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
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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
¨
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(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
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(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)
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AGREED AND ENTERED INTO this
day of
, 2004.
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Tax
Identification Number or
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Type or Print
Name of Subscriber(s) in exact
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Social Security
Number
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Form to be Used
on Records of the Company
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Address:
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Number and
Street
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Signature
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City, State,
and Zip
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Signature of
Joint Subscriber, If Any
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ACCEPTANCE OF SUBSCRIPTION
The foregoing is hereby accepted
this day of
2004
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SYNTHETIC BLOOD
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INTERNATIONAL, INC.
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By
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Duly Authorized Officer
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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 Shares shall be deemed to have been
issued, and Holder or any other person so designated to be named
therein shall be deemed to have become a holder of record of such
shares for all purposes, as of the date the Warrant
