Exhibit 10.02
SUBSCRIPTION AGREEMENT
THIS SUBSCRIPTION AGREEMENT (this "Agreement") is entered into by and
between Diatect International Corporation, a California corporation (the
"Company"), and the undersigned subscriber, (the "Investor"), to purchase
securities of the Company pursuant hereto.
The Company is offering for sale up to One Million Four Hundred
Thousand (1,400,000 shares of its restricted common stock, no par value per
share (the "Common Stock") at a purchase price of $0.287 per share.
On the foregoing premises, the Investor hereby subscribes for the
purchase of the Common Stock on the following terms and conditions:
1. Subscription to Purchase Common Stock
1.1 Offer to Purchase. Subject to the terms and conditions of
this Agreement, the Investor irrevocably subscribes to purchase at
Closing (as hereinafter defined), as follows:
Name of Investor: Philip M. Morrell
Number of Shares: 1,400,000
Total Subscription Price: $402,000
With this Agreement, the Investor is also tendering to the Company: (i)
a suitability letter, (ii) an investment letter, (iii) payment of the full
subscription amount, and (iv) a certificate of corporation, partnership, or
other entity, if applicable. The foregoing are sometimes hereinafter referred to
as the "Subscription Documents."
1.2 Acceptance or Rejection. The acceptance or rejection of
the offer to purchase Common Stock shall take place at such time and
place within a maximum of up to 10 days of the date hereof, as the
Company may specify (which time and place are designated as the
"Closing"). The purchaser has read and understands that there are no
provisions for escrow of the funds being delivered concurrently with
the execution of this Agreement and further understands that at the
Closing, the Company shall either (a) accept this subscription (in
whole or in part) and deliver to the Investor certificates represent
the Common Stock, all against delivery to the Company of the full
purchase price of the Common Stock or (b) reject this subscription and
return to the Investor his or her subscription (or as much thereof as
is not accepted).
2. Representations. The Investor hereby represents and warrants as
follows:
2.1 Age. The Investor, if a natural person, is over the age of
18 years.
2.2 No Governmental Approval. The Investor acknowledges that
neither the United States Securities and Exchange Commission nor the
securities commission of any other state or federal agency has made any
determination as to the merits of purchasing the Common Stock.
2.3 Information Provided by the Investor. All information,
which the Investor has provided to the Company, or to its
representatives concerning the Investor's suitability to invest in the
Company, is complete, accurate, and correct as of the date of this
Agreement. Such information includes, but is not limited to,
information concerning the Investor's personal financial affairs,
business position, and the knowledge and experience of the Investor and
the Investor's advisors.
2.4 Information Provided by the Company. The Investor has been
provided with all material information requested by either the
Investor, the Investor's purchaser representative, or others
representing the Investor, including any information requested to
verify any information furnished, and there has been direct
communication between the Company and its representatives on the one
hand and the Investor and the Investor's representatives and advisors
on the other in connection with information regarding the purchase made
hereby. There has been made available the opportunity to ask questions
of and receive answers from the Company and/or the officers, employees,
or representatives of the Company concerning the terms and conditions
of this offering and to obtain any additional information (to the
extent the Company possesses such information or can acquire it without
unreasonable effort or expense) desired or necessary to verify the
accuracy of the information provided.
2.5 Subscription Subject to Acceptance. The Investor
acknowledges that this Agreement may be accepted or rejected by the
Company with respect to all or part of the amount subscribed and that,
to the extent the subscription may be rejected, the accompanying
subscription payment will be refunded without payment of interest and
without deduction of expenses.
2.6 Financial Condition of the Investor. The Investor has
adequate means of providing for his or her current needs and possible
personal contingencies and has no need now, and anticipates no need in
the foreseeable future, to sell the securities for which the
undersigned hereby subscribes. The Investor represents that Investor is
able to bear the economic risks of this investment and is able to hold
the securities for an indefinite period of time and has a sufficient
net worth to sustain a loss of the entire investment, in the event such
loss should occur.
2.7 Purchase Entirely for Own Account. The Investor has no
present intention of dividing the securities with others or of
reselling or otherwise disposing of any portion of the securities,
unless registered pursuant to a registration statement filed with the
Securities and Exchange Commission.
2.8 No Reliance on Unauthorized Representations. The Investor
has relied on no representations from the Company, or any broker or
salesman or their partners, shareholders, directors, officers,
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employees, or agents. In making a decision to purchase the securities,
the Investor has made an independent investigation without assistance
of the Company. The Investor has received no offering literature
regarding the Company.
2.9 No Solicitation. The Investor was at no time solicited by
any leaflet, public promotional meeting, circular, newspaper or
magazine article, radio or television advertisement, or any other form
of general advertising or solicitation in connection with the offer,
sale, or purchase of the securities.
3. Representations Regarding Exemptions and Restrictions on Transfer.
The Undersigned is executing and delivering to the Company a separate investment
letter setting forth additional representations and warranties, which are
incorporated herein by reference.
4. Indemnity. The Investor hereby agrees to indemnify the Company, any
registered sales agent, and any person participating in the offering, to hold
them harmless, and to grant them a right of set-off, from and against any and
all liability, damages, cost, or expense (including, but not limited to,
reasonable attorneys' fees), including the amount paid in settlement and whether
or not suit is commenced, incurred on account of or arising out of:
(a) Any inaccuracy in the Investor's declarations,
representations, and warranties set forth in any subscription document
executed and delivered by the Investor in connection with his or her
subscription for the Common Stock;
(b) The disposition of any of the securities contrary to the
Investor's declarations, representations, and warranties set forth
herein or in any subscription document executed in connection with his
or her subscription for the Common Stock; and
(c) Any action, claim, threat, allegation, suit or proceeding
based on (i) the claim that any such declaration, representation, or
warranty was inaccurate or misleading or otherwise cause for obtaining
damages or redress from the Company, any sales agent, or any person
participating in the offering; or (ii) the disposition of any of the
securities by any party hereof.
5. Setoff. Notwithstanding the provisions of the last preceding section
or the enforceability thereof, the Investor hereby grants the Company the right
of Setoff against any amounts payable by the Company to the Investor for
whatever reason, any and all damages, costs, or expenses (including, but not
limited to, reasonable attorneys' fees) incurred on account of or arising out of
any of the items referred to in clauses (a) through (c) of the last preceding
section.
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6. Miscellaneous. The Investor further understands, acknowledges, and
agrees that:
(a) This Agreement is not transferable or assignable by the
Investor.
(b) This Agreement constitutes the entire agreement between
the parties respecting the subject matter hereof.
(c) Notwithstanding any of the representations, warranties,
acknowledgments, or agreements made herein by the Investor, the
Investor does not hereby or in any other manner waive any rights
granted to the Investor under federal or state securities laws.
(d) This Agreement does not entitle the undersigned to any
rights as a shareholder of the Company's securities with respect to any
securities purchasable hereunder which have not been fully paid for.
INVESTOR
Date: March 9, 2005 Philip M. Morrell
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Subscriber
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Social Security Number
/s/ Philip M. Morrell
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Signature
615 Desota Street
Salt Lake City, UT 84103
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