INDIVIDUAL REAFFIRMATION AND RATIFICATION AGREEMENT August 22, 2006
Exhibit
10.6
August
22, 2006
Laurus
Master Fund, Ltd.
c/o
Laurus Capital Management LLC
000
Xxxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Ladies
and Gentlemen:
Reference
is made to (a) the Limited Guaranty, dated as of January 30, 2006 (as amended,
restated, modified or supplemented from time to time, the “Nazem Guaranty”),
entered into by Xxxx X. Xxxxx in favor of Laurus Master Fund, Ltd. (“Laurus”),
(b) the Limited Guaranty, dated as of January 30, 2006 (as amended, restated,
modified or supplemented from time to time, the “Flood Guaranty”), entered into
by Xxxx X. Xxxxx III in favor of Laurus, (c) the Limited Guaranty, dated
as of
January 30, 2006 (as amended, restated, modified or supplemented from time
to
time, the “Diamond Guaranty”), entered into by Xxxx Xxxxxxx in favor of Laurus,
(d) the Limited Guaranty, dated as of January 30, 2006 (as amended, restated,
modified or supplemented from time to time, the “X. Xxxxx Guaranty”), entered
into by Xxxxxxxxxxx Xxxxx in favor of Laurus and (e) the Limited Guaranty,
dated
as of January 30, 2006 (as amended, restated, modified or supplemented from
time
to time, the “X. Xxxxx Guaranty”), entered into by Xxxx Xxxxx in favor of Laurus
(the Nazem Guaranty, the Flood Guaranty, the Diamond Guaranty, the X. Xxxxx
Guaranty and the X. Xxxxx Guaranty, each an “Existing Guaranty” and
collectively, the “Existing Guaranties”).
In
consideration for the loan made by Laurus to Flagship Patient Advocates,
Inc.
(f/k/a Flagship Healthcare Management, Inc.), a Delaware corporation
(“Flagship”), pursuant to an Amended and Restated Securities Purchase Agreement,
dated as of the date hereof (as amended, restated, modified or supplemented
from
time to time, the “Purchase Agreement”) among Patients & Physicians, Inc.
(f/k/a Finity Holdings, Inc.), a Delaware corporation (“Patients”), Flagship and
Laurus, under which loans the undersigned has derived or expects to derive
a
financial advantage, each of the undersigned hereby:
(a) represents
and warrants to Laurus that he has reviewed and approved the terms and
provisions of the Purchase Agreement and the Related Agreements (as defined
in
the Purchase Agreement; such Related Agreements collectively with the Purchase
Agreement, the “August 2006 Agreements”);
(b) acknowledges,
ratifies and confirms that all of the terms, conditions, representations
and
covenants contained in the Existing Guaranty to which he is a party are in
full
force and effect and shall remain in full force and effect after giving effect
to the execution and effectiveness of the August 2006 Agreements;
(c) acknowledges,
ratifies and confirms that (i) the defined term “Obligations” under the Existing
Guaranty to which he is a party includes, without limitation, all obligations
and liabilities of each of Flagship and Patients under the August 2006
Agreements (including interest accruing after the filing of any petition
in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, whether or not a claim for post-filing or post-petition interest
is
allowed or allowable in such proceeding), whether now existing or hereafter
arising, direct or indirect, liquidated or unliquidated, absolute or contingent
(collectively, the “Obligations”), (ii) all of the Obligations are secured by
his Security Interest Grant (as defined below) and (iii) all of the Obligations
benefit directly from the Existing Guaranty to which he is a party;
(d) acknowledges
and confirms that (i) the occurrence of an Event of Default under any of
the
August 2006 Agreements shall constitute an event of default under the Existing
Guaranty to which he is a party and (ii) the occurrence of an event of default
under the Existing Guaranty to which he is a party shall constitute an Event
of
Default under the August 2006 Agreements;
(e) represents
and warrants that no offsets, counterclaims or defenses exist as of the date
hereof with respect to any of the undersigned’s obligations under the Existing
Guaranty to which he is a party;
(f) acknowledges,
ratifies and confirms (i) his grant to Laurus of a security interest and
lien in
the assets more specifically set forth in the Existing Guaranty to which
he is a
party (the “Security Interest Grant”) and (ii) that his Security Interest Grant
(A) shall not be impaired, limited or affected in any manner whatsoever by
the
effectiveness of the August 2006 Agreements and (B) secures all Obligations;
and
(g) releases,
remises, acquits and forever discharges Laurus and Laurus’ employees, agents,
representatives, consultants, attorneys, fiduciaries, officers, directors,
partners, predecessors, successors and assigns, subsidiary corporations,
parent
corporations, and related corporate divisions (all of the foregoing hereinafter
called the “Released Parties”), from any and all actions and causes of action,
judgments, executions, suits, debts, claims, demands, liabilities, obligations,
damages and expenses of any and every character, known or unknown, direct
and/or
indirect, at law or in equity, of whatsoever kind or nature, for or because
of
any matter or things done, omitted or suffered to be done by any of the Released
Parties prior to and including the date of execution hereof, and in any way
directly or indirectly arising out of or in any way connected to this
Reaffirmation and Ratification Agreement, the Existing Guaranty to which
he is a
party, the August 2006 Agreements and any other document, instrument or
agreement made by him in favor of Laurus.
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2
This
agreement shall be governed by and construed in accordance with the laws
of the
State of New York.
Very
truly yours,
/S/ Xxxx X.
Xxxxx
XXXX
X.
XXXXX
Address:
00 X. 00xx
Xxxxxx
Xxx
Xxxx,
XX 00000
Telephone
No.: 000-000-0000
Facsimile
No.: 212-340-9101
/S/ Xxxx X. Xxxxx
III
XXXX
X.
XXXXX III
Address:431
Xxxxxxxx Xxx.
Xxxxxxxxx,
XX 00000
Telephone
No.: 000-000-0000
Facsimile
No.: 000-000-0000
/S/ Xxxx
Xxxxxxx
XXXX
XXXXXXX
Address:
c/o
Brennan, Xxxxx & Diamond
00
Xxxx
Xxxxxx
Xxxxx,
XX
00000
Telephone
No.: 000-000-0000
Facsimile
No.: 000-000-0000
/S/ Xxxxxxxxxxx Xxxxx
XXXXXXXXXXX
XXXXX
Address:
0000 Xxxx Xxxxxx
Xxxxxxxx,
XX 00000
Telephone
No.: 000-000-0000
Facsimile
No.: 000-000-0000
/S/ Xxxx
Xxxxx
XXXX
XXXXX
Address:
0000 Xxxx Xxxxxx
Xxxxxxxx,
XX 00000
Telephone
No.: 000-000-0000
Facsimile
No.: 000-000-0000
ACCEPTED
AND AGREED TO:
LAURUS
MASTER FUND, LTD.
By: /S/
Xxxxx
Grin
Name:
Xxxxx Grin
Title:
Director