EXHIBIT 10.44
CONVERSION AGREEMENT
THIS CONVERSION AGREEMENT ("Agreement"), is made and entered effective
as of February 23, 1999, among LifeRate Systems, Inc., a Minnesota corporation
(the "Company"), and Medtronic, Inc. a Minnesota corporation ("Medtronic").
A. Medtronic holds a Convertible Promissory Note, dated May 12, 1997,
of the Company in the principal amount of One Million Dollars ($1,000,000.00),
as amended pursuant to a letter agreement, dated November 10, 1997 (as amended,
the "Note").
B. The Company has ceased operations and is winding down its business.
C. Medtronic is willing to enter into this Agreement in full
satisfaction of the Note so to facilitate the winding down of the Company's
business.
Accordingly, in consideration of the foregoing, the mutual promises set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. PARTIAL PAYMENT ON THE NOTE. Promptly following execution of this
Agreement, the Company shall pay to Medtronic the amount of Sixty-Two Thousand
Dollars ($62,000) as a principal payment under the Note. After such payment the
principal amount due under the Note shall be Nine Hundred Thirty-Eight Thousand
Dollars ($938,000) (the "New Principal Amount").
2. CONVERSION OF NOTE. Medtronic hereby agrees that effective upon the
payment, of $62,000 pursuant to Section 1, the New Principal Amount will
automatically convert into 625,333 shares of Common Stock of the Company (the
"Conversion Securities") at a conversion price of $1.50 per share. Medtronic
acknowledges no interest is due under the Note. The cash payment of $62,000 and
the issuance of the Conversion Securities shall constitute full payment of all
amounts due under the Note and all obligations of the Company thereunder. Upon
the payment of $62,000 pursuant to Section 1, Medtronic shall surrender the
original Note to the Company, and the Company shall instruct its transfer agent
and registrar to issue to Medtronic a stock certificate representing 625,333
shares of Common Stock.
3. REPRESENTATIONS AND WARRANTIES OF MEDTRONIC. Medtronic represents
and warrants to the Company as follows:
(a) The Conversion Securities are being acquired for
investment for Medtronic's own account and not with the view to, or for
resale in connection with, any distribution or public offering thereof.
Medtronic understands that the Conversion Securities have not been
registered under the Securities Act of 1933, as amended (the
"Securities Act"), or any state securities laws by reason of their
contemplated issuance in transactions exempt from the registration
requirements of the Securities Act and applicable state securities laws
and that the reliance of the Company and others upon these exemptions
is predicated in part upon this representation by Medtronic. Medtronic
further understands that the Conversion Securities may not be
transferred or resold without registration under the Securities Act and
any applicable state securities laws, or an exemption from the
requirements of the Securities Act and applicable state securities
laws.
(b) Medtronic's principal office is at 0000 Xxxxxxx Xxxxxx
X.X., Xxxxxxxxxxx, Xxxxxxxxx 00000-0000. Medtronic qualifies as an
"accredited investor," as defined in Rule 501 of Regulation D under the
Securities Act. Medtronic acknowledges that the Company has made
available to Medtronic at a reasonable time prior to the execution of
this Agreement the opportunity to ask questions and receive answers
concerning the business, operations and financial condition of the
Company and the terms and conditions of the issuance of securities
contemplated by this Agreement and to obtain any additional information
(which the Company
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possesses or can acquire without unreasonable effort or expense) as may
be necessary to verify the accuracy of information furnished to
Medtronic. Medtronic is able to bear the loss of its entire investment
in the Conversion Securities without any material adverse affect on its
business, operations or prospects, and has such knowledge and
experience of financial and business matters that it is capable of
evaluating the merits and risks of the investment to be made by it
pursuant to this Agreement.
(c) This Agreement has been duly authorized by all necessary
action on the part of Medtronic, has been duly executed and delivered
by Medtronic and is a valid and binding agreement of Medtronic.
4. ASSIGNMENT. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns, but neither this Agreement nor any of the rights and obligations of the
parties hereunder shall be assigned (whether voluntarily, involuntarily, by
operation of law or otherwise), in whole or in part, by any party without the
prior written consent of each other party, and neither this Agreement nor any
provision hereof may be amended, modified, waived or discharged without the
written consent of the party against whom enforcement of such amendment,
modification, waiver or discharge is sought..
5. MISCELLANEOUS.
(a) This Agreement embodies the entire agreement and
understanding of the parties relative to the subject matter hereof and
supersedes any and all other agreements and understanding, whether
written or oral, relative to the matters discussed herein.
(b) This Agreement shall be construed and enforced in
accordance with the laws of the State of Minnesota.
(c) 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 in the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the date first written above.
LIFERATE SYSTEMS, INC.
By /s/ X.X. Xxxxxxxx
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X.X. Xxxxxxxx
Its Acting CEO
MEDTRONIC, INC.
By /s/ Xxxxxxx Xxxxxxx
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Xxxxxxx Xxxxxxx
Its Vice President, Chief Development Officer
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