EXHIBIT 10.3
AMENDMENT NO. 4 TO NOTE PURCHASE AGREEMENT
This Amendment No. 4 to Note Purchase Agreement (this "Amendment"), dated
as of May 12, 2004, amends that certain Note Purchase Agreement, dated as of
March 1, 2002, by and among Horizon Medical Products, Inc., a Georgia
corporation (the "Company"); ComVest Venture Partners, L.P., a Delaware limited
partnership ("ComVest," and together with its successors and assigns, the
"Purchaser"), and the Additional Note Purchasers (as defined therein), as
amended by Amendment No. 1 to Note Purchase Agreement, dated as of June 10,
2002, Amendment No. 2 to Note Purchase Agreement, dated as of July 29, 2002, and
Amendment No. 1 to Note Purchase Agreement dated as of October 21, 2003 (as
amended, the "Note Purchase Agreement"). Capitalized terms used in this
Amendment but not defined herein have the meanings given to such terms in the
Note Purchase Agreement.
WHEREAS, the Company has requested an extension of the time to repay the
indebtedness and certain other modifications to the Note Purchase Agreement; and
WHEREAS, the Purchaser and Medtronic, Inc. ("Medtronic") have agreed to
such modification subject to the terms and conditions set forth herein; and
WHEREAS, the other Additional Note Purchasers have the right, but not the
obligation, to become parties to this Amendment.
NOW, THEREFORE, in consideration of the premises and mutual covenants of
the parties hereunder, the Company, the Purchaser and the Electing Noteholders
(as defined below) agree as follows:
Section 1. Amendments. The Note Purchase Agreement and, to the extent
applicable, the Notes are hereby modified as follows:
(a) The definition of "Maturity Date" is hereby deleted in its
entirety and replaced with the following:
""Maturity Date" means (i) with respect to the Electing Notes,
July 16, 2008 and (ii) with respect to the Non-Electing Notes, July
16, 2005."
(b) The following definitions are hereby added to Section 1 of the
Note Purchase Agreement:
""Electing Noteholders" means the Purchaser, Medtronic, and
each Additional Note Purchaser who is a party to this Amendment."
""Electing Notes" means the Purchaser Senior Subordinated
Convertible Note, the Medtronic Additional Note, and the Additional
Notes held by the Electing Noteholders."
""Medtronic Co-Marketing Agreement"" means that certain
Co-Promotion Agreement dated as of March 15, 2002, between Medtronic
and the Company, and as amended by that amendment thereto dated as
of April 15, 2003.
""Merger" means the Merger (as defined in the Merger
Agreement) and the other transactions contemplated by the Merger
Agreement."
""Merger Agreement" means the Agreement and Plan of Merger,
dated May 12, 2004, by and among XXXX MEDICAL SYSTEMS, INC., a
Delaware corporation ("Parent"), HORNET ACQUISITION CORP., a
Delaware corporation and a wholly-owned subsidiary of Parent, and
the Company."
""Merger Closing Date" means the Closing Date as defined in
the Merger Agreement."
""Non-Electing Notes" means the Additional Notes held by the
Additional Note Purchasers who do not execute this Amendment as
Electing Noteholders."
(c) Section 2.1(a) is hereby deleted in its entirety and replaced
with the following:
"(a)(i) The Company has duly authorized the issue, sale and delivery
of (A) its Purchaser Senior Subordinated Convertible Note, in the
aggregate principal amount of $4,400,000, to be dated the date of
issue thereof, (B) its Medtronic Additional Note, in the aggregate
principal amount of $4,000,000, to be dated the date of issue
thereof and (C) its Additional Notes, in the aggregate principal
amount of up to $6,600,000, to be dated the date of issue thereof.
(ii) Each of the Electing Notes shall bear interest from such date
on the unpaid principal amount thereof (calculated on the basis of a
360-day year and actual days elapsed) at a rate per annum equal to
(A) 6% per annum from the date thereof to and including the date
that is the six month anniversary of the Closing Date, (B) 8% per
annum from the date that is the six month anniversary of the Closing
Date until the first anniversary of the Merger Closing Date, and (C)
14% from the first anniversary of the Merger Closing Date until such
time as the Electing Notes shall have been paid in full, such
interest to be payable quarterly in arrears on the fifth day of each
month (commencing on the date that is the three month anniversary of
the Closing Date), and at maturity, to bear interest, payable on
demand, on any overdue principal and, to the extent permitted by
applicable law, on any overdue interest, fees and other overdue
amounts payable hereunder until the same shall be paid, at a
variable rate per
annum equal to the sum of 3.00% plus the rate that would at the time
be applicable under the foregoing provisions to principal amounts
not overdue and, in the case of each of the Electing Notes, to
mature on the Maturity Date, and to be substantially in the form of
Exhibit B hereto;
(iii) Each of the Non-Electing Notes shall bear interest from such
date on the unpaid principal amount thereof (calculated on the basis
of a 360-day year and actual days elapsed) at a rate per annum equal
to (A) 6% per annum from the date thereof to and including the date
that is the six month anniversary of the Closing Date and (B) 8% per
annum from the date that is the six month anniversary of the Closing
Date until such time as the Non-Electing Notes shall have been paid
in full, such interest to be payable quarterly in arrears on the
fifth day of each month (commencing on the date that is the three
month anniversary of the Closing Date), and at maturity, to bear
interest, payable on demand, on any overdue principal and, to the
extent permitted by applicable law, on any overdue interest, fees
and other overdue amounts payable hereunder until the same shall be
paid, at a variable rate per annum equal to the sum of 3.00% plus
the rate that would at the time be applicable under the foregoing
provisions to principal amounts not overdue and, in the case of each
of the Non-Electing Notes, to mature on the Maturity Date, and to be
substantially in the form of Exhibit B hereto;"
(d) Section 3.1(a) is hereby deleted in its entirety and replaced
with the following:
"(a) Subject to the provisions of this Section 3.1(a), the Company
at its option may, after giving not less than three (3) days' prior
written notice (the "Company Conversion Notice") to the Purchaser
and each Additional Note Purchaser, prepay the unpaid principal
balance of the Notes, together with all accrued but unpaid interest
on the principal amount being prepaid to the date of such
prepayment, in whole or in part (in an aggregate amount of not less
than $1,000,000 or any greater amount which is an even multiple of
$100,000, or in an amount equal to the aggregate principal balance
of all of the Notes) as set forth below. It is also expressly
understood and agreed by the Company that, notwithstanding anything
to the contrary contained herein or in any other Note Document, each
holder of a Note shall have the right to convert such Note as
provided in this Agreement notwithstanding the giving by the Company
of any 3-day notice of prepayment under this Section 3.1(a) if such
holder of a Note shall give to the Company the Company Conversion
Notice or the Default Conversion Notice, as the case may be."
(e) The following Section 11.5 is hereby added to the Note Purchase
Agreement:
"Section 11.5. Estoppel.
(a) The Requisite Noteholders, on behalf of themselves and the
Additional Note Purchasers, hereby acknowledge and agree that, as of
May 12, 2004: (i) this Agreement and all covenants, rights and
obligations contained herein are in full force and effect; (ii) to
their knowledge, no breach or default on the part of the Company
exists under this Agreement or the Notes; and (iii) to their
knowledge, no event has occurred and no condition exists which, with
the giving of notice or lapse of time or both, could constitute such
a default or would otherwise entitle any party to this Agreement or
the holder of any of the Notes to declare any breach or default
under the Agreement, including without limitation any event or
condition that constitutes or could constitute an Event of Default,
on the part of the Company. The Requisite Noteholders further
acknowledge and agree, on behalf of themselves and the Additional
Note Purchasers, that the statements set forth in this Section 11.5
shall act as a waiver of any claim by any party to this Agreement or
the holder of any of the Notes, to the extent such claim is based
upon facts contrary to those asserted in this Section 11.5.
(b) Notwithstanding any provision in this Agreement to the contrary,
neither Medtronic nor the Requisite Noteholders shall be permitted
to declare an Event of Default under Section 11.1 of this Agreement
in respect of any breach, default or condition that occurs or exists
prior to the expiration of the Pre-Closing Period, unless such
breach, default or condition giving rise to such Event of Default,
either alone or together with any other breach, default or condition
giving rise to any other Event of Default, has, or is reasonably
likely to have, a Material Adverse Effect. For purposes of this
Section 11.5(b), "Pre-Closing Period" means the period beginning on
May 12, 2004 and ending immediately before the Effective Time (as
defined in the Merger Agreement)."
Section 2. Merger Consent. Notwithstanding any provision in the Note
Purchase Agreement to the contrary, including, without limitation, Sections 9.8,
10.3 and 11.1, ComVest and Medtronic, representing the Requisite Noteholders,
hereby consent to the Merger and acknowledge that neither the Merger nor any of
the transactions contemplated in the Merger Agreement will constitute an Event
of Default under the Note Purchase Agreement.
Section 3. Effective Date. This Amendment will become effective as to the
Purchaser, Medtronic and each other Electing Noteholder as of the Effective Time
(as defined in the Merger Agreement); provided, however, that the amendments set
forth in Section 1(e) above shall be effective as of the date hereof.
Section 4. Continuing Effect. Except as expressly amended hereby, the Note
Purchase Agreement, the Notes and the Additional Notes shall continue to be, and
shall remain, in full force and effect in accordance with its terms.
Section 5. Governing Law. This Amendment shall be governed by and
construed and interpreted in accordance with the laws of the State of New York.
Section 6. Counterparts. This Amendment may be executed in two or more
counterparts, each of which shall be deemed an original but all of which shall
together constitute one and the same instrument.
[SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF, the undersigned parties have caused this Amendment
to be duly executed by their respective officers thereunto duly authorized, as
of the date first above written.
COMPANY
HORIZON MEDICAL PRODUCTS, INC.
By: /s/ Xxxxxx X. Xxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxx
Title: Interim CEO
PURCHASER
COMVEST VENTURE PARTNERS, L.P.
By: /s/ Xxxxxx Blue
--------------------------
Name: Xxxxxx Blue
Title: Partner/President
MEDTRONIC
MEDTRONIC, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President and Chief
Development Officer
ELECTING NOTEHOLDERS
[INSERT SIGNATURE BLOCKS FOR ELECTING
NOTEHOLDERS]
