MANAGEMENT AGREEMENT
Exhibit 10.2
THIS MANAGEMENT AGREEMENT (the “Agreement”) is made as of January 13, 2014, by and among Cambridge Cardiac Technologies Inc. (the “CCT”), Cambridge Heart, Inc. (“Company”) and a majority in interest (as defined in the Security Agreement) of the parties identified on Schedule A (the “Secured Creditors”).
RECITALS AND ACKNOWLEDGEMENTS
As the basis for, and as further consideration for this Agreement, the parties hereto hereby acknowledge and agree as follows:
A. Whereas the Secured Creditors are the holders of notes as described on Schedule A (the “Notes”) issued by the Company.
B. Whereas CHI is indebted to the Secured Creditors pursuant to the Notes and the Transaction Documents (as defined in the Notes) in the amounts set forth on Schedule A (the “Accrued Debt”).
C. Whereas, the Accrued Debt is secured by a Security Agreement dated January 17, 2012, as amended (the “Security Agreement”).
D. Whereas the Collateral Agent will conduct a public UCC (the “Auction”) sale of certain assets of the Company identified on Schedule B on January 28, 2014 at 2:00 PM EST at the offices of JP&R Advertising 000 Xxxxxxxx, Xxxx 000 Xxx Xxxx, XX 00000 (the “Auction”).
E. Whereas the Secured Creditors intend to jointly credit bid the Accrued Debt at the Auction and, if determined to be the highest bidder at such auction, assign the ownership of the Assets to CCT.
F. Whereas, the Company requires a minimal amount of funding to enable the Company to continue to function pending the Auction.
G. Whereas, the Company has hired Xxxxx X. Xxxxxxx (the “Wind-Down Agent”) to act wind down the Company after the Auction.
NOW, THEREFORE, in consideration of the above recitals and agreements and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:
1. Auction. The Company acknowledges notice of the Auction.
2. Funding. Upon the execution of this Agreement, CCT will provide the Company with $97,500 to be used for the expenses identified on Schedule C. The Company will issue CCT a note for $97,500 which will be secured pari passu with the Notes. The funds will be wired to the Wind-Down Agent pursuant to the wire instructions on Schedule D.
1
3. Continuation. The Company agrees to have the business of the Company to continue to run until the earlier of (a) the day after the Auction; or (b) January 31, 2014 (the “End Date”).
4. Management of the Business. Until the End Date, the Company will consult with CCT in the management of the business of the Company and decisions to spend any money required to continue the business.
5. Assumption of Debts. CCT hereby assumes to pay all debts of the Company that accrue from January 13, 2014 through the End Date related to the running of the business of the Company in which the Secured Creditors have been consulted and provided consent (the “Assumed Debts”). CCT will indemnify the Company for any claims arising from the Assumed Debts. It is contemplated that the debts will first be paid from the cash flow of the business and that CCT will make up any shortfall.
6. Bankruptcy. The Company agrees not to commence bankruptcy or receivership proceeding nor encourage anyone else to commence such proceedings until 91 days after the End Date.
7. Governing Law. This Agreement is governed by and is to be construed and enforced as though made and to be fully performed in the State of New York, without regard to the conflicts of law rules. Any and all disputes are to be resolved in the courts of the state of New York located in New York County. THE PARTIES HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY PROCEEDINGS INITIATED PURSUANT TO EITHER THIS AGREEMENT OR ANY DOCUMENT OR AGREEMENT REFERRED TO HEREIN.
8. Execution. This Agreement may be signed in any number of counterparts with the same effect as if the signatures thereto and hereto were upon the same instrument. Facsimile copies of signatures shall be binding as original signatures.
9. Notices. Notices shall be made in accordance with the Transaction Documents. CCT’s address is c/o Grushko & Xxxxxxx, P.C., 000 Xxxxxxxx Xxxxxx, Xxxxxx Xxxxxx XX 00000.
10. Severance/Waiver. If any term or provision of this Agreement or the application thereof to any party or circumstance shall be held to be invalid, illegal or unenforceable in any respect by a court of competent jurisdiction, the validity, legality and enforceability of the remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby, and the affected term or provision shall be modified to the minimum extent permitted by law so as to achieve most fully the intention of this Agreement. No term or provision contained herein may be modified, amended or waived except by written agreement or consent signed by the party or parties to be bound thereby.
[Signature Pages Follow]
2
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed in their respective names, as of the date first written above.
|
CAMBRIDGE CARDIAC TECHNOLOGIES INC.
|
CAMBRIDGE HEART, INC. | |||
|
/s/ Xxxxxxxx xx Xxxxx
|
/s/ Xxxx XxXxxxxxx
|
|||
|
Name: Xxxxxxxx xx Xxxxx
|
Name: Xxxx XxXxxxxxx
|
|||
|
Title: CEO/Chairman
|
Title: Director
|
[Signatures of a majority in interest of the Secured Creditors of the next page]
3
“SECURED CREDITORS”
|
ALPHA CAPITAL ANSTALT
|
OSIRIS INVESTMENT PARTNERS, L.P.
|
|||
|
s/ Xxxxxx Xxxxxxxxx
|
/s/ Xxxx Stuila
|
|||
|
Name: Xxxxxx Xxxxxxxxx
|
Name: Xxxx Stuila
|
|||
|
Title: Director
|
Title: Principal & Managing Member
|
|||
| SANDOR CAPITAL MASTER FUND, L.P. | PHYSIO-CONTROL | |||
| Name: | Name: | |||
| Title: | Title: | |||
|
CRANSHIRE CAPITAL MASTER FUND, LTD.
|
BRIO CAPITAL, LP
|
|||
| /s/ Xxxxx Xxxxxx | ||||
| Name: | Name: Xxxxx Xxxxxx | |||
|
Title:
|
Title: Director
|
|||
| XXXX XXXXXXX | XXXXXXXX XX XXXXX | |||
| /s/ Xxxx Xxxxxxx |
/s/ Xxxxxxxx xx Xxxxx
|
|||
| XXXX XXXXX XXXXXXXXXXX | XXXXX X. XXXXXXXX | |||
| XXXXXX XXXX | XXXXX XXXXXXXX | |||
| XXXX AND XXXXX XXXXXX, JTWROS | XXXXXXX XXXXXX | |||
| XXXXX XXXXX | XXXXXX X. XXXXXXX | |||
| XXXX X. XXXX | XXXXXX X. XXXX | |||
| XXXXXXX XXXXXXXXXX | XXXX XXXXX | |||
| XXXXXXX XXXXX | XXXXXX GIRSCHWEILER | |||
|
/s/ Xxxxxx Girschweiler
|
4
SCHEDULE A
|
Secured Creditor
|
Note
|
|||
|
Alpha Capital Anstalt
|
$ | 500,000 | ||
|
Xxxxxxxx xx Xxxxx
|
$ | 250,000 | ||
|
Xxxx Xxxxxxx
|
$ | 350,000 | ||
|
Osiris Investment Partners, L.P.
|
$ | 170,000 | ||
|
Cranshire Capital Master Fund, Ltd.
|
$ | 50,000 | ||
|
Xxxxxx X. Xxxxxxx
|
$ | 50,000 | ||
|
Xxxx Xxxxx Xxxxxxxxxxx
|
$ | 100,000 | ||
|
Xxxxxxxx xx Xxxxx
|
$ | 50,000 | ||
|
Xxxxx X. Xxxxxxxx
|
$ | 75,000 | ||
|
Xxxxxx Xxxx
|
$ | 220,000 | ||
|
Xxxxx Xxxxxxxx
|
$ | 50,000 | ||
|
Xxxx and Xxxxx Xxxxxx, JTWROS
|
$ | 110,000 | ||
|
Xxxxxxx Xxxxxx
|
$ | 150,000 | ||
|
Xxxx Xxxxxxx
|
$ | 75,000 | ||
|
Xxxxx Xxxxx
|
$ | 50,000 | ||
|
Xxxxxx X. Xxxx
|
$ | 50,000 | ||
|
Sandor Capital Master Fund, L.P.
|
$ | 150,000 | ||
|
Xxxx X. Xxxx
|
$ | 50,000 | ||
|
Brio Capital, LP
|
$ | 250,000 | ||
|
Xxxxxxx Xxxxxxxxxx
|
$ | 55,000 | ||
|
Xxxx Xxxxx
|
$ | 85,000 | ||
|
Xxxx Xxxxxxx
|
$ | 25,000 | ||
|
Xxxxxxx Xxxxx
|
$ | 25,000 | ||
|
Osiris Investment Partners, L.P.
|
$ | 150,000 | ||
|
Xxxxxx Girschweiler
|
$ | 400,000 | ||
|
Osiris Investment Partners, L.P.
|
$ | 80,000 | ||
|
Xxxx Xxxxxxx
|
$ | 112,500 | ||
|
Xxxxxxxx xx Xxxxx
|
$ | 75,000 | ||
|
Xxxx Xxxxxxx
|
$ | 50,000 | ||
|
Xxxxxxxx xx Xxxxx
|
$ | 100,000 | ||
|
Physio-Control
|
$ | 125,000 | ||
|
Total
|
$ | 4,032,500 | ||
5
SCHEDULE B
1)Accounts Receivable – any and all accounts receivable balances outstanding. Estimated at 11/26/13 at approximately $100,000 - $150,000 dependent on ultimate collectability.
2) Inventory – any and all finished goods and components for the manufacture, service and support of the Heartwave II and CH2000 product lines sold by Debtor.
3) Furniture, Fixtures and Equipment – miscellaneous desks, computer and other standard office equipment. Also, certain electronic testing equipment and tools required in the manufacture and service of the Heartwave II and CH2000 systems.
4) Intellectual Property – any and all US and foreign patents and patent pending filings, protecting the technology underlying the Micro-volt T-Wave Alternans technology as embodied in the Heartwave II system and certain derivatives thereof. Includes any and all trademarks and copyrights related to the Heartwave II and CH2000 product lines.
SCHEDULE C
1. $7,500.00 Xxxxx X. Xxxxxxx
2. $55,000.00 Sales Tax
3. $10,000.00 Xxxxxx
4. $15,000.00 Future legal and wind down
5. $10,000.00 miscellaneous expenses
6
