EXHIBIT 10.38
LIMITED WAIVER AND AMENDMENT
LIMITED WAIVER
AND AMENDMENT, dated as of October 26, 2005 (this
"Waiver and Amendment"), to that certain Note and Warrant
Purchase Agreement,
dated as of March 31, 2004 (the "Original
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 ("Anushka PBG"),
Anushka Boca Acquisition Sub, LLC, a Delaware limited liability company
("Anushka Boca"), Wild Hare Acquisition Sub, LLC, A
Delaware limited liability
company, DiSchino Corporation, a Florida
corporation ("DiSchino"), and Advanced
K, LLC, a Delaware limited liability company ("Advanced K. LLC"); each of
Advanced K, LLC, Anushka PBG, Anushka Boca, Wild Hare
Acquisition and DiSchino
being herein called a "Co-Borrower"; 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 Waiver and Amendment, the
"Purchaser").
RECITALS
A. Pursuant to the Original Purchase Agreement, the Purchase 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 and a Waiver and Amendment dated as of August 30, 2005
(collectively, the "Amendments"), 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 "Amended Purchase Agreement".
Capitalized terms used herein without definition shall have the respective
meanings ascribed to them in the Amended
Purchase Agreement.
C. The Obligors have requested, and the Purchaser has agreed,
to make
certain amendments to, and to waive certain obligations under, the Amended
Purchase Agreement, subject to payment by
the Co-Borrowers to the Purchaser of a
restructuring fee in the amount of
$50,000.
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. Waiver of Minimum Unit EBITDAR covenant test. The Purchaser
waives
compliance by the Co-Borrowers with the requirements of Section 7.4 of the
Amended Purchase agreement, for the fiscal
quarter ended September 30, 2005. The
Purchaser hereby irrevocably waives any Default or Event of
Default that may
have arisen at any time prior to the date
hereof by reason of the failure of the
Co-Borrowers to comply with the provisions of Section 7.4 of the amended
Purchase Agreement as in effect on or prior
to the date hereof.
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2. Waiver of Minimum Unit Fixed Charge coverage Ratio covenant test.
The Purchaser waives compliance by the Co-Borrowers with the requirements of
Section 7.5 of the Amended Purchase Agreement for the fiscal quarter ended
September 30, 2005. The Purchase hereby
irrevocably waives any
Default or Event
of Default that may have arisen at any time prior to the
date hereof by reason
of the failure of the Co-Borrowers to comply with the
provisions of Section 7.5
of the Amended Purchase Agreement as in
effect on or prior to the date hereof.
3. Increase
of Limit on Capital Expenditures. Section 6.3 of the
Amended Purchase Agreement is hereby
amended by deleting clause (ii) thereof and
inserting in lieu thereof the following
clause:
"(ii) $12,000,000
in the aggregate for
the fiscal year ended June 30,
2006,"
4. Extension of time for delivery of Monthly Financials.
The Purchaser
agrees to extend the due date for delivery by the Parent of the monthly
financial statements of the Parent and its
Subsidiaries, as
required by Section
5.15(b) of The amended Purchase Agreement,
for each of the months ended July 31,
August 31 and September 30, 2005, respectively, to November 15, 2005. The
Purchaser hereby irrevocably waives any Default or Event of
Default that may
have arisen at any time prior to the date
hereof by reason of the failure of the
parent to comply with the provisions of
Section 5.15(b) of the Amended Purchase
Agreement as in effect on or prior to the
date hereof.
5. Extension
of time for delivery of Quarterly financials. the
Purchaser agrees to extend the due date for delivery by the Parent of the
quarterly financial statements as required under
Section 5.15(c) of the Amended
Purchase Agreement, for the fiscal quarter ended June
30, 2005, to November 15,
2005. The Purchase hereby irrevocably
waives any Default or Even of Default that
may have arisen at any time prior to the
ate hereof by reason of the failure of
the Parent to comply with the provisions of Section 5.15(c) of the Amended
Purchase Agreement as in effect on or prior
to the date hereof.
6. Amendment to Section 5.7.
a. The first paragraph of Section 5.7 of the Amended Purchase
Agreement
is hereby deleted in its entirety and there
is hereby inserted in
lieu thereof
the following new paragraph:
"5.7. Compliance Certificates. The co-Borrowers shall deliver
to the Purchasers,
together with the
quarterly financial
statements
required to be
delivered for each quarterly fiscal period
