EXHBIT 10.41
AMENDMENT TO NOTE AND WARRANT PURCHASE AGREEMENT
AMENDMENT TO NOTE AND WARRANT PURCHASE AGREEMENT, dated as of November
29, 2005 (this " to that certain Note and Warrant Purchase Agreement, dated as
of March 31, 2004 (the " Purchase Agreement") as amended by the amendments and
waivers hereinafter referred to, by and among Advanced Aesthetics, Inc., a
Delaware corporation (the "Parent") and each of Anushka PBG Acquisition Sub,
LLC, a Delaware limited liability company ( PBG") Anushka Boca Acquisition Sub,
LLC, a Delaware limited liability company ( Boca") Wild Hare Acquisition Sub,
LLC, a Delaware limited liability company ( Hare Acquisition") XxXxxxxx
Corporation, a Florida corporation ("XxXxxxxx"), and Advanced K, LLC, a Delaware
limited liability company ( K, LLC each of Advanced K, LLC, Anushka PBG, Anushka
Boca, Wild Hare Acquisition and XxXxxxxx being herein called a " the
Co-Borrowers and the Parent being herein collectively called the "Obligors"),
Technology Investment Capital Corp., a Maryland corporation, as Collateral Agent
and Purchaser (for the purposes of this Amendment, the "Purchaser").
RECITALS
A. Pursuant to the Original Purchase Agreement, the Purchaser agreed to
purchase, subject to the satisfaction of certain conditions, senior secured
promissory notes due 2009 of the Co-Borrowers (the "Note' in a maximum aggregate
principal amount of $10,000,000.
B. Pursuant to amendments dated May 30, 2004, June 29, 2004, September
30, 2004, March 15, 2005 and July 11, 2005, a Limited Waiver and Amendment dated
February 23, 2005, a Waiver and Amendment dated as of August 30, 2005 and a
Limited Waiver and Amendment dated as of October 26, 2005 (collectively, the "
certain amendments were made to the Original Purchase Agreement and certain
obligations under the Original Purchase Agreement were waived by the Purchaser.
(The Original Purchase Agreement as amended by the Amendments is hereinafter
referred to as the " Purchase Agreement" Capitalized terms used herein without
definition shall have the respective meanings ascribed to them in the Existing
Purchase Agreement.
C. The Obligors have requested, and the Purchaser has agreed, to make
certain amendments to the Existing Purchase Agreement, subject to payment by the
Co-Borrowers to the Purchaser of a fully earned and non-refundable amendment fee
in the amount of $100,000.
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual covenants and agreements contained herein, and for other good and
valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Amendment to Section 7.1 Section 7.1 of the Existing Purchase
Agreement is hereby deleted in its entirety and there is hereby inserted in lieu
thereof the following new Section 7.1:
7.1 Minimum Consolidated EBITDA. The Co-Borrowers shall not,
at the end of any fiscal quarter, permit Consolidated EBITDA for the
four fiscal quarters ended on such date to be less than the amount set
forth below for such period:
Four Fiscal Quarters Ended Minimum Consolidated EBITDA
December 31, 2006 $6,000,000
March 31, 2007 and each fiscal $6,500,000
quarter thereafter
2. Amendment to Section 7.2 Section 7.2 of the Existing Purchase
Agreement is hereby deleted in its entirety and there is hereby inserted in lieu
thereof the following new Section 7.2:
7.2 Consolidated Total Debt to Consolidated EBITDA. For each
fiscal quarter, commencing June 30, 2006, the Co-Borrowers shall not
permit the ratio of Consolidated Total Debt to Consolidated EBITDA as
of the end of any fiscal quarter set forth below to be greater than the
ratio set forth below:
Four Fiscal Quarters Ended Consolidated Total Debt to
Consolidated EBITDA Ratio
December 3l,2006 2.25 to 1.00
March 31, 2007 and each fiscal 2.00 to 1.00
quarter thereafter
3. Amendment to Section 7.3 Section 7.3 of the Existing Purchase
Agreement is hereby deleted in its entirety and there is hereby inserted in lieu
thereof the following new Section 7.3:
7.3 Consolidated Senior Debt Ratio. The Co-Borrowers shall not
permit the Consolidated Senior Debt ratio as of the end of any fiscal
quarter set forth below to be greater than the ratio set forth below:
Fiscal Quarter Ended Minimum Consolidated Senior Debt Ratio
December 31, 2006 and each fiscal 2.00 to 1.00
quarter thereafter
4. Amendment to Section 7.4 Section 7.4 of the Existing Purchase
Agreement is hereby deleted in its entirety and there is hereby inserted in lieu
thereof the following new Section 7.4:
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7.4 Minimum Unit EBITDA. The Co-Borrowers shall not, at the end of any
fiscal quarter, permit Unit EBITDAR for any fiscal quarter to be less than the
amount set forth below for such fiscal quarter:
Fiscal Quarter Ended Minimum Unit EBITDAR
December 31, 2005 $1,860,000
March 31, 2006 $2,340,000
June 30, 2006 $2,630,000
September 30, 2006 $2,890,000
December 31, 2006 and each fiscal quarter thereafter $2,500,000
5. Amendment to Section 7.5 Section 7.5 of the Existing Purchase
Agreement is hereby deleted in its entirety and there is hereby inserted in lieu
thereof the following new Section 7.5:
7.5 Minimum Unit Fixed Charge Ratio. The Co-Borrowers shall
not permit the Unit Fixed Charge Ratio for any fiscal quarter to be
less than the amount set forth below for such fiscal quarter:
Fiscal Quarter Ended Minimum Unit Fixed Charge Coverage Ratio
December 31, 2005 120 to 1.00
March3l, 2006 1.60 to 1.00
June 30, 2006 1.80 to 1.00
September 30, 2006 1.90 to 1.00
December 31,2006 and each 2.50 to 1.00
fiscal quarter thereafter
6. Addition of Section 7.6 There is hereby inserted in the Existing
Purchase Agreement a new Section 7.6 immediately following Section 7.5 thereof,
as follows:
7.6 Minimum Unrestricted Cash Balance. Commencing on the date
(if any) on which the Subscription Payments (as such term is defined in
the North Sound Escrow Agreement referred to below) shall have been
released and the closing of the Proposed Financing (as therein defined)
shall have occurred, the Co-Borrowers shall not permit the Unrestricted
Cash Balance at any time during any of the fiscal quarters set forth
below to be less than the amount set forth opposite such fiscal
quarter:
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Fiscal Quarter Ended Minimum Unrestricted Cash Balance
December 31, 2005 $9,500,800
March 31, 2006 $3,500,000
June 30, 2006 $2,000,000
September 30, 2006 $2,000,000
For the purposes of this Section 7.6, the following terms shall have the
respective meanings set forth below:
"North Sound Escrow Agreement" means that certain
Escrow Agreement dated as of September 13, 2005 among Xxxxxx
and Xxxx LLP, as escrow agent, North Sound Capital LLC and the
Parent, as from time to time amended, modified or
supplemented.
"Unrestricted Cash Balance" means, at any time, the
aggregate amount of Cash and Cash Equivalents of the Parent
and its Subsidiaries at such time, excluding any such Cash or
Cash Equivalents that are (i) held in the Escrow Account, (ii)
subject to any Lien (other than a Lien created pursuant to the
Transactions Documents), or (iii) the disposition or use of
which by the Parent or its Subsidiaries is limited or
restricted in any way pursuant to any escrow agreement or
other agreement or instrument (other than any of the
Transaction Documents other than the Escrow Account Control
Agreement) to which the Parent or any of its Subsidiaries is a
party.
7. Representations and Warranties of the Obligors. Each of the Obligors
represents and warrants to the Purchaser that:
(a) After giving effect to this Amendment, the representations and
warranties contained in Section 3 of the Existing Purchase Agreement are true in
all material respects on and as of the date hereof to the same extent as if made
on and as of the date hereof except to the extent that such representations and
warranties specifically relate to an earlier date, in which case they are true
in all material respects as of such earlier date.
(b) The execution, delivery and performance by each of the Obligors of
this Amendment are within their respective corporate powers and have been duly
authorized by all necessary corporate action on the part of the board of
directors and stockholders of each respective Obligor. This Amendment has been
duly executed and delivered by each of the Obligors and is the legal, valid and
binding obligation of each Obligor, enforceable against that Obligor, in
accordance with its terms, except to the extent that such enforcement may be
limited by applicable bankruptcy, insolvency and other similar laws affecting
creditors' rights generally and by general principles of equity.
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(c) Neither the execution and delivery by each of the Obligors of this
Amendment, nor the fulfillment of or compliance with the terms and provisions
hereof, will conflict with, or result in a breach or violation of the terms,
conditions or provisions of, or constitute a default under, or result in the
creation of any Lien on any properties or assets of any Obligor pursuant to, the
Organizational Documents of such Obligor or any contract, agreement, mortgage,
indenture, lease or instrument to which such Obligor is a party or by which it
is bound or to which any of its assets are subject, or any statute, ordinance,
law, rule, regulation, order, writ, judgment, injunction, decree or award to
which such Obligor or any of its assets are subject.
(d) No consent, approval or authorization of or declaration,
registration or filing with any Governmental Authority or any nongovernmental
Person, including, without limitation, any creditor or stockholder of any
Obligor, is required in connection with the execution or delivery by such
Obligor of this Amendment or the performance by such Obligor of its obligations
hereunder, or as a condition to the legality, validity or enforceability of this
Amendment or any provision hereof.
8. Further Amendments to Financial Covenants The parties hereto shall
use commercially reasonable efforts, after the delivery to the Purchaser of the
financial projections referred to below and prior to September 30, 2006, to
amend, in a manner reasonably satisfactory to the parties hereto, the financial
covenants set forth in Sections 7.1 through 7.6, inclusive, of the Existing
Purchase Agreement as amended by this Amendment (with respect to the
requirements thereof that are or shall be applicable with respect to dates later
than September 30, 2006 and periods ending after such date), based on financial
projections for the applicable periods which shall be prepared by management of
the Obligors, approved by the Board of Directors of the Parent, and delivered to
the Purchaser not later than June 30, 2006; provided that (i) such covenants as
so amended shall be based upon an assumed realization of 80% of the Consolidated
EBITDA forecasted in such projections if such realization would permit the
Obligors to satisfy in a timely manner all of their payment obligations under
the Transaction Documents and all other payment obligations of the Obligors
becoming due during the applicable periods; (ii) such amendment shall become
effective only upon the execution by the parties hereto of definitive
documentation setting forth such amendments, which documentation shall be
reasonably satisfactory in form and substance to the Purchaser; and (iii) until
the execution and delivery by all parties hereto of such definitive
documentation, the provisions of Sections 7.1 through 7.6, inclusive, of the
Existing Purchase Agreement as hereby amended shall continue in effect without
change.
9. Effectiveness of Amendment Payment of Fees and Expenses On the date
hereof, the Obligors shall pay to the Purchaser, by wire transfer or other
immediately available funds, a fully earned and non-refundable amendment fee in
the amount of $100,000. This Amendment shall become effective as of the date
hereof upon the due execution hereof by all parties hereto and receipt by the
Purchaser of such amendment fee. In addition, the Obligors shall pay, or
reimburse the Purchaser for, all costs and expenses of the Purchaser incurred in
connection with the negotiation, preparation and execution of this Amendment,
including without limitation the fees and cash disbursements of Purchaser's
special counsel, Xxxxx Xxxxxxx LLP.
10. Effect of Amendment It is hereby agreed that, except as
specifically provided herein, this Amendment does not in any way affect or
impair the terms, conditions and other
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provisions of the Existing Purchase Agreement or any of the other Transaction
Documents, or the obligations of the Obligors thereunder, and all terms,
conditions and other provisions of the Existing Purchase Agreement and the
Transaction Documents shall remain in full force and effect except to the extent
specifically amended, modified or waived pursuant to the provisions of this
Amendment.
11. Counterparts This Amendment may be executed in any number of
counterparts, each of which shall be deemed an original, and all of which taken
together shall be deemed to constitute one and the same instrument. Delivery of
an executed counterpart of a signature page of this Amendment by telecopy or
other electronic means shall be effective as delivery of a manually executed
counterpart of this Agreement. Delivery of manually executed counterparts of
this Amendment shall immediately follow delivery by telecopy or other electronic
means, but the failure to so deliver a manually executed counterpart shall not
affect the validity, enforceability, or binding effect hereof
12. Governing Law THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
13. Headings Section headings are included herein for convenience of
reference only and shall not constitute a part of this Amendment for any other
purposes.
[REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the
day and year first written above.
ADVANCED AESTHETICS, INC.
By: /s/ X. X. Xxxxx
----------------------------
Name: X. X. Xxxxx
Title: EVP & CFO
ANUSHKA PBG ACQUISITION SUB, LLC
By: /s/ X. X. Xxxxx
----------------------------
Name: X. X. Xxxxx
Title: EVP & CFO
ANUSHKA BOCA ACQUISITION SUB, LLC
By: /s/ X. X. Xxxxx
----------------------------
Name: X. X. Xxxxx
Title: EVP & CFO
WILD HARE ACQUISITION SUB, LLC
By: /s/ X. X. Xxxxx
----------------------------
Name: X. X. Xxxxx
Title: EVP & CFO
XXXXXXXX CORPORATION
By: /s/ X. X. Xxxxx
----------------------------
Name: X. X. Xxxxx
Title: EVP & CFO
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ADVANCED K, LLC
By: /s/ X. X. Xxxxx
----------------------------
Name: X. X. Xxxxx
Title: EVP & CFO
TECHNOLOGY INVESTMENT CAPITAL
CORP., as Collateral Agent and Purchaser
/s/ Xxxx X. Xxxxxxxxx
By:_____________________________________
Name: Xxxx X. Xxxxxxxxx
Title: President
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