-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MJc8poJmcV1b7l8kzhsFP84CborELf4EXFcrCtM028wM+rlbs8Aosup+O5f8P7es MUGv+lF+6bdcg8vtJov2Sg== 0000950144-98-005839.txt : 19980513 0000950144-98-005839.hdr.sgml : 19980513 ACCESSION NUMBER: 0000950144-98-005839 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19980512 SROS: NONE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: HENLEY HEALTHCARE INC CENTRAL INDEX KEY: 0000890284 STANDARD INDUSTRIAL CLASSIFICATION: SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841] IRS NUMBER: 760335587 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-54003 FILM NUMBER: 98616106 BUSINESS ADDRESS: STREET 1: 120 INDUSTRIAL BLVD CITY: SUGAR LAND STATE: TX ZIP: 77478-3128 BUSINESS PHONE: 7132767000 MAIL ADDRESS: STREET 1: 120 INDUSTRIAL BLVD CITY: SUGAR LAND STATE: TX ZIP: 77478 FORMER COMPANY: FORMER CONFORMED NAME: LASERMEDICS INC DATE OF NAME CHANGE: 19940406 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: MAXXIM MEDICAL INC CENTRAL INDEX KEY: 0000858660 STANDARD INDUSTRIAL CLASSIFICATION: ORTHOPEDIC, PROSTHETIC & SURGICAL APPLIANCES & SUPPLIES [3842] IRS NUMBER: 760291634 STATE OF INCORPORATION: TX FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 10300 49TH ST N CITY: CLEARWATER STATE: FL ZIP: 33762 BUSINESS PHONE: 7132405588 MAIL ADDRESS: STREET 1: 10300 49TH STREET NORTH CITY: CLEARWATER STATE: FL ZIP: 33762 SC 13D 1 MAXXIM MEDICAL FORM SC 13D 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 Henley Healthcare, Inc. ----------------------- (Name of Issuer) Common Stock, Par Value $.01 ---------------------------- (Title of Class of Securities) 42550V 10 7 ----------- (CUSIP Number) Kenneth W. Davidson, President Maxxim Medical, Inc. 10300 49th Street North Clearwater, Florida 33762 (813) 561-2100 -------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) September 30, 1997 ------------------ (Date of Event Which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ]. The information required in the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act, but shall be subject to all other provisions of the Act (however, see the Notes.) 2 1 NAMES OF REPORTING PERSONS/I.R.S. IDENTIFICATION NOS. Maxxim Medical, Inc. 76-0291634 - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS Not applicable. See Introduction to the Statement and Item 3 of the Statement below. - -------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION State of Texas - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES 3,000,000 ----------------------------------------------------- BENEFICIALLY 8 SHARED VOTING POWER 0 OWNED BY EACH ----------------------------------------------------- 9 SOLE DISPOSITIVE POWER REPORTING 3,000,000 ----------------------------------------------------- PERSON WITH 10 SHARED DISPOSITIVE POWER 0 ----------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,000,000 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (10) EXCLUDES CERTAIN SHARES [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11 43.6% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON CO - -------------------------------------------------------------------------------- 2 3 INTRODUCTION This statement on Schedule 13D is filed on behalf of Maxxim Medical, Inc., a Texas corporation ("Maxxim"). On April 30, 1996, Maxxim and Henley Healthcare, Inc. ("Henley")(then known as Lasermedics, Inc.) entered into an agreement whereby Henley purchased certain assets (and assumed certain liabilities) associated with the Henley Healthcare Division of Maxxim, for a purchase price of approximately $13.5 million. The purchase price was paid by the issuance by Henley to Maxxim of a convertible subordinated promissory note in the principal amount of $7 million (the "Note"), with the balance of the purchase price paid in cash. From the date of the issuance of the Note (April 30, 1996) until September 30, 1997, when the Note was first modified, Maxxim had the right to convert the outstanding principal due under the Note into shares of Henley common stock, par value $.01 per share ("Common Stock" or "Shares") at any time at a conversion price of $3.00 per share, giving Maxxim the beneficial ownership of 2,333,333 Shares with respect to the principal balance due under the Note. Maxxim is also entitled to convert any accrued and unpaid interest due under the Note into Common Stock. Interest on the Note currently accrues at a rate of 6% per annum and increases 2% per annum on May 1 of each calendar year. Accrued interest is due and payable on May 1 and November 1 of each calendar year until May 1, 2003. At the time of the April 1996 transaction between Henley and Maxxim, the Common Stock was not registered under Section 12 of the Securities Exchange Act of 1934. Subsequently, on June 26, 1996, Henley filed a registration statement for the Common Stock with the Securities and Exchange Commission, which registration statement was declared effective on August 12, 1996. In September 1997, Henley requested that Maxxim agree to an increase in the amount of other debt to which the Note would be subordinate. Maxxim agreed to such increase in exchange for a reduction in the conversion price from $3.00 to $2.00. On September 30, 1997, the terms of the Note were so modified, giving Maxxim the beneficial ownership of 3,500,000 Shares with respect to the $7 million principal balance due under the Note. In connection with the original transaction between Maxxim and Henley, Maxxim entered into a Voting and Shareholders Agreement (the "Agreement") with Henley, Mr. Michael M. Barbour (President and a director of Henley) and Dr. Chadwick F. Smith, M.D. (the Chairman of the Board of Henley), pursuant to which, among other things, (i) Henley created a vacancy in its Board of Directors and elected a nominee of Maxxim, Mr. Kenneth W. Davidson, to fill the vacancy, and (ii) Mr. Barbour and Dr. Smith agreed to vote their Shares in favor of Maxxim's nominee during the term of the Agreement. In addition, under the Agreement each of Maxxim, Barbour and Smith granted to Henley the right to purchase all, but not less than all, Shares which each of them might desire to sell in the future, on the same terms as they proposed to sell such Shares to a third party. They also each granted to one another the right to purchase all, but not less than all, of such Shares if Henley does not purchase such Shares. The Agreement will terminate upon the merger or consolidation of Henley with another corporation (provided that Henley is not the survivor in the merger and the merger is not with a company owned or controlled by any of the parties); a public offering of Common Stock by Henley; or if both the principal amount due under the Note is reduced to less than $1.5 million and Maxxim's ownership of the Common Stock is reduced to less than 10% of the outstanding Shares. On February 20, 1998, Maxxim converted $2,000,000 due under the Note into 1,000,000 Shares. In connection with such conversion, Henley agreed to register 3 4 the 1,000,000 Shares for resale by Maxxim under the federal and state securities laws as soon as reasonably practicable and Messrs. Barbour and Smith and Henley agreed to waive their rights to purchase the Shares to be sold by Maxxim under the registration statement. On March 13, 1998, Maxxim converted another $2,000,000 due under the Note into 1,000,000 additional Shares. In connection with such conversion, Henley agreed to register the additional 1,000,000 Shares for resale by Maxxim under the federal and state securities laws as soon as reasonably practicable and Messrs. Barbour and Smith and Henley agreed to waive their rights to purchase the Shares to be sold by Maxxim under the registration statement. On April 15, 1998, Maxxim sold 500,000 Shares in a private sale. Item 1. Security and Issuer: This statement relates to shares of Common Stock, par value $.01 per share, of Henley Healthcare, Inc., a Texas corporation, the principal executive offices of which are located at 120 Industrial Blvd., Sugar Land, Texas 77478-3128. Item 2. Identity and Background. The person filing this statement is Maxxim Medical, Inc., a Texas corporation. The principal business of Maxxim is the manufacture and development of a diversified range of specialty medical products. The principal office and principal business of Maxxim are located at 10300 49th Street North, Clearwater, Florida 33762. The attached Schedule I sets forth a list of the executive officers and directors of Maxxim as well as their business addresses, present principal occupations or employment and the name, principal business and address of any corporation or other organization in which such employment is conducted, and citizenship. Maxxim has no controlling person or corporation. During the last five years, neither Maxxim nor, to the best of Maxxim's knowledge, any person named on Schedule I, has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) nor been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction in which as a result of such proceeding Maxxim or any such person was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. Item 3. Source and Amount of Funds or Other Consideration. On April 30, 1996, Maxxim and Henley (then known as Lasermedics, Inc.) entered into an agreement whereby Henley purchased certain assets (and assumed certain liabilities) associated with the Henley Healthcare Division of Maxxim, for a purchase price of approximately $13.5 million. The purchase price was paid by the issuance by Henley to Maxxim of a convertible subordinated promissory note in the principal amount of $7 million (the "Note"), with the balance of the purchase price paid in cash. The outstanding principal and interest due under the Note may be converted by Maxxim at any time, and from time to time, into Common Stock without the payment of any additional consideration. 4 5 Item 4. Purpose of Transaction The original purpose of Maxxim's acquisition of the Note was to assist Henley in financing the purchase of the Henley Healthcare Division from Maxxim. Maxxim negotiated the Voting and Shareholders Agreement with Messrs. Barbour and Smith in order to assure Maxxim representation on the Board of Directors of Henley so that it could influence the management of Henley. Maxxim negotiated the convertibility of the Note into Common Stock in order to have the opportunity to share in any increase in the value of Henley Common Stock during the period in which the Note was outstanding. Maxxim converted $2 million of the outstanding amount due under the Note into 1 million Shares in February 1998, and an another $2 million due under the Note into an additional 1 million Shares in March 1998, at the request of Henley. Henley was out of compliance with the listing standards of the Nasdaq Stock Market at such time, due to an increase in such standards in February 1998, and the conversion of such amounts of debt into equity brought Henley into compliance with the new standards. Maxxim sold 500,000 Shares on April 15, 1998, in a private sale. Maxxim intends to further reduce its percentage of Share ownership as opportunities arise, consistent with maintaining the value of its investment in its remaining Shares and the Note. In connection with the conversion of the $4,000,000 due under the Note into 2,000,000 Shares, Henley agreed to register the 2,000,000 Shares for resale by Maxxim under the federal and state securities laws as soon as reasonably practicable. Item 5. Interest in Securities of the Issuer. (a) According to Henley's most recently available filing with the Commission, there were 5,383,205 Shares of Common Stock outstanding on March 25, 1998. At May 1, 1998, Maxxim owned of record 1,500,000 Shares, or approximately 27.9% of the total number of outstanding Shares. Maxxim beneficially owns an additional 1,500,000 Shares, issuable upon the conversion of the outstanding principal amount due under the Note ($3,000,000). Therefore, Maxxim beneficially owns a total of 3,000,000 Shares, or approximately 43.6% of the 6,883,205 Shares which would be outstanding upon the issuance of the additional 1,500,000 Shares upon the conversion of the remaining principal amount due under the Note. Maxxim is also entitled to convert any accrued and unpaid interest due under the Note into Common Stock. Interest on the Note currently accrues at a rate of 6% per annum and increases 2% per annum on May 1 of each calendar year. Accrued interest is due and payable on May 1 and November 1 of each calendar year until May 1, 2003. The interest payment due May 1, 1998 has been paid. To the best of Maxxim's knowledge, of the persons listed on Schedule I, only Messrs. Davidson and Henley beneficially own any Shares of Henley. Mr. Davidson beneficially owns an additional 20,000 Shares, representing Shares he has the current right to acquire under currently exercisable stock options. Mr. Henley beneficially owns an additional 45,000 Shares, representing Shares he has the current right to acquire under currently exercisable warrants. (b) Maxxim has the sole right to vote and dispose of all of the Shares beneficially owned by it. To the best of Maxxim's knowledge, each of Messrs. Davidson and Henley has the sole right to vote and dispose of the Shares beneficially owned by him. 5 6 (c) In September 1997, Henley requested that Maxxim agree to an increase in the amount of other debt to which the Note would be subordinate. Maxxim agreed to such increase in exchange for a reduction in the conversion price from $3.00 to $2.00. On September 30, 1997, the terms of the Note were so modified, giving Maxxim the beneficial ownership of 3,500,000 Shares with respect to the $7 million principal balance due under the Note. On February 20, 1998, Maxxim converted $2,000,000 due under the Note into 1,000,000 Shares. On March 13, 1998, Maxxim converted another $2,000,000 due under the Note into an additional 1,000,000 Shares. On April 15, 1998, Maxxim sold 500,000 Shares for $3.09 per share in a private sale. To the best of Maxxim's knowledge, except as described above, there have been no other transactions in the Common Stock effected during the period from July 30, 1997, to May 1, 1998, by Maxxim or any of the persons listed in Schedule I. Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer. In connection with the original transaction between Maxxim and Henley, Maxxim entered into a Voting and Shareholders Agreement (the "Agreement") with Henley, Mr. Michael M. Barbour (President and a director of Henley) and Dr. Chadwick F. Smith, M.D. (the Chairman of the Board of Henley), pursuant to which, among other things, (i) Henley created a vacancy in its Board of Directors and elected a nominee of Maxxim, Mr. Kenneth W. Davidson, to fill the vacancy, and (ii) Mr. Barbour and Dr. Smith agreed to vote their Shares in favor of Maxxim's nominee during the term of the Agreement. In addition, under the Agreement each of Maxxim, Barbour and Smith granted to Henley the right to purchase all, but not less than all, Shares which each of them might desire to sell in the future, on the same terms as they proposed to sell such Shares to a third party. They also each granted to one another the right to purchase all, but not less than all, of such Shares if Henley does not purchase such Shares. The Agreement will terminate upon the merger or consolidation of Henley with another corporation (provided that Henley is not the survivor in the merger and the merger is not with a company owned or controlled by any of the parties); a public offering of Common Stock by Henley; or if both the principal amount due under the Note is reduced to less than $1.5 million and Maxxim's ownership of the Common Stock is reduced to less than 10% of the outstanding Shares. According to Henley's most recently available filing with the Commission, Messrs. Smith and Barbour beneficially owned 430,666 and 421,748 Shares, respectively, at March 16, 1998. Of such Shares, 235,000 and 228,333 Shares were issuable to Messrs. Smith and Barbour, respectively, upon the exercise of presently outstanding options. The Shares beneficially owned by Messrs. Smith and Barbour represent approximately 7.67% and 7.52% of the Shares which would be outstanding upon the issuance of all such Shares. Maxxim disclaims beneficial ownership of the Shares beneficially owned by Messrs. Smith and Barbour. In February and March, 1998, Maxxim converted $4,000,000 due under the Note into 2,000,000 Shares. In connection with such conversion, Henley agreed to register the 2,000,000 Shares for resale by Maxxim under the federal and state securities laws as soon as reasonably practicable and Messrs. Barbour and Smith and Henley agreed to waive their rights to purchase the Shares to be sold by Maxxim under the registration statement. 6 7 Item. 7. Material to be Filed as Exhibits. 1.1 Convertible Subordinated Promissory Note of Henley, dated April 30, 1996, in the original principal amount of $7,000,000 payable to Maxxim. (Previously filed with the Commission as Exhibit 1.2 to the Form 8-K of Henley, dated April 30, 1996, and incorporated herein by this reference.) 1.2 First Modification to Convertible Subordinated Promissory Note of Henley, dated September 30, 1997. 1.3 Registration Rights Agreement dated April 30, 1996 by and between Henley and Maxxim. (Previously filed with the Commission as Exhibit 1.3 to the Form 8-K of Henley, dated April 30, 1996, and incorporated herein by this reference.) 1.4 Voting and Shareholders Agreement dated April 30, 1996 by and among Henley, Michael M. Barbour, Chadwick F. Smith, MD, and Maxxim. (Previously filed with the Commission as Exhibit 1.4 to the Form 8-K of Henley, dated April 30, 1996, and incorporated herein by this reference.) 1.5 Letter Agreement, dated February 20, 1998, relating to the conversion by Maxxim of $2 million due under the Henley Note into 1 million Shares of Common Stock. 1.6 Letter Agreement, dated March 13, 1998, relating to the conversion by Maxxim of $2 million due under the Henley Note into 1 million Shares of Common Stock. 7 8 Schedule I Each of the individuals below, except for Messrs. Davidson, Graham, Lamont, Wafelman and Beek, is a citizen of the United States of America. Messrs. Davidson, Graham and Lamont are citizens of Canada. Messrs. Wafelman and Beek are citizens of The Netherlands. For each person whose employment is with Maxxim, the principal business of their employer and their business address is described under Item 2 above.
PRINCIPAL OCCUPATION OR EMPLOYMENT; PRINCIPAL NAME BUSINESS OF EMPLOYER; BUSINESS ADDRESS. - ---- --------------------------------------- Kenneth W. Davidson............... Chairman of the Board, President and Chief Executive Officer Maxxim Medical, Inc. Peter M. Graham................... Executive Vice President, Chief Operating Officer and Secretary Maxxim Medical, Inc. David L. Lamont................... Vice President and Group Vice President Maxxim Medical, Inc. Henry T. DeHart................... Vice President, Executive Vice President Operations, Case Management Maxxim Medical, Inc. Jack F. Cahill.................... Vice President, Executive Vice President Sales and Marketing, Case Management Maxxim Medical, Inc. Alan S. Blazei.................... Vice President, Controller and Treasurer Maxxim Medical, Inc. Joseph D. Dailey.................. Vice President, Information Services Maxxim Medical, Inc. Suzanne R. Garon.................. Vice President, Human Resources Maxxim Medical, Inc. Rob W. Beek....................... Vice President, Managing Director, Maxxim Medical Europe Maxxim Medical, Inc. Donald R. DePriest................ President of MedCom Development Corporation, the General Partner of MCT Investors, L.P., a limited partnership engaged in the business of venture capital investing. MCT Investors, L.P. 625 Slaters Lane, G100 Alexandria, VA 22314 Peter G. Dorflinger............... President and Chief Operating Officer of Physicians Resource Group, Inc., a physicians practice management company. Physicians Resource Group, Inc. 3 Lincoln Center, Suite 1540 5430 LBJ Freeway Dallas, TX 75240
8 9 Martin Grabois, M.D............... Professor and Chairman of the Department of Physical Medicine and Rehabilitation at Baylor College of Medicine in Houston, Texas. Baylor College of Medicine Dept. of PM&R 1333 Moursund Ave. Clinic Bldg. A221 Houston, TX 77030 Ernest J. Henley, Ph.D............ Professor of Chemical Engineering at the University of Houston 49 Brior Hollow Lane #1902 Houston, TX 77027 Richard O. Martin, Ph.D........... Chairman and Chief Executive Officer, of Physio-Control International Corp., a manufacturer of cardiac defibrillators and monitoring equipment. Physio-Control International Corp. 11811 Willows Road N.E. Redmond, WA 98073-9706 Henk R. Wafelman, Ing............. Executive Chairman of the Dutch Society of Enterprises in Medical Technology, a Netherlands based technology society. Taksteeg 3 1012 PB Amsterdam, The Netherlands
9 10 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: May 8, 1998 Alan S. Blazei - ------------------------------------- (Signature) Vice President, Controller, Treasurer - ------------------------------------- (Name and Title) 10 EX-99.1.2 2 FIRST MODIFICATION TO CONVERTIBLE PROMISSORY NOTE 1 EXHIBIT 1.2 FIRST MODIFICATION TO CONVERTIBLE SUBORDINATED PROMISSORY NOTE THIS FIRST MODIFICATION TO CONVERTIBLE SUBORDINATED PROMISSORY NOTE (this "Modification") dated as of September 30, 1997, between Henley 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 Amendment, 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 time of conversion. Unless and until the occurrence of an Event of Default, the Conversion 2 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. 3 IN WITNESS WHEREOF, the parties hereto have caused this Modification to be executed as of the first written above. HENLEY HEALTHCARE, INC. a Texas corporation By: /s/ Michael M. Barbour ------------------------------------- Michael M. Barbour, President and Chief Executive Officer MAXXIM MEDICAL, INC. a Delaware corporation By: /s/ Ken Davidson ------------------------------------- Name: Ken Davidson ----------------------------------- Title: President ---------------------------------- EX-99.1.5 3 AGREEMENT 1 EXHIBIT 1.5 [MAXXIM MEDICAL LETTERHEAD] February 20, 1998 Maxxim Medical, Inc. 103000 49th Street North Clearwater, FL 34622 Gentlemen: This letter will serve as our agreement relating to certain issues concerning the conversion by Maxxim 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 Henley's full redemption obligation due in the year 2003 and partially to Henley's 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 Henley. 2. As further consideration for the agreement of Maxxim 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 Henley 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 Henley 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 Henley 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 2 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 Henley 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. Henley will bear all costs and expenses related to the Registration Statement other than the expenses incurred by Maxxim for underwriters commissions and discounts or legal fees incurred by Maxxim. 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, Maxxim hereby acknowledges and agrees that Henley 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 Henley 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 Henley 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. Henley 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. Henley and Maxxim 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 Henley, Chadwick F. Smith and Michael M. Barbour 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 Maxxim of the shares of Common Stock to be included in the Registration Statement. Henley agrees that any legend on the Maxxim Common Stock certificate shall be removed by Henley's Registrar or Transfer agent within 24 hours of notice to Henley, that Maxxim 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. 3 Very truly yours, HENLEY HEALTHCARE, INC. BY:/s/ Michael M. Barbour ----------------------- TITLE: President -------------------- Acknowledged and agreed to by: MAXXIM MEDICAL, INC. By: /s/ Kenneth W. Davidson ------------------------------- Title: President ---------------------------- Date: Feb. 20/98 ----------------------------- /s/ Chadwick F. Smith ---------------------------------- Chadwick F. Smith Date: 2-20-98 ----------------------------- /s/ Michael M. Barbour ---------------------------------- Michael M. Barbour Date: 2-20-98 ----------------------------- EX-99.1.6 4 AGREEMENT 1 EXHIBIT 1.6 [MAXXIM MEDICAL LETTERHEAD] March 13, 1998 Maxxim Medical, Inc. 10300 49th Street North Clearwater, FL 34622 Gentlemen: This letter will serve as our agreement relating to certain issues concerning the conversion by Maxxim 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 date 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 Henley's full redemption obligation due in the year 2003 and 2002 and partially to Henley's redemption obligation due in the year 2001 as provided in Section 2.3 of the convertible Note. All accrued and unpaid interest on the convertible Note through March 31, 1998 in the aggregate amount of $66,667 is hereby paid in cash by Henley. 2. As further consideration for the agreement of Maxxim 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 Henley 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 Henley 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 Henley has been 2 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 would be improper in view of (or improper without disclosure in a prospectus), a proposed financing, public offering, reorganization, recapitalization, 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 Henley 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. Henley will bear all costs and expenses related to the Registration Statement other than the expenses incurred by Maxxim for underwriters' commissions and discounts or legal fees incurred by Maxxim. 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, Maxxim hereby acknowledges and agrees that Henley 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 Henley 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 Henley 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. Henley 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. Henley and Maxxim 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 Henley, Chadwick F. Smith and Michael M. Barbour 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 Maxxim of the shares of Common Stock to be included in the Registration Statement. Henley agrees that any legend on the Maxxim Common Stock certificate shall be removed by Henley's Registrar or Transfer agent within 24 hours of notice to Henley, that Maxxim 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 your acceptance and agreement of the above by acknowledging this agreement in the space provided below. 2 3 Very truly yours HENLEY HEALTHCARE, INC. By: /s/ Michael M. Barbour ------------------------------- Title: President & CEO ---------------------------- Acknowledged and agreed to by MAXXIM MEDICAL, INC. By: /s/ Alan Blazei -------------------------------- Title: V.P. & Controller ----------------------------- Date: 3/13/98 ------------------------------ /s/ Chadwick F. Smith - ----------------------------------- Chadwick F. Smith Date: 3/13/98 ------------------------------ /s/ Michael M. Barbour - ----------------------------------- Michael M. Barbour Date: 3/13/98 ------------------------------ -----END PRIVACY-ENHANCED MESSAGE-----