EXHIBIT 4.5
FIRST MODIFICATION TO CONVERTIBLE
SUBORDINATED PROMISSORY NOTE
THIS FIRST MODIFICATION TO CONVERTIBLE SUBORDINATED PROMISSORY NOTE (this
"Modification") dated as of September 30, 1997, between Xxxxxx Healthcare, Inc.,
a Texas corporation (the "Company"), and Maxxim Medical, Inc., a Delaware
corporation (the "Holder"). Hereinafter, capitalized words and phrases used
herein which are defined in the Note (as such term is hereinafter defined) are
used herein as therein defined, unless otherwise indicated.
WITNESSETH
WHEREAS, the Company issued to the Holder a $7,000,000 Convertible
Subordinated Promissory Note dated as of April 30, 1996 (the "Note");
WHEREAS, the Company intends to enter into that certain Asset Purchase
Agreement on September 30, 1997, between the Company and CYBEX International,
Inc., a New York corporation ("CYBEX"), whereby the Company will acquire certain
of the assets of CYBEX;
WHEREAS, in connection with the CYBEX acquisition, the Company has
requested that the Holder execute an amendment (the "Subordination Amendment")
to that certain Subordination Agreement, dated as of April 30, 1996, by and
among the Holder, the Company and Comerica Bank - Texas (the "Subordination
Agreement") increasing the amount of allowable indebtedness under the Senior
Loan Documents (as defined in the Subordination Agreement) from $10,000,000 to
12,000,000;
WHEREAS, the Holder has agreed to execute the Subordination Amendment in
exchange for the reduction of its Conversion Price (as defined in the Note) from
$3.00 to $2.00; and
WHEREAS, the parties hereto desire to modify the applicable provisions of
the Note.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants and agreements hereinafter set forth, the parties hereto hereby agree
as follows:
1. MODIFICATION OF THE NOTE.
1.1 Section 4.1 of the Note is hereby deleted and the following
section is substituted therefor:
"4.1 CONVERSION PRIVILEGE AND CONVERSION PRICE. Subject to and upon
compliance with the provisions of this Article IV, at the option of the
Holder, all or any portion of the amounts owed and outstanding under this
Note may be converted at any time and from time to time into fully paid
and nonassessable shares of Common Stock (the "Shares"), calculated as to
each conversion to the nearest 1/100 of a share at the Conversion Price,
determined as hereinafter provided, in effect at the
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time of conversion. Unless and until the occurrence of an Event of
Default, the Conversion Price shall be $2.00 per share of Common Stock,
subject to adjustment in accordance with Article 5 hereof. Upon the
occurrence of an Event of Default, the Conversion Price shall be
automatically adjusted to an amount equal to the lesser of (i) the
Conversion Price in effect as of the date of the Event of Default and (ii)
80% of the average Market Price for the 30 trading days immediately
preceding the date of the Event of Default, which amount shall be subject
to further adjustment in accordance with Article 5 hereof. All amounts so
converted shall be applied first to pay any accrued and unpaid interest
and second to reduce the principal amount of this Note as of the date of
such conversion as if payment or prepayment in such amount has occurred,
with any reduction in principal to be applied to satisfy the Company's
redemption obligations under Section 2.3.2 hereof in accordance with
Section 2.3.4 hereof. This right of conversion must be exercised by
delivery of a written notice to the Company setting forth the amount to be
converted to be effective upon the Company's receipt of such notice (the
"Conversion Notice"). Notwithstanding the foregoing, in the event the
Company provides notice to the Holder of its intention to redeem all or
any portion of the outstanding principal balance of this Note pursuant to
Section 2.3.1 hereof, the Company must receive the Conversion Notice on or
before the last Business Day prior to the effective date of such
redemption to the extent that the Holder desires to convert all or any
portion of the amount to be redeemed by the Company."
1.2 Section 6.7(b) of the Note is hereby deleted and the following
section is substituted therefor:
"(b) Funded Debt of the Company under the Senior Indebtedness
not exceeding $12,000,000 in aggregate principal amount at any one time
outstanding;"
2. NO FURTHER EFFECT. Except as expressly modified hereby, the Note shall
remain in full force and effect.
3. GOVERNING LAW. This Modification shall be governed by and construed in
accordance with the laws of the State of Texas.
4. COUNTERPARTS; EFFECTIVENESS. This Modification may be signed in any
number of counterparts, each of which shall be an original, and with the effect
as if the signatures thereto and hereto were upon the same instrument. This
Modification shall be effective as of the date hereof when each of the parties
hereto shall have executed counterparts hereof.
5. ORAL AGREEMENTS. This Modification represents the final expression
between the parties with respect to the subject matter hereof, and may not be
contradicted by evidence of prior or contemporaneous oral agreement of the
parties.
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IN WITNESS WHEREOF, the parties hereto have caused this Modification to be
executed as of the date first written above.
XXXXXX HEALTHCARE, INC.
a Texas corporation
By: /s/ XXXXXXX X. XXXXXXX
Xxxxxxx X. Xxxxxxx,
President and Chief Executive Officer
MAXXIM MEDICAL, INC.
a Delaware corporation
By: /s/ XXXXXXX X. XXXXXXXX
Name: XXXXXXX X. XXXXXXXX
Title: CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE
OFFICER
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