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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) January 14, 1997
NU-TECH BIO-MED, INC.
(Exact Name of Registrant as specified in charter)
Delaware 0-11772 25-1411971
(State or other jurisdic- (Commission (IRS Employer
tion of incorporation) File Number) Identification No.)
500 Fifth Avenue Suite 2424, New York, New York 10036
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 391-2424
55 Access Road Warwick, Rhode Island 02886
(Former name or former address, if changed since last report.)
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ITEM 2. ACQUISTION OR DISPOSITION OF ASSETS.
PROPOSED SALE OF MEDICAL SCIENCE INSTITUTE TO PHYSICIANS CLINICAL
LABORATORY.
As previously disclosed, on November 18, 1996, Nu-Tech Bio- Med, Inc.
(the "Company") acquired all of the capital stock of Medical Science Institue
("MSI"). The Company had acquired MSI upon approval by the United States
Bankruptcy Court of the Central District of California (the "Court") (Case No.
LA 95-37790 TD) of the First Amended Plan of Reorganization (the "MSI Plan") of
Medical Science Institute. MSI is engaged in the medical laboratory business
primarily in the State of California and had been operating under Chapter 11 of
the U.S. Bankruptcy Code since October 26, 1995. MSI provides clinical
laboratory testing services, including testing of human tissue and fluid
specimens to physicians, managed-care organizations, hospitals and other health
care providers. MSI is a California corporation with its principal executive
offices located in Burbank, California.
The Company has agreed to sell its ownership interests in MSI to
Physicians Clinical Laboratory, a Delaware corporation ("PCL") which, in turn,
subject to approval of the United States Bankruptcy Court having jurisdiction
over PCL, will become a 51% subsidiary of Nu-Tech. PCL is a debtor-in-possession
operating under Chapter 11 of the United States Bankruptcy Code.
In addition, in November 1996 Nu-Tech reached an agreement with the
holders of the senior debt, subordinated debt and the management of PCL whereby
Nu-Tech will acquire a 51% interest in PCL. The terms of the agreement provided
that PCL would file a plan of reorganization under Chapter 11 of the United
States Bankruptcy Code to effectuate the agreement (the "PCL Plan"). On November
8, 1996, PCL and the Company filed the PCL Plan with the U.S. Bankruptcy Court
located in the Central District of California (Case No. SV96-23185-GM). PCL is a
full service clinical laboratory capable of providing a comprehensive battery of
testing services. PCL is a publicly held corporation which, until recently,
filed reports with the Commission under the Securities Exchange Act of 1934, as
amended. PCL is delinquent in its filings with the Commission and has not filed
any reports since the quarter ended May 31, 1996. PCL has been operating as a
debtor-in- possession under Chapter 11 of the Bankruptcy Code since November 8,
1996. PCL's common stock is traded in the over-the-counter market of the
National Securities Dealers Automated Quotation System under the symbol "PCLI".
The Company had previously purchased approximately $13,300,000 of
Senior Debt for $10,000,000 on November 7, 1996 in advance of the filing of the
PCL Plan with the bankruptcy court. In accordance with the PCL Plan, certain
holders of senior debt
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contributed $10,000,000 in DIP financing to PCL, which under the terms of the
reorganization, will be forgiven. The PCL Plan also requires that the Company
purchase an additional 17% of the capital stock of PCL for $5,000,000 upon
confirmation of the PCL Plan. Pursuant to the PCL Plan, and assuming approval of
the PCL Plan by the bankruptcy court, the approximately $13,300,000 of debt
purchased by Nu-Tech would be converted into 34% of the common stock of PCL,
which together with the 17% purchased for $5,000,000, will result in NuTech
owning 51% of the outstanding common stock of PCL.
The Company and PCL have submitted a motion to the United States
Bankruptcy Plan pursuant to which the Company will sell all of its interests in
MSI to PCL for its costs and certain expenses of the acquisition aggregating
aproximately $7,200,000 plus any additional sums paid by Nu-Tech to MSI since
its acquisition. Nu-Tech had agreed to the terms of this sale for strategic
business purposes. PCL will also assume all other obligations incurred by
Nu-Tech in connection with the MSI acquisition, including Nu-Tech's guarantee of
certain remiang obligations under the MSI Plan. The motion has been set for
hearing on January 29, 1997. Assuming the court approves the motion, of which
there can be no asurance, a closing will be held shortly thereafter. As stated
above, if the PCL Plan is approved by the bankruptcy court, Nu-Tech will own 51%
of the ownership interes of PCL, which in turn will own MSI as a wholly-owned
subsidiary.
Pursuant to the PCL Plan, J. Marvin Feigenbaum, President and Chief
Executive Officer of the Company, has been retained as crisis manager of PCL and
serves as the equivalent of the Chief Operating Officer of PCL. It is
contemplated that Mr. Feigenbaum will serve in such capacity pending the
bankruptcy court's determination of the PCL Plan.
The PCL Plan is subject to the approval of the bankruptcy court and
there can be no assurance such approval will be obtained, that the PCL Plan will
be approved as filed with the court or that the acquisition of PCL will be
consummated. There can be no assurance that the Company will be able to
successfully operate the business even if the PCL acquisition is consummated.
Should the PCL Plan not be consummated, Nu-Tech will be a creditor of PCL. Under
the terms of the PCL Plan, however, no competing offer for PCL may be accepted
by the bankruptcy court unless (i) such competing offer is at least $2.5 million
higher than the bid by Nu-Tech and (ii) on the effective date of the competing
plan Nu-Tech receives $1.88 million in cash as compensation for its time and
expense in pursuing the PCL Plan.
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ITEM 5. OTHER EVENTS.
On January 23, 1997 the Company obtained a loan in the principal amount
of $2,000,000 from a private lender, the proceeds of which were used to repay an
earlier lender who had provided funds for a portion of the MSI acquisition. The
new loan bears interest at 7.5% per annum and is due and payable 60 days from
the date of the loan. The loan is secured by the Company's $13,300,000 debt
participation interest in PCL and by the capital stock of MSI. The lender also
received five year common stock purchase warrants to purchase 100,000 shares of
common stock at $11.50 per share.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL,INFORMATION
AND EXHIBITS.
a. Financial Statements of Businesses Acquired.
NONE
b. Pro Forma Financial information.
NONE
c. Exhibits.
2.5 Motion of Physician's Clinical Laboratory for
Entry of Order authorizing Physician's Clinical
Laboratory to acquire all of the Issued and
Outstanding Stock of Medical Science Institute.
10.29 Form of Promissory Note of Nu-Tech Bio-Med, Inc. in
the principal amount of $2,000,000 dated January 23,
1997 in favor of The Michael Jesselson Trust.
10.30 Security Agreement dated January 23, 1997 between
Nu-Tech Bio-Med, Inc. and The Michael Jesselson
Trust
10.31 Form of Common Stock Purchase Warrant dated
January 23, 1997 to purchase 100,000 shares of
Common Stock at an exercise price of $11.50 per
share.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NU-TECH BIO-MED, INC.
By: /s/ J. Marvin Feigenbaum
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J. Marvin Feigenbaum
Chairman of the Board,
President, Chief Executive
and Chief Financial Officer
Dated: January 27, 1996
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EXHIBIT INDEX
Exhibit No. Description
2.5 Motion of Physician's Clinical Laboratory for
Entry of Order authorizing Physician's Clinical
Laboratory to acquire all of the Issued and
Outstanding Stock of Medical Science Institute.
10.29 Form of Promissory Note of Nu-Tech Bio-Med, Inc. in the
principal amount of $2,000,000 dated January 23,
1997 in favor of The Michael Jesselson Trust.
10.30 Security Agreement dated January 23, 1997 between
Nu-Tech Bio-Med, Inc. and The Michael Jesselson
Trust
10.31 Form of Common Stock Purchase Warrant dated
January 23, 1997 to purchase 100,000 shares of
Common Stock at an exercise price of $11.50 per
share.
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Exhibit 2.5
David S. Kurtz
Timothy R. Pohl
JONES, DAY, REAVIS & POGUE
77 West Wacker
Chicago, Illinois 60601-1692
Telephone: (312) 782-3939
Susanne Meline, Bar No. 169177
JONES, DAY, REAVIS & POGUE
555 West Fifth Street, Suite 4600
Los Angeles, California 90013-1025
Telephone: (213) 489-3939
Attorneys for Debtors
and Debtors in Possession
UNITED STATES BANKRUPTCY COURT
CENTRAL DISTRICT OF CALIFORNIA
In re: ) Jointly Administered
) Case No. SV96-23185-GM
PHYSICIANS CLINICAL )
LABORATORY, INC., ) Chapter 11
a Delaware corporation, )
et al., ) MOTION OF DEBTORS AND DEBTORS IN
) POSSESSION FOR ENTRY OF ORDER
Debtors. ) AUTHORIZING PHYSICIANS CLINICAL
) LABORATORY, INC. TO ACQUIRE ALL
) ISSUED AND OUTSTANDING STOCK OF
) MEDICAL SCIENCE INSTITUTE;
) MEMORANDUM OF POINTS AND
) AUTHORITIES IN SUPPORT THEREOF;
) DECLARATIONS OF J. MARVIN
) FEIGENBAUM AND ROBERT H. WARSHAUER
)
) Date: January 29, 1997
) Time: 9:00 a.m.
) Place: Courtroom 303
) 21041 Burbank Boulevard
) Woodland Hills, CA 91367
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The above-captioned debtors and debtors in possession
(collectively, the "Debtors") hereby move this Court for the entry of an order
authorizing Debtor Physicians Clinical
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Laboratory, Inc. ("PCL") to acquire from Nu-Tech Bio-Med, Inc. ("Nu-Tech") all
of the issued and outstanding stock of Medical Science Institute ("MSI"),
pursuant to section 363 of the Bankruptcy Code, 11 U.S.C. SectionSection
101-1330 (the "Bankruptcy Code"). The proposed acquisition (the "MSI
Acquisition") of the stock of MSI (the "MSI Stock"), would be consummated
pursuant to the terms and conditions outlined in the termsheet (the "MSI
Termsheet") attached as Schedule 1 to the declaration of Robert Warshauer (the
"Warshauer Declaration"), which is attached hereto. In support of this Motion,
the Debtors respectfully represent as follows:
PCL BACKGROUND
1. On November 8, 1996 (the "Petition Date"), the Debtors
commenced their respective reorganization cases by filing voluntary petitions
for relief under chapter 11 of the Bankruptcy Code.
2. The Debtors are continuing in possession of their property
and are operating and managing their businesses, as debtors in possession,
pursuant to sections 1107 and 1108 of the Bankruptcy Code.
3. The Court has jurisdiction over this matter pursuant to 28
U.S.C. SectionSection 157 and 1334. This is a core proceeding pursuant to 28
U.S.C. Section 157(b)(2).
4. Pursuant to an order entered on the Petition Date, the
Debtors' chapter 11 cases have been consolidated for procedural purposes only
and are being administered jointly.
5. On November 18, 1996, the United States Trustee
for the Central District of California (the "U.S. Trustee")
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appointed a statutory committee of unsecured creditors in these cases, pursuant
to section 1102 of the Bankruptcy Code (the "Creditors' Committee").
6. The Debtors provide clinical laboratory testing services in
the State of California. Clinical testing focuses on testing bodily fluids for
the diagnosis and treatment of illnesses. The Debtors provide these services in
a high-quality and cost-efficient manner to a diversified group of customers and
payor sources, including office-based physicians, managed health care
associations and acute-care hospitals.
MSI BACKGROUND
7. MSI is also in the business of providing clinical
laboratory testing services. MSI's laboratory is located in Burbank, California
and MSI leases approximately twenty (20) physician service centers, primarily in
the Southern California area. MSI's present annual revenues are approximately
$12 million.
8. On or about October 26, 1995, MSI commenced a chapter 11
case entitled In Re Medical Science Institute in the United States Bankruptcy
Court, Central District of California, Case No. LA 95-37790 TD (the "MSI
Bankruptcy Case"). On or about November 18, 1996, the Bankruptcy Court confirmed
MSI's First Amended Plan of Reorganization (the "MSI Plan"), pursuant to which
Nu-Tech acquired the MSI Stock. As more fully set forth in the declaration of J.
Marvin Feigenbaum (the "Feigenbaum Declaration") attached hereto, the total
purchase price paid by Nu-Tech for the MSI Stock was approximately $6.75
million, comprised as follows: (a) $2,210,595.56 in cash used to fund
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outstanding administrative claims (including $750,000 of outstanding
professional fees, which the MSI Plan provides can not exceed $1.175 million),
non-tax priority claims and effective date lease payments; (b) $2,540,480.75
paid to Austin Financial Services, Inc. to satisfy its senior secured claim
against MSI's assets; and (c) Nu-Tech stock valued at $2 million, paid to MSI's
sole shareholder.
9. In addition, pursuant to the MSI Plan, reorganized MSI
assumed the obligations to: (a) satisfy outstanding, postpetition trade
payables; (b) pay outstanding cure amounts for obligations with respect to
assumed leases; (c) pay approximately $425,000 in prepetition priority taxes
owed to the Federal government with interest, over six years from the date of
assessment; and (d) pay the difference between allowed professional fees (up to
a cap of $1.175 million) and the $750,000 paid on or about the effective date,
in payments over 15 months. Nu-Tech has guaranteed payment of such unpaid
professional Fees.
10. In addition to the foregoing, as more fully set forth in
the Feigenbaum Declaration, Nu-Tech incurred approximately $64,800.00 of fees
and expenses in acquiring the MSI Stock and, from the MSI Plan effective date
through December 24, 1996, has contributed an additional $405,000.00 to MSI in
order to support its operations. Additionally, on December 2, 1996, Nu-Tech
borrowed $2.5 million from a third party in order to partly finance its
acquisition of the MSI Stock, and will incur interest charges with respect to
that loan through the date of closing of PCL's acquisition of the MSI
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Stock. Further, Nu-Tech believes that it may be necessary to loan or contribute
additional funds to MSI prior to such date of up to $400,000. Exclusive of this
interest and any additional loans or contributions which may be made after
December 24, 1996, Nu-Tech's total investment in MSI is $7,220,874.05.
PCL REORGANIZATION PLAN NEGOTIATIONS
11. As the Court is aware, the Debtors commenced heir chapter
11 cases after reaching agreement on the terms of a reorganization plan with
their senior secured lenders (the "Senior Lenders") and Nu-Tech, which provided
for, among other things, Nu-Tech to acquire 51% of reorganized PCL's common
stock in return for a $15 million cash investment in the Debtors. The agreement
provided for Nu-Tech to receive the reorganized PCL stock in two components: (a)
34% of such stock in satisfaction of Nu-Tech's $13.3 million secured claim
against PCL, which claim was purchased from the Senior Lenders for $10 million
prior to the Petition Date, and which $10 million was used by the Senior Lenders
to fund a debtor in possession loan facility (the "DIP Loan") for the Debtors,
which has been previously approved by this Court and (b) 17% of such stock in
exchange for a $5 million cash infusion upon the effective date of a
reorganization plan. On or about December 2, 1996, the Debtors filed a joint
plan of reorganization, which incorporated the terms of that agreement.
12. Since such plan was filed, the Debtors, the Senior
Lenders, Nu-Tech and the Creditors' Committee have reached an agreement
regarding treatment of general unsecured creditors under the reorganization
plan. An amended plan will be filed not later than January 17, 1997, which will
include certain revisions
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to the plan as originally filed, to reflect the agreement reached with the
Creditors' Committee (the "Amended Plan"). As part of the agreement reached with
the Creditors' Committee, and because the Creditors' Committee believes that the
MSI Acquisition is in the best interests of the Debtors' estates, the Creditors'
Committee agreed to support this Motion.
SUMMARY OF THE MSI ACQUISITION
13. Pursuant to the MSI Termsheet, the MSI Acquisition
provides that PCL will acquire 100% of the MSI Stock from Nu-Tech for a total
purchase price (the "Purchase Price") of $7,220,874.05 plus the Adjustment
Amount. The Adjustment Amount shall be equal to any additional funds loaned or
contributed by Nu-Tech to MSI after December 24, 1996 through the closing of the
MSI Acquisition, including interest paid or accrued by Nu-Tech on funds it
borrowed to finance its initial purchase of the MSI Stock, from December 2, 1996
until the date of the closing of the MSI Acquisition (the "Closing Date").
Nu-Tech estimates that the Adjustment Amount will not exceed $400,000.00.
14. The Purchase Price shall be payable as follows: (a) PCL
shall pay Nu-Tech $2,220,874, plus the Adjustment Amount, in cash (which will be
drawn from the DIP Loan) and (b) PCL shall issue to Nu-Tech a promissory note
(the "Promissory Note") in the original principal amount of $5 million.
15. The Promissory Note shall accrue interest at the rate of
10% per annum and the principal amount thereof, together with all accrued
interest and other fees and charges thereunder, shall become due and payable if:
(a) the Amended Plan, in form and substance acceptable to Nu-Tech and the Senior
Lenders, is
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not confirmed on or before November 8, 1997; (b) the Debtor defaults in its
obligations under the DIP Loan; or (c) the assets or stock of PCL are sold to a
third party other than Nu-Tech. By operation of the Order Approving Termination
Fee and Overbid Protection entered by the Court on January 6, 1997, payment of
the Promissory Note must be made in full before any sale of the Debtors' stock
or assets to a third party other than Nu-Tech could be consummated.
16. If the MSI Acquisition is approved, the Amended Plan will
provide that all of PCL's obligations under the Promissory Note shall be
satisfied in full by the issuance of 17% of the issued and outstanding stock of
reorganized PCL under the Amended Plan, on the date it becomes effective. As set
forth in paragraph 11 above, the plan as originally filed contemplated that
Nu-Tech would acquire 17% of reorganized PCL's stock in exchange for $5 million
in cash.
17. PCL's obligations under the Promissory Note shall be
secured by a lien (the "Lien") encumbering all of PCL's assets (the "Assets"),
including the MSI Stock, which shall be junior only to the lien securing
repayment of the DIP Loan and to all validly perfected liens arising prior to
the Petition Date in and to the Assets, other than the lien securing repayment
of the prepetition indebtedness owed to the Senior Lenders and Nu-Tech. Without
limiting the foregoing, the Lien shall be senior to any and all administrative
claims, including claims with priority pursuant to Bankruptcy Code
SectionSection 364(c) and 507(b), other than administrative claims "carved-out"
of the lien granted to the Senior Lenders under the DIP Loan. Nu-Tech shall be
granted
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immediate relief from the automatic stay to exercise any and all remedies
available to it under the Promissory Note or with respect to the Lien in the
event the Senior Lenders are granted relief from stay with respect to the DIP
Loan. The Senior Lenders have agreed that, after payment in full of the DIP
Loan, proceeds derived from a sale or liquidation of the Assets shall be paid to
Nu-Tech until the Promissory Note has been paid in full.
THE MSI ACQUISITION IS IN
THE BEST INTERESTS OF THE DEBTORS' ESTATES
18. The Debtors, the Senior Lenders, Nu-Tech and the
Creditors' Committee have all concluded that the MSI Acquisition is in the best
interest of the Debtors' estates, and that the transaction should take place as
soon as possible.
19. The parties have reached the conclusion that the MSI
Acquisition is in the best interests of the Debtors' estates because, among
other reasons:
(a) The combination of PCL and MSI will result in increased
profitability for both entities because of economies of scale
and cost savings;
(b) PCL is currently experiencing operating losses because
annual revenues are being generated at a rate insufficient to
produce operating profit. It is anticipated that, if the MSI
Acquisition is consummated, the additional revenue generated
by MSI's operations will result in the combined entities
operating at a profit; and
(c) The Purchase Price is favorable to PCL relative to the
amount of revenues expected to be contributed to
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PCL. The purchase price is equal to the actual cost of
Nu-Tech's investment in MSI.
AUTHORITY FOR THE REQUESTED RELIEF
20. Bankruptcy Code Section 363(b)(1) provides THAT: [t]he
trustee, after notice and a hearing, may use, sell, or lease, other
than in the ordinary course of business, property of the estate.
The debtor in possession or trustee may be authorized to take such action if
there is an articulated business justification for the transaction, the
transaction is in the best interests of the estate and the transaction is
entered into in good faith. See, e.g., In re Wilde Horse Enterprises, Inc., 136
B.R. 830, 841 (Bankr. C.D. Ca. 1991) ("In approving any sale outside the
ordinary course of business, the court must not only articulate a sufficient
business reason for the sale, it must further find it is in the best interests
of the estate, i.e., it is fair and reasonable, that it has been given adequate
marketing, that it has been negotiated and proposed in good faith, that the
purchaser is proceeding in good faith, and that it is an `arm's length'
transaction.")
21. In particular, Section 363(b)(1) permits a debtor to use
estate assets to acquire the stock of another entity provided there is good
business justification. See In re Raytech Corporation, 190 B.R. 149 (Bankr. D.
Conn. 1995). Thus, in In re Raytech Corporation, supra, a debtor in possession
was authorized pursuant to Bankruptcy Code Section 363(b)(1) to acquire the
stock of a third party where the purchase was intended to increase the market
share of one of the debtor's subsidiaries and "[t]he purchase would also create
economies of scale that would increase
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profitability and create synergies with the business of [acquired company]".
Id., at 153.
22. As set forth in paragraph 18 above, all of the Debtors'
major economic constituencies believe that the acquisition of the MSI Stock by
PCL pursuant to the terms and conditions more fully outlined herein is in the
best interests of the Debtors' estates.
WHEREFORE, the Debtors respectfully request that the Court
enter an order, substantially in the form attached hereto as Exhibit A,
authorizing PCL to: (i) acquire the MSI Stock pursuant to the terms and
conditions more fully set forth herein; (ii) borrow $2,220,874.05 plus the
Adjustment Amount pursuant to the DIP Loan to pay the cash portion of the
Purchase Price; (iii) execute and deliver the Promissory Note; (iv) grant the
Lien upon the terms and conditions, and with the priority more fully set forth
in the Motion; (v) execute any and all documents reasonably necessary and
appropriate to facilitate the acquisition of the MSI Stock; and (vi) grant such
other relief as the Court deems proper.
Dated: January 13, 1997 Respectfully submitted,
JONES, DAY, REAVIS & POGUE
________________________________________
Susanne Meline
Attorneys for Debtors and
Debtors in Possession
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DECLARATION OF ROBERT H. WARSHAUER
I, Robert H. Warshauer, declare as follows:
I am over 18 years of age, and, if called as a witness,
could and would testify as to the matters set forth below based on my personal
knowledge, unless otherwise stated.
1. I am the partner of Ernst & Young LLP ("Ernst & Young"),
the Debtors' financial advisors, responsible for Ernst & Young's representation
of the Debtors. I make this declaration in support of the Debtors' Motion For
Entry of Order Authorizing Physicians Clinical Laboratory, Inc. to Acquire All
Issued and Outstanding Stock of Medical Science Institute (the "Motion"). All
capitalized terms not otherwise defined herein shall have the same meaning as
set forth in the Motion.
2. The Debtors provide clinical laboratory testing services
throughout the state of California. As of January 30, 1996, the Debtors operated
one full-service clinical laboratory in Sacramento, twenty (20) "stat"
laboratories and more than two hundred (200) patient service centers ("PSC's")
located in close proximity to referral sources throughout the Debtors' service
areas.
3. As more fully set forth in the Debtors' disclosure
statement ("Disclosure Statement") filed with this Court on or about December 2,
1996, PCL's net revenues for the fiscal years ended February 28, 1995 and
February 29, 1996 were approximately $111 million and $90.3 million,
respectively. However, at the present time, due to a continuing erosion in
business, the Debtors estimate that their present annual revenues are
approximately $57 million.
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4. The Debtors have filed, or soon will file, a plan of
reorganization (the "Plan") that reflects an agreement reached with the Senior
Lenders, Nu-Tech and the Creditors' Committee.
5. Nu-Tech has offered to sell the MSI Stock to PCL for a
Purchase Price equal to the Nu-Tech's actual investment in MSI. The MSI Purchase
Price for the MSI Stock will be $7,220,874.05 plus the Adjustment Amount,
payable as follows: (a) cash (which will be drawn against the DIP Loan) in the
sum of $2,220,874.05 plus the Adjustment Amount; and (b) issuance of a
Promissory Note to Nu-Tech in the original principal amount of $5 million. The
Promissory Note shall accrue interest at the rate of 10% per annum and the
principal amount thereof, together with all accrued interest and other fees and
charges, shall become due and payable if: (i) PCL's currently contemplated Plan,
in form and substance acceptable to Nu-Tech and the Senior Lenders, is not
confirmed on or before November 8, 1997; (ii) the Debtors default in their
obligations under the DIP Loan; or (iii) the assets or stock of PCL are sold to
a third party. In the event the Plan is confirmed on or before November 8, 1997,
however, all of PCL's obligations under the Promissory Note shall be satisfied
in full by the issuance of 17% of the issued and outstanding stock of
reorganized PCL pursuant to the Plan.
6. The Debtors have concluded that the MSI Acquisition is in
the best interests of the Debtors' estates and that the MSI Acquisition should
take place as soon as possible and should not await confirmation of the Plan.
7. The Debtors believe that the MSI Acquisition is in the best
interest of the estates because, among other things:
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(a) The combination of PCL and MSI will result in
increased profitability, as a result of cost savings and
economies of scale;
(b) The purchase price is favorable to PCL in light
of the net revenues anticipated to be contributed to PCL by
MSI; and
(c) PCL is currently experiencing operating losses;
it is anticipated that, if the MSI Acquisition is consummated,
the combined entities will operate at a profit.
8. The Debtors believe that PCL should acquire the MSI Stock
as soon as possible. Based on the Debtors' present revenues of approximately $57
million, their operations are experiencing operating losses. The contribution of
approximately $12 million of revenues by MSI will be highly beneficial to the
Debtors and will likely result in profitable operating results.
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I declare under penalty of perjury under the laws of the
United States that the foregoing is true and correct.
Executed this 13th day of January, 1997, at Los Angeles, California.
________________________________________
ROBERT H. WARSHAUER
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DECLARATION OF J. MARVIN FEIGENBAUM
I, J. Marvin Feigenbaum, declare as follows:
I am over 18 years of age and, if called as a witness, could
and would testify as to the matters set forth below based on my personal
knowledge, unless otherwise stated.
1. I am the Chief Operating Officer of Physicians Clinical
Laboratory, Inc. ("PCL" or the "Debtor"), Debtor and Debtor in Possession
herein, President of Nu-Tech Bio-Med, Inc. ("Nu-Tech") and President of Medical
Science Institute ("MSI"), a wholly-owned subsidiary of Nu-Tech. I make this
declaration in support of the Debtors' Motion For Entry of Order Authorizing
Physicians Clinical Laboratory, Inc. to Acquire All Issued and Outstanding Stock
of Medical Science Institute (the "Motion"). All capitalized terms not otherwise
defined herein shall have the same meaning as set forth in the Motion.
2. MSI is in the business of providing clinical laboratory
testing services. MSI's laboratory is located in Burbank, California and MSI
leases approximately twenty (20) PSC's, primarily in the Southern California
area. MSI's present annual revenues are approximately $12 million.
3. On or about October 26, 1995, MSI commenced a Chapter 11
case entitled In Re Medical Science Institute, United States Bankruptcy Court,
Central District of California, Case No. LA 95-37790 TD (the "MSI Bankruptcy
Case"). On or about November 18, 1996, the Bankruptcy Court confirmed MSI's
First Amended Plan of Reorganization (the "MSI Plan"), pursuant to which Nu-Tech
acquired all of the issued and outstanding Stock of Reorganized
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MSI. The total purchase price paid by Nu-Tech was approximately $6.75 million,
comprised as follows:
(a) $2,210,595.56 in cash used to fund outstanding
administrative claims (including $750,000 of outstanding
professional fees, which the MSI Plan provides can not exceed
$1.175 million), non-tax priority claims and effective date
lease payments;
(b) $2,540,480.75 paid to Austin Financial Services,
Inc. to satisfy its senior secured claim against MSI's assets;
and
(c) $2 million of Nu-Tech stock paid to MSI's sole
shareholder.
4. In addition, pursuant to the MSI Plan, reorganized MSI
assumed the obligation to:
(a) Satisfy outstanding, postpetition trade payables;
(b) Pay outstanding obligations with respect to
assumed leases;
(c) Pay approximately $425,000 in prepetition
priority taxes owed to the federal government with interest,
over six years from the date of assessment; and
(d) Pay the difference between allowed
professional fees (up to a cap of $1.175 million) and
the $750,000 paid on or about the effective date, in
payments over 15 months. Nu-Tech has guaranteed
payment of the Unpaid Professional Fees (the "Nu-Tech
Fee Guaranty").
-19-
<PAGE> 17
5. In addition to the foregoing, Nu-Tech incurred
approximately $64,800.00 of fees and expenses in acquiring MSI and, from the MSI
effective date through December 24, 1996, has contributed an additional
$405,000.00 to MSI in order to support its operations.
6. On December 2, 1996, Nu-Tech borrowed $2.5 million from a
third party in order to acquire the Stock and will incur interest charges with
respect to that loan through the date the proposed MSI Acquisition closes.
Further, Nu-Tech believes that it may be necessary to loan or contribute
additional funds to MSI prior to such date, but that such additional advances or
contributions will not exceed approximately $400,000. Exclusive of this interest
and any additional loans or contributions that may be made after December 24,
1996, Nu-Tech's total investment in MSI is $7,220,874.05.
-20-
<PAGE> 18
I declare under penalty of perjury under the laws of the
United States that the foregoing is true and correct.
Executed this 13th day of January, 1997, at Los Angeles,
California.
________________________________________
J. MARVIN FEIGENBAUM
-21-
<PAGE> 19
David S. Kurtz
Timothy R. Pohl
JONES, DAY, REAVIS & POGUE
77 West Wacker
Chicago, Illinois 60601-1692
Telephone: (312) 782-3939
Susanne Meline, Bar No. 169177
JONES, DAY, REAVIS & POGUE
555 West Fifth Street, Suite 4600
Los Angeles, California 90013-1025
Telephone: (213) 489-3939
Attorneys for Debtors
and Debtors in Possession
UNITED STATES BANKRUPTCY COURT
CENTRAL DISTRICT OF CALIFORNIA
In re: ) Jointly Administered
) Case No. SV96-23185-GM
PHYSICIANS CLINICAL )
LABORATORY, INC., ) Chapter 11
a Delaware corporation, )
et al., ) ORDER GRANTING MOTION OF DEBTORS
) AND DEBTORS IN POSSESSION FOR
Debtors. ) ENTRY OF ORDER AUTHORIZING
) PHYSICIANS CLINICAL LABORATORY,
) INC. TO ACQUIRE ALL ISSUED AND
) OUTSTANDING STOCK OF MEDICAL
) SCIENCE INSTITUTE
)
) Date: [TO BE SET]
) Time: [TO BE SET]
) Place: Courtroom 303
) 21041 Burbank Boulevard
- -------------------------------------- Woodland Hills, CA 91367
-22-
Exhibit A
<PAGE> 20
This matter is before the Court on the Motion for Entry of
Order Authorizing Physicians Clinical Laboratory, Inc. to Acquire All Issued and
Outstanding Stock of Medical Science Institute (the "Motion") filed by the
above-captioned debtors and debtors in possession (collectively, the "Debtors");
the Court (i) having reviewed the Motion and (ii) having heard the statements of
counsel in support of the relief requested in the Motion at a hearing before the
Court; the Court finding that (a) the Court has jurisdiction over this matter
pursuant to 28 U.S.C. SectionSection 157 and 1334; (b) this is a core proceeding
pursuant to 28 U.S.C. Section 157(b)(2); and (c) the MSI Acquisition, as such
term is defined in the Motion, is in the best interest of the Debtors' estates
and creditors; and the Court being fully advised in the premises and having
determined that there is just cause for the relief granted herein;
IT IS HEREBY ORDERED THAT:
1. All capitalized terms shall have the definitions assigned
to them in the Motion.
2. The Motion shall be, and hereby is, granted.
3. Debtor PCL shall be, and hereby is, authorized to purchase
100% of the issued and outstanding capital stock of MSI for a purchase price of
$7,220,874.05, plus the Adjustment Amount.
4. The Debtors shall be, and hereby are, authorized to take
such steps and execute such documents and instruments as
-23-
Exhibit A
<PAGE> 21
may be necessary or appropriate to implement and effectuate the terms and
conditions of the MSI Acquisition.
5. The Debtors shall be, and hereby are, authorized to draw
down on the DIP Loan in the amount of $2,220,874, plus the Adjustment Amount, in
order to pay the cash portion of the Purchase Price to Nu-Tech.
6. PCL shall be, and hereby is, authorized to issue to Nu-Tech
the Promissory Note in the original principal amount of $5 million under the
terms and conditions set forth in the Motion.
7. To secure PCL's obligations under the Promissory Note,
Nu-Tech shall be, and hereby is, effective upon consummation of the MSI
Acquisition, granted a lien on all assets of PCL, including the MSI Stock, which
lien shall be (a) junior only to the liens granted to the Senior Lenders under
the DIP Loan and all validly perfected liens arising prior to the Petition Date,
provided that the lien granted to Nu-Tech hereunder shall be senior in priority
to the lien of the Senior Lenders securing their prepetition claims and (b)
subject to the Carve-Out (as defined in the order of this Court dated December
3, 1996 approving the DIP Loan) to the same extent as the liens and indebtedness
thereunder. In addition, Nu-Tech's claim with respect to the Promissory Note
shall be, and hereby is, treated as an administrative claim senior to all other
administrative claims, pursuant to sections 364(c) and 507(b) of the Bankruptcy
Code, except for claims covered by the Carve-Out.
-24-
Exhibit A
<PAGE> 22
8. In the event the Senior Lenders are granted relief
from the automatic stay with respect to the DIP Loan, Nu-Tech
shall also be, without any further order of this Court, granted relief from the
automatic stay, pursuant to section 362 of the Bankruptcy Code, to exercise any
and all remedies available to it under the Promissory Note or with respect to
the Lien granted hereunder.
Dated: _________, 1997 ________________________________________
UNITED STATES BANKRUPTCY JUDGE
-25-
Exhibit A
<PAGE> 1
Exhibit 10.29
SECURED PROMISSORY NOTE
2,000,000 New York, New York
January ___, 1997
FOR VALUE RECEIVED, the undersigned unconditionally promises to pay to the
order of The Michael G. Jesselson 12/18/80 Trust (the "Lender"), at 1301 Avenue
of the Americas, Suite 4101, New York, New York 10019, or at such place
designated by Lender, the principal amount of TWO MILLION DOLLARS ($2,000,000)
on April 18, 1997; provided, however, that this Secured Promissory Note (the
"Note") shall become immediately due and payable upon (i) the filing by, or
against, the undersigned of any petition for protection under the United States
Bankruptcy Code, or any similar statute, (ii) the invalidity or any attempted
revocation of the Security Agreement of even date herewith executed by the
undersigned in favor of the Lender, (iii) the Lender's determination that a
material adverse change has occurred in the financial condition, operations,
business or prospects of the undersigned, or (iv) any representation or warranty
contained herein or in the documents executed in connection herewith being
untrue. The occurrence of any of the events described in clauses (i) through
(iv) of the foregoing sentence or the failure of the undersigned to pay any
amount when due hereunder shall constitute a default under this Note.
The undersigned promises to pay interest on the unpaid balance of such
principal amount from and including the date of this Note to but excluding the
date this Note is paid in full at a rate per annum equal to the greater of: (a)
seven and one-half percent (7 1/2%) per annum; or (b) the rate of interest
imputed by the Internal Revenue Service as of the date of execution.
All payments under this Note shall be made in lawful money of the United
States of America and in immediately available funds at the Lender's office
specified above. This Note may be prepaid in whole or in part, at any time,
without penalty.
The undersigned waives presentment, notice of dishonor, protest and any
other notice or formality with respect to this Note.
The undersigned agrees to reimburse the Lender on demand for all
reasonable costs, expenses and charges (including, without limitation,
reasonable attorneys' fees and charges) in connection with the interpretation,
performance or enforcement of this Note.
<PAGE> 2
This Note shall be binding on the undersigned and its successors and
assigns and shall insure to the benefit of the Lender and her successors and
assigns; provided that the undersigned may to delegate any obligations under
this note without the prior written consent of the Lender.
The proceeds of this Note shall be used solely for the purpose of
retirement certain indebtedness owned by the undersigned to Oaktree Capital
Management, LLC, as general partner or investment manager on behalf of certain
funds and accounts, in the original principal amount of $2.5 million.
The undersigned represents and warrants that:
It is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has all requisite corporate power,
and has all material governmental approvals necessary, to own its assets and to
carry on its business as now being or as proposed to be conducted.
The execution and delivery of this Note will not conflict with or result
in a breach of, or require any consent under, the charter or by-laws of the
undersigned or any applicable governmental regulation or any material agreement
or instrument to which the undersigned is a party or to which it is subject, or
constitute a default under, or result in the terminating of, or result in the
acceleration or mandatory prepayment of, any indebtedness evidenced by any such
agreement or instrument; and
The undersigned has all necessary corporate power and authority to
execute, deliver and perform its obligations under this Note; the execution,
delivery and performance by the undersigned of this Note has been duly
authorized by all necessary corporate action on its part; and this Note when
executed and delivered by the undersigned for value will constitute, its legal,
valid and binding obligation, enforceable against it in accordance with its
terms.
The undersigned's chief operating officer and principal place of business
is located at the address set forth below.
All notices and communications to be given under this Note shall be given
or made in writing to the intended recipient at the address specified below or,
at such other address as shall be designated in a notice given to such entity.
All such communications shall be deemed to have been duly given when transmitted
by telex or telecopier, delivered to the telegraph or cable office or personally
delivered or, in the case of a mailed notice, upon receipt, in each case, given
Or addressed as follows:
<PAGE> 3
To the undersigned: Nu-Tech Bio-Med, Inc.
500 Fifth Avenue, Suite 2424
New York, New York 10016
Telecopier: (212) 391-2864
Attention: J. Marvin Feigenbaum
To the Lender: The Michael G. Jesselson
12/18/80 Trust
1301 Avenue of the Americas
New York, New York 10019
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW
OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THE STATE
OF NEW YORK. THE UNDERSIGNED HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF
THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF
ANY NEW YORK STATE COURT SITTING IN NEW YORK COUNTY, NEW YORK FOR THE PURPOSES
OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. THE UNDERSIGNED IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT
IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
THE UNDERSIGNED HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS NOTE OR THE TRANSACTIONS CONTEMPLATED BY THIS
NOTE.
IN WITNESS WHEREOF, the undersigned has caused this Note to be duly
executed and delivered as of the date and year first above written.
NU-TECH BIO-MED, INC.,
a Delaware corporation
By_____________________
J. Marvin Feigenbaum
Its President
<PAGE> 1
Exhibit 10.30
SECURITY AGREEMENT
Dated as of January ___, 1997
by
NU-TECH BIO-MED, INC.
in favor of
THE MICHAEL G. JESSELSON 12/18/80 TRUST
<PAGE> 2
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "Agreement") dated as of January ___, 1997
is made by Nu-Tech Bio-Med, Inc., a Delaware corporation (the "Company") in
favor of The Michael G. Jesselson 12/18/80 Trust (the "Secured Party").
The Secured Promissory Note dated as of January ____, 1997 in the amount
of Two Million Dollars ($2,000,000) (the "Note") executed by the Company in
favor of the Lender provides, subject to its terms and conditions, for a
concurrent loan to the Company. It is a condition to the concurrent loan under
the Note by the Secured Party that the Company shall have executed and
delivered, and granted the Lien provided for in, this Agreement.
To induce the Secured Party to enter into, and to extend credit under, the
Note and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Company has agreed to pledge, assign and
grant a security interest in the Collateral as security for the Secured
Obligations. Accordingly, the Company agrees with the Secured Party as follows:
1. Definitions and Interpretation.
1.1 Certain Defined Terms. The following terms shall have the
following meanings under this Agreement:
"BASIC DOCUMENT" shall mean the Note and this Agreement.
"CODE" shall mean the Uniform Commercial Code as in effect in the
State of New York from time to time or, by reason of mandatory application, any
other applicable jurisdiction.
"COLLATERAL" shall mean all right, title and interest of the Company
in: (a) its 16.4447% participation interest in the credit facilities evidenced
by the Credit Agreement, which it purchased pursuant to the Participation
Agreement dated as of November 8, 1996 among, inter alia, the Company and
Oaktree Capital Management, LLC, and various other parties (collectively,
"Oaktree"), a copy of which is attached hereto, (the "Participation Agreement")
and all instruments or chattel paper (each as defined in the Code) evidencing,
representing, arising from or existing in respect of,
- 1 -
<PAGE> 3
relating to, securing or otherwise supporting the payment of such participation
interest, including all of the right, title and interest of the Company in, to
and under the Participation Agreement and the Agreement dated as of November 8,
1996 among, inter alia, the Company and Oaktree, a copy of which is attached
hereto, (the "Agreement") and all proceeds and products in whatever form of all
or any part of the foregoing (together with all rights to recover and proceed
with respect to the same) and all substitutions for and replacements of all or
any part of the foregoing; and (b) the MSI Stock.
"CREDIT AGREEMENT" shall mean the Credit Agreement dated as of April
1, 1994 between Physician's Clinical Laboratory, Inc., the Agent and the
financial institutions party thereto.
"DEFAULT" shall mean any default described in the Note.
"LIEN" shall mean, with respect to any property, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
property or any agreement to give, or notice of, any of the foregoing.
"MSI" shall mean Medical Science Institute, a California
corporation.
"MSI STOCK" shall mean all of the issued and outstanding common
stock of MSI.
"SECURED OBLIGATIONS" shall mean any and all obligations of the
Company for the performance of its agreements, covenants and undertakings under
or in respect of the Note, including the payment of all amounts owed thereunder.
1.2 Interpretation. In this Agreement, unless otherwise indicated,
the singular includes the plural and plural the singular; words importing either
gender include the other gender; references to statutes or regulations are to be
construed as including all statutory or regulatory provisions consolidating,
amending or replacing the statute or regulation referred to; references to
"writing" include printing, typing, lithography and other means of reproducing
words in a tangible visible form; the words "including," "includes" and
"include" shall be deemed to be followed by the words "without limitation";
references to articles, sections (or subdivisions of sections), exhibits,
annexes or schedules are to this Agreement; references to agreements and other
contractual instruments shall be deemed to include all subsequent amendments,
extensions and other modifications to such instruments (without, however,
limiting any
- 2 -
<PAGE> 4
prohibition on any such amendments, extensions and other modifications by the
terms of any such document); and references to persons or entities including
their respective permitted successors and assigns.
2. Collateral.
2.1 Grant. As collateral security for the prompt payment in full
when due (whether at stated maturity, by acceleration or otherwise) and
performance of the Secured Obligations, the Company hereby pledges, assigns and
grants to the Secured Party a security interest in all of the Company's right,
title and interest in and to the Collateral.
2.2 Perfection. Concurrently with the execution and delivery of this
Agreement, the Company shall (i) file such financing statements and other
documents in such offices as shall be necessary or as the Secured Party may
request to perfect and establish the Lien granted by this Agreement, (ii)
deliver and pledge to the Secured Party any and all instruments and chattel
paper, endorsed or accompanied by such instruments of assignment and transfer in
such form and substance as the Secured Party may request, including, without
limitation, certificates representing the MSI Stock, and (iii) take all such
other actions as shall be necessary or as the Secured Party may request to
perfect and establish the priority of the Lien granted by this Agreement.
2.3 Preservation and Protection of Security Interests . The Company
shall:
(a) upon the acquisition after the date of this Agreement by
the Company of any instrument or chattel paper evidencing all or any part of the
interests constituting the Collateral, promptly deliver and pledge to the
Secured Party all such instruments or chattel paper, endorsed or accompanied by
such instruments of assignment and transfer in such form and substance as the
Secured Party may request; and
(b) give, execute, deliver, file or record any and all
financing statements, notices, contracts, agreements or other instruments,
obtain any and all governmental approvals and take any and all steps that may be
necessary or as the Secured Party may request to create, perfect, establish the
priority of, or to preserve the validity, perfection or priority of, the Lien
granted by this Agreement or to enable the Secured Party to exercise and enforce
its rights, remedies, powers and privileges under this Agreement with respect to
such Lien.
- 3 -
<PAGE> 5
2.4 Attorney-in-Fact.
(a) The Secured Party is hereby appointed the attorney-in-fact
of the Company for the purpose of carrying out the provisions of this Agreement
and taking any action and executing any instruments which the Secured Party may
deem necessary or advisable to accomplish the purposes of this Agreement, to
preserve the validity, perfection and priority of the Lien granted by this
Agreement (including, without limitation, the filing or recording of such
financing statements as Secured Party may deem appropriate or necessary) and,
following any Default, to exercise its rights, remedies, powers and privileges
under this Agreement. This appointment as attorney-in-fact is irrevocable and
coupled with an interest. Without limiting the generality of the foregoing, the
Secured Party shall be entitled under this Agreement upon the occurrence and
continuation of any Default (i) to ask, demand, collect, sue for, recover,
receive and give receipt and discharge for amounts due and to become due under
and in respect of all or any part of the Collateral; (ii) to receive, endorse
and collect any instruments or other drafts, instruments, documents and chattel
paper in connection with clause (i) above (including any draft or check
representing the proceeds of insurance or the return of unearned premiums);
(iii) to file any claims or take any action or proceeding that the Secured Party
may deem necessary or advisable for the collection of all or any part of the
Collateral, including the collection of any compensation due and to become due
under any contract or agreement with respect to all or any part of the
Collateral; and (iv) to execute, in connection with any sale or disposition of
the Collateral under Section 4, any endorsements, assignments, bills of sale or
other instruments of conveyance or transfer with respect to all or any part of
the Collateral.
(b) So long as no Default shall have occurred and be
continuing, the Company shall have the right to exercise all voting, consensual
and other powers of ownership pertaining to the Collateral for all purposes not
inconsistent with the terms of this Agreement.
(c) If any Default shall have occurred and be continuing, and
whether or not the Secured Party exercises any available right to declare any
Secured Obligation due and payable or seeks or pursues any other right, remedy,
power or privilege available to it under applicable law, this Agreement or any
other Basic Document, all payments and other distributions on the Collateral
shall be paid directly to the Secured Party or its designee, retained by it and
applied as set forth in Section 4.04.
- 4 -
<PAGE> 6
2.5 Rights and Obligations.
(a) The Company shall remain liable to perform its duties and
obligations under the contracts and agreements included in the Collateral in
accordance with their respective terms to the same extent as if this Agreement
had not been executed and delivered. The exercise by the Secured Party of any
right, remedy, power or privilege in respect of this Agreement shall not release
the Company from any of its duties and obligations under such contracts and
agreements. The Secured Party shall have no duty, obligation or liability under
such contracts and agreements by reason of this Agreement or any other Basic
Document, nor shall the Secured Party be obligated to perform any of the duties
or obligations of the Company under any such contract or agreement or to take
any action to collect or enforce any claim under any such contract or agreement.
(b) No Lien granted by this Agreement in the Company's right,
title and interest in any contract or agreement shall be deemed to be a consent
by the Secured Party to any such contract or agreement.
(c) No reference in this Agreement to proceeds or to the sale
or other disposition of Collateral shall authorize the Company to sell or
otherwise dispose of any Collateral.
(d) The Secured Party shall not be required to take steps
necessary to preserve any rights against prior parties to any part of the
Collateral.
3. Representations, Warranties and Covenants. As of the date of this
Agreement, the Company represents, warrants and covenants to the Secured Party
as follows:
3.1 Title. The Company is the sole beneficial owner of the
Collateral in which it purports to grant a Lien pursuant to this Agreement, and
such Collateral is free and clear of all Liens. The Lien granted by this
Agreement in favor of the Secured Party has attached and constitutes a perfected
security interest in all of such Collateral prior to all other Liens.
3.2 Sales and Other Liens. The Company shall not dispose of any
Collateral, create, incur, assume or suffer to exist any Lien upon any
Collateral or file or suffer to be on file or authorize to be filed, in any
jurisdiction, any financing
- 5 -
<PAGE> 7
statement or like instrument with respect to all or any part of the Collateral
in which the Secured Party is not named as the sole secured party.
3.3 Principal Place of Business. The Company's chief executive
office and principal place of business is located at the address set forth
below.
3.4 Original Documents Evidencing Underlying Credit Facility. The
Company represents and warrants that the original Credit Agreement and all other
documents, instruments or chattel paper evidencing the credit facility arising
out of the Credit Agreement are held by Oaktree Capital Management, LLC, or an
affiliate thereof, and that the Company does not have in its possession any such
original agreements, documents, instruments or chattel paper.
3.5 Restrictions On Issuing MSI Stock. The Company hereby represents
and warrants that the MSI Stock represents all of the issued and outstanding
common stock of MSI and further covenants not to issue any additional stock of
MSI (whether preferred, common or otherwise) until the Note has been paid in
full.
3.6 Further Assurances. The Company agrees that, from time to time
upon the written request of the Secured Party, the Company will execute and
deliver such further documents and do such other acts and things as the Secured
Party may reasonably request in order fully to effect the purposes of this
Agreement.
4. Remedies.
4.1 Events of Default, Etc. If any Default shall have occurred and
be continuing:
(a) The Secured Party in its discretion may make any
reasonable compromise or settlement it deems desirable with respect to any of
the Collateral and may extend the time of payment, arrange for payment in
installments, or otherwise modify the terms of, all or any part of the
Collateral;
(b) The Secured Party in its discretion may, in its name or in
the name of the Company or otherwise, demand, sue for, collect or receive any
money or property at any time payable or receivable on account of or in exchange
for all or any part of the Collateral, but shall be under no obligation to do
so;
- 6 -
<PAGE> 8
(c) The Secured Party in its discretion may, upon ten business
days' prior written notice to the Company of the time and place, with respect to
all or any part of the Collateral which shall then be or shall thereafter come
into the possession, custody or control of the Secured Party or any of its
agents, sell, lease or otherwise dispose of all or any part of such Collateral,
at such place or places as the Secured Party deems best, for cash, for credit or
for future delivery (without thereby assuming any credit risk) and at public or
private sale, without demand of performance or notice of intention to effect any
such disposition or of time or place of any such sale (except such notice as is
required above or by applicable statute and cannot be waived), and the Secured
Party or any other person or entity may be the purchaser, lessee or recipient of
any or all of the Collateral so disposed of at any public sale (or, to the
extent permitted by law, at any private sale) and thereafter hold the same
absolutely, free from any claim or right of whatsoever kind, including any right
or equity of redemption (statutory or otherwise), of the Company, any such
demand, notice and right or equity being hereby expressly waived and released.
The Secured Party may, without notice or publication, adjourn any public or
private sale or cause the same to be adjourned from time to time by announcement
at the time and place fixed for the sale, and such sale may be made at any time
or place to which the sale may be so adjourned; and
(d) The Secured Party shall have, and in its discretion may
exercise, all of the rights, remedies, powers and privileges with respect to the
Collateral of a secured party under the Code (whether or not the Code is in
effect in the jurisdiction where such rights, remedies, powers and privileges
are asserted) and such additional rights, remedies, powers and privileges to
which a secured party is entitled under the laws in effect in any jurisdiction
where any rights, remedies, powers and privileges in respect of this Agreement
or the Collateral may be asserted, including the right, to the maximum extent
permitted by law, to exercise all voting, consensual and other powers of
ownership pertaining to the Collateral as if the Secured Party were the sole and
absolute owner of the Collateral (and the Company agrees to take all such action
as may be appropriate to give effect to such right).
The proceeds of, and other realization upon, the Collateral by virtue of the
exercise of remedies under this Section 4.01 shall be applied in accordance with
Section 4.4.
4.2 Deficiency. If the proceeds of, or other realization upon, the
Collateral by virtue of the exercise of remedies under Section 4.01 are
insufficient to cover the costs and expenses of such exercise and the payment in
full of the other Secured Obligations, the Company shall remain liable for any
deficiency.
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<PAGE> 9
4.3 Private Sale.
(a) The Secured Party shall incur no liability as a result of
the sale, lease or other disposition of all or any part of the Collateral at any
private sale pursuant to Section 4.01 conducted in a commercially reasonable
manner. The Company hereby waives any claims against the Secured Party arising
by reason of the fact that the price at which the Collateral may have been sold
at such a private sale was less than the price which might have been obtained at
a public sale or was less than the aggregate amount of the Secured Obligations,
even if the Secured Party accepts the first offer received and does not offer
the Collateral to more than one offeree.
(b) The Company recognizes that, by reason of certain
prohibitions contained in the Securities Act of 1933 and applicable state
securities laws, the Secured Party may be compelled, with respect to any sale of
all or any part of the Collateral, to limit purchasers to those who will agree,
among other things, to acquire the Collateral for their own account, for
investment and not with a view to distribution or resale. The Company
acknowledges that any such private sales may be at prices and on terms less
favorable to the Secured Party than those obtainable through a public sale
without such restrictions, and, notwithstanding such circumstances, agree that
any such private sale shall be deemed to have been made in a commercially
reasonable manner and that the Secured Party shall have no obligation to engage
in public sales and no obligation to delay the sale of any Collateral for the
period of time necessary to permit the respective Issuer of such Collateral to
register it for public sale.
4.4 Application of Proceeds. Except as otherwise expressly provided
in this Agreement and except as provided below in this Section 4.04, the
proceeds of, or other realization upon, all or any part of the Collateral by
virtue of the exercise of remedies under Section 4.01 and any other cash at the
time held by the Secured Party under this Agreement, shall be applied by the
Secured Party:
First, to the payment of the costs and expenses of such
exercise of remedies, including reasonable out-of-pocket costs and expenses of
the Secured Party, the fees and expenses of its agents and counsel and all other
expenses incurred and advances made by the Secured Party in that connection;
Next, to the payment in full of the remaining Secured
Obligations in such manner as the Secured Party may determine; and
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<PAGE> 10
Finally, to the payment to the Company, or its respective
successors or assigns, or as a court of competent jurisdiction may direct, of
any surplus then remaining.
As used in this Section 4, "proceeds" of Collateral shall mean cash,
securities and other property realized in respect of, and distributions in kind
of, Collateral, including any property received under any bankruptcy,
reorganization or other similar proceeding as to the Company or any issuer of,
or account debtor or other obligor on, any of the Collateral.
5. Miscellaneous.
5.1 Waiver. No failure on the part of the Secured Party to exercise
and no delay in exercising, and no course of dealing with respect to, any right,
remedy, power or privilege under this Agreement shall operate as a waiver of
such right, remedy, power or privilege, nor shall any single or partial exercise
of any right, remedy, power or privilege under this Agreement preclude any other
or further exercise of any such right, remedy, power or privilege or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges provided in this Agreement are cumulative and not
exclusive of any rights, remedies, powers and privileges provided by law.
5.2 Notices. All notices and communications to be given under this
Agreement shall be given or made in writing to the intended recipient at the
address specified below or, as to any party, at such other address as shall be
designated by such party in a notice to each other party. Except as otherwise
provided in this Agreement, all such communications shall be deemed to have been
duly given when transmitted by telex or telecopier, delivered to the telegraph
or cable office or personally delivered or, in the case of a mailed notice, upon
receipt, in each case, given or addressed as provided in this Section 5.02:
To the Company: NU-TECH BIO-MED, INC.
500 Fifth Avenue, Suite 2424
New York, New York 10016
Fax No.: (212) 391-2864
Attention: J. Marvin Feigenbaum
To the Secured Party: The Michael G. Jesselson
12/18/80 Trust
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<PAGE> 11
1801 Avenue of the Americas
New York, NY 10019
5.3 Expenses, Etc. The Company agrees to pay or to reimburse the
Secured Party for all costs and expenses (including reasonable attorney's fees
and expenses) that may be incurred by the Secured Party in any effort to enforce
any of the provisions of Section 4 or any of the obligations of the Company in
respect of the Collateral or in connection with (a) the preservation of the Lien
of, or the rights of the Secured Party under this Agreement or (b) any actual or
attempted sale, lease, disposition, exchange, collection, compromise, settlement
or other realization in respect of, or care of, the Collateral, including all
such costs and expenses (and reasonable attorney's fees and expenses) incurred
in any bankruptcy, reorganization, workout or other similar proceeding relating
to the Company.
5.4 Amendments, Etc. Any provision of this Agreement may be
modified, supplemented or waived only by an instrument in writing duly executed
by the Company and the Secured Party. Any such modification, supplement or
waiver shall be for such period and subject to such conditions as shall be
specified in the instrument effecting the same and shall be binding upon the
Secured Party, each holder of any of the Secured Obligations and the Company,
and any such waiver shall be effective only in the specific instance and for the
purposes for which given.
5.5 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the Company, the Secured Party and each holder of any of
the Secured Obligations and their respective successors and permitted assigns.
The Company shall not assign or transfer its rights under this Agreement without
the prior written consent of the Secured Party.
5.6 Survival. All representations and warranties made in this
Agreement or in any certificate or other document delivered pursuant to or in
connection with this Agreement shall survive the execution and delivery of this
Agreement or such certificate or other document (as the case may be) or any
deemed repetition of any such representation or warranty.
5.7 Agreements Superseded. This Agreement supersedes all prior
agreements and understandings, written or oral, among the parties with respect
to the subject matter of this Agreement.
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<PAGE> 12
5.8 Severability. Any provision of this Agreement that is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions of this Agreement, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
5.9 GOVERNING LAW; SUBMISSION TO JURISDICTION. THIS AGREEMENT SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK. THE COMPANY HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK
STATE COURT SITTING IN NEW YORK, NEW YORK FOR THE PURPOSES OF ALL LEGAL
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT. THE COMPANY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT
AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT
IN AN INCONVENIENT FORUM.
5.10 WAIVER OF JURY TRIAL. THE COMPANY AND THE SECURED PARTY HEREBY
IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered as of the day and year first above written.
NU-TECH BIO-MED, INC.,
a Delaware corporation
By__________________________________
J. Marvin Feigenbaum
Its President
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<PAGE> 1
Exhibit 10.31
THE TRANSFERABILITY OF THIS WARRANT IS
RESTRICTED AS PROVIDED IN SECTION 2
January 23, 1997
NU-TECH BIO-MED, INC.
COMMON STOCK PURCHASE WARRANT
For good and valuable consideration, the receipt of which is hereby
acknowledged by Nu-Tech Bio-Med, Inc., a Delaware corporation (the "Company"),
MICHAEL G. JESSELSON 12/18/1980 TRUST, with an address at 1301 Avenue of
Americas, New York, New York 10019 (sometimes referrred to as the "Holder") is
hereby granted the right to purchase, at any time from the date hereof until
5:00 P.M., New York City time, on January 22, 2002 ("Warrant Exercise Term"), up
to 100,000 paid and non-assessable shares of the Company's Common Stock, $.01
par value per share ("Common Stock").
This Warrant is exercisable at a per share price (the "Exercise Price") of
$11.50 per share. The number of Shares purchasable upon exercise of the Warrants
represented by this certificate and the Exercise Price per Share shall be
subject to further adjustment from time to time as set forth herein.
l. Exercise of Warrant.
l.l The purchase rights represented by this Warrant are exercisable at
the option of the holder hereof, in whole or in part (but not as to fractional
shares of the Common Stock) during any period in which this Warrant may be
exercised as set forth above. In the case of the purchase of less than all the
shares of Common Stock purchasable under this Warrant, the Company shall cancel
this Warrant upon the surrender thereof and shall execute and deliver a new
Warrant of like tenor for the balance of the shares of Common Stock purchasable
hereunder.
l.2 The issuance of certificates for shares of Common Stock upon the
exercise of this Warrant shall be made without charge to the holder hereof
including, without limitation, any tax which may be payable in respect of the
issuance thereof, and such certificates shall be issued in the name of, or in
such names as may be directed by, the holder hereof; provided, however, that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the issuance and delivery of such certificate in a name
other than that of the holder and the Company shall not be required to issue or
deliver such certificates unless or until the person or persons requesting the
issuance thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.
l.3 In case the Company shall (i) pay a dividend in Common Shares or
make a distribution in Common Shares, (ii) subdivide its outstanding Common
Shares, (iii) combine its
<PAGE> 2
outstanding Common Shares into a smaller number of Common Shares (by way of a
reverse split or otherwise) or (iv) issue by reclassification of its Common
Shares other securities of the Company, the number of Warrant Shares purchasable
upon exercise of the Warrants immediately prior thereto shall be adjusted so
that the Warrantholder shall be entitled to receive the kind and number of
Warrant Shares or other securities of the Company which it would have owned or
would have been entitled to receive after the happening of any of the events
described above, had the Warrants been exercised immediately prior to the
happening of such event or any record date with respect thereto. Any adjustment
made pursuant to this subsection 1.3 shall become effective immediately after
the effective date of such event retroactive to the record date, if any, for
such event.
l.4 In case of any reclassification or change of outstanding shares
of Common Stock issuable upon exercise of this Warrant (other than change in par
value, or from par value to no par value, or from no par value to par value, or
as a result or a subdivision or combination), or in case of any consolidation or
merger of the Company with or into another corporation (other than a merger in
which the Company is the continuing corporation and which does not result in any
reclassification or change of outstanding shares of Common Stock, other than a
change in number of the shares issuable upon exercise of the Warrant) or in case
of any sale or conveyance to another corporation of the property of the Company
as an entirety or substantially as an entirety, the holder of this Warrant shall
have the right thereafter to exercise this Warrant into the kind and amount of
shares of stock and other securities and property receivable upon such
reclassification, change, consolidation, merger, sale or conveyance by a holder
of the number of shares of Common Stock of the Company for which the Warrant
might have been exercised immediately prior to such reclassification, change,
consolidation, merger, sale or conveyance. The above provisions of this Section
l.4 shall similarly apply to successive reclassifications and changes of shares
of Common Stock and to successive consolidations, mergers, sales or conveyances.
l.5 The Company covenants that it will at all times reserve and keep
available out of its authorized Common Stock, solely for the purpose of issuance
upon exercise of this Warrant as herein provided, such number of shares of
Common Stock as shall then be issuable upon the exercise of this Warrant. The
Company covenants that all shares of Common Stock which shall be so issuable
shall be duly and validly issued and fully-paid and non-assessable.
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<PAGE> 3
1.6 At any time during the Warrant Exercise Term, the Holder may, at
its option, exchange the Warrants represented by such Holder's Warrant
certificate, in whole or in part (a "Warrant Exchange"), into the number of
fully paid and non-assessable Warrant Shares determined in accordance with this
Section 1.6, by surrendering such Warrant certificate at the principal office of
the Company or at the office of its transfer agent, accompanied by a notice
stating such Holder's intent to effect such exchange, the number of Warrant
Shares to be exchanged and the date on which the Holder requests that such
Warrant Exchange occur (the "Notice of Exchange"). The Warrant Exchange shall
take place on the date specified in the Notice of Exchange, or, if later, the
date the Notice of Exchange is received by the Company (the "Exchange Date").
Certificates for the Warrant Shares issuable upon such Warrant Exchange and, if
applicable, a new Warrant of like tenor evidencing the balance of the Warrant
Shares remaining subject to the Holder's Warrant certificate, shall be issued as
of the Exchange Date and delivered to the Holder within three (3) days following
the Exchange Date. In connection with any Warrant Exchange, the Holder's Warrant
certificate shall represent the right to subscribe for and acquire the number of
Warrant Shares (rounded to the next highest integer) equal to (A) the number of
Warrant Shares specified by the Holder in its Notice of Exchange (the "Total
Share Number") less (B) the number of Warrant Shares equal to the quotient
obtained by dividing (i) the product of the Total Share Number and the existing
Exercise Price (as hereinafter defined) per Share by (ii) the Market Price (as
hereafter defined) of a share of Common Stock.
As used herein, the phrase "Market Price" at any date shall be
deemed to be the last reported sale price, or, in case no such reported sale
takes place on such day, the average of the last reported sale prices for the
last three (3) trading days prior to such date, in either case as officially
reported by the principal securities exchange on which the Common Stock is
listed or admitted to trading or as reported in the Nasdaq Market System
(National Market or SmallCap Market), or, if the Common Stock is not listed or
admitted to trading on any national securities exchange or quoted on the Nasdaq
Market System (National Market or SmallCap Market), the last reported sale price
as furnished by the National Association of Securities Dealers, Inc. through
Nasdaq or similar organization if Nasdaq is no longer reporting such
information, or if the Common Stock is not quoted on Nasdaq, as determined in
good faith by resolution of the Board of Directors of the Company, based on the
best information available to it for the two (2) days immediately preceding such
issuance or sale and the day of such issuance or sale.
2. Restrictions on Transfer.
The holder acknowledges that he has been advised by the Company that
this Warrant and the shares of Common Stock (the "Warrant Shares") issuable upon
exercise thereof (collectively the
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<PAGE> 4
"Securities") have not been registered under the Securities Act of 1933, as
amended (the "Securities Act"), that the Warrant is being issued, and the shares
issuable upon exercise of the Warrant will be issued, on the basis of the
statutory exemption provided by section 4(2) of the Securities Act relating to
transactions by an issuer not involving any public offering, and that the
Company's reliance upon this statutory exemption is based in part upon the
representations made by the holder contained herein. The holder acknowledges
that he has been informed by the Company of, or is otherwise familiar with, the
nature of the limitations imposed by the Securities Act and the rules and
regulations thereunder on the transfer of securities. In particular, the holder
agrees that no sale, assignment or transfer of the Securities shall be valid or
effective, and the Company shall not be required to give any effect to any such
sale, assignment or transfer, unless (i) the sale, assignment or transfer of the
Securities is registered under the Securities Act, and the Company has no
obligations or intention to so register the Securities, or (ii) the Securities
are sold, assigned or transferred in accordance with all the requirements and
limitations of Rule 144 under the Securities Act or such sale, assignment, or
transfer is otherwise exempt from registration under the Securities Act. The
holder represents and warrants that he has acquired this Warrant and will
acquire the Securities for his own account for investment and not with a view to
the sale or distribution thereof or the granting of any participation therein,
and that he has no present intention of distributing or selling to others any of
such interest or granting any participation therein. The holder acknowledges
that the securities shall bear the following legend:
"These securities have not been registered under the
Securities Act of 1933. Such securities may not be sold
or offered for sale, transferred, hypothecated or
otherwise assigned in the absence of an effective
registration statement with respect thereto under such
Act or an opinion of counsel to the Company that an
exemption from registration for such sale, offer,
transfer, hypothecation or other assignment is available
under such Act."
3. Registration Rights.
3.l During the period commencing January 23, 1997 and until Janaury
22, 2001, the Company shall advise the Holder of this Warrant or of the Warrant
Shares or any then holder of Warrants or Warrant Shares (such persons being
collectively referred to herein as "holders") by written notice at least 20 days
prior to the filing of any registration statement under the Securities Act of
1933 (the "Act") covering securities of the Company, except on Form S-4 or Form
S-8, and upon the request of any such holder within ten days after the date of
such notice, include in any such
4
<PAGE> 5
registration statement such information as may be required to permit a public
offering of the Warrant Shares. The Company shall supply prospectuses and other
documents as the Holder may request in order to facilitate the public sale or
other disposition of the Warrant Shares, qualify the Warrant Shares for sale in
such states as any such holder designates and do any and all other acts and
things which may be necessary or desirable to enable such Holders to consummate
the public sale or other disposition of the Warrant Shares, and furnish
indemnification in the manner as set forth in Subsection 3.2 of this Section 3.
Such holders shall furnish information and indemnification as set forth in
Subsection 3.2 of this Section 3. For the purpose of the foregoing, inclusion of
the Warrant Shares in a Registration Statement pursuant to this sub-paragraph
3.l under a condition that the offer and/or sale of such Warrant Shares not
commence until a date not to exceed 90 days from the effective date of such
registration statement shall be deemed to be in compliance with this
sub-paragraph 3.l. The Company shall include the Warrant Shares in a
registration statement currently before the Securities and Exchange Commission
as of this date.
3.2 The following provisions of this Section 3 shall also be
applicable to the exercise of the registration rights granted under this Section
3.l:
(A) The foregoing registration rights shall be contingent on
the holders furnishing the Company with such appropriate information (relating
to the intentions of such holders) as the Company shall reasonably request in
writing. Following the effective date of such registration, the Company shall
upon the request of any owner of Warrants and/or Warrant Shares forthwith supply
such number of prospectuses meeting the requirements of the Act as shall be
requested by such owner to permit such holder to make a public offering of all
Warrant Shares from time to time offered or sold to such holder, provided that
such holder shall from time to time furnish the Company with such appropriate
information (relating to the intentions of such holder) as the Company shall
request in writing. The Company shall also use its best efforts to qualify the
Warrant Shares for sale in such states as such holder shall reasonably
designate.
(B) The Company shall bear the entire cost and expense of any
registration of securities initiated by it under Subsection 3.l of this Section
3 notwithstanding that Warrant Shares subject to this Warrant may be included in
any such registration. Any holder whose Warrant Shares are included in any such
registration statement pursuant to this Section 3 shall, however, bear the fees
of his own counsel and any registration fees, transfer taxes or underwriting
discounts or commissions applicable to the Warrant Shares sold by him pursuant
thereto.
(C) The Company shall indemnify and hold harmless each such
holder and each underwriter, within the meaning of the
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<PAGE> 6
Act, who may purchase from or sell for any such holder any Warrant Shares from
and against any and all losses, claims, damages and liabilities caused by any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement or any post-effective amendment thereto or any
registration statement under the Act or any prospectus included therein required
to be filed or furnished by reason of this Section 3 or caused by any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading except
insofar as such losses, claims, damages or liabilities are caused by any such
untrue statement or alleged untrue statement or omission or alleged omission
based upon information furnished or required to be furnished in writing to the
Company by such holder or underwriter expressly for use therein, which
indemnification shall include each person, if any, who controls any such
underwriter within the meaning of such Act; provided, however, that the Company
shall not be obliged so to indemnify any such holder or underwriter or
controlling person unless such holder or underwriter shall at the same time
agree to indemnify the Company, its directors, each officer signing the related
registration statement and each person, if any, who controls the Company within
the meaning of such Act, from and against any and all losses, claims, damages
and liabilities caused by any untrue statement or alleged untrue statement of a
material fact contained in any registration statement or any prospectus required
to be filed or furnished by reason of this Section 3 or caused by any omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading insofar as such losses, claims,
damages or liabilities are caused by any untrue statement or alleged untrue
statement or omission based upon information furnished in writing to the Company
by any such holder or underwriter expressly for use therein.
4. Miscellaneous.
4.l All the covenants and agreements made by the Company in this
Warrant shall bind its successors and assigns.
4.2 No recourse shall be had for the payment of the principal of or
the interest of premium, if any, on this Warrant or for any claim based hereon
or otherwise in any manner in respect hereof, against any incorporator,
stockholder, officer or director, past, present or future, of the Company or of
any predecessor corporation, whether by virtue of any constitutional provision
or statute or rule of law, or by the enforcement of any assessment or penalty or
in any other manner, all such liability being expressly waived and released by
the acceptance hereof and as part of the consideration for the issue hereof.
4.3 No course of dealing between the Company and the holder hereof
shall operate as a waiver of any right of any holder
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<PAGE> 7
hereof, and no delay on the part of the holder in exercising any
right hereunder shall so operate.
4.4 This Warrant may be amended only by a written instrument
executed by the Company and the holder hereof. Any amendment shall be endorsed
upon this Warrant, and all future holders shall be bound thereby.
4.5 All communications provided for herein shall be sent, except as
may be otherwise specifically provided, by registered or certified mail: if to
the holder of this Warrant, to the address shown on the books of the Company;
and if to the Company, to 55 Access Road, Warwick, Rhode Island 02886, attention
of the Chairman, or to such other address as the Company may advise the holder
of this Warrant in writing. Notices shall be deemed given when mailed.
4.6 The provisions of this Warrant shall in all respects be
constructed according to, and the rights and liabilities of the parties hereto
shall in all respects be governed by, the laws of the State of New York. This
Warrant shall be deemed a contract made under the laws of the State of New York
and the validity of this Warrant and all rights and liabilities hereunder shall
be determined under the laws of said State.
4.7 The headings of the Sections of this Warrant are inserted for
convenience only and shall not be deemed to constitute a part of this Warrant.
IN WITNESS WHEREOF, NU-TECH BIO-MED, INC. has caused this
Warrant to be executed in its corporate name by its Chairman, and
its seal to be affixed hereto.
Dated: January 23, 1997
NU-TECH BIO-MED, INC.
By:________________________________
J. Marvin Feigenbaum, Chairman
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<PAGE> 8
SUBSCRIPTION FORM
TO: Nu-Tech Bio-Med, Inc.
55 Access Road
Warwick, Rhode Island 02886
The undersigned holder hereby irrevocably elects to exercise the right
to purchase shares of Common Stock covered by this Warrant according to the
conditions hereof and herewith makes full payment of the Exercise Price of such
shares. Kindly deliver to the undersigned a certificate representing the Shares.
INSTRUCTIONS FOR DELIVERY
Name: ____________________________________________________________
(please typewrite or print in block letters)
Address: __________________________________________________________
Dated: _________________________
Signature ________________________________
8
