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EXHIBIT 10.1
FIFTH AMENDMENT TO LOAN AGREEMENT
This Fifth Amendment to Loan Agreement (this "Amendment") is
made and entered into as of October 16, 1997, by and among TEXAS COMMERCE BANK
NATIONAL ASSOCIATION, a national banking association, with an office located at
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ ("Lender"), and HORIZON HEALTH
CORPORATION, formerly known as HORIZON MENTAL HEALTH MANAGEMENT, INC., a
Delaware corporation ("Parent"), HORIZON MENTAL HEALTH MANAGEMENT, INC., a
Texas corporation ("Management"), and MENTAL HEALTH OUTCOMES, INC., a Delaware
corporation ("Outcomes"), each of which has ▇▇▇▇ ▇▇▇▇▇'▇ ▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ as its principal business address (Parent, Management
and Outcomes are individually, each a "Borrower" and collectively, the
"Borrowers").
R E C I T A L S:
A. On September 29, 1995, Lender and Borrowers entered into that
certain Loan Agreement (the "Loan Agreement") pursuant to which Lender agreed
to make loans and advances (collectively the "Loans") to Borrowers in
accordance with the terms thereof. The Loans are evidenced by that certain
Revolving Credit Note of even date with the Loan Agreement, in the stated
principal amount of $11,000,000.00, bearing interest and being payable to the
order of Lender as therein provided (as amended, the "Note").
B. On December 20, 1995, Lender and Borrowers entered into that
certain First Amendment to Loan Agreement (the "First Amendment"), pursuant to
which Borrowers and Lender made certain amendments to the Loan Agreement. In
May, 1996, Lender and Borrowers entered into that certain Second Amendment to
Loan Agreement (the "Second Amendment"), pursuant to which Borrowers and Lender
made certain additional amendments to the Loan Agreement. On July 12, 1996,
Lender and Borrowers entered into that certain Third Amendment to Loan
Agreement (the "Third Amendment"), pursuant to which Borrowers and Lender made
certain additional amendments to the Loan Agreement. On May 23, 1997, Lender
and Borrowers entered into that certain Fourth Amendment to Loan Agreement (the
"Fourth Amendment"), pursuant to which Borrowers and Lender made certain
additional amendments to the Loan Agreement. The Loan Agreement, the First
Amendment, the Second Amendment, the Third Amendment, the Fourth Amendment, the
Note and the documents, instruments and agreements executed in connection
therewith are collectively referred to herein as the "Loan Documents".
C. Borrowers have requested Lender to modify the Loan Agreement,
and Lender, as the legal and equitable owner and holder of the Loan Agreement,
at the request of Borrowers, for good and valuable consideration, is willing to
enter into this Amendment upon the terms and conditions set forth below.
FIFTH AMENDMENT - Page 1
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A G R E E M E N T:
NOW, THEREFORE, for and in consideration of Ten and No/100 Dollars
($10.00) and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Borrowers and Lender hereby covenant and
agree as follows:
1. Definitions. Capitalized terms used but not otherwise defined
herein shall have the meanings given to them in the Loan Agreement.
2. Change of Name. Parent amended its Certificate of
Incorporation to change its name to Horizon Health Corporation. A copy of the
amendment to Parent's Certificate of Incorporation is attached to this
Amendment as Exhibit A. From and after the date of this Amendment, all
references in the Loan Agreement and the Loan Documents to Parent shall be
deemed references to Parent after giving effect to the amendment to Parent's
Certificate of Incorporation.
3. Increase of Commitment. The definition of "Commitment" is
amended to read as follows:
Commitment means the commitment of Lender to make Revolving Credit
Loans to Borrowers pursuant to Section 2.1 hereof in an aggregate
principal amount at any one time outstanding not to exceed
$14,000,000, or such lower amount as may be provided for pursuant to
the terms of this Agreement.
4. Maximum Amount of Revolving Credit Loans. Section 2.1(a) to
the Loan Agreement is amended and restated in its entirety to read as follows:
(a) Subject to and in reliance upon the terms,
conditions, representations and warrants contained in this Agreement,
Lender agrees to make revolving credit loans to Borrowers in one or
more advances ("Revolving Credit Loans") up to the Revolving
Commitment Termination Date so long as the aggregate of the Revolving
Credit Loans outstanding never exceeds the Commitment. Lender shall
have no obligation to make any Revolving Credit Loan (x) on a
non-Business Day, or (y) after, and Lender's commitment to lend on a
revolving basis shall expire on, the Revolving Commitment Termination
Date. During the Revolving Commitment Period, Borrowers may borrow,
repay and re-borrow the Revolving Credit Loans in whole or part, all
in accordance with terms and conditions of this Agreement.
5. Removal of Borrowing Base Limitation. Section 2.7 to the Loan
Agreement is amended and restated in its entirety to read as follows:
2.7 Mandatory Payment of Revolving Credit Loans. If, at
any time during the Revolving Commitment Period, the unpaid principal
balance of the Revolving Credit Note shall exceed the Commitment,
then, Borrowers shall
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immediately repay, without premium or penalty, Revolving Credit Loans
in an amount equal to such excess, along with accrued unpaid interest
on the amount so repaid to the date of such repayment.
6. Borrowing Base Report. Section 5.3(c) of the Loan Agreement,
which requires monthly Borrowing Base Reports, is hereby deleted in its
entirety.
7. Subsidiaries. Schedule 4.17 to the Loan Agreement is amended
and restated in its entirety by replacing it with Schedule 4.17 to this
Amendment, in order to reflect three additional subsidiaries of Parent,
specifically, Clay Care, Inc., a Texas corporation, Geriatric Medical Care,
Inc., a Tennessee corporation, and Specialty Healthcare Management, Inc., a
Delaware corporation.
8. Notices. Schedule 8.1 to the Loan Agreement is amended and
restated in its entirety by replacing it with Schedule 8.1 to this Amendment,
in order to reflect a change in address of the Borrowers.
9. Revolving Credit Note. Exhibit B to the Loan Agreement,
setting forth the form of the Revolving Credit Note, is hereby deleted and
replaced in its entirety by Exhibit B to this Amendment.
10. Acorn Acquisition. In accordance with Section 5.2 (c) of the
Loan Agreement, Lender hereby consents to the acquisition by Borrowers of all
of the outstanding capital stock of Acorn Behavioral HealthCare Management
Corporation, a Pennsylvania corporation, for approximately $12.7 million in
cash.
11. Performance of Obligations. Borrowers hereby expressly
promise to perform all of their obligations under the Loan Agreement and other
Loan Documents, as modified by this Amendment.
12. Costs and Expenses. Borrowers hereby agree to reimburse
Lender for Lender's costs and expenses, including, but not limited to,
attorney's fees and legal expenses, incurred by Lender in connection with (a)
the preparation of this Amendment and the Loan Documents executed in connection
herewith and in connection with the negotiation and consummation of the
transaction contemplated hereby; and (b) the enforcement of the Loan Documents
(including reasonable, actual attorneys fees if collected by or through an
attorney) and all such expense incurred in the defense of legal proceedings
involving any claim made against Lender arising out of the Loan Documents. The
obligations of Borrowers hereunder shall survive the final payment of all
Obligations of Borrowers and the resulting termination of this Amendment.
13. Loan Documents. All references to the Loan Agreement in the
Loan Documents shall be deemed to be the Loan Agreement, as modified hereby.
14. No Counter-claims. Borrowers hereby acknowledge and agree
that (a) Lender is not in default in the performance of its obligations under
the Loan Documents; (b) Borrowers
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have no claims, counterclaims, offsets, credits or defenses to the Loan
Documents and the performance of its obligations thereunder, or if Borrowers
have any such claims, counterclaims, offsets, credits or defenses to the Loan
Documents or any transaction related to the Loans and/or the Loan Documents,
same are hereby waived, relinquished and released in consideration of Lender's
execution and delivery of this Amendment; (c) all of the provisions of the Loan
Documents, except as amended hereby, are in full force and effect; and (d) upon
the execution hereof, the Loan Agreement, the Note, and the other Loan
Documents are not in default.
15. Force and Effect. Except as expressly modified and amended in
this Amendment, all of the terms, provisions and conditions of the Loan
Agreement, the Note, and all other Loan Documents are and shall remain in full
force and effect and are incorporated herein by reference.
16. No Waiver. Borrowers acknowledge that the execution of
this Amendment by Lender is not intended nor shall it be construed as (a) an
actual or implied waiver of any default under the Loan Agreement, the Note or
any other Loan Documents or (b) an actual or implied waiver of any condition or
obligation imposed upon Borrowers pursuant to the Loan Agreement, the Note or
any other Loan Documents, except to the extent expressly set forth herein.
17. Counterparts. This Amendment may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed to be an original, and all
of which taken together shall constitute but one and the same instrument.
18. Final Agreement. THIS AMENDMENT AND THE OTHER LOAN
DOCUMENTS EMBODY THE ENTIRE AGREEMENT BETWEEN THE PARTIES AND SUPERSEDE ALL
PRIOR AGREEMENTS AND UNDERSTANDINGS, IF ANY, RELATING TO THE SUBJECT MATTER
HEREOF. THIS WRITTEN AGREEMENT REPRESENTS 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 ORAL AGREEMENTS
BETWEEN THE PARTIES.
IN WITNESS WHEREOF, the parties have executed this Fifth Amendment to
Loan Agreement as of the day and year first above written.
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, a national banking association
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Vice President
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HORIZON HEALTH CORPORATION,
formerly known as
HORIZON MENTAL HEALTH MANAGEMENT,
INC., a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Executive Vice President
and Secretary
HORIZON MENTAL HEALTH MANAGEMENT,
INC., a Texas corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice President
and Secretary
MENTAL HEALTH OUTCOMES, INC.,
a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Executive Vice President,
Secretary and Treasurer
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By their execution below, each of HHMC Partners, Inc., a Delaware
corporation ("Partners") and HHG Colorado, Inc., a Colorado corporation
("Colorado") (Partners and Colorado are individually each a "Guarantor" and
collectively the "Guarantors") acknowledge and consent to all of the terms and
conditions of this Amendment, and ratify and confirm their respective Guaranty
to and for the benefit of Lender. Guarantors acknowledge that Guarantors have
no claims, counterclaims, offsets, credits or defenses to the Loan Documents
and the performance of their obligations thereunder, or if Guarantors do have
any such claims, counterclaims, offsets, credits or defenses to the Loan
Documents or any transaction related to the Loans and/or the Loan Documents,
same are hereby waived, relinquished and released in consideration of Lender's
execution and delivery of this Amendment. Further, Guarantors agree that
nothing contained in this Amendment shall adversely affect any right or remedy
of Lender under the Guaranties and that with respect to the Guaranties, all
references in the Guaranties to the "Obligations" shall mean the "Obligations",
as amended by this Amendment; that the execution and delivery of this Amendment
shall in no way change or modify their obligations as Guarantors pursuant to
their respective Guaranty; and that the execution and delivery of any
agreements by Borrowers and Lender in connection with this Amendment shall not
constitute a waiver by Lender of any of Lender's rights against Guarantors.
Guarantors guarantee the full and faithful performance by Borrowers of all of
its duties and obligations under this Amendment, the Loan Agreement and the
other Loan Documents.
HHMC PARTNERS, INC.,
a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Executive Vice President,
Secretary and Treasurer
HHG COLORADO, INC.,
a Colorado corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President, Secretary
and Treasurer
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SCHEDULE 4.17
SUBSIDIARIES
1. Subsidiaries of Horizon Health Corporation, a Delaware corporation
Horizon Mental Health Management, Inc., a Texas corporation
Mental Health Outcomes, Inc., a Delaware corporation
HHG Colorado, Inc., a Colorado corporation
Clay Care, Inc., a Texas corporation
Geriatric Medical Care, Inc., a Tennessee corporation
Specialty Healthcare Management, Inc., a Delaware corporation
2. Subsidiaries of Horizon Mental Health Management, Inc., a Texas corporation
HHMC Partners, Inc., a Delaware corporation
SCHEDULE 4.17 - Page 1
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SCHEDULE 8.1
NOTICES
BORROWERS: Horizon Health Corporation
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▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
COPY TO: ▇▇▇▇▇▇▇▇▇▇▇ & Price, L.L.P.
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Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
LENDER: Texas Commerce Bank National Association
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▇. ▇. ▇▇▇ ▇▇▇▇▇▇
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Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
COPY TO: ▇▇▇▇▇▇ & ▇▇▇▇, L.L.P.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
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Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
SCHEDULE 8.1 - Page 1
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EXHIBIT A
Amendment to Certificate of Incorporation
[Omitted; Previously filed as Exhibit 4.1
to the Company's Current Report on
Form 8-K dated August 11, 1997]
EXHIBIT A - Page 1
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EXHIBIT B TO LOAN AGREEMENT
AMENDED AND RESTATED
REVOLVING CREDIT NOTE
[Omitted; Filed as Exhibit 10.2 herewith]