RESCISSION AGREEMENT
THIS RESCISSION AGREEMENT (the "Agreement), dated as of the 9th day of
December, 2003, is entered into by and among AMERICAN UNITED GLOBAL, INC., a
Delaware corporation with its principal office address at 00000 XX 000xx Xxxxx,
Xxxxxxxx, Xxxxxxxxxx 00000 ("AUGI"), LIFETIME ACQUISITION CORP., a Delaware
corporation and wholly owned subsidiary of AUGI with its principal office
address at 00000 XX 000xx Xxxxx, Xxxxxxxx, Xxxxxxxxxx 00000 ("Lifetime
Acquisition"), LIFETIME HEALTHCARE SERVICES, INC., a Delaware corporation with
its principal office address at 000 Xxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxx Xxxx
00000 ("Lifetime"), NEW YORK MEDICAL, INC., a Delaware corporation with its
principal office address at Two Jericho Plaza, Wing B, Jericho, New York 11753
("NY Medical"), REDWOOD INVESTMENTS ASSOCIATES, L.P., a Delaware limited
partnership with its principal office address at Two Xxxxxxx Xxxxx, Xxxx X,
Xxxxxxx, Xxx Xxxx 00000 ("Redwood") and THE NEW YORK MEDICAL EMPLOYEES STOCK
OWNERSHIP PLAN AND TRUST, an employee stock ownership plan (the "ESOP").
WHEREAS, Redwood, Lifetime and NY Medical are parties to that certain Stock
Purchase Agreement dated as of March 21, 2003 (the "Stock Purchase Agreement")
pursuant to which Lifetime acquired from Redwood 55% of the issued and
outstanding capital stock of NY Medical (the Stock Purchase Agreement and
certain other documents, instruments and agreements executed and delivered in
connection therewith are collectively referred to herein as the "Stock Purchase
Transaction Documents"); and
WHEREAS, AUGI and Lifetime Acquisition are parties to that certain Amended
and Restated Agreement and Plan of Merger among AUGI, Lifetime Acquisition and
Lifetime dated as of June 16, 2003 (the "Merger Agreement"); and
WHEREAS, pursuant to the Merger Agreement, Lifetime Acquisition was merged
with and into (the "Merger") Lifetime, a holding company whose only asset
consists of its ownership of 55% of the issued and outstanding capital stock of
NY Medical; and
WHEREAS, in connection with or relating to the Merger and the Merger
Agreement, AUGI, Lifetime Acquisition and others executed and delivered certain
other documents, instruments and agreements (such other documents together with
the Merger Agreement are collectively referred to herein as the "Merger
Documents"); and
WHEREAS, AUGI and the ESOP entered into a Share Exchange Agreement dated as
of August 31, 2003 (the "Share Exchange Agreement") pursuant to which AUGI
obtained the right to acquire ownership of the remaining 45% of the issued and
outstanding capital stock of NY Medical;
WHEREAS, the parties desire to cancel, rescind, and render null and void,
ab initio, the Merger Agreement and all documents, instruments, securities and
other certificates executed or delivered in connection with the transaction
contemplated by the Merger Agreement, the Stock Purchase Transaction Documents
and the Share Exchange Agreement; and
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:
1. Rescission of Merger. The parties hereby cancel and rescind the Merger and
Merger Documents and declare the Merger and Merger Documents to be null and
void, ab initio, for all purposes, including, without limitation, for tax
purposes.
2. Rescission of Stock Purchase Transaction Documents. The parties hereby cancel
and rescind the Stock Purchase Transaction Documents and transactions
contemplated thereby and declare the Stock Purchase Transaction Documents and
transaction contemplated thereby to be null and void, ab initio, for all
purposes, including, without limitation, for tax purposes.
3. Rescission of Share Exchange Agreement. The parties hereby cancel and rescind
the Share Exchange Agreement and the transaction contemplated thereby and
declare the Share Exchange Agreement and transactions contemplated thereby to be
null and void, ab initio, for all purposes, including, without limitation, for
tax purposes.
4. Results of Rescission. The parties hereby acknowledge and agree that, as a
result of the rescissions and cancellations described above each party shall, in
every respect, be in the same position it was in immediately prior to the
consummation of the transactions expressly rescinded hereby and all transactions
relating thereto. Specifically, Lifetime Acquisition remains a wholly owned
subsidiary of AUGI; all right, title and interest in and to the 55% of the
issued and outstanding capital stock of NY Medical which was purportedly
purchased by Lifetime shall be vested in Redwood; and all right, title and
interest in and to the 45% of the issued and outstanding capital stock of NY
Medical which is the subject to the Share Exchange Agreement shall be vested in
the ESOP.
5. Bridge Financing Repayment Agreement. The parties acknowledge that during
2004 AUGI lent to Lifetime (which, in turn, loaned such funds to NY Medical) and
NY Medical an aggregate of $1,500,000, and that such loans were consolidated and
are now evidenced by NY Medical's 6% note to AUGI which provides for the
repayment of principal and interest due thereunder on January 2, 2004 (the "NY
Medical Note"). The parties further acknowledge that, at a meeting of the Board
of Directors of AUGI on October 23, 2003, AUGI agreed to modify the terms of the
NY Medical Note such that all principal and interest thereunder shall be due on
January 2, 2005. The parties also acknowledge that AUGI obtained the $1,500,000
which it lent to Lifetime and NY Medical through a bridge financing arrangement
pursuant to which AUGI sold convertible notes having an aggregate principal
amount of $1,500,000 (the "Bridge Notes"), and that such Bridge Notes must be
repaid by AUGI to the bridge lenders on March 31, 2004. In consideration of the
fact that AUGI needs the funds due to it pursuant to the NY Medical Note to
enable it to repay the Bridge Notes, and that AUGI will be unable to repay the
Bridge Notes will be unable to repay the Bridge Notes until January 2, 2005 when
the NY Medical Note is repaid, as an accommodation to AUGI the parties hereby
agree that the NY Medical Note shall be modified such that all principal and
interest thereunder shall be due from NY Medical to AUGI on March 30, 2004 (one
day prior to the maturity date of the Bridge Notes), AUGI further agrees that,
in consideration of NY Medical's agreement to change the maturity date of the NY
Medical Note from January 2, 2005 to March 30, 2004, NY Medical shall have the
right to communicate directly with the holders of the Bridge Notes for the
purpose of, among other things, negotiating an alternate mechanism for the
payment of the Bridge Notes (such as the issuance of shares of NY Medical stock
as full or partial payment of the Bridge Notes).
6. Further Instruments and Assurances. AUGI and Lifetime Acquisition will
execute and deliver all such other and further instruments and documents as may
be necessary or desirable to carry out the purposes of this Agreement.
7. Notices. Unless otherwise provided, any notice required or permitted under
this Agreement shall be given in writing and shall be deemed effectively given
upon personal delivery to the party to be notified or upon deposit with Federal
Express (or any other courier providing evidence of delivery) with next business
day delivery charges prepaid and addressed to the receiving party at its address
as first set forth above. By notice complying with the foregoing provisions of
this Section each party shall have the right to change the mailing address for
future notices and communications to such party.
8. Invalidity and Severability. If any provisions of this Agreement are held
invalid or unenforceable, such invalidity or unenfoceability shall not effect
the other provisions of this Agreement which are intended to be, and shall be
deemed, severable.
9. Assignment and Binding Effect. No party shall assign this Agreement to any
extent without the written consent of the other parties hereto. Subject to the
foregoing, this Agreement shall be binding upon and inure to the benefit of the
parties and their respective successors and assigns.
10. Waiver. Any term or provision of this Agreement may be waived at any time by
the party entitled to the benefit thereof by a written instrument duly executed
by such party.
11. Governing Law; Consent to Jurisdiction. This agreement shall be governed by
and interpreted and enforced in accordance with the laws of the State of New
York as applied to contracts made and fully performed therein. Each of the
parties hereto hereby irrevocably and unconditionally submits for itself and its
property in any legal action or proceeding relating to or arising in connection
with this Agreement to the exclusive general jurisdiction of the Courts of the
State of New York, the courts of the United States of America for the Southern
District of New York, and the appellate courts of any of the foregoing.
12. Modification. No modification, amendment or waiver of any of the provisions
of this Agreement shall be effective unless in writing and signed by all parties
hereto.
13. Counterparts. This Agreement and any amendments hereto may be executed in
any number of counterparts, all of which together shall constitute a single,
original instrument.
14. Entire Agreement. This Agreement represents the entire Agreement with
respect to matters contemplated herein and supersedes any prior oral or written
agreements or undertakings between the parties to such matters. This Agreement
shall not be amended to any extent except by a writing executed by the parties.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered as to the date first above written.
AMERICAN UNITED GLOBAL, INC.
By: /s/ Xx. Xxxxxxxx Xxxxxx
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Xx. Xxxxxxxx Xxxxxx, Authorized Signatory
LIFETIME ACQUISITION CORP.
By: /s/ Xx. Xxxxxxxx Xxxxxx
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Xx. Xxxxxxxx Xxxxxx, Authorized Signatory
LIFETIME HEALTHCARE SERVICES, INC.
By: /s/ Xx. Xxxxxxxx Xxxxxx
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Xx. Xxxxxxxx Xxxxxx, Authorized Signatory
NEW YORK MEDICAL, INC.
By:/s/Xxx Civeralla
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Xxx Xxxxxxxxxx, Chief Financial Officer
REDWOOD INVESTMENTS ASSOCIATES, L.P.
By: /s/ Xx. Xxxxxxxx Xxxxxx
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Xx. Xxxxxxxx Xxxxxx, General Partner
NEW YORK MEDICAL EMPLOYEE
STOCK OWNERSHIP PLAN AND TRUST
By:/s/Xxx Civeralla
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Xxx Xxxxxxxxxx, Interim Trustee
