AGREEMENT AND CONSENT
This
AGREEMENT AND CONSENT (this “Agreement”),
dated
as of June 25, 2008, is made by and among MedaSorb Technologies Corporation,
a
Nevada corporation (the “Company”),
and
the holders of the Series A 10% Cumulative Convertible Preferred Stock, par
value $0.001 per share (the “Series
A Preferred Stock”)
of the
Company signatory hereto (each a “Holder”
and
collectively the “Holders”).
WHEREAS,
the undersigned Holders constitute the holders of not
less
than 80% of
the
issued and outstanding shares of the Series A Preferred Stock and 80% of the
outstanding Class A Common Stock Purchase Warrants (the “Class
A Warrants”)
of the
Company;
WHEREAS,
the Company desires to issue and sell shares of Series B 10% Cumulative
Convertible Preferred Stock, par value $0.001 per share (the “Series
B Preferred Stock”)
in a
private placement (the “Series
B Financing”)
to
certain “accredited investors” (the “Series
B Investors”);
WHEREAS,
the rights, preferences, and limitations of the Series B Preferred Stock will
be
governed by a Certificate of Designation (the “Series
B Certificate of Designation”)
to be
filed with the Secretary of State of the State of Nevada immediately prior
to,
or concurrently with, the consummation of the Series B Financing;
WHEREAS,
the rights, preferences, and limitations of the Series A Preferred Stock are
set
forth in that certain Certificate of Designation filed with the Secretary of
State of the State of Nevada on June 29, 2006 (the “Series
A Certificate of Designation”);
and
WHEREAS,
the investment by the Series B Investors in the Series B Financing will benefit
the Holders by aiding the overall financial condition of the Company, in which
the Holders have a significant interest as stockholders thereof, and the Holders
are therefore willing to consent to (a) certain matters related to the Series
B
Financing for which the Holders’ consent is required under relevant provisions
of the Series A Certificate of Designation; (b) the permanent waiver of
anti-dilution protections contained in the various subscription agreements
(the
“Series
A Subscription Agreement”)
pursuant to which such Holders purchased shares of Series A Preferred Stock,
and
the agreed upon reduction of the conversion price of the Series A Preferred
Stock and exercise price of the Class A Warrants applicable to certain of the
undersigned as provided for herein; and (c) certain amendments to the Series
A
Certificate of Designation as provided herein.
NOW,
THEREFORE, in consideration of the foregoing premises, and the mutual agreements
contained herein, the Company and the Holders hereby agree as
follows:
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1.
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Consent
of the Holders.
Each of the undersigned Holders hereby consent to and approve of:
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(i) the
Company’s designation of the Series B Preferred Stock pursuant to the Series B
Certificate of Designation in the Form of Exhibit A hereto, with the rights
and
preferences (including as to dividends and upon a liquidation of the Company)
as
set forth in the Series B Certificate of Designation, and issuance and sale
of
shares of Series B Preferred Stock to the Series B Investors in the Series
B
Financing;
(ii) the
amendment and restatement of the Series A Certificate of Designation, as set
forth in the Certificate
of Amendment to Certificate of Designation with
respect to the Series A Preferred Stock in the form of Exhibit B attached
hereto;
(iii) the
permanent waiver of the anti-dilution protections provided by Section 12(b)
of
the Series A Subscription Agreement with respect to the Series A Preferred
Stock;
(iv) the
permanent
waiver
of
the anti-dilution protections provided by Section 12(b) of the Series A
Subscription Agreement with respect to the Class A Warrants;
(v) the
waiver in full of all pre-emptive rights and rights of first refusal provided
for in Section 12(a) of the Series A Subscription Agreement with respect to
the
Series B Financing; and
(vi) the
waiver in full of all registration rights provided for under Section 11 of
the
Series A Subscription Agreement.
2. Reduction
of Conversion Price of Series A Preferred Stock.
The
Company and the Holders hereby agree that the conversion price with respect
to
the Series A Preferred Stock held by the Holders shall be reduced, effective
only upon the initial closing of the Series B Financing (the “Initial
Closing”),
as
set forth on Schedule A hereto. In the event that within the 60-day period
following the Initial Closing, the Company, at one or more additional closings,
issues additional shares of Series B Preferred Stock so that the aggregate
gross
proceeds raised by the Company on the Initial Closing and such additional
closings (excluding
the principal amount of outstanding debt of the Company converted into Series
B
Preferred Stock) from
the
Holders, affiliates of the Holders, and persons introduced to the Company by
the
Holders or their affiliates, is $1,500,000 or more (such closings, collectively,
a “Qualified
Closing”),
the
conversion price with respect to the Series A Preferred Stock held by the
Holders shall be further reduced as provided on Schedule A.
3. Reduction
to Exercise Price of Class A Warrants.
The
Company and the Holders hereby agree that the exercise price with respect to
the
Class A Warrants held by the Holders shall be reduced, effective only upon
the
Initial Closing, as set forth on Schedule A hereto. Upon the consummation of
a
Qualified Closing, the conversion price with respect to the Class A Warrants
held by the Holders shall be further reduced as provided on Schedule A.
4. Holding
Period.
The
Company acknowledges and agrees that the holding period under Rule 144 under
the
Securities Act of 1933, as amended, with respect to the shares
of
Series
A
Preferred Stock held by the Holders shall tack back to the original issue date
of the Series A Preferred Stock of June 30, 2006 with respect to shares
of
Series
A Preferred Stock purchased
by the Holders on June 30, 2006, or such other original issue date with respect
to shares of Series A Preferred Stock otherwise acquired or purchased by the
respective Holders.
5. Counterparts.
This
Agreement may be executed in any number of counterparts and by the different
signatories hereto on separate counterparts, each of which, when so executed,
shall be deemed an original, but all such counterparts shall constitute but
one
and the same instrument. This Agreement may be executed by facsimile signature
and delivered by facsimile transmission.
2
6. Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New York, and any action brought by any party hereunder with respect
to
this Agreement shall be brought only in the civil or state courts of New York
or
in the federal courts located in New York County.
[Signature
Page Follows]
3
IN
WITNESS WHEREOF,
the
undersigned have executed this Agreement as of the 25th_ day of June,
2008.
| MEDASORB TECHNOLOGIES CORPORATION | ||
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By:
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/s/
Xx Xxxxx
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|
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Name:
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Xx
Xxxxx
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|
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Title:
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Chief
Executive Officer
|
|
| ALPHA CAPITAL | ||
| AKTIENGESELLSCHAFT | ||
|
By:
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/s/
Xxxxxx Xxxxxxxx
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|
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Name:
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Xxxxxx
Xxxxxxxx
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|
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Title:
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Director
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| LONGVIEW FUND, LP | ||
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By:
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/s/
S. Xxxxxxx Xxxxxxxx
|
|
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Name:
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S.
Xxxxxxx Xxxxxxxx
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|
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Title:
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CFO
– Investment Adviser
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|
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PLATINUM
PARTNERS LONG TERM GROWTH III LLC
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||
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By:
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/s/
Xxxx Xxxxxxxxx
|
|
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Name:
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Xxxx
Xxxxxxxxx
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|
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Title:
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XX
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|
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XXXXX
INTERNATIONAL LTD.
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||
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By:
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/s/
Xxxxxxx Xxxxx
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|
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Name:
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Xxxxxxx
Xxxxx
|
|
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Title:
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||
| /s/ Xxxxxx Xxxxxxxx | ||
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Xxxxxx
Xxxxxxxx
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||
4
SCHEDULE
A
Reduction
of Series A Conversion Price and Warrant Exercise Price
|
Series
A Holder
|
Initial
Closing
|
Qualified
Closing
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|||||||||||
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Preferred Stock
Conversion Price
|
|
Warrant
Exercise Price
|
|
Preferred Stock
Conversion Price
|
|
Warrant
Exercise Price
|
|||||||
|
Alpha
Capital Aktiengesellschaft
|
$
|
0.26
|
$
|
0.52
|
$
|
0.20
|
$
|
0.40
|
|||||
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Longview
Fund, LP
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$
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1.25
|
$
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2.00
|
$
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0.45
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$
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0.90
|
|||||
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Platinum
Partners Long
Term
Growth III LLC
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$
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1.25
|
$
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2.00
|
$
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0.10
|
$
|
0.40
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|||||
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Xxxxx
International Ltd.
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$
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0.26
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$
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0.52
|
$
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0.20
|
$
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0.40
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|||||
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Xxxxxx
Xxxxxxxx
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$
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1.25
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$
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2.00
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$
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0.10
|
$
|
0.40
|
|||||
5
EXHIBIT
A
Series
B Preferred Stock Certificate of Designation
6
EXHIBIT
B
Series
A Preferred Stock Certificate of Amendment to Certificate of
Designation
7
