Exhibit 10.2
LOAN AND SECURITIES PURCHASE AGREEMENT
By and Between
LIFE CRITICAL CARE CORPORATION
and
MORGENTHAU BRIDGE LOAN LLC
August 12, 1995
LOAN AND SECURITIES PURCHASE AGREEMENT
THIS LOAN AND SECURITIES PURCHASE AGREEMENT (this "Agreement")
is dated as of August 12, 1995 and is made by and between LIFE CRITICAL CARE
CORPORATION, a Delaware corporation (the "Company"), and MORGENTHAU BRIDGE LOAN
LLC, a Maryland limited liability company (the "Purchaser").
RECITALS
WHEREAS, the Company intends to acquire (the "Acquisitions")
certain assets or all of the outstanding capital stock of certain companies in
the home medical equipment business pursuant to the terms of anticipated Asset
Purchase Agreements and Stock Purchase Agreements by and between the Company and
such companies or their stockholders, as applicable;
WHEREAS, the Company desires to borrow from the Purchaser and
the Purchaser desires to lend to the Company up to the aggregate principal
amount of $750,000 pursuant to the terms and limitations set forth in this
Agreement;
WHEREAS, a condition precedent to the Loan, as hereinafter
defined, which the Company acknowledges will provide a direct benefit to it, is
the issuance by the Company to the Purchaser of warrants (the "Warrants") to
purchase 107,000 shares (the "Warrants Shares") of the voting common stock of
the Company (the "Stock") as set forth in Exhibit B hereto, which Exhibit B is
hereby made a part hereof in consideration of the exercise price (the "Exercise
Price") set forth in Exhibit B, with the form of Warrant also being included as
part of such Exhibit B;
WHEREAS, the fair market value of the allocation of the
purchase price for the investment units comprised of the Warrants and the Loan
is as follows: the fair market value of the Warrants is $-0- (zero dollars),
subject to the Exercise Price of $0.10 per Warrant Share, and the fair market
value of the Loan is the principal amount advanced by the Purchaser to the
Company hereunder; and
WHEREAS, the Purchaser is hereby irrevocably authorized and
empowered by the Company to pay the Exercise Price to itself to be applied to
the payment of any outstanding amount of principal and interest due and owing
under the Loan (as hereinafter defined) at such time or times and in such order
and manner of application as it may from time to time, in its sole discretion,
determine. The aforementioned payment of the Exercise price shall be deemed to
be full payment thereof to the same extent as if the same monies were directly
received by the Company.
NOW, THEREFORE, for consideration, the adequacy and
sufficiency of which is hereby acknowledged by the parties hereto, and in
consideration of the premises and the mutual covenants herein contained, the
parties hereby agree as follows:
ARTICLE I
ISSUANCE OF NOTES AND WARRANTS
SECTION 1.01 Issuance of Notes and Warrants.
(a) Subject to the terms and conditions set forth herein and
in the Note, as hereinafter defined, the Company shall borrow from the Purchaser
and the Purchaser shall lend to the Company, on the Closing Date (as hereinafter
defined), the aggregate principal amount (the "Principal Amount") of up to
$750,000 to be evidenced by the issuance by the Company to the Purchaser of a
cash advances subordinated promissory note (a "Note") in the form of Exhibit A
hereto (the "Loan"). On the Closing Date and in consideration for the Loan, the
Company shall become obligated to issue to the Purchaser the Warrants, in the
form of Exhibit B hereto.
(b) Payments for the Note will be made by the Purchaser by
check or by wire transfers with the amount advanced to be recorded, upon each
such advance, on the Note, up to an amount equal to the Principal Amount. The
Company's obligation to issue to the Purchaser the Warrants shall arise upon
each advance under the Note.
(c) Warrant Exercise Proceeds. The Purchaser is hereby
irrevocably authorized and empowered by the Company to pay the Exercise Price to
itself to be applied to the payment of any outstanding amount of principal and
interest due and owing under the Loan (as hereinafter defined) at such time or
times and in such order and manner of application as it may from time to time,
in its sole discretion, determine. The aforementioned payment of the Exercise
Price shall be deemed to be full payment thereof to the same extent as if the
same monies were directly received by the Company.
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SECTION 1.02 Closing.
(a) The closing (the "Closing") of the Loan and the issuance
of the Note shall take place at the offices of The Morgenthau Group, Inc., ▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ at 10:00 a.m., Ft.
Lauderdale time, as of the date of this Agreement (such date and time of closing
being herein called the "Closing Date").
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Purchaser as
follows:
SECTION 2.01 Organization, Qualifications and Corporate Power.
The Company is a corporation duly incorporated and organized, validly existing
and in good standing under the laws of the State of Delaware and is duly
licensed or qualified as a foreign corporation in each other jurisdiction, if
any, in which the nature of business transacted by it or the character of the
properties owned or leased by it makes such licensing or qualification
necessary, except where the failure to so qualify would not have a material
adverse effect (a "Material Adverse Effect") upon the financial condition or
operations of the Company. The Company has full power and authority (corporate
and other) to own and hold its properties and to conduct its businesses as
currently conducted. The Company has the corporate power and authority to
execute, deliver and perform this Agreement. The Company has the corporate power
and authority to issue and deliver the Note and the Warrants, and to execute,
deliver and perform any other document required pursuant to this Agreement.
SECTION 2.02 Authorization of Agreement, Etc.
(a) The execution, delivery and performance by the Company of
this Agreement, and the issuance and delivery of the Note and of the Warrants by
the Company, have been duly authorized by all requisite corporate action and
will not violate any provision of law, any order of any court or other agency of
government, the charter or by-laws of the Company, or any provision of any
indenture, agreement or other instrument to which the Company is a party or by
which the Company or any of its properties or assets are bound or affected, or
conflict with, result in a breach of or constitute (with due notice or lapse of
time or both) a default under any such indenture, agreement or other instrument,
or result in the creation or imposition of any lien, charge or encumbrance of
any nature whatsoever upon any of the properties or assets of the company other
than as permitted and contemplated by this Agreement.
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(b) The Note having been duly authorized and, when issued and
delivered in accordance with this Agreement, will be a legal, valid and binding
obligation of the Company, enforceable in accordance with its terms, subject to
general equity principles and to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws from time to time in effect
affecting the enforcement of creditors' rights generally. The Warrants and the
Warrant Shares have been duly authorized and the Warrant Shares, upon the
issuance thereof upon the exercise of the Warrants, will be validly issued,
fully paid and nonassessable shares of the Stock of the Company. The execution,
issuance and delivery of the Note, the Warrants and the Warrant Shares are not,
except as disclosed to the Purchaser in writing, subject to any preemptive
rights of shareholders of the Company, or to any right of first refusal or other
similar right in favor of any person.
SECTION 2.03 Validity. This Agreement has been duly executed
and delivered by the Company, and (assuming the due authorization, execution and
delivery by the Purchaser) constitutes the legal, valid and binding obligations
of the Company enforceable in accordance with its terms, subject to general
equity principles and to applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws from time to time in effect affecting the
enforcement of creditors' rights generally. Each other document executed in
connection with this Agreement or the transactions contemplated hereby by the
Company, including, but not limited to, the Note and the Warrants (collectively,
the "Loan Documents") constitute the valid, legally binding obligation of the
Company and are enforceable in accordance with their respective terms, subject
to general equity principles and to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws from time to time in effect
affecting the enforcement of creditors' rights generally.
SECTION 2.04 Governmental Approvals. No registration or filing
with, or consent or approval of, or other action by, any federal, state or other
governmental agency or instrumentality is or will be necessary for the valid
execution, delivery and performance of this Agreement or the issuance, sale and
delivery of the Note or the Warrants.
SECTION 2.05 Offering of Warrants. Neither the Company nor, to
the knowledge of the Company, any person or entity authorized or employed by the
Company as agent, broker, dealer or otherwise in connection with the offering or
sale of the Warrants has offered the Warrants for sale to, or solicited any
offers to buy the Warrants from, or otherwise approached or negotiated with
respect thereto with, any person or persons other than the Purchaser and certain
other purchasers of similar notes and warrants under circumstances that have
involved the use of any form of general advertising or solicitation as such
terms are used in Regulation D promulgated under the Securities Act of 1933, as
amended (the "Securities Act"), and neither the Company nor, to the knowledge of
the Company, any person acting on its behalf has
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taken any action (including, without limitation, any offer, issuance or sale
of any security of the Company, whether to a subsequent investor or otherwise,
under circumstances which might require the integration of such security with
the offering of the Warrants under the Securities Act or the rules and
regulations of the Securities and Exchange Commission [the "Commission"]
thereunder) in a manner which would make the exemptions afforded by the
Securities Act unavailable for the offering, issuance or sale of the Warrants.
SECTION 2.06 Compliance With Law. Except as disclosed to the
Purchaser in writing, the Company is not in default under any order of any
court, governmental authority, arbitration board or tribunal to which it is
subject, or in violation of any laws, ordinances, governmental rules or
regulations, the violation of which would have a Material Adverse Effect.
SECTION 2.07 Litigation. Except as disclosed and described to
the reasonable satisfaction of the Purchaser, there are no proceedings against
the Company, its officers or directors pending or, so far as is known by the
Company, threatened before any court or administrative agency which, if
adversely decided, would have a Material Adverse Effect.
SECTION 2.08 No Conflicting Agreements. There are no
provisions of the Company's charter and by-laws and no provisions of any
existing mortgage, deed of trust, indenture, lease, or other material agreement
binding the Company or affecting its properties which would conflict with or in
any way prevent the execution, delivery, or carrying out of terms of this
Agreement, the Note, the Warrants or the other Loan Documents.
SECTION 2.09 Financial Condition. The Company has delivered to
the Purchaser copies of its most recent unaudited financial statements. Except
as disclosed to the Purchaser in writing, there has been no material adverse
change in the financial condition of the Company or the results of the
operations thereof since the date of such financial statement as stated above.
SECTION 2.10 Information. All information contained in any
financial statement, application, schedule, report, certificate, loan agreement,
equity sharing agreement, or any other document provided by the Company or by
any other officer, director or shareholder in connection with the issuance of
the Note and the Warrants or with any of the Loan Documents is in all respects
true and accurate, and the Company or such other person has not omitted to state
any material fact or any fact necessary to make such information not misleading.
SECTION 2.11 Taxes. All taxes imposed upon the Company and its
properties, operations, and income (including payroll taxes) are paid so as to
be current.
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SECTION 2.12 Employee Benefit Plans. Each employee benefit
plan, agreement, arrangement or understanding maintained for the benefit of the
Company's current or former employees (a "Plan") is in full force and effect in
accordance with its terms and complies in all material respects with all
applicable laws. The Company is not in default of any of its respective material
obligations under any Plan.
SECTION 2.13 Intellectual Property. The Company owns or has
rights to all patents, trademarks, copyrights, trade secrets or other
intellectual property and technology (the "Intellectual Property"), used or held
for use in connection with its businesses available for such use and in the
possession or subject to the control of the Company and/or necessary to conduct
its businesses as now conducted. The Company has not granted any rights in any
such Intellectual Property to any other person. The present operations of the
Company do not infringe on any Intellectual Property owned by any other party.
SECTION 2.14 Past Activities. During the past ten (10) years,
except as previously disclosed to the Purchaser in writing, none of the
Company's current directors or officers have been arrested or convicted of any
material crime, nor have any of them been the subject of a voluntary or
involuntary bankruptcy proceeding or been an officer or director of a company
which has been the subject of a voluntary or involuntary bankruptcy proceeding.
SECTION 2.15 Brokerage Fee. The Company has not dealt with any
broker, finder, commission agent or other party in connection with the
transactions contemplated by this Agreement, and the Company is under no
obligation to pay any broker's fee or commission in connection with such
transactions to any person.
SECTION 2.16 Leases. Upon the request of the Purchaser, the
Company shall provide to the Purchaser copies of every material lease of real or
personal property to which the Company is a party and which are in effect at the
time of the request.
SECTION 2.17 Subsidiaries and Affiliates. The Company has no
subsidiaries or affiliates which are not a party to this Agreement.
SECTION 2.18 Other Agreements. The Company has not entered
into any written or oral "side agreements" which amend or modify any other
agreement entered into by the Company, and none of the officers and directors of
the Company have agreed to take any action beyond what is required in any other
agreement entered into by the Company which have a value or require the Company
to pay an amount in excess of $25,000.
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ARTICLE III
COVENANTS
Until the later of payment in full of the Note or the exercise
or expiration of the Warrants:
SECTION 3.01 Financial Statements. The Company shall provide
to the Purchaser within thirty (30) days of the end of each accounting quarter,
quarterly balance sheets, source statements and statements of use of funds,
prepared in accordance with generally accepted accounting principles,
consistently applied.
SECTION 3.02 Certificate of No Default. The Company shall
provide the Purchaser with a quarterly certificate of the President of the
Company stating that no default has occurred during the immediately concluded
calendar quarter under this Agreement or under any of the other Loan documents,
or describing the nature of any default hereunder or thereunder.
SECTION 3.03 Annual Audit. The Company shall provide the
Purchaser with an annual independent certified audit of the Company within
ninety (90) days after the fiscal year end of the Company from an accounting
firm acceptable to the Purchaser, provided that the accounting firm of Ernst &
Young, LLP shall be deemed acceptable.
SECTION 3.04 Governmental Filings. Within thirty (30) days
after filing, at the request of the Purchaser, the Company shall provide the
Purchaser with a copy of all material reports or other documents filed by the
Company with any governmental agencies, including without limitation, the
Internal Revenue Service and the Commission.
SECTION 3.05 Lawsuits. Within thirty (30) days after filing or
receipt, the Company shall provide the Purchaser with copies of all pleadings
filed in connection with any material suits or proceedings filed by or against
the Company in which the amount in controversy exceeds $50,000.
SECTION 3.06 Compliance With Laws. The Company will at all
times comply in all material respects with all applicable federal, state, and
local laws, rules, and regulations, and orders of any court or other
governmental authority having jurisdiction.
SECTION 3.07 Default Notices. Within ten (10) days after
receipt of any notification, the Company shall provide the Purchaser with a copy
of any notification received by the Company relating to any defaults by the
Company on any loans,
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leases, material contracts or other material agreements to which the Company is
a party.
SECTION 3.08 Insurance. The Company will (a) at all times
maintain with well-rated and responsible insurance companies such insurance as
is required by applicable laws and such other insurance in such amounts, of such
types, and against such risks, hazards, liabilities, casualties, and
contingencies as is customarily maintained by companies similarly situated
(including Federal flood insurance if the businesses of the Company are located
in a Federal Flood Area), (b) list the Purchaser on such policies as a loss
payee, to the extent of the Purchaser's interest in the Company, and (c) file
with the Purchaser annually a detailed list of the insurance then in effect and
stating the names of the insurance companies, the types, the amounts, and rates
of the insurance, dates of the expiration thereof and the properties and risks
covered thereby, and, within thirty (30) days after notice in writing from the
Purchaser, obtain such additional insurance as the Purchaser may reasonably
request, provided that the terms of such additional insurance (including the
premiums) are dictated by sound business judgment.
SECTION 3.09 Financing. Except for an initial public offering
by the Company and any secondary offering, the Company will notify the Purchaser
as to the proposed amount and terms of any third-party equity financing for the
Company at least thirty (30) days prior to offering participation in such
financing to any other entity. During such thirty (30) day period, the Company
will negotiate in good faith with the Purchaser as to the amount of, and the
terms of participation in such financing by the Purchaser. The Purchaser shall
have the first right to participate in all or any portion of such offering with
other similarly situated "purchasers" of notes and warrants.
SECTION 3.10 Maintain Existence. The Company will at all times
maintain in full force and effect its corporate existence, rights, privileges,
and franchises and qualify and remain qualified in all jurisdictions where
qualification is required.
ARTICLE IV
NEGATIVE COVENANTS
Until the later of payment in full of the Note or exercise or
expiration of the Warrants, the Company shall not, without the prior written
consent of the Purchaser:
SECTION 4.01 Dividends. Make any cash or other dividend
distributions to its shareholders except that the Company may pay dividends to
any holders of cumulative preferred stock, if any shall be issued.
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SECTION 4.02 Sales. Sell or otherwise dispose of any assets of
the Company which have an individual value in excess of $100,000 outside the
regular course of business.
SECTION 4.03 Capital Acquisitions. Other than the
Acquisitions, acquire any asset or other capital item having an individual value
in excess of $350,000.
SECTION 4.04 Related Party Transaction. Transact any business
or enter into any agreement with any member of the board of directors or an
officer of the Company, unless in an "arm's length" transaction negotiated by
each party.
SECTION 4.05 Reorganization. Merge or consolidate with another
corporation or entity or dissolve or otherwise liquidate, except as permitted by
this Agreement.
SECTION 4.06 Corporate Matters. Change the nature of its
business operations, or invest any funds in any concern or entity not strictly
related to its business.
SECTION 4.07 Sale of Stock. Issue or sell any of its stock,
options, convertible debt, or preferred stock, or redeem the same, issue or
grant any stock appreciation rights or other rights in or to stock, or issue or
grant any bonus, profit sharing or other similar arrangements, except as
permitted by this Agreement.
SECTION 4.08 Contracts. Enter into any agreements or leases
not in the normal course of its businesses which require annual payments in
excess of $100,000.
SECTION 4.09 Loans. Enter into any loan agreements or other
borrowing arrangements or increase borrowings under any currently existing
institutional debt which would require annual payments on such new arrangements
in excess of $100,000.
SECTION 4.10 Corporate Structure. Other than in connection
with an IPO, alter its corporate structure so that a change of control occurs,
establish or purchase any new subsidiary or invest more than $100,000 in any one
of its affiliates.
SECTION 4.11 Stock Redemption. Redeem in any one calendar year
shares of their respective stock which, at the time of redemption, would have a
fair market value of greater than $100,000.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
SECTION 5.01 Authorization. The Purchaser has the power and
authority to execute and deliver this Agreement. All action on the part of the
Purchaser necessary for the authorization, execution, delivery and performance
of all obligations of the Purchaser under this Agreement have been taken. This
Agreement, when executed and delivered by the Purchaser (assuming the due
authorization, execution and delivery by the Company) shall constitute a legal,
valid and binding obligation of the Purchaser, enforceable against the Purchaser
in accordance with its terms, subject to general equity principles and to
applicable bankruptcy, insolvency, reorganization, moratorium and similar laws
from time to time in effect affecting the enforcement of creditors' rights
generally.
SECTION 5.02 Investment Representations. The Purchaser
represents and warrants to the Company:
(a) the Warrants (and if applicable, the Warrant Shares)
(collectively, the "Investor Interest") to be acquired by it pursuant to this
Agreement are being acquired for its own account and not with a view toward the
distribution or resale of the Investor Interest or any part thereof in any
transaction which would be in violation of the securities laws of the United
States of America or any State, without prejudice, however, to its rights at all
times to sell or otherwise dispose of all or any part of the Investor Interest
to an affiliate or any person pursuant to a registration statement under the
Securities Act and any comparable State act or under an exemption from such
registration available under the Securities Act and any comparable State act;
provided that such transfers to affiliates, when taken as a whole, will not be
integrated so as to invalidate the exemption from registration under the
Securities Act or any comparable state act pursuant to which the Investor
Interest is being issued by the Company. It has been advised that the Investor
Interest has not been registered under the Securities Act or the securities laws
of any State, on the grounds that no distribution or public offering of the
Investor Interest is presently contemplated by it.
(b)(i) it is an "accredited investor" as defined in Rule
501(a) promulgated under the Securities Act or (ii) by reason of its business
and financial experience, and the business and financial experience of those
persons retained by it to advise it with respect to the Investor Interest, it,
together with such advisors, has such knowledge, sophistication and experience
in business and financial matters so as to be capable of evaluating the merits
and risks of the prospective investment, and it is able to bear the economic
risk of such investment and, at the present time, is able to afford a complete
loss of such investment.
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(c) prior to making a decision to enter into this Agreement
and acquire the Investor Interest, it has been provided the opportunity to ask
questions of, and receive answers from the executive officers of the Company
concerning the Company, and to obtain from the Company any information requested
from the Company. On the basis of the foregoing, and on the representations of
the Company contained in this Agreement and the representations contained in the
other Loan Documents, it acknowledges that it possesses sufficient information
to understand the merits and risks associated with an investment in the Investor
Interest.
SECTION 5.03 Reliance on Information. The Purchaser
acknowledges that it has relied upon the information provided by the executive
officers of the Company and upon the representations of the Company contained
herein and the representations of such entity contained in the other Loan
Documents.
ARTICLE VI
CONDITIONS TO THE
OBLIGATIONS OF THE PURCHASER TO CLOSE
SECTION 6.01 Obligations of the Purchaser to Close. The
obligation of the Purchaser to purchase and pay the first advance for the Note
on the Closing Date is, at the Purchaser's sole option, subject to the
satisfaction, on or before such date, of the following conditions:
(a) Representations and Warranties to be True and Correct. The
representations and warranties contained herein shall be true and correct in all
material respects on and as of the Closing Date with the same effect as though
such representations and warranties had been made on and as of such date, and
the Company shall have certified to such effect to the Purchaser in writing.
(b) Performance. The Company shall have performed and complied
in all material respects with all material agreements and material conditions
contained herein required to be performed or complied with by it prior to or at
the Closing Date.
(c) All Proceedings to be Satisfactory. All corporate and
other proceedings to be taken by the Company in connection with the transactions
contemplated hereby and all documents incident thereto shall be reasonably
satisfactory in form and substance to the Purchaser and the Purchaser shall have
received all such counterpart originals or certified or other copies of such
documents as it may reasonably request.
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(d) Obligation of the Company to Execute and Deliver the
Warrants. The obligation of the Company to execute and deliver to the Purchaser
the Warrants shall become binding at the Closing, with the amount of the
Warrants to be determined by the actual amount of the Principal Amount advanced
under the Note.
(e) Issuance, Sale and Delivery of the Note. The full
issuance and sale by the Company and delivery to the Purchaser of the Note.
SECTION 6.02 Obligation of the Company to Close. The
obligation of the Company to issue, sell and deliver the Note and the Warrants
and to consummate the other transactions contemplated by the Loan Documents on
the Closing Date is, at the Company's option, subject to the satisfaction on or
before such date, of the following conditions:
(a) Payment. The Purchaser shall transfer to the Company
an aggregate amount, at one time or from time to time, up to the Principal
Amount as requested by the Company.
(b) Representations and Warranties to be True and Correct. The
representations and warranties contained herein with respect to the Purchaser
shall be true and correct in all material respects on and as of the Closing Date
with the same effect as though such representations and warranties had been made
on and as of such date, and the Purchaser shall have certified to such effect to
the Company, in writing.
ARTICLE VII
DEFAULT AND REMEDIES
SECTION 7.01 Events of Default. A default (an "Event of
Default") occurs if:
(a) The Company fails to make any payment of principal,
interest or other amounts required by the Note or any other obligation in any of
the Loan Documents which relate to a monetary payment within sixty (60) days of
when the same becomes due and payable;
(b) The Company fails to comply with or perform in any
material respect any of the covenants or obligations contained in this Agreement
or any other Loan Document, or there occurs a default or Event of Default under
any of the other Loan Documents, or under any other loan documents, and such
failure continues for sixty (60) days after written notice from the Purchaser to
the Company;
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(c) There shall be a declared default under any senior
indebtedness pursuant to its terms, which default extends beyond any applicable
period of grace or cure provided therein with respect thereto;
(d) The Company, pursuant to or within the meaning of any
bankruptcy law: (1) becomes insolvent, (2) fails generally to pay its debts as
they become due, (3) admits in writing its inability to pay debts generally as
they become due, (4) commences a voluntary case or proceeding, (5) consents to
the entry of a judgment, decree or order for relief against it in an involuntary
case or proceeding, (6) consents to the appointment of a custodian for it or for
all or substantially all of its properties, (7) consents to or acquiesces in the
institution of bankruptcy or insolvency against it, (8) applies for, consents to
or acquiesces in the appointment of or taking possession by a custodian of it or
for any part of its properties, (9) makes a general assignment for the benefit
of its creditors, or (10) adopts any board or committee resolution (or
otherwise) that authorizes action to approve any of the foregoing;
(e) The representations and warranties contained in this
Agreement prove to have been false or inaccurate in any material respect when
made and such failure continues for sixty (60) days after written notice from
the Purchaser.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01 Waiver of Stay, Extension or Usury Laws. The
Company covenants (to the extent that it may lawfully do so) that it will not at
any time insist upon, plead, or in any manner whatsoever claim or take the
benefit or advantage of, and will actively resist any attempts by any other
party on their behalf to insist upon, plead or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law or any usury law or
other law, which would prohibit or forgive the Company from making any payment
on the Note, or which may affect the covenants or the performance of this
Agreement or any agreement contemplated hereby; and (to the extent that it may
lawfully do so) the Company hereby expressly waives all benefits or advantages
of any such law and covenant that it will not hinder, delay or impede the
execution of any power herein granted to the Purchaser, but will suffer and
permit the execution of every such power as though no such law had been enacted.
SECTION 8.2 Survival of Agreements. All covenants and
agreements made herein shall survive the execution and delivery of this
Agreement and the issuance, sale and delivery of the Note and Warrants pursuant
hereto. All statements
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contained in any certificate or other instrument delivered by the Company
hereunder shall be deemed to constitute representations and warranties made by
the Company.
SECTION 8.3 Brokerage. No broker or finder has acted on behalf
of the Company in connection with this Agreement or the transactions
contemplated hereby, and the Purchaser has made no agreement to pay any agent,
finder, broker or any other representative, any fee or commission in the nature
of a finder's or originator's fee arising out of or in connection with the
subject matter of this Agreement. Each party hereto will indemnify and hold
harmless the other against and in respect of any claim for brokerage or other
commissions relative to this Agreement or to the transactions contemplated
hereby, based in any way on agreements, arrangements or understandings made or
claimed to have been made by such party with any third party.
SECTION 8.04 Recitals. The Recitals contained herein are
specifically incorporated herein by reference and made a part hereof.
SECTION 8.05 Notices. All notices, requests, consents and
other communications hereunder shall be in writing and shall be delivered
personally or mailed by first class registered or certified mail or by Federal
Express or other reliable courier service, postage prepaid, in either case
addressed as follows:
(a) if to the Company at
Life Critical Care Corporation
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn.: ▇▇▇ ▇. ▇▇▇▇▇▇, Vice President
with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P.
400 Court Towers
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
(b) if to the Purchaser at
Morgenthau Bridge Loan LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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or, in any such case, at such other address or addresses as shall have been
furnished in writing by such party to the others. Any such communication shall
be deemed given when delivered personally against written receipt or if mailed,
upon the earlier to occur of the date of actual receipt or 48-hours after the
date of mailing to the address indicated.
SECTION 8.06 Change, etc. Neither this Agreement nor any term,
condition, representation, warranty, covenant, or agreement hereof may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing by the party against whom such change, waiver, discharge or termination
is sought.
SECTION 8.07 Terms Binding. All of the terms, conditions,
stipulations, warranties, representations, and covenants of this Agreement shall
apply to and be binding upon, and shall inure to the benefit of, the parties
hereto and each of their respective heirs, personal representatives, successors
and assigns.
SECTION 8.08 Gender, etc. Whenever used herein, the singular
number shall include the plural, the plural the singular, and the use of the
masculine, feminine, or neuter gender shall include all genders.
SECTION 8.09 Headings. The section and subsection headings in
this Agreement are for convenience of reference only and shall not limit or
otherwise affect any of the terms hereof.
SECTION 8.10 Governing Law. This Agreement and all
transactions contemplated hereby, including without limitation, the Note and
Warrants, shall be deemed to be made under, and shall be governed by, the
internal laws of the State of Maryland, without regard to the conflicts of law
principles of such State.
SECTION 8.11 Consent to Jurisdiction; Service of Process. Each
party hereto agrees and consents that any action or proceeding arising out of or
brought to enforce the provisions of this Agreement may be brought in any
appropriate court in the State of Maryland or in any other court having
jurisdiction over the subject matter.
SECTION 8.12 Waiver of Jury Trial. The Purchaser and the
Company each waive all right to a trial by jury in any suit, action, or
proceeding under, arising out of, or relating to this Agreement, any of the Loan
Documents or any transactions contemplated thereby.
SECTION 8.13 Further Assurances and Corrective Instruments.
The parties hereto agree that they will, from time to time, execute and deliver,
or cause to be executed and delivered, such supplements hereto and such further
instruments as may
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reasonably be required for carrying out the intention of the parties to, or
facilitating the performance of, this Agreement.
SECTION 8.14 Illegality. If fulfillment of any provision
hereof or any transaction related hereto or to the other Loan Documents at the
time performance of such provisions shall be due shall involve transcending the
limit of validity prescribed by law, then, ipso facto, the obligation to be
fulfilled shall be reduced to the limit of such validity; and if any clause or
provision herein contained operates or would prospectively operate to invalidate
this Agreement in whole or in part, then such clause or provision only shall be
void, as though not herein contained, and the remainder of this Agreement shall
remain operative and in full force and effect; provided, however, that, if any
such provision pertains to the repayment of the Company's obligations hereunder,
the occurrence of any such invalidity shall constitute an Event of Default.
SECTION 8.15 Assignment. This Agreement and the other Loan
Documents may not be assigned, in whole or in part, by the Company without the
prior written consent of the Purchaser, which consent shall not be unreasonably
withheld or delayed.
SECTION 8.16 Entire Agreement. This Agreement and the other
Loan Documents constitute the entire agreement of the parties with respect to
the subject matter thereof; the Loan Documents may not be modified or amended
except in writing.
SECTION 8.17 Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
ARTICLE IX
REGISTRATION RIGHTS
SECTION 9.1. Demand Registration.
9.1.1. Request for Registration.
9.1.1.1. The Purchaser (herein referred
to as the "Warrantholder") may, by Notice to the Company, make a request for
registration under the Securities Act of all or part of its Registrable
Securities (i.e., capital stock of the Company owned by the Warrantholder) (a
"Demand Registration") at any time after June 30, 1997.
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9.1.1.2. As soon as practicable after
receipt of a request for a Demand Registration of the Company, the Company
will file a registration statement with respect to the Demand Registration.
The Company agrees to use its best efforts to cause the Demand Registration to
be declared effective no later than 120 days after such request and to keep such
Demand Registration continuously effective for sixty (60) days. The Company
further agrees, if necessary, to supplement or make amendments to the Demand
Registration, if required by the registration form used by the Company for such
Demand Registration, by the instructions applicable to each such registration
form by the Securities Act, or by the Warrantholder. The Company agrees to
furnish to the Warrantholder, copies of any such supplement or amendment
prior to its being used and/or filed with the Commission. The Company
will pay all Registration Expenses (as hereinafter defined) in connection
with each Demand Registration, whether or not it becomes effective. The
Company will make available to the Warrantholder, as soon as reasonably
practicable, a statement of operations which shall satisfy the provisions
of Section 11(a) of the Securities Act and Rule 158 thereunder.
9.1.1.3. In any registration under this
Section 9.1.1, the Company shall give written notice thereof to the
management stockholders of the Company (the "Management Stockholders") and
upon the written request of any of them given within 15 days after the giving
of such notice by the Company, the Company will notify the Warrantholder as
to the number of the securities requested to be included in such
registration statement, including securities for its own account, except as
set forth below.
9.1.1.4. If any registration pursuant
to this Section 9.1.1 shall be underwritten in whole or in part, the
Company shall allow the securities requested for inclusion by the
Warrantholder and/or the Management Stockholders to be included in the
underwriting on the same terms and conditions as the securities otherwise
being sold through the underwriters, unless the managing underwriter for the
distribution of the securities shall in its good faith judgment be of the
opinion that the sale of such securities would adversely affect either the
price or the marketing of the securities to be sold for the account of the
Company. The Company will effect the registration of only that number of
securities requested for inclusion by the Warrantholder and/or the
Management Stockholders which the managing underwriter believes, in its good
faith judgment, can be included in such registration without such adverse
effect. Any securities allowed to be included in the registration in excess of
those to be sold by the Company shall be apportioned to the Warrantholder and
the Management Stockholders pro rata among them according to the total number of
shares sought to be registered.
9.1.1.5. In the event the Warrantholder,
by Notice to the Company, makes a request for registration pursuant to this
Section 9.1, the Company need not effect a Demand Registration in response to
the Warrantholder's request if the
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Company can find a purchaser, upon terms and conditions acceptable to the
Warrantholder, for all of the Registrable Securities held by the Warrantholder;
provided that, if the purchase and sale of the Registrable Securities is not
completely within sixty (60) days from the date the request for Demand
Registration is received by the Company, the Company shall not be relieved of
its obligation to effect a Demand Registration.
9.1.2. Selection of Underwriters. If the
Warrantholder elects, the offering of Registrable Securities pursuant to
such Demand Registration shall be in the form of an underwritten offering. If
any Demand Registration is in the form of an underwritten offering, the
Company shall be entitled to select the investment banker or investment bankers
and manager or managers to administer the offering.
9.1.3. Payment of Notes. All amounts
outstanding under the Note shall be repaid (whether or not then due) prior to
or as a part of such Demand Registration.
SECTION 9.2. Piggy-Back Registration.
9.2.1. Warrantholder's Option.
9.2.1.1. Following the initial public
offering by the Company of any of its securities, if the Company or the
Management Stockholders propose to file a registration statement under the
Securities Act with respect to an offering by a Company or the Management
Stockholders for its own account of any class of security of the Company then
the Company shall in each case give written notice of such proposed filing to
the Warrantholder at least thirty (30) days before the anticipated filing
date, and such notice shall offer the Warrantholder the opportunity to include
in such registration statement such number of Registrable Securities as the
Warrantholder may request. The Company shall use its best efforts to cause
the managing underwriter or underwriters of a proposed underwritten
offering to permit the Warrantholder to include such securities in such offering
on the same terms and conditions as the securities of the Company and the
Management Stockholders included therein.
9.2.1.2. Notwithstanding the foregoing,
if the managing underwriter or underwriters of such proposed underwritten
offering determine in good faith that the total amount of securities which
the Warrantholder, the Company and any other persons or entities intend to
include in such offering is sufficiently large to materially and adversely
affect the success of such offering (including, without limitation, by a
significant and adverse decrease in the proposed offering price) then the
amount of securities to be offered shall be reduced pro rata to the extent
necessary to reduce the total amount of securities to be included in such
offering to the amount recommended by such managing underwriter or
underwriters.
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9.2.1.3 In the event the Warrantholder
elects to include Registrable Securities in a registration under this
Section 9.2, the Company or the Management Stockholders (as the case may
be) proposing such registration need not include Registrable Securities in
the registration statement in response to the Warrantholder's request if the
Company or the Management Stockholders can find a purchaser, upon terms and
conditions acceptable to the Warrantholder, for the aggregate principal amount
of the Registrable Securities proposed by the Warrantholder to be
registered; if the purchase and sale of the Registrable Securities proposed
by the Warrantholder to be registered is not completed within sixty (60)
days, the Company and the Management Stockholders shall not be relieved of their
obligations under this Section 9.2.
9.2.2. Payment of Registration Expenses. The
Company will pay all Registration Expenses in connection with any
registration described in this Section 9.2 except for the Warrantholder's pro
rata share of any underwriter's discount for any registration in which the
Warrantholder participates.
9.2.3. Exception from Registration.
Notwithstanding the provisions of this Section 9.2, the Company shall have no
obligation to include any Registrable Securities in any registration filed by
the Company if the registration form to be used by the Company pursuant to the
Securities Act is Form S-8 or another form which cannot be used for the public
sale of Registrable Securities, provided that, at least thirty (30) days
before the filing of any such Form S-8 or other such form, the Company shall
notify the Warrantholder of its intent to so file such a registration form.
SECTION 9.3. Registration Procedures.
9.3.1. Registration. Whenever the Warrantholder
requests that any Registrable Securities be registered pursuant to
Section 9.1 or Section 9.2 of this Agreement, the Company will use its best
efforts to effect the registration and the sale of such Registrable Securities
in accordance with the intended method of disposition thereof as quickly as
practicable, and in connection with any such request the Company will as
expeditiously as possible:
9.3.1.1. before filing a registration
statement that registers any Registrable Securities or any prospectus
relating thereto or any amendments or supplements relating to such a
registration statement or a prospectus, the Company will (i) furnish to
the Warrantholder's counsel copies of all such documents proposed to be
filed, which documents will be subject to the review of such counsel, and (ii)
notify the Warrantholder of any stop order issued or threatened to be issued
by the Commission in connection therewith and take all reasonable actions
required to prevent the entry of such stop order or to remove it if entered;
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9.3.1.2. furnish to the Warrantholder
such number of copies of such registration statement, each amendment and
supplement thereto (including one copy of all exhibits thereto), the
prospectus included in such registration statement (including each
preliminary prospectus) and such other documents as the Warrantholder may
reasonably request in order to facilitate the disposition of the Registrable
Securities owned by the Warrantholder;
9.3.1.3. use its best efforts to
register or qualify such Registrable Securities under such other securities
or blue sky laws of such jurisdictions in the United States of America as the
Warrantholder reasonably requests and do any and all other acts and things which
may be reasonably necessary or advisable to enable the Warrantholder to
consummate the disposition of its Registrable Securities in such
jurisdictions; provided, however, that the Company will not be required to (i)
qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 9.3.1.3, (ii) subject
itself to taxation in any such jurisdiction or (iii) consent to general service
of process in any such jurisdiction;
9.3.1.4. use its best efforts to cause the
Registrable Securities covered by such registration statement to be
registered with or approved by such other governmental agencies or
authorities as may be necessary by virtue of the business and operations of
the Company to enable the Warrantholder to consummate the disposition of such
Registrable Securities;
9.3.1.5. notify the Warrantholder at any
time when a prospectus relating thereto is required to be delivered under
the Securities Act, of the happening of any event as a result of which the
prospectus included in such registration statement contains an untrue
statement of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not misleading,
and the Company will prepare a supplement or amendment to such prospectus so
that such prospectus will not contain an untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading;
9.3.1.6. enter into such customary
agreements (including an underwriting agreement in customary form) and
take all such other actions as the Warrantholder or the underwriters
retained by the Company reasonably request in order to expedite or facilitate
the disposition of such Registrable Securities;
9.3.1.7. make available for inspection
by the Warrantholder and any underwriter participating in any
disposition pursuant to such registration statement, and any attorney,
accountant or other agent retained by the Warrantholder or underwriter
(collectively, the "Inspectors"), all financial and other records, pertinent
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corporate documents and properties of the Company (collectively, the
"Records") as shall be reasonably necessary to enable them to exercise their due
diligence responsibility, and cause the Company's officers, directors and
employees to supply all information reasonably requested by any such
Inspector in connection with such registration statement. Records which the
Company determines, in good faith, to be confidential and which it notifies the
Inspectors are confidential shall not be disclosed by the Company unless (i) the
disclosure of such Records is necessary to avoid or correct a misstatement or
omission in the registration statement or (ii) the release of such Records is
ordered pursuant to a subpoena or other order from a court of competent
jurisdiction;
9.3.1.8. use all reasonable efforts to
obtain a cold comfort letter from the Company's independent certified public
accountants in customary form and covering such matters of the type
customarily covered by cold comfort letters as the Warrantholder or the
underwriters retained by the Company reasonably request;
9.3.1.9. otherwise use its best efforts to
comply with all applicable rules and regulations of the Commission, and made
available to the Warrantholder, as soon as reasonably practicable, an earnings
statement, which earnings statement shall satisfy the provisions of Section
11(a) of the Securities Act;
9.3.1.10. obtain an opinion or opinions
from counsel for the Company in customary form satisfactory to the
Warrantholder; and
9.3.1.11. comply with the requirements
for listing on the exchange selected by agreement of the Company and the
Warrantholder.
9.3.2. Information. For the purposes of
effecting the registration of the Registrable Securities of the
Warrantholder pursuant to Sections 9.1 and 9.2 hereof, and for the purposes
of effectuating a public offering of its securities, the Company may
require the Warrantholder to furnish to the Company such information regarding
the Warrantholder, their officers and directors, the Registrable Securities
held by the Warrantholder and the proposed distribution of such Securities
as may be required to be disclosed in a registration statement by the
rules and regulations under the Securities Act or under any other
applicable securities or blue sky laws, or as may be required to effect the
registration of the Registrable Securities held by the Warrantholder.
SECTION 9.4. Registration Expenses. All expenses incident to
the Company's performance of or compliance with this Agreement, including
without limitation all registration and filing fees, fees and expenses of
compliance with blue sky qualifications of the Registrable Securities, rating
agency fees, printing expenses, messenger and delivery expenses, internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the fees and
expenses incurred in connection with the listing of the securities to
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be registered and fees and disbursements of counsel for the Company and
all independent certified public accountants (including the expenses of any
annual audit, special audit or "cold comfort" letters required by or incident
to such performance), securities acts liability insurance (if the Company
elects to obtain such insurance), the reasonable fees and expenses of any
special experts retained in connection with such registration, fees and
expenses of other Persons retained by the Company, fees and expenses of the
Warrantholder incurred in connection with each registration hereunder
(but not including any underwriting discounts or commissions
attributable to the sale of the Warrantholder's Registrable Securities)
and any out-of-pocket expenses of the Warrantholder, specifically including
the fees of one counsel for all Warrantholders (all such expenses being
herein called "Registration Expenses"), will be borne by the Company.
SECTION 9.5. Indemnification.
9.5.1. Indemnification.
9.5.1.1. The Company agrees to indemnify,
to the fullest extent permitted by law, the Warrantholder, each of their
partners and officers, and each Person who controls the Warrantholder (within
the meaning of the Securities Act or the Securities Exchange Act of 1934, as
amended -- the "Securities Exchange Act") and any investment advisor thereof
or agent therefor against all losses, claims, damages, liabilities and
expenses to which any such Person may become subject under the Securities Act,
the Securities Exchange Act, state securities or Blue Sky laws or otherwise,
insofar as such losses, claims, damages, liabilities and expenses (or actions
in respect thereof) arose out of or are based upon any untrue or alleged
untrue statement of a material fact contained in any registration
statement, prospectus or preliminary prospectus or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein no misleading, except insofar as the
same are caused by or contained in any information with respect to the
Warrantholder furnished in writing to the Company by or on behalf of the
Warrantholder expressly for use therein or by the Warrantholder's failure to
deliver a copy of the registration statement or prospectus or any amendments or
supplements thereto after the Company has furnished the Warrantholder with a
sufficient number of copies of the same. In connection with an underwritten
offering, the Company will indemnify the underwriters thereof, their officers
and directors and each person who controls such underwriters (within the meaning
of the Securities Act or the Securities Exchange Act) to the same extent as
provided above with respect to the indemnification of the Warrantholder.
9.5.1.2. Each Warrantholder agrees to
indemnify, to the fullest extent permitted by law, each Company and each of
its officers and directors who have signed the registration statement, each
Person who controls the Company
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(within the meaning of the Securities Act or the Securities Exchange
Act), the Management Stockholder selling under such registration and any
agent therefor, against all losses, claims, damages, liabilities and
expenses (or actions in respect thereof) arose out of or are based upon any
untrue or alleged untrue statement of a material fact contained in any
registration statement, prospectus or preliminary prospectus or any omission or
alleges omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading insofar as the same
are caused by or contained in any information with respect to such
Warrantholder furnished to the Company by or on behalf of such Warrantholder
failure to deliver a copy of the registration statement or prospectus or
any amendments or supplements thereto to a prospective purchaser after
the Company has furnished such Warrantholder with a sufficient number of copies
of the same; provided, however, that the obligation of each Warrantholder
hereunder shall be limited to an amount equal to the net proceeds received by
such Warrantholder pursuant to the sale of Registrable Securities as
contemplated herein. In connection with an underwritten offering, each
Warrantholder hereunder shall be limited to an amount equal to the net
proceeds received by such Warrantholder pursuant to the sale of Registrable
Securities as contemplated herein. In connection with an underwritten offering,
each Warrantholder will indemnify the underwriters thereof, their officers and
directors and each person who controls such underwriters (within the meaning of
the Securities Act or the Securities Exchange Act) to the same extent as
provided above with respect to indemnification of the Company.
9.5.2. Conduct of Indemnification Proceedings.
9.5.2.1. In case any action shall be brought
against any Person entitled to indemnification hereunder (an "Indemnified
Person"), the Indemnified Person shall promptly notify the Person from
whom indemnification is sought (the "Indemnifying Person"), in writing, and
the Indemnifying Person shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to the Indemnified Person and the
payment of all expenses. The Indemnified Person shall have the right to
employ separate counsel in any such action and participate in the
defense thereof, but, the fees and expenses of any such counsel shall be
paid by the Indemnifying Person only if (i) the Indemnifying Person shall
fail to assume the defense of such action as provided herein, (ii) the
Indemnified Person reasonably shall have concluded that there may be one or
more legal defenses available to it which are different from or additional to
those available to the Indemnifying person or other Persons represented by
counsel employed by the Indemnifying Person or (iii) the Indemnified Person
reasonably shall have concluded that a conflict of interest exists between the
Indemnifying Person and the Indemnified Person with respect to the action. The
Indemnifying Person shall not be liable for any settlement of any such action
effected without its consent, but if settled with the consent of the
Indemnifying Person or if there be a final judgment for the plaintiff in any
such action, the
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Indemnifying Person agrees to indemnify and hold harmless the Indemnified
Person from and against any loss or liability by reason of such settlement
or judgment.
9.5.2.2. This Section and all of the
indemnification provisions contained herein shall survive termination of
this Agreement and shall remain operative and in full force and effect
notwithstanding any such termination.
SECTION 9.7. Rule 144. If the Company shall have filed a
registration statement pursuant to the requirements of Section 12 of the
Securities Exchange Act or a registration statement pursuant to the requirements
of the Securities Act, the Company covenants that it will file the reports
required to be filed by it under the Securities Act and Securities Exchange Act
and the rules and regulations adopted by the Commission thereunder. Upon the
request of the Warrantholder, the Company will deliver to the Warrantholder a
written statement as to whether it has complied with such requirements. The
Company will take such further action as the Warrantholder may reasonably
request, all to the extent required from time to time to enable the
Warrantholder to sell Registrable Securities without registration under the
Securities Act within the limitation of the exemptions provided by (a) Rule 144
under the Securities Act, as such rule may be amended from time to time or (b)
any similar rule or regulation hereafter adopted by the Commission.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed on their behalf by their duly authorized
representatives, as of the day and year first above written.
WITNESS: LIFE CRITICAL CARE CORPORATION
_____________________________ By:__________________________(SEAL)
▇▇▇ ▇. ▇▇▇▇▇▇, Vice President
- COMPANY -
WITNESS: MORGENTHAU BRIDGE LOAN LLC
By: Morgenthau Bridge Financing
Corp., Manager
_____________________________ By:__________________________(SEAL)
its authorized signatory
- PURCHASER -
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EXHIBIT A
▇▇. ▇
▇▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇: $ See Loan Schedule
REGISTERED
SUBORDINATED NOTE
LIFE CRITICAL CARE CORPORATION
PAYMENT ON THE PRINCIPAL OF AND INTEREST ON THIS NOTE IS REQUIRED TO BE
MADE DIRECTLY TO THE REGISTERED HOLDER HEREOF WITHOUT NOTATION HEREON. IT CANNOT
BE DETERMINED FROM THE FACE OF THIS NOTE WHETHER ALL OR ANY PART OF THE
PRINCIPAL OF OR INTEREST ON THIS NOTE HAS BEEN PAID.
LIFE CRITICAL CARE CORPORATION (the "Company"), a Delaware corporation,
for value received, promises to pay to the registered holder of this note (the
"Holder") by December 31, 1997 (or earlier as herein referred to), the amounts
specified on the Loan Schedule which is attached to this note and made a part
hereof. The Holder may make additional cash advances (hereinafter referred to as
"loans") to the Company, from time to time, pursuant to the terms and conditions
of that certain Loan and Securities Purchase Agreement of even date herewith,
which shall be covered by this note and recorded on the Loan Schedule.
The interest hereon shall be payable at the annual rate of Eighteen
Percent (18%) per annum (the "Rate") for each day from the date of this note
until the date the principal amount of this note is paid in full. The first
interest payment shall be due on December 31, 1995, and thereafter on the last
day of each of March, June, September and December, or the next succeeding
business day. The accrued interest on the unpaid principal balance evidenced by
the Loan Schedule shall also be covered by this note and shall be recorded on
the Loan Schedule.
The total outstanding principal, together with accrued interest
thereon, shall be payable on December 31, 1997.
Principal of and interest on this note shall be paid to the registered
Holder hereof by check mailed by the Company to the address of the Holder as it
appears on the Note Register and at the end of this note without the necessity
of surrendering or presenting this note, and all such payments shall fully
discharge the obligation of the Company hereunder to the extent made and shall
be recorded on the Loan Schedule. The Company and the Holder hereof may make
provision for the payment of principal and interest by such other method as may
be mutually agreed upon in writing.
The Company shall pay to the Holder of this note a late charge at the
option of the Holder equal to two percent (2%) of any payment of principal or
interest due if such payment is not received by the registered owner within
fifteen (15) days after such payment is due. Whether or not a late charge is
imposed, interest on principal or interest due but unpaid shall accrue from the
date on which such payment of principal or interest is due at the Rate.
At the option of the Company and upon notice to the Holder at its
address as it appears on the Note Register and at the end of this note, except
as otherwise provided herein, this note may be redeemed by the Company in part
or in whole, less any partial payments previously made by the Company, if any,
at any time or from time to time. In the event the Company redeems only part of
the note, any amount paid to the Holder shall be applied, first, to accrued but
unpaid interest, and second, the then outstanding principal amount. In the event
the Company redeems the entire note, the redemption price shall be equal to the
outstanding principal of the note plus accrued and unpaid interest to the date
of the redemption. Except for a redemption in connection with an initial public
offering by the Company as to which this redemption notice is hereby waived, any
such redemption shall be made upon at least thirty (30) days' but not more than
sixty (60) days' prior notice to the Holder at the address of the Holder as it
appears on the Note Register and at the end of this note. On the date designated
for redemption of the whole note, the note so called for redemption shall become
and be due and payable at the above redemption price, the interest on such notes
shall cease to accrue, and the Holder hereof shall have no rights in respect of
this note except to receive payment of the redemption price hereof. The Company
shall be obligated to redeem this Note simultaneously with its closing on an
initial public offering by the Company of any of its securities.
This note shall be registered by the Company upon the initial delivery
hereof, in the name of the initial purchaser, by endorsement in the space
provided at the end hereof and on the books to be kept for that purpose by the
Company and, thereafter, this note shall be transferable only by successive
endorsements to successive registered holders. Payment of this note and the
interest hereon shall be made only to the registered Holder hereof on the date
such payment is due. The Company may deem and treat the person in whose name
this note is registered as the absolute owner hereof for all purposes and the
Company shall not be affected by any notice to the contrary.
The rights of the Holder to the principal sum or any sum or part
thereof, and the interest due thereon, are and shall remain subject and
subordinate to (a) the prior payment of any and all other indebtedness
(including the principal of and interest on any such indebtedness) constituting
existing or future obligations of the Company for money borrowed from any bank,
trust company, insurance company, or other institutional lender and (b) the
claims of all secured trade and contract creditors of the Company; and upon
dissolution or liquidation of the Company no payment shall be due or payable
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upon this note until all of the obligations described in this paragraph shall
have been paid in full. The Holder hereby agrees (i) to amend this section of
the note if required to do so by any third-party lender to the Company and (ii)
to execute any and all documents necessary to accomplish such an amendment.
No covenant or agreement contained in this note shall be deemed to be a
covenant or agreement of any past, present or future incorporator, officer,
director or shareholder of the Company or of any predecessor or successor
corporation in his or her individual capacity and no incorporator, officer,
director or shareholder of the Company shall be liable personally on this note
or be subject to any personal liability or accountability by reason of the
issuance of this note, all such liability being, by the acceptance hereof and as
part of the consideration for the issuance hereof, expressly released.
The Company hereby stipulates and warrants that the loan evidenced
hereby is a commercial loan and that all of the proceeds of such loan will be
used solely to acquire or carry on a business or commercial enterprise.
IN WITNESS WHEREOF, the corporate seal of the Company is hereto affixed
and these presents duly signed by the duly authorized officers of the Company as
of the day and year first above written.
ATTEST: LIFE CRITICAL CARE CORPORATION
______________________________ By: ______________________________(SEAL)
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Assistant Secretary ▇▇▇ ▇. ▇▇▇▇▇▇, Vice President
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE (FEDERAL) SECURITIES ACT OF 1933 OR APPLICABLE SECURITIES ACT OF ANY
STATE BUT HAVE BEEN ISSUED IN RELIANCE UPON EXEMPTIONS FROM REGISTRATION
CONTAINED IN SAID ACTS. NO SALE, OFFER TO SELL OR OTHER TRANSFER OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE MADE UNLESS A REGISTRATION
STATEMENT UNDER SAID ACTS IS IN EFFECT WITH RESPECT TO THE SECURITIES, OR AN
EXEMPTION FROM THE REGISTRATION PROVISIONS OF SUCH ACTS IS THEN APPLICABLE.
REGISTERED HOLDER: ADDRESS:
Morgenthau Bridge Loan LLC ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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LOAN SCHEDULE
The Subordinated Note to which this Loan Schedule is attached evidences
loans made by the Holder to the Company, in the principal amounts and on the
dates set forth below, subject to prepayments of principal set forth below:
================== --------------- --------------- ---------------- --------------- --------------- ================
LOAN AMOUNT PRINCIPAL UNPAID INTEREST INTEREST NOTATION
DATE PAID PRINCIPAL ACCRUED PAID MADE BY
BALANCE
================== --------------- --------------- ---------------- --------------- --------------- ================
12/02/95 $ 15,000
================== --------------- --------------- ---------------- --------------- --------------- ================
12/19/95 $ 85,000
================== --------------- --------------- ---------------- --------------- --------------- ================
12/27/95 $ 25,000
================== --------------- --------------- ---------------- --------------- --------------- ================
01/17/96 $ 50,000
================== --------------- --------------- ---------------- --------------- --------------- ================
01/22/96 $100,000
================== --------------- --------------- ---------------- --------------- --------------- ================
01/29/96 $ 65,000
================== --------------- --------------- ---------------- --------------- --------------- ================
01/31/96 $ 35,000
================== --------------- --------------- ---------------- --------------- --------------- ================
02/13/96 $ 50,000
================== --------------- --------------- ---------------- --------------- --------------- ================
================== --------------- --------------- ---------------- --------------- --------------- ================
================== --------------- --------------- ---------------- --------------- --------------- ================
================== --------------- --------------- ---------------- --------------- --------------- ================
================== --------------- --------------- ---------------- --------------- --------------- ================
================== --------------- --------------- ---------------- --------------- --------------- ================
================== --------------- --------------- ---------------- --------------- --------------- ================
================== --------------- --------------- ---------------- --------------- --------------- ================
================== --------------- --------------- ---------------- --------------- --------------- ================
================== --------------- --------------- ---------------- --------------- --------------- ================
================== --------------- --------------- ---------------- --------------- --------------- ================
================== --------------- --------------- ---------------- --------------- --------------- ================
================== --------------- --------------- ---------------- --------------- --------------- ================
================== --------------- --------------- ---------------- --------------- --------------- ================
================== --------------- --------------- ---------------- --------------- --------------- ================
================== =============== =============== ================ =============== =============== ================
================== =============== =============== ================ =============== =============== ================
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EXHIBIT B
WARRANTS
Attached hereto is the form of Warrant to be issued to the Purchaser by
the Company as a condition precedent to the Purchaser's commitment to make the
Loan in the aggregate amount of $750,000 to the Company.
The Company hereby agrees to issue Warrants to the Purchaser to
purchase 107,000 shares of the Company's common stock (the "Warrant Shares").
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE SECURITIES WHICH
MAY BE PURCHASED BY EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "SECURITIES ACT") OR THE SECURITIES ACT OF ANY
STATE. THE WARRANTS ARE BEING OFFERED PURSUANT TO A CLAIM OF EXEMPTION FROM
REGISTRATION CONTAINED IN SECTION 4(2) OF THE SECURITIES ACT AND EXEMPTIONS FROM
REGISTRATION UNDER THE SECURITIES ACT OF APPLICABLE STATES, AND MAY NOT BE SOLD
OR TRANSFERRED EXCEPT PURSUANT TO EFFECTIVE REGISTRATIONS UNDER SUCH ACTS OR IN
A TRANSACTION WHICH IS EXEMPT UNDER SUCH ACTS.
LIFE CRITICAL CARE CORPORATION
A DELAWARE CORPORATION
FORM OF DETACHABLE STOCK WARRANT
TO PURCHASE CAPITAL STOCK OF THE COMPANY
Certificate No.: 1 No. of Warrants: 107,000
FOR VALUE RECEIVED, LIFE CRITICAL CARE CORPORATION, a Delaware
corporation (the "Corporation"), grants the following rights to Morgenthau
Bridge Loan LLC, its successors and assigns (the "Holder").
The Warrants represented hereby are part of a duly authorized issue of
214,000 Warrants delivered pursuant to certain loan and securities purchase
agreements between the Corporation and certain others including pursuant to that
certain Loan and Securities Purchase Agreement dated August 12, 1995, by and
between the Corporation and the Holder (the "Securities Purchase Agreement").
Capitalized terms used herein without definition shall have the meaning set
forth in the Securities Purchase Agreement.
The Holder is entitled, in accordance with the terms and conditions of
this Certificate, until the expiration of the Exercise Period, to purchase
voting common Capital Stock of the Corporation, par value $0.01, from the
Corporation at the Exercise Price shown below, upon delivery of this Certificate
to the Corporation with the subscription form attached hereto duly executed and
upon payment of the Exercise Price for the shares purchased.
EXERCISE PRICE: The exercise price per share (the "Exercise Price") shall be Ten
Cents ($0.10), subject to adjustment as provided for in Section 4(d) hereof.
CONDITION TO EXERCISE: The Warrants hereunder may not be exercised so long as
the Holder shall timely and fully receive all interest, principal and other
amounts, if any, due and payable under the Note.
EXERCISE PERIOD: The Warrants represented hereby shall be exercisable commencing
on March 15, 1996 and shall expire at 5:00 p.m. on the later of December 31,
1998, or two (2) years from the date on which all sums due under the Note are
paid in full (the "Exercise Period").
NUMBER AND CLASS OF SHARES PURCHASABLE: The Holder is entitled to purchase one
(1) share of fully paid and non-assessable voting common Capital Stock of the
Company subject to adjustment from time to time as specified in this Certificate
for each Warrant represented by this Certificate.
SECTION 1. CORPORATION'S COVENANTS AS TO CAPITAL STOCK. Capital Stock
deliverable on the exercise of the Warrants represented hereby shall, at
delivery, be fully paid and non-assessable, free from taxes, liens and charges
with respect to their purchase. The Corporation shall take any necessary steps
(including, but not limited to, amending the Corporation's charter) to assure
that the number and par value of shares authorized by the Corporation's charter
are sufficient to satisfy the conversion and purchase rights of outstanding
convertible securities, options and warrants, and shall at all times reserve and
hold available sufficient shares of Capital Stock to satisfy all conversion and
purchase rights of all outstanding convertible securities, options and warrants.
SECTION 2. CORPORATION'S REPRESENTATIONS AND WARRANTIES AS TO CAPITAL
STOCK. The Corporation represents and warrants to the Holder as of the date
hereof that ___________ shares of the common Capital Stock of the Corporation
are issued and outstanding, and no shares of any other class of stock of the
Corporation or securities convertible at any time into shares of any class of
stock of the Corporation are authorized.
SECTION 3. METHOD OF EXERCISE. The purchase rights represented by these
Warrants are exercisable at the option of the Holder at any time during the
Exercise Period, upon the delivery of this Certificate to the Corporation with
its subscription form duly executed and upon payment of the Exercise Price.
These Warrants shall be deemed to have been exercised, and the Holder shall be
deemed to have become a stockholder of record of the Corporation for the
purposes of receiving dividends and for all other purposes whatsoever, as of the
date of surrender of this Certificate accompanied by payment of the Exercise
Price. If this Certificate is exercised in respect of less than all of the
Warrants represented hereby, the Holder shall be entitled to receive a new
certificate of like tenor and date for the number of Warrants which shall not
have been exercised.
-2-
SECTION 4. ADJUSTMENT OF SHARES PURCHASABLE. In case prior to
the expiration of these Warrants by exercise or by the terms of this
Certificate:
(a) The Corporation shall be recapitalized through the subdivision of
its outstanding shares of Capital Stock into a greater number of shares, or
shall by exchange or substitution of or for its outstanding Capital Stock or
otherwise, reduce the number of such shares, then in each such case the number
of shares deliverable upon the exercise of these Warrants and the Exercise
Price, as provided in Section 4(d), shall be changed in the same proportion as
such increase or decrease of the outstanding shares of such Capital Stock of the
Corporation.
(b) A dividend shall be declared or paid at any time on the Capital
Stock of the Corporation in its Capital Stock or in securities convertible into
Capital Stock of the Corporation, then in each such case, as a condition to such
dividend, the number of shares deliverable upon the exercise thereafter of these
Warrants, shall, without requiring any payment by the Holder in addition to the
payment per Warrant specified on the face hereof, be increased in proportion to
the increase, through such dividend, in the number of outstanding shares of
Capital Stock of the Corporation and such additional shares of Capital Stock
shall be available to enable the Holder to fully exercise its rights to acquire
Capital Stock under these Warrants. In the computation of the increased number
of shares deliverable upon the exercise of these Warrants, any dividend paid or
distributed upon the Capital Stock in securities convertible into shares of
Capital Stock, shall be treated as a dividend paid in Capital Stock to the
extent that shares of stock are issuable upon the conversion thereof. The
obligations of the Corporation and the rights of the Holder shall not be
affected by the exercise of any conversion privileges heretofore granted to the
holders of any of the Capital Stock or securities of the Corporation or of any
other corporation.
(c) The Corporation shall be recapitalized by reclassifying its
outstanding Capital Stock without par value into stock with par value, or
changing Capital Stock of par value to stock without par value, or the
Corporation or a successor corporation shall consolidate or merge with, or
convey all, or substantially all, of its or any successor corporation's property
or assets to, any other corporation or corporations (any such corporation being
included within the meaning "successor corporation" hereinbefore used in the
event of any consolidation or merger of such corporation with, or the sale of,
all or substantially all of the property of such corporation to another
corporation or corporations) then, as a condition to such recapitalization,
consolidation, merger, or conveyance, lawful and adequate provision shall be
made whereby the Holder shall thereafter have the right to purchase, upon the
basis and upon the terms and conditions specified in this Certificate, in lieu
of the shares of Capital Stock of the Corporation theretofore purchasable upon
the
-3-
exercise of these Warrants, such shares of stock, securities, or assets as may
be issued or payable with respect to, or in exchange for, the number of
shares of Capital Stock of the Corporation theretofore purchasable upon the
exercise of these Warrants had such recapitalization, consolidation, merger, or
conveyance not taken place; and in any such event the rights of the Holder to an
adjustment of the number of shares of Capital Stock purchasable upon the
exercise of these Warrants as herein provided and of the Exercise Price as
provided for in Section 4(d) hereof, shall continue and be preserved in respect
of any stock which the Holder becomes entitled to purchase. It shall be a
condition of such consolidation, merger, or conveyance that each successor
corporation shall assume in manner and form reasonably satisfactory to the
Holder the obligation to deliver to the Holder, upon the exercise of these
Warrants, such shares of Capital Stock, securities, or assets as, in accordance
with the provisions of this Certificate shall have been provided for the
purpose.
(d) In the event the number of shares per Warrant purchasable hereunder
is adjusted pursuant to Section 4(a)-(c), above, the Exercise Price shall be
adjusted so that it is equal to the Exercise Price in effect prior to such
adjustment multiplied by a fraction, the numerator of which is the number of
shares per Warrant purchasable hereunder prior to the adjustment called for
Section 4(a)-(c), and the denominator of which is the number of shares per
Warrant purchasable hereunder after the adjustment called for in Section
4(a)-(c).
Upon each increase of the number of shares of Capital Stock of
the Corporation deliverable upon the exercise of these Warrants, or in the event
of changes in the rights of the Holder by reason of other events hereinbefore
set forth, then in each such case the Corporation shall forthwith deliver to the
Holder a certificate executed by its president or one of its vice presidents,
and attested by its secretary or one of its assistant secretaries, stating the
increased number of shares so deliverable or specifying the other shares of
Capital Stock, securities or assets, and the amount thereof so deliverable and
setting forth in reasonable detail the method of calculation and the facts upon
which such calculation is based.
Upon each increase of the number of shares of Capital Stock of
the Corporation deliverable upon the exercise of these Warrants, the increased
number of shares so deliverable shall be only a round sum obtained by rounding
up to the nearest integer any fractions resulting from the calculation of the
increased number of shares to be delivered. No fractions of shares shall be
issued upon the exercise of these Warrants.
-4-
SECTION 5. SPECIAL RIGHTS OF THE HOLDER.
5.1. If any dissolution, liquidation or winding up of the Corporation
shall be proposed, then the Corporation shall cause at least thirty (30) days'
prior written notice to be mailed, by certified or registered mail, return
receipt requested, to the Holder at its address as it appears on the books of
the Corporation. Such notice shall specify the date as of which holders of
record of Capital Stock shall participate in distribution rights upon such
dissolution, liquidation, or winding up, as the case may be, to the end that,
during such period of thirty days, the Holder may exercise these Warrants in
whole or in part, and be entitled in respect of the shares of Capital Stock so
purchased to all the rights of the other holders of Capital Stock of the
Corporation.
5.2. Whenever the Corporation proposes to file a registration statement
for the registration of any of its securities under the Securities Act of 1933,
or any other federal or state securities laws or regulations, at least thirty
(30) days prior to filing such registration statement the Corporation shall give
written notice of such proposed filing to the Holder as set forth in the
Securities Purchase Agreement.
SECTION 6. EXCHANGE FOR OTHER DENOMINATIONS. This Certificate is
exchangeable for new certificates of like tenor and date representing in the
aggregate the right to purchase the number of shares purchasable hereunder in
denominations designated by the Holder at the time of surrender.
SECTION 7. DUE EXECUTION, ISSUANCE AND DELIVERY OF CERTIFICATE AND
CAPITAL STOCK. The Corporation covenants that the issuance of this Certificate
shall constitute full authority to those of its officers who are charged with
the duty of issuing stock certificates to promptly execute, issue and deliver to
the Holder the necessary certificate for shares of Capital Stock or other
securities of the Corporation required by the exercise of the Warrants
represented hereby.
SECTION 8. TRANSFER. These Warrants shall be registered on the books of
the Corporation, which shall be kept by it at its principal office for that
purpose. Subject to the restrictions upon assignment and transfer set forth in
the Securities Purchase Agreement, these Warrants shall be transferable on said
books by the Holder in person or by duly authorized attorney upon surrender of
this Certificate properly endorsed. The Corporation agrees that, while these
Warrants shall remain valid and outstanding, its stock transfer books shall not
be closed for any purpose whatsoever except under arrangements which shall
insure to persons exercising warrants or applying for transfer of stock all
rights and privileges which they might have had or received if the stock
transfer books had not been closed and they had exercised their Warrants at any
time during which such transfer book shall have been closed.
-5-
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
duly executed, ensealed and delivered on its behalf this ____ day of
_____________, 199__.
ATTEST: LIFE CRITICAL CARE CORPORATION
______________________________ By:______________________________(SEAL)
____________________, Secretary _______________________, President
-6-
ASSIGNMENT OF STOCK PURCHASE WARRANT
_______________________, 19___
For value received, the undersigned hereby assigns to
_______________ all the rights and interests represented by the attached
Certificate and hereby irrevocably constitutes and appoints
_______________ attorney to transfer the same on the books of Life
Critical Care Corporation with full power of substitution in the premises.
Witness:___________________________ By:________________________________
Name:______________________________
Title:_____________________________
-7-
EXERCISE OF OPTION TO PURCHASE
PURSUANT TO ATTACHED STOCK PURCHASE AGREEMENT
______________________, 19_____
TO: ____________________________________
The undersigned, the Holder of record of the attached Certificate of
Life Critical Care Corporation, hereby exercises the option granted by the
Warrants evidenced by the attached Certificate to purchase upon the terms set
forth in such Certificate ______ shares of Capital Stock of Life Critical Care
Corporation and hereby makes payment of the Exercise Price set forth on the face
of the Certificate.
Witness:___________________________ By:_______________________________
Name:_____________________________
Title:____________________________
-8-
FIRST AMENDMENT
TO
ASSET PURCHASE AGREEMENT
THIS FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT (this "Amendment")
made as of the 15th day of March, 1996, by and among Blue Water Medical Supply,
Inc., Blue Water Industrial Products, Inc. and Life Critical Care Corporation.
RECITALS
The parties are parties to an Asset Purchase Agreement among them dated
January 22, 1996 (the "Agreement") and desire to amend the Agreement as set
forth herein.
NOW, THEREFORE, FOR AND IN CONSIDERATION OF the mutual entry into this
Amendment by the parties hereto, and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged by each party hereto,
the parties hereto hereby agree as follows:
Section 1. Amendment of Agreement. The provisions of the Agreement
are hereby amended as follows:
(a) Section 1.5(x) of the Agreement is hereby amended by adding the
following at the end of the existing Section 1.5(x): "Purchaser shall pay for
the unreimbursed portion of the purchase price of the Equipment by executing and
delivering to Medical Supply Purchaser's promissory note at Closing in an
original principal amount equal to the total unreimbursed payments, with the
note not bearing interest prior to default with the note bearing interest at an
annual rate of interest equal to 12% following any default, and with the
payments under the note being level payments over approximately the average term
of the remaining rental agreements/arrangements on the Equipment."
(b) New Section 1.5 (xi) is hereby added as follows: "(xi) If the
Closing shall not have been completed on or before the scheduled Closing Date,
Purchaser shall be entitled to extend the Closing Date for one (1) thirty
(30)-day extension of the Closing Date upon the payment of Fifty Thousand
Dollars ($50,000), payable on or prior to the original Closing Date (the
'Additional Deposit') in the same manner as the Deposit set forth in Section
1.5(i) hereof, which Additional Deposit shall be applied to the Purchase Price
at Closing or returned to the Purchaser if this Agreement is terminated solely
as a result of Section 7.2.4 or paid over to Seller if this Agreement is
terminated for any other reason. If this extension is exercised by Purchaser,
conforming changes shall automatically be made to any other affected Section of
this Agreement including without
limitation Section 7.2.5 (by extending the date in the last line thereof to May
30, 1996) and Section 7.3 (by including within the amount of the 'Deposit'
referred to in the last line thereof the amount of the Additional Deposit)."
(c) Section 7.2.5 is hereby amended by correcting a typographical error
therein by deleting the year "1995" as it appears in item (ii) thereof and by
inserting in lieu thereof the year "1996".
Section 2. Effect of this Amendment. Except as is hereinabove set
forth, the provisions of the Agreement shall hereafter remain in full force and
effect.
Section 3. This Amendment may be executed in two or more counterparts,
all of which when taken together shall constitute one and the same original.
IN WITNESS WHEREOF, the parties have executed this Amendment the day
and year first above written.
BLUE WATER MEDICAL SUPPLY, INC.
By: ____________________________
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President
BLUE WATER INDUSTRIAL PRODUCTS, INC.
By: ___________________________
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President
LIFE CRITICAL CARE CORPORATION
By: __________________________
▇▇▇ ▇. ▇▇▇▇▇▇, Vice President
-2-
SECOND AMENDMENT
TO
ASSET PURCHASE AGREEMENT
THIS SECOND AMENDMENT TO ASSET PURCHASE AGREEMENT (this "Amendment") is
executed this 2nd day of July, 1996 to be made effective as of the 30th day of
May, 1996, by and among Blue Water Medical Supply, Inc., Blue Water Industrial
Products, Inc. and Life Critical Care Corporation.
RECITALS
The parties are parties to an Asset Purchase Agreement among them dated
January 22, 1996, as previously amended by a First Amendment to Asset Purchase
Agreement dated April 24, 1996 (collectively, the "Agreement") and desire to
amend the Agreement as set forth herein.
NOW, THEREFORE, FOR AND IN CONSIDERATION OF the mutual entry into this
Amendment by the parties hereto, and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged by each party hereto,
the parties hereto hereby agree as follows:
Section 1. Amendment of Agreement. The provisions of the Agreement
are hereby amended as follows:
(a) Section 1.1 of the Agreement is hereby amended by deleting the date
"April 30, 1996" as it appears in the fourth line thereof and by inserting in
lieu thereof the date "November 1, 1996."
(b) Section 1.5 (ii) of the Agreement is hereby amended by deleting the
existing Section 1.5(ii) and by inserting the following in lieu thereof:
"(ii) the balance of the Purchase Price shall be paid as
follows:
(a) Ninety Percent (90%) of the Purchase
Price, after being reduced by the Deposit, shall be paid by wire transfer
of immediately available funds to such bank account as shall be designated by
the Seller or by delivery of a cashier's check to the Seller at Closing; and
(b) Ten Percent (10%) of the Purchase Price (the
"Purchase Price Balance") shall be paid by the issuance by Purchaser to
Seller of that number of shares of the common stock of Purchaser determined
by dividing the amount of the offering price per share of the Common Stock
into the Purchase Price Balance and multiplying the resulting number of
shares by 110% (e.g., if the Purchase Price Balance is $640,000 and the
offering price per share of Common Stock is $20.00 per share, the number of
shares would be 32,000 shares times 110% for a total of 35,200 shares) (the
"Common Stock"), or, if the IPO (as defined in Section 4.1.0 hereof) shall not
have been completed at Closing, in cash in lieu of the Common Stock.
(c) If as of the second anniversary of
Closing the "Fair Market Value" of the Common Stock (i.e., the average
closing prices of the Common Stock for the ten business days ending with the
second anniversary of Closing) has (i) declined by at least 15% but not more
than 45%, then Purchaser shall issue to Seller, and Seller shall be entitled
to, an increase in the number of shares of Common Stock comprising a portion of
the Purchase Price so that the Fair Market Value of the Common Stock and any
additional shares of Purchaser's common stock shall equal at such time 85% of
the fair market value of the Common Stock as of the date of Closing; (ii)
declined by more than 45%, then Purchaser shall issue to Seller, and Seller
shall be entitled to, an increase in the number of shares of Common Stock
comprising a portion of the Purchase Price equal to 30% of the fair market value
of the Common Stock as of the date of Closing; (iii) increased by at least 15%
but not more than 30%, then Seller shall transfer to Purchaser that number of
shares of the Common Stock with a Fair Market Value equal to the amount in
excess of 115% of the fair market value of the Common Stock as of the date of
Closing; and (iv) increased by more than 30%, then Seller shall transfer to
Purchaser that number of shares of the Common Stock with a Fair Market Value
equal to 15% of the fair market value of the Common Stock as of the date of
Closing. In lieu of the issuance or delivery of any shares of Common Stock
pursuant to the previous sentence, Purchaser may pay to Seller, or Seller may
pay to Purchaser, in their respective sole discretion, an amount in cash equal
to the Fair Market Value of the applicable shares of Common Stock, provided such
election is irrevocably made in writing by the payor within two (2) business
days of the second anniversary of the Closing. All payments or deliveries
pursuant to the previous two sentences shall be made within thirty (30) days
after the second anniversary of the Closing. For purposes of this subsection,
the Common Stock shall include all requisite adjustments for stock dividends,
dividends, stock splits, recapitalizations, mergers, consolidations,
combinations or exchange of shares. If any Common Stock issued at Closing is
sold or otherwise transferred by Seller prior to the second anniversary of the
Closing, this subsection shall be read to be adjusted to the revised number of
shares of Common Stock as of the date of Closing as reduced by any such sales or
transfers."
-2-
(c) New Section 1.5 (xii) is hereby added as follows: "(xii) The
Closing shall have been completed on or before November 1, 1996. In addition,
Purchaser hereby agrees that if, for any reason other than a material
misrepresentation by Seller or a material change in the business of either
Medical Supply or Industrial Products, it does not file with the Securities and
Exchange Commission its registration statement for an initial public offering on
or before August 15, 1996, then Seller shall be entitled to terminate this
Agreement and retain the Deposit (including the original Deposit and the
Additional Deposit). Conforming changes are hereby made to any other affected
Section of this Agreement, including without limitation Section 7.2.5 (by
extending the date in the last line thereof to November 1, 1996).
(d) Section 4.2.1.1 of the Agreement is hereby amended by deleting
existing Section 4.2.1.1 and by inserting in lieu thereof the following:
"4.2.1.1. The wire transfer or delivery of a cashier's
check in the amount of 90% of the Purchase Price, less the
amount of the Deposit, and the delivery of the Common
Stock."
(e) The last sentence of Section 5.2 is hereby deleted and the
following is hereby added at the end of Section 5.2: "Notwithstanding anything
to the contrary otherwise contained in this Agreement, Seller shall be entitled
to maintain their businesses in the ordinary course of business, including
hiring, firing, and giving raises, provided there is no material adverse effect
to either Medical Supply or Industrial Products and, further, provided, that
prompt notice of any such events or actions is provided to Purchaser.
(f) New Section 6.5 is hereby added as follows:
"SECTION 6.5. Lock-Up Agreements. Seller warrants that, if
required by the underwriter(s) for the IPO, it will enter into
any required "lock-up" agreement; provided, however, that
Seller will not be required to a lock-up of the Common Stock
for a period of time in excess of the shortest period of time
agreed to by any other principal stockholder of Purchaser."
(g) New Section 6.6 is hereby added as follows:
"SECTION 6.6. Registration Rights. Purchaser shall, at
closing, enter into a Registration Rights Agreement
pursuant to which Seller shall be granted certain
piggyback registration rights with respect to the Common
Stock."
-3-
Section 2. Effect of this Amendment. Except as is hereinabove set
forth, the provisions of the Agreement shall hereafter remain in full force and
effect.
Section 3. This Amendment may be executed in two or more counterparts,
all of which when taken together shall constitute one and the same original.
Section 4. By their execution hereof, the parties hereto hereby agree
that this Amendment is voluntarily accepted for the purpose of making a full and
final compromise adjustment, settlement and waiver of any and all prior defaults
of the Agreement that either has alleged has occurred prior to the execution
hereof.
IN WITNESS WHEREOF, the parties have executed this Amendment the day
and year first above written.
BLUE WATER MEDICAL SUPPLY, INC.
By: ____________________________
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President
BLUE WATER INDUSTRIAL PRODUCTS, INC.
By: ___________________________
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President
LIFE CRITICAL CARE CORPORATION
By: __________________________
▇▇▇ ▇. ▇▇▇▇▇▇, Vice President
-4-
THIRD AMENDMENT
TO
ASSET PURCHASE AGREEMENT
THIS THIRD AMENDMENT TO ASSET PURCHASE AGREEMENT (this "Amendment") is
executed this ___ day of September, 1996 to be made effective as of the 15th day
of August, 1996, by and among Blue Water Medical Supply, Inc., Blue Water
Industrial Products, Inc. and Life Critical Care Corporation.
RECITALS
The parties are parties to an Asset Purchase Agreement among them dated
January 22, 1996, as previously amended by a First Amendment to Asset Purchase
Agreement dated April 24, 1996, and as further amended by a Second Amendment to
Asset Purchase Agreement dated July 2, 1996 (collectively, the "Agreement") and
desire to amend the Agreement as set forth herein.
NOW, THEREFORE, FOR AND IN CONSIDERATION OF the mutual entry into this
Amendment by the parties hereto, and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged by each party hereto,
the parties hereto hereby agree as follows:
Section 1. Amendment of Agreement. The provisions of the Agreement
are hereby amended as follows:
(a) Section 1.1 of the Agreement is hereby amended by deleting the date
"November 1, 1996" as it appears in the fourth line thereof and by inserting in
lieu thereof the date "December 31, 1996."
(b) Section 1.1 of the Agreement is hereby further amended by
adding the following at the end of existing Section 1.1:
"Closing will take place simultaneously with the closing
of the IPO (as defined in Section 4.1.0 hereof)."
(c) Section 1.5 (ii) of the Agreement is hereby amended by deleting the
existing Section 1.5(ii) and by inserting the following in lieu thereof:
"(ii) the balance of the Purchase Price shall be paid as
follows:
(a) Subject to the provisions of Section 1.5(ii)(b)
hereof, a portion of the Purchase Price shall be paid by the issuance
by Purchaser to Seller of 67,155 shares of the common stock of
Purchaser (the "Common Stock") which shall be valued at 90.91% of the
offering price per share in Purchaser's IPO (as defined in Section
4.1.0.1 hereof) (e.g., if the offering
price per share in the IPO is $10.00, then the amount applied
against the Purchase Price shall be $610,500); and
(b) The balance of the Purchase Price, after being
reduced by the Deposit, shall be paid by wire transfer of immediately
available funds to such bank account as shall be designated by the
Seller or by delivery of a cashier's check to the Seller at Closing;
provided, however, that in no event shall the cash portion of the
Purchase Price (prior to being reduced by the Deposit) be less than
$5,494,000 and, if the offering price per share in the IPO is greater
than $10.00, the number of shares to be issued to Seller pursuant to
Section 1.5(ii)(a) hereof shall be reduced to that number of shares
equal to $610,500 divided by the IPO price per share, with the quotient
multiplied by 110% (i.e., if the IPO price per share equals $11.00, the
cash portion of the Purchase Price would be $5,494,000, reduced by the
Deposit, and the number of shares issued pursuant to Section 1.5(ii)(a)
hereof would be 61,050 shares). Any further adjustments to the Purchase
Price shall be post-Closing adjustments.
(d) Section 1.5 (xii) is hereby amended by deleting existing Section
1.5(xii) and by inserting the following in lieu thereof: "(xii) The Closing
shall have been completed on or before December 31, 1996. Conforming changes are
hereby made to any other affected Section of this Agreement, including without
limitation Section 7.2.5 (by extending the date in the last line thereof to
December 31, 1996)."
(e) Section 2.16 of the Agreement is hereby amended by adding the
following at the end of existing Section 2.16:
"Seller has no liabilities or obligations (whether absolute, accrued,
contingent or otherwise), except liabilities, obligations or
contingencies that are accrued or reserved against in the Statements or
that were incurred since the date of the Statements in the ordinary
course of business and would not reasonably likely have a material
adverse effect on the business, operations, properties, assets,
condition (financial or otherwise), prospects or results of operations
of Seller."
(f) Section 4.2.1.1 of the Agreement is hereby amended by deleting
existing Section 4.2.1.1 and by inserting in lieu thereof the following:
"4.2.1.1. The wire transfer or delivery of a cashier's
check in the amount of the cash portion of the Purchase
Price, less the amount of the Deposit, and the delivery of
the Common Stock."
(g) New Section 5.6 is hereby added as follows:
"SECTION 5.6 Cooperation. Seller agrees reasonably to
cooperate with Purchaser in its IPO (as defined in Section
4.1.0 hereof)."
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(h) Section 7.3 of the Agreement is hereby amended by
adding to the beginning of the second sentence thereof the following:
"Except for vehicle transfer taxes in Michigan which shall be paid by
Purchaser,".
Section 2. Effect of this Amendment. Except as is hereinabove set
forth, the provisions of the Agreement shall hereafter remain in full force and
effect.
Section 3. This Amendment may be executed in two or more counterparts,
all of which when taken together shall constitute one and the same original.
Section 4. By their execution hereof, the parties hereto hereby agree
that this Amendment is voluntarily accepted for the purpose of making a full and
final compromise adjustment, settlement and waiver of any and all prior defaults
of the Agreement that either has alleged has occurred prior to the execution
hereof.
IN WITNESS WHEREOF, the parties have executed this Amendment the day
and year first above written.
BLUE WATER MEDICAL SUPPLY, INC.
By: ____________________________
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President
BLUE WATER INDUSTRIAL PRODUCTS, INC.
By: ___________________________
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President
LIFE CRITICAL CARE CORPORATION
By: __________________________
▇▇▇ ▇. ▇▇▇▇▇▇, Vice President
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