REAFFIRMATION AND RATIFICATION AGREEMENT August 22, 2006
Exhibit
10.7
August
22, 2006
Laurus
Master Fund, Ltd.
c/o
Laurus Capital Management LLC
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Ladies
and Gentlemen:
Reference
is made to (a) the Master Security Agreement, dated as of January 30, 2006
(as
amended, restated, modified or supplemented from time to time, the “Master
Security Agreement”) by and among Flagship Patient Advocates, Inc. (f/k/a
Flagship Healthcare Management, Inc.), a Delaware corporation (“Flagship”),
Patients & Physicians, Inc. (f/k/a Finity Holdings, Inc.), a Delaware
corporation (“Patients”), and Laurus Master Fund, Ltd. (“Laurus”), (b) the
Intellectual Property Security Agreement, dated as of January 30, 2006 (as
amended, restated, modified or supplemented from time to time, the “IP Security
Agreement”), between Flagship and Laurus, (c) the Intellectual Property Security
Agreement, dated as of January 30, 2006 (as amended, restated, modified or
supplemented from time to time, the “Patients IP Security Agreement”), between
Patients and Laurus, and (d) the Subsidiary Guaranty, dated as of January 30,
2006 (as amended, restated, modified or supplemented from time to time, the
“Guaranty”), made by Patients in favor of Laurus (the Master Security Agreement,
the IP Security Agreement, the Patients IP Security Agreement and the Guaranty,
each a “January 2006 Agreement” and collectively, the “January 2006
Agreements”).
To
induce
Laurus to enter into the Amended and Restated Securities Purchase Agreement
dated as of the date hereof by and among Flagship, Patients and Laurus (as
amended, restated, modified or supplemented from time to time, the “Purchase
Agreement”), and to satisfy their obligations under the Post Closing Letter,
dated as of January 30, 2006, between Laurus and Flagship, each of the
undersigned hereby:
(a) represents
and warrants to Laurus that it has reviewed and approved the terms and
provisions of the Purchase Agreement and the Related Agreements (as defined
in
the Purchase Agreement; such Related Agreements collectively with the Purchase
Agreement, the “August 2006 Agreements”);
(b) acknowledges,
ratifies and confirms that all of the terms, conditions, representations and
covenants contained in the January 2006 Agreements to which it is a party are
in
full force and effect and shall remain in full force and effect after giving
effect to the execution and effectiveness of the August 2006
Agreements;
(c) acknowledges,
ratifies and confirms that (i) the defined term “Obligations” under each of the
Guaranty, the Master Security Agreement, the IP Security Agreement and the
Patients IP Security Agreement includes, without limitation, all obligations
and
liabilities of each of Flagship and Patients under the August 2006 Agreements
and all other obligations and liabilities of each of the undersigned to Laurus
(including interest accruing after the filing of any petition in bankruptcy,
or
the commencement of any insolvency, reorganization or like proceeding, whether
or not a claim for post-filing or post-petition interest is allowed or allowable
in such proceeding), whether now existing or hereafter arising, direct or
indirect, liquidated or unliquidated, absolute or contingent (collectively,
the
“Obligations”), (ii) all of the Obligations are secured by the Security Interest
Grants (as defined below) and (iii) all of the Obligations benefit directly
from
all guaranties included in the January 2006 Agreements;
(d) acknowledges
and confirms that (i) the occurrence of an Event of Default under any of the
August 2006 Agreements shall constitute an Event of Default under the January
2006 Agreements and (ii) the occurrence of an Event of Default under any of
the
January 2006 Agreements shall constitute an Event of Default under the August
2006 Agreements;
(e) represents
and warrants that no offsets, counterclaims or defenses exist as of the date
hereof with respect to any of the undersigned’s obligations under any of the
January 2006 Agreements;
(f) acknowledges,
ratifies and confirms (i) the grant by each undersigned to Laurus of a security
interest and lien in the assets of each undersigned as more specifically set
forth in the January 2006 Agreements and the August 2006 Agreements, as
applicable (the “Security Interest Grants”) and (ii) that the Security Interest
Grants (A) shall not be impaired, limited or affected in any manner whatsoever
by the effectiveness of the August 2006 Agreements and (B) secure all
Obligations; and
(g) releases,
remises, acquits and forever discharges Laurus and Laurus’ employees, agents,
representatives, consultants, attorneys, fiduciaries, officers, directors,
partners, predecessors, successors and assigns, subsidiary corporations, parent
corporations, and related corporate divisions (all of the foregoing hereinafter
called the “Released Parties”), from any and all actions and causes of action,
judgments, executions, suits, debts, claims, demands, liabilities, obligations,
damages and expenses of any and every character, known or unknown, direct and/or
indirect, at law or in equity, of whatsoever kind or nature, for or because
of
any matter or things done, omitted or suffered to be done by any of the Released
Parties prior to and including the date of execution hereof, and in any way
directly or indirectly arising out of or in any way connected to this
Reaffirmation and Ratification Agreement, the January 2006 Agreements, the
August 2006 Agreements and any other document, instrument or agreement made
by
any of the undersigned in favor of Laurus.
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2
This
agreement shall be governed by and construed in accordance with the laws of
the
State of New York.
Very
truly yours,
PATIENTS
& PHYSICIANS, INC.
By:
/S/
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Name:
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Title:
CEO
Address:
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FLAGSHIP
PATIENT ADVOCATES, INC.
By:
/S/
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Name:
▇▇▇▇ ▇. ▇▇▇▇▇
Title:
CEO
Address:
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ACCEPTED
AND AGREED TO:
LAURUS
MASTER FUND, LTD.
By:
/S/
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Grin
Name:
▇▇▇▇▇ Grin
Title:
Director