AMENDMENT NO. 2
TO
LOAN AND SECURITY AGREEMENT
THIS AMENDMENT NO. 2 ("Amendment") is entered into as of February 1,
1997, by and between Accuhealth, Inc., Midview Drug, Inc., Accuhealth Home Care,
Inc. and Citiview Drug Co., Inc. (each, a "Borrower" and jointly and severally,
the "Borrowers") and Xxxxxxxxx & Xxxxxxxxx Inc. ("Lender").
BACKGROUND
Borrowers and Lender are parties to a Loan and Security Agreement dated
as of April 28, 1994, as amended by Amendment No. 1 dated as of February 1, 1996
(as further amended, supplemented or otherwise modified from time to time, the
"Loan Agreement") pursuant to which Lender provides borrowers with certain
financial accommodations.
Borrowers have requested that Lender amend certain provisions of the
Loan Agreement and Lender is willing to do so on the terms and conditions
hereafter set forth.
NOW, THEREFORE, in consideration of any loan or advance or grant of
credit heretofore or hereafter made to or for the account of Borrower by Lender,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as follows:
1. DEFINITIONS. All capitalized terms not otherwise defined herein
shall have the meanings given to them in the Loan Agreement.
2. AMENDMENT TO LOAN AGREEMENT. Subject to satisfaction of the
conditions precedent set forth in Section 3 below, the Loan Agreement is hereby
amended as follows:
2.1. Section 1(a) is amended as follows:
(a) The defined term "Contract Rate" is amended in its entirety to read
as follows:
"CONTRACT RATE" shall mean, as applicable, the Revolving Interest
Rate and the Term Loan Rate.
(b) The defined term "LOANS" is amended by inserting the words, the
"Term Loan" immediately after the word "Advances" on the first line thereof.
(c) The defined term "TERM" is amended by deleting the date "April 1,
1996" on the first line thereof and inserting the date "April 1, 1998".
(d) the following defined terms are inserted in the appropriate
alphabetical order:
"REVOLVING INTEREST RATE" means an interest rate per annum equal
to the (i) Prime Rate plus (ii) two and seven-eighths percent
(2-7/8%).
"SECOND AMENDMENT" means Amendment No. 2 to Loan and Security
Agreement dated as of February 1, 1997 among borrowers and
Lender.
"SECOND AMENDMENT EFFECTIVE DATE" shall mean February 1, 1997.
"TERM LOAN" shall have the meaning set forth in Section 2(h).
"TERM LOAN RATE" means an interest rate per annum equal to the
(i) Prime Rate plus (ii) five percent (5%).
"TERM NOTE" shall mean the promissory note described in Section
2(h) hereof.
2.2 Section 2 of the Loan Agreement is hereby amended by adding the
following new subsection (h) at the end thereof:
"(h) TERM LOAN. Subject to the terms and conditions set forth
herein and in the Ancillary Agreements, Lender will make a term loan to
Borrowers in the sum of $500,000 ("Term Loan"). The Term Loan shall be
advanced on the Second Amendment Effective Date and shall be, with
respect to principal, payable on the last day of the Term, subject to
acceleration upon the occurrence of an Event of Default hereunder or
termination of this Agreement, and shall otherwise be evidenced by and
subject to the terms and conditions set forth in a secured promissory
note in substantially the form attached to the Second Amendment as
EXHIBIT 2(h) ("Term Note")."
2.3 Section 3 of the Loan Agreement is hereby amended by (i) deleting
the term "Revolving Credit Advances" in the heading thereof and inserting
"Loans" in its place and stead, (ii) placing an "(a)" immediately before the
word "Borrowers" on the second line and (iii) adding the following at the end
thereof:
"(b) The Term Loan shall be due and payable as provided in
paragraph 2(h) hereof and in the Term Note. the Term Loan may only be
voluntarily prepaid, in whole or in part, upon payment in full of the
Revolving Credit Advances."
2.4 Section 5(a)(i) of the Loan Agreement is hereby amended by placing
the word "applicable" immediately before the term "Contract Rate" on the third
line thereof.
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2.5 Section 5(b)(ii) of the Loan Agreement is hereby amended in its
entirety to read as follows:
"Borrowers shall pay to Lender a facility fee in an amount equal
to $40,000 per annum payable in equal quarterly installments of $10,000
each on the 28th day of each July, October, January and April until
this Agreement is irrevocably terminated and all Obligations hereunder
shall have been paid in full, such payments to commence on April 28,
1997."
2.6. Section 17 of the Loan Agreement is hereby amended in it entirety
to read as follows:
"This Agreement shall continue in full force and effect until the
expiration of the Term; PROVIDED, HOWEVER, Lender may terminate upon
the occurrence and continuance of an Even of Default. Notwithstanding
the foregoing, Lender shall release its security interests at any time
after fifteen (15) days notice upon payment to it of all Obligations if
Borrowers shall have (i) provided Lender with an executed release of
any and all claims which Borrowers may have or thereafter shall have
under this Agreement and (ii) paid to Lender (x) the unpaid balance of
the facility fee referred to in Section 5 hereof and (y) an early
payment during the period ending with the expiration of the Term equal
to the product of (x) $150,000 multiplied by (y) the difference between
(i) fourteen (14) and (ii) the number of full months which have elapsed
from the Second Amendment Effective Date until the date of payment of
the fee hereunder, such fee being intended to compensate Lender for its
costs and expenses incurred in initially approving this Agreement or
extending same (the "Prepayment Fee").
Notwithstanding the foregoing, in the event that Borrowers shall
terminate this Agreement at a time when no Event of Default shall have
occurred and be continuing solely because the sum of Receivables
Availability plus Inventory Availability minus applicable reserves
("Availability") shall have decreased by more than 50% from
Availability as of the end of the immediately preceding month, the
early payment fee during the period ending with the expiration of the
Term, equal to the product of seventy five percent (75%) of the actual
interest charges for the three (3) months immediately preceding the
date of termination (the "Line Fee").
Notwithstanding the foregoing, in the event that Lender (x) shall
terminate this Agreement at any time following the occurrence and
during the continuance of an Event of Default or (y) shall assign all
of the Obligations to a transferee pursuant to the provisions of
Section 15 hereof and Borrower terminates this Agreement, Borrower
shall not be obligated to pay any early payment fee.
Notwithstanding the foregoing, in the event that Borrowers shall
terminate this Agreement after (a) Accuhealth shall sell substantially
all of its assets or common stock to Care Group Inc. or (b) Accuhealth
shall complete a merger with Care Group Inc., the Prepayment Fee, the
Line Fee and the facility fee due in
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accordance with Section 5(b)(ii) of this Agreement, in the aggregate,
shall not exceed $75,000.
3. CONDITIONS OF EFFECTIVENESS. This amendment shall become effective as of
February 1, 1997, when and only when Lender shall have received (i) four (4)
copies of this Amendment executed by Borrower and consented and agreed to by
Xxxxx X. Xxxxx and Xxxxxxx Xxxxxxxxx as limited guarantors subject to the same
Guaranty Agreements described in the Loan Agreement, (ii) a certified resolution
of each Borrower authorizing the acceptance of the terms and provisions of the
Term Loan and the increase of the facility, (iii) the Term Note executed by each
Borrower with respect to the Term Loan described in Section 2.2 of this
Amendment and (iv) such other certificates, instruments, documents, agreements
and opinions of counsel as may be requited by Lender or its counsel, each of
which shall be in form and substance satisfactory to Lender and its counsel.
4. REPRESENTATIONS AND WARRANTIES. Borrowers hereby represent and warrant
as follows:
(a) this Amendment and the Loan Agreement, as amended hereby,
constitute legal, valid and binding obligations of Borrowers and are
enforeceable against Borrowers in accordance with their respective
terms.
(b) Upon the effectiveness of this Amendment, Borrowers hereby
reaffirm all covenants, representations and warranties made in the Loan
Agreement to the extent the same are not amended hereby and agree that
all such covenants, representations and warranties shall be deemed to
have been remade as of the effective date of this Amendment.
(c) No Event of Default or Default has occurred and is continuing
or would exist after giving effect to this Amendment.
(d) Borrowers have no defense, counterclaim or offset with
respect to the Loan Agreement.
5. EFFECT ON THE LOAN AGREEMENT.
(a) Upon the effectiveness of this Amendment, each reference in
the Loan Agreement to "this Agreement," "hereunder," "herein" or words of like
import shall mean and be a reference to the Loan Agreement as amended hereby.
(b) Except as specifically amended herein, the Loan Agreement,
and all other documents, instruments and agreements executed and/or delivered in
connection therewith, shall remain in full force and effect, and are hereby
ratified and confirmed.
(c) The execution, delivery and effectiveness of this Amendment
shall not operate as a waiver of any right, power or remedy of Lender, nor
constitute a waiver of any provision of the Loan Agreement, or any other
documents, instruments or agreements executed and/or delivered under or in
connection therewith.
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6. GOVERNING LAW. This Amendment shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns and
shall be governed by and construed in accordance with the laws of the State of
New York.
7. HEADINGS. Section headings in this Amendment are included herein for
convenience of reference only and shall not constitute a part of this Amendment
for any other purpose.
8. COUNTERPARTS. This Amendment may be executed by the parties hereto
in one or more counterparts, each of which shall be deemed an original and all
of which taken together shall be deemed to constitute one and the same
agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, this Amendment has been duly executed as of the day
and year first written above.
ACCUHEALTH, INC.
By: /s/ XXXXX X. XXXXX
--------------------------------
Name: Xxxxx X. Xxxxx
Title: President
MIDVIEW DRUG, INC.
By: /s/ XXXXX X. XXXXX
--------------------------------
Name: Xxxxx X. Xxxxx
Title: President
ACCUHEALTH HOME CARE, INC.
By: /s/ XXXXX X. XXXXX
--------------------------------
Name: Xxxxx X. Xxxxx
Title: President
CITIVIEW DRUG CO., INC.
By: /s/ XXXXX X. XXXXX
--------------------------------
Name: Xxxxx X. Xxxxx
Title: President
XXXXXXXXX & XXXXXXXXX, INC.
By:
--------------------------------
Name:
Title:
CONSENTED AND AGREED TO:
/s/ XXXXX X. XXXXX
-------------------------
Xxxxx X. Xxxxx
-------------------------
XXXXXXX XXXXXXXXX
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ACCUHEALTH, INC.
By: /s/ XXXXX X. XXXXX
--------------------------------
Name: Xxxxx X. Xxxxx
Title: President
MIDVIEW DRUG, INC.
By: /s/ XXXXX X. XXXXX
--------------------------------
Name: Xxxxx X. Xxxxx
Title: President
ACCUHEALTH HOME CARE, INC.
By: /s/ XXXXX X. XXXXX
--------------------------------
Name: Xxxxx X. Xxxxx
Title: President
CITIVIEW DRUG CO., INC.
By: /s/ XXXXX X. XXXXX
--------------------------------
Name: Xxxxx X. Xxxxx
Title: President
XXXXXXXXX & XXXXXXXXX, INC.
By:
--------------------------------
Name:
Title:
CONSENTED AND AGREED TO:
/s/ XXXXX X. XXXXX
-------------------------
Xxxxx X. Xxxxx
/s/ XXXXXXX XXXXXXXXX
-------------------------
Xxxxxxx Xxxxxxxxx
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