Loan Agreement - Biopure Corp. and Carl W. Rausch
AGREEMENT RE LOAN
This agreement (this "Agreement"), dated July 29, 2002, is made by and between
Biopure Corporation, a Delaware corporation (the "Company"), and Carl W. Rausch
(the "Executive").
RECITALS
The Executive and the Company entered into a loan agreement on August 8, 1990,
pursuant to which the Executive borrowed from the Company the principal amount
of $700,000 ("Principal") plus interest ("Interest") thereon at the "Prescribed
Rate" as defined in the promissory note dated August 8, 1990, as restated by a
promissory note dated July 31, 1995 (the "Restated Note."). Payment of Principal
and Interest was deferred twice for consideration given by the Executive, the
last such deferral being by action of the board of directors of the Company
taken June 24, 1999; such board action deferred payment of the Principal and
Interest until July 31, 2003 and established the Prescribed Rate from and after
July 24, 1999 at 4.71% annually.
The Executive and the Company have agreed to enter into an employment agreement
as of the date hereof ("Employment Agreement").
AGREEMENT
Now therefore, in consideration of the mutual covenants and promises herein
contained and other good and valuable consideration, the Company and the
Executive hereby agree as follows:
1. The Company hereby cancels and foregoes entitlement to and
receipt of all Interest accrued through the date of this
Agreement. The Executive represents and warrants that the
Executive has taken no deductions for federal income tax
purposes of any amount of Interest.
2. The Executive agrees to accelerate a portion of the payment of
the Principal (i.e., $700,000) to July 29, 2002. The amount of
the Principal to be paid on July 29, 2002, shall be $446,900.
The Executive authorizes the Company to apply said amount to
the payment of Principal by offset of deferred compensation
being paid to the Executive on the date hereof.
3. The Restated Note shall be further restated and executed,
simultaneously with the execution and delivery of this
Agreement, in the form attached hereto as Exhibit A.
4. Monthly payments of interest payable under the Restated Note
may be withheld from or offset against the Executive's monthly
compensation under the Employment Agreement (whether during or
after the "Employment Term," as defined therein).
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In witness whereof this Agreement has been executed by or on behalf of the
parties hereto, as an instrument under seal as of the date first above written.
Biopure Corporation
By: ___________________________________
___________________________________
Title
________________________________________
Carl W. Rausch