EXHIBIT 4.2
NAME OF SUBSCRIBER:_____________________________________
To: CARESIDE, INC.
0000 XXXXXXX XXXXXXX
XXXXXX XXXX, XX 00000
SECURITIES PURCHASE AND SUBSCRIPTION AGREEMENT
SECTION 1.
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1.1 Subscription. The undersigned (the "Purchaser"), intending to be
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legally bound, hereby subscribes for and agrees to purchase the following
securities of Careside, Inc., a Delaware corporation (the "Company"),
immediately upon the acceptance of such subscription by the Company together
with other similar subscriptions which aggregate at least three million dollars
($3,000,000) (the "Minimum Offering"):
(a) such number of shares of Series C Convertible Preferred
Stock, $.01 par value per share (the "Preferred Stock") as
is reached when (i) the Aggregate Purchase Price (as
hereafter defined) is divided by (ii) 10,000 times eighty
percent (80%) of the average closing price of the Company's
common stock, $.01 par value per share (the "Common Stock"),
during the five (5) trading days prior to the first closing
(such average hereafter referred to as the "Index Price"),
and
(b) a warrant (the "Warrant") to purchase such number of shares
of Common Stock as is reached when the number of shares of
Preferred Stock purchased is multiplied by 10,000, for a
purchase price of the Index Price plus $0.125 per share of
Common Stock,
for an aggregate purchase price of ______________________________dollars
($___________) (the "Aggregate Purchase Price") in accordance with the terms and
conditions of this Securities Purchase and Subscription Agreement (the
"Subscription Agreement") and pursuant to the Company's Confidential Private
Offering Memorandum dated March 1, 2001 (the "Confidential Memorandum").
Purchasers acknowledge that the above calculations may result in the purchase of
fractional shares of Preferred Stock.
1.2 Purchase of Securities; Delivery of Documents. The Purchaser
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understands and acknowledges that the Aggregate Purchase Price shall be remitted
to Xxxxxxxxx & Company LLC (the "Placement Agent"), as agent for the Company, in
exchange for the Preferred Stock and Warrant (the "Purchased Securities").
Payment for the Purchased Securities shall be made by certified check or wire
transfer in accordance with the instructions of the Placement Agent,
together with an executed copy of this Subscription Agreement. Also,
contemporaneously with the execution and delivery of this Subscription Agreement
by the Purchaser, the Purchaser is delivering to the Company a completed
Accredited Investor Questionnaire (the "Questionnaire") in the form attached to
this Subscription Agreement as Appendix III.
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SECTION 2.
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2.1 Acceptance or Rejection. The Company's acceptance of the
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Purchaser's subscription shall be evidenced by the Company's execution and
delivery of a duplicate original or a copy of this Subscription Agreement to the
Purchaser.
(a) The Purchaser understands and agrees that the Company reserves
the right to reject this subscription for the Preferred Stock in whole or in
part, at any time prior to the applicable Closing (as defined in Section 2.2
hereof), notwithstanding prior receipt by the Purchaser of notice of acceptance
of the Purchaser's subscription.
(b) In the event a subscription is accepted in part, the applicable
portion of the Aggregate Purchase Price shall be retained by the Company in
payment of the shares of Preferred Stock to be sold to the Purchaser and the
balance shall be returned promptly to the Purchaser, without interest thereon.
(c) The Purchaser understands and agrees that this offer to purchase
is and shall be irrevocable, but its obligations hereunder will terminate if
this offer is rejected by the Company, pursuant to the terms herein.
(d) In the event of rejection of this subscription, or in the event
the sale of the Preferred Stock subscribed for by the Purchaser is not
consummated by the Company for any reason (in which event this Subscription
Agreement shall be deemed to be rejected), this Subscription Agreement and any
other agreement entered into between the Purchaser and the Company relating to
this subscription shall thereafter have no force or effect and the Company shall
promptly return or cause to be returned to the Purchaser the Aggregate Purchase
Price remitted to the Company by the Purchaser, without interest thereon or
deduction therefrom.
(e) Pending acceptance or rejection of this subscription at a
Closing, the Aggregate Purchase Price shall be held in escrow by Resource Trust
Bank, Minneapolis, Minnesota (the "Escrow Agent") pursuant to an escrow
agreement among the Company, the Placement Agent and the Escrow Agent.
2.2 Closing; Closing Date.
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The closing of the purchase and sale of the Minimum Offering (the
"Initial Closing") shall take place at the offices of Xxxxxx Xxxxxxxx LLP, 0000
Xxx Xxxxx Xxxxxx,
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Xxxxxxxxxxxx, XX 00000, or such other place as may be mutually agreed by the
Company and the Placement Agent, no later than May 30, 2001 (the "Termination
Date") or upon the Company's acceptance of subscriptions equal to the Minimum
Offering. Subsequent closings of part or all of the sale of securities
contemplated by the Confidential Memorandum, if any, will be held at such times
after the Initial Closing as shall be determined by the Company (each, a
"Closing") prior to the Termination Date. At the Initial Closing, the Company
shall deliver to the Purchaser (i) certificates for the Preferred Stock and
Warrant issued and sold to the Purchaser, duly registered in the Purchaser's
name (or their nominee) against payment in full by the Purchaser of the
Aggregate Purchase Price, and (ii) an opinion of Xxxxxx Xxxxxxxx LLP, counsel to
the Company, addressed to the Purchaser with respect to the valid existence and
good standing of the Company, the due authorization, execution and delivery of
this Agreement and the issuance and sale of the Preferred Stock and Warrant, and
that the Preferred Stock and Warrant, upon issuance and sale to the Purchaser,
are duly authorized, validly issued, fully paid and nonassessable.
SECTION 3.
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3.1 Representations and Warranties of the Company.
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The Company represents and warrants that:
(a) The Company is a corporation duly organized and validly existing
and in good standing under the laws of the State of Delaware, and duly qualified
to do business and in good standing as a foreign corporation in each state in
which the nature of its business or properties requires such qualification
(except where failure to qualify would not have a material adverse effect on the
Company taken as a whole), with full power and authority, corporate and
otherwise, to enter into and perform this Subscription Agreement, and to execute
and deliver the various instruments and documents provided for herein.
(b) The execution, delivery and performance by the Company of this
Subscription Agreement and the issuance and delivery by the Company of the
Preferred Stock and Warrant as contemplated hereby have been duly authorized by
all necessary corporate action and will not violate any provision of law, court
order or decree, or any provision of the Company's Certificate of Incorporation
or Bylaws, or result in the breach of, constitute a default under or result in
the creation of any lien, charge or encumbrance upon any property or assets of
the Company pursuant to any agreement or instrument to which the Company is a
party, or by which it or any of its property may be bound or affected. This
Subscription Agreement is a valid and binding obligation of the Company,
enforceable in accordance with its terms subject to general principles of equity
and bankruptcy and other laws affecting creditors' rights generally.
(c) There are no material lawsuits or proceedings pending, or, to the
Company's knowledge, threatened, against or affecting the Company and there are
no proceedings before any governmental commission, bureau or other
administrative agency pending, or, to the Company's knowledge, threatened,
against or affecting the Company.
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(d) As of January 31, 2001, the authorized capital stock of the
Company consisted of 50,000,000 shares of common stock, $.01 par value per share
(the Company "Common Stock") and 5,000,000 shares of preferred stock, $.01 par
value per share (the "Preferred Stock"). As of January 31, 2001, there were
11,262,352 shares of Company Common Stock and 180 shares of Series B Preferred
Stock (the "Series B Preferred Stock") outstanding and 179,626 shares of Series
A Preferred Stock have been issued and have been converted to Common Stock and a
warrant to purchase Common Stock. As of January 31, 2001, 6,122,007 shares of
Company Common Stock are issuable upon the exercise of currently exercisable
warrants and options and upon the conversion of the outstanding shares of Series
B Preferred Stock.
(e) The Preferred Stock issuable under this Subscription Agreement or
upon exercise of the Warrant has been duly authorized and, when issued against
payment therefor, will be validly issued, fully paid and nonassessable and will
be issued in reliance upon applicable exemptions from the registration and
qualification provisions of all applicable securities laws of the United States
and each state whose securities laws may be applicable thereto. All Preferred
Stock purchased hereunder and the Common Stock issued upon exercise of the
Warrant will be issued free and clear of any preemptive or similar right and
free and clear of any claim, lien, security interest or other encumbrance. The
Company has reserved for issuance upon exercise of the Warrant the full number
of shares of Common Stock issuable upon exercise thereof.
(f) No governmental permit, consent, approval or authorization is
required in connection with (i) the execution, delivery and performance of this
Subscription Agreement by the Company or (ii) the offer, sale, issuance and
delivery by the Company of the Preferred Stock and Warrant contemplated hereby;
provided that, all representations made to the Company by the Purchaser in this
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Subscription Agreement and in any other document or instrument delivered in
connection herewith are assumed for purposes of this representation and warranty
to be accurate and complete.
(g) The Confidential Memorandum and any amendment or supplement
thereto provided by the Company to the Purchaser does not, at the date hereof,
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading.
(h) As of the date hereof, the Company's Common Stock and its
publicly traded warrants are traded on the AMEX.
(i) No sale of Common Stock or other securities by the Company within
the last six (6) months require integration under the Act and Regulation D
promulgated thereunder that would materially adversely affect the sale of the
Common Stock and Warrant or the timely effectiveness of the Registration
Statement referred to in Appendix II.
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SECTION 4.
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4.1 Purchaser Representations, Warranties and Covenants.
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The Purchaser hereby acknowledges, represents and warrants to, and
agrees with, the Company and its affiliates as follows:
(a) The Purchaser has received, read carefully and understands the
Confidential Memorandum and has had an adequate opportunity to consult his own
attorney, accountant or investment advisor (his "Advisors") with respect to the
suitability of the investment contemplated hereby for the Purchaser. The
Purchaser further acknowledges that the Purchaser and his Advisors have also
made such other investigation, review, examination and inquiry concerning the
Company and its business and affairs as they have deemed appropriate so as to
understand the nature of the investment in the Purchased Securities, including
without limitation, the merits and risks thereof.
(b) The Purchaser is acquiring the Purchased Securities for the
Purchaser's own account as principal, not as a nominee or agent, for investment
purposes only, and not with a view to, or for, resale, distribution or
fractionalization thereof in whole or in part, which resale, distribution or
fractionalization would violate the Securities Act of 1933, as amended (the
"Securities Act"). Further, the Purchaser does not have any contract,
undertaking, agreement or arrangement with any person to sell, transfer or grant
participations to such person or to any third person, with respect to the
Purchased Securities, for which the Purchaser is subscribing.
(c) The Purchaser has full power and authority to enter into this
Subscription Agreement. The execution and delivery of this Subscription
Agreement has been duly authorized, if applicable, by the Purchaser and this
Subscription Agreement constitutes a valid and legally binding obligation of the
Purchaser.
(d) The Purchaser acknowledges the Purchaser's understanding that the
offering and sale of the Purchased Securities is intended to be exempt from
registration under the Securities Act by virtue of Section 4(2) thereof and the
provisions of Regulation D promulgated thereunder ("Regulation D"). In
furtherance thereof, the Purchaser represents and warrants to and agrees with
the Company and its affiliates as follows:
(i) The Purchaser understands that the basis for the exemption
from registration may not be present if, notwithstanding such
representations, the Purchaser's intention is merely to acquire the
Preferred Stock for a fixed or determinable period in the future, or
for a market rise, or for sale if the market does not rise.
Accordingly, the Purchaser does not have any such intention;
(ii) The Purchaser has the financial ability to bear the economic
risk of the Purchaser's investment, has adequate means for providing
for the Purchaser's
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current needs and personal contingencies and has no need for liquidity
with respect to the Purchaser's investment in the Company; and
(iii) The Purchaser has such knowledge and experience in
financial and business matters as to be capable of evaluating the
merits and risks of the prospective investment in the Preferred Stock.
If other than an individual, the Purchaser also represents that it has
not been organized for the purpose of acquiring the Preferred Stock.
(e) The information in the Questionnaire completed and executed by
the Purchaser is accurate and true in all respects and the Purchaser is an
"accredited investor," as that term is defined in Rule 501 of Regulation D as
described in Appendix I hereto.
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(f) The Purchaser:
(i) Has been furnished with copies of the Confidential
Memorandum, a List of FDA Approved Tests, the Company's Quarterly
Report on Form 10-Q for the quarter ended September 30, 2000, the
Company's Annual Report on Form 10-K for the year ended December 31,
1999 and any documents which may have been made available upon request
for a reasonable period of time prior to the date hereof
(collectively, the "Documents"). The Purchaser acknowledges and agrees
that the Documents supercede all written information regarding the
Company that the Purchaser may have received prior to the date of the
Documents. The Purchaser has carefully read the Documents and has
relied solely (except as indicated in subsections (ii) and (iii)
below) on the information contained in the Documents (including all
exhibits thereto);
(ii) Has been provided an opportunity for a reasonable period
of time prior to the date hereof to obtain additional information
concerning the Purchased Securities, the Company and all other
information to the extent the Company possesses such information or
can acquire it without unreasonable effort or expense;
(iii) Has been given the opportunity for a reasonable period of
time prior to the date hereof to ask questions of, and receive answers
from, the Company or its representatives concerning the terms and
conditions of the Offering and other matters pertaining to this
investment, and has been given the opportunity for a reasonable period
of time prior to the date hereof to obtain such additional information
necessary to verify the accuracy of the information contained in the
Documents or that which was otherwise provided in order for the
Purchaser to evaluate the merits and risks of purchase of the
Purchased Securities to the extent the Company possesses such
information or can acquire it without unreasonable effort or expense;
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(iv) Has not been furnished with any oral representation or oral
information in connection with the Offering which is not contained
herein or in the Documents; and
(v) Has determined that the Purchased Securities are a suitable
investment for the Purchaser and that at this time the Purchaser could
bear a complete loss of such investment.
(g) This offer is not transferable or assignable by the Purchaser
unless the Purchaser complies with the terms of transfer contained herein. The
Purchaser further represents, warrants and agrees that the Purchaser will not
sell or otherwise transfer the Purchased Securities, without registration under
the Securities Act or an exemption therefrom, and that the Purchaser fully
understands and agrees that the Purchaser must bear the economic risk of the
Purchaser's purchase because, among other reasons, none of the Purchased
Securities has been registered under the Securities Act or under the securities
laws of any state and, therefore, none can be resold, pledged, assigned or
otherwise disposed of unless they are subsequently registered under the
Securities Act and under the applicable securities laws of such states or an
exemption from such registration is available. In particular, the Purchaser is
aware that the Preferred Stock is a "restricted security," as such term is
defined in Rule 144 promulgated under the Securities Act ("Rule 144"), and may
not be sold pursuant to Rule 144 unless all of the conditions of Rule 144 are
met. The Purchaser also understands that, except as expressly otherwise provided
herein, the Company is under no obligation to register the Preferred Stock on
the Purchaser's behalf or to assist the Purchaser in complying with any
exemption from registration under the Securities Act or applicable state
securities laws. The Purchaser further understands that sales or transfers of
the Purchased Securities are further restricted by state securities laws and the
provisions of this Subscription Agreement.
(h) No representations or warranties have been made to the Purchaser
by the Company, or any officer, employee, agent or affiliate of the Company,
other than the representations and warranties of the Company contained herein,
and in subscribing for the Purchased Securities, the Purchaser is not relying
upon any representations other than those contained herein.
(i) Any information which the Purchaser has heretofore furnished to
the Company with respect to the Purchaser's financial position and business
experience is correct and complete as of the date of this Subscription Agreement
and if there should be any material change in such information the Purchaser
will immediately furnish such revised or corrected information to the Company.
(j) The Purchaser understands and agrees that, at issuance, the
Preferred Stock shall bear the following legend, or a similar legend to the same
effect, until (i) such Preferred Stock shall have been registered under the
Securities Act and effectively been disposed
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of in accordance with a registration statement that has been declared effective;
or (ii) in the opinion of counsel for the Company such Preferred Stock be may
sold without registration under the Securities Act or any applicable "Blue Sky"
or state securities laws:
"THE PREFERRED STOCK REPRESENTED BY THIS CERTIFICATE HAS NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), AND IS SUBJECT TO RESTRICTIONS ON TRANSFERABILITY
AS SET FORTH IN THIS CERTIFICATE. THE PREFERRED STOCK
REPRESENTED HEREBY MAY NOT BE SOLD, TRANSFERRED, OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT OR AN OPINION OF COUNSEL, REASONABLY
ACCEPTABLE TO COUNSEL FOR THE COMPANY, TO THE EFFECT THAT THE
PROPOSED SALE, TRANSFER, OR DISPOSITION MAY BE EFFECTUATED
WITHOUT REGISTRATION UNDER THE ACT."
(k) The Purchaser understands and agrees that, at issuance, Common
Stock issued upon exercise of the Warrant shall bear the following legend, or a
similar legend to the same effect, until (i) such Common Stock shall have been
registered under the Securities Act and effectively been disposed of in
accordance with a registration statement that has been declared effective; or
(ii) in the opinion of counsel for the Company such Preferred Stock be may sold
without registration under the Securities Act or any applicable "Blue Sky" or
state securities laws:
"THE COMMON STOCK REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND IS SUBJECT
TO RESTRICTIONS ON TRANSFERABILITY AS SET FORTH IN THIS CERTIFICATE. THE
COMMON STOCK REPRESENTED HEREBY MAY NOT BE SOLD, TRANSFERRED, OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE ACT OR AN OPINION OF COUNSEL, REASONABLY ACCEPTABLE TO COUNSEL FOR THE
COMPANY, TO THE EFFECT THAT THE PROPOSED SALE, TRANSFER, OR DISPOSITION
MAY BE EFFECTUATED WITHOUT REGISTRATION UNDER THE ACT."
(l) The Purchaser: is not (i) a director, officer, or substantial
security holder of the Company (a "Related Party"), (ii) a subsidiary, affiliate
or other closely-related person of a Related Party, or (iii) any person, company
or entity in which a Related Party has a substantial direct or indirect
interest.
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(m) No Federal or state agency has made any findings or determination
as to the fairness of the Offering or the Purchased Securities (or any part
thereof) for investment, or any recommendation or endorsement of any of the
Purchased Securities (or any part thereof).
(n) The Purchaser covenants that it will not, directly or indirectly
through its affiliates or agents, at any time prior to nine months from the
Termination Date, effect short sales of the Common Stock or hedge transactions
in the Common Stock that customarily result in a counter party engaging in short
sales.
(o) The Purchaser covenants that it will not, directly or indirectly
through its affiliates or agents, at any time prior to the Conversion Date,
effect any sales of the Common Stock; make, or in any way participate in, any
"solicitation" of "proxies" (as such terms are defined under Regulation 14A of
the Securities Exchange Act of 1934 ) to vote or seek to advise or influence in
any manner whatsoever any person or entity with respect to the voting of any
securities of the Company or any of its subsidiaries; form, join or in any way
participate in a "group" (within the meaning of Section 13(d)(3) of the Exchange
Act) with respect to any securities of the Company; or take any other action to
influence or control the Company or its management or policies or the market
price of its publicly traded stock.
(p) The foregoing representations, warranties and agreements shall
survive the Closing.
SECTION 5.
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5.1 Registration of the Common Stock. Within fifteen (15) days
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after the date Careside's shareholders approve the terms of the Preferred Stock
relating to the conversion of the Preferred Stock (the "Shareholder Approval
Date"), the Company shall file a registration statement on Form S-3 registering
for resale the Common Stock issuable upon conversion of the Preferred Stock and
upon exercise of the Warrant in accordance with the provisions set forth in
Appendix II, which is attached hereto and incorporated by reference as if set
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forth herein in its entirety. The Company shall use its reasonable best efforts
to have such registration statement declared effective and to cause the listing
of the Common Stock conversion of the Preferred Stock and issuable upon exercise
of the Warrant on the AMEX as soon as practicable. The Company does not hereby
undertake to register the Preferred Stock or the Warrant included in the
Purchased Securities.
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SECTION 6.
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6.1 Indemnification of the Company.
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(a) The Purchaser agrees to indemnify and hold harmless the Company,
its officers and directors, employees, agents and affiliates and each other
person, if any, who controls any thereof within the meaning of Section 15 of the
Securities Act or Section 20(a) of the Securities Exchange Act of 1934 (the
"Exchange Act"), against any loss, liability, claim, damage and expense
whatsoever (including, but not limited to, any and all expenses whatsoever
reasonably incurred in investigating, preparing or defending against any
litigation commenced or threatened or any claim whatsoever) arising out of or
based upon any false representation or warranty or breach or failure by the
Purchaser to comply with any covenant or agreement made by the Purchaser herein
or in any other document furnished by the Purchaser to any of the foregoing in
connection with this transaction. The Purchaser also agrees to indemnify the
Company as set forth in Appendix II with respect to the resale registration of
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Common Stock underlying the Purchased Securities.
6.2 Indemnification of Purchaser. The Company agrees to indemnify and
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hold harmless the Purchaser against any loss, liability, claim, damage and
expense whatsoever (including, but not limited to, any and all expenses
whatsoever reasonably incurred in investigating, preparing or defending against
any litigation commenced or threatened or any claim whatsoever) arising out of
or based upon any false representation or warranty or breach or failure by the
Company to comply with any covenant or agreement made by the Company herein or
in any other Document furnished by the Company to any of the foregoing in
connection with the transaction contemplated by this Subscription Agreement. The
Company also agrees to indemnify the Purchaser as set forth in Appendix II with
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respect to the resale registration of the Common Stock or underlying the
Purchased Securities.
6.3 Modification. Neither this Subscription Agreement nor any
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provisions hereof shall be modified, discharged or terminated except by an
instrument in writing signed by the party against whom any waiver, change,
discharge or termination is sought.
6.4 Notices. All notices, authorizations, demands or requests
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required or permitted to be delivered to any party in connection with this
Subscription Agreement shall be in writing and shall be deemed to have been duly
given if personally delivered, if sent by facsimile transmission (with receipt
confirmed by automatic transmission report), if sent by a nationally-recognized
overnight courier with charges prepaid, if sent by registered or certified mail,
return receipt requested and postage prepaid (or by the most nearly comparable
method if mailed from or to a location outside the United States), or addressed
as follows:
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If to the Company, to:
0000 Xxxxxxx Xxxxxxx
Xxxxxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxx
Fax: 000-000-0000
With copies (which copies shall not constitute notice) to:
Xxxxxx Xxxxxxxx LLP
0000 Xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
Attn: Xxxxx X. Xxxxxxx, Esquire
Fax: 000-000-0000
If to the Purchaser, to the address shown on such Purchaser's
signature page hereto,
or to such other address as the party to whom the notice is to be given may have
furnished to the other party hereto in writing in accordance with the provisions
of this Section 6.4. Any such notice or communication shall be deemed to have
been received (i) in the case of personal delivery, on the date of such
delivery, (ii) in the case of facsimile transmission (with receipt confirmed by
automatic transmission report), on the date of such transmission, (iii) in the
case of a nationally-recognized overnight courier, on the next business day
after the date when delivered to such courier, and (iv) in the case of mailing
(or by the most nearly comparable method if mailed from or to a location outside
the United States), on the third business day following that on which the piece
of mail containing such communication is posted; provided, however, that three
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additional business days shall be added to the time any notice or communication
sent from or to a location outside the United States shall be deemed to have
been received in (iii) or (iv) above.
6.5 Counterparts. This Subscription Agreement may be executed through
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the use of separate signature pages or in any number of counterparts (and by
facsimile signature), and each of such counterparts shall, for all purposes,
constitute one agreement binding on all parties, notwithstanding that all
parties are not signatories to the same counterpart.
6.6 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 heirs, executors, administrators, successors, legal
representatives and assigns. If the Purchaser is more than one person, the
obligation of the Purchaser shall be joint and several and the agreements,
representations, warranties and acknowledgments herein contained shall be deemed
to be made by and be binding upon each such person and his heirs, executors,
administrators and successors.
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6.7 Severability. In the event that any provision of this
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Subscription Agreement shall be deemed to be invalid, illegal or unenforceable,
the validity, legality or enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.
6.8 Entire Agreement. This Subscription Agreement and the documents
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referenced herein contain the entire agreement of the parties and there are no
representations, covenants or other agreements except as stated or referred to
herein and therein.
6.9 Assignability. This Subscription Agreement is not transferable
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or assignable by the Purchaser.
6.10 Applicable Law. This Subscription Agreement shall be governed by
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and construed in accordance with the laws of the State of Delaware, without
giving effect to conflicts of law principles.
6.11 Jurisdiction. The Purchaser and the Company each hereby submit
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to the exclusive jurisdiction of the courts of the State of Delaware and to the
United States District Court for the District of Delaware with respect to any
action or legal proceeding commenced by either of them with respect to this
Subscription Agreement, the Offering or the Common Stock. Each of them
irrevocably waives any objection they now have or hereafter may have respecting
the venue of any such action or proceeding brought in such a court or respecting
the fact that such court is an inconvenient forum and consents to the service of
process in any such action or proceeding by means of registered or certified
mail, return receipt requested, in care of the address set forth above or below
or at such other address as either of them shall furnish in writing to the
other.
6.12 Waiver. The Purchaser and the Company each hereby waive trial by
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jury in any action or proceeding involving any matter (whether sounding in tort,
contract, fraud or otherwise) in any way arising out of or relating to this
Subscription Agreement, the Offering or the Preferred Stock.
6.13 Pronouns. The use herein of the masculine pronouns "he," "him"
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or "his" or similar terms shall be deemed to include the feminine and neuter
genders as well and the use herein of the singular pronoun shall be deemed to
include the plural as well.
6.14 Survival. The respective indemnities, representations,
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warranties and agreements of the Company and the Purchasers contained in this
Subscription Agreement or made by or on behalf on them, respectively, pursuant
to this Subscription Agreement, shall survive the delivery of and payment for
the Common Stock and shall remain in full force and effect regardless of any
investigation made by or on behalf of any of them or any person controlling any
of them for a period of one year from the date hereof.
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EXECUTION PAGE FOR INDIVIDUAL
IN WITNESS WHEREOF, subject to acceptance by the Company, the undersigned
has completed this Subscription Agreement to evidence its offer to purchase the
Purchased Securities, comprised of Preferred Stock and the Warrant, on this
______day of _____________, 2001.
Amount of check enclosed or wire transfer sent*: $_______________________.
___________________________________ _______________________________________
Signature of Purchaser (Name of Purchaser - Please Print)
___________________________________ _______________________________________
Social Security Number of Purchaser Address of Purchaser
Accepted:
Dated: _________________, 2001 CARESIDE, INC
By:____________________________________
Name:
Title:
*Wire transfer instructions are available from Xxxxxxxxx & Company LLC or the
Company.
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EXECUTION PAGE FOR OFFER TO PURCHASE BY AN ENTITY
(Not applicable to offers by individuals)
IN WITNESS WHEREOF, subject to acceptance by the Company, the undersigned
has completed this Subscription Agreement to evidence its offer to purchase the
Purchased Securities, comprised of Preferred Stock and the Warrant, this ___
day of ______________, 2001.
Amount of check enclosed or wire transfer sent*: $___________________
* Wire transfer instructions are available from Xxxxxxxxx & Company LLC or the
Company.
Please print the following information exactly as you wish it to appear on the
Company records.
_____________________________ _________________________________________
(Name of Subscriber) (Address)
_____________________________ _________________________________________
(Tax Identification Number)
_____________________________ _________________________________________
(Telephone)
The undersigned trustee, partner or corporate officer certifies that he has
full power and authority from the beneficiaries, partners or directors of the
entity named below to execute this Subscription Agreement on behalf of the
entity and to make the representations and warranties made herein on their
behalf and that investment in the Company has been affirmatively authorized by
the governing board of such entity and is not prohibited by the governing
documents of the entity.
Date: ______________, 2001 _______________________________________
(Print Name of Entity)
__________________________ By:____________________________________
(Print Name and Capacity) (Signature of authorized trustee, partner,
or corporate officer)
ACCEPTED:
Date: ______________, 2001 CARESIDE, INC.
By:____________________________________
Name:
Title:
-00-
XXXXXXXXX XXXXXXXXXXXXXX
XXXXX OF )
)ss.:
COUNTY OF )
On this ___ day of ____________, 2001, before me personally came
_________________ to be known, being by me duly sworn, did depose and say that
he resides at ___________________________________, that he is the
________________________ of ________________________________, the corporation
described in and which executed the foregoing instrument; that he knows the seal
of said corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by order of the board of directors of said
corporation, and that he signed his name thereto by like order.
_________________________
Notary Public
PARTNERSHIP ACKNOWLEDGMENT
STATE OF )
)ss.:
COUNTY OF )
On this ___ day of ____________, 2001, before me personally came
_________________ to be known, to be a partner in
___________________________________, a partnership, and known to be the person
described in and who executed the foregoing instrument in the partnership name,
and said ____________ duly acknowledged that he executed the foregoing
instrument on behalf of said partnership.
_________________________
Notary Public
-15-
Appendix I
----------
Pursuant to Rule 501 of Regulation D promulgated under the Securities Act,
an accredited investor means:
(a) A bank as defined in Section 3(a)(2) of the Securities Act, or any
savings and loan association or other institution as defined in
Section 3(a)(5)(A) of the Securities Act whether acting in its
individual or fiduciary capacity; any broker or dealer registered
pursuant to Section 15 of the Exchange Act; any insurance company as
defined in Section 2(13) of the Securities Act, any investment company
registered under the Investment Company Act of 1940 or a business
development company as defined in Section 2(a)(48) of that act; any
Small Business Investment Company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958; any plan established and maintained by a
state, its political subdivisions, or any agency or instrumentality of
a state or its political subdivisions, for the benefit of its
employees if such plan has total assets in excess of $5,000,000; any
employee benefit plan within the meaning of the Employee Retirement
Income Security Act of 1974 if the investment decision is made by a
plan fiduciary, as defined in Section 3(21) of such act, which is
either a bank, savings and loan association, insurance company, or
registered investment advisor, or if the employee benefit plan has
total assets in excess of $5,000,000 or, if a self-directed plan, with
investment decision made solely by persons that are accredited
investors;
(b) Any private business development company as defined in Section 202
(a)(22) of the Investment Advisers Act of 1940;
(c) Any organization described in Section 501(c)(3) of the Internal
Revenue Code (the "Code"), corporation, Massachusetts or similar
business trust, or partnership, not formed for the specific purpose of
acquiring the securities offered, with total assets in excess of
$5,000,000;
(d) Any director or executive officer of the Company;
(e) Any natural person whose individual net worth, or joint net worth with
that person's spouse, at the time of such person's purchase exceeds
$1,000,000;
(f) Any natural person who had an individual income in excess of $200,000
in each of the two most recent years or joint income with that
person's spouse in excess of $300,000 in each of those years and who
reasonably expects to reach the same income level in the current year;
(g) Any trust, with assets in excess of $5,000,000, not formed for the
specific purpose of acquiring the securities offered, whose purchase
is directed by a person having such
-16-
knowledge and experience in financial and business matters so such
person is capable of evaluating the merits and risks of the investment
to be made; or
(h) Any entity in which all of the equity owners are accredited investors.
In addition, a participant in a defined contribution or profit sharing plan
qualified under Section 401 of the Code may be deemed the purchaser of the
Common Stock for the purpose of determining whether the plan is an accredited
investor if the following conditions are satisfied: (x) the plan trust must
provide for segregated accounts for each plan participant, (y) the plan document
must provide the participant with the power to direct the trustee to make each
particular investment to the extent of the participant's voluntary contributions
plus that portion of employer contributions that have vested to the
participant's benefit and (z) the investment in the Common Stock must have been
made pursuant to an exercise by the participant of the power to direct the
investment of his or her account in the plan trust.
-17-
Appendix II
-----------
1. Registration of the Common Stock.
--------------------------------
a. Subject to paragraph 1(b) below, within fifteen (15) days after
the date Careside's shareholders approve the terms of the Preferred Stock
relating to the conversion of the Preferred Stock (the "Shareholder Approval
Date"), the Company agrees to file a registration statement (the "Registration
Statement") on Form S-3 with the Securities Exchange Commission ("Commission")
registering the Common Stock (which term, for all purposes of this Appendix II,
shall be deemed to include the shares of Common Stock issuable upon conversion
of the Preferred Stock and upon exercise of the Warrant) for sale under the
Securities Act. The Company reserves the right to convert such registration to a
registration with like effect on any other form that may be or may become
available to the Company. The Company further reserves the right to include in
such registration statement for registration any shares of its Common Stock
which the Company, in its sole discretion, determines to include therein.
b. If the Company shall furnish to the holders of Common Stock
included in the Registration Statement (each a "Holder", and collectively the
"Holders") a certificate signed by its Chief Executive Officer stating that, in
the good faith judgment of the Company's Board of Directors, it would be
detrimental to the Company and its shareholders for the Registration Statement
to be filed by reason of a material activity or pending event or transaction
(such as a material acquisition, joint venture, merger, consolidation or
financing transaction) and it is therefore advisable to defer the filing of such
registration statement, the Company shall have a one-time right to defer such
filing of the Registration Statement for a period of not more than ninety (90)
days after the date upon which the Company would otherwise have been required to
file the Registration Statement pursuant to Section 1(a). The Company hereby
confirms that it is not aware of any event, development, fact or state of
affairs that exists as of the date hereof that constitutes, or that would
reasonably be expected to lead to, a material activity or pending event or
transaction within the meaning of the preceding sentence.
c. The Company's obligation to register is limited to one
Registration Statement which becomes effective under the Securities Act, and,
provided that the Company complies with its obligations under this Agreement, no
further registration statements (other than required amendments or supplements
to the original Registration Statement) will be filed for the benefit of the
Holders.
d. The Company shall use its best efforts to obtain effectiveness of
the Registration Statement as soon as practicable and shall continue to use its
best efforts to maintain such effectiveness for the registration until the
earlier of (i) the second (2nd) anniversary of the Initial Closing or (ii) the
date on which the Holder or his permitted transferee or assignee no longer holds
any Common Stock. The Registration Statement filed in connection herewith shall
not be deemed to have been effected unless it has become effective with the
Commission.
-18-
Notwithstanding the foregoing, the Registration Statement will not be deemed to
have been effected if after it has become effective under the Securities Act,
such registration is interfered with by any stop order, injunction or other
order or requirement of the Commission or other governmental agency or any court
proceeding for any reason. The Company shall use its best efforts to prevent the
issuance of any stop order or other suspension of effectiveness of the
Registration Statement, and, if such an order is issued, to obtain the
withdrawal of such order at the earliest possible moment and to notify the
Purchaser of the issuance of such order and the resolution thereof.
2. Registration Expenses. The Company shall pay all expenses incurred in
---------------------
connection with the registration of the Common Stock on the Registration
Statement.
3. Registration Procedures.
-----------------------
a. In connection with the Company's obligation to register the
Common Stock under the Securities Act as provided in Section 1, the Company, as
expeditiously as possible and subject to the terms and conditions herein, will
use its best efforts to:
(i) cause the Registration Statement to be prepared and filed
with the Commission pursuant to Section 1(a) above to become effective
as soon as practicable;
(ii) prepare and file with the Commission such amendments and
supplements to such Registration Statement and the prospectus used in
connection therewith as may be necessary to keep such Registration
Statement effective and to comply with the provisions of the Securities
Act with respect to the disposition of all securities covered by such
Registration Statement until such time as no Holder or his permitted
transferee or assignee holds any Common Stock or, if earlier, the
second (2/nd/) anniversary of the Initial Closing;
(iii) furnish to the Holders such number of conformed copies of
such registration statement and of each such amendment and supplement
thereto (in each case including all exhibits), such number of copies of
the prospectus contained in such Registration Statement (including each
preliminary prospectus and any summary prospectus) and any other
prospectus filed under the Securities Act, in conformity with the
requirements of the Securities Act, and such other documents, in each
case, as the Holders may reasonably request;
(iv) register or qualify all Common Stock covered by such
Registration Statement under such other United States state securities
or blue sky laws of such jurisdictions as any of the Holders shall
reasonably request, to keep such registration or qualification in
effect for so long as such registration remains in effect, and take any
other action which may be reasonably necessary or advisable
-19-
to enable the Holders to consummate the disposition of the Common
Stock owned by the Holders in such jurisdictions, except that the
Company shall not for any such purpose be required to qualify
generally to do business as a foreign corporation in any jurisdiction
wherein it would not but for the requirements of this Section 3(a)(iv)
be obligated to be so qualified, subject itself to taxation in any
such jurisdiction, or consent to general service of process in any
such jurisdiction;
(v) immediately notify the Holders at any time when a
prospectus relating to the Common Stock is required to be delivered
under the Securities Act, of the happening of any event as a result of
which the prospectus included in such Registration Statement, as then
in effect, includes an untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the
circumstances under which they were made, and promptly prepare and
furnish to the Holders a reasonable number of copies of a supplement
to or an amendment of such prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such Common Stock, such
prospectus shall not include an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light
of the circumstances under which they were made;
(vi) comply with all applicable rules and regulations of the
Commission, and not file (or withdraw or correct) any amendment or
supplement to such Registration Statement or prospectus to which the
Holders shall have reasonably objected in writing on the grounds that
such amendment or supplement does not comply in all material respects
with the requirements of the Securities Act or of the rules or
regulations thereunder;
(vii) provide a transfer agent and registrar for all Common
Stock covered by such Registration Statement not later than the
effective date of such Registration Statement; and
(viii) promptly list all Common Stock covered by such
Registration Statement on the AMEX or any securities exchange or
automated inter-dealer quotation system on which any of the Company
Common Stock is then listed or traded.
b. The Holders agree that upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 3(a)(v),
the Holders will forthwith discontinue their disposition of Common Stock
pursuant to the Registration Statement until the Holders receive copies of the
supplemented or amended prospectus contemplated by Section 3(a)(v) and, if so
directed by the Company, will deliver to the Company all copies, other than
-20-
permanent file copies, then in the possession of the Holders of the prospectus
relating to such Common Stock current at the time of receipt of such notice and
that they will immediately notify the Company, at any time when a prospectus
relating to the registration of such Common Stock is required to be delivered
under the Securities Act, of the happening of any event as a result of which
information previously furnished by the Holders to the Company for inclusion in
such prospectus contains an untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances under which
they were made.
c. As a condition of the fulfillment of its obligations under this
Agreement, the Company may require the Holders, at their own expense, to furnish
the Company with such information and undertakings regarding such Holders and
the distribution of such securities as the Company may from time to time
reasonably request in writing to the extent necessary in order to cause the
registration statement to comply with the Securities Act, and the Holders shall
provide such information and make such undertakings as are requested.
d. In connection with the preparation and filing of each
registration statement under the Securities Act, the Company will give the
Holders and their respective counsel and accountants, the reasonable opportunity
to participate in the preparation of such Registration Statement, each
prospectus included therein or filed with the Commission and each amendment
thereof or supplement thereto, and will give each of them such reasonable access
to its books and records and such reasonable opportunities to discuss the
business of the Company with its officers and the independent public accountants
who have certified its financial statements as shall be necessary to conduct a
reasonable investigation within the meaning of the Securities Act.
e. Promptly after a sale of Common Stock pursuant to the
Registration Statement (assuming that no stop order is in effect with respect to
the registration statement at the time of such sale), the Company shall
cooperate with the Holders and provide the transfer agent for the Common Stock
with such instructions and legal opinions as may be required in order to
facilitate the issuance to the purchaser (or the Holder's broker) of new
unlegended certificates for such Common Stock.
4. Indemnification; Contribution.
-----------------------------
a. To the extent permitted by applicable law, the Company shall
indemnify and hold harmless each Holder, each person, if any, who controls such
Holders within the meaning of the Securities Act, and each officer, director,
partner, and employee of such Holders and such controlling person, against any
and all losses, claims, damages, liabilities and expenses (joint or several),
including reasonable attorneys' fees and disbursements and expenses of
investigation, incurred by such party pursuant to any actual or threatened
action, suit, proceeding or investigation, or to which any of the foregoing
persons may become subject under the Securities Act, the Exchange Act or any
other federal or state laws, insofar as such losses, claims,
-21-
damages, liabilities and expenses arise out of or are based upon any of the
following statements, omissions or violations (collectively a "Violation"):
(i) Any untrue statement or alleged untrue statement of a
material fact contained in such Registration Statement, including any
preliminary prospectus or final prospectus contained therein, or any
amendments or supplements thereto;
(ii) 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; or
(iii) Any violation or alleged violation by the Company of the
Securities Act, the Exchange Act, any applicable state securities law
or any rule or regulation promulgated under the Securities Act, the
Exchange Act or any applicable state securities law; provided,
however, that the indemnification required by this Section 4(a) shall
not apply to amounts paid in settlement of any such loss, claim,
damage, liability or expense if such settlement is effected without
the consent of the Company (which consent shall not be unreasonably
withheld), nor shall the Company be liable in any such case for any
such loss, claim, damage, liability or expense to the extent (and only
to the extent) that it arises out of or is based upon a Violation
which occurs in reliance upon and in conformity with written
information furnished to the Company by the indemnified party
expressly for use in connection with such registration.
b. To the extent permitted by applicable law, each Holder shall
indemnify and hold harmless the Company, each of its directors, each of its
officers who shall have signed the registration statement, each person, if any,
who controls the Company within the meaning of the Securities Act, any other
Holder, any controlling Person of any such other Holder and each officer,
director, partner and employee of such other Holder and such controlling Person,
against any and all losses, claims, damages, liabilities and expenses (joint and
several), including reasonable attorneys' fees and disbursements and expenses of
investigation, incurred by such party pursuant to any actual or threatened
action, suit, proceeding or investigation, or to which any of the foregoing
Persons may otherwise become subject under the Securities Act, the Exchange Act
or any other federal or state laws, insofar as such losses, claims, damages,
liabilities and expenses arise out of or are based upon any Violation, in each
case to the extent (and only to the extent) that such Violation occurs in
reliance upon and in conformity with written information furnished by such
Holder expressly for use in connection with such registration; provided,
--------
however, that the indemnification required by this Section 4(b) shall not apply
-------
to amounts paid in settlement of any such loss, claim, damage, liability or
expense if settlement is effected without the consent of the relevant Holder
(which consent shall not be unreasonably withheld); and, provided further that
-------- -------
in no event shall the amount of any indemnity under this Section 4(b) exceed the
gross proceeds from the applicable offering received by such Holder.
-22-
c. Promptly after receipt by an indemnified party under this Section
4 of notice of the commencement of any action, suit, proceeding, investigation
or threat thereof made in writing for which such indemnified party may make a
claim under this Section 4, such indemnified party shall deliver to the
indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party; provided, however, that an indemnified
party shall have the right to retain its own counsel at its own expense (except
as specifically provided below). The failure to deliver written notice to the
indemnifying party within a reasonable time following the commencement of any
such action shall not relieve such indemnifying party of any liability to the
indemnified party under this Section 4 except, if and to the extent that the
indemnifying party is actually prejudiced thereby, but in no event shall it
relieve the indemnifying party of any liability that it may have to any
indemnified party otherwise than pursuant to this Section 4. Any fees and
expenses incurred by the indemnified party (including any fees and expenses
incurred in connection with investigating or preparing to defend such action or
proceeding) shall be paid to the indemnified party, as incurred, within sixty
(60) days of written notice thereof to the indemnifying party (regardless of
whether it is ultimately determined that an indemnified party is not entitled to
indemnification hereunder, but in such event such amounts shall be immediately
refunded). Any such indemnified party shall have the right to employ separate
counsel in any such action, claim or proceeding and to participate in the
defense thereof, but the fees and expenses of such counsel shall be the expenses
of such indemnified party unless (i) the indemnifying party has agreed to pay
such fees and expenses or (ii) the indemnifying party shall have failed to
promptly assume the defense of such action, claim or proceeding or (iii) the
named parties to any such action, claim or proceeding (including any impleaded
parties) include both such indemnified party and the indemnifying party, and
such indemnified party shall have been advised by counsel that there may be one
or more legal defenses available to it which are different from or in addition
to those available to the indemnifying party and that the assertion of such
defenses would create a conflict of interest such that counsel employed by the
indemnifying party could not faithfully represent the indemnified party, it
being understood, however, that the indemnifying party shall not, in connection
with any one such action, claim or proceeding or separate but substantially
similar or related actions, claims or proceedings in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys
(together with appropriate local counsel) at any time for all such indemnified
parties. No indemnifying party shall be liable to an indemnified party for any
settlement of any action, proceeding or claim without the written consent of the
indemnifying party, which consent shall not be unreasonably withheld.
d. If the indemnification required by this Section 4 from the
indemnifying party is unavailable to an indemnified party hereunder in respect
of any losses, claims, damages, liabilities or expenses referred to in this
Section 4:
-23-
(i) The indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages,
liabilities or expenses in such proportion as is appropriate to
reflect the relative fault of the indemnifying party and indemnified
parties in connection with the actions which resulted in such losses,
claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative fault of such
indemnifying party and indemnified parties shall be determined by
reference to, among other things, whether any violation has been
committed by, or relates to information supplied by, such indemnifying
party or indemnified parties, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such Violation; provided however, that in no event shall the
obligation of any indemnifying party to contribute under this clause
(i) exceed the amount that such indemnifying party would have been
obligated to pay by way of indemnification if the indemnification
provided for in Section 4(a) had been available under the
circumstances. The amount paid or payable by a party as a result of
the losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include, subject to the limitations set forth
in Section 4(a) and (b), any legal or other fees or expenses
reasonably incurred by such party in connection with any investigation
or proceeding.
(ii) The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 4(d) were
determined by pro rata allocation or by any other method of allocation
that does not take into account the equitable considerations referred
to in Section 4(d)(i). No person guilty of fraudulent
misrepresentation within the meaning of Section 11(f) of the
Securities Act shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation.
e. The obligations of the Company and the Holders under this Section
4 shall survive the completion of any offering of Common Stock pursuant to a
registration statement.
5. Rule144; Exchange Act Filings. The Company shall file as and when
-----------------------------
applicable, on a timely basis, all reports required to be filed by it under the
Exchange Act. If, for any reason the Company is not required to file reports
pursuant to the Exchange Act, upon the request of any Holder, the Company shall
make publicly available the information specified in subparagraph (c)(2) of Rule
144 of the Securities Act, and take such further action as may be reasonably
required from time to time and as may be within the reasonable control of the
Company, to enable the Holders to transfer the Common Stock to a transferee
without registration under the Securities Act within the limitation of the
exemptions provided by Rule 144 under the Securities Act or any similar rule or
regulation hereafter adopted by the Commission. The Company further covenants
and agrees that it will furnish to each Holder so long as such Holder owns
Common Stock promptly upon request, (i) a written statement by the Company as to
the status of its
-24-
compliance with the reporting requirements of Rule 144, the 1933 Act and the
1934 Act, (ii) a copy of the most recent annual or quarterly report of the
Company and such other reports and documents so filed by the Company, and (iii)
such other information as may be reasonably requested to permit the Holders to
sell such securities pursuant to Rule 144 without registration.
6. Transfer or Assignment of Registration Rights. The rights of a
---------------------------------------------
Holder provided herein to cause the Company to register the Common Stock may be
transferred or assigned only with respect to Common Stock transferred to an
affiliate of such Holder.
-25-
Appendix III
------------
CARESIDE, INC.
Accredited Investor Questionnaire
---------------------------------
This Questionnaire is being given to each prospective investor who has
expressed interest in purchasing shares of Preferred Stock (the "Shares") of
Careside, Inc. (the "Company") pursuant to the terms set forth in the Company's
Confidential Private Offering Memorandum dated March __, 2001, as amended or
supplemented and together with all exhibits thereto (the "Memorandum"), that was
delivered together with this Questionnaire. The undersigned understands that
this Questionnaire by itself is not an offer of the Shares to the undersigned.
All capitalized terms not otherwise defined in this Questionnaire have the
meanings given to them in the Memorandum.
The undersigned understands that the purpose of this Questionnaire is to
determine whether the private placement of the Shares satisfies the requirements
for an exemption from registration pursuant to Section 4(2) of the Securities
Act of 1933 as amended (the "Securities Act"), and Rule 506 of Regulation D
promulgated thereunder, and applicable state securities laws. The undersigned
further understands that the Company and Xxxxxxxxx & Company LLC., which has
been engaged by the Company to act as its placement agent (the "Placement
Agent") in connection with this offering, will rely on the accuracy and
completeness of the responses entered into this Questionnaire by the
undersigned. Accordingly, the undersigned represents and warrants to the Company
and the Placement Agent that (i) the information contained in this Questionnaire
is true and correct and may be relied upon by the Company and the Placement
Agent for the purpose of complying with federal and state securities laws; and
(ii) the undersigned will immediately notify the Company and the Placement Agent
of any material change in any such information occurring prior to the closing of
any purchase of the Shares by the undersigned.
All information contained in this Questionnaire will be treated
confidentially. However, the undersigned understands and agrees that, although
the Company will use its best efforts to keep the information provided in the
answers to this Questionnaire confidential, the Company may present this
Questionnaire and the information provided herein to such parties as it may deem
advisable if called upon to establish the availability under any federal or
state securities laws of an exemption from registration of the private placement
of the Shares or if the contents hereof are relevant to any issue in any
investigation, action, suit, or proceeding to which the Placement Agent or the
Company is a party or by which it is or may be bound.
Please complete the Questionnaire as thoroughly as possible and sign and
date the Questionnaire as and where indicated.
If the prospective investor has any questions as to the appropriate
response to any of the following questions, he, she or it should contact Xxxxxxx
X. Xxxx at Xxxxxx Xxxxxxxx, LLP., 000-000-0000.
-26-
I. Identification
--------------
Name of Investor _______________________________________
Address (residence if an
individual; principal place
of business if an entity)
Type of Ownership _______________________________________
_______________________________________
_______________________________________
Telephone number _______________________________________
Facsimile number _______________________________________
Manner of Ownership of the Shares:
[ ] Individual [ ] Corporation
[ ] Joint Tenants, with [ ] Trust
right of survivorship [ ] General Partnership
[ ] Tenants in common [ ] Limited Partnership
[ ] Tenants by the entireties [ ] Limited Liability Company
[ ] Community property [ ] Other (describe)
II. Further Representations and Warranties The undersigned hereby makes the
--------------------------------------
following additional representations and warranties.
1. Except as described below, the subscription for and purchase of the
Shares pursuant to the terms set forth in the Memorandum will be solely for the
undersigned's own account and not for the account of any other person or entity.
The undersigned has no intention of distributing or reselling the Shares in any
transaction that would be in violation of the Securities Act or the securities
laws of any state.
2. The undersigned has such knowledge, sophistication and experience in
business and financial matters that the undersigned is capable of evaluating the
merits and risks of an investment in the Shares.
3. At the present time, the undersigned could afford a complete loss of
his, her or its investment in the Shares.
4. The undersigned acknowledges (i) receipt of the Confidential
Memorandum; and (ii) that the undersigned, the undersigned's counsel and other
advisors have been afforded the opportunity to ask such questions as the
undersigned or such advisors have deemed necessary of, and to receive answers
from, representatives of the Company concerning the terms and conditions of the
private placement of the Shares and the risks arising from an investment in the
Shares.
-27-
5. The undersigned represents and warrants that the undersigned is an
"accredited investor" as defined under Rule 501 of Regulation D promulgated
under the Securities Act and as set forth in Section III below.
Set forth below any exceptions to representations 1 through 5:
---
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
III. Accredited Investor Status
--------------------------
The issuance of the Shares pursuant to the Private Placement will not be
registered under the Securities Act. This Section III is intended to determine
whether the undersigned qualifies as an "accredited investor," which is defined
as an investor falling within any of the following eight categories at the time
of the relevant purchase and sale of securities. Please check the appropriate
box(es) below to indicate which (if any) of the following categories apply to
the prospective investor.
[_] (1) Any bank as defined in Section 3(a)(2) of the Securities Act or any
savings and loan association or other institution as defined in Section
3(a)(5)(A) of the Securities Act whether acting in its individual or
fiduciary capacity; any broker dealer registered pursuant to Section 15 of
the Securities Exchange Act of 1934; any insurance company as defined in
Section 2(13) of the Securities Act; any investment company registered
under the Investment Company Act of 1940 or a business development company
as defined in Section 2(a)(48) of that Act; any Small Business Investment
Company licensed by the U.S. Small Business Administration under Section
301(c) or (d) of the Small Business Investment Act of 1958; any plan
established and maintained by a state, its political subdivisions, or any
agency or instrumentality of a state or its political subdivisions, for the
benefits of its employees, if such plan has total assets in excess of
$5,000,000; any employee benefit plan within the meaning of the Employee
Retirement Income Security Act of 1974, if the investment decision is made
by a plan fiduciary, as defined in Section 3(21) of such Act, which is
either a bank, savings and loan association, insurance company, or
registered investment adviser, or if the employee benefit plan has total
assets in excess of $5,000,000 or, if a self-directed plan, with investment
decisions made solely by persons that are accredited investors.
[_] (2) Any private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940.
[_] (3) Any organization described in Section 501(c)(3) of the Internal Revenue
Code, corporation, Massachusetts or similar business trust, or partnership,
not formed for the specific purpose of acquiring the Shares, with total
assets in excess of $5,000,000.
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[_] (4) Any director or executive officer of the Company.
[_] (5) Any natural person whose individual net worth, or joint net worth with
that person's spouse, at the time of his or her purchase exceeds
$1,000,000. As used herein, the term "net worth" means the excess of total
assets (including home, home furnishings and automobiles valued at their
current fair market value) over total liabilities.
[_] (6) Any natural person who had an individual income in excess of $200,000
in each of the two most recent years, or joint income with that person's
spouse in excess of $300,000 in each of the two most recent years, and who
reasonably expects to reach the same income level in the current year. In
determining income, an investor should add to his or her adjusted gross
income any amounts attributable to tax exempt income received, losses
claimed as a limited partner in any limited partnership, deductions claimed
for depletion, contributions to an XXX or Xxxxx retirement plan, alimony
payments and any amount by which income from long-term capital gains has
been reduced in arriving at adjusted gross income.
[_] (7) Any trust with total assets in excess of $5,000,000, not formed for the
specific purpose of acquiring the Shares, whose purchase is directed by a
person who has such knowledge and experience in financial and business
matters that such person is capable of evaluating the merits and risks of
an investment in the Shares.
[_] (8) Any entity in which all of the equity owners are accredited investors
(i.e., each equity owner falls into one or more of the above seven
categories).
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IV General Information - For Investors Subscribing as Individuals Only
-------------------------------------------------------------------
Name(s): _____________________________
_____________________________
Social Security or Tax
Identification Number: _____________________________
Date of Birth: _____________________________
Citizenship: _____________________________
Address of Residence: _____________________________
_____________________________
_____________________________
State where registered
to vote: _____________________________
State where licensed
to drive: _____________________________
Name of Employer: _____________________________
Nature of Business: _____________________________
Current Position or Title: _____________________________
Year First Employed
at Current Employer: _____________________________
Description of responsibilities at the Employer that would support a
conclusion that you have such knowledge, sophistication and experience in
business and financial matters that you are capable of evaluating the merits and
risks of an investment in the Shares:
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
-30-
Please describe any position you have held in the past five years that
would support a conclusion that you have such knowledge, sophistication and
experience in business and financial matters that you are capable of evaluating
the merits and risks of an investment in the Shares:
Name of Position Held and Dates of
Company Responsibilities Employment
------- ---------------- ----------
Please state anything else that would support a conclusion that you have
such knowledge, sophistication and experience in business and financial matters
that you are capable of evaluating the merits and risks of an investment in the
Shares:
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
Please describe generally in the space provided below your general
investment experience (including any trading activities, private placements,
tax-oriented or venture capital investment experience, or self-directed
retirement accounts).
Nature
of Investment Year
------------- ----
V. General Information - For Corporations, LLC's, Partnerships, Trusts and
-----------------------------------------------------------------------
Other Entities
---------------
Name: _____________________________
Federal Employer
Identification Number: _____________________________
-31-
Address: _____________________________
_____________________________
_____________________________
Jurisdiction of formation
or incorporation: _____________________________
Current Total Assets: _____________________________
Current Net Worth: _____________________________
Description of the nature of the business conducted by the entity:
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
Description of the business, financial and investment experience of the
entity and the investment manager(s) of the entity:
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
-32-
IN WITNESS WHEREOF, the undersigned has executed this Accredited Investor
Questionnaire this ____ day of ____________, 2001.
For Individuals:
---------------
_____________________________ ________________________________________
Signature of Investor Signature of Joint Investor (if any*)
_____________________________ ________________________________________
Print Name of Investor Print Name of Joint Investor (if any*)
* If investment is in joint names, all joint investors must sign.
For Entities:
------------
_____________________________________
(Print Name of Entity)
By: ________________________________
Name:
Title:
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