OMNIBUS AMENDMENT
Exhibit
99.1
This
Omnibus Amendment (“Amendment”) is made
as of the 30th day of
September, 2008, by and among Photomedex, Inc. (“Borrower”), CIT
Healthcare LLC in its capacity as Agent (“Agent”) and in its
capacity as lender (“CIT”) and Life
Sciences Capital LLC (“Life Sciences” and
collectively with CIT, “Lenders” and each a
“Lender”).
Background
A. Borrower,
Agent and Lenders are parties to a certain Master Term Loan and Security
Agreement, dated as of December 31, 2007 (as it may be amended, supplemented,
restated or otherwise modified from time to time, the “Loan Agreement”),
pursuant to which Borrower established certain financing arrangements with
Lenders. The Loan Agreement and all instruments, documents and
agreements executed in connection therewith, or related thereto, including
without limitation the Agency Agreement (defined herein) are referred to herein
collectively as the “Loan
Documents”. All capitalized terms not otherwise defined herein
shall have the meaning ascribed thereto in the Loan Agreement.
B. Agent
and Lenders are parties to a certain Interlender and Agency Agreement, dated as
of December 31, 2007 (as it may be amended, supplemented, restated or otherwise
modified from time to time, the “Agency
Agreement”).
C. Borrower
acknowledges to Agent that certain Events of Default have occurred due to
Borrower’s failure to comply with (i) Section 3.1(f) of the Loan Agreement for
failure to deliver original certificates, executed by the Obligors, evidencing
delivery and acceptance of the Laser Equipment related to those Transactions and
Transaction Documents which were entered into during the period commencing after
December 31, 2007 through and including the date of this Amendment
(collectively, the “Acceptance
Certificates”), and (ii) Section 3.2(f) of the Loan Agreement for failure
to provide a favorable opinion by Borrower’s outside counsel addressed to Agent
and Lenders (collectively, the “Existing Defaults”).
D. Borrower
has requested and Agent and Lenders have agreed to amend the terms and
conditions of the Loan Documents pursuant to the terms and conditions of this
Amendment, and Agent and Lenders have consented and agreed to amend the Agency
Agreement pursuant to the terms of this Amendment.
NOW,
THEREFORE, with the foregoing Background incorporated by reference and made a
part hereof and intending to be legally bound, the parties hereto agree as
follows:
1. Existing
Defaults. Borrower represents and warrants that as of this
date, the Existing Defaults have occurred and remain outstanding under the Loan
Documents. By entering into this Amendment, Agent and Lenders do not
waive any of the Existing Defaults. The amendment of the Loan
Documents contemplated by this Amendment shall not be deemed a waiver of Agent’s
or any Lenders’ rights or remedies nor constitute a course of conduct or dealing
on behalf of Agent or any Lender. Agent and Lenders hereby expressly
reserve all rights and remedies available under the Loan Documents, any related
agreement, or otherwise available at law or equity. All rights and
remedies under the Loan Documents are cumulative and not alternative, and Agent
may proceed in any order from time to time against Borrower or any other person
or entity liable for any or all of Borrower’s obligations to Agent and Lenders
under the Loan Documents. Any failure to exercise, or any delay in
exercising, any such right or remedy, at any time, or Agent or any Lender
engaging in any discussions with Borrower about a potential resolution of these
problems, shall not be deemed or constitute a waiver or impairment of any of
Agent’s or any Lender’s rights, remedies or options.
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2. Amendments to the Loan
Agreement. The Loan Agreement is hereby amended in the following
manner:
a. Term
Loans. The last sentence of Section 1.1(a) of the Loan
Agreement is deleted in its entirety and replaced with the
following:
In no
event shall the aggregate principal amount of all Term Loans exceed Thirteen
Million Nine Hundred Twenty-Seven Thousand Five Hundred Thirty-Three and 78/100
Dollars ($13,927,533.78) less, without duplication, all prepayments of principal
and scheduled prepayments of principal through the date of
determination. For avoidance of doubt, as of the date of the Omnibus
Amendment, dated September 30, 2008, by and among Borrower, Agent and Lenders,
the aggregate principal amount of all Term Loans shall not exceed Ten Million
Seventy-Two Thousand Four Hundred Sixty-Six and 22/100 Dollars
($10,072,466.22).
b. New Term Loans.
Notwithstanding anything to the contrary in the Loan Agreement, each Term Loan
lent to Borrower on or after the date of this Amendment, shall be repaid with
interest payable in arrears at the interest rate equal to the sum of (i) LIBOR
Rate as of two (2) days prior to the date of such Term Loan (the “Base Rate”), plus
(ii) 850 basis points (8.5%) (the “Applicable Margin”)
and over a term in accordance with the amortization schedule provided in such
Term Note. Interest under each Term Loan shall be calculated on the
basis of a 360 day year for the actual number of days elapsed. All
payments of principal and interest shall be due on the Payment Due Date. As used
herein, “LIBOR
Rate” means the three-month London Interbank Offered Rate for any day as
found in the Wall Street Journal, Interactive Edition, or any successor edition
or publication and selected by Agent in its sole discretion for any day during a
given month. In the event such rate ceases to be published or quoted,
LIBOR Rate shall mean a comparable rate of interest reasonably selected by
Agent. Agent’s determination of the LIBOR Rate shall be conclusive
and binding on Borrower, absent manifest error.
3. Consent to Amendment to the
Agency Agreement. Pursuant to Section 1.15 of the Agency
Agreement, Agent and Lenders, as evidenced by their signatures hereto, hereby
agree and consent to increase CIT’s Pro Rata Share and adjust each Lender’s Pro
Rata Percentage to the amounts set forth on the Schedule I attached hereto as
Exhibit
1.
4. Amendment to the Agency
Agreement. The Agency Agreement is hereby amended in the following
manner:
a. Schedule
I. Schedule 1 to the Agency Agreement is hereby amended and
restated in its entirety with the Schedule I attached hereto as Exhibit
1.
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5. Covenants. Borrower
hereby covenants and agrees that:
a. Negative Pledge Regarding
Intellectual Property. Until all Term Loans under the Loan
Agreement have been paid and performed in full and the Loan Agreement shall have
terminated, Borrower shall not create, incur, assume or suffer to exist any Lien
of any kind upon any Intellectual Property related to or in connection with the
Laser Equipment, or convey, sell, lease or otherwise dispose of all or any part
of any such Intellectual Property, whether now owned or hereafter
acquired. As used herein, “Intellectual
Property” means all of Borrower’s right, title and interest in and to
patents, patent rights (and applications and registrations therefor), trademarks
and service marks (and applications and registrations therefor), inventions,
copyrights, mask works (and applications and registrations therefor), trade
names, trade styles, software and computer programs, source code, object code,
trade secrets, methods, processes, know how, drawings, specifications,
descriptions, and all memoranda, notes, and records with respect to any research
and development, all whether now owned or subsequently acquired or developed by
Borrower and whether in tangible or intangible form or contained on magnetic
media readable by machine together with all such magnetic media (but not
including embedded computer programs and supporting information included within
the definition of “goods” under the Uniform Commercial Code as in effect on the
date hereof in the State of New Jersey).
b. Indebtedness. Until
all Term Loans under the Loan Agreement have been paid and performed in full and
the Loan Agreement shall have terminated, Borrower shall not create, incur,
assume or permit to exist any Indebtedness, without Agent’s prior written
consent, except the Perseus Indebtedness. As used herein, “Indebtedness” means,
with respect to Borrower, the aggregate amount of, without duplication, (a) all
obligations of Borrower for borrowed money, (b) all obligations of Borrower
evidenced by bonds, debentures, notes or other similar instruments, (c) all
obligations of Borrower to pay the deferred purchase price of property or
services, (d) all capital lease obligations of Borrower, (e) all obligations or
liabilities of others secured by a Lien on any asset of Borrower, whether or not
such obligation or liability is assumed, (f) all obligations or liabilities of
others guaranteed by Borrower, and (g) any other obligations or liabilities
which are required by GAAP to be shown as debt on the balance sheet of Borrower;
and “Perseus
Indebtedness” means, the unsecured Indebtedness of Borrower to Perseus
LLC, whether now existing or hereafter incurred, in an aggregate amount not to
exceed $25,000,000.00, which shall be expressly subordinated to all of
Borrower’s Indebtedness to Agent and Lenders under the Loan Agreement, to the
extent and manner set forth in an Intercreditor Agreement, in form and substance
satisfactory to Agent in its sole, but
reasonable, discretion.
c. Acceptance
Certificates. On or before December 29, 2008, Borrower
shall deliver to Agent, all outstanding original Acceptance Certificates in form
and substance satisfactory to Agent and Agent’s counsel.
6. Representations and
Warranties.
a. Borrower
represents and warrants that all warranties and representations made to Agent
and Lenders under the Loan Agreement and the other Loan Documents are true and
correct as to the date hereof.
b. Each
of the parties hereto represents and warrants to Agent and Lenders that the
execution and delivery by each of the parties hereto of this Amendment and all
other documents, instruments, and agreements executed in connection with this
Amendment to which it is a party, and the performance by each of the
transactions herein contemplated (i) are and will be within such party’s powers,
(ii) have been authorized by all necessary organizational action, and (iii) are
not and will not be in contravention of any order of any court or other agency
of government, of law or any other indenture, agreement or undertaking to which
such party is a party or by which the property of such party is bound, or be in
conflict with, result in a breach of, or constitute (with due notice and/or
lapse of time) a default under any such indenture, agreement or undertaking or
result in the imposition of any lien, charge or encumbrance of any nature on any
of the properties of such party.
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c. Each
of the parties hereto represents and warrants that this Amendment and all other
documents, instruments and agreements executed in connection with this Amendment
and any assignment, instrument, document, or agreement executed and delivered in
connection herewith, will be valid, binding and enforceable in accordance with
its respective terms.
d. Borrower
represents and warrants that other than the Existing Defaults, no Event of
Default or event, which with the giving of notice or passage of time or both
would become an Event of Default, has occurred and is continuing under the Loan
Agreement or any of the other Loan Documents.
7. Effectiveness
Conditions. This Amendment shall be effective upon completion
of the following conditions precedent (all documents to be in form and substance
satisfactory to Agent and Agent’s counsel):
a. Execution
and delivery by Borrower of this Amendment, that certain Term Note in the face
amount of $1,927,533.78 for the benefit of CIT (the “CIT Note”), and that
certain Warrant No. W-2 for the purchase of 175,230 shares of common stock
of Borrower for the benefit of CIT;
b. Execution
and delivery by Borrower of an Assignment accompanied by a schedule listing the
Transactions securing the Term Loan evidenced by the CIT Note (the “CIT Term
Loan”).
c. Delivery
by Borrower of updated UCC searches to Agent’s and Lenders’
satisfaction;
d. Delivery
by Borrower of the original Transaction Documents in connection with the CIT
Term Loan;
e. Delivery
by Borrower of a certified copy of resolutions of Borrower, authorizing the
execution of this Amendment and each document required to be delivered by any
Section hereof;
f. Delivery
by Borrower of Secretary’s Certificate, certifying no change to the Borrower’s
Articles of Incorporation and Bylaws, and certifying that Borrower has not
suffered a material adverse change, nor has a material adverse change been
threatened, in Borrower’s financial condition, business or operations since the
date of Borrower’s most recent financial statement delivered to Agent and
Lenders;
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g. Delivery
by Borrower of an original Instruction Letter, executed by Borrower, Elavon,
Inc. f/k/a NOVA Information Systems, Inc. and Agent, dated on or about June 17,
2008;
h. Delivery
by Borrower of a favorable opinion executed by Borrower’s outside counsel,
addressed to Agent and Lenders;
i. Delivery
by Borrower of evidence that each of the following UCC-1 financing statements
filed by General Electric Capital Corporation against Borrower have been
terminated: (i) UCC-1 financing statement #20071225613, filed April 2, 2007 in
the State of Delaware, and (ii) UCC-1 financing statement #20071227734, filed
April 2, 2007 in the State of Delaware;
j. Delivery
by Borrower to Agent, for its own behalf, an agency fee in the amount of
$19,275.33, in immediately available funds, which shall be fully earned upon its
receipt;
k. Other
than the Existing Defaults, no Event of Default or event, which with the giving
of notice or passage of time or both would become an Event of Default, shall
have occurred and be continuing under the Loan Documents;
l. Payment
by Borrower of any and all costs, fees and expenses of Agent (including
attorneys’ fees) in connection with this Amendment and the transactions
contemplated hereby; and
m. Execution
and/or delivery by Borrower of all agreements, instruments and documents
requested by Agent to effectuate and implement the terms hereof and the Loan
Documents.
8. Confirmation of
Indebtedness. Borrower hereby acknowledges and confirms that
as of the close of business on September 30, 2008, Borrower is indebted to Agent
and Lenders, without defense, setoff, claim or counterclaim under the Loan
Documents, in the aggregate principal amount of $10,073,307.29, plus all fees,
costs and expenses (including attorneys’ fees) incurred to date in connection
with the Loan Documents.
9. Ratification of Loan
Documents. Except as expressly set forth herein, all of the
terms and conditions of the Loan Agreement, the Agency Agreement and the other
Loan Documents are hereby ratified and confirmed and continue unchanged and in
full force and effect. All references to the Loan Agreement shall
mean the Loan Agreement as modified by this Amendment and all references to the
Agency Agreement shall mean the Agency Agreement as modified by this
Amendment.
10. Collateral. To
secure the payment, promptly when due, and the punctual performance, of all of
Borrower’s obligations under the Loan Documents to Agent and Lenders, and
satisfaction by Borrower of all covenants and undertakings contained in the Loan
Agreement and the other Loan Documents, Borrower ratifies and confirms the prior
grant of the security interest in and lien upon and to, all of its right, title
and interest in and to the Collateral, including (i) all Transaction Documents,
(ii) all payments due and to become due under all Transaction Documents or
otherwise due from the Obligors for the purchase of consumables or accessories
or for treatment access codes (collectively, the “Payments”), and (iii) all
Laser Equipment and other collateral securing and/or related in any way to the
Transactions, together with all additions, replacements, substitutions, parts,
repairs, accessories, accessions and attachments to such Laser Equipment (iv)
all deposit accounts into which the Payments are delivered and/or deposited and
(v) all proceeds of all of the foregoing, including insurance
proceeds.
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11. Governing
Law. This Amendment shall be governed by, construed and
enforced in accordance with the laws of the State of New Jersey.
12. CONSENT TO JURISDICTION AND
WAIVER OF JURY TRIAL. BORROWER, AGENT AND LENDERS (A) AGREE TO
SUBMIT THEMSELVES IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AMENDMENT
AND ANY LOAN DOCUMENTS FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN
RESPECT HEREOF OR THEREOF, TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE
STATE OF NEW JERSEY, CAMDEN COUNTY, OR THE COURTS OF THE UNITED STATES OF
AMERICA FOR THE DISTRICT OF NEW JERSEY, AND APPELLATE COURTS FROM
ANY THEREOF, (B) CONSENT THAT ANY ACTION OR PROCEEDING SHALL BE BROUGHT IN SUCH
COURTS, AND WAIVE ANY OBJECTION THAT EACH MAY NOW OR HEREAFTER HAVE TO THE VENUE
OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT, (C) AGREE THAT SERVICE OF
PROCESS OF ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY CERTIFIED MAIL (OR
ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO THE APPROPRIATE
PARTY AT ITS ADDRESS AS SET FORTH IN THE LOAN AGREEMENT OR THE AGENCY AGREEMENT,
AS APPLICABLE, AND SERVICE MADE SHALL BE DEEMED TO BE COMPLETED UPON THE EARLIER
OF ACTUAL RECEIPT OR FIVE (5) DAYS AFTER THE SAME SHALL HAVE BEEN POSTED AS
AFORESAID, AND (D) AGREE THAT NOTHING HEREIN OR IN ANY OTHER LOAN DOCUMENT SHALL
AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW. BORROWER, AGENT AND LENDERS EACH HEREBY UNCONDITIONALLY WAIVES
ITS RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF, DIRECTLY OR INDIRECTLY, THIS AMENDMENT, THE LOAN DOCUMENTS, THE
TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY, ANY OF THE RELATED DOCUMENTS, ANY
DEALINGS BETWEEN THE PARTIES HERETO RELATING TO THE SUBJECT MATTER HEREOF OR
THEREOF, AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED AMONG BORROWER, AGENT
AND/OR LENDERS, OR ANY OF THEM.
13. Release. As
further consideration for Agent’s and Lender’s agreement to grant the
accommodations set forth herein, Borrower hereby waives and releases and forever
discharges Agent and Lenders and its respective officers, directors, attorneys,
agents and employees from any liability, damage, claim, loss or expense of any
kind that Borrower may now or hereafter have against Agent or Lenders arising
out of or relating to this Amendment or the Loan Documents.
14. Counterparts. This
Amendment may be executed in any number of counterparts, each of which when so
executed shall be deemed to be an original, and such counterparts together shall
constitute one and the same respective agreement. Signature by
facsimile or PDF shall bind the parties hereto.
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[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
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IN
WITNESS WHEREOF, the parties have executed this Amendment the day and year first
above written.
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BORROWER:
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PHOTOMEDEX,
INC.
By: /s/ Xxxxxx
XxXxxxx
Name: Xxxxxx
XxXxxxx
Title: CFO
|
|
AGENT:
|
CIT
HEALTHCARE LLC
By: /s/ Xxxxx
Xxxxxxxxx
Name: Xxxxx
Xxxxxxxxx
Title: SVP
|
|
LENDERS:
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CIT
HEALTHCARE LLC
By: /s/ Xxxxx
Xxxxxxxxx
Name: Xxxxx
Xxxxxxxxx
Title: SVP
|
|
LIFE
SCIENCES CAPITAL LLC
By: /s/Xxxxxxx
Xxxxxxxxxx
Name: Xxxxxxx
Xxxxxxxxxx
Title: President
and CEO
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[SIGNATURE
PAGE TO OMNIBUS AMENDMENT]
S-1
EXHIBIT
1
Schedule
1
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Lender
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Pro
Rata Share
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Pro
Rata Percentage
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CIT
Healthcare LLC
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7,927,533.78
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56.9%
|
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Life
Sciences Capital LLC
|
6,000,000.00
|
43.1%
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