EXHIBIT 10.56
SUBSCRIPTION AGREEMENT
August 20, 2003
NexGen Bacterium, Inc.
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Gentlemen:
This letter will constitute the subscription agreement between New York
Health Care, Inc. ("NYHC" or the "Company"), a New York corporation, and NexGen
Bacterium, Inc., a Panama corporation, ("you" or the "Investor") regarding its
acquisition of shares of the $.01 par value common stock of NYHC.
1. Subscription. The Investor agrees to accept from NYHC and NYHC
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agrees to issue to the Investor 1,000,000 shares of the unissued $.01 par value
common stock (the "Shares") of NYHC as part of the purchase price for certain
assets being sold by the Investor to The Bio Balance Corp. ("Bio"), a
wholly-owned subsidiary of NYHC, pursuant to an Asset Purchase Agreement among
the Investor, Bio and NYHC (the "Asset Agreement"), and a Registration Rights
Agreement among the Investor and NYHC (the "Registration Rights Agreement"),
both approved August 20, 2003.
2. Representations, Warranties and Covenants of Subscriber. The
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Investor hereby acknowledges, represents, warrants, covenants and agrees as
follows:
(a) the Investor has been furnished with full access to the books,
records and reports of the Company, including but not limited to all of the
Company's SEC Form 10-K, 10-Q
and 8-K reports and all documents filed by the Company or any insider with the
SEC, and any documents which may have been made available upon request
(collectively referred to as "additional materials");
(b) the Investor has been given the opportunity to ask questions
of and receive answers from the Company's officers, directors and independent
accountants concerning matters pertaining to an investment in the Company and
has been given the opportunity to obtain such information necessary to verify
the accuracy of information that was otherwise provided in order for it to
evaluate the merits and risks of an acquisition of Shares to the extent the
Company possesses such information or can acquire it without unreasonable effort
or expense, and has not been furnished any offering literature except as
mentioned herein;
(c) the Investor has not been furnished with any oral
representation in connection with the Shares;
(d) the Investor has determined that the Shares it is accepting as
payment for the Assets being in the Asset Agreement are a suitable investment in
view of its presently anticipated financial needs and that it and all of its
equity owners could bear a loss of the investment at this time and for the
foreseeable future;
(e) with the exception of its reliance on any information provided
by the Company as part of a due diligence examination of the Company for
purposes of reaching its decision as to whether or not to invest in the Company,
the Investor is not relying on the Company, its officers, directors, employees,
agents, investment bankers or attorneys, with respect to individual tax and
other legal or economic considerations involved in this investment. The
Investor has relied on its knowledge and experience, and that of its legal and
economic advisors, with regard to the tax and other legal or economic
considerations involved in this transaction. The Investor is capable of
evaluating the merits and risks of this investment;
(f) except as provided in the Asset Agreement and the Registration
Rights Agreement, the Investor will not sell or otherwise transfer the Shares
without registration under the Securities Act of 1933 (the "Securities Act") and
appropriate state securities ("Blue Sky") laws or the availability of
appropriate exemptions therefrom and fully understands and agrees that he must
bear the economic risks of its purchase for an indefinite period of time
because, among other reasons, the Shares have not been registered under the
Securities Act or under the Blue Sky laws of any state and, therefore, cannot be
resold, pledged, assigned, hypothecated or otherwise disposed of unless they are
subsequently registered under the Securities Act and under the applicable Blue
Sky laws or pursuant to available exemptions from such registration;
(g) the Investor is a citizen and resident of Panama;
(h) the Investor is an "accredited investor" as defined in Section
2(15) of the Securities Act of 1933, as amended, and Rule 501 promulgated by the
United States Securities and Exchange Commission thereunder;
(i) except as provided in the Asset Agreement, the Shares the
Investor is accepting will be solely for the account of the Investor for
investment purposes only and are not being purchased for any distribution,
subdivision or fractionalization thereof; the Investor has no contract,
undertaking agreement or arrangement with any person to sell, transfer or pledge
any Shares to such person or anyone else and has no present plan to enter into
any such contract, undertaking, agreement or arrangement;
(j) the Investor has furnished the Company with information about
the Investor and such information is correct and complete as of this date. If
there should be any material change in such information, the Investor will
immediately furnish such revised or corrected information to the Company; and
(k) it has made the foregoing representations, warranties,
covenants and agreements knowing that they shall survive its purchase of Shares.
3. Representations, Warranties and Covenants of the Company. The
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Company hereby acknowledges, represents, warrants, covenants and agrees as
follows:
(a) The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of New York and has all
requisite power and authority to own, lease and operate its properties, carry on
its business as now being conducted, enter into this Subscription Agreement and
consummate the transactions contemplated hereby. The execution and delivery by
the Company of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized by all necessary
corporate action on the part of the Company and this Agreement is a legal, valid
and binding obligation of the Company enforceable against the Company in
accordance with its terms. Neither the execution and delivery by the Company of
this Agreement nor the consummation of the transactions contemplated hereby will
conflict with or result in a breach of any provision of its Certificate of
Incorporation or By-Laws or result in a material default under any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, license,
agreement, judgment, court order, restraint, lien or other instrument or
obligation to which the Company is a party or by which the Company or its assets
or properties may be bound.
(b) The Company has furnished the Investor with information about
the Company and such information is correct and complete as of the date of this
Subscription Agreement. If there should be any material change in such
information, the Company will immediately furnish such revised or corrected
information to the Investor.
(c) The Company has made the foregoing representations,
warranties, covenants and agreements knowing that they shall survive the
Investor's acquisition of the Shares.
4. Investor Awareness. The Investor acknowledges its complete
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understanding of the following facts:
(a) No federal or state agency has passed upon the investment
quality of the Shares or made any finding or determination as to the fairness,
merits or risks of any investment in them.
(b) There are substantial risks of loss of the investment incident
to the purchase of Shares.
(c) The Shares have not been registered under the Securities Act
or any Blue Sky laws and must be held indefinitely unless they are subsequently
so registered or exemptions from such registration are available. The Shares
cannot be sold without registration or other compliance with the Securities Act
and applicable Blue Sky laws.
5. Modification. Neither this Agreement nor any provision hereof shall
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be waived, modified, discharged or terminated except by an instrument in writing
signed by the party against whom any waiver, modification, discharge or
termination is sought.
6. Notices. Any notice, demand or other communication which any party
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hereto may be required, or may elect, to give anyone interested hereunder shall
be sufficiently given if (a) deposited, postage prepaid, in a United States mail
letter box, registered or certified mail, return receipt requested, addressed to
such address as may be given herein, or (b) delivered personally at such
address, or (c) delivered by fax transmission to a fax number provided by such
person (who confirms receipt thereof). The addresses and fax numbers for the
delivery of notices are as follows:
If to the Company: New York Health Care, Inc.
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with a copy to: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Scheichet & ▇▇▇▇▇, P.C.
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If to the Investor: NexGen Bacterium, Inc.
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with a copy to: The BioBalance Corp.
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7. Counterparts. This Subscription Agreement may be executed in any
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number of counterparts and each of such counterparts shall, for all purposes,
constitute one agreement binding on all the parties.
8. Binding Effect. Except as otherwise provided herein, this
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Subscription Agreement shall be binding upon and inure to the benefit of the
parties and their respective heirs, executors, administrators, successors, legal
representatives and assigns. If the undersigned is more than one person, the
obligation of the undersigned shall be joint and several and the covenants,
agreements, representations, warranties and acknowledgments herein contained
shall be deemed to be made by and be binding upon each such person.
9. Entire Agreement. This instrument and the Asset Agreement dated
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this date contain the entire agreement of the parties and there are no
representations, warranties, covenants or other agreements, except as stated or
referred to herein and therein.
10. Benefit and Transfer or Assignment. Except as provided otherwise
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herein, this Subscription Agreement is not transferable or assignable by the
undersigned without the written consent of the Company, which consent shall not
be unreasonably withheld. No such written consent shall be required for a
transfer or assignment by the Investor of its rights or interests under this
Subscription Agreement to a corporation or limited liability company in which
the Investor owns, directly or indirectly, more than 50% of the capital stock
and in which all other shareholders are accredited investors.
11. Applicable Law. This Subscription Agreement shall be governed by
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and construed in accordance with the laws of the State of New York without
giving effect to that state's conflicts of laws provisions.
INVESTOR: NEW YORK HEALTH CARE, INC.
NEXGEN BACTERIUM, INC.
/s/Michel ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Nuezo By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
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Michel ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Nuezo, ▇▇▇▇▇ ▇▇▇▇▇, President
General Attorneys
Attest:
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Secretary