SUBSCRIPTION AGREEMENT
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Alfacell Corporation
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Up to 2,500,000 Units, each Unit consisting of two (2) Shares of
Common Stock and one (1) three-year Warrant to purchase one
share of Common Stock
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To: Alfacell Corporation
This Subscription Agreement (this "Agreement") is made between Alfacell
Corporation, a Delaware Corporation (the "Company"), and the undersigned
prospective purchaser who is subscribing hereby for units (the "Units"), each
such Unit consisting of two (2) shares of the Company's common stock, par value
$.001 per share (the "Common Stock") and one (1) warrant to purchase one (1)
share of Common Stock (the "Warrant"). The shares of Common Stock (the "Shares")
and Warrants which comprise the Units will be detached and are separately
transferable and for purposes of this Subscription Agreement all references to
Units shall mean such Shares and Warrants. The form of the Warrant is attached
hereto as Exhibit A. Each Warrant shall be exercisable at a price of $2.50 per
share of Common Stock during the period commencing three (3) months after
issuance thereof and terminating three (3) years after issuance thereof. This
subscription is submitted to you in accordance with and subject to the terms and
conditions described in this Subscription Agreement and the Company's
Confidential Private Placement Memorandum dated December 15, 1997 (as it may be
supplemented or updated from time to time, the "Memorandum"), relating to the
offering (the "Offering") of up to 4,000,000 Shares of Common Stock. It is
agreed that the terms of the Offering are hereby amended to reflect the offering
by the Company of up to 2,500,000 of the Units described herein. Except as
specifically provided otherwise herein all of the terms of the Offering
contained in the Memorandum shall remain in effect.
In consideration of the Company's agreement to sell Units to the undersigned
upon the terms and conditions summarized in the Memorandum, the undersigned
agrees and represents as follows:
A. SUBSCRIPTION
(1) The undersigned hereby irrevocably subscribes for and agrees to purchase the
number of Units indicated on the signature page hereto (the "Signature Page") at
the purchase price set forth on the Signature Page. The undersigned hereby
agrees to wire the aggregate purchase price of the Units subscribed for by the
undersigned as set forth in the Signature Page (the "Payment") to the following
non-interest bearing escrow account:
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(2) The Payment (or, in the case of rejection of a portion of the undersigned's
subscription, the part of the Payment relating to such rejected portion) will be
returned promptly, without interest or deduction, if the undersigned's
subscription is rejected in whole or in part or if the Offering is terminated
without a closing. Upon receipt by the Company of the requisite payment for all
Units to be purchased by the subscribers whose subscriptions are accepted (each,
a "Purchaser" and, collectively, the "Purchasers") at each closing of the
Offering (a "Closing"), the Shares and Warrants so purchased will be issued in
the name of each Purchaser, and the name of such Purchaser will be registered on
the books of the Company as the record owner of such Shares and Warrants. The
Company will issue to each Purchaser the stock certificates representing the
Shares purchased and the Warrant Agreement representing the Warrants purchased.
The Shares and Warrants may not be transferred prior to the Closing.
(3) The undersigned hereby acknowledges receipt of a copy of the Memorandum, and
hereby agrees to be bound thereby, as amended hereby, upon the (i) execution and
delivery to the Company, in care of ▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, Inc. (the "Placement
Agent"), of the Signature Page, and (ii) acceptance at a Closing by the Company
of the undersigned's subscription (the "Subscription").
(4) The undersigned agrees that the Company may, in its sole and absolute
discretion, reduce the undersigned's Subscription to any amount of Units that in
the aggregate does not exceed the amount of Units hereby applied for without any
prior notice to or further consent by the undersigned. The undersigned hereby
irrevocably constitutes and appoints the Placement Agent and each officer of the
Placement Agent, each of the foregoing acting singly, in each case with full
power of substitution, the true and lawful agent and attorney-in-fact of the
undersigned, with full power and authority in the undersigned's name, place and
stead, to amend this Subscription Agreement, including in each case the
Signature Page, to effect any of the foregoing provisions of this Paragraph (4).
Alfacell Escrow Account(1)
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Southwest Bank of Texas as Escrow Agent
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(1)Wire instructions to be provided by Placement Agent prior to submission
of Subscription Agreement by Purchasers and Closing.
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B. REPRESENTATIONS AND WARRANTIES
The undersigned hereby represents and warrants to, and agrees with, the Company
and the Placement Agent as follows:
(1) The undersigned has been furnished with and has carefully read the
Memorandum (including the Attachments thereto) and this Subscription Agreement
and is familiar with and understands the Memorandum and the terms of the
Offering, has based his or her decision to invest on the information contained
in the Memorandum and this Subscription Agreement and has not been furnished
with any other offering literature or prospectus which is inconsistent or
contradictory in any material way with the Memorandum (including Annexes
thereto). The undersigned has carefully considered and has, to the extent the
undersigned believes such discussion necessary, discussed with the undersigned's
professional legal, tax, accounting and financial advisors the suitability of an
investment in the Units for the undersigned's particular tax and financial
situation and has determined that the Units being subscribed for by the
undersigned are a suitable investment for the undersigned.
(2) The undersigned acknowledges that (i) the undersigned has had the right to
request copies of any documents, records, and books pertaining to this
investment and (ii) any such documents, records and books which the undersigned
requested have been made available for inspection by the undersigned, the
undersigned's attorney, accountant or adviser(s).
(3) The undersigned and/or the undersigned's adviser(s) has/have had a
reasonable opportunity to ask questions of and receive answers from a person or
persons acting on behalf of the Company concerning the Offering and all such
questions have been answered to the full satisfaction of the undersigned.
(4) The undersigned is not subscribing for Units as a result of or subsequent to
any advertisement, article, notice or other communication published in any
newspaper, magazine or similar media or broadcast over television or radio or
presented at any seminar or meeting.
(5) If the undersigned is a natural person, the undersigned has reached the age
of majority in the state in which the undersigned resides, has adequate means of
providing for the undersigned's current financial needs and contingencies, is
able to bear the substantial economic risks of an investment in the Units for an
indefinite period of time, has no need for liquidity in such investment and, at
the present time, could afford a complete loss of such investment.
(6) The undersigned or the undersigned's purchaser representative, as the case
may be, has had such knowledge and experience in financial, tax and business
matters so as to enable the undersigned to utilize the information made
available to the undersigned in connection with the Offering to evaluate the
merits and risks of an investment in the Units and to make an informed
investment decision with respect thereto.
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(7) The undersigned will not sell or otherwise transfer the Units without
registration under the Securities Act of 1933, as amended (the "Securities Act")
or applicable state securities laws or an exemption therefrom. None of the Units
have been registered under the Securities Act or under the states' securities
laws. The undersigned represents that the undersigned is purchasing the Units
for the undersigned's own account, for investment and not with a view toward
resale or distribution except in compliance with the Securities Act. The
undersigned has not offered or sold the Units being acquired nor does the
undersigned have any present intention of selling, distributing or otherwise
disposing of such Units either currently or after the passage of a fixed or
determinable period of time or upon the occurrence or non-occurrence of any
predetermined event or circumstances in violation of the Securities Act.
(8) The undersigned recognizes that investment in the Units involves substantial
risks, including loss of the entire amount of his or her investment. Further,
the undersigned has carefully read and considered the matters set forth under
the caption "Risk Factors" in the Memorandum, and has taken full cognizance of
and understands all of the risks related to the purchase of the Units.
(9) The undersigned acknowledges that the certificates representing the shares
of Common Stock purchased and the Warrants purchased shall each be stamped or
otherwise imprinted with a legend substantially in the following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT WITH RESPECT TO
THE SECURITIES OR AN EXEMPTION THEREFROM. ANY SUCH TRANSFER MAY ALSO BE SUBJECT
TO APPLICABLE STATE SECURITIES LAWS.
(10) If this Subscription Agreement is executed and delivered on behalf of a
partnership, corporation, trust or estate: (i) such partnership, corporation,
trust or estate has the full legal right and power and all authority and
approval required (a) to execute and deliver, or authorize execution and
delivery of, this Subscription Agreement and all other instruments executed and
delivered by or on behalf of such partnership, corporation, trust or estate in
connection with the purchase of its Units, (b) to delegate authority pursuant to
power of attorney and (c) to purchase and hold such Units, (ii) the signature of
the party signing on behalf of such partnership, corporation, trust or estate is
binding upon such partnership, corporation, trust or estate; and (iii) such
partnership, corporation or trust has not been formed for the specific purpose
of acquiring such Units, unless each beneficial owner of such entity is
qualified as an accredited investor within the meaning of Rule 501(a) of
Regulation D promulgated under the Securities Act and has submitted information
substantiating such individual qualification.
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(11) The undersigned acknowledges that if he or she is purchasing the Units
subscribed for hereby in a fiduciary capacity, the above representations and
warranties shall be deemed to have been made on behalf of the person or persons
for whom he or she is so purchasing.
(12) If the undersigned is a retirement plan or is investing on behalf of a
retirement plan, the undersigned acknowledges that investment in the Units poses
additional risks including the inability to use losses generated by an
investment in the Units to offset taxable income.
(13) The undersigned acknowledges that if he or she is purchasing the Units
subscribed for hereby in a fiduciary capacity, the above representations and
warranties shall be deemed to have been made on behalf of the person or persons
for whom he or she is so purchasing.
(14) The undersigned represents and warrants that the information set forth
herein concerning the undersigned is complete, true and correct.
(15) The undersigned agrees to indemnify and hold the Company and its directors,
officers, employees, affiliates, controlling persons and agents (including the
Placement Agent and any control persons of the Placement Agent) and their
respective heirs, representatives, successors and assigns harmless against all
liabilities, costs and expenses incurred by them as a result of, (a) any
misrepresentation made by the undersigned contained in this Agreement (including
the Investor Questionnaire contained herein), (b) any sale or distribution by
the undersigned in violation of the Securities Act or any applicable state
securities or "blue sky" laws or (c) any untrue statement of a material fact
made by the undersigned and contained herein.
C. UNDERSTANDINGS
The undersigned understands, acknowledges and agrees with the Company and the
Placement Agent as follows:
(1) This Subscription may be rejected, in whole or in part, by the Company or
the Placement Agent, in the sole and absolute discretion of either of them, at
any time before the Closing on the Units covered by such subscription,
notwithstanding prior receipt by the undersigned of notice of acceptance of the
undersigned's Subscription. The Company may terminate this Offering at any time
in its sole discretion. The execution of this Agreement or solicitation of the
investment contemplated hereby, shall create no obligation of the Company to
accept any subscription or complete the Offering.
(2) The undersigned hereby acknowledges and agrees that the Subscription
hereunder is irrevocable by the undersigned, that, except as required by law,
the undersigned is not entitled to cancel, terminate or revoke this Agreement or
any agreements of the undersigned hereunder and that this Agreement and such
other agreements shall survive the death or disability of the undersigned and
shall be binding upon and inure to the benefit of the parties and their heirs,
executors, administrators, successors, legal representatives and permitted
assigns. If the undersigned is more than one person, the obligations of the
undersigned hereunder shall be joint and several and the agreements,
representations, warranties and acknowledges herein contained shall be deemed to
be made by and be binding upon each such person and his/her heirs, executors,
administrators, successors, legal representatives and permitted assigns.
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(3) No federal or state agency has made any finding or determination as to the
accuracy or adequacy of the Memorandum or as to the fairness of the terms of
this Offering for investment nor any recommendation or endorsement of the Units.
(4) The Offering is intended to be exempt from registration under the Securities
Act by virtue of Section 4(2) of the Securities Act and the provisions of
Regulation D thereunder, which is in part dependent upon the truth, completeness
and accuracy of the statements made by the undersigned herein.
(5) There can be no assurance that the undersigned will be able to sell or
dispose of the Units. It is understood that in order not to jeopardize the
Offering's exempt status under Section 4(2) of the Securities Act and Regulation
D, any transferee may, at a minimum, be required to fulfill the investor
suitability requirements thereunder.
(6) The Placement Agent will receive compensation in connection with the
Offering but is not guaranteeing or assuming responsibility of the operation or
possible liability of the Company, including, without limitation, compliance by
the Company with the agreements entered into in connection with the Offering,
and will not supervise or participate in the operation or management of the
Company.
(7) The undersigned understands that. With the exception of the registration
rights set forth in Section D of this Subscription Agreement, (i) the Company
has no obligation to register the Units for resale under any federal or state
securities laws or to take any action which would make available any exemption
from the registration requirements of such laws, and (ii) the undersigned
therefore may be precluded from selling or otherwise transferring or disposing
the Units or any portion thereof for an indefinite period of time or at any
particular time and may therefore have to bear the economic risk of investment
in the Share of an indefinite period of time.
(8) The undersigned agrees that if and to the extent required by an underwriter
of the Company's Securities in a public offering the undersigned will execute a
"lock-up" agreement regarding some or all of his or her Units thereby agreeing
not to sell such Units for a period of time (not to exceed 180 days) after
completion of the public offering whether or not such Units are included in the
public offering.
(9) The undersigned understands that the Units are being offered and sold in
reliance on specific exemptions from the registration requirements of federal
and state securities laws and that the Company and the principals and
controlling persons thereof are relying upon the truth and accuracy of the
representations, warranties, agreements, acknowledgments, and understandings set
forth in this Subscription Agreement in order to determine the applicability of
such exemptions and the suitability of the undersigned to acquire Units.
(10) The undersigned acknowledges that the information contained in the
Memorandum, including without limitations the existence and terms of the
Offering, is confidential and non-public and agrees that all such information
shall be kept in confidence by the undersigned and neither used for the
undersigned's personal benefit (other than in connection with this Subscription)
nor disclosed to any third party for any reason; provided, however, that this
confidentiality obligation shall not apply to any such information that (i) is
part of the public knowledge or literature and readily accessible at the date
hereof, (ii) becomes part of the public knowledge or literature and readily
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accessible by publication (except as a result of a breach of this provision) or
(iii) is received from third parties (except third parties who disclose such
information in violation of any confidentiality agreements or obligations,
including, without limitation, any Subscription Agreement entered into with the
Company). The undersigned acknowledges that the foregoing restrictions on the
undersigned's use and disclosure of the confidential, non-public information
contained in the Memorandum restricts the undersigned from trading in the
Company's securities to the extent information would be deemed to be material by
a reasonable investor in determining whether to invest in the Company's
securities.
(11) The representations, warranties and agreements of the undersigned contained
herein and in any other writing delivered in connection with the transactions
contemplated hereby shall be true and correct in all respects on and as of the
date of sale of the Units as if made on and as of such date and shall survive
the execution and delivery of this Agreement and the purchase of the Units.
(12) Insofar as indemnification for liabilities under the Securities Act may be
permitted to directors, officers or controlling persons of the Company, the
Company has been informed that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in such
Act and is therefore unenforceable to such extent.
D. REGISTRATION RIGHTS
(1) The Company covenants and agrees that on or before the earlier to occur of
(i) March 31, 1998 or (ii) the 45th day following the final closing of the
Offering by the Company, the Company will cause to be filed under of the
Securities Act a registration statement ( the "Registration Statement"),
registering the resale of (A) the Shares and (B) the shares of Common Stock or
other securities issuable under the Warrants (the "Warrant Shares"), included in
the Units purchased in the Offering by the undersigned and naming the
undersigned in the Registration Statement as a selling shareholder.
(a) Except to the extent any delay is due to the failure of the undersigned
to reasonably cooperate in providing to the Company such information as shall be
reasonably requested by the Company in writing for use in the Registration
Statement, if the Registration Statement is not filed with the Securities and
Exchange Commission within the target dates set forth in the first sentence of
section D(1) (the "Outside Filing Date"), the Company shall declare and pay for
no additional consideration to the undersigned additional shares of Common Stock
equal to 1% of the sum of the Shares plus the Warrant Shares (the "Delay
Shares") then held by the undersigned for each week after the Outside Filing
Date that the Registration Statement remains unfiled.
(b) All Delay Shares issuable pursuant to paragraph (a) above when issued,
shall be duly authorized, fully paid and nonassessable and shall be included in
the Registration Statement contemplated hereby. Such Delay Shares shall be
registered in the name of the undersigned or the name or names of the nominee(s)
of the undersigned in such denominations as the undersigned shall request
pursuant to instructions delivered to the Company.
(2) The Company shall use its commercially reasonable best efforts to have the
Registration Statement declared effective as soon as reasonably practicable
after such filing, and to keep such
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Registration Statement continuously effective until the earlier of (i) the date
of all the Shares and Warrant Shares purchased by Purchasers in the Offering and
included in the Registration Statement have been sold publicly by the Purchasers
and (ii) the second anniversary of the final Closing of the Offering; provided,
however, that the Company may voluntarily suspend the effectiveness of such
Registration Statement for a limited time, which is no event shall be longer
than 120 days, if the Company has been advised by its counsel or underwriters to
the Company that the offering of the shares of Common Stock pursuant to the
Registration Statement would adversely affect, or would be improper in view of
(or improper without disclosure in a prospectus), a proposed financing, a
reorganization, recapitalization, merger, consolidation, or similar transaction
involving the Company, in which case the Company shall be required to keep such
Registration Statement effective for an additional period of time beyond two
years following the final Closing of the Offering equal to the number of days
the effectiveness thereof is suspended pursuant to this provision.
(3) Upon the occurrence of any event that would cause the Registration Statement
to contain a material misstatement or omission or not to be effective and usable
during the period that such Registration Statement is required to be effective
and usable, the Company shall promptly file an amendment or supplement to the
Registration Statement and use its commercially reasonable best efforts to cause
such amendment to be declared effective as soon as practicable thereafter.
(4) The Company will bear all costs and expenses related to the Registration
Statement other than the expenses incurred by the Purchasers for underwriters'
commissions and discounts, if any, or legal fees incurred by the Purchasers.
(5) The Company shall furnish each Purchaser with such number of copies of the
prospectus forming a part of the Registration Statement as such person may
reasonably request in order to facilitate a public sale or disposition of the
Shares covered by the Registration Statement.
(6) The Company shall use commercially reasonable efforts to register or qualify
the Shares and Warrant Shares owned by the undersigned which are included in the
Registration Statement under the securities or blue sky laws of the
undersigned's state of residence and the state of New York.
(7) The Company shall notify each Purchaser and its counsel of any stop order
threatened or issued by the Securities and Exchange Commission or any state
securities regulatory authority, or a trading halt threatened or issued by
NASDAQ or other exchange or over-the-counter market in which the Common Stock is
publicly traded, and take all actions required to prevent the entry of such stop
order or the imposition of such trading halt or to remove such stop order or
trading halt if entered or imposed.
(8) In connection with the registration hereunder and as a condition to the
Company's obligation hereunder, the undersigned will furnish to the Company in
writing such information with respect to the undersigned and the proposed
distribution of the Shares and Warrant Shares by the undersigned as shall be
reasonably necessary in order to assure compliance with Federal and applicable
state securities laws.
(9) (a) In connection with the registration of the Shares and Warrant Shares
under the Securities Act, the Company will indemnify and hold harmless each
seller of such Shares and
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Warrant Shares thereunder and each other person, if any, who controls such
seller, against any losses, claims, damages or liabilities, joint or several, to
which such seller or controlling person may become subject under the Securities
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in any registration
statement under which the Shares and Warrant Shares were registered under the
Securities Act, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading
in light of the circumstances then existing, and shall reimburse each such
seller and each such controlling person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability, or action; provided, however, that the
Company shall not be liable in any such case if and to the extent that any such
loss, claim, damage or liability arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission in any
document made in reliance upon and in conformity with information furnished by
such seller or such controlling person in writing specifically for use in the
preparation of such documents.
(b) In connection with the registration of the Shares and Warrant Shares
under the Securities Act, each seller of such shares thereunder severally and
not jointly, will indemnify and hold harmless the Company and each person, if
any, who controls the Company within the meaning of the Securities Act, each
officer of the Company, each director of the Company and each person who
controls the Company against all losses, claims, damages or liabilities to which
the Company or any such officer, director or controlling person may become
subject under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities or actions or omissions in respect thereof arise out of
or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the registration statement under which such Shares or
Warrant Shares were registered under the Securities Act, any preliminary
prospectus or final prospectus contained therein, or any amendment or supplement
thereof, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading in light of the circumstances then
existing, and shall reimburse the Company and each such officer, director, and
controlling person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that such seller shall be liable
hereunder in any such case if and only to the extent that such untrue statement
or alleged untrue statement or omission or alleged omission in any document was
made in reliance upon and conformity with information furnished to the Company
by or on behalf of such seller in writing for use in the preparation of such
documents; provided, further, however, that the liability of each seller
hereunder shall be limited to the proportion of any such loss, claim, damage,
liability or expense which is equal to the proportion that the public offering
price of Shares and Warrant Shares sold by such seller under such registration
statement bears to the total public offering price of all securities sold
thereunder, but not to exceed the proceeds allocable to such seller from the
sale of Shares and Warrant Shares covered by such registration statement. The
registration rights with respect to the Warrant Shares shall transfer to any
transferee should the Warrant be transferred. The Company shall use its best
efforts to allow Rule 144 under the Securities Act to be used.
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E. MISCELLANEOUS
(1) All pronouns and any variations thereof used herein shall be deemed to refer
to the masculine, feminine, singular or plural, as the identity of the person or
persons may require.
(2) Except as set forth in Section A(4) herein, neither this Agreement nor any
provision hereof shall be waived, modified, changed, discharged, terminated,
revoked or canceled except by an instrument in writing signed by the party
against whom any change, discharge or termination is sought.
(3) Notices required or permitted to be given hereunder shall be in writing and
shall be deemed to be sufficiently given when personally delivered or sent by
registered mail, return receipt requested, addressed: (i) if to the Company, to
Alfacell Corporation, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇, with a copy to the
Placement Agent addressed to ▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, Inc., ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Telecopy (713)
993-4696, or (ii) if to the undersigned, to the address for correspondence set
forth in the Signature Page, or at such other address as may have been specified
by written notice given in accordance with this Paragraph (3).
(4) Failure of the Company to exercise any right or remedy under this Agreement
or any other agreement between the Company and the undersigned, or otherwise, or
delay by the Company in exercising such right or remedy, will not operate as a
waiver thereof. No waiver by the Company will be effective unless and until it
is in writing and signed by the Company.
(5) This Agreement shall be enforced, governed and construed in all respects in
accordance with the laws of the State of New Jersey, as such laws are applied by
the New Jersey courts to agreements entered into and to be performed in New
Jersey by and between residents of New Jersey, and shall be binding upon the
undersigned, the undersigned's heirs, estate, legal representatives, successors
and assigns and shall inure to the benefit of the Company, its successors and
assigns. If any provision of this Subscription Agreement is invalid or
unenforceable under any applicable statute or rule of law, then such provision
shall be deemed modified to conform with such statute or rule of law. Any
provision hereof that may prove invalid or unenforceable under any law shall not
affect the validity or enforceability of any other provisions hereof.
(6) This Subscription Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof and may be amended only
by a writing executed by both parties hereto. This Subscription Agreement shall
supersede any prior agreement relating to the subject matter hereof, between the
parties hereto, including without limitation any prior subscription agreements.
(7) Each party hereto has had the opportunity to review this Agreement with its
separate legal counsel.
F. SIGNATURE
The signature of this Agreement is contained as part of the applicable
subscription package, entitled "Signature Page".
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ALFACELL CORPORATION
SIGNATURE PAGE
The undersigned hereby subscribes for the number of Units as set forth below.
1. Dated: ____________________, 19___
2. Number of Units subscribed for : ____________________
3. Aggregate purchase price for number of Units subscribed for, at $4.00 per
Unit:
$____________________
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Signature of Subscriber Taxpayer Identification or
(and title, if applicable) Social Security Number
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Signature of Joint Purchaser Taxpayer Identification or
(if any) Social Security Number
----------------------------------- -------------------------------------
Name and Residence Address Mailing Address
(Post Office Address Not Acceptable) (if different from Residence Address)
----------------------------------- -------------------------------------
Name (please print as name will Name (please print)
appear on certificate)
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Number and Street Number and Street
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City, State, Zip Code City, State, Zip Code
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ALFACELL CORPORATION
SIGNATURE PAGE
Subscription for______________________Units at $4.00 per Unit for an aggregate
purchase price of $_______________________is hereby accepted.
By:_______________________________________Dated: ______________________________
Kuslima Shogen
Chief Executive Officer
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ACCREDITED INVESTOR STATUS
INVESTORS MUST CHECK APPLICABLE CHOICE OR CHOICES.
The undersigned is an "accredited investor" as that term is defined in Rule
501(a) of Regulation D promulgated pursuant to the Act ("Regulation D"), by
virtue of the fact that:
1. Accredited investors must initial at least one of the following two
statements:
____ A. The undersigned had individual income of more than $200,000 (or $300,000
including income attributable to spouse) in each of the most recent two years
and reasonably expects to have an individual income in excess of $200,000 (or
$300,000 including income attributable to spouse) for the current year.
____ B. The undersigned has an individual net worth, or a combined net worth
with the undersigned's spouse, in excess of $1,000,000. For purposes of this
Subscription Agreement, "individual net worth" means the excess of total assets
as fair market value, including homes and personal property, over total
liabilities.
2. Accredited partnerships, corporations, trusts or other equity investors
must initial one or more of the following statements:
____ A. All of the individual equity owners of the undersigned qualify as
accredited investors under statements (1A) or (1B) above.
____ B. The undersigned is a bank, savings and loan, or insurance company as
defined in the Act, or is a corporation, partnership, or business trust with
total assets in excess of $5,000,000.
____ C. The undersigned otherwise meets the definition of an accredited investor
set forth in Rule 501(a) of Regulation D, as follows (explain briefly and
contact the Company prior to submission to verify accredited investor status):
------------------------------
Signature of Subscriber
------------------------------
Signature of Joint Purchasers
------------------------------
Print Name of Subscriber
------------------------------
Print Name of Joint Purchasers
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WARRANT TO PURCHASE _____________ SHARES OF COMMON STOCK VOID AFTER 5:00 p.m.
NEW JERSEY TIME, ON __________________. THIS WARRANT AND THE SHARES OF COMMON
STOCK ISSUABLE UPON THE EXERCISE HEREOF HAVE BEEN AND WILL BE ISSUED IN
TRANSACTIONS WHICH HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR UNDER ANY STATE SECURITIES OR BLUE SKY LAWS. THIS
WARRANT AND SUCH SHARES MAY NOT BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR
OTHERWISE DISPOSED OF, IN WHOLE OR IN PART, IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT AND APPLICABLE STATE LAW, OR AN OPINION OF
COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
NO. _________ _______________SHARES
ALFACELL CORPORATION
This certifies that, for value received,_________________, the registered
holder hereof or assigns (the "Warrant holder") is entitled to purchase from
Alfacell Corporation, a Delaware corporation (the "Company"), at any time on and
after _____________________, and before 5:00 p.m., New Jersey time, on
___________________ (the "Termination Date"), at the purchase price of $2.50 per
share (the "Exercise Price"), the number of shares of Common Stock, par value
$.001 per share, of the Company set forth above (the "Warrant Stock"). The
number of shares of Warrant Stock, the Termination Date and the Exercise Price
per share of this Warrant shall be subject to adjustment from time to time as
set forth below.
SECTION I. TRANSFER OR EXCHANGE OF WARRANT.
The Company shall be entitled to treat the Warrant holder as the owner in
fact hereof for all purposes and shall not be bound to recognize any equitable
or other claim to or interest in this Warrant on the part of any other person.
This Warrant shall be transferable only on the books of the Company, maintained
at its principal office upon delivery of this Warrant Certificate duly endorsed
by the Warrant holder or by his duly authorized attorney or representative, or
accompanied by proper evidence of succession, assignment or authority to
transfer. Upon any registration of transfer, the Company shall deliver a new
Warrant Certificate or Certificates to the persons entitled thereto.
SECTION II. TERM OF WARRANT; EXERCISE OF WARRANTS.
A. Termination. The Company may, in its sole discretion, extend the
Termination Date with respect to the exercise of this Warrant upon notice to the
Warrant holder. As used herein, "Termination Date" shall be deemed to include
any such extensions.
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B. Exercise. This Warrant shall be exercised by surrender to the Company,
at its principal office, of this Warrant Certificate, together with the Purchase
Form attached hereto duly completed and signed, and upon payment to the Company
of the Exercise Price for the number of shares of Warrant Stock in respect of
which this Warrant is then exercised. Payment of the aggregate Exercise Price
shall be made in cash or by certified or official bank check.
C. Warrant Certificate. Subject to Section III hereof, upon such surrender
of this Warrant Certificate and payment of the Exercise Price as aforesaid, the
Company shall issue and cause to be delivered to or upon the written order of
the Warrant holder a certificate or certificates for the number of full shares
of Warrant Stock so purchased upon the exercise of such Warrant, together with
cash, as provided in Section VI hereof, in respect of any fractional shares of
Warrant Stock otherwise issuable upon such surrender. Such certificate or
certificates representing the Warrant Stock shall be deemed to have been issued
and any person so designated to be named therein shall be deemed to have become
a holder of record of such shares of Warrant Stock as of the date of receipt by
the Company of this Warrant Certificate and payment of the Exercise Price as
aforesaid; provided, however, that if, at the date of surrender of this Warrant
Certificate and payment of the Exercise Price, the transfer books for the
Warrant Stock or other class of stock purchasable upon the exercise of this
Warrant shall be closed, the certificate or certificates for the shares of
Warrant Stock in respect of which this Warrant is then exercised shall be deemed
issuable as of the date on which such books shall next be opened (whether before
or after the Termination Date) and until such date the Company shall be under no
duty to deliver any certificate for such shares of Warrant Stock; provided
further, however, that the transfer books of record, unless otherwise required
by law, shall not be closed at any one time for a period longer than twenty (20)
days. The rights of purchase represented by this Warrant shall be exercisable,
at the election of the Warrant holder, either in full or from time to time in
part, and, in the event that this Warrant is exercised in respect of fewer than
all of the shares of Warrant Stock purchasable on such exercise at any time
prior to the Termination Date, a new Warrant Certificate evidencing the
remaining Warrant or Warrants will be issued, and the Company shall deliver the
new Warrant Certificate or Certificates pursuant to the provisions of this
Section.
SECTION III. PAYMENT OF TAXES.
The Company will pay all documentary stamp taxes, if any, attributable to
the initial issuance of the shares of Warrant Stock upon the exercise of this
Warrant; provided, however, that the Warrant holder shall pay any tax or taxes
which may be payable in respect of any transfer involved in the issue or
delivery of Warrant Certificates or the certificates for the shares of Warrant
Stock in a name other than that of the Warrant holder in respect of which this
Warrant or shares of Warrant Stock are issued.
SECTION IV. MUTILATED OR MISSING WARRANT CERTIFICATES.
In case this Warrant Certificate shall be mutilated, lost, stolen or
destroyed, the Company shall, at the request of the Warrant holder, issue and
deliver, in exchange and substitution for and upon cancellation of this
certificate if mutilated, or in lieu of and in substitution for this certificate
15
if lost, stolen or destroyed, a new Warrant Certificate of like tenor and
representing an equivalent right or interest, but only upon receipt of evidence
satisfactory to the Company of such loss, theft or destruction of this Warrant
Certificate and indemnity, if requested, also satisfactory to the Company.
SECTION V. RESERVATION OF SHARES OF WARRANT STOCK.
There has been reserved, and the Company shall at all times keep reserved
so long as this Warrant remains outstanding, out of its authorized Common Stock
a number of shares of Common Stock sufficient to provide for the exercise of the
rights of purchase represented by this Warrant. The transfer agent for the
Common Stock and every subsequent transfer agent for any shares of the Company's
capital stock issuable upon the exercise of this Warrant will be irrevocably
authorized and directed at all times to reserve such number of authorized shares
as shall be requisite for such purpose.
SECTION VI. FRACTIONAL SHARES.
No fractional shares or scrip representing fractional shares shall be
issued upon the exercise of this Warrant. With respect to any fraction of a
share called for upon the exercise of this Warrant, the Company shall pay to the
Warrant holder an amount in cash equal to such fraction multiplied by the
current market price of such fractional share. "Market Price", as of any date
means, (i) the last reported sale price for the shares of Common Stock as
reported by the National Association of Securities Dealers Automated Quotation
National Market System, ("NASDAQ-NMS"), (ii) the closing bid price for the
shares of Common Stock as reported by the National Association of Securities
Dealers Automated Quotation System ("NASDAQ") if the shares are not traded on
NASDAQ-NMS, (iii) the average of the closing bid and closing asked prices of the
Common Stock as reported by the National Quotations Bureau if the shares are not
traded on NASDAQ; (iv) the last reported sale price, if the shares of Common
Stock are listed on a national securities exchange or (v) if market value cannot
be calculated as of such date on any of the foregoing basis, the fair market
price determined by the Board of Directors of the Company, acting with
reasonable business judgment.
SECTION VII. EXERCISE PRICE; ANTI-DILUTION PROVISIONS.
A. Exercise Price. The shares of Warrant Stock shall be purchasable upon
the exercise of this Warrant, at a price of $2.50 per share. The Company may, in
its sole discretion, reduce the Exercise Price applicable to the exercise of
this Warrant upon notice to the Warrant holder. As used herein, "Exercise Price"
shall be deemed to include any such reduction.
If the Company shall at any time issue Common Stock by way of dividend or
other distribution on any stock of the Company or effect a stock split or
reverse stock split of the outstanding shares of Common Stock, the Exercise
Price shall be proportionately decreased in the case of such issuance (on the
day following the date fixed for determining stockholders entitled to receive
such dividend or other distribution or such stock split) or increased in the
case of such reverse stock split (on the date that such reverse stock split
shall become effective), by multiplying the Exercise Price in effect immediately
prior to the stock dividend or other distribution, stock split
16
or reverse stock split by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately prior to such stock dividend or
other distribution, stock split or reverse stock split, and the denominator of
which is the number of shares of Common Stock outstanding immediately after such
stock dividend or other distribution, stock split or reverse stock split.
B. No Impairment. The Company (a) will not increase the par value of any
shares of stock receivable upon the exercise of this Warrant above the amount
payable therefor upon such exercise, and (b) will take all such action as may be
necessary or appropriate in order that the Company may validly and legally issue
fully paid and nonassessable shares of Common Stock upon the exercise of this
Warrant.
C. Number of Shares Adjusted. Upon any adjustment of the Exercise Price
pursuant to this Warrant, the Warrant holder shall thereafter (until another
such adjustment) be entitled to purchase upon the exercise of this Warrant, at
the new Exercise Price, the number of shares, calculated to the nearest full
share, obtained by multiplying the number of shares of Warrant Stock initially
issuable upon exercise of this Warrant by the Exercise Price in effect on the
date hereof and dividing the product so obtained by the new Exercise Price.
SECTION VIII. RECLASSIFICATION, REORGANIZATION OR MERGER.
In case of any reclassification, capital reorganization or other change of
outstanding shares of Common Stock of the Company (other than a change in par
value or as a result of an issuance of Common Stock by way of dividend or other
distribution or of a stock split or reverse stock split) or in case of any
consolidation or merger of the Company with or into another corporation (other
than a merger with a subsidiary in which merger the Company is the continuing
corporation and which does not result in any reclassification, capital
reorganization or other change of outstanding shares of Common Stock of the
Company issuable upon exercise of this Warrant) or in case of any sale or
conveyance to another corporation of the property of the Company as an entirety
or substantially as an entirety, the Company shall cause effective provision to
be made so that the Warrant holder shall have the right thereafter, by
exercising this Warrant, to purchase the kind and amount of shares of stock and
other securities and property the Warrant holder would have been entitled to
receive if the Warrant holder had exercised this Warrant immediately prior to
such reclassification, capital reorganization or other change, consolidation,
merger, sale or conveyance. Any such provision shall include provision for
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Warrant. The foregoing provisions of this
Section shall similarly apply to successive reclassifications, capital
reorganizations and changes of shares of Common Stock and to successive
consolidations, mergers, sales and conveyances.
SECTION IX. REGISTRATION RIGHTS.
The Warrant holder shall have the registration rights with respect to the
resale of the Warrant Stock as set forth in Section D of the Subscription
Agreement by and between the Company and the Warrant holder of even date
herewith. The registration rights with respect to the transfer of the Warrant
stock shall transfer to any transferee should the Warrant be transferred.
17
SECTION X. NOTICES TO WARRANT HOLDERS.
So long as this Warrant shall be outstanding and unexercised (a) if the
Company shall pay any dividend or make any distribution upon the Common Stock or
(b) if the Company shall offer to the holders of Common Stock for subscription
or purchase by them any shares of stock of any class or any other rights or (c)
if any capital reorganization of the Company, reclassification of the capital
stock of the Company, consolidation or merger of the Company with or into
another corporation, sale, lease or transfer of all or substantially all of the
assets of the Company to another corporation, or the voluntary or involuntary
dissolution, liquidation or winding up of the Company shall be effected, then,
in any such case, the Company shall cause to be delivered to the Warrant holder,
at least ten days prior to the date specified in (i) or (ii) below, as the case
may be, a notice containing a brief description of the proposed action and
stating the date on which (i) a record is to be taken for the purpose of such
dividend or distribution, or (ii) such reclassification, reorganization,
consolidation, merger, conveyance, lease, dissolution, liquidation or winding up
is to take place and the date, if any, as of which the holders of Common Stock
of record shall be entitled to exchange their shares of Common Stock for
securities or other property deliverable upon such reclassification,
reorganization, consolidation, merger, conveyance, dissolution, liquidation or
winding up.
SECTION XI. NOTICES.
Any notice pursuant to this Warrant by the Company or by the Warrant holder
shall be in writing and shall be deemed to have been duly given if delivered or
mailed certified mail, return receipt requested, (a) if to the Company, to it at
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Chief Executive
Officer and (b) if to the Warrant holder to the Warrant holder at the address
set forth on the signature page hereto. Each party hereto may from time to time
change the address to which such party's notices are to be delivered or mailed
hereunder by notice in accordance herewith to the other party.
SECTION XII. SUCCESSORS.
All the covenants and provisions of this Warrant by or for the benefit of
the Company or the Warrant holder shall bind and inure to the benefit of their
respective successors and assigns hereunder.
SECTION XIII. APPLICABLE LAW.
This Warrant shall be deemed to be a contract made under the laws of the
State of Delaware applicable to agreements made and to be performed entirely in
Delaware and for all purposes shall be construed in accordance with the internal
laws of Delaware without giving effect to the conflicts of laws principles
thereof.
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SECTION XIV. BENEFITS OF THIS WARRANT.
Nothing in this Warrant shall be construed to give to any person or
corporation other than the Company and the Warrant holder any legal or equitable
right, remedy or claim under this Warrant and this Warrant shall be for the sole
and exclusive benefit of the Company and the Warrant holder.
IN WITNESS WHEREOF, the parties hereto have executed this Warrant
Certificate or caused this Warrant Certificate to be duly executed as of the day
and year first above written.
ALFACELL CORPORATION
By: __________________________________
Name: Kuslima Shogen
Title: Chief Executive Officer
Warrant holder
By: __________________________________
Name: ________________________________
Address:
______________________________________
______________________________________
______________________________________
______________________________________
Social Security or
Taxpayer Identification Number
19
PURCHASE FORM
The undersigned hereby irrevocably elects to exercise the Warrant
represented by this Warrant Certificate to the extent of _____________ shares of
Common Stock, par value $.001 per share, of Alfacell Corporation, and hereby
makes payment of $______________ in payment of the actual exercise price
thereof.
Name: _______________________________________________________________
(Please type or print in block letters)
Address:_____________________________________________________________
(Address for delivery of Stock Certificate)
Social Security or
Taxpayer Identification Number:______________________________________
Signature:___________________________________________________________
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ASSIGNMENT FORM
FOR VALUED RECEIVED, _____________________________ hereby sells, assigns and
transfers unto__________________________________________________________________
(Please type or print in block letters)
Address ________________________________________________________________________
the right to purchase Common Stock, par value $.001 per share, of Alfacell
Corporation, represented by this Warrant Certificate to the extent of
______________ shares as to which such right is exercisable and does hereby
irrevocably constitute and appoint ___________________________, to transfer the
same on the books of the Company with full power of substitution in the
premises.
_______________________________
Signature
Dated:_________________ , 199_
Notice: The signature of this assignment must
correspond with the name as it appears upon the
face of this Warrant Certificate in every
particular, without alteration or enlargement or
any change whatever.
SIGNATURE GUARANTEED:
_______________________________
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