THIRD AMENDMENT AND WAIVERS DATED AS OF MAY 29, 2007 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...
THIRD
AMENDMENT AND WAIVERS
DATED
AS OF MAY 29, 2007
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 ▇▇▇▇▇▇▇ HYPERBARIC LLC, GREATER BRONX HYPERBARIC LLC (f/k/a Montefiore
Hyperbaric LLC), ▇▇▇▇▇ ▇▇▇▇, 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, ▇▇▇▇▇▇ 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
(collectively,
the “Borrower”)
AND
SIGNATURE
BANK
(the
“Bank”)
THIS
THIRD AMENDMENT AND WAIVER (collectively, the “Third Amendment”) made as of the
29th
day of
May, 2007 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 ▇▇▇▇▇▇▇ HYPERBARIC LLC, GREATER BRONX
HYPERBARIC LLC (f/k/a Montefiore Hyperbaric LLC), ▇▇▇▇▇ ▇▇▇▇, 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, ▇▇▇▇▇▇ 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, each
with a place of business at ▇▇▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ and
SIGNATURE BANK, a New York bank having an office at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the “Bank”).
W
I T N E S S E T H:
WHEREAS,
certain of the entities comprising the Borrower and the Bank entered into a
Amended and Restated Loan Agreement dated as of June 17, 2005 as amended by
a
First Amendment dated as of April 7, 2006 and a Second Amendment dated as of
February 1, 2007 (collectively, the “Agreement”) providing for certain financial
accommodations to the Borrower and which Agreement is now in full force and
effect; and
WHEREAS,
in accordance with the provisions of Section 5.10 of the Agreement, the
following Persons, affiliates of the Borrower prior to the date of this Third
Amendment, have executed an adoption supplement in the form of Exhibit C to
the
Agreement and therefore have also entered into this Third Amendment: 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 (collectively, the “Additional Borrowers”); and
WHEREAS,
The Center for Wound Healing, Inc., the holder of all or the majority of the
ownership interests in the Borrower (the “Corporate Guarantor”) has guaranteed
the Borrowers’ obligation under the Loan Agreement by execution of a guaranty of
all liability (the “Guaranty”);
WHEREAS,
the Borrower has requested that the Bank agree to increase the amount of the
Commitment and agree to certain other modifications of the Agreement;
and
WHEREAS,
the Bank is willing to increase the Commitment and modify 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 Third Amendment capitalized terms, unless otherwise defined, shall
have
the meaning ascribed thereto in the Agreement.
2.
The
Bank
and the Borrower agree that the outstanding principal balance of the Loans
evidenced by the Note is $5,000,000.00 and interest has been paid on all Prime
Loans through April 30, 2007 and on all Libor Loans through the end of the
applicable Interest Period.
3.
As
an
inducement for the Bank to enter into this Third 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 9 hereof,
the Borrower and the Bank hereby agree that the Agreement is amended as
follows:
(A) The
definitions of “Borrowing Base”, “Guarantor”, “Loan Documents”, “Loans”,
“Notes”, “Subordinated Debt” and “Termination Date” appearing in Section 1.1 are
amended by deleting same and substituting the following:
“Borrowing
Base”
shall
mean eighty (80%) percent of the Borrower’s Eligible Receivables which are not
subject to a security interest in favor of a Person other than the Bank (other
than security interests granted to the Debenture Holders for which the
intercreditor provisions of the Subordination Agreement referred to in Section
9(F) of the Third Amendment apply) except, that for the period from the
effective date of entry into the Third Amendment to August 30, 2007, such
percentage shall be increased to eighty-five (85%) percent in respect of such
period.
“Guarantor”
shall
mean individually or collectively the Individual Guarantors and/or the Corporate
Guarantor.
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“Loan
Documents”
shall
mean this Agreement, the Notes, the Security Agreement, the Guarantees and
each
document, agreement and instrument executed in connection herewith or pursuant
hereto.
“Loans”
shall
mean, collectively, the Revolving Credit Loans and the Term Loan.
“Notes”
shall
mean, collectively, the Revolving Credit Note and the Term Note.
“Subordinated
Debt”
shall
mean the indebtedness subordinated pursuant to (a) subordination agreements
which are satisfactory in all respects to the Bank and its counsel evidenced
by
the Corporate Guarantor’s $5,500,000 Secured Convertible Debenture dated April
7, 2006 (the “Debentures”) payable to the parties named therein (the “Debenture
Holders”) as increased to the principal amount of $6,498,733.33 pursuant to the
first amendment to same (the “SD First Amendment”) and (b) subordination
agreements which are satisfactory in all respects to the Bank and its counsel
evidenced by any additional unsecured debt that may be issued by the Corporate
Guarantor or any entity comprising the Borrower after the effective date of
the
Third Amendment.
“Termination
Date”
shall
mean February 29, 2008.”
(B) The
additional definitions of “Individual Guarantors”, “Corporate Guarantor”, “Term
Loan” and “Term Note” and “Third Amendment” are added to Section 1.1 of the
Agreement to read as follows:
“Individual
Guarantors”
shall
mean ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and any other natural Person who
guarantees the Loans.
“Corporate
Guarantor”
shall
mean The Center for Wound Healing, Inc. and any other Person which guarantees
the Loans other than the Individual Guarantors.
“Term
Loan”
shall
mean the loan made pursuant to Section 2.5.1 hereof.
“Term
Note”
shall
have the meaning ascribed in Section 2.5.2 hereof.
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“Third
Amendment”
shall
mean the Third Amendment and Waiver, dated as of May 29, 2007 to Amended and
Restated Loan Agreement by and among the Borrower and the Bank.
(C) Section
2.1 of the Agreement is amended by deleting same and substituting the following
therefor:
“2.1 Commitment.
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) (y) Five Million Five Hundred Thousand ($5,500,000.00)
Dollars and, (z) after satisfaction of the conditions contained in Section
7A(ii), (iii) and (iv) of the Debentures as amended by the SD First Amendment
provided that payment required by such Section 7(A)(ii) is made from the
proceeds of the sale of equity or the issuance of Subordinated Debt, Six Million
and 00/100 ($6,000,000.00) Dollars or (ii) the Borrowing Base less the aggregate
principal amount of the Term Loan (the “Commitment”). During the Commitment
Period, the Borrower may use the Commitment by borrowing, paying and prepaying
in whole or in part and reborrowing, all in accordance with the terms and
conditions hereof. Each Revolving Credit Loan shall be in the minimum principal
amount of Two Hundred Fifty Thousand and 00/100 ($250,000.00) Dollars with
respect to LIBOR Loans or One Hundred Thousand and 00/100 ($100,000.00) Dollars
with respect to Prime Loans. Each Revolving Credit Loan shall bear interest
at a
rate per annum to be elected by the Borrower pursuant to Section 2.4 hereof,
and
in the case of LIBOR Loans for the Interest Period specified, and continued
or
converted in accordance with the requirements of Section 2.13 hereof, equal
to,
for Prime Loans, the Prime Rate in effect from time to time or, for LIBOR Loans,
for the Interest Period elected, at LIBOR plus 2.50%. If no LIBOR quotation
is
available pursuant to Section 2.11 or 2.12 hereof, the Revolving Credit Loans
shall bear interest as Prime Loans.”
(D) New
Sections 2.5.1 and 2.5.2 are added to the Agreement to read as
follows:
“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, (b) all the conditions of Section 7A(ii)
of the Debenture have been satisfied provided that any payment required by
such
Section of the Debenture is made from the proceeds of the sale of equity or
the
issuance of Subordinated Debt, (c) any prepayment required under Section 2.7
hereof after taking into consideration the making of the Term Loan has been
made
and (d) 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 satisfaction of the aforesaid conditions in the principal amount
of $1,500,000. The Term Loan shall bear interest at a rate per annum equal
to
the Prime Rate plus 1%.
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2.5.2 Term
Note:
The
Term Loan shall be evidenced by a promissory note of the Borrower substantially
in the form of Exhibit A-2 hereto with appropriate insertions (the “Term Note”)
payable to the order of the Bank and dated the date of the Term Loan. The
principal amount of the Term Note shall be payable in seven (7) consecutive
monthly installments of principal commencing on September 1, 2007 and continuing
on the first day of each month thereafter, the first six (6) of which shall
be
in an amount equal to $33,333, and the final installment on March 1, 2008 which
will be in the amount equal to the then unpaid principal balance together with
interest. The Borrower will pay interest on the outstanding principal balance
payable on the first day of each month commencing on the first day of the month
following the satisfaction of the conditions to availability set forth in
Section 2.5.1 hereof and continuing thereafter on the first day of each month
until March 1, 2008 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.”
(E) Section
2.6 of the Agreement is amended by deleting same and substituting the following
therefor:
“2.6 Voluntary
Payment.
The
Borrower may prepay any Prime Loan in whole or in part without premium or
penalty; provided, however, that each partial prepayment shall be in an amount
not less than $50,000. The Borrower may not prepay a LIBOR Loan prior to the
last day of an Interest Period. Any partial prepayment of principal of the
Term
Loan shall be applied to the last maturing installments in inverse order of
their respective maturities. Each prepayment shall be made together with payment
of accrued interest on the amount prepaid to and including the date of
prepayment.”
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(F) Section
2.7 of the Agreement is amended by deleting same and substituting the following
therefor:
“2.7 Mandatory
Payment.
The
Borrower shall prepay the Revolving Credit Loans at any time that the aggregate
outstanding principal amounts of Revolving Credit Loans and the Term Loan
exceeds the Borrowing Base, in the amount of such excess. Such prepayment shall
occur no later than five days following the date that the Bank received or
should have received the Borrowing Base Certificate required by Section 5.2(d)
hereof and such prepayment shall be applied first to reduce the Revolving Credit
Loans and next to reduce the Term Loan and applied, in the case of the Term
Loan, to the last maturing installments in inverse order of their respective
maturities.”
(G) Section
2.14 of the Agreement is amended by deleting same and substituting the following
therefor:
“2.14 Use
of
Proceeds.
The
proceeds of the Revolving Credit Loans shall be used to fund working capital
needs of each entity comprising the Borrower and capital expenditures provided
same are within the limitations of Section 7.7 hereof. The proceeds of the
Term
Loan will be used to fund completion of (or reimburse the Borrower or the
Corporate Guarantor for funding of) build outs of various hyperbaric oxygen
centers owned by certain of the Borrowers and related costs and
expenses.”
(H) A
new
Section 2.15 is added to the Agreement to read as follows:
“2.15 Extension
Fee.
Although the Bank has no obligation to further extend the Termination Date,
if
the Bank, in its sole discretion, provides for such an extension, the Bank
shall
be entitled to be paid a fee of $100,000.00 simultaneously with the making
of
such extension of the Termination Date.
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(I) Section
3.6 of the Agreement is amended by deleting same and substituting the following
therefor:
“3.6 No
Default.
Except
as set forth on Schedule-1 annexed hereto, the Borrower is not in default under
or with respect to any Contractual Obligation in any respect which could
reasonably be expected to be materially adverse to the business, operations,
property or financial or other condition of the Borrower, or which could
materially and adversely affect the ability of the Borrower to perform its
obligations under this Agreement and the other Loan Documents to which it is
a
party. No Default or Event of Default has occurred and is
continuing.”
(J) Section
3.12 of the Agreement is amended by deleting same and substituting the following
therefor:
“3.12 Security
Agreement. The
Borrower owns and has full authority to pledge, assign and grant to the Bank
a
first priority security interest in the Collateral as set forth in the Security
Agreement. The provisions of the Security Agreement are effective to create
in
favor of the Bank a legal, valid and enforceable security interest in all right,
title and interest of the Borrower in the Collateral except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors’ rights generally
or by equitable principles relating to enforceability (where enforcement is
sought by proceedings in equity or law). The financing statements which have
been or will be filed in the offices of the Secretaries of State of the
respective jurisdictions where each entity comprising the Borrower was formed
under the names set forth therein and the Security Agreement constitute and
create a fully perfected first priority security interest in all right, title
and interest of the Borrower in the Collateral, superior in right to any other
Liens, existing or future, which any Person may have against the Collateral.
All
of the foregoing representations specifically do not apply to the Borrowers
listed on Schedule-1 annexed hereto to the extent that such entities have
previously granted security interests to the Debenture Holders.”
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(K) Section
5.2 of the Agreement is deleted and the following is substituted
thereof:
“5.2 Financial
Information and Compliance Certificates.
Furnish
to the Bank:
(a)
(i)
Except as specifically provided to the contrary in Section 5 of the Third
Amendment, within 120 days of the close of each fiscal year of the Corporate
Guarantor throughout the Commitment Period, consolidated and consolidating
balance sheets, statements of income and retained earnings and statements of
cash flows of the Corporate Guarantor as of the last day of and for such fiscal
year, each such statement to be prepared in accordance with GAAP consistently
applied and audited by Raich Ende ▇▇▇▇▇▇ & Co., LLP or another firm of
independent certified public accountants satisfactory to the Bank; (ii) Except
as specifically provided to the contrary in Section 5 of the Third Amendment,
within 45 days of the close of the first three quarters of each fiscal year
throughout the Commitment Period commencing with the quarter ended June 30,
2005, consolidated and consolidating balance sheets, statements of income and
retained earnings and statements of cash flows of each Borrower as of the last
day of such quarter and for the portion of the fiscal year then elapsed, each
such statement to be prepared in accordance with GAAP consistently applied
and
compiled by Raich Ende ▇▇▇▇▇▇ & Co., LLP or another firm of independent
certified public accountants satisfactory to the Bank; and (iii) annually,
and
not later than April 30 of each year throughout the Commitment Period commencing
April 30, 2005 the personal financial statements on the Bank’s standard form of
each Individual Guarantor and, within fifteen (15) days of the filing thereof,
personal tax returns of each Individual Guarantor.
(b) At
the
same time as it delivers the financial statements called for by Section
5.2(a)(i) and (ii), deliver a certificate of the chief financial officer of
the
Corporate Guarantor evidencing a computation of compliance with the provisions
of Section 6 hereof and stating that in each case except as disclosed in such
certificate, the person making such certificate has no knowledge of any Default
or Event of Default. Together with their delivery of annual audited financial
statements, the Borrower’s certified public accountant shall also deliver such a
certificate, which shall be addressed to the Corporate Guarantor and the
Bank.
(c) At
the
time any officer of the Corporate Guarantor obtains knowledge of any Default,
if
such Default is then continuing, the Corporate Guarantor shall furnish to the
Bank a certificate of the chief financial officer of the Borrower setting forth
the details thereof and the action which the Borrower is taking or proposes
to
take with respect thereto.
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(d) By
the
(i) 25th day of each month for the months ended April, May and June 2007 and
(ii) for each month thereafter, the 20th day of each month, furnish to the
Bank
a detailed accounts receivable aging report and Borrowing Base Certificate
containing a Borrowing Base calculation in form and detail acceptable to the
Bank.
(e) The
Borrower will cause the Corporate Guarantor to, with reasonable promptness,
furnish such other data as may be reasonably requested by the Bank and will
at
all times and from time to time during business hours upon reasonable advance
notice permit the Bank by or through any of its officers, agents, employees,
attorneys or accountants to inspect and make extracts from such Corporate
Guarantor’s books and records. Upon request of the Bank, the Borrower will cause
the Corporate Guarantor to permit such access for the purpose of the conduct
of
field audits. The cost of any field audits shall be for the account of the
Borrower.
(f) For
each
financial statement or report specified in Section 5.2(a) and 5.2 (d) hereof
not
received by the Bank by the required date specified in such Section (the
“Delivery Date”), the Borrower shall pay the Bank a fee (the “Administrative
Fee”) to compensate the Bank for its additional costs and administrative
expenses associated with monitoring and insuring compliance with this subsection
(f) hereof. The Administrative Fee shall be equal to the amount set forth in
the
table below for the corresponding date of delivery:
|
# of days after the Delivery Date
|
Administrative Fee
|
|||
|
30-59
|
$
|
500.00
|
||
|
60-89
|
$
|
750.00
|
||
|
90
and more
|
$
|
1,500.00
|
||
The
Borrower shall receive a credit for any amount of any Administrative Fee paid
by
the Corporate Guarantor. The imposition of the Administrative Fee shall not
be
deemed a waiver by the Bank of the timely receipt of the required financial
statements by the Delivery Date.”
(L) A
new
Section 5.11 is added to the Agreement to read as follows:
“5.11 Post-Closing
Obligations.
As soon
as possible, but in any event within thirty (30) days after the Closing Date,
the Borrower shall deliver to the Bank evidence satisfactory to the Bank of
the
completion of the publication requirements for the entities listed in Schedule-1
annexed hereto.”
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(M) Section
6
of the Agreement is amended by deleting same and substituting the following
therefor:
“SECTION
6. FINANCIAL
COVENANTS
The
Borrower hereby agrees that, so long as the Commitment remains in effect, the
Notes remain outstanding and unpaid, or any other amount is owing to the Bank
hereunder, the Borrower will cause the Corporate Guarantor to maintain at all
times (unless otherwise indicated below):
6.1 Minimum
Tangible Net Worth.
A
minimum Tangible Net Worth, as hereinafter defined, of at least the amount
indicated as at the end of the corresponding quarterly period.
|
Quarterly
Period
|
Amount
|
|||
|
6/30/07
|
$
|
9,000,000
|
||
|
9/30/07
|
$
|
9,000,000
|
||
|
12/31/07
|
$
|
9,500,000
|
||
Tangible
Net Worth means Total Assets inclusive of an add back of $5,381,000
(representing the beneficial conversion factor for the Debentures) minus the
sum
of (i) Intangible Assets, and (ii) Total Liabilities other than 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.
6.2 Funded
Debt to EBITDA Ratio.
A
maximum ratio of Funded Debt, as hereinafter defined to EBITDA, as hereinafter
defined, of not more than 3.0 to 1.0 as at the end of each quarter, commencing
September 30, 2007, for the annualized period then-ended and ended at each
quarterly period thereafter. For the quarter ended September 30, 2007, EBITDA
for such annualized period will be calculated by multiplying the September
30,
2007 quarterly EBITDA by four. For the quarter ended December 31, 2007, EBITDA
for such annualized period will be calculated by multiplying the sum of
September 30, 2007 quarterly EBITDA and December 31, 2007 quarterly EBITDA
by
two. Funded Debt means all Debt for borrowed money inclusive of Capitalized
Lease Obligations but excluding Subordinated Debt. EBITDA means income from
continuing operations before the payment of interest, taxes and option expenses,
if any, plus depreciation and amortization determined in accordance with
GAAP.
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Except
as
otherwise specified, all financial covenants shall be calculated in accordance
with GAAP consistently applied.”
(N) Section
7.1 of the Agreement is amended by deleting same and substituting the following
therefor:
“7.1 Indebtedness
for Borrowed Money.
Incur,
or permit to exist, any indebtedness for borrowed money except (i) indebtedness
incurred pursuant to borrowings hereunder and under any other loans made by
the
Bank in its discretion to the Borrower, (ii) indebtedness existing on the date
hereof and reflected in the financial statements referred to in Section 3.1
hereof or on Schedule-1 attached hereto, (iii) indebtedness constituting
Subordinated Debt, (iv) indebtedness under Capitalized Lease Obligations or
secured by purchase money liens and security interests permitted by Section
7.4
(iv) hereof not to exceed $3,000,000.00 in the aggregate for the fiscal year
ended June 30, 2007, without the prior written consent of the Bank, provided
that the incurrence of the foregoing indebtedness does not result in the breach
of any covenant contained in Section 6 hereof, provided however, that
notwithstanding anything to the contrary in this Agreement, there shall be
no
restriction on the issuance of equity securities by the Corporate Guarantor
and/or any entity comprising the Borrower as long as there is no violation
of
Section 7.14 hereof.”
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(O) Section
7.4 of the Agreement is amended by deleting same and substituting the following
therefor:
“7.4 Liens.
Create,
assume or permit to exist, any Lien on any of its property or assets now owned
or hereafter acquired except (i) Liens in favor of the Bank; (ii) other Liens
incidental to the conduct of its business or the ownership of its property
and
assets which were not incurred in connection with the borrowing of money or
the
obtaining of advances or credit and which do not materially impair the use
thereof in the operation of its business; (iii) Liens for taxes or other
governmental charges which are not delinquent or which are being contested
in
good faith and for which a reserve shall have been established in accordance
with GAAP; (iv) purchase money liens or security interests in equipment
hereafter acquired or a lien or security interest incurred in connection with
any Capitalized Lease Obligation not exceeding the limit set forth in Section
7.1 (iv) hereof; (v) liens, pledges or deposits under workers’ compensation,
unemployment insurance, social security or similar legislation or to secure
public or statutory obligations, surety, stay, appeal, performance or other
similar bonds or obligations arising in the ordinary course of business; and
(vi) liens in favor of the Debenture Holders as enumerated in the Subordination
Agreement referred to in Section 9(F) of the Third Amendment.”
(P) Section
7.5 of the Agreement is amended by deleting same and substituting the following
therefor:
“7.5 Contingent
Liabilities.
Assume,
endorse, be or become liable for or guarantee the obligations of any Person
(collectively, “Contingent Liabilities”) except the endorsement of negotiable
instruments for deposit or collection in the ordinary course of business and
the
Subordinated Debt.”
(Q) Section
7.7 of the Agreement is amended by deleting same and substituting the following
therefor:
“7.7 Capital
Expenditures.
Expend
in the aggregate for the Borrower in excess of $2,500,000.00 for the fiscal
year
ended June 30, 2007, for capital expenditures without the prior written consent
of the Bank.”
-
12 -
(R) Section
7.11 of the Agreement is amended by deleting same and substituting the following
therefor:
“7.11 Transactions
with Affiliates.
Directly or indirectly purchase, acquire or lease any property from, or sell,
transfer or lease any property to, or enter into any other transaction, with
any
Affiliate except in the ordinary course of business pursuant to the reasonable
requirements of the Borrower’s business and at prices and on terms not less
favorable to it than those which would have been obtained in an arm’s-length
transaction with a non-affiliated third party, provided however, this Section
shall not be deemed to prohibit any Borrower or the Corporate Guarantor from
transferring property to: (i) another Borrower, (ii) the Corporate Guarantor,
or
(iii) an Affiliate organized or acquired after the date of this Agreement,
provided that in the case of a transfer to such an Affiliate any such Affiliate
has fully complied with the requirements of Section 5.10 hereof to the
satisfaction of the Bank prior to or simultaneously with any such
transfer.”
(S) Section
7.12 of the Agreement is amended by deleting same and substituting the following
therefor:
“7.12 Distributions
and Purchase of Interests.
Make
any distributions either in cash or property (other than distributions payable
in membership interests of the Borrower) prior to the Termination Date on any
of
its membership interests or apply any of its property or assets to the purchase,
redemption or other retirement of, or set apart any sum for the payment of
any
distributions on, or the purchase, redemption or other retirement of, or make
any other distribution by reduction of capital or otherwise in respect of any
membership interests of the Borrower, except the Borrower may pay cash
distributions out of net income for the following (collectively, the “Permitted
Payments”) (a) to the Corporate Guarantor; and (b) for the sole purpose of
paying the actual annual federal, state and local income tax liabilities, if
any, of each minority member of a Borrower listed in Schedule-1 which are
required to be paid by such member (in respect of the profit of such Borrower),
provided that such distributions shall be no more than required to cover such
tax liabilities as detailed in a calculation prepared by the Borrower and
submitted to the Bank for approval at least ten (10) days prior to the making
of
such distribution; and (c) upon the dissolution or cessation of the business
of
any Borrower, to the minority members of such Borrower in respect of each such
member’s accrued earnings that have not previously been distributed to them; and
(d) provided
further,
however,
that
the making of any Permitted Payments specified in clause (b) and (c)
individually or in the aggregate shall not result in a breach of any covenant
contained in Section 6 hereof.”
-
13 -
(T) Section
7.13 of the Agreement is amended by deleting same and substituting the following
therefor:
“7.13 No
Lien Senior to or Equal to Loan Documents.
Create
or cause to be created any lien or charge on any property subject to the
security interest of the Loan Documents which is superior or equal to the liens
or security interests of the Loan Documents except liens in favor of the
Debenture Holders as enumerated in the Subordination Agreement referred to
in
Section 9(F) of the Third Amendment.”
(U) Section
7.14 of the Agreement is amended by deleting same and substituting the following
therefor:
“7.14 Change
of Control.
Without
the prior written consent of the Bank, suffer or permit a Change of Control
Transaction, as hereinafter defined. Change of Control Transaction means the
occurrence after the date hereof of any of the following:
(a) With
respect to the Corporate Guarantor: (i) an acquisition after the date hereof
by
an individual or legal entity or “group” (as described in Rule 13d-5(b)(1)
promulgated under the Exchange Act) of effective control (whether through legal
or beneficial ownership of capital stock of the Corporate Guarantor, by contract
or otherwise) of in excess of 40% of the voting securities of the Corporate
Guarantor (other than by means of conversion or exercise of the Debentures
and
the Securities issued together with the Debentures), or (ii) the Corporate
Guarantor merges into or consolidates with any other Person, or any Person
merges into or consolidates with the Corporate Guarantor and, after giving
effect to such transaction, the stockholders of the Corporate Guarantor
immediately prior to such transaction own less than 60% of the aggregate voting
power of the Corporate Guarantor or the successor entity of such transaction,
or
(iii) the Corporate Guarantor sells or transfers all or substantially all of
its
assets to another Person and the stockholders of the Corporate Guarantor
immediately prior to such transaction own less than 60% of the aggregate voting
power of the acquiring entity immediately after the transaction, or (iv) a
replacement at one time or within a two year period of more than one-half of
the
members of the Corporate Guarantor’s board of directors which is not approved by
a majority of those individuals who are members of the board of directors on
the
date hereof (or by those individuals who are serving as members of the board
of
directors on any date whose nomination to the board of directors was approved
by
a majority of the members of the board of directors who are members on the
date
hereof), or (v) the execution by the Corporate Guarantor of an agreement to
which the Corporate Guarantor is a party or by which it is bound, providing
for
any of the events set forth in clauses (i) through (iv) above.
-
14 -
(b) With
respect to the Borrower: the failure of the Corporate Guarantor to own all
of
the ownership interests in the Borrower other than minority interests referred
to in Section 7.12 of Schedule-1 attached hereto.
(c) With
respect to clauses (a) and (b) hereof, the taking of any of the actions in
connection with Sections 7(A)(i) or 7(b)(i) of the Debenture or Section 4(d)
of
the SD First Amendment by the Debenture Holders will not be deemed a violation
of this covenant provided the Borrower is in compliance with Section 7.15
hereof.”
(V) Section
7.15 of the Agreement is amended by deleting same and substituting the following
therefor:
“7.15 Change
in Management.
Suffer
or permit ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ not to be active as chief executive officer of
the
Borrower and the Corporate Guarantor on substantially a full time
basis.”
(W) Section
8(a) of the Agreement is amended by deleting same and substituting the following
therefor:
“(a) The
Borrower shall fail to pay any interest on or principal of a Note on the due
date therefor or shall fail to pay any other amount payable hereunder within
ten
(10) days of the due date therefor or five (5) days in the case of a prepayment
required pursuant to Section 2.7 hereof; or”
(X) Section
8(e) of the Agreement is amended by deleting same and substituting the following
therefor:
“(e) The
Borrower or any Guarantor shall (i) default in any payment of any indebtedness
for borrowed money owing to the Bank (other than the Note), or other
indebtedness in excess of the principal amount of $50,000.00, inclusive of
the
Subordinated Debt held by the Debenture Holders, beyond the period of grace,
if
any, provided in the instrument or agreement under which such indebtedness
was
created; or (ii) default in the observance or performance of any other agreement
or condition relating to any such indebtedness or contained in any instrument
or
agreement evidencing, securing or relating thereto or any other event shall
occur or condition exist, in each case the effect of which default or other
event or condition is to cause or permit the holder or holders of such
indebtedness (or a trustee or agent on behalf of such holder or holders) to
cause such indebtedness to become due prior to its stated maturity;
or”
-
15 -
(Y) Section
8(l) of the Agreement is amended by deleting same and substituting the following
therefor:
“(l) if
any
Individual Guarantor dies or is judicially declared incompetent provided,
however,
death
will not be deemed an Event of Default hereunder if the decedent Individual
Guarantor has at least $2,500,000.00 of life insurance that has been
collaterally assigned to the Bank on forms satisfactory to the Bank and its
counsel; or”
(Z) Section
9.2 of the Agreement is amended by deleting same and substituting the following
therefor:
“9.2 Additional
Collateral Security.
In
addition to the collateral described in Section 9.1 hereof, payment of the
Obligations is also secured by (i) a first priority security interest in the
property of the Borrower and the Corporate Guarantor described in the Security
Agreement whether now owned or hereafter acquired, as provided in the Security
Agreement, (ii) a collateral assignment of life insurance in the minimum amount
of $7,500,000.00 on the life of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ which will be delivered to
the
Bank within forty-five (45) days of the date of this Third Amendment and (iii)
at the option of the Borrower, collateral assignment(s) of life insurance in
the
minimum amount of $2,500,000.00 on the life of either or both Individual
Guarantors (the foregoing, together with the collateral described in Section
9.1
hereof, the “Collateral”).”
(AA) Section
10.1 of the Agreement is amended by deleting same and substituting the following
therefor:
“10.1 Notices.
All
notices, requests and demands to or upon the respective parties hereto to be
effective shall be in writing unless otherwise expressly provided herein and
shall be deemed to have been duly given or made when delivered by hand, or
by
telegram or telecopy, or when deposited in the mail addressed as follows, or
to
such address as may be hereafter notified in writing by the respective parties
hereto and any future holders of the Note:
-
16 -
|
The
Borrower:
|
|
|
▇▇▇
▇▇▇▇▇ ▇ ▇▇▇▇▇,
|
|
|
▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
|
|
|
Attn:
▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
|
|
|
Chief Executive Officer
|
|
|
The
Bank:
|
Signature
Bank
|
|
▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
|
|
|
▇▇▇▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
|
|
|
Attn:
▇▇. ▇▇▇▇ ▇▇▇▇▇▇
|
|
|
Vice President”
|
(BB) To
conform to the amendments to Section 2.1 of the Agreement, Exhibit A, the
Revolving Credit Note, is replaced and superceded by Exhibit A-1, the Amended
and Restated Revolving Credit Note, attached hereto and made a part
hereof.
(CC) To
conform to the amendment of the definition of Borrowing Base, Exhibit B is
replaced and superceded by Exhibit B-1 attached hereto and made a part
hereof.
(DD) The
Schedule to the Agreement is amended by deleting same and replacing same with
Schedule-1 annexed hereto.
5. (A)Non-compliance
by the Borrower with Section 5.2(a)(ii) of the Agreement is hereby waived by
the
Bank for the periods provided for below:
(i) For
the
quarter ended September 30, 2006 provided such quarterly financials are
delivered by June 30, 2007;
(ii) For
the
fiscal year ended June 30, 2006 provided such annual financials are delivered
by
June 30, 2007;
(iii) For
the
quarter ended December 31, 2006 provided such quarterly financials are delivered
by July 31, 2007; and
(iv) For
the
quarter ended March 31, 2007 provided such quarterly financials are delivered
by
August 31, 2007.
(B) Non-compliance
by the Borrower with Section 5.7 of the Agreement is hereby waived by the Bank
with respect to the litigation and disputes enumerated in Sections 3.5 and
3.6
of Schedule-1 hereto.
(C) Non-compliance
by the Borrower with Section 5.10 of the Agreement is hereby waived by the
Bank
with respect to the Additional Borrowers enumerated in the second “WHEREAS”
clause of the Third Amendment.
-
17 -
Borrower
acknowledges that the foregoing waivers are based on the specific facts thereof
and the foregoing condition regarding the lack of an Event of Default and if
either the facts underlying such waivers or an Event of Default subsequently
occurs, the grant of such waivers will be of no further force or effect and
the
Bank will be entitled to full enforcement of all the remedies provided for
under
the foregoing Agreement with respect to the Events of Default for which such
waivers have been conditionally granted.
6. 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).
7. By
their
execution of this letter in the space provided below, the Guarantors 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 the
Guarantors).
8. The
amendment and waiver 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.
9. This
Third 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 Third Amendment and the borrowings
to be made under the Agreement, together with the Borrower’s updated officers’
certificate;
(B) Note.
The
Bank shall have received the Amended and Restated Revolving Credit Note in
the
form of Exhibit A-1 conforming to the requirements hereof and duly executed
by
the Borrower.
(C) Guarantee.
The
Bank shall have received the Guarantee executed by the Corporate Guarantor
on
the Bank’s standard form with such modifications as shall have been agreed to by
the Bank and the Bank’s counsel.
-
18 -
(D) Reaffirmations
and Acknowledgments and Amendment to the Amended and Restated Continuing
Guaranty of Individual Guarantors.
The
Bank shall have received the Reaffirmations and Acknowledgments and Amendment
to
the Amended and Restated Continuing Guaranty of Individual Guarantors’
guarantees on the Bank’s standard form duly executed by the Individual
Guarantors.
(E) Security
Agreements.
The
Bank shall have received the Amended and Restated Security Agreement duly
executed by the Additional Borrowers and the Security Agreement duly executed
by
the Corporate Guarantor on the Bank’s standard form with such modifications as
shall have been agreed to by the Bank and Bank’s counsel, together with UCC-1
financing statements, UCC-3 termination statements or amendments (if required),
UCC searches and security agreement questionnaires.
(F) Subordination
Agreement.
The
Bank shall have received from the parties thereto and the Corporate Guarantor
the amended and restated Subordination Agreement satisfactory in all respects
to
the Bank and its counsel.
(G) LLC
Documents.
The
Bank shall have received a members ‘ certificate/officers’ certificate of the
additional Borrowers certifying as to each entity comprising the Additional
Borrower’s articles of formation, operating agreement, incumbency and consents
and the Corporate Guarantor’s certificate of incorporation, bylaws, and
resolutions.
(H) Good
Standing Certificate.
The
Bank shall have received a good standing and qualification certificate(s) for
the Additional Borrower and the Corporate Guarantor from the states of
organization and the states where said Persons are doing business.
(I) Opinion
of Counsel.
The
Bank shall have received an opinion of counsel to the Borrower and the Corporate
Guarantor in form and detail reasonably acceptable to the Bank and its
counsel.
(J) 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.
(K) Fees.
The
Bank shall have received evidence of payment of the $50,000.00 due the Bank
consisting of a $25,000.00 origination fee and $25,000.00 waiver fee and the
fees and disbursements of the Bank’s counsel.
(L) Approval
of the Bank’s Counsel.
All
legal matters incident to this Third Amendment shall be satisfactory to counsel
to the Bank.
-
19 -
10. This
Third Amendment is dated for convenience as of May 29, 2007 and shall be
effective on the date of execution by the Bank retroactive to May 2,
2007.
11. Except
as
hereby amended the said agreement dated as of June 17, 2005 as amended by the
First Amendment dated as of April 7, 2006 and the Second Amendment dated as
of
February 1, 2007 is in all respects ratified and confirmed.
-
20 -
IN
WITNESS WHEREOF, the parties hereto have caused this Third Amendment to be
executed by their duly authorized officers as of the date first written
above.
Borrower:
NY
HYPERBARIC, LLC
FOREST
HILLS HYPERBARIC, LLC
SCRANTON
HYPERBARIC LLC
JFK
HYPERBARIC LLC
TRENTON
HYPERBARIC, LLC
NEWARK
BI
LLC
PASSAIC
HYPERBARIC, LLC
ST
▇▇▇▇▇▇▇ HYPERBARIC LLC
GREATER
BRONX HYPERBARIC LLC
(f/k/a
MONTEFIORE HYPERBARIC LLC)
▇▇▇▇▇
▇▇▇▇, LLC
SOUTH
NASSAU HYPERBARIC LLC
NEW
YORK
HYPERBARIC AND
WOUND
CARE CENTERS LLC (DEL)
NEW
YORK
HYPERBARIC AND
WOUND
CARE CENTERS, L.L.C. (N.Y.)
VB
HYPERBARIC, LLC
EIN
HYPERBARIC LLC
MAIMONIDES
HYPERBARIC, LLC
THE
SQUARE HYPERBARIC, LLC
SOUTH
N
HYPERBARIC LLC
MUHLENBERG
HYPERBARIC LLC
▇▇▇▇▇▇
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
HYBERBARIC,
LLC
(a/k/a
MASSACHUSETTS HYPERBARIC, LLC)
MEADOWLANDS
HYPERBARIC, LLC
by
their
managers/members
|
By:
|
|
|
▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇
|
|
| Chief Executive Officer |
-
21 -
|
Bank:
SIGNATURE
BANK
|
|
|
By:
|
|
|
▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇▇▇
|
|
-
▇▇ -
▇▇▇▇▇
▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ of________________, ss:
On
the
_____ day of May, in the year 2007, before me the undersigned, personally
appeared ▇▇▇▇▇▇
▇.
▇▇▇▇▇▇▇,
personally known to me or proved to me on the basis of satisfactory evidence
to
be the individual whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his capacity, and that by his
signature on the instrument, the individual or the person upon behalf of which
the individual acted, executed the instrument.
|
Notary
Public
|
-
23 -
SCHEDULE-1
SCHEDULE
3.5
Pending
Litigations
|
Case Caption
|
Case No.
|
Court
|
Nature of
Action
|
||||
|
Warantz
Healthcare Group v. CFWH
|
07-05247
|
Nassau
Supreme Court
|
Breach
of Contract
|
||||
|
Premium
Builders, Inc. v. Pennsylvania Hyperbaric, LLC
|
6659-C
of 2006
|
Court
of Common Pleas, Luzerne County (PA)
|
Breach
of Contract
|
||||
|
Sky
Hyperbaric Equipment Company, Inc. v. New York Hyperbaric & Wound Care
Centers LLC
|
16066/06
|
Westchester
Supreme Court
|
Breach
of Contract
|
SCHEDULE
3.6
Disputed
Contractual Obligations
|
Party
|
Nature of Dispute
|
||
|
Med-Air
Consultants, Inc.
|
Breach
of Contract
|
||
|
Advantage
Healthcare Solutions (“AHS”)
|
Breach
of Contract
|
||
|
Grace
Consulting
(▇▇▇▇▇▇
▇▇▇▇▇▇)
|
Breach
of Contract
|
Schedule-1
SCHEDULE
3.10 (f)
Environmental
Complaint
NONE
SCHEDULE
3.11
List
of Permits, Licenses, Authorizations, Approvals and Governmental
Consents
NONE
SCHEDULE
3.12
Debenture
Holders UCC Filings
|
Entity
|
Date
|
File
No.
|
|||
|
The
Center for Wound Healing, Inc. (Corporate Guarantor)
|
4/7/2006
|
2006011019-6
|
|||
|
Hyperbaric,
LLC (f/k/a Massachusetts Hyperbaric, LLC)
|
4/10/2006
|
200647078710
|
|||
|
Meadowlands
Hyperbaric, LLC
|
4/10/2006
|
2353266-3
|
|||
|
NJ
Hyperbaric LLC
|
4/10/2006
|
2353266-3
|
|||
|
Pennsylvania
Hyperbaric, LLC
|
4/13/2006
|
2006041700247
|
|||
|
CMC
Hyperbaric, LLC
|
4/13/2006
|
2006041700247
|
SCHEDULE
5.11
New
York Entities Not in Compliance with Publication
Requirements
|
Entity
|
Status
|
||
|
Far
Rockaway Hyperbaric, LLC
|
Publication
in process
|
||
|
Atlantic
Hyperbaric, LLC
|
Publication
in process
|
||
|
CEF
Products, LLC
|
Publication
in process
|
||
|
The
Center For Wound Healing II, LLC
|
Publication
in process
|
Schedule-1
SCHEDULE
7.4
Permitted
Liens
NONE
SCHEDULE
7.12 (c)
Schedule
of Ownership by Minority Members
|
Borrower
|
Minority Members’
Ownership %
|
|||
|
New
York Hyperbaric and Wound Care Centers, LLC
|
11.25
|
%
|
||
|
▇▇▇▇▇▇
Hyperbaric, LLC
|
25
|
%
|
||
|
JFK
Hyperbaric, LLC
|
7.5
|
%
|
||
|
Muhlenberg
Hyperbaric, LLC
|
28
|
%
|
||
|
Newark
BI, LLC
|
25
|
%
|
||
|
Passaic
Hyperbaric, LLC
|
9.375
|
%
|
||
|
Trenton
Hyperbaric, LLC
|
24
|
%
|
||
|
CEF
Products, LLC
|
20
|
%
|
||
|
Forest
Hills Hyperbaric, LLC
|
30
|
%
|
||
|
Greater
Bronx Hyperbaric, LLC
|
10
|
%
|
||
|
Maimonides
Hyperbaric, LLC
|
17
|
%
|
||
|
NY
Hyperbaric, LLC
|
30
|
%
|
||
|
St.
▇▇▇▇▇ Hyperbaric
|
20
|
%
|
||
|
South
N Hyperbaric, LLC
|
20
|
%
|
||
|
South
Nassau LLC
|
14.37
|
%
|
||
|
The
Square Hyperbaric, LLC
|
21.875
|
%
|
||
|
Scranton
Hyperbaric, LLC
|
9
|
%
|
||
Schedule-1
EXHIBIT
A-1
AMENDED
AND RESTATED REVOLVING CREDIT NOTE
|
$6,000,000.00
|
Garden
City, New York
|
May
29, 2007
|
NY
Hyperbaric, LLC, a New York limited liability company, Forest Hills Hyperbaric,
LLC, a New York limited liability company, Scranton Hyperbaric LLC, a
Pennsylvania limited liability company, JFK Hyperbaric LLC, a New Jersey limited
liability company, Trenton Hyperbaric, LLC, a New Jersey limited liability
company, Newark BI LLC, a New Jersey limited liability company, Passaic
Hyperbaric, LLC, a New York limited liability company, St ▇▇▇▇▇▇▇ Hyperbaric
LLC, a New York limited liability company, Greater Bronx Hyperbaric LLC (f/k/a
Montefiore Hyperbaric LLC), a New York limited liability company, ▇▇▇▇▇ ▇▇▇▇,
LLC, a New York limited liability company, South Nassau Hyperbaric, LLC a New
York limited liability company, New York Hyperbaric and Wound Care Centers
LLC,
a Delaware limited liability company, New York Hyperbaric and Wound Care
Centers, L.L.C., a New York limited liability company, VB Hyperbaric, LLC,
a New
York limited liability company, EIN Hyperbaric LLC, a New York limited liability
company, Maimonides Hyperbaric, LLC, a New York limited liability company,
The
Square Hyperbaric, LLC, a New York limited liability company, South N Hyperbaric
LLC, a New York limited liability company, Muhlenberg Hyperbaric LLC, a New
Jersey limited liability company, ▇▇▇▇▇▇ Hyperbaric LLC, a Massachusetts limited
liability company, The Center for Wound Healing I, LLC (f/k/a Modern Medical,
LLC), a New Jersey limited liability company, The Center for Wound Healing
II,
LLC, (f/k/a Modern Medical Specialties, LLC), a New York limited liability
company, NJ Hyperbaric, LLC, a New Jersey limited liability company, Far
Rockaway Hyperbaric, LLC, a New York limited liability company, Atlantic
Hyperbaric, LLC, a New York limited liability company, Atlantic Associates,
LLC,
a Delaware limited liability company, CEF Products, LLC, a New York limited
liability company, CMC Hyperbaric, LLC, a Pennsylvania limited liability
company, Pennsylvania Hyperbaric, LLC, a Pennsylvania limited liability company,
Hyperbaric, LLC (a/k/a Massachusetts Hyperbaric, LLC), a Massachusetts limited
liability company and Meadowlands Hyperbaric, LLC, a New Jersey limited
liability company (collectively, the “Borrower”), for value received, hereby
promises to pay to the order of SIGNATURE BANK (the “Bank”) at the office of the
Bank specified in Section 10.1 of the Loan Agreement dated as of June 17, 2005,
between the Borrower and the Bank, as amended from time to time (as so amended
the “Agreement”; terms defined in the Agreement shall have their defined
meanings when used in this Note), in lawful money of the United States of
America and in immediately available funds the principal amount of SIX MILLION
AND 00/100 ($6,000,000.00) DOLLARS payable on the Termination Date, or, if
less
than such principal amount, the aggregate unpaid principal amount of all Loans
made by the Bank to the Borrower pursuant to Section 2.1 of the Agreement.
The
Borrower further promises to pay interest at said office in like money on the
unpaid principal balance of this Note from time to time outstanding at the
rate
per annum set forth in Section 2 of the Agreement. Interest shall be computed
on
the basis of a 360-day year for actual days elapsed and shall be payable monthly
as provided in the Agreement. All Loans made by the Bank pursuant to Section
2.1
of the Agreement and payments of the principal thereon may be endorsed by the
holder of this Note on the schedule annexed hereto, to which the holder may
add
additional pages. The aggregate net unpaid amount of Loans set forth in such
schedule shall be presumed to be the principal balance hereof. After the stated
or any accelerated maturity hereof, this Note shall bear interest at a rate
as
set forth in the Agreement, payable on demand, but in no event in excess of
the
maximum rate of interest permitted under applicable law. All payments shall
be
made by automatic debit from an account maintained at the Bank in which Borrower
shall maintain balances sufficient to pay the monthly payments (Account
#▇▇▇▇▇▇▇▇▇▇).
Exhibit
A-1/Page 1
This
Note
is the Amended and Restated Revolving Credit Note referred to in the Agreement,
and is entitled to the benefits thereof and may be prepaid, and is required
to
be prepaid, in whole or in part as provided therein. This Amended and Restated
Revolving Credit Note is secured by the collateral described in the Agreement,
including the collateral set forth in the Security Agreement.
The
joint
and several obligations of each Borrower under this Note shall be absolute
and
unconditional and shall remain in full force and effect until the entire
principal, interest, penalties, premiums and late charges, if any, on this
Note
and all additional payments, if any, due pursuant to any other Loan Document
(collectively, the “Obligations”) shall have been paid. There being more than
one Borrower, the following provisions shall apply: (a) Each Borrower agrees
that it is jointly and severally, directly, and primarily liable to Bank for
payment in full of the Obligations and that such obligation is independent
of
the duties, obligations, and liability of each and all of the other joint and
several Borrowers. Bank may bring a separate action or actions on the
Obligations against each, any, or all of the Borrowers, whether action is
brought against any other or all of such Borrowers or any one or more of the
Borrowers is or is not joined therein; (b) Each Borrower agrees that any release
that may be given by Bank to any one or more of the Borrowers or any guarantor
of the Obligations shall not release any other Borrower from its Obligations
hereunder; (c) Each Borrower hereby waives any right to assert against Bank
any
defense (legal or equitable), setoff, counterclaim, or claims that such Borrower
individually may now or any time hereafter have against another Borrower or
any
other party liable to Bank in any manner or way whatsoever; (d) Any and all
present and future debt and other obligations of any Borrower to any other
Borrower are hereby subordinated to the full payment and performance of the
Obligations; provided, however, such debt and other obligations may be incurred
and repaid, subject to the terms of this Note, as long as no Event of Default
shall have occurred and not have been waived; (e) Each Borrower is presently
informed as to the financial condition of each of the other Borrowers and of
all
other circumstances that a diligent inquiry would reveal and that bear upon
the
risk of nonpayment of the Obligations. Each Borrower hereby covenants that
it
will continue to keep itself informed as to the financial condition of all
other
Borrowers, the status of all other Borrowers, and of all circumstances that
bear
upon the risk of nonpayment. Absent a written request from any of the Borrowers
to Bank for information, each Borrower hereby waives any and all rights it
may
have to require Bank to disclose to such Borrower any information that Bank
may
now or hereafter acquire concerning the condition or circumstances of any of
the
Borrowers; (f) Each Borrower waives all rights to notices of default, existence,
creation, or incurring of new or additional indebtedness and all other notices
of formalities to which such Borrower may, as a joint and several Borrower
hereunder, be entitled; and (g)The term “Borrower” shall mean “the Borrowers and
each of them individually and collectively”.
The
joint
and several obligations of the Borrower to Bank under this Note shall remain
in
full force and effect (or be reinstated) until Bank has received payment in
full
of all obligations and the expiration of any applicable preference or similar
period pursuant to any bankruptcy, insolvency, reorganization, moratorium or
similar law, or at law or equity, without any claim having been made before
the
expiration of such period asserting an interest in all or any part of any
payment(s) received by Bank.
Exhibit
A-1/Page 2
Each
Borrower expressly agrees that Bank shall not be required first to institute
any
suit or to exhaust its remedies against any other Borrower or any other person
or party to become liable hereunder or against any Collateral, in order to
enforce this Note; and expressly agree that, notwithstanding the occurrence
of
any of the foregoing, each Borrower shall be and remain, directly and primarily
liable for all sums due under this Note and under the Loan Documents. On
disposition by Bank of any property encumbered by any Collateral, each Borrower
shall be and shall remain jointly and severally liable for any
deficiency.
Upon
the
occurrence of any one or more of the Events of Default specified in the
Agreement, all amounts then remaining unpaid on this Note may be declared to
be
immediately due and payable as provided in the Agreement.
This
Note
shall replace and supersede the note made by the Borrower to the order of the
Bank dated June 17, 2005 in the principal amount of $5,000,000 (the “Prior Note”
which was a replacement of the Noted dated November 4, 2004 in the principal
amount of $2,000,000.00 which was in turn a replacement of a prior note dated
March 26, 2004 in the principal amount of $1,000,000.00; provided, however,
that
the execution and delivery of this Note shall not in any circumstance be deemed
to have terminated, extinguished or discharged the Borrower’s indebtedness under
such Prior Note, all of which indebtedness shall continue under and be governed
by this Note and the documents, instruments and agreements executed pursuant
hereto or in connection herewith. This Note is a replacement, consolidation,
amendment and restatement of the Prior Note and IS NOT A NOVATION. The Borrower
shall also pay and this Note shall also evidence any and all unpaid interest
on
all the loan made by the Bank to the Borrower pursuant to Prior Note, and at
the
interest rate specified therein, for which this Note has been issued as
replacement therefor.
This
Note
shall be construed in accordance with and governed by the laws of the State
of
New York.
NY
HYPERBARIC, LLC
FOREST
HILLS HYPERBARIC, LLC
SCRANTON
HYPERBARIC LLC
JFK
HYPERBARIC LLC
TRENTON
HYPERBARIC, LLC
NEWARK
BI
LLC
PASSAIC
HYPERBARIC, LLC
ST
▇▇▇▇▇▇▇ HYPERBARIC LLC
GREATER
BRONX HYPERBARIC LLC
(f/k/a
MONTEFIORE HYPERBARIC LLC)
▇▇▇▇▇
▇▇▇▇, LLC
SOUTH
NASSAU HYPERBARIC LLC
NEW
YORK
HYPERBARIC AND
WOUND
CARE CENTERS LLC (DEL)
NEW
YORK
HYPERBARIC AND
WOUND
CARE CENTERS, L.L.C. (N.Y.)
VB
HYPERBARIC, LLC
EIN
HYPERBARIC LLC
MAIMONIDES
HYPERBARIC, LLC
THE
SQUARE HYPERBARIC, LLC
Exhibit
A-1/Page 3
SOUTH
N
HYPERBARIC LLC
MUHLENBERG
HYPERBARIC LLC
▇▇▇▇▇▇
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
HYBERBARIC,
LLC
(a/k/a
MASSACHUSETTS HYPERBARIC, LLC)
MEADOWLANDS
HYPERBARIC, LLC
by
their
managers/members
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
Exhibit
A-1/Page 4
SCHEDULE
OF LOANS AND PAYMENT OF PRINCIPAL
TO
AMENDED AND RESTATED REVOLVING CREDIT NOTE DATED AS OF MAY ___, 2007 FROM NY
HYPERBARIC, LLC, FOREST HILLS HYPERBARIC, LLC, SCRANTON HYPERBARIC LLC, JFK
HYPERBARIC LLC, TRENTON HYPERBARIC, LLC, NEWARK BI LLC, PASSAIC HYPERBARIC,
LLC,
ST ▇▇▇▇▇▇▇ HYPERBARIC LLC, GREATER BRONX HYPERBARIC LLC (f/k/a Montefiore
Hyperbaric LLC), ▇▇▇▇▇ ▇▇▇▇, 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, ▇▇▇▇▇▇ 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
|
Date
|
Amount of
Loan
|
Interest Rate
|
Last Day of
Interest Period
|
Balance
Principal Paid
|
Remaining
Unpaid
|
Notation
Made By
|
|||||||
Exhibit
▇-▇/▇▇▇▇ ▇
▇▇▇▇▇▇▇
▇-▇
▇▇▇▇
NOTE
|
$1,500,000.00
|
Garden
City, New York
|
May
29, 2007
|
NY
Hyperbaric, LLC, a New York limited liability company, Forest Hills Hyperbaric,
LLC, a New York limited liability company, Scranton Hyperbaric LLC, a
Pennsylvania limited liability company, JFK Hyperbaric LLC, a New Jersey limited
liability company, Trenton Hyperbaric, LLC, a New Jersey limited liability
company, Newark BI LLC, a New Jersey limited liability company, Passaic
Hyperbaric, LLC, a New York limited liability company, St ▇▇▇▇▇▇▇ Hyperbaric
LLC, a New York limited liability company, Greater Bronx Hyperbaric LLC (f/k/a
Montefiore Hyperbaric LLC), a New York limited liability company, ▇▇▇▇▇ ▇▇▇▇,
LLC, a New York limited liability company, South Nassau Hyperbaric, LLC a New
York limited liability company, New York Hyperbaric and Wound Care Centers
LLC,
a Delaware limited liability company, New York Hyperbaric and Wound Care
Centers, L.L.C., a New York limited liability company, VB Hyperbaric, LLC,
a New
York limited liability company, EIN Hyperbaric LLC, a New York limited liability
company, Maimonides Hyperbaric, LLC, a New York limited liability company,
The
Square Hyperbaric, LLC, a New York limited liability company, South N Hyperbaric
LLC, a New York limited liability company, Muhlenberg Hyperbaric LLC, a New
Jersey limited liability company, ▇▇▇▇▇▇ Hyperbaric LLC, a Massachusetts limited
liability company, The Center for Wound Healing I, LLC (f/k/a Modern Medical,
LLC), a New Jersey limited liability company, The Center for Wound Healing
II,
LLC, (f/k/a Modern Medical Specialties, LLC), a New York limited liability
company, NJ Hyperbaric, LLC, a New Jersey limited liability company, Far
Rockaway Hyperbaric, LLC, a New York limited liability company, Atlantic
Hyperbaric, LLC, a New York limited liability company, Atlantic Associates,
LLC,
a Delaware limited liability company, CEF Products, LLC, a New York limited
liability company, CMC Hyperbaric, LLC, a Pennsylvania limited liability
company, Pennsylvania Hyperbaric, LLC, a Pennsylvania limited liability company,
Hyperbaric, LLC (a/k/a Massachusetts Hyperbaric, LLC), a Massachusetts limited
liability company and Meadowlands Hyperbaric, LLC, a New Jersey limited
liability company (collectively, the “Borrower”), for value received, hereby
promises to pay to the order of SIGNATURE BANK (the “Bank”) at the office of the
Bank specified in Section 10.1 of the Loan Agreement dated as of June 17, 2005,
between the Borrower and the Bank, as amended from time to time (as so amended
the “Agreement”; terms defined in the Agreement shall have their defined
meanings when used in this Note), in lawful money of the United States of
America and in immediately available funds the principal amount of ONE MILLION
FIVE HUNDRED THOUSAND AND 00/100 ($1,500,000.00) DOLLARS payable in seven
consecutive monthly installments of $33,333.00 each and the last and final
installment equal to the then unpaid principal balance of this Note payable
on
the first day of each month commencing September 1, 2007 and a final payment
equal to the then unpaid principal balance of this Note on March 1, 2008. The
Borrower further promises to pay interest at said office in like money on the
unpaid principal balance of this Note from time to time outstanding at an annual
rate selected pursuant to the terms of Section 2 of the Agreement on the first
day of each month commencing May 1, 2007. Interest shall be computed on the
basis of a 360-day year for actual days elapsed and shall be payable as provided
in the Agreement. After the stated or accelerated maturity hereof, this Note
shall bear interest at a rate as set forth in the Agreement, payable on demand,
but in no event in excess of the maximum rate of interest permitted under any
applicable law.
Exhibit
A-2/Page 1
This
Note
is the Term Note referred to in the Agreement, and is entitled to the benefits
and subject to the terms thereof and may be prepaid in whole or in part (subject
to the indemnity provided in the Agreement) as provided therein. This Note
is
secured by the collateral described in the Security Agreements.
Upon
the
occurrence of any one or more of the Events of Default specified in the
Agreement, all amounts then remaining unpaid under this Note may be declared
immediately due and payable as provided in the Agreement.
This
Note
shall be construed in accordance with and governed by the laws of the State
of
New York.
NY
HYPERBARIC, LLC
FOREST
HILLS HYPERBARIC, LLC
SCRANTON
HYPERBARIC LLC
JFK
HYPERBARIC LLC
TRENTON
HYPERBARIC, LLC
NEWARK
BI
LLC
PASSAIC
HYPERBARIC, LLC
ST
▇▇▇▇▇▇▇ HYPERBARIC LLC
GREATER
BRONX HYPERBARIC LLC
(f/k/a
MONTEFIORE HYPERBARIC LLC)
▇▇▇▇▇
▇▇▇▇, LLC
SOUTH
NASSAU HYPERBARIC LLC
NEW
YORK
HYPERBARIC AND
WOUND
CARE CENTERS LLC (DEL)
NEW
YORK
HYPERBARIC AND
WOUND
CARE CENTERS, L.L.C. (N.Y.)
VB
HYPERBARIC, LLC
EIN
HYPERBARIC LLC
MAIMONIDES
HYPERBARIC, LLC
THE
SQUARE HYPERBARIC, LLC
SOUTH
N
HYPERBARIC LLC
MUHLENBERG
HYPERBARIC LLC
▇▇▇▇▇▇
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
HYBERBARIC,
LLC
(a/k/a
MASSACHUSETTS HYPERBARIC, LLC)
MEADOWLANDS
HYPERBARIC, LLC
by
their
managers/members
▇▇▇▇▇▇▇
▇-▇
Form
of Borrowing Base Certificate
The
undersigned officer(s) of the Borrower certify(ies) that the information
furnished herein as of ______________________ as to Eligible Accounts Receivable
is true, and correct and that as of the date hereof no Event of Default
exists.
Computation
of Borrowing Base
|
▇.
|
▇▇▇▇▇
Accounts Receivable
|
$_______
|
|
|
B.
|
Less:
Receivables 120 days and over
|
$_______
|
|
|
C.
|
Eligible
Accounts Receivable (A-B)
|
$_______
|
|
|
D.
|
80%
of Line C
|
||
|
(85%
from May ___, 2007 to August 30, 2007)
|
$_______
|
||
|
E.
|
Principal
Amount of Term Loan
|
$_______
|
|
|
F.
|
Borrowing
Base Availability (D-E)
|
$_______
|
|
|
G.
|
Aggregate
principal balance of Revolving Credit Loans Outstanding
|
$_______
|
|
|
H.
|
Commitment
Available or Amount Due:
|
||
|
If
Line F is greater than Line G,Commitment Available (F-G)
|
$_______
|
||
|
If
Line G is greater than Line F,Amount Due (G-F)
|
$_______
|
|
[NAME
OF BORROWER]
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
Exhibit
B/Page 1