Private Client Group Merrill Lynch Business Financial Services Inc. 222 North LaSalle Street 17th Floor Chicago, Illinois 60601 (312)499-3030 September 22, 2006
EXHIBIT
10.5
|
Private Client Group Xxxxxxx Xxxxx Business Financial Services Inc. 000 Xxxxx XxXxxxx Xxxxxx 00xx Xxxxx Xxxxxxx, Xxxxxxxx 00000 (312)499-3030 September 22, 2006 |
Re: Amendment to Loan Documents
Ladies & Gentlemen:
This Letter Agreement will serve to confirm certain agreements of Xxxxxxx Xxxxx Business Financial
Services Inc. (“MLBFS”) and Continucare Corporation (“Customer”) with respect to: (i) that certain
WCMA LOAN AND SECURITY AGREEMENT NO. 81V-0764 between MLBFS and Customer (including any previous
amendments and extensions thereof), and (ii) all other agreements between MLBFS and Customer or any
party who has guaranteed or provided collateral for Customer’s obligations to MLBFS (a “Guarantor”)
in connection therewith (collectively and as amended from time to time, the “Loan Documents”).
Capitalized terms used herein and not defined herein shall have the meaning set forth in the Loan
Documents.
Subject to the terms hereof, effective as of the “Effective Date” (as defined below), the Loan
Documents are hereby amended as follows:
As of the effective date:
(a) The Minimum EBITDA Covenant is hereby deemed released and terminated.
(b) The term “Obligations” shall mean all present and future liabilities, indebtedness and other
obligations of Customer and Continucare MDHC, LLC (“MDHC”) to MLBFS, howsoever created, arising or
evidenced, whether now existing or hereafter arising, whether direct or indirect, absolute or
contingent, due or to become due, primary or secondary or joint or several, and, without limiting
the generality of the foregoing, shall include principal, accrued interest (including without
limitation interest accruing after the filing of any petition in bankruptcy), all advances made by
or on behalf of MLBFS under the Loan Documents, collection and other costs and expenses incurred
by or on behalf of MLBFS, whether incurred before or after judgment, and all present and future
liabilities, indebtedness and obligations of Customer under this Loan Agreement, of MDHC under that
certain WCMA Reducing Revolver Loan and Agreement No. 81V-02074 , and under that certain WCMA
Reducing Revolver Loan and Security Agreement No. 81V-02075, both as amended from time to time.
Xxxxxxx Xxxxx Business Financial Services Inc.
Continucare Corporation
Page No. 2
Page No. 2
(c) The following Covenants have been added:
(i) Minimum
Tangible Net Worth. Continucare
Corporation and Continucare MDHC, LLC’s consolidated
“Tangible Net Worth” shall at all times exceed
$12,000,000.00. For the purposes hereof, the term
“Tangible Net Worth” shall mean Continucare Corporation and Continucare MDHC, LLC’s consolidated
net worth as shown on Continucare Corporation and Continucare MDHC, LLC’s consolidated regular
financial statements prepared in accordance with GAAP, but excluding an amount equal to: (i) any
Intangible Assets, and (ii) any amounts now or hereafter directly or indirectly owing to
Continucare Corporation or Continucare MDHC, LLC by officers, shareholders or affiliates of
Continucare Corporation or Continucare MDHC, LLC. “Intangible Assets” shall mean the total amount
of goodwill, patents, trade names, trade or service marks, copyrights, experimental expense,
organization expense, unamortized debt discount and expense, the excess of cost of shares acquired
over book value of related assets, and such other assets as are properly classified as “intangible
assets” of Continucare Corporation or Continucare MDHC, LLC determined in accordance with GAAP.
(ii) Debt Service Coverage Ratio. Continucare Corporation and Continucare MDHC, LLC’s consolidated
“Debt Service Coverage Ratio” shall at all times exceed 1.25 to 1. For purposes hereof, “Debt
Service Coverage Ratio” shall mean the ratio of: (a) income before interest (including payments in
the nature of interest under capital leases), taxes, depreciation, amortization, and other non-cash
charges, to (b) the sum of the aggregate principal and interest paid or accrued, the aggregate
rental under capital leases paid or accrued, any dividends and other distributions paid or payable
to shareholders, and taxes paid in cash; all as determined on a trailing 12-month basis as set
forth in Continucare Corporation and Continucare MDHC, LLC’s regular consolidated quarterly
financial statements prepared in accordance with GAAP.
Except as expressly amended hereby, the Loan Documents shall continue in full force and effect upon
all of their terms and conditions.
By their execution of this Letter Agreement, the below-named Guarantors hereby consent to the
foregoing modifications to the Loan Documents, and hereby agree that the “Obligations” under their
respective Unconditional Guaranty and/or agreements providing collateral shall extend to and
include the Obligations of Customer under the Loan Documents, as amended hereby.
Customer and said Guarantors acknowledge, warrant and agree, as a primary inducement to MLBFS to
enter into this Agreement, that: (a) no Default or Event of Default has occurred and is continuing
under the Loan Documents; (b) each of the warranties of Customer in the Loan Documents are true and
correct as of the date hereof and shall be deemed remade as of the date hereof; (c) neither
Customer nor any of said Guarantors have any claim against MLBFS or any of its affiliates arising
out of or in connection with the Loan Documents or any other matter whatsoever; and (d) neither
Customer nor any of said Guarantors have any defense to payment of any amounts owing, or any right
of counterclaim for any reason under, the Loan Documents.
Xxxxxxx Xxxxx Business Financial Services Inc.
Continucare Corporation
Page No. 3
Page No. 3
Provided that no Event of Default, or event which with the giving of notice, passage of time, or
both, would constitute an Event of Default, shall then have occurred and be continuing under the
terms of the Loan Documents, the amendments and agreements in this Letter Agreement will become
effective on the date (the “Effective Date”) upon which: (a) Customer and the Guarantors shall have
executed and returned the duplicate copy of this Letter Agreement enclosed herewith; and (b) an
officer of MLBFS shall have reviewed and approved this Letter Agreement as being consistent in all
respects with the original internal authorization hereof.
Notwithstanding the foregoing, if Customer and the Guarantors do not execute and return the
duplicate copy of this Letter Agreement within 14 days from the date hereof, or if for any other
reason (other than the sole fault of MLBFS) the Effective Date shall not occur within said 14-day
period, then all of said amendments and agreements will, at the sole
option of MLBFS, be void.
Very truly yours,
Very truly yours,
Xxxxxxx Xxxxx Business Financial Services Inc.
By: |
||||
| Assistant Vice President |
Accepted:
Continucare Corporation
Continucare Corporation
By:
|
/s/ Xxxxxxxx X. Xxxxxxxxx | ||||
Printed Name: |
Xxxxxxxx X. Xxxxxxxxx | ||||
Title: |
CFO | ||||
Xxxxxxx Xxxxx Business Financial Services Inc.
Continucare Corporation
Page No. 4
Page No. 4
Approved:
Continucare MDHC, LLC
By:
Continucare Corporation, It’s Member
By:
|
/s/ Xxxxxxx X. Xxxxxxxxx, Xx. | |||
Printed Name: Xxxxxxx X. Xxxxxxxxx, Xx.
Title: CEO
CNU Blue 2, LLC
By:
Continucare Corporation, It’s Member
By:
|
/s/ Xxxxxxx X. Xxxxxxxxx, Xx. | |||
Printed Name: Xxxxxxx X. Xxxxxxxxx, Xx.
Title: CEO
