Comprehensive Healthcare Solutions, Inc. Yonkers, New York 10705
Comprehensive
Healthcare Solutions, Inc.
00
Xxxxxx Xxxxxx, Xxxx 000
Yonkers,
New York 10705
December
5, 2006
Comprehensive
Associates LLC
00
Xxxxxxx Xxxx
Roslyn,
New York 11557
Ladies
and Gentlemen:
On
August
19, 2005, Comprehensive Associates LLC (“Associates”)
provided a loan to Comprehensive Healthcare Solutions, Inc. (“Comprehensive”)
in the
amount of two hundred thirty-five thousand dollars ($235,000), and Comprehensive
issued to Associates two (2) Convertible Debentures of even date, one in the
principal amount of two hundred thousand dollars ($200,000) (the “$200,000
Debenture”),
and
one in the principal amount of thirty-five thousand dollars ($35,000) (the
“$35,000
Debenture”
and,
together with the $200,000 Debenture, the “Debentures”).
Simultaneously therewith, Comprehensive and Associates entered into a Consulting
Agreement of even date (the “Consulting
Agreement”)
and a
Registration Rights Agreement of even date (the “Registration
Rights Agreement”),
and
Comprehensive issued to Associates warrants for the purchase of an aggregate
of
five million (5,000,000) shares of Common Stock of Comprehensive (the
“Warrants”
and
together with the Debentures, the Consulting Agreement and the Registration
Rights Agreement, the “Initial
Transaction Documents”).
On
September 16, 2005, Comprehensive and Associates entered into a letter agreement
(the “Early
Redemption Letter Agreement”)
pursuant to which Comprehensive was granted the option, under certain
circumstances, to redeem and prepay the entire outstanding aggregate principal
amount of the Debentures, and Comprehensive agreed to be responsible for and
to
pay all legal fees and expenses incurred by Associates in connection with the
preparation, negotiation and execution of the Initial Transaction Documents
and
the Early Redemption Letter Agreement.
On
September 28, 2005, Associates provided a loan to Comprehensive in the amount
of
twenty-eight thousand dollars ($28,000), and Comprehensive issued to Associates
a promissory note in such principal amount (the “Note”).
Simultaneously therewith, Comprehensive and Associates entered into a letter
agreement of even date therewith (the “Utilization
Letter Agreement”)
pursuant to which Comprehensive agreed to pay to Associates certain amounts
based on the utilization of prescription discount cards, and a letter agreement
of even date therewith (the “Reimbursement
Letter Agreement”)
pursuant to which Comprehensive agreed to be responsible for and to pay all
legal fees and expenses incurred by Associates in connection with the
preparation, negotiation and execution of the Note, the Utilization Letter
Agreement and the Reimbursement Letter Agreement.
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On
June
16, 2006, Comprehensive and Associates entered into a letter agreement (the
“Security
Letter Agreement”)
pursuant to which, among other matters, Associates was granted a first security
interest in all of Comprehensive’s assets as security for the satisfaction of
Comprehensive’s obligations under the Transaction Documents (as defined
therein), and, in connection with the Registration Rights Agreement,
Comprehensive issued to Associates a debenture in the principal amount of
twenty-seven thousand four hundred dollars ($27,400) (the “$27,400
Debenture”).
The
Note,
the Utilization Letter Agreement, the Reimbursement Letter Agreement, the Early
Redemption Letter Agreement, the Security Letter Agreement and the Initial
Transaction Documents are collectively referred to as the “Prior
Transaction Documents.”
The
parties hereby agree to amend the Prior Transaction Documents as
follows:
1. Transfer
of Assets.
(a)
Pursuant to an Assignment and Bill of Sale being executed simultaneously
herewith (the “Bill
of Sale”),
Comprehensive is assigning and transferring to Associates all of its right,
title and interest in an to all of its assets, properties and rights, other
than
the Excluded Assets (as hereinafter defined) (the “Assets”),
including, without limitation, all of its right, title and interest in, to
and
under a Marketing Affiliation Agreement, dated as of July 27, 2006, with
Alliance Healthcard, Inc. (“Alliance”)
(the
“Alliance
Agreement”)
and
all other assets and rights relating to Comprehensive’s medical discount card
business (the “Transfer”),
free
and
clear of all mortgages, liens, pledges, security interests, charges, claims,
restrictions and encumbrances of any nature whatsoever (collectively,
“Liens”),
except for the Lien currently held by Associates.
For
purposes hereof, the term “Excluded
Assets”
shall
mean Comprehensive’s shares of stock of Accutone Inc. and Interstate Hearing Aid
Service Inc. through which Comprehensive operates its audiological services
and
Comprehensive’s rights under this letter agreement and the Prior Transaction
Documents.
(b) It
is
expressly understood and agreed that, except pursuant to the Assignment and
Assumption Agreement of even date being executed simultaneously herewith between
Comprehensive and Associates with respect to the Alliance Agreement, in no
event
shall Associates assume or be responsible for, whether pursuant to this letter
agreement or otherwise, any liability or obligation of Comprehensive of any
kind, nature or description whatsoever, fixed or contingent, inchoate or
otherwise.
2. Cancellation
of $27,400 Debenture and Legal Fees.
In
consideration of the Transfer, Associates xxxxxx agrees that the $27,400
Debenture is cancelled and of no further force or effect and that
Comprehensive’s obligation to reimburse Associates for legal fees pursuant to
the Prior Transaction Documents in the maximum amount of $20,188.75 is cancelled
and of no further force or effect. The parties agree that the total amount
due
under the $27,400 Debenture as of the date hereof is
$__________.
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3. Debentures.
(a) In
further consideration for the Transfer, the Maturity Date for the $200,000
Debenture and the $35,000 Debenture shall be the earlier of (i) six (6) months
from the date hereof or (ii) the date on which, and to the extent that,
Comprehensive receives any funds from any financing or other capital-raising
transaction, whether as equity, debt or otherwise.
(b) In
the
event either or both of the Debentures is not paid when due, whether on the
Maturity Date, following an Event of Default thereunder or otherwise, the
Conversion Price (as defined in the Debentures) shall be reduced to one cent
($.01), subject to adjustment as provided for in Section 2 of the Debentures.
In
the event the par value of Comprehensive’s Common Stock is reduced to less than
one cent ($.01) (the “Par
Value Reduction”),
then,
effective upon the Par Value Reduction, the reference to “one cent ($.01)” in
the initial sentence of this paragraph shall instead be the reduced par value
amount but not less than one-half of one cent ($.005), subject to adjustment
as
provided for in Section 2 of the Debentures.
(c) Until
such time as the Debentures are paid in full or converted in full into Common
Stock, Comprehensive will
not
sell, or enter into any agreement to sell, shares of its Common Stock or any
Common Stock Equivalents (as such term is defined in the Debentures) without
the
prior written consent of Associates. Any consent given by Associates shall
not
impair or otherwise affect its rights under Section 2 of the Debentures,
including, without limitation, the anti-dilution adjustments provided for
therein.
(d) In
addition to the Events of Default provided for in the Debentures, each of the
following shall constitute an Event of Default under the Debentures:
(i) a
breach
by Comprehensive of any of its representations, warranties or other obligations
under this letter agreement;
(ii) the
acquisition by any person or entity, or any group of persons or entities, of
shares of capital stock that represent a majority of the voting power of
Comprehensive.
(e) Nothing
herein shall be deemed a waiver by Associates of its right to declare an Event
of Default under either or both of the Debentures for a circumstance that
exists, or an event that occurs, after the date hereof; provided, however,
that
Associates agrees that the Registration Statement (as such term is defined
in
the Debentures) not being effective or current and Xxxx Xxxxxxx no longer
serving as President of the Company shall not constitute Events of Default
under
the Debentures.
4. Representations
and Warranties.
Comprehensive makes
the
following representations and warranties to Associates, each of which shall
be
deemed material, and Associates, in executing, delivering and consummating
this
letter agreement, has relied upon the correctness and completeness of each
of
such representations and warranties:
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(a) No
consent of any governmental or other regulatory agency, or of any other person
or entity, is required to be received by or on the part of Comprehensive to
enable it to enter into and carry out this letter agreement and the transactions
contemplated hereby, including the transfer to Associates of all of the right,
title and interest of Comprehensive in and to the Assets.
(b) Comprehensive
has the power and authority to enter into this letter agreement and to carry
out
its obligations hereunder; the execution and delivery of this letter agreement
and the consummation of the transactions contemplated hereby have been duly
authorized by the Board of Directors of Comprehensive and no other corporate
proceedings on the part of Comprehensive, including, without shareholder
approval, are necessary to authorize the execution and delivery of this letter
agreement and the consummation of the transactions contemplated hereby; and
this
letter agreement constitutes the valid and binding obligation of Comprehensive
and is enforceable in accordance with its terms.
(c) Neither
the execution and delivery of this letter agreement by Comprehensive nor
compliance by Comprehensive with any of the provisions hereof nor the
consummation of the transactions contemplated hereby, will:
(i) violate
or conflict with any provision of the Certificate of Incorporation or By-laws
of
Comprehensive;
(ii) violate
or, alone or with notice or the passage of time, result in the breach or
termination of, or otherwise give any contracting party the right to terminate,
or declare a default under, the terms of any agreement or understanding to
which
Comprehensive is a party or by which it or any of the Assets may be
bound;
(iii) result
in
the creation of any Lien upon any of the Assets;
(iv) violate
any order, decree or judgment against, or binding upon, Comprehensive or upon
the Assets; or
(v) violate
any law or regulation of any jurisdiction relating to Comprehensive or the
Assets.
(d) Comprehensive
has performed all obligations required to be performed by it to date under
the
Alliance Agreement and the other agreements and contracts listed on Schedule
A
to the Bill of Sale (the “Other
Agreements”),
is
not in default under the Alliance Agreement or any of the Other Agreements
and
has received no notice of any dispute, default or alleged default thereunder
which has not heretofore been cured or which notice has not heretofore been
withdrawn; to Comprehensive’s knowledge, there is no default under the Alliance
Agreement by Alliance or under any of the Other Agreements by the other parties
thereto; the Alliance Agreement and the Other Agreements are freely assignable
to Associates.
(e) Comprehensive
owns outright, and has good and marketable title to, all of the Assets, free
and
clear of all Liens, except for the Lien held by Associates.
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(f) Comprehensive
owns and has the right to use the names, “Comprehensive HealthCare Solutions”
and “The Solution Card” (the “Names”),
Each
of the Names will be owned and available for use by Associates on identical
terms and conditions immediately subsequent to the date hereof. Comprehensive’s
use of the Names has not interfered with, infringed upon, misappropriated,
or
otherwise come into conflict with any intellectual property rights of any person
or entity, and Comprehensive has never received any charge, complaint, claim,
demand, or notice alleging any such interference, infringement,
misappropriation, or violation, including any claim that Comprehensive must
license or refrain from using either of the Names. To the knowledge of
Comprehensive, no person or entity has interfered with, infringed upon,
misappropriated, or otherwise come into conflict with either of the Names.
Comprehensive has not licensed or granted to any person or entity rights of
any
nature to use either of the Names, does not pay, and is not obligated to pay,
royalties to any person or entity for use of either of the Names, and is not
otherwise a party to, or bound by, any oral or written agreement or contract
with regard to either of the Names.
(g) The
authorized capital stock of the Company consists of 20,000,000 shares of Common
Stock, $.01 par value, of which 17,077,109 shares are issued and outstanding,
and 5,000 shares of Preferred Stock, $.01 par value, none of which are issued
or
outstanding. Except for the Debentures and the Warrants, there are no
subscriptions, options, warrants, rights, calls or other commitments to which
the Company is a party, or by which it is bound, calling for the issuance,
sale,
transfer or other disposition of any class of securities of the Company and
there are no outstanding securities or instruments of the Company convertible
into or exchangeable for shares of Common Stock or any other securities of
the
Company.
(h) The
Company has submitted to the Securities and Exchange Commission a preliminary
information statement pursuant to which, among other matters, the number of
authorized shares of Common Stock of the Company would be increased to
150,000,000 (the “Authorized
Shares Increase”).
The
Authorized Shares Increase has been approved by the holders of a majority of
the
outstanding voting securities of the Company. The Company will use its best
efforts to finalize the information statement, mail definitive copies thereof
to
its shareholders and file a Certificate of Amendment of its Certificate of
Incorporation with the State of Delaware as soon as possible.
5. Indemnification.
From
and
after the date hereof, Comprehensive will reimburse, indemnify and hold harmless
Associates and its directors, officers, members, managers, employees, successors
and assigns (an “Indemnified
Party”)
against and in respect of any and all actions, proceedings, damages, losses,
deficiencies, liabilities, assessments, fines, costs and expenses, including
court costs, costs and expenses of investigation and reasonable attorneys fees
incurred or suffered by any Indemnified Party that result from, relate to or
arise out of:
(a) any
and
all liabilities and obligations of Comprehensive of any kind, nature and
description whatsoever, fixed or contingent, inchoate or otherwise, that either
(A) are existing on the date hereof or (B) arise out of, or result from or
relate to, any transaction entered into, or any state of facts existing, prior
to or at the date hereof which are imposed on Associates as result of or in
connection with the transactions contemplated in this letter agreement, whether
pursuant to the Alliance Agreement, the Other Agreements or
otherwise;
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(b) any
and
all claims against any Indemnified Party that relate to Comprehensive or the
Assets in which the principal event giving rise thereto occurred on or prior
to
the date hereof or which result from or arise out of any action or inaction
on
or prior to the date hereof of Comprehensive or any director, officer, employee,
shareholder, agent or representative of Comprehensive, whether pursuant to
the
Alliance Agreement, the Other Agreements or otherwise; and/or
(c) any
misrepresentation, breach of warranty or nonfulfillment of any agreement or
covenant on the part of Comprehensive under this letter agreement.
6. No
Waiver.
Except
as expressly provided for in this letter agreement or in any of the documents
referred to herein, nothing herein or therein shall be deemed or construed
as a
waiver of any rights and/or remedies of Associates under or with respect to
any
of the Prior Transaction Documents, whether at law or in equity.
7. Legal
Fees and Expenses.
In
consideration of the foregoing, Comprehensive agrees to be responsible for
and
shall pay all legal fees and expenses incurred by Associates in connection
with
the preparation, negotiation and execution of this letter agreement and the
documents referred to herein up to a maximum of $3,500.
8. Entire
Agreement.
This
letter agreement constitutes the entire agreement of the parties with respect
to
the subject matter hereof. No modification of this letter agreement or any
part
thereof shall be valid unless in writing and signed by or on behalf of the
party
to be charged therewith.
9. Headings.
The
headings or captions under sections of this letter agreement are for convenience
of reference only and do not in any way modify, interpret or construe the intent
of the parties or affect any of the provisions of this letter
agreement.
10. Counterparts. This
letter agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original and all of which together shall constitute
one
instrument.
11. Facsimile
Signatures.
Signatures hereon which are transmitted via facsimile shall be deemed original
signatures.
12. Representation
by Counsel; Interpretation.
The
parties acknowledge that they have been represented by counsel, or afforded
the
opportunity to be represented by counsel, in connection with this letter
agreement and the transactions contemplated hereby. Accordingly, any rule or
law
or any legal decision that would require the interpretation of any claimed
ambiguities in this letter agreement against the party that drafted it has
no
application and is expressly waived by the parties. The provisions of this
letter agreement shall be interpreted in a reasonable manner to give effect
to
the intent of the parties hereto.
13. General.
Except
as amended hereby, the provisions of the Prior Transaction Documents shall
continue in full force and effect in accordance with their respective
terms.
[Remainder
of page intentionally left blank. Signature page follows.]
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If
you
are in agreement with the foregoing, please so indicate by signing in the space
provided below.
Very
truly yours,
COMPREHENSIVE
HEALTHCARE
SOLUTIONS,
INC.
By:
/s/
Xxxx Xxxxxxx
Xxxx
Xxxxxxx,
Chairman
of the Board and CEO
Agreed:
COMPREHENSIVE
ASSOCIATES LLC
By:
The
Nybor Group, Inc., Managing Member
By:
/s/
Xxxxx Xxxxxxxxx
Xxxxx
Xxxxxxxxx, President
