EXHIBIT 10.22
CARESIDE, INC.
0000 XXXXXXX XXXXXXX
XXXXXX XXXX, XX 00000
April 30, 1999
VIA TELECOPIER
--------------
S.R. One, Limited
4 Tower Bridge
000 Xxx Xxxxxx Xxxxx
Xxxxx 000
Xxxx Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Ms. Xxxxxx Xxxxx
Xxxx Xxxxxx:
This letter sets forth our mutual binding commitment to undertake,
upon consummation of Careside, Inc.'s initial public offering of units comprised
of one share of common stock and one common stock purchase warrant, the exchange
of Series A Convertible Preferred Stock for one-third of the promissory note
issued to S.R. One, Limited in connection with Careside's bridge financing
pursuant to the Securities Purchase Agreement dated December 17, 1998 between
Careside and S.R. One.
The terms of this arrangement are summarized below and shall be set
forth, together with customary representations, warranties and covenants, in a
mutually agreeable Securities Conversion Agreement consistent with the
following:
Issuer Careside, Inc. ("the Company"), a Delaware
corporation.
Closing Date: Upon consummation of the Company's initial public
offering (the "IPO")
Issue Conversion of $1 million, plus interest thereon, of
the existing $3.0 million note issued in conjunction
with the Securities Purchase Agreement dated December
17, 1999 into shares of Series A Convertible
Preferred Stock. The number of shares of Series A
Convertible Preferred Stock received on conversion of
the loan
shall be equal to the principal and interest so
converted divided by 85% of the IPO price per unit.
The stated value of each share of Series A
Convertible Preferred Stock shall be equal to the IPO
price per unit.
I. Preferred Stock
---------------
Right of Conversion Each share of Series A Convertible Preferred Stock is
convertible at any time (at the option of the holder)
after 6 months following the closing of the IPO into
a unit comprised of one share of the Company's common
stock and one warrant to purchase one share of common
stock. The exercise price of each warrant received on
the conversion will be 150% of the IPO unit price.
Such warrants will be immediately exercisable after
their issuance.
Dividend Provisions The holders of the Series A Preferred Stock shall be
entitled to receive cumulative dividends at the rate
of 10% per annum when and if declared by the Board of
Directors. Accrued and unpaid dividends will convert
into units at the IPO unit price upon conversion of
the Series A Convertible Preferred Stock into units.
Voting Rights The holders of the Series A Convertible Preferred
Stock shall be entitled to one vote per share of
Preferred Stock. Warrants will not have voting
rights.
Ranking Senior in right of payment and liquidation to the
common stock of the Company. Liquidation preference
equal to the stated value plus accumulated preferred
dividends.
Registration Rights Common Stock issuable upon conversion of Series A
Convertible Preferred Stock or exercise of warrants
shall have registration rights (one demand and
piggyback) after 6 months following the IPO.
Anti-dilution Anti-dilution protection for capitalization, stock
Provisions dividends, splits, etc.
Redemption The Series A Convertible Preferred Stock will be
redeemable in whole and not in part, at the option of
the Company for an amount equal to the sum of (i) the
IPO unit price, (ii) any accrued and unpaid
dividends, and (iii) the greater of (a) $0.05 or (b)
the average 5-day trading price of a share of common
stock less the exercise price, for each warrant
redeemed.
II. The Bridge Loan The original terms governing the loan warrants
Warrants continue to apply to these warrants and will differ
-------------------- from the terms associated with the warrants received
on conversion of the Series A Convertible Preferred
Stock.
Amount In consideration of conversion of the loan, the
number of warrants to purchase common stock
associated with the original loan shall be determined
by dividing $1,500,000 by 85% of the IPO price per
unit.
Term Four years from the closing of the IPO.
Exercise Price As it currently is, i.e., a discount of 15% from
----
the IPO price per unit.
Registration Rights The existing loan warrant registration rights
agreement would be extended to all of these loan
warrants.
III. The Bridge Loan The original terms of the bridge loan shall remain as
-------------------- they currently are except as follows:
Maturity All unpaid principal and interest shall become due on
December 17, 1999
Interest Rate The interest rate shall increase to 10% at July 1,
1999 on all principal then outstanding.
Conversion All or any portion of the remaining principal, plus
accrued interest thereon, shall be convertible at the
option of S. R. One, Limited, exercisable after
December 1, 1999, into additional shares of Series A
Convertible Preferred Stock determined on the same
basis as the terms set forth herein.
Prepayment The Company shall be entitled to prepay all or any
portion of the outstanding balance of the loan at any
time without premium or penalty. Prepayments shall be
applied first to accrued and unpaid interest.
Please indicate your acknowledgment that the above reflects our
agreement by signing in the space provided below.
Sincerely,
/s/ X. Xxxxxxx Stoughton
X. Xxxxxxx Stoughton
Acknowledged and Agreed
this 30th day of April, 1999.
S.R. ONE, LIMITED
By: /s/ Xxxxxx Xxxxx
____________________
