EIGHTH AMENDMENT DATED AS OF DECEMBER 18, 2008 TO AMENDED AND RESTATED LOAN AGREEMENT BY AND AMONG NY HYPERBARIC, LLC, FOREST HILLS HYPERBARIC, LLC, SCRANTON HYPERBARIC LLC, JFK HYPERBARIC LLC, TRENTON HYPERBARIC, LLC, NEWARK BI LLC, PASSAIC...
Exhibit
10.11
DATED AS
OF DECEMBER 18, 2008
TO
AMENDED
AND RESTATED LOAN AGREEMENT
BY AND
AMONG
NY
HYPERBARIC, LLC, FOREST HILLS HYPERBARIC, LLC, SCRANTON HYPERBARIC LLC, JFK
HYPERBARIC LLC, TRENTON HYPERBARIC, LLC, NEWARK BI LLC, PASSAIC HYPERBARIC, LLC,
ST XXXXXXX HYPERBARIC LLC, GREATER BRONX HYPERBARIC LLC (f/k/a Montefiore
Hyperbaric LLC), XXXXX XXXX, LLC, SOUTH NASSAU HYPERBARIC, LLC, NEW YORK
HYPERBARIC AND WOUND CARE CENTERS LLC, NEW YORK HYPERBARIC AND WOUND CARE
CENTERS, L.L.C., VB HYPERBARIC, LLC, EIN HYPERBARIC LLC, MAIMONIDES HYPERBARIC,
LLC, THE SQUARE HYPERBARIC, LLC, SOUTH N HYPERBARIC LLC, MUHLENBERG HYPERBARIC
LLC, XXXXXX HYPERBARIC LLC, THE CENTER FOR WOUND HEALING I, LLC (f/k/a
Modern Medical, LLC), THE CENTER FOR WOUND HEALING II, LLC (f/k/a Modern Medical
Specialties, LLC), NJ HYPERBARIC, LLC, FAR ROCKAWAY HYPERBARIC, LLC, ATLANTIC
HYPERBARIC, LLC, ATLANTIC ASSOCIATES, LLC, CEF PRODUCTS, LLC, CMC HYPERBARIC,
LLC, PENNSYLVANIA HYPERBARIC, LLC, HYPERBARIC, LLC (a/k/a Massachusetts
Hyperbaric, LLC) and MEADOWLANDS HYPERBARIC, LLC, BAYONNE HYPERBARIC, LLC,
RARITAN BAY HYPERBARIC, LLC, CFWH MEZZANINE, LLC, SOUTH OCEAN COUNTY HYPERBARIC,
LLC, THE CENTER FOR WOUND HEALING, INC.
(collectively,
the “Borrower”)
AND
SIGNATURE
BANK
(the
“Bank”)
THIS
EIGHTH AMENDMENT (the “Eighth Amendment”) made as of the 18th day of December,
2008 by and among NY HYPERBARIC, LLC, FOREST HILLS HYPERBARIC, LLC, SCRANTON
HYPERBARIC LLC, JFK HYPERBARIC LLC, TRENTON HYPERBARIC, LLC, NEWARK BI LLC,
PASSAIC HYPERBARIC, LLC, ST XXXXXXX HYPERBARIC LLC, GREATER BRONX HYPERBARIC LLC
(f/k/a Montefiore Hyperbaric LLC), XXXXX XXXX, LLC, SOUTH NASSAU HYPERBARIC,
LLC, NEW YORK HYPERBARIC AND WOUND CARE CENTERS LLC, NEW YORK HYPERBARIC AND
WOUND CARE CENTERS, L.L.C., VB HYPERBARIC, LLC, EIN HYPERBARIC LLC, MAIMONIDES
HYPERBARIC, LLC, THE SQUARE HYPERBARIC, LLC, SOUTH N HYPERBARIC LLC, MUHLENBERG
HYPERBARIC LLC, XXXXXX HYPERBARIC LLC, THE CENTER FOR WOUND HEALING I, LLC
(f/k/a Modern Medical, LLC), THE CENTER FOR WOUND HEALING II, LLC (f/k/a Modern
Medical Specialties, LLC), NJ HYPERBARIC, LLC, FAR ROCKAWAY HYPERBARIC, LLC,
ATLANTIC HYPERBARIC, LLC, ATLANTIC ASSOCIATES, LLC, CEF PRODUCTS, LLC, CMC
HYPERBARIC, LLC, PENNSYLVANIA HYPERBARIC, LLC, HYPERBARIC, LLC (a/k/a
Massachusetts Hyperbaric, LLC), MEADOWLANDS HYPERBARIC, LLC, BAYONNE HYPERBARIC,
LLC, RARITAN BAY HYPERBARIC, LLC, CFWH MEZZANINE, LLC, SOUTH OCEAN COUNTY
HYPERBARIC, LLC, and THE CENTER FOR WOUND HEALING, INC., each with a place of
business at 000 Xxxxx Xxxxxx Xxxx, Xxxxxxxxx, XX 00000, and SIGNATURE BANK, a
New York bank having an office at 0000 Xxxxxxxx Xxxxxx, Xxxxxx Xxxx, Xxx Xxxx
00000 (the “Bank”).
WITNESSETH:
WHEREAS,
certain of the entities comprising the Borrower and the Bank entered into an
Amended and Restated Loan Agreement dated as of June 17, 2005 as amended by a
First Amendment dated as of April 7, 2006, a Second Amendment dated as of
February 1, 2007, a Third Amendment and Waiver dated as of May 29, 2007, a
Fourth Amendment and Waiver dated as of July 31, 2007, a Fifth Amendment
dated as of October 11, 2007, a Sixth Amendment dated as of March 19, 2008
and a Seventh Amendment dated as of March 31, 2008 (collectively, the
“Agreement”), providing for certain financial accommodations to the Borrower and
which Agreement is now in full force and effect; and
WHEREAS,
the Borrower and the Bank desire to amend the Agreement on the terms and
conditions hereinafter set forth;
NOW,
THEREFORE, in consideration of the premises and the agreements hereinafter set
forth and for other good and valuable consideration, the parties hereto agree as
follows:
1. As
used in this Eighth Amendment, capitalized terms, unless otherwise defined,
shall have the meaning ascribed thereto in the Agreement.
2. The
Bank and the Borrower agree that immediately prior to the execution of this
Eighth Amendment, the outstanding principal balance of (i) the Revolving Credit
Loans evidenced by the Note is $3,810,000 (as of December 18, 2008), and (ii)
the Term Loan evidenced by the Term Note is $249,988.45 (as of December
18, 2008), and that interest has been paid on such Loans for all Prime
Loans comprising all or a portion thereof through November 30, 2008 and for
all LIBOR Loans comprising all or a portion thereof through the end of the
applicable Interest Period.
2
3. As
an inducement for the Bank to enter into this Eighth Amendment, the Borrower
hereby represents and warrants as follows:
(A) There
are no defenses or offsets to its obligations under the Agreement, the Note or
any of the other agreements in favor of the Bank referred to in the Agreement,
and if any such defenses or offsets exist without the knowledge of the Borrower,
the same are hereby waived.
(B) All
the representations and warranties made by the Borrower in the Agreement are
true and correct in all material respects as if made on the date
hereof.
4. Subject
to the satisfaction of the conditions precedent set forth in Paragraph 8 hereof,
the Borrower and the Bank hereby agree that the Agreement amended as
follows:
(A) The
definitions of the terms “EBITDA” and “Termination Date” shall be deleted and in
lieu thereof of the following shall be inserted:
“‘EBITDA’ shall mean
net income on continuing operations before the payment of interest and taxes,
plus depreciation, amortization and non-cash compensation expense, determined in
accordance with GAAP.”
“‘Termination Date’
shall mean the earlier of (a) December 31, 2010 or if such date
is not a Business Day, the Business Day next succeeding such date; or (b) the
date the Commitment is terminated pursuant to Section 8 hereof.”
(B) Section
2.1 of the Agreement shall be amended by deleting therefrom the phrase “for
Prime Loans, the Prime Rate in effect from time to time or,” and inserting in
lieu thereof the phrase “equal to, for Prime Loans, the Prime Rate in effect
from time to time plus 0.50%, or,”.
(C) Notwithstanding
anything contained in the Agreement to the contrary, no Loans may bear interest
at a rate per annum based on LIBOR, no LIBOR Loans may be continued as LIBOR
Loans, and in this regard, Section 2.4 of the Agreement shall be deleted in its
entirety, and in lieu thereof, the following shall be inserted:
3
“2.4
Procedure for
Borrowing. Upon compliance with the conditions contained in Section 4
hereof, the Borrower may borrow under the Commitment during the Commitment
Period on any Business Day by giving the Bank irrevocable notice of a request
for a Loan hereunder on the date of the proposed Prime Loan borrowing. Such
notice shall be written (including, without limitation, via facsimile
transmission, and/or via email to XXxxxxx@xxxxxxxxxxx.xxx and
xxxxxx@xxxxxxxxxxx.xxx at
the Bank; provided that any such email notice shall be confirmed in writing by
proper written notice hereunder (including via facsimile transmission) promptly
after any such email notice shall have been sent) and shall be sufficient only
if a written notice executed by the Borrower shall have actually been received
by the Bank by no later than 11:00 a.m., New York, New York time, on the date on
which such notice is required to be given. Unless notification is otherwise
furnished by the Borrower to the Bank (in a manner consistent with the
requirements of this Section 2.4), Loans will be made by credits to the
Borrower’s demand deposit account maintained with the Bank upon compliance with
the requirements of this Section.”
(D) Section
2.13 of the Agreement shall be deleted in its entirety, and in lieu thereof, the
following shall be inserted:
“2.13
Continuation and
Conversion of Loans. The Borrower shall convert any LIBOR Loan into a
Prime Loan at the end of an Interest Period applicable thereto.”
(E) Section
6.1 of the Agreement shall be deleted in its entirety, and in lieu thereof, the
following shall be inserted:
“6.1
Debt Service Coverage
Ratio. The Borrower shall maintain a ratio of (a) EBITDA minus cash
Capital Expenditures minus dividends and distributions to (b) the current
portion of long term Debt plus cash interest expense, for each fiscal quarter of
the Borrower, determined on a rolling four quarter basis as of the last day of
each fiscal quarter, commencing with the fiscal quarter ending
September 30, 2008, of not less than 1.25:1.00 at any such
time.”
(F) Section
6.3 of the Agreement shall be deleted in its entirety, and in lieu thereof, the
following shall be inserted:
“6.3
Minimum Effective
Tangible Net Worth. A minimum Effective Tangible Net Worth, as
hereinafter defined, of at least the amount indicated below as of the last day
of each corresponding fiscal quarter.
|
12/31/08
|
$ | 16,500,000 | ||
|
3/31/09
|
$ | 17,500,000 | ||
|
6/30/09
|
$ | 18,500,000 | ||
|
9/30/09
through 6/30/10
|
$ | 19,500,000 | ||
|
9/30/10
and thereafter
|
$ | 21,000,000 |
4
Effective
Tangible Net Worth means Total Assets minus the sum of (i) Intangible Assets,
and (ii) Total Liabilities except Subordinated Debt; Total Assets means total
assets determined in accordance with GAAP; Intangible Assets means assets that
in accordance with GAAP are properly classifiable as intangible assets
including, but not limited to goodwill, franchises, licenses, patents,
trademarks, trade names, and copyrights and “soft assets” such as assets due
from officers, employees, stockholders, affiliates and related
parties.”
(G) The
following sections shall be added to the Agreement:
“6.4
Senior Debt to EBITDA
Ratio. A maximum ratio of Senior Debt, as hereinafter defined, to EBITDA,
determined on a rolling four quarter basis as of the last day of each fiscal
quarter, of not more than 1.0 to 1.0. Senior Debt means all Debt for borrowed
money inclusive of Capitalized Lease Obligations but exclusive of Debt which is
subordinated to the Debt of the Borrower to the Bank pursuant to subordination
agreements in form and substance satisfactory to the Bank.
6.5 Total Debt to EBITDA
Ratio. A maximum ratio of Total Debt to EBITDA, determined on a rolling
four quarter basis as of the last day of each fiscal quarter, of not greater
than 3.5 to 1.0 for any such period ending on or subsequent to December 31,
2008 but not subsequent to June 30, 2010, or 2.5 to 1.0 for any such period
ending from or after September 30, 2010.”
(H) Section
7.7 of the Agreement shall be deleted in its entirety, and in lieu thereof, the
following shall be inserted:
“6.6
Maximum Capital
Expenditures. Expend in the aggregate for Capital Expenditures greater
than $3.5 million in/for the four fiscal quarter period ended June 30, 2009; $5
million in/for the four fiscal quarter period ended June 30, 2010; or $5.5
million in/for the four fiscal quarter ended June 30, 2011.”
(I) The
definition of the term “Borrowing Base” shall be amended by deleting therefrom
the phrase “eighty (80%)” and inserting in lieu thereof the phrase “eighty-five
(85%)”.
(J) The
first sentence of Section 2.1 of the Agreement shall be deleted in its entirety,
and in lieu thereof the following shall be inserted:
“Subject
to the terms and conditions hereof, and provided further that the Borrower is in
compliance with Section 5.2(d) hereof, the Bank agrees to make loans to the
Borrower (the “Revolving Credit Loans”) in an aggregate principal amount not to
exceed the lesser of (i) Six Million ($6,000,000.00) Dollars or (ii) the
Borrowing Base less the aggregate principal amount of the Term Loan (the
“Commitment”).”
5
(K) Sections
2.5.1 and 2.5.2 of the Agreement shall be deleted in their respective
entireties, and in lieu thereof the following shall be inserted:
“2.5.1
Term Loan:
Subject to the terms and conditions hereof and provided that (a) no Default or
Event of Default has occurred and is continuing, and (b) the Borrower has
executed and delivered the Term Note referred to in Section 2.5.2 hereof, the
Bank agrees to make a term loan (the “Term Loan”) to the Borrower on December
18, 2008 in the principal amount of $2,000,000, the proceeds of which shall
be used to repay in full (on December 18, 2008) the “Term Loan” existing and
outstanding on, but immediately prior to the funding of the Term Loan and the
application of a portion of the same to the repayment of such pre-existing “Term
Loan” (inclusive of all principal and interest relating thereto) on December 18,
2008, and to fund the completion of (or reimburse the Borrower for the funding
of) build-outs of various hyperbaric oxygen centers by certain of the Borrowers
and related to costs and expenses. The Term Loan shall bear interest at a rate
per annum equal to the Prime Rate plus 1%.
2.5.2
Term Note: The
Term Loan shall be evidenced by a promissory note of the Borrower in form and
substance satisfactory to the Bank (the “Term Note”) payable to the order of the
Bank and dated December 18, 2008. The principal amount of the Term Note shall be
payable in forty-eight (48) consecutive monthly installments of principal
commencing on January 1, 2009 and continuing on the first day of each month
thereafter, each in the principal amount equal to $41,666.66, with the final
installment on December 1, 2012 (which will be in the amount equal to the then
unpaid principal balance together with unpaid interest). The Borrower will pay
interest on the outstanding principal balance of the Term Loan on the first day
of each month commencing on January 1, 2009, and on December 1, 2012 (when
the entire unpaid principal balance of the Term Note together with all interest
accrued and unpaid shall be paid in full). Interest shall be computed on the
basis of a 360 day year for actual days elapsed and shall be payable as provided
in Section 2.8 hereof.”
6
5. It
is expressly understood and agreed that all collateral security for the Loans
set forth in the Agreement prior to the amendment provided for herein, is and
shall continue to be collateral security for the Loans and other extensions of
credit provided under the Agreement as herein modified. Without limiting the
generality of the foregoing, the Borrower hereby absolutely and unconditionally
confirms that each document and instrument executed by the Borrower pursuant to
the Agreement continues in full force and effect, is ratified and confirmed and
is and shall continue to be applicable to the Agreement (as herein
amended).
6. By
their execution of this letter in the space provided below, the Guarantors (if
any) hereby consent to this amendment and reaffirm their continuing liability
under their guarantees in respect of the Agreement, as amended hereby, and all
documents, instruments and agreements executed pursuant thereto or in connection
therewith, without offset, defense or counterclaim (any such offset, defense or
counterclaim as may exist being hereby irrevocably waived by any such
Guarantors).
7. The
amendments set forth herein is limited precisely as written and shall not be
deemed (except as the Agreement is herein modified) to (a) be a consent to or a
waiver of any term or condition of the Agreement or any of the documents
referred to therein, or (b) prejudice any right or rights which the Bank may now
have or may have in the future under or in connection with the Agreement or any
documents referred to therein. Whenever the Agreement is referred to in the
Agreement or any of the instruments, agreements or other documents or papers
executed and delivered in connection therewith, it shall be deemed to mean the
Agreement (as the case may be) as amended hereby. This Agreement may be signed
in one or more counterparts which, when taken together, shall constitute one and
the same document. The parties to this Agreement agree that, for purposes of the
execution of this Agreement, facsimile signatures and scanned signatures through
email will constitute original signatures.
8. This
Eighth Amendment shall become effective on such date as all of the following
conditions have been satisfied:
(A) Borrower
Authorization. The Bank shall have received certified copies of all
corporate action (in form and substance satisfactory to the Bank) taken by the
Borrower to authorize the execution, delivery and performance of this Eighth
Amendment and the borrowings to be made under the Agreement, together with the
Borrower’s updated officers’ certificate;
(B) Additional Matters.
All other documents and legal matters in connection with the transactions
contemplated by this Agreement shall be satisfactory in form and substance to
the Bank and its counsel;
(C) Fees and Expenses.
The Bank shall have received evidence of payment of the fees and disbursements
of the Bank’s counsel;
(D) Facility Extension
Fee. The Borrower shall have paid to the Bank a revolving credit facility
extension fee in the amount of $5,000.00;
(E) Term Loan. The
Borrower shall have paid the “Term Loan” (as such term was defined in the
Agreement immediately prior to the effectiveness of this Eighth Amendment), and
all accrued but unpaid interest thereon through the date hereof, to the Bank in
full, in the aggregate amount of $250,578.70;
7
(F) Additional Facility
Extension Fee. The Borrower shall have paid to the Bank a term loan
facility extension fee in the amount of $20,000.00;
(G) Term Note. The
Borrower shall have executed and delivered to the Bank a term note in the form
attached hereto as Exhibit A (the “Term Note”), which Term Note shall be deemed
included within the definition of the term Loan Documents; and
(H) Subordination and
Intercreditor Agreement. Reference is made to that certain Subordination
and Intercreditor Agreement dated as of March 31, 2008, by and among the
Borrower, the Bank, Bison Capital Equity Partners II-A, L.P. and Bison Capital
Equity Partners II-B, L.P. (the “SIA”). Capitalized terms used in this Section
shall have the meanings given to the same in the SIA. Notwithstanding anything
contained in the SIA to the contrary, the parties hereto and the parties to the
SIA agree: (a) that Senior Debt include all Obligations of the Borrower to the
Bank which are created, amended or modified by, or referenced in, this Eighth
Amendment; (b) that the SIA is hereby amended by modifying the definition of the
term “Cap Amount” as follows: “Cap Amount: means $8,000,000; provided, that the
Cap Amount shall be reduced by the amount that the principal amount available
under the Credit Agreement is reduced from time to time from and after December
18, 2008.”; and (c) that no consent or approval of the Subordinated Lender
is required under the SIA (other than with respect to the amendment which is the
subject of clause (b) above) or otherwise in connection with any of the
transactions which were contemplated by or a subject of this Eighth Amendment
(but that if any such consent is/was required, the Subordinated Lender hereby
agrees that such consent is hereby given).
9. This
Eighth Amendment is dated for convenience as of December 5, 2008 and shall be
effective on the date of execution by the Bank.
10. Except
as hereby amended, the Amended and Restated Loan Agreement is in all respects
ratified and confirmed.
IN
WITNESS WHEREOF, the parties hereto have caused this Eighth Amendment to be
executed by their duly authorized officers as of the date first written
above.
|
Borrower:
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|
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NY
HYPERBARIC, LLC
|
|
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FOREST
HILLS HYPERBARIC, LLC
|
|
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SCRANTON
HYPERBARIC LLC
|
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JFK
HYPERBARIC LLC
|
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TRENTON
HYPERBARIC, LLC
|
|
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NEWARK
BI LLC
|
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PASSAIC
HYPERBARIC, LLC
|
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ST
XXXXXXX HYPERBARIC LLC
|
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GREATER
BRONX HYPERBARIC LLC
|
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(f/k/a
MONTEFIORE HYPERBARIC LLC)
|
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XXXXX
XXXX, LLC
|
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SOUTH
NASSAU HYPERBARIC LLC
|
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NEW
YORK HYPERBARIC AND
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8
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WOUND
CARE CENTERS LLC (DEL)
|
|
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NEW
YORK HYPERBARIC AND
|
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WOUND
CARE CENTERS, L.L.C. (N.Y.)
|
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VB
HYPERBARIC, LLC
|
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EIN
HYPERBARIC LLC
|
|
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MAIMONIDES
HYPERBARIC, LLC
|
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THE
SQUARE HYPERBARIC, LLC
|
|
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SOUTH
N HYPERBARIC LLC
|
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MUHLENBERG
HYPERBARIC LLC
|
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XXXXXX
HYPERBARIC LLC
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THE
CENTER FOR WOUND HEALING I, LLC
|
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(f/k/a
MODERN MEDICAL, LLC)
|
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THE
CENTER FOR WOUND HEALING II, LLC
|
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(f/k/a
MODERN MEDICAL SPECIALTIES, LLC)
|
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NJ
HYPERBARIC, LLC
|
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FAR
ROCKAWAY HYPERBARIC, LLC
|
|
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ATLANTIC
HYPERBARIC, LLC
|
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ATLANTIC
ASSOCIATES, LLC
|
|
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CEF
PRODUCTS, LLC
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CMC
HYPERBARIC, LLC
|
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PENNSYLVANIA
HYPERBARIC, LLC
|
|
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HYPERBARIC,
LLC
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(a/k/a
MASSACHUSETTS HYPERBARIC, LLC)
|
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BAYONNE
HYPERBARIC, LLC,
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RARITAN
BAY HYPERBARIC, LLC,
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CFWH
MEZZANINE, LLC,
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SOUTH
OCEAN COUNTY HYPERBARIC, LLC
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By
their managers/members
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By:
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/s/ Xxxxxx X. Xxxxxxx
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Xxxxxx
X. Xxxxxxx
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Chief
Executive Officer
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By:
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/s/ Xxxxxx X. Xxxxxxx
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Xxxxxx
X. Xxxxxxx
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Chief
Executive Officer
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9
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Bank:
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SIGNATURE
BANK
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|
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By:
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/s/ Xxxxx Xxxxx
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Xxxxx
Xxxxx
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Senior
Vice President
|
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THE
UNDERSIGNED HEREBY AGREES TO THE PROVISIONS OF SECTION 8(H) OF THIS EIGHTH
AMENDMENT AND AFFIRMS/RE-AFFIRMS ITS OBLIGATIONS, AFTER GIVING EFFECT TO THIS
EIGHTH AMENDMENT, UNDER THE SIA WHICH IS THE SUBJECT OF SUCH
SECTION.
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BISON
CAPITAL EQUITY PARTNERS II-A, L.P.
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a
Delaware limited partnership
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By:
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/s/ Xxxxx Xxxxxxxx
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Xxxxx
Xxxxxxxx
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Managing
Member
|
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BISON
CAPITAL EQUITY PARTNERS II-B, L.P.
a
Delaware limited partnership
|
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By:
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/s/ Xxxxx Xxxxxxxx
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Xxxxx
Xxxxxxxx
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Managing
Member
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10
