Document:

exv10w1

 

Exhibit 10.1

MEMORANDUM OF INTENT

     THIS MEMORANDUM OF INTENT (this “MOI”) is entered into as of the 12th day of September, 2007
by and among I-FLOW CORPORATION, a Delaware corporation (the “Seller”), INFUSYSTEM, INC., a
California corporation (the “Company”), HAPC, INC., a Delaware corporation (the “Buyer”), and
ICELAND ACQUISITION SUBSIDIARY, INC., a Delaware corporation (the “Acquisition Sub”).

     1. Background. The parties to this MOI previously entered into that certain Stock
Purchase Agreement, dated as of September 29, 2006, and as thereafter amended (the “Agreement”).
Capitalized terms in this MOI that are not otherwise defined are intended to have the same meanings
given them in the Agreement.

     2. Proposed Further Amendment. The parties currently intend to enter into a further
amendment to the Agreement (the “Price Amendment”). The Price Amendment is contemplated to amend
the Agreement as follows:

     (a) The Purchase Price shall be reduced to:

     (i) One Hundred Million Dollars ($100,000,000) (the “Base
Amount”), which will be adjusted subsequent to the Closing pursuant
to the provisions of Section 2.5 of the Agreement relating to a
Surplus Amount or Deficit Amount, as relevant; plus

     (ii) the contingent right of the Seller to receive an
additional amount of up to Twelve Million Dollars ($12,000,000) (the
“Earn-Out”).

     (b) The Base Amount will be payable at the Closing in a combination of cash and
a Promissory Note. The cash amount will equal Eighty-Five Million Dollars
($85,000,000) less the dollar amount (which amount may be zero) actually returned to
the shareholders of the Buyer voting against the Acquisition and requesting a return
of their investment in accordance with the terms of such investment (the “HAPC
Shareholder Return Amount”). The principal amount of the Promissory Note will equal
Fifteen Million Dollars ($15,000,000) plus the HAPC Shareholder Return Amount.

 

 

     (c) The Earn-Out will provide that the Buyer will make an additional cash
payment (the “Additional Payment”) to the Seller of up to Twelve Million Dollars
($12,000,000) based on the audited consolidated net revenues of the Buyer for its
fiscal year ended December 31, 2010 (“FY 2010”). Specifically, the amount of the
Additional Payment shall be calculated as follows:

	 	 	 	 	 
	Buyer’s FY 2010	 	 
	Consolidated Net Revenues	 	Additional Payment
	 
	 	 	 	 
	Less than the “First Revenue Target”

(as defined below)

	 	$	0	 
	 
	 	 	 	 
	Greater than or equal to First Revenue
Target but less than “Second Revenue
Target” (as defined below)

	 	$3 million plus the “Incremental
Amount” (as defined below)

	 
	 	 	 	 
	Greater than or equal to Second
Revenue Target

	 	$12 million

     The “First Revenue Target” shall be equal to the Company’s 2007 actual net revenues (excluding
all revenues related to the Seller’s ON-Q product line) for the entire calendar year 2007,
multiplied by 2.744 (representing a 40% compound average growth rate).

     The “Second Revenue Target” shall be equal to the Company’s 2007 actual net revenues
(excluding all revenues related to the Seller’s ON-Q product line) for the entire calendar year
2007, multiplied by 3.375 (representing a 50% compound average growth rate).

     The “Incremental Amount” shall equal $9 million multiplied by the ratio of (a) the Buyer’s
actual FY 2010 audited consolidated net revenues minus the First Revenue Target, divided by (b) the
Second Revenue Target minus the First Revenue Target.

     3. Intention of Parties. It is expressly understood that this MOI constitutes an
expression of intention and is not binding upon, nor does it create any legal obligation of, any of
the parties to this MOI or their respective affiliates in any manner whatsoever. This MOI’s
exclusive purpose is to reflect the parties’ current intentions respecting certain matters to be
addressed in connection with their contemplated discussions and negotiations. The matters
discussed in this MOI are further subject to approvals by the Boards of Directors of all parties
and execution and delivery of mutually satisfactory definitive documentation. As a result, it is
the express intention of the parties that the Agreement remains in full force and effect and shall
not in any manner be deemed amended unless and until the Price Amendment is executed and delivered
by all of the parties to this MOI. The Buyer shall reimburse to the Seller, at the earlier of the
Closing or October 31, 2007, all out-of-pocket expenses incurred by the Seller associated with the
Price Amendment. This MOI may be executed in two or more counterparts, all of which shall be
considered one and the same instrument, and may be executed by electronic or facsimile signature,
and an electronic or facsimile signature shall constitute an original for all purposes.

2

 

	 	 	 	 	 	 	 	 	 
	HAPC, INC.	 	 	 	I-FLOW CORPORATION
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ John E. Voris
	 	 	 	By:
	 	/s/ Donald M. Earhart
	 

	 	 
	 	 	 	 	 	 
	 
	 	Name: John E. Voris	 	 	 	 	 	Name: Donald M. Earhart
	 
	 	Title: CEO	 	 	 	 	 	Title: CEO and President
	 
	 	 	 	 	 	 	 	 
	ICELAND ACQUISITION	 	 	 	 	 	 
	SUBSIDIARY, INC.	 	 	 	INFUSYSTEM, INC.
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ John E. Voris
	 	 	 	By:
	 	/s/ James R. Talevich
	 

	 	 
	 	 	 	 	 	 
	 

	 	Name: John E. Voris
	 	 	 	 	 	Name: James R. Talevich
	 

	 	Title: CEO
	 	 	 	 	 	Title: Chief Financial Officer and Secretary

3exv10w32

 

Exhibit 10.32

LIFECORE BIOMEDICAL, INC.

INCENTIVE STOCK OPTION AGREEMENT

     THIS OPTION AGREEMENT is made as of the _____ of ______, 20_____ between
Lifecore Biomedical, Inc., a Minnesota corporation (hereinafter called the “Company”), and
____________ an employee of the Company or one or more of its subsidiaries (hereinafter called the
“Optionee”).

     WHEREAS, the Company desires, by affording the Optionee an opportunity to purchase shares of
its Common Stock (the “Common Stock”), as hereinafter provided, to carry out the purpose of the
2003 Stock Incentive Plan (the “Plan”) of the Company approved by its shareholders.

     NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth and for other
good and valuable consideration, the parties hereby agree as follows:

	1.	 	Grant of Option. The Company hereby grants to the Optionee the right and Option
(hereinafter called the “Option”) to purchase from the Company all or any part of an aggregate
amount of ____________ shares of the Common Stock of the Company on the terms and
conditions herein set forth. The Option granted hereunder is intended to be an “incentive
stock option” within the meaning of Section 422 of the Internal Revenue Code of 1986.
	 
	2.	 	Purchase Price. The purchase price of the shares of the Common Stock covered by this
Option shall be $________ per share.
	 
	3.	 	Term of Option. The term of the Option shall expire on __________ (the
“Expiration Date”) subject to earlier termination as hereinafter provided.
	 
	4.	 	Exercise of Option. The Option may be exercised as follows:

	 	(a)	 	On and after _________, the Option may be exercised as to _______ shares.
	 
	 	(b)	 	On and after _________, the Option may be exercised as to _______ shares.
	 
	 	(c)	 	On and after _________, the Option may be exercised as to _______ shares.
	 
	 	(d)	 	On and after _________, the Option may be exercised as to _______ shares.

     In no event shall the Option be exercisable after the Expiration Date.

	5.	 	Non-Transferability. The Option shall not be transferable otherwise than by will or
the laws of descent and distribution, and the Option may be exercised, during the lifetime of
the Optionee, only by the Optionee.

	6.	 	Termination of Employment. In the event the employment of the Optionee shall be
terminated for any reason other than death, Disability, or Retirement (as defined below) any
unexercised Option may be exercised by the Optionee at any time within ninety (90) days of
such termination, but only to the extent the Option was exercisable by the Optionee on the
date of termination; provided, however, that in the event of termination for Cause (as defined
below), such Option shall terminate immediately upon such termination of employment. In no
event shall any Option be exercisable after the Expiration Date specified in Section 3 hereof.
So long as the Optionee shall continue to be an employee of the Company or one or more of it
subsidiaries, the Option shall not be affected by any change of duties or position. Nothing
in this Option Agreement shall confer upon the Optionee any right to continue in the employ of

 

 

the Company or of any of its subsidiaries or interfere in any way with the right of the Company or
any such subsidiary to terminate the employment of the Optionee at any time.

	7.	 	Death, Disability, or Retirement of Optionee. If the Optionee shall die, or shall
suffer a Disability, or terminate employment as a result of Retirement (as defined below)
while this Option is in effect, the Option may be exercised by the person to whom the Option
is transferred by will or the applicable laws of descent and distribution (in the case of
death) or by the Optionee or his or her legal representative (in the case of Disability) or by
the Optionee (in the case of Retirement) at any time within twelve (12) months after the
Optionee’s death, termination of employment as a result of Disability, or Retirement, but in
no event later than the Expiration Date specified in Section 3 hereof.

	8.	 	Method of Exercising Option. Subject to the terms and conditions of the Plan, the
Option may be exercised by written notice to the Accounting Department at the principal office
of the Company. Such notice shall state the election to exercise the Option and the number of
shares in respect of which it is being exercised, and shall be signed by the person so
exercising the Option. Such notice shall be accompanied by payment of the full purchase price
of such shares, which payment shall be made in cash or by check or bank draft payable to the
Company. In the sole discretion of the Company, the Optionee may pay the purchase price by
delivering shares of Common Stock of the Company already owned by the optionee (which in the
case of stock acquired upon exercise of an option have been owned for more than six months on
the date of surrender) with a fair market value equal to the purchase price or by a
combination of cash and such shares, whose fair market value shall equal the purchase price.
For purposes of this paragraph, the “fair market value” of the Common Stock of the Company
shall be established in the manner set forth in the Plan.

The certificate or certificates for the shares as to which the Option shall have been so
exercised shall be registered in the name of the person so exercising the Option, or if the
Optionee so elects, in the name of the Optionee and one other person as joint tenants, and shall
be delivered as soon as practicable after the notice shall have been received. In the event the
Option shall be exercised by any person other than the Optionee, such notice shall be
accompanied by appropriate proof of such right of such person to exercise the Option. All
shares that shall be purchased upon the exercise of the Option as provided herein shall be fully
paid and nonassessable.

	9.	 	Option Plan. This Option is subject to certain additional terms and conditions set
forth in the Plan pursuant to which this Option has been issued. A copy of the Plan is on
file with the Chief Financial Officer of the Company and each Option holder by acceptance
hereof agrees to and accepts this Option subject to the terms of the Plan.

	10.	 	General. The Company shall at all times during the term of the Option reserve and
keep available such number of shares of Common Stock as will be sufficient to satisfy the
requirements of this Option Agreement, shall pay all original issue and transfer taxes with
respect to the issue and transfer of shares pursuant hereto and all other fees and expenses
necessarily incurred by the Company in connection therewith, and will from time to time use
its best efforts to comply with all laws and regulations which, in the opinion of counsel for
the Company, shall be applicable thereto.

	11.	 	Status. Neither the Optionee nor the Optionee’s executor, administrator, heirs, or
legatees, shall be or have any rights or privileges of a shareholder of the Company in respect
of the shares transferable upon exercise of the Option granted hereunder, unless and until
certificates representing such shares shall be endorsed, transferred, and delivered and the
transferee has caused the Optionee’s name to be entered as the shareholder of record on the
books of the Company.

	12.	 	Common Authority. The existence of the Option herein granted shall not affect in any
way the right or power of the Company or its shareholders to make or authorize any or all
adjustments, recapitalizations, reorganizations or other changes in the Company’s capital
structure or its business, or any merger or consolidation of the Company, or any issue of
bonds, debentures, preferred or prior preference stock ahead of or affecting the Common Stock
of the Company, or any sale or transfer of all or any part of its assets or business, or any
other corporate act or proceeding, whether of a similar character or otherwise.

 

 

The Option granted herein shall become exercisable in full, without regard to any installment
exercise provisions, for a period specified by the Committee, but not to exceed sixty (60) days,
prior to the occurrence of any of the following events: (i) dissolution or liquidation of the
Company other than in conjunction with a bankruptcy of the Company or any similar occurrence,
(ii) any merger, consolidation, acquisition, separation, reorganization, or similar occurrence,
where the Company will not be the surviving entity or (iii) the transfer of substantially all of
the assets of the Company or 75% or more of the outstanding Common Stock of the Company.

	13.	 	Disputes. As a condition of the granting of the Option herein granted, the Optionee
agrees, for the Optionee and the Optionee’s personal representatives, that any dispute or
disagreement which may arise under or as a result of or pursuant to this Agreement shall be
determined by the Company, in its sole discretion, and that any interpretation by the Company
of the terms of this Agreement shall be final, binding and conclusive.
	 
	14.	 	Binding Effect. This Agreement shall be binding upon the heirs, executors,
administrators and successors of the parties hereto.
	 
	15.	 	Definitions. For the purposes of the Option, the following terms shall have the
indicated meanings:

(a) “Cause” means a felony conviction of a participant or the failure of a participant
to contest prosecution for a felony, willful misconduct, dishonesty or intentional violation of
a statute, rule or regulation, any of which, in the judgment of the Company, is harmful to the
business or reputation of the Company.

(b) “Disability” means disabled within the meaning of Section 22(e)(3) of the Code as
determined by the Committee.

(c) “Retirement” means retirement from active employment with the Company and any
Affiliate of the Company either (i) on or after age 65, or (ii) with consent of the Committee at
the time of retirement.

     This stock option agreement could be construed to imply that Lifecore expects long term
continued financial appreciation in its common stock price in the public equity marketplace. As
such, it constitutes a forward looking document as defined in the Private Securities Litigation
Reform Act of 1995. Because of numerous risks and uncertainties in Lifecore’s business activity,
the Company’s actual business results may differ materially from those implied. Prospective stock
option investors are cautioned to refer to more detailed discussions of Lifecore’s specific
business risks as presented and updated from time to time in the Company’s reports on Forms 10-Q
and 10-K. In addition, even if Lifecore’s business performance does improve, the potential option
investor is cautioned that the public stock marketplace may not reflect those improvements in an
appreciated price for Lifecore’s common stock.

     IN WITNESS WHEREOF, the Company and the Optionee have executed this Agreement as of the day
and year first above written.

	 	 	 	 	 
	 	LIFECORE BIOMEDICAL, INC.

 	 
	 	By  	 
	 	 	Its   President & CEO 

 	 
	 

Optionee ________________________

Date ____________

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