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EXHIBIT 10.40
ACCUMED INTERNATIONAL, INC.
SUBSCRIPTION AGREEMENT made as of this ____ day of ________, 1997
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, the Company desires to issue a minimum of seventy (70) and a
maximum of eighty-five (85) units ("Units") in a private placement (the
"Private Placement"), each Unit consisting of $100,000 principal amount of 12%
Convertible Promissory Notes of the Company (the "Notes") in the form attached
hereto as Exhibit A and 10,000 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 the Subscriber desires to acquire the number of Units set forth on the
signature page hereof;
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. SUBSCRIPTION FOR UNITS AND REPRESENTATIONS BY AND COVENANTS OF
SUBSCRIBER
1.1 Subject to the terms and conditions hereinafter set
forth, the Subscriber hereby subscribes for and agrees to purchase from the
Company such number of Units as is set forth upon the signature page hereof at
a price equal to $100,000 per Unit, and the Company agrees to sell such Units
to the Subscriber for said purchase price subject to the Company's right to
sell to the Subscriber such lesser number of Units as it may, in its sole
discretion, deem necessary or desirable. The purchase price is payable by
certified or bank check made payable to Chase Manhattan Bank, as Escrow Agent
for AccuMed International, Inc., contemporaneously with the execution and
delivery of this Subscription Agreement. The Notes and Warrants will be
delivered by the Company within ten (10) days following the consummation of
this offering as set forth in Article III hereof. The Subscriber understands
however, that this purchase of Units is contingent upon the Company making
sales of a minimum of seventy ($7,000,000 principal amount of Notes and 700,000
Warrants) prior to the Termination Date as defined in Article III hereof.
1.2 The Subscriber recognizes that the purchase of Units
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 and the Units; (ii) he may
not be able to liquidate his investment; (iii) transferability of the
securities comprising the Units 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
Confidential Term Sheet (the "Term Sheet"), including the attachments thereto.
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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 an investment in the Units.
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 Units 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 Term Sheet 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
offering, and any additional information which he had requested.
1.6 The Subscriber acknowledges that this offering of
Units 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 Units.
1.7 The Subscriber acknowledges that this offering of
Units 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 Notes and Warrants comprising his
Units 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 Notes and
Warrants comprising the Units 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
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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
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 securities comprising the Units. 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
comprising the Units 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 comprising
the Units or 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 consents to the placement of a legend
on any certificate or other document evidencing the Notes and Warrants
comprising his Units and the Common Stock issuable upon exercise and/or
conversion of such Warrants and Notes stating that they have not been
registered under the Act and setting forth or referring to the restrictions on
transferability and sale thereof.
1.11 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 subscription and to
close the offer at any time.
1.12 The Subscriber hereby represents that the address of
Subscriber furnished by him at the end of this Subscription Agreement is the
undersigned's principal
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residence if he is an individual or its principal business address if it is a
corporation or other entity.
1.13 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 NASD's Rules of Fair Practice, receipt of which must be
acknowledged by such firm on the signature page hereof.
1.14 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.
1.15 The Subscriber hereby represents that such Subscriber
either has a preexisting personal or business relationship with the Company or
any of its partners, officers, directors or controlling persons, or by reason
of such Subscriber's business or financial experience or the business or
financial experience of such Subscriber's professional advisors who are
unaffiliated with and who are not compensated by the Company or any affiliate
or selling agent of the Company, directly or indirectly, and could be
reasonably assumed to have the capacity to protect such Subscriber's own
interests in connection with the transaction.
1.16 The Subscriber expressly agrees and understands that
the Company does not currently have sufficient shares to permit conversion of
the Notes and exercise of a portion of the Warrants and that the ability of the
Company to increase its authorized shares is contingent on certain factors
beyond the Company's control, including stockholder approval. The Subscriber
hereby agrees that in the event the Company, despite use of its best efforts,
is unable to effect an increase in the number of authorized shares, such
holder's sole remedy shall be the increased interest and decreased conversion
price set forth in Section 1.E. of the Notes.
II. REPRESENTATIONS BY THE COMPANY
The Company represents and warrants to the Subscriber that
prior to the consummation of this offering and at the Closing Date:
(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
Subscription 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 offer and sale of the Units and the securities contained therein
will have been duly taken and approved.
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(c) The Notes and Warrants comprising the Units 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) Except as set forth in the Term Sheet, the Company
will at all times during the term of the Notes 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 Notes.
(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 Subscription Agreement, the
issuance of the Notes or the Warrants, 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 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
Term Sheet 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 subscription period will begin as of February 27,
1997 and will terminate at 11:59 PM Eastern time on March 14, 1997, unless
extended by the Company and the Placement Agent for up to an additional sixty
(60) days (the "Termination Date"). Of the
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Units seventy will be offered on a "best efforts-all or none" basis and the
remaining fifteen Units will be offered on a "best efforts" basis as more
particularly set forth in the Term Sheet. The minimum subscription per
subscriber shall be one-half Unit ($50,000), provided, however, that smaller
investments may be accepted at the discretion of the Placement Agent and the
Company.
3.2 Placement of the Units will be made by Commonwealth
Associates (the "Placement Agent"), which will receive (i) a placement fee in
the amount of 7% of the purchase price of the Units placed; (ii) an
accountable expense allowance of up to $75,000; (iii) warrants to purchase
200,000 shares of Common Stock of the Company for assisting the Company in the
placement and (iv) other compensation as summarized in the Term Sheet.
3.3 Pending the sale of the Units, all funds paid
hereunder shall be deposited by the Company in escrow with Chase Manhattan
Bank. If the Company shall not have obtained subscriptions (including this
subscription) for purchases of seventy (70) Units ($7,000,000 principal amount
of Notes and 700,000 Warrants) for an aggregate purchase price of $7,000,000 on
or before the Termination Date, then this subscription shall be void and all
funds paid hereunder by the Subscriber, without interest, shall be promptly
returned to the Subscriber, subject to paragraph 3.5 hereof. If seventy (70)
Units are sold at or prior to the Termination Date, then all subscription
proceeds shall be paid over to the Company within ten days thereafter. In
such event, placements of additional Units may continue until the Termination
Date, with subsequent releases of funds to be at the mutual consent of the
Company and the Placement Agent.
3.4 The Subscriber hereby authorizes and directs the
Company to deliver the securities to be issued to such Subscriber pursuant to
this Subscription Agreement to the residential or business address indicated in
the Confidential Investor Questionnaire included herein.
3.5 The Subscriber hereby authorizes and directs the
Company to return any funds for unaccepted subscriptions to the same account
from which the funds were drawn, including any customer account maintained with
the Placement Agent.
3.6 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.
3.7 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
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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 last closing of the Private Placement, but not more than
five (5) years from the Termination Date, the Company shall receive a written
request therefor (the "Demand Notice") from holders of Notes convertible into
at least thirty percent (30%) of the shares of Common Stock ("Registrable
Securities") issuable or issued upon conversion of the Notes or the exercise of
the Warrants (the "Requesting Holders"), 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
last closing of the Private Placement, 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
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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 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
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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;
(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
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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 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.
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(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 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.
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V. MISCELLANEOUS
5.1 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:
Xxxxx 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.
5.2 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.
5.3 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.
5.4 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.
5.5 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 purchase of Units 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.
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5.6 The holding of any provision of this Subscription
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.
5.7 It is agreed that a waiver by either party of a
breach of any provision of this Subscription Agreement shall not operate, or be
construed, as a waiver of any subsequent breach by that same party.
5.8 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 Subscription Agreement.
5.9 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 may use information relating to the Subscriber
in any registration statement under the Act with respect to the Registrable
Securities.
VI. CONFIDENTIAL INVESTOR QUESTIONNAIRE
6.1 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.
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Category C ____ The undersigned is a director or executive officer of the
Company which is issuing and selling the Units.
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.
_______________________________________________
_______________________________________________
(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 Units 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
acquiring the Units, 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.
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_______________________________________________
_______________________________________________
(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 Closing Date in the event that the representations and
warranties in this Agreement shall cease to be true, accurate and complete.
6.2 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:
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
(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 ____
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(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 ____
6.3 Manner In Which Title to be Held. (circle one)
(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 UNITS ARE BEING SUBSCRIBED FOR BY AN ENTITY, THE ATTACHED
CERTIFICATE OF SIGNATORY MUST ALSO BE COMPLETED.
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6.4 NASD Affiliation:
Are you associate(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."
(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
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Date: ___________________
6.5 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 6 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 Subscription
Agreement as of the day and year first written above.
NUMBER OF UNITS _____ X $__________ = $__________
____________________________________ ____________________________________
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: _____________ ____, 1997
This Subscription Agreement is agreed to and accepted as of
_________________, 1997.
ACCUMED INTERNATIONAL, INC.
_______________________________________
Name:
Title:
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INSTITUTIONAL INVESTOR SIGNATURE PAGE
IN WITNESS WHEREOF, the parties have executed this Subscription
Agreement as of the day and year first written above.
NUMBER OF UNITS _____ X $__________ = $__________
____________________________________ ____________________________________
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: __________________, 1997
This Subscription Agreement is agreed to and accepted as of
_________________, 1997.
ACCUMED INTERNATIONAL, INC.
_______________________________________
Name:
Title:
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CERTIFICATE OF SIGNATORY
(To be completed if Units are
being subscribed for 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 Subscription Agreement and to purchase
and hold the Units, and the Notes and Warrants underlying the Units and certify
further that the Subscription 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
________________, 1997.
_________________________________
(Signature)
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