AGREEMENT
This Agreement is entered into as of this 28th day of March, 1997, by
and between LifeRate Systems, Inc., a corporation organized under the laws of
the State of Minnesota (the "Company") and The Atlanta Cardiology Group, P.C., a
professional corporation organized under the laws of the State of Georgia
("ACG").
RECITALS:
The Company and ACG are parties to a certain Letter of Agreement (the
"Letter Agreement") dated September 28, 1994 relating to the development,
production and implementation of certain practice guidelines and clinical
outcomes systems for cardiology (all such guidelines, products and systems
developed or being developed under the Letter Agreement being herein called
"Letter Agreement Products and Systems").
The Company and ACG desire to terminate the Letter Agreement in its
entirety and replace it with a new agreement as provided herein.
In connection with the termination of the Letter Agreement, the Company
has agreed to issue, and ACG have agreed to acquire, on the terms and conditions
set forth herein, a Convertible Subordinated Note in the principal amount of
$2,250,000 U.S., in the form attached as Exhibit A (the "Note"), which Note also
provides, among other things, that $2,000,000 of the principal amount thereof is
convertible into shares of the Company's Common Stock, in which event the
remaining $250,000, together with accrued interest, shall be payable at
maturity.
AGREEMENT:
For good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the Company and ACG agree as follows:
1. Agreement To Issue And Acquire Note; Termination Of Letter Agreement;
Mutual Release.
1.1. Issuance of Note. Subject to the terms and conditions hereof,
at the Closing (as defined below), and in consideration for
the termination of the Letter Agreement and the execution of
the Mutual Release (referred to below), the Company hereby
agrees to issue to ACG, and ACG agrees to acquire from the
Company, the Note.
1.2. Termination of Letter Agreement. Subject to the terms and
conditions hereof, at the Closing, the Letter Agreement shall
terminate in all respects and neither ACG nor the Company
shall have any responsibility, liability or obligation to each
other in respect of the Letter Agreement.
1.3. Mutual Release. Subject to the terms and conditions hereof, at
the Closing, the parties hereto will each execute the Mutual
Release in the form attached as Exhibit B.
2. Closing.
2.1. Closing Dates. The closing of the matters provided for in this
Agreement shall take place at the offices of Xxxxxxxxxxx Xxxxx
& Xxxxxxxx, 00 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxxxx,
Xxxxxxxxx 00000, at 11 a.m., Minneapolis time, on or about
March 26, 1997, or as soon as practical thereafter (the
"Closing") or at such other place or different time or day as
may be mutually acceptable to ACG and the Company, provided
that all other conditions to the Closing as provided in this
Agreement have been met to the reasonable satisfaction of, or
waived by, ACG or the Company, as the case may be. The date
and time on which the Closing occurs is referred to as the
"Closing Date."
2.2. Delivery of Note. At the Closing, the Company will deliver the
Note to ACG. The Note shall be dated and shall accrue interest
on the original principal amount commencing on the Closing
Date.
3. Representations And Warranties By The Company.
The Company hereby represents and warrants to ACG the following as of
the Closing Date, except as disclosed in the Schedules attached hereto
in reasonable detail:
3.1. Organization, Standing, Etc. The Company is a corporation duly
organized, validly existing and in good standing under the
laws of the State of Minnesota and has the requisite power and
authority to own or lease its properties and to carry on its
business as it is now being conducted. The Company has the
requisite power and authority to execute this Agreement and to
issue the Note and the shares issuable on conversion of the
Note (the "Conversion Shares") and to perform its obligations
under this Agreement and the Note.
3.2. Governing Instruments. The copies of the charter documents of
the Company, and all amendments thereto (collectively, the
"Charter Documents"), delivered to legal counsel for ACG prior
to the execution of this Agreement, are true and complete
copies of the duly and legally adopted Charter Documents in
effect.
3.3. Valid Issuance. The Note, when issued pursuant to the terms of
this Agreement, will be duly authorized, validly issued and
enforceable in accordance with its terms and the terms of this
Agreement, except as such enforceability may be limited by
bankruptcy, insolvency, moratorium, reorganization or other
similar laws affecting the enforcement of creditors' rights
generally and to judicial limitations on the enforcement of
the remedy of specific performance and other equitable
remedies. The Conversion Shares have been reserved for
issuance and, when issued upon the conversion of the Note,
will be duly authorized, validly issued and outstanding, fully
paid, nonassessable and free and clear of all pledges, liens
and encumbrances.
3.4. Securities Laws. Based in part upon the representations of ACG
in Section 4, no consent, authorization, approval, permit or
order of or filing with any governmental or regulatory
authority is required under current laws and regulations in
connection with the execution and delivery of this Agreement
or the offer, issuance, sale or delivery of the Note, other
than the filing of a Form D pursuant to Regulation D under the
Securities Act of 1933, as amended (the "Securities Act"), and
the qualification thereof, if required, under applicable state
securities laws which qualification has been or will be
effected as a condition of this sale. Under the circumstances
contemplated by this Agreement, the offer, issuance, sale and
delivery of the Note will not, under current laws and
regulations, require compliance with the prospectus delivery
or registration requirements of the Securities Act.
3.5. Capital Stock.
(a) The authorized capital stock of the Company as of the
date hereof is contained in the Company's Annual
Report on Form 10-KSB, for the year-ended December
31, 1996 ("Form 10-KSB"). All of the outstanding
shares of the Company were duly authorized and
validly issued and are fully paid and nonassessable.
(b) There are no outstanding subscriptions, options,
warrants, calls, contracts, demands, commitments,
convertible securities or other agreements or
arrangements of any character or nature whatever,
other than this Agreement, under which the Company is
obligated to issue any securities of any kind
representing an ownership interest in the Company,
except as set forth in the Form 10-KSB. The issuance
of the Note and the Conversion Shares do not
constitute an event, under any anti-dilution
provisions of any securities issued (or issuable
pursuant to outstanding rights, warrants or options)
by the Company or any agreements with respect to the
issuance of securities by the Company, which will
either increase the number of shares issuable
pursuant to such provisions or decrease the
consideration per share to be received by the Company
pursuant to such provisions.
(c) Except as set forth on the Form 10-KSB, no holder of
any securities of the Company is entitled to any
preemptive or similar rights to purchase any
securities of the Company from the Company.
3.6. Corporate Acts and Proceedings. This Agreement has been duly
authorized by all necessary corporate action on behalf of the
Company, has been duly executed and delivered by authorized
officers of the Company, is a valid and binding agreement on
the part of the Company and is enforceable against the Company
in accordance with its terms, except as such enforceability
may be limited by bankruptcy, insolvency, moratorium,
reorganization or other similar laws affecting the enforcement
of creditors' rights generally and to judicial limitations on
the enforcement of the remedy of specific performance and
other equitable remedies. All corporate actions necessary to
the authorization, creation, issuance and delivery of the Note
and the Conversion Shares and reservation of the Conversion
Shares contemplated hereunder has been taken by the Company,
or will be taken by the Company on or prior to the Closing.
4. Representations and Agreements of ACG.
ACG hereby severally represents, warrants to, and agrees with, the
Company that:
4.1. Investment Intent. ACG is purchasing the Note for investment
for such its own account and not with the view to, or for
resale in connection with, any distribution or public offering
thereof. ACG has no current plan or intention to engage in a
sale, exchange, transfer, distribution, redemption, reduction
in any way of ACG's risk of ownership by short sale or
otherwise, or other disposition, directly or indirectly of the
Note pursuant to this Agreement.
4.2. Knowledge and Experience. ACG has substantial experience in
evaluating and investing in private placement transactions of
securities in companies similar to the Company and has the
knowledge and experience in financial and business matters
such that ACG is capable of evaluating the merits and risks of
his investment in the Company and has the capacity to protect
his own interests.
4.3. Location of Principal Office, Qualification as an Accredited
Investor, Etc. The state of domicile of ACG is the state set
forth in ACG's address in Sections 12.2. ACG, by execution of
this Agreement, hereby represents that it qualifies as an
"accredited investor" for purposes of Regulation D promulgated
under the Securities Act. ACG can bear the loss of the entire
investment in the Note without any material adverse effect on
its assets, net worth, business, operations or prospects.
4.4. Acts and Proceedings. This Agreement has been duly authorized
by all necessary action on the part of ACG, has been duly
executed and delivered by ACG, and is a valid and binding
agreement of ACG and enforceable against ACG in accordance
with its terms, except as enforceability may be limited by
bankruptcy, insolvency, moratorium, reorganization or other
similar laws affecting the enforcement of creditor's rights
generally and to judicial limitations on the remedy of
specific enforcement and other equitable remedies.
4.5. Disclosure of Information. ACG acknowledges that the Company
has made available to ACG at a reasonable time prior to the
execution of this Agreement the opportunity to ask questions
and receive answers concerning the terms and conditions of the
offering of the Note and to obtain any additional information
(which the Company possesses or can acquire without
unreasonable effort or expense) as may be necessary to verify
the accuracy of information furnished to ACG. The foregoing,
however, does not limit or modify the representations and
warranties of the Company in this Agreement or the right of
ACG to rely thereon. ACG acknowledges that in making the
decision to invest in the Company, ACG is not relying on any
person, firm or company, other than the Company and its
officers, employees and/or directors.
4.6. Restrictions on Resale; Rule 144. ACG understands that (i)
neither the Note nor the Conversion Shares have been
registered under the Securities Act or any state securities
laws because they are being issued in transactions exempt from
such registration requirements, pursuant to Section 4(2) of
the Securities Act and applicable state securities laws, and
(ii) the reliance of the Company and others upon these
exemptions is predicated in part upon this representation by
ACG. ACG acknowledges that the Shares must be held
indefinitely unless subsequently registered under the
Securities Act and any applicable state securities act or
unless exemptions from such registration are available. ACG
understands that neither the Note nor the Conversion Shares
may be transferred or resold without (i) registration under
the Securities Act and any applicable state securities laws,
or (ii) an exemption from the requirements of the Securities
Act and applicable state securities laws. ACG understands that
an exemption from such registration is not presently available
pursuant to Rule 144 promulgated under the Securities Act by
the Securities and Exchange Commission (the "Commission") and
that ACG may not sell any securities acquired hereunder
pursuant to Rule 144 prior to the expiration of a two-year
period (or shorter period, if applicable) after ACG has
acquired such securities and in full compliance with all other
provisions of Rule 144.
4.7. Legend; Stop Transfer. The Note shall bear the following
legend:
"THIS NOTE AND THE UNDERLYING SECURITIES HAVE NOT BEEN
REGISTERED UNDER EITHER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), OR APPLICABLE BLUE SKY LAWS, AND IS SUBJECT TO
CERTAIN INVESTMENT REPRESENTATIONS. THIS NOTE MAY NOT BE SOLD,
OFFERED FOR SALE OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION UNDER THE ACT, AND THE APPLICABLE BLUE SKY LAWS
OR AN EXEMPTION THEREFROM."
The Conversion Shares, if and when issued shall bear a similar
legend. In addition, the Company shall make a notation
regarding the restrictions on transfer of the Note and
Conversion Shares in its books and the Note and Conversion
Shares shall be transferred on the books of the Company only
if transferred or sold pursuant to an effective registration
statement under the Securities Act covering the Note and
Conversion Shares or an opinion of counsel satisfactory to the
company that such registration is not required.
4.8. No Intellectual Property Rights. ACG confirms, acknowledges
and agrees that ACG does not own, or claim any ownership or
other any right, title or interest in, any intellectual
property rights related to the Letter Agreement Products and
Systems, or any other intellectual property of the Company,
including, but not limited to, any inventions, patents,
copyrights, trade secrets, trademarks or confidential
information embodied in source code or object code.
5. Conditions of ACG's Obligations.
The obligation of ACG to acquire the Note at the Closing is subject to
the fulfillment or written waiver by ACG prior to or on the Closing
Date of the conditions set forth in this Section 5.
5.1. Representations and Warranties. The representations and
warranties of the Company under this Agreement shall be true
in all material respects as of the Closing Date with the same
effect as though made on and as of such date.
5.2. Compliance with Agreement. The Company shall have performed
and complied with all agreements or conditions required by
this Agreement to be performed and complied with by it prior
to or as of the Closing Date.
5.3. Certificate of Officers. The Company shall have delivered to
ACG a certificate, dated as of each Closing Date, executed by
the President and Chief Financial Officer of the Company,
certifying to the satisfaction of the conditions specified in
Sections 5.1 and 5.2.
5.4. Supporting Documents. Legal counsel for ACG shall have
received the following:
(a) a copy of resolutions of the Board of Directors
authorizing and approving the Note and authorizing
and approving the execution, delivery and performance
of this Agreement, all such resolutions to be
certified by an officer of the Company;
(b) a Certificate of Incumbency executed by an officer of
the Company certifying the names, titles and
signatures of the officers authorized to execute this
Agreement and further certifying that the Charter
Documents of the Company delivered to legal counsel
for ACG at the time of the execution of this
Agreement have been validly adopted and have not been
amended or modified; and
(c) such additional supporting documentation and other
information with respect to the transactions
contemplated hereby as legal counsel for ACG may
reasonably request.
5.5. Qualification under State Securities Laws. All registrations,
qualifications, permits and approvals required under
applicable state securities laws for the lawful execution and
delivery of this Agreement and the offer, sale, issuance and
delivery of the securities to ACG at the closing shall have
been obtained or will be obtained in compliance with such
laws.
6. Conditions of the Company's Obligations.
The obligations of the Company to ACG under this Agreement are subject
to the fulfillment on or before the Closing of each of the following
conditions, the waiver of which shall not be effective unless consented
to in writing by the Company:
6.1. Representations and Warranties. The representations and
warranties of ACG contained in Section 4 shall be true and
correct on and as of the Closing with the same force and
effect as if such representations and warranties had been made
on and as of the Closing.
6.2. Qualification under State Securities Laws. All registrations,
qualifications, permits and approvals required under
applicable state securities laws for the lawful execution and
delivery of this Agreement and the offer, sale, issuance and
delivery of the securities to ACG at the Closing shall have
been obtained or will be obtained in compliance with such
laws.
7. Affirmative Covenants of the Company.
While the Note remains outstanding, the Company covenants and agrees as
follows:
7.1. Note Covenants. The Company shall comply with the Affirmative
Covenants of the Company as set forth in Section 7 of the
Note.
7.2. Conversion of Note. The Note shall be convertible, at the
option of ACG, at the rate and on the other terms and
conditions set forth in the Note. All of the Conversion Shares
that may be issued, upon issuance, will be fully paid and
nonassessable and free from all taxes, liens and charges
(except for taxes, if any, upon the income of the holder and
applicable transfer taxes) with respect to the issue thereof.
The Company further covenants and agrees that the Company will
at all times have authorized and reserved a sufficient number
of its shares of Common Stock for the purpose of issuance upon
the exercise of such conversion privileges.
7.3. Designee to Attend Board Meetings. ACG will have the right to
appoint a designee to attend all meetings of the Board of
Directors of the Company, which designee shall also receive
copies of all materials distributed to the Board.
7.4. License. The Company will grant ACG a perpetual, royalty-free
license to use the LifeRate system, including upgrades, as well
provide ACG with access to the LifeRate's complete database,
upon mutually agreeable terms to be negotiated within the next
30 days.
8. Negative Covenants.
The Company agrees that while the Note remains outstanding the Company
will comply with the negative covenant set forth in Section 8 of the
Note.
9. Registration Rights.
9.1. Required Registration. If, at any time after ACG shall have
given notice of conversion to the Company indicating the
intent to convert the Note into shares of Common Stock, the
Company shall receive a written request from ACG, the Company
shall prepare and file a registration statement under the
Securities Act as promptly as reasonable possible, covering
the number of Conversion Shares which are the subject of such
requests and shall use its best efforts to cause such
registration statement to become effective. In the event that
ACG determines for any reason not to proceed with a
registration at any time before the registration statement has
been declared effective by the Commission, and such
registration statement is withdrawn with respect to the
Conversion Shares covered thereby, and ACG agrees to bear its
own expenses incurred in connection therewith and to reimburse
the Company for the expenses incurred by it attributable to
the registration of such Conversion Shares, then ACG shall not
be deemed to have exercised a right to require the Company to
register Conversion Shares pursuant to this Section at the
expense of the Company. If a registration statement filed by
the Company at the request of ACG pursuant to this Section is
withdrawn at the initiative of the Company, then ACG shall not
be deemed to have exercised a right to require the Company to
register Conversion Shares pursuant to this Section.
The managing underwriter of an offering registered pursuant to
this Section shall be selected by ACG and shall be reasonably
acceptable to the Company. Without the written consent of ACG,
neither the Company nor any other holder of securities of the
Company may include securities in such registration if, in the
good faith judgment of the managing underwriter of such public
offering, the inclusion of such securities would interfere
with the successful marketing of the Conversion Shares or
require the exclusion of any portion of the Conversion Shares
to be registered. Shares to be excluded from an underwritten
public offering shall be selected in the manner provided in
Section 9.2.
The obligation of the Company under this Section 9.1 shall be
limited to one registration statement. The Company shall pay
the expenses described in Section 9.5 for such registration
statement.
For purposes of this Section 9, Conversion Shares shall be
deemed to include the Common Stock or other securities of the
Company issued and outstanding in a stock split or
reclassification of or a stock dividend or other distribution
on or in substitution or exchange for, or in a merger or
consolidation involving the Company or a sale of all or
substantially all of the Company's assets in exchange for or
otherwise in connection with, the Conversion Shares.
9.2. Incidental Registration. Each time the Company shall determine
to proceed with the actual preparation and filing of a
registration statement under the Securities Act in connection
with the proposed offer and sale for money of any of its
securities by it or any of its security holders (other than a
registration statement on Form X-0, X-0 or other limited
purpose form), the Company will give written notice of its
determination to ACG. Upon the written request of ACG given
within 30 days after receipt of any such notice from the
Company, the Company will, except as herein provided, cause
all Conversion Shares so requested to be included in such
registration statement, all to the extent requisite to permit
the sale or other disposition by the prospective seller or
sellers of the Conversion Shares to be so registered;
provided, however, that nothing herein shall prevent the
Company from, at any time, abandoning or delaying any
registration. If any registration pursuant to this Section
shall be underwritten in whole or in part, the Company may
require that the Conversion Shares requested for inclusion
pursuant to this Section be included in the underwriting on
the same terms and conditions as the securities otherwise
being sold through the underwriters. If in the good faith
judgment of the managing underwriter of such public offering
the inclusion of all of the Conversion Shares originally
covered by a request for registration would reduce the number
of shares to be offered by the Company or interfere with the
successful marketing of the shares of stock offered by the
Company, the number of Conversion Shares to be included in the
underwritten public offering shall be reduced; first, pro rata
among the holders thereof requesting inclusion in such
registration who do not have written registration rights, and
thereafter, pro rata among those holders who have written
registration rights. Those Conversion Shares which are thus
excluded from the underwritten public offering shall be
withheld from the market by the holders thereof for a period,
not to exceed 90 days, which the managing underwriter
reasonably determines is necessary in order to effect the
underwritten public offering.
9.3. Registration Procedures. If and whenever the Company is
required by the provisions of Section 9.1 to effect the
registration of Conversion Shares under the Securities Act,
the Company will:
(a) prepare and file with the Commission a registration
statement with respect to such securities, and use
its best efforts to cause such registration statement
to become and remain effective for such period as may
be reasonably necessary to effect the sale of such
securities, not to exceed nine months;
(b) prepare and file with the Commission such amendments
to such registration statement and supplements to the
prospectus contained therein as may be necessary to
keep such registration statement effective for such
period as may be reasonably necessary to effect the
sale of such securities, not to exceed nine months;
(c) furnish to the security holders participating in such
registration and to the underwriters of the
securities being registered such reasonable number of
copies of the registration statement, preliminary
prospectus, final prospectus and such other documents
as such underwriters may reasonably request in order
to facilitate the public offering of such securities;
(d) use its best efforts to register or qualify the
securities covered by such registration statement
under such state securities or blue sky laws of such
jurisdictions as such participating holders may
reasonably request within 20 days following the
original filing of such registration statement,
except that the Company shall not for any purpose be
required to execute a general consent to service of
process or to qualify to do business as a foreign
corporation in any jurisdiction wherein it is not so
qualified;
(e) notify the security holders participating in such
registration, promptly after it shall receive notice
thereof, of the time when such registration statement
has become effective or a supplement to any
prospectus forming a part of such registration
statement has been filed;
(f) notify such holders promptly of any request by the
Commission for the amending or supplementing of such
registration statement or prospectus or for
additional information;
(g) prepare and file with the Commission, promptly upon
the request of any such holders, any amendments or
supplements to such registration statement or
prospectus which, in the opinion of counsel for such
holders (and concurred in by counsel for the
Company), is required under the Securities Act or the
rules and regulations thereunder in connection with
the distribution of the conversion shares by such
holder;
(h) prepare and promptly file with the Commission and
promptly notify such holders of the filing of such
amendment or supplement to such registration
statement or prospectus as may be necessary to
correct any statements or omissions if, at the time
when a prospectus relating to such securities is
required to be delivered under the Securities Act,
any event shall have occurred as the result of which
any such prospectus or any other prospectus as then
in effect would include an untrue statement of a
material fact or omit to state any material fact
necessary to make the statements therein, in the
light of the circumstances in which they were made,
not misleading;
(i) advise such holders, promptly after it shall receive
notice or obtain knowledge thereof, if the issuance
of any stop order by the Commission suspending the
effectiveness of such registration statement or the
initiation or threatening of any proceeding for that
purpose and promptly use its best efforts to prevent
the issuance of any stop order or to obtain its
withdrawal if such stop order should be issued; and
(j) not file any amendment or supplement to such
registration statement or prospectus to which a
majority in interest of such holders shall have
reasonably objected on the grounds that such
amendment or supplement does not comply in all
material respects with the requirements of the
Securities Act or the rules and regulations
thereunder, after having been furnished with a copy
thereof at least two business days prior to the
filing thereof, unless in the opinion of counsel for
the Company the filing of such amendment or
supplement is reasonably necessary to protect the
Company form any liabilities under any applicable
federal or state law and such filing will not violate
applicable law.
9.4. Expenses. With respect to a registration statement pursuant to
Section 9.1, with the exception of such expenses incurred
after the decision by the Company not to proceed, the Company
shall bear the following fees, costs and expenses: all
registration, filing and NASD fees, printing expenses, fees
and disbursements of counsel and accountants for the Company
and all legal fees and disbursements and other expenses of
complying with state securities or blue sky laws of any
jurisdictions in which the securities to be offered are to be
registered or qualified. Fees and disbursements of counsel and
accountants for the selling security holders, underwriting
discounts and commissions and transfer taxes for selling
security holders and any other expenses incurred by the
selling security holders not expressly included above shall be
borne by the selling security holders.
9.5. Indemnification.
(a) The Company will indemnify and hold harmless ACG and
any underwriter (as defined in the Securities Act)
for such holder and each person, if any, who controls
such holder or such underwriter within the meaning of
the Securities Act, from and against any and all
loss, damage, liability, cost and expense to which
such holder or any such underwriter or controlling
person may become subject under the Securities Act or
otherwise, insofar as such losses, damages,
liabilities, costs or expenses are caused by any
untrue statement or alleged untrue statement of any
material fact contained in such registration
statement, any prospectus contained therein or any
amendment or supplement thereto, or arise out of or
are based upon the omission or alleged omission to
state therein a material fact required to be stated
therein or necessary to make the statements therein,
in light of the circumstances in which they were
made, not misleading; provided, however, that the
Company will not be liable in any such case to the
extent that any such loss, damage, liability, cost or
expense arises out of or is based upon an untrue
statement or alleged untrue statement or omission or
alleged omission so made in conformity with written
information furnished by such holder or such
controlling person in writing specifically for use in
the preparation thereof.
(b) ACG will indemnity and hold harmless the Company, any
controlling person and any underwriter from and
against any and all loss, damage, liability, cost or
expense to which the Company or any controlling
person and/or any underwriter may become subject
under the Securities Act or otherwise, insofar as
such losses, damages, liabilities, costs or expenses
are caused by any untrue or alleged untrue statement
of any material fact contained in such registration
statement, any prospectus contained therein or any
amendment or supplement thereto, or arise out of or
are based upon the omission or the alleged omission
to state therein a material fact required to be
stated therein or necessary to make the statements
therein, in light of the circumstances in which they
were made, not misleading, in each case to the
extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or
alleged omission was so made in reliance upon and in
strict conformity with written information furnished
by ACG specifically for use in the preparation
thereof.
(c) Promptly after receipt by an indemnified party
pursuant to the provisions of paragraph (a) or (b) of
this Section 9.5 of notice of the commencement of any
action involving the subject matter of the foregoing
indemnity provisions, such indemnified party will, if
a claim thereof is to be made against the
indemnifying party pursuant to the provisions of said
paragraph (a) or (b), promptly notify the
indemnifying party of the commencement thereof; but
the omission to so notify the indemnifying party will
not relieve it from any liability which it may have
to any indemnified party otherwise than hereunder. In
case such action is brought against any indemnified
party and it notifies the indemnifying party of the
commencement thereof, the indemnifying party shall
have the right to participate in, and, to the extent
that it may wish, jointly with any other indemnifying
party similarly notified, to assume the defense
thereof, with counsel satisfactory to such
indemnified party; provided, however, if the
defendants in any action include both the indemnified
party and the indemnifying party and there is a
conflict of interest which would prevent counsel for
the indemnifying party from also representing the
indemnified party, the indemnified party or parties
shall have the right to select separate counsel to
participate in the defense of such action on behalf
of such indemnified party or parties. After notice
from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the
indemnifying party will not be liable to such
indemnified party pursuant to the provisions of said
paragraph (a) or (b) for any legal or other expense
subsequently incurred by such indemnified party in
connection with the defense thereof other than
reasonable costs of investigation, unless (i) the
indemnified party shall have employed counsel in
accordance with the proviso of the preceding
sentence, (ii) the indemnifying party shall not have
employed counsel satisfactory to the indemnified
party to represent the indemnified party within a
reasonable time after the notice of the commencement
of the action, or (iii) the indemnifying party has
authorized the employment of counsel for the
indemnified party at the expense of the indemnifying
party.
10. Events of Default; Acceleration.
An "Event of Default" shall occur upon the occurrence of any of the
following events:
10.1. Representation and Warranties. Any representation or warranty
made by the Company herein shall prove to have been incorrect
in any material respect on or as of the date made and remains
unremedied for a period of thirty (30) days after ACG provides
the Company with written notice thereof; or
10.2. Covenants. The Company shall default in the observance or
performance of any material covenant or agreement contained in
this Agreement and such default shall continue unremedied for
a period of the earlier of thirty (30) days from the date an
executive officer of the Company has actual knowledge of such
default or thirty (30) days after ACG has provided the Company
with written notice of such breach; or
10.3. Note Terms. An Event of Default shall occur under the Note;
then, and in any such event, so long as any Event of Default shall be
continuing, ACG by notice of default to the Company, declare the Note
owned by ACG (with accrued interest thereon) and all other amounts
owing under this Agreement to be due and payable forthwith, whereupon
the same shall immediately become due and payable.
11. Remedies Upon an Event of Default.
Upon the occurrence of an Event of Default, unless such Event of
Default shall have been waived or cured prior to the exercise of the
remedies set forth in this Section, ACG shall have all other remedies
at law or in equity, afforded to holders of debt or otherwise provided
for by this Agreement.
12. Miscellaneous.
12.1. Changes, Waivers, Etc. Neither this Agreement nor any
provision hereof may be changed, waived, discharged or
terminated orally, but only by a statement in writing signed
by the party against which enforcement of the change, waiver,
discharge or termination is sought.
12.2. Notices. All notices, requests, consents and other
communications required or permitted hereunder shall be in
writing and shall be delivered, or mailed first-class postage
prepaid, registered or certified mail, as follows:
(a) if to ACG, to the addresses listed on Schedule 1; and
The Atlanta Cardiology Group, P.C.
0000 Xxxxxxxxx
Xxxxxxxx Xxxx X.X.
Xxxxxxx, XX 00000
Attention: President
(b) if to the Company, to:
LifeRate Systems, Inc.
0000 Xxxxx Xxxxxxxxx
Xxxxx, XX 00000
Attention: Chief Executive Officer
and such notices and other communications shall for all
purposes of this Agreement be treated as being effective or
having been given if delivered personally, or, if sent by
mail, when received. Any party may change its address for such
communications by giving notice thereof to the other parties
in conformity with this Section.
12.3. Survival of Representations, Warranties, Agreements, Etc. All
representations, warranties, covenants and agreements
contained herein or in any certificate delivered pursuant to
this Agreement shall survive the execution and delivery of
this Agreement or such certificate, as the case may be, any
investigation at any time made by ACG or on its behalf, and
the closing of the transactions contemplated by this
Agreement. All statements contained in any certificate,
instrument or other writing prepared by or on behalf of the
Company and delivered by the Company pursuant to this
Agreement or in connection with or in contemplation of the
transactions herein contemplated shall constitute
representations and warranties by the Company hereunder.
12.4. Successors and Assigns. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon
and be enforceable by the successors and assigns of the
parties hereto, including the holder or holders from time to
time of any of the Note or Conversion Shares; provided,
however, that ACG may assign all or a portion of this Note to
no more than one additional person or entity upon the prior
written consent of the Company, which shall not be
unreasonably withheld.
12.5. Entire Agreement. This Agreement, the schedules hereto, the
documents referenced herein and the exhibits thereto,
constitute the entire understanding and agreement of the
parties hereto with respect to the subject matter hereof and
thereof and supersede all prior and contemporaneous agreements
or understandings, inducements or conditions, express or
implied, written or oral, between the parties with respect
hereto and thereto. The express terms hereof control and
supersede any course of performance or usage of the trade
inconsistent with any of the terms hereof.
12.6. Other Remedies. Any and all remedies herein expressly
conferred upon a party shall be deemed cumulative with, and
not exclusive of, any other remedy conferred hereby or by law
on such party, and the exercise of any one remedy shall not
preclude the exercise of any other.
12.7. Delays or Omissions. Except as expressly provided herein, no
delay or omission to exercise any right, power or remedy
accruing to any party under this Agreement shall impair any
such right, power or remedy of such party nor shall it be
construed to be a waiver of any such breach or default, or an
acquiescence thereto, or of a similar breach or default
thereafter occurring; nor shall any waiver of any single
breach or default be deemed a waiver of any other breach or
default theretofore or thereafter occurring. Any waiver,
permit, consent or approval of any kind or character on the
part of any party hereto of any breach of default under the
Agreement, or any waiver on the part of any party of any
provisions or conditions of this Agreement, must be in writing
and shall be effective only to the extent specifically set
forth in such writing.
12.8. Construction of Agreement. This Agreement has been negotiated
by the respective parties hereto and their attorneys and the
language hereof shall not be construed for or against any
party. A reference in this Agreement to any section shall
include a reference to every section the number of which
begins with the number of the section to which reference is
specifically made. The titles and headings herein are for
reference purposes only and shall not in any manner limit the
construction of this Agreement which shall be considered as a
whole. A reference to a section means a section of this
Agreement, unless the context expressly otherwise requires.
12.9. Governing Law. This Agreement shall be governed by and
construed under the laws of the State of Minnesota.
12.10. Counterparts. This Agreement may be executed concurrently 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.
12.11. Severability. Should any one or more of the provisions of this
Agreement or of any agreement entered into pursuant to this
Agreement be determined to be illegal or unenforceable, all
other provisions of this Agreement and of each other agreement
entered into pursuant to this Agreement, shall be given effect
separately from the provision or provisions determined to be
illegal or unenforceable and shall not be affected thereby.
12.12. Expenses. The Company will reimburse ACG for up to an
aggregate of $10,000 of professional fees and expenses
incurred in connection with the negotiation and execution of
this Agreement and the Note, upon submission of reasonable
documentation.
IN WITNESS WHEREOF, each of the Company and ACG has caused this
Agreement to be executed by its duly authorized representatives in counterpart.
COMPANY: LIFERATE SYSTEMS, INC.
By:______________________________________
Its: ____________________________________
ACG: ATLANTA CARDIOLOGY GROUP, P.C.
By:______________________________________
Its: ____________________________________
