Exhibit 4.1
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SAFESCIENCE, INC.
(a Nevada corporation)
SUBSCRIPTION DOCUMENTS:
PURCHASER SUITABILITY STATEMENT
SUBSCRIPTION AGREEMENT
SAFESCIENCE, INC.
SUBSCRIPTION INSTRUCTIONS
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Before signing these documents, you should consult
your own counsel and accountant as to tax matters and related matters concerning
an investment in the Company. Fully complete and sign all the documents included
in this Subscription Package and then send such documents to:
Xxxx X. Xxxxx, Senior Vice President and CFO
SAFESCIENCE, INC.
00 Xx. Xxxxx Xxxxxx
Xxxxxx, XX 00000
I. Minimum Subscription: Generally, the minimum subscription amount is
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$250,000, unless otherwise agreed to by SafeScience, Inc.
II. Payment: Payment in full of the subscription price is due upon the
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acceptance of this subscription and shall be made by check made payable to
the order of "SafeScience, Inc." or by wire transfer to Fleet Bank; ABA
Routing # __________; Account # ___________; Account Name: SafeScience,
Inc. The Company may deposit, at its option, the proceeds from the
Subscription into an account established by the Company pending the earlier
of acceptance or rejection of such subscription or termination of the
offering.
III. Purchaser Suitability Statements: All investors, individually and where
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applicable (for example in the case of trusts, pension and profit sharing
plans, IRAs and SEPs) through their duly authorized trustees, custodians or
other authorized fiduciaries, must fully complete, sign and date the
Purchaser Suitability Statement.
IV. Subscription Agreement: Two (2) copies of the form of the Subscription
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Agreement are enclosed in this Subscription Package. The Subscription
Agreement contains various statements and representations and must be read
in its entirety. Both copies of the Subscription Agreement should be
completed according to the following instructions and returned with the
Purchaser Suitability Statement:
If the Purchaser is an individual or corporation, date, sign, and provide
the information required on pages 1, 2-5 (as applicable), 6-7 (as applicable),
8, 9 and 15-16 (as applicable) of the Subscription Agreement. A copy of the
completed Subscription Agreement will be returned to you after the subscription
has been accepted by the Company.
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SAFESCIENCE, INC.
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PURCHASER SUITABILITY STATEMENT
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The undersigned directly, if an individual, or as partner, officer,
trustee, custodian or authorized fiduciary on behalf of the investing
corporation, partnership, trust, pension or profit sharing plan, individual
retirement arrangement ("IRA") or simplified employee retirement plan ("SEP"),
has irrevocably agreed to purchase shares of Common Stock of SafeScience, Inc.
(the "Company") for a total dollar amount of ______________. The investor or
investing entity is herein called the "Investor".
The offer and sale of shares ("Shares") is not being registered under the
Securities Act of 1933, as amended (the "Act"), but rather is being made
privately on behalf of the Company, pursuant to the private placement exemption
from registration provided in Section 4(2) of the Act and the requirements of
certain applicable state securities laws. The undersigned acknowledges that the
information contained herein is needed by the Company in order to ensure
compliance with the requirements of the private placement exemption and to
determine (a) whether an investment in the Company by the investor is suitable
in light of the Investor's financial position, and (b) whether the Investor, or
its trustees, custodian and other authorized fiduciaries, have such knowledge
and experience in financial business matters and risks that the undersigned is
capable of evaluating the merits and risks of the investment by the Investor in
the Company.
The undersigned also understands that (a) the Company will rely on the
information contained herein for purposes of such determination and (b) the
Shares will not be registered under the Act in reliance upon the exemption from
registration afforded by Section 4(2) of the Act, and in reliance on similar
exemptions under certain applicable state security laws.
Accordingly, the undersigned individually and, where applicable, on behalf
of the Investor, represents and warrants to the Company that the information
contained herein is complete and accurate and may be relied upon by the Company,
and hereby agrees to notify the Company immediately if there are any material
changes in the information provided herein and to furnish to the Company any
other information which the Company may request so as to determine the
suitability of the undersigned.
The undersigned also understands and agrees that, although the Company will
use its best efforts to keep the information provided in this Statement strictly
confidential at all times, the Company may present this Statement and the
information provided in answer to it to such parties as it deems advisable if
called upon to establish the availability under any federal or state securities
laws of an exemption from registration of the offer or sale of Shares.
In accordance with the foregoing, the following representations and
information are hereby made and provided by the undersigned:
A. Investor Information.
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1. Individual Investors
Name: __________________________________________________
Home Phone: (____) _________________________
(a) Date of Birth: _________________________
(b) Social Security No.: ___________________
(c) Citizenship: ___________________________
(d) Home address (Post Office Boxes are not acceptable):
____________________________________________
____________________________________________
(e) State in which Registered to Vote: __________________________
(f) Name of Employer and Position: ______________________________
____________________________________________
(g) Nature of Employer's Business: ______________________________
(h) How long have you been employed at
your current position? _________________
(i) If you have had more than one job in the last five years, give the same
information with respect to each such job:
____________________________________________
____________________________________________
(j) Business Address: _______________________________________
____________________________________________
(k) Business Telephone Number: (____) _______________
(l) Educational background (highest degree awarded):
School _____________________________________
Degree ______________Year Conferred ________
(m) Address to which all correspondence should be sent:
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____________________________________________
____________________________________________
2. Partnerships, Corporations, Trusts or Other Entities (Non-ERISA)
Name of Entity: _________________________
(a) Type of Entity: ___________________
(b) Taxpayer Identification No.: ___________________
(c) Date of Organization or Incorporation: ___________________
(d) Business Address (Post Office Boxes are not acceptable):
______________________________
_______________________________
_______________________________
(e) Business Telephone Number: ____________________________
(f) State or other Jurisdiction in which Organized or Incorporated: ____________
(g) Was this partnership, corporation, trust or other entity formed for the
specific purpose of investing in the Company? Yes _____ No _____
The information requested in paragraph A (1)
above ("Individual Investors") should also be provided in regard to the
individual(s) who is making the investment decision on behalf of the
partnership, corporation, trust or other entity.
3. Investor's Trustee, Custodian or Fiduciary -- If Individual
Name: __________________________________________________
Home Phone: (____) ______________________
(a) Date of Birth: ______________________
(b) Social Security No.: ________________
(c) Home address (Post Office Boxes are not acceptable):
____________________________________________
____________________________________________
(d) State in which Registered to Vote: _________
(e) Name of Employer and Position: ______________________
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____________________________________________________
(f) Nature of Employer's Business: _____________________________
(g) How long have you been employed at
your current position? _________________
(h) If you have had more than one job in the last five years,
give the same information with respect to each such job:
____________________________________________________
____________________________________________________
(i) Business Address: __________________________________________
____________________________________________________
(j) Business Telephone Number: (____) _____________
(k) Educational background (highest degree awarded):
School _____________________________________________
Degree _______________Year Conferred _______________
(l) Address to which all correspondence should be sent:
____________________________________________________
____________________________________________________
4. Investor's Trustee, Custodian or Other Fiduciaries -- If Not Individual
Name of Entity: ____________________________________________
(a) Type of Entity: ________________________________________
(b) Taxpayer Identification Number: __________________
(c) Date of Organization or Incorporation: ___________
(d) Address (Post Office Boxes are not acceptable):
____________________________________________________
____________________________________________________
(e) Telephone Number: (____) ________________
(f) State or other Jurisdiction
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in which Organized: ____________________
The information requested in items 3 and 4 above should
also be provided with regard to each trustee, custodian or other fiduciary who
is making the investment decision on behalf of the investor. Separate sheets
should be used if necessary.
5. Investor -- if a Pension or Profit Sharing Plan, SEP or IRA
Name of Investor: __________________________________________
________________________________________________________
(a) Type of Plan or Other Entity: __________________________
(b) Taxpayer Identification Number: __________________
(c) Date of Organization or Formation: _______________
(d) Address (Post Office Boxes are not acceptable):
____________________________________________________
____________________________________________________
(e) Telephone Number: (____) ____________________
(f) State or other Jurisdiction
in which Organized: ________________________
(g) Was this plan or other entity formed for the specific purpose of investing
in the Company?
Yes _______ No ________
B. Suitability Standards for Investors
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The Company intends to rely upon the exemption from registration afforded
by Rules 501-503 and Rule 506 of Regulation D under the Act. Therefore,
representations and information as to the qualification of the undersigned under
Regulation D, as set forth below, are to be made and provided by the undersigned
in order for the Company better to determine whether the undersigned's
subscription for Shares may be accepted by the Company in light of the
requirements of Section 4(2) under the Act.
Under Rules 501-503 and Rule 506 under the Act, Shares may be sold to no
more than 35 purchasers. For purposes of determining the Number of purchasers
of shares, persons who are Accredited Investors (as defined in Rule 501) are not
counted.
With respect to a partnership, corporation or trust (herein called an
"Entity"), an Accredited Investor includes (i) a trust with total assets in
excess of $5,000,000 whose purchase is directed by a sophisticated person (as
described in Rule 506) and (ii) any Entity in which each of the equity owners
either (a) is an individual whose net worth (either individually or jointly with
his spouse) exceeds $1,000,000 or (b) is an individual who had an individual
income (not joint with his spouse, and computed as described below) in each of
the two most recent years in excess of $200,000, or a joint income (together
with the income of his/her spouse) in such years in excess of $300,000 and
reasonably expects such an individual or joint income in
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excess of such level in the current year. Accredited Investors also include
certain institutional investors, private business development companies and tax-
exempt organizations.
Investors who would be Accredited Investors if the Company were to rely on
the exemption from registration afforded by Regulation D, and investors who
would not be Accredited Investors, each must meet certain minimum suitability
standards.
Any investor that is able to qualify as an accredited investor is requested
to indicate the basis for such qualification under item 1 below.
1. Accredited Investor Suitability Standards.
For purposes of determining whether an investor is an Accredited Investor,
please check the applicable box below:
[_] (a) the undersigned, if a natural person, or each partner,
shareholder or beneficiary of the undersigned (a) has a net worth, individually
or jointly with his spouse, and exclusive of the value of home, home furnishings
and automobiles, of at least $1,000,000 or (b) had an individual income (not
including the income of his spouse) in excess of $200,000 or a joint income,
together with the income of his spouse, in excess of $300,000, in each of the
two most recent years and reasonably expects such individual or joint income to
reach such income level in the current, year ("income" meaning an individual's
adjusted gross income as reported on his federal income tax return, increased by
any deductions for long-term capital gains or depletion, any tax-exempt interest
and allocable losses of any partnerships of which the individual is a partner);
or
[_] (b) the undersigned is a domestic bank, whether acting in its
individual or fiduciary capacity; a domestic insurance company; a registered
broker or dealer, an investment company registered under the Investment Company
Act of 1940 (the "1940 Act") or "business development company" as defined in the
1940 Act; a Small Business Investment Company licensed by the United States
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 subdivision, 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: or an employee benefit plan within the meaning
of Title I of the Employee Retirement Income Security Act of 1974, if the
investment decision is made by a plan fiduciary that 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
[_] (c) the undersigned is a "private business development company" as
defined in the 1940 Act; or
[_] (d) the undersigned is 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 the securities offered, with total assets in excess of $5,000,000; or
[_] (e) the undersigned is a trust, not formed for the purpose of
acquiring the Shares, whose purchase is directed by a person with such knowledge
and experience in financial and business matters that he is capable of
evaluating the merits and risks of the investment, and such trust has total
assets in excess of $5,000,000; or
[_] (f) the undersigned does not meet the standards set forth above.
2. Minimum Suitability Standards for All Investors
(a) The undersigned, if an individual, (i) is a citizen of the United
States and at least 21 years of age (unless otherwise set forth in Paragraph
(A)(l)(c) above) and (ii) is a bona fide resident and domiciliary (not a
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temporary or transient resident) of the State set forth in Paragraph (A)(l)(d)
above and has no present intention of becoming a resident of any other state or
jurisdiction. The undersigned, if a partnership, corporation, trust or other
entity, was created or organized under the laws of the jurisdiction set forth in
Paragraph (A)(2)(f) above and has no present intention of altering the
jurisdiction of its creation or Organization;
(b) the undersigned has adequate means for providing for current needs and
personal contingencies and has no need for liquidity in this investment; and
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(c) the undersigned, alone or with his Purchaser Representative, has
sufficient knowledge and experience in financial and business matters so as to
be capable of evaluating the merits and risks associated with an investment in
the Company and of making an informed investment decision.
Dated: _______________
______________________________
(If Investor is an individual, signature)
[______________________________]
(Printed name of Investor)
By: _______________________________________
(If Investor is an entity, signature
and title of partner, trustee, or
authorized officer)
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DO NOT SIGN WITHOUT READING THIS AGREEMENT IN ITS ENTIRETY
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Purchaser: ___________________________
Purchaser Representative: ____________
SUBSCRIPTION AGREEMENT
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THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES ACT OF ANY
STATE. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD OR
TRANSFERRED FOR VALUE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION OF THEM UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND/OR APPLICABLE STATE SECURITIES ACTS
OR AN OPINION OF COUNSEL TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED
UNDER SUCH ACT OR ACTS.
THIS INVESTMENT MAY BE SUBJECT TO ADDITIONAL STATE REQUIREMENTS AS SET
FORTH BELOW. INVESTORS SHOULD REFER TO THOSE REQUIREMENTS BEFORE EXECUTING THIS
AGREEMENT.
____________________________
____________________________
____________________________
____________________________
____________________________
Ladies and Gentlemen:
The undersigned desires to subscribe for shares of Common Stock in
SafeScience, Inc., a Nevada corporation (the "Company") in the Company's private
placement of up to $5,000,000 of its securities (the "Offering").
1. Subscription. The undersigned hereby irrevocably subscribes for and
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agrees to purchase ______________ shares of Common Stock (the "Shares") for an
aggregate subscription price of $______________ (at a price per share of $1.35
per share). The undersigned shall also receive a warrant to purchase
___________ shares of Common Stock of the Company at $1.90 per share in
substantially the form of Exhibit A (50% warrant coverage) (the "Warrant"), in
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accordance with the terms and conditions of this Subscription Agreement.
2. Acceptance of Subscription. The undersigned acknowledges that the
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Company has the right, without liability, to reject this subscription and to
determine the date of acceptance of this subscription, and that such
subscription shall be deemed to be accepted only when signed by the Company.
The undersigned agrees that subscriptions need not be accepted in the order in
which they are received.
3. Payment. Payment in full of the subscription price is due upon the
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acceptance of this subscription and shall be made by check made payable to the
order of "SafeScience, Inc." or by wire transfer to Fleet Bank; ABA Routing #
_________; Account # __________; Account Name: SafeScience, Inc. The Company
may deposit, at its option, the proceeds from the Subscription into an account
established by the Company pending the earlier of acceptance or rejection of
such subscription or termination of the offering.
4. Acceptance of Subscription. Upon acceptance of this subscription by
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the Company, compliance with any requirements under the Nevada corporation law,
and any other applicable law, and the designation of
the undersigned as a stockholder on the records of the Company, the undersigned
shall become a stockholder of the Company.
5. Representations and Warranties of the Company. The Company
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hereby represents and warrants to the undersigned, as of the date hereof, as
follows:
(a) Organization and Qualification. The Company is duly organized,
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validly existing and in good standing under the laws of the State of Nevada and
has all requisite corporate power and authority to own and lease its properties,
to carry on its business as presently conducted and as proposed to be conducted
and to consummate the transactions contemplated hereby. The Company is duly
qualified as a foreign corporation and in good standing to do business in each
jurisdiction in which the nature of the business conducted or the property owned
by it requires such qualification, except where the failure to be so qualified
would not, individually or in the aggregate, have a material adverse effect on
the business, assets, liabilities (contingent or otherwise), operations,
condition (financial or otherwise), or prospects of the Company (a "Company
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Material Adverse Effect").
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(b) Capitalization.
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(i) The authorized capital stock of the Company as of the date
hereof, consists of 100,000,000 shares of Common Stock, of which 25,770,403
shares are issued and outstanding, and of which 1,151,230 shares are reserved
for issuance upon exercise of options granted to employees, officers, directors
and consultants.
(ii) As of the date hereof, the Company has reserved a sufficient
number of shares of Common Stock for issuance upon exercise of the Warrant.
(iii) There are no preemptive rights, voting agreements, rights of
first offer or refusal, options, warrants or other conversion or exchange
privileges or rights presently outstanding to purchase, subscribe for or
otherwise acquire, or any securities convertible into or exercisable or
exchangeable for or into, any of the Company's capital stock (collectively,
"Preemptive Rights"), except as described on Schedule 5(b) attached hereto.
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There are no agreements to register any of the Company's outstanding securities
under U.S. federal securities laws, other than pursuant to Registration Rights
Agreement between the Company and Elan International Services, Ltd. ("EIS")
dated June 29, 2001 and except as described on Schedule 5(b).
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(iv) The Shares, when issued against payment therefor in accordance
with this Agreement will be duly and validly issued, fully paid and non-
assessable, and the Warrant, when issued against payment therefor in accordance
with this Agreement, will be duly and validly issued. The shares of Common
Stock issuable upon exercise of the Warrant, ("the "Warrant Shares"), will be
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duly and validly issued, fully paid and non-assessable.
(c) Authorization of Transaction Documents. The Company has full
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corporate power and authority to execute and deliver this Agreement and to
perform its obligations hereunder. The execution, delivery and performance by
the Company of this Agreement have been duly authorized by all requisite
corporate action by the Company and, when executed and delivered by the Company,
this Agreement will be the valid and binding obligations of the Company,
enforceable against the Company in accordance with their respective terms,
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or similar laws affecting the rights of creditors generally and
subject to general principles of equity.
(d) No Violations. The execution, delivery and performance by the
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Company of this Agreement and the compliance with the provisions hereof by the
Company do not and will not violate, conflict with or constitute or result in a
breach of or default under (or an event which with notice or passage of time or
both would constitute a default) or give rise to any right of termination,
cancellation or acceleration under, or
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result in the creation of any Encumbrance (as defined below) upon any properties
or assets of the Company under (i) the Articles of Incorporation or bylaws of
the Company, (ii) any applicable law, statute, rule or regulation, or any
ruling, writ, injunction, order, judgment or decree of any court, arbitrator,
administrative agency or other governmental body applicable to the Company or
any of its properties or assets or (iii) any contract, indenture, mortgage, deed
of trust, lease, agreement or other instrument, to which the Company is a party
or by which the Company or any of its property is bound, except, in each case,
where such violation, conflict, breach, default, termination, cancellation,
acceleration or Encumbrance would not, individually or in the aggregate, have a
Company Material Adverse Effect. As used herein, the term "Encumbrance" shall
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mean any material lien, charge, encumbrance, claim, option, proxy, pledge,
security interest, or other similar right of any nature other than statutory
liens securing payments not yet due and payable or due but not yet delinquent.
(e) Approvals. Except as set forth on Schedule 5(e) attached
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hereto, no permit, authorization, consent, approval, or order of or by, or any
notification of or filing with, any person or entity (governmental or otherwise)
is required in connection with the execution, delivery or performance of this
Agreement by the Company.
(f) Financial Statements. The audited balance sheets of the Company
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at December 31, 2000 (the "Last Audit Date"), and 1999 and the related
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statements of operations, stockholders' equity (deficit) and cash flows for the
years then ended, together with the reports and opinions thereon of Xxxxxx
Xxxxxxxx LLP (the "Audited Financial Statements"), and the unaudited balance
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sheet of the Company at March 31, 2001 and the related statements of operations
and cash flows for the three months then ended (the "Unaudited Financial
-------------------
Statements"; collectively with the Audited Financial Statements, the "Financial
---------- ---------
Statements") are accurate and complete and fairly present the financial position
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of the Company and the results of its operations and its cash flows at such
dates and for the periods indicated and were prepared in conformity with United
States generally accepted accounting principles applied on a consistent basis
throughout the periods indicated (except as may be otherwise indicated therein),
subject, in the case of the Unaudited Financial Statements, to normal year-end
audit adjustments (which shall not be material in the aggregate) and the absence
of footnote disclosures. As of the date hereof, the Company has not incurred
and is not liable for any material liabilities or obligations except as set
forth on the face of the March 31, 2001 balance sheet or Schedule 5(f).
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(g) Taxes. The Company has filed in a timely manner any federal,
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state, local and foreign tax returns, reports and filings (collectively,
"Returns"), including income, franchise, property and other taxes, and has paid
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or accrued the appropriate amounts reflected on such Returns heretofore required
to be filed. Except as set forth on Schedule 5(g) attached hereto, none of the
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Returns have been audited or challenged, nor has the Company received any notice
of challenge nor have any of the amounts or other data included in the Returns
been challenged or reviewed by any governmental authority. The Company has no
knowledge of any liability of any tax to be imposed upon its properties or
assets as of the date hereof that is not adequately provided for.
(h) Plans. Except as set forth on Schedule 5(h) attached hereto,
----- -------------
which sets forth an accurate and complete list and description of all employee
benefit plans maintained or sponsored by the Company or to which the Company is
required to make contributions (the "Benefit Plans"), the Company does not
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maintain, sponsor, is not required to make contributions to or otherwise have
any liability with respect to any pension, profit sharing, thrift or other
retirement plan, employee stock ownership plan, deferred compensation, stock
ownership, stock purchase, performance share, bonus or other incentive plan,
severance plan, health or group insurance plan, welfare plan, or other similar
plan, agreement, policy or understanding (whether written or oral), whether or
not such plan is intended to be qualified under Section 401(a) of the U.S.
Internal Revenue Code of 1986, as amended, or within the meaning of Section 3(3)
of the U.S. Employee Retirement Income Security Act of 1974, as amended, which
plan covers any employee or former employee of the Company. The Benefit Plans
have been and are administered in substantial compliance with their terms and
the requirements of applicable law.
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(i) Absence of Certain Events. Since March 31, 2001, except (x) as
--------------------------
contemplated by the Securities Purchase Agreement dated June 22, 2001 between
the Company and EIS, the License Agreement between the Company and SafeScience
Newco, Ltd. dated June 29, 2001, and the Subscription, Joint Development and
Operating Agreement among the Company, EIS, Elan Corporation, plc and
SafeScience Newco, Ltd. dated June 29, 2001 (such agreements, along with the
agreements and certificates contemplated by such agreements, the "Elan
Transaction Documents"), (y) as disclosed in the Company's forms, reports,
schedules, statements, exhibits and other documents (collectively, the "SEC
---
Filings") filed pursuant to the Securities Exchange Act of 1934, as amended
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(the "'34 Act"), or (z) as set forth on Schedule 5(i) attached hereto, (A) the
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Company has not (i) made, paid or declared any dividend or distribution to any
equity holder (in such capacity) or redeemed any of its capital stock, (ii)
varied its business plan or practices, in any material respect, from past
practices, (iii) entered into any financing, joint venture, license or similar
arrangement that would limit or restrict its ability to perform its obligations
hereunder or (iv) suffered or permitted to be incurred any liability or
obligation or any Encumbrance against any of its properties or assets that would
limit or restrict its ability to perform its obligations hereunder; and (B)
there has not been any change or development which has had, or could reasonably
be expected to have, a Company Material Adverse Effect.
(j) No Liabilities. Since March 31, 2001, except as contemplated or
--------------
provided by the Elan Transaction Documents, the Company has not incurred or
suffered any liability or obligation, matured or unmatured, contingent or
otherwise, except in the ordinary course of business and except any such
liability or obligation that have not had and could not reasonably be expected
to have, individually or in the aggregate, a Company Material Adverse Effect.
(k) Properties and Assets; Etc.
--------------------------
(i) Except as set forth on Schedule 5(k) attached hereto, the
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Company has good and marketable title to its properties and assets shown in the
Financial Statements to be owned by the Company, and has valid leasehold
interests to the properties and assets shown in the Financial Statements to be
leased by the Company, in each case subject to no Encumbrances.
(ii) The Company owns or possesses sufficient legal rights to use
pursuant to license, sublicense, agreement or permission all Intellectual
Property used in the operation of its business as presently conducted, in each
case, subject to no Encumbrances required to be disclosed in the Financial
Statements except as set forth therein, other than any failure to own or possess
sufficient legal rights which, individually or in the aggregate, would not have
a Company Material Adverse Effect. All of the Intellectual Property which is
owned by the Company is owned free and clear of all Encumbrances; none of the
Company's rights in or use of the Intellectual Property has been or, to the
Company's knowledge, is currently threatened to be challenged; to the Company's
knowledge, without making any inquiry other than those, if any, routinely
conducted by the Company in the ordinary course of business, no current or
currently planned product based upon the Company's Intellectual Property would
infringe any patent, trademark, service mark, trade name or copyright of any
other person or entity issued or pending on the Closing Date if the Company were
to distribute, sell, market or manufacture such products, and the Company is not
aware of any actual or threatened claim by any person or entity alleging any
infringement by the Company of a patent, trademark, service mark, trade name or
copyright possessed by such person or entity. None of such Intellectual
Property, whether foreign or domestic, has been canceled, abandoned, or
otherwise terminated, other than such cancellations, abandonments or
terminations which, individually or in the aggregate, would not have a Company
Material Adverse Effect.
(iii) Schedule 5(k) lists the material contracts and agreements of
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the Company other than the Elan Transaction Documents, and each is a legal and
valid agreement binding upon the Company and, to the Company's knowledge, is in
full force and effect. To the Company's knowledge, there is no breach or
default by any party thereunder except any such breach or default that has not
had and could not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect.
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(iv) The Company has and maintains adequate and sufficient insurance,
including liability, casualty and products liability insurance, covering risks
associated with its business, properties and assets, including insurance that is
customary for companies similarly situated.
(v) The Company, its business and properties and assets are in
compliance in all material respects with all applicable statutes, laws and
regulations, including without limitation, those relating to (i) health, safety
and employee relations, (ii) environmental matters, including the discharge of
any hazardous or potentially hazardous materials into the environment, and (iii)
the development, commercialization and sale of pharmaceutical and biotechnology
products, including all applicable regulations of the U.S. Food and Drug
Administration and comparable applicable foreign regulatory authorities and to
its knowledge, no material expenditures are or will be required in order to
comply with any such existing statute, law or regulation, except any such non-
compliance that could not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect.
(l) Legal Proceedings, etc. Except as set forth under the Company's
----------------------
SEC Filings, there is no legal, administrative, arbitration or other action or
proceeding or governmental or investigation pending, or to the Company's
knowledge, threatened against the Company, or any director, officer or employee
of the Company in their capacities as such that (i) challenges the validity or
performance of this Agreement or (ii) could reasonably be expected to have a
Company Material Adverse Effect. The Company is not in violation of, or default
under, any material laws, judgments, injunctions, orders or decrees of any
court, governmental department, commission, agency, instrumentality or
arbitrator applicable to its business, other than any violations or defaults
which, individually or in the aggregate, would not have a Company Material
Adverse Effect.
(m) Brokers or Finders. There have been no investment bankers,
------------------
brokers or finders used by the Company in connection with the transactions
contemplated hereby and no persons or entities are entitled to a fee or
compensation in respect thereof, other than the Shemano Group.
(n) SEC Filings. Except as set forth on Schedule 5(n) attached
----------- -------------
hereto, the Company has timely filed with the Securities and Exchange Commission
(the "SEC") all forms, reports, schedules, statements, exhibits and other
---
documents (collectively, the "SEC Filings") required to be filed by the Company
-----------
on or before the date hereof. At the time filed, the SEC Filings, including
without limitation, any financial statements, exhibits and schedules included
therein or documents incorporated therein by reference (i) did not contain any
untrue statement of material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading and (ii)
complied in all material respects with the applicable requirement of the '34
Act, as the case may be.
6. Representations and Warranties of Undersigned. The undersigned hereby
---------------------------------------------
represents and warrants to the Company that:
(a) the undersigned, if an individual, is not less than twenty-one years of
age;
(b) the undersigned, either alone or with his Purchaser Representative, if
any, named below has such knowledge and experience in financial and business
matters that he is capable of evaluating the merits and risks of an investment
in the Company, and, if a resident of a certain state, meets any additional
suitability standards applicable to him under state law;
(c) if the undersigned is utilizing a Purchaser Representative for this
investment:
(i) such Purchaser Representative, named at the beginning of this
Agreement, has acted as his "Purchaser Representative" as defined in
Regulation D under the Securities Act of 1933, as amended;
-5-
(ii) the undersigned has relied upon the advice of such Purchaser
Representative as to the merits of an investment in the Company and the
suitability of such investment for the undersigned; and
(iii) such Purchaser Representative has heretofore confirmed to the
undersigned in writing (a true and correct copy of which is furnished to
the Company herewith) during the course of this transaction any past,
present or future material relationship, actual or contemplated, between
the Purchaser Representative and/or its affiliates and the Company and/or
any of its affiliates, and any compensation received or to be received as a
result thereof;
(d) if the undersigned is a partnership, corporation, trust or other
entity:
(i) it was not formed for the purpose of this investment;
(ii) it is authorized and otherwise duly qualified to purchase and hold
Shares; and
(iii) this Subscription Agreement has been duly and validly authorized and
executed and, when delivered, will constitute the legal, valid, binding and
enforceable obligation of the undersigned;
(e) if the undersigned prospective investor is subject to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), to the best of the
undersigned's knowledge, neither the Company nor any affiliate of the Company is
a party in interest or disqualified person, as defined in ERISA Section 3(14)
and the Internal Revenue Code of 1954, as amended, section 4975(e)(2),
respectively, with respect to such plan;
(f) the undersigned is not subject to a statutory disqualification, as
set forth in Section 3(a)(39) of the Securities Exchange Act of 1934, as
amended;
(g) the undersigned and his Purchaser Representative, if any, have been
given full and complete access to all information with respect to the Company
and the Company's proposed activities that the undersigned and his Purchaser
Representative, if any, have deemed necessary to evaluate the merits and risks
of an investment in the Company;
(h) the undersigned and, if applicable, his Purchaser Representative,
have had a full opportunity to ask questions of and to receive satisfactory
answers from a representative of the Company concerning the terms and conditions
of this investment and all such questions have been answered to the full
satisfaction of the undersigned;
(i) the undersigned and, if applicable, his Purchaser Representative,
have had the opportunity to receive documents related to the Company and to ask
questions of and receive answers from the Company regarding the Company, its
business and the terms and conditions of the Offering and have read carefully
copies of the Company's SEC Filings, including the exhibits thereto, and the
undersigned is familiar with and agrees to all the terms and conditions of the
offering of Shares and the Warrant;
(j) the undersigned is aware of the risks associated with an investment
in the Company, including those described in the "Risk Factors" section of the
Company's SEC Filings;
(k) the undersigned has adequate means of providing for his current needs
and possible personal contingencies, has no need for liquidity with respect to
his investment in the Company, and has financial resources sufficient to bear
the economic risk of such investment;
(l) the undersigned has been advised and understands that an investment
in the Company is highly speculative and has received no representations or
warranties from the Company with respect to such investment;
-6-
(m) the undersigned acknowledges that there are substantial restrictions
on the transferability of, and there will be no public market for, the Shares
and the shares of Common Stock issuable upon exercise of the Warrant (the
"Warrant Shares") and, accordingly, it may not be possible for the undersigned
to liquidate his investment in case of an emergency or otherwise, and the
undersigned has been advised that while Rule 144 of the Securities Act of 1933,
as amended, is presently applicable to Shares and the Warrant Shares, the
undersigned understands that the Company may not continue to be obligated to
make publicly available any information, filings and reports which are a
condition to the availability of Rule 144;
(n) the undersigned is aware that no securities administrator of any
state or federal government has made or will make any finding or determination
relating to this investment;
(o) Shares and the Warrant subscribed for hereby are being purchased for
the undersigned's own account (or a trust account if the undersigned is a
trustee), for investment purposes only and are not being purchased with a view
to or for any resale, fractionalization, subdivision or distribution of such
Shares; and
(p) all information which the undersigned and his Purchaser
Representative, if any, has provided to the Company, including (but not limited
to) the information, representations and warranties of the undersigned contained
in the Purchaser Suitability Statement executed by the undersigned and submitted
to the Company in connection with this Subscription, is true and correct in all
material respects as of the date set forth below and the undersigned agrees to
furnish any additional information which the Company may request so as to
determine the suitability of the undersigned, and to notify the Company
immediately should any material changes in such information occur.
7. Compliance with Federal and State Securities Laws. The undersigned
-------------------------------------------------
understands and agrees that the following restrictions and limitations are
applicable to his purchase, resales, pledges, hypothecations or other transfers
of Shares and the Warrant Shares:
(a) The undersigned agrees that Shares and the Warrant Shares shall not
be sold, pledged, hypothecated or otherwise transferred unless such Shares or
Warrant Shares are registered under the Securities Act of 1933, as amended, and
applicable state securities laws or are exempt therefrom.
(b) A legend in substantially the following form has been or will be
placed on any instruments evidencing Shares and the Warrant Shares:
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES ACT OF ANY
STATE. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES, AND SUCH
SECURITIES MAY NOT BE SOLD OR TRANSFERRED FOR VALUE IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION OF THEM UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND/OR APPLICABLE STATE SECURITIES ACTS OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER
SUCH ACT OR ACTS.
(c) If applicable, the legend described in subparagraph (b) above will be
placed with respect to any new instrument(s) or other document(s) issued upon
presentment by the undersigned of such instrument(s) or other document(s) for
transfer.
8. Transferability. The undersigned understands and agrees that the
---------------
restrictions on the transfer or assignment of Shares and the Warrant Shares
which may be imposed by the states in which such Shares and Warrant Shares may
be offered shall be binding on the undersigned.
9. Registration Rights.
-------------------
-7-
(a) The Company shall file a registration statement covering the Shares
and the shares of common stock issuable upon exercise of the Warrant within 60
days of the Company's termination of Offering (the "Closing"). Thereafter, the
Company shall use its best efforts to cause such registration statement to be
declared effective by the 120th day after the Closing.
(b) The Company shall pay all expenses incurred by the Company in
connection with the registration, qualification and/or exemption of the Shares,
including any SEC and state securities law registration and filing fees,
printing expenses, fees and disbursements of the Company's counsel and
accountants, transfer agents' and registrars' fees, fees and disbursements of
experts used by the Company in connection with such registration, qualification
and/or exemption, and expenses incidental to any amendment or supplement to the
registration statement or prospectuses contained therein. The Company shall
not, however, be liable for any sales, broker's or underwriting commissions upon
sale by the undersigned or other holder of any of the Shares.
10. Indemnification. The undersigned acknowledges and understands the
---------------
meaning and legal consequences of the representations and warranties herein and
hereby agrees to indemnify and hold harmless the Company and its officers,
directors, controlling persons, agents, employees, attorneys and accountants
from and against any and all loss, damage or liability, together with all costs
and expenses (including attorneys fees and disbursements) which any of them may
incur by reason of:
(a) any breach of any representation, warranty or agreement of the
undersigned contained in this Subscription Agreement; or
(b) any false, misleading or inaccurate information, or any breach of any
representation, warranty or agreement of the undersigned, contained in the
Purchaser Suitability Statement executed by the undersigned.
Notwithstanding the foregoing, no representation, warranty, acknowledgment
or agreement made herein by the undersigned shall in any manner be deemed to
constitute a waiver of any rights of the undersigned under federal or state
securities laws. All representations and warranties contained in this
Subscription Agreement and the Purchaser Suitability Statement executed by the
undersigned, and the indemnification contained in this paragraph 10, shall
survive the acceptance of this subscription and any other transaction
contemplated herein.
11. Applicable Law. This Subscription Agreement shall be governed by and
--------------
construed in accordance with the laws of the Commonwealth of Massachusetts,
except as to any matter, to the extent it involves any United States statute, in
accordance with the laws of the United States.
12. Gender. Whenever the singular number is used herein and when required
------
by the context the same shall include the plural and the masculine gender shall
include the feminine and, where applicable, shall include any corporation, firm
or partnership executing this Subscription Agreement.
13. Binding Effect. This Subscription Agreement shall be binding upon and
--------------
inure to the benefit of the undersigned and his successors and neither this
Subscription Agreement nor any interest herein shall not be assignable by him.
This Subscription Agreement shall inure to the benefit of the Company and its
successors and assigns, and upon its acceptance by the Company shall be binding
upon the Company and its successors and assigns.
14. Joint and Several Representations. If more than one person is signing
---------------------------------
this Subscription Agreement, each representation, warranty and undertaking
herein shall be the joint and several representations warranty and undertaking
of each such person. If the undersigned is a partnership, corporation, trust or
other entity, the undersigned further represents and warrants that (a) the
individual executing this Subscription Agreement has full power and authority to
execute and deliver this Subscription Agreement on behalf of the
-8-
undersigned and (b) the undersigned has full right and power to perform its
obligations pursuant to the provisions hereof and become a stockholder of the
Company.
15. Notice. All notice required to be given to the undersigned shall be
------
deemed given when received by the undersigned, and shall be sent by air express
courier with regular service to the undersigned at the address indicated below,
or as amended by written notice to the Company.
IN WITNESS WHEREOF, the undersigned has executed and sealed this
Subscription Agreement this day of __________________2001.
____________________________
(Print or type name of
Subscriber)
______________________________
(If Subscriber is an
individual, signature)
By:___________________________
(If Subscriber is an entity,
signature and title of partner,
trustee, or authorized officer)
[____________________________]
(If Purchaser is an individual,
home address; or if Purchaser
is an entity, business address)
______________________________
(Social Security or Tax
Identification Number)
______________________________
(Signature of Joint Tenant, if any)
______________________________
(Printed Name of Joint Tenant, if any)
______________________________
______________________________
City, State and Zip Code
(Home Address)
______________________________
(Social Security or Tax
Identification Number of
Joint Tenant)
______________________________
-9-
(Social Security or Tax
Identification Number of
Joint Tenant)
Type of Ownership
(check as appropriate):
___ Individual
___ Joint tenants with
rights of survivorship
___ Tenants in common
___ Community property
___ Trust
___ Other (indicate):
___ Corporation
Total Dollar Amount of Subscription: ____________________.
THIS INVESTMENT MAY BE SUBJECT TO ADDITIONAL STATE REQUIREMENTS AS SET
FORTH BELOW. INVESTORS SHOULD REFER TO THOSE REQUIREMENTS BEFORE EXECUTING THIS
AGREEMENT.
-10-
Subject to the terms and conditions of this Subscription Agreement, the
foregoing subscription is approved and accepted as of the _____ day of
____________, 2001.
SAFESCIENCE, INC.
By:______________________________
Xxxx X. Xxxxx, Senior Vice President and
CFO
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