Exhibit 10.47
SUBSCRIPTION AGREEMENT
MOLECULAR DIAGNOSTICS, INC.
Molecular Diagnostics, Inc. (the "Company") has authorized for sale
through Bathgate Capital Partners LLC (the "Placement Agent"), 40 Units, each
comprising one $100,000 principal amount, 10% secured convertible debentures
("Notes") and warrants ("Warrants") to purchase 25,000 shares of the Company's
$.001 par value common stock ("Common Stock"). The Minimum offering is
$1,500,000 minimum offering; the Maximum Offering is $4,000,000. The minimum
investment is $100,000.
The undersigned hereby subscribes for ____________ Units
($________)(the "Subscription Price").
The Common Stock included in the Unit or issuable upon conversion of
the Note shall be registered for public sale with the Securities and Exchange
Commission (the "Commission"), in accordance with the terms set forth in the
registration rights agreement (the "Registration Agreement"), entered into
between the holder of the Note (the "Holder") and the Company of even date.
The undersigned agrees to pay the aggregate Subscription Price for
the Unit being purchased hereunder. The entire purchase price is due and payable
upon the submission of this Subscription Agreement, and shall be payable by wire
transfer to the order of "Molecular Diagnostics, Inc. Escrow Account" at AMG
Guaranty Trust, National Association (the "Escrow Agent"). The wire instructions
are as follows:
AMG Guaranty Trust Co.
ABA No. 000000000
N/O: Trust Department
F/B/O Molecular Diagnostics, Inc. Escrow Account
Account No. 01-
The Company has the right to reject this subscription in whole or in
part.
The undersigned acknowledges that the Unit being purchased hereunder
and its component securities will not be registered under the Securities Act of
1933 (the "Act"), or the securities laws of any state (the "State Acts"), in
reliance upon an exemption from the registration requirements of the Act and the
State Acts; that absent an exemption from registration contained in the Act and
the State Acts, the Unit, Note and Common Stock would require registration; and
that the Company's reliance upon such exemptions is based, in material part,
upon the undersigned's representations, warranties, and agreements contained in
this Subscription Agreement and the Registration Rights Agreement (collectively,
the "Subscription Documents").
1. The undersigned represents, warrants, and agrees as follows:
a. The undersigned agrees that this Subscription Agreement is
and shall be irrevocable.
b. The undersigned has carefully read the Term Sheet dated
January 15, 2004; the Form of Secured Convertible Promissory Note, the Form of
Warrant, and the Form of General Security Agreement, a list of litigation in
which the Company is involved, and the unaudited financial statements of the
Company dated November 21, 2003, each of which has been provided to the
undersigned; and the following filings made by the Company with the Securities
and Exchange Commission ("SEC"), all of which are available on the Internet at
xxx.xxx.xxx, including the Form 10-K Annual Report filed with the SEC on July
21, 2003, the Form 10-QSB Quarterly Report filed with the SEC on August 1, 2003,
the Form 10-QSB Quarterly Report filed with the SEC on August 13, 2003, the Form
10-QSB Quarterly Report filed with the SEC on November 19, 2003, the Form 8-K
Current Report filed with the SEC on November 21, 2003 and the Form 10-QSB/A
Quarterly Report filed with the SEC on November 21, 2003 (collectively, the
"Disclosure Materials") and of which the undersigned acknowledges will obtain
from the SEC's web site at xxx.xxx.xxx. The undersigned has been given the
opportunity to ask questions of, and receive answers from, the Company
concerning the terms and conditions of this Offering and the Disclosure
Materials and to obtain such additional information, to the extent the Company
possesses such information or can acquire it without unreasonable effort or
expense, necessary to verify the accuracy of same as the undersigned reasonably
desires in order to evaluate the investment. The undersigned understands the
Disclosure Materials, and the undersigned has had the opportunity to discuss any
questions regarding any of the Disclosure Materials with his counsel or other
advisor. Notwithstanding the foregoing, the only information upon which the
undersigned has relied is that set forth in the Disclosure Materials. The
undersigned has received no representations or warranties from the Company or
the Placement Agent, their employees, agents or attorneys, in making this
investment decision other than as set forth in the Disclosure Materials. The
undersigned does not desire to receive any further information.
c. The undersigned is aware that the purchase of the Unit is a
speculative investment involving a high degree of risk, that there is no
guarantee that the undersigned will realize any gain from this investment, and
that the undersigned could lose the total amount of this investment.
d. The undersigned understands that no federal or state agency
has made any finding or determination regarding the fairness of the Unit for
investment, or any recommendation or endorsement of the Unit.
e. The undersigned is purchasing the Units for the
undersigned's own account, with the intention of holding the Units with no
present intention of dividing or allowing others to participate in this
investment or of reselling or otherwise participating, directly or indirectly,
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in a distribution of the Units or the securities underlying the Units, and shall
not make any sale, transfer, or pledge thereof without registration under the
Act and any applicable securities laws of any state or unless an exemption from
registration is available under those laws.
f. The undersigned represents that if an individual, he has
adequate means of providing for his or her current needs and personal and family
contingencies and has no need for liquidity in this investment in the Units. The
undersigned has no reason to anticipate any material change in his or her
personal financial condition for the foreseeable future.
g. The undersigned is financially able to bear the economic
risk of this investment, including the ability to hold the Units indefinitely,
or to afford a complete loss of his investment in the Units.
h. The undersigned represents that the undersigned's overall
commitment to investments which are not readily marketable is not
disproportionate to the undersigned's net worth, and the undersigned's
investment in the Units will not cause such overall commitment to become
excessive. The undersigned understands that the statutory basis on which the
Units are being sold to the undersigned and others would not be available if the
undersigned's present intention were to hold the Units for a fixed period or
until the occurrence of a certain event. The undersigned realizes that in the
view of the Commission, a purchase now with a present intent to resell by reason
of a foreseeable specific contingency or any anticipated change in the market
value, or in the condition of the Company, or that of the industry in which the
business of the Company is engaged or in connection with a contemplated
liquidation, or settlement of any loan obtained by the undersigned for the
acquisition of the Units, and for which such Units may be pledged as security or
as donations to religious or charitable institutions for the purpose of securing
a deduction on an income tax return, would, in fact, represent a purchase with
an intent inconsistent with the undersigned's representations to the Company,
and the Commission would then regard such sale as a sale for which the exemption
from registration is not available. The undersigned will not pledge, transfer or
assign this Subscription Agreement.
i. The undersigned represents that the funds provided for this
investment are either separate property of the undersigned, community property
over which the undersigned has the right of control, or are otherwise funds as
to which the undersigned has the sole right of management. The undersigned is
purchasing the Units with the funds of the undersigned and not with the funds of
any other person, firm, or entity and is acquiring the Units for the
undersigned's account. No person other than the undersigned has any beneficial
interest in the Units being purchased hereunder.
j. The address shown under the undersigned's signature at the
end of this Subscription Agreement is the undersigned's principal residence if
he or she is an individual, or its principal business address if it is a
corporation or other entity.
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l. The undersigned 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 Units.
m. The undersigned acknowledges that the certificates for the
securities comprising the Unit which the undersigned will receive will contain a
legend substantially as follows:
THE SECURITIES WHICH ARE REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). THE SECURITIES HAVE BEEN ACQUIRED FOR
INVESTMENT PURPOSES ONLY AND NOT WITH A VIEW TO DISTRIBUTION
OR RESALE, AND MAY NOT BE SOLD, TRANSFERRED, MADE SUBJECT TO A
SECURITY INTEREST, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED
OF UNLESS AND UNTIL REGISTERED UNDER THE SECURITIES ACT OF
1933 (THE "ACT"), AS AMENDED, OR EVIDENCE SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER SUCH ACT.
The undersigned further acknowledges that a stop transfer
order will be placed upon the certificates for the securities in accordance with
the Act. The undersigned further acknowledges that the Company is under no
obligation to aid the undersigned in obtaining any exemption from registration
requirements.
n. The undersigned represents that he is an "accredited
investor" as that term is defined under the Act.
2. The undersigned expressly acknowledges and agrees that the
Company is relying upon the undersigned's representations contained in the
Subscription Documents. The undersigned further acknowledges that Bathgate
Capital Partners LLC has acted as placement agent with respect to this offering
(the "Placement Agent"). In consideration for its services, the Placement Agent
will receive (i) a commission equal to 4% of the gross proceeds of the loan; and
(ii) a warrant to purchase 1,000 shares of the Company's Common Stock at a price
of $0.18 per share, for each Unit sold in the offering.
3. The Company has been duly and validly incorporated and is validly
existing and in good standing as a corporation under the laws of the State of
Delaware. The Company represents that it has all requisite power and authority,
and all necessary authorizations, approvals and orders required as of the date
hereof to own its properties and conduct its business as described in the
Disclosure Materials and to enter into this Subscription Agreement and to be
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bound by the provisions and conditions hereof; provided, however, the Company
must file a Certificate of Amendment to the Certificate of Incorporation
("Certificate of Amendment") with the State of Delaware increasing its
authorized capital to enable the Company to reserve and issue all of the shares
of common stock issuable in connection with the sale of the Units.
4. The Company covenants and agrees that:
a. This transaction is subject to the execution of a security
agreement, substantially in the form attached hereto as Exhibit A.
b. This transaction is subject to the conversion of $190,000 of
Xxxxxxx Xxxxxxxx'x secured promissory note to 1,900,000 shares of common stock.
c. This transaction is subject to the conversion of the outstanding
$1,980,200 Bridge II 12% secured promissory notes issued from October 2002 to
November 2003 to shares of common stock; provided, however, it shall be within
the Placement Agent's discretion to close this offering in the event that not
all of the Bridge II 12% secured promissory notes are converted.
d. Upon the completion of the minimum offering in the amount of
$1,500,000, Xxxxx Xxxxxxxx will resign as an executive officer of the Company.
5. Except as otherwise specifically provided for hereunder, no party
shall be deemed to have waived any of his or its rights hereunder or under any
other agreement, instrument or papers signed by any of them with respect to the
subject matter hereof unless such waiver is in writing and signed by the party
waiving said right. Except as otherwise specifically provided for hereunder, no
delay or omission by any party in exercising any right with respect to the
subject matter hereof shall operate as a waiver of such right or of any such
other right. A waiver on any one occasion with respect to the subject matter
hereof shall not be construed as a bar to, or waiver of, any right or remedy on
any future occasion. All rights and remedies with respect to the subject matter
hereof, whether evidenced hereby or by any other agreement, instrument, or
paper, will be cumulative, and may be exercised separately or concurrently.
6. The parties have not made any representations or warranties with
respect to the subject matter hereof not set forth herein, and this Subscription
Agreement, together with any instruments or documents executed simultaneously
herewith in connection with this offering, constitutes the entire agreement
between them with respect to the subject matter hereof. All understandings and
agreements heretofore had between the parties with respect to the subject matter
hereof are merged in this Subscription Agreement and any such instruments and
documents, which alone fully and completely expresses their agreement.
7. This Subscription Agreement may not be changed, modified,
extended, terminated or discharged orally, but only by an agreement in writing,
which is signed by all of the parties to this Subscription Agreement.
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8. The parties agree to execute any and all such other further
instruments and documents, and to take any and all such further actions
reasonably required to effectuate this Subscription Agreement and the intent and
purposes hereof.
9. This Subscription Agreement shall be governed by and construed in
accordance with the laws of the State of Illinois and the undersigned hereby
consents to the jurisdiction of the courts of the State of Illinois and the
United States District Courts situated therein.
[INTENTIONALLY BLANK]
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EXECUTION BY SUBSCRIBER
$
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Exact Name in Which Title is to be Held
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(Signature)
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Name (Please Print)
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Residence: Number and Street
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City State Zip Code
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Social Security Number
Accepted this _____ day of ___________, 2004, on behalf of Molecular
Diagnostics, Inc.
By:
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Xxxxx Xxxxxxxx, CEO
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