Attached files
| file | filename |
|---|---|
| 10-Q - Center for Wound Healing, Inc. | v174537_10q.htm |
| EX-32.1 - Center for Wound Healing, Inc. | v174537_ex32-1.htm |
| EX-31.1 - Center for Wound Healing, Inc. | v174537_ex31-1.htm |
| EX-31.2 - Center for Wound Healing, Inc. | v174537_ex31-2.htm |
EXHIBIT
4.1
SECOND
AMENDMENT TO SECURITIES PURCHASE AGREEMENT
THIS
SECOND AMENDMENT TO SECURITIES PURCHASE AGREEMENT is made on February 12, 2010
(this “Agreement”),
by and between Bison Capital Equity Partners II-A, L.P., a Delaware limited
partnership, and Bison Capital Equity Partners II-B, L.P., a Delaware limited
partnership (collectively, “Purchaser”),
on the one hand, and The Center for Wound Healing, Inc., a Nevada corporation
(the “Company”),
on the other hand. Any capitalized term used but not otherwise
defined herein shall have the same meaning as set forth in the Securities
Purchase Agreement dated as of March 31, 2008 by and between Purchaser and the
Company, as amended by the First Amendment dated as of April 16, 2009 (as
amended, the “Securities
Purchase Agreement”).
WHEREAS,
the Company is in Default under the Securities Purchase Agreement for violation
of the financial covenant set forth in Section 9.18(a) of the Securities
Purchase Agreement for the twelve-month period ending on December 31,
2009, as more fully described on Exhibit "A" (the “Existing
Default”); and
WHEREAS,
the parties desire to waive and amend certain provisions of the Securities
Purchase Agreement subject to the terms and conditions set forth
herein.
NOW,
THEREFORE, in consideration of the premises and mutual covenants contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as
follows:
1. Subject
to the due and timely payment and performance of all of the Company's
obligations hereunder, Purchaser hereby waives the Existing Default effective
from December 31, 2009 through the date hereof. The Company hereby
acknowledges and agrees that the waiver given by Purchaser hereunder (a) is a
waiver of the Existing Default only and does not constitute a waiver of any
other Default or Event of Default under the Transaction Documents, and (b) is
not, and is not intended as, a waiver by Purchaser of or in respect of any
breach, Default or Event of Default under the Transaction Documents occurring
from and after the date hereof.
2. The
definition of “Consolidated
Adjusted EBITDA” set forth in Section 1.1 of the
Agreement is hereby amended and restated in its entirety to read as
follows:
“Consolidated
Adjusted EBITDA" shall mean, with respect to the Company and its
Subsidiaries during a specified period of time, the sum of the following, each
calculated for such period:
(a)
Consolidated Net Income before taxes for such period (excluding (i) pre-tax
gains on the sale of assets, (ii) other pre-tax extraordinary or non-recurring
gains and (iii) any non-cash adjustments resulting from the existence of any
embedded derivatives contained in the Warrant Agreement or arising from the
issuance of Warrant Securities as may be required by FASB Statement No. 133 or
EITF Issue No. 00-19);
-1-
plus
(b) the
sum of the following without duplication and to the extent reflected as a charge
in the statement of such net income for such period: (i) interest
expense, (ii) depreciation, (iii) amortization, (iv) any non-cash stock
compensation expense, (v) any non-cash expense resulting from the issuance of
the Warrant and the Note, (vi) solely for purposes of measuring the Consolidated
Adjusted EBITDA for any quarter in fiscal year 2008, up to $1,000,000 in
the aggregate of non-recurring expenses that are identified in amounts of
the end of each quarter of fiscal year 2008 when publicly filed that are
reasonably approved (as non-recurring expenses) by Purchaser and that were
included in the calculation of Consolidated Net Income during such quarter,
and (v) each of the following amounts (collectively, the “Addbacks”),
provided, that
each Addback shall only be taken into account in the calculation of Consolidated
Adjusted EBITDA (1) for purposes of determining compliance with Section 9.18(a) and
(2) for the month in which the expense related to such Addback (as described
below) was recognized and for the eleven months immediately following such
month:
(A) up to
$1,258,859 for the quarter ended June 30, 2009;
(B) up to
$142,310 for the quarter ended September 30, 2009;
(C) up to
$401,968 for the quarter ended December 31, 2009; and
(D)
$500,000 in the quarter ended March 31, 2010.
minus
(c)
interest income calculated in determining net income for such
period;
provided, that
(A) the Consolidated Adjusted EBITDA of any Person or business disposed of
for consideration by any Credit Party during such period shall be excluded for
such period (the consummation of such disposition and the repayment of any
Indebtedness in connection therewith shall be assumed to have occurred on the
first day of such period); (B) Consolidated Adjusted EBITDA shall not include
any income of a Person that is not consolidated with the Company or that cannot
be distributed to the Company due to any Contractual Obligation or Requirement
of Law; and (C) all amounts included in or excluded from this definition shall
be calculated in accordance with GAAP.”
3. Notwithstanding
anything to the contrary herein or any Transaction Document, the Note is hereby
amended as follows: from and after January 1, 2010, the Scheduled
Interest Rate on the Note shall equal (a) 16.5% per annum (and the Scheduled
Cash Interest Rate shall be twelve percent (12%) per annum, and the
Scheduled PIK Interest Rate shall be four and a half percent (4.5%) per annum)
if the Company is not in compliance with its covenants under the Securities
Purchase Agreement without giving effect to any Addbacks or otherwise taking the
Addbacks into account in the definition of Consolidated Adjusted EBITDA, and (b)
during such periods that the Company is in compliance with its covenants under
the Securities Purchase Agreement (without giving effect to any Addbacks or
otherwise taking the Addbacks into account in the definition of Consolidated
Adjusted EBITDA), 15% per annum (and the Scheduled Cash Interest Rate shall be
twelve percent (12%) per annum, and the Scheduled PIK Interest Rate shall
be three percent (3%) per annum during such periods).
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4. Section 11.1 of the
Agreement is hereby amended and restated in its entirety to read as
follows:
"11.1 Change of Control
Redemption. Subject to the subordination provisions of the
Intercreditor Agreement, upon the occurrence of a Change of Control (other than
a Change of Control that would not constitute an Event of Default hereunder),
the holder of the Note shall have the right to require the Company to repurchase
the Note. Upon such election by the holder of the Note, the Company
shall, immediately prior to and as a condition to the closing of any Change of
Control, redeem the Note, in full, for an amount (which shall in no event be a
negative number) in immediately available funds equal to one hundred percent
(100%) of the principal amount thereof outstanding on the date of redemption
(together with accrued interest thereon and premium, if any, and all Purchaser’s
Expenses, if any, associated with such redemption); provided, that if the
Change of Control occurs prior to June 30, 2010, then the purchase price of the
Note shall additionally include interest that would have accrued from the date
of redemption of the Note through and including June 30, 2010; and provided further,
that if the Change of Control occurs prior to July 31, 2010, then the Warrants
(as defined in the Warrant Agreement) shall automatically be deemed canceled
upon such redemption of the Note without further liability on the part of the
Company under the Warrant Agreement or this Agreement (including, without
limitation, Section 12.1 of this Agreement). The Company shall,
immediately prior to and as a condition to the closing of any Change of Control,
pay to Purchaser all Purchaser's Expenses incurred in connection with such
Change of Control."
5. Each
of the Company, its subsidiaries, affiliates, officers, directors and
representatives (together, the “Releasing
Parties”) fully releases and discharges forever Purchaser and its current
and former agents, employees, officers, directors, owners, partners,
shareholders, trustees, representatives, attorneys, subsidiaries, divisions,
related corporations, assigns, successors, and affiliated organizations
(hereafter referred to collectively as the “Released
Parties”), and each and all of them, from any and all liabilities,
claims, causes of action, charges, complaints, obligations, costs, losses,
damages, injuries, attorneys’ fees, and other legal responsibilities, of any
form whatsoever, whether known or unknown, unforeseen, unanticipated,
unsuspected or latent, which the Releasing Parties have incurred or expect to
incur, or now own or hold, or have at any time heretofore owned or held, or may
at any time own, hold, or claim to hold by reason of any matter or thing arising
from any cause whatsoever prior to the date of this Agreement. This
Agreement does not purport to release claims that cannot be released as a matter
of law.
Each
Releasing Party acknowledges and intends that the Released Parties are being
released from unknown and unforeseen claims to the fullest extent permitted by
law and each Releasing Party waives any defenses based thereon. Each
Releasing Party expressly waives and relinquishes all rights and benefits that
the Releasing Party may have under any statute or other applicable law
comparable to Section 1542 of the California Civil Code, which Section 1542 is
intended to protect against an inadvertent release of unknown or unsuspected
claims, and reads as follows:
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“Section
1542. [General Release; extent.] A general release does not extend to claims
which the creditor does not know or suspect to exist in his or her favor at the
time of executing the release, which if known by him or her must have materially
affected his or her settlement with the debtor.”
Each
Releasing Party, being aware of said Section 1542, hereby expressly waives any
rights the Releasing Party may have under any statutes, other applicable law or
common law principles of similar effect, with respect to the claims purported to
be released hereby.
Each
Releasing Party covenants and agrees never to commence, prosecute or assist in
any way, or cause, permit or advise to be commenced or prosecuted, any action,
proceeding, or discovery against any Released Party based on any released
claim.
Each
Releasing Party agrees to indemnify and hold Purchaser and the other persons and
entities released by this Agreement harmless from and against any and all claims
arising from or in connection with any action or proceeding brought by it or for
its benefit or on its initiative contrary to the provisions of this
Agreement. This Agreement shall be deemed breached and a cause of
action shall accrue immediately upon the commencement of any action or
proceeding contrary to this Agreement, and in any such action or proceeding this
Agreement may be pleaded as a defense by any person or entity released by this
Agreement, or may be asserted by way of cross-complaint, counterclaim or
cross-claim in any such action or proceeding.
6. In
partial consideration of Purchaser’s agreement to enter into this Agreement, the
Company shall, within 3 business days of demand therefor, reimburse Purchaser
for all attorneys’ fees and expenses actually incurred by or on behalf of
Purchaser pursuant to, in respect of or otherwise in connection with this
Agreement or the Existing Default. The payment of all such amounts
shall be made by wire transfer of immediately available funds to an account
designated by Purchaser.
7. This
Agreement amends the Securities Purchase Agreement and all references to the
Securities Purchase Agreement shall be deemed to incorporate this
Agreement. All other terms and conditions of the Transaction
Documents shall remain in full force and effect and shall not be affected by
this Agreement.
8. This
Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original as against any party whose signature appears hereon,
and all of which shall together constitute one and the same
instrument. This Agreement shall become binding when one or more
counterparts hereof, individually or taken together, shall bear the signatures
of all of the parties reflected hereon as the signatories.
9. Sections 14.5, 14.6, 14.7 and 14.8 of the
Securities Purchase Agreement are hereby incorporated by reference and made a
part of this Agreement mutatis
mutandis, except that the references therein to “this Agreement” shall
include this Agreement.
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[Signature
Page Follows]
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IN
WITNESS WHEREOF, the parties hereto have each caused this Agreement to be duly
signed as of the date first above written.
|
BISON
CAPITAL EQUITY PARTNERS
II-A,
L.P.
|
|
|
By:
BISON CAPITAL PARTNERS II,
LLC,
its general partner
|
|
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By:
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/s/ Douglas B. Trussler
|
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Name:
|
Douglas
B. Trussler
|
|
Title:
|
Managing
Member
|
|
BISON
CAPITAL EQUITY PARTNERS
II-B,
L.P.
|
|
|
By:
BISON CAPITAL PARTNERS II,
LLC,
its general partner
|
|
|
By:
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/s/ Douglas B. Trussler
|
|
Name:
|
Douglas
B. Trussler
|
|
Title:
|
Managing
Member
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|
THE
CENTER FOR WOUND HEALING,
INC.
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|
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By:
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/s/ Andrew G. Barnett
|
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Name:
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Andrew
G. Barnett
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Title:
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Chief
Executive Officer
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Exhibit
A
Existing
Default
The
Company’s Consolidated Adjusted EBITDA (measured prior to the effectiveness of
this Amendment) for the trailing twelve months ended December 31, 2009 was
$5,913,309, which failed to comply with the minimum requirement of $6,500,000
for such period.