Document:

Exhibit 10.17

RHI Entertainment Holdings, LLC

RHI Entertainment, LLC

320 Park Avenue

New York, New York 10022

January 12, 2006

Kelso & Company, L.P. 

320 Park Avenue, 24th Floor 

New York, New York 10022

Ladies and Gentlemen:

RHI Entertainment Holdings, LLC (“RHI Holdings”) and RHI Entertainment, LLC (“RHI,” and together with RHI Holdings, the “Companies”) hereby agree to retain you, Kelso & Company, L.P. (“Kelso”), and any of your affiliates or designees (collectively, with Kelso, the “Kelso Group”), to provide consulting and advisory services to the Companies commencing on the date hereof for a term ending on the date on which Kelso and its affiliates cease
to own, directly or indirectly, any preferred units or other equity interests of RHI Holdings or RHI or other equity interest of any successor entity of RHI Holdings or RHI, respectively. Such services may include (i) assisting in the raising of additional debt and equity capital from time to time for RHI Holdings or RHI or any of their subsidiaries, if deemed advisable by the Board of Managers of RHI Holdings or RHI, as applicable, (ii) assisting RHI Holdings or RHI in their long-term strategic planning generally, and (iii) providing such other consulting and advisory services as RHI Holdings or RHI, as applicable, may reasonably request.

In consideration of the Kelso Group’s providing the foregoing services, RHI Holdings or RHI will pay to Kelso (i) a fee of $6,000,000 in cash, which amount shall be paid on the Closing Date (as defined in the Purchase and Sale Agreement, dated as of November 29, 2005, by and among HEI Acquisition, LLC, Hallmark Entertainment, LLC and Hallmark Cards, Incorporated (the “Purchase Agreement”)), (ii) an annual advisory fee (the “Annual Advisory Fee”) of $600,000 payable quarterly in advance on January 1, April 1, July 1 and October 1 (or the first business day following each such date), provided that the first payment shall be due on the Closing Date (as defined in the Purchase Agreement) and shall be
in an amount pro-rated for the period from the Closing Date to the end of the then current fiscal quarter and (iii) such other fees (which may include advisory fees or transaction-based fees) as the Board of Managers (including the affirmative vote of Robert Halmi Jr. or his successor) of RHI Holdings or RHI, as applicable, may determine from time to time. At any time following the Closing Date, the Board of Managers (including the affirmative vote of Robert Halmi Jr.) of RHI Holdings or RHI may, in its discretion, determine to increase the amount of the Annual Advisory Fee to $1,000,000. In addition, if the Kelso Group invests additional equity in the Companies on one or more occasions after the date hereof, then, in each such case, the Companies and Kelso will negotiate in good faith to effect a mutually acceptable increase to such advisory fee. 

 

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Notwithstanding the foregoing, the parties understand and agree that at any time (and for so long) as (i) an “Event of Default” (as defined in the Credit, Security, Guaranty and Pledge Agreement (the “Credit Agreement”), dated as of January 12, 2006, by and among HEI Acquisition, LLC, the Guarantors named therein, the Lenders named therein, JPMorgan Chase Bank, National Association, BNP Paribas, the Royal Bank of Scotland PLC, Union Bank of California and Societe Generale) exists and/or (ii) an “Event of Default” (as defined in the Credit, Security, Guaranty and Pledge Agreement (the “2nd Lien Agreement”), dated as of January 12, 2006, by and among HEI Acquisition, LLC, the Guarantors referred to therein, the Lenders referred to therein and JPMorgan Chase Bank, N.A., as agent for the Lenders named therein) exists, then in each case, no
quarterly advisory payments shall be made pursuant to the foregoing paragraph; provided that such unpaid quarterly advisory payments shall accrue interest at a rate equal to 7% per annum, and any such unpaid quarterly advisory payments in arrears (included the interest accrued thereon) shall be paid by the Companies as soon as reasonably practicable following the time that an “Event of Default” (as defined in the Credit Agreement) ceases to exist or has otherwise been cured and/or an “Event of Default” (as defined in the 2nd Lien Agreement) ceases to exist or has otherwise been cured, in each case as applicable.

RHI Holdings or RHI, as applicable, shall reimburse Kelso promptly for the Kelso Group’s out-of-pocket costs and expenses incurred in connection with any investment by the Kelso Group in the Companies, whether made on or after the date hereof (the “Acquisition”). Such costs and expenses shall include, but not be limited to, those incurred by the Kelso Group in the course of monitoring its investment in RHI Holdings or its subsidiaries (including RHI) and performing any of Kelso’s services or duties provided hereunder.

RHI Holdings or RHI will, jointly and severally, indemnify each member of the Kelso Group, and their respective officers, directors, affiliates’, respective partners, employees, agents and control persons (as such term is used in the Securities Act of 1933, as amended, and the rules and regulations thereunder) to the fullest extent lawful against any and all claims, losses and expenses as incurred (including all reasonable fees and disbursements of any such indemnitee’s counsel and other out-of-pocket expenses incurred in connection with the investigation of and preparation for any such pending or threatened claims and any litigation or other proceedings arising therefrom) in connection with the Acquisition, any of the transactions contemplated by the Purchase Agreement (including the financing of the Acquisition) or such indemnitee’s investment in the
Acquisition or out of any services rendered by the Kelso Group hereunder or any such indemnitee being a controlling person of RHI Holdings, RHI or any of their subsidiaries, provided, however, there shall be excluded from such indemnification any such claim, loss or expense to the extent that it is based upon any action or failure to act by such indemnitee that is found in a final judicial determination to constitute gross negligence or intentional misconduct on such indemnitee’s part. RHI Holdings or RHI, as applicable, will advance costs and expenses, including attorney’s fees, incurred by any such indemnitee in defending any such claim in advance of the final disposition of such claim upon receipt of an undertaking by or on behalf of such indemnitee to repay amounts so advanced if it shall ultimately be determined
that such indemnitee is not entitled to be indemnified by RHI Holdings or RHI, as applicable, pursuant to this Agreement. 

Except as expressly stated herein, the Companies’ obligations set forth in this Agreement (including, but not limited to, those included in the two immediately preceding 

 

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paragraphs) shall survive the termination of Kelso’s services pursuant to the first paragraph of this Agreement. 

This agreement may not be amended or revised except by a writing signed by the parties. This agreement shall be governed by the laws of the State of New York, without regards to its principles of conflict of laws.

If you are in agreement with the foregoing, kindly so indicate by signing a counterpart of this letter, whereupon it will become a binding agreement between us.

 

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                        Very truly yours,
 
	
                         
 	
                         
 	
                        
 RHI ENTERTAINMENT HOLDINGS, LLC
 
	
                          
 	
                         
 	
      

      By: 
 	
                          
 
	
                         
 	
                         
 	
                         
 	
                        Name:
 
	
                         
 	
                         
 	
                         
 	
                        Title:
 

 

	
                         
 	
                         
 	
                        RHI ENTERTAINMENT, LLC
 
	
                          
 	
                         
 	
      

      By: 
 	
                          
 
	
                         
 	
                         
 	
                         
 	
                        Name:
 
	
                         
 	
                         
 	
                         
 	
                        Title:
 

 

 

 

	
                        Agreed and accepted as of the date
 and year first above written:
 	
                         
 	
                         
 
	
                        
 KELSO & COMPANY, L.P.
 	
                         
 	
                         
 
	
      By:   
 	
                        
 Kelso & Companies, Inc.,
 its general partner
 	
                         
 	
                         
 	
                         
 
	
      

      By:
 	
                         
 	
                         
 	
                         
 	
                         
 
	
                         
 	
                        Name:
 	
                         
 	
                         
 	
                         
 
	
                         
 	
                        Title:exv10w1

 

EXHIBIT 10.1

FURTHER AGREEMENT REGARDING PROJECT ICELAND

     THIS FURTHER AGREEMENT REGARDING PROJECT ICELAND (this “Agreement”) dated as of
October 17, 2007 by and among I-Flow Corporation, a Delaware corporation (the “Seller”),
InfuSystem, Inc., a California corporation (the “Company”), HAPC, Inc., a Delaware
corporation (the “Buyer”) and Iceland Acquisition Subsidiary, Inc., a Delaware corporation
(the “Acquisition Sub”), is entered into with reference to the following:

     WHEREAS, the Seller, the Company, the Buyer and the Acquisition Sub entered into that certain
Stock Purchase Agreement dated as of September 29, 2006, as amended to date (the “SPA”) and
capitalized terms used but not defined herein shall have the respective meanings ascribed to them
in the SPA;

     WHEREAS, the Seller, the Company, the Buyer, the Acquisition Sub, Sean D. McDevitt and Philip
B. Harris entered into that certain Acknowledgement and Agreement Regarding Stock Purchase
Agreement and Guaranty dated as of October 8, 2007 (the “Acknowledgement”);

     WHEREAS, the Buyer intends to adjourn its previously convened Buyer Stockholders’ Meeting
until a date that is after the Termination Date, in an effort to increase the likelihood that the
Stockholder Approval will be obtained, because HAPC and its Board believe such approval to be in
the best interests of the HAPC Shareholders;

     WHEREAS, the Seller may in its discretion purchase shares of common stock of the Buyer from
one or more third parties in privately negotiated or market transactions (to which the Buyer would
not be party) to increase the likelihood that the Stockholder Approval will be obtained (the
“Seller Purchase”); and

     WHEREAS, in connection with the SPA and the Acknowledgement, the parties hereto wish to agree
as to certain matters.

     NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, and intending to be legally bound, the parties hereto acknowledge and agree as
follows:

     1. Termination Fee. Because the Stockholder Approval will not be obtained on or prior
to the Termination Date, and pursuant to Section 2(d) of the Acknowledgement, the Termination Fee
of $3,000,000.00 will be unconditionally due and owing to the Seller on the Termination Date
(October 22, 2007) and will be paid to the Seller in accordance with the terms of the
Acknowledgement. Such non-refundable Termination Fee shall be paid to the Seller regardless of
whether or not the transactions contemplated by the SPA are successfully consummated.

     2. Agreement Not to Terminate SPA. The parties hereto agree not to terminate the SPA
pursuant to its terms prior to November 1, 2007.

 

 

     3. Waiver re Buyer Stockholders’ Meeting. The Seller hereby waives the Buyer’s
obligations pursuant to Section 2(b) of the Acknowledgement relating to the re-convening of the
Buyer Stockholders’ Meeting on October 19, 2007. Notwithstanding the foregoing, the Seller reserves
the right, and the Buyer re-affirms the Seller’s right, to cause the Buyer Stockholders’ Meeting to
be concluded at a later specified date on or after November 1, 2007 pursuant to Section 1 of the
Acknowledgement, should the Seller deem it desirable to do so.

     4. Buyer Proxy Supplement. The Seller shall inform the Buyer of a Seller Purchase. The
Buyer agrees to promptly prepare, file with the Securities and Exchange Commission (the “SEC”) and
deliver to its stockholders (in any event no later than October 19, 2007) a supplement to the Proxy
Statement disclosing any Seller Purchase of more than 5% of the outstanding shares of the Buyer’s
Common Stock, and the Company Proxy Information contained in such supplement shall be in a form
acceptable to the Seller. The Seller shall have no liability or responsibility for the contents of
such supplement that are not Company Proxy Information. The Seller represents to the Buyer, and the
Seller acknowledges that the Proxy Supplement will state, that it is the present intention of the
Seller to vote any shares of Common Stock obtained in a Seller Purchase in favor of the acquisition
proposal (as defined in the Buyer’s proxy statement).

     5. Prompt Liquidation of Trust. In the event that the Seller makes a Seller Purchase
of more than 5% of the outstanding shares of the Buyer’s Common Stock and the SPA is terminated for
any reason on or after November 1, 2007, the Buyer shall, within 15 days after such termination,
adopt a specific plan of dissolution and liquidation for recommended approval by the Buyer’s
stockholders. The Buyer shall file a preliminary proxy statement with the SEC setting out such plan
of dissolution and liquidation within 30 days after such termination of the SPA, and will use all
reasonable and diligent efforts to thereafter finalize such proxy statement and secure stockholder
approval of such plan as soon as practicable.

     6. Registration Statement. If deemed advisable by the Seller in connection with a
dividend to the Seller’s stockholders of the shares acquired pursuant to any Seller Purchase, the
Buyer shall prepare and file (and use commercially reasonable efforts to maintain the effectiveness
of) a registration statement for such distribution to the Seller’s stockholders and/or the resale
by such stockholders of such shares. In addition, normal and customary piggy-back registration
rights will be included in the Promissory Note Documents.

     7. No Change in Control Agreements. The Buyer represents and warrants to the Seller
that neither the Buyer nor any subsidiary has in effect (a) any shareholder rights plan, or (b) any
agreement with any person or entity that provides for providing of severance or other benefit based
upon ownership by a person or group of more than a specified percentage of the Buyer’s issued and
outstanding capital stock.

     8. IPO Shares. Except as specifically described in the Buyer’s Second Supplement to
its Proxy Statement, as filed with the SEC on October 16, 2007, no shares which are not “IPO
Shares” (as defined in the Buyer’s current Certificate of Incorporation, as amended to date) have
been transferred by the original purchasers thereof. All shares of the Buyer’s common stock which
are currently available for purchase and sale in public or private transactions are IPO Shares.

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     9. Miscellaneous. The General Provisions of Article XI of the SPA are hereby
incorporated and shall also apply to the Acknowledgment.

     10. No Amendments to SPA or Acknowledgement. Except as expressly set forth herein, the
provisions of the SPA and the Acknowledgement shall remain in full force and effect in accordance
with their terms.

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     IN WITNESS WHEREOF, the Seller, the Company, the Buyer, and the Acquisition Sub have caused
this Agreement to be executed as of the date first written above.

	 	 	 	 	 
	 	I-FLOW CORPORATION

 	 
	 	By:  	/s/ Donald M. Earhart
 	 
	 	 	Name:  	Donald M. Earhart 	 
	 	 	Title:  	Chairman, CEO & President 	 
	 
	 	INFUSYSTEM, INC.

 	 
	 	By:  	                 /s/ James J. Dal Porto
 	 
	 	 	Name:  	James J. Dal Porto 	 
	 	 	Title:  	CEO 	 
	 
	 	HAPC, INC.

 	 
	 	By:  	                      /s/ John E. Voris
 	 
	 	 	Name:  	John E. Voris 	 
	 	 	Title:  	CEO 	 
	 
	 	ICELAND ACQUISITION SUBSIDIARY, INC.

 	 
	 	By:  	/s/ John E. Voris
 	 
	 	 	Name:  	John E. Voris 	 
	 	 	Title:  	CEO

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