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EXHIBIT
10.2
MEDICAL SOLUTIONS MANAGEMENT
INC.
237 Cedar Hill
Street
Marlboro, MA 01752
November 16,
2007
Gentlemen:
Reference is hereby made to
that certain Third Amendment, of even date herewith (the “
Third Amendment ”), to Guarantee Fee, Reimbursement
and Indemnification Agreement, dated as of March 16, 2007, as
amended on April 17, 2007 and on May 16, 2007 (as so
amended, the “ Guarantee Fee Agreement ”), by
and among Medical Solutions Management Inc., a Nevada corporation
(“ MSMI ”), OrthoSupply Management, Inc., a
Delaware corporation, and Vicis Capital Master Fund, a sub-trust of
Vicis Capital Series Master Trust, a unit trust organized and
existing under the laws of the Cayman Islands (the “
Fund ”). As referenced in the Third Amendment, MSMI
proposes to enter into that certain Amendment No. 2 (the
“ Letter of Credit Amendment ”), in the form of
Exhibit A to the Third Amendment, to the Irrevocable Standby
Letter of Credit No. 00034 in favor of Sovereign Bank (as
amended and in effect from time to time, the “ Letter of
Credit ”), to change the expiration date in the Letter of
Credit from March 15, 2008 to March 15, 2009. Pursuant to
the terms of the Guarantee Fee Agreement, the Letter of Credit may
not be amended without the Fund’s prior written consent, and
in consideration of the Fund’s consent to the Letter of
Credit Amendment, which consent is to be provided in the Third
Amendment, MSMI hereby agrees with the Fund as follows:
1. MSMI is currently in the
process of amending in the State of Nevada its Amended and Restated
Articles of Incorporation to increase the number of authorized but
unissued shares of MSMI common stock, $0.0001 par value per share
(the “ Common Stock ”), from 100,000,000 to
200,000,000 shares (such amendment, the “ Charter
Amendment ”). Immediately upon and subject to the
effectiveness of the Charter Amendment in the State of Nevada, MSMI
will issue to the Fund a warrant for 3,060,000 shares of Common
Stock in the form of Exhibit A hereto.
[Signatures on Following
Page]
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| Very truly yours, |
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| MEDICAL SOLUTIONS MANAGEMENT INC. |
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| By: |
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/s/ Brian D.
Lesperance
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Brian D.
Lesperance |
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Chief
Executive Officer |
If the foregoing is
acceptable, please sign below where indicated.
APPROVED AND ACCEPTED:
VICIS CAPITAL MASTER FUND
a sub-trust of Vicis Capital Series
Master Trust
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By: Caledonian Bank & Trust
Limited
Trustee of Vicis Capital Series Master
Trust
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| By: |
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/s/ Keith W.
Hughes
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| Name: |
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Keith W.
Hughes |
| Title: |
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Chief
Financial Officer |
-2-
Exhibit A
THIS WARRANT OR THE SHARES OF COMMON
STOCK ISSUABLE UPON CONVERSION HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS.
NO SALE OR DISPOSITION MAY BE EFFECTED WITHOUT (i) AN
EFFECTIVE REGISTRATION STATEMENT RELATED THERETO, (ii) AN
OPINION OF COUNSEL FOR THE HOLDER, REASONABLY SATISFACTORY TO THE
COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED, (iii) RECEIPT
OF A NO-ACTION LETTER(S) FROM THE APPROPRIATE GOVERNMENTAL
AUTHORITY(IES), OR (iv) OTHERWISE COMPLYING WITH THE
PROVISIONS OF SECTION 7 OF THIS WARRANT.
THIS WARRANT AND THE SECURITIES
ISSUABLE UPON EXERCISE OF THIS WARRANT ARE SUBJECT TO CERTAIN
RESTRICTIONS SET FORTH IN THAT CERTAIN LOCK-UP AND LEAK-OUT
AGREEMENT, DATED AS OF JUNE 28, 2006, AS MAY BE AMENDED OR
MODIFIED FROM TIME TO TIME, BY AND BETWEEN MEDICAL SOLUTIONS
MANAGEMENT INC. AND THE HOLDER.
SERIES CS WARRANT TO
PURCHASE SHARES
OF COMMON
STOCK
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| Warrant Number |
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CS- |
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| Date of Grant |
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, 200 (the “ Grant Date
”) |
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| Exercise Term |
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The purchase
right represented by this Warrant is exercisable, in whole or in
part, at any time from the Grant Date and from time to time
thereafter through and including the close of business on the date
five (5) years from the Grant Date (the “ Expiration
Date ”); provided , however , that in the
event that any portion of this Warrant is unexercised as of the
Expiration Date, the terms of Section 2(b) of this Warrant
shall apply. |
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| Name of Holder |
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Vicis
Capital Master Fund |
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| Right to
Purchase the following number of shares of Common Stock of Medical
Solutions Management Inc. (subject to adjustment as provided
herein) |
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3,060,000 |
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| Warrant Price |
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$0.50 |
Page 1
Exhibit A
Medical Solutions Management Inc., a
Nevada corporation (the “ Company ”), hereby
certifies that, for value received, the “ Holder
” identified in the table above, or its registered assigns,
is the registered holder of a warrant (the “ Warrant
”) to subscribe for and purchase the number of fully paid and
nonassessable Common Stock set forth in the table above (as
adjusted pursuant to Section 4 hereof, the “
Warrant Shares ”) of the Company, at a price per share
equal to $0.50 (such price and such other price as shall result,
from time to time, from the adjustments specified in
Section 4 hereof is herein referred to as the “
Warrant Price ”), subject to the provisions and upon
the terms and conditions hereinafter set forth.
As used herein, (a) the
term “ Common Stock ” shall mean the
Company’s presently authorized Common Stock, par value
$0.0001 per share, and any stock into or for which such Common
Stock may hereafter be converted or exchanged, and (b) the
term “ Other Warrants ” shall mean any warrant
issued upon transfer or partial exercise of this Warrant. The term
“ Warrant ” as used herein shall be deemed to
include Other Warrants unless the context hereof or thereof clearly
requires otherwise.
1. Term . The term of
the purchase right represented by this Warrant as set forth in the
table above.
2. Exercise; Expiration;
Redemption .
a. Method of Exercise;
Payment; Issuance of New Warrant . Subject to
Section 1 hereof, the purchase right represented by
this Warrant may be exercised by the Holder, in whole or in part
and from time to time after the Initial Exercise Date, by the
surrender of this Warrant (with the notice of exercise form
attached hereto as Exhibit A duly executed) at the principal
office of the Company and by the payment to the Company of an
amount equal to the then applicable Warrant Price multiplied by the
number of Warrant Shares then being purchased. The person or
persons in whose name(s) any certificate(s) representing shares of
Common Stock shall be issuable upon exercise of this Warrant shall
be deemed to have become the holder(s) of record of, and shall be
treated for all purposes as the record holder(s) of, the shares
represented thereby (and such shares shall be deemed to have been
issued) immediately prior to the close of business on the date or
dates upon which this Warrant is exercised. In the event of any
exercise of the rights represented by this Warrant, certificates
for the shares of stock so purchased shall be delivered to the
Holder as soon as possible and in any event within thirty
(30) days after such exercise and, unless this Warrant has
been fully exercised, a new Warrant representing the portion of the
Warrant Shares, if any, with respect to which this Warrant shall
not then have been exercised shall also be issued to the Holder as
soon as possible and in any event within such thirty (30)-day
period.
Page 2
Exhibit A
b. Expiration . In the
event that any portion of this Warrant is unexercised as of the
Expiration Date, such portion of this Warrant shall automatically
expire, and the Holder shall have no rights with respect to such
unexercised portion of this Warrant.
c. Maximum . In no
event shall the Holder be entitled to exercise any Warrant Shares
to the extent that, after such exercise, the sum of the number of
shares of Common Stock beneficially owned by the Holder and its
affiliates (other than shares of Common Stock which may be deemed
beneficially owned through the ownership of the unexercised portion
of the Warrant Shares or any unexercised right held by the Holder
subject to a similar limitation), would result in beneficial
ownership by the Holder and its affiliates of more than 4.99% of
the outstanding shares of Common Stock (after taking into account
the shares to be issued to the Holder upon such exercise). For
purposes of this Section 2(c) , beneficial ownership
shall be determined in accordance with Section 13(d) of the
Securities Exchange Act of 1934, as amended. Nothing herein shall
preclude the Holder from disposing of a sufficient number of other
shares of Common Stock beneficially owned by the Holder so as to
thereafter permit the continued exercise of this
Warrant.
d. Cashless Exercise .
Subject to the provisions hereof, at any time or from time to time
prior to the Expiration Date, the Holder shall also have the right
to exercise this Warrant or any portion thereof, without payment by
the Holder of the Warrant Price in cash or any other consideration
(other than the surrender of rights to receive Warrant Shares
hereunder), as provided herein (a “ Cashless Exercise
”). Upon a Cashless Exercise with respect to a particular
number of Warrant Shares (the “ Exchanged Warrant
Shares ”), the Company shall deliver to the Holder
(without payment by the Holder of the Warrant Price in cash or any
other consideration (other than the surrender of rights to receive
Common Stock hereunder) that number of Warrant Shares computed
using the following formula:
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X = |
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the number of Warrant Shares to be delivered to the
holder; |
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Y
= |
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the number of Exchanged Warrant Shares; |
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A = |
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the Fair
Market Value of the Warrant Shares as determined in accordance with
Section 4. |
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B
= |
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the
Warrant Price (as adjusted through the Cashless Exercise
Date) |
A Cashless Exercise may be
effected by the Holder by the surrender of this Warrant as provided
herein, together with a written statement specifying that the
Holder thereby intends to effect a Cashless Exercise and indicating
the number of Exchanged Warrant Shares which are covered by the
Cashless Exercise. Such Cashless Exercise shall be effective upon
receipt by the Company of this Warrant, together with the aforesaid
written statement, or on such later date as is specified therein
(the “ Cashless Exercise Date ”). The Company
shall
Page 3
Exhibit A
issue to the Holder as of the Cashless
Exercise Date a certificate for the Warrant Shares issuable upon
the Cashless Exercise and, if applicable, a new warrant of like
tenor evidencing the balance of the Warrant Shares remaining
subject to this Warrant.
3. Stock Fully Paid;
Reservation of Shares . All Warrant Shares that may be issued
upon the exercise of the rights represented by this Warrant will,
upon issuance pursuant to the terms and conditions herein, be fully
paid and nonassessable, and free from all taxes (other than any
taxes determined with respect to, or based upon, the income of the
person to whom such shares are issued), liens and charges (other
than liens or charges created by actions of the Holder or the
person to whom such shares are issued), and pre-emptive rights with
respect to the issue thereof. During the period within which the
rights represented by this Warrant may be exercised, the Company
will at all times have authorized, and reserved for the purpose of
the issue upon exercise of the purchase rights evidenced by this
Warrant, a sufficient number of shares of its Common Stock to
provide for the exercise of the rights represented by this
Warrant.
4. Adjustment of Warrant
Price and Number of Shares . The number and kind of securities
purchasable upon the exercise of this Warrant and the Warrant Price
shall be subject to adjustment from time to time upon the
occurrence of certain events, as follows:
a. Reclassification or
Merger . In case of any reclassification, change or conversion
of securities of the class issuable upon exercise of this Warrant
(other than a change in par value, or from par value to no par
value, or from no par value to par value, or as a result of a
subdivision or combination), or in case of any merger of the
Company with or into another corporation (other than a merger with
another corporation in which the Company is the acquiring and the
surviving corporation and which does not result in any
reclassification or change of outstanding securities issuable upon
exercise of this Warrant), or in case of any sale of all or
substantially all of the assets of the Company, the Company, or
such successor or purchasing corporation, as the case may be, shall
duly execute and deliver to the Holder a new Warrant (in form and
substance satisfactory to the Holder), so that the Holder shall
have the right to receive, at a total purchase price not to exceed
that payable upon the exercise of the unexercised portion of this
Warrant, and in lieu of the shares of Common Stock theretofore
issuable upon exercise of this Warrant, the kind and amount of
shares of stock, other securities, money and property receivable
upon such reclassification, change or merger by a holder of the
number of shares of Common Stock then purchasable under this
Warrant. Such new Warrant shall provide for adjustments that shall
be as nearly equivalent as may be practicable to the adjustments
provided for in this Section 4 . The provisions of this
Section 4(a) shall similarly apply to successive
reclassifications, changes, mergers and transfers.
Page 4
Exhibit A
b. Subdivision or
Combination of Shares . If at any time while this Warrant
remains outstanding and unexpired the Company shall subdivide or
combine its outstanding shares of Common Stock, the Warrant Price
shall be proportionately decreased in the case of a subdivision or
increased in the case of a combination, effective at the close of
business on the date the subdivision or combination becomes
effective.
c. Stock Dividends .
If at any time while this Warrant is outstanding and unexpired the
Company shall pay a dividend with respect to Common Stock payable
in Common Stock, then the Warrant Price shall be adjusted, from and
after the date of determination of stockholders entitled to receive
such dividend or distribution, to that price determined by
multiplying the Warrant Price in effect immediately prior to such
date of determination by a fraction (i) the numerator of which
shall be the total number of shares of Common Stock outstanding
immediately prior to such dividend, and (ii) the denominator
of which shall be the total number of shares of Common Stock
outstanding immediately after such dividend.
d. Rights Offerings .
In case the Company shall, at any time after the Grant Date, issue
rights, options or warrants to the holders of equity securities of
the Company, entitling them to subscribe for or purchase shares of
Common Stock (or securities convertible or exchangeable into Common
Stock) at a price per share of Common Stock (or having a conversion
or exchange price per share of Common Stock if a security
convertible or exchangeable into Common Stock) less than the
Warrant Price in effect on the record date for such issuance (or
the date of issuance, if there is no record date), the Warrant
Price to be in effect on and after such record date (or issuance
date, as the case may be) shall be reduced, concurrently with such
issue, to a price equal to the consideration received per share in
connection with the issuance of such Additional Shares of Common
Stock. In case such purchase or subscription price may be paid in
part or in whole in a form other than cash, the fair value of such
consideration shall be determined by the Board of Directors of the
Company (the “ Board of Directors ”) in good
faith as set forth in a duly adopted board resolution certified by
the Company’s Secretary or Assistant Secretary. Such
adjustment shall be made successively whenever such an issuance
occurs; and in the event that such rights, options, warrants, or
convertible or exchangeable securities are not so issued or expire
or cease to be convertible or exchangeable before they are
exercised, converted, or exchanged (as the case may be), then the
Warrant Price shall again be adjusted to be the Warrant Price that
would then be in effect if such issuance had not occurred,
provided however , the Company shall adjust the
number of Warrant Shares issued upon any exercise of this Warrant
after the adjustment required pursuant to this
Section 4(d) but
Page 5
Exhibit A
prior to the date such subsequent
adjustment is made, in order to equitably reflect the fact that
such rights, options, warrants, or convertible or exchangeable
securities were not so issued or expired or ceased to be
convertible or exchangeable before they were exercised, converted,
or exchanged (as the case may be).
e. Other Issuances of
Securities . In case the Company or any subsidiary of the
Company shall, at any time after the Grant Date, issue shares of
Common Stock, or rights, options, warrants or convertible or
exchangeable securities containing the right to subscribe for or
purchase shares of Common Stock (excluding (i) shares, rights,
options, warrants, or convertible or exchangeable securities or
issued in any of the transactions described in
Sections 4(a) , 4(b) , 4(c) , or
4(d) above, (ii) shares issued upon the exercise of
such rights, options or warrants or upon conversion or exchange of
such convertible or exchangeable securities, and (iii) this
Warrant and any shares issued upon exercise thereof), at a price
per share of Common Stock (determined in the case of such rights,
options, warrants, or convertible or exchangeable securities by
dividing (x) the total amount receivable by the Company in
consideration of the sale and issuance of such rights, options,
warrants, or convertible or exchangeable securities, plus the total
minimum consideration payable to the Company upon exercise,
conversion, or exchange thereof by (y) the total maximum
number of shares of Common Stock covered by such rights, options,
warrants, or convertible or exchangeable securities) lower than the
Warrant Price in effect on the date of such issuance, then the
Warrant Price shall be reduced, concurrently with such issue, to a
price equal to the consideration received per share in connection
with the issuance of such Additional Shares of Common Stock. For
the purposes of such adjustment, the maximum number of shares of
Common Stock which the holder of any such rights, options, warrants
or convertible or exchangeable securities shall be entitled to
subscribe for or purchase shall be deemed to be issued and
outstanding as of the date of such sale and issuance and the
consideration received by the Company therefor shall be deemed to
be the consideration received by the Company for such rights,
options, warrants, or convertible or exchangeable securities, plus
the minimum consideration or premium stated in such rights,
options, warrants, or convertible or exchangeable securities to be
paid for the shares of Common Stock covered thereby. In case the
Company shall sell and issue shares of Common Stock, or rights,
options, warrants, or convertible or exchangeable securities
containing the right to subscribe for or purchase shares of Common
Stock for a consideration consisting, in whole or in part, of
property other than cash or its equivalent, then in determining the
price per share of Common Stock and the consideration received by
the Company for purposes of the first sentence of this
Section 4(e) , the Board of Directors shall determine,
in go
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