0000950142-05-000277.txt : 20120705 0000950142-05-000277.hdr.sgml : 20120704 20050204171503 ACCESSION NUMBER: 0000950142-05-000277 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20050204 DATE AS OF CHANGE: 20050204 GROUP MEMBERS: CARDIAC SCIENCE CO-INVESTMENT, LP GROUP MEMBERS: FRANK H. PEARL GROUP MEMBERS: PERSEUS ACQUISITION/RECAPITALIZATION FUND, LLC GROUP MEMBERS: PERSEUS ACQUISITION/RECAPITALIZATION MANAGEMENT, LLC GROUP MEMBERS: PERSEUS MARKET OPPORTUNITY FUND, LP GROUP MEMBERS: PERSEUS MARKET OPPORTUNITY PARTNERS GP, LLC GROUP MEMBERS: PERSEUS MARKET OPPORTUNITY PARTNERS, LP GROUP MEMBERS: PERSEUS MF, L.L.C. GROUP MEMBERS: PERSEUS, LLC GROUP MEMBERS: PERSEUSPUR, L.L.C. GROUP MEMBERS: RAPPAHANNOCK INVESTMENT COMPANY SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: CARDIAC SCIENCE INC CENTRAL INDEX KEY: 0000876188 STANDARD INDUSTRIAL CLASSIFICATION: ELECTROMEDICAL & ELECTROTHERAPEUTIC APPARATUS [3845] IRS NUMBER: 330465681 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-41851 FILM NUMBER: 05578025 BUSINESS ADDRESS: STREET 1: 1900 MAIN STREET STREET 2: SUITE 700 CITY: IRVINE STATE: CA ZIP: 92614 BUSINESS PHONE: (949) 797-3800 MAIL ADDRESS: STREET 1: 1900 MAIN STREET STREET 2: SUITE 700 CITY: IRVINE STATE: CA ZIP: 92614 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: PEARL FRANK H CENTRAL INDEX KEY: 0000927752 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 2099 PENNSYLVANIA AVENUE NW STREET 2: SUITE 900 CITY: WASHINGTON STATE: DC ZIP: 20006 BUSINESS PHONE: 2024520101 MAIL ADDRESS: STREET 1: 2099 PENNSYLVANIA AVENUE NW STREET 2: SUITE 900 CITY: WASHINGTON STATE: DC ZIP: 20003 SC 13D/A 1 sc13da2-cardiac.txt AMENDMENT NO. 2 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. 2) CARDIAC SCIENCE, INC. (Name of Issuer) Common Stock, par value $.001 per share (Title of Class of Securities) 141410209 (CUSIP Number) Rodd Macklin Perseus Acquisition/Recapitalization Fund, L.L.C. Perseus Market Opportunity Fund, L.P. Cardiac Science Co-Investment, L.P. 888 Seventh Avenue, 29th Floor New York, NY 10106 Tel. No.: (212) 651-6400 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) with a copy to Bruce A. Gutenplan, Esq. Paul, Weiss, Rifkind, Wharton & Garrison LLP 1285 Avenue of the Americas New York, New York 10019-6064 January 28, 2005 (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject to this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box [_]. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes.) -------------------------------------------------------------------------------- CUSIP No. 141410209 SCHEDULE 13D Page 2 of 30 -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON Perseus Acquisition/Recapitalization Fund, L.L.C. -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X] (b) [_] -------------------------------------------------------------------------------- 3 SEC USE ONLY -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* OO -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [_] -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 5,910,565 (1) NUMBER OF ---------------------------------------- SHARES 8 SHARED VOTING POWER BENEFICIALLY -0- OWNED BY ---------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING 5,910,565 (1) PERSON ---------------------------------------- WITH 10 SHARED DISPOSITIVE POWER -0- -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 5,910,565 (1) -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [_] -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 6.2% (1) -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* OO -------------------------------------------------------------------------------- * SEE INSTRUCTIONS BEFORE FILLING OUT ------------------ (1) Assuming complete exercise of the warrants held by Perseus A/R Fund to purchase an aggregate of 5,910,565 shares of Common Stock. See Item 5 herein. -------------------------------------------------------------------------------- CUSIP No. 141410209 SCHEDULE 13D Page 3 of 30 -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON Perseus Market Opportunity Fund, L.P. -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X] (b) [_] -------------------------------------------------------------------------------- 3 SEC USE ONLY -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* OO -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [_] -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 8,454,782 (1) NUMBER OF ---------------------------------------- SHARES 8 SHARED VOTING POWER BENEFICIALLY -0- OWNED BY ---------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING 8,454,782 (1) PERSON ---------------------------------------- WITH 10 SHARED DISPOSITIVE POWER -0- -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 8,454,782 (1) -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [_] -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 8.8% (1) -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* PN -------------------------------------------------------------------------------- * SEE INSTRUCTIONS BEFORE FILLING OUT ---------------- (1) Assuming complete exercise of the warrants held by Perseus Market Opportunity to purchase an aggregate of 6,345,077 shares of Common Stock. See Item 5 herein. -------------------------------------------------------------------------------- CUSIP No. 141410209 SCHEDULE 13D Page 4 of 30 -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON Cardiac Science Co-Investment, L.P. -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X] (b) [_] -------------------------------------------------------------------------------- 3 SEC USE ONLY -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* OO -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [_] -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 2,151,839 (1) NUMBER OF ---------------------------------------- SHARES 8 SHARED VOTING POWER BENEFICIALLY -0- OWNED BY ---------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING 2,151,839 (1) PERSON ---------------------------------------- WITH 10 SHARED DISPOSITIVE POWER -0- -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,151,839 (1) -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 2.3% (1) -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* PN -------------------------------------------------------------------------------- * SEE INSTRUCTIONS BEFORE FILLING OUT ------------------- (1) Assuming complete exercise of the warrants held by CS Co-Investment to purchase an aggregate of 2,151,839 shares of Common Stock. See Item 5 herein. -------------------------------------------------------------------------------- CUSIP No. 141410209 SCHEDULE 13D Page 5 of 30 -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON Perseus Acquisition/Recapitalization Management, L.L.C. -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X] (b) [_] -------------------------------------------------------------------------------- 3 SEC USE ONLY -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* Not Applicable -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [_] -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 8,062,404 (1) NUMBER OF ---------------------------------------- SHARES 8 SHARED VOTING POWER BENEFICIALLY -0- OWNED BY ---------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING 8,062,404 (1) PERSON ---------------------------------------- WITH 10 SHARED DISPOSITIVE POWER -0- -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 8,062,404 (1) -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [_] -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 8.2% (1) -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* OO -------------------------------------------------------------------------------- * SEE INSTRUCTIONS BEFORE FILLING OUT ----------------- (1) Assuming complete exercise of each of (i) the warrants held by Perseus A/R Fund and (ii) the warrants held by CS Co-Investment, to purchase an aggregate of 8,062,404 shares of Common Stock. See Item 5 herein. -------------------------------------------------------------------------------- CUSIP No. 141410209 SCHEDULE 13D Page 6 of 30 -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON Perseus Market Opportunity Partners, L.P. -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X] (b) [_] -------------------------------------------------------------------------------- 3 SEC USE ONLY -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* Not Applicable -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [_] -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 8,454,782 (1) NUMBER OF ---------------------------------------- SHARES 8 SHARED VOTING POWER BENEFICIALLY -0- OWNED BY ---------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING 8,454,782 (1) PERSON ---------------------------------------- WITH 10 SHARED DISPOSITIVE POWER -0- -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 8,454,782 (1) -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [_] -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 8.6% (1) -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* PN -------------------------------------------------------------------------------- * SEE INSTRUCTIONS BEFORE FILLING OUT ------------------ (1) Assuming complete exercise of the warrants held by Perseus Market Opportunity to purchase an aggregate of 6,345,077 shares of Common Stock. See Item 5 herein. -------------------------------------------------------------------------------- CUSIP No. 141410209 SCHEDULE 13D Page 7 of 30 -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON Perseus Market Opportunity Partners GP, L.L.C. -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X] (b) [_] -------------------------------------------------------------------------------- 3 SEC USE ONLY -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* Not Applicable -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [_] -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 8,454,782 (1) NUMBER OF ---------------------------------------- SHARES 8 SHARED VOTING POWER BENEFICIALLY -0- OWNED BY ---------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING 8,454,782 (1) PERSON ---------------------------------------- WITH 10 SHARED DISPOSITIVE POWER -0- -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 8,454,782 (1) -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [_] -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 8.6% (1) -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* OO -------------------------------------------------------------------------------- * SEE INSTRUCTIONS BEFORE FILLING OUT ------------------ (1) Assuming complete exercise of the warrants held by Perseus Market Opportunity to purchase an aggregate of 6,345,077 shares of Common Stock. See Item 5 herein. -------------------------------------------------------------------------------- CUSIP No. 141410209 SCHEDULE 13D Page 8 of 30 -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON Perseus, L.L.C. -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X] (b) [_] -------------------------------------------------------------------------------- 3 SEC USE ONLY -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* Not Applicable -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [_] -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 8,454,782 (1) ---------------------------------------- NUMBER OF 8 SHARED VOTING POWER SHARES -0- BENEFICIALLY ---------------------------------------- OWNED BY 9 SOLE DISPOSITIVE POWER EACH 8,454,782 (1) REPORTING ---------------------------------------- PERSON 10 SHARED DISPOSITIVE POWER WITH -0- -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 8,454,782 (1) -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [_] -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 8.6% (1) -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* OO -------------------------------------------------------------------------------- * SEE INSTRUCTIONS BEFORE FILLING OUT ------------------ (1) Assuming complete exercise of the warrants held by Perseus Market Opportunity to purchase an aggregate of 6,345,077 shares of Common Stock. See Item 5 herein. -------------------------------------------------------------------------------- CUSIP No. 141410209 SCHEDULE 13D Page 9 of 30 -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON Perseus MF, L.L.C. -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X] (b) [_] -------------------------------------------------------------------------------- 3 SEC USE ONLY -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* Not Applicable -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [_] -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware -------------------------------------------------------------------------------- 7 SOLE VOTING POWER -0- ---------------------------------------- NUMBER OF 8 SHARED VOTING POWER SHARES -0- BENEFICIALLY ---------------------------------------- OWNED BY 9 SOLE DISPOSITIVE POWER EACH -0- REPORTING ---------------------------------------- PERSON 10 SHARED DISPOSITIVE POWER WITH -0- -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON -0- -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [_] -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0% -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* OO -------------------------------------------------------------------------------- * SEE INSTRUCTIONS BEFORE FILLING OUT -------------------------------------------------------------------------------- CUSIP No. 141410209 SCHEDULE 13D Page 10 of 30 -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON Rappahannock Investment Company -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X] (b) [_] -------------------------------------------------------------------------------- 3 SEC USE ONLY -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* Not Applicable -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [_] -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 8,454,782 (1) NUMBER OF ---------------------------------------- SHARES 8 SHARED VOTING POWER BENEFICIALLY 0 OWNED BY ---------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING 8,454,782 (1) PERSON ---------------------------------------- WITH 10 SHARED DISPOSITIVE POWER 0 -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 8,454,782 (1) -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [_] -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 8.6% (1) -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* CO -------------------------------------------------------------------------------- * SEE INSTRUCTIONS BEFORE FILLING OUT ---------------- (1) Assuming complete exercise of the warrants held by Perseus Market Opportunity to purchase an aggregate of 6,345,077 shares of Common Stock. See Item 5 herein. -------------------------------------------------------------------------------- CUSIP No. 141410209 SCHEDULE 13D Page 11 of 30 -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON Perseus EC, L.L.C. -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X] (b) [_] -------------------------------------------------------------------------------- 3 SEC USE ONLY -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* Not Applicable -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [_] -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware -------------------------------------------------------------------------------- 7 SOLE VOTING POWER -0- NUMBER OF ---------------------------------------- SHARES 8 SHARED VOTING POWER BENEFICIALLY -0- OWNED BY ---------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING -0- PERSON ---------------------------------------- WITH 10 SHARED DISPOSITIVE POWER -0- -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON -0- -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [_] -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0% -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* OO -------------------------------------------------------------------------------- * SEE INSTRUCTIONS BEFORE FILLING OUT -------------------------------------------------------------------------------- CUSIP No. 141410209 SCHEDULE 13D Page 12 of 30 -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON Perseuspur, L.L.C. -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X] (b) [_] -------------------------------------------------------------------------------- 3 SEC USE ONLY -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* Not Applicable -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [_] -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 8,062,404 (1) NUMBER OF ---------------------------------------- SHARES 8 SHARED VOTING POWER BENEFICIALLY 0 OWNED BY ---------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING 8,062,404 (1) PERSON ---------------------------------------- WITH 10 SHARED DISPOSITIVE POWER 0 -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 8,062,404 (1) -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [_] -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 8.2% (1) -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* OO -------------------------------------------------------------------------------- * SEE INSTRUCTIONS BEFORE FILLING OUT ---------------- (1) Assuming complete exercise of each of (i) the warrants held by Perseus A/R Fund and (ii) the warrants held by CS Co-Investment, to purchase an aggregate of 8,062,404 shares of Common Stock. See Item 5 herein. -------------------------------------------------------------------------------- CUSIP No. 141410209 SCHEDULE 13D Page 13 of 30 -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON Frank H. Pearl (in the capacity described herein) -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X] (b) [_] -------------------------------------------------------------------------------- 3 SEC USE ONLY -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* Not Applicable -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [_] -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 16,517,186 (1) NUMBER OF ---------------------------------------- SHARES 8 SHARED VOTING POWER BENEFICIALLY 0 OWNED BY ---------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING 16,517,186 (1) PERSON ---------------------------------------- WITH 10 SHARED DISPOSITIVE POWER 0 -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 16,517,186 (1) -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [_] -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 15.9% (1) -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* IN -------------------------------------------------------------------------------- * SEE INSTRUCTIONS BEFORE FILLING OUT ---------------- (1) Assuming complete exercise of each of (i) the warrants held by Perseus A/R Fund, (ii) the warrants held by Perseus Market Opportunity and (iii) the Warrants held by CS Co-Investment, to purchase an aggregate of 14,407,481 shares of Common Stock. See Item 5 herein. -------------------------------------------------------------------------------- CUSIP No. 141410209 SCHEDULE 13D Page 14 of 30 -------------------------------------------------------------------------------- Pursuant to Rule 13d-2(a) of Regulation D-G of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended (the "Act"), the undersigned hereby amend their Schedule 13D Statement dated June 10, 2002 an amended by Amendment No. 1 dated July 20, 2004. Item 1. SECURITY AND ISSUER. No material change. Item 2. IDENTITY AND BACKGROUND. No material change. Item 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. Item 3 is amended and restated in its entirety to read as follows: Pursuant to a Senior Note and Warrant Purchase Agreement, dated as of May 29, 2002 (the "2002 Purchase Agreement"), among the Purchasers and the Company, the Company issued and the Purchasers acquired senior notes of the Company (the "Senior Notes") in the aggregate principal amount of $50,000,000 and warrants to purchase 3,000,000 shares of Common Stock (consisting of 1,307,297 shares issuable to Perseus A/R Fund, 1,216,754 shares issuable to Perseus Market Opportunity and 475,949 shares issuable to CS Co-Investment) at an exercise price of $4.00 per share (the "Four Dollar Warrants") and warrants to purchase 10,000,000 shares of Common Stock (consisting of 4,357,657 shares issuable to Perseus A/R Fund, 4,055,847 shares issuable to Perseus Market Opportunity and 1,586,496 shares issuable to CS Co-Investment) at an exercise price of $3.00 per share (the "Three Dollar Warrants," and together with the Four Dollar Warrants, the "2002 Warrants") for an aggregate purchase price of $50,000,000 (the "2002 Purchase Price"). The source of the 2002 Purchase Price was capital contributions from the partners and members of the Purchasers. In connection with the service of Ray E. Newton, III, a managing director of Perseus, as a director of the Company, the Company issued to the Purchasers warrants to purchase 25,000 shares of Common Stock at an exercise price of $1.75 per share on October 24, 2002 (the "2002 Director Warrants") and warrants to purchase 100,000 shares of Common Stock at an exercise price of $4.61 per share on September 17, 2003 (the "2003 Director Warrants" and, together with the 2002 Director Warrants, the "Director Warrants"). The 2002 Director Warrants were issued as follows: (i) warrants to purchase 10,894 shares to Perseus A/R Fund, (ii) warrants to purchase 10,140 shares to Perseus Market Opportunity and (iii) warrants to purchase 3,966 shares to CS Co-Investment. The 2003 Director Warrants were issued as -------------------------------------------------------------------------------- CUSIP No. 141410209 SCHEDULE 13D Page 15 of 30 -------------------------------------------------------------------------------- follows: (i) warrants to purchase 43,577 shares to Perseus A/R Fund, (ii) warrants to purchase 40,558 shares to Perseus Market Opportunity and (iii) warrants to purchase 15,865 shares to CS Co-Investment. No funds were provided in connection with the issuance of the Director Warrants. In connection with a waiver to 2002 Purchase Agreement and as adjusted by the Amendment described below, the Company granted warrants to purchase 411,947 shares of Common Stock (the "Credit Agreement Warrants") on March 16,2004 as follows: (i) warrants to purchase 179,526 shares to Perseus A/R Fund, (ii) warrants to purchase 167,086 shares to Perseus Market Opportunity and (iii) warrants to purchase 65,335 shares to CS Co-Investment. No funds were provided in connection with the issuance of the Credit Agreement Warrants. Pursuant to a Purchase Agreement, dated as of July 20, 2004 (the "2004 Purchase Agreement"), among the Company, Perseus Market Opportunity and the other purchasers named therein, the Company sold to Perseus Market Opportunity 2,109,705 shares of Common Stock and a warrant to purchase 843,882 shares of Common Stock at an exercise price of $2.84 per share (the "2004 Warrant" and, together with the 2002 Warrants, the Director Warrants and the Credit Agreement Warrants, the "Warrants") for an aggregate purchase price of $5,000,000.85 (the "2004 Purchase Price"). The source of the 2004 Purchase Price was capital contributions from the partners of Perseus Market Opportunity. Item 4. PURPOSE OF TRANSACTION. Item 4 is amended and restated in its entirety to read as follows: Except as disclosed herein, the Reporting Persons have acquired the Common Stock and the Warrants for investment purposes. A copy of the Purchase Agreement is attached to the initial Schedule 13D as Exhibit 2 and incorporated herein by reference, a copy of the form of 2002 Warrants is attached to the initial Schedule 13D as Exhibit 3 and incorporated herein by reference, a copy of the Registration Rights Agreement (the "Registration Rights Agreement") is attached to the initial Schedule 13D as Exhibit 4 and incorporated herein by reference and a copy of the form of the Senior Notes is attached to the initial Schedule 13D as Exhibit 5 and incorporated herein by reference. A copy of the 2002 Director Warrant issued to Perseus Market Opportunity Fund is attached to Amendment No. 1 to this Schedule 13D as Exhibit 2 and incorporated herein by reference (similar warrants were granted to Perseus A/R Fund and CS Co-Investment). A copy of the 2004 Director Warrant issued to Perseus A/R Fund is attached to -------------------------------------------------------------------------------- CUSIP No. 141410209 SCHEDULE 13D Page 16 of 30 -------------------------------------------------------------------------------- Amendment No. 1 to this Schedule 13D as Exhibit 3 and incorporated herein by reference (similar warrants were granted to Perseus Market Opportunity and CS Co-Investment). A copy of the Credit Agreement Warrant issued to Perseus A/R Fund is attached to Amendment No. 1 to this Schedule 13D as Exhibit 4 and incorporated herein by reference (similar warrants were granted to Perseus Market Opportunity and CS Co-Investment). A copy of the 2004 Purchase Agreement is attached to Amendment No. 1 to this Schedule 13D as Exhibit 5 and incorporated herein by reference. A copy of the form of 2004 Warrants is attached to Amendment No. 1 to this Schedule 13D as Exhibit 6 and incorporated herein by reference. A copy of the Amended and Restated Registration Rights Agreement (as defined below) is attached to Amendment No. 1 to this Schedule 13D as Exhibit 7 and incorporated herein by reference. Set forth below is a description of certain material terms of the Purchase Agreement, the 2002 Warrant, the Registration Rights Agreement, the Director Warrants, the Credit Agreement Warrants, the 2004 Purchase Agreement, the 2004 Warrant and the Amended and Restated Registration Rights Agreement. The following description of certain material terms is qualified in its entirety by reference to the Purchase Agreement, the 2002 Warrants, the Registration Rights Agreement, the Director Warrants, the Credit Agreement Warrants, the 2004 Purchase Agreement, the 2004 Warrant and the Amended and Restated Registration Rights Agreement. TERMS OF THE PURCHASE 2002 AGREEMENT Board Representation. Pursuant to the 2002 Purchase Agreement, so long as Purchasers and their transferees of the Senior Notes (the "Transferees") continue to own at least 50% of the shares of Common Stock issued or issuable upon the exercise of the 2002 Warrants (the "2002 Registrable Securities"), Purchasers and such Transferees have the right, at the direction of Purchasers and such Transferees holding 51% or more of the 2002 Registrable Securities then owned by Purchasers and such Transferees, to designate two directors to the Board of Directors of the Company (the "Board"). In addition, pursuant to the 2002 Purchase Agreement, so long as Purchasers and the Transferees continue to own at least 25% of the 2002 Registrable Securities, Purchasers and such Transferees have the right, at the direction of Purchasers and such Transferees holding 51% or more of the 2002 Registrable Securities then owned by Purchasers and such Transferees, to designate one director to the Board. Additionally, pursuant to the 2002 Purchase Agreement, up to two directors designated by Purchasers and the Transferees have the right, upon request, to serve on (i) each committee of the Board and (ii) the Board of Directors of each material subsidiary of the Company. Upon the closing of the transactions contemplated by the 2002 Purchase -------------------------------------------------------------------------------- CUSIP No. 141410209 SCHEDULE 13D Page 17 of 30 -------------------------------------------------------------------------------- Agreement, the Board elected one representative of the Purchasers, Ray E. Newton, III, to the Board. In addition, pursuant to the 2002 Purchase Agreement, at any time that the Purchasers and the Transferees are no longer entitled to designate representatives to the Board and hold at least: (i) 25% of the Senior Notes issued to Purchasers and such Transferees, the Purchasers and such Transferees shall have certain observation rights, including but not limited to (a) appointing a non-voting representative to attend meetings of the Board and (b) to make proposals, recommendations and suggestions to the Company's officers and directors relating to the business and affairs of the Company at such reasonable times as may be requested by the Purchasers or such Transferees (it being understood that the Company will not be required to accept such proposals, recommendations or suggestions). TERMS OF THE 2002 WARRANTS Exercise Rights. The Common Stock underlying the Four Dollar Warrants may be purchased at a price per share equal to $4.00 (the "Four Dollar Exercise Price") and the Common Stock underlying the Three Dollar Warrants may be purchased at a price per share equal to $3.00 (the "Three Dollar Exercise Price" and, together with the Four Dollar Exercise Price, the "2002 Exercise Prices"). As a result of an anti-dilution adjustment, the Company issued replacement Four Dollar warrants to the Purchasers on September 17, 2003. Four Dollar Warrants to purchase 1,318,911 shares, 1,227,564 shares and 480,177 shares of Common Stock were issued to Perseus A/R Fund, Perseus Market Opportunity and CS Co-Investment, respectively, at an exercise price of $3.96 per share. The 2002 Exercise Prices may be paid (i) in cash, (ii) through the cancellation of indebtedness owed by the Company to the Purchasers or the Transferees under the Senior Notes or (iii) in certain circumstances, by reducing the number of shares of Common Stock issuable upon the exercise of the 2002 Warrants having a fair market value equal to such Exercise Prices, all in accordance with the terms contained in the 2002 Warrants. The 2002 Exercise Prices and the number of shares issuable upon exercise of the 2002 Warrants will be subject to adjustment upon the occurrence of certain events as set forth in the 2002 Warrants. Pursuant to an Amendment and Limited Waiver to the 2002 Purchase Agreement (the "Amendment"), dated January 28, 2004 between the Purchasers and the Company, in exchange for certain amendments to the Senior Notes and the waiver contained in the Amendment, the Company agreed to reduce the Three Dollar Exercise Price to $2.00 per share and the Four Dollar Exercise Price to $2.00 per share. A copy of the Amendment is attached hereto -------------------------------------------------------------------------------- CUSIP No. 141410209 SCHEDULE 13D Page 18 of 30 -------------------------------------------------------------------------------- as Exhibit 2 and incorporated herein by reference. The description of the Amendment set forth above is qualified in its entirety by reference to the Amendment. Exercise at the Company's Option. If, at any time following May 30, 2005, the daily closing price per share of Common Stock for 45 consecutive trading days (occurring at least 45 consecutive trading days following May 30, 2005) is at least $6.00 per share (with appropriate adjustments to be made for any stock dividend, split-up, subdivision or any other combination or reclassification), then the Company may, at its option, require the holders of the 2002 Warrants to exercise such 2002 Warrants, all in accordance with the terms and conditions contained in the 2002 Warrants. Exercise Period. The 2002 Warrants are exercisable at any time, or from time to time, from the date of issuance, May 30, 2002, until May 30, 2009 (the "2002 Warrant Expiration Date"). In the event that a filing under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended ("HSR") is required to be made before certain shares of Common Stock may be issued upon the exercise of the 2002 Warrants, then the 2002 Warrant Expiration Date with respect to the right to exercise the 2002 Warrants into such shares shall be the third business day following the expiration or termination of the statutory waiting period under HSR (and any extension thereof). TERMS OF THE DIRECTOR WARRANTS Exercise Rights. The Common Stock underlying the 2002 Director Warrants may be purchased at a price per share equal to $1.75 (the "2002 Director Exercise Price) and the Common Stock underlying the 2003 Director Warrants may be purchased at a price per share equal to $4.61 (the "2003 Director Exercise Price" and, together with the 2002 Director Exercise Price, the "Director Exercise Prices"). The Director Exercise Prices may be paid (i) in cash or (ii) in certain circumstances, by reducing the number of shares of Common Stock issuable upon the exercise of the Director Warrants having a fair market value equal to such Director Exercise Prices, all in accordance with the terms contained in the Director Warrants. The Director Exercise Prices and the number of shares issuable upon exercise of the Director Warrants will be subject to adjustment upon the occurrence of certain events as set forth in the Director Warrants. Exercise Period. One fourth of the 2002 Director Warrants were exercisable on October 24, 2003. The remaining 2002 Director Warrants vest proportionately over the next 36 months, with all of such warrants becoming fully vested on October 24, 2006. One fourth of the 2003 Director Warrants are exercisable on September 17, 2004. The remaining 2003 Director Warrants vest proportionately over the -------------------------------------------------------------------------------- CUSIP No. 141410209 SCHEDULE 13D Page 19 of 30 -------------------------------------------------------------------------------- next 36 months, with all of such warrants becoming fully vested on September 17, 2007. The 2002 Director Warrants expire on October 24, 2012. The 2003 Director Warrants expire on September 17, 2013. TERMS OF THE CREDIT AGREEMENT WARRANTS Exercise Rights. The Common Stock underlying the Credit Agreement Warrants may be purchased at a price per share equal to $3.95 (the "Credit Agreement Exercise Price"). The Credit Agreement Exercise Price may be paid (i) in cash, (ii) through the cancellation of indebtedness owed by the Company to the warrant holder under the Senior Notes or (iii) in certain circumstances, by reducing the number of shares of Common Stock issuable upon the exercise of the Credit Agreement Warrants having a fair market value equal to such Credit Agreement Exercise Price, all in accordance with the terms contained in the Credit Agreement Warrants. The Credit Agreement Exercise Price and the number of shares issuable upon exercise of the Credit Agreement Warrants will be subject to adjustment upon the occurrence of certain events as set forth in the Credit Agreement Warrants. As a result of anti-dilution adjustments and the Amendment described above, the Credit Agreement Exercise Price was reduced to $2.00 per share. The description of the Amendment set forth above is qualified in its entirety by reference to the Amendment. Exercise at the Company's Option. If, at any time following March 16, 2007, the daily closing price per share of Common Stock for 45 consecutive trading days (occurring at least 45 consecutive trading days following March 16, 2007) is at least $6.00 per share (with appropriate adjustments to be made for any stock dividend, split-up, subdivision or any other combination or reclassification), then the Company may, at its option, require the holders of the Credit Agreement Warrants to exercise such Credit Agreement Warrants, all in accordance with the terms and conditions contained in the Credit Agreement Warrants. Exercise Period. The Credit Agreement Warrants are exercisable at any time, or from time to time, from the date of issuance, March 16, 2004, until March 16, 2011 (the "Credit Agreement Warrant Expiration Date"). In the event that a filing under HSR is required to be made before certain shares of Common Stock may be issued upon the exercise of such Credit Agreement Warrants, the Credit Agreement Warrant Expiration Date with respect to the right to exercise the Credit Agreement Warrants into such shares shall be the third business day following the expiration or termination of the statutory waiting period under HSR (and any extension thereof). -------------------------------------------------------------------------------- CUSIP No. 141410209 SCHEDULE 13D Page 20 of 30 -------------------------------------------------------------------------------- TERMS OF THE 2004 WARRANT Exercise Rights. The Common Stock underlying the 2004 Warrant may be purchased at a price per share equal to $2.84 (the "2004 Exercise Price). The 2004 Exercise Price may be paid (i) in cash, (ii) through the cancellation of indebtedness owed by the Company to Perseus Market Opportunity under the Senior Notes, or (iii) in certain circumstances, by reducing the number of shares of Common Stock issuable upon the exercise of the 2004 Warrant having a fair market value equal to such 2004 Exercise Price, all in accordance with the terms contained in the 2004 Warrant. The 2004 Exercise Price and the number of shares issuable upon exercise of the 2004 Warrants will be subject to adjustment upon the occurrence of certain events as set forth in the 2004 Warrant. Pursuant to an Agreement (the "2005 Agreement"), dated January 28, 2005, by and among the Company, Perseus Market Opportunity and the other purchasers named therein, the 2004 Exercise Price was reduced to $2.50. A copy of the 2005 Agreement is attached hereto as Exhibit 3 and incorporated herein by reference. The description of the 2005 Agreement set forth above is qualified in its entirety by reference to the 2005 Agreement. Exercise Period. The 2004 Warrant is exercisable at any time, or from time to time, from the date of issuance, July 20, 2004, until May 30, 2009 (the "2004 Warrant Expiration Date"). In the event that a filing under HSR is required to be made before certain shares of Common Stock may be issued upon the exercise of the 2004 Warrant, then the 2004 Warrant Expiration Date with respect to the right to exercise the 2004 Warrant into such shares shall be the third business day following the expiration or termination of the statutory waiting period under HSR (and any extension thereof). TERMS OF THE REGISTRATION RIGHTS AGREEMENT In connection with the 2002 Purchase Agreement, the Company granted the Purchasers certain Form S-1 demand registration rights, "piggy-back" registration rights and Form S-3 registration rights as described more fully in the Registration Rights Agreement in connection with the 2002 Registrable Securities. The Company had an obligation under the Registration Rights Agreement to prepare and file with the Securities and Exchange Commission (the "Commission"), within 45 days following May 30, 2002, a shelf registration statement pursuant to Rule 415 promulgated under the Securities Act of 1933, as amended (the "Securities Act"), on Form S-3 registering the 2002 Registrable Securities. The purpose of such registration rights was to facilitate the Purchasers' ability to dispose of their 2002 Registrable Securities in a public sale. -------------------------------------------------------------------------------- CUSIP No. 141410209 SCHEDULE 13D Page 21 of 30 -------------------------------------------------------------------------------- TERMS OF THE AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT In connection with the 2004 Purchase Agreement, the Company entered into an Amended and Restated Registration Rights Agreement with Perseus Market Opportunity and the other parties to the 2004 Purchase Agreement (the "Amended and Restated Registration Rights Agreement"). Pursuant to the Amended and Restated Registration Rights Agreement, the Company granted Perseus Market Opportunity and the other parties to such agreement certain demand registration rights, "piggy-back" registration rights and Form S-3 registration rights in connection with the shares of Common Stock purchased by Perseus Market Opportunity pursuant to the 2004 Purchase Agreement and the shares of Common Stock underlying the 2004 Warrants purchased by Perseus Market Opportunity pursuant to the 2004 Purchase Agreement (collectively, the "2004 Registrable Securities"). The Company had an obligation under the Amended and Restated Registration Rights Agreement to prepare and file with the Commission, within 60 days following July 20, 2004, a shelf registration statement pursuant to Rule 415 promulgated under the Securities Act on Form S-3 registering the 2004 Registrable Securities. Pursuant to the 2005 Agreement, the Company agreed to file such shelf registration statement concurrently with the execution and delivery of the 2005 Agreement. The purpose of such registration rights is to facilitate Perseus Market Opportunity's ability to dispose of its 2004 Registrable Securities in a public sale. ADDITIONAL DISCLOSURE The Reporting Persons may from time to time acquire additional shares of Common Stock in the open market or in privately negotiated transactions, subject to availability of Common Stock at prices deemed favorable, the Company's business or financial condition and other factors and conditions the Reporting Persons deem appropriate. Alternatively, the Reporting Persons may sell all or a portion of their Common Stock, the Warrants or Common Stock issued upon exercise of the Warrants in privately negotiated transactions, in the open market pursuant to the exercise of certain registration rights granted pursuant to the Registration Rights Agreement and the Amended and Restated Registration Rights Agreement as described above or through an exemption from registration in compliance with applicable law, in each case, subject to the factors and conditions referred to above and to the terms of the 2002 Purchase Agreement, the 2004 Purchase Agreement, the Warrants, the Registration Rights Agreement and the Amended and Restated Registration Rights Agreement, as the case may be. In addition, the Reporting Persons may formulate other purposes, plans or proposals regarding the Company or any of its securities to -------------------------------------------------------------------------------- CUSIP No. 141410209 SCHEDULE 13D Page 22 of 30 -------------------------------------------------------------------------------- the extent deemed advisable in light of general investment and trading policies, market conditions or other factors. Except as described in the 2002 Purchase Agreement, the 2004 Purchase Agreement, the Warrants, the Registration Rights Agreement or the Amended and Restated Registration Rights Agreement, and as otherwise set forth in this Schedule 13D, no Reporting Person or any individual otherwise identified in Item 2 has any present plans or proposals which relate to or would result in: (a) the acquisition by any person of additional securities of the Company, or the disposition of securities of the Company; (b) an extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Company or any of its subsidiaries; (c) a sale or transfer or a material amount of assets of the Company or of any of its subsidiaries; (d) any change in the present board of directors or management of the Company, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board; (e) any material change in the present capitalization or dividend policy of the Company; (f) any other material change in the Company's business or corporate structure; (g) changes in the Company's charter, bylaws or instruments corresponding thereto or other actions which may impede the acquisition of control of the Company by any person; (h) causing a class of securities of the Company to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; (i) a class of equity securities of the Company becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934; or (j) any action similar to any of those enumerated above. Item 5. INTEREST IN SECURITIES OF THE ISSUER. (a) As of the date hereof, Perseus A/R Fund may be deemed to beneficially own 5,910,565 shares of Common Stock, based on calculations made in accordance with Rule 13d-3(d) representing approximately 6.2% of the outstanding shares of Common Stock in accordance with Rule 13d-3(d). As of the date hereof, the Perseus Market Opportunity may be deemed to beneficially own 8,454,782 shares of Common Stock, based on calculations made in accordance with Rule 13d-3(d), representing 8.8% of the outstanding shares of Common Stock in accordance with Rule 13d-3(d). As of the date hereof, CS Co-Investment may be deemed to beneficially own 2,151,839 shares of Common Stock, based on calculations made in accordance with Rule 13d-3(d), representing approximately 2.3% of the outstanding shares of Common Stock in accordance with Rule 13d-3(d). The above percentages are based upon there -------------------------------------------------------------------------------- CUSIP No. 141410209 SCHEDULE 13D Page 23 of 30 -------------------------------------------------------------------------------- being 89,231,425 shares of Common Stock outstanding as of January 31, 2005. By virtue of the relationships between and among the Reporting Persons described in Item 2 of this Statement on Schedule 13D, as of the date hereof, each of (i) Perseus Partners, (ii) Perseus Partners GP, (iii) Perseus and (iv) Rappahannock may be deemed to beneficially own 8,454,782 shares of Common Stock, based on calculations made in accordance with Rule 13d-3(d), representing approximately 8.6% of the outstanding shares of Common Stock in accordance with Rule 13d-3(d). By virtue of the relationships between and among the Reporting Persons described in Item 2 of this Statement on Schedule 13D, as of the date hereof, each of (i) Perseus Management and (ii) Perseuspur may be deemed to beneficially own 8,062,404 shares of Common Stock, based on calculations made in accordance with Rule 13d-3(d), representing approximately 8.2% of the outstanding shares of Common Stock in accordance with Rule 13d-3(d). By virtue of the relationships between and among the Reporting Persons described in Item 2 of this Statement on Schedule 13D, as of the date hereof, Mr. Pearl may be deemed to beneficially own 16,517,186 shares of Common Stock, based on calculations made in accordance with Rule 13d-3(d), representing approximately15.9% of the outstanding shares of Common Stock in accordance with Rule 13d-3(d). For the purpose of the above amounts and percentages (and the amounts set forth below in subsection (b)), the Reporting Persons have included all shares of Common Stock underlying the Director Warrants as if all of such warrants have vested on the date hereof. The Reporting Persons herby disclaim beneficial ownership of any warrants that they do not beneficially own as set forth on Rule 13d-3(d). (b) By virtue of the relationships between and among the Reporting Persons described in Item 2 of this Statement on Schedule 13D, Perseus A/R Fund may be deemed to have the sole power to direct the voting and disposition of the 5,910,565 shares of Common Stock beneficially owned by Perseus A/R Fund. By virtue of the relationships between and among the Reporting Persons described in Item 2 of this Statement on Schedule 13D, CS Co-Investment may be deemed to have the sole power to direct the voting and disposition of the 2,151,839 shares of Common Stock beneficially owned by CS Co-Investment. -------------------------------------------------------------------------------- CUSIP No. 141410209 SCHEDULE 13D Page 24 of 30 -------------------------------------------------------------------------------- By virtue of the relationships between and among the Reporting Persons described in Item 2 of this Statement on Schedule 13D, each of (i) Perseus Management and (ii) Perseuspur may be deemed to have the sole power to direct the voting and disposition of the 5,910,565 shares of Common Stock beneficially owned by Perseus A/R Fund and the 2,151,839 shares of Common Stock owned by CS Co-Investment. By virtue of the relationships between and among the Reporting Persons described in Item 2 of this Statement on Schedule 13D, each of (i) Perseus Market Opportunity, (ii) Perseus Partners, (iii) Perseus Partners GP, (iv) Perseus and (v) Rappahannock may be deemed to have the sole power to direct the voting and disposition of the 8,454,782 shares of Common Stock beneficially owned by Perseus Market Opportunity. By virtue of the relationships between and among the Reporting Persons described in Item 2 of this Statement on Schedule 13D, Mr. Pearl may be deemed to have the sole power to direct the voting and disposition of the 5,910,565 shares of Common Stock beneficially owned by Perseus A/R Fund, the 8,454,782 shares of Common Stock owned by Perseus Market Opportunity and the 2,151,839 shares of Common Stock owned by CS Co-Investment. (c) Except as set forth above, no Reporting Person nor, to the best knowledge of each Reporting Person, any person identified in Item 2 hereof, beneficially owns any shares of Common Stock or has effected any transaction in shares of Common Stock during the preceding 60 days. (d) Each of the Reporting Persons affirms that no person other than the Reporting Persons has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the shares of Common Stock owned by the Reporting Persons. The partners and members of the Purchasers have the right to participate in the receipt of dividends from, or proceeds from the sale of, the Warrants or the Common Stock held for the account of the Purchasers in accordance with their ownership interests in the Purchasers. (e) Not applicable. Item 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. Item 6 is amended and restated in its entirety to read as follows: -------------------------------------------------------------------------------- CUSIP No. 141410209 SCHEDULE 13D Page 25 of 30 -------------------------------------------------------------------------------- As described in Items 3 and 4 above, on May 29, 2002, the Purchasers and the Company entered into to the 2002 Purchase Agreement pursuant to which the Purchasers agreed to purchase Senior Notes issued by the Company in the aggregate principal amount of $50,000,000 and 2002 Warrants exercisable for an aggregate of 13,000,000 shares of Common Stock, subject to adjustment upon the occurrence of certain events as set forth in the 2002 Warrants. The Purchasers and the Company also entered into the Registration Rights Agreement pursuant to which the Purchasers have certain Form S-1 demand registration rights, "piggy-back" registration rights and Form S-3 registration rights as described more fully in the Registration Rights Agreement. The Company had an obligation under the Registration Rights Agreement to prepare and file with the Commission within 45 days following May 30, 2002 a shelf registration statement on Form S-3 or successor form registering the 2002 Registrable Securities. Additionally, Survivalink Corporation, a subsidiary of the Company, entered into a Guaranty, dated May 30, 2002 and Cadent Medical Corporation, a subsidiary of the Company, entered into a Guaranty, dated May 30, 2002, both of which guaranty certain obligations of the Company under the Senior Notes and the Purchase Agreement and are in the form of Guaranty, a copy of which is attached to the initial Schedule 13D as Exhibit 6 and incorporated herein by reference. Certain obligations of the Company under the Senior Notes and the 2002 Purchase Agreement are secured by a Security Agreement, dated May 30, 2002 (the "Security Agreement"), entered into by the Purchasers, the Company, HSBC Bank USA, as agent for the Purchasers and Cadent Medical Corporation, Survivalink Corporation, Cardiac Science Sweden AB, Artema Medical AB, Artema Technologies AB and Cardiac Science International, each a subsidiary of the Company, a copy of which is attached to the initial Schedule 13D as Exhibit 7 and incorporated herein by reference. As described in Items 3 and 4, Perseus Market Opportunity and the Company entered into the 2004 Purchase Agreement pursuant to which Perseus Market Opportunity purchased 2,109,705 shares of Common Sock and the 2004 Warrants exercisable for 843,882 shares of Common Stock, subject to adjustment upon the occurrence of certain events set forth in the 2004 Warrants. Perseus Market Opportunity and the Company entered into the Amended and Restated Registration Rights Agreement pursuant to which Perseus Market Opportunity has certain demand registration rights, "piggy-back" registration rights and Form S-3 registration rights as described more fully in the Amended and Restated Registration Rights Agreement. -------------------------------------------------------------------------------- CUSIP No. 141410209 SCHEDULE 13D Page 26 of 30 -------------------------------------------------------------------------------- The Company had an obligation under the Amended and Restated Registration Rights Agreement to prepare and file with the Commission, within 60 days following July 20, 2004, a shelf registration statement on Form S-3 or successor form registering the 2004 Registrable Securities. Pursuant to the 2005 Agreement, the Company agreed to file such shelf registration statement concurrently with the execution and delivery of the 2005 Agreement. The Company also issued the 2002 Director Warrants and the 2004 Director Warrants to Mr. Newton and the Credit Agreement Warrants to Perseus A/R Fund, Perseus Market Opportunity and CS Co-Investment. The foregoing summaries of the 2002 Purchase Agreement, the 2002 Warrants, the Registration Rights Agreement, the form of Guaranty and the Security Agreement are qualified in their entirety by reference to Exhibits 2, 3, 4, 6 and 7, respectively, to the initial Schedule 13D. The foregoing summaries of the 2002 Director Warrants, the 2004 Director Warrants, the Credit Agreement Warrants, the 2004 Purchase Agreement, the 2004 Warrants and the Amended and Restated Registration Rights Agreement are qualified in their entirety to Exhibits 2, 3, 4, 5, 6 and 7, respectively, to Amendment No. 1 to the Schedule 13D. The foregoing summaries of the Amendment and the 2005 Agreement are qualified in their entirety to Exhibits 2 and 3, respectively. Item 7. MATERIAL TO BE FILED AS EXHIBITS. Exhibit 1: Joint Filing Agreement, dated February 4, , 2005, among (i) Perseus Acquisition/Recapitalization Fund, L.L.C., (ii) Perseus Market Opportunity Fund, L.P., (iii) Cardiac Science Co-Investment, L.P., (iv) Perseus Acquisition/Recapitalization Management, L.L.C., (v) Perseus Market Opportunity Partners, L.P., (vi) Perseus Market Opportunity Partners GP, L.L.C., (vii) Perseus, L.L.C., (viii) Perseus MF, L.L.C., (ix) Rappahannock Investment Company, (x) Perseus EC, L.L.C., (xi) Perseuspur, L.L.C., and (xii) Frank H. Pearl. Exhibit 2: Amendment No. 3 and Limited Waiver to Senior Note and Warrant Purchase Agreement, dated as of January 28, 2005, by and among Cardiac Science, Inc., Perseus Acquisition/Recapitalization Fund, L.P., Perseus Market Opportunity Fund, L.P. and Cardiac Science Co-Investment, L.P. -------------------------------------------------------------------------------- CUSIP No. 141410209 SCHEDULE 13D Page 27 of 30 -------------------------------------------------------------------------------- Exhibit 3: Agreement, dated as of January 28, 2005, by and among Cardiac Science, Inc., Perseus Market Opportunity Fund, L.P. and the other parties thereto. Exhibit 4: Power of Attorney, dated April 9, 2003, by Frank Pearl in favor of Rodd Macklin (filed as Exhibit 8 to Amendment No. 1 to the Reporting Persons' report on Schedule 13D filed on July 22, 2004 and incorporated herein by reference). -------------------------------------------------------------------------------- CUSIP No. 141410209 SCHEDULE 13D Page 28 of 30 -------------------------------------------------------------------------------- SIGNATURE After reasonable inquiry and to the best of its knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct. Dated: February 4, 2005 PERSEUS ACQUISITION/RECAPITALIZATION FUND, L.L.C. By: Perseus Acquisition/Recapitalization Management, L.L.C., its Managing Member By: Perseuspur, L.L.C., its Managing Member By: /s/ Rodd Macklin -------------------------------------- Name: Rodd Macklin Title: Secretary and Treasurer PERSEUS MARKET OPPORTUNITY FUND, L.P. By: Perseus Market Opportunity Partners, L.P., its General Partner By: Perseus Market Opportunity Partners GP, L.L.C., its General Partner By: Perseus, L.L.C., its Managing Member By: Perseuspur, L.L.C, its Managing Member By: /s/ Rodd Macklin -------------------------------------- Name: Rodd Macklin Title: Secretary and Treasurer -------------------------------------------------------------------------------- CUSIP No. 141410209 SCHEDULE 13D Page 29 of 30 -------------------------------------------------------------------------------- CARDIAC SCIENCE CO-INVESTMENT, L.P. By: Perseus Acquisition/Recapitalization Management, L.L.C., its General Partner By: Perseuspur, L.L.C., its Managing Member By: /s/ Rodd Macklin -------------------------------------- Name: Rodd Macklin Title: Secretary and Treasurer PERSEUS ACQUISITION/RECAPITALIZATION MANAGEMENT, L.L.C. By: Perseuspur, L.L.C., its Managing Member By: /s/ Rodd Macklin -------------------------------------- Name: Rodd Macklin Title: Secretary and Treasurer PERSEUS MARKET OPPORTUNITY PARTNERS, L.P. By: Perseus Market Opportunity Partners GP, L.L.C., its General Partner By: Perseus, L.L.C., its Managing Member By: Perseuspur, L.L.C, its Managing Member By: /s/ Rodd Macklin -------------------------------------- Name: Rodd Macklin Title: Secretary and Treasurer PERSEUS MARKET OPPORTUNITY PARTNERS GP, L.L.C. By: Perseus, L.L.C., its Managing Member By: Perseuspur, L.L.C, its Managing Member By: /s/ Rodd Macklin -------------------------------------- Name: Rodd Macklin Title: Secretary and Treasurer -------------------------------------------------------------------------------- CUSIP No. 141410209 SCHEDULE 13D Page 30 of 30 -------------------------------------------------------------------------------- PERSEUS, L.L.C. By: Perseuspur, L.L.C, its Managing Member By: /s/ Rodd Macklin -------------------------------------- Name: Rodd Macklin Title: Secretary and Treasurer PERSEUS MF, L.L.C. By: /s/ Rodd Macklin -------------------------------------- Name: Rodd Macklin Title: Secretary and Treasurer RAPPAHANNOCK INVESTMENT COMPANY By: /s/ Rodd Macklin -------------------------------------- Name: Rodd Macklin Title: Secretary and Treasurer PERSEUS EC, L.L.C. By: Perseuspur, L.L.C, its Managing Member By: /s/ Rodd Macklin -------------------------------------- Name: Rodd Macklin Title: Secretary and Treasurer PERSEUSPUR, L.L.C. By: /s/ Rodd Macklin -------------------------------------- Name: Rodd Macklin Title: Secretary and Treasurer FRANK H. PEARL /s/ Rodd Macklin -------------------------------------- Name: Rodd Macklin Title: Attorney-in-Fact EX-99 2 ex1sc13da2-cardiac.txt EXHIBIT 1 EXHIBIT 1 --------- JOINT FILING AGREEMENT Each of the undersigned hereby acknowledges and agrees, in compliance with the provisions of Rule 13d-1(k)(1) promulgated under the Securities Exchange Act of 1934, as amended, that the Schedule 13D to which this Agreement is attached as an Exhibit (the "Schedule 13D"), and any amendments thereto, will be filed with the Securities and Exchange Commission jointly on behalf of the undersigned. This Agreement may be executed in one or more counterparts. Dated: February 4, 2005 PERSEUS ACQUISITION/RECAPITALIZATION FUND, L.L.C. By: Perseus Acquisition/Recapitalization Management, L.L.C., its Managing Member By: Perseuspur, L.L.C., its Managing Member By: /s/ Rodd Macklin -------------------------------------- Name: Rodd Macklin Title: Secretary and Treasurer PERSEUS MARKET OPPORTUNITY FUND, L.P. By: Perseus Market Opportunity Partners, L.P., its General Partner By: Perseus Market Opportunity Partners GP, L.L.C., its General Partner By: Perseus, L.L.C., its Managing Member By: Perseuspur, L.L.C, its Managing Member By: /s/ Rodd Macklin -------------------------------------- Name: Rodd Macklin Title: Secretary and Treasurer CARDIAC SCIENCE CO-INVESTMENT, L.P. By: Perseus Acquisition/Recapitalization Management, L.L.C., its General Partner By: Perseuspur, L.L.C., its Managing Member By: /s/ Rodd Macklin -------------------------------------- Name: Rodd Macklin Title: Secretary and Treasurer PERSEUS ACQUISITION/RECAPITALIZATION MANAGEMENT, L.L.C. By: Perseuspur, L.L.C., its Managing Member By: /s/ Rodd Macklin -------------------------------------- Name: Rodd Macklin Title: Secretary and Treasurer PERSEUS MARKET OPPORTUNITY PARTNERS, L.P. By: Perseus Market Opportunity Partners GP, L.L.C., its General Partner By: Perseus, L.L.C., its Managing Member By: Perseuspur, L.L.C, its Managing Member By: /s/ Rodd Macklin -------------------------------------- Name: Rodd Macklin Title: Secretary and Treasurer PERSEUS MARKET OPPORTUNITY PARTNERS GP, L.L.C. By: Perseus, L.L.C., its Managing Member By: Perseuspur, L.L.C, its Managing Member By: /s/ Rodd Macklin -------------------------------------- Name: Rodd Macklin Title: Secretary and Treasurer PERSEUS, L.L.C. By: Perseuspur, L.L.C, its Managing Member By: /s/ Rodd Macklin -------------------------------------- Name: Rodd Macklin Title: Secretary and Treasurer PERSEUS MF, L.L.C. By: /s/ Rodd Macklin -------------------------------------- Name: Rodd Macklin Title: Secretary and Treasurer RAPPAHANNOCK INVESTMENT COMPANY By: /s/ Rodd Macklin -------------------------------------- Name: Rodd Macklin Title: Secretary and Treasurer PERSEUS EC, L.L.C. By: Perseuspur, L.L.C, its Managing Member By: /s/ Rodd Macklin -------------------------------------- Name: Rodd Macklin Title: Secretary and Treasurer PERSEUSPUR, L.L.C. By: /s/ Rodd Macklin -------------------------------------- Name: Rodd Macklin Title: Secretary and Treasurer FRANK H. PEARL /s/ Rodd Macklin -------------------------------------- Name: Rodd Macklin Title: Attorney-in-Fact EX-2 3 ex2sc13da2-cardiac.txt EXHIBIT 2 EXHIBIT 2 --------- AMENDMENT NO. 3 AND LIMITED WAIVER TO SENIOR NOTE AND WARRANT PURCHASE AGREEMENT This AMENDMENT NO. 3 AND LIMITED WAIVER TO SENIOR NOTE AND WARRANT PURCHASE AGREEMENT (this "Amendment") is entered into as of January 28, 2005, by and among Cardiac Science, Inc., a Delaware corporation ("CSI"), and the Purchasers with respect to that certain Senior Note and Warrant Purchase Agreement, dated as of May 29, 2002, as amended July 1, 2003, as further amended March 15, 2004 (the "Purchase Agreement"), among CSI and the Purchasers. Collectively, CSI and the Purchasers may be referred to as the "Parties" herein. Section 1. Definitions. Capitalized terms used herein and not otherwise defined herein shall have the respective meanings assigned thereto in the Purchase Agreement, as amended hereby. Section 2. Amendments to the Purchase Agreement. (1) Section 2.1(a) of the Purchase Agreement is hereby amended and restated in its entirety to read as follows: "(a) Unless otherwise accelerated pursuant to the terms hereof, the entire unpaid principal amount of the Senior Notes shall be due and payable in cash on May 29, 2008." (2) Section 2.1(b)(ii) of the Purchase Agreement is hereby amended and restated in its entirety to read as follows: "(b) (ii) Subject to subsection (iii) of this Section 2.1(b), from and after the third anniversary of the Closing Date, accrued and unpaid interest on the Senior Notes calculated at the rate of 6.9% per annum shall accrue and be paid in kind (i.e., such interest shall be capitalized when due and added to the principal balance of the Senior Notes) quarterly in arrears on each Interest Payment Date and on the Termination Date." (3) Section 7.12 of the Purchase Agreement is hereby amended and restated in its entirety to read as follows: "7.12 Financial Covenants. (a) Debt to Capitalization Ratio. The Company shall not as of the last day of each fiscal quarter of the Company, commencing with the fiscal quarter ended March 31, 2005, permit the ratio of Total Funded Debt to (y) Total Capitalization plus (z) interest expense resulting solely from the amortization of the Warrants in accordance with GAAP (the "Funded Debt to Capitalization Ratio") to be more than 50%. (b) Minimum EBITDA. The Company shall not permit EBITDA for the periods specified below to be less than:

-------------------------------------------------------------------------------- For the Period From EBITDA shall not and Including To and Including be less than -------------------------------------------------------------------------------- January 1, 2005 December 31, 2005 ($3.0 million) January 1, 2006 March 31, 2006 $1.0 million April 1, 2006 June 30, 2006 $1.0 million July 1, 2006 September 30, 2006 $1.0 million October 1, 2006 December 31, 2006 $1.0 million Each Quarter Thereafter $1.5 million --------------------------------------------------------------------------------

Solely for the purposes of this Section 7.12(b), "Interest Expense," as such term is used in the calculation of EBITDA, means, with reference to any period, the sum of all cash interest charges net of interest income (including paid-in-kind interest, imputed interest charges with respect to Capitalized Lease Obligations and all amortization of debt discount and expense, but excluding dividends) of the Company and its Subsidiaries for such period determined on a consolidated basis in accordance with GAAP. Interest Expense shall give effect to any net payments made or received by the Company or any of its Subsidiaries with respect to any Hedge Agreements in effect during the applicable period (or any portion thereof). Additionally, solely for the purposes of this Section 7.12(b) with respect to the period from and including January 1, 2005 to and including December 31, 2005, any and all accounting charges to the Company resulting from the Company's agreement entered into in January 2005 with the investors who participated in the July 2004 financing shall be added back to the calculation of EBITDA. (4) Section 7.13 of the Purchase Agreement is hereby amended and restated in its entirety to read as follows: "7.13 Capital Expenditures. The Company shall not, nor shall it permit any of its Subsidiaries to, incur Capital Expenditures in the aggregate in excess of:

------------------------------------------------------------------------------------------------------- For Each Quarter During the Periods Below From and Capital Expenditures shall not be Including To and Including more than ------------------------------------------------------------------------------------------------------- January 1, 2005 March 31, 2005 $1.50 million April 1, 2005 June 30, 2005 $1.25 million July 1, 2005 December 31, 2006 $0.75 million Each Quarter Thereafter $1.00 million -------------------------------------------------------------------------------------------------------

Section 3. Amendment to the Notes. Effective as of the date of this Amendment, the senior notes in the aggregate original principal amount of $50,000,000 issued pursuant to the Purchase Agreement (collectively, the "Notes") shall be amended so that all references to the date "May 30, 2007" contained in the Notes are replaced with the date "May 29, 2008." Promptly following the surrender of the original Notes for cancellation, CSI shall deliver amended and restated Notes reflecting the foregoing amendment. Section 4. Amendment to the Warrants. Effective as of the date of this Amendment: (1) The Warrant Price (as defined in the warrants set forth on Exhibit A hereto (collectively, the "Warrants")) shall be amended so that the Warrant Price contained therein shall be equal to $2.00 per share, subject to further adjustments after the date hereof pursuant to Section 4 of the Warrants. (2) The number of Warrant Shares (as defined in the Warrants) subject to the Warrants shall be amended, to the extent required, to equal the amount specified by each Purchaser's name under the heading "As Adjusted" on Exhibit A hereto. (3) The last paragraph of Section 4(f)(i) of the Warrants shall be amended and restated in its entirety to read as follows: "Notwithstanding the foregoing, there shall be no adjustment to the Warrant Price or the number of shares of Common Stock obtainable upon the exercise of this Warrant with respect to the issuance or the granting of options to directors, officers or employees of the Company or the exercise thereof pursuant to stock option plans or agreements approved by the Board of Directors of the Company, but only to the extent that the aggregate number of shares of Common Stock covered by such option plans and agreements do not exceed 15,000,000 shares in the aggregate (subject to adjustment to reflect any stock split, stock dividend, reclassification, recapitalization or other transaction having a similar effect)." Promptly following the surrender of the original Warrants for cancellation, CSI shall deliver to each Purchaser one or more amended and restated Warrants reflecting the foregoing amendments. The Parties agree that the number of Warrant Shares subject to the Warrants under the heading "As Adjusted" on Exhibit A hereto shall not be subject to any future additional anti-dilution adjustments under Section 4(f) of the Warrants. Section 5. Limited Waiver. (1) Purchase Agreement. The Purchasers hereby waive any Event of Default arising solely as a result of CSI's failure to comply with the covenants contained in the following Sections of the Purchase Agreement: (i) Sections 6.1 and 6.2 with respect to certain deliveries by CSI prior to the date hereof, (ii) Section 7.4 with respect to the sale of the MDT trainer business and the CPR Prompt product line during 2004, (iii) Sections 7.5 and 7.6 with respect to the cancellation of Ray Cohen's promissory note in the aggregate amount of $588.684.93 in exchange for the surrender and cancellation of 277,682 shares of CSI's common stock, (iv) Section 7.6 with respect to CSI's July 2004 PIPE financing, (v) Section 7.12 of the Agreement with respect to CSI's fiscal quarter and year ended December 31, 2004, and (vi) Sections 6.6 and 6.13 with respect to subparagraphs (i) through (v) above. (2) Warrants. Except as otherwise set forth in this Amendment, the Purchasers hereby waive any additional anti-dilution adjustments to the Warrant Shares or the Warrant Price contained in the Warrants arising prior to the date of this Amendment. Section 6. Miscellaneous. (1) Effect; Ratification. The amendments and waivers set forth herein are effective solely for the purposes set forth herein and shall be limited precisely as written, and shall not be deemed to (a) be a consent to any amendment, waiver or modification of any other term or condition of the Purchase Agreement or of any other instrument or agreement referred to therein, except as set forth herein, or (b) prejudice any right or remedy that the Purchasers may now have or may have in the future under or in connection with the Purchase Agreement, as amended hereby, or any other instrument or agreement referred to therein. This Amendment shall be construed in connection with and as part of the Purchase Agreement and all terms, conditions, representations, warranties, covenants and agreements set forth in the Purchase Agreement and each other instrument or agreement referred to therein, except as herein amended, are hereby ratified and confirmed and shall remain in full force and effect. (2) Counterparts. This Amendment may be executed in any number of counterparts, each such counterpart constituting an original and all of which when taken together shall constitute one and the same instrument. [Signatures on next page] IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered as of the date first above written. CSI: CARDIAC SCIENCE, INC. By: /s/ Roderick de Greef ------------------------------------ Name: Roderick de Greef Title: Chief Financial Officer PURCHASERS: PERSEUS ACQUISITION/RECAPITALIZATION FUND, L.L.C. By: Perseus Acquisition/Recapitalization Management, L.L.C., its Manager By: /s/ Ray E. Newton, III ------------------------------------ Name: Ray E. Newton, III Title: PERSEUS MARKET OPPORTUNITY FUND, L.P. By: Perseus Market Opportunity Partners, L.P., its General Partner By: Perseus Market Opportunity Partners GP,L.L.C., its General Partner By: /s/ Ray E. Newton, III ------------------------------------ Name: Ray E. Newton, III Title: CARDIAC SCIENCE CO-INVESTMENT. L.P. By: Perseus Acquisition/Recapitalization Management, L.L.C., its General Partner By: /s/ Ray E. Newton, III ------------------------------------ Name: Ray E. Newton, III Title: EXHIBIT A --------- WARRANTS

------------------------------------------------------------------------------------------------ NAME WARRANT NO. AS ADJUSTED ------------------------------------------------------------------------------------------------ Perseus Acquisition/Recapitalization Fund, L.L.C. W-1 4,357,657 Perseus Market Opportunity Fund, L.P. W-2 4,055,847 Cardiac Science Co-Investment, L.P. W-3 1,586,496 Perseus Acquisition/Recapitalization Fund, L.L.C. W-4 1,318,911 Perseus Market Opportunity Fund, L.P. W-5 1,227,564 Cardiac Science Co-Investment, L.P. W-6 480,177 Perseus Acquisition/Recapitalization Fund, L.L.C. W-7 179,526 Perseus Market Opportunity Fund, L.P. W-8 167,086 Cardiac Science Co-Investment, L.P. W-9 65,335 Total: 13,438,599 ------------------------------------------------------------------------------------------------

EX-3 4 ex3sc13da2-cardiac.txt EXHIBIT 3 EXHIBIT 3 --------- AGREEMENT This AGREEMENT (the "Agreement") shall be effective as of January 28, 2005 (the "Effective Date"), and is entered into by and among Cardiac Science, Inc., a Delaware corporation ("DFIB"), Perseus Market Opportunity Fund, L.P., Winterset Master Fund, L.P., Mill River Master Fund, L.P., Massachusetts Mutual Life Insurance Company and Walter Villiger (collectively, the "Investors"). Collectively, DFIB and the Investors may be referred to as the "Parties" herein. RECITALS WHEREAS, pursuant to the Purchase Agreement, dated July 20, 2004, by and among DFIB and the Investors (the "Purchase Agreement"), DFIB issued and sold to the Investors an aggregate of 5,219,409 shares of DFIB common stock (the "Shares") and warrants to purchase up to an additional aggregate of 2,087,763 shares of DFIB common stock (as set forth on Exhibit A, the "Warrants," and collectively with the Shares, the "Securities"); WHEREAS, in order to induce each of the Investors to enter into the Purchase Agreement and to consummate the transactions contemplated thereby, DFIB agreed to provide such Investors with certain registration rights as set forth in that certain Amended and Restated Registration Rights Agreement dated July 20, 2004, by and among DFIB and the investors signatory thereto (the "Rights Agreement"); WHEREAS, Section 6.2 of the Rights Agreement obligates DFIB to file a shelf registration statement with the Securities and Exchange Commission within sixty (60) days after the date of the Rights Agreement to register the Securities (the "Shelf Registration Statement"); WHEREAS, DFIB has not yet filed such Shelf Registration Statement as of the date hereof; and WHEREAS, the Parties wish to resolve all matters and claims between them arising from or related to DFIB's delay in filing such Shelf Registration Statement and the issuance of the Securities. AGREEMENT NOW, THEREFORE BE IT RESOLVED, in consideration of the foregoing recitals, and the mutual promises, agreement and understandings contained herein, the Parties hereby agree as follows: 1. Issuance of Additional Shares of DFIB Common Stock. On the Effective Date, DFIB shall issue an aggregate of 476,637 additional shares of DFIB common stock (the "Additional Shares") to certain of the Investors in the amounts set forth on Exhibit B attached to this Agreement. 2. Cash Payment. On the Effective Date, DFIB shall pay Perseus Market Opportunity Fund, L.P. an aggregate of $556,184 by wire transfer of immediately available funds to an account designated by such entity (the "Cash Payment"). 3. Amendment to Warrants. Effective as of the date of the Effective Date of this Agreement: (a) The Warrant Price (as defined in the Warrants) shall be amended so that the Warrant Price contained therein shall be equal to $2.50 per share, subject to further adjustments after the date hereof pursuant to Section 4 of the Warrants. (b) The last paragraph of Section 4(f)(i) of the Warrants shall be amended and restated in its entirety to read as follows: "Notwithstanding the foregoing, there shall be no adjustment to the Warrant Price or the number of shares of Common Stock obtainable upon the exercise of this Warrant with respect to the issuance or the granting of options to directors, officers or employees of the Company or the exercise thereof pursuant to stock option plans or agreements approved by the Board of Directors of the Company, but only to the extent that the aggregate number of shares of Common Stock covered by such option plans and agreements do not exceed 15,000,000 shares in the aggregate (subject to adjustment to reflect any stock split, stock dividend, reclassification, recapitalization or other transaction having a similar effect)." Promptly following the surrender of the original Warrants for cancellation, DFIB shall deliver to each Investor an amended and restated Warrant reflecting the foregoing amendments. 4. Limited Waiver. Except as otherwise set forth in this Agreement, the Investors hereby waive any additional anti-dilution adjustments to the Warrant Shares or the Warrant Price contained in the Warrants arising on or prior to the date of this Amendment. 5. Filing of Shelf Registration Statement. Concurrently with the execution and delivery of this Agreement, DFIB shall file, in accordance with Section 6.2 of the Rights Agreement, the Shelf Registration Statement. The Parties acknowledge and agree that the definition of "Registrable Securities," "Common Stock" and all references to "Common Stock issued to the Investors pursuant to the 2004 Purchase Agreement" in the Rights Agreement shall be deemed to include the Additional Shares. 6. Release. Except for the rights or obligations as have been created under this Agreement, the Parties hereby fully, completely, finally and forever release, relinquish and discharge each other and each of their respective parent companies, predecessor companies, subsidiaries, affiliated companies, related entities, agents, consultants, present and former employees, present and former officers and directors, attorneys, insurers, successors and assigns (which said aforementioned released parties shall hereinafter be referred to collectively as "Releasees"), of and from any and all claims, actions, causes of action, demands, rights, debts, agreements, promises, liabilities, damages, accountings, costs and expenses, whether known or unknown, suspected or unsuspected, fixed or contingent, of every nature whatsoever, which relate to the delay in filing the Shelf Registration Statement prior to the date hereof, and the issuance of the Securities. Notwithstanding the foregoing, the matters released hereunder shall exclude damages arising as a result of any remedy required by Nasdaq in the event that Nasdaq determines that stockholder approval was necessary for the consummation of the transactions contemplated by the Purchase Agreement (such exclusion shall not include any damages arising out of any alleged breaches of the Purchase Agreement to the extent that such breaches would result in damages in excess of any remedy required by Nasdaq). All matters released hereunder shall sometimes hereinafter be referred to as the "Released Claims." IT IS THE INTENTION OF THE PARTIES HERETO THAT THIS AGREEMENT, TOGETHER WITH ITS EXHIBIT, SHALL BE EFFECTIVE AS A FULL AND FINAL ACCORD AND SATISFACTION AND RELEASE OF EACH AND EVERY RELEASED CLAIM. IN FURTHERANCE OF THIS INTENTION, THE PARTIES HERETO, AND EACH OF THEM, ACKNOWLEDGE THAT THEY HAVE BEEN ADVISED BY LEGAL COUNSEL AND ARE FAMILIAR WITH THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH PROVIDES AS FOLLOWS: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH, IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR." THE PARTIES HERETO, BEING AWARE OF SAID CODE SECTION, HEREBY EXPRESSLY WAIVE ANY RIGHTS THEY MAY HAVE THEREUNDER, AS WELL AS UNDER ANY OTHER STATUTES OR COMMON LAW DOCTRINES OF SIMILAR EFFECT. The Parties hereto, and each of them, acknowledge that they may hereafter discover facts in addition to, or different from, those which they now know or believe to be true with respect to the subject matter of this Agreement and the Released Claims, but that notwithstanding the foregoing, it is their intention that this release operate to fully, finally, completely and forever settle and release each Releasee from each, every and all of the Released Claims, and that in furtherance of such intention, the releases herein given shall be and remain in effect as full and complete releases, notwithstanding the discovery or existence of any such additional or different facts. The Parties hereto warrant and represent to each other that as to any Released Claim, the Party releasing same is the sole and absolute owner thereof, free and clear of all other rights and interests therein and has the right, ability and sole power to release such Released Claims, and the releasing Party agrees to hold harmless and indemnify the released Parties from any liability or claim asserted against a released Party which is based on a claim which the releasing Party purported to release hereunder. 7. No Admission of Liability. The Parties hereby acknowledge and agree that this Agreement is entered into as a compromise settlement which is not in any respect or for any purpose to be deemed or construed as an admission or concession of any liability whatsoever on the part of any of the Parties hereto. 8. Representations, Warranties and Covenants. (a) Representations, Warranties and Covenants of the Investors. Each Investor, severally and not jointly, hereby makes the representations, warranties and covenants with respect to the Additional Shares and this Agreement as previously made with respect to the Securities and the Purchase Agreement, respectively, in Section 5 of the Purchase Agreement. (b) Representations, Warranties and Covenants of DFIB. DFIB hereby makes the representations and warranties with respect to the Additional Shares and this Agreement as previously made with respect to the Securities and the Purchase Agreement, respectively, in Sections 4.3 and 4.4 of the Purchase Agreement. 9. Confidentiality. The Parties agree to keep the terms of this Agreement strictly and completely confidential, and that they will not communicate or otherwise disclose to any past, present or future employee of the Parties, or to a member of the general public, the terms, amount, or fact of this Agreement, including drafts created in negotiating the same, or the events and transactions which are the subject matter of the Agreement, except as may be required to be disclosed pursuant to law or government regulation (including, without limitation, the requirements of the Securities and Exchange Commission) or compulsory process; provided, however, that the Parties may disclose this Agreement to their officers, directors, legal counsel or financial advisors with the instruction that this Agreement and its terms be kept confidential, or to others who are bound by a confidentiality agreement. 10. Miscellaneous. (a) Governing Law. This Agreement and its Exhibit shall be governed by and construed in accordance with the laws of Delaware without regard to conflict of laws provisions. (b) Entire Agreement. This Agreement (to include its Exhibit) contains the entire agreement and understanding between the Parties hereto and supersedes any prior or contemporaneous written or oral agreements, representations, discussions, proposals, understandings and the like respecting the subject matter hereof. (c) Headings and Interpretation. The headings and captions of this Agreement are provided for convenience only and are intended to have no effect in construing or interpreting this Agreement. In the event that any language in this Agreement is held to be uncertain, any such language shall not be interpreted against any Party to the Agreement based on who drafted such language. Each of the Parties represents that it has executed this Agreement voluntarily and with full advice of independent counsel of its choosing prior to the execution of this Agreement and its Exhibit. (d) Authority. Each Party represents and warrants that it has taken all actions and obtained all authorizations, consents and approvals as are conditions precedent to its authority to execute this Agreement and its Exhibits as applicable, and that this Agreement, to include its Exhibit, is a binding agreement, enforceable against it in accordance with its terms. (e) Successors and Assigns. This Agreement (to include any Exhibit) binds the successors and permitted assigns of the respective Parties. DFIB may not sell, assign or transfer ("Transfer") this Agreement without the consent of the Investors holding a majority of the Additional Shares then-outstanding; provided, however, that no consent shall be required in connection with a merger, consolidation or sale of substantially all of the Company's assets so long as the successor or transferee agrees in writing to be bound by the provisions of this Agreement. The Investors may not Transfer this Agreement without the consent of DFIB, except that the Investors may Transfer this Agreement to any Affiliate (as defined in the Purchase Agreement) of any Investor (including affiliated funds or partners thereof) provided that the transferee agrees in writing to be bound by the provisions of this Agreement. (f) Further Assurances. The Parties will cooperate with each other as reasonably requested to effectuate the purposes and provisions of this Agreement and its Exhibit, including but not limited to preparing, executing and delivering other documents. (g) Waiver and Amendment. No breach hereof can be waived unless done in writing and signed by the Party to be charged. Waiver of any one breach shall not be deemed to be a waiver of any other breach of the same or any other provision hereof. This Agreement may be amended only by a writing signed by the Parties. (h) Notices. All notices, requests, demands or other communications under this Agreement shall be in writing and shall be deemed to have been duly given on the date of service if served personally on the Party to whom notice is to be given, on the first business day after sending any such notice, request, demand or other communication by facsimile, or on the fifth business day after mailing if mailed to the Party to whom notice is to be given by first-class mail, registered or certified, postage prepaid and properly addressed as set forth on the signature page hereto (or to such different address as provided by a Party to the other Parties by written notice). (i) Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. Signatures obtained and exchanged by facsimile will be binding to the same extent as original signatures. (j) Severability. The Parties agree that the enforceability or invalidity of any provision or provisions of this Agreement or its Exhibit shall not render any other provision or provisions herein or therein contained unenforceable or invalid. [Signature Page Follows] In WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first written above. DFIB: CARDIAC SCIENCE, INC. By: /s/ Roderick de Greef ------------------------------ Name: Roderick de Greef Title: Chief Financial Officer 16931 Millikan Avenue Irvine, California 92606 Telecopier No.: 949-951-7315 Attention: Chief Financial Officer INVESTORS: PERSEUS MARKET OPPORTUNITY FUND, L.P. By: /s/ Ray E. Newton, III ------------------------------ Name: Ray E. Newton, III Title: c/o Perseus, L.L.C. 888 Seventh Avenue, 29th Floor New York, New York 10106 Telecopier No.: 212-651-6399 Attention: Ray E. Newton, III WINTERSET MASTER FUND, L.P. By: Babson Capital Management LLC, as Investment Manager By: /s/ Audrey Meyer Lampert -------------------------------- c/o Babson Capital Management LLC 1500 Main Street, Suite 2800 Springfield, MA 01115 Telecopier No.: Attention: Audrey Meyer Lampert Managing Director MILL RIVER MASTER FUND, L.P. By: Babson Capital Management LLC, as Investment Manager By: /s/ Audrey Meyer Lampert -------------------------------- c/o Babson Capital Management LLC 1500 Main Street, Suite 2800 Springfield, MA 01115 Telecopier No.: Attention: Audrey Meyer Lampert Managing Director MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY By: Babson Capital Management LLC, as Investment Manager By: /s/ Audrey Meyer Lampert -------------------------------- c/o Babson Capital Management LLC 1500 Main Street, Suite 2800 Springfield, MA 01115 Telecopier No.: Attention: Audrey Meyer Lampert Managing Director /s/ Walter Villiger ------------------------------------ Walter Villiger ____________________________________ ____________________________________ ____________________________________ Telecopier No.:_____________________ EXHIBIT A WARRANTS

-------------------------------------------------------------------------------------------------------------- NAME WARRANT NO. WARRANT SHARES -------------------------------------------------------------------------------------------------------------- Perseus Market Opportunity Fund, L.P. W-10 843,882 Winterset Master Fund, L.P. W-11 80,000 Mill River Master Fund, L.P. W-12 60,000 Massachusetts Mutual Life Insurance Company W-13 703,881 Walter Villiger W-14 400,000 Total: 2,087,763 --------------------------------------------------------------------------------------------------------------

EXHIBIT B COMMON STOCK ISSUANCE

----------------------------------------------------------------------------------------------------------- Investor Name Number of Shares of DFIB Common Stock ----------------------------------------------------------------------------------------------------------- Winterset Master Fund, L.P. 30,655 Mill River Master Fund, L.P. 22,991 Massachusetts Mutual Life Insurance Company 269,717 Walter Villiger 153,274 Total: 476,637 -----------------------------------------------------------------------------------------------------------