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EXHIBIT 10.2
FORM OF
AMHERST FEE AGREEMENT
This Amherst Fee Agreement (this "FEE AGREEMENT") is entered into as of
__________, 1998 by and among I-FLOW Corporation, a California corporation
("I-FLOW"), I-Flow Subsidiary, Inc., a California corporation and wholly owned
subsidiary of I-FLOW ("I-FLOWSUB"), Venture Medical, Inc., a Michigan
corporation ("VMI"), Infusystems II, Inc., a Michigan corporation,
("INFUSYSTEM"), the undersigned shareholders of VMI (the "VMI SHAREHOLDERS"),
the undersigned shareholders of INFUSYSTEM (the "INFUSYSTEM SHAREHOLDERS"), and
Amherst Capital Partners, L.L.C., a limited liability company formed under the
laws of the State of Michigan ("AMHERST"). Capitalized terms used but not
defined herein shall have their defined meaning set forth in the Merger
Agreement (as hereinafter defined).
RECITALS
WHEREAS, I-FLOW, I-FLOWSUB, VMI, INFUSYSTEM, the VMI Shareholders and
the INFUSYSTEM Shareholders have entered into that certain Agreement and Plan of
Merger dated as of even date herewith (the "MERGER AGREEMENT");
WHEREAS, the Merger Agreement provides for the merger of VMI and
INFUSYSTEM with and into I-FLOWSUB (the "MERGER"); and
WHEREAS, Section 7.1(f) of the Merger Agreement requires that I-FLOW,
I-FLOWSUB, VMI, INFUSYSTEM, the VMI Shareholders, the INFUSYSTEM Shareholders
and AMHERST enter into an agreement providing for the payment by I-FLOWSUB of up
to Two Hundred Thousand Dollars ($200,000) of AMHERST's fees and expenses in
connection with the Merger and payment by the VMI Shareholders and the
INFUSYSTEM Shareholders of any additional amounts due to AMHERST in connection
with the Merger.
NOW, THEREFORE, in consideration of the premises set forth above and
the covenants contained in this Agreement and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged by the
parties, the parties hereby agree as follows.
AGREEMENT
1. PAYMENT.
(a) Amount. I-FLOWSUB shall pay up to Two Hundred Thousand
Dollars ($200,000) to AMHERST for fees and expenses incurred by Amherst in
connection with the Merger (the "MERGER FEE").
(b) Form of Payment. The Merger Fee shall be payable in
unregistered shares of common stock, no par value, of I-FLOW (the "FEE SHARES")
which shares shall be valued based on the average closing price of I-FLOW common
stock for the period beginning fifteen (15) trading days and ending five (5)
trading days immediately preceding the Closing Date (the "CLOSING VALUE").
I-FLOW shall use its commercially reasonable best efforts to cause the Fee
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Shares to be registered under the Securities Act of 1933, as amended, within six
(6) months of the Closing Date.
(c) Payment Date. The Merger Fee shall be paid by I-FLOWSUB to
AMHERST not later than ten (10) calendar days after the Effective Time.
(d) Valuation Floor. In the event that the average closing
price of I-FLOW common stock on the Nasdaq Small Cap Market for the twenty
trading day period immediately preceding the six-month anniversary of the
Closing (the "SIX MONTH VALUE") is less than the Closing Value (subject to
normal and customary adjustment in the event of a stock split or similar event),
I-FLOW will promptly pay to AMHERST as an additional fee the "SHORTFALL". For
purposes hereof, the Shortfall shall be the greater of zero or that dollar
amount calculated pursuant to the following calculation:
Step 1: Subtract the aggregate number of Fee Shares sold by AMHERST from the
number of Fee Shares initially issued pursuant to Section 1(b) hereof (the
"NUMBER OF PRICE-GUARANTEED SHARES").
Step 2: Subtract the Six Month Value from the Closing Value (the "PRICE
DIFFERENTIAL").
Step 3: Multiply the Price Differential by the Number of Price-Guaranteed Shares
(the "SHORTFALL").
At its election, I-FLOW may pay the Shortfall, if any, by the issuance
of additional shares of I-FLOW common stock valued at the Six Month Value, in
cash, or in any combination of I-FLOW common stock and cash.
(e) Additional Payments.
(i) Notwithstanding any resolution, consent or separate
covenant of the Board of Directors of VMI, the Board of Directors of INFUSYSTEM,
the VMI Shareholders and/or the INFUSYSTEM Shareholders to the contrary, the VMI
Shareholders and the INFUSYSTEM Shareholders shall pay to AMHERST any amounts
exceeding the Merger Fee that are due to AMHERST in connection with the Merger
or otherwise including, without limitation, any additional amounts that may be
due to AMHERST pursuant to that certain Letter Agreement dated February 14, 1997
by and among AMHERST, VMI and INFUSYSTEM and any amendments thereto (the "LETTER
AGREEMENT").
(ii) AMHERST acknowledges and agrees that, than the
amounts agreed to be paid by the VMI Shareholders and the INFUSYSTEM
Shareholders pursuant to the Letter Agreement, no additional amounts are due
from VMI, INFUSYSTEM, the VMI Shareholders or the INFUSYSTEM Shareholders and it
shall not seek to recover any additional amounts from the VMI Shareholders or
the INFUSYSTEM Shareholders in connection with the Merger, this Fee Agreement,
the Letter Agreement, or otherwise.
(iii) AMHERST acknowledges and agrees that, than the
Merger Fee and the Shortfall, if any, no additional amounts are due from I-FLOW,
I-FLOWSUB, the
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Surviving Corporation or their respective directors, officers, employees,
agents, financial advisors, counsel and other representatives (the "I-FLOW
AFFILIATES") and it shall not seek to recover any additional amounts from
I-FLOW, I-FLOWSUB, the Surviving Corporation or the I-Flow Affiliates in
connection with the Merger, this Fee Agreement, the Letter Agreement or
otherwise.
2. GENERAL PROVISIONS.
(a) Governing Law. This Fee Agreement shall be governed in all
respects, including validity, interpretation and effect, by the internal laws of
the State of Michigan.
(b) Entire Agreement. This Fee Agreement constitutes the
entire agreement of the parties and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings and negotiations between the
parties with respect to the subject matter of this Fee Agreement.
(c) Modifications and Amendments. This Fee Agreement may not
be modified, changed or supplemented, nor may any obligations hereunder be
waived, except by written instrument signed by the party to be charged.
(d) Successor and Assigns. This Fee Agreement and the
provisions hereof shall be binding upon and inure to the benefit of the
respective parties and the heirs, successors, assigns and personal
representatives of each of them.
(e) Attorneys' Fees. If any action, suit or proceeding is
filed by any party to enforce this Fee Agreement or otherwise with respect to
the subject matter of this Fee Agreement, the prevailing party or parties shall
be entitled to recover its actual attorneys' fees and disbursements incurred in
connection with such action, suit or proceeding.
(f) Counterparts. This Agreement may be executed in
counterparts, each of which shall be an original but all of which shall
constitute one and the same instrument.
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IN WITNESS WHEREOF, I-FLOW, I-FLOWSUB, VMI, INFUSYSTEM, the VMI
Shareholders and the INFUSYSTEM Shareholders have caused this Fee Agreement to
be duly executed and delivered as of the date first written above.
I-FLOW CORPORATION, VENTURE MEDICAL, INC.,
A CALIFORNIA CORPORATION A MICHIGAN CORPORATION
By: __________________________ By:__________________________
Xxxxxx X. Xxxxxxx Xxxxxx X. Xxxxxxx
President and Chief Executive Officer President
By: ___________________________ By:_________________________
Xxxxx X. Dal Porto Xxxxxxx Xxxxxxxxx
Assistant Secretary Secretary
I-FLOW SUBSIDIARY, INC., INFUSYSTEMS II, INC.,
A CALIFORNIA CORPORATION A MICHIGAN CORPORATION
By:____________________________ By:_________________________
Xxxxx X. Dal Porto Xxxxxx X. Xxxxxxx
President and Chief Executive Officer President
By: ___________________________ By: ________________________
Xxxxx X. Xxxxxx Xxxxxxx Xxxxxxxxx
Secretary Secretary
AMHERST CAPITAL PARTNERS, L.L.C.,
A LIMITED LIABILITY COMPANY FORMED UNDER THE LAWS
OF THE STATE OF MICHIGAN
By:____________________
Name:__________________
Title:_________________
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VMI SHAREHOLDERS
By: _________________________ By:________________________
Xxxxxxxxx X. Xxxxxx Xxxxxxx Xxxxxxxxx
By: _________________________ By:________________________
Xxxxxx X. Xxxxxxx Xxxxxxx Xxxx
By: _________________________
Xxxxxxxx Xxxxxxxx
INFUSYSTEM SHAREHOLDERS
By: _________________________ By:________________________
Xxxxxxxxx X. Xxxxxx Xxxxxxx Xxxx
By: _________________________ By:________________________
Xxxxxxx Xxxxxxxxx Xxxxxxxx Xxxxxxxx
By: _________________________ By:________________________
Xxxxxx X. Xxxxxxx Xxxxx Xxxxxx
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