EXHIBIT 10.54
WARRANT EXCHANGE AGREEMENT
This Agreement, made as of the 1st day of July, 2002 by and among
CareCentric, Inc., a Delaware corporation, herein sometimes referred to as
"CareCentric" or the Issuer", and Mestek, Inc., a Pennsylvania corporation,
herein sometimes referred to as the "Mestek" or the "Warrant Holder";
WHEREAS CareCentric issued to Mestek a certain warrant to purchase 490,396
shares of CareCentric's common stock on or before March 7, 2003 at a purchase
price of $3.21 per share (the "Prior Warrant") dated March 7, 2002;
WHEREAS as additional consideration with respect to a refinancing and debt
restructuring transaction entered into between CareCentric and Mestek, among
others, pursuant to a Secured Convertible Credit Facility and Security Agreement
of even date herewith (the "Credit Facility") CareCentric has agreed to re-price
and extend the term of the Prior Warrant in favor of Mestek;
WHEREAS to effect such repricing and term extension of the Prior Warrant the
parties agree to exchange the Prior Warrant for a new warrant to purchase
490,396 shares of CareCentric common stock (the "Shares"), identical in all
respects to the Prior Warrant except as to the pricing and the term (the "New
Warrant").
NOW, THEREFORE, FOR MUTUAL PROMISES AND OTHER VALUABLE CONSIDERATION EXCHANGED,
IT IS HEREBY AGREED:
1. Issuance of New Warrant. CareCentric is issuing a New Warrant to
purchase 490,396 shares of its common stock exercisable at any time on
or before July 15, 2004 at a purchase price of $1.00 per share and
otherwise on the same terms and conditions as the Prior Warrant and in
the form attached hereto as Exhibit "A".
2. Exchange of Warrants. Mestek, as holder of the Prior Warrant, is
exchanging the Prior Warrant for the New Warrant as of July 1, 2002 in
full consideration for the Prior Warrant.
3. Representations, Warranties and Covenants of CareCentric. CareCentric
covenants, warrants, and represents THAT THE FOLLOWING ARE TRUE:
(1) Corporate Powers. CareCentric is a corporation duly organized,
existing and in good standing under the laws of the State of
Delaware.
(2) Authorization.Copies of the Corporate CareCentric's Corporate
Minutes specifically authorizing the transactions herein have
been delivered to Mestek, and such copies are true, complete and
correct in every particular.
(3) CareCentric's Powers.
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(A) The execution, delivery and performance of this Agreement
and the other Closing documents by CareCentric are within
its legal powers, and have been duly authorized and are not
in contravention of law or of the terms of CareCentric's
Certificate of Incorporation, By-Laws or Minutes or of any
agreement to which CareCentric is a party or by which it is
bound. No other corporate, court or other proceedings are
necessary to authorize the execution, delivery and
performance of this Agreement by CareCentric.
(B) This Agreement and the other Closing documents have been
duly executed and delivered by CareCentric and constitute
legal, valid, binding and enforceable obligations of
CareCentric in accordance with their respective terms upon
and against all third parties and against CareCentric and
its employees, officers, directors and creditors and persons
and entities related to such persons by ownership interest
or otherwise.
(C) All consents, approvals, authorizations, declarations and
filings with individuals, entities and/or governmental
authorities required in connection with the execution and
delivery of this Agreement and the other Closing documents
and in connection with the consummation of the transactions
contemplated by this Agreement in order to make it legal,
valid, binding and enforceable have been obtained, completed
and satisfied.
(4) Suits and Other Actions.
(A) To the best of CareCentric's knowledge, there is no
litigation, arbitration or other governmental or private
actions, suits, claims, proceedings or investigations
(whether or not purportedly on behalf of or against
CareCentric) concluded, pending or threatened against
CareCentric which may have a material adverse effect upon
CareCentric's ability to make this Agreement legal, valid,
binding and enforceable or to carry out the transactions
contemplated by this Agreement. CareCentric is not in
default with respect to any order, writ, injunction or
decree of any court or other governmental agency.
(B) The execution, delivery and performance of this Agreement by
CareCentric has not, and will not violate, or result in a
breach of, or constitute a default under any judgment, order
or decree to which it may be subject.
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4. Representations and Warranties of Mestek.
(a)Power and Authority. Mestek represents and warrants that Mestek has
the power to enter into this Agreement and to carry out its
obligations hereunder. The execution and delivery of this Agreement
and the consummation of the transaction contemplated have been duly
authorized by Mestek. No other corporate, court or other proceedings
are necessary to authorize the consummation of this Agreement and the
transactions contemplated hereby. This Agreement has been duly
executed and delivered by Mestek, and constitutes a valid and binding
obligation of Mestek. The execution and performance of this Agreement
by Mestek does not violate, result in a breach of, or constitute a
default under any judgment, order or decree to which it may be
subject, nor does such making or performance constitute a violation of
or conflict with any provision of Mestek's Articles of Incorporation
or By-laws.
(b) Investment Intent. Mestek is acquiring the Warrant for investment
for its own account and not with a view to, or for resale in
connection with, the distribution thereof, except for any such
distribution thereof effected in compliance with the Securities Act of
1933, as amended (the "Securities Act"). Mestek will not, directly or
indirectly, transfer, sell, assign, pledge, hypothecate or otherwise
dispose of any Shares unless the transfer, sale, assignment, pledge,
hypothecation or other disposition (the "transfer") (i) is pursuant to
an effective registration statement under the Securities Act or (ii)
Mestek shall have furnished CareCentric with an opinion of counsel,
which opinion and counsel shall be reasonably satisfactory to
CareCentric, to the effect that no such registration is required
because of the availability of an exemption from registration under
the Securities Act.
(c) Legend. Mestek has been advised by CareCentric that the
certificate or certificates to be issued upon exercise of the New
Warrant, representing the Shares will bear the following legend:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS AND, UNLESS SO
REGISTERED, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES
LAWS.
(d) Restricted Securities. Mestek has been advised by CareCentric that
(i) any Shares received by Mestek upon the exercise of the New Warrant
will be "restricted securities" as defined under Rule 144 (as it may
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be amended from time to time) promulgated under the Securities Act
("Rule 144"); (ii) the Shares must be held indefinitely and Mestek
must continue to bear the economic risk of the investment in the
Shares unless the offer and sale of the Shares is subsequently
registered under the Securities Act or an exemption from such
registration is available; (iii) Rule 144 does not presently provide
an exemption for present resales of the Shares; (iv) when and if the
Shares may be disposed of without registration under the Securities
Act in reliance on Rule 144, such disposition can, under some
circumstances, be made only in limited amounts and otherwise in
accordance with the terms and conditions of such Rule; (v) a
restrictive legend in the form heretofore set forth will be placed on
the certificates representing the Shares; and (vi) a notation will be
made in the appropriate records of CareCentric indicating that the
Shares are subject to restriction on transfer and appropriate stop
transfer restrictions will be issued to CareCentric's transfer agent
with respect to the Shares.
5. Conditions Precedent to Closing.
(a) CareCentric. The obligations of CareCentric to issue and exchange
the New Warrant for the Prior Warrant shall be subject to (i) the
fulfillment, prior to or at the Closing, of the execution and delivery
of all of the documentation relating to the Credit Facility, (ii) the
representations and warranties of Mestek being true and correct on and
as of the date of the exchange and (iii) CareCentric having received
the opinion of Mestek's counsel, dated as of the Closing Date, in form
and substance reasonably satisfactory to CareCentric's counsel.
(b) Mestek. The obligation of Mestek to tender the Prior Warrant for
exchange shall be subject to (i) the fulfillment, prior to or at the
Closing, of all of the documentation relating to the Credit Facility,
(ii) the representations and warranties of CareCentric being true and
correct on and as of the date of the exchange and (iii) Mestek having
received the opinion of CareCentric's counsel, dated as of the Closing
Date, in form and substance reasonably satisfactory to Mestek's
counsel.
6. After Closing. Subsequent to Closing of this Agreement, each party
shall, at the request of any other party, furnish, execute and deliver
such documents, instruments, opinions of counsel, certificates,
notices or other further assurances as counsel of the requesting party
shall reasonably deem necessary or desirable for effecting complete
consummation of this Agreement.
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7. Indemnification. CareCentric agrees to indemnify Mestek for, and hold
Mestek harmless from and against, any and all damages, losses, costs,
expenses (including, without limitation, reasonable fees and
disbursements of counsel for Mestek), judgments, settlements and other
liabilities, suffered or incurred in connection with any claim or
action relating to or arising out of any breach by CareCentric of any
of its representations or covenants contained in this Exchange
Agreement or the New Warrant or the failure of CareCentric to perform
any obligation required to be performed by it under the Agreement or
the New Warrant.
7. Survival. The representations, covenants and warranties herein made
shall survive closing and the delivery of any or all documents.
8. Miscellaneous.
(A) Notices. All notices, elections, requests, demands and other
communications hereunder shall be in writing and shall be
deemed to have been given at the time received by certified
or registered mail, postage prepaid and addressed to the
parties hereto as follows (or to such other person or place
which the respective party has otherwise designated by
notice under this provision):
TO CARECENTRIC, INC.:
0000 Xxxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: President and CEO
Fax: (000) 000-0000
With a copy to:
Xxxxxxx X. Xxxxx
Xxxxxx Xxxxxx Xxxxxxx LLP
2800 One Atlantic Center
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Fax: (000) 000-0000
TO MESTEK:
R. Xxxxx Xxxxx, President
000 Xxxxx Xxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Fax: (000) 000-0000
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With a copy to:
J. Xxxxxxxx Xxxxxx, Vice President,
Corporate and Legal Affairs
000 Xxxxx Xxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Fax: (000) 000-0000
(B) Binding Agreement. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto, their
respective personal representatives, heirs, successors and
assigns.
(C) Entire Agreement. This Agreement constitutes the entire
agreement of the parties hereto pertaining to its subject
matter and supersedes all prior and contemporaneous
agreements, undertakings and understandings of the parties
hereto in connection with the subject matter hereof.
(D) Governing Law.This Agreement shall be governed by the laws
of the State of Delaware without regard to principles of
conflicts of laws.
(E) Headings. The headings in this Agreement are inserted for
convenience only and are not to be considered in the
construction of the provisions hereof and shall not in any
way limit the scope or modify the substance or context of
any section or paragraph hereof.
(F) Waivers. Any forbearance, failure or delay by either party
in exercising any right, power, or remedy hereunder shall
not be deemed to be a waiver of such right, power, or remedy
and any single or partial exercise of any right, power or
remedy hereunder shall not preclude the further exercise
thereof; and any right, power and remedy shall continue in
full force and effect until such right, power or remedy is
specifically waived by an instrument in writing. No waiver
of any of the provisions of this Agreement shall be deemed
or shall constitute a waiver of any other provision of this
Agreement, nor shall such waiver constitute a continuing
waiver unless otherwise expressly provided.
(G) Amendment. No amendment or modification of this Agreement or
waiver of its terms shall be effective unless in a writing
signed by both parties.
(H) Severability. Each separately numbered paragraph of this
Agreement shall be treated as severable, to the end that if
any one or more such paragraphs shall be adjudged or
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declared illegal, invalid or unenforceable, this Agreement
shall be interpreted, and shall remain in full force and
effect, as though such paragraph or paragraphs had never
been contained in this Agreement.
(I) Counterparts. This agreement may be executed in any number
of counterparts, each of which shall be an original with the
same effect as if the signatures thereto and hereto were
upon the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date first
above written.
CareCentric, Inc.
By: /s/ Xxxx X. Xxxxx
-------------------------------------
Its: President
Mestek, Inc.:
By: /s/ R. Xxxxx Xxxxx
-------------------------------------
Its: President & COO
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EXHIBIT "A"
WARRANT
8
1490029
