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EXHIBIT NO. 10.29
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AVITAR, INC.
SUBSCRIPTION AGREEMENT
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 (the "Act"), 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,
THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES COMMISSION OR ANY OTHER REGULATORY AUTHORITY, NOR
HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED
THE MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THE
MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
AGREEMENT, dated as of April 25, 1996 by and between Avitar, Inc., a
Delaware corporation (The "Company"), and the undersigned investor (the
"Purchaser").
WITNESSETH:
WHEREAS, the Company is seeking to raise up to $500,000 from a targeted
group of potential investors;
WHEREAS, in order to effectuate such financing, the Company is offering
for sale shares of its common stock, par value $.01 (the "Common Stock"), in an
aggregate amount up to $500,000 (the "Maximum Amount") with a minimum offering
amount (the "Minimum Amount") of $100,000 (the "Offering");
WHEREAS, the Company is making the Offering pursuant to Regulation D
promulgated under the Securities Act of 1933, as amended; and
WHEREAS, in order to comply with the requirements of Regulation D, the
Company requires the Purchaser to make the representations, warranties and
agreements contained herein to, and for the reliance of, the Company.
NOW, THEREFORE, in consideration of the mutual agreements contained
herein, and subject to the terms and conditions set forth herein, the Company
and the Purchaser hereby agree as follows:
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1. Subscription. The Purchaser, intending to be legally bound, hereby
irrevocably agrees to purchase from the Company the number of shares of
Common Stock (the "Shares") set forth on the signature page hereof, at a
purchase price of $.____ per Share. The Purchaser hereby acknowledges
and agrees that the minimum subscription amount for Shares is $____
(subject to the right of the Company, in its sole discretion, to reduce
such minimum subscription amount).
2. Payment. The Purchaser encloses herewith a check payable to the order
of, or will immediately make a wire transfer payment to, "Avitar, Inc."
in the full amount of the purchase price of the Shares being subscribed
for. To request wire transfer instructions, please contact Jay
Leatherman, Jr., Chief Financial Officer of the Company, at (203)
234-7737. Such funds will be held for the Purchaser's benefit, and will
be returned promptly, without interest, penalty, expense or deduction if
this Subscription Agreement is not accepted by the Company, the Offering
is terminated pursuant to its terms or by the Company, or the Minimum
Amount of Shares is not sold.
3. Segregation of Funds. All payments made as provided in Section 2 hereof
shall be held and kept segregated from its other funds by the Company
until the earliest to occur of (a) the closing of the sale of the
Minimum Amount of Shares (the "First Closing"), (b) the termination of
the Offering by the Company or (c) June 30, 1996 unless extended by the
Company to not later than August 31, 1996 (the "Termination Date"). The
Company may continue to offer and sell the Shares and conduct additional
closing(s) (each, a "Closing") for the sale of additional Shares after
the First Closing and until the Termination Date, at such times and in
such amounts as it, in its sole discretion, deems appropriate.
4. Acceptance of Subscription. The Purchaser understands and agrees that
the Company, in its sole discretion, reserves the right to accept or
reject this or any other subscription for Shares, in whole or in part
and in any order, notwithstanding prior receipt by the Purchaser of
notice of acceptance of this subscription. The Company shall have no
obligation hereunder until the Company shall execute and deliver to the
Purchaser an executed copy of this Subscription Agreement. If this
subscription is rejected in whole or the Offering is terminated or the
Minimum Amount is not raised, all funds received from the Purchaser will
be returned without interest, penalty, expense or deduction, and this
Subscription Agreement shall thereafter be of no further force or
effect. If this subscription is rejected in part, the funds for the
rejected portion of this subscription will be returned without interest,
penalty, expense
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or deduction, and this Subscription Agreement will continue in full
force and effect to the extent this subscription was accepted.
The Company reserves the right to, in its sole discretion and without
notice to the Purchaser or any other subscribers, increase or decrease
the Minimum Amount and/or the Maximum Amount.
5. Representation, Warranties and Agreements of the Company. The Company
hereby represents and warrants to the Purchaser, and covenants and
agrees with the Purchaser, as follows:
a. The Company has been duly organized, is validly existing and is in
good standing under the laws of the State of Delaware.
b. This Agreement and the issuance of the Shares have been duly
authorized by the Company.
c. The Company is in compliance in all material respects with the
Federal securities laws applicable to the issuance of the Shares to
the Purchaser; provided, however, that in making such representation
and warranty, the Company is relying upon the truth and accuracy of
the Purchaser's representations and warranties set forth in this
Agreement.
d. The Shares, when issued upon payment of the appropriate purchase
price, will be validly issued, fully paid and nonassessable and free
from preemptive rights.
e. (i) The Common Stock is registered pursuant to Section 12(g) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
(ii) the Company files periodic reports pursuant to the Exchange Act
and has filed all reports required to be filed thereunder and (iii)
the Common Stock is quoted on The Nasdaq Stock Market (SmallCap
Market).
6. Representations, Warranties and Agreements of the Purchaser. The
Purchaser hereby represents and warrants to the Company, and covenants
and agrees with the Company, as follows:
a. The Purchaser understands and acknowledges that none of the Shares
offered by the Company pursuant to the Offering are registered under
the Securities Act of 1933, as amended (the "Securities Act"), or
any state securities laws. The Purchaser understands that the
offering and sale of the Shares is intended to be exempt from
registration under the Securities Act, by virtue of
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Section 4(2) and/or Section 4(6) thereof and the provisions of Regulation D
promulgated thereunder, based, in substantial part, upon the representations
warranties and agreements of the Purchaser contained in this Subscription
Agreement.
b. The Purchaser and the Purchaser's attorney, accountant, purchaser
representative and/or tax advisor, if any (collectively, the "Advisors") have
received, or had made available to it, copies of the following documents of
the Company (the "Disclosure Documents"): the Annual Report on Form 10-KSB of
the Company for its fiscal years ended September 30, 1994 and 1995, the
Quarterly Report on Form 10-QSB of the Company for the fiscal quarter ended
December 31, 1995, and all other documents reasonably requested by the
Purchaser. The Purchaser has carefully reviewed the Disclosure Documents and
understands the information contained therein.
c. Neither the Securities and Exchange Commission ("Commission") nor any state
securities commission has approved the Shares or the Offering, or passed upon
or endorsed the merits of the Offering or confirmed the accuracy or
determined the adequacy of this Subscription Agreement. This Subscription
Agreement has not been reviewed by any Federal, state or other regulatory
authority.
d. The Purchaser acknowledges that all documents, records, and books pertaining
to an investment in the Shares have been made available for inspection by
such Purchaser and the Advisors, if any.
e. The Purchaser and the Advisors, if any, have had a reasonable opportunity to
ask questions of and receive satisfactory answers from a person or persons
acting on behalf of the Company concerning the Offering, the Shares and the
Company and all such questions have been answered to the full satisfaction
of the Purchaser and the Advisors, if any.
f. In evaluating the suitability of an investment in the Company, the Purchaser
has not relied upon any representation or other information (oral or written)
other than as stated in this Subscription Agreement and/or as contained in
the Disclosure Documents.
g. The Purchaser is unaware of, is no way relying on, and did not become aware
of the Offering of the Shares through or as a result of any form of general
solicitation or general advertising, including, without limitation, any
article, notice, advertisement or other
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communication published in any newspaper, magazine or similar media or
broadcast over television or radio, in connection with the Offering and is
not subscribing for the Shares and did not become aware of the Offering
through or as a result of any seminar or meeting to which the Purchaser was
invited by, or any solicitation of a subscription by, a person not
previously known to the Purchaser in connection with investments in
securities generally.
h. The Purchaser has taken no action which would give rise to any claim by any
person for brokerage commissions, finders' fees or the like relating to
this Subscription Agreement or the transactions contemplated hereby.
i. The Purchaser, together with the Advisors, have such knowledge and
experience in financial, tax, and business matters, and, in particular,
investments in securities, so as to enable them to utilize the information
made available to them in connection with the Offering to evaluate the
merits and risks of an investment in the Shares and to make an informed
investment decision with respect thereto.
j. The Purchaser is not relying on the Company or any of its officers,
directors, employees or agents with respect to the legal, tax, economic and
related considerations of an investment in the Shares, and the Purchaser has
relied on the advice of, or has consulted with, only his own Advisors (if
any).
k. The Purchaser is acquiring the Shares solely for such Purchaser's own
account for investment and not with a view to resale or distribution
thereof, in whole or in part. The Purchaser has no agreement or arrangement,
formal or informal, with any person to sell or transfer all or any part of
the Shares, and the Purchaser has no plans to enter into any such agreement
or arrangement.
l. The Purchaser must bear the substantial economic risks of an investment in
the Shares indefinitely because the Shares may not be sold, hypothecated or
otherwise disposed of unless subsequently registered under the Securities
Act and applicable state securities laws or an exemption from such
registration is available. The Purchaser acknowledges that legends shall be
placed on the Shares to the effect that they have not been registered under
the Securities Act or applicable state securities laws and appropriate
notations thereof will be made in the Company's stock books. Stop transfer
instructions will be placed with the transfer agent of the Company.
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m. The Purchaser has adequate means of providing for such Purchaser's
current financial needs and foreseeable contingencies and has no need for
liquidity of the investment in the Shares for an indefinite period of time.
n. The Purchaser is aware that an investment in the Shares involves a number of
very significant risks and investment considerations.
o. The Purchaser meets the requirements of at least one of the suitability
standards for an "accredited investor" under Regulation D promulgated under
the Securities Act and as set forth on the Accredited Investor Certification
contained herein.
p. The Purchaser: (i) if a natural person represents that the Purchaser has
reached the age of 21 and has full power and authority to execute and deliver
this Subscription Agreement and all other related agreements or certificates
and to carry out the provisions hereof and thereof and has adequate means for
providing for his or her current financial needs and anticipated future needs
and possible personal contingencies and emergencies and has no need for
liquidity in the investment in the Shares; (ii) if a corporation,
partnership, limited liability company or partnership, association, joint
stock company, trust, unincorporated organization or other entity represents
that such entity was not formed for the specific purpose of acquiring the
Shares, such entity is duly organized, validly existing and in good standing
under the laws of the state of its organization, the consummation of the
transactions contemplated hereby is authorized by, and will not result in a
violation or breach of any law, regulation, agreement to which it is a party
or is otherwise bound or of its charter or other organizational documents;
such entity has full power and authority to execute and deliver this
Subscription Agreement and all other related agreements or certificates and
to carry out the provisions hereof and thereof and to purchase and hold the
Shares; the execution and delivery of this Subscription Agreement has been
duly authorized by all necessary action; this Subscription Agreement has been
duly executed and delivered on behalf of such entity and is a legal, valid
and binding obligation of such entity; and (iii) if executing this
Subscription Agreement in a representative or fiduciary capacity, represents
that it has full power and authority to execute and deliver this Subscription
Agreement in such capacity and on behalf of the subscribing individual, ward,
partnership, trust, estate, corporation, limited liability company or
partnership, or other entity for whom the Purchaser is executing this
Subscription Agreement, and such individual, ward, partnership, trust,
estate,
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corporation, limited liability company or partnership, or other entity has
full right and power to perform pursuant to this Subscription Agreement and
make an investment in the Company, and that this Subscription Agreement
constitutes a legal, valid and binding obligation of such entity. The
execution and delivery of this Subscription Agreement will not violate or be
in conflict with any order, judgment, injunction, agreement or document to
which the Purchaser is a party or by which it is bound.
q. Any information which the Purchaser has heretofore furnished or furnishes
herewith to the Company is complete and accurate and may be relied upon by
the Company in determining the availability of an exemption from registration
under Federal and state securities laws in connection with the Offering. The
Purchaser will notify and supply corrective information to the Company
immediately (and without a specific request therefor) upon the occurrence of
any change therein occurring prior to the Company's issuance of the Shares.
r. The Purchaser has significant prior investment experience, including
investment in non-registered securities. The Purchaser has a sufficient net
worth to sustain a loss of its entire investment in the Company in the event
such a loss should occur. The Purchaser's overall commitment to investments
which are not readily marketable is not excessive in view of his/its net
worth and financial circumstances and the purchase of the Shares will not
cause such commitment to become excessive. The investment is a suitable one
for the Purchaser.
s. No oral or written representations have been made, or oral or written
information furnished, to the Purchaser in connection with the Offering which
are in any way inconsistent with the information contained herein.
t. The Purchaser acknowledges that, even if the Maximum Amount is raised from
the sale of the Shares, the net proceeds thereof will provide the Company
with the funds to meet only its most immediate needs and that additional
funds will be required by the Company (with the consequent dilution of value
and/or ownership) through additional equity and/or debt financing(s), and no
assurance can be given as to the availability, adequacy or terms of any such
financing(s). In the event that the Company does not obtain the requisite
funds, it may be necessary for the Company to reduce, suspend or cease
certain of its operations. The Purchaser
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acknowledges that the Company intends to use the net proceeds of the
Offering for its working capital requirements.
u. Blue Sky Information:
FOR RESIDENTS OF ALL STATES:
THE SECURITIES OFFERED HEREBY HAVE NOT 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. THE SECURITIES HAVE NOT BEEN APPROVED
OR DISAPPROVED BY THE SECURITIES COMMISSION OR ANY OTHER REGULATORY
AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED
THE MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THE MEMORANDUM.
ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
FOR CONNECTICUT RESIDENTS:
THE SECURITIES HAVE NOT BEEN REGISTERED UNDER SECTION 36-485 OF THE
CONNECTICUT UNIFORM SECURITIES ACT AND THEREFORE CANNOT BE RESOLD UNLESS
THEY ARE REGISTERED UNDER THE CONNECTICUT UNIFORM SECURITIES ACT OR UNLESS
AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
FOR PENNSYLVANIA RESIDENTS:
THE SECURITIES REFERRED TO IN THIS SUBSCRIPTION AGREEMENT HAVE NOT BEEN
REGISTERED UNDER THE PENNSYLVANIA SECURITIES ACT OF 1972 (THE "1972 ACT")
AND PENNSYLVANIA RESIDENTS HEREBY AGREE NOT TO SELL OR OTHERWISE ATTEMPT TO
CONVEY OR ASSIGN THEIR SECURITIES FOR ONE YEAR FROM THE DATE OF PURCHASE
UNLESS THEIR SECURITIES ARE SUBSEQUENTLY REGISTERED UNDER THE 1972 ACT OR
UNDER THE SECURITIES ACT OF 1933.
UNDER PROVISIONS OF THE 1972 ACT, EACH PENNSYLVANIA RESIDENT SHALL HAVE THE
RIGHT TO WITHDRAW HIS ACCEPTANCE WITHOUT INCURRING ANY LIABILITY TO THE
SELLER, UNDERWRITER (IF ANY) OR ANY OTHER PERSON, WITHIN TWO BUSINESS DAYS
FROM THE DATE OF RECEIPT BY THE ISSUER OF HIS WRITTEN BINDING
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CONTRACT OF PURCHASE OR, IN THE CASE OF A TRANSACTION IN WHICH THERE IS
NO WRITTEN BINDING CONTRACT OF PURCHASE, WITHIN TWO BUSINESS DAYS AFTER
HE MAKES THE INITIAL PAYMENT FOR THE SECURITIES BEING OFFERED.
FOR VERMONT RESIDENTS:
EACH PERSON WHO ACCEPTS AN OFFER TO PURCHASE SECURITIES DIRECTLY FROM
THE ISSUER OR AN AFFILIATE OF THE ISSUER SHALL HAVE THE RIGHT TO
WITHDRAW HIS ACCEPTANCE WITHOUT INCURRING ANY LIABILITY TO THE SELLER,
UNDERWRITER (IF ANY) OR ANY OTHER PERSON WITHIN THREE BUSINESS DAYS
AFTER HE MAKES THE INITIAL PAYMENT FOR THE SECURITIES BEING OFFERED.
7. Indemnification. The Purchaser hereby agrees to indemnify and hold harmless
the Company and its officers, directors, employees, agents, control persons
and affiliates against all losses, liabilities, claims, damages, and expenses
whatsoever (including, but not limited to, any and all expenses incurred in
investigating, preparing, or defending against any litigation commenced or
threatened) based upon or arising out of any actual or alleged false
acknowledgment, representation or warranty, or misrepresentation or omission
to state a material fact, or breach by the Purchaser of any covenant or
agreement made by the Purchaser herein or in any other document delivered in
connection with this Subscription Agreement.
8. Irrevocability; Binding Effect. The Purchaser hereby acknowledges and agrees
that the subscription hereunder is irrevocable by the Purchaser, except as
required by applicable law, and that this Subscription Agreement shall
survive the death, disability or bankruptcy, as the case may be, of the
Purchaser and shall be binding upon and inure to the benefit of the parties
hereto and their respective heirs, executors, administrators, successors,
legal representatives, and permitted assigns. If the Purchaser is more than
one person, the obligations of the Purchaser hereunder shall be joint and
several and the agreements, representations, warranties, and acknowledgements
herein shall be deemed to be made by and be binding upon each such person and
such person's heirs, executors, administrators, successors, legal
representatives, and permitted assigns.
9. Modification. This Subscription Agreement shall not be modified or waived
except by an instrument in writing signed by the party against whom any such
modification or waiver is sought.
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10. Notices. Any notice or other communication required or permitted to be
given hereunder shall be in writing and shall be mailed by certified mail,
return receipt requested, or delivered against receipt to the party to whom
it is to be given (a) if to the Company, at 556 Washington Avenue, North
Haven, Connecticut 06473, Attn.: Peter P. Phildius, Chairman of the Board,
or (b) if to the Purchaser, at the address set forth on the signature page
hereof (or, in either case, to such other address as the party shall have
furnished in writing in accordance with the provisions of this Section 10).
Any notice or other communication given by certified mail shall be deemed
given at the time of certification thereof, except for a notice changing a
party's address which shall be deemed given at the time of receipt thereof.
11. Assignability. This Subscription Agreement and the rights, interests and
obligations hereunder are not transferable, assignable or delegable by the
Purchaser and the transfer or assignment of the Shares shall be made only
in accordance with all applicable laws and this Subscription Agreement.
12. Applicable Law. This Subscription Agreement shall be governed by and
construed in accordance with the laws of the State of New York without
regard to its conflicts of laws principles. The Purchaser hereby
irrevocably submits to the non-exclusive jurisdiction of any New York State
court or United States Federal court sitting in New York County over any
action or proceeding arising out of or relating to this Subscription
Agreement or any agreement contemplated hereby, and the Purchaser hereby
irrevocably agrees that all claims in respect of such action or proceeding
may be heard and determined in such New York State or Federal court. The
Purchaser further waives any objection to venue in such State and any
objection to any action or proceeding in such State on the basis of a
non-convenient forum. The Purchaser further agrees that any action or
proceeding brought against the Company shall be brought only in New York
State or United States Federal courts sitting in New York County. THE
PURCHASER HEREBY AGREES TO WAIVE ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS SUBSCRIPTION AGREEMENT OR
ANY DOCUMENT OR AGREEMENT CONTEMPLATED HEREBY.
13. Blue Sky Qualification. The purchase of the Shares under this Subscription
Agreement is expressly conditioned upon the exemption from registration
and/or qualification of the offer and sale of the Shares from applicable
Federal and State securities laws. The Company shall not be required to
qualify this transaction under the securities laws of any jurisdiction and,
should qualification be necessary, the Company
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shall be released from any and all obligations to maintain the
Offering, and may rescind any sale contracted, in the
jurisdiction.
14. Piggyback Registration. If, at any time commencing after the date
hereof until such time as the purchaser has sold or otherwise
disposed of the shares, the Company proposes to register any of its
equity securities under the Act (other than in connection with a
merger or consolidation or pursuant to a Registration Statement
on Form S-8 or S-4 or comparable registration statement), it will
give written notice, at least thirty (30) days prior to the filing
of such registration, to the Purchaser of its intention to do so.
If the Purchaser notifies the Company within twenty (20) days after
receipt of any such notice of his/her desire to include the shares
in such proposed registration statement, the Company shall, subject
to the provisions set forth below, afford the Purchaser the
opportunity to have such shares registered under such registration
statement. If such registration statement is an underwritten
registration, and the managing underwriters advise the Company
that in their opinion the number of securities requested to be
included in such registration exceeds the number which can be sold
in such offering without materially adversely affecting such
underwriters' ability to effect an orderly distribution of such
securities, the Company will include in such registration first,
the securities proposed to be sold thereunder and, second, all
other securities having registration rights on a pro-rata basis.
The Company shall have the right at any time thereafter to elect
not to file any such proposed registration statement or to
withdraw the same after filing but prior to the effective date
thereof. The Company shall pay all such expenses relating to the
registration except sales commissions attributable to these
securities and except expenses incurred by the Purchaser such as
counsel for the Purchaser. Such sales commissions and other
expenses incurred by the Purchaser will be borne by the Purchaser.
15. Use of Pronouns. All pronouns and any variations thereof used
herein shall be deemed to refer to the masculine, feminine, neuter,
singular or plural as the identity of the person or persons
referred to may require.
16. Miscellaneous.
a. This Agreement constitutes the entire agreement between the
Purchaser and the Company with respect to the subject
matter hereof and supersedes all prior oral or written
agreements and understandings, if any, relating to the
subject matter hereof. The terms and provisions of this
Agreement may be waived, or consent for the departure
therefrom granted, only by a written document
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executed by the party entitled to the benefits of such terms or
provisions.
b. The Purchaser's representations and warranties made in this Agreement
shall survive the execution and delivery hereof and the sale and
delivery of the Shares.
c. Each of the parties hereto shall pay its own fees and expenses
(including the fees of any attorneys, accountants, advisors, appraisers
or others engaged by such party) in connection with this Agreement and
the transactions contemplated hereby whether or not the transactions
contemplated hereby are consummated.
d. This Agreement may be executed in one or more counterparts each of
which shall be deemed an original, but all of which shall together
constitute one and the same instrument.
e. Paragraph titles are for descriptive purposes only and shall not
control or alter the meaning of this Subscription Agreement as set
forth in the text.
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Accredited Investor Certification
---------------------------------
(Check the appropriate box(es))
/ / (i) I am a natural person who had individual income of more than
$200,000 in each of the most recent two years or joint income with
my spouse in excess of $300,000 in each of the most recent two years
and reasonably expect to reach that same income level for the current
year ("income", for purposes hereof, should be computed as follows:
individual adjusted gross income, as reported (or to be reported)
on a Federal income tax return, increased by (1) any deduction of
long-term capital gains under section 1202 of the Internal Revenue Code
of 1986, as amended (the "Code"), (2) any deduction for depletion under
Section 611 et seg. of the Code, (3) any exclusion for interest under
Section 103 of the Code and (4) any losses of a partnership as reported
on Schedule E of Form 1040);
/ / (ii) I am a natural person whose individual net worth (i.e. total
assets in excess of total liabilities), or joint net worth with my
spouse, will at the time of purchase of the Shares be in excess of
$1,000,000;
/ / (iii) The Purchaser is an investor satisfying the requirements of
Section 501(a)(1), (2) or (3) of Regulation D promulgated under the
Securities Act, which includes but is not limited to, a self-directed
employee benefit plan where investment decisions are made solely by
persons who are "accredited investors" as otherwise defined in
Regulation D;
/ / (iv) The Purchaser is a trust, which trust has total assets in excess
of $5,000,000, which is not formed the specific purpose of acquiring the
Shares offered hereby and whose purchase is directed by a sophisticated
person as described in Rule 506(b) (ii) of Regulation D and who has such
knowledge and experience in financial and business matters that he is
capable of evaluating the risks and merits of an investment in the
Shares;
/ / (v) I am a director or executive officer of the Company; or
/ / (vi) The Purchaser is an entity (other than a trust) in which all of
the equity owners meet the requirements of at least one of the above
subparagraphs.
FOR MASSACHUSETTS RESIDENTS:
/ / My investment in the Shares does not exceed 25% of my and my spouse's
joint net worth (excluding our principal residence and furnishings).
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IN WITNESS WHEREOF, the Purchaser has executed this Subscription Agreement this
_____ day of _________, 1996.
______________________ x $___________ = _________________________________
(Shares being purchased) (Share Price) Subscription (Minimum of $10,000)
If the purchaser is an INDIVIDUAL, and if purchased as JOINT TENANTS, as
TENANTS IN COMMON, or as COMMUNITY PROPERTY:
____________________________________ ____________________________________
Print Name(s) Social Security Number(s)
____________________________________ ____________________________________
Signature(s) of Purchaser(s)
____________________________________ ____________________________________
Date Address
If the purchaser is a PARTNERSHIP, CORPORATION, or TRUST:
____________________________________ ____________________________________
Name of Partnership, Corporation Federal Taxpayer Identification
or Trust Number
____________________________________
Date
By:_________________________________ ____________________________________
Name: State of Organization
Title:______________________________ ____________________________________
Address
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SUBSCRIPTION ACCEPTED AND AGREED TO this ____ day of __________, 1996.
AVITAR, INC.
By: ____________________________
Title: _________________________