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EXHIBIT 10.1
MASTER RESTRUCTURING AGREEMENT
This
Master Restructuring Agreement is made as of this 10th day of
July, 2008 by and among ADUROMED INDUSTRIES, INC. (formerly
General Devices, Inc., “ADRM”), ADUROMED
CORPORATION (“Aduromed”), SHERLEIGH ASSOCIATES
INC. DEFINED BENEFIT PENSION PLAN (“Sherleigh”),
PEQUOT CAPITAL MANAGEMENT, INC. (“Pequot”), on
behalf of PEQUOT SCOUT FUND, L.P., PEQUOT MARINER MASTER FUND,
L.P., PEQUOT NAVIGATOR OFFSHORE FUND, INC., PEQUOT DIVERSIFIED
MASTER FUND, LTD., and PREMIUM SERIES PCC LIMITED CELL 33
(collectively, the “Pequot Funds”), HELLER CAPITAL
INVESTMENTS (“Heller”) and the individuals and
entities listed on Schedule A attached hereto identified as
the “Polak/Lazar Secured Parties” (the Polak/Lazar
Secured Parties together with Heller are collectively referred
to herein as the “Bridge Loan
Holders”).
WHEREAS,
the Pequot Funds and Sherleigh (together the “Preferred
Holders”) are holders of 6,263,702 shares of Series A
Preferred Stock, par value $0.0001 per share (the
‘‘Series A Preferred’’) and 15,780,160
shares of Series B Preferred stock, par value $0.0001 per
share both of which Series Preferred are immediately
convertible into shares of Common Stock of ADRM, par value
$0.0001 per share (“Common Stock”) (the
“Series B Preferred’’, and together with the
Series A Preferred, the “Preferred
Stock”);
WHEREAS,
the terms of the Series A Preferred are set forth in a
Certificate Of Designations Of Series A Preferred Stock filed
January 23, 2006 with the Secretary of State of the State of
Delaware (the “Series A Designations”) and the
terms of the Series B Preferred are set forth in a Certificate
Of Designations Of Series B Preferred Stock filed January 23,
2006 with the Secretary of State of the State of Delaware (the
“Series B Designations”, and together with the
Series A Designations, the “Preferred Series
Designations”);
WHEREAS,
the Preferred Holders are holders of Warrants issued in
connection with the issuance of the Series A Preferred
entitling the holder(s) to purchase 6,263,699 shares of the
Common Stock at a price of $0.37883 per share of Common Stock
through October 4, 2010 (the ‘‘Series A Preferred
Warrants’’) and Warrants issued in connection with
the issuance of the Series B Preferred entitling the holder(s)
to purchase 15,780,160 shares of Common Stock at a price of
$0.37883 per share of Common Stock through January 23, 2011
(the ‘‘Series B Preferred Warrants’’,
and together with the Series A Preferred Warrants, the
“Preferred Warrants”);
WHEREAS,
in connection with the issuance of the Preferred Stock and the
Preferred Warrants, Aduromed, ADRM and the Preferred Holders
entered into an Amended and Restated Stockholders Agreement,
dated as of January 23, 2006 (the “Stockholders
Agreement”);
WHEREAS,
in connection with the issuance of the Preferred Stock and the
Preferred Warrants, Aduromed, ADRM and the Preferred Holders
entered into an Amended and Restated Registration Rights
Agreement, dated as of January 23, 2006 (the “Preferred
Registration Agreement”);
WHEREAS,
the Bridge Loan Holders are currently holding $1,275,000
deemed principal amount in secured notes of ADRM (the
“Bridge Notes”);
WHEREAS,
in connection with the original issuance of the Bridge Notes,
Aduromed, ADRM and the Bridge Loan Holders entered into
Loan
and Security Agreement, dated as of June 27, 2007 (the
“Security Agreement”), a Subsidiary Guarantee,
dated as of June 27, 2007 (the “Guarantee”) and
Common Stock Purchase Warrants for the purchase of 2,550,000
shares of Common Stock at an original exercise price of $0.38
per share (the “Original Bridge Warrants”, and
together with the Bridge
Notes, the Security
Agreement, the Guarantee and the Extension Bridge Warrants (as
defined below), the “Bridge Loan
Documents”);
WHEREAS,
pursuant to a Loan Extension Agreement, dated as of December
27, 2007, by and among the Bridge Loan Holders, Aduromed and
ADRM (the “Extension Agreement”), the Bridge Loan
Holders agreed to extend the maturity date of their Bridge
Notes to June 30, 2008;
WHEREAS,
pursuant to the Extension Agreement, the Bridge Loan Holders
were given additional Common Stock Purchase Warrants for the
purchase of 2,450,000 shares of Common Stock (the
“Extension Bridge Warrants”, and together with the
Original Bridge Warrants, the “Bridge
Warrants”);
WHEREAS,
Joseph Esposito and certain other individuals (collectively,
“Esposito”) are willing to align themselves with
the ADRM management team and are willing to invest at least
$500,000 into ADRM and Aduromed and use their best efforts to
cause additional investors to invest an additional $500,000
into ADRM and Aduromed as part of a new business plan going
forward (Esposito and such additional investors are
hereinafter referred to as the “New Management
Investors”);
WHEREAS,
the Pequot Funds are willing to invest $1,300,000 into ADRM
and Aduromed as part of a new business plan going forward (the
“New Pequot Investment”);
WHEREAS,
Sherleigh is willing to invest $700,000 into ADRM and Aduromed
as part of a new business plan going forward (the “New
Sherleigh Investment”);
WHEREAS,
Heller is willing to invest $250,000 into ADRM and Aduromed as
part of a new business plan going forward (the “New
Heller Investment”)
WHEREAS,
certain other parties may be willing to invest up to
$1,000,000 into ADRM and Aduromed as part of a new business
plan going forward (such parties are hereinafter referred to
as the “New Investors”); and
WHEREAS,
the Preferred Holders and the Bridge Loan Holders wish to
restructure their respective investments in ADRM in a manner
which provides ADRM with the opportunity to execute its
business plan and attract additional investors into ADRM going
forward;
NOW,
THEREFORE, in consideration of the agreements herein contained
and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties
hereto hereby agree as follows:
1.
Effective Time .
The “Effective Time” as used herein shall mean as of
12:00 noon Eastern Standard Time on July 30, 2008 or such other
time and date as is mutually agreed by the parties hereto. All
transactions contemplated hereby to be consummated as of the
Effective Time shall be deemed to happen
contemporaneously.
2.
The Sherleigh Preferred Stock .
Sherleigh hereby agrees that as of the Effective Time all
outstanding shares of Preferred Stock held by Sheleigh shall
convert automatically and without further action on its part into
20,000,081 shares of Common Stock. The Preferred Holders and ADRM
further agree that any and all amendments to the Preferred Series
Designations necessary to effectuate the conversion contemplated in
the previous sentence are hereby made. ADRM hereby agrees to take
any and all necessary or appropriate actions to issue and register
pursuant to the Securities Act of 1933 the Common Stock
contemplated to be issued pursuant to such aforementioned
conversion
such
that such shares of Common Stock may be offered and resold from
time to time, and to take any and all necessary or appropriate
actions to keep in effect any and all registration statements
covering the shares of Common Stock to be issued upon conversion of
the Preferred Stock .
3. The Pequot Preferred Stock; Accumulated Dividends and Liquidated
Damages .
Pequot and the Pequot Funds hereby agree that as of the Effective
Time all 14,171,054 outstanding shares of Preferred Stock held by
the Pequot Funds shall be surrendered to ADRM and from and after
the Effective Time such shares of Preferred Stock shall no longer
be deemed to be outstanding. The Preferred Holders and ADRM further
agree that any and all amendments to the Preferred Series
Designations necessary to effectuate the action contemplated in the
previous sentence are hereby made. The parties hereto further agree
that as of the Effective Time (i) accumulated dividends payable on
the Preferred Stock held by the Pequot Funds as of June 30, 2008 in
the amount of $690,436 and (ii) liquidated damages in the amount of
$387,000 payable to the Pequot Funds by ADRM pursuant to Section
1.1 of the Preferred Registration Agreement, shall each be
forfeited and shall no longer be due and payable.
4.
The Preferred Warrants .
The parties hereto hereby agree that as of the Effective Time the
Preferred Warrants shall be amended such that (i) they collectively
represent the right to purchase 55,999,998 shares of Common Stock
at an exercise price of $0.025 per share, of which Pequot Funds
will hold warrants for the purchase of 36,000,001 shares of Common
Stock and Sherleigh will hold warrants for the purchase of
19,999,997 shares of Common Stock and (ii) Section 5 of each of the
Preferred Warrants shall be deleted and of no further force and
effect. ADRM
hereby agrees to take any and all necessary or appropriate actions
to issue and register pursuant to the Securities Act of 1933 the
Common Stock issuable upon exercise of
the Preferred Warrants such
that such shares of Common Stock may be offered and resold from
time to time, and to take any and all necessary or appropriate
actions to keep in effect any and all registration statements
covering the shares of Common Stock issuable upon exercise of the
Preferred Warrants.
5.
Sherleigh
Preferred Stock Accumulated Dividends .
The parties hereto hereby agree that as of the Effective Time
accumulated dividends payable on the Preferred Stock held by
Sherleigh as of June 30, 2008 in the amount of $383,576 shall be
converted automatically and without further action on their part
into 15,343,040 shares of Common Stock. From and after June 30,
2008 no further dividends shall accrue or be payable on the
Preferred Stock. As additional consideration for converting such
accrued dividends, Sherleigh will receive new warrants to purchase
15,343,040 shares of Common Stock at an exercise price of $0.025
per share. Such warrants shall contain equivalent terms to the new
warrants contemplated to be issued in Sections 13 through 16
hereof. ADRM hereby agrees to take any and all necessary or
appropriate actions to issue and register pursuant to the
Securities Act of 1933 the Common Stock contemplated to be issued
pursuant to such aforementioned conversion or
issuable upon exercise of the aforementioned warrants such that
such shares of Common Stock may be offered and resold from time to
time, and to take any and all necessary or appropriate actions to
keep in effect any and all registration statements covering the
shares of Common Stock to be issued upon such conversion or
issuable upon exercise of such warrants .
6.
Sherleigh
Preferred Stock Liquidated Damages .
The parties hereto hereby agree that as of the Effective Time the
liquidated damages in the amount of $215,000 payable to Sherleigh
by ADRM pursuant to Section 1.1 of the Preferred Registration
Agreement shall be converted automatically and without further
action on their part into 8,600,000 shares of Common Stock. As
additional consideration for converting such liquidated damages,
Sherleigh will receive new warrants to purchase 8,600,000 shares of
Common Stock at an exercise price of $0.025 per share. Such
warrants shall contain equivalent terms to the new warrants
contemplated to be issued in Sections 13 through 16 hereof. ADRM
hereby agrees to take any and all necessary or appropriate actions
to issue and register pursuant to the Securities Act of 1933 the
Common Stock contemplated to be issued pursuant to such
aforementioned conversion or
issuable upon exercise of the aforementioned warrants such that
such shares of Common Stock may be offered and resold from time to
time, and to take any and all necessary or appropriate actions to
keep in effect any and all registration statements covering the
shares of Common Stock to be issued upon such conversion or
issuable upon exercise of such warrants .
7.
The Stockholders Agreement .
Aduromed, ADRM and the Preferred Holders hereby agree that as of
the Effective Time the Stockholders Agreement shall be terminated
and of no further force and effect.
8.
Preferred Stand Still Agreement .
The Preferred Holders agree to stand still and not exercise rights
contained in the Preferred Series Designations until the Effective
Time.
9.
Bridge Notes .
The Bridge Loan Holders, ADRM and Aduromed hereby agree that as of
the Effective Time the Bridge Notes in the principal amount of
$1,275,000 shall convert automatically and without further action
on their part into 93,750,000 shares of Common Stock. From and
after June 30, 2008 no further principal or interest shall accrue
or be payable on such Bridge Notes. ADRM hereby agrees to take any
and all necessary or appropriate actions to issue and register
pursuant to the Securities Act of 1933 the Common Stock
contemplated to be issued pursuant to such aforementioned
conversion. The parties hereto further agree that Heller and the
Polak/Lazar Secured Parties may, prior to the Effective Time,
transfer Bridge Notes among themselves on such terms as they shall
agree, but that any such transfers shall not effect the principal
amount of Bridge Notes outstanding or the resulting number of
shares of Common Stock resulting from such conversion as set forth
above. Heller and the Polak/Lazar Secured Parties shall advise ADRM
prior to the Effective Time as to the respective principal amounts
of Bridge Notes held by them as of the Effective Time.
10.
The Bridge Warrants .
The parties hereto hereby agree that as of the Effective Time the
Bridge Warrants shall be amended such that (i) they collectively
represent the right to purchase 93,750,000 shares of Common Stock
at an exercise price of $0.025 per share, such warrants to be
issued to Heller and the Polak/Lazar Secured Parties pro rata
according the respective principal amount of Bridge Notes that each
such party holds as of the Effective Time. As of the Effective Time
Section 3(b) of each of the Bridg
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