AMENDMENT NO. 8 TO LOAN AND SECURITY AGREEMENT
AMENDMENT dated as of March 12, 1999, by and among Health Fitness
Corporation, a Minnesota corporation ("Borrower"), Health Fitness Rehab, Inc., a
Minnesota corporation ("HF Rehab"), The Preferred Companies, Inc., an Arizona
corporation ("TPC"), Health Fitness Rehab of Iowa, Inc., an Iowa corporation
("HF Rehab Iowa"), Xxxxx & Associates Physical Therapy Corp., an Iowa
corporation ("Xxxxx"), Medlink Corporation, an Iowa corporation ("Medlink"),
Medlink Services, Inc., an Iowa corporation ("Medlink Services"), Midlands
Physical Therapy, Inc., a Nebraska corporation ("Midlands"), Fitness Centers of
America, a California corporation ("Fitness Centers"), Sports & Orthopedic
Physical Therapy, Inc., a Minnesota corporation ("Sports Therapy") and
International Fitness Club Network, Inc., a Rhode Island corporation, formerly
known as Xxxxx X. Xxxxxxxxx, Inc. ("IFCN", and together with Sports Therapy, HF
Rehab, TPC, HF Rehab Iowa, Xxxxx, Medlink, Medlink Services, Midlands and
Fitness Centers, collectively, "Guarantors" and sometimes referred to
individually as a "Guarantor") and Xxxxxxxxx L.L.C., a New York limited
liability company ("Lender").
W I T N E S S E T H
WHEREAS, Lender and Borrower have entered into financing arrangements
pursuant to which Lender may make loans and advances and provide other financial
accommodations to Borrower as set forth in the Loan and Security Agreement,
dated February 17, 1998, by and among Lender, Borrower and Guarantors, as
amended by Amendment No. 1 to Loan and Security Agreement, dated February 28,
1998, Amendment No. 2 to Loan and Security Agreement, dated June 4, 1998,
Amendment No. 3 to Loan and Security Agreement, dated June 26, 1998, Amendment
No. 4 to Loan and Security Agreement, dated September 10, 1998, Amendment No. 5
to Loan and Security Agreement, dated November 2, 1998, Amendment No. 6 to Loan
and Security Agreement, dated January 8, 1999 and Amendment No. 7 to Loan and
Security Agreement, dated February 26, 1999 (and as amended hereby and as the
same may hereafter be further amended, modified, supplemented, extended,
renewed, restated or replaced, the "Loan Agreement") and the agreements,
documents and instruments at any time executed and/or delivered in connection
therewith or related thereto (collectively, together with the Loan Agreement,
the "Financing Agreements");
WHEREAS, Borrower and Guarantors have requested certain amendments to
the Loan Agreement and Lender is willing to agree to such amendments, subject to
the terms and conditions contained herein;
NOW, THEREFORE, in consideration of the mutual conditions and
agreements set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1. Definitions. For purposes of this Amendment, unless otherwise
defined herein, all terms used herein, including, but not limited to, those
terms used and/or defined in the recitals above, shall have the respective
meanings assigned to such terms in the Loan Agreement.
2. Waivers.
(a) Subject to the terms and conditions contained herein, Lender
hereby waives the Event of Default arising under Section 9.1(b) of the Loan
Agreement as a result of the failure of Borrower to comply with Section 8.10 and
Section 8.10A of the Loan Agreement as of December 31, 1998, provided, that, (i)
such waiver shall only apply to the failure of Borrower to comply with such
Sections for the period from January 1, 1998 through and including December 31,
1998 (and not as of the end of any month thereafter) and (ii) such waiver shall
not be effective unless and until Lender shall have received an original of this
Amendment duly executed and delivered by Borrower and Guarantors.
(b) Lender has not waived, is not by this Amendment waiving, and
has no intention of waiving any other Event of Default which may have occurred
on or prior to the date hereof, whether or not continuing on the date hereof, or
which may occur after the date hereof (whether the same or similar to the Events
of Default referred to above), other than the Event of Default specifically
referred to in Section 4(a) for the period ending December 31, 1998. Upon the
occurrence of any other Event of Default, whether or not continuing on the date
hereof, or which may occur on or after the date hereof (whether the same or
similar to the Event of Default described above, including an Event of Default
pursuant to the failure of Borrower and Guarantors to comply with Section 8.10
or 8.10A of the Loan Agreement as of the last day of any month after December
31, 1998), Lender shall have and hereby specifically reserves the right in its
discretion, to exercise any and all of its rights and remedies under the Loan
Agreement, the other Financing Agreements, applicable law or otherwise.
(c) The foregoing waiver shall not be construed as a bar to or a
waiver of any other or further Event of Default on any future occasion, whether
similar in kind or otherwise and shall not constitute a waiver, express or
implied of any of the rights and remedies of Lender arising under the terms of
the Financing Agreements of any future occasion or otherwise.
3. Fee. In consideration of the terms hereof, Borrower shall pay to
Lender a fee in the amount of $10,000, which fee is fully earned as of the date
hereof and shall be payable upon the earliest of the occurrence of an Event of
Default, or termination or non-renewal of the financing arrangements between
Lender and Borrower under the Loan Agreement or the sale by Borrower of all or
any substantial portion of its physical therapy business or the Final Date.
Lender may, at its option, charge such fee to the loan account of Borrower
maintained by Lender.
4. Binding Effect. This Amendment has been duly executed and delivered
by Borrower and Guarantors and is in full force and effect as of the date
hereof, and the agreements and obligations of Borrower and Guarantors contained
herein constitute the legal, valid and binding obligations of Borrower and
Guarantors enforceable against Borrower and Guarantors in accordance with their
respective terms.
5. Conditions Precedent. The effectiveness of the other provisions of
this Amendment shall be subject to the receipt by Lender of an original of this
Amendment, duly authorized, executed and delivered by Borrower and Guarantors.
6. Effect of this Amendment. Except as modified pursuant hereto, no
other changes or modifications to the Financing Agreements are intended or
implied and in all other respects the Financing Agreements are hereby
specifically ratified, restated and confirmed by all parties hereto as of the
effective date hereof. To the extent of conflict between the terms of this
Amendment and the other Financing Agreements, the terms of this Amendment shall
control.
7. Further Assurances. The parties hereto shall execute and deliver
such additional documents and take such additional action as may be necessary or
proper to effectuate the provisions and purposes of this Amendment.
8. Governing Law. The rights and obligations hereunder of each of the
parties hereto shall be governed by and interpreted and determined in accordance
with the internal laws of the State of New York (without giving effect to
principles of conflicts of law or choice of law).
9. Binding Effect. This Amendment shall be binding upon and inure to
the benefit of each of the parties hereto and their respective successors and
assigns.
10. Counterparts. This Amendment may be executed in any number of
counterparts, but all of such counterparts shall together constitute but one and
the same agreement. In making proof of this Amendment, it shall not be necessary
to produce or account for more than one counterpart thereof signed by each of
the parties hereto.
IN WITNESS WHEREOF, each of the undersigned have caused this agreement
to be duly authorized, executed and delivered as of the day and year first above
written.
HEALTH FITNESS CORPORATION HEALTH FITNESS REHAB, INC.
By: By:
Title: Chief Financial Officer Title: Chief Financial Officer
XXXXX & ASSOCIATES PHYSICAL THE PREFERRED COMPANIES, INC.
THERAPY SERVICES CORP.
By:
By:
Title: Chief Financial Officer Title: Chief Financial Officer
MEDLINK CORPORATION HEALTH FITNESS REHAB OF IOWA, INC.
By: By:
Title: Chief Financial Officer Title: Chief Financial Officer
MEDLINK SERVICES, INC. FITNESS CENTERS OF AMERICA
By: By:
Title: Chief Financial Officer Title: Chief Financial Officer
SPORTS & ORTHOPEDIC PHYSICAL INTERNATIONAL FITNESS CLUB
THERAPY, INC. NETWORK, INC.
By: By:
Title: Chief Financial Officer Title:
MIDLANDS PHYSICAL THERAPY, INC.
By:
Title: Chief Financial Officer
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ABLECO FINANCE LLC as Agent
By:
Title:
