Exhibit 10.20
Form of Subscription Agreement between the
Company and the investors in the Company’s December 2008
offering of Units consisting of Notes and Warrants
Anpath
Group, Inc.
December 1, 2008
ANPATH GROUP, INC.
SUBSCRIPTION INSTRUCTIONS
IMPORTANT: PLEASE READ THE ATTACHED
SUBSCRIPTION AGREEMENT CAREFULLY BEFORE COMPLETING AND SIGNING
IT. THERE ARE SIGNIFICANT REPRESENTATIONS CONTAINED IN
THE SUBSCRIPTION AGREEMENT.
All subscribers must complete and execute the
documents contained in this booklet in accordance with the
instructions set forth below. Any questions you may have
concerning these documents should be directed to Stephen Hoelscher,
telephone (704) 658-3350.
INSTRUCTIONS
1.
Fill in the requested information and Sign the
Subscription Agreement.
2.
Fill in the Investor Information form attached as Annex
A to the Subscription Agreement.
3. Individual
Investors – Fill in and Sign the Certificate
for Individual Investors attached as Annex B to the
Subscription Agreement.
4. Entity
Investors - Fill in and Sign the Certificate for
Entity Investors attached as Annex C to the Subscription
Agreement.
5. Fax
all forms to Stephen Hoelscher at (704) 658-3358 and then Send all
signed original documents with a check (if applicable)
to:
Anpath Group,
Inc.
116 Morlake
Drive
Suite
201
Mooresville, NC
28117
Attention: Stephen
Hoelscher
6. Please
make your subscription payment payable to the order of
“SIGNATURE BANK – AS ESCROW AGENT FOR ANPATH GROUP,
INC.”
To wire funds
directly see the following instructions:
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Bank
Name:
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Signature
Bank
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261 Madison
Avenue, New York, New York 10016
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Acct.
Name:
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Signature Bank
as Escrow Agent for ANPATH GROUP, INC.
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ABA
Number:
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026013576
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A/C Account
#:
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1501156309
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FBO:
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Investor
Name
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Social Security
or EIN Number
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Address
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Each
investor who executes a Subscription Agreement and the other
documents contained in this package (individually an “
Investor ” and collectively, the “
Investors ”) will purchase the number of units
(the “ Units ”) set forth on the
signature page to such Subscription Agreement at a purchase price
of $10,000 per Unit. Each Unit consists of one (1) 8%
Subordinated Convertible Promissory Note (a “
Note ”) and a five (5) year warrant (a “
Warrant ”), exercisable for the purchase of
20,000 shares of the Company’s common stock, par value
$0.0001 per share (the “ Common Stock
”). Subscriptions for the Units will be made in
accordance with and subject to the terms and conditions of the
Subscription Agreement. The Units are being offered (the
“ Offering ”) on a “best
efforts” all or none basis up to 50 Units (the “
Minimum Amount ”) and thereafter on a
reasonable efforts basis up to 500 Units ($ 5,000,000
) (the “ Maximum Amount
”). The minimum investment amount that may be
purchased by an Investor is one Unit ($10,000) (the “
Minimum Investor Purchase ”); provided however,
the Company may in its sole discretion, accept an Investor
subscription for an amount less than the Minimum Investor
Purchase.
The Offering is being made solely to
“accredited investors” (as defined in Rule 501 of
Regulation D promulgated under the Securities Act of 1933, as
amended (the “ Securities Act
”)).
All subscription funds will be held in the
Company’s non-interest bearing escrow account at Signature
Bank, 261 Madison Avenue, New York, New York 10016. The
Offering will terminate on or before December 31, 2008 (the “
Initial Offering Period ”), which period may be
extended by the Company to a date no later than February 20, 2009
(the “ Termination Date ”, with this
additional period, together with the Initial Offering Period, being
referred to as the “ Offering Period
”). The Company may hold an initial closing
(“ Initial Closing ”) at any time after
the receipt of accepted subscriptions equal to the Minimum Amount
on or prior to the Termination Date. After the Initial
Closing, subsequent closings with respect to additional Units may
take place at any time, as determined jointly by the Company (each
such closing, together with the Initial Closing, being referred to
as a “ Closing ”). In the
event that a Closing is not held prior to the Termination Date, the
Company will refund all subscription funds, without deduction
and/or interest accrued thereon, and will return the subscription
documents to each subscriber.
If the Company
rejects a subscription, either in whole or in part (which decision
is in its sole discretion), the rejected subscription funds or the
rejected portion thereof will be returned promptly to such
subscriber without interest accrued thereon.
SUBSCRIPTION
AGREEMENT
This
SUBSCRIPTION AGREEMENT (this “ Agreement
”) is made and entered into as of [________________], 200__,
by and between Anpath Group, Inc., a Delaware corporation (the
“ Company ”) and the investor identified
on the signature page to this Agreement (the “
Investor ”).
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WHEREAS , pursuant to the Company’s Confidential
Private Placement Memorandum, dated December 1, 2008, the Company
is offering (the “ Offering ”), upon the
terms and conditions stated in this Agreement, a minimum of 50
units (the “ Minimum Amount ”) and a
maximum of 500 units (the “ Maximum Amount
”); at a purchase price of $10,000 per unit (each, a “
Unit ”), each Unit consisting of:
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one 8% subordinated convertible promissory note
(a “ Note ”) convertible into shares (the
“ Conversion Shares ”) of common stock of
the Company, par value $0.0001 per share (the “ Common
Stock ”); and
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a warrant (the
“ Warrant ”) to purchase 20,000 shares of
Common Stock at an exercise price of $0.75 per share (the “
Warrant Shares ”);
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WHEREAS , the Units, Notes, Conversion Shares, Warrants
and Warrant Shares issued pursuant to this Agreement are
collectively referred to herein as the “
Securities ;”
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WHEREAS , the Company may engage registered broker
dealers and other persons (“ Selling Agents
”) to offer and sell Units in the Offering and may pat to
such Selling Agents the compensation disclosed in the
Memorandum;
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WHEREAS , contemporaneous with the sale of the Units,
the parties hereto will execute and deliver a Registration Rights
Agreement, substantially in the form attached as Exhibit D to the
Memorandum (the “ Registration Rights Agreement
”), pursuant to which the Company will agree to provide
certain registration rights with respect to the Conversion Shares
and the Warrant Shares under the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder, and
applicable state securities laws.
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NOW,
THEREFORE , in
consideration of the mutual terms, conditions and other agreements
set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound hereby, the parties hereto hereby
agree to the sale and purchase of the Units as set forth
herein.
For purposes of
this Agreement, the terms set forth below shall have the
corresponding meanings provided below.
.1
“
Affiliate
” means, with respect to
any specified Person:
.1
if such Person is an individual,
the spouse of that Person and, if deceased or disabled, his heirs,
executors, or legal representatives, if applicable, or any trusts
for the benefit of such individual or such individual’s
spouse and/or lineal descendants, or
.2
otherwise, another Person that
directly, or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, the
Person specified. As used in this definition,
“control” shall mean the possession, directly or
indirectly, of the power to cause the direction of the management
and policies of a Person, whether through the ownership of voting
securities or by contract or other written
instrument.
.2
“
Business Day
” means any day on which
banks located in New York City are not required or authorized by
law to remain closed.
.3
“
Closing
” and “
Closing Date
” as defined in Section
2.7 .
.4
“
Common Stock
” as defined in the
recitals above.
.5
“
Company Financial
Statements ” as
defined in Section 6.5 hereto.
.6
“
Company’s
knowledge ”
means the information and/or other items that the executive
officers (as defined in Rule 405 under the Securities Act) of the
Company have actual knowledge of after due
inquiry.
.7
“
Escrow Account
” means the Company’s
non-interest bearing account at Signature Bank, 261 Madison Avenue,
New York, New York 10016 (the “ Escrow Agent ”).
.8
“
Escrow Agreement
” means the Escrow
Agreement, dated November 26, 2008, by and among the Company and
the Escrow Agent.
.9
“
Exchange Act
” means the Securities
Exchange Act of 1934, as amended.
.10
“
Final Closing Date
” as defined in Section
2.7 .
.11
“
Initial Closing
” as defined in Section
2.7 .
.12
“
Investor Certification
” as defined in Section
2.6 .
.13
“
Liens ” means any mortgage, lien, title claim,
assignment, encumbrance, security interest, adverse claim, contract
of sale, restriction on use or transfer or other defect of title of
any kind.
.14
“
Material Adverse
Effect ” means a
material adverse effect on, and a “
Material Adverse
Change ” means a
material adverse change in:
.1
the assets, liabilities, results
of operations, condition (financial or otherwise), business, or
prospects of the Company and its Subsidiaries taken as a
whole; or
.2
the ability of the Company to
perform its obligations under the Transaction
Documents,
but, to the extent applicable, shall exclude any
circumstance, change or effect to the extent resulting or arising
from: (i) any change in general economic conditions in the
industries or markets in which the Company and its Subsidiaries
operate so long as the Company and its Subsidiaries are not
disproportionately (in a material manner) affected by such changes;
(ii) national or international political conditions, including any
engagement in hostilities, whether or not pursuant to the
declaration of a national emergency or war, or the occurrence of
any military or terrorist attack so long as the Company and its
Subsidiaries are not disproportionately (in a material manner)
affected by such changes; (iii) changes in United States generally
accepted accounting principles, or the interpretation thereof; or
(iv) the entry into or announcement of this Agreement, actions
contemplated by this Agreement, or the consummation of the
transactions contemplated hereby.
.15
“
Maximum Amount
” as defined in the
recitals above.
.16
“
Minimum Amount
” as defined in the
recitals above.
.17
“
Person ” shall mean an individual, entity,
corporation, partnership, association, limited liability company,
limited liability partnership, joint-stock company, trust or
unincorporated organization.
.18
“
Memorandum
” means the Company’s
Confidential Private Placement Memorandum, dated December 1, 2008,
together with any and all amendments and/or supplements
thereto.
.19
“
Regulation D
” as defined in Section
4.11 hereto.
.20
“
Registration Rights
Agreement ” as
defined in the recitals above.
.21
“
Rule 144
” as defined in Section
4.10(c) hereto.
.22
“
SEC ” means the United States Securities and
Exchange Commission.
.23
“
SEC Reports
” means all reports,
schedules, forms, statements and other documents required to be
filed by the Company with the SEC pursuant to the reporting
requirements of the Exchange Act since December 31,
2008.
.24
“
Securities
” as defined in the
recitals above.
.25
“
Securities Act
” means the Securities Act
of 1933, as amended.
.26
“
Selling Agents
” as define in the recitals
above.
.27
“
Shares ” as defined in the recitals
above.
.28
“
Subsidiaries
” shall mean any
corporation or other entity or organization, whether incorporated
or unincorporated, in which the Company owns, directly or
indirectly, any controlling equity or other controlling ownership
interest or otherwise controls through contract or
otherwise.
.29
“
Transaction Documents
” shall mean this
Agreement, the Memorandum, the Registration Rights Agreement, the
Warrants and the Escrow Agreement.
.30
“
Transfer
” shall mean any sale,
transfer, assignment, conveyance, charge, pledge, mortgage,
encumbrance, hypothecation, security interest or other disposition,
or to make or effect any of the above.
.31
“
Warrant Shares
” as defined in the
recitals above.
.32
“
Warrants
” as defined in the
recitals above.
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Sale and
Purchase of Units.
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.33
Subscription for Units
. Subject to the terms and conditions of
this Agreement, the undersigned Investor hereby subscribes for and
agrees to purchase the number of Units set forth on the signature
page to this Subscription Agreement, at a purchase price of $10,000
per Unit.
.34
Terms of the Securities
. The terms of the Notes are as described in the form
of Note attached to the Memorandum as Exhibit B and the
terms of the Warrants are as described in the form of Warrant
attached to the Memorandum as Exhibit C .
.35
Payment . The Investor
encloses herewith a check payable to, or will immediately make a
wire transfer payment to, “Signature Bank, as Escrow Agent
for Anpath Group, Inc.,” in the full amount of the purchase
price of the Units being subscribed for.
.36
Deposit of Funds . All
payments made as provided in Section 2.3 hereof will be
deposited by the Company in the Company’s Escrow
Account. In the event that the Company does not effect a
Closing (as defined below), on or before December 31, 2008 (the
“ Initial Offering Period ”), which
period may be extended by the Company in its sole discretion to a
date no later than February 20, 2009 (the “
Termination Date ”, with this additional period,
together with the Initial Offering Period, being referred to herein
as the “ Offering Period ”), the Company
will refund all subscription funds, without deduction and/or
interest accrued thereon, and will return the subscription
documents to the Investor.
.37
Acceptance of Subscription
. The Investor understands and agrees that the
Company, in its sole discretion, reserves the right to accept or
reject this or any other subscription for the Units, in whole or in
part, notwithstanding prior receipt by the Investor of notice of
acceptance of this or any other subscription. The
Company will have no obligation hereunder until the Company
executes and delivers to the Investor an executed signature page to
this Subscription Agreement. If an Investor’s
subscription is rejected in whole or the Offering is terminated,
all funds received from the Investor will be returned without
interest, penalty, expense or deduction, and this Subscription
Agreement will thereafter be of no further force or
effect. If an Investor’s subscription is rejected
in part, the funds for the rejected portion of such subscription
will be returned without interest, penalty, expense or deduction,
and this Subscription Agreement will continue in full force and
effect to the extent such subscription was accepted.
.38
Closing Deliveries
. Together with the check for, or wire transfer of,
the full purchase price, the Investor is delivering a completed and
executed signature page to this Agreement and a completed investor
certification attached hereto as Annex B or Annex C
as applicable (the “ Investor Certification
”).
.39
Closings . The Company
may hold an initial closing (“ Initial Closing
”) at any time after the receipt of accepted subscriptions
prior to the Termination Date equal to the Minimum
Amount. After the Initial Closing, subsequent Closings
with respect to additional Units may take place at any time, as
determined by the Company, with respect to subscriptions accepted
prior to the Termination Date (each such closing, together with the
Initial Closing, being referred to as a “ Closing
”). The date of each Closing shall be referred
to herein as a “ Closing Date ” and the
date of the final Closing shall be referred to herein as the
“ Final Closing Date .”
.40
Offering to Accredited Investors
. This Offering is limited to accredited investors as
defined in Section 2(15) of the Securities Act, and Rule 501 under
Regulation D, and is being made without registration under the
Securities Act in reliance upon the exemptions contained in
Sections 4(2) of the Securities Act, Rule 506 under Regulation D
and applicable state securities laws.
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Acknowledgements of the Investor
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The undersigned
Investor hereby acknowledges that:
.41
Resale Restrictions
. None of the Securities have been registered under
the Securities Act, or under any state securities or “blue
sky” laws of any state of the United States, and, unless so
registered, none of the Securities may be offered or sold by the
Investor except pursuant to an effective registration statement
under the Securities Act, or pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the
Securities Act and in each case only in accordance with applicable
state securities laws.
.42
Legends on Notes, Conversion Shares,
Warrants and Warrant Shares . The Investor
understands that, certificates evidencing the Notes, the Conversion
Shares, the Warrants and Warrant Shares shall bear a restrictive
legend in substantially the following form (and a stop-transfer
order may be placed against transfer of the certificates evidencing
such Conversion Shares and Warrant Shares):
“THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT
AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL, IN A
FORM ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD
PURSUANT TO RULE 144 UNDER SAID ACT.”
If required by the authorities of any state in
connection with the issuance or sale of the Notes, the Conversion
Shares, the Warrants or any Warrant Shares, the certificates will
also bear any legend required by such state authority.
.43
Agreements . It has
received and carefully read each of the Transaction
Documents.
.44
Independent Advice
. The Investor has been advised to consult the
Investor’s own legal, tax and other advisors with respect to
the merits and risks of an investment in the Securities and with
respect to applicable resale restrictions, and it is solely
responsible (and neither the Company nor the Selling Agents, if
any, is in any way, directly and/or indirectly, responsible) for
compliance with:
.1
any applicable laws of the
jurisdiction in which the Investor is resident in connection with
the distribution of the Securities hereunder, and
.2
applicable resale
restrictions.
.45
No Insurance . There
is no government or other insurance covering any of the
Securities.
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Representations, Warranties and Acknowledgments
of the Investor .
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The undersigned
Investor hereby represents and warrants to the Company
that:
.46
Capacity . The
Investor: (i) if a natural person, represents that the Investor has
reached the age of 21 and has full authority, legal capacity and
competence to enter into, execute and deliver this Agreement and
the Transaction Documents to which the Investor is a party and all
other related agreements or certificates and to take all actions
required pursuant hereto and thereto and to carry out the
provisions hereof and thereof and, (ii) if a corporation,
partnership, or limited liability company or partnership, or
association, joint stock company, trust, unincorporated
organization or other entity, represents that such entity was not
formed for the specific purpose of acquiring the Units, such entity
is duly organized, validly existing and in good standing under the
laws of the state of its organization, such entity has full power
and authority to execute and deliver this Agreement, the
Transaction Documents to which it is a party and all other related
agreements or certificates and to take all actions required
pursuant hereto and thereto and to carry out the provisions hereof
and thereof and to purchase and hold the Units, the execution and
delivery of this Agreement and the Transaction Documents to which
it is a Party have been duly authorized by all necessary action; or
(iii) if executing this Agreement in a representative or fiduciary
capacity, represents that it has full power and authority to
execute and deliver this Agreement and the Transaction Documents to
which it is a Party in such capacity and on behalf of the
subscribing individual, ward, partnership, trust, estate,
corporation, or limited liability company or partnership, or other
entity for whom the Investor is executing this Agreement and the
Transaction Documents, and such individual, partnership, ward,
trust, estate, corporation, or limited liability company or
partnership, or other entity has full right and power to perform
pursuant to this Agreement and the Transaction Documents to which
it is a party and make an investment in the Company.
.47
No Violation of Corporate Governance
Documents . If the Investor is a corporation or other
entity, the entering into of this Agreement and the other
Transaction Documents to which it is a party and the transactions
contemplated hereby and thereby do not and will not result in the
violation of any of the terms and provisions of any law applicable
to, or the charter or other organizational documents, bylaws or
other constating documents of, the Investor or of any agreement,
written or oral, to which the Investor may be a party or by which
the Investor is or may be bound.
.48
Binding Agreement
. The Investor has duly executed and delivered this
Agreement and the other Transaction Documents to which it is a
party, and this Agreement and the other Transaction Documents
constitute a valid and binding agreement of the Investor
enforceable against the Investor in accordance with their
respective terms, except as such enforceability may be limited by
general principals of equity, or to applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation and other
similar laws relating to, or affecting generally, the enforcement
of applicable creditors’ rights and remedies.
.49
No SEC Review or Approval
. Neither the SEC nor any other securities
commission, securities regulator or similar regulatory authority
has reviewed or passed on the merits of the Securities or on any of
the documents reviewed or executed by the Investor in connection
with the sale of the Securities.
.50
Purchase Entirely for Own Account
. The Securities are being acquired for the
Investor’s own account, not as nominee or agent, for
investment purposes only and not with a view to the resale or
distribution of any part thereof in violation of the Securities
Act, and the Investor has no present intention of selling, granting
any participation in, or otherwise distributing the same in
violation of the Securities Act, without prejudice, however, to the
Investor’s right at all times to sell or otherwise dispose of
all or any part of such Securities in compliance with applicable
federal and state securities laws.
.51
Not a Broker-Dealer
. The Investor is neither a registered representative
under the Financial Industry Regulatory Authority (“
FINRA ”), a member of FINRA or associated or
Affiliated with any member of FINRA, nor a broker-dealer registered
with the SEC under the Exchange Act or engaged in a business that
would require it to be so registered, nor is it an Affiliate of a
such a broker-dealer or any Person engaged in a business that would
require it to be registered as a broker-dealer. In the event the
Investor is a member of FINRA, or associated or Affiliated with a
member of FINRA, the Investor agrees, if requested by FINRA, to
sign a lock-up, the form of which shall be satisfactory to FINRA
with respect to the Notes, Conversion Shares, Warrants and the
Warrant Shares.
.52
Not an Underwriter
. The Investor is not an underwriter of the Common
Stock, nor is it an Affiliate of an underwriter of the Common
Stock.
.53
Investment Experience
. The Investor acknowledges that the purchase of the
Securities is a highly speculative investment and that it can bear
the economic risk and complete loss of its investment in the
Securities and has such knowledge and experience in financial
and/or business matters that it is capable of evaluating the merits
and risks of the investment contemplated hereby.
.54
Disclosure of Information
. The Investor has had an opportunity to receive, and
fully and carefully review, all information related to the Company
and the Securities requested by it and to ask questions of and
receive answers from the Company regarding the Company, its
business and the terms and conditions of the offering of the
Securities. The Investor acknowledges that it has
received, and fully and carefully reviewed and understands all of
the Transaction Documents, including, but not limited to, the
Memorandum describing, among other items, the Company, its
business, its risks, the Securities and the offering of the
Securities. Investor acknowledges that it has received,
either in hardcopy or electronically, copies of the SEC Reports,
and has fully and carefully reviewed and understands the SEC
Reports. The Investor understands that its investment in
the Securities involves a high degree of risk. The
Investor’s decision to enter into this Agreement has been
made based solely on the independent evaluation of the Investor and
its representatives. The Investor has received such
accounting, tax and legal advice from Persons other than the
Company as it has considered necessary to make an informed
investment decision with respect to the acquisition of the
Securities.
.55
Restricted Securities
. The Investor understands that the sale or re-sale
of the Securities has not been and is not being registered under
the Securities Act or any applicable state securities laws, and the
Securities, as applicable, may not be transferred
unless:
.1
they are sold pursuant to an
effective registration statement under the Securities Act;
or
.2
they are sold pursuant to a valid
exemption from the registration requirements of the Securities Act
and, if required by the Company, the Investor shall have delivered
to the Company, at the Investor’s sole cost and expense, an
opinion of counsel that shall be in form, substance and scope
customary for opinions of counsel in comparable transactions to the
effect that the Securities to be sold or transferred may be sold or
transferred pursuant to an exemption from the registration
requirements of the Securities Act, which opinion shall be
acceptable to the Company; or
.3
they are sold or transferred to
an “affiliate” (as defined in Rule 144, promulgated
under the Securities Act (or a successor rule (“
Rule 144
”)) of the Investor who
agrees to sell or otherwise transfer the Securities only in
accordance with this Section 4.10 and who is an accredited
investor, or
.4
they are sold pursuant to Rule
144.
The Investor understands that any sale of the
Securities made in reliance of Rule 144 may be made only in
accordance with the terms of Rule 144 and other than as provided in
the Transaction Documents, neither the Company nor any other Person
is under any obligation to register the Securities under the
Securities Act or any state securities laws. Notwithstanding the
foregoing or anything else contained herein to the contrary, the
Securities may be pledged as collateral in connection with a bona
fide margin account or other lending arrangement.
.56
Ac
