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EXHIBIT 1.5
[MAXXIM MEDICAL LETTERHEAD]
February 20, 1998
Maxxim Medical, Inc.
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Gentlemen:
This letter will serve as our agreement relating to certain issues
concerning the conversion by ▇▇▇▇▇▇ Medical, Inc. a Delaware corporation
("Maxxim"), of a portion of the certain convertible subordinated promissory note
dated April 30, 1996, in the original principal amount of $7,000,000, as amended
by that certain note modification agreement dated September 20, 1997 (the
"Convertible Note"), issued by Henley Healthcare, Inc., a Texas corporation
("Henley"), to Maxxim. For good and valuable consideration, the receipt of
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Pursuant to Section 4.1 of the Convertible Note, Maxxim gives notice of
the conversion of $2,000,000 of the principal amount of the Convertible
note into 1,000,000 shares of the common stock, par value $.01 per
share ("Common Stock"), of Henley, based on the current conversion
price of $2.00 per share under the Convertible Note. The data of such
conversion is effective as of the date of this letter and Henley hereby
tenders to Maxxim a certificate representing the 1,000,000 shares of
Common Stock. Notwithstanding the provisions of Section 4.1 of the
Convertible Note, the parties agree that the entire $2,000,000 of the
convertible Note so converted reduces the principal amount of the
Convertible Note and such sum shall be applied to ▇▇▇▇▇▇'▇ full
redemption obligation due in the year 2003 and partially to ▇▇▇▇▇▇'▇
redemption obligation due in the year 2002 as provided in Section 2.3
of the convertible Note. All accrued and unpaid interest on the
convertible Note through February 28, 1998 in the aggregate amount of
$26,667 is hereby paid in cash by ▇▇▇▇▇▇.
2. As further consideration for the agreement of ▇▇▇▇▇▇ to convert the
amount of Convertible Note set forth above, Henley hereby agrees to
use its commercially reasonable best efforts to file a shelf
registration statement on Form S-3, as amended from time to time, (the
"Registration Statement") with the U.S. Securities & Exchange
Commission ("SEC") to register resales of the Common Stock issued to
Maxxim hereby as soon as reasonably practicable after the date hereof;
provided, that, Maxxim hereby acknowledges and agrees that the
Registration Statement will not be filed until such time as ▇▇▇▇▇▇ has
completed the audit of its consolidated financial statements at and as
of December 31, 1997, and filed its Annual Report on Form 10-K with
the SEC including the results of such audit which matters ▇▇▇▇▇▇
agrees to accomplish as soon as practicable. Henley shall use its
commercially reasonable best efforts to have the Registration
Statement declared effective as soon as possible after such filing,
and to keep such Registration Statement continuously effective until
the second anniversary of the initial date of effectiveness of such
Registration Statement subject to extension as herein provided;
provided, however, that Henley may voluntarily from time to time
suspend the effectiveness of the Registration Statement for a limited
time which in no event shall be longer than 90 days in any instance
and 150 days in the aggregate, if ▇▇▇▇▇▇ has been advised in writing
by its counsel or its underwriters that the offering of shares of
Common Stock pursuant to the Registration Statement would materially
and adversely affect, or
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would be improper in view of (or improper without disclosure in a
prospectus), a proposed financing, public offering, reorganization,
re-capitalization, merger, consolidation or similar transaction involving
Henley, in which case Henley shall be required to keep such Registration
Statement effective for an additional period of time beyond the second
anniversary date equal to the number of days the effectiveness thereof is
suspended pursuant to this provision. Upon the occurrence of any event that
would cause the Registration Statement to contain a material misstatement
or omission or not to be effective and usable during the period that such
Registration Statement is required to be effective and usable, Henley shall
promptly notify Maxxim in writing specifying the reasons that the
Registration Statement may not be used to sell Common Stock including a
copy of the written advice received by ▇▇▇▇▇▇ from its counsel or
underwriters and Henley shall promptly file an amendment to the
Registration Statement and use its commercially reasonable best efforts to
cause such amendment to be declared effective as soon as practicable
thereafter. ▇▇▇▇▇▇ will bear all costs and expenses related to the
Registration Statement other than the expenses incurred by ▇▇▇▇▇▇ for
underwriters commissions and discounts or legal fees incurred by ▇▇▇▇▇▇.
Maxxim shall furnish to Henley such information regarding its holdings and
the proposed manner of distribution of Common Stock as Henley may
reasonably request and as shall be required by the rules and regulations of
the SEC in connection with the Registration Statement. Notwithstanding the
foregoing, ▇▇▇▇▇▇ hereby acknowledges and agrees that ▇▇▇▇▇▇ may include in
the Registration Statement the offering for resale of additional shares of
its common stock issuable upon the conversion of other securities of Henley
to be issued in connection with proposed private placement to be
accomplished by ▇▇▇▇▇▇ in the next 30 days after the date of this letter;
provided, however, that such inclusion will not reduce in any manner the
number of Maxxim shares to be included in the Registration Statement.
3. The Registration Rights Agreement entered by and between Maxxim and ▇▇▇▇▇▇
dated April 30, 1996 ("Registration Rights Agreement"), remains in full
force and effect, except that the shares of Common Stock issued by Henley
to Maxxim, as set forth in paragraph 1 above, shall no longer be
"Registerable Securities" as defined in such Registration Statement as
provided herein. ▇▇▇▇▇▇ acknowledges and agrees that registration of the
Maxxim Common Stock does not constitute a Demand Registration pursuant to
the provisions of the Registration Rights Agreement.
4. ▇▇▇▇▇▇ and ▇▇▇▇▇▇ agree that the indemnification and contribution rights
and obligations of the parties as provided in Section 5 of the Registration
Rights Agreement shall be applicable to the Transactions herein described
and are incorporated herein by this reference as if fully set forth.
5. Each of ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ hereby waive and
release in full their rights of first refusal granted under Section 2 of
that certain Voting Agreement dated April 20, 1996, executed by such
persons and Maxxim insofar as such rights apply to the sale by ▇▇▇▇▇▇ of
the shares of Common Stock to be included in the Registration Statement.
▇▇▇▇▇▇ agrees that any legend on the Maxxim Common Stock certificate shall
be removed by ▇▇▇▇▇▇'▇ Registrar or Transfer agent within 24 hours of
notice to ▇▇▇▇▇▇, that ▇▇▇▇▇▇ has sold any of the Common Stock pursuant to
the Registration Statement.
6. This letter may not be amended without the written approval of the parties
hereto, and shall be construed, interpreted and enforced under the laws of
the State of Texas.
Please acknowledge you acceptance and agreement of the above by
acknowledging this agreement in the space provided below.
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Very truly yours,
HENLEY HEALTHCARE, INC.
BY:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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TITLE: President
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Acknowledged and agreed to by:
MAXXIM MEDICAL, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Title: President
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Date: Feb. 20/98
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/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Date: 2-20-98
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/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Date: 2-20-98
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