SECOND AMENDMENT TO COMMERCIAL BUSINESS LOAN AGREEMENT FOR TERM LOANS AND LINES OF CREDIT
Exhibit 10.11
SECOND AMENDMENT TO COMMERCIAL
BUSINESS LOAN AGREEMENT FOR TERM LOANS AND LINES OF CREDIT
THIS SECOND AMENDMENT TO COMMERICAL BUSINESS LOAN AGREEMENT FOR TERM LOANS AND LINES OF CREDIT (this “Second Amendment”) is dated May 30th, 2019, by
and among VIEMED, INC., a Delaware corporation (“Viemed”), SLEEP MANAGEMENT, L.L.C. (“Sleep Management”), a Louisiana limited liability company, and HOME SLEEP DELIVERED, L.L.C. (“Home Sleep”), a Louisiana limited liability company (collectively, the “Borrower”), and XXXXXXX XXXXXXX
BANK, a Mississippi state chartered bank, formally known as Whitney Bank (the “Lender”). The Borrower, Guarantor, if any, and any other person who may be liable now or in the future for any portion of any Loans are referred to as “Obligor”,
which term means individually, collectively, and interchangeably any, each and/or all of them.
R E C I T A L S:
A. Borrower and Lender are parties to that certain Commercial Business Loan Agreement for Term Loans and Lines of Credit dated February 21, 2018, as amended by First Amendment dated March
19, 2019, pursuant to which the Lender established in favor of Borrower, among other things, a revolving line of credit in the maximum aggregate principal amount of $10,000,000.00 (collectively, with all past, present and future amendments and/or
restatements, the “Agreement”).
B. Borrower has now applied to Lender for a term loan in the amount of $4,845,000.00 to purchase a commercial office building located at 000 Xxxxxxx Xxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxx.
C. Lender, subject to the terms and conditions of this Second Amendment, has agreed to Borrower’s requests.
NOW, THEREFORE, in consideration of the mutual covenants hereunder set forth, Borrower and Lender do hereby covenant and agree to amend the Agreement as
follows:
1. Revisions to Article A – The Loan or Loans.
A. A new subsection, entitled “TERM LOAN,” is hereby added to Section A of the Agreement, immediately below the existing subsection entitled “LETTER
OF CREDIT SUBLIMIT,” as follows:
TERM LOAN to Borrower in the principal amount of Four Million Eight Hundred Forty-Five Thousand and no/100 ($4,845,000.00) Dollars (the
“Term Loan” which term shall include all renewals, extensions or modifications thereof) bearing interest at the rate of the One Month ICE LIBOR plus 2.45% per annum from date until paid, payable in monthly installments
of principal in the amount reflected on the attached amortization schedule plus accrued interest commencing on July 1, 2019, and continuing on the same day of each month thereafter with a final installment of all outstanding principal and accrued
interest due and payable on May 30, 2026, which Term Loan shall be represented by Bank’s standard form of installment note executed on May 30, 2019 (the “Term Note,” which term shall include all renewals, extensions or modifications thereof). The
term “One Month ICE LIBOR” shall have the meaning set forth in the Term Note.
Notwithstanding anything set forth herein to the contrary, the interest rate accruing on the Term Loan shall be subject to the “Required Hedge” provisions set forth in Section D(16), below.
2. Revisions to Article C – Use of Proceeds. Section C of the Agreement, entitled “USE OF PROCEEDS,” is hereby deleted in
its entirety and restated as follows:
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USE OF PROCEEDS.
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(1) Line of Credit. The proceeds from the Line of Credit will be used for the following purpose(s): (a) working capital and general corporate purposes with a letter of credit
sublimit of $2,000,000.00; and (b) Permitted Acquisitions pursuant to Subsection D(15) of this Agreement.
(2) Term Loan. The proceeds from the Term Loan will be used to purchase the commercial office building located at 000 Xxxxxxx Xxxxxx Xxxx, Xxxxxxxxx, XX 00000.
3. Revisions to Article D – Representations, Warranties and Covenants.
A. New Subsection D(8)(d), entitled “Loan-to-Value Ratio,” is hereby added to the Agreement as follows:
(d) Loan-to-Value Ratio. Borrower shall maintain a maximum Loan-to-Value Ratio of .85 (or 85.00%). For the
purposes of this covenant, the term “Loan-to-Value Ratio” shall mean, for any given period, the aggregate outstanding balance of the Term Loan, in principal, accrued interest, and other fees and costs divided by the most recent appraised value of the property located at 000 Xxxxxxx Xxxxxx Xxxx, Xxxxxxxxx, XX 00000.
B. A new subsection, entitled “Mortgage,” is hereby added to Section D(9) of the Agreement, immediately below the existing subsection entitled
“Security Agreement,” as follows
Mortgage: Borrower, Viemed, Inc., shall grant to the Bank a first priority lien on the real property located at 000 Xxxxxxx Xxxxxx Xxxx, Xxxxxxxxx, XX 00000
and shall assign to the Bank all present and future rents, leases, and profits relating to the real property pursuant to a Multiple Indebtedness Mortgage, Pledge of Leases and Rents, and Security Agreement.
C. New Subsection D(16), entitled “Required Hedge,” is hereby added to the Agreement as follows:
(16) Required Hedge. Borrower shall hedge the floating interest expense of the Term Loan for such terms as
Bank shall determine by maintaining one or more interest rate swap transactions with a counter-party reasonably acceptable to Bank in an aggregate notional amount equal to an amount of not less than $600,000.00 and providing for a fixed rate, all
upon terms and subject to such conditions as shall be acceptable to Bank (the “Required Hedge”). Any prepayment, acceleration, reduction, increase or other change in the terms of any of the Term Loan will not alter the notional amount of any such
interest rate swap transactions or otherwise affect Borrower’s obligation to continue making payments under any such interest rate swap transactions, which will remain in full force and effect notwithstanding any such prepayment, acceleration,
reduction, increase or change, subject to the terms of such interest rate swap transaction.
4. Expenses. Borrower will pay all of the costs, expenses and fees incurred in
connection with the Agreement, as documented pursuant to the original Agreement, as modified by this Second Amendment and any future amendments.
5. Confirmation of Loan Documents and Security. Each Obligor understands and
agrees that all other terms, conditions, and provisions of the Agreement and/or the Loan Documents shall remain in full force and effect. All of the liens, privileges, mortgages, security interests, priorities, and equities existing and to exist
under and in accordance with the terms of the Agreement, as amended, the Revolving Note, and the Loan Documents are hereby extended and carried forward as security for the Agreement, the Revolving Note, The Term Note, the Loans, and all other
indebtedness, obligations, and liabilities of Borrower to Lender.
6. Representations; Resolutions. As of the date hereof, and after giving effect
to this Second Amendment, each Obligor confirms, reaffirms, and restates the representations and warranties set forth in the Agreement and the Loan Documents. Each Obligor further confirms and reaffirms each and every resolution, certificate,
consent, and/or other authorization provided to Lender, and further represents that each such resolution, certificate, consent, and/or other authorization (i) remains in full force and effect, (ii) stands of record on the books of such Obligor, and
(iii) may be relied upon by Lender, including without limitation the Authorizations given by Borrower and Guarantor on or about February 21, 2018, as well as any before or after.
7. No Right of Setoff; Release of Claims. Borrower acknowledges that as of the
date of this Second Amendment, Borrower has no right to setoff any amount against the amounts owed by Borrower to Lender. In consideration of this Second Amendment, each Obligor further releases Lender from any and all claims arising on or prior to
the date of this Second Amendment, known or unknown, in connection with the Agreement, the Loans, the Revolving Note, and/or the Loan Documents.
8. No Course of Dealing. This Second Amendment shall not establish a course of
dealing or be construed as evidence of any willingness on Lender’s part to grant other or future amendments, should any be requested, and Lender is under no obligation to grant or approve such other or future amendments.
9. AMENDMENT. THE AGREEMENT AND THIS SECOND AMENDMENT ARE CREDIT OR LOAN AGREEMENTS AS DESCRIBED IN LOUISIANA REVISED STATUTES
6:1121, ET SEQ. THERE ARE NO ORAL AGREEMENTS BETWEEN LENDER AND ANY OBLIGOR. THE AGREEMENT, AS AMENDED BY THIS SECOND AMENDMENT, THE REVOLVING NOTE, AND THE LOAN DOCUMENTS SET FORTH THE ENTIRE AGREEMENT
OF THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF AND THEREOF AND SUPERSEDE ALL PRIOR WRITTEN AND ORAL UNDERSTANDINGS BETWEEN THE PARTIES WITH RESPECT TO THE MATTERS HEREIN SET FORTH. THE AGREEMENT, AS AMENDED BY THIS SECOND AMENDMENT, MAY
NOT BE MODIFIED OR AMENDED EXCEPT BY A WRITING SIGNED AND DELIVERED BY BORROWER AND LENDER.
10. Miscellaneous provisions.
a. This Second Amendment shall be governed by and construed in accordance with the laws of the State of Louisiana. This Second Amendment may be executed in any number of counterparts, all
of which counterparts, when taken together, shall constitute one and the same instrument.
b. Except as expressly amended herein, the Agreement and all of the terms, conditions, and provisions set forth therein shall continue in full force and effect. The Agreement, as amended by
this Second Amendment, is hereby ratified and confirmed by the parties hereto.
c. No novation or satisfaction of any indebtedness, obligations, and/or liabilities owed by any Obligor to Lender is intended by this Second Amendment.
d. Unless specifically defined in this Second Amendment, capitalized terms used herein shall have the meanings set forth in the Agreement.
11. USA Patriot Act. Lender is subject to the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”) and Lender hereby notifies Borrower that pursuant to the requirements of the Act, Lender is required to
obtain, verify, and record information that identifies Borrower, which information includes the name and address of Borrower and other information that will allow Lender to identify Borrower in accordance with the Act. Borrower shall, promptly
following each request by Lender, provide all documentation and other information requested by Lender in order for Lender to comply with its ongoing obligations under the applicable “know your customer” and anti-money laundering rules and
regulations, including the Act.
Executed by the parties as of the date set forth above.
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Lender:
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Xxxxxxx Xxxxxxx Bank,
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a Mississippi state chartered bank
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| By: |
/s/ Xxxxx Xxxxxxxxx
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Xxxxx Xxxxxxxxx
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Senior Vice President
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Borrower:
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Viemed, Inc.
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| By: |
/s/ Xxxxx Xxxx
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Xxxxx Xxxx
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Chief Executive Officer
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Sleep Management, L.L.C.
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| By: |
/s/ Xxxxx Xxxx
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Xxxxx Xxxx
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Member & Manager
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Home Sleep Delivered, L.L.C.
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| By: |
/s/ Xxxxx Xxxx
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Xxxxx Xxxx
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Member & General Manager
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