertaking, agreement or
arrangement;
(l) The
Subscriber acknowledges and understands that prior to this Offering there was
only a limited public market for the Common Stock and no assurance can be given
that a public market will be maintained so that any subscribers in this Offering
may avail any benefit from the same;
(m) The
Subscriber's compliance with the terms and conditions of this Subscription
Agreement will not conflict with any instrument or agreement pertaining to the
will develop for the Units offered hereby, or if developed, that it or the
transactions contemplated herein; and will not conflict in, result in a breach
of, or constitute a default under any instrument to which the Subscriber is a
party;
(n) The
Subscriber will seek its own legal, tax and investment advice concerning tax
implications attendant upon the purchase of the Units and understands and
accepts that the Company is relying upon this representation insofar as
disclosure of tax matters is concerned;
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(o) The
Subscriber hereby acknowledges and represents that the Subscriber is aware of
the information set forth in this document and in any exhibits attached hereto;
and
(p) The
foregoing representations and warranties are true and accurate as of the date
hereof and shall be true and accurate as of the date of delivery of the
subscription to the Company and shall survive such delivery. If, in
any respect, such representations and warranties shall not be true and accurate,
the Subscriber shall give written notice of such fact to the Company, specifying
which representations and warranties are not true and accurate and the reasons
therefor.
7. Risk Factors. THE SUBSCRIBER
ACKNOWLEDGES THAT THERE ARE SIGNIFICANT RISKS ASSOCIATED WITH THE PURCHASE OF
THE UNITS AND THAT SUCH SECURITIES ARE HIGHLY SPECULATIVE AND SHOULD NOT BE
PURCHASED BY ANYONE WHO CANNOT AFFORD A TOTAL LOSS OF HIS OR HER ENTIRE
INVESTMENT. All of the risks and disclosures contained within the
company’s filings with the securities and exchange commission, are hereby
incorporated by reference. The Subscriber represents and warrants
that he or she has carefully considered and reviewed the Company’s filings with
the Securities and Exchange Commission, which are hereby incorporated by
reference in reaching a determination to exercise the Warrants.
8. Responsibility. The
Company or its officers and directors shall not be liable, responsible or
accountable for damages or otherwise to any Subscriber for any act or omission
performed or omitted by them in good faith and in a manner reasonably believed
by them to be within the scope of the authority granted to them by this
Subscription Agreement and in the best interests of the Company, provided they
were not guilty of gross negligence, willful or wanton misconduct, fraud, bad
faith or any other breach of fiduciary duty with respect to such acts or
omissions.
9. Miscellaneous.
(a)
The Company and the Subscriber hereby covenant that this Subscription Agreement
is intended to and does contain and embody herein all of the understandings and
agreements, both written or oral, of the Company and the Subscriber with respect
to the subject matter of this Subscription Agreement, and that there exists no
oral agreement or understanding, express or implied liability, whereby the
absolute, final and unconditional character and nature of this Subscription
Agreement shall be in any way invalidated, empowered or
affected. There are no representations, warranties or covenants other
than those set forth herein.
(b)
The headings of this Subscription Agreement are for convenient reference only
and they shall not limit or otherwise affect the interpretation or effect of any
terms or provisions hereof.
(c)
This Subscription Agreement shall not be changed or terminated except as set
forth herein. All of the terms and provisions of this Subscription
Agreement shall be binding upon and inure to the benefit of and be enforceable
by and against the successors and assigns of the Company and the heirs,
executors, administrators and assigns of the Subscriber.
(d)
A modification or waiver of any of the provisions of this Subscription Agreement
shall be effective only if made in writing and executed with the same formality
as this Subscription Agreement. The failure of either the Company or
the Subscriber to insist upon strict performance of any of the provisions of
this Subscription Agreement shall not be construed as a waiver of any subsequent
default of the same or similar nature, or of any other nature or
kind.
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(e)
The various provisions of this Subscription Agreement are severable from each
other and from the other provisions of this Agreement, and in the event that any
provision in this Subscription Agreement shall be held invalid or unenforceable
by a court of competent jurisdiction, the remainder of this Subscription
Agreement shall be fully effective, operative and enforceable.
(f)
Pronouns used herein are to be interpreted as referring to both the masculine
and feminine gender.
(g)
This Subscription Agreement shall be construed and interpreted in accordance
with the laws of the State of Nevada without reference to conflict of laws
principle. The parties agree that in the event of a laws controversy
arising out of the interpretation, construction, performance or breach of this
Subscription Agreement, any and all claims arising out of, or relating to, this
Subscription Agreement shall be submitted by arbitration according to the
Commercial Arbitration Rules of the American Arbitration Association located in
New York City before a single arbitrator. Notwithstanding the prior
sentence, any other action commenced by either party herein shall be venued in
the appropriate court of competent jurisdiction located in the county of New
York, State of New York.
(h)
This Subscription Agreement may be executed in one or more counterparts each of
which shall be deemed an original and all of which together shall be deemed to
be one and the same instrument.
THE SUBSCRIBER ACKNOWLEDGES THAT,
EXCEPT AS SET FORTH IN THIS AGREEMENT, NO REPRESENTATIONS OR WARRANTIES HAVE
BEEN MADE TO IT, OR TO ITS ADVISORS, BY THE COMPANY, OR BY ANY PERSON ACTING ON
BEHALF OF THE COMPANY, WITH RESPECT TO THE INTERESTS, THE PROPOSED BUSINESS OF
THE COMPANY, THE DEDUCTIBILITY OF ANY ITEM FOR TAX PURPOSES, AND/OR THE
ECONOMIC, TAX, OR ANY OTHER ASPECTS OR CONSEQUENCES OF A PURCHASE OF AN INTEREST
AND/OR ANY INVESTMENT IN THE COMPANY, AND THAT IT HAS NOT RELIED UPON ANY
INFORMATION CONCERNING THE OFFERING, WRITTEN OR ORAL, OTHER THAN THAT CONTAINED
IN THIS SUBSCRIPTION AGREEMENT.
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The
Subscriber hereby offers to exercise ___ Units and encloses payment of
$100,000.00 per Unit for an aggregate investment of $____________.
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Signature
of Subscriber
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Name
of Subscriber
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Name
of the Authorized Signatory
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(If
Applicable)
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(Print)
Xxxxxx Xxxxxxx - Xxxxxxxxx
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(Xxxxx)
Xxxx, Xxxxx and Zip Code
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Social
Security/Taxpayer I.D. Number:
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AGREED
TO AND ACCEPTED:
As of
___________, 2008
By:
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Xxxxxx
Xxxxxxx, M.D.
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Chief
Executive Officer
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COMPLETE
“SUBSCRIBER QUESTIONNAIRE” BELOW;
PROVIDE
REQUISITE ADDITIONAL INFORMATION
SUBSCRIBER
QUESTIONNAIRE
PERSONAL
DATA.
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Full
Name
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Residence
Telephone (Area Code Number)
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Business
Telephone (Area Code Number)
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Residence
or Principal Address (Street/City/State/Zip Code)
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Birth
Date
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Mailing
Address (if other than residence)
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Citizenship
(U.S./Other)
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Marital
Status
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Social
Security/Taxpayer I.D. Number
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Spouse’s
Full Name
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E-mail
Address
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Spouse’s
Social Security Number
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Facsimile
Number (Area Code/Number)
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ACCREDITED
INVESTOR. If Subscriber (or the entity on behalf of which
Subscriber is acting) is an “accredited investor” as that term is defined in
Rule 501(a) of Regulation D promulgated under the Act, and, as such, falls
within at least one of the following categories, then please INITIAL each applicable
category.
______
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(a)
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A
bank or savings and loan association or other institution (acting either
in an individual or fiduciary capacity), registered broker-dealer,
insurance company, registered investment company, or business development
company, or licensed “small business investment company,” or an employee
benefit plan which either is represented in a fiduciary capacity by a
bank, savings and loan association, insurance company or registered
investment advisor, has total assets in excess of $5,000,000 or is
self-directed and the plan’s business investments are made solely by
accredited investors.
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______
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(b)
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A
trust (i) with total assets in excess of $5,000,000, (ii) which was not
formed for the specific purpose of acquiring the subject securities, and
(iii) whose purchase is directed by a person who has such knowledge and
experience in financial and business matters as to be capable of
evaluating the merits and risks of the prospective
investment.
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______
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(c)
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An
organization described in Section 501(c)(3) of the Internal Revenue Code,
corporation or similar business trust, or partnership, not formed for the
specific purpose of acquiring the subject securities, with total assets in
excess of $5,000,000.
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______
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(d)
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An
entity in which all of the equity owners are “accredited
investors.”
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(e)
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A
director or an executive officer of the Company.
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______
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(f)
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A
natural person whose individual net worth, or joint net worth with spouse
(if any), exceeds $1,000,000
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______
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(g)
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A
natural person whose income in each of the two most recent calendar years
exceeded $200,000 individually, or $300,000 jointly with spouse (if any),
and who reasonably expects to reach that income level in the current
year.
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