Attached files
| file | filename |
|---|---|
| 8-K - Adynxx, Inc. | e606965_8k-hepalife.htm |
| EX-9.1 - Adynxx, Inc. | e606965_ex9-1.htm |
| EX-4.2 - Adynxx, Inc. | e606965_ex4-2.htm |
| EX-4.1 - Adynxx, Inc. | e606965_ex4-1.htm |
| EX-2.2 - Adynxx, Inc. | e606965_ex2-2.htm |
| EX-2.1 - Adynxx, Inc. | e606965_ex2-1.htm |
| EX-16.1 - Adynxx, Inc. | e606965_ex16-1.htm |
| EX-10.2 - Adynxx, Inc. | e606965_ex10-2.htm |
| EX-99.1 - Adynxx, Inc. | e606965_ex99-1.htm |
| EX-10.1 - Adynxx, Inc. | e606965_ex10-1.htm |
Subscription
Agreement
By
and Between
Hepalife Technologies, Inc.,
a Florida corporation (the “Company”) and the subscriber whose name is
set forth on the signature pages affixed hereto (the “Subscriber”
Recitals
WHEREAS, the Company is
offering, a minimum (the “Minimum Number”) of 9,400,000
units and up to a maximum (the “Maximum Number”) of 20,000,000
units (collectively, the “Units”), of the Company’s common
stock, $0.001 par value per share (the “Common Stock”), at a price of
$0.125 per Unit (the “Purchase
Price”), on a “best efforts, all or none” basis with respect to the
Minimum Number and on a “best efforts” basis with respect to the remaining
10,6400,000 Units (the “Offering”).
WHEREAS, each Unit consists of
(i) one (1) share (collectively, the “Unit Shares”)of the Company’s
Common Stock; (ii) one
half of one Series E Stock Purchase Warrant in the form of Exhibit
A hereto (the “Series E
Warrants”); and one half of one Series F Stock Purchase Warrant in the
form of Exhibit
B hereto (the “Series F
Warrants” and together with the Series E Warrants, the “Warrants”).
WHEREAS, one Series E Warrant
entitles the holder to purchase one additional common share (the “Series E Shares”) at a price
of $0.16 for a period of five (5) years from the Closing Date as such term is
defined in Section 1.3
hereof; and one Series F Warrant entitles the holder to purchase one additional
common share (the “Series F
Shares”) at a price of $0.20 for a period of five (5) years from the
Closing Date; collectively, the Series E Shares and the Series F Shares are
referred to herein as the “Warrant Shares.”
WHEREAS, the Company is
conducting this Offering as a consequence of its having entered into a
non-binding Memorandum of Intent dated February 24, 2010 (the “MOI”) with AquaMed
Technologies, Inc. (“AquaMed”), which MOI
contemplates the Company’s acquisition of all of the outstanding shares, on a
fully-diluted basis, of AquaMed (the “AquaMed Acquisition”) in
exchange for an aggregate of 80,000,000 shares of the Company’s Common Stock,
provided that certain preconditions are satisfied. One of the
preconditions to the consummation of the AquaMed Acquisition is that, on the
closing date of the AquaMed Acquisition, the Company has cash on hand (after
deduction of accrued and unpaid liabilities) and/or held in escrow pursuant to
this Offering for its benefit an aggregate of $3,600,000.
WHEREAS, the Units will only
be offered and sold to a limited number of subscriber who are “accredited investors,” as such
term is defined in Section 2.7
hereof.
1
WHEREAS, the Company and the
Subscriber are executing and delivering this Agreement in reliance upon an
exemption from securities registration afforded by, but not limited to, the
provisions of Section 4(2) and 4(6) of the Securities Act of 1933, as amended
(the “1933 Act”), and
Regulation D (“Regulation
D”) and Regulation S (“Regulation S”) each as
promulgated by the United States Securities and Exchange Commission (the “Commission”) under the 1933
Act.
WHEREAS, pending the Closing,
as such term is defined in Section 1.3 hereof, the
parties hereto desire to have the aggregate proceeds from the sale of Units held
in escrow by Alfred V. Greco,
LLP (the “Escrow
Agent”) pursuant to the terms of an Escrow Agreement by and among, the
Company, AquaMed and the Escrow Agent, substantially in the form attached hereto
as Exhibit
C (the “Escrow
Agreement”).
WHEREAS, the Company has
engaged Palladium Capital Advisors, LLC (the “Placement Agent”) on a
non-exclusive basis to assist the Company in placing the Units in the Offering
as described herein.
WHEREAS, the undersigned
Subscriber hereby subscribes to purchase the number of Units set forth on the
signature page attached hereto (the “Subscribed Units”), at an
aggregate price as set forth on such signature page hereto (the “Subscription Amount”), subject
to the terms and conditions of this Agreement and on the basis of the
representations, warranties, covenants and agreements contained
herein.
WHEREAS, the Company desires
to enter into this Agreement to issue and sell the Subscribed Units to the
Subscriber and the Subscriber desires to purchase the number of Subscribed Units
from the Company all on the terms and conditions set forth herein.
NOW, THEREFORE, in
consideration of the mutual covenants and other agreements contained in this
Agreement the Company and the Subscriber hereby agree as follows:
1.
Subscription for Units; Subscription Procedures; Closing.
1.1 Subscription. Subject to the
terms and conditions hereinafter set forth, the Subscriber hereby irrevocably
subscribes for and agrees to purchase from the Company the Subscribed Units and
simultaneously with the Subscriber’s execution and delivery of this Agreement,
herewith has transmitted the Subscription Amount in the form of either (i) a
valid check or (ii) a wire transfer of funds, to the Escrow Agent as
follows:
(a) Check. If by check, payable to
as Escrow Agent, and delivered to:
Alfred V. Greco, PLLC
199 Main Street
White Plains, New York
10601
(b) Wire Transfer. If by wire
transfer of funds to:
2
|
Bank:
|
HSBC
BANK
|
|
666
FIFTH AVENUE, NEW YORK, NEW YORK 10103
|
|
|
ABA
Routing #:
|
021001088
|
|
Beneficiary:
|
Alfred
V. Greco, PLLC Attorney Escrow Account
|
|
Account
#:
|
011031395
|
|
Reference:
|
“HepaLife
Technologies, Inc. – [insert Subscriber’s
name]”
|
1.2 Subscription
Procedure. To complete a subscription for the Units, the
Subscriber must fully comply with the subscription procedure provided in this
Section 1.2 on or before
the Closing Date
:
(a) Subscription
Agreement. On or before the Closing Date, the Subscriber shall
review, complete and execute the Signature Page to this Agreement; and shall
have completed the Subscriber Questionnaire and Certification set forth in Section 8 hereof, and shall
return this Agreement, as executed to the Company c/o Sierchio & Company,
LLP, 430 Park Avenue, Suite 702, New York, New York 10022. Executed
documents may be delivered to by facsimile or electronic mail (e-mail), provided
that the Subscriber delivers the original copies of the documents as soon as
practicable thereafter.
(b) Subscription
Amount. Simultaneously with the delivery of this Agreement, as
provided herein, the Subscriber shall deliver the Subscription Amount to the
Escrow Agent as set forth in Section 1.1 above. Subject to
Section 1.4 below, the
minimum subscription is $100,000 (the “Minimum Investment”).
1.3 Closings; Closing
Date.
(a) Date and Place of Closing. The
consummation of the transactions contemplated herein shall take place at the
offices of Sierchio & Company, 430 Park Avenue, Suite 702, New York, New
York 10022, upon the satisfaction or waiver of all conditions to closing set
forth in Sections 4
and 5 hereof (the
“Closing
Conditions”). Anything herein to the contrary
notwithstanding, upon acceptance by the Company of subscriptions equal to at
least the Minimum Number and the satisfaction of the Closing Conditions, the
Company shall have the right at any time thereafter, prior to the Offering Termination Date (as
defined below), to effect an initial closing with respect to the Offering (the
“Initial
Closing”). Thereafter, the Company shall continue to accept
additional subscriptions for, and continue to have closings (“Subsequent Closings” and
together with the Initial Closing, each a “Closing” and the date thereof
the “Closing Date”) with
respect to subscriptions from new or existing investors, from time to time up to
and including the Offering Termination Date.
(b) Purchases by the Company’s Affiliates
and Placement Agents. The Subscriber understands that the Company’s,
AquaMed’s, and the Placement Agent’s respective officers, directors,
employees and/or affiliates may purchase Units which purchases may be used to
satisfy the Minimum Number.
3
(c) Subscriber’s Closing
Deliveries. At the Closing, the Subscriber shall have
delivered to:
(1)
the Company, the following:
(i)
This
Agreement, and the completed Subscriber Questionnaire and Certification
incorporated therein;
(ii)
For U.S.
citizens or residents of the U.S., an Internal Revenue Service Form
W-9;
(iii) For
individual investors, a copy of one form of government issued picture
identification (e.g. state issued driver’s license or passport);
and
(2) to
the Escrow Agent, the Subscription Amount.
(d) Company’s Closing
Deliveries. At the Closing, the Company shall have delivered
to
(1) the
Subscriber:
(i) If
accepted by the Company, a duly countersigned copy of this
Agreement;
(ii) a
copy of the written instructions to its transfer agent to issue and deliver
certificates representing the Unit Shares acquired by the Subscriber, all as
more fully set forth on the signature page hereto, to the address set forth on
the aforesaid signature page; and
(2)
the Escrow Agent, written (i) notice of the satisfaction of the Closing
Conditions and (ii) direction to release the Escrowed Funds to the
Company.
1.4 Company Discretion to Accept or
Reject Subscriptions. The Subscriber understands and agrees
that the Company in its sole discretion reserves the right to accept or reject
this or any other subscription for Units, in whole or in part, notwithstanding
prior receipt by the Subscriber of notice of acceptance of this
subscription. Anything herein to the contrary notwithstanding, the
Company in its sole discretion, may accept subscriptions for less than the
Minimum Investment. The Company shall have no obligation hereunder
until the Company shall execute and deliver to the Subscriber an executed copy
of this Agreement. If this subscription is rejected in whole, or the
offering of Units is terminated, all funds received from the Subscriber will be
returned without interest or offset, and this Agreement shall thereafter be of
no further force or effect. If this subscription is rejected in part,
the funds for the rejected portion of this subscription will be returned without
interest or offset, and this Agreement will continue in full force and effect to
the extent this subscription was accepted.
1.5 Termination of the
Offering. This Offering will terminate upon the earlier to occur of
(a) the date on which the Company has received accepted subscriptions for the
Maximum Number (b) May 31, 2010, unless such date is extended for a period not
to exceed 60 days, without notice thereof being required to be given to the
Subscriber, or (c) in the sole discretion of the Company at any time after it
has received accepted subscriptions for the Minimum Number (the “Offering Termination
Date”).
4
2. Subscriber Representations and
Warranties. The Subscriber hereby represents and warrants to
and agrees with the Company that:
2.1 Authorization; Power and
Enforceability.
(a) Authorization;
Enforceability. The Subscriber has the requisite power and authority
to enter into and perform this Agreement and the other Transaction Documents, as that
term is defined in Section
3.3 hereof, and to purchase the Subscribed Units being sold to it
hereunder. The execution, delivery and performance of this Agreement
and the other Transaction Documents by the Subscriber and the consummation by it
of the transactions contemplated hereby and thereby have been duly authorized by
all necessary corporate action, and no further consent or authorization of the
Subscriber or its Board of Directors or stockholders, if applicable, is
required. This Agreement and the other Transaction Documents when
executed and delivered by Subscriber constitute a valid and binding obligation
of the Subscriber, enforceable against the Subscriber in accordance with the
terms thereof.
(b) Corporate and Other
Entities. If the Subscriber is a corporation, partnership,
limited liability company, trust, employee benefit plan, individual retirement
account, Keogh Plan, or other tax-exempt entity, (i) it is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization and (ii) it is authorized and qualified to purchase the Units and
the Person signing this Agreement and the other Transaction Documents on behalf
of such entity has been duly authorized by such entity to do so.
2.2 No
Conflicts. The execution, delivery and performance of this
Agreement and the other Transaction Documents and the consummation by the
Subscriber of the transactions contemplated hereby and thereby or relating
hereto or thereto do not and will not (i) result in a violation of the
Subscriber’s charter documents, bylaws or other organizational documents, if
applicable, (ii) conflict with nor constitute a default (or an event which with
notice or lapse of time or both would become a default) under any agreement to
which the Subscriber is a party, nor (iii) result in a violation of any law,
rule, or regulation, or any order, judgment or decree of any court or
governmental agency applicable to the Subscriber or its properties (except for
such conflicts, defaults and violations as would not, individually or in the
aggregate, have a material adverse effect on Subscriber). The
Subscriber is not required to obtain any consent, authorization or order of, or
make any filing or registration with, any court or governmental agency in order
for it to execute, deliver or perform any of its obligations under this
Agreement and the other Transaction Documents nor to purchase the
Units in accordance with the terms hereof, provided that for purposes of the
representation made in this sentence, the Subscriber is assuming and relying
upon the accuracy of the relevant representations and agreements of the Company
herein.
5
2.3 Company Information. The
Subscriber hereby acknowledges and hereby represents that the Subscriber has
been furnished by the Company during the course of the Offering with all
information regarding the Company, the terms and conditions of the Offering and
any additional information that the Subscriber, its purchaser representative,
attorney and/or accountant has requested or desired to know, and has been
afforded the opportunity to ask question of and receive answers from duly
authorized officers or other representatives of the Company concerning the
Company and the terms and conditions of the Offering.
2.4 Risk
Acknowledgement. The Subscriber recognizes that the purchase
of the Subscribed Units involves a high degree of risk including, without
limitation, the following: (a) the Company is a development stage business with
limited operating history and requires and will require substantial funds in
addition to the proceeds of the Offering; (b) a purchase of the Units is highly
speculative, and only investors who can afford the loss of their entire
investment should consider purchasing Units; (c) the Subscriber may not be able
to liquidate its investment in the Units; (d) transferability of the Units is
limited; and (e) the Company has not paid a dividend on its capital stock since
inception and does not anticipate paying any dividends in the foreseeable
future.
2.5 No Offering Materials. In
reaching its decision to purchase the Subscribed Units, the Subscriber has
relied solely upon the information and representations provided by the Company
herein. To the extent necessary, the Subscriber has retained, at its
own expense, and relied upon appropriate professional advice regarding the
investment, tax and legal merits and consequences of this Agreement, the other
Transaction Documents and the purchase of the Subscribed Units hereunder. The
Subscriber disclaims reliance on any statements made or information provided by
any Person or entity in the course of the Subscriber’s consideration of an
investment in the Units other than those set forth herein. The
Subscriber acknowledges and agrees that the Subscriber has not relied upon the
independent investigation or verification, if any, which may have been
undertaken by the Placement Agent.
2.6 Communication of
Offer. The offer to sell the Units was directly communicated
to Subscriber by the Company or the Placement Agents (or an authorized agent or
representative of the Company or a Placement Agent). The Subscriber
represents that no Units were offered or sold to it by means of any form of
general solicitation or general advertising and that at no time was Subscriber
presented with or solicited by any leaflet, newspaper or magazine article, radio
or television advertisement, or any other form of general advertising or
solicited or invited to attend a promotional meeting otherwise than in
connection and concurrently with such communicated offer.
2.7 Accredited Investor Status.
The Subscriber is, and will be on the Closing Date, an "accredited investor,” as such
term is defined in Regulation D as reflected by the Subscriber’s responses to
the questions contained in Section 8
hereof. If the Subscriber is a natural Person, the Subscriber
has reached the age of majority in the state or other jurisdiction in which the
Subscriber resides, has adequate means of providing for the Subscriber’s current
financial needs and contingencies, is able to bear the substantial economic
risks associated with the purchase of the Units, has no need for liquidity with
respect to such purchase, and, at the present time, can afford a complete loss
of such investment.
6
2.8 Experience of the Subscriber.
The Subscriber, its advisers (who are not compensated by or affiliated with the
Company, including the Placement Agent, directly or indirectly), if any, and
designated representatives, if any, have the knowledge and experience in
financial and business matters necessary to evaluate the merits and risks of its
prospective investment in the Company, and have carefully reviewed and
understand the risks of, and other considerations relating to, the purchase of
Units and the tax consequences of the investment, and have the ability to bear
the economic risks of the investment and protect the Subscriber’s interests in
connection with the transaction contemplated hereby.
2.9 No Governmental
Review. The Subscriber acknowledges and understands that no
United States federal or state agency, including the Commission has passed on or
made recommendations or endorsement of the Units or the suitability of the
investment contemplated hereby; nor, have such authorities passed upon or
endorsed the merits of the offering of the Units.
2.10 Compliance with Securities
Act. The Subscriber understands and agrees that the
Units have not been registered under the 1933 Act or any applicable state
securities laws, by reason of their issuance in a transaction that does not
require registration under the 1933 Act (based in part on the accuracy of the
representations and warranties of the Subscriber contained herein), and that
such Units must be held indefinitely unless a subsequent disposition is
registered under the 1933 Act or any applicable state securities laws or is
exempt from such registration. In any event, and subject to compliance with
applicable securities laws, the Subscriber may enter into lawful hedging
transactions in the course of hedging the position they assume and the
Subscriber may also enter into lawful short positions or other derivative
transactions relating to the Units, or interests in the Units, and deliver the
Units, or interests in the Units, to close out their short or other positions or
otherwise settle other transactions, or loan or pledge the Units, or interests
in the Units, to third parties who in turn may dispose of these
Units.
2.11 Purchase of Units for the
Subscriber’s Account. On the Closing Date, the Subscriber will
purchase subscribed for Units for which it has subscribed as principal for its
own account for investment only and not with a view toward, or for resale in
connection with, the public sale or any distribution thereof.
2.12 Restricted
Securities. The Subscriber understands that the Units
have not been registered under the 1933 Act and Subscriber will not sell, offer
to sell, assign, pledge, hypothecate or otherwise transfer any of the Units
unless pursuant to an effective registration statement under the 1933 Act, or
unless an exemption from registration is available. Notwithstanding
anything to the contrary contained in this Agreement, the Subscriber may
transfer (without restriction and without the need for an opinion of counsel)
the Units to its Affiliates (as defined below) provided that each such Affiliate
is an “accredited investor” under Regulation D and such Affiliate agrees to be
bound by the terms and conditions of this Agreement. For the purposes of this
Agreement, an “Affiliate” of any Person or
entity means any other Person or entity directly or indirectly controlling,
controlled by or under direct or indirect common control with such Person or
entity. For purposes of this definition, “control” means the power to
direct the management and policies of such Person or firm, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise. The Subscriber understands and hereby acknowledges that
the Company has no obligation or intention to register the Units, the Unit
Shares, the Warrants or the Warrant Shares under the 1933 Act or any state
securities or “blue sky” laws.
7
2.13 Acknowledgement of and Consent to
Restrictive Legend. The certificates representing the Units
and the securities comprising the Units shall bear the following or similar
legend:
FOR U.S. PERSONS:
“THE SECURITIES REPRESENTED HEREBY
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “1933
ACT”), OR APPLICABLE STATE SECURITIES LAWS. THESE SECURITIES MAY NOT
BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF (A) AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE 1933 ACT, OR (B)
AN OPINION OF COUNSEL (REASONABLY SATISFACTORY TO THE COMPANY), THAT
REGISTRATION IS NOT REQUIRED UNDER SAID 1933 ACT.”
FOR
NON-U.S. PERSONS:
“THESE
SECURITIES WERE ISSUED IN AN OFFSHORE TRANSACTION TO PERSONS WHO ARE NOT U.S.
PERSONS (AS DEFINED IN REGULATION S) PURSUANT TO REGULATION S UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”). ACCORDINGLY, NONE OF
THE SECURITIES TO WHICH THIS CERTIFICATE RELATES HAVE BEEN REGISTERED UNDER THE
1933 ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE MAY
BE OFFERED OR SOLD IN THE UNITED STATES OR, DIRECTLY OR INDIRECTLY, TO U.S.
PERSONS EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE
STATE SECURITIES LAWS. IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE
SECURITIES MAY NOT BE CONDUCTED UNLESS IN ACCORDANCE WITH THE 1933
ACT.”
2.14 Non-US Persons. If
the Subscriber is not a “U.S.
Person” as defined in Regulation S, the Subscriber further represents and
warrants to the Company that:
(a) it
is acquiring the Units in an offshore transaction pursuant to Regulation S and
the Subscriber was outside the United States when receiving and executing
this Agreement;
(b) the
Subscriber has not acquired the Units as a result of, and will not itself engage
in, any “directed selling efforts” (as defined in Regulation S) in the United
States in respect of the Units which would include any activities undertaken for
the purpose of, or that could reasonably be expected to have the effect of,
conditioning the market in the United States for the resale of the Units;
provided, however, that the Subscriber may sell or otherwise dispose of the
Units pursuant to registration of the Units under the 1933 Act and any
applicable state and provincial securities laws or under an exemption from such
registration requirements and as otherwise provided herein;
8
(c) the
Subscriber understands and agrees that offers and sales of any of the Units
prior to the expiration of a period of one year after the date of transfer of
the Units under this Agreement (the “Distribution Compliance
Period”), shall only be made in compliance with the safe harbor
provisions set forth in Regulation S, pursuant to the registration provisions of
the 1933 Act or an exemption therefrom, and that all offers and sales after the
Distribution Compliance Period shall be made only in compliance with the
registration provisions of the 1933 Act or an exemption therefrom, and in each
case only in accordance with all applicable securities laws;
(d) the
Subscriber understands and agrees not to engage in any hedging transactions
involving the Units prior to the end of the Distribution Compliance Period
unless such transactions are in compliance with the 1933 Act;
and
(e) the
Subscriber hereby represents that it has satisfied itself as to the full
observance of the laws of its jurisdiction in connection with any invitation to
subscribe for the Units or any use of this Agreement, including: (i) the legal
requirements within its jurisdiction for the purchase of the Units; (ii) any
foreign exchange restrictions applicable to such purchase; (iii) any
governmental or other consents that may need to be obtained; and (iv) the income
tax and other tax consequences, if any, that may be relevant to the purchase,
holding, redemption, sale or transfer of the Units. The Subscriber’s
subscription and payment for, and its continued beneficial ownership of the
Units, will not violate any applicable securities or other laws of the
Subscriber’s jurisdiction.
2.15 Definitive Agreement. The Subscriber
acknowledges that the Company and AquaMed are negotiating the terms and
conditions of a definitive agreement with respect to the AquaMed Acquisition
(the “Definitive
Agreement”). If the Definitive Agreement is not executed by
May 31, 2010 (unless such date is extended by the Company and AquaMed), or if
the transactions contemplated by the Definitive Agreement are not consummated by
May 31, 2010 the Subscription Amount transmitted to the Escrow Agent by the
Subscriber will be returned to the Subscriber and this Agreement will terminate
and be of no further force or effect. The undersigned acknowledges that any
extension of the Offering is not a basis for the Subscriber’s revocation of its
subscription.
2.16 Address. The Subscriber
represents that the address of the Subscriber furnished by the Subscriber on the
signature page hereof is the Subscriber’s principal residence if the Subscriber
is an individual or its principal business address if it is a corporation or
other entity.
2.17 FINRA
Affiliation. The Subscriber acknowledges that if he or she is
a Registered Representative of a Financial Industry Regulatory Authority (“FINRA”) member firm, he or she
must give such firm the notice required by NASD Rule 3050, receipt of which must
be acknowledged by such firm in Section 8 below.
9
2.18 No Brokers. Except
as to the Placement Agent, the Subscriber represents and warrants that is has
not engaged, consented to or authorized any broker, finder or intermediary to
act on its behalf, directly or indirectly, as a broker, finer or intermediary in
connection with the transactions contemplated hereby. The Subscriber
hereby agrees to indemnify and hold harmless the Company from and against all
fees, commission or other payments owning to any such Person or firm action on
behalf of such the Subscriber hereunder.
2.19 Other Offerings. The Subscriber acknowledges
that the Company will, from time to time, offer and sell additional shares of
Common Stock and/or preferred stock on such terms and conditions as its Board of
Directors, in its sole discretion, may determine. The terms and conditions of
the offer and sale of any such additional shares of Common Stock may be
different from and on better than the terms of this Offering and may result in
substantial dilution to the existing shareholders.
2.20 Confidentiality. The
Subscriber agrees not to issue any public statement with respect the
Subscriber’s investment or proposed investment in the Company or the terms of
any agreement or covenant between it and the Company without the Company’s prior
written consent, except such disclosures as may be required under applicable law
or under any applicable order, rule or regulation.
2.21 No Consents. The
Subscriber represents that no authorization, approval, consent or license of any
Person (collectively, “Subscriber Consents”) is
required to be obtained for the purchase of the Subscribed Units by the
Subscriber, other than as have been obtained and which Subscriber Consents are
in full force and effect.
2.22 Irrevocability of the Subscription.
The Subscriber understands, acknowledges and agrees with the Company
that, except as otherwise set forth herein, the subscription to purchase the
Subscribed Units is irrevocable by the Subscriber, that except as required by
law, the Subscriber is not entitled to cancel, terminate or revoke this
Agreement or any agreements of the Subscriber hereunder and that this Agreement
and such other agreements shall survive the death or disability of the
Subscriber and shall be binding upon and inure to the benefit of the parties and
their respective heirs, executors, administrators, successors, legal
representatives and permitted assigns. If the Subscriber is more than
one Person, the obligations of the Subscriber hereunder shall be joint and
several and the agreements, representations, warranties and acknowledgments
herein contained shall be deemed to be made by and be binding upon each such
Person, his/her heirs, executors, administrators, successors, legal
representatives and permitted assigns.
2.23 Certain Trading Activities.
The Subscriber has not directly or indirectly, nor has any Person acting at the
direction of the Subscriber, engaged in any transactions in the securities of
the Company (including, without limitation, any short sales involving the
Company's securities) since the earlier to occur of (i) the time the Subscriber
was first contacted by the Company or the Placement Agent regarding an
investment in the Company and (ii) the 30 th day
prior to the date of this Agreement. The Subscriber covenants that neither it
nor any Person acting at the direction of the Subscriber will engage in any
transactions in the securities of the Company (including short sales) after the
date hereof and prior to the date that the transactions contemplated by this
Agreement are publicly disclosed.
10
2.24 Reliance. The Subscriber
understands and acknowledges that (i) the Subscribed Units are being offered and
sold to the Subscriber without registration under the 1933 Act in a private
placement that is intended to be exempt from the registration provisions of the
1933 Act and (ii) the availability of such exemption, depends in part on, and
the Company will rely upon, the accuracy and truthfulness of, the foregoing
representations and warranties and the Subscriber hereby consents to such
reliance. The
Subscriber agrees that the representations, warranties and covenants of the
Subscriber contained herein (or in any representation letter or questionnaire
executed and delivered by the Subscriber pursuant to the provisions hereof)
shall be true and correct both as of the execution of this Agreement and as of
the Closing Date, and shall survive the completion of the distribution of the
Subscribed Units. The Subscriber hereby
agrees to notify the Company immediately of any change in any representation,
warranty, covenant or other information relating to the Subscriber contained in
this Agreement, or any exhibit hereto, which takes place prior to
Closing.
3. The Company Representations and
Warranties. The Company represents and warrants to and agrees with the
Subscriber that:
3.1 Due
Incorporation. The Company is a corporation duly incorporated,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation and has the requisite corporate power to own its properties and to
carry on its business as presently conducted. The Company is duly
qualified as a foreign corporation to do business and is in good standing in
each jurisdiction where the nature of the business conducted or property owned
by it makes such qualification necessary, other than those jurisdictions in
which the failure to so qualify would not have a Material Adverse
Effect. For purposes of this Agreement, a “Material Adverse Effect” shall
mean a material adverse effect on the financial condition, results of
operations, prospects, properties or business of the Company and its
Subsidiaries taken as a whole. For purposes of this Agreement, “Subsidiary” means, with
respect to any entity at any date, any corporation, limited or general
partnership, limited liability company, trust, estate, association, joint
venture or other business entity of which more than 50% of (i) the
outstanding capital stock having (in the absence of contingencies) ordinary
voting power to elect a majority of the board of directors or other managing
body of such entity, (ii) in the case of a partnership or limited liability
company, the interest in the capital or profits of such partnership or limited
liability company or (iii) in the case of a trust, estate, association,
joint venture or other entity, the beneficial interest in such trust, estate,
association or other entity business is, at the time of determination, owned or
controlled directly or indirectly through one or more intermediaries, by such
entity.
3.2 Outstanding
Stock. All issued and outstanding shares of capital stock and
other equity interests in the Company have been duly authorized and validly
issued and are fully paid and non-assessable.
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3.3 Authority;
Enforceability. This Agreement and any other agreements
delivered together herewith or therewith or in connection herewith or
therewith (collectively, the “Transaction Documents”) have
been duly authorized, executed and delivered by the Company and are valid and
binding agreements of the Company enforceable in accordance with their terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights generally and to general principles of equity. The
Company has full corporate power and authority necessary to enter into and
deliver this Agreement and to perform its obligations thereunder.
3.4 Capitalization and Additional
Issuances. The authorized and outstanding capital stock
of the Company is set forth in the Exchange Act Documents, as
such term is defined in Section
3.9 hereof. Except as set forth in the Exchange Act Documents,
there are no options, warrants, or rights to subscribe to, securities, rights,
understandings or obligations convertible into or exchangeable for or giving any
right to subscribe for any shares of capital stock or other equity interest of
the Company or any of its Subsidiaries. The only officer, director,
employee and consultant stock option or stock incentive plan or similar plan
currently in effect or contemplated by the Company is described in the Exchange Act
Documents. Except as set forth in the Exchange Act Documents there are
no outstanding agreements or preemptive or similar rights affecting the
Company's Common Stock. The Company has no direct or indirect Subsidiaries other
than those set forth in the Exchange Act Documents. Except as
disclosed in the Exchange Act Documents, the Company owns, directly or
indirectly, all of the capital stock of its Subsidiaries free and clear of any
and all liens, and all the issued and outstanding shares of capital stock of
each Subsidiary are validly issued and are fully paid, non-assessable and free
of preemptive and similar rights.
3.5 Consents. No
consent, approval, order or authorization of, or registration, qualification,
designation, declaration or filing with, any governmental authority, is required
by the Company or any Affiliate of the Company in connection with the
consummation of the transactions contemplated by this Agreement, except as may
be required in connection with filings pursuant to Regulation D, or otherwise in
connection with the Definitive Agreement, or which otherwise would not have a
Material Adverse Effect or the consummation of any of the other agreements,
covenants or commitments of the Company or any Subsidiary contemplated hereby.
Any such qualifications and filings will, in the case of qualifications, be
effective on the Closing and will, in the case of filings, be made within the
time prescribed by law.
3.6 No Violation or
Conflict. If the representations and warranties of the
Subscriber in Section 2
are true and correct, then neither the issuance nor the sale of the Units nor
the performance of the Company’s obligations under this Agreement by the Company
will, except as set forth in the Definitive Agreement:
(a) violate,
conflict with, result in a breach of, or constitute a default (or an event which
with the giving of notice or the lapse of time or both would be reasonably
likely to constitute a default) under (A) the articles or certificate of
incorporation, charter or bylaws of the Company, (B) to the Company's knowledge,
any decree, judgment, order, law, treaty, rule, regulation or determination
applicable to the Company of any court, governmental agency or body, or
arbitrator having jurisdiction over the Company or over the properties or assets
of the Company or any of its Affiliates, (C) the terms of any bond, debenture,
note or any other evidence of indebtedness, or any agreement, stock option or
other similar plan, indenture, lease, mortgage, deed of trust or other
instrument to which the Company or any of its Affiliates is a party, by which
the Company or any of its Affiliates is bound, or to which any of the properties
of the Company or any of its Affiliates is subject, or (D) the terms of any
"lock-up" or similar provision of any underwriting or similar agreement to which
the Company, or any of its Affiliates is a party except the violation, conflict,
breach, or default of which would not have a Material Adverse Effect;
or
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(b) result
in the creation or imposition of any lien, charge or encumbrance upon the
Subscribed Units or any of the assets of the Company or any of its Affiliates
except in favor of the Subscriber as described herein; or
(c) result
in the triggering of any piggy-back or other registration rights of any Person
or entity holding securities of the Company or having the right to receive
securities of the Company.
3.7 The Units. The
Units upon issuance:
(a) are,
or will be, free and clear of any security interests, liens, claims or other
encumbrances, subject only to restrictions upon transfer under the 1933 Act and
any applicable state securities laws;
(b) have
been, or will be, duly and validly authorized and validly issued, and
non-assessable;
(c) will
not have been issued or sold in violation of any preemptive or other similar
rights of the holders of any securities of the Company or rights to acquire
securities of the Company;
(d) will
not subject the holders thereof to personal liability by reason of being such
holders; and
(e) assuming
the representations and warranties of the Subscriber as set forth in Section 2 hereof are true and
correct, will not result in a violation of Section 5 under the 1933
Act.
3.8 Litigation. Except
as set forth in the Exchange Act Documents, there is no litigation, arbitration,
mediation, action, suit, claim, proceeding or investigation, whether legal or
administrative, pending against the Company or any of its Subsidiaries or, to
the Company’s knowledge, threatened against the Company or any of its
Subsidiaries or any of their respective assets, properties or operations, at
applicable law or in equity, before or by any governmental authority or any
order of any governmental authority that, individually or in the aggregate, and
taking into consideration the aggregate amounts reserved for any such matters in
the Company Financial Statements (as defined in Section 3.10), has had or caused
or would reasonably be expected to have or cause a Material Adverse
Effect.
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3.9 Information Concerning
Company. Since December 31, 2008, all reports and statements,
including all amendments, required to be filed by the Company with the
Commission under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), have been
filed. Such filings, together with all amendments and all documents
incorporated by reference therein, are referred to as “Exchange Act
Documents.” Each Exchange Act Document conformed in all
material respects to the requirements of the Exchange Act and the rules and
regulations thereunder, and no Exchange Act Document, at the time each such
document was filed, included any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading. The Company is not a “shell company” as contemplated
by Rule 144; however, it was previously a shell company” as contemplated
by Rule 144 which ceased to be such, and has filed current “Form 10 Information” (as
defined in Rule 144) with the Commission more than twelve months prior to the
date hereof.
3.10 Company Financial
Statements. As of their respective dates, the financial statements
of the Company included in the Exchange Act Documents (the “Company Financial Statements”)
for its most recently completed fiscal year and any subsequent interim period
have been prepared in accordance with generally accepted accounting principles
in the United States (“GAAP”), consistently applied,
during the periods involved (except (i) as may be otherwise indicated in such
Company Financial Statements or the notes thereto, or (ii) in the case of
unaudited interim statements, to the extent they may exclude footnotes or may be
condensed or summary statements) and, fairly present in all material respects,
on the basis stated therein and on the date thereof, the financial position of
the Company at the respective dates therein specified and its results of
operations and cash flows for the periods then ended (subject, in the case of
unaudited interim statements, to normal year-end audit
adjustments).
3.11 Material Changes; Undisclosed Events,
Liabilities or Developments. Since December 31, 2009, except
as specifically disclosed in a subsequent Exchange Act Document filed prior to
the date hereof, (i) there has been no event, occurrence or development that has
had or that could reasonably be expected to result in a Material Adverse Effect,
(ii) the Company has not incurred any liabilities (contingent or otherwise)
other than (A) trade payables and accrued expenses incurred in the ordinary
course of business consistent with past practice and (B) liabilities not
required to be reflected in the Company’s Financial Statements pursuant to GAAP
or disclosed in filings made with the Commission, (iii) the Company has not
altered its method of accounting, (iv) the Company has not declared or made any
dividend or distribution of cash or other property to its stockholders or
purchased, redeemed or made any agreements to purchase or redeem any issued and
outstanding shares of its Common Stock, and (v) the Company has not issued any
equity securities to any officer, director or Affiliate. The Company
does not have pending before the Commission any request for confidential
treatment of information.
3.12 Regulatory
Permits. The Company possesses all certificates,
authorizations and permits issued by the appropriate federal, state, local or
foreign regulatory authorities necessary to conduct its businesses, except where
the failure to possess such permits could not have, or reasonably be expected to
result in, a Material Adverse Effect (“Material Permits”), and the
Company has not received any notice of proceedings relating to the revocation or
modification of any Material Permit.
14
3.13 Title to and Condition of
Assets. As of the date hereof, Company or its Subsidiaries
have good and valid title to the assets of the Company and its Subsidiaries,
other than defects or irregularities of title that do not materially impair the
ownership or operation of such assets and in each case free and clear of all
liens, except for liens permitted under the Definitive Agreement or liens that
have not had or caused and would not reasonably be expected to have or cause a
Material Adverse Effect. The assets of the Company and its Subsidiaries are in
good operating condition, normal wear and tear excepted.
3.14 Internal Accounting
Controls. The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management’s general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
asset accountability, (iii) access to assets is permitted only in accordance
with management’s general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any
differences. The Company has established disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
Company and designed such disclosure controls and procedures to ensure that
material information relating to the Company is made known to the Company’s
certifying officers by others within the Company, particularly during the period
in which the Company’s Form 10-K or 10-Q, as the case may be, are being
prepared. The Company’s certifying officers have evaluated the
effectiveness of the Company’s controls and procedures as of the end of the
reporting period covered by the Company’s Form 10-K and each of the Company’s
Forms 10-Q filed with the Commission (each such date, the “Evaluation Date”) and
presented in each such report their conclusions about the effectiveness of the
Company’s disclosure controls and procedures based on their evaluations as of
the applicable Evaluation Date. Since the Evaluation Date of the
Company’s most recently filed Form 10-K or Form 10-Q, there have been no
significant changes in the Company’s disclosure controls and procedures, the
Company’s internal control over financial reporting (as defined in Exchange Act
Rules 13a-15(f) or 15d-15(f)) or, to the Company’s knowledge, in other factors
that could significantly affect the Company’s internal controls over financial
reporting.
3.15 No Integrated Offering.
Neither the Company, nor any of its Affiliates, nor any Person acting on its or
their behalf, has directly or indirectly made any offers or sales of any
security of the Company nor solicited any offers to buy any security of the
Company under circumstances that would cause the offer of the Units pursuant to
this Agreement to be integrated with prior offerings by the Company for purposes
of the 1933 Act or any applicable stockholder approval provisions, including,
without limitation, under the rules and regulations of the OTC Bulletin
Board. No prior offering will impair the exemptions relied upon in
this Offering or the Company’s ability to timely comply with its obligations
hereunder. Neither the Company nor any of its Affiliates will take
any action or steps that would cause the offer or issuance of the Units to be
integrated with other offerings which would impair the exemptions relied upon in
this Offering or the Company’s ability to timely comply with its obligations
hereunder. The Company will not conduct any offering other than the
transactions contemplated hereby that may be integrated with the offer or
issuance of the Units that would impair the exemptions relied upon in this
Offering or the Company’s ability to timely comply with its obligations
hereunder.
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3.16 No General
Solicitation. Neither the Company, nor any of its Affiliates,
nor to its knowledge, any Person acting on its or their behalf, has engaged in
any form of general solicitation or general advertising (within the meaning of
Regulation D under the 1933 Act) in connection with the offer or sale of the
Units.
3.17 No Disagreements with Accountants and
Lawyers. There are no material disagreements of any kind presently
existing, or reasonably anticipated by the Company to arise between the Company
and the accountants and lawyers previously and presently employed by the
Company, including but not limited to disputes or conflicts over payment owed to
such accountants and lawyers, nor have there been any such disagreements during
the two years prior to the Closing Date.
3.18 Investment
Company. Neither the Company nor any Affiliate of the
Company is an “investment
company” within the meaning of the Investment Company Act of 1940, as
amended.
3.19 Foreign Corrupt
Practices. Neither the Company, nor to the knowledge of the
Company, any agent or other Person acting on behalf of the Company, has (i)
directly or indirectly, used any funds for unlawful contributions, gifts,
entertainment or other unlawful expenses related to foreign or domestic
political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to any foreign or domestic political
parties or campaigns from corporate funds, (iii) failed to disclose fully any
contribution made by the Company (or made by any Person acting on its behalf of
which the Company is aware) which is in violation of law, or (iv)
violated in any material respect any provision of the Foreign Corrupt Practices
Act of 1977, as amended.
3.20 Listing. The
Company's Common Stock is quoted on the OTC Bulletin Board under the symbol
“HPLF.” The
Company has not received any oral or written notice that its Common Stock is not
eligible nor will become ineligible for quotation on the OTC Bulletin Board nor
that its Common Stock does not meet all requirements for the continuation of
such quotation and (ii) the Company satisfies all the requirements for the
continued quotation of its Common Stock on the OTC Bulletin Board.
3.21 Acknowledgment Regarding Subscriber’s
Purchase of the Units. The Company acknowledges and agrees
that the Subscriber is acting solely in the capacity of an arm’s length
purchaser with respect to the Transaction Documents and the transactions
contemplated thereby. The Company further acknowledges that no
Subscriber is acting as a financial advisor or fiduciary of the Company (or in
any similar capacity) with respect to the Transaction Documents and the
transactions contemplated thereby, and any advice given by any Subscriber or any
of their respective representatives or agents in connection with the Transaction
Documents and the transactions contemplated thereby is merely incidental to the
Subscriber’s purchase of the Subscribed Units.
16
3.22 Disclosure. The
information set forth herein, taken together with the Exchange Act Documents, as
of the date hereof contains no untrue statement of a material fact nor omits to
state a material fact necessary in order to make the statements contained
therein, in light of the circumstances under which they were made, not
misleading.
4. Subscriber’s Conditions of Closing.
The Subscriber’s obligation to purchase the Subscribed Units is subject
to the satisfaction or waiver, on or before the Closing Date, of the conditions
contained in this Section
4.
4.1 Representations, Warranties and
Covenants. The representations, warranties and covenants of the Company
set forth in Section 3
hereof shall be true in all material respects on and as of the Closing
Date.
4.2 Closing Deliveries. The
conditions in Section
1.3(d) hereof shall have been satisfied or waived in writing by the
Subscriber.
4.3 Definitive
Agreement. The transactions contemplated by the Definitive
Agreement shall have been contemporaneously consummated.
4.4 Minimum Number. The
Minimum Number of Units shall have been subscribed for and with the Subscription
Amount therefor deposited with the Escrow Agent.
4.5 Company’s
Covenants. All covenants, agreements and conditions contained
in this Agreement to be performed by the Company on or prior to the date of such
Closing shall have been performed, complied with in all material respects, or
waived in writing by the Subscriber.
4.6 No Adverse Action or Decision.
There shall be no action, suit, investigation or proceeding pending, or to the
Company’s knowledge, threatened, against or affecting the Company or any of its
properties or rights, or any of its affiliates, associates, officers or
directors, before any court, arbitrator, or administrative or governmental body
that (i) seeks to restrain, enjoin, prevent the consummation of or otherwise
adversely affect the transactions contemplated by this Agreement, or (ii)
questions the validity or legality of any such transaction or seeks to recover
damages or to obtain other relief in connection with any such
transaction.
5. Company’s Conditions of Closing.
The Company’s obligation to sell the Subscribed Units is subject to the
satisfaction or waiver, on or before the Closing Date, of the conditions
contained in this Section
5.
5.1 Representations, Warranties and
Covenants. The representations, warranties and covenants of the
Subscriber set forth in Section
2 hereof shall be true in all material respects on and as of the Closing
Date.
5.2 Closing Deliveries. The
conditions in Section
1.3(c) hereof shall have been satisfied or waived in writing by the
Company.
17
5.3 Definitive
Agreement. The transactions contemplated by the Definitive
Agreement shall have been contemporaneously consummated.
5.4 Minimum Number. The
Minimum Number of Units shall have been subscribed for and with the Subscription
Amount therefor deposited with the Escrow Agent..
5.5 Subscriber’s
Covenants. All covenants, agreements and conditions contained
in this Agreement to be performed by the Subscriber on or prior to the date of
such Closing shall have been performed, complied with in all material respects,
or waived in writing by the Company.
5.6 No Adverse Action or Decision.
There shall be no action, suit, investigation or proceeding pending, or
to the Company’s knowledge, threatened, against or affecting the Company or any
of its properties or rights, or any of its affiliates, associates, officers or
directors, before any court, arbitrator, or administrative or governmental body
that (i) seeks to restrain, enjoin, prevent the consummation of or otherwise
adversely affect the transactions contemplated by this Agreement, or (ii)
questions the validity or legality of any such transaction or seeks to recover
damages or to obtain other relief in connection with any such
transaction.
6. Covenants of the
Company. The Company covenants and agrees with the Subscriber
as follows:
6.1 Stop
Orders. Subject to the three day prior notice requirement
described in Section
6.5, the Company will advise the Subscriber, within twenty-four hours
after it receives notice of issuance by the Commission, any state securities
commission or any other regulatory authority of any stop order or of any order
preventing or suspending any offering of any securities of the Company, or of
the suspension of the qualification of the Common Stock of the Company for
offering or sale in any jurisdiction, or the initiation of any proceeding for
any such purpose. The Company will not issue any stop transfer order
or other order impeding the sale, resale or delivery of any of the Units, except
as may be required by any applicable federal or state securities laws and unless
contemporaneous notice of such instruction is given to the
Subscriber.
6.2 Reserved.
6.3 Market
Regulations. If required, the Company shall notify the
Commission, the Principal Market and applicable state authorities, in accordance
with their requirements, of the transactions contemplated by this Agreement, and
shall take all other necessary action and proceedings as may be required and
permitted by applicable law, rule and regulation, for the legal and valid
issuance of the Units to the Subscriber and promptly provide copies thereof to
the Subscriber.
6.4 Use of
Proceeds. The proceeds of the Offering will be employed
by the Company for working capital.
18
6.5 Confidentiality. From
the date of this Agreement and until Closing Date, the Company agrees that
except as may be required by law or in connection with a Form 8-K, Form 10-Q,
Form 10-K or in correspondence with the Commission regarding same, it will not
disclose publicly or privately the identity of the Subscriber unless expressly
agreed to in writing by Subscriber or only to the extent required by law and
then only upon not less than three business days prior notice to
Subscriber.
6.6 Return of Subscription Amount.
If the Closing Conditions have not been satisfied on or prior to the Offering
Termination Date, the Company, in writing, will so notify the Escrow Agent
pursuant to the terms of the Escrow Agreement and direct the Escrow Agent to
return the Subscription Amount to the Subscriber in accordance with the terms of
the Escrow Agreement.
7. Miscellaneous.
7.1 Notices. All
notices, demands, requests, consents, approvals, and other communications
required or permitted hereunder shall be in writing and, unless otherwise
specified herein, shall be (i) personally served, (ii) deposited in the mail,
registered or certified, return receipt requested, postage prepaid, (iii)
delivered by reputable air courier service with charges prepaid, or (iv)
transmitted by hand delivery, telegram, or facsimile, addressed as set forth
below or to such other address as such party shall have specified most recently
by written notice. Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice is
to be received) or (b) on the second business day following the date of mailing
by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The addresses for
such communications shall be: (i) if to the Company, to: Hepalife Technologies,
Inc., 60 State Street, Suite 700, Boston, Massachusetts 02109, with a copy
(which shall not constitute notice) to Sierchio & Company, LLP, 430 Park
Avenue, Suite 702, New York, New York 10022, Facsimile 212-246-3039; and (ii) if
to the Subscriber, to: the addresses and fax numbers indicated on the signature
page hereto.
7.2 Entire Agreement;
Assignment. This Agreement and other Transaction Documents
delivered in connection herewith represent the entire agreement between the
parties hereto with respect to the subject matter hereof. Neither the
Company nor the Subscribers has relied on any representations not contained or
referred to in this Agreement and the documents delivered
herewith. No right or obligation of the Company shall be
assigned without prior notice to and the written consent of the Subscriber. The
Subscriber may not assign this Agreement without the prior written consent of
the Company.
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7.3 Indemnification. The
Subscriber agrees to indemnify and hold harmless the Company and the Placement
Agent, and their respective officers, directors, employees, agents, control
Persons and affiliates from and against all losses, liabilities, claims,
damages, costs, fees and expenses whatsoever (including, but not limited to, any
and all expenses incurred in investigating, preparing or defending against any
litigation commenced or threatened) based upon or arising out of (i) any sale or
distribution of the Units by the Subscriber in violation of the 1933 Act or any
applicable state securities or “blue sky” laws or (ii) any actual or alleged
false acknowledgment, representation or warranty, or misrepresentation or
omission to state a material fact, or breach by the Subscriber of any covenant
or agreement made by the Subscriber herein, in any Transaction Document, or in
any other document delivered in connection with this Agreement or any
Transaction Document.
7.4 Counterparts/Execution. This
Agreement may be executed in two or more counterparts, all of which when taken
together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the
other party, it being understood that both parties need not sign the same
counterpart. In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
page were an original thereof.
7.5 Calendar
Days. All references to “days” in the Transaction
Documents shall mean calendar days unless otherwise stated. The terms
“business days” and “trading days” shall mean days that the New York Stock
Exchange is open for trading for three or more hours. Time periods
shall be determined as if the relevant action, calculation or time period were
occurring in New York City. Any deadline that falls on a non-business
day in any of the Transaction Documents shall be automatically extended to the
next business day and interest, if any, shall be calculated and payable through
such extended period.
7.6 Captions; Certain
Definitions. The captions of the various sections and
paragraphs of this Agreement have been inserted only for the purposes of
convenience; such captions are not a part of this Agreement and shall not be
deemed in any manner to modify, explain, enlarge or restrict any of the
provisions of this Agreement. As used in this Agreement the term
“Person” shall mean and include an individual, a partnership, a joint venture, a
corporation, a limited liability company, a trust, an unincorporated
organization and a government or any department or agency thereof. All pronouns
and any variations thereof used herein shall be deemed to refer to the
masculine, feminine, neuter, singular or plural as the identity of the Person or
Persons referred to may require.
7.7 Severability. In
the event that any term or provision of this Agreement shall be finally
determined to be superseded, invalid, illegal or otherwise unenforceable
pursuant to applicable law by an authority having jurisdiction and venue, that
determination shall not impair or otherwise affect the validity, legality or
enforceability: (i) by or before that authority of the remaining terms and
provisions of this Agreement, which shall be enforced as if the
unenforceable term or provision were deleted, or (ii) by or before any other
authority of any of the terms and provisions of this Agreement.
7.8 Successor
Laws. References in the Transaction Documents to laws, rules,
regulations and forms shall also include successors to and functionally
equivalent replacements of such laws, rules, regulations and forms. A
successor rule to Rule 144 shall include any rule that would be available to a
non-Affiliate of the Company for the sale of Common Stock not subject to volume
restrictions and after a six month holding period.
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7.9 Irrevocability; Binding
Effect. The Subscriber hereby acknowledges and agrees that the
subscription hereunder is irrevocable by the Subscriber, except as required by
applicable law, and that this Agreement shall survive the death or disability of
the Subscriber and shall be binding upon and inure to the benefit of the parties
and their heirs, executors, administrators, successors, legal representatives
and permitted assigns. If the Subscriber is more than one Person, the
obligations of the Subscriber hereunder shall be joint and several and the
agreements, representations, warranties and acknowledgments herein shall be
deemed to be made by and be binding upon each such Person and such Person’s
heirs, executors, administrators, successors, legal representatives and
permitted assigns.
7.10 Modification. Except
as otherwise expressly provided herein, any term of this Agreement may be
amended and observance of any term of this Agreement may be waived (either
generally or in a particular instance, either retroactively or prospectively and
either for a specified period of time or indefinitely) with the written consent
of the Company and subscribers holding Units equal to at least sixty-six and
two-third percent (66 2/3%) of the then subscribed for Units. Any amendment or
waiver effected in accordance with this Section 7.10 shall be binding
upon the Subscriber and the Company (even if the Subscriber does not consent to
such amendment or waiver), and upon the effectiveness of such amendment or
waiver, the Company shall promptly give notice to the Subscriber if the
Subscriber has not previously consented thereto in writing.
7.11 Fees. Unless
otherwise specifically provided, each of the parties
hereto shall pay its own fees and expenses (including the fees of any attorneys,
accountants, appraisers or others engaged by such party) in connection with this
Agreement and the transactions contemplated hereby, whether or not the
transactions contemplated hereby are consummated. Anything herein to the
contrary notwithstanding, the Company on the one hand, and the Subscriber
(for himself only) on the other hand, agree to indemnify the other against and
hold the other harmless from any and all liabilities to any Persons other than
the Placement Agent, claiming brokerage commissions, finder’s fees or due
diligence fees on account of services purported to have been rendered on behalf
of the indemnifying party in connection with this Agreement or the transactions
contemplated hereby or in connection with any investment in the Company at any
time, whether or not such investment was consummated and arising out of such
party’s actions. The Company will pay the Placement Agent a cash
commissions equal to eight percent (8%) of the gross proceeds derived from the
sale of the Units through the services of the Placement Agent to investors
introduced to the Company by the Placement Agents (the “Placement Agent
Investors”). The Company will also issue a number of Series E
Warrants and Series F Warrants to the Placement Agent equal to four percent (4%)
of the aggregate number of Unit Shares sold to the Placement Agent
Investors.
7.12 Survival of
Representations. All representations, warranties and
agreements contained herein or made in writing by or on behalf of any party to
this Agreement in connection herewith shall survive the execution and delivery
of this Agreement and the consummation of the transactions contemplated
hereby.
21
7.13 Confidentiality. The
Subscriber acknowledges and agrees that any information or data the Subscriber
has acquired from or about the Company or may acquire in the future, not
otherwise properly in the public domain was received in
confidence. The Subscriber agrees not to divulge, communicate or
disclose, except as may be required by law or for the performance of this
Agreement, or use to the detriment of the Company or for the benefit of any
other Person, or misuse in any way, any confidential information of the Company,
including any scientific, technical, trade or business secrets of the Company
and any scientific, technical, trade or business materials that are treated by
the Company as confidential or proprietary, including, but not limited to,
internal personnel and financial information of the Company or its affiliates,
information regarding AquaMed, the manner and methods of conducting the business
of the Company or its affiliates and confidential information obtained by or
given to the Company about or belonging to third parties. The
Subscriber understands that the Company may rely on this agreement of
confidentiality to comply with the exemptive provisions of Regulation FD under
the 1933 Act as set forth in Rule 100(a)(b)(2)(ii) of Regulation
FD. In addition, the Subscriber acknowledges that it is aware that
the United States securities laws generally prohibit any Person who is in
possession of material nonpublic information about a public company such as the
Company from purchasing or selling securities of such company.
7.14 Binding Obligation. Upon the
execution and delivery of this Agreement by the Subscriber, this Agreement shall
become a binding obligation of the Subscriber with respect to the purchase of
the Units as herein provide, subject, however to the right reserved by the
Company to enter into the same agreement with or other subscribers and to add
an/or remove other Persons as subscribers.
7.15 Further Assurances. The
parties hereto agree to execute and deliver all such further documents,
agreements and instruments and take such other and further action as may be
necessary or appropriate to carry out the purposes and intent of this
Agreement.
7.16 No Third Party Rights. Nothing
in this Agreement shall create or be deemed to create any rights in any Person
or entity not a party to this Agreement, provided however that if the Subscriber
has been introduced by the Placement Agent, the Placement Agent may rely on the
representations of the Subscriber in Section 2 hereof and the
representations and warranties of the Company in Section 3 hereof.
7.17 Governing
Law. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed by
and construed and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflicts of law
thereof. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in New York County, New
York for the adjudication of any dispute hereunder or in connection herewith or
with any transaction contemplated hereby or discussed herein, and hereby
irrevocably waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of any such
court, that such suit, action or proceeding is improper. Each party
hereby irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by mailing a copy thereof
via registered or certified mail or overnight delivery (with evidence of
delivery). Nothing contained herein shall be deemed to limit in any way any
right to serve process in any manner permitted by law. Each party irrevocably
waives, to the fullest extent permitted by applicable law, any and all right to
trial by jury in any legal proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby. If either party
shall commence an action or proceeding to enforce any provisions of the
documents contemplated herein, then the prevailing party in such action or
proceeding shall be reimbursed by the other party for its attorney’s fees and
other costs and expenses incurred with the investigation, preparation and
prosecution of such action or proceeding.
22
8. Subscriber
Questionnaire and Certification.
(a) US
PERSONS
The
Subscriber has initialed those representations applicable to the Subscriber and
hereby represents and warrants that those representations which are initialed
are true and correct.
|
FOR
INDIVIDUAL INVESTORS:
|
||
|
____________
|
1.
|
Subscriber
represents that he or she has an individual net worth, or together with
his or her spouse a combined net worth, in excess of $1,000,000. For
purposes of this representation, “net worth” means the excess of total
assets at fair market value, including, home, home furnishings and
automobiles, over total liabilities.
|
|
____________
|
2.
|
Subscriber
represents that he or she had an individual income of more than $200,000
in each of the last two calendar years or joint income with his or her
spouse in excess of $300,000 in each of those years and reasonably expects
to reach the same income level in the current calendar
year.
|
|
FOR
CORPORATIONS, PARTNERSHIPS OR LIMITED LIABILITY
COMPANIES:
|
||
|
____________
|
3.
|
Subscriber
represents that it is a corporation, Massachusetts or similar business
trust, or partnership not formed for the specific purpose of acquiring
Units with total assets in excess of
$5,000,000.
|
|
For
purposes of determining “net worth,” the principal residence owned by an
individual must be valued either at (A) cost, including the cost of
improvements, net of current encumbrances upon the property, or (B) the
appraised value of the property as determined upon a written appraisal
used by an institutional lender making a loan to the individual secured by
the property, including the cost of subsequent improvements, net of
current encumbrances upon the property. “Institutional lender” means a
bank, savings and loan company, industrial loan company, credit union or
personal property broker or a company whose principal business is as a
lender upon loans secured by real property and that has such loans
receivable in the amount of $2,000,000 or
more.
|
23
|
____________
|
4.
|
Subscriber
represents that all of its equity owners meet the standard set out in
Statement (1) above ($ 1,000,000 net worth) or Statement (2) above
($200,000 individual income or $300,000 joint income). For purposes of
this representation, “net worth” means the excess of total tangible assets
at current value less total liabilities. Please list below the names of
all equity owners of Subscriber. EACH SUCH EQUITY OWNER MUST
COMPLETE A SUBSCRIBER QUESTIONNAIRE AND CERTIFICATION.
|
|
Name
of All Equity Owners
|
||
|
_____________________________________________
|
||
|
_____________________________________________
|
||
|
_____________________________________________
|
||
|
FOR
TRUSTS OTHER THAN EMPLOYEE BENEFIT TRUSTS:
|
||
|
____________
|
5.
|
Subscriber
represents that it has total assets in excess of $5,000,000, was not
formed for the specific purpose of acquiring Units and that the investment
is being directed by a sophisticated Person as defined below. For purposes
of this representation, a “sophisticated Person” means a Person who has
such knowledge and experience in financial and business matters that he or
she is capable of evaluating the merits and risks of the prospective
investment.
|
|
____________
|
6.
|
Subscriber
represents that it is (a) a bank as defined in Section 3(a)(2) of the 1933
Act, (b) acting in its fiduciary capacity as trustee, (c) subscribing for
the purchase of the securities being offered on behalf of a
trust.
|
|
____________
|
7.
|
Subscriber
represents that it is a revocable trust that may be amended or revoked at
any time by its grantors and that all of its grantors meet the standard
set out in Statement (1) above ($1,000,000 net worth) or statement (2)
(above $200,000 individual income or $300,000 joint income). Please list
below the names of all grantors. EACH SUCH GRANTOR
MUST COMPLETE A SUBSCRIBER QUESTIONNAIRE AND
CERTIFICATION.
|
|
Name
of Grantors
|
||
|
_____________________________________________
|
||
|
_____________________________________________
|
||
|
_____________________________________________
|
||
24
|
FOR
EMPLOYEE BENEFIT PLAN; OR STATE PLANS:
|
||
|
____________
|
8.
|
Subscriber
represents that it is an employee benefit plan within the meaning of Title
I of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”), with respect to which the decision to invest was made by a plan
fiduciary as defined in Section 3(21) of ERISA that is a bank, savings and
loan association, insurance company or investment adviser registered under
the Investment Advisers Act of 1940, as amended (the “1940
Act”).
|
|
____________
|
9.
|
Subscriber
represents that it is an employee benefit plan within the meaning of Title
I of ERISA and it has total assets in excess of
$5,000,000.
|
|
____________
|
10.
|
Subscriber
represents that it is a self-directed plan with respect to which the
decision to invest was made solely by Persons who are “accredited
investors” within the meaning of Regulation D under the 1933
Act.
|
|
____________
|
11.
|
Subscriber
represents that it is a plan established and maintained by a state, its
political subdivisions, or an agency or instrumentality of a state or its
political subdivisions, for the benefit of its employees, and that it has
total assets in excess of $5,000,000.
|
|
FOR
CHARITABLE ORGANIZATIONS:
|
||
|
____________
|
12.
|
Subscriber
represents that it is an organization described in Section 501(c)(3) of
the Internal Revenue Code of 1986, as amended not formed for the specific
purpose of acquiring Units with total assets in excess of
$5,000,000.
|
|
OTHER
ACCREDITED INVESTORS:
|
||
|
____________
|
13.
|
Subscriber
represents that it is either a non-resident alien of the United States, a
foreign entity (i.e., not formed under the laws of any state of the United
States or its territories) or a bank as defined in Section 3 (a)(2) of the
1933Act whether acting in its individual or fiduciary
capacity.
|
|
____________
|
14.
|
Subscriber
represents that it is a savings and loan association or other institution
specified in Section 3(a)(5)(A) of the 1933 Act whether acting in its
individual or fiduciary capacity.
|
|
____________
|
15.
|
Subscriber
represents that it is a broker or dealer registered pursuant to Section 15
of the Securities Exchange Act of 1934.
|
|
____________
|
16.
|
Subscriber
represents that it is an insurance company as defined in
Section 2(13) of the 1933 Act.
|
25
|
____________
|
17.
|
Subscriber
represents that it is an investment company registered under the 1940
Act.
|
|
____________
|
18.
|
Subscriber
represents that it is a business development company as defined in Section
2(a) (48) of the 1940 Act.
|
|
____________
|
19.
|
Subscriber
represents that it is a Small Business Investment Company licensed by the
U.S. Small Business Administration under Section 301(c) or (d) of the
Small Business Investment Act of 1958, as amended.
|
|
____________
|
20.
|
Subscriber
represents that it is a private business development company as defined in
Section 202(a)(22) of the 1940 Act.
|
B. FOR
NON-U.S. PERSON SUBSCRIBERS
(If
the Subscriber is not a U.S. Person the Subscriber must INITIAL this
section):
Initial _______ The Subscriber
is not a “U.S. Person” as defined in Regulation S; and specifically the
Subscriber is not:
1. a
natural Person resident in the United States of America, including its
territories and possessions (“United States”);
2. a
partnership or corporation organized or incorporated under the laws of the
United States;
3. an
estate of which any executor or administrator is a U.S. Person;
4. a
trust of which any trustee is a U.S. Person;
5. an
agency or branch of a foreign entity located in the United States;
6. a
non-discretionary account or similar account (other than an estate or trust)
held by a dealer or other fiduciary for the benefit or account of a U.S.
Person;
7. a
discretionary account or similar account (other than an estate or trust) held by
a dealer or other fiduciary organized, incorporated, or (if an individual)
resident in the United States; or
8. a
partnership or corporation: (i) organized or incorporated under the laws of any
foreign jurisdiction; and (ii) formed by a U.S. Person principally for the
purpose of investing in securities not registered under the 1933 Act, unless it
is organized or incorporated, and owned, by accredited investors (as defined in
Rule 501(a) under the 1933 Act) who are not natural Persons, estates or
trusts.
26
And, in
addition:
9. the
Subscriber was not offered the Units in the United States;
10. at the
time the buy-order for the Units was originated, the Subscriber was outside the
United States; and
11. the
Subscriber is purchasing the Units for its own account and not on behalf of any
U.S. Person (as defined in Regulation S) and a sale of the Units has not been
pre-arranged with a purchaser in the United States.
[COMPANY’S
SIGNATURE PAGE FOLLOWS]
27
HEPALIFE
TECHNOLOGIES, INC.
IN
WITNESS WHEREOF, the Company has duly executed this Subscription
Agreement.
|
Dated:
|
,
2010
|
|
HEPALIFE
TECHNOLOGIES, INC.
|
|||
|
By:
|
|||
|
Name:
|
Amit
S. Dang
|
||
|
Title:
|
Chief
Executive Officer and President
|
||
[SUBSCRIBER’S
SIGNATURE PAGE FOLLOWS]
28
HEPALIFE
TECHNOLOGIES, INC.
SUBSCRIBER
SIGNATURE PAGE
IN WITNESS WHEREOF, the
Subscriber hereby executes this Subscription Agreement.
|
Dated:
|
,
2010
|
|
X
|
$0.125
|
=
|
$
|
||
|
Number
of Units
|
Price
per Share
|
Purchase
Price
|
|
SUBSCRIBER
(individual)
|
SUBSCRIBER
(entity)
|
|||
|
Signature
|
Name
of Entity
|
|||
|
Print
Name
|
Signature
|
|||
|
Print
Name:
|
||||
|
Signature
(if Joint Tenants or Tenants in Common)
|
||||
|
Title:
|
||||
|
Address
of Principal Residence:
|
Address
of Executive Offices:
|
|||
|
Social
Security Number(s):
|
IRS
Tax Identification Number:
|
|||
|
Telephone
Number:
|
Telephone
Number:
|
|||
|
Facsimile
Number:
|
Facsimile
Number:
|
|||
|
E-mail
Address:
|
E-mail
Address:
|
|||
|
Placement
Agent, if any:
|
||||
29
Exhibit
A
Form of
Series E Warrant
Exhibit
B
Form of
Series F Warrant
Exhibit
C
Form of
Escrow Agreement
30