Exhibit 10.20
SECURITIES PURCHASE AGREEMENT
Securities Purchase Agreement (together with the schedules and exhibits
hereto, this "Agreement"), dated as of October __, 2003, by and between Enhance
Biotech, Inc., a Delaware corporation (the "Company"), and each of the Persons
(as defined below) who has executed a signature page to this Agreement (each a
"Purchaser," and together, the "Purchasers").
W I T N E S S E T H:
WHEREAS, the Company desires to issue and sell to the Purchasers, and
the Purchasers desire to purchase from the Company, the Securities (as such term
is defined below) as set forth below.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants and agreements hereinafter contained, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, intending to be legally bound, the parties hereto hereby agree as
follows:
1. Authorization and Sale of Securities.
1.1 Authorization. The Company has duly authorized the issuance and
sale of $2,000,000 of shares of its Common Stock, par value $0.001 per share at
a price of $1.50 per share (the "Common Stock"). The Company is offering shares
of the Common Stock Securities (the "Offering") for sale only to individuals,
entities or groups, including, without limitation, corporations, limited
liability companies, limited or general partnerships, joint ventures,
associations, joint stock companies, trusts, unincorporated organizations, or
governments or any agencies or political subdivisions thereof (each, a "Person")
who are "accredited investors" (as defined herein). Each Purchaser of Common
Stock in this Offering shall receive Common Stock Purchase Warrants (the
"Purchase Warrants") to purchase an aggregate number of shares of the Common
Stock equal to one hundred percent (100%) of the number of shares of Common
Stock purchased by such Purchaser in the Offering, exercisable at $1.50 per
share, such warrants to be exerciseable for a period of 5 years from closing.
The Purchase Warrants are sometimes hereinafter referred to as the "Warrants."
The Common Stock and the Warrants offered hereby are sometimes hereinafter
referred to as the "Securities". The Purchasers of the Securities shall have the
benefit of piggy back registration rights in respect of the shares of Common
Stock underlying the Securities. The Company is making the Offering of the
Securities directly through its officers and its directors. Each purchaser of
Common Stock in this offering shall have the right to make an identical
investment at any time within 6 months of the date hereof, on the same terms and
conditions. Should the Company achieve agreed milestones at any time within 6
months of the date hereof, the Company will give 14 days notice to subscribe to
each purchaser. Should each purchaser not subscribe after the 14 day notice
period, then the purchaser will lose the right to make the identical investment.
1.2 Subscription.
Subject to the terms and conditions hereinafter set forth in this
Agreement, each Purchaser hereby offers to purchase, at a price of $1.50 per
share, the number of shares of Common Stock set forth beneath each such
Purchaser's name on the signature pages of this Agreement, for an aggregate
purchase price (the "Purchase Price") to be paid by such Purchaser in the amount
set forth on the signature page beneath such Purchaser's name.
1.3 Subscription Procedures. To submit this Subscription, each
Purchaser must deliver (i) this Agreement, including, without limitation, the
Purchaser Questionnaire accompanying this Agreement, both duly completed and
executed, to the following address, unless otherwise advised by the Company:
16th Floor, 000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxxxx Every, CEO
Telephone: (000) 000 0000
Facsimile: (000) 000 0000
Attention: Compliance (re Enhance Biotech, Inc.)
(with any questions to be raised with Xxxxx Every at (000) 000-0000)
The Company may accept or reject subscriptions, in whole or in part, or
accept subscriptions for less than the $50,000 minimum subscription, in its sole
discretion. The Company shall notify each Purchaser of the portion, if any, of
such Purchaser's subscription which has been accepted, payment instructions for
the purchase price, including wire transfer instructions and instructions for
delivery of payment by checks, if applicable, and the date upon which the
applicable Closing shall be held and payment must be made. At each applicable
Closing, each Purchaser acquiring Securities at such Closing shall deliver and
pay the applicable purchase price in full for the Securities being purchased by
such Purchaser at such Closing, in the amount of $1.50 for each share of Common
Stock for which such Purchaser's subscription has been accepted, in U.S.
dollars, in immediately available funds, in accordance with the payment
instructions contained in the notification to such Purchaser by the Company.
2. Closing.
Upon acceptance of subscriptions for Common Stock totaling $2,000,000
the Company shall hold a closing of the purchase and sale of such Securities.
3. Conditions to the Obligations of each Purchaser at Closing.
The obligation of each Purchaser to purchase and pay for the Securities
subscribed for by such Purchaser at the applicable Closing is subject to the
satisfaction on or prior to the Closing Date, as the case may be, of the
following conditions, each of which may be waived by the applicable Purchaser:
3.1 Representations and Warranties. The representations and warranties
of the Company contained in this Agreement which are qualified as to materiality
must be true and correct in all respects and the representations and warranties
of the Company contained in this Agreement which are not qualified as to
materiality must be true and correct in all material respects as of the Closing
Date except to the extent that the representations and warranties relate to an
earlier date in which case the representations and warranties must be true and
correct as written or true and correct in all material respects, as the case may
be, as of the earlier date.
3.2 Performance of Covenants. The Company shall have performed or
complied with in all material respects all covenants and agreements required to
be performed by it on or prior to the applicable Closing pursuant to this
Agreement, including, without limitation, the delivery of certificates
evidencing the Securities issued to the Purchasers at the Closing.
3.3 No Injunctions; etc. No court or governmental injunction, order or
decree prohibiting the purchase and sale of the Securities will be in effect.
There will not be in effect any law, rule or regulation prohibiting or
restricting the sale or requiring any consent or approval of any Person that has
not been obtained to issue and sell the Securities to the Purchasers.
3.4 Closing Documents. At Closing, the Company shall have delivered to
each applicable Purchaser the following:
(a) a certificate of the President of the Company certifying that the
conditions in Sections 3.1, 3.2 and 3.3 have been satisfied;
(b) a certificate, accompanied by the applicable Warrants, evidencing
the Securities purchased by such Purchaser; and
3.6 Waivers and Consents. Except as set forth in the next sentence, the
Company will have obtained all consents and waivers necessary to execute and
deliver this Agreement and all related documents and agreements and to issue and
deliver the Securities, and all consents and waivers will be in full force and
effect.
4. Conditions to the Obligations of the Company at Closing.
The obligation of the Company to issue and sell the Securities to any
Purchaser is subject to the satisfaction on or prior to each Closing Date of the
following conditions, each of which may be waived by the Company:
4.1 Representations and Warranties. The representations and warranties
of the Purchaser contained in this Agreement which are qualified as to
materiality must be true and correct in all respects and the representations and
warranties of the Purchasers contained in this Agreement which are not qualified
as to materiality must be true and correct in all material respects as of the
applicable Closing Date.
4.2 Performance of Covenants. The Purchasers will have performed or
complied with in all material respects all covenants and agreements required to
be performed by the Purchasers on or prior to the Closing pursuant to this
Agreement.
4.3 Purchaser Questionnaire. All of the information furnished by such
Purchaser in the confidential purchaser questionnaire accompanying this
Agreement (the "Purchaser Questionnaire") shall have been accurate and complete
in all material respects.
4.4 No Injunctions. No court or governmental injunction, order or
decree prohibiting the purchase or sale of the Securities will be in effect.
4.5 Closing Documents. The Purchasers will have delivered to the
Company this Agreement and a purchasers questionnaire duly executed by the
Purchasers.
5. Representations and Warranties of each Purchaser.
Each Purchaser, in order to induce the Company to perform this
Agreement, hereby represents and warrants, severally and not jointly, as
follows:
5.1 Due Authorization. Each Purchaser represents for such Purchaser to
the Company that such Purchaser has full power and authority and has taken all
action necessary to authorize such Purchaser to execute, deliver and perform
such Purchaser's obligations under this Agreement. This Agreement is the legal,
valid and binding obligation of such Purchaser in accordance with its terms.
5.2 Accredited Investor. Each Purchaser represents that such Purchaser
is an Accredited Investor as that term is defined in Regulation D promulgated
under the Securities Act of 1933, as amended (the "Securities Act").
5.3 No Investment Advice. The Company has not made any other
representations or warranties to such Purchaser other than as set forth herein
or incorporated herein by reference with respect to the Company or rendered any
investment advice.
5.4 Investment Experience. Each Purchaser represents that such
Purchaser has not authorized any Person to act as such Purchaser's Purchaser
Representative (as that term is defined in Regulation D of the General Rules and
Regulations under the Securities Act) in connection with this transaction. Such
Purchaser has such knowledge and experience in financial, investment and
business matters that such Purchaser is capable of evaluating the merits and
risks of the prospective investment in the securities of the Company. Such
Purchaser has consulted with such independent legal counsel or other advisers as
such Purchaser has deemed appropriate to assist such Purchaser in evaluating the
proposed investment in the Company.
5.5 Adequate Means. Each Purchaser represents as to such Purchaser that
such Purchaser (i) has adequate means of providing for such Purchaser's current
financial needs and possible contingencies; and (ii) can afford (a) to hold
unregistered securities for an indefinite period of time as required; and (b)
sustain a complete loss of the entire amount of the subscription.
5.6 Access to Information. Each Purchaser represents that such
Purchaser has been afforded the opportunity to ask questions of, and receive
answers from the officers and/or directors of the Company acting on its behalf
concerning the terms and conditions of this transaction 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 had such
opportunity to the extent such Purchaser considers appropriate in order to
permit such Purchaser to evaluate the merits and risks of an investment in the
Company. It is understood that all documents, records and books pertaining to
this investment have been made available for inspection, and that the books and
records of the Company will be available upon reasonable notice for inspection
by investors during reasonable business hours at its principal place of
business. The foregoing shall in no way be deemed to limit the ability of each
Purchaser to rely on the representations and warranties set forth herein or
incorporated herein by reference.
5.7 No Endorsement. Each Purchaser further acknowledges that the offer
and sale of the Securities has not been passed upon or the merits thereof
endorsed or approved by any state or federal authorities.
5.8 Non-Registered Securities. Each Purchaser acknowledges that the
offer and sale of the Securities have not been registered under the Securities
Act or any state securities laws and the Securities and the underlying shares of
Common Stock may be resold only if registered pursuant to the provisions
thereunder or if an exemption from registration is available. Each Purchaser
understands that the offer and sale of the Securities is intended to be exempt
from registration under the Securities Act, based, in part, upon the
representations, warranties and agreements of such Purchaser contained in this
Agreement.
5.9 No Resale. Each Purchaser represents that the Securities being
subscribed for, and the securities underlying the subscription, are being
acquired solely for the account of such Purchaser for such Purchaser's
investment and not with a view to, or for resale in connection with, any
distribution in any jurisdiction where such sale or distribution would be
precluded. By such representation, such Purchaser means that no other Person has
a beneficial interest in the Securities or the securities underlying the
subscription, and that no other Person has furnished or will furnish directly or
indirectly, any part of or guarantee the payment of any part of the
consideration to be paid by such Purchaser to the Company in connection
therewith. Such Purchaser does not intend to dispose of all or any part of the
Securities or the securities underlying the subscription except in compliance
with the provisions of the Securities Act and applicable state securities laws,
and understands that the Securities and the securities underlying the
subscription are being offered pursuant to a specific exemption under the
provisions of the Securities Act, which exemption(s) depends, among other
things, upon the compliance with the provisions of the Securities Act.
5.10 Legend. Each Purchaser hereby acknowledges and agrees that the
Company may insert the following or similar legend on the face of the
certificates evidencing the Securities purchased by such Purchaser and the
shares of Common Stock issued upon the exercise of the Warrants, as the case may
be, if required in compliance with the Securities Act or state securities laws:
"These securities have not been registered under the Securities Act of
1933, as amended (the "Securities Act"), or any state securities laws
and may not be sold or otherwise transferred or disposed of except
pursuant to an effective registration statement under the Securities
Act and any applicable state securities laws, or an opinion of counsel
satisfactory to counsel to the issuer that an exemption from
registration under the act and any applicable state securities laws is
available."
5.11 Broker's or Finder's Commissions. No finder, broker, agent,
financial person or other intermediary has acted on behalf of any Purchaser in
connection with the sale of the Securities by the Company or the consummation of
this Agreement or any of the transactions contemplated hereby.
Each Purchaser certifies that each of the foregoing representations and
warranties by such Purchaser set forth in this Section 5 are true as of the date
hereof and shall survive such date.
6. Representations and Warranties of the Company.
The Company represents and warrants to the Purchasers as follows:
6.1 Organization, Good Standing and Qualification. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. The Company has full corporate power and authority to
own and hold its properties and to conduct its business. The Company is duly
licensed or qualified to do business, and in good standing, in each jurisdiction
in which the nature of its business requires licensing, qualification or good
standing, except for any failure to be so licensed or qualified or in good
standing that would not have a material adverse effect on the Company or its
results of operations, assets or financial condition or on its ability to
perform its obligations under this Agreement or to issue the Securities (a
"Material Adverse Effect").
6.2 Capitalization. As of the date hereof, the authorized capital stock
of the Company consists of 25,000,000 shares of Common Stock, par value $0.001
per share (the "Common Stock"). As of the date hereof, (i) 16,839,900 shares of
Common Stock were issued and outstanding, (ii) except as set forth below, no
shares of Common Stock were reserved for issuance upon exercise of outstanding
options issued to persons other than shares reserved for issuance upon exercise
of options issued to officers of the Company, (iii) except as set forth below,
no shares of Common Stock were reserved for issuance upon the exercise of
outstanding warrants and (iv) Company is offering 1,333,333 shares of its Common
Stock in the Offering and the accompanying Warrants, and is reserving for
issuance upon exercise of the Warrants 1,333,333 shares of Common Stock
underlying such Warrants as of this date. All the outstanding shares of Common
Stock have been duly authorized and validly issued and are fully paid and
nonassessable and free of preemptive rights created by or through the Company,
and have been issued in compliance with all federal and state securities laws,
and were not issued in violation of any preemptive rights or similar rights to
subscribe for or purchase securities. Except as set forth in this Section 6.2,
including without limitation the next succeeding sentence, there are no other
options, warrants or other rights, convertible debt, agreements, arrangements or
commitments of any character obligating the Company to issue or sell any shares
of capital stock of or other equity interests in the Company other than to
officers of the Company. The Company has an outstanding warrant for 1,000,000
shares, issued to Jano Holdings Limited, exercisable at a purchase price equal
to the Purchase Price for each share of Common Stock sold in this offering,
which warrant expires February 22nd, 2008. The Company is not obligated to
retire, redeem, repurchase or otherwise reacquire any of its capital stock or
other securities. Except as disclosed in this Section 6.2 and as contemplated by
this Agreement, there are no stockholders agreements, voting agreements or other
similar agreements with respect to the Common Stock to which the Company is a
party. Except as contemplated by this Agreement, the Company does not directly
or indirectly own or have any investment in any of the capital stock of, or any
other proprietary interest in, any Person other than Enhance Lifesciences
Limited, a corporation organized under the laws of the United Kingdom, and
Enhance Lifesciences Inc., a Delaware Corporation. The Company has not adopted a
stockholders rights plan, poison pill or similar arrangement.
6.3 Corporate Power, Authorization; Enforceability. Except as otherwise
expressly stated in this Agreement, the Company has full corporate power and
authority to execute, deliver and enter into this Agreement, and the instruments
evidencing the Warrants (collectively, the "Transaction Documents") and to
consummate the transactions contemplated hereby and thereby. Except as otherwise
expressly stated in this Agreement, all action on the part of the Company, its
directors or stockholders necessary for the authorization, execution, delivery
and performance of the Transaction Documents by the Company, the authorization,
sale, issuance and delivery of the Securities contemplated hereby and the
performance of the Company's obligations hereunder and thereunder has been
taken. Except as otherwise expressly stated in this Agreement, the Securities to
be purchased on each the Closing Date and the shares of Common Stock issuable
upon the exercise of the Warrants have been duly authorized and, when issued in
accordance with this Agreement, will be validly issued, fully paid and
nonassessable and will be free and clear of any mortgage, deed of trust, pledge,
hypothecation, assignment, encumbrance, lien (statutory or other) or preference,
priority, right or other security interest or preferential arrangement of any
kind or nature whatsoever (excluding Common stock and equity related
preferences) (collectively, "Liens") imposed by or through the Company other
than restrictions imposed by the Transaction Documents and applicable securities
laws. No preemptive or other rights to subscribe for or purchase equity
securities of the Company exists with respect to the issuance and sale of the
Securities or the shares of Common Stock issuable upon exercise of the Warrants.
Except as otherwise expressly stated in this Agreement, the Transaction
Documents have been duly executed and delivered by the Company, and constitute
the legal, valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, fraudulent conveyance or
transfer, moratorium or similar laws affecting the enforcement of creditors'
rights generally and by general principles of equity relating to enforceability
(regardless of whether considered in a proceeding at law or in equity).
6.4 Litigation. There are no claims, actions, suits, investigations or
proceedings pending or, to the Company's knowledge, threatened proceedings
against the Company or its respective assets, at law or in equity, by or before
any Governmental Authority, or by or on behalf of any third party, except for
any claim, action, suit, investigation or proceeding which would not have a
Material Adverse Effect nor does the Company have knowledge that there is any
reasonable basis for any of the foregoing. There are no claims, actions, suits,
investigations or proceedings pending or, to the Company's knowledge, threatened
proceedings against the Company contesting the right of the Company to use,
sell, import, license, or make available to any Person any of the Company's
products or services currently or previously sold, offered, licensed or made
available to any Person or used by the Company or opposing or attempting to
cancel any of the Company's Intellectual Property rights, except for any claim,
action, suit, investigation or proceeding which would not have a Material
Adverse Effect.
6.5 Compliance with Laws; No Default or Violation; Contracts. Except as
otherwise contemplated by this Agreement in respect of the Special Participation
Warrants, the Company is in compliance in all material respects with all
Requirements of Law and all orders issued by any court or Governmental Authority
against the Company in all material respects. To the Company's knowledge, there
is no existing or currently proposed Requirement of Law which could reasonably
be expected to prohibit or restrict the Company from, or otherwise materially
adversely affect the Company in, conducting its business in any jurisdiction in
which it now conducts or proposes to conduct such business. The Company has all
material licenses, permits and approvals of any Governmental Authority
(collectively, "Permits") that are necessary for the conduct of the business of
the Company; (ii) such Permits are in full force and effect; and (iii) no
violations are or have been recorded in respect of any Permit. No material
expenditure is presently required by the Company to comply with any existing
Requirements of Law or order. Except as would not be reasonably expected to have
a Material Adverse Effect, the Company is not (i) in default under or in
violation of any indenture, loan or credit agreement or any other agreement or
instrument to which it is a party of by which it or any of its properties is
bound or (ii) in violation of any order, decree or judgment of any court,
arbitrator or other Governmental Authority. The contracts described in the
Commission Documents or incorporated by reference therein that are material to
the Company (collectively, the "Contractual Obligations") are in full force and
effect on the date hereof, and neither the Company nor, to the Company's
knowledge, any other party to such contracts is in breach of or default under
any of such contracts nor, to the Company's knowledge, does any condition exist
that with notice or lapse of time or both would constitute a default by such
other party thereunder. The Company has not received notice of a default and is
not in default under or, with respect to, any Contractual Obligation nor, to the
Company's knowledge, does any condition exist that with notice or lapse of time
or both would constitute a default thereunder. All of such Contractual
Obligations are valid, subsisting, in full force and effect and binding upon the
Company and, to the Company's knowledge, the other parties thereto, and the
Company has paid in full or accrued all amounts due thereunder and has satisfied
in full or provided for all of its liabilities and obligations thereunder.
6.6 Insurance. The Company maintains and will continue to maintain
insurance of the types and in the amounts that the Company reasonably believes
is adequate for its business, including, but not limited to, insurance covering
all real and personal property owned or leased by the Company against theft,
damage, destruction, acts of vandalism and all other risks customarily insured
against by similarly situated companies, all of which insurance is in full force
and effect.
6.7 Environmental Matters. The Company is in compliance, in all
material respects, with all applicable Environmental Laws. There is no civil,
criminal or administrative judgment, action, suit, demand, claim, hearing,
notice of violation, investigation, proceeding, notice or demand letter pending
or, to the Company's knowledge, threatened against the Company pursuant to
Environmental Laws. To the Company's knowledge, there are no past or present
events, conditions, circumstances, activities, practices, incidents, agreements,
actions or plans which could reasonably be expected to prevent compliance with,
or which have given rise to or will give rise to liability which would have a
Material Adverse Effect, under Environmental Laws. For purposes of the
foregoing, "Environmental Laws" means federal, state, local and foreign laws,
principles of common laws, civil laws, regulations, and codes, as well as
orders, decrees, judgments or injunctions, issued, promulgated, approved or
entered thereunder relating to pollution, protection of the environment or
public health and safety.
6.8 Taxes. The Company has paid or caused to be paid, or has
established reserves in accordance with GAAP for all Tax liabilities applicable
to the Company for all fiscal years that have not been examined and reported on
by the taxing authorities (or closed by applicable statutes). No additional Tax
assessment against the Company has been heretofore proposed or, to the Company's
knowledge, threatened by any Governmental Authority for which provision has not
been made on its balance sheet.
No tax audit is currently in progress and there is no unassessed
deficiency proposed or, to the Company's knowledge, threatened against the
Company. The Company has no knowledge of any change in the rates or basis of
assessment of any Tax (other than federal income tax), of the Company which
would reasonably be expected to have a Material Adverse Effect. The Company has
not agreed to or is required to make any adjustments under section 481 of the
Code by reason of a change of accounting method or otherwise. None of the assets
of the Company is required to be treated as being owned by any Person, other
than the Company or any of its subsidiaries, pursuant to the "safe harbor"
leasing provisions of Section 168(f)(8) of the Code. The company is not a
"United States real property holding corporation" (a "USRPHC") as that term is
defined in Section 897(c)(2) of the Code and the regulations promulgated
thereunder.
For purposes of this Agreement, "Code" means the Internal Revenue Code
of 1986, as amended, and "Taxes" means any federal, state, provincial, county,
local, foreign and other taxes (including, without limitation, income, profits,
windfall profits, alternative, minimum, accumulated earnings, personal holding
company, capital stock, premium, estimated, excise, sales, use, occupancy, gross
receipts, franchise, ad valorem, severance, capital levy, production, transfer,
withholding, employment, unemployment compensation, payroll and property taxes,
import duties and other governmental charges and assessments), whether or not
measured in whole or in part by net income, and including deficiencies,
interest, additions to tax or interest, and penalties with respect thereto, and
including expenses associated with contesting any proposed adjustments related
to any of the foregoing.
6.9 Intellectual Property.
(a) "Intellectual Property" shall mean all of the following as
they are necessary in connection with the business of the Company as presently
conducted and as they exist in all jurisdictions throughout the world, in each
case, to the extent owned by or licensed to the Company: (i) patents, patent
applications and inventions, designs and improvements described and claimed
therein, patentable inventions and other patent rights (including any divisions,
continuations, continuations-in-part, reissues, reexaminations, or interferences
thereof, whether or not patents are issued on any such applications and whether
or not any such applications are modified, withdrawn, or resubmitted)
("Patents"); (ii) trademarks, service marks, trade dress, trade names, brand
names, designs, logos, or corporate names, whether registered or unregistered,
and all registrations and applications for registration thereof ("Trademarks");
(iii) copyrights and mask works, including all renewals and extensions thereof,
copyright registrations and applications for registration thereof, and
non-registered copyrights ("Copyrights"); (iv) trade secrets, inventions,
know-how, process technology, databases, confidential business information,
customer lists, technical data and other proprietary information and rights
("Trade Secrets"); (v) computer software programs, including, without
limitation, all source code, object code, and documentation related thereto
("Software"); (vi) Internet addresses, domain names, web sites, web pages and
similar rights and items ("Internet Assets"); and (vii) all licenses,
sublicenses and other agreements or permissions including the right to receive
royalties, or any other consideration related to the property described in
(i)-(vi). The Intellectual Property contains all of the intellectual property
necessary to operate the business of the Company as currently conducted.
(b) The Company exclusively owns (or otherwise has the right to
use the Intellectual Property pursuant to a valid license, sublicense or other
agreement), free and clear of all Liens, and has the unrestricted right (subject
to any such license terms, if applicable) to use, sell, license, or sublicense
all Intellectual Property.
(c) There are no issued Patents, registrations, filings and
applications for any Patents, Trademarks and Copyrights filed by the Company.
(d) There are no material licenses, sublicenses, distributor
agreements and other agreements or permissions ("IP Licenses") under which the
Company is a (i) licensor, or (ii) licensee, distributor, or reseller, except
such licenses, sublicenses and other agreements relating to off-the-shelf
software which is commercially available on a retail basis for less than $1000
per license and $50,000 in the aggregate and used solely on the computers of the
Company ("Off-the-Shelf Software"). To the knowledge of the Company, all of the
IP Licenses, if any, are valid, enforceable, and in full force and effect, and,
with respect to the Company, will continue to be on identical terms immediately
following the completion of the transactions contemplated by this Agreement.
(e) All products made, used or sold by the Company under the
Patents have been marked with the proper patent notice.
(f) All products and materials made, used or sold by the Company
containing Trademarks bear the proper federal registration notice where
permitted by law.
(g) All works encompassed by the Copyrights and used by the
Company have been marked with the proper copyright notice.
(h) To the Company's knowledge, upon reasonable inquiry in
accordance with sound business practice and business judgment, all the Company's
Intellectual Property rights are valid and enforceable. The Company has taken
all reasonably necessary actions to maintain and protect each item of
Intellectual Property owned by the Company.
(i) The Company has taken all reasonable precautions to protect
the secrecy, confidentiality, and value of its Trade Secrets and the proprietary
nature and value of its Intellectual Property. To the best of the Company's
knowledge, none of the Trade Secrets, wherever located, the value of which is
contingent upon maintenance of confidentiality thereof, have been disclosed to
any employee, representative or agent of the Company or any other person not
obligated to maintain such Trade Secret in confidence pursuant to a
confidentiality agreement entered into with the Company, except as required
pursuant to the filing of a patent application by the Company.
(j) The Company is diligently prosecuting all Patent applications
it has filed, as instructed by patent counsel. The Company is diligently filing
and preparing to file Patent applications for all inventions in a manner and
within a sufficient time period to avoid statutory disqualification of any
potential Patent application.
(k) Unless otherwise disclosed by the Company or pursuant to a
current license, it is not necessary for the Company's business to use any
Intellectual Property owned by any present or past director, officer, employee
or consultant of the Company (or persons the Company presently intends to hire).
To the actual knowledge of the Company's executive officers, at no time during
the conception or reduction to practice of any of the Company's Intellectual
Property was any developer, inventor or other contributor to such Intellectual
Property operating under any grants from any Governmental Authority or subject
to any employment agreement, invention and assignment, nondisclosure agreement
or other Contractual Obligation with any Person that could adversely affect the
Company's rights to its Intellectual Property.
(l) To the knowledge of the Company, upon reasonable inquiry in
accordance with sound business practice and business judgment, none of the
Intellectual Property, products or services owned, used, developed, provided,
sold or licensed by the Company, or made for, used or sold by or licensed to the
Company by any person infringes upon or otherwise violates any Intellectual
Property rights of others.
(m) To the knowledge of the Company, upon reasonable inquiry in
accordance with sound business practice and business judgment, no Person is
infringing upon or otherwise violating the Intellectual Property rights of the
Company.
6.10 Employee Benefit Plans.
(a) Neither the Company nor any entity which is or was under
common control within the meaning of Section 414(b), (c), (m) or (o) of the Code
maintains or contributes to, or has within the preceding six years maintained or
contributed to, or may have any liability with respect to any employee benefit
plan subject to Title IV of Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), or Section 412 of the Code or any "multiple employer plan"
within the meaning of the Code or ERISA. Each employee benefit plan,
arrangement, policy, program, agreement or commitment which the Company
maintains, contributes to or may have any liability in respect to (each, a
"Plan") has been established and administered in accordance with its terms, and
complies in form and in operation with the applicable requirements of ERISA, the
Code and other applicable Requirements of Law. No claim with respect to the
administration or the investment of the assets of any Plan (other than routine
claims for benefits) is pending. No event has occurred in connection with which
the Company or any Plan, directly or indirectly, could be subject to any
material liability under ERISA, the Code or any other law, regulation or
governmental order applicable to any Plan, or under any agreement, instrument,
statute, rule of law or regulation pursuant to or under which the Company has
agreed to indemnify any person against liability incurred under, or for a
violation or failure to satisfy the requirement of, any such statute, regulation
or order. The Company has no liability, whether absolute or contingent,
including any obligations under any Plan, with respect to any misclassification
of any person as an independent contractor rather than as an employee.
(b) The Company does not have any obligations to provide or any direct
or indirect liability, whether contingent or otherwise, with respect to the
provision of health or death benefits to or in respect of any former employee,
except as may be required pursuant to Section 4980B of the Code and the
corresponding provisions of ERISA and the cost of which are fully paid by such
former employees.
(c) There are no unfunded obligations under any Plan which are not
fully reflected on the Financial Statements.
6.11 Investment Company. The Company is not an "investment company" or
an "affiliated person" of, or "promoter" or "principal underwriter" for an
investment company, within the meaning of the Investment Company Act of 1940, as
amended.
6.12 Private Offerings. Assuming the truth of each Purchaser's
representations and acknowledgments contained in Section 5 hereof, neither the
Company nor any Person acting on its behalf (other than the Purchasers, as to
whom the Company makes no representations) has offered or sold the Securities by
means of any general solicitation or general advertising within the meaning of
Rule 502(c) under the Securities Act. The Company has not sold the Securities to
anyone other than the subscribers to this Agreement. Each Security shall bear
substantially the same legend set forth in Section 8 hereof for at least so long
as required by the Securities Act.
6.13 Broker's or Finder's Commissions. No finder, broker, agent,
financial person or other intermediary has acted on behalf of the Company in
connection with the sale of the Securities by the Company or the consummation of
this Agreement or any of the transactions contemplated hereby. The Company has
not had any direct or indirect contact with any investment banking firm (or
similar firm) with respect to the offer of the Securities by the Company to the
Purchasers or the Purchasers' subscriptions for the Securities.
6.14 Disclosure. The Transaction Documents do not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements contained herein or therein, in the light of the
circumstances under which they were made, not misleading. The Company does not
have any knowledge of any fact that has specific application to the Company
(other than general economic or industry conditions) and that can reasonably be
foreseen to cause a Material Adverse Effect that has not been set forth in the
Transaction Documents or the Commission Documents.
The Company certifies that each of the foregoing representations and
warranties by the Company sets forth in this Section 6 are true as of the date
hereof and shall survive such date as contemplated in Section 7.1.
7. Indemnification.
7.1 The Company agrees to indemnify and hold harmless the Purchasers,
their affiliates and each of their respective directors, officers, general and
limited partners, principals, agents and attorneys (individually, an
"Indemnified Party" and collectively, the "Indemnified Parties") from and
against any and all losses, claims, damages, Liabilities, costs (including
reasonable attorneys' fees) and expenses (collectively, "Losses") to which any
Indemnified Party may become subject, insofar as such Losses arise out of, in
any way relate to, or result from (i) any breach of any representation or
warranty made by the Company contained in or made pursuant to this Agreement, or
(ii) the failure of the Company to fulfill any agreement or covenant contained
in or made pursuant to this Agreement. All of the representations and warranties
of the Company made herein shall survive the execution and delivery of this
Agreement until the date that is ninety (90) days after the filing by the
Company with the Commission of audited financial statements of the Company for
the fiscal year ending January 31, 2004 (or, if such fiscal year changes and no
such audited consolidated financial statements are available, then the successor
fiscal year), except for (a) Sections 6.1 (Organization, Good Standing and
Qualification), 6.2 (Capitalization), 6.3 (Corporate Power, Authorization;
Enforceability), 6.12 (Private Offerings) and 6.13 (Broker's or Finder's
Commission), which representations and warranties shall survive indefinitely (or
if indefinite survival is not permitted by law, then for the maximum period
permitted by applicable law), (b) Section 6.8 (Taxes), which representation and
warranty shall survive until the later to occur of (i) the lapse of the statute
of limitations with respect to the assessment of any tax to which such
representation and warranty relates (including any extensions or waivers
thereof) and (ii) sixty (60) days after the final administrative or judicial
determination of the Taxes to which such representation and warranty relates,
and no claim with respect to Section 6.8 may be asserted thereafter with the
exception of claims arising out of any fact, circumstance, action or proceeding
to which the party asserting such claim shall have given notice to the other
parties to this Agreement prior to the termination of such period of reasonable
belief that a tax liability will subsequently arise therefrom, and (c) Section
6.7 (Environmental Matters), which representation and warranty shall survive
until the lapse of the applicable statute of limitations. Except as set forth
herein, all of the covenants, agreements and obligations of the parties hereto
shall survive the Closing indefinitely (or if indefinite survival is not
permitted by law, then for the maximum period permitted by applicable law).
7.2 Promptly after receipt by an Indemnified Party under Section 7.1 of
notice of any claim as to which indemnity may be sought, including, without
limitation, the commencement of any action or proceeding, the Indemnified Party
will, if a claim in respect thereof may be made against the indemnifying party
under this Section, promptly notify the indemnifying party in writing of the
commencement thereof; provided that the failure of the Indemnified Party to so
notify the indemnifying party will not relieve the indemnifying party from its
obligations under this Section unless, and only to the extent that, such
omission results in the indemnifying party's forfeiture of substantive rights or
defenses or being materially prejudiced by the Indemnified Person's failure to
give such notice. In case any action or proceeding is brought against any
Indemnified Party, and it notifies the indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to assume the defense thereof
at its own expense, with counsel satisfactory to such Indemnified Party in its
reasonable approval (which approval will not be withheld or delayed
unreasonably); provided, however, that any Indemnified Party may, at its own
expense, retain separate counsel to participate in such defense at its own
expense. After notice from the indemnifying party to the Indemnified Party of
its election to so assume the defense thereof, the indemnifying party will not
be Liable to the Indemnified Party under that Section 7 for any legal or any
other expenses subsequently incurred by the Indemnified Party in connection with
the defense thereof (other than reasonable costs of investigation) unless
incurred at the written request of the indemnifying party. Notwithstanding the
above, the Indemnified Party will have the right to employ counsel of its own
choice in any action or proceeding (and be reimbursed by the indemnifying party
for the reasonable fees and expenses of the counsel and other reasonable costs
of the defense) if, in the written opinion of such Indemnified Party's counsel,
representation of the Indemnified Party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests or conflicts between the Indemnified Party and any other party
represented by the counsel in the action; provided, however, that the
indemnifying party will not in connection with any one action or proceeding or
separate but substantially similar actions or proceedings arising out of the
same general allegations, be Liable for the reasonable fees and expenses of more
than one separate firm of attorneys at any time for all Indemnified Parties,
except to the extent that local counsel, in addition to regular counsel, is
required in order to effectively defend against the action or proceeding. An
indemnifying party will not be Liable to any Indemnified Party for any
settlement or entry of judgment concerning any action or proceeding effected
without the consent of the indemnifying party, which consent shall not be
unreasonably withheld. The indemnifying party agrees that it will not, without
the prior written consent of the Indemnified Party, settle, compromise or
consent to the entry of any judgment in any pending or threatened claim relating
to the matters contemplated hereby (if any Indemnified Party is a party thereto
or has been actually threatened to be made a party thereto) unless such
settlement, compromise or consent includes an unconditional release of each
Indemnified Party from all liability arising or that may arise out of such
claim. The rights accorded to an Indemnified Party hereunder shall be in
addition to any rights that any Indemnified Party may have at common law, by
separate agreement or otherwise; provided, however, that notwithstanding the
foregoing or anything to the contrary contained in this Agreement, (a) nothing
in this Section 7 shall restrict or limit any rights that any Indemnified Party
may have to seek equitable relief and (b) this Section 7 shall be the sole
remedy for any breach of the Company's representations and warranties contained
in Section 6 except with respect to claims arising out of fraud or willful
misconduct.
8. Covenants.
8.1 Use of Proceeds. The Company will use the proceeds from this
Offering for general corporate purposes.
8.2 Conduct of the Company's Business. Except as contemplated by this
Agreement, during the period from the date hereof to the Closing Date, the
Company will conduct its business and operations solely in the ordinary course
of business consistent with past practice and use reasonable commercial efforts
to keep available the services of its officers and employees and preserve its
current relationships with customers, suppliers, licensors, creditors and others
having business dealings with it.
8.3 Reasonable Best Efforts. Subject to the terms and conditions of
this Agreement, each of the parties hereto will use its reasonable best efforts
to take, or cause to be taken, all actions, and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate the transactions contemplated by this Agreement at the earliest
practicable date.
8.4 Tax Matters.
(a) The Company covenants that it will use commercially reasonable
efforts not to become a USRPHC at any time while any Purchaser owns any of the
Securities.
(c) In the event that a Purchaser desires to sell or dispose of any of
the Securities or Common Stock underlying such Securities as permitted under
this Agreement and applicable law, and upon demand by such Purchaser, the
Company agrees to deliver to such Purchaser a letter (the "Letter") which
complies with Sections 1.1445-2(c)(3) and 1.897-2(h) of the Treasury
Regulations, addressed to such Purchaser, stating whether or not the Company is
a USRPHC. The Letter shall be delivered to the Purchaser one business day prior
to the close of any sale or disposition of the Securities or Conversion Stock by
the Purchaser (the "Delivery Date"). The Letter shall be dated as of the
Delivery Date and signed by a corporate officer who must verify under penalties
of perjury that the statement is correct to his knowledge and belief pursuant to
Section 1.897-2(h) of the Treasury Regulations.
8.5 Piggyback Registration Rights
(a) Right to Piggyback. Whenever the Company proposes to register
any of its securities under the Securities Act (other than pursuant to a Demand
Registration, or a registration on Form S-4 or S-8 or any successor or similar
forms) and the registration form to be used may be used for the registration of
Registrable Securities, whether or not for sale for its own account, the Company
will give prompt written notice (but in no event less than twenty five (25) days
before the anticipated filing date) to all holders of Registrable Securities,
and such notice shall describe the proposed registration and distribution and
offer to all holders of Registrable Securities the opportunity to register the
number of Registrable Securities as each such holder may request. The Company
will include in such registration all Registrable Securities with respect to
which the Company has received written requests for inclusion therein within
fifteen (15) days after the holders' receipt of the Company's notice (a
"Piggyback Registration").
(b) Reasonable Efforts. The Company shall use all reasonable best
efforts to cause the managing underwriter or underwriters of a proposed
underwritten offering to permit the Registrable Securities requested to be
included in a Piggyback Registration to be included on the same terms and
conditions as any similar securities of the Company or any other security holder
included therein and to permit the sale or other disposition of such Registrable
Securities in accordance with the intended method of distribution thereof.
(c) Withdrawal. Any Designated Holder shall have the right to
withdraw its request for inclusion of its Registrable Securities in any
Registration Statement pursuant to this Section 8.5 by giving written notice to
the Company of its request to withdraw; provided, that in the event of such
withdrawal (other than pursuant to Section 8.5(f) hereof, the Company shall not
be required to reimburse such holder for fees and expenses hereof incurred by
such holder prior to such withdrawal, unless such withdrawal was due to a
material adverse change to the Company. The Company may withdraw a Piggyback
Registration at any time prior to the time it becomes effective.
(d) Priority in Registrations. If a Piggyback Registration is an
underwritten primary registration on behalf of the Company, and the managing
underwriters advise the Company in writing (with a copy to each party hereto
requesting registration of Registrable Securities) that in their opinion the
number of Registrable Securities requested to be included on a secondary basis
in such registration exceeds the number which can be sold in such offering
without materially and adversely affecting the marketability of such primary or
secondary offering (the "Company Offering Quantity"), then the Company will
include in such registration securities in the following priority:
(i) First, the Company will include the securities the
Company proposes to sell.
(ii) Second, the Company will include all Registrable
Securities requested to be included by any Designated Holder, and if the number
of such Designated Holders' securities requested to be included exceeds the
Company Offering Quantity, then the Company shall include only each such
requesting Designated Holders' pro rata share of the shares available for
registration by the Purchaser, based on the amount of securities held by such
holder, on an as converted basis.
(e) Cutback. If, as a result of the proration provisions of this
Section 8.5, any Designated Holders shall not be entitled to include all
Registrable Securities in a Piggyback Registration that such Designated Holders
has requested to be included, such holder may elect to withdraw his request to
include Registrable Securities in such registration but the Company shall be
required to reimburse such holder for the fees and expenses hereof incurred by
such holder prior to such withdrawal.
9. FOR RESIDENTS OF ALL STATES: NEITHER THE SECURITIES OFFERED HEREBY
OR THE SECURITIES INTO WHICH SUCH SECURITIES MAY BE CONVERTED HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS
OF ANY STATE AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE
REGISTRATION REQUIREMENTS OF SAID ACT AND SUCH LAWS. THE SECURITIES ARE SUBJECT
TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR
RESOLD EXCEPT AS PERMITTED UNDER SAID ACT AND SUCH LAWS PURSUANT TO REGISTRATION
OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO
BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
10. No Waiver.
Notwithstanding any of the representations, warranties, acknowledgments
or agreements made herein by the Purchasers, the Purchasers do not thereby or in
any manner waive any rights granted to the Purchasers under federal or state
securities laws.
11. Miscellaneous.
11.1 Notices. Any notice or other communication given hereunder by any
party hereto to any other party hereto shall be in writing and delivered
personally or by facsimile transmission or sent by registered or certified mail
or by any express mail or overnight courier service, postage or fees prepaid:
If to the Company:
Enhance Biotech, Inc.
16th Floor, 000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxxxx Every, CEO
Telephone: (000) 000 0000
Facsimile: (000) 000 0000
If to the Purchasers:
To each Purchaser at such Purchaser's name and
address set forth on the signature page to this
Agreement.
Any notice that is delivered personally or by facsimile
transmission in the manner provided herein shall be deemed to have been duly
given to the party to whom it is directed upon actual receipt by such party or
its agent. Any notice that is addressed and mailed or sent by courier in the
manner herein provided shall be conclusively presumed to have been duly given to
the party to which it is addressed at the close of business, local time of the
recipient, on the fourth business day after the day it is so placed in the mail
or, if earlier, the time of actual receipt.
11.2 Successors and Assigns. This Agreement will be binding upon and
inure to the benefit of the parties hereto and to their respective heirs, legal
representatives, successors and assigns, provided, that no party may assign this
Agreement without the prior written consent of the other party, such consent not
to be unreasonably withheld; provided, further, that a Purchaser may assign this
Agreement to its wholly-owned affiliates without consent; provided that any
transfer of Securities or shares of Common Stock underlying such Securities must
be in compliance with the Transaction Documents and all applicable law.
11.3 Entire Agreement. This Agreement sets forth the entire agreement
and understanding among the parties as to the subject matter hereof and merges
and supersedes all prior discussions, agreements and understandings of any and
every nature among them; provided that any confidentiality agreement between the
Company and any Purchaser shall remain in effect. This Agreement may be amended
only by mutual written agreement of the Company and a majority in interest of
the Purchasers, and the Company may take any action herein prohibited or omit to
take any action herein required to be performed by it, and any breach of any
covenant, agreement, warranty or representation may be waived, only if the
Company has obtained the written consent or waiver of the Purchasers purchasing
a majority of the Securities offered hereby.
11.4 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York with respect to contracts
made and to be fully performed therein, without regard to the conflicts of laws
principles thereof. The parties hereto hereby agree that any suit or proceeding
arising under this Agreement, or in connection with the consummation of the
transactions contemplated hereby, shall be brought solely in a federal or state
court located in the County of New York and State of New York. By its execution
hereof, both the Company and the Purchasers hereby consent and irrevocably
submit to the in personam jurisdiction of the federal and state courts located
in the County of New York and State of New York and agree that any process in
any suit or proceeding commenced in such courts under this Agreement may be
served upon it personally or by certified or registered mail, return receipt
requested, or by Federal Express or other courier service, with the same force
and effect as if personally served upon the applicable party in New York and in
the city or county in which such other court is located. The parties hereto each
waive any claim that any such jurisdiction is not a convenient forum for any
such suit or proceeding and any defense of lack of in personam jurisdiction with
respect thereto.
11.5 Severability. The holding of any provision of this Agreement to be
invalid or unenforceable by a court of competent jurisdiction will not affect
any other provision of this Agreement, which will remain in full force and
effect. If any provision of this Agreement is declared by a court of competent
jurisdiction to be invalid, illegal or incapable of being enforced in whole or
in part, the provision will be interpreted so as to remain enforceable to the
maximum extent permissible consistent with applicable law and the remaining
conditions and provisions or portions thereof will nevertheless remain in full
force and effect and enforceable to the extent they are valid, legal and
enforceable, and no provisions will be deemed dependent upon any other covenant
or provision unless so expressed herein.
11.6 No Waiver. A waiver by either party of a breach of any provision
of this Agreement will not operate, or be construed, as a waiver of any
subsequent breach by that same party.
11.7 Further Assurances. The parties agree to execute and deliver all
further documents, agreements and instruments and take further action as may be
necessary or appropriate to carry out the purposes and intent of this Agreement.
11.8 Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original, but all of which will
together constitute the same instrument.
11.9 No Third Party Beneficiaries. Nothing in this Agreement creates in
any Person not a party to this Agreement any legal or equitable right, remedy or
claim under this Agreement, and this Agreement is for the exclusive benefit of
the parties hereto. The parties expressly recognize that this Agreement is not
intended to create a partnership, joint venture or other similar arrangement
between any of the parties or their respective affiliates.
11.10 Headings. The headings in this Agreement are solely for
convenience of reference and shall be given no effect in the construction or
interpretation of this Agreement.
11.11 Publicity Restrictions. Except as may be required by applicable
Requirements of Law, no Purchaser shall issue a publicity release or public
announcement or otherwise make any disclosure concerning this Agreement, the
transactions contemplated hereby without prior approval by the Company; provided
that each Purchaser may disclose on its worldwide web pages and its offering
materials, if any, the name of the Company, the name of the Chief Executive
Officer of the Company, a brief description of the business of the Company
consistent with the Commission Documents or the Company's press releases or
other public statements, the Company's logo and the aggregate amount of such
Purchaser's investment in the Company without having any ownership interest in,
or other right to use of, any of the same, and without taking any action which
would adversely affect the Company's interest in such logo or omitting to take
any action necessary to protect the same. If any announcement is required by
applicable law or the rules of any securities exchange or market on which such
shares of Common Stock are traded to be made by any party hereto, prior to
making such announcement such party will deliver a draft of such announcement to
the Company and shall give the Company reasonable opportunity to comment
thereon. The parties agree to attribute and otherwise indicate ownership of the
other party's trademarks and logos.
11.12 Certification. Each Purchaser certifies that such Purchaser has
read this entire Agreement and that every statement on such Purchaser's part
made and set forth herein is true and complete.
[Remainder of page intentionally left blank.]
IN WITNESS WHEREOF, the undersigned has executed this Securities
Purchase Agreement on the date his signature has been subscribed and sworn to
below.
The shares of Common Stock and the common stock purchase warrants are to be
issued in:
----------------------------------------------------------
Print Name of Investor
shares of Common Stock subscribed for
------------------
____ individual name
Subscription price paid herewith:
$ (being $1.50 x the number of shares
-----------------
____ tenants in the entirety of Common Stock listed above)
----------------------------------------------------------
____ corporation (an officer must sign) Print Name of Joint Investor
(if applicable)
----------------------------------------------------------
____ partnership (all general partners must sign) Signature of Investor
----------------------------------------------------------
____ trust Signature of Joint Investor
----------------------------------------------------------
____ limited liability company
----------------------------------------------------------
(with a copy to:)
----------------------------------------------------------
----------------------------------------------------------
----------------------------------------------------------
Address of Investor
Accepted as of the ___ day of __________, 2003 as to _______________ shares of
Common Stock; Subscription price accepted being $______________, being $1.50 x
the number of shares of Common Stock as to which this Subscription is accepted:
ENHANCE BIOTECH, INC.
By: ___________________________________________
Name:
Title:
