EXHIBIT A
SUBSCRIPTION AGREEMENT
TotalMed Systems, Inc. Corporate Office:
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▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Suite 203
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The undersigned has received and read the
Confidential Private Placement Memorandum
("Memorandum"), of TotalMed Systems, Inc., a Florida
corporation ("Company"), Pursuant to which the
undersigned is offering to purchase
______shares of the Company's Common Stock at a
purchase price of $0.50 per share ("Offered Shares").
The terms used and not defined in this Subscription
Agreement have the meanings specified for such terms in the Memorandum.
1. Subscription. On the terms and subject to the
conditions of this Subscription Agreement and the
Memorandum, the undersigned hereby subscribes for
the number of Offered Shares of the Company,
specified below for a subscription price of $0.50 per
Offered Share (minimum purchase $________). The
undersigned hereby agrees that this subscription shall
be irrevocable and shall survive the death or
disability of the undersigned. Payment of the
purchase price for the Offered Shares is
$_________ due upon subscription.
2. Acceptance of Subscription. The undersigned
acknowledges that (i) the
Company has the right to accept or reject this
subscription in whole or in part, and (ii) this
subscription shall be deemed to be accepted by the
Company only when this Subscription Agreement is
signed by the Company. The undersigned agrees that
subscriptions need not be accepted by the Company in
the order in which subscriptions are received.
3. Representations, Warranties, and Covenants
of the Undersigned. Theundersigned hereby represents and
warrants to and covenants with the Company, the Company's officers,
directors, employees, attorneys, agents and any
person who has solicited this subscription as follows:
a. The undersigned has adequate means of
providing for his or her current needs and possible personal
contingencies, and he or she has no need in the
foreseeable future to sell the Offered Shares.
The undersigned is able to accommodate the economic
risks of the undersigned's purchase of Offered Shares,
and the undersigned has a sufficient net worth to
sustain a loss of his or her
investment in the Company, or a portion thereof, in the event
such loss should occur.
b. The undersigned has such knowledge and experience in
financial and business matters that he or she is capable of
evaluating the merits and risks of an investment in the Company.
c. The undersigned confirms that all documents,
records and books, pertaining to his or her proposed
investment in the Company have been made available to the
undersigned.
d. The undersigned has had an opportunity to ask questions
of and receive satisfactory answers from the Company, or any
person or persons acting on the Company's behalf, concerning
the terms and conditions of his or her proposed investment in
the Company, and all such questions have been answered to
the complete satisfaction of the undersigned.
e. The Offered Shares will be acquired by the
undersigned for his or her own account for investment in a
manner which would not require registration or qualification
pursuant to the provisions of the Securities Act of 1933, as
amended ("Act"), or any state Blue Sky law.
f. The undersigned understands that the offer and sale
of the Offered Shares in the individual states in transactions which
satisfy the requirements of Rule 506 of Regulation
D promulgated pursuant to Section 4(2) of the Securities Act
of 1933 are not required to be registered or qualified in the
individual states because of adoption of the National Securities Markets
Improvement Act of 1996 ("NSMIA"). NSMIA preempts state
registration and similar qualification provisions for
transactions exempt pursuant to that Rule 506.
g. The undersigned represents that it has been called to
his or her attention by those provisions of the Memorandum
and by those persons with whom the undersigned has dealt in
connection with his or her proposed investment in the Company,
that the Company has no history of operation and no earnings
and that the undersigned's proposed investment in the Company
involves significant risks which may result in the loss of that
investment, or a portion thereof.
h. The undersigned has received no representations or
warranties in making his or her investment decision.
i. The undersigned acknowledges and agrees that the Company
have made available to the undersigned or his or her personal advisors
the Opportunity to obtain appropriate information to
evaluate the merits and risks of an investment in the Company.
j. The undersigned understands that neither the
Securities and Exchange Commission nor any Securities
Administrator or similar person of any state or province has
made any finding or determination relating to the fairness
of any purchase of the Offered Shares and that neither the
Securities and Exchange Commission nor any Securities
Administrator or similar person of any state or province has
or will recommend or endorse a purchase of the Offered Shares.
k. The undersigned is now a bona fide citizen of the
United States of America and a bona fide resident of the
state set forth below and the address and Social Security
number or federal tax identification number set forth below are
his true and correct residence and Social Security number or
federal tax identification number. The undersigned has no
current intention of becoming a resident of any other state or
jurisdiction. If the undersigned is a corporation, partnership,
trust or other form of business organization, the undersigned
represents and warrants that the undersigned was formed pursuant to the
laws of , and the undersigned's principal place of business is
within such state, and that the undersigned was not organized for the
purpose of acquiring Offered Shares.
l. The undersigned hereby represents and warrants that
the undersigned's total purchase of Offered Shares shall not exceed
10% of the undersigned's net worth.
By initialing where indicated and appropriate below, the
undersigned hereby represents and warrants that the undersigned
is an "Accredited Investor", as defined by the provisions of
Rule 501 of Regulation D promulgated pursuant to the Act, and
falls within one of the following categories:
(1) The undersigned is a director or executive
officer of the issuer Company, or a director, executive
officer, or general partner of a general partner of the
Company; or
(2) The undersigned is a natural person
whose individual net worth oint net worth with the
undersigned's spouse, at the time of his or her purchase
exceeds $1,000,000; or
(3) The undersigned is a natural person who had an
individual income in excess of $200,000 in each of
the 2 most recent years or joint income with the
undersigned's spouse in excess of $300,000 in each of
those years and has a reasonable expectation of
having the same income level in the current year; or
(4) The undersigned is a trust, with total
assets in excess of $3,750,000, not formed for the
specific purpose of acquiring the securities offered,
whose purchase is directed by a sophisticated person as
described in Regulation 230.506(b)(2)(ii) promulgated
pursuant to the Act; or
(5) The undersigned is an entity in which all
of the equity owners are Accredited Investors.
4. Indemnification. The undersigned acknowledges that he or she
understands the meaning and legal consequences of the
representations, warranties, and covenants specified in
Paragraph 3 of this Subscription Agreement and that the Company
has relied on such representations, warranties and
covenants, and the undersigned hereby agrees to indemnify
and hold harmless the Company, and its officers, directors,
controlling persons, agents, attorneys, accountants, and
employees, from any and all loss, damage or liability due to,
or occurring because of, a breach of any such representation,
warranty, or covenant.
5. Subsequent Registration of Offered Shares. The undersigned
has no right to require that the Offered Shares be registered
pursuant to the provisions of the Act, or otherwise. The
undersigned further acknowledges and agrees that the Company has
no obligation to assist the undersigned in obtaining any
exemption from any registration requirements imposed by
applicable law. The undersigned also acknowledges and agrees
that he or she shall be responsible for compliance with all
conditions on transfer imposed by a Securities Administrator or
similar person of any state, province or territory.
6. Limitation on Transfer of Offered Shares. The undersigned
acknowledges and agrees that he or she is aware that there are
substantial restrictions on the transferability of the Offered Shares.
Because the Offered Shares will not, and the
undersigned has no right to require that the Offered Shares, be
registered pursuant to the provisions of the Act, the undersigned
agrees not to sell, transfer, assign, pledge, hypothecate or otherwise
dispose of any Offered Shares unless such sale is
exempt from such registration pursuant to the provisions
of the Act. The undersigned further acknowledges and agrees that
the Company has no obligation to assist the undersigned in obtaining
any exemption from any registration requirements imposed by applicable
law. The undersigned also acknowledges and
agrees that he or she shall be responsible for compliance
with all conditions on transfer imposed by a Securities Administrator
of any state, province or territory and for any expenses incurred by
the Company for legal and accounting services in connection with reviewing
such a proposed transfer and issuing opinions in connection therewith.
7. Compliance with Act. The undersigned understands and agrees that the
following restrictions and limitations are applicable to his or her purchase
and any sale, transfer, assignment, pledge, hypothecation or other disposition
of Offered Shares pursuant to Section 4(2) of the Act and Rule 506
of Regulation D promulgated pursuant thereto:
a. The undersigned agrees that the Offered Shares
shall not be sold, pledged, hypothecated or otherwise
disposed of unless the Offered Shares are registered pursuant
to the Act and applicable state or other applicable securities
laws or are exempt there from.
b. A legend in substantially the following form has been
or will be placed on any certificate(s) or other documents
evidencing the Offered Shares*
THE SECURITIES REPRESENTED BY THIS INSTRUMENT OR
DOCUMENT HAVE BEEN ACQUIRED FOR INVESTMENT ONLY AND HAVE
NOT BEEN REGISTERED PURSUANT TO THE PROVISIONS OF THE
SECURITIES ACT OF 1933 AS AMENDED ("ACT"), AND HAVE BEEN
OFFERED AND SOLD IN RELIANCE UPON THE EXEMPTIONS
SPECIFIED IN SECTION 4 (2) OF THE ACT AND RULE 506
OF REGULATION D PROMULGATED PURSUANT THERETO. WITHOUT
SUCH REGISTRATION, SUCH SECURITIES MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED OR
OTHERWISE DISPOSED OF, EXCEPT UPON DELIVERY TO THE
COMPANY OR ITS TRANSFER AGENT OF AN OPINION OF COUNSEL
SATISFACTORY TOTHE COMPANY OR ITS TRANSFER AGENT THAT
REGISTRATION IS NOT REQUIRED FOR SUCH TRANSFER OR THE
SUBMISSION TO THE COMPANY OR ITS TRANSFER AGENT OF SUCH
OTHER EVIDENCE AS MAY BE SATISFACTORY TO THE COMPANY OR
ITS TRANSFER AGENT TO THE EFFECT THAT ANY SUCH TRANSFER
SHALL NOT BE IN VIOLATION OF THE ACT, APPLICABLE
STATE SECURITIES LAWS OR ANY RULE OR REGULATION
PROMULGATED PURSUANT THERETO.
c. Stop transfer instructions to the transfer agent of the
Company have been or will be placed with respect to the Offered Shares
so as to restrict the sale, transfer, pledge, hypothecation or other
disposition thereof, subject to the further
terms hereof, including the provisions of the legend set forth
in subparagraph (b) above.
d. The legend and stop transfer instructions described in
subparagraphs (b) and (c) above will be placed on any new
certificate(s) or other documents for transfer.
8. Financial information. The undersigned has previously
been furnished an Investor Questionnaire which has been
completed and executed by the undersigned and the
information contained therein remains true and correct in
material aspects.
9. Do you reasonably expect that either your own income from
all sources during the current year will exceed $200,000 or the
joint income of you and your spouse (if married) from all
sources during the current year will exceed $300,000?
___ Yes ____No
If no, please specify the amount: $
9. Percentage of your income (as shown above) anticipated to be derived from
sources other than salary:
10. Was your yearly income from all sources during each of the
last two years in excess of $200,000 or was the joint income
of you and your spouse (if married) from all sources during
each of those years in excess of $300,000? __ Yes _ No
If no, please specify the amount for last year: $
and the year before:
$
11. Will your net worth as of the date you purchase the
Offered Shares, together with the net worth of your spouse, be
in excess of $ 1 million? __ Yes _ No
If no, please specify the amount: $
11 . Please describe your educational background and degrees
obtained, if any:
12. If you have any existing personal or business
relationship with the Company or
any of its officers, directors or controlling persons, please
describe the nature and duration of each relationship:
13. Please describe in reasonable detail the nature and
extent of your business, financial and investment experience
that you believe gives you the capacity to
evaluate the merits and risks of the proposed investment
and the capacity to protect your interests:
I am a commercial underwriter in the insurance industry.
I have the financial capacity to make this investment.
14. Are you purchasing the Offered Shares for your own
account and for investment purposes only?
__ Yes __ No
If no, please specify for whom you are investing and the reason
for investing:
15. In evaluating this investment, will you use the services of
any of the following advisors? If so, please identify, providing
address and telephone number:
Accountant:
Attorney:
Licensed investment adviser:
15. Anticipated amount of subscription: ___________
16. Indicate type of ownership in which securities will be held:
__ Individual
Tenants in common
Joint tenancy with rights of survivorship (husband and wife only)
Community property
Other (describe):
Please go to PART III on the last page and sign and date
this questionnaire.
PART II. NONINDIVIDUAL INVESTORS
Please complete this PART only if the proposed purchase is
to be made by a corporation, partnership, trust or other
entity. If the investment will be made by more than one
affiliated entity, please COMPLETE A COPY OF THIS
QUESTIONNAIRE FOR EACH ENTITY.
1.. Name (as it will appear on stock certificate):
2. Address of principal place of business:):
3. Jurisdiction of formation or incorporation:
4. Contact person:
5. Telephone number:
6. Fax number:
7. Type of entity (corporation, partnership, trust, etc.):
8. Taxpayer identification number:
9. Was this entity formed for the purpose of this investment?
Yes No
If yes, all shareholders, partners or other equity owners
must answer Company PART I of this Questionnaire.
10. Amount of your proposed investment: $
11 . Entity's net worth at the time the securities will be
purchased: $
12. Check the appropriate line to indicate which of the
following accurately describes the nature of the business
conducted by the investing entity:
Private business development company as defined in
Section 202(a)(22) of the Investment Advisers Act of 1940
(namely, a U.S. venture capital fund that invests
primarily through private placements in nonpublic traded
securities and makes available, either directly or through co
investors, to the portfolio companies significant guidance
concerning management, operations or business objectives);
A small business investment company licensed by the U.S.
Small Business
Administration pursuant to Section 301 (c) or (d) of the Small
Business Investment Act of 1958;
An investment company registered pursuant to the
Investment Company Act of 1940 or a business development company
as defined in Section 2(a)(48) of that Act;
A bank as defined in Section 3(a)(2) of the Securities
Act of 1933 or a savings and loan association or other
institution defined in Section 3(a)(5)(A) of that Act, acting in
either an individual or fiduciary capacity;
An insurance company as defined in Section 2(13) of the
Securities Act of 1933;
An employee benefit plan within the meaning of Title I
of the Employee Retirement Income Security Act of 1974 (a) whose
investment decision is made by a fiduciary that is
either a bank, a savings and loan association, an insurance
company or a registered investment advisor or whose total assets
exceed $5 million or (b) if a self-directed plan, whose investment
decisions are made solely by persons who are accredited investors;
An organization described in Internal Revenue Code
Section 501(c)(3), a corporation, a Massachusetts or similar
business trust or a partnership, in each case not formed for the
purpose of this investment, with total assets in excess of $5
million;
An entity not located in the United States and whose
equity owners are neither U.S. citizens nor U.S. residents;
A trust with total assets in excess of $5 million whose
purchase is directed by a
sophisticated person as described in Rule 506(b)(2)(ii) under the
Securities Act of 1933;
Other (describe):
13. Please provide information detailing the business, financial
and investment experience of the entity and investment manager of
the entity:
PART III. SIGNATURE PAGE FOR INVESTOR QUESTIONNAIRE
In signing below, you acknowledge that the information provided in
this questionnaire is true and correct in all material respects
and that you recognize that the Company and its counsel are
relying on the truth and accuracy of that information in
reliance on the exemption contained in Section 4(2) of the
Securities Act of 1933, as amended, and Rule 506 and Regulation D.
You agree to notify the Company promptly of any changes in the
foregoing information that occur before the investment.
Executed at ___________________, on _____________.
If investor is an individual:
(Signature)
(Print of type name)
If investor is an entity:
(Print or type name)
By:
Title:
OFFEREE QUESTIONNAIRE
RULE 506 OF THE SECURITIES AND EXCHANGE CONMSSION REQUIRES AN
ISSUER OF SECURITIES TO REASONABLY BELIEVE THAT PROSPECTIVE
PURCHASERS OF THE SHARES OF COMMON STOCK BEING OFFERED ARE
EITHER ACCREDITED INVESTORS OR THAT THOSE WHO ARE NOT
ACCREDIT'ED INVESTORS HAVE THE BUSINESS ACUMEN TO EVALUATE
THE MERITS AND RISKS OF THE INVESTMENT. TI-IIS QUESTIONNAIRE MUST
BE ANSWERED FULLY AND RETURNED TO TOTALMED SYSTEMS, INC., (A
FLORIDA CORPORATION) (THE "COMPANY"), SO THAT IT MAY COMPLY
WITH THE REGULATIONS.
THE INFORMATION SUPPLIED WILL BE HELD IN STRICTEST CONFIDENCE.
IT WILL BE USED ONLY TO ENSURE THAT ALL PROSPECTIVE INVESTORS
ARE QUALIFIED UNDER RULE 506 OF THE SECURITIES AND EXCHANGE
COMMISSION. NO INFORMATION WILL BE DISCLOSED EXCEPT TO THE
EXTENT THAT LAW OR REGULATION REQUIRES SUCH DISCLOSURE.
OTHERWISE TOTALMED SYSTEMS, INC., A REGISTERED FLORIDA
CORPORATION MAY ONLY USE SUCH INFORMATION BY PROPER LEGAL
PROCESS, OR IN LITIGATION INVOLVING THE COMPANY OR ITS
AFFILIATE*, CONTROLLING PERSONS, OFFICERS, DIRECTORS, PARTNERS,
EMPLOYEES, SHAREHOLDERS, ATTORNEYS OR AGENTS.
PART I: TO BE COMPLETED BY ALL INVESTORS WHO ARE INDIVIDUALS
1.1 Personal Data
Name __________________
Address of principal residence (include city, state, and zip code)
________________________________________
Telephone Number ____ Age ___
1.2 Employment and Business Experience
Present Occupation ___________________________________
Type of Business employed by or Owned
_________________________________________________
address ________________________________________________
Telephone Number
________________________
Length of service with present employer or
____________________________________
Present Title or
Position __________________________________________
Prior Occupations, employment and length of service during the
past (5) five years:
Occupation Business Years of Service
Other business, government or professional positions held and
approximate dates of
service (List all professional licenses, directorships and
elected positions in government
service:
1.3 Education (College and post graduate)
1.4 Prior Investment and Current Investment Objectives
During the past five years, I have made investments in:
Frequency
Public Traded Stock
Private Placements
Public Ltd. Partnerships
Joint Ventures
Oil & Gas
Real Estate
Manufacturing
High Technology
Tax Shelters
1=Often
2=Occasionally
3=Seldom
4=Never
My current investment objectives are
Current Income:
Appreciation:
Tax Shelter:
Other:
1.5 Net worth and Income
Accredited Investors:
My individual net worth or joint net worth with my spouse
exceeds $1,000,000.
__ Yes __No
I had an individual income in excess of $200,000 in each of the
two most recent years or joint income with my spouse in excess
of $300,000 in each of the two most recent years and reasonably
expect to reach the same income level in the current year.
__ Yes __No
Other Investors:
My present net worth exceeds
During the previous tax year I had an annual income in excess of
During the present tax year I anticipate an income of
Reference:
Please provide the name of your accountant, attorney, or other
individual familiar with your finances who may 795be
contacted to verify financial information contained in this
questionnaire and in exhibit "A" attached hereto.
Name _____________________________
Address ___________________________________
Relationship Accountant
Telephone number ______________________
PART II: TO BE COMPLETED BY ALL INVESTORS WHO ARE NOT
INDIVIDUALS
2.1 Organizational Information
Name of Entity
Address of principal office
Telephone Number
Type of organization
Date and place of organization
2.2 Investor Status
The investor is (check one of the following IF APPLICABLE):
(_) a bank as defined in Section 3(a)(2) of the Securities
Act of 1933 (the "Act"), or any 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
Securities Exchange Act of 1934; ( ) an
insurance company as defined in Section 2(13) of the
Act; (_) an investment company
registered under the Investment Company Act of 1940; (---)
a business development company as defined in Section 2(a)(48)
of the Investment Company Act of 1940; a Small Business
Investment Company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958; an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security
Act of 1974 and the investment is made by the undersigned as
a plan fiduciary as defined in Section 3 (21) of such Act and
the undersigned is a bank, an insurance company or a
registered investment advisor; or ( ) an employee
benefit plan with 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;
( ) A private business development company as defined
in Section 202(a)(22) of the Investment Advisors Act of
1940;
( ) An organization described in Section 501(c)(3) of
the Internal Revenue Code, corporation, Massachusetts or
similar business trust, or partnership, not formed for
the specific purpose of acquiring the Units of
Participation offered, with total assets in excess of
$5,000,000;
( ) Any trust, with total assets in excess of
$5,000,000, not formed for the specific purpose of
acquiring the Units of Participation offered, whose
purchase is directed by a "sophisticated person";
( ) An entity in which all of the equity owners are
accredited investors. (If you checked this section, each equity owner
must also complete this Questionnaire.)
List all equity owners:
Type of entity:
Attach copy of Articles of Incorporation and Resolution
authorizing investment; Partnership Agreement; or Trust
Agreement, as applicable.
PART III: TO BE COMPLETED BY ALL INVESTORS
3.1 Representations
I represent that I have received the Private Placement
Memorandum for the Company relating to this offering, and
that I understand the merits and the risks involved in this
offering, that I have sufficient knowledge and experience
in similar programs or investments to evaluate the merits
and risks of an investment in the Company (or that I have
retained an attorney, accountant, financial advisor or
consultant as my purchaser representative); that because of
my background, employment experience, family or financial
situation or economic bargaining power, I have received and have
had access to material and relevant information enabling me to
make an informed investment decision, and that all information I
have requested has been furnished to me; that I am able to bear
the economic risk of loss of the entire investment which I may
make in the Company; and that the information provided herein is
complete, true, correct, and may be relied upon.
The amount of this investment is equal to % of my net
worth.
If applicable, the name and address of my purchaser
representative is:
3.2 NASD Affiliation
Do you have -any direct or indirect affiliation or
association with any person or firm
which is a member of the National Association of Securities
Dealers, Inc., as an officer,
director, shareholder, partner, principal, registered
representative, employee or
otherwise?
__Yes __ No
If yes, provide details:
3.3 Type of Ownership for Units of Participation
(___) Individual Ownership
(one signature required)
( ) Joint Tenants with
Right of Survivorship
Subscription Agreement)
( ) Tenants in
Common
(both parties must sign
Subscription Agreement)
( ) Trust
(both parties must sign
(include name of trust, name of trustee, date trust was
formed, and copy of the
Trust Agreement or other authorization)
3.4 Manner of Solicitation
Describe the manner in which you received knowledge of the
investment (i.e., by personal contact or acquaintance with an
investment advisor or counselor, with Company personnel, a
broker-dealer or otherwise, naming such person):
Date________________
Signature of offeree
