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Msg  155954 of 156674  at  9/19/2021 4:34:31 PM  by

poolblue3


 In response to msg 155952 by  poolblue3
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Re: Novation Companies, Inc. OTCBB $NOVC by the Numbers.

 https://contracts.justia.com/companies/novation-companies-inc-1649/contract/69168/
 
How can anyone with the fiduciary duty to Common Shareholders of public company like Novation Companies, Inc. $NOVC expect NOVC Board to cut such a deal with Note Holders aka Fortress behind Taberna CDOs I & II signed off on by Fortress CFO Dan Bass or EJF Capital behind Kodiak CDO One signed off on by Neal Wilson, Co CEO with Manny Friedman and not gain a cram down reduction in principle.
 
This deal NOVC First Amendment to Senior Secured Note Purchase Agreement
(see below) was announced 8/9/2019 months after $NOVC Novation Companies, Inc. OTCBB $NOVC already officially exit Ch 11 4/19/19. Ch 11 $NOVC already paid $6.3M cash these same investors all their back interest compounded $5.8M plus $500K Non-Defined Penalty for no cram down.
 
What kind of deal and who was NOVC Board really representing (NOVC Board included Barry Igdaloff, Howard Amster both DX investors with Fortress, Wesley R. Edens CEO & Chuck Gillman, Jeff Eberwein or appointees)? Did Igdaloff Chairman of NOVC Board give Sr Note Holders payback for their help in making Igdaloff and co investors a mint at Dynex Capital NYSE $DX or did Barry Igdaloff who was suppose to be representing NOVC common shareholders just give away $11M cash plus 27% of all NOVC common shares 117M per 10K 2020 (9M share for 0 plus 22.250M 10 year warrants at one penny strike aka zero) for no cram down.
 
Keep in mind NOVC Board of Directors had a fiduciary duty to all common shareholders. Their performance ensure NOVC share price of pennies which makes 18M RSUs taken at pennies, unethical, unconsciousable or worse illegal.  Barry Igdaloff and Howard Amster both $DX investors allowed Chuck Gillman, Jeff Eberwein and post their SEC fines of $420K in 2017 https://www.sec.gov/litigation/admin/2017/34-80038.pdf their 3 appointees (David Pointer 6M RSU, Lee Keddie and Tim Eriksen 1.333M RSU each) to run NOVC Board and take 18M RSUs at pennies. The fact is 6M RSU went to Pointer, 2.667M went to Tim Eriksen, Lee Keddie who did nothing to help shareholder value. Now like Richard Rector who Igdaloff allowed to leave www.healthcare-staffing.com CEO with most of his 1M RSU he has allowed 2 of these 3 to leave the NOVC Board wiht 2.7M RSUs taken at pennies. Barry Igdaloff, Howard Amster and David Pointer must be held accountable. 
 

First Amendment to Senior Secured Note Purchase Agreement

Contract Categories: Business Finance - Note Agreements
EX-10.1 2 ex_154341.htm EXHIBIT 10.1 ex_154341.htm

Exhibit 10.1

FIRST AMENDMENT TO SENIOR SECURED NOTE PURCHASE AGREEMENT

THIS FIRST AMENDMENT TO SENIOR SECURED NOTE PURCHASE AGREEMENT is dated as of August 9, 2019, by and among NOVATION COMPANIES, INC., a Maryland corporation (“Issuer”), each of those Subsidiaries of the Issuer identified as a “Guarantor” on the signature pages hereto and such other Subsidiaries of the Issuer as may from time to time become a party hereto (each a Guarantor and collectively, the “Guarantors”), the Noteholders listed on the signature page hereof (together with such Persons who may become Noteholders hereunder from time to time, each a “Noteholder” and collectively, the “Noteholders”), and Wilmington Savings Fund Society, FSB as Collateral Agent (the “Collateral Agent”) (the “Amendment”).

R E C I T A L S

A. Issuer, the Guarantors, the Noteholders and the Collateral Agent are parties to that certain Senior Secured Note Purchase Agreement dated as of July 27, 2017 (as amended, modified or supplemented, the “Note Purchase Agreement”).

B. Issuer’s obligations under the Note Purchase Agreement are further evidenced by Notes executed by Issuer payable to the Noteholders.

C. On April 1, 2019, Issuer made an interest payment in an amount equal to $1,337,839.19 (One million three hundred and thirty-seven thousand eight hundred and thirty-nine dollars and nineteen cents) which exceeded the amount due under the Amended and Restated Notes (as defined herein) by $1,125,382.59 (One million one hundred and twenty-five thousand three hundred and eighty-two dollars and fifty-nine cents) (the “April 2019 Payment Surplus”).

D. On July 1, 2019, Issuer made an interest payment in an amount equal to $1,323,316.35 (One million three hundred and twenty-three thousand three hundred and sixteen dollars and thirty-five cents) which exceeded the amount due under the Amended and Restated Notes (as defined herein) by $1,110,859.75 (One million one hundred and ten thousand eight hundred and fifty-nine dollars and seventy-five cents) (the “July 2019 Payment Surplus”, and, together with the April 2019 Payment Surplus, the “2019 Payment Surplus”).

E. The parties desire to amend the Note Purchase Agreement and the Notes to, among other things, adjust the Applicable Rate in effect as of April 1, 2019 and to provide Issuer a credit against future interest payments in an amount equal to the 2019 Payment Surplus, on the terms as hereinafter provided.

NOW, THEREFORE, in consideration of these premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. Same Terms. All terms used herein which are defined in the Note Purchase Agreement shall have the same meanings when used herein, unless the context hereof otherwise requires or provides. In addition, all references in the Note Purchase Agreement and the Notes to the “Agreement” shall mean the Note Purchase Agreement, as amended by this Amendment, as the same shall hereafter be amended from time to time. In addition, the following terms have the meanings set forth below:

Amended and Restated Notes” shall mean collectively the amended and restated senior secured notes issued by Issuer hereunder in substantially the form of Exhibit A attached hereto.

Effective Date means August 9, 2019.

Modification Papers” means this Amendment, the Amended and Restated Notes and all of the other documents and agreements executed in connection with the transactions contemplated by this Amendment.

2. Conditions Precedent. The transactions contemplated by this Amendment shall be deemed to be effective as of the Effective Date, when the following conditions have been complied with to the satisfaction of the Noteholders, unless waived in writing by the Noteholders:

A. Amendment. This Amendment shall be fully executed by the parties hereto.

B. Amended and Restated Notes. The Amended and Restated Notes shall be executed and delivered to the Noteholders.

C. Shares of Common Stock of Issuer. Issuer shall issue an aggregate of nine million (9,000,000) shares of common stock of Issuer to the Noteholders to be allocated ratably among the Noteholders as set forth on Schedule 1 attached hereto.

D. Warrants. Issuer shall issue warrants substantially in the form of Exhibit B attached hereto to purchase an aggregate of twenty-two million two hundred fifty thousand (22,250,000) shares of common stock of Issuer to the Noteholders to be allocated ratably among the Noteholders as set forth on Schedule 1 attached hereto.

E. Further Assurances. Execution and/or delivery of all other agreements, instruments and documents requested by the Noteholders to effectuate and implement the terms hereof.

F. Representations and Warranties. All representations and warranties contained herein or in the documents referred to herein or otherwise made in writing in connection herewith or therewith shall be true and correct in all material respects as of the date hereof, in each case other than representations and warranties that relate to a specific date.

G. No Event of Default. After giving effect to this Amendment, no Event of Default shall have occurred and be continuing.

3. Amendments to Note Purchase Agreement. On the Effective Date, the Note Purchase Agreement shall be amended as follows:

A. Section 1.1 of the Note Purchase Agreement shall be amended by amending and restating the definition of “Applicable Rate” in its entirety to read as follows:

Applicate Rate” shall have the meaning set forth in Section 2 of the Notes.

B. Section 1.1 of the Note Purchase Agreement shall be amended by adding the following new definitions in their proper alphabetical order:

Excess Cash Flow” shall mean Consolidated Net Income plus depreciation and amortization expense of the Issuer and its Subsidiaries for such period less the sum of, without duplication, (i) all cash principal payments on the Notes made during such period and all cash payments on Indebtedness (other than Indebtedness incurred under this Agreement) of the Issuer or its Subsidiaries during such period to the extent such other Indebtedness is permitted to be incurred, and such payments are permitted to be made, under this Agreement, (ii) any capital expenditures made by the Issuer or its Subsidiaries during such period, (iii) fees and expenses paid in cash and incurred in connection with any amendments or other modifications to this Agreement or the Notes, (iv) all scheduled loan servicing fees and other similar fees in respect of Indebtedness of the Issuer or its Subsidiaries paid in cash during such period, to the extent such Indebtedness is permitted to be incurred, and such payments are permitted to be made, under this Agreement, (v) fees and expenses paid in cash and incurred in connection with any consummated Permitted Acquisition and (vi) the excess, if any of working capital at the end of such period over working capital at the beginning of such period (or plus the excess, if any, of the working capital at the beginning of such period over working capital at the end of such period).

First Amendment Effective Date” shall mean August 9, 2019.”

C. The Note Purchase Agreement shall be amended by adding the following as a new Section 2.9 to the Note Purchase Agreement to read as follows:

“Section 2.9 Mandatory Prepayment.

Contemporaneously with the delivery to the Noteholders of annual financial statements pursuant to Section 5.1(a) hereof, commencing with the delivery to the Noteholders of the financial statements for the fiscal year ended on December 31, 2019 or, if such financial statements are not delivered to the Noteholders on the date such statements are required to be delivered pursuant to Section 5.1(a) hereof, on the date such statements are required to be delivered to the Noteholders pursuant to Section 5.1(a) hereof, the Issuer shall prepay the outstanding principal amount of the Notes in accordance with Section 2.4 in an amount equal to the result of (to the extent positive) (1) 50% of the Excess Cash Flow of the Issuer and its Subsidiaries for such fiscal year minus (2) the aggregate principal amount of all payments made by the Issuer pursuant to Section 2.5 for such fiscal year (solely to the extent not included in the calculation of Excess Cash Flow). Notwithstanding the foregoing, Excess Cash Flow shall exclude any amounts attributable to periods prior to (x) the First Amendment Effective Date and (y) in the case of any Person that becomes a Subsidiary of the Issuer after the First Amendment Effective Date pursuant to a Permitted Acquisition, the consummation date of such Permitted Acquisition.”

D. Section 5.4 of the Note Purchase Agreement shall be amended by amending and restating such section in its entirety to read as follows:

“Preserve, renew and keep in full force and effect its corporate or other formative existence and good standing, take all reasonable action to maintain all rights, privileges and franchises necessary or desirable in the normal conduct of its business and to maintain its goodwill and comply with all Contractual Obligations and Requirements of Law, except where the failure to do so could not reasonably be expected to have a Material Adverse Effect. Notwithstanding the foregoing, upon consultation and consent of the Required Noteholders (such consent not to be unreasonably withheld or delayed), the Issuer shall be permitted to liquidate any Guarantor (other than in connection with an Asset Sale) so long as 100% of its assets are distributed to the Issuer or another Guarantor.”

E. Sections 5.9 of the Note Purchase Agreement shall be amended by amending and restating the introductory clause of such section in its entirety to read as follows:

“Beginning on December 31, 2021, comply with the following financial covenants:”

F. Exhibit 1.1(b) to the Note Purchase Agreement shall be amended in its entirety by replacing it with Exhibit A attached hereto.

4. Retroactive Effect. For purposes of clarification, the Applicable Rate as amended herein shall be applied retroactively in accordance with the terms of the Amended and Restated Notes.

5. Continuation of Obligations. As of the Effective Date, Issuer does hereby agree that it remains liable for the payment and performance of all of the terms, conditions, liabilities, indemnities, and obligations under the Note Purchase Agreement and the Notes, including, without limitation, the Obligations, whether now or hereafter arising or accruing.

6. Reaffirmation. Issuer hereby represents and agrees that there are no oral agreements which modify any of the Note Purchase Agreement or the Notes and that the Note Purchase Agreement and the Notes, as expressly modified herein, constitute the entire agreement between Issuer and the Noteholders with respect to the Obligations. Nothing herein shall constitute any novation with respect to the Note Purchase Agreement or the Notes. Except as expressly modified herein, all terms, covenants and provisions of the Note Purchase Agreement and the Notes shall remain unaltered and in full force and effect.

7. Certain Representations. Issuer represents and warrants that, as of the date hereof: (a) Issuer has full power and authority to execute the Modification Papers to which it is a party, and such Modification Papers constitute the legal, valid and binding obligation of Issuer enforceable in accordance with their terms, except as enforceability may be limited by general principles of equity and applicable bankruptcy, insolvency, reorganization, moratorium, and other similar laws affecting the enforcement of creditors’ rights generally; and (b) no authorization, approval, consent or other action by, notice to, or filing with, any governmental authority or other person is required for the execution, delivery and performance by Issuer of the Modification Papers to which it is a party.

8. Limitation on Agreements. Except as expressly set forth herein, the modifications set forth herein are limited precisely as written and shall not be deemed (a) to be a consent under or a waiver of or an amendment to any other term or condition in the Note Purchase Agreement, or (b) to prejudice any right or rights which any Noteholder now has or may have in the future under or in connection with the Note Purchase Agreement, as amended hereby, or any of the other documents referred to herein or therein.

9. Counterparts. This Amendment may be executed in any number of counterparts, each of which when executed and delivered shall be deemed an original, but all of which constitute one instrument. 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.

10. Incorporation of Certain Provisions by Reference. The provisions of Sections 9.1 and 9.2 of the Note Purchase Agreement are incorporated herein by reference for all purposes.

11. Entirety, Etc. This instrument and the Note Purchase Agreement and the Notes embody the entire agreement between the parties. THIS AMENDMENT AND THE NOTE PURCHASE AGREEMENT AND THE AMENDED AND RESTATED NOTES REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

[Signature Page Follows.]


IN WITNESS WHEREOF, the parties hereto have executed this Amendment to be effective as of the Effective Date.

ISSUER:

NOVATION COMPANIES, INC., a Maryland corporation

By: /s/ Carolyn Campbell

Name: Carolyn Campbell

Title: Chief Financial Officer

GUARANTORS:

NOVATION HOLDING, INC., a Delaware corporation

By: /s/ Carolyn Campbell

Name: Carolyn Campbell

Title: Chief Financial Officer

HEALTHCARE STAFFING, INC., A GEORGIA CORPORATION

By: /s/ Carolyn Campbell

Name: Carolyn Campbell

Title: Chief Financial Officer

[Signatures Continue on Following Pages]

NOTEHOLDERS:

TABERNA PREFERRED FUNDING II, LTD.

By: TP Management LLC, as attorney-in-fact for Taberna Capital Management, LLC, its Collateral Manager

By: /s/ Daniel Bass

Name: Daniel Bass

Title: Authorized Signatory

KODIAK CDO I, LTD.

By: EJF CDO Manager LLC, its Collateral Manager

By: EJF Investments Manager LLC, its Managing Member

By: /s/ Neal J. Wilson

Name: Neal J. Wilson

Title: Chief Executive Officer

[Signatures Continue on Following Pages]

COLLATERAL AGENT: Wilmington Savings fund society, FSB

By: /s/ Haley Harris

Name: Haley Harris

Title: Trust Officer

SCHEDULE 1

Allocation of Shares

Kodiak CDO I, Ltd. – 3,240,000 shares

Taberna Preferred Funding I, Ltd. – 2,880,000 shares

Taberna Preferred Funding II, Ltd. – 2,880,000 shares

Allocation of Warrants

Kodiak CDO I, Ltd. – 8,010,000 shares

Taberna Preferred Funding I, Ltd. – 7,120,000 shares

Taberna Preferred Funding II, Ltd. – 7,120,000 shares


EXHIBIT A



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Replies
Msg # Subject Author Recs Date Posted
155955 Re: Novation Companies, Inc. OTCBB $NOVC by the Numbers-$91mil DEBT is FACT bankbuyer 0 9/19/2021 4:38:54 PM
155958 Re: Novation Companies, Inc. OTCBB $NOVC by the Numbers. poolblue3 3 9/20/2021 8:25:23 AM


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