Exhibit 10.3
GUARANTEE FEE AND REIMBURSEMENT
AGREEMENT
THIS GUARANTEE FEE AND REIMBURSEMENT
AGREEMENT (this “Agreement”) is entered into as of this
29th day of September, 2006 between HAPC, INC., a Delaware
corporation (“HAPC”), and SEAN MCDEVITT
(“SM”), PAT LAVECCHIA (“PL”) and PHILLIP
HARRIS (“PH”). SM, PL and PH, and their respective
executors, heirs, personal and legal representatives, successors,
and assigns, are sometimes hereinafter collectively referred to
individually as a “Guarantor” and, collectively, as the
“Guarantors”.
WHEREAS, I-Flow Corporation
(“I-Flow”), InfuSystem, Inc.
(“InfuSystem”), HAPC and Iceland Acquisition
Subsidiary, Inc., a Delaware corporation (the “Acquisition
Sub”), have entered into that certain Stock Purchase
Agreement, dated as of the date hereof (the “Stock Purchase
Agreement”), pursuant to which HAPC will purchase all of the
issued and outstanding capital stock of InfuSystem through
Acquisition Sub;
WHEREAS, in order to induce the
I-Flow to execute the Stock Purchase Agreement, the Guarantors have
executed and delivered that certain Guaranty, dated as of the date
hereof, in favor of I-Flow (the “Guaranty”), and have
agreed to provide certain collateral within 15 days, in each case
(the “Collateral”) to secure certain payment
obligations of HAPC pursuant to the Stock Purchase
Agreement.
WHEREAS, as a material inducement
for the Guarantors to execute the Guaranty and provide the
Collateral, HAPC has agreed to pay to each Guarantor a fee and
reimburse and indemnify the Guarantors, all as more fully set forth
in this Agreement.
NOW, THEREFORE, in consideration of
the mutual: promises and covenants contained herein and for other
good and valuable consideration, the sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Guarantee Fee . In
consideration of the execution by each of the Guarantors of the
Guaranty, HAPC shall deliver to the Guarantors an aggregate amount
equal to $400,000 in cash by wire transfer of immediately available
funds (the “Guarantee Fee”), payable $100,000 upon the
execution and delivery of the Guaranty and $300,000 upon the
closing of the transactions contemplated by, or the termination of,
the Stock Purchase Agreement.
2. Reimbursement . In the
event any Guarantor pays any amounts in respect of its obligations
under the Guaranty or any of the Collateral of any Guarantor is
foreclosed (referred to herein as a “Reimbursable
Event”), HAPC shall immediately reimburse such Guarantor for
amount paid or the value of the collateral foreclosed in cash by
wire transfer of immediately available funds.
3. Demand Note . In the event
HAPC does not (i) pay the Guarantee Fee to the Guarantors
pursuant to the Section 1, or (ii) immediately reimburse
the Guarantors upon demand pursuant to the Section 2, in
addition to any other remedies available under this Agreement or
otherwise, each Guarantor shall have the right to request HAPC to
immediately issue a demand note in favor of such Guarantor in the
principal amount equal to such amount which has not be paid or
reimbursed to such Guarantor. Such demand note shall bear interest
at a rate per annum equal to 13%. Such interest shall be calculated
daily on the basis of a year of three hundred and sixty
(360) days and the actual number of days elapsed, without
compounding.
4. (a) Indemnification . HAPC shall
indemnify and hold harmless each of the Guarantors, to the fullest
extent permitted by the law, from and against any and all
liability, claims, losses, damages, costs and expenses, including,
without limitation, counsel fees and disbursements, incurred by a
Guarantor as a direct or indirect result of the transactions
contemplated hereby, as soon as practicable but in any event no
later than ten days after written demand is presented to HAPC by a
Guarantor. Such indemnification shall include any and all awards,
judgments, fines, penalties and amounts paid in settlement
(including all interest, assessments and other charges, including
the claimant’s costs, counsel
