<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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): NOVEMBER 17, 1998
IATROS HEALTH NETWORK, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Delaware 0-20345 23-2596710
- --------------------------------------------------------------------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
</TABLE>
11910 Greenville Avenue, Suite 300, Dallas, TX 75243
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (888) 900-1133
11 Piedmont Center, Suite 403, Atlanta, GA 30305
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE> 2
ITEM 1. CHANGES IN CONTROL OF REGISTRANT.
On November 17, 1998, Match, Inc. ("Match"), a corporation wholly owned
by Mr. Ronald E. Lusk, acquired 533,333 shares of the Registrant's Series A
Senior Convertible Preferred Stock, par value $.001 ("Preferred Stock"),
representing 100% of the issued and outstanding shares of that class of stock,
for a purchase price of $1 million. The shares were acquired in a private
transaction from The Presbyterian Foundation for Philadelphia, Inc. (the
"Seller") at a price per share of $1.875.
The terms of the Preferred Stock provide that at any time that cumulative
dividends on the Preferred Stock remain in arrears for more than two quarters,
the owners of the Preferred Stock will have the right to elect, voting as a
separate class, one additional director to the Board. The holders of the
Preferred Stock will have the right to elect an additional director each time
the cumulative dividends remain in arrears for two additional quarters, except
that the maximum number of directors the holders of the Preferred Stock may
elect, voting as a separate class, will be seven.
Since the Registrant has not paid dividends on the Preferred Stock,
holders of the Preferred Stock have the right to elect up to seven (of
a possible 13) members of the Registrant's Board of Directors. Thus, the
purchase of all the Preferred Stock effectively gave Match control of the
Registrant and Mr. Lusk, as the sole shareholder and principal executive
officer of Match, the ability to effectively exercise control over the election
of a majority of the Registrant's board of directors.
The $1 million purchase price was paid partly in cash ($200,000) and
partly in the form of a non-recourse, non-interest bearing promissory note from
Match to the Seller (for $800,000, payable in semi-annual installments over two
years and secured by a pledge of the purchased Preferred Stock). The source of
the cash funds was from Match's working capital which was provided through an
investment by Mr. Lusk from his personal funds.
Also on November 17, 1998, Match executed a consent of sole holder of
the Preferred Stock expanding the size of the Board to seven and electing Mr.
Lusk, Robert Lee Woodson, III, Albert Sousa and Joe C. Williams, Jr. to the
Board. At a meeting of the Board of Directors on the same day, the Board
appointed Mr. Lusk as Chairman of the Board.
On November 20, 1998, members of senior management, including the
President and Chief Executive Officer, resigned and the Board of Directors
appointed Mr. Woodson as President and Chief Executive Officer of the
Registrant.
Under the terms of the Stock Purchase Agreement and the Stock Pledge
Agreement between Match and the Seller, which are attached as Exhibits 2.1 and
2.2 and incorporated herein by reference, the Seller would reacquire all rights
with respect to the Preferred Stock owned by Match, including the rights to vote
and dispose of the Preferred Stock, in the event that Match defaults on its
obligations under its promissory note to the Seller or the Stock Pledge
Agreement.
<PAGE> 3
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) EXHIBITS.
2.1 Stock Purchase Agreement dated as of November 17, 1998,
between The Presbyterian Foundation for Philadelphia, Inc.
and Match, Inc. (exhibits omitted)
2.2 Stock Pledge Agreement dated as of November 17, 1998,
between Match, Inc. and The Presbyterian Foundation for
Philadelphia, Inc.
<PAGE> 4
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.
IATROS HEALTH NETWORK, INC.
---------------------------
(Registrant)
Date: December 17, 1998 By: /s/
-------------------- ----------------------------------
Ronald E. Lusk, Chairman
<PAGE> 5
EXHIBIT INDEX
Exhibit Description
- ------- -----------
2.1 Stock Purchase Agreement dated as of November 17, 1998,
between The Presbyterian Foundation for Philadelphia, Inc. and
Match, Inc. (exhibits omitted)
2.2 Stock Pledge Agreement dated as of November 17,
1998, between Match, Inc. and The Presbyterian Foundation for
Philadelphia, Inc.
<PAGE> 1
Exhibit 2.1
STOCK PURCHASE AGREEMENT
================================================================================
THIS STOCK PURCHASE AGREEMENT (this "AGREEMENT"), dated as of November
17, 1998, is by and between The Presbyterian Foundation for Philadelphia, Inc.,
a Pennsylvania non-profit corporation ("SELLER"), and Match, Inc., a Texas
corporation ("PURCHASER").
RECITALS:
WHEREAS, Seller beneficially owns five hundred thirty-three thousand
three hundred thirty-three shares of Series A Senior Convertible Preferred Stock
(the "PREFERRED STOCK") of Iatros Health Network, Inc. ("IATROS"), which were
issued to Seller pursuant to the terms and conditions of that certain Securities
Purchase Agreement dated as of July 25, 1994, by and between Seller and Iatros,
a copy of which is attached hereto as Exhibit A; and
WHEREAS, Seller desires to sell, and Purchaser desire to purchase, all
of the Preferred Stock (which, for purposes of this Agreement, shall be referred
to collectively as the "SHARES") in accordance with the terms and conditions of
this Agreement.
NOW, THEREFORE, for and in consideration of the mutual promises,
covenants and conditions herein contained and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto, intending to be legally bound, agree as follows:
ARTICLE I
SALE AND TRANSFER OF SHARES; CLOSING
1.1 Shares. Subject to the terms and conditions of this Agreement,
Seller will sell and transfer the Shares to Purchaser, and Purchaser will
purchase the Shares from Seller.
1.2 Purchase Price. The purchase price (the "PURCHASE PRICE") for the
Shares will be One Million Dollars ($1,000,000.00).
1.3 Closing. The purchase and sale (the "CLOSING") provided for in this
Agreement shall take place upon the execution and delivery of this Agreement by
the parties.
1.4 Deliveries. At Closing:
(a) Seller shall execute the Stock Pledge Agreement in
the form of Exhibit B hereto (the "Stock Pledge Agreement"), under which Seller
will agree to hold the Shares and deliver to Purchaser certificates representing
the Shares, duly endorsed (or accompanied by duly executed stock powers), for
transfer to Purchaser upon payment by Purchaser of the Note (as hereinafter
defined).
<PAGE> 2
(b) Purchaser shall deliver to Seller:
(i) Two Hundred Thousand Dollars ($200,000.00) by
bank cashier's or certified check payable to the order of, or by wire transfer
to accounts specified by, Seller;
(ii) a non-recourse promissory note payable to Seller
in the principal amount of Eight Hundred Thousand Dollars ($800,000.00) in the
form of Exhibit C hereto (the "Note"); and
(iii) a copy of the Stock Pledge Agreement executed by
Purchaser.
1.5 Further Assurances. Seller shall, from time to time after the date
hereof, as and when required by Purchaser, or by Purchaser's successors or
assigns, execute and deliver on behalf of Purchaser such stock powers and other
instruments, and there shall be taken or caused to be taken all such further and
other action, as shall be appropriate, advisable or necessary, in order to vest,
perfect or confirm, of record or otherwise, in Purchaser all right and title to,
and possession of, the Shares and to otherwise carry out the purposes of this
Agreement, subject, however, to the terms of the Stock Pledge Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
2.1 Organization and Good Standing; Authority; No Conflict. Seller is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Pennsylvania. Seller has all requisite corporate power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. This Agreement has been duly authorized, executed and
delivered by Seller and constitutes the legal, valid and binding obligation of
Seller, enforceable against Seller in accordance with its terms.
2.2 Agreement Not in Breach of Other Instruments. The execution and
delivery of this Agreement, the consummation of the transactions contemplated
hereby and the fulfillment of the terms hereof will not violate or result in a
breach of any of the terms or provisions of, or constitute a default (or any
event which, with notice or the passage of time, or both, would constitute a
default) under, or conflict with or result in the termination of, or accelerate
the performance required by, (i) any agreement, indenture or other instrument to
which Seller is a party or by which it is bound, (ii) the Certificate of
Incorporation, Bylaws or similar organizational documents of Seller, (iii) any
judgment, decree, order or award of any court, governmental body or arbitrator
by which Seller is bound, or (iv) any law, rule or regulation applicable to
Seller.
2.3 No Legal Bar. Seller is not prohibited by any order, writ,
injunction or decree of any body of competent jurisdiction from consummating the
transactions contemplated by this
<PAGE> 3
Agreement and all other agreements referenced herein, and no action or
proceeding is pending against Seller which questions the validity of this
Agreement or any such other agreements, any of the transactions contemplated
hereby or thereby or any action which has been taken by any of the parties in
connection herewith or therewith or in connection with any of the transactions
contemplated hereby or thereby.
2.4 Title; Possession. Seller has good and marketable title to the
Shares being transferred hereby and there are no security interests, liens or
other encumbrances whatsoever with respect thereto. Seller has possession of the
certificates representing the Shares being transferred hereby.
2.5 No Brokerage Fees. Seller has not dealt with, nor is obligated to
make any payment to, any finder, broker, investment banker or financial advisor
in connection with any of the transactions contemplated by this Agreement or the
negotiations looking toward the consummation of such transactions, other than
brokerage fees, if any, which may be payable by Seller to S.W. Ryan & Co., Inc.,
for which Seller shall solely responsible.
2.6 Dividends in Arrears. Iatros has not made any payment of dividends
to Purchaser or any of its affiliates on the Shares since the issuance thereof,
and neither Purchaser nor any affiliate of Purchaser has taken any action to
appoint any members to the Iatros Board of Directors.
EXCEPT AS EXPRESSLY SET FORTH ABOVE, SELLER IS NOT MAKING ANY REPRESENTATIONS OR
WARRANTIES, EITHER EXPRESS OR IMPLIED, WITH RESPECT TO THE SHARES OR THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
3.1 Organization and Good Standing; Authority; No Conflict. Purchaser is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Texas. Purchaser has all requisite corporate power and
authority to enter into this Agreement, the Note and the Stock Pledge Agreement
(the "Transaction Documents") and to consummate the transactions contemplated
hereby. The Transaction Documents have been duly authorized, executed and
delivered by Purchaser and constitute the legal, valid and binding obligations
of Purchaser, enforceable against Purchaser in accordance with their terms.
3.2 Transaction Documents Not in Breach of Other Instruments. The
execution and delivery of the Transaction Documents, the consummation of the
transactions contemplated hereby and the fulfillment of the terms hereof will
not violate or result in a breach of any of the terms or provisions of, or
constitute a default (or any event which, with notice or the passage of time, or
both, would constitute a default) under, or conflict with or result in the
termination of, or
<PAGE> 4
accelerate the performance required by, (i) any agreement, indenture or other
instrument to which Purchaser is a party or by which it is bound, (ii) the
Certificate of Incorporation, Bylaws or similar organizational documents of
Purchaser, (iii) any judgment, decree, order or award of any court, governmental
body or arbitrator by which Purchaser is bound, or (iv) any law, rule or
regulation applicable to Purchaser.
3.3 No Legal Bar. Purchaser is not prohibited by any order, writ,
injunction or decree of any body of competent jurisdiction from consummating the
transactions contemplated by the Transaction Documents and all other agreements
referenced herein, and no action or proceeding is pending against Purchaser
which questions the validity of the Transaction Documents or any such other
agreements, any of the transactions contemplated hereby or thereby or any action
which has been taken by any of the parties in connection herewith or therewith
or in connection with any of the transactions contemplated hereby or thereby.
3.4 No Brokerage Fees. Purchaser has not dealt with, nor is obligated to
make any payment to, any finder, broker, investment banker or financial advisor
in connection with any of the transactions contemplated by this Agreement or the
negotiations looking toward the consummation of such transactions.
3.5 Shareholder, Director and Officer. Ronald E. Lusk owns all of the
issued and outstanding shares of Purchaser, and is the sole director and officer
of Purchaser.
3.6 Purchaser's Investigation and Experience. Purchaser acknowledges
that Seller is making no representations or warranties whatsoever with respect
to the value of the Shares or the rights provided by the Shares to a holder
thereof. Purchaser has undertaken any and all investigation with respect to
Iatros and the Shares which Purchaser deems necessary or desirable with respect
to the transactions contemplated by the Transaction Documents and is relying
solely on its own investigation as to the value of the Shares and the risks of
ownership thereof. Purchaser and its shareholder have substantial experience in
investments comparable to an investment in the Shares, have the resources
necessary and appropriate to assume the risks of an investment in the Shares and
to protect their interests therein, and have been advised by legal counsel with
respect to the transactions contemplated by the Transaction Documents.
3.7 Investment Intent. Purchaser is acquiring the Shares for its own
account and not on behalf of any other person. Purchaser is acquiring the Shares
for investment and not with a view to distribution or with the intent to divide
its participation with others by reselling or otherwise distributing the Shares.
Purchaser understands that the Shares are being sold hereunder without
registration under the Securities Act of 1933, as amended (the "1933 Act"), and
any applicable state securities laws, by reason of their issuance in a
transaction exempt from the registration requirements of the 1933 Act and such
state laws, and that they must be held indefinitely unless they are subsequently
registered under the 1933 Act and such state laws, or
<PAGE> 5
such subsequent disposition thereof is exempt from registration. Purchaser is an
"accredited investor" within the meaning of Rule 501, promulgated under the 1933
Act.
ARTICLE IV
INDEMNIFICATION
4.1 Indemnification by Seller. Seller hereby agrees to indemnify
and hold Purchaser harmless from and against any claim, liability, obligation,
loss or other damage (including, without limitation, reasonable attorneys' fees
and expenses) asserted against, imposed upon or incurred by Purchaser arising
out of any inaccuracy in or breach of any of Seller's representations and
warranties set forth in Article 2 of this Agreement.
4.2 Indemnification by Purchaser. Purchaser hereby agrees to
indemnify and hold Seller harmless from and against any claim, liability,
obligation, loss or other damage (including, without limitation, reasonable
attorneys' fees and expenses) asserted against, imposed upon or incurred by
Seller arising out of any inaccuracy in or breach of any of Purchaser's
representations and warranties set forth in Article 3 of this Agreement.
4.3 Claims Process. As soon as is reasonably practicable after
Purchaser or Seller becomes aware of any claim that it has which is covered
under this Article 4, Purchaser or Seller, as the case may be ("Indemnified
Party") shall notify the other party ("Indemnifying Party") in writing, which
notice shall describe the claim in reasonable detail, and shall indicate the
amount (estimated, if necessary to the extent feasible) of the claim. In the
event of a third party claim which is subject to indemnification under this
Article 4, the Indemnifying Party shall promptly defend such claim by counsel of
its own choosing, subject to the approval of the Indemnified Party, which
approval shall not unreasonably be withheld, and the Indemnified Party shall
cooperate with the Indemnifying Party in the defense of such claim including the
settlement of the matter on the basis stipulated by the Indemnifying Party (with
the Indemnifying Party being responsible for all costs and expenses of such
settlement). Any such settlement shall include a complete and unconditional
release of the Indemnified Party from the claim.
4.4 Survival; Claims. The representations and warranties set
forth in Articles 2 and 3 above, and the indemnification rights set forth in
this Article 4, shall survive for a period of one (1) year after the date
hereof. No party shall have any liability for any breach of any representation
or warranty set forth herein unless the other party shall have given it written
notice of such breach promptly upon becoming aware of same and prior to the
first anniversary of the date of this Agreement. Such notice shall identify the
applicable Section of this Agreement, the alleged breach and the amounts for
which the indemnitor is alleged to be liable in detail. The indemnitor shall be
entitled to assume the defense of any third-party claim, provided that it admits
in writing its obligation to indemnify the indemnitee for such claim.
ARTICLE V
<PAGE> 6
MISCELLANEOUS
5.1 Expenses. Each party hereto shall bear and pay all costs and
expenses incurred by it in connection with the transactions contemplated by this
Agreement including, without limitation, fees, costs and expenses of its own
financial consultants, accountants and counsel.
5.2 Attorneys' Fees. In the event any party brings an action to
enforce this Agreement, the prevailing party or parties in such action shall be
entitled to recover reasonable costs incurred in connection therewith, including
reasonable attorneys' fees. Reasonable attorneys' fees shall include reasonable
charges allocated for internal counsel.
5.3 Entire Agreement. This Agreement (including all Exhibits
hereto) supersedes any and all other agreements, oral or written, between the
parties hereto with respect to the subject matter hereof, and contains the
entire agreement between such parties with respect to the transactions
contemplated hereby. No party to this Agreement shall be entitled to rely on any
representation, warranty or agreement not set forth in this Agreement.
5.4 Amendments. This Agreement shall not be modified or amended
except by an instrument in writing signed by or on behalf of all of the parties
hereto.
5.5 Successors; Assignment. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted transferees and assignees.
Neither this Agreement nor any interest herein may directly or indirectly be
transferred or assigned by any party, in whole or in part, without the written
consent of the other parties, which consent shall not be unreasonably withheld.
5.6 Notices. Any notice, demand or request required or permitted
to be given under the provisions of this Agreement shall be in writing and shall
be deemed to have been duly given on the earlier of (a) the date actually
received by the party in question, by whatever means and however addressed, or
(b) the date sent by telecopy, or on the date of personal delivery, if delivered
by hand, or on the date signed for if sent, prepaid, by Federal Express or
similar nationally-recognized overnight delivery service, to the following
addresses, or to such other addresses as either party may request, in the case
of Seller, by notifying Purchaser, and in the case of Purchaser, by notifying
Seller:
If to Purchaser: Match, Inc.
6245 North Federal Highway
Suite 500
Ft. Lauderdale, FL 33308-1900
Attn: Ronald E. Lusk
Telephone: (954) 771-0500
Telecopy: (954) 771-0899
With copies to: Reed Smith Shaw & McClay, LLP
1301 K Street, N.W.
Suite 1100 - East Tower
<PAGE> 7
Washington, DC 20005
Attn: Thomas C. Fox, Esq.
Telephone: (202) 414-9200
Telecopy: (202) 414-9299
If to Seller: The Presbyterian Foundation for
Philadelphia, Inc.
39th & Market Streets
Philadelphia, PA 19104
Attn: President
Telephone: (215) 662-9102
Telecopy: (215) 662-5169
With copies to: Morgan, Lewis & Bockius, LLP
2000 One Logan Square
Philadelphia, PA 19103-6993
Attn: John F. Bales, Esq.
Telephone: (215) 963-5478
Telecopy: (215) 963-5299
5.7 Waiver. No waiver hereunder shall be valid unless set forth
in writing.
5.8 Severability. In the event that any term or provision of this
Agreement or any application thereof shall be held by a tribunal of competent
jurisdiction to be unlawful or unenforceable, the remainder of this Agreement
and any other application of such term or provision shall continue in full force
and effect and the parties shall endeavor to replace the unlawful or
unenforceable provision with one that is lawful and enforceable and which gives
the fullest effect to the intent of the parties as expressed herein.
5.9 No Third Party Beneficiary. This Agreement is for the
benefit of, and may be enforced only by, Seller and Purchaser, and their
respective successors and permitted transferees and assignees, and is not for
the benefit of, and may not be enforced by, any third party.
5.10 Applicable Law. This Agreement shall be governed by and
construed and enforced in accordance with, the laws of the Commonwealth of
Pennsylvania, without regard to the conflicts of laws provisions thereof.
5.11 Construction. The titles and headings to sections herein are
inserted for convenience of reference only, and are not intended to be a part of
or to affect the meaning or interpretation of this Agreement. The parties
acknowledge that each party and its counsel have reviewed and revised this
Agreement and that consequently any rule of construction to the effect that any
ambiguities are to be resolved against the drafting party is not applicable in
the interpretation of this Agreement or any exhibits or schedules hereto.
5.12 Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement.
<PAGE> 8
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date and year first above written.
THE PRESBYTERIAN FOUNDATION FOR
PHILADELPHIA, INC.
By: /s/ Gail Kass
----------------------------
Name: Gail Kass
Its: Executive Vice President
MATCH, INC.
By: /s/ Ronald E. Lusk
----------------------------
Name: Ronald E. Lusk
Its: President
<PAGE> 1
Exhibit 2.2
STOCK PLEDGE AGREEMENT
================================================================================
THIS STOCK PLEDGE AGREEMENT (this "AGREEMENT"), dated as of
November 17, 1998, is by and between Match, Inc., a Texas corporation
("PLEDGOR"), and The Presbyterian Foundation for Philadelphia, Inc., a
Pennsylvania non-profit corporation ("PLEDGEE").
PRELIMINARY STATEMENTS
A. Pursuant to that certain Stock Purchase Agreement dated as of
November 17, 1998, by and between Pledgor and Pledgee (the "PURCHASE
AGREEMENT"), Pledgor purchased from Pledgee five hundred thirty-three thousand
three hundred thirty three (533,333) shares of Series A Senior Convertible
Preferred Stock (the "PREFERRED STOCK") of Iatros Health Network, Inc.
("IATROS"). Capitalized terms not defined herein shall have the meanings given
thereto in the Purchase Agreement.
B. Pledgor has paid for its purchase of the shares of the
Preferred Stock (which, for purposes of this Agreement, may be referred to as
the "PLEDGED SHARES") in part by delivery to Pledgee of a non-recourse
promissory note (the "NOTE").
C. The Note is secured by the pledge of the Pledged Shares. For
the purpose of this Agreement, the term "Pledged Shares" shall mean the
Preferred Stock and shall also mean and include any other securities (including,
without limitation, common stock of Iatros issued upon conversion of the
Preferred Stock and any stock dividend or distribution or exchange in respect of
the Preferred Stock or such common stock in connection with any reorganization,
recapitalization, reclassification, or increase or reduction of capital) to
which Pledgor shall become entitled for any reason whatsoever as an addition to,
in substitution for or in exchange for any shares of the Pledged Shares or such
Iatros common stock or other securities.
ACCORDINGLY, in consideration of the preceding preliminary
statements and the mutual covenants, agreements, representations and warranties
herein contained, the parties hereto, intending to be legally bound, now agree
as follows:
STATEMENT OF AGREEMENT
SECTION 1. GRANT AND TERMS OF PLEDGE.
1.1 Grant. As security for the full and timely payment and
performance of the Note, Pledgor hereby assigns and pledges to Pledgee, and
grants to Pledgee a security interest (the "SECURITY INTEREST") in, all right,
title and interest of Pledgor to the Pledged Shares and in the proceeds thereof,
in order to secure the due payment and performance of all indebtedness and other
obligations of Pledgor under the Note.
<PAGE> 2
1.2 Continuing Agreement. This Agreement creates a continuing
security interest in the Pledged Shares and shall remain in full force and
effect until the Note has been paid in full.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF PLEDGOR. The Pledgor
represents and warrants to the Pledgee as follows:
2.1 Power and Authorization. Pledgor has the power to execute,
deliver and perform its obligations under this Agreement and the Note to which
it is a party, and Pledgor has taken all necessary action to authorize such
execution, delivery and performance.
2.3 Ownership of Collateral. Except for the Security Interest,
the Pledgor is the legal and beneficial owner of the Pledged Shares, free and
clear of any security interest, lien or other encumbrance.
2.3 First Lien on the Collateral. The Security Interest
constitutes and creates a valid and continuing lien in favor of the Pledgee
securing the Note, which Security Interest is prior to all other security
interests, liens or other encumbrances. All action necessary or desirable to
protect the Security Interest in the Pledged Shares has been, or shall be, duly
taken by the Pledgor. Upon delivery of the certificates representing the Pledged
Shares, the Security Interest shall be perfected in the Pledged Shares.
SECTION 3. COVENANTS OF PLEDGOR.
3.1 Sale of Pledged Shares. The Pledgor shall not, without the
prior written consent of the Pledgee, sell, encumber, or otherwise dispose of or
hypothecate the Pledged Shares or any portion thereof.
3.2 Delivery of Pledged Shares. All certificates or instruments
at any time representing or evidencing the Pledged Shares shall be immediately
delivered by the Pledgor to the Pledgee, to be held by or on behalf of the
Pledgee pursuant hereto, and shall be in suitable form for transfer by delivery,
or shall be accompanied by instruments of transfer or assignment, duly executed
in blank, all in form and substance satisfactory to Pledgee. If Pledgor shall at
any time become entitled to receive or shall receive any stock certificate
(including, without limitation, any certificate representing the common stock of
Iatros or a stock dividend or distribution, or exchange in respect of the
Pledged Shares in connection with any reorganization, recapitalization,
reclassification, increase or reduction of capital or otherwise), option or
right, whether as an addition to, in substitution for or in exchange for any
shares of the Pledged Shares, or otherwise, Pledgor agrees to accept the same as
agent for Pledgee and to deliver promptly the same to Pledgee, in exact form as
received, with appropriate stock powers relating thereto duly executed in blank
to be held by Pledgee, subject to the terms hereof, as a further security
hereunder.
<PAGE> 3
3.3 Ownership of Pledged Shares. The Pledgor shall defend the
Pledged Shares against all claims and demands of all persons or entities at any
time claiming the Pledged Shares or any interest therein.
3.4 Additional Documents. At any time and from time to time, upon
the request of the Pledgee, and at the sole expense of the Pledgee, the Pledgor
shall promptly execute and deliver any and all such further instruments and
documents and shall take such further action as may be deemed necessary or
desirable in the reasonable judgment of the Pledgee to obtain, maintain and
perfect the Security Interest or to pledge the Pledged Shares to any lender of
the Pledgee.
SECTION 4. VOTING RIGHTS AND DIVIDENDS
4.1 General. Prior to an Event of Default (as hereinafter
defined), the Pledgor shall be entitled to exercise and receive all voting and
all other rights and privileges, including receipt of dividends, pertaining to
the Pledged Shares.
4.2 Proxies. Prior to an Event of Default, the Pledgee shall
execute and deliver (or cause to be executed and delivered) to the Pledgor all
such proxies and other instruments as Pledgor may reasonably request for the
purpose of enabling the Pledgor to exercise the voting and other rights which
the Pledgor is entitled to exercise and receive pursuant to Section 4.1 hereof.
4.3 Rights Upon Default. Upon the occurrence and during the
continuance of a failure to pay all payments when due under the Note or a
failure to promptly discharge all obligations of Pledgor under this Agreement
("EVENT OF DEFAULT"), all rights of the Pledgor to exercise the voting and other
rights and privileges, including receipt of dividends, which the Pledgor would
otherwise be entitled to exercise or receive pursuant hereto shall cease to be
effective upon written notice by the Pledgee to the Pledgor ("NOTICE OF
Default"), and upon delivery of such notice become vested in the Pledgee who
shall thereupon have the sole right to exercise and receive such voting and all
other rights and privileges, including, without limitation, the right to
exercise all voting and corporate rights pertaining to the Pledged Shares at any
meeting of shareholders and exercise any and all rights of conversion, exchange,
subscription or any other rights, privileges or options pertaining to the
Pledged Shares; provided, any dividends received by the Pledgee shall be applied
against the amount owed by the Pledgor to the Pledgee under the Note. Upon an
Event of Default, Pledgee shall have the right to cause the Pledged Shares to be
registered in the name of Pledgee and may deliver certificates evidencing the
Pledged Shares and stock powers, or other powers of attorney, with respect
thereto, to the
<PAGE> 4
transfer agent for Iatros to enable the Pledgee to obtain a certificate or
certificates for the Pledged Shares in the name of the Pledgee and the
recordation with the transfer agent of the Pledgee as the holder of record of
the Pledged Shares.
SECTION 5. REMEDIES OF THE PLEDGEE
5.1 Remedies Upon Event of Default. If an Event of Default shall
have occurred and is continuing, the Pledgee shall have all of the rights given
to a secured party upon default by the Uniform Commercial Code, and may proceed
to foreclose the Security Interest given to the Pledgee hereunder by selling all
or any part of the Pledged Shares at such price or prices and upon such other
terms that are commercially reasonable. Such sales may be in one or more
parcels, at the same or different times, at public or private sale, provided
such sales are made in a commercially reasonable manner. Such sale or sales may
be made for cash or upon credit or in exchange for other securities or property,
or any combination of such consideration. In no event shall Pledgor be credited
with any part of the proceeds of sale of any Pledged Shares until cash payment
thereon is actually received by Pledgee and all expenses, including reasonable
attorneys' fees, in connection with such sale have been paid. The pledgor agrees
that the Pledgee shall be under no obligation to affect a public sale of all or
part of the Pledged Shares and may resort to one or more private sales and such
private sales may be at prices and on terms less favorable to the Pledgor than
if the Pledged Shares were sold at public sales. The Pledgor agrees that private
sales as described above shall be deemed to have been made in a commercially
reasonable manner. In connection with any such sale or other disposition
pursuant to this Agreement, Pledgee shall have the right, in the name, place and
stead of Pledgor, to execute all necessary endorsements, assignments or other
instruments of conveyance or transfer with respect to all or any part of the
Pledged Shares. The Pledgor agrees that at least ten (10) days prior notice of
the time and place of any proposed sale of the Pledged Shares shall constitute
reasonable notification. At any sale of the Pledged Shares, the Pledgee may bid
(which bid shall be in the form of all or a portion of the cancellation of
indebtedness of the Pledgor to the Pledgee under the Note) for the purchase of
the Pledged Shares.
5.2 Termination of Security Interest; Release of Pledged Shares.
Upon performance in full of the Pledgor's obligations to the Pledgee under the
Note, the Security Interest granted herein shall terminate and all rights to the
Pledged Shares shall revert to the Pledgor. Upon such termination of the
Security Interest or release of any Pledged Shares, the Pledgee will execute and
deliver to the Pledgor such documents as the Pledgor shall reasonably request to
evidence the termination of the Security Interest or the release of any Pledged
Shares which have not yet theretofore been sold or otherwise applied or
released.
5.3 Care. Beyond the exercise of reasonable care to assure the
safe custody of the Pledged Shares while held hereunder, the Pledgee shall have
no duty or liability to preserve
<PAGE> 5
rights pertaining thereto, and shall have no responsibility with respect to the
Pledged Shares upon surrendering such to the Pledgor.
SECTION 6. GENERAL
6.1 Amendments. No amendment to or waiver of any provision of
this Agreement shall in any event be effective unless in a writing signed by or
on behalf of the parties hereto. Any such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.
6.2 No Implied Waiver; Remedies Cumulative. No failure or delay
on the part of the Pledgee in exercising any right, power or privilege hereunder
and no course of dealing between the Pledgor and the Pledgee shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege.
6.3 Parties Bound. The rights of the Pledgee hereunder shall
inure to the benefit of its successors and assigns. This Agreement shall be
binding upon the Pledgor and its heirs, legatees, successors and assigns.
6.4 Notice. Notices hereunder shall be given to the parties
hereto at the addresses and as designated in the Purchase Agreement.
6.5 Construction of Agreement; Modifications. This Agreement
represents the final agreement of the parties and may not be contradicted by
evidence of prior, contemporaneous or subsequent oral agreements of the parties.
There are no unwritten oral agreements between the parties. Furthermore, this
agreement supersedes all prior written agreements and understandings, if any,
relating to the subject matter hereof.
6.6 Applicable Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the Commonwealth of
Pennsylvania, without regard to the conflicts of law provisions thereof.
6.7 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, and all of which
together shall constitute one and the same instrument notwithstanding that all
parties are not signatories to each counterpart.
6.8 Construction. The titles and headings to sections herein are
inserted for convenience of reference only, and are not intended to be a part of
or to affect the meaning or interpretation of this Agreement. The parties
acknowledge that each party and its counsel have reviewed and revised this
Agreement and that consequently any rule of construction to the effect that any
ambiguities are to be resolved against the drafting party is not applicable in
the interpretation of this Agreement.
<PAGE> 6
6.9 Successors and Assigns. This Agreement shall be binding upon
the Pledgor and its successors and assigns, and shall inure to the benefit of
and be enforceable by the Pledgee and its successors and assigns. Neither party
may assign or transfer any of its interests or obligations hereunder without the
prior written consent of the other party, such consent not unreasonably
withheld.
[SIGNATURE PAGE FOLLOWS]
<PAGE> 7
IN WITNESS WHEREOF, each party hereto has caused this Agreement to be
duly executed and delivered as of the date first above written.
PLEDGOR:
MATCH, INC.
By: /s/ Ronald E. Lusk
-----------------------------
Name: Ronald E. Lusk
Its: President
PLEDGEE:
THE PRESBYTERIAN FOUNDATION FOR
PHILADELPHIA, INC.
By: /s/ Gail Kass
-----------------------------
Name: Gail Kass
Its: Executive Vice President
