EXHIBIT 10.30
February 11, 2000
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CARDIMA, INC.
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SUBSCRIPTION AGREEMENT
Cardima, Inc.
00000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000-0000
Attn.: President
Ladies and Gentlemen:
1. Subscription. The undersigned is hereby purchasing from Cardima, Inc.,
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a Delaware corporation (the "Company"), __________________ shares (the "Shares")
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of the Company's common stock, par value $0.001 (the "Common Stock"), together
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with a detachable warrant to purchase one share of Common Stock for each five
Shares purchased hereby (the "Warrants"), for a purchase price of $2.25 per
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Share and accompanying Warrant, or an aggregate purchase price of
$____________________ (the "Purchase Price"). This Subscription is being made
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in connection with the Company's private placement of Shares and accompanying
Warrants solely to "Accredited Investors" (the "Offering"). The Terms of the
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Offering are more specifically described on Annex A hereto.
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2. Closing. On the date hereof (the "Closing"), payment of the Purchase
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Price is being made by electronic wire transfer in accordance with the following
instructions:
Bank Name: Chase, NYC
ABA #: 000000000
Credit: United States Trust Company of New York
Account #: 000-0-000000
Further Credit: Sunrise/Cardima, Inc.
Account #: 00000000
Attention: Xxxxx Xxxxx
or by delivery of a bank check or certified check made payable to "Cardima, Inc.
- Escrow Account," in either case against delivery to the undersigned of a
certificate representing the Shares and a warrant agreement representing the
Warrants. All checks should be delivered, together with an executed copy of
this Subscription Agreement, to the Placement Agent for this Offering as
follows:
Sunrise Securities Corp.
000 Xxxx 00xx Xxxxxx
00xx xxxxx
Xxx Xxxx, Xxx Xxxx
Attention: Xxxxxxx Xxxx, Managing Director
3. Representations and Warranties of the Company. To induce the
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undersigned to enter into this Agreement and to purchase the Shares and
Warrants, the Company hereby represents and warrants to the undersigned the
following:
(a) Organization Standing, Etc. The Company is a corporation duly
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organized, validly existing and in good standing under the laws of the State of
Delaware and has the requisite corporate power and authority to own or lease its
properties and to carry on its business as it is now being conducted. The
Company has the requisite corporate power and authority to issue the Shares and
to perform its obligations under this Subscription Agreement.
(b) Valid Issuance. The Shares, when issued and delivered pursuant to
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terms of this Subscription Agreement, will be duly and validly authorized,
validly issued, fully paid and nonassessable, and free of preemptive rights and
no personal liability will attach to the ownership thereof. The Warrants have
been duly authorized and, when issued and delivered pursuant to this
Subscription Agreement, will be duly executed, issued and delivered and will
constitute valid and legally binding terms, except as enforceability may be
limited by bankruptcy, insolvency or other laws affecting the rights of
creditors generally or by general equitable principles, and entitled to the
benefits provided by the warrant agreement pursuant to which such Warrants are
to be issued (the "Warrant Agreement"). The shares of Common Stock issuable
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upon exercise of the Warrants (the "Warrant Shares") have been reserved for
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issuance upon the exercise of the Warrants and when issued in accordance with
the terms of the Warrants and Warrant Agreement, will be duly and validly
authorized, validly issued, fully paid and nonassessable, and free of preemptive
rights and no personal liability will attach to the ownership thereof. The
Warrant Agreement has been duly authorized and, when executed and delivered
pursuant to this Subscription Agreement, will be duly executed and delivered and
will constitute the valid and legally binding obligation of the Company
enforceable in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency or other laws affecting the rights of
creditors generally or by general equitable principles.
(c) Corporate Acts and Proceedings. This Subscription Agreement and
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the Offering have been duly authorized by all necessary corporate action on
behalf the Company. This Subscription Agreement has been duly executed and
delivered by authorized officers of the Company, is a valid and binding
agreement on the part of the Company and is enforceable against the Company in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency or other laws affecting the rights of creditors generally
or by general equitable principles. All corporate actions necessary to the
authorization, creation, issuance and delivery of the Shares and Warrants and
the conducting of the Offering have been taken by the Company.
(d) Compliance with Applicable Laws and Other Instruments. Neither
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the execution or delivery of, nor the performance of or compliance with this
Subscription Agreement, the issuance of the Shares or the Warrants nor the
consummation of the transactions contemplated hereby will, with or without the
giving of notice or passage of time, result in any material breach of, or
constitute a material default under, or result in the imposition of any material
lien or encumbrance upon any asset or property of the Company pursuant to any
material agreement or other instrument to which the Company is a party or by
which it or any of its properties, assets or rights is bound or affected, and
will not violate the Company's Certificate of Incorporation or Bylaws.
(e) Securities Laws. Based in part upon the representations of the
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undersigned in Section 5 hereof, no consent, authorization, approval, permit or
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order of or filing with any governmental or regulatory authority is required
under current laws and regulations in connection with the execution and delivery
of this Agreement or the offer, issuance, sale or delivery of the Shares or
Warrants, other than (i) the filing of a Form D pursuant to Regulation D under
the Securities Act of 1933, as amended (the "Act"), (ii) the filing, if
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required, of any notice with any state whose laws require such filing, and (iii)
the qualification thereof, if required, under other applicable state laws, which
qualification has been or will be effected as a condition of the Offering.
Under the circumstances contemplated by this Subscription Agreement, the offer,
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issuance, sale and delivery of the Shares and Warrants will not, under current
laws and regulations, require compliance with the prospectus delivery or
registration requirements in the Act.
(f) Capital Stock. As of February 10, 2000, the authorized and issued
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capital stock of the Company is correctly set forth in Annex A hereto. All of
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the outstanding shares of the Company were duly authorized and validly issued
and are fully paid and nonassessable. Except as described in the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1998 (the
"Form 10-K"), quarterly report on Form 10-Q for the quarter ended March 31,
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1999, quarterly report on Form 10-Q for the quarter ended June 30, 1999 or
quarterly report on Form 10-Q for the quarter ended September 30, 1999
(collectively, the "SEC Filings"), in each case as filed with the Securities and
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Exchange Commission (the "Commission"), there are no outstanding subscriptions,
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options, warrants, calls, contracts, demands, commitments, convertible
securities or other agreements or arrangements of any character or nature
whatever, other than in connection with the Offering, pursuant to which the
Company is obligated to issue any securities of any kind representing an
ownership interest in the Company. Neither the offer nor the issuance or sale
of the Shares and/or Warrants constitutes an event under any anti-dilution
provisions of any securities issued (or issuable pursuant to outstanding rights,
warrants or options) by the Company or any agreements with respect to the
issuance of securities by the Company, which will either increase the number of
securities issuable pursuant to such provisions or decrease the consideration
per share to be received by the Company pursuant to such provisions. No holder
of any securities of the Company is entitled to any preemptive or similar rights
to purchase any securities of the Company in connection with the Offering.
(g) SEC Filings. The Company has furnished, or made available through
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the XXXXX Internet web site of the Commission, to the undersigned true and
complete copies of the SEC Filings. As of their respective filing dates, the
SEC Filings complied in all material respects with the applicable requirements
of the Exchange Act of 1934, as amended (the "Exchange Act"). None of the SEC
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Filings as of their respective dates contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading, except to the extent
amendments thereto were made in compliance with Commission rules and regulations
subsequent to the date thereof.
4. Transfer Restrictions.
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(a) The undersigned realizes that the Shares, the Warrants and the
Warrant Shares are not registered under the Act or any foreign or state
securities laws. The undersigned agrees that the Shares, the Warrants and the
Warrant Shares will not be sold, offered for sale, pledged, hypothecated or
otherwise transferred (collectively, "Transfer"), except in compliance with the
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Act and applicable foreign and state securities laws. The undersigned
understands that he can only Transfer the Shares, the Warrants and the Warrant
Shares pursuant to registration under the Act or pursuant to an exemption
therefrom. The undersigned understands that to Transfer the Shares, the
Warrants and the Warrant Shares may require in certain jurisdictions specific
approval by the appropriate governmental agency or commission in such
jurisdiction. The undersigned has been advised that, except as set forth in
Section 6 hereof, the Company has no obligation, and does not intend, to cause
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the Shares, the Warrants and the Warrant Shares to be registered under the Act
or the securities law of any other jurisdiction or to comply with the
requirements for any exemption under the Act, including but not limited to,
those provided by Rule 144 and Rule 144A promulgated under the Act, or under the
securities law of any other jurisdiction.
(b) To enable the Company to enforce the transfer restrictions
contained in Section 4(a) hereof, the undersigned hereby consents to the placing
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of legends upon, and stop-transfer orders with the transfer agent of the Common
Stock with respect to, the Shares, the Warrants and the Warrant Shares.
5. Representations and Warranties of the Undersigned. To induce the
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Company to accept the undersigned's subscription, the undersigned hereby
represents and warrants to the Company that:
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(a) the undersigned, if an individual, has reached the age of majority
in the jurisdiction in which he resides, is a bona fide resident of the
jurisdiction contained in the address set forth on the signature page of this
Subscription Agreement, is legally competent to execute this Subscription
Agreement, and does not intend to change residence to another jurisdiction;
(b) the undersigned, if an entity, is duly authorized to execute this
Subscription Agreement and this Subscription Agreement, when executed and
delivered by the undersigned, will constitute a legal, valid and binding
obligation enforceable against the undersigned in accordance with its terms; and
the execution, delivery and performance of this Subscription Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all requisite corporate or other necessary action on the part of the
undersigned;
(c) the Shares and Warrants subscribed for hereby are being acquired
by the undersigned for investment purposes only, for the account of the
undersigned and not with the view to any resale or distribution thereof, and the
undersigned is not participating, directly or indirectly, in a distribution of
such Shares or Warrants and will not take, or cause to be taken, any action that
would cause the undersigned to be deemed an "underwriter" of such Shares or
Warrants as defined in Section 2(11) of the Act;
(d) the undersigned has had access to all materials, books, records,
documents and information relating to the Company which the undersigned has
requested, including (i) the SEC Filings, and (ii) the Company's Proxy Statement
dated April 30, 1999 as amended (the "Proxy Statement"), and has been provided
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the opportunity to verify the accuracy of the information contained therein;
(e) the undersigned acknowledges and understands that investment in
the Shares and Warrants involves a high degree of risk, including without
limitation, the risks set forth in the SEC Filings under the caption "Factors
Affecting Future Results" in "Management's Discussion and Analysis of Financial
Condition and Results of Operations";
(f) the undersigned acknowledges that the undersigned has been offered
an opportunity to ask questions of, and receive answers from, officers of the
Company concerning all material aspects of the Company and its business and the
Offering, and that any request for such information has been fully complied with
to the extent the Company possesses such information or can acquire it without
unreasonable effort or expense;
(g) the undersigned has such knowledge and experience in financial and
business matters that the undersigned is capable of evaluating the merits and
risks of an investment in the Company and can afford a complete loss of his
investment in the Company;
(h) the undersigned has, in connection with its decision to purchase
the Shares, relied solely upon this Agreement, SEC Filings and the Proxy
Statement;
(i) the undersigned represents and warrants to and covenants with the
Company that the undersigned has not engaged and will not engage in any sales of
the Shares, including a short sale covered by the Shares, prior to the
effectiveness of the Resale Registration Statement (as defined in Section 6),
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except to the extent that any such short sale is fully covered by shares of
Common Stock of the Company other than the Shares, or such sale is otherwise
exempt from registration under the Act;
(j) the undersigned recognizes that no governmental agency has passed
upon the issuance of the Shares or Warrants or made any finding or determination
as to the fairness of this Offering;
(k) if the undersigned is purchasing the Shares and Warrants
subscribed for hereby in a representative or fiduciary capacity, the
representations and warranties contained herein shall be deemed to have been
made on behalf of the person or persons for whom such Shares and Warrants are
being purchased;
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(l) the undersigned has not entered into any agreement to pay
commissions to any persons with respect to the purchase or sale of the Shares or
Warrants, except commissions for which the undersigned will be responsible;
(m) the undersigned acknowledges that the Company will pay to Sunrise
Securities Corp. a commission with respect to the sale of the Shares and
Warrants by the Company to the undersigned (except to the extent otherwise
provided in Annex A) of (i) 7.0% of the aggregate Purchase Price, payable at the
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option of Sunrise Securities Corp. in cash or in shares of Common Stock and
Warrants valued at $2.25, and (ii) five-year warrants to purchase, at a purchase
price of $2.48, that number of shares of Common Stock and Warrants equal to 7%
of the number of Shares and Warrants being purchased by the undersigned
hereunder; and
(n) the undersigned is an "Accredited Investor" as that term is
defined in Section 501(a) of Regulation D promulgated under the Act.
Specifically the undersigned is (check appropriate item(s)):
[_] (i) a bank as defined in Section 3(a)(2) of the Act, or a savings and loan association or other
institution as defined in Section 3(a)(5)(A) of the Act whether acting in its individual or
fiduciary capacity; a broker or dealer registered pursuant to Section 15 of the Exchange Act;
an insurance company as defined in Section 2(13) of the Act; an investment company registered
under the Investment Company Act of 1940 or a business development company as defined in
Section 2(a)(48) of that Act; a Small Business Investment Company licensed by the U.S. Small
Business Administration under Section 301(c) of (d) of the Small Business Investment Act of
1958; a plan established and maintained by a state, its political subdivisions, for the benefit
of its employees, if such plan has total assets in excess of $5,000,000; any employee benefit
plan within the meaning of the Employment Retirement Income Security Act of 1974, if the
investment decision is made by a plan fiduciary, as defined in Section 3(21) of such Act, which
is either a bank, savings and loan association, insurance company, or registered investment
advisor, or if the employee benefit plan has total assets in excess of $5,000,000, or if a
self-directed plan, with investment decisions made solely by persons that are Accredited
Investors;
[_] (ii) a private business development company as defined in Section 202(a)(22) of the Investment
Advisers Act of 1940;
[_] (iii) an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as
amended, corporation, Massachusetts or similar business trust, or partnership, not formed for
the specific purpose of acquiring Shares, with total assets in excess of $5,000,000;
[_] (iv) a director or executive officer of the Company;
[_] (v) a natural person whose individual net worth, or joint net worth with that person's spouse, at
the time of his or her purchase exceeds $1,000,000;
[_] (vi) a natural person who had an individual income (not including his or her spouse's income) in
excess of $200,000 in 1998 and 1999 or joint income with his or her spouse in excess of
$300,000 in each of those years and has a reasonable expectation of reaching such income level
in 2000;
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[_] (vii) a trust, with total assets in excess of $5,000,000, not formed for the specific purpose of
acquiring Shares, whose purchase is directed by a person having such knowledge and experience in
financial and business matters that he or she is capable of evaluating the merits and risks
entailed in the purchase of Shares; or
[_] (viii) an entity in which all of the equity owners are Accredited Investors. (If this alternative is
checked, the undersigned must identify each equity owner and provide statements signed by each
demonstrating how each is qualified as an Accredited Investor.)
6. Registration of Shares and Warrant Shares under the Act.
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(a) By its acceptance hereof, the Company agrees that it shall, at its
expense, (i) not later than 45 business days after the final closing of the
Offering (the "Filing Deadline") file a registration statement or amend an
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existing effective registration statement (in either case, the "Resale
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Registration Statement") with the Commission to register under the Act the
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resale by the undersigned of the Shares and the Warrant Shares, (ii) use its
reasonable best efforts to cause the Resale Registration Statement to become
effective under the Act as promptly as practicable, (iii) after the Resale
Registration Statement is declared effective under the Act, furnish the
undersigned with such number of copies of the final prospectus included in the
Resale Registration Statement (the "Prospectus") as the undersigned may
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reasonably request to facilitate the resale of Shares, and (iv) use its
reasonable best efforts to cause such Registration Statement to remain effective
until such time as the undersigned becomes eligible to resell the Shares and the
Warrant Shares pursuant to Rule 144 under the Act.
(b) The Company will prepare and file with the Commission such
amendments and Prospectus supplements, including post-effective amendments to
the Resale Registration Statement, as the Company determines may be necessary or
appropriate, and use its reasonable best efforts to have such post-effective
amendments declared effective as promptly as practicable; cause the Prospectus
to be supplemented by any Prospectus supplement, and as so supplemented, to be
filed with the Commission; and promptly notify the undersigned when a
Prospectus, and any Prospectus supplement or post-effective amendment must be
filed or has been filed (including any filing in response to a Sale Notice) and,
with respect to any post-effective amendment, when the same has become
effective.
(c) In connection with the Resale Registration Statement, the
undersigned shall furnish the Company such information as the Company shall
reasonably request.
(d) The Company acknowledges that the undersigned and other purchasers
of Shares and Warrants will suffer damages if the Company fails to fulfill its
obligation to file a Resale Registration Statement by the Filing Deadline or to
cause the Resale Registration Statement to become effective under the Act in a
timely fashion, and that it would not be feasible to ascertain the extent of
such damages. Accordingly, in the event that the Company shall fail to file a
timely Resale Registration Statement in accordance with Section 6(a)(i) above,
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the Company shall issue to the undersigned, as compensation therefor, shares of
Common Stock equal to (i) 1% of the Shares for each 30 days or part thereof the
filing is delayed until 60 days after the Filing Deadline, and (ii) 2% of the
Shares for each 30 days or part thereof the filing is delayed from 60 days after
the Filing Deadline. In addition, in the event that the Company shall fail to
cause the Resale Registration Statement to be declared effective within 150
business days of the final closing of the Offering (the "Effectiveness
Deadline"), the Company shall issue to the undersigned, as compensation
therefor, shares of Common Stock equal to (i) 1% of the Shares for each 30 days
or part thereof effectiveness is delayed until 60 days after the Effectiveness
Deadline and (ii) 2% of the Shares for each 30 days or part thereof
effectiveness is delayed beyond 60 days after the Effectiveness Deadline.
However, the Company shall not be required to issue such additional shares in
either case of failure to timely file or failure to timely cause effectiveness
if such failure has been caused by (a) the failure of the undersigned to provide
information in connection with the Resale Registration
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Statement in accordance with Section 6(d) above, or (b) the occurrence of a
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material event not in the ordinary course which may delay the filing of the
Resale Registration Statement pending public disclosure, which disclosure shall
be promptly made by the Company.
(e) At any time the Company may refuse to permit the undersigned to
resell any Shares or Warrant Shares pursuant to the Resale Registration
Statement; provided, however, that in order to exercise this right, the Company
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must deliver a certificate in writing to the undersigned to the effect that
withdrawal of such Resale Registration Statement is necessary because a sale
pursuant to the Resale Registration Statement in its then-current form could
constitute a violation of the federal securities laws. In such an event, the
Company shall use its best efforts to amend the Resale Registration Statement if
necessary and take all other actions necessary to allow such sale under the
federal securities laws, and shall notify the undersigned promptly after it has
determined that such sale has become permissible under the federal securities
laws. In any calendar year, the Company may exercise this right no more than
two times, for not more than 30 days in each instance. The undersigned hereby
covenants and agrees that it will not sell any Shares pursuant to the Resale
Registration Statement during the periods the Resale Registration Statement is
withdrawn as set forth in this Section 6(e).
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7. Indemnification.
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(a) The undersigned understands the meaning and legal consequences of
the representations and warranties made by the undersigned in this Subscription
Agreement, and agrees to indemnify and hold harmless the Company and each of the
Company's directors, officers, stockholders, employees, counsel, agents,
successors and assignees from and against any and all loss, damage, liability or
expenses (including, without limitation, attorneys' fees), as and when incurred,
due to or arising out of (in such case in whole or in part) any breach of any
representation or warranty made by the undersigned set forth herein or in any
other agreement or other document furnished by the undersigned to any of the
foregoing in connection with the Offering, any failure by the undersigned to
fulfill any of its covenants or agreements set forth herein, or arising out of
the resale or distribution by the undersigned of the Shares, the Warrants or the
Warrant Shares or any portion thereof in violation of the Act or any applicable
foreign or state securities or "blue sky" law.
(b) The Company understands the meaning and legal consequences of the
representations and warranties made by it in this Subscription Agreement, and
agrees to indemnify and hold harmless the undersigned and each of the
undersigned's directors, officers, stockholders, employees, counsel, agents,
successors and assigns from and against any and all loss, damage, liability or
expense (including, without imitation, attorneys' fees), as and when incurred,
due to or arising out of (in each case in whole or in part) any breach of any
representation or warranty made by the Company set forth herein, or any failure
by the Company to fulfill any of its covenants or agreements set forth herein.
(c) To the extent permitted by law, the Company will indemnify and
hold harmless each holder of Shares included in the Resale Registration
Statement (a "Holder"), the directors, if any, of such Holder, the officers, if
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any, of such Holder, and each person, if any, who controls such Holder within
the meaning of the Act or the Exchange Act, against any losses, claims, damages,
expenses or liabilities to which any of them may become subject, under the Act,
the Exchange Act or otherwise, insofar as such losses, claims, damages, expenses
or liabilities (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon any of the following statements,
omissions or violation (collectively, a "Violation"): (i) any untrue statement
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or alleged untrue statement of a material fact contained in the Resale
Registration Statement, including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto, (ii) the omission or
alleged omission to state therein a material fact required to be stated therein,
or necessary to make the statements therein, in light of the circumstances in
which they were made, not misleading, or (iii) any violation or alleged
violation by the Company of the Act, the Exchange Act, any state securities law
or any rule or regulation promulgated under the Act, the Exchange Act or any
state securities law; and the Company will reimburse the Holders and each such
controlling person, promptly as such expenses are incurred, for any legal or
other expenses reasonably
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incurred by them in connection with investigating or defending any such loss,
claim, damage, liability, action or proceeding.
(d) To the extent permitted by law, each Holder, severally and not
jointly, will indemnify and hold harmless, to the same extent and in the same
manner set forth in Section 7(c), the Company, each of its directors and
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officers who have signed the Resale Registration Statement, and each person, if
any, who controls the Company within the meaning of the Act or the Exchange Act,
against any losses, claims, damages or liabilities to which any of them may
become subject, under the Act, the Exchange Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions or proceedings, whether
commenced or threatened in respect thereof) arise out of or are based upon any
Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished by such Holder expressly for use in connection with the Resale
Registration Statement; and such Holder will reimburse such persons for any
legal or other expenses reasonably incurred by any of them in connection with
investigating or defending any such loss, claim, damage, liability or action.
(e) With respect to the indemnification set forth in Sections 7(c) or
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(d) above, to the extent any indemnification by an indemnifying party is
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prohibited or limited by law, the indemnifying party agrees to make the maximum
contribution with respect to any amounts for which it would otherwise be liable
under said Sections 7(c) or (d) to the extent permitted by law; provided that
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(i) no contribution shall be made under circumstances where the maker would not
have been liable for indemnification under the fault standards set forth in said
Sections 7(c) or (d), and (ii) no party guilty of fraudulent misrepresentation
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(within the meaning of Section 11 of the Act) shall be entitled to contribution
from any party who was not guilty of such fraudulent misrepresentation.
8. Further Documents. The undersigned agrees that it will execute such
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other documents as may be necessary or desirable in connection with the
transactions contemplated hereby.
9. Modification. Neither this Subscription Agreement nor any provisions
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hereof shall be waived, modified, discharged or terminated except by an
instrument in writing signed by the party against whom any such waiver,
modification, discharge or termination is sought.
10. Notices. Any notice or other communication required or permitted to
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be given hereunder shall be in writing and shall be mailed by certified mail,
return receipt requested, or by Federal Express, Express Mail or similar
overnight delivery or courier service and delivered against receipt to the
party to whom it is to be given, (i) if to the Company, at the address set forth
on the first page hereof, (ii) if to the undersigned, at its address set forth
on the signature page hereto, or (iii) in either case, to such other address as
the party shall have furnished in writing in accordance with the provisions of
this Section 10. Notice to the estate of any party shall be sufficient if
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addressed to the party as provided in Section 10. Any notice or other
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communication given by certified mail shall be deemed given at the time of
certification thereof, except for a notice changing a party's address which
shall be deemed given at the time of receipt thereof. Any notice given by other
means permitted by this Section 10 shall be deemed given at the time of receipt
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thereof.
11. Counterparts. This Subscription Agreement may be executed through the
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execution of separate signature pages or in any number of counterparts, and each
such counterpart shall, for all purposes, constitute one agreement binding on
all parties, notwithstanding that all parties are not signatories to the same
counterpart.
12. Entire Agreement. This Subscription Agreement contains the entire
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agreement of the parties with respect to the subject matter hereof and there are
no representations, covenants or other agreements except as stated or referred
to herein.
13. Severability. Each provision of this Subscription Agreements is
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intended to be severable from every other provision, and the invalidity or
illegality of any portion hereof shall not affect the validity or legality of
the remainder hereof.
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14. Assignability. This Subscription Agreement is not transferable or
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assignable by the undersigned.
15. Applicable Law. This Subscription Agreement has been negotiated and
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consummated in the State of New York and shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to
conflict of laws.
16. Choice of Jurisdiction. Any action or proceeding arising directly,
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indirectly or otherwise, in connection with, out of or from this Subscription
Agreement, any breach hereof or any transaction covered hereby shall be resolved
within New York, New York. Accordingly, the parties consent and submit to the
jurisdiction of the United States federal and state courts located within New
York, New York.
17. Taxpayer Identification Number. The undersigned verifies under
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penalties of perjury that any Taxpayer Identification Number or Social Security
Number shown on the signature page hereto is true, correct and complete.
18. Pronouns. Any personal pronoun shall be considered to mean the
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corresponding masculine, feminine or neuter personal pronoun, as the context
requires.
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IN WITNESS WHEREOF, the undersigned has executed this Subscription
Agreement this _______ day of ________________________, 2000.
Number of Shares Subscribed for: __________________ Shares
INDIVIDUAL SUBSCRIBER: ENTITY SUBSCRIBER:
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(Signature of Subscriber) (Print Name of Subscriber)
By:
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(Typed or Printed Name)
Name: Title:
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(Residence Address) (Address)
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(City, State and Zip Code) (City, State and Zip Code)
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(Telephone Number) (Telephone Number)
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(Telecopier Number) (Telecopier Number)
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(Tax I.D. or Social Security Number) (Tax I.D. or Social Security Number)
ACCEPTED:
CARDIMA, INC. For entities desiring that certificates
for Shares be delivered to an address
By:_________________________________ other than that set forth above, set
Name:_______________________________ for the delivery address:
Title:______________________________
Dated: ______________________, 2000
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(Address)
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(City, State and Zip Code)
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Annex A
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CARDIMA, INC.
FEBRUARY 2000 Private Placement
Terms of Offering
Private Placement This offering is being made exclusively to
institutions and high-net worth individuals that
meet the definition of "Accredited Investor" as set
forth in Section 501(a) of Regulation D under the
Securities Act of 1933 (the "Act").
Amount $6,000,000 to $10,500,000
Shares 2,666,666 to 4,666,666 shares of Common Stock (the
"Shares") of Cardima, Inc. (the "Company") together
with a detachable warrant (to purchase one share of
Common Stock) for each five Shares purchased in the
offering (the "Warrants"). The Warrants will have a
five-year term and an exercise price of $2.48.
Price $2.25 per Share and accompanying Warrant
Pre-Offering Outstanding
Shares 16,566,976 shares of Common Stock
Pre-Offering Warrants and
Options 1993 Stock Option Plan 1,591,477
Director Stock Option Plan 200,000
Warrants 1,037,512
Escrow Funds shall be placed in a non-interest bearing
escrow account at US Trust Company pending receipt
of the minimum placement of $6,000,000 (exclusive
of the investment by St. Jude Medical, Inc.
referred to below).
Risk Factors Investment in the Shares involves a high degree of
risk including those set forth in the registration
statements and periodic reports filed by the
Company with the Securities and Exchange Commission
(the "Commission"). The Shares have not been
registered under the Act or any foreign or state
securities laws. The Shares may not be sold until
registration under the Act in accordance with the
registration rights described below or pursuant to
an exemption from registration.
Placement Agent Sunrise Securities Corp. ("Sunrise") is acting as
placement agent. Sunrise shall be paid a commission
of 7% of the sales price and be issued warrants
(the "Placement Agent Warrants") to purchase a
number of shares of Common Stock and Warrants equal
to 7% of the Shares and Warrants placed. The term
of the Placement Agent Warrants is 5 years, and the
exercise price is $2.48. Sunrise may elect to
receive all or any part of its commission in shares
of Common Stock and Warrants valued at $2.25,
provided, that at least 50% of
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Sunrise's commissions will be paid in this manner.
Sunrise will also be reimbursed for its expenses up
to a maximum of $30,000. Employees of the Placement
Agent who meet the definition of "Accredited
Investor" as set forth in Section 501(a) of
Regulation D under the Act may purchase Shares for
their own personal account on the same terms and
conditions as other investors in the offering. Any
such purchases shall count towards the minimum and
maximum offerings, respectively.
St. Jude Investment The first closing of the offering shall be a
conditioned on a simultaneous closing of a
$3,000,000 investment in the Company by St. Jude
Medical, Inc.
Registration Rights The Company shall, at its expense, (i) not later
than a data 45 business days after the final
closing of the offering (the "Filing Deadline")
file a registration statement (the "Registration
Statement") with the Commission to register under
the Act the resale by the subscribers of the Shares
and the shares of Common Stock underlying the
Warrants, (ii) use its reasonable best efforts to
cause the Registration Statement to become
effective under the Act as promptly as practicable,
(iii) after the Registration Statement is declared
effective under the Act, furnish subscribers with
such number of copies of the prospectus included in
the Registration Statement as the subscribers may
reasonably request to facilitate the resale of the
Shares and the shares of Common Stock underlying
the Warrants, and (iv) use its reasonable best
efforts to cause such Registration Statement to
remain effective until such time as the subscribers
become eligible to resell the Shares and the shares
of Common Stock underlying the Warrants, pursuant
to Rule 144. In the event that the Company shall
fail to timely file a Registration Statement in
accordance with the above, the Company shall issue
to the subscribers, as compensation therefor,
shares of Common Stock equal to (i) 1% of the
Shares for each 30 days or part thereof the filing
is delayed until 60 days after the Filing Deadline,
and (ii) 2% of the Shares for each 30 days or part
thereof the filing is delayed from 60 days after
the Filing Deadline. In addition, in the event that
the Company shall fail to cause the Registration
Statement to be declared effective within 150
business days of the final closing of the Offering
(the "Effectiveness Deadline"), the Company shall
issue to the subscribers, as compensation therefor,
shares of Common Stock equal to (i) 1% of the
Shares for each 30 days or part thereof
effectiveness is delayed until 60 days after the
Effectiveness Deadline and (ii) 2 % of the Shares
for each 30 days or part thereof effectiveness is
delayed beyond 60 days after the Effectiveness
Deadline. However, the Company shall not be
required to issue such additional shares of Common
Stock in either instance of failure to timely file
or failure to timely cause effectiveness, if such
failure has been caused by (a) the failure of the
subscribers to provide information in connection
with the Registration Statement, or (b) the
occurrence of a material event not in the ordinary
course which may delay the filing of the
Registration Statement pending public disclosure,
which disclosure shall be promptly
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made.
The Company may at any time refuse to permit
subscribers to resell any Shares pursuant to the
Registration Statement upon delivery to the
Subscribers of a written certificate to the effect
that withdrawal of the Registration Statement is
necessary because a sale thereunder in the then
current form would constitute a violation of
federal securities laws. In the event of a
withdrawal, the Company shall use its best efforts
to amend the Registration Statement and/or take all
other necessary actions to again permit sales in
compliance with the federal securities law. In any
calendar year, the Company may exercise this right
of withdrawal no more than two times, for no more
than 30 days in each instance.
Lock up For a period of one year following the final
closing of the offering, the Company shall not sell
or offer to sell any of its securities, except
pursuant to the Company's stock option plan,
without the written consent of Sunrise, which
consent shall not be unreasonably withheld.
Termination of offering The offering will terminate on April 10, 2000
unless extended by mutual consent of the Company
and Sunrise (the "Termination Date"). On the
Termination Date, any funds remaining in escrow
that have not been closed upon shall be promptly
returned to subscribers without interest thereon.
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