|
Exhibit
10.2
SUBSCRIPTION
AGREEMENT
Synthetic Blood
International, Inc.
3189 Airway Avenue, Building
C
Costa Mesa, CA
92626
THE COMMON STOCK AND
WARRANTS, INCLUDING THE COMMON STOCK UNDERLYING THE WARRANTS, OF
SYNTHETIC BLOOD INTERNATIONAL, INC. AND THIS SUBSCRIPTION AGREEMENT
(this “Agreement”) HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (“Act”), OR
QUALIFIED UNDER THE STATE SECURITIES LAWS OF ANY STATE. THE
SECURITIES ARE BEING SOLD IN RELIANCE ON EXEMPTIONS FROM SUCH
REGISTRATION AND QUALIFICATION REQUIREMENTS. THE SECURITIES AND
RIGHTS PURSUANT TO THIS AGREEMENT CANNOT BE SOLD, TRANSFERRED,
ASSIGNED, OR OTHERWISE DISPOSED OF, EXCEPT IN COMPLIANCE WITH
APPLICABLE FEDERAL AND STATE SECURITIES LAWS, INCLUDING REGULATION
S PROMULGATED UNDER THE ACT.
This Agreement shall
constitute the irrevocable offer of the undersigned to purchase, in
the amounts and subject to the terms set forth in this Agreement,
shares of common stock, par value $0.01 per share, and an equal
number of warrants to purchase common stock of the Company, the
form of which is attached hereto as Exhibit A ( collectively the
“Securities”) of Synthetic Blood International, Inc., a
New Jersey corporation (the “Company”), at a purchase
price of $0.20 for each share and warrant. On execution by both
parties, this Agreement shall become a bilateral agreement binding
on both the undersigned and the Company and the undersigned agrees
to be bound by the terms of the warrant attached hereto as Exhibit
A. Each part of this Agreement must be completed by the undersigned
and, by execution below, the undersigned acknowledges that he/she
understands that the Company is relying on the accuracy and
completeness hereof in complying with its obligations under
applicable securities laws.
On the foregoing, it is
hereby agreed as follows:
1. SUBSCRIPTION. The
undersigned hereby irrevocably subscribes for the purchase of
shares of common stock and warrants (an equal number of each). The
undersigned is tendering to the Company:
(a) one signed copy of this
Agreement; and
(b) payment in the amount of
$0.20 per share and warrant, or a total of $
.
2. GENERAL REPRESENTATIONS OF
SUBSCRIBER. The undersigned hereby represents and warrants as
follows:
(a) The undersigned is over
the age of 18 years.
(b) The undersigned
acknowledges that neither the United States Securities and Exchange
Commission nor the securities commission of any state or other
federal agency has made any determination as to the merits of
purchasing these securities.
(c) The undersigned has
received and read the Company’s annual report on Form 10-K
for the fiscal year ended April 30, 2004, quarterly report on Form
10-Q for the fiscal quarter ended July 31,
2004, and Prospectus dated September 10,
2004 as filed with the Securities and Exchange Commission, and
understands the risk of an investment in the Company, including the
risks set forth under “RISK FACTORS” section of the
foretasted Prospectus The undersigned acknowledges that an
investment in the Company involves high risks.
(d) The undersigned, either
alone or with the assistance of one or more advisers engaged by him
or her, has such knowledge and experience in business and financial
matters that he or she is capable of evaluating the Company, its
business operations, and the risks and merits of an investment in
the Company.
(e) The undersigned has been
provided with all materials and information requested by the
undersigned or his or her representatives, including any
information requested to verify any information furnished, and the
undersigned has been provided the opportunity for direct
communication between the Company and its representatives and the
undersigned and its representatives regarding the purchase made
hereby, including the opportunity to ask questions of and receive
answers from the Company.
(f) All information which the
undersigned has provided to the Company or its agents or
representatives concerning the undersigned’s suitability to
invest in the Company is complete, accurate, and correct as of the
date of the undersigned’s signature on this Agreement. Such
information includes, but is not limited to, information concerning
the undersigned’s personal financial affairs, business
position, and the knowledge and experience of the undersigned and
the undersigned’s advisers.
(g) The undersigned has no
present intention of dividing any of the securities or the rights
under this Agreement with others or of reselling or otherwise
disposing of any portion of the securities, either currently or
after the passage of a fixed or determinable period of time or on
the occurrence or nonoccurrence of any predetermined event or
circumstance.
(h) The undersigned was at no
time solicited by any leaflet, public promotional meeting,
circular, newspaper or magazine article, radio or television
advertisement, or any other form of general advertising or
solicitation in connection with the offer, sale, or purchase of the
securities through this Agreement.
(i) The undersigned has
adequate means of providing for his or her current needs and
possible contingencies and has no need now and anticipates no need
in the foreseeable future, to sell any portion of the securities
for which the undersigned hereby subscribes. The undersigned is
able to bear the economic risks of this investment and,
consequently, without limiting the generality of the foregoing, is
able to hold the securities for an indefinite period of time, and
has a sufficient net worth to sustain a loss of the entire
investment, in the event such loss should occur.
(j) The undersigned
acknowledges that this Agreement may be accepted or rejected in
whole or in part by the Company and that, to the extent the
subscription may be rejected, the accompanying subscription payment
may be refunded with interest and without deduction of
expenses.
3. REPRESENTATIONS REGARDING
EXEMPTIONS AND RESTRICTIONS ON TRANSFER. The undersigned represents
that the securities are being acquired without a view to, or for,
resale in connection with any distribution of the securities or any
interest therein without registration or other compliance under the
Act, and that the undersigned has no direct or indirect
participation in any such undertaking or in the underwriting of
such an undertaking. The undersigned understands that the
securities have not been registered, but are being acquired by
reason of a specific exemption under the Act as well as under
certain state statutes for transactions by an issuer not involving
any public offering and that any disposition of the securities may,
under certain circumstances, be inconsistent with this exemption
and may
2
make the undersigned an
“underwriter” within the meaning of the Act. The
undersigned acknowledges that the securities must be held and may
not be sold, transferred, or otherwise disposed of for value unless
they are subsequently registered under the Act or an exemption from
such registration is available. The Company is under no obligation
to register the securities under the Act or under Section 12 of the
Securities Exchange Act of 1934, as amended. The certificates
representing the securities will bear a legend restricting
transfer, except in compliance with applicable federal and state
securities statutes.
[NOTE: Please Initial All Applicable
“YES” Answers Under Items 4 & 5]
4. PERSONAL FINANCIAL
INFORMATION. The following information pertaining to the
undersigned as a natural person is being provided here in
lieu of furnishing a personal financial statement.
(a) My individual net worth,
or joint net worth with my spouse, exceeds $1,000,000.
Yes
¨
No
¨
(b) My individual income in
2003 and 2002 exceeded $200,000 in each such year, and I reasonably
expect my individual income will be in excess of $200,000 in
2004.
Yes
¨
No
¨
(c) The joint income of my
spouse and I in 2003 and 2002 exceeded $300,000 in each such year,
and I reasonably expect our joint income will be in excess of
$300,000 in 2004.
Yes
¨
No
¨
(d) Considering the foregoing
and all other relevant factors in my financial and personal
circumstances, I am able to bear the economic risk of an investment
in the Company.
Yes
¨
No
¨
5. BUSINESS FINANCIAL
INFORMATION. The following information pertaining to the
undersigned as a corporation, partnership, or other legal
entity is being provided here in lieu of furnishing a financial
statement.
(a) The undersigned is an
employee benefit plan within the meaning of the Employee Retirement
Income Security Act of 1974, and investment decisions are made by a
plan fiduciary, as defined in section 3(21) of such act, which is
either a bank, savings and loan association, insurance company, or
registered investment advisor and the employee benefit plan has
total assets in excess of $5,000,000.
Yes
¨
No
¨
3
(b) The undersigned is an
employee benefit plan within the meaning of the Employee Retirement
Income Security Act of 1974, and the employee benefit plan is a
self-directed plan with investment decisions made solely by persons
who satisfy one or more of the other criteria set forth in Items 4
and 5, and the employee benefit plan has total assets in excess of
$5,000,000.
Yes
¨
No
¨
(c) The undersigned is a
private business development company as defined in section
202(a)(22) of the Investment Advisers Act of 1940.
Yes
¨
No
¨
(d) The undersigned is an
organization described in section 501(c)(3) of the Internal Revenue
Code, 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.
Yes
¨
No
¨
(e) The undersigned is a
trust, with total assets in excess of $5,000,000, not formed for
the specific purpose of acquiring the securities offered, whose
purchase is directed by a sophisticated person.
Yes
¨
No
¨
(f) The undersigned is an
entity in which all of the equity owners are accredited investors
under the criteria set forth in Items 4 and 5.
Yes
¨
No
¨
6. INDEMNITY. The undersigned
hereby agrees to indemnify the Company and any person participating
in the offering and to hold them harmless from and against any and
all liability, damage, cost, or expense (including, but not limited
to, reasonable attorney’s fees) incurred on account of or
arising out of:
(a) any inaccuracy in his or
her declarations, representations, and warranties set forth herein
or made by the undersigned to the Company in connection with his or
her subscription;
(b) the disposition of any
portion of the securities which he or she will receive, contrary to
his or her declarations, representations, and warranties set forth
herein; and
4
(c) any action, suit, or
proceeding based on (i) the claim that said declarations,
representations or warranties were inaccurate or misleading or
otherwise cause for obtaining damages or redress from the Company,
or (ii) the disposition of any of the securities or any part
hereof.
7. SETOFF. Notwithstanding
the provisions of the last preceding section or the enforceability
thereof, the undersigned hereby grants to the Company the right to
setoff against any amounts payable by the Company to the
undersigned, for whatever reason, of any and all damages, costs, or
expenses (including, but not limited to, reasonable
attorney’s fees) which are incurred on account of or arising
out of any of the items referred to in clauses (a) through (c) of
the last preceding section.
8. MISCELLANEOUS. The
undersigned further understands, acknowledges, and agrees
that:
(a) This Agreement is
registered in the name of the undersigned on the books of the
Company at its principal offices, and no transfer hereof shall be
valid and binding on the Company unless made at such offices by the
registered holder or his attorney-in-fact duly authorized in
writing. The Company may deem and treat the person in whose name
this Agreement is registered as the absolute owner hereof for the
purpose of receiving any securities issuable pursuant hereto and
for all other purposes.
(b) This Agreement
constitutes the entire agreement between the parties respecting the
subject matter hereof.
(c) Notwithstanding any of
the representations, warranties, acknowledgments, or agreements
made herein by the undersigned, the undersigned does not waive any
rights granted to the undersigned under federal and state
securities laws.
(d) The undersigned will hold
title to the securities as follows:
Community Property
Joint Tenants, with Right of
Survivorship
Tenants in Common
Separate Property
Other
(Single
Person, Trust, Etc., Please Indicate)
5
AGREED AND ENTERED INTO this
day of
, 2004.
|
|
|
|
|
|
|
| Tax
Identification Number or |
|
Type or
Print Name of Subscriber(s) in exact |
| Social
Security Number |
|
Form to
be Used on Records of the Company |
Address:
|
|
|
|
|
|
|
| Number and
Street |
|
Signature |
|
|
|
|
|
|
| City, State,
and Zip |
|
Signature
of Joint Subscriber, If Any |
ACCEPTANCE OF
SUBSCRIPTION
The foregoing is hereby
accepted this day of
2004
|
|
|
|
SYNTHETIC BLOOD
|
|
INTERNATIONAL, INC.
|
|
|
|
By
|
|
|
| |
|
Duly Authorized Officer
|
6
EXHIBIT A
NEITHER THIS SECURITY NOR THE SECURITIES
INTO WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH
THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION
OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “ SECURITIES
ACT ”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES
LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
REASONABLY ACCEPTABLE TO THE COMPANY TO SUCH EFFECT, THE SUBSTANCE
OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS
SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A
FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR”
AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT.
COMMON STOCK PURCHASE
WARRANT
To Purchase
Shares of Common Stock of
Synthetic Blood
International, Inc.
THIS COMMON STOCK PURCHASE
WARRANT (the “ Warrant ”) CERTIFIES that, for
value received,
(the “ Holder ”), is entitled, upon the terms
and subject to the limitations on exercise and the conditions
hereinafter set forth, at any time on or prior to September 30,
2007 (the “ Termination Date ”) but not
thereafter, to subscribe for and purchase from Synthetic Blood
International, Inc., a New Jersey corporation (the “
Company ”), up to
shares (the “ Warrant Shares ”) of Common Stock,
par value $0.01 per share, of the Company (the “ Common
Stock ”). The purchase price of one share of Common Stock
(the “ Exercise Price ”) under this Warrant
shall be $0.275, subject to adjustment hereunder. The Exercise
Price and the number of Warrant Shares for which the Warrant is
exercisable shall be subject to adjustment as provided
herein.
1. Title to Warrant .
Prior to the Termination Date and subject to compliance with
applicable laws and Section 7 of this Warrant, this Warrant and all
rights hereunder are transferable, in whole or in part, at the
office or agency of the Company by the Holder in person or by duly
authorized attorney, upon surrender of this Warrant together with
the Assignment Form annexed hereto properly endorsed. The
transferee shall sign an investment letter in form and substance
reasonably satisfactory to the Company.
2. Authorization of
Shares . The Company covenants that all Warrant Shares which
may be issued upon the exercise of the purchase rights represented
by this Warrant will, upon exercise of the purchase rights
represented by this Warrant, be duly authorized, validly issued,
fully paid and nonassessable and free from all taxes, liens and
charges in respect of the issue thereof (other than taxes in
respect of any transfer occurring contemporaneously with such
issue).
3. Exercise of Warrant
.
(a) Exercise of the purchase
rights represented by this Warrant may be made at any time or times
on or before the Termination Date by delivery to the Company of a
duly executed facsimile copy of the Notice of Exercise Form annexed
hereto (or such other office or agency of the Company as it may
designate by notice
in writing to the registered Holder at
the address of such Holder appearing on the books of the Company);
provided, however, said exercise will be void and of no effect if
the Holder does not surrender this Warrant to the Company and the
Company does not receive payment of the aggregate Exercise Price of
the shares purchased by wire transfer or cashier’s check
drawn on a United States bank on or before the fifth day following
the date notice of exercise is delivered to the Company.
Certificates for shares purchased hereunder shall be delivered to
the Holder within 3 Trading Days from the delivery to the Company
of the notice of exercise, surrender of this Warrant and payment of
the aggregate Exercise Price as set forth above (“ Warrant
Share Delivery Date ”). This Warrant shall be deemed to
have been exercised on the date the Exercise Price is received by
the Company. The Warrant Sh
| 
