                 IN THE COURT OF APPEALS OF TENNESSEE
                             AT NASHVILLE
                                 October 14, 2010 Session

    COLLATERAL PLUS, LLC, ET AL. v. MAX WELL MEDICAL, INC.

                   Appeal from the Chancery Court for Davidson County
                      No. 08-2534-II   Carol L. McCoy, Chancellor


                   No. M2010-00638-COA-R3-CV - Filed March 29, 2011


RICHARD H. DINKINS, J., dissenting.

       Because I am of opinion that the $900,000 placement fee was earned when Collateral
Plus was successful in securing financial assistance for MAX Well and became payable in
February 2008 when the remainder of MAX Well’s stock was purchased, I respectfully
dissent from the court’s holding that MAX Well is entitled to summary judgment.

        As the majority notes, in resolving this dispute, we are to ascertain the intention of the
parties through the plain language of the agreement. Eatherly Const. Co. v. HTI Mem'l
Hosp., M2003-02313-COA-R3CV, 2005 WL 2217078 (Tenn. Ct. App. Sept. 12, 2005). In
this inquiry, in order to avoid repugnancy between the several provisions of a single contract,
its provisions should be construed in harmony with each other, if such construction can be
reasonably made. Id. (citing Rainey v. Stansell, 836 S.W.2d 117, 119 (Tenn.Ct.App.1992)),
Applying that standard, there is nothing from which to conclude that the parties did not
intend for MAX Well’s liability for the placement fee to survive the termination of the Loan
Management Agreement.

        The agreement provides that “to facilitate the Loan [from Suntrust Bank], the
members of [Collateral Plus] have made available certain letters of credit and other credit
enhancements and [Collateral Plus] has agreed to act as paying agent for the Loan” and that
“as consideration for the supply of such guarantees, credit enhancements and its role in
facilitating the credit line, [MAX Well] is providing compensation to [Collateral Plus] as set
forth herein.” Section 2 of the agreement provides that it is to remain in effect until the loan
is paid in full. Collateral Plus’ compensation is set forth in section 4 and is composed of
several elements, each of which is specifically related to either securing, servicing, or
monitoring the $4.5 million line of credit. Each element of compensation constitutes a
distinct part of the total consideration for Collateral Plus’ efforts1 and sets forth the time and
the manner in which that item is payable.

        I do not consider the time and manner by which the placement fee was to be paid a
conditional obligation of MAX Well; neither do I consider the continuation of the agreement
a condition precedent to Max Well’s liability for the fee. Rather, the placement fee became
a liability of MAX Well when the loan was made and remained a liability until Collateral
Plus brought suit. The fact that the contract was to terminate when the loan was paid off is
consistent with the fact that Collateral Plus would no longer have loan servicing and
monitoring responsibilities and its guarantees of MaxWell’s loan would no longer be in
force. The conclusion of Collateral Plus’ responsibilities under the agreement is not
inconsistent with MAX Well’s continuing liability for payment of the placement fee “upon
a change of control of [MAX Well, sale of [MAX Well], or the acquisition of [MAX Well’s]
assets.” There is nothing to indicate that the parties intended that termination of the
agreement would extinguish MAX Well’s liability for the placement fee. I believe such a
result to be contrary to the intention of the parties as reflected in the agreement..



                                                          ____________________________________
                                                          RICHARD H. DINKINS, JUDGE


       1

           4) Fees, Compensation, and Security

                 a) Manager shall be entitled to the following fees under this Agreement (the
                 “Fees”):

                         i) excess interest, if any, paid pursuant to Section 3, above;
                         ii) any fees associated with providing the letters of credit, payable upon
                         the loan agreement’s execution;
                         iii) a nonrefundable restructuring fee of $90,000.00, payable at closing;
                         iv) any legal or bank fees related to the loan agreement and loan, payable
                         at closing;
                         v) a nonrefundable, advisory fee of $7,500.00 per month, payable in
                         advance on or before the 1st of the month. . . .
                         vi) a commitment fee of $90,000.00, payable at closing;
                         vii) a funding fee of one percent (1%) of the outstanding balance, paid
                         monthly; and
                         viii) a placement fee of $900,000.00, payable upon a change of control
                         of the Borrower, sale of the Borrower, or the acquisition of the
                         Borrower’s assets.


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