EXHIBIT 10.1
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SUBSCRIPTION AGREEMENT
THIS SUBSCRIPTION AGREEMENT (this "AGREEMENT"), dated as of May
9,
2008, by and between CAS Medical Systems, Inc., a Delaware
corporation, located
at 44 East Industrial Road, Branford, Connecticut 06405 (the
"COMPANY"), and the
subscriber identified on the signature page hereto (the
"Subscriber").
WHEREAS, the Company and the Subscriber are executing and
delivering
this Agreement in reliance upon an exemption from securities
registration
afforded by the provisions of Section 4(2), Section 4(6) and/or
Regulation D
("REGULATION D") as promulgated by the United States Securities and
Exchange
Commission (the "COMMISSION") under the Securities Act of 1933, as
amended (the
"1933 ACT").
WHEREAS, the parties desire that, upon the terms and subject to
the
conditions contained herein, the Company shall issue and sell to
the Subscriber,
as provided herein, and the Subscriber shall purchase 333,333
shares (the
"SHARES") of common stock of the Company, par value $0.004 per
share, of the
Company (the "COMMON STOCK") for an aggregate purchase price of
$1,000,000 (the
"PURCHASE PRICE"). This Agreement, together with any other
agreement and
document executed in connection herewith are referred to herein as
the
"TRANSACTION DOCUMENTS";
NOW, THEREFORE, in consideration of the mutual covenants and
other
agreements contained in this Agreement the Company and the
Subscriber hereby
agree as follows:
1. Purchase and Sale. Subject to the satisfaction or
waiver of the terms and conditions of this Agreement, on the date
hereof (the
"CLOSING DATE"), the Subscriber shall purchase and the Company
shall sell to the
Subscriber (the "CLOSING") the Shares.
2. Payment for Shares; Delivery of Certificate. On or
prior to the Closing Date, the Subscriber shall transmit by wire
transfer of
immediately available funds pursuant to instructions provided by
the Company, an
amount equal to the Purchase Price. On or promptly following the
Closing Date,
the Company shall deliver to the Subscriber in accordance with this
Agreement a
certificate representing the Shares purchased pursuant hereto.
3. Subscriber's Representations and Warranties. The
Subscriber hereby represents and warrants to and agrees with the
Company that:
(a) Organization and Standing of the
Subscriber. The Subscriber is a limited liability company duly
organized,
validly existing and in good standing under the laws of the
jurisdiction of its
organization and has the requisite power to own its assets and to
carry on its
business as presently conducted.
(b) Authorization and Power. The Subscriber
has the requisite power and authority to enter into and perform
this Agreement
and each other Transaction Document to which it is a party or by
which it is
bound and to purchase the Shares being sold to it hereunder. The
execution,
delivery and performance by the Subscriber of this Agreement and
each other
Transaction Document to which the Subscriber is a party or by which
it is bound
and the consummation by it of the transactions contemplated hereby
and thereby
have been duly authorized by all necessary limited liability
company action, and
no further consent or authorization of the Subscriber or its
members is
required. This Agreement and each other Transaction Document to
which the
Subscriber is a party or by which it is bound has been duly
authorized, executed
and delivered by the Subscriber and constitutes, or shall
constitute when
executed and delivered, a valid and binding obligation of the
Subscriber
enforceable against the Subscriber in accordance with the terms
hereof and
thereof, subject to bankruptcy, insolvency,
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fraudulent transfer, reorganization, moratorium and similar laws of
general
applicability relating to or affecting creditors' rights generally
and to
general principles of equity.
(c) No Conflicts. The execution, delivery
and performance of this Agreement and each other Transaction
Document to which
the Subscriber is a party or by which it is bound and the
consummation by the
Subscriber of the transactions contemplated hereby or thereby or
relating hereto
do not and will not (i) result in a violation of the Subscriber's
organizational
documents or (ii) conflict with, or constitute a default (or an
event which with
notice or lapse of time or both would become a default) under, or
give to others
any rights of termination, amendment, acceleration or cancellation
of any
agreement, indenture or instrument or obligation to which the
Subscriber is a
party or by which its properties or assets are bound, or result in
a violation
of any law, rule, or regulation, or any order, judgment or decree
of any court
or governmental agency applicable to the Subscriber or its
properties (except
for such conflicts, defaults and violations as would not,
individually or in the
aggregate, have a material adverse effect on the Subscriber). The
Subscriber is
not required to obtain any consent, authorization or order of, or
make any
filing or registration with, any court or governmental agency in
order for it to
execute, deliver or perform any of its obligations under this
Agreement and each
other Transaction Document to which the Subscriber is a party or by
which it is
bound or to purchase the Shares in accordance with the terms
hereof, provided
that for purposes of the representation made in this sentence, the
Subscriber is
assuming and relying upon the accuracy of the relevant
representations and
agreements of the Company herein.
(d) Information on Company. The Subscriber
has been informed by the Company that the Company files reports
pursuant to the
Securities Exchange Act of 1934, as amended (the "1934 ACT")
(hereinafter called
the "REPORTS"), has had the opportunity to review such Reports and
has received
in writing from the Company such other information concerning its
operations,
financial condition and other matters as the Subscriber has
requested in writing
(such other information is collectively, the "OTHER WRITTEN
INFORMATION"), and
considered all factors the Subscriber deems material in deciding on
the
advisability of investing in the Shares. The Subscriber understands
that an
investment in the Shares offered hereby is highly speculative and
involves a
high degree of risk and an investment should be made only by
investors who can
afford the loss of their entire investment.
(e) Information on Subscriber. The
Subscriber is an "accredited investor", as such term is defined in
Regulation D
promulgated by the Commission under the 1933 Act, is experienced in
investments
and business matters, and, with its representatives, has such
knowledge and
experience in financial, tax and other business matters as to
enable the
Subscriber to utilize the information made available by the Company
(including,
without limitation, the Reports and Other Written Information) to
evaluate the
merits and risks of and to make an informed investment decision
with respect to
the proposed purchase, which represents a speculative investment.
The Subscriber
is able to bear the risk of such investment for an indefinite
period and to
afford a complete loss thereof. The information set forth on the
signature page
hereto regarding the Subscriber is accurate.
(f) Purchase of Shares. On the Closing Date,
the Subscriber will purchase the Shares as principal for its own
account for
investment only and not with a view toward, or for resale in
connection with,
the public sale or any distribution thereof, but Subscriber does
not agree to
hold the Shares for any minimum amount of time.
(g) Compliance with Securities Act. The
Subscriber understands and agrees that the Shares have not been
registered under
the 1933 Act or any applicable state securities laws, by reason of
their
issuance in a transaction that does not require registration under
the 1933 Act
(based in part on the accuracy of the representations and
warranties of
Subscriber contained herein), and that such Shares must be held
indefinitely
unless a subsequent disposition is registered under the 1933 Act or
any
applicable state securities laws or is exempt from such
registration.
Notwithstanding anything to the contrary contained in this
Agreement, the
Subscriber may transfer (without restriction and without the
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need for an opinion of counsel) the Shares to its Affiliates (as
defined below)
provided that each such Affiliate is an "accredited investor" under
Regulation D
and such Affiliate agrees to be bound by the terms and conditions
of this
Agreement and each other Transaction Document to which the
Subscriber is a party
or by which it is bound. For the purposes of this Agreement, an
"AFFILIATE"
means any Person (as such term is defined below) that, directly or
indirectly
through one or more intermediaries, controls or is controlled by or
is under
common control with a Person, as such terms are used in and
construed under Rule
144 under the 1933 Act. With respect to a Subscriber, any
investment fund or
managed account that is managed on a discretionary basis by the
same investment
manager as the Subscriber will be deemed to be an Affiliate of the
Subscriber.
Affiliate, when employed in connection with the Company, includes
each
Subsidiary of the Company (if any). A "PERSON" means any individual
or
corporation, partnership, trust, incorporated or unincorporated
association,
joint venture, limited liability company, joint stock company,
government (or an
agency or subdivision of any thereof) or other entity of any
kind.
(h) Shares Legend. The certificate or
certificates representing the Shares shall bear the following or
similar legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
THESE SHARES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH SECURITIES ACT OR ANY APPLICABLE STATE
SECURITIES LAW OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO CAS MEDICAL SYSTEMS, INC. THAT SUCH
REGISTRATION IS NOT REQUIRED."
(i) Communication of Offer. The Subscriber
is not purchasing the Shares as a result of any advertisement,
article, notice
or other communication regarding the Shares published in any
newspaper, magazine
or similar media or broadcast over television or radio or presented
at any
seminar or any other general solicitation or general
advertisement.
(j) No Governmental Review. The Subscriber
understands that no United States federal or state agency or any
other
governmental or state agency has passed on or made recommendations
or
endorsement of the Shares or the suitability of the investment in
the Shares nor
have such authorities passed upon or endorsed the merits of the
offering of the
Shares.
(k) Correctness of Representations. The
Subscriber represents that the foregoing representations and
warranties are true
and correct as of the date hereof and, unless the Subscriber
otherwise notifies
the Company prior to the Closing Date, shall be true and correct as
of the
Closing Date.
4. Company Representations and Warranties. The Company
represents and warrants to and agrees with the Subscriber that
except as set
forth in the Reports or the Other Written Information:
(a) Due Incorporation. The Company is a
corporation duly organized, validly existing and in good standing
under the laws
of the jurisdiction of its incorporation and has the requisite
corporate power
to own its properties and to carry on its business as presently
conducted.
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(b) Capitalization. As of the date hereof,
the authorized capital stock of the Company consists of (i)
40,000,000 shares of
Common Stock, of which 10,946,599 shares are issued and
outstanding, all of
which are duly authorized, validly issued, fully paid,
non-assessable and are
not subject to preemptive rights created by statutes, the Company's
articles of
incorporation or by laws or any agreement to which the Company is a
party or by
which it is bound, and (ii) 1,000,000 shares of Series A Cumulative
Convertible
Preferred Stock, par value $0.001 per share, none of which is
issued or
outstanding. The Company has no other authorized, issued or
outstanding class of
capital stock. Except as set forth in Section 4(b) of the
disclosure letter
delivered to the Subscriber by the Company on the Closing Date (the
"DISCLOSURE
LETTER"), there are no outstanding options, warrants, securities,
notes or
instruments convertible into or exercisable for any of the capital
stock of the
Company.
(c) Authorization and Power. The Company has
the requisite power and authority to enter into and perform this
Agreement and
each other Transaction Document to which it is a party or by which
it is bound
and to issue the Shares being sold hereunder. The execution,
delivery and
performance by the Company of this Agreement and each other
Transaction Document
to which the Company is a party or by which it is bound and the
consummation by
it of the transactions contemplated hereby and thereby have been
duly authorized
by all necessary corporate action, and no further consent or
authorization of
the Company or its stockholders is required. This Agreement and
each other
Transaction Document to which the Company is a party or by which it
is bound has
been duly authorized, executed and delivered by the Company and
constitutes, or
shall constitute when executed and delivered, a valid and binding
obligation of
the Company enforceable against the Company in accordance with the
terms hereof
and thereof, subject to bankruptcy, insolvency, fraudulent
transfer,
reorganization, moratorium and similar laws of general
applicability relating to
or affecting creditors' rights generally and to general principles
of equity.
(d) No Conflicts. The execution, delivery
and performance of this Agreement and each other Transaction
Document to which
the Company is a party or by which it is bound and the consummation
by the
Company of the transactions contemplated hereby or thereby or
relating hereto do
not and will not (i) result in a violation of the Company's
articles of
incorporation or bylaws or (ii) conflict with, or constitute a
default (or an
event which with notice or lapse of time or both would become a
default) under,
or give to others any rights of termination, amendment,
acceleration or
cancellation of any agreement, indenture or instrument or
obligation to which
the Company is a party or by which its properties or assets are
bound, or result
in a violation of any law, rule, or regulation, or any order,
judgment or decree
of any court or governmental agency applicable to the Company or
its properties
(except for such conflicts, defaults and violations as would not,
individually
or in the aggregate, have a material adverse effect on the
Company). The Company
is not required to obtain any consent, authorization or order of,
or make any
filing or registration with, any court or governmental agency or
arbitrator
having jurisdiction over the Company or any of its Affiliates
