EXHIBIT 10.35
CARESIDE, INC.
0000 Xxxxxxx Xxxxxxx
Xxxxxx Xxxx, XX 00000
December 8, 1998
Xxxxxxx Xxxxx Securities Incorporated
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Reference is made to that certain Placement Agency Agreement
(the "1996 Placement Agreement"), dated December 10, 1996, by and between
Careside, Inc. (formerly known as Exigent Diagnostics, Inc.) (the "Company") and
Xxxxxxx Xxxxx Securities Incorporated ("Xxxxxxx Xxxxx"), that certain letter
agreement (the "Investment Banking Agreement"), dated January 31, 1997, by and
between the Company and Xxxxxxx Xxxxx, that certain Lock-Up and Right of First
Offer Agreement (the "Lock-Up Agreement"), dated January 31, 1997, by and among
the Company, X. Xxxxxxx Stoughton, Xxxxxx X. Xxxxx, Exigent Partners, L.P. and
Xxxxxxx Xxxxx and that certain Placement Agency Agreement (the "1998 Placement
Agreement"), dated January 29, 1998, by and between the Company and Xxxxxxx
Xxxxx entered into in connection with the 1998 private placement of common stock
by the Company (the "1998 Private Placement"). As set forth in Section 5(l) of
the 1996 Placement Agreement, the Company agreed to enter into an employment
agreement with Xxxxxxx Xxxxxx. As set forth in the Investment Banking Agreement,
the Company agreed for a period of five years from the date thereof to use the
investment banking services of Xxxxxxx Xxxxx in connection with any sale or
exchange of the Company's stock or assets, merger, consolidation, acquisition,
financing, joint venture or other arrangement with certain parties and to pay
Xxxxxxx Xxxxx certain fees, as set forth in the Investment Banking Agreement, at
the closing of any such transaction. As set forth in Section 3(h) of the 1998
Placement Agreement, the Company agreed to pay Xxxxxxx Xxxxx a fee upon the
completion of an initial public offering of the Company's common stock which
utilized the investment banking services of Xxxxxxxxxx & Co. Inc.
("Xxxxxxxxxx").
At present, the Company (i) is not a party to an employment
agreement with Xxxxxxx Xxxxxx, (ii) intends to undertake an initial public
offering of the Company's common stock utilizing the investment banking services
of Xxxxxxxxxx (the "IPO") and (iii) prior to the consummation of the IPO,
expects to undertake transactions involving private investments in the equity or
debt of the Company by persons who currently are stockholders of the Company or
entities or affiliates under the direct or indirect control of such persons, as
well as an equipment lease financing with Finova Technology Finance, Inc.
("Finova").
To induce the Company to proceed with the IPO, and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and intending to be legally bound, the Company and Xxxxxxx Xxxxx
hereby agree as follows:
1. Xxxxxxx Xxxxx hereby (a) waives the requirement set forth
in Section 5(l) of the 1996 Placement Agreement that the Company enter into an
employment agreement with Xxxxxxx Xxxxxx and (b) agrees that Xxxxxxx Xxxxx will
not seek, undertake or institute any judgment, decision, arbitration, suit,
proceeding or action against or involving the Company or any other party for not
complying with the covenant set forth in Section 5(l) of the 1996 Placement
Agreement requiring the Company to enter into an employment agreement with
Xxxxxxx Xxxxxx.
2. Xxxxxxx Xxxxx hereby waives its (i) irrevocable
preferential right of first offer and any rights associated therewith set forth
in Section 2 of the Lock-Up Agreement and (ii) right to provide the Company with
investment banking services in or after the IPO, including in connection with
any other public or private offering of the Company's securities following the
IPO. Further, Xxxxxxx Xxxxx hereby consents to the Company utilizing the
investment banking services of Xxxxxxxxxx and the other underwriters named in
the Company's registration statement filed with the Securities Exchange
Commission in and after the IPO.
3. Xxxxxxx Xxxxx hereby waives any right to receive the
Placement Agent's Fee and the Agent's Warrants (as each such term is defined in
the 1996 and the 1998 Placement Agreements) pursuant to Section 3(f) of the 1996
and the 1998 Placement Agreements with respect to any person or entity which may
invest in the Company pursuant to the IPO.
4. Xxxxxxx Xxxxx acknowledges and agrees that (i) any right of
Xxxxxxx Xxxxx to receive, or any obligation of the Company to pay or grant, the
Placement Agent's Fee and the Agent's Warrants (as each such term is defined in
the 1996 Placement Agreement) pursuant to Section 3(f) of the 1996 Placement
Agreement has either been fulfilled or has expired and (ii) no Placement Agent's
Fee or Agent's Warrants are owed or due Xxxxxxx Xxxxx from the Company pursuant
to such provision.
5. Xxxxxxx Xxxxx acknowledges and agrees that any right of
Xxxxxxx Xxxxx to receive, or any obligation of the Company to pay or grant, the
Placement Agent's Fee and the Agent's Warrants (as each such term is defined in
the 1998 Placement Agreement), to the extent accruing prior to the date hereof,
has been fulfilled.
6. Xxxxxxx Xxxxx hereby waives the application of Section 3(f)
of the 1998 Placement Agreement with respect to any and all payments (whether
the Placement Agent's Fee, the Agent's Warrants (each as defined therein) or
otherwise) which may be owed or due it for the purchase by any investor of the
Company's common stock or debt securities contemplated by that certain side
letter attached hereto as Exhibit A so long as the execution of definitive
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documents
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with such investor occurs prior to June 30, 1999 and regardless of the term of
any debt securities sold to such investor.
7. Xxxxxxx Xxxxx and the Company hereby acknowledge and agree
that the term `SmithKline' as used in the Investment Banking Agreement means any
subsidiary, affiliate or entity directly or indirectly controlled by SmithKline
or its executive officers or directors, including but not limited to SR-One.
8. Xxxxxxx Xxxxx hereby acknowledges and agrees that the
consummation of a private investment in the Company's equity or debt securities
by any of SmithKline (or any affiliate thereof including without limitation
SR-One), Xx. Xxxxx Xxxxxxx, or an affiliated entity controlled directly or
indirectly by him, or Finova, shall not result in either (i) the Company owing
to Xxxxxxx Xxxxx any Placement Agent's Fee or Agent's Warrants (as such terms
are defined in both the 1996 and the 1998 Private Placement Agreements) or any
other fee under the 1996 or the 1998 Private Placement Agreements or the
Investment Banking Agreement or (ii) any obligation on the part of the Company
to utilize the investment banking or other transactional support services of
Xxxxxxx Xxxxx in connection therewith.
9. Xxxxxxx Xxxxx hereby acknowledges and agrees that any
amounts payable by the Company to Xxxxxxx Xxxxx pursuant to the Investment
Banking Agreement shall become due as and when the funds triggering the fees due
to Xxxxxxx Xxxxx are received by the Company.
10. Xxxxxxx Xxxxx and the Company hereby acknowledge and
confirm that the Company shall pay Xxxxxxx Xxxxx $100,000 upon the consummation
of the IPO pursuant to Section 3(h) of the 1998 Placement Agreement.
[The rest of this page is intentionally left blank.]
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11. This letter represents our entire agreement with respect
to the subject matter hereof, superseding all prior agreements and
understandings, written or oral. It may not be modified or amended except in a
writing signed by both parties. This letter agreement may be signed in
counterparts (including by facsimile signature) and shall be governed by and
construed in accordance with the laws of the State of New York without reference
to the choice of law doctrine thereof.
Very truly yours,
CARESIDE, INC.
By: /s/ X. Xxxxxxx Stoughton
-------------------------------------
Name: X. Xxxxxxx Stoughton
Title: Chairman of the Board of Directors and
Chief Executive Officer
Acknowledged and Agreed:
XXXXXXX XXXXX SECURITIES INCORPORATED
By: /s/ Xxxxxxx X. Xxxxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: President
/s/ X. Xxxxxxx Stoughton
-----------------------------------------
X. Xxxxxxx Stoughton
/s/ Xxxxxx X. Xxxxx
-----------------------------------------
Xxxxxx X. Xxxxx
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Exhibit A
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CARESIDE, INC.
0000 Xxxxxxx Xxxxxxx
Xxxxxx Xxxx, Xxxxxxxxxx 00000
(000) 000-0000
Xxxxx Xxxxxxxxx
Xxxxxxx Xxxxx Securities Incorporated
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Mr. Xxxxx:
Careside has a unique opportunity to pursue an investment from
Xx. Xxxxx Xxxxxxx or one of his investment funds. We have negotiated the
proposed transaction in the past few weeks and he is prepared to go forward. The
security to be purchased will be a debt instrument repayable within one year
unless the holder opts to convert it to equity. The Debt will be mandatorily
convertible to equity upon an IPO. The other terms of the investment are
outlined in the attached term sheet.
One hitch remains in our way. Xx. Xxxxxxx has refused to make
an investment if it would result in dilution of his investment for warrant and
fees paid to Xxxxxxx Xxxxx Securities. As you know, I pursued this opportunity
with Xx. Xxxxxxx on my own, although he was one of the original investors in
both the 1997 and 1998 private placements conducted through Xxxxxxx Xxxxx.
Accordingly, Careside requests that you waive any and all fees
due under Section 3(j) of the Placement Agency Agreements executed with Xxxxxxx
Xxxxx or under the so-called investment banking side letter dated January 31,
1997, in order to allow Careside to pursue this investment.
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I assume you will call Mr. Frieli to confirm his position and
have alerted him to expect your call. It is my certain hope Xxxxxxx Xxxxx will
see the value of this investment in Careside and allow it to proceed unfettered.
Your signing below will constitute your waiver, for purposes of this investment
only by Xx. Xxxxxxx or one of his funds, of my obligation Careside may have
pursuant to Section 3(f) or this investment banking letter.
Sincerely,
CARESIDE, INC.
By: /s/ X. Xxxxxxx Stoughton
---------------------------
X. Xxxxxxx Stoughton
Acknowledged and agreed for
Xxxxxxx Xxxxx Securities, Incorporated
By: /s/ Xxxxxxx Xxxxxxxxx
---------------------------------
Title: President
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