Exhibit 10.71
AGREEMENT
THIS AGREEMENT is made and entered into as of March __, 2002 (this
Agreement"), by and among Xxxxxx Xxxxxxx, an individual residing at 00 Xxxxxxx
Xxxx, Xxxxx Xxxxxxxxxx, Xxxxxxxxxxxxx 00000 ("Xxxxxxx"), Xxxxxx Xxxxx, an
individual residing at 000 Xxxxxx Xxxxx, Xxxx Xxxxx, Xxx Xxxx 00000 ("Xxxxx"),
and Horizon Medical Products, Inc., a Georgia corporation with its principal
place of business at 0 Xxxxx Xxxxxxx Xxxxxx, 0000 Xxxxxxxxx Xxxxxxx, X.X.,
Xxxxxxx, Xxxxxxx 00000 ("Horizon") (Picheny, Fuchs, and Horizon hereinafter
being collectively referred to as the "Parties");
Whereas, the Parties, along with Xxxxxxxxx Xxxxx, who is not a party to
this Agreement, are all signatories to a certain Stock Purchase Agreement dated
October 15, 1998, as amended on December 14, 1999 and again on December 15, 2000
(the Stock Purchase Agreement together with such amendments hereinafter being
collectively referred to as the "Stock Purchase Agreement");
Whereas, the Parties entered into that certain Settlement Agreement
dated March 29, 2001 ("Settlement Agreement") concerning the Second Anniversary
Payment (as defined in the Stock Purchase Agreement), under which Settlement
Agreement the amount owed to Xxxxxxx and Xxxxx as of March 15, 2002 will be
$928,336.00 in principal and $7,834.00 in interest;
Whereas, the Parties entered into that certain Agreement dated December
15, 2001 ("December Agreement") concerning the Third Anniversary Payment (as
defined in the Stock Purchase Agreement), under which December Agreement the
amount owed to Xxxxxxx and Xxxxx as of March 15, 2002 will be $624,273.00 in
principal and $5,268.00 in interest;
Whereas, the Parties desire to restructure the payment schedules
presently provided for in the Settlement Agreement and in the December Agreement
in the manner provided below and to make certain other agreements concerning the
Parties as provided below;
NOW THEREFORE, it is agreed by and among the Parties, in consideration
of the benefits flowing to the Parties hereto, upon and subject to the following
terms and conditions, as follows:
1. The amount owed by Horizon to Xxxxxxx and Xxxxx as of March 15, 2002
under the Settlement Agreement and under the December Agreement will be
$1,565,711.00, as described in the schedule attached hereto and incorporated
herein by this reference (the "Schedule"). Such amount shall be paid by Horizon,
as follows:
(a) At the closing of the refinancing of Horizon's senior secured
indebtedness which is scheduled to occur on March 15, 2002, (the "Closing"),
payment in the amount of One Hundred Thousand Dollars ($100,000.00) shall be
made to Xxxxxxx and Xxxxx in a separate amount for each as described in the
Schedule; and
(b) The remaining amount owed to Xxxxxxx and Xxxxx after the
Closing shall accrue interest at the simple interest rate of eight percent (8%)
per anum accruing from and after the Closing; and
(c) The remaining amount owed to Xxxxxxx and Xxxxx after the
Closing and accrued interest thereon shall be paid to Xxxxxxx and Xxxxx in equal
monthly installment amounts of principal and interest over forty-eight (48)
consecutive months after the Closing, with the initial monthly installment
payable on April 15, 2002, and each monthly payment thereafter on the same day
of each calendar month. Such monthly payments are described on the Schedule.
2. Horizon will pay Xxxxxxx and Xxxxx monthly payments for their COBRA
benefits under the Xxxxxx Health Plan, or the amount of that premium should
Xxxxxxx and Xxxxx not be eligible for the plan for any reason, from the date
hereof until December 15, 2006. Xxxxxxx and Xxxxx agree to maintain the
confidentiality of this provision and will disclose this provision only on a
need to know basis, except to the extent disclosure may be affirmatively
required by law. Notwithstanding the foregoing, in event of disclosure, Horizon
shall not be relieved of any of its obligations hereunder.
3. Xxxxxxx and Xxxxx agree that the amounts payable pursuant to the
terms of this Agreement shall be subordinated and junior to the senior secured
indebtedness of the Company to LaSalle Business Credit, Inc., or any other
senior secured lender to the Company, on the same terms and on a parri passu
basis as the $15,000,000 senior subordinated convertible notes to be issued by
the Company to ComVest Venture Partners, L.P. ("ComVest"), Medtronic, Inc.
("Medtronic") and additional investors the ("Convertible Notes").
4. If Horizon is acquired by a third party by merger or stock
acquisition or sale of substantially all of its assets, or Horizon sells its
medical device manufacturing operation, then Horizon shall immediately pay the
full remaining amount of principal then owed to Xxxxxxx and Xxxxx hereunder and
all accrued interest thereon. If the Company repays the Convertible Notes, then
Horizon shall pay an amount such that the percentage reduction in the remaining
amount then owed to Xxxxxxx and Xxxxx equals the percentage reduction in the
remaining amount owed under the Convertible Notes, provided that such payment
shall be required only to the extent the amount repaid on the Convertible Notes
is not invested in equity or debt of the Company by ComVest, Medtronic or their
respective affiliates or by any other party originated by ComVest or its
affiliates.
5. This Agreement represents the entire agreement among the Parties
concerning the subject matter hereof and supersedes the December Agreement, the
Settlement Agreement, and any other prior agreements and understandings, written
or oral, among the Parties with respect to the subject matter hereof. Upon
payment of the $100,000.00 at Closing as provided for in paragraph 1(a) above,
plus any interest accrued thereon from March 15, 2002 until the date of actual
closing at the simple interest rate of eight percent (8%) per annum, the
Affidavit of Confession of Judgment (the "Confession of Judgment"), dated April
17, 2001 and delivered in connection with the Settlement Agreement, shall
terminate and shall have no further force or effect, and the original executed
Confession of Judgment shall be returned by Xxxxxxx and Xxxxx to Horizon. This
Agreement may not be modified or amended except in writing signed by all of the
Parties. This Agreement shall be governed by and construed and enforced in
accordance with the internal laws of the State of New York (without applications
of its choice of law rules). Any action or proceeding arising out of or relating
to this Agreement shall be held exclusively in the United States District Court,
Southern District of New York or the Supreme Court of the
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Xxxxx xx Xxx Xxxx, Xxx Xxxx Xxxxxx. The Parties consent to the personal
jurisdiction of the New York courts in any action to enforce the provisions of
this Agreement.
6. The amount payable pursuant to this Agreement is subject to
prepayment at any time, in whole or in part, without notice, penalty or
additional interest. All prepayments shall be applied first to the payment of
accrued interest and then to the payment of the latest maturing installment of
principal.
7. In the event the Company fails to make a scheduled payment of
interest or principal hereunder and the Company fails to make such payment
within ten (10) days of written notice of such failure by Xxxxxxx and Xxxxx,
then Xxxxxxx and Xxxxx may declare the unpaid principal amount payable
hereunder, together with the interest accrued thereon, immediately due and
payable. Upon acceleration of the entire unpaid principal balance of the amount
owed by the Company to Xxxxxxx and Xxxxx hereunder, interest shall continue to
accrue thereafter at a simple rate of ten percent (10%) per annum until the
entire principal amount due hereunder shall have been paid in full.
8. Upon acceleration of the entire unpaid principal balance of the
amount owed by the Company hereunder, Xxxxxxx and Xxxxx shall be entitled to the
reimbursement by the Company of all of their costs of collection of the amount
due pursuant to this Agreement, including reasonable attorneys' fees if
collected by or through an attorney or in bankruptcy or in other judicial
proceedings.
9. (a) The Company, for and on behalf of itself, its employees,
officers, affiliates, directors, agents, shareholders, successors and assigns,
does hereby fully, finally, and forever release and discharge Xxxxxxx and Xxxxx
and all of their affiliates, agents, successors and assigns from any and all
actions, claims, suits, damages, debts, judgments, levies, executions or
liabilities, of any kind or character, whether now known or unknown, asserted or
unasserted, liquidated or unliquidated, fixed or contingent, legal or equitable,
direct or indirect, and which have existed, may have existed, or do exist, from
the beginning of the world until the date of the execution of this Agreement,
except for the obligations set forth in this Agreement.
(b) Xxxxxxx and Xxxxx, for and on behalf of themselves, their
affiliates, agents, successors and assigns, do hereby fully, finally, and
forever release and discharge the Company, its employees, officers, affiliates,
directors, agents, shareholders, successors and assigns from any and all
actions, claims, suits, damages, debts, judgments, levies, executions or
liabilities, of any kind or character, whether now known or unknown, asserted or
unasserted, liquidated or unliquidated, fixed or contingent, legal or equitable,
direct or indirect, and which have existed, may have existed, or do exist, from
the beginning of the world until the date of the execution of this Agreement,
except for the obligations set forth in this Agreement.
10. This Agreement may be executed in one or more actual or telecopied
counterparts, all of which shall be one in the same instrument and all of which
shall be considered duplicate originals. This Agreement shall be binding upon
and inured to the benefit of the Parties and their respect heirs, executors,
administrators, successors, and assigns and upon any corporation or other entity
with which any Party hereto may merge or consolidate.
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11. Should any provision of this Agreement require judicial
interpretation, the Parties agree that a court shall not apply the presumption
that the terms shall be more strictly construed against the Party who prepared
the same, it being agreed that all Parties collectively participated in the
negotiation and preparation of this Agreement.
12. The Company shall provide to Xxxxxxx and Xxxxx an annual
certification from the Company's auditors stating that the Company has complied
with the provisions of paragraph 4 above.
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement effective as
stated above.
HORIZON MEDICAL PRODUCTS, INC.
BY: /s/ Xxxxxxx X. Xxxxxxxx, Xx.
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Xxxxxxx X. Xxxxxxxx, Xx.
President
/s/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx
/s/ Xxxxxx Xxxxx
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Xxxxxx Xxxxx
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