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EXHIBIT 4.4
ACCUMED INTERNATIONAL, INC.
SUBSCRIPTION AGREEMENT AND REGISTRATION RIGHTS AGREEMENT made as
of this 23rd day of February, 1998 (this "Agreement") between ACCUMED
INTERNATIONAL, INC., a Delaware corporation with its principal offices at 000 X.
Xxxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000 (the "Company") and the undersigned
(the "Subscriber").
WHEREAS, in an exchange offer (the "Exchange Offer"), the Company
desires to exchange up to $6,000,000 principal amount of 12% Convertible
Promissory Notes of the Company (the "Notes"), for shares (the "Shares") of
Series A Convertible Preferred Stock, $0.01 par value per share (the
"Convertible Preferred Stock"), as described in the Certificate of Designation
Preferences and Rights attached hereto as Exhibit A and common stock purchase
warrants (the "Warrants"), in the form included in the warrant agreement (the
"Warrant Agreement") attached hereto as Exhibit B on the terms and conditions
hereinafter set forth and set forth in the Confidential Exchange Offer
Memorandum dated February 13, 1998 (the "Memorandum") and accompanying Letter of
Transmittal ("Letter of Transmittal") with which this Agreement is enclosed;
WHEREAS, for each $1,000 principal amount of Notes exchanged (and
accrued interest thereon through the Expiration Date (defined herein)), the
Subscriber shall receive such number of shares of Convertible Preferred Stock
having a stated value of $1,000 plus an amount equal to the interest accrued and
unpaid thereon and Warrants exercisable to purchase twenty-five (25%) percent of
the number of shares of Common Stock issuable upon conversion of the Convertible
Preferred Stock issued to the Subscriber;
NOW, THEREFORE, for and in consideration of the premises and the
mutual covenants hereinafter set forth, the parties hereto do hereby agree as
follows:
I. EXCHANGE OF NOTES AND REPRESENTATIONS BY AND
COVENANTS OF SUBSCRIBER
1.1 Subject to the terms and conditions hereinafter set
forth, the Subscriber hereby agrees to exchange such principal amount of Notes
set forth on the signature page hereof and in the Transmittal Letter for the
Convertible Preferred Stock and Warrants, upon the terms set forth herein and in
the Memorandum and the Letter of Transmittal. For each $1,000 increment of
principal amount of Notes exchanged (and accrued interest thereon), tendering
holders will receive such number of Shares and Warrants calculated as set forth
in the Memorandum. The Shares and Warrants (collectively, the "Securities") will
be delivered to Subscribers as provided for in the Memorandum.
1.2 The Subscriber recognizes that the exchange of the
Notes for the Shares and Warrants involves a high degree of risk in that (i) an
investment in the Company is highly speculative and only investors who can
afford the loss of their entire investment should consider investing in the
Company; (ii) he may not be able to liquidate his investment;
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(iii) transferability of the securities is extremely limited; and (iv) in the
event of a disposition, an investor could sustain the loss of his entire
investment, as well as other risk factors as more fully set forth herein and in
the Memorandum, including the attachments thereto.
1.3 The Subscriber represents that he is an "accredited
investor" as such term in defined in Rule 501 of Regulation D promulgated under
the United States Securities Act of 1933, as amended (the "Act"), as indicated
by his responses to the Investor Questionnaire, and that he is able to bear the
economic risk of exchanging the Notes for the Securities.
1.4 The Subscriber acknowledges that he has prior
investment experience, including investment in non-listed and non-registered
securities, or he has employed the services of an investment advisor, attorney
or accountant to read all of the documents furnished or made available by the
Company both to him and to all other prospective investors in the Exchange Offer
and to evaluate the merits and risks of such an investment on his behalf, and
that he recognizes the highly speculative nature of this investment.
1.5 The Subscriber acknowledges receipt and careful review
of the Memorandum and the attachments thereto (the "Offering Documents") and
hereby represents that he has been furnished by the Company during the course of
this transaction with all information regarding the Company which he had
requested or desired to know; that all documents which could be reasonably
provided have been made available for his inspection and review; and that such
information and documents have, in his opinion, afforded the Subscriber with all
of the same information that would be provided him in a registration statement
filed under the Act; that he has been afforded the opportunity to ask questions
of and receive answers from duly authorized officers or other representatives of
the Company concerning the terms and conditions of the Exchange Offer, and any
additional information which he had requested.
1.6 The Subscriber acknowledges that the Exchange Offer
may involve tax consequences, including but not limited to the possible need to
recognize interest income relating to the Warrants and that the contents of the
Offering Documents do not contain tax advice or information. The Subscriber
acknowledges that he must retain his own professional advisors to evaluate the
tax and other consequences of an investment in the Securities.
1.7 The Subscriber acknowledges that the Exchange Offer
has not been reviewed by the United States Securities and Exchange Commission
("SEC") because of the Company's representations that this is intended to be a
nonpublic offering pursuant to Sections 4(2) or 3(b) of the Act. The Subscriber
represents that the Shares and Warrants are being purchased for his own account,
for investment and not for distribution or resale to others. The Subscriber
agrees that he will not sell or otherwise transfer such Securities unless they
are registered under the Act or unless an exemption from such registration is
available.
1.8 The Subscriber understands that the Shares and
Warrants have not been registered under Act by reason of a claimed exemption
under the provisions of the Act which depends, in part, upon his investment
intention. In this connection, the Subscriber understands that it is the
position of the SEC that the statutory basis for such exemption would not be
present if his representation merely meant that his present intention was to
hold such securities for a short period, such as the capital gains period of tax
statutes, for a deferred sale, for a market rise, assuming that a market
develops, or for any other fixed period. The Subscriber realizes that, in the
view of the SEC, a purchase now with an intent to resell would represent a
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purchase with an intent inconsistent with his representation to the Company, and
the SEC might regard such a sale or disposition as a deferred sale to which such
exemptions are not available.
1.9 The Subscriber understands that there is no public
market for the Shares or Warrants. Rule 144 (the "Rule") promulgated under the
Act requires, among other conditions, a one year holding period prior to the
resale (in limited amounts) of securities acquired in a non-public offering
without having to satisfy the registration requirements under the Act. The
Subscriber understands that the Company makes no representation or warranty
regarding its fulfillment in the future of any reporting requirements under the
Securities Exchange Act of 1934, as amended, or its dissemination to the public
of any current financial or other information concerning the Company, as is
required by the Rule as one of the conditions of its availability. The
Subscriber understands and hereby acknowledges that the Company is under no
obligation to register the Securities or the shares of Common Stock underlying
the Shares and Warrants under the Act, with the exception of certain
registration rights set forth in Article IV herein. The Subscriber consents that
the Company may, if it desires, permit the transfer of the Securities or shares
of Common Stock issuable upon exercise and/or conversion thereof out of his name
only when his request for transfer is accompanied by an opinion of counsel
reasonably satisfactory to the Company that neither the sale nor the proposed
transfer results in a violation of the Act or any applicable state "blue sky"
laws (collectively "Securities Laws"). The Subscriber agrees to hold the Company
and its directors, officers and controlling persons and their respective heirs,
representatives, successors and assigns harmless and to indemnify them against
all liabilities, costs and expenses incurred by them as a result of any
misrepresentation made by him contained herein or any sale or distribution by
the undersigned Subscriber in violation of any Securities Laws.
1. 10 The Subscriber agrees not to sell, transfer, assign,
hypothecate or otherwise dispose of 64% of the Shares and the shares of Common
Stock underlying such Shares for a period of up to one year after the Expiration
Date (as defined in the Memorandum).
1. 11 The Subscriber consents to the placement of a legend
on any certificate or other document evidencing the Shares and Warrants and the
shares of Common Stock issuable upon exercise and/or conversion of such Warrants
and Shares stating that they have not been registered under the Act and setting
forth or referring to the restrictions on transferability and sale thereof.
1.12 The Subscriber understands that the Company will
review this Subscription Agreement and is hereby given authority by the
undersigned to call his bank or place of employment or otherwise review the
financial standing of the Subscriber; and it is further agreed that the Company
reserves the unrestricted right to reject or limit any exchange and to terminate
the Exchange Offer at any time.
1.13 The Subscriber hereby represents that the address of
Subscriber furnished by him at the end of this Subscription Agreement is the
undersigned's principal residence if he is an individual or its principal
business address if it is a corporation or other entity.
1.14 The Subscriber acknowledges that if he is a
Registered Representative of an NASD member firm, he must give such firm the
notice required by the
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NASD's Rules of Fair Practice, receipt of which must be acknowledged by such
firm on the signature page hereof.
1.15 The Subscriber hereby represents that, except as set
forth in the Offering Documents, no representations or warranties have been made
to the Subscriber by the Company or any agent, employee or affiliate of the
Company and in entering into this transaction, the Subscriber is not relying on
any information, other than that contained in the Offering Documents and the
results of independent investigation by the Subscriber.
II. REPRESENTATIONS BY THE COMPANY
The Company represents and warrants to the Subscriber that
on the date hereof and on the Expiration Date (as defined herein):
(a) Each of the Company and its subsidiaries is a
corporation duly organized, existing and in good standing under the laws of the
State of its incorporation and has the corporate power to conduct the business
which it conducts and proposes to conduct.
(b) The execution, delivery and performance of this
Agreement by the Company will have been duly approved by the Board of Directors
of the Company and all other actions required to authorize and effect the
exchange of the Notes for the Shares and Warrants will have been duly taken and
approved.
(c) The Shares and Warrants have been duly and validly
authorized and when issued and paid for in accordance with the terms hereof,
will be valid and binding obligations of the Company enforceable in accordance
with their respective terms.
(d) The Company will at all times during the term of the
Shares and Warrants have authorized and reserved a sufficient number of shares
of Common Stock to provide for exercise and/or conversion of the Warrants and
Shares.
(e) The Company and its subsidiaries have obtained, or are
in the process of obtaining, all licenses, permits and other governmental
authorizations necessary to the conduct of their respective business; such
licenses, permits and other governmental authorizations obtained are in full
force and effect; and the Company and its subsidiaries are in all material
respects complying therewith, except where the failure to comply will not
materially adversely affect the business, property, financial condition or
operations of the Company and its subsidiaries, taken as a whole.
(f) The Company knows of no pending or threatened legal or
governmental proceedings to which the Company or its subsidiaries is a party
which could materially adversely affect the business, property, financial
condition or operations of the Company and its subsidiaries, taken as a whole.
(g) The Company is not in violation of or default under,
nor will the execution and delivery of this Agreement, the issuance of the
Shares or the Warrants in exchange for the Notes, and the incurrence of the
obligations herein and therein set forth and the consummation of the
transactions herein or therein contemplated, result in a violation of, or
constitute a default under, the certificate of incorporation or by-laws, in the
performance or
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observance of any material obligations, agreement, covenant or condition
contained in any bond, debenture, note or other evidence of indebtedness or in
any material contract, indenture, mortgage, loan agreement, lease, joint venture
or other agreement or instrument to which the Company is a party or by which it
or any of its properties may be bound or in violation of any material order,
rule, regulation, writ, injunction, or decree of any government, governmental
instrumentality or court, domestic or foreign.
(h) The selected financial information contained in the
Memorandum previously furnished by the Company to the Subscriber presents fairly
the financial condition of the Company as of the date and for the periods
indicated.
III. TERMS OF SUBSCRIPTION
3.1 The Exchange Offer will begin as of February 13, 1998
and will terminate at 5:00 PM New York time on February 19, 1998 unless extended
by the mutual consent of the Company and the Placement Agent (the "Expiration
Date").
3.2 The Exchange Offer will be made through Commonwealth
Associates (the "Placement Agent"), which will receive (i) a fee in the amount
of 5% of the principal amount of the Notes exchanged; (ii) reimbursement of
accountable expenses; (iii) warrants to purchase up to 5% of the shares of
Common Stock of the Company underlying the Shares and Warrants issued in the
Exchange Offer; (iv) reduction in the exercise price of warrants previously
issued to Commonwealth in connection with the private placement of the Notes;
and (v) other compensation as summarized in the Memorandum.
3.3 The Subscriber hereby authorizes and directs the
Company to deliver the securities to be issued to such Subscriber pursuant to
the Exchange Offer as provided for in the Letter of Transmittal.
3.4 The Subscriber acknowledges that at such time, if
ever, as any of the securities are registered, sales of such securities will be
subject to state securities laws, including those of states which may require
any securities sold therein to be sold through a registered broker-dealer or in
reliance upon an exemption from registration.
3.5 If the Subscriber is not a United States person, such
Subscriber hereby represents that it has satisfied itself as to the full
observance of the laws of its jurisdiction in connection with any invitation to
subscribe for the Securities or any use of this Agreement, including (i) the
legal requirements within its jurisdiction for the purchase of the Securities,
(ii) any foreign exchange restrictions applicable to such purchase, (iii) any
governmental or other consents that may need to be obtained, and (iv) the income
tax and other tax consequences, if any, that may be relevant to the purchase,
holding, redemption, sale or transfer of the Securities. Such Subscriber's
subscription and payment for, and his or her continued beneficial ownership of
the Securities, will not violate any applicable securities or other laws of the
Subscriber's jurisdiction.
IV. REGISTRATION RIGHTS
4.1 Demand Registration. If at any time after three (3)
months following the Expiration Date, but not more than five (5) years from the
Expiration Date, the
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Company shall receive a written request therefor (the "Demand Notice") from
holders (the "Requesting Holders") of Shares convertible into at least thirty
percent (30%) of the shares of Common Stock issuable or issued upon conversion
of the Shares or the exercise of the Warrants ("Registrable Securities"), the
Company shall prepare and file with the SEC a registration statement under the
Act covering the "Registrable Securities" which are the subject of such request
and shall use its best efforts to cause such registration statement to become
effective. In addition, upon the receipt of such request, the Company shall
promptly give written notice to all other record holders of Registrable
Securities that such registration is to be effected. The Company shall include
in such registration statement such Registrable Securities for which it has
received written requests to register by such other record holders within thirty
(30) days after the delivery of the Company's written notice to such other
record holders.
In the event that at the time of the Demand Notice the
Company is in the process of preparing a registration statement under the Act
relating to an underwritten public offering, then no holder of securities of the
Company, including Requesting Holders, may include securities in such
registration if in the good faith judgment of the managing underwriter of such
public offering the inclusion of such securities would interfere with the
successful marketing of the securities being underwritten. Shares to be excluded
from an underwritten public offering shall be selected in a manner provided in
Section 4.2 below. To the extent only a portion of the Registrable Securities
held by a Requesting Holder is included in the underwritten public offering, a
registration statement covering those Registrable Securities which are excluded
from the underwritten public offering will be filed within 180 days of the
consummation of the underwritten public offering.
The obligation of the Company under this Section 4.1 shall
be limited to one registration statement. The Company shall pay the expenses
described in Section 4.4 for the registration statement filed pursuant to this
Section 4.1, except for underwriting discounts and commissions and legal fees of
the Requesting Holders, which shall be borne by the Requesting Holders.
4.2 "Piggyback" Registration Rights. From and after the
Expiration Date, and until such time as the Registrable Securities are freely
salable (without restriction) under Rule 144 promulgated under the Act, if the
Company shall determine to proceed with the actual preparation and filing of a
registration statement under the Act in connection with the proposed offer and
sale of any of its securities by it or any of its security holders (other than a
registration statement on Form X-0, X-0 or other limited purpose form), the
Company will give written notice of its determination to all record holders of
the Registrable Securities. Upon the written request from the Requesting
Holders, (as defined in Section 4.1) within twenty (20) days after receipt of
any such notice from the Company, the Company will, except as herein provided,
cause all such Registrable Securities to be included in such registration
statement, all to the extent requisite to permit the sale or other disposition
by the prospective seller or sellers of the Registrable Securities to be so
registered; provided, further, that nothing herein shall prevent the Company
from, at any time, abandoning or delaying any registration. If any registration
pursuant to this Section 4.2 shall be underwritten in whole or in part, the
Company may require that the Registrable Securities requested for inclusion
pursuant to this Section 4.2 be included in the underwriting on the same terms
and conditions as the securities otherwise being sold through the underwriters.
In the event that the Registrable Securities requested for inclusion pursuant to
this Section 4.2 together with any other shares which have similar piggyback
registration rights (such shares and the Registrable Securities being
collectively referred to as the "Requested Stock") would, in the good faith
judgment of the managing underwriter of such public offering, reduce
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the number of shares to be offered by the Company or interfere with the
successful marketing of the shares of stock offered by the Company, the number
of shares of Requested Stock otherwise to be included in the underwritten public
offering may be reduced pro rata (by number of shares) among the holders thereof
requesting such registration or excluded in their entirety if so required by the
underwriter. To the extent only a portion of the Requested Stock is included in
the underwritten public offering, those shares of Requested Stock which are thus
excluded from the underwritten public offering shall be withheld from the market
by the holders thereof for a period, not to exceed 180 days, which the managing
underwriter reasonably determines is necessary in order to effect the
underwritten public offering. A registration statement covering those shares of
Requested Stock excluded from the underwritten offering will be filed within 180
days of the consummation of the underwritten public offering.
The obligation of the Company under this Section 4.2 shall
be unlimited to the number of registration statements.
4.3 Registration Procedures. If and whenever the Company
is required by the provisions of Section 4.1 or 4.2 to effect the registration
of Registrable Securities under the Act, the Company will:
(a) prepare and file with the SEC a registration
statement with respect to such securities, and use its best efforts to cause
such registration statement to become and remain effective until the Registrable
Securities are freely salable without the volume limitations of Rule 144;
(b) prepare and file with the SEC such amendments
to such registration statement and supplements to the prospectus contained
therein as may be necessary to keep such registration statement effective until
the Registrable Securities are freely salable without the volume limitations of
Rule 144;
(c) furnish to the security holders participating
in such registration and to the underwriters of the securities being registered
such reasonable number of copies of the registration statement, preliminary
prospectus, final prospectus and such other documents as such underwriters may
reasonably request in order to facilitate the public offering of such
securities;
(d) use its best efforts to register or qualify the
securities covered by such registration statement under such state securities or
blue sky laws of such jurisdictions as such participating holders may reasonably
request in writing within twenty (20) days following the original filing of such
registration statement, except that the Company shall not for any purpose be
required to execute a general consent to service of process or to qualify to do
business as a foreign corporation in any jurisdiction wherein it is not so
qualified;
(e) notify the security holders participating in
such registration, promptly after it shall receive notice thereof, of the time
when such registration statement has become effective or a supplement to any
prospectus forming a part of such registration statement has been filed;
(f) notify such holders promptly of any request by
the SEC for the amending or supplementing of such registration statement or
prospectus or for additional information;
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(g) prepare and file with the SEC, promptly upon
the request of any such holders, any amendments or supplements to such
registration statement or prospectus which, in the opinion of counsel for such
holders (and concurred in by counsel for the Company), is required under the Act
or the rules and regulations thereunder in connection with the distribution of
Common Stock by such holder;
(h) prepare and promptly file with the SEC and
promptly notify such holders of the filing of such amendment or supplement to
such registration statement or prospectus as may be necessary to correct any
statements or omissions if, at the time when a prospectus relating to such
securities is required to be delivered under the Act, any event shall have
occurred as the result of which any such prospectus or any other prospectus as
then in effect would include an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in the light
of the circumstances in which they were made, not misleading; and
(i) advise such holders, promptly after it shall
receive notice or obtain knowledge thereof, of the issuance of any stop order by
the SEC suspending the effectiveness of such registration statement or the
initiation or threatening of any proceeding for that purpose and promptly use
its best efforts to prevent the issuance of any stop order or to obtain its
withdrawal if such stop order should be issued.
4.4 Expenses.
(a) With respect to each registration requested
pursuant to Section 4.1 hereof, and with respect to each inclusion of
Registrable Securities in a registration statement pursuant to Section 4.2
hereof, all fees, costs and expenses of and incidental to such registration,
inclusion and public offering (as specified in paragraph (b) below) in
connection therewith shall be borne by the Company, provided, however, that any
security holders participating in such registration shall bear their pro rata
share of the underwriting discount and commissions and transfer taxes.
(b) The fees, costs and expenses of registration to
be borne by the Company as provided in paragraph (a) above shall include,
without limitation, all registration, filing, and NASD fees, printing expenses,
fees and disbursements of counsel and accountants for the Company, and all legal
fees and disbursements and other expenses of complying with state securities or
blue sky laws of any jurisdictions in which the securities to be offered are to
be registered and qualified (except as provided in 4.4(a) above). Fees and
disbursements of counsel and accountants for the selling security holders and
any other expenses incurred by the selling security holders not expressly
included above shall be borne by the selling security holders.
4.5 Indemnification.
(a) The Company will indemnify and hold harmless
each holder of Registrable Securities which are included in a registration
statement pursuant to the provisions of Sections 4.1 or 4.2 hereof, its
directors and officers, and any underwriter (as defined in the Act) for such
holder and each person, if any, who controls such holder or such underwriter
within the meaning of the Act, from and against, and will reimburse such holder
and each such underwriter and controlling person with respect to, any and all
loss, damage, liability, cost and expense to which such holder or any such
underwriter or controlling person may become
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subject under the Act or otherwise, insofar as such losses, damages,
liabilities, costs or expenses are caused by any untrue statement or alleged
untrue statement of any material fact contained in such registration statement,
any prospectus contained therein or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading; provided, however, that the Company will not be liable in any such
case to the extent that any such loss, damage, liability, cost or expenses
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission so made in conformity with information furnished
by such holder, such underwriter or such controlling person in writing
specifically for use in the preparation thereof.
(b) Each holder of Registrable Securities included
in a registration pursuant to the provisions of Sections 4.1 or 4.2 hereof will
indemnify and hold harmless the Company, its directors and officers, any
controlling person and any underwriter from and against, and will reimburse the
Company, its directors and officers, any controlling person and any underwriter
with respect to, any and all loss, damage, liability, cost or expense to which
the Company or any controlling person and/or any underwriter may become subject
under the Act or otherwise, insofar as such losses, damages, liabilities, costs
or expenses are caused by any untrue statement or alleged untrue statement of
any material fact contained in such registration statement, any prospectus
contained therein or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was so made in reliance upon
and in strict conformity with written information furnished by or on behalf of
such holder specifically for use in the preparation thereof.
(c) Promptly after receipt by an indemnified party
pursuant to the provisions of paragraph (a) or (b) of this Section 4.5 of notice
of the commencement of any action involving the subject matter of the foregoing
indemnity provisions such indemnified party will, if a claim thereof is to be
made against the indemnifying party pursuant to the provisions of said paragraph
(a) or (b), promptly notify the indemnifying party of the commencement thereof;
but the omission to so notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party otherwise than
hereunder. In case such action is brought against any indemnified party and it
notifies the indemnifying party of the commencement thereof, the indemnifying
party shall have the right to participate in, and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified party,
provided, however, if the defendants in any action include both the indemnified
party and the indemnifying party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it and/or other
indemnified parties which are different from or in addition to those available
to the indemnified party, or if there is a conflict of interest which would
prevent counsel for the indemnifying party from also representing the
indemnified party, the indemnified party or parties have the right to select
separate counsel to participate in the defense of such action on behalf of such
indemnified party or parties. After notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party pursuant to the
provisions of said paragraph (a) or (b) for any legal or other expense
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation, unless (i) the indemnified
party shall have employed
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counsel in accordance with the provisions of the preceding sentence, (ii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after the notice of the commencement of the action or (iii) the indemnifying
party has authorized the employment of counsel for the indemnified party at the
expense of the indemnifying party.
V. Covenants of Company.
The Company covenants and agrees that, so long as the
Convertible Preferred Stock is outstanding, it will:
(a) Promptly pay and discharge all lawful taxes,
assessments, and governmental charges or levies imposed upon the Company or upon
its income and profits, or upon any of its property, before the same shall
become in default, as well as all lawful claims for labor, materials and
supplies which, if unpaid, might become a lien or charge upon such properties or
any part thereof; provided, however, that the Company, if so required under
generally accepted accounting principles, shall not be required to pay and
discharge any such tax, assessment, charge, levy or claim so long as the
validity thereof shall be contested in good faith by appropriate proceedings and
the Company shall set aside on its books adequate reserves with respect to any
such tax, assessment, charge, levy or claim so contested;
(b) Do or cause to be done all things reasonably
necessary to preserve and keep in full force and effect its corporate existence,
rights and franchises and comply with all laws applicable to the Company, except
where the failure to comply would not have a material adverse effect on the
Company;
(c) At all times reasonably maintain, preserve,
protect and keep its property used in and material to the conduct of its
business in good repair, working order and condition (ordinary wear and tear
excluded), and from time to time make such repairs, renewals, replacements,
betterments and improvements thereto as shall be reasonably required in the
conduct of its business;
(d) To the extent reasonably necessary for the
operation of its business, keep adequately insured by all financially sound
reputable insurers, all property of a character usually insured by similar
corporations and carry such other insurance as is usually carried by similar
corporations;
(e) At all times keep true and correct books,
records and accounts; and
VI. MISCELLANEOUS
6.1 Any notice or other communication given hereunder
shall be deemed sufficient if in writing and sent by registered or certified
mail, return receipt requested, addressed to the Company, at its registered
office, 000 Xxxxx Xxxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000 , Attention: Xxxx
X. Xxxxxxxx and Xxxxx Xxxxxxx and to the Subscriber at his address indicated on
the last page of this Subscription Agreement. Notices shall be deemed to have
been given on the date of mailing, except notices of change of address, which
shall be deemed to have been given when received.
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6.2 This Subscription Agreement shall not be changed,
modified or amended except by a writing signed by the parties to be charged, and
this Subscription Agreement may not be discharged except by performance in
accordance with its terms or by a writing signed by the party to be charged.
6.3 This Subscription Agreement shall be binding upon and
inure to the benefit of the parties hereto and to their respective heirs, legal
representatives, successors and assigns. This Subscription Agreement sets forth
the entire agreement and understanding between the parties as to the subject
matter thereof and merges and supersedes all prior discussions, agreements and
understandings of any and every nature among them.
6.4 Notwithstanding the place where this Subscription
Agreement may be executed by any of the parties hereto, the parties expressly
agree that all the terms and provisions hereof shall be construed in accordance
with and governed by the laws of the State of New York. The parties hereby agree
that any dispute which may arise between them arising out of or in connection
with this Subscription Agreement shall be adjudicated before a court located in
New York City and they hereby submit to the exclusive jurisdiction of the courts
of the State of New York located in New York, New York and of the federal courts
in the Southern District of New York with respect to any action or legal
proceeding commenced by any party, and irrevocably waive any objection they now
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, relating to or arising out of this Subscription Agreement or
any acts or omissions relating to the sale of the securities hereunder, and
consent to the service of process in any such action or legal proceeding by
means of registered or certified mail, return receipt requested, in care of the
address set forth below or such other address as the undersigned shall furnish
in writing to the other.
6.5 This Subscription Agreement may be executed in
counterparts. Upon the execution and delivery of this Subscription Agreement by
the Subscriber, this Subscription Agreement shall become a binding obligation of
the Subscriber with respect to the exchange of the Notes for the Shares and
Warrants as herein provided; subject, however, to the right hereby reserved to
the Company to enter into the same agreements with other subscribers and to add
and/or to delete other persons as subscribers and to not accept the subscription
hereunder.
6.6 The holding of any provision of this Agreement to be
invalid or unenforceable by a court of competent jurisdiction shall not affect
any other provision of this Subscription Agreement, which shall remain in full
force and effect.
6.7 It is agreed that a waiver by either party of a breach
of any provision of this Agreement shall not operate, or be construed, as a
waiver of any subsequent breach by that same party.
6.8 The parties agree to execute and deliver all such
further documents, agreements and instruments and take such other and further
action as may be necessary or appropriate to carry out the purposes and intent
of this Agreement.
6.9 The Company agrees not to disclose the names,
addresses or any other information about the Subscribers, except as required by
law, provided, that the Company
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may use information relating to the Subscriber in any registration statement
under the Act with respect to the Registrable Securities.
VII. CONFIDENTIAL INVESTOR QUESTIONNAIRE
7.1 The Subscriber represents and warrants that he, she or it
comes within one category marked below, and that for any category marked, he or
she has truthfully set forth, where applicable, the factual basis or reason the
Subscriber comes within that category. ALL INFORMATION IN RESPONSE TO THIS
SECTION WILL BE KEPT STRICTLY CONFIDENTIAL. The undersigned agrees to furnish
any additional information which the Company deems necessary in order to verify
the answers set forth below.
Category A ____ The undersigned is an individual (not a partnership,
corporation, etc.) whose individual net worth, or joint net
worth with his or her spouse, presently exceeds $1,000,000.
EXPLANATION. In calculating net worth you may
include equity in personal property and real
estate, including your principal residence, cash,
short-term investments, stock and securities.
Equity in personal property and real estate should
be based on the fair market value of such property
less debt secured by such property.
Category B ____ The undersigned is an individual (not a partnership,
corporation, etc.) who had an income in excess of $200,000
in each of the two most recent years, or joint income with
his or her spouse in excess of $300,000 in each of those
years (in each case including foreign income, tax exempt
income and full amount of capital gains and loses but
excluding any income of other family members and any
unrealized capital appreciation) and has a reasonable
expectation of reaching the same income level in the current
year.
Category C ____ The undersigned is a director or executive officer of the
Company which is offering to exchange the Notes for the
Securities.
Category D ____ The undersigned is a bank; a savings and loan association;
insurance company; registered investment company; registered
business development company; licensed small business
investment company ("SBIC"); or employee benefit plan within
the meaning of Title 1 of ERISA and (a) the investment
decision is made by a plan fiduciary which is either a bank,
savings and loan association, insurance company or
registered investment advisor, or (b) the plan has total
assets in excess of $5,000,000 or is a self
directed plan with investment decisions made solely by persons that are
accredited investors.
_______________________________________________
_______________________________________________
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(describe entity)
Category E ____ The undersigned is a private business development company
as defined in section 202(a)(22) of the Investment Advisors
Act of 1940.
_______________________________________________
_______________________________________________
(describe entity)
Category F ____ The undersigned is either a corporation, partnership,
Massachusetts business trust, or non-profit organization
within the meaning of Section 501(c)(3) of the Internal
Revenue Code, in each case not formed for the specific
purpose of acquiring the Securities and with total assets in
excess of $5,000,000.
_______________________________________________
_______________________________________________
(describe entity)
Category G ____ The undersigned is a trust with total assets in excess of
$5,000,000, not formed for the specific purpose of
exchanging the Notes for the Securities, where the purchase
is directed by a "sophisticated person" as defined in
Regulation 506(b)(2)(ii).
Category H ____ The undersigned is an entity (other than a trust) all the
equity owners of which are "accredited investors" within one
or more of the above categories. If relying upon this
Category alone, each equity owner must complete a separate
copy of this Agreement.
_______________________________________________
_______________________________________________
(describe entity)
Category I ____ The undersigned is not within any of the categories above
and is therefor not an accredited investor.
The undersigned agrees that the undersigned will notify the Company at any time
on or prior to the Exchange Date in the event that the representations and
warranties in this Agreement shall cease to be true, accurate and complete.
7.2 SUITABILITY (please answer each question)
(a) For an individual Subscriber, please describe your current employment,
including the Company by which you are employed and its principal
business:
______________________________________________________________________
______________________________________________________________________
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______________________________________________________________________
______________________________________________________________________
(b) For an individual Subscriber, please describe any college or graduate
degrees held by you:
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
(c) For an individual Subscriber, do you expect your current level of income
to significantly decrease in the foreseeable future:
YES ____ NO ____
(d) For all Subscribers, please check types of prior investments:
U.S. Government Securities ______ Private Placements _____
Publicly Traded Corporate Mutual Funds _____
Securities _____ Other (describe) ___________________
Real Estate Investments _____ ___________________
(e) For all Subscribers, please state whether you have participated in other
private placements before:
YES ____ NO ____
(f) For all Subscribers, please indicate frequency of such prior
participation in private placements:
Public Private
Companies Companies
Frequently __________ __________
Occasionally __________ __________
Never __________ __________
(g) For all Subscribers, do you have any other investments or contingent
liabilities which you reasonably anticipate could cause you to need
sudden cash requirements in excess of cash readily available to you:
YES ____ NO ____
(h) For all Subscribers, are you familiar with the risk aspects and the
non-liquidity of investments such as the securities for which you seek
to subscribe?
YES ____ NO ____
(i) For all Subscribers, do you understand that there is no guarantee of
financial return on this investment and that you run the risk of losing
your entire investment?
YES ____ NO ____
7.3 Manner In Which Title to be Held. (circle one)
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(a) Individual Ownership
(b) Community Property
(c) Joint Tenant with Right of
Survivorship (both parties
must sign)
(d) Partnership*
(e) Tenants in Common
(f) Company*
(g) Trust*
(h) Other
(j) For trust, corporate, partnership and other institutional Subscribers,
do you expect your total assets to significantly decrease in the
foreseeable future:
YES ____ NO ____
*IF THE NOTES ARE BEING EXCHANGED FOR THE SECURITIES BY AN ENTITY, THE
ATTACHED CERTIFICATE OF SIGNATORY MUST ALSO BE COMPLETED.
7.4 NASD Affiliation:
Are you associated(1) with an NASD member firm(2) (please check one):
YES ____ NO ____
If Yes, please describe:
______________________________________________________
______________________________________________________
______________________________________________________
(1) The NASD defines a "person associated with a member" or "associated
person of a member" as being every sole proprietor, general or limited
partner, officer, director or branch manager of any member, or any
natural person occupying a similar status or performing similar
functions, or any natural person engaged in the investment banking or
securities business who is directly or indirectly controlling or
controlled by such member (for example, any employee), whether or not
any such person is registered or exempt from registration with the NASD.
Thus, "person associated with a member" or "associated person of a
member" includes a sole proprietor, general or limited partner, officer,
director or branch manager of an organization of any kind (whether a
corporation, partnership or other business entity) which itself is
either a "member" or a "Person associated with a member" or "associated
person of a member." In addition, an organization of any kind is a
"person associated with a member" or "associated person of a member" if
its sole proprietor or any one of its general or limited partners,
officers, directors or branch managers is a "member," "person associated
with a member" or "associated person of a member."
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(2) The NASD defines a "member" as being any individual, partnership,
corporation or other legal entity that is a broker or dealer admitted to
membership in the NASD.
*IF SUBSCRIBER IS A REGISTERED REPRESENTATIVE WITH AN NASD MEMBER FIRM,
HAVE THE FOLLOWING ACKNOWLEDGMENT SIGNED BY THE APPROPRIATE PARTY:
The undersigned NASD member firm acknowledges receipt of the notice
required by Article 3, Sections 28(a) and (b) of the Rules of Fair Practice or
any successor rules or regulations.
-------------------------
Name of NASD Member Firm
By: ____________________
Authorized Officer
Date: ___________________
7.5 The undersigned is informed of the significance to the
Company of the foregoing representations and answers contained in the
Confidential Investor Questionnaire contained in this Section 7 and such answers
have been provided under the assumption that the Company will rely on them.
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INDIVIDUAL INVESTOR SIGNATURE PAGE
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the day and year first written above.
PRINCIPAL AMOUNT OF NOTES EXCHANGED: $_________________
____________________________________ ____________________________________
Signature Signature (if purchasing jointly)
____________________________________ ____________________________________
Name Typed or Printed Name Typed or Printed
____________________________________ ____________________________________
Address Address
____________________________________ ____________________________________
City, State and Zip Code City, State and Zip Code
____________________________________ ____________________________________
Telephone - Business Telephone - Business
____________________________________ ____________________________________
Telephone - Residence Telephone - Residence
____________________________________ ____________________________________
Facsimile - Business Facsimile - Business
____________________________________ ____________________________________
Facsimile - Residence Facsimile - Residence
____________________________________ ____________________________________
Tax ID# or Social Security # Tax ID# or Social Security #
Name in which securities should be issued:
___________________________________________
Dated: _____________ ____, 1998
This Subscription Agreement is agreed to and accepted as of February
___, 1998.
ACCUMED INTERNATIONAL, INC.
____________________________________
Name:
Title:
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INSTITUTIONAL INVESTOR SIGNATURE PAGE
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the day and year first written above.
PRINCIPAL AMOUNT OF NOTES EXCHANGED: $______________
____________________________________ ______________________________________
Name of Institution Number of Partners (If Applicable)
____________________________________ ______________________________________
Address Number of Shareholders (If Applicable)
____________________________________ ______________________________________
City, State and Zip Code State of Formation
____________________________________ ______________________________________
Telephone Date of Formation
____________________________________ ______________________________________
Facsimile Tax ID# or Social Security # of
Institution
____________________________________
Signature
_____________________________________
Name (Typed or Printed) of Individual
Signing on Behalf of Institution
____________________________________
Position or Title
Name in which securities should be issued:
___________________________________________
Dated: __________________, 1998
This Subscription Agreement is agreed to and accepted as of February __,
1998.
ACCUMED INTERNATIONAL, INC.
____________________________________
Name:
Title:
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CERTIFICATE OF SIGNATORY
(To be completed if Notes are being
exchanged for Securities by an entity)
I, ____________________________, am the _________________________
of ______________________________________ (the "Entity").
I certify that I am empowered and duly authorized by the Entity
to execute and carry out the terms of the Agreement and to exchange the Notes
for the Shares and Warrants and certify further that the Agreement has been duly
and validly executed on behalf of the Entity and constitutes a legal and binding
obligation of the Entity.
IN WITNESS WHEREOF, I have set my hand this _____ day of
________________, 1998.
_________________________________
(Signature)
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