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Reimbursement and Indemnification Agreement

Indemnification Agreement

Reimbursement and Indemnification Agreement | Document Parties: MEDICAL SOLUTIONS MANAGEMENT INC. | OrthoSupply Management, Inc | Vicis Capital Series Master Trust You are currently viewing:
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MEDICAL SOLUTIONS MANAGEMENT INC. | OrthoSupply Management, Inc | Vicis Capital Series Master Trust

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Title: Reimbursement and Indemnification Agreement
Governing Law: Massachusetts     Date: 11/23/2007

Reimbursement and Indemnification Agreement, Parties: medical solutions management inc. , orthosupply management  inc , vicis capital series master trust
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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]

 


Very truly yours,
MEDICAL SOLUTIONS MANAGEMENT INC.
By:  

/s/ Brian D. Lesperance

  Brian D. Lesperance
  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

 

By: Caledonian Bank & Trust Limited

Trustee of Vicis Capital Series Master Trust

By:  

/s/ Keith W. Hughes

Name:   Keith W. Hughes
Title:   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

 

Warrant Number    CS-
Date of Grant                 , 200    (the “ Grant Date ”)
Exercise Term    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.
Name of Holder    Vicis Capital Master Fund
Right to Purchase the following number of shares of Common Stock of Medical Solutions Management Inc. (subject to adjustment as provided herein)    3,060,000
Warrant Price    $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:

 

   X =   

Y (A - B)

  
      A   

 

Where:    X =    the number of Warrant Shares to be delivered to the holder;
   Y =    the number of Exchanged Warrant Shares;
      A =    the Fair Market Value of the Warrant Shares as determined in accordance with Section 4.
      B =    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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