Exhibit (b)(4)
XXXXX ASSOCIATES
January 14, 1998
Bruckmann, Xxxxxx, Xxxxxxxx & Co., Inc.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
Reference is made to the draft Agreement and Plan of Merger (the "Merger
Agreement"), dated as of January 14, 1998, between MEDIQ Incorporated (the
"Company") and MQ Acquisition Corporation ("Acquiror"), providing for the
merger of Acquiror with and into the Company (as provided for in the Merger
Agreement) (the "Merger").
We are pleased to advise you that funds managed by Xxxxx Associates
("Xxxxx") are committed to invest up to $20,000,000 in securities of the
Acquiror which will be converted in the Merger into a combination of equity
securities of the Company (the "Investment"). The amount of the Investment
shall be determined by Bruckmann, Xxxxxx, Xxxxxxxx & Co., Inc. and its
affiliates (collectively "BRS"), but shall in no event be less than
$15,000,000 (the "Minimum Investment"). The Investment (i) is being made to
permit Acquiror to consummate the Merger and the other transactions
contemplated by the draft Merger Agreement, all as provided in the draft
Merger Agreement and the Information previously provided by you to us with
respect to the structure and pricing of the transaction, and (ii) will be
made on a pari pasu basis with the investment by BRS and Xxxxxx Xxxxxxx
Xxxxxxxx & Co. ("FFT"), and the terms of the securities received by Xxxxx
shall be on terms no less favorable than those securities received by BRS and
FFT.
In the event the Merger is consummated, any transaction or management
fees entitled to be received by BRS pursuant to the Merger shall be shared as
follows: (i) BRS shall be entitled to the first 25% thereof; and (ii) each of
BRS, FFT and Xxxxx shall be entitled to a pro rata share of the balance
(based on the amount invested by BRS, FFT and Xxxxx in the securities of the
Acquiror), provided that BRS in its sole discretion may modify the allocation
of any management fees at any time after the first anniversary of closing. In
the event the Merger is not consummated, any break-up fees (or profit in
connection with option agreements with the Company's stockholders) or expense
reimbursement entitled to be received by BRS pursuant to the Merger Agreement
(in each case, net of any out-of-pocket expenses incurred and paid by BRS,
FFT or Xxxxx in connection with the transactions contemplated hereby) shall
be shared as follows: (i) BRS shall be entitled to the first 25% thereof; and
(ii) BRS, FFT and Xxxxx shall share the balance 60%, 24% and 16%,
respectively. Consistent with the preceding sentence, any
out-of-pocket expenses or liquidated damages incurred and paid by BRS, FFT
or Xxxxx in connection with the transactions contemplated hereby, to the
extent such expenses are not reimbursed by the Company, shall be borne as
follows: (i) the first 25% thereof shall be borne by BRS; and (ii) the
balance shall be borne 60% by BRS, 24% by FFT and 16% by Xxxxx. Xxxxx shall
reimburse BRS promptly for all such expenses required to be borne by Xxxxx.
Galen's obligation hereunder and the Investment are conditioned on (a)
the negotiation and execution of (i) a definitive Merger Agreement, (ii)
documentation for the financing necessary to consummate the transactions
contemplated hereby and (iii) a customary Stockholders Agreement among Xxxxx,
BRS and the other investors providing for, among other things, Galen's right
to customary representation on the Board of Directors of the Company, all in
form and substance reasonably satisfactory to Xxxxx and (b) the fulfillment to
Acquiror's reasonable satisfaction of all the conditions to Acquiror's
obligations under the Merger Agreement. We realize that our commitment is an
obligation to invest only the Minimum Investment and any additional amount
(up to an aggregate of $20,000,000) requested by BRS.
Our obligations under this letter will expire on June 30, 1998 unless
extended by our mutual agreement.
Xxxxx Associates
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
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Title: President
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Accepted and agreed this
14th day of January, 1998
Bruckmann, Xxxxxx, Xxxxxxxx & Co., Inc.
By: /s/ Xxxxx X. Xxxxxxxxx
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Name: Xxxxx X. Xxxxxxxxx
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Title: Managing Director
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