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EXHIBIT 10.1
SUBSCRIPTION AGREEMENT
SUBSCRIPTION AGREEMENT made
as of this ___ day of ____________, 2007, between Transdel
Pharmaceuticals, Inc., a Delaware corporation (the “
Company ”),
and the undersigned (the “
Subscriber ”).
WHEREAS, pursuant
to a Confidential Offering Memorandum dated July 30, 2007 (the
“
PPM ”),
the Company is offering in a private placement (the “
Offering ”)
to accredited investors up to 50 Units at a purchase price of
$100,000 per Unit for a maximum aggregate purchase price of
$5,000,000 (the “
Maximum Offering ”).
Each Unit consists of 50,000 shares of the Company’s common
stock, par value $0.001 per share (the “
Common Stock ”),
and a five-year, redeemable warrant to purchase 12,500 shares of
Common Stock at a cash exercise price of $4.00 per share and a
cashless exercise price of $5.00 per share (the “
Warrants ”).
As used herein, the term “Units” means such Units, and
all Common Stock and Warrants underlying the Units),
and
WHEREAS ,
the Subscriber desires to subscribe for the number of Units set
forth on the signature page hereof, on the terms and conditions
hereinafter set forth.
NOW, THEREFORE ,
for and in consideration of the premises and the mutual covenants
hereinafter set forth, the parties hereto do hereby agree as
follows:
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I.
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SUBSCRIPTION FOR AND REPRESENTATIONS AND COVENANTS OF
SUBSCRIBER
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1.1
Subject
to the terms and conditions hereinafter set forth, the
Subscriber hereby subscribes for and agrees to purchase from
the Company such number of Units set forth upon the signature
page hereof, at a price equal to $100,000 per Unit, and the
Company agrees to sell such to the Subscriber for said
purchase price, subject to the Company’s right to sell
to the Subscriber such lesser number of (or no) Units as the
Company may, in its sole discretion, deem necessary or
desirable. The purchase price is payable by wire transfer of
immediately available funds, pursuant to the wire instructions
attached as
Exhibit D to
the PPM or by check payable to Signature Bank, as Escrow Agent to
Transdel Pharmaceuticals, Inc.
1.2
The
Subscriber recognizes that the purchase of Units involves a
high degree of risk in that (i) an investment in the Company
is highly speculative and only investors who can afford the
loss of their entire investment should consider investing in
the Company and the Units; (ii) the Units are not registered
under the Securities Act of 1933, as amended (the
“
Act ”),
or any state securities law; (iii) there is no trading market for
the Units, none is likely ever to develop, and the Subscriber may
not be able to liquidate his, her or its investment; (iv)
transferability of the Units is extremely limited; and (v) an
investor could suffer the loss of his, her or its entire
investment.
1.3
The
Subscriber is an “accredited investor,” as such
term in defined in Rule 501 of Regulation D promulgated under
the Act, and the Subscriber is able to bear the economic risk
of an investment in the Units.
1.4
The
Subscriber has prior investment experience (including
investment in non-listed and non-registered securities), and
has read and evaluated, or has employed the services of an
investment advisor, attorney or accountant to read and
evaluate, all of the documents furnished or made available by
the Company to the Subscriber and to all other prospective
investors in the Units, including the PPM, as well as the
merits and risks of such an investment by the Subscriber. The
Subscriber’s overall commitment to investments which are
not readily marketable is not disproportionate to the
Subscriber’s net worth, and the Subscriber’s
investment in the Units will not cause such overall commitment
to become excessive. The Subscriber, if an individual, has
adequate means of providing for his or her current needs and
personal and family contingencies and has no need for
liquidity in his or her investment in the Units. The
Subscriber is financially able to bear the economic risk of
this investment, including the ability to afford holding the
Units for an indefinite period or a complete loss of this
investment.
1.5
The
Subscriber acknowledges receipt and careful review of the PPM,
all supplements to the PPM, and all other documents furnished
in connection with this transaction by the Company
(collectively, the “
Offering Documents ”)
and has been furnished by the Company during the course of this
transaction with all information regarding the Company which the
Subscriber has requested or desires to know; and the Subscriber has
been afforded the opportunity to ask questions of and receive
answers from duly authorized officers or other representatives of
the Company concerning the terms and conditions of the Offering,
and any additional information which the Subscriber has
requested.
1.6
The
Subscriber acknowledges that the purchase of the Units may
involve tax consequences to the Subscriber and that the
contents of the Offering Documents do not contain tax advice.
The Subscriber acknowledges that the Subscriber must retain
his, her or its own professional advisors to evaluate the tax
and other consequences to the Subscriber of an investment in
the Units. The Subscriber acknowledges that it is the
responsibility of the Subscriber to determine the
appropriateness and the merits of a corporate entity to own
the Subscriber’s Units and the corporate structure of
such entity.
1.7
The
Subscriber acknowledges that this Offering has not been
reviewed by the Securities and Exchange Commission (the
“
SEC ”)
or any state securities commission, and that no federal or state
agency has made any finding or determination regarding the fairness
or merits of the Offering. The Subscriber represents that the Units
are being purchased for his, her or its own account, for investment
only, and not with a view toward distribution or resale to others.
The Subscriber agrees that he, she or it will not sell or otherwise
transfer the Units unless they are registered under the Act or
unless an exemption from such registration is
available.
1.8
The
Subscriber understands that the provisions of Rule 144 under
the Act are not available for at least one (1) year to permit
resales of the Units or the Common Stock and Warrants
comprising the Units and there can be no assurance that the
conditions necessary to permit such sales under Rule 144 will
ever be satisfied. The Subscriber understands that the Company
is under no obligation to comply with the conditions of Rule
144 or take any other action necessary in order to make
available any exemption from registration for the sale of the
Units or the Common Stock and Warrants comprising the
Units.
1.9
The
Subscriber understands that the Units have not been registered
under the Act by reason of a claimed exemption under the
provisions of the Act which depends, in part, upon his, her or
its investment intention. In this connection, the Subscriber
understands that it is the position of the SEC that the
statutory basis for such exemption would not be present if
his, her or its representation merely meant that his, her or
its present intention was to hold such securities for a short
period, such as the capital gains period of tax statutes, for
a deferred sale, for a market rise, assuming that a market
develops, or for any other fixed period. The Subscriber
realizes that, in the view of the SEC, a purchase now with an
intent to resell would represent a purchase with an intent
inconsistent with his, her or its representation to the
Company and the SEC might regard such a sale or disposition as
a deferred sale, for which such exemption is not
available.
1.10
The
Subscriber agrees to indemnify and hold the Company, its
directors, officers and controlling persons and their
respective heirs, representatives, successors and assigns
harmless against all liabilities, costs and expenses incurred
by them as a result of any misrepresentation made by the
Subscriber contained herein or any sale or distribution by the
Subscriber in violation of the Act (including, without
limitation, the rules promulgated thereunder), any state
securities laws, or the Company’s Certificate of
Incorporation or By-laws, as amended from time to
time.
1.11
The
Subscriber consents to the placement of a legend on any
certificate or other document evidencing the Common Stock or
the Warrants stating that such securities have not been
registered under the Act and setting forth or referring to the
restrictions on transferability and sale thereof.
1.12
The
Subscriber understands that the Company will review and rely
on this Subscription Agreement without making any independent
investigation; and it is agreed that the Company reserves the
unrestricted right to reject or limit any subscription and to
withdraw the Offering at any time.
1.13
The
Subscriber hereby represents that the address of the
Subscriber furnished at the end of this Subscription Agreement
is the undersigned’s principal residence, if the
Subscriber is an individual, or its principal business address
if it is a corporation or other entity.
1.14
The
Subscriber acknowledges that if the Subscriber is a Registered
Representative of a National Association of Securities
Dealers, Inc. (“
NASD ”)
member firm, the Subscriber must give such firm the notice required
by the NASD’s Conduct Rules, receipt of which must be
acknowledged by such firm on the signature page
hereof.
1.15
The
Subscriber hereby acknowledges that neither the Company nor
any persons associated with the Company who may provide
assistance or advice in connection with the Offering (other
than the placement agent, if one is engaged by the Company)
are or are expected to be members or associated persons of
members of the NASD or registered broker-dealers under any
federal or state securities laws.
1.16
The
Subscriber understands that, pursuant to the terms of the
Offering as set forth in the PPM, the Company must receive
subscriptions for 30 Units for an aggregate purchase price of
$3,000,000 (the “
Minimum Offering ”)
in order to close on the sale of any Units and that persons
affiliated with the Company or its consultants, advisors, or
placement agents may subscribe for Common Stock, in which case the
Company may accept subscriptions from such affiliated parties in
order to reach the Minimum Offering; and that, accordingly, no
investor should conclude that achieving the Minimum Offering is the
result of any independent assessment of the merits or advantages of
the Offering or the Company made by Subscribers in the Minimum
Offering.
1.17
The
Subscriber hereby represents that, except as expressly set
forth in the Offering Documents, no representations or
warranties have been made to the Subscriber by the Company or
any agent, employee or affiliate of the Company and, in
entering into this transaction, the Subscriber is not relying
on any information other than that contained in the Offering
Documents and the results of independent investigation by the
Subscriber.
1.18
All
information provided by the Subscriber in the Investor
Questionnaire attached as
Exhibit B to
the PPM is true and accurate in all respects, and the Subscriber
acknowledges that the Company will be relying on such information
to its possible detriment in deciding whether the Company can sell
these securities to the Subscriber without giving rise to the loss
of the exemption from registration under applicable securities
laws.
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II.
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REPRESENTATIONS BY THE COMPANY
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The
Company represents and warrants to the Subscriber that as of
the date of the closing of this Offering (the “
Closing Date ”):
(a)
The
Company is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware
and has the corporate power to conduct the business which it
conducts and proposes to conduct.
(b)
The
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