|
EXHIBIT 10.1
SUBSCRIPTION AGREEMENT
NeoStem,
Inc.
420
Lexington Avenue
Suite
450
New
York, New York 10170
Attention:
Chief Executive Officer
Ladies
and Gentlemen:
The
undersigned investor (the “
Investor ”)
under the following terms and conditions, offers to subscribe (the
“Offer”) for the securities of NeoStem, Inc., a
Delaware corporation. (the “Company” or
“NeoStem”). The Company is issuing units
(“Units”) at a per Unit price of $1.20 with each Unit
consisting of (a) one share (the “Common Shares”) of
common stock, $.001 par value (the “Common Stock”) and
(b) one accompanying warrant (each, a “Warrant” and
together the “Warrants”) for the p urchase
of one share of Common Stock at an exercise price equal to $1.75,
subject to adjustment, expiring five years from the date of
issuance (the “Warrant Shares”). The
form of Warrant is attached hereto as
Exhibits A .
The Company is issuing up to 1,000,000 Units.
The
Investor understands that the Units are being issued pursuant
to one or more exemptions from the registration requirements
of the Securities Act of 1933, as amended (the “
Securities Act ”
or the “
Act ”),
in
a private placement pursuant to an exemption from registration
under Regulation D promulgated under Section 4(2) and Rule
506 of
the Act. As such, the Common Stock, the Warrants and the Warrant
Shares each are “
restricted securities ”
and may not be sold or transferred absent a registration statement
declared effective under the Act or an exemption from the
registration requirements of the Act.
1.
Subscription .
The
closing (the “Closing”) of the transactions
hereunder shall take place at the offices of the Company or at
such other location as the Company may determine after the
receipt by the Company of subscriptions for Units from
Investors from time to time and after it has been determined
that all conditions in this Agreement have been met. At each
Closing, funds equal to the Subscription Amount of each
Investor shall be delivered to the Company and the Company
shall promptly thereafter deliver to each such Investor his,
her or its respective Shares and Warrants as provided
herein.
Subject
to the terms and conditions hereinafter set forth in this
Subscription Agreement, the Investor hereby offers to
subscribe for Units as set forth in the Investor Signature
Page attached hereto and contemporaneously herewith makes
payment for the purchase of the Units by wire transfer or
check.
2.
Conditions .
The
Offer is made subject to the following conditions: (i) that
the Company, acting in good faith, shall have the right to
accept or reject this Offer, in whole or in part, for any
reason; (ii) that the Investor agrees to comply with the terms
of this Subscription Agreement; and (iii) the American Stock
Exchange shall have approved the Offering.
Acceptance
of this Offer shall be deemed given by the countersigning of
this Subscription Agreement by the Company. In the event the
Company does not accept the Offer, any and all proceeds for
the purchase of the Units by the Investor shall be returned to
Investor.
3.
Representations and Warranties of the Investor
.
The
Investor, in order to induce the Company to accept this Offer,
hereby warrants and represents as follows:
(a)
Organization; Authority .
The
Investor, if not an individual, is an entity duly organized,
validly existing and in good standing under the laws of the
jurisdiction of its organization with the requisite power and
authority to enter into and to consummate the transactions
contemplated by this Subscription Agreement and otherwise to carry
out its obligations hereunder. The purchase by Investor of the
Units hereunder has been duly authorized by all necessary action on
the part of Investor. This Subscription Agreement has been duly
executed by Investor, and when delivered by Investor in accordance
with the terms hereof, will constitute the valid and legally
binding obligation of Investor, enforceable against it in
accordance with its terms, except (i) as limited by general
equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, and
(ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable
remedies.
(b)
Investor Representation .
Investor understands that the Units,
Common Shares, Warrants and Warrant Shares are each
“restricted securities” and have not been registered
under the Securities Act or qualified under any applicable state
securities law by reason of their issuance in a transaction that
does not require registration or qualification (based in part on
the accuracy of the representations and warranties of the Investor
contained herein), and that such securities must be held
indefinitely unless a subsequent disposition is registered under
the Securities Act or any applicable state securities laws or is
exempt from such registration. The Investor hereby agrees that the
Company may insert the following or similar legend on the face of
the certificates evidencing the Units,
Common Shares, Warrants and Warrant Shares ,
if required in compliance with federal and state securities
laws:
“These
securities have not been registered under the Securities Act
of 1933, as amended (the “Securities Act”) nor
under the securities laws of any state. They may not be sold,
offered for sale, or hypothecated in the absence of a
registration statement in effect with respect to the
securities under such act or an opinion of counsel reasonably
satisfactory to the company that such registration is not
required pursuant to a valid exemption therefrom under the
Securities Act.”
The
Investor understands and acknowledges that the Commission
currently takes the position that coverage of short sales of
shares of the Common Stock “against the box” prior
to the effective date of a registration statement registering
the re-sale of the Common Shares and the Warrant Shares is a
violation of Section 5 of the Securities Act, as set forth in
Item 65, Section 5 under Section A, of the Manual of Publicly
Available Telephone Interpretations, dated July 1997, compiled
by the Office of Chief Counsel, Division of Corporation
Finance. Accordingly, the Investor agrees not to use any of
the Common Shares or Warrant Shares to cover any short sales
made prior to the effective date of such registration
statement.
(c)
No Distribution .
Investor
is acquiring the Units as principal for its own account, in the
ordinary course of its business, and not with a view to or for
distributing or reselling such Units or any part thereof. Investor
has no present intention of distributing any of such Common Shares,
Warrants or Warrant Shares and has no agreement or understanding,
directly or indirectly, with any other individual, corporation,
partnership, trust, incorporated or unincorporated association,
joint venture, limited liability company, joint stock company,
government (or an agency or subdivision thereof), or other entity
of any kind (each, a “
Person ”)
regarding the distribution of such Common Shares, Warrants or
Warrant Shares (this representation and warranty not limiting such
Investor’s right or intent to sell the Common Share, Warrants
or Warrant Shares
pursuant
to a Registration Statement or otherwise in compliance with
applicable federal and state securities laws).
(d)
Investor Status .
Investor is, and on each date on which it exercises any Warrants it
will be an “Accredited Investor” as defined in Rule
501(a)(1), (a)(2), (a)(3), (a)(7), or (a)(8) under the Securities
Act. In
general, an Accredited Investor is deemed to be an institution with
assets in excess of $5,000,000 or individuals with net worth in
excess of $1,000,000 or annual income exceeding $200,000, or
$300,000 jointly with their spouse.
(e)
Experience of Investor .
Investor, either alone or together with its representatives, has
such knowledge, sophistication, and experience in business and
financial matters so as to be capable of evaluating the merits and
risks of the prospective investment in the Units, and has so
evaluated the merits and risks of such investment.
The
Investor has not authorized any Person to act as his Purchaser
Representative (as that term is defined in Regulation D of the
General Rules and Regulations under the Act) in connection with
this transaction. Investor
is able to bear the economic risk of an investment in the Units
and, at the present time, is able to afford a complete loss of such
investment.
(f)
General Solicitation .
Investor is not purchasing the Units as a result of any
advertisement, article, notice or other communication regarding the
Units published in any newspaper, magazine, or similar media or
broadcast over television or radio or presented at any seminar or
any other general solicitation or general
advertisement.
(g)
Access to Information .
The Investor has reviewed the SEC Reports (as that term is defined
in Section 4(g)) and neither the Company nor any of its
representatives have made any other representations or warranties
to the Investor with respect to the Company except as contained
herei n
or in the SEC Reports. Specifically, the Investor acknowledges that
the SEC Reports disclose that the Company is actively exploring
acquisition opportunities and that prior to the Closing the Company
may enter into one or more letters of intent in connection with
pursuing such an acquisition. The Investor has also been afforded
the opportunity to ask questions of, and receive answers from, the
officers and/or directors of the Company concerning the terms and
conditions of the Offering and to obtain any additional
information, to the extent that the Company possesses such
information or can acquire it without unreasonable effort or
expense, necessary to verify the accuracy of the information
furnished; and has availed himself of such opportunity to the
extent he considers appropriate in order to permit him to evaluate
the merits and risks of an investment in the Units. It is
understood that all documents, records, and books pertaining to
this investment have been made available for inspection by the
Investor during reasonable business hours at the Company’s
principal place of business. Notwithstanding the foregoing, it is
understood that the Investor is purchasing the Units without being
furnished any prospectus setting forth all of the information that
would be required to be furnished under the Securities Act and this
Offering has not been passed upon or the merits thereof endorsed or
approved by any state or federal authorities.
(h)
Placement Agent Fees .
The Investor has been advised by any placement agent (the
“Placement Agent”) through whom the Units have been
purchased of the fees being paid to the Placement Agent in
connection with its acting as Placement Agent in the Offering and
Investor has no objections to the fees being paid.
4.
Representations and Warranties of the Company
.
The
Company hereby makes the following representations and
warranties to the Investor:
(a)
Organization and Qualification .
Each of the Company and its subsidiaries (each, a
“Subsidiary”) is an entity duly incorporated or
otherwise organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation or organization
(as applicable), with the requisite power and authority to own and
use its properties and assets and to carry on its business as
currently conducted. Neither
the Company nor any Subsidiary is in violation or default of any of
the provisions of its respective certificate or articles of
incorporation, bylaws or other organizational or charter documents.
Each of the Company and the Subsidiaries is duly qualified to
conduct business and is in good standing as a foreign corporation
or other entity in each jurisdiction in which the nature of the
business conducted or property owned by it makes such qualification
necessary, except where the failure to be so qualified or in good
standing, as the case may be, would not have or reasonably be
expected to result in (i) a material adverse effect on the
legality, validity or enforceability of this Subscription
Agreement, (ii) a material adverse effect on the results of
operations, assets, business, prospects or financial condition of
the Company and the Subsidiaries, taken as a whole, or (iii) a
material adverse effect on the Company’s ability to perform
in any material respect on a timely basis its obligations under
this Subscription Agreement (any of (i), (ii), or (iii), a
“
Material Adverse Effect ”)
and no Proceeding has been instituted in any such jurisdiction
revoking, limiting or curtailing or seeking to revoke, limit or
curtail such power and authority or qualification
.
(b)
Authorization; Enforcement .
The Company has the requisite corporate power and authority to
enter into and to consummate the Offering, to issue the Units and,
upon due exercise of the Warrants, to duly issue the shares of
Common Stock deliverable thereunder. The execution and delivery of
this Subscription Agreement and the Units by the Company and the
consummation by it of the transactions contemplated hereby have
been duly authorized by all necessary action on the part of
the Company
and no further consent or action is required by the Company, other
than the Required Approvals (as defined below). This Subscription
Agreement, when executed and delivered in accordance with the terms
hereof, will constitute the valid and binding obligation of the
Company enforceable against the Company in accordance with its
terms, except
(i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws of general application
affecting enforcement of creditors’ rights generally and (ii)
as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies
.
(c)
No Conflicts .
The execution, delivery, and performance of this Subscription
Agreement by the Company and the consummation by the Company of the
Offering and issuance of the Units does not and will not: (i)
conflict with or violate any provision of the Company’s or
any Subsidiary’s certificate or articles of incorporation,
bylaws or other organizational or charter documents or (ii) subject
to obtaining the Required Approvals, conflict with, or constitute a
default (or an event that with notice or lapse of time or both
would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation (with or
without notice, lapse of time or both) of any agreement, credit
facility, debt, or other instrument (evidencing the Company’s
or a Subsidiaries’ debt or otherwise) or other understanding
to which the Company or either of the Subsidiaries is a party or by
which any property or asset of the Company or its Subsidiaries is
bound or affected, or (iii) result in a violation of any law, rule,
regulation, order, judgment, injunction, decree, or other
restriction of any court or governmental authority as currently in
effect to which the Company or any of the Subsidiaries is subject
(including federal and state securities laws and regulations), or
by which any property or asset of the Company or either of the
Subsidiaries is bound or affected; except in the case of each of
clauses (ii) and (iii), such as could not, individually or in the
aggregate have a Material Adverse Effect.
(d)
Filings, Consents, and Approvals .
Neither the Company nor any of the Subsidiaries is required to
obtain any consent, waiver, authorization, or order of, give any
notice to, or make any filing or registration with, any court or
other federal, state, local, or other governmental authority or
other Person in connection with the execution, delivery and
performance by the Company of this Subscription Agreement, other
than: (i) the filing with the Securities and Exchange Commission
(“
Commission ”)
of the Registration Statement pursuant to Section 5, (ii) the
filing with the Commission of a Form D pursuant to Commission
Regulation D, and
(iii) any applicable Blue Sky filings
(collectively,
the “
Required Approvals ”).
(e)
Issuance of the Units .
The Units, and each component or underlying security, are duly
authorized and, when issued and paid for in accordance with this
Subscription Agreement, will be duly and validly issued, fully paid
and nonassessable, free and clear of all liens, and not subject to
any preemptive rights. The Company will reserve from its duly
authorized capital stock a number of shares of Common Stock
required for issuance of the Warrant Shares.
(f)
Capitalization .
The number of shares and type of all authorized, issued, and
outstanding capital stock of the Company is as set forth in the SEC
Reports as of the respective dates set forth therein. No Person has
any right of first refusal, preemptive right, right of
participation, or any similar right to participate in the
Offering. No
further approval or authorization of any stockholder, the Board of
Directors of the Company, or others is required for the issuance
and sale of the Units and the underlying Warrant
Shares .
Upon exercise of the Warrants in accordance with their terms, the
Warrant Shares issuable thereby will be deemed duly authorized,
validly issued, fully paid and non-accessible in all
respects.
(g)
SEC Reports; Financial Statements .
The Company has filed all reports required to be filed by it under
the Securities Act and the Exchange Act, including pursuant to
Section 13(a) or 15(d) thereof, for the one year preceding the date
hereof (or such shorter period as the Company was required by law
to file such material) (the foregoing materials being collectively
referred to herein as the “
SEC Reports ”).
As of their respective dates, the SEC Reports complied in all
material respects with the requirements of the Securities Act and
the Exchange Act and the rules and regulations of the Commission
promulgated thereunder, and none of the SEC Reports, when filed,
contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances
under which they were made, not misleading. The Company has advised
Investor(s) that a copy of each of the SEC Reports (together with
all exhibits and schedules thereto and as amended to date) is
available at
http://www.sec.gov ,
a website maintained by the Commission where Investor(s) may view
the SEC Reports.
(h)
Material Changes .
Since the date of the latest audited financial statements included
in the SEC Reports, except as specifically disclosed in the SEC
Reports or referred to in this Subscription Agreement, (i) there
has been no event, occurrence, or development that has had 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 required to be disclosed in filings made with the
Commission, (iii) the Company has not altered its method of
accounting or the identity of its auditors, and (iv) the Company
has not declared or made any dividend or distribution of cash or
other property to its stockholders except in the ordinary course of
business consistent with prior practice, or purchased, redeemed or
made any agreements to purchase or redeem any shares of its capital
stock except consistent with prior practice or pursuant to existing
Company stock option or similar plans.
(i)
Litigation .
Except as set forth in the SEC Reports and routine inquiries, there
is no action, suit, inquiry, notice of violation, proceeding, or
investigation pending or, to the knowledge of the Company,
threatened against or affecting the Company, the Subsidiaries or
any of its properties before or by any court, arbitrator,
governmental or administrative agency or regulatory authority
(federal, state, county, local, or foreign) (collectively, an
“
Action ”)
which: (i) adversely affects or challenges the legality, validity
or enforceability of this Subscription Agreement or the Units or
(ii) could, if there were an unfavorable decision, individually or
in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect.
(j)
Compliance .
Neither
the Company nor any Subsidiary (i) is in default under or in
violation of (and no event has occurred that has not been waived
that, with notice or lapse of time or both, would result in a
default by the Company or any Subsidiary under), nor has the
Company or any Subsidiary received notice of a claim that it is in
default under or that it is in violation of, any indenture, loan or
credit agreement, (ii) is in violation of any order of any court,
arbitrator or governmental body, or (iii) is in violation of any
statute, rule or regulation of any governmental authority,
including without limitation all foreign, federal, state and local
laws applicable to its business except in e
|
