Exhibit 10.8
LOAN AND SECURITIES PURCHASE AGREEMENT
THIS LOAN AND SECURITIES PURCHASE AGREEMENT (this "Agreement")
is dated as of September __, 1996 and is made by and between LIFE CRITICAL CARE
CORPORATION, a Delaware corporation (the "Company"), and the person whose name
appears on the signature page hereof (the "Purchaser").
RECITALS
WHEREAS, the Company intends simultaneously to close on (i)
the acquisition (the "Acquisitions") of certain assets or all of the outstanding
capital stock of four (4) companies which provide home health care products and
services in the northern Midwest region pursuant to the terms of Asset Purchase
Agreements and Stock Purchase Agreements by and between the Company and such
companies or their stockholders, as applicable, and (ii) an initial public
offering by the Company of certain of its common stock (the "IPO");
WHEREAS, the Company desires to borrow from the Purchaser and
the Purchaser desires to lend to the Company the amount set forth on the
signature page hereof (the "Principal Amount") 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 sale by the Company to the Purchaser of that number of shares of the voting
common stock of the Company (the "Stock") set forth on the signature page
hereof; and
WHEREAS, the Principal Amount will be allocated ten cents per
share to the Stock and the balance to the Note.
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 STOCK
SECTION 1.01 Issuance of Notes and Stock.
(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 Principal Amount to be evidenced by the issuance by the Company to
the Purchaser of a 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 Stock.
(b) Payment of the Principal Amount will be made by the
Purchaser by certified or cashier's check or by wire transfer.
SECTION 1.02 Closing. 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"). The Stock shall be
issued promptly to the Purchaser by the Company.
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 Stock, and to execute,
deliver and perform any other document required pursuant to this Agreement.
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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 Stock 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.
(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 Stock will be
validly issued, fully paid and nonassessable shares of the Stock of the Company.
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 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. 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 Stock (collectively,
the "Loan Documents") constitute the valid, legal and 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 Stock.
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SECTION 2.05 Offering of Stock. 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 Stock has offered the Stock for sale to, or solicited any offers to
buy the Stock 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 stock 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 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 Stock 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 Stock.
SECTION 2.06 Compliance With Law. 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. 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 certificate of incorporation 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 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.
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ARTICLE III
COVENANTS
Until the payment in full of the Note:
SECTION 3.01 Certificate of No Default. At the Purchaser's
request, 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 3.02 Commission 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
the Commission.
SECTION 3.03 Compliance With Laws. The Company will use its
best efforts to 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 3.04 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
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
SECTION 4.01 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.
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SECTION 4.02 Investment Representations. The Purchaser
represents and warrants to the Company:
(a) the Note and the Stock (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) it is an "accredited investor" as defined in Rule 501(a)
promulgated under the Securities Act, and has indicated with an "x" which of the
following categories applies to the Purchaser:
_______ an organization described in Section 501(c)(3) of the
Internal Revenue Code, corporation, Massachusetts or
similar business trust, or partnership, not formed
for the specific purpose of acquiring the Note and
the Stock, with total assets in excess of $5,000,000.
_______ a natural person whose individual net worth, or
joint net worth with that person's spouse, at the
time of purchase, exceeds $1,000,000.
_______ a natural person who had an individual income in
excess of $200,000 in each of the most recent two
years or joint income with that person's spouse in
excess of $300,000 in each of those years and has a
reasonable expectation of reaching the same
income level in the current year.
_______ a trust with total assets in excess of $5,000,000
not formed for the specific purpose of acquiring
the Note and the Stock, whose purchase is directed
by a sophisticated person.
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_______ an employee benefit plan within the meaning of Title
1 of the Employee Retirement Income Security Act of
1974, if the investment decision is made by a plan
fiduciary which is a savings and loan association, if
the employee benefit plan has total assets in excess
of $5,000,000 or if the plan is a self-directed plan,
with investment decisions made solely by persons that
are accredited investors.
_______ an entity in which each of the equity owners falls
within one or more of the foregoing categories.
(c) 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.
(d) 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.
(e) it is not currently, and has not been within the last
12 months, an NASD member or affiliated with any NASD member.
SECTION 4.03 Acknowledgments. The Purchaser acknowledges and
understands that:
(a) No Federal or state agency has made any finding or
determination as to the fairness of the offering of the Note and Stock for
public or private investment, or any recommendation or endorsement of the Note
or the Stock.
(b) The Note and the Stock have not been registered under the
Securities Act and may not be sold unless subsequently registered under the
Securities Act or an exemption from such registration is available. The
Purchaser agrees that a legend to the foregoing effect may be placed on any and
all of the Notes and certificates for the Stock.
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(c) The Company is relying upon the accuracy of the
Purchaser's information provided to the Company, including the Purchaser's state
of residence on the signature page hereof.
(d) A commission will be payable by the Company to
Morgenthau & Associates, Inc. in an amount equal to 8% of the Principal
Amount.
(e) There is no assurance that the Company's IPO will occur.
SECTION 4.04 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.
SECTION 4.05 Lock-Up Agreement. The Purchaser agrees to enter
into a lock-up agreement covering the Stock purchased hereunder not to exceed 12
months from the Effective Date (i.e., the effective date of the Company's
proposed IPO) as required by the Company's underwriter for its proposed IPO.
ARTICLE V
DEFAULT
SECTION 5.01 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; or
(c) 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,
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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.
ARTICLE VI
MISCELLANEOUS
SECTION 6.01 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 6.02 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 Stock pursuant
hereto. All statements 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 6.03 Brokerage. Morgenthau & Associates, Inc. has been
retained by the Company and the Company is solely responsible for any payments
to it. No other 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 except as set forth
hereinabove, based in any way on agreements, arrangements or understandings made
or claimed to have been made by such party with any third party.
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SECTION 6.04 Recitals. The Recitals contained herein are
specifically incorporated herein by reference and made a part hereof.
SECTION 6.05 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.: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P.
400 Court Towers
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
(b) if to the Purchaser at the Purchaser's address
on the signature page hereof
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 6.06 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 6.07 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.
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SECTION 6.08 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 6.09 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 6.10 Governing Law. This Agreement and all
transactions contemplated hereby, including without limitation, the Note and
Stock, 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 6.11 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 6.12 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 6.13 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 reasonably be required for carrying out the intention of the
parties to, or facilitating the performance of, this Agreement.
SECTION 6.14 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.
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SECTION 6.15 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 6.16 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.
SECTION 6.17 Indemnification by Purchaser The Purchaser shall
indemnify, hold harmless, and defend the Company and its officers, directors,
affiliates, agents and employees with respect to any and all loss, damage,
expense, claim, action or liability incurred or to which any of the same may be
subject as a result of the breach or untruth of any of the representations and
warranties of the Purchaser contained in this Agreement.
ARTICLE VII
REGISTRATION RIGHTS
SECTION 7.1 Piggy-Back Registration.
7.1.1. Purchaser's Option.
7.1.1.1. Following the initial public
offering by the Company of any of its securities and until the second
anniversary of the date of this Agreement, if the Company proposes to file a
registration statement under the Securities Act with respect to an offering
by the Company 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 Purchaser at least thirty (30) days before the anticipated filing date,
and such notice shall offer the Purchaser the opportunity to include in
such registration statement such number of Registrable Securities (i.e.,
capital stock of the Company purchased by the Purchaser hereunder and owned
by the Purchaser) as the Purchaser may request. The Company shall use its best
efforts to cause the managing underwriter or underwriters of a proposed
underwritten offering to permit the Purchaser to include such securities
in such offering on the same terms and conditions as the securities of the
Company included therein.
7.1.1.2. 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
Purchaser, the Company and any other persons or entities intend to include in
such offering is sufficiently large to
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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
with other sellers in the offering 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.
7.1.1.3 In the event the Purchaser elects
to include Registrable Securities in a registration under this Section
7.1, the Company need not include Registrable Securities in the
registration statement in response to the Purchaser's request if the
Company can find a purchaser, upon terms and conditions acceptable to the
Purchaser, for the aggregate principal amount of the Registrable Securities
proposed by the Purchaser to be registered; if the purchase and sale of the
Registrable Securities proposed by the Purchaser to be registered is not
completed within sixty (60) days, the Company shall not be relieved of its
obligations under this Section 7.1.
7.1.2. Payment of Registration Expenses. The
Company will pay all Registration Expenses in connection with any
registration described in this Section 7.1 except for the Purchaser's pro
rata share of any underwriter's discount for any registration in which the
Purchaser participates.
7.1.3. Exception from Registration.
Notwithstanding the provisions of this Section 7.1, 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.
7.1.4. Availability of Rule 144. Notwithstanding
anything contained herein to the contrary, the registration rights set
forth in this Section 7.1 shall not be available to any Registrable Securities
that are freely transferable pursuant to Rule 144(k) of the SEC under the
Securities Act.
SECTION 7.2 Registration Procedures.
7.2.1. Registration. Whenever the Purchaser
requests that any Registrable Securities be registered pursuant to Section
7.1 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.
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7.2.2. Information. For the purposes of
effecting the registration of the Registrable Securities of the
Purchaser pursuant to Section 7.1 hereof, and for the purposes of effectuating a
public offering of its securities, the Company may require the Purchaser to
furnish to the Company such information regarding the Purchaser, the
Registrable Securities held by the Purchaser 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 Purchaser.
SECTION 7.3 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 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 Purchaser incurred in
connection with each registration hereunder (but not including any underwriting
discounts or commissions attributable to the sale of the Purchaser's Registrable
Securities) and any out-of-pocket expenses of the Purchaser, specifically
including the fees of one counsel for all selling stockholders other than the
Company in such registration (all such expenses being herein called
"Registration Expenses"), will be borne by the Company.
SECTION 7.4 Indemnification.
7.4.1. Indemnification.
7.4.1.1. The Company agrees to indemnify,
to the fullest extent permitted by law, the Purchaser, each of their
partners and officers, and each Person who controls the Purchaser (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
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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 Purchaser furnished in writing to the
Company by or on behalf of the Purchaser expressly for use therein or by
the Purchaser's failure to deliver a copy of the registration statement
or prospectus or any amendments or supplements thereto after the Company has
furnished the Purchaser 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 Purchaser.
7.4.1.2. The Purchaser agrees to
indemnify, to the fullest extent permitted by law, the Company and each of its
officers and directors who have signed the registration statement, each Person
who controls the Company (within the meaning of the Securities Act or the
Securities Exchange Act), the other selling stockholders selling under such
registration and any agent therefor, against all losses, claims, damages,
liabilities and expenses (or actions in respect thereof) that 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 not
misleading insofar as the same are caused by or contained in any information
with respect to such Purchaser furnished to the Company by or on behalf of
such Purchaser expressly for use therein or by the Purchaser's 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 Purchaser with a sufficient number of copies of the same;
provided, however, that the obligation of the Purchaser hereunder shall be
limited to an amount equal to the net proceeds received by the Purchaser
pursuant to the sale of Registrable Securities as contemplated herein. In
connection with an underwritten offering, the Purchaser shall be limited to an
amount equal to the net proceeds received by the Purchaser pursuant to the sale
of Registrable Securities as contemplated herein. In connection with an
underwritten offering, the Purchaser 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.
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7.4.2. Conduct of Indemnification Proceedings.
7.4.2.1. 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 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.
7.4.2.2. 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 7.5 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 Purchaser, the Company will deliver to the Purchaser a written
statement as to whether it has complied with such requirements. The Company will
take such further action as the Purchaser may reasonably request, all to the
extent required from time to time to enable the Purchaser 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.
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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)
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
- COMPANY -
WITNESS:
_____________________________ _____________________________(SEAL)
- PURCHASER -
Purchaser's Address (Section 6.05(b)):
Principal Amount of Note: $_____________ __________________________
Number of Shares of Stock: _____________ shares* __________________________
* i.e., 5,000 shares for each $50,000 Principal Amount of Note.
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EXHIBIT A
No. ___
August __, 1996 Principal Amount: $__________
REGISTERED
SUBORDINATED NOTE
LIFE CRITICAL CARE CORPORATION
PAYMENT ON THE PRINCIPAL OF AND INTEREST ON THIS NOTE IS REQUIRED TO BE
MADE DIRECTLY TO THE REGISTERED HOLDER HEREOF WITHOUT NOTATION HEREON. IT CANNOT
BE DETERMINED FROM THE FACE OF THIS NOTE WHETHER ALL OR ANY PART OF THE
PRINCIPAL OF OR INTEREST ON THIS NOTE HAS BEEN PAID.
LIFE CRITICAL CARE CORPORATION (the "Company"), a Delaware corporation,
for value received, promises to pay to the registered holder of this note (the
"Holder") by June 30, 1997 (or earlier as herein referred to), the principal
amount of ______________________________ ($_______) and interest as set forth
herein.
The interest hereon shall be payable at the annual rate of Twelve
Percent (12%) 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.
Interest hereunder shall accrue and shall be due on June 30, 1997.
The total outstanding principal, together with accrued interest
thereon, shall be payable on June 30, 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. 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.
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 ten (10) 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 within three (3) days after 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
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.
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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 ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, 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:
_____________________________ __________________________
_____________________________ __________________________
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