EXHIBIT 10.1
February 20, 1998
Maxxim Medical, Inc.
00000 00xx Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Gentlemen:
This letter will serve as our agreement relating to certain issues
concerning the conversion by Maxxim Medical, Inc., a Delaware corporation,
("Maxxim"), of a portion of the certain convertible subordinated promissory note
dated April 30, 1996, in the original principal amount of $7,000,000, as amended
by that certain note modification agreement dated September 20, 1997 (the
"Convertible Note"), issued by Xxxxxx Healthcare, Inc., a Texas corporation,
("Xxxxxx"), to Maxxim. For good and valuable consideration, the receipt of
sufficiency of which are hereby acknowledged, the parities hereto agree as
follows:
1. Pursuant to Section 4.1 of the Convertible Note, Maxxim gives notice of
the conversion of $2,000,000 of the principal amount of the Convertible
note into 1,000,000 shares of the common stock, par value $.01 per share
("Common Stock"), of Xxxxxx, based on the current conversion price of
$2.00 per share under the Convertible Note. The data of such conversion
is effective as of the date of this letter and Xxxxxx hereby tenders to
Maxxim a certificate representing the 1,000,000 shares of Common stock.
Notwithstanding the provisions of Section 4.1 of the Convertible Note,
the parties agree that the entire $2,000,000 of the convertible Note so
converted reduces the principal amount of the Convertible Note and such
sum shall be applied to Xxxxxx'x full redemption obligation due in the
year 2003 and partially to Xxxxxx'x redemption obligation due in the
year 2002 as provided in Section 2.3 of the Convertible Note. All
accrued and unpaid interest on the Convertible Note through February 28,
1998 in the aggregate amount of $26,667 is hereby paid in cash by
Xxxxxx.
2. As further consideration for the agreement of Maxxim to convert the
amount of Convertible Note set forth above, Xxxxxx hereby agrees to use
its commercially reasonable best efforts to file a shelf registration
statement on Form S-3, as amended from time to time, (the "Registration
Statement") with the U. S. Securities and Exchange Commission ("SEC) to
register resales of the Common Stock issued to Maxxim hereby as soon as
reasonably practicable after the date hereof; provided, that, Maxxim
hereby acknowledges and agrees that the Registration Statement will not
be filed until such time as Xxxxxx has completed the audit of its
consolidated financial statements at and as of December 31, 1997, and
filed its Annual Report on Form 10-K with the SEC including the results
of such audit which matters Xxxxxx agrees to accomplish as soon as
practicable. Xxxxxx shall use its commercially reasonable best efforts
to have the Registration Statement declared effective as soon as
possible after such filing, and to keep such Registration Statement
continuously effective until the second anniversary of the initial date
effectiveness of such Registration Statement subject to extension as
herein provided; provided, however, that Xxxxxx may voluntarily form
time to time suspend the effectiveness of the Registration Statement for
a limited time, which in no event shall be longer than 90 days in any
instance and 150 days in the aggregate, if Xxxxxx has been advised in
writing by its counsel or its underwriters that the offering of shares
of
Common Stock pursuant to the Registration Statement would materially
and adversely affect, or would be improper in view of ( improper without
disclosure in a prospectus), a proposed financing, public offering,
reorganization, re-capitalization, merger, consolidation or similar
transaction involving Xxxxxx, in which case Xxxxxx shall be required to
keep such anniversary date equal to the number of days the effectiveness
thereof is suspended pursuant to this provision. Upon the occurrence of
any event that would cause the Registration Statement to contain a
material misstatement or omission or not to be effective and usable
during the period that such Registration Statement is required to be
effective and usable. Xxxxxx shall promptly notify Maxxim in writing
specifying the reasons that the Registration Statement may not be used
to sell Common stock including a copy of the written advice received by
Xxxxxx from its counsel or underwriters and Xxxxxx shall promptly file
an amendment to the Registration Statement and use its commercially
reasonable best efforts to cause such amendment to be declared effective
as soon as practicable thereafter. Xxxxxx will bear all costs and
expenses related to the Registration Statement other than the expenses
incurred by Maxxim for underwriters' commissions and discounts or legal
fees incurred by Maxxim. Maxxim shall furnish to Xxxxxx such information
regarding its holdings and the proposed manner of distribution of Common
Stock as Xxxxxx may reasonably request and as shall be required by the
rules and regulations of the SEC in connection with the Registration
Statement. Notwithstanding the foregoing, Maxxim hereby acknowledges and
agrees that Xxxxxx may include in the Registration Statement the
offering for resale of additional shares of its common stock issuable
upon the conversion of other securities of Xxxxxx to be issued in
connection with proposed private placement to be accomplished by Xxxxxx
in the next 30 days after the date of this letter; provided, however,
that such inclusion will not reduce in any manner the number of Maxxim
shares to be included in the Registration Statement.
3. The Registration Rights Agreement entered by and between Maxxim and
Xxxxxx dated April 30, 1996 ("Registration Rights Agreement"), remains
in full force and effect, except that the shares of Common Stock issued
by Xxxxxx to Maxxim, as set forth in paragraph 1 above, shall no longer
be "Registerable Securities" as defined in such Registration Statement
as provided herein. Xxxxxx acknowledges and agrees that registration of
the Maxxim Common Stock does not constitute a Demand Registration
pursuant to the provisions of the Registration Rights Agreement.
4. Xxxxxx and Maxxim agree that the indemnification and contribution rights
and obligations of the parties as provided in Section 5 of the
Registration Rights Agreement shall be applicable to the Transactions
herein described and are incorporated herein by this reference as if
fully set forth.
5. Each of Xxxxxx, Xxxxxxxx X. Xxxxx and Xxxxxxx X. Xxxxxxx hereby waive
and release in full their rights of first refusal granted under Section
2 of that certain Voting Agreement dated April 20, 1996, executed by
such persons and Maxxim insofar as such rights apply to the sale by
Maxxim of the shares of Common Stock to be included in the Registration
Statement. Xxxxxx agrees that any legend on the Maxxim Common Stock
certificate shall be removed by Xxxxxx'x Registrar or Transfer agent
within 24 hours of notice to Xxxxxx, that Maxxim has sold any of the
Common Stock pursuant to the Registration Statement.
6. This letter may not be amended without the written approval of the
parities hereto and shall be construed, interpreted and enforced under
the laws of the State of Texas.
Please acknowledge your acceptance and agreement of the above by
acknowledging this agreement in the space provided below.
Very truly yours,
XXXXXX HEALTHCARE, INC.
By: /s/ XXXXXXX X. XXXXXXX
Title: PRESIDENT & CEO
Acknowledged and agreed to by:
MAXXIM MEDICAL, INC.
By: /s/ XXXXXXX X. XXXXXXXX
Title: CHAIRMAN, PRESIDENT & CEO
Date: FEBRUARY 20, 1998
/s/ XXXXXXXX X. XXXXX
Xxxxxxxx X. Xxxxx
Date: FEBRUARY 20, 1998
/S/ XXXXXXX X. XXXXXXX
Xxxxxxx X. Xxxxxxx
Date: FEBRUARY 20, 1998
