Exhibit 10.05
AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
VistaCare, Inc.
Vista Hospice Care, Inc.
VistaCare USA, Inc.
FHI Health Systems, Inc.
FHI GP, Inc.
FHI LP, Inc.
Family Hospice, Ltd. and
FHI Management, Ltd.
as BORROWERS
with
HEALTHCARE BUSINESS CREDIT CORPORATION
as LENDER
dated as of June 3, 2002
TABLE OF CONTENTS
PAGE
SECTION 1. DEFINITIONS AND INTERPRETATION............................... 1
1.1. Terms Defined................................................ 1
1.2. Matters of Construction...................................... 8
1.3. Accounting Principles........................................ 9
1.4. Restatement.................................................. 9
SECTION 2. THE LOANS.................................................... 9
2.1. Total Facility - Description................................. 9
2.2. Funding Procedures........................................... 10
2.3. Interest and Fees............................................ 11
2.4. Additional Interest Provisions............................... 13
2.5. Payments..................................................... 13
2.6. Use of Proceeds.............................................. 14
2.7. Lockboxes and Collections.................................... 14
2.8. Fees......................................................... 16
SECTION 3. COLLATERAL................................................... 16
3.1. Description.................................................. 16
3.2. Lien Documents............................................... 17
3.3. Other Actions................................................ 18
3.4. Searches..................................................... 18
3.5. Filing Security Agreement.................................... 18
3.6. Power of Attorney............................................ 18
SECTION 4. CLOSING AND CONDITIONS PRECEDENT TO ADVANCES................. 19
4.1. Resolutions, Opinions, and Other Documents................... 19
4.2. Additional Preconditions to Loans............................ 20
4.3. Absence of Certain Events.................................... 21
4.4. Compliance with this Agreement............................... 21
4.5. Closing Certificate.......................................... 21
4.6. Closing...................................................... 21
4.7. Non-Waiver of Rights......................................... 21
SECTION 5. REPRESENTATIONS AND WARRANTIES............................... 21
5.1. Organization and Validity.................................... 21
5.2. Places of Business........................................... 22
5.3. Operation of Facilities...................................... 22
5.4. Pending Litigation........................................... 23
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5.5. Medicaid and Medicare Cost Reporting......................... 23
5.6. Title to Collateral.......................................... 23
5.7. Governmental Consent......................................... 23
5.8. Taxes........................................................ 23
5.9. Financial Statements......................................... 23
5.10. Full Disclosure.............................................. 24
5.11. Guarantees, Contracts, etc................................... 24
5.12. Compliance with Laws......................................... 24
5.13. Other Associations........................................... 24
5.14. Environmental Matters........................................ 25
5.15. Capital Stock and Equity Interests........................... 25
5.16. Lockboxes.................................................... 25
5.17. Borrowing Base Reports....................................... 25
5.18. Security Interest............................................ 25
5.19. Accounts..................................................... 26
5.20. Pension Plans................................................ 26
5.21. Representations and Warranties for each Loan................. 26
5.22. Interrelatedness of Borrowers................................ 28
SECTION 6. BORROWERS' AFFIRMATIVE COVENANTS............................. 28
6.1. Payment of Taxes and Claims.................................. 28
6.2. Maintenance of Insurance, Financial Records and
Legal Existence.............................................. 28
6.3. Business Conducted........................................... 30
6.4. Litigation................................................... 30
6.5. Taxes........................................................ 30
6.6. Financial Covenants.......................................... 30
6.7. Financial and Business Information........................... 30
6.8. Officers' Certificates....................................... 31
6.9. Inspection................................................... 32
6.10. Tax Returns and Reports...................................... 32
6.11. Material Adverse Developments................................ 32
6.12. Places of Business........................................... 32
6.13. Notice of Action............................................. 32
6.14. Verification of Information.................................. 32
6.15. Value Track System(TM)....................................... 33
SECTION 7. BORROWERS' NEGATIVE COVENANTS................................ 33
7.1. Merger, Consolidation, Dissolution or
Liquidation.................................................. 33
7.2. Liens and Encumbrances....................................... 33
7.3. Negative Pledge.............................................. 34
7.4. Transactions With Affiliates or Subsidiaries................. 34
7.5. Guarantees................................................... 34
7.6. Loans to Other Persons....................................... 34
7.7. Change in Ownership.......................................... 35
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7.8. Distributions................................................ 35
7.9. Change in Business........................................... 35
7.10. Adverse Transactions......................................... 35
SECTION 8. DEFAULT...................................................... 35
8.1. Events of Default............................................ 35
8.2. Rights and Remedies on Default............................... 38
8.3. Nature of Remedies........................................... 39
8.4. Set-Off...................................................... 39
SECTION 9. MISCELLANEOUS................................................ 39
9.1. GOVERNING LAW................................................ 39
9.2. Integrated Agreement......................................... 40
9.3. Waiver and Indemnity......................................... 40
9.4. Time......................................................... 40
9.5. Expenses of LENDER........................................... 41
9.6. Confidentiality.............................................. 41
9.7. Notices...................................................... 41
9.8. Headings..................................................... 42
9.9. Survival..................................................... 42
9.10. Successors and Assigns....................................... 42
9.11. Duplicate Originals.......................................... 42
9.12. Modification................................................. 42
9.13. Signatories.................................................. 42
9.14. Third Parties................................................ 42
9.15. Waivers...................................................... 43
9.16. CONSENT TO JURISDICTION...................................... 43
9.17. WAIVER OF JURY TRIAL......................................... 44
9.18. Publication.................................................. 44
9.19. Discharge of Taxes, Borrower's Obligations, Etc.............. 44
9.20. Injunctive Relief............................................ 44
SECTION 10. SPECIAL INTER-BORROWER PROVISIONS............................ 44
10.1. Certain Borrower Acknowledgments and Agreements.............. 44
10.2. Maximum Amount Of Joint and Several Liability................ 45
10.3. Authorization of VistaCare, Inc. by Borrowers................ 45
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EXHIBIT LIST
Exhibit 2.1(c)(i) -- Revolving Credit Note
Exhibit 2.1(c)(ii) -- Term Loan Note
Exhibit 2.2(c) -- Form of Loan Request
Exhibit 4.2A -- Form of Notice Letter Re: Commercial Obligors
Exhibit 4.2B -- Form of Notice Letter Re: Government Obligors
Exhibit 5.11 -- Guarantees
Exhibit 6.8 -- Officer's Certificates
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AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
This Amended and Restated Loan and Security Agreement (as the same may
from time to time be amended, restated, modified or otherwise supplemented, this
"AGREEMENT") is dated this 3rd day of June, 2002, by and among VistaCare, Inc.,
a Delaware corporation, Vista Hospice Care, Inc., a Delaware corporation,
VistaCare USA, Inc., a Delaware corporation, FHI Health Systems, Inc., a
Delaware corporation, FHI GP, Inc., a Texas corporation, FHI LP, Inc., a Nevada
corporation, Family Hospice, Ltd., a Texas limited partnership, FHI Management,
Ltd., a Texas limited partnership (together with each of their successors and
permitted assigns, collectively referred to as the "BORROWERS" and each
individually referred to as a "BORROWER"), and Healthcare Business Credit
Corporation, a Delaware corporation, as lender (together with its successors and
assigns, the "LENDER").
BACKGROUND
WHEREAS, BORROWERS and LENDER entered into a Loan and Security Agreement
dated as of April 16, 2001 (said Loan and Security Agreement, as amended, the
"Existing Credit Agreement");
WHEREAS, pursuant to the Existing Credit Agreement, LENDER has made
certain revolving loans (collectively, the "Prior Loans") to BORROWERS which
Prior Loans are evidenced by that certain revolving credit note of BORROWERS
dated as of April 16, 2001 in the original principal amount of $30,000,000 (the
"Prior Note");
WHEREAS, BORROWERS have requested and LENDER has agreed to, among other
things, repay the Interim Advance under the Existing Credit Agreement with a
term loan pursuant to the terms and conditions of this Agreement; and
WHEREAS, BORROWERS and LENDER desire that, on the terms and conditions
herein, (i) the Existing Credit Agreement be amended and restated into this
Agreement, (ii) the Prior Loans continue under this Agreement, (iii) the Term
Loan (as defined hereinafter) repay the outstanding principal balance of the
Interim Amount and provide for additional working capital and general corporate
purposes, and (iv) the Loans under the Existing Credit Agreement continue in
full force and effect and, together with the other Loan Documents, secure the
Obligations of BORROWERS (as such terms are defined hereinafter).
NOW, THEREFORE, in consideration of the premises, the following mutual
agreements and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree
that the Existing Credit Agreement be amended and restated to read in its
entirety, as follows:
SECTION 1. DEFINITIONS AND INTERPRETATION
1.1. Terms Defined: As used in this Agreement, the following terms have
the following respective meanings:
"ACCOUNT" or "ACCOUNTS" means a right to payment of a monetary
obligation, whether or not earned by performance for services rendered or to be
rendered or for a secondary obligation incurred or to be incurred, including but
not limited to (a) the third party reimbursable portion of accounts receivable
owing to a BORROWER arising out of the delivery by such BORROWER of medical,
surgical, diagnostic or other professional, medical or dental services and/or
the supply of goods related to any of such services (whether such services are
supplied by a BORROWER or a third party), including all rights to reimbursement
under any agreements with an Obligor, (b) all accounts, general intangibles,
rights, remedies, guarantees, and security interests in respect of the
foregoing, all rights of enforcement and collection, all books and records
evidencing or related to the foregoing, and all rights under this Agreement in
respect of the foregoing, (c) all information and data compiled or derived by
such BORROWER in respect of such accounts receivable, subject to the
confidentiality rights under applicable law and under rights and rules of JCAHO
and (d) all proceeds of any of the foregoing. The term includes health-care
insurance receivables.
"ACCOUNTS DETAIL FILE" has the meaning set forth in Section 2.2(b)
hereof.
"ADVANCE(S)" means any monies advanced or credit extended, including
without limitation the Loans to or for the benefit of BORROWERS, or any of them
by LENDER, under the Total Facility.
"ADVANCE RATE" means eighty five percent (85%) or such other
percentage(s) resulting from an adjustment pursuant to Section 2.1(f) below.
"AFFILIATE" means with respect to any Person (the "Specified
Person"), (a) any Person which directly or indirectly controls, or is controlled
by, or is under common control with, the Specified Person, and (b) any director
or officer (or, in the case of a Person which is not a corporation, any
individual having analogous powers) of the Specified Person or of a Person who
is an Affiliate of the Specified Person within the meaning of the preceding
clause (a). For purposes of the preceding sentence, "control" of a Person shall
mean the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, or direct or indirect
ownership (beneficially or of record) of, or direct or indirect power to vote,
5% or more of the outstanding shares of any class of capital stock of such
Person (or in the case of a Person that is not a corporation, 5% or more of any
class of equity interest).
"AUTHORIZED OFFICER" means any officer or partner of a BORROWER
authorized by specific resolution of such BORROWER to request Loans as set forth
in the incumbency certificate referred to in Section 4.1(d) of this Agreement.
"BILLING DATE" means the date on which the ▇▇▇▇ for services
rendered or goods provided was sent to the respective Obligor.
"BORROWING BASE" means, at any date, an amount equal to the lesser
of (a) the sum of (i) the Revolving Loan Commitment, plus (ii) if the LENDER has
made any Loan under the Tranche A Facility, the Tranche A Loan Commitment, plus
(iii) if the LENDER has made any Loan under the Tranche B Facility, the Tranche
B Loan Commitment or (b) the product of (i) the
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applicable Advance Rate then in effect, times (ii) the Estimated Net Value of
all Eligible Accounts as of such date.
"BORROWING BASE DEFICIENCY" means, as of any date, the amount, if
any, by which (a) the aggregate amount of all Advances outstanding as of such
date exceeds (b) the Borrowing Base as of such date.
"BORROWING BASE EXCESS" means, as of any date, the amount, if any,
by which (a) the Borrowing Base as of such date exceeds (b) the aggregate amount
of all Advances outstanding as of such date.
"BORROWING BASE REPORT" has the meaning set forth in Section 2.2(b)
hereof.
"BUSINESS DAY" means any day other than a Saturday, Sunday or any
day on which banking institutions in Philadelphia, Pennsylvania or New York
City, New York are permitted or required by law, executive order or governmental
decree to remain closed or a day on which LENDER is closed for business.
"CHAMPUS" means the Civilian Health and Medical Program of the
Uniformed Service, a part of TRICARE, a medical benefits program supervised by
the U.S. Department of Defense.
"CLOSING" has the meaning set forth in Section 4.6 hereof.
"CLOSING DATE" has the meaning set forth in Section 4.6 hereof.
"COLLATERAL" has the meaning set forth in Section 3.1 hereof.
"COLLECTIONS" means with respect to any Account, all cash
collections on such Account.
"COLLECTION ACCOUNT" has the meaning set forth in Section 2.7(a)
hereof.
"COMMERCIAL LOCKBOX" means a lockbox in the name of LENDER (or a
nominee of LENDER) and maintained at the Lockbox Bank, or such other bank as is
acceptable to LENDER, to which Collections on all Accounts, other than
Government Accounts, are sent.
"COMMITMENT FEE" has the meaning set forth in Section 2.8 hereof.
"CONCENTRATION LIMITS" means the various financial tests, expressed
as percentages of the then current ENV of all Eligible Accounts, described on
SCHEDULE 1 as in effect from time to time.
"CONTRACT" means an agreement by which an Obligor is obligated to
pay for services rendered to patients of BORROWER.
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"DEBT SERVICE COVERAGE RATIO" means the ratio of (a) the sum of (i)
net income, plus (ii) interest expense, plus (iii) income taxes, plus (iv)
depreciation and amortization expenses, minus non-financed capital expenditures
to (b) the sum of (i) interest expense, plus (ii) the current portion of
long-term debt, plus (iii) the current portion of lease payments under
capitalized leases plus (iv) Distributions, all as determined for BORROWERS on a
consolidated basis in accordance with GAAP.
"DEFAULT RATE" means 300 basis points above the interest rate
otherwise applicable on the Loans or Term Loan.
"DEFAULTED ACCOUNT" means an Account as to which (a) the initial ENV
has not been received in full as Collections within one hundred and eighty (180)
days of the Billing Date, or (b) LENDER reasonably deems uncollectible because
of the bankruptcy or insolvency of the Obligor or any other reason.
"DEPOSITORY AGREEMENT(S)" means those certain Depository Agreements
entered into in connection with this Agreement among BORROWERS, LENDER and the
Lockbox Bank, relating to the Commercial Lockbox and the Government Lockbox, as
applicable.
"DISTRIBUTION" means (i) dividends or other distributions on capital
stock or other equity interests of a BORROWER; (ii) the redemption, repurchase
or acquisition of such stock or equity interests or of warrants, rights or other
options to purchase such stock or equity interest; and (iii) loans made to any
Shareholders.
"DOWNLOAD DATE" has the meaning set forth in Section 2.2(b) hereof.
"ELIGIBLE ACCOUNT" means an Account of a BORROWER:
(a) which is a liability of an Obligor which is (i) a commercial
insurance company reasonably acceptable to LENDER, organized under the laws of
any jurisdiction in the United States, having its principal office in the United
States, other than those listed on SCHEDULE 1 as ineligible, (ii) a Blue
Cross/Blue Shield Plan other than those listed on SCHEDULE 1 as ineligible,
(iii) CHAMPUS, Medicare or Medicaid, or (iv) a HMO, PPO or an institutional
Obligor reasonably acceptable to LENDER, or any other type of Obligor, not
included in the categories of Obligors listed in the foregoing clauses (i) -
(iii), organized under the laws of any jurisdiction in the United States, having
its principal office in the United States, and is listed on SCHEDULE 1 as an
eligible Obligor,
(b) the Obligor of which is not an Affiliate of BORROWER,
(c) the Obligor of which has received a letter substantially in
the form of EXHIBIT 4.2A (in the case of all Accounts other than Government
Accounts) or a letter substantially in the form of EXHIBIT 4.2B (in the case of
all Government Accounts),
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(d) in an amount, as relating to a specific ▇▇▇▇ of an individual
patient, not less than Five and No/100 Dollars ($5.00) nor more than Fifty
Thousand and No/100 Dollars ($50,000.00), denominated and payable in United
States dollars,
(e) as to which the representations and warranties of Section 5.21
hereof are true,
(f) which (i) does not arise from the delivery of cosmetic surgery
services and (ii) is not a workers' compensation claim (unless expressly
approved by LENDER) and (iii) does not arise from any services delivered for
injury sustained in a motor vehicle accident (unless the Obligor on such Account
is a type of Obligor permitted pursuant to clause (a) of this definition) and
(iv) does not have an Obligor who is the individual patient or person who
received the goods or services rendered,
(g) which is not outstanding more than (i) one hundred and eighty
(180) days past the Billing Date in the case of Accounts that have been billed,
and (ii) forty five (45) days past the last day of the month in which the
corresponding services and/or goods were provided in the case of Accounts that
have not been billed, provided that in no event may the Account be outstanding
more than two hundred and twenty five (225) days past the last day of the month
in which the corresponding services and/or goods were provided, and provided
further that such services rendered but not yet billed are Eligible Accounts to
the extent (A) such services are reflected in BORROWERS' accounting records in a
manner consistent with the recording of the billed accounts receivable and (B)
that such amount does not exceed one hundred percent (100%) of eligible billed
accounts receivable,
(h) to the extent such Account does not include late charges or
finance charges,
(i) which complies with such other criteria and requirements as
may be specified from time to time by LENDER in its reasonable discretion, and
(j) which is an Estimated Additional Unbilled Account.
"ESTIMATED ADDITIONAL UNBILLED ACCOUNTS" has the meaning set forth
in Section 2.2(b) hereof.
"ESTIMATED NET VALUE" or "ENV" means on any date of calculation with
respect to any Account an amount equal to the anticipated cash collections as
calculated by LENDER using the Value Track System(TM) (which system periodically
adjusts such amount to reflect LENDER's evaluation of the performance of similar
Accounts and to reflect payments received with respect thereto), except that if
LENDER determines that all Obligor payments with respect to an Account have been
made or if an Account has become a Defaulted Account, the ENV of such Account
shall be zero.
"EVENT OF DEFAULT" has the meaning set forth in Section 8.1 hereof.
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"EXPENSES" has the meaning set forth in Section 9.5 hereof.
"FUNDING DATE" has the meaning set forth in Section 2.2(a) hereof.
"GAAP" means generally accepted accounting principles, consistently
applied.
"GOVERNMENT ACCOUNTS" means Accounts on which any federal or state
governmental unit or any intermediary for a federal or state governmental unit
is the Obligor.
"GOVERNMENT LOCKBOX" means a lockbox and deposit account in the name
of BORROWER(s) maintained at the Lockbox Bank, or such other bank as is
acceptable to LENDER, to which Collections on all Government Accounts are sent.
"HAZARDOUS SUBSTANCES" means any substances defined or designated as
hazardous or toxic waste, hazardous or toxic material, hazardous or toxic
substance or similar term, by any environmental statute, rule or regulation of
any governmental entity presently in effect and applicable to such real
property.
"INITIAL CREDIT FACILITY" has the meaning set forth in Section
2.1(a) hereof.
"INITIAL CREDIT TERM" has the meaning set forth in Section 2.1(d).
"INITIAL TRANCHE TERM" has the meaning set forth in Section 2.1(d).
"JCAHO" means the Joint Commission for Accreditation of Healthcare
Organizations, a nationally recognized organization providing accreditations to
hospitals and other healthcare facilities, or any successor entity charged with
performing its functions.
"LIBOR RATE" means an annual rate equal to the sum of the annual
rate in effect in the London Interbank market applicable to one (1) month
deposits of U.S. dollars as reported in the Wall Street Journal on the second
Business Day preceding the date of determination. If the Wall Street Journal is
not published on such Business Day or does not report such rate, such rate shall
be as reported by such other publication or source as LENDER may select.
"LOAN(S)" has the meaning set forth in Section 2.1(b) hereof and
shall include the Term Loan.
"LOAN DOCUMENTS" means this Agreement, the Revolving Credit Note,
the Term Note, the Depository Agreements and all agreements relating to the
Government Lockbox and the Commercial Lockbox, all financing statements and any
other agreements, instruments, documents and certificates executed and/or
delivered in connection with this Agreement, as each may be amended, restated,
modified or otherwise supplemented from time to time.
"LOAN REQUEST" has the meaning set forth in Section 2.2(c) hereof.
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"LOCKBOX BANK" means PNC Bank, National Association, or such other
bank that is acceptable to LENDER.
"MATURITY DATE" has the meaning set forth in Section 2.1(d) hereof.
"MONITORING FEE" has the meaning set forth in Section 2.8 hereof.
"NET WORTH" means the aggregate amount, determined on a consolidated
basis in accordance with GAAP, of all of the assets of the BORROWERS less all
liabilities of the BORROWERS.
"OBLIGATIONS" means all now existing or hereafter arising loans,
advances, liabilities, debts, obligations, covenants, and duties of payment or
performance of every kind, matured or unmatured, direct or contingent, owing,
arising, due or to become due, or payable to LENDER, by or from BORROWERS, or
any of them, in each case to the extent arising out of this Agreement or any
other Loan Document or otherwise, including, without limitation, all obligations
to repay principal of and interest on all the Loans, and to pay interest, fees,
including but not limited to renewal fees, Unused Line Fees, Non-use Fees,
Termination Fees, the Monitoring Fee, other collateral monitoring fees,
examination fees, closing fees, facility fees, costs, charges, expenses,
professional fees, and any other sums chargeable to BORROWERS, or any of them,
under the Loan Documents or any other agreement with LENDER, whether or not
evidenced by any note or other instrument.
"OBLIGOR" means the party primarily obligated to pay an Account.
"PERSON" means any individual, corporation, partnership, limited
liability partnership, limited liability company, association, trust,
unincorporated organization, joint venture, court or government or political
subdivision or agency thereof, or other entity.
"PERMITTED LIENS" has the meaning set forth in Section 5.6.
"PRIME RATE" means the highest per annum rate of interest referenced
as the "Prime Rate" as reported in the Money Rates Section of The Wall Street
Journal, on the date of determination. If The Wall Street Journal is not
published on such Business Day or does not report such rate, such rate shall be
as reported by such other publication or source as LENDER may select.
"PROPERTY" means an interest of BORROWER in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible.
"REVOLVING CREDIT NOTE" has the meaning set forth in Section 2.1(c).
"REVOLVING LOAN COMMITMENT" means an amount equal to Twenty Million
and No/100 Dollars ($20,000,000.00).
"SECURITIES" has the meaning set forth in Section 6.14 hereof.
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"SHAREHOLDER" means, as applicable, a shareholder, member or partner
of BORROWER.
"SUBORDINATED DEBT" means debt or other obligations of a BORROWER
that is subordinated to the Obligations of Borrowers to LENDER on terms and
conditions that are satisfactory to LENDER in its sole discretion.
"TERM LOAN" has the meaning set forth in Section 2.1(a).
"TERM LOAN AMOUNT" means an amount equal to Three Million and No/100
Dollars ($3,000,000.00).
"TERM LOAN COMMITMENT FEE" has the meaning set forth in Section 2.8
hereof.
"TERM LOAN MATURITY DATE" has the meaning set forth in Section
2.1(e) hereof.
"TERM NOTE" has the meaning set forth in Section 2.1(c) hereof.
"TERMINATION FEE" has the meaning set forth in Section 2.3(d).
"TOTAL FACILITY" has the meaning set forth in Section 2.1(a) hereof.
"TOTAL FACILITY COMMITMENT" has the meaning set forth in Section
2.1(a) hereof.
"TRANCHE A FACILITY" has the meaning set forth in Section 2.1(a)
hereof.
"TRANCHE A LOAN COMMITMENT" means an amount equal to Five Million
and No/100 Dollars ($5,000,000.00).
"TRANCHE B FACILITY" has the meaning set forth in Section 2.1(a)
hereof.
"TRANCHE B LOAN COMMITMENT" means an amount equal to Five Million
and No/100 Dollars ($5,000,000.00).
"TRICARE" means the medical program for active duty members,
qualified family members, CHAMPUS eligible retirees and their family members and
survivors, of all uniformed services.
"UNIFORM COMMERCIAL CODE" or "UCC" means the Uniform Commercial Code
as in effect from time to time in the State of New Jersey.
"UNMATURED EVENT OF DEFAULT" means an event which with the passage
of time, giving of notice or both, would become an Event of Default.
"UNUSED LINE FEE" has the meaning set forth in Section 2.3(c)
hereof.
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"VALUE TRACK SYSTEM(TM)" means the proprietary business system used
by LENDER to value and record the status of Accounts.
1.2. Matters of Construction: The terms "herein," "hereof" and
"hereunder" and other words of similar import refer to this Agreement as a whole
and not to any particular section, paragraph or subdivision. Any pronoun used
shall be deemed to cover all genders. Wherever appropriate in the context, terms
used herein in the singular also include the plural and vice versa. All
references to statutes and related regulations shall include any amendments of
same and any successor statutes and regulations. Unless otherwise provided, all
references to any instruments or agreements to which LENDER is a party,
including, without limitation, references to any of the Loan Documents, shall
include any and all modifications or amendments thereto and any and all
extensions or renewals thereof. All other undefined terms contained in this
Agreement shall, unless the context indicates otherwise, have the meanings
provided for by the UCC to the extent the same are used or defined therein.
1.3. Accounting Principles: Where the character or amount of any asset or
liability or item of income or expense is required to be determined or any
consolidation or other accounting computation is required to be made for the
purposes of this Agreement, this shall be done in accordance with GAAP, to the
extent applicable, except as otherwise expressly provided in this Agreement.
1.4. Restructuring: On the Closing Date, and at the time on such date
that the restructuring contemplated by this Agreement occurs, (a) the Prior
Loans shall continue as Loans under this Agreement and be evidenced by the
Revolving Note, (b) the proceeds of the Term Loan shall be used to pay in full
the Interim Advance and shall be used to provide for additional working capital
and general corporate purposes of the BORROWERS and (c) the security interests
and liens granted by BORROWERS under the Loan Documents and the documents
delivered in connection therewith shall continue in full force and effect under
this Agreement. None of the Prior Loans shall be deemed to have been repaid as a
result of the restructuring described in this Section 1.4. None of the liens of
BORROWERS granted to LENDER pursuant to the Loan Documents shall be terminated
as a result of the restructuring described in this Section 1.4.
1.5. Restatement: This Agreement shall not constitute a novation of the
Existing Agreement or all or any portion of the Obligations evidenced thereby.
SECTION 2. THE LOANS
2.1. Total Facility - Description:
(a) Subject to the terms and conditions of this Agreement, LENDER
hereby establishes for the joint and several benefit of BORROWERS a total
facility (the "TOTAL FACILITY") of up to Thirty Million and No/100 Dollars
($30,000,000) (the "TOTAL FACILITY COMMITMENT") consisting of (i) a line of
credit facility (the "INITIAL CREDIT FACILITY") which shall not at any time
exceed the maximum aggregate principal amount of the Revolving Loan Commitment,
(ii) a line of credit facility (the "TRANCHE A FACILITY") in a maximum aggregate
principal amount at any
9
time not to exceed the Tranche A Loan Commitment and (iii) a line of credit
facility (the "TRANCHE B FACILITY") in a maximum aggregate principal amount at
any time not to exceed the Tranche B Loan Commitment. In addition to the Total
Facility, LENDER shall also provide to BORROWERS a term loan (the "TERM LOAN")
which shall be made available to BORROWERS on the Closing Date in the principal
amount not to exceed the Term Loan Amount, the proceeds of which will be used
for additional working capital and general corporate purposes and to pay in full
the outstanding principal balance of the Interim Advance as set forth and
defined in the Existing Credit Agreement.
(b) The Total Facility shall include Advances which may be
extended by LENDER to or for the benefit of BORROWERS from time to time
hereunder in the form of revolving credit loans ("LOANS"). The aggregate
outstanding amount of all Advances under the Total Facility, at any time, shall
not exceed the Borrowing Base. In no event shall the initial principal amount of
any Loan be less than One Hundred Thousand and No/100 Dollars ($100,000.00).
Subject to such limitation, the outstanding balance of all Advances may
fluctuate from time to time, either to be reduced by repayments made by
BORROWERS or to be increased by future Advances which may be made by LENDER. If
the aggregate outstanding amount of all Advances exceeds the Borrowing Base,
BORROWERS shall immediately repay such excess in full. LENDER has the right at
any time, and from time to time, in its reasonable discretion (but without any
obligation) to set aside reasonable reserves against the Borrowing Base in such
amounts as LENDER may reasonably deem appropriate. The Obligations of BORROWERS
under the Total Facility, the Term Loan and this Agreement are joint and several
and shall at all times be absolute and unconditional.
(c) At Closing, BORROWERS shall duly execute and deliver to LENDER
(i) a promissory note made payable to the order of LENDER in the principal
amount of the Total Facility Commitment (as the same may be amended, modified or
replaced from time to time, the "REVOLVING CREDIT NOTE" and (ii) a promissory
note made payable to the order of LENDER in the principal amount of the Term
Loan Amount (as the same may be amended, modified or replaced from time to time,
the "TERM LOAN NOTE"). The Revolving Credit Note and the Term Loan Note shall
evidence BORROWERS' joint and several, absolute and unconditional obligation to
repay LENDER for all Loans made by LENDER under the Total Facility and the Term
Loan, respectively, with interest as herein and therein provided. Each and every
Advance under the Total Facility shall be evidenced by the Revolving Credit
Note, which is hereby incorporated herein by reference and made a part hereof.
The Revolving Credit Note and the Term Loan Note shall be substantially in the
form of EXHIBIT 2.1(C)(I) and EXHIBIT 2.1(C)(II), respectively, attached hereto
and made a part hereof.
(d) The term ("INITIAL CREDIT TERM") of the Total Facility shall
expire on April 30, 2005. All Loans under the Total Facility shall be repaid on
or before the earlier of (i) the last day of the Initial Credit Term, (ii) upon
termination of the Total Facility, and (iii) termination of this Agreement (the
earliest of such dates, the "MATURITY DATE"). After the Maturity Date no further
Loans shall be available from LENDER.
10
(e) The Term Loan shall be repaid on or before the earlier of (i)
April 30, 2005 and (ii) termination of this Agreement (the earlier of such
dates, the "TERM LOAN MATURITY Date").
(f) From time to time, upon not less than three (3) Business Days
notice to BORROWERS and provided that an Event of Default or Unmatured Event of
Default has occurred hereunder, LENDER may adjust the Advance Rate in order to
reflect, in LENDER'S reasonable judgment, the experience with BORROWERS
(including by way of illustration, to adjust for any known or potential offsets
by Medicare or Medicaid) or the aggregate amount or percentage of the
Collections with respect to the Accounts.
2.2. Funding Procedures:
(a) Subject to the terms and conditions of this Agreement and so
long as no Event of Default or Unmatured Event of Default has occurred
hereunder, LENDER will make Loans to BORROWERS once a week, on a specified
Business Day of each week (such day to be mutually agreeable to BORROWERS and
LENDER) or on such other day of the week as BORROWERS may request (such day is
referred to herein as the "FUNDING DATE", whether or not BORROWERS have
requested a Loan to be made on such date) and more frequently if requested by
BORROWERS so long as there exists sufficient Borrowing Base Excess based on the
most recent Borrowing Base Report.
(b) Not later than 11:00 a.m. (Eastern Time) three (3) Business
Days prior to each Funding Date ("DOWNLOAD DATE"), BORROWERS will deliver to
LENDER the computer file data associated with the Accounts, which shall include,
without limitation, the information (including changes in the Obligor
reimbursement rates and changes in federal or state laws or regulations
affecting payment for medical services), required by LENDER to enable LENDER to
process and value the outstanding Accounts of BORROWERS on LENDER's Value Track
System(TM), as well as ▇▇▇▇ and collect such Accounts following an Event of
Default ("ACCOUNTS DETAIL FILE"). The computer file data associated with the
Accounts shall include information which will enable LENDER to estimate
additional unbilled Accounts ("ESTIMATED ADDITIONAL UNBILLED ACCOUNTS") from the
Download Date to the day immediately preceding the Funding Date or from the
Download Date to any day between such period provided that LENDER is able to
ascertain any Estimated Additional Unbilled Accounts from such computer file
data. Upon completion of the processing of the data with respect to such
Accounts, LENDER will prepare and deliver to BORROWERS by no later than 5:00
p.m. (Eastern Time) on the first Business Day following the Download Date (or if
such Accounts Detail File is not delivered until after 11:00 a.m. (Eastern Time)
on the Download Date, the second Business Day following the Download Date) a
report regarding the Borrowing Base then in effect, which shall be substantially
in the form of EXHIBIT 2.2(b) (a "BORROWING BASE REPORT").
(c) On the Funding Date, BORROWERS will sign and return the
Borrowing Base Report to LENDER. If BORROWERS are requesting that a Loan be made
on such Funding Date, BORROWERS shall also deliver to LENDER, concurrently with
the Borrowing Base Report, a written request for such Loan substantially in the
form of EXHIBIT 2.2(c) (a "LOAN REQUEST"). The
11
Borrowing Base Report and Loan Request may be delivered via telecopy and
BORROWERS acknowledge that LENDER may rely on BORROWERS' signatures by
facsimile, which shall be legally binding upon BORROWERS.
(d) Subject to the terms and conditions of this Agreement, if the
Borrowing Base Report and Loan Request are delivered to LENDER before 11:00 a.m.
(Eastern Time) on the Funding Date, LENDER will advance on the Funding Date (or
the next Business Day if the Borrowing Base Report and Loan Request are
delivered after 11:00 a.m. (Eastern Time)) to BORROWER a Loan in an amount equal
to the lesser of (i) the amount of the Loan requested by BORROWERS in the Loan
Request or (ii) the Borrowing Base Excess as of such date, provided that such
Loan is not less than One Hundred Thousand and No/100 Dollars ($100,000.00).
(e) LENDER's determination of the Estimated Net Value of the
Eligible Accounts and other amounts to be determined or calculated under this
Agreement shall, in the absence of manifest error, be binding and conclusive.
2.3. Interest and Fees:
(a) Each Advance shall bear interest on the outstanding principal
amount thereof from the date made until such Advance is paid in full. The
BORROWERS agree to pay interest on the unpaid principal amount of each Loan from
time to time outstanding hereunder at the following rates per year:
(i) before maturity of any Loan, whether by acceleration or
otherwise, at the option of BORROWER, subject to the terms hereof at a rate
equal to:
(A) the Prime Rate, plus one and one-half of one
percent (1.50%) per annum. The interest rate on all amounts outstanding under
the Total Facility shall be adjusted weekly based on the Prime Rate as of each
Funding Date; or
(B) the LIBOR Rate, plus three percent (3.00%) per
annum.
(ii) after the Maturity Date, until paid, at a rate equal the
Default Rate.
(b) The Term Loan shall bear interest on the outstanding principal
amount thereof from the Closing Date until such Term Loan is paid in full. The
BORROWERS agree to pay interest on the unpaid principal amount of the Term Loan
until the Term Loan Maturity Date at the LIBOR Rate, plus three and one-half
percent (3.50%) per annum. The BORROWERS further agree to pay interest on the
unpaid principal amount of the Term Loan after the Term Loan Maturity Date,
until paid, at a rate equal to the Default Rate.
(c) BORROWERS shall unconditionally pay to LENDER a fee ("UNUSED
LINE FEE") equal to three-eighths of one percent (0.375%) per annum of the
unused portion of the Total Facility. The unused portion of the Total Facility
shall be the difference between (a) an amount equal to the sum of (i) the
Revolving Loan Commitment plus (ii) the Tranche A Loan Commitment, if BORROWERS
obtain any Advance under such facility, plus (iii) the Tranche B
12
Loan Commitment, if BORROWERS obtain any Advance under such facility, minus (b)
the average daily outstanding balance of the Loans during each month (or portion
thereof), which fees shall be calculated and payable monthly, in arrears, and
shall be due and payable on the first Funding Date of each calendar month.
(d) If any Event of Default shall occur and be continuing, the
rate of interest applicable to each Loan then outstanding shall be the Default
Rate. The Default Rate shall apply from the date of the Event of Default until
the date such Event of Default is waived or cured, and interest accruing at the
Default Rate shall be payable upon demand.
(e) Should BORROWERS terminate the Total Facility for any reason
prior to the last day of the Initial Credit Term, in addition to repayment of
all Obligations under the Total Facility then outstanding and termination of
LENDER's commitment hereunder, BORROWERS shall unconditionally be obligated to
pay at the time of such termination, a fee ("TERMINATION FEE") in an amount
equal to the product of (i) the product of (A) an amount equal to the sum of the
Revolving Credit Commitment plus the Tranche A Loan Commitment, if BORROWERS'
obtained any Advance under the Tranche A Facility, plus the Tranche B Loan
Commitment, if BORROWERS' obtained any Advance under the Tranche B Facility,
multiplied by (B) one-half of one percent (0.50%), multiplied by (ii) the
remaining number of years until the last day of the Initial Credit Term (for
purposes of such calculation, such number of years is rounded up to the next
whole number for any partial year remaining). BORROWERS acknowledge that the
Termination Fee is an estimate of LENDER's damages in the event of early
termination and is not a penalty. In the event of termination of the Total
Facility, all of the Obligations under the Total Facility shall be immediately
due and payable upon the termination date stated in any notice of termination.
(f) Should the BORROWERS terminate the Term Loan for any reason
prior to the Term Loan Maturity Date, in addition to repayment of all
Obligations related to the Term Loan, BORROWERS shall unconditionally be
obligated to pay at the time of such termination, a fee ("TERM LOAN TERMINATION
FEE") in an amount equal to (i) one and one-half percent (1.50%) of the Term
Loan Amount if the effective date of such termination by BORROWERS is on or
prior to the first annual anniversary of the Closing Date, (ii) one percent
(1.00%) of the Term Loan Amount if the effective date of such termination by
BORROWERS is after the first annual anniversary of the Closing Date and prior to
the second annual anniversary of the Closing Date, and (iii) one half of one
percent (0.50%) of the Term Loan Amount if the effective date of such
termination by BORROWERS is after the second annual anniversary of the Closing
Date and prior to the third annual anniversary of the Closing Date. BORROWERS
acknowledge that the Term Loan Termination Fee is an estimate of LENDER's
damages in the event of early termination and is not a penalty. In the event of
termination of the Term Loan, all of the Obligations under the Term Loan shall
be immediately due and payable upon the termination date stated in any notice of
termination.
(g) All undertakings, agreements, covenants, warranties and
representations of BORROWERS contained in the Loan Documents shall survive any
termination as set forth in Section 2.3(e) or Section 2.3(f) above, and LENDER
shall retain its liens in the Collateral and all
13
of its rights and remedies under the Loan Documents notwithstanding such
termination until BORROWERS have paid the Obligations to LENDER, in full, in
immediately available funds, together with the applicable Termination Fee or
Term Loan Termination Fee, if any. Notwithstanding the payment in full of the
Obligations, LENDER shall not be required to terminate its security interests in
the Collateral unless, with respect to any loss or damage LENDER may incur as a
result of dishonored checks or other items of payment received by LENDER from
BORROWERS or any Obligor and applied to the Obligations, LENDER shall (i) have
received a written agreement duly executed by BORROWERS and by any Person whose
loans or other advances to BORROWERS are used in whole or in part to satisfy the
Obligations, indemnifying LENDER from any such loss or damage; or (ii) have
retained such monetary reserves and security interests on the Collateral for
such period of time as LENDER, in its reasonable discretion, may deem necessary
to protect LENDER from any such loss or damage.
2.4. Additional Interest Provisions:
(a) Calculation of Interest: Interest shall be computed for the
actual number of days elapsed on the basis of a year consisting of 360 days,
including the date a Loan is made and excluding the date such Loan or any
portion thereof is paid or prepaid.
(b) Continuation of Interest Charges: All contractual rates of
interest chargeable on outstanding Loans shall continue to accrue and be paid
even after default, maturity, acceleration, judgment, bankruptcy, insolvency
proceedings of any kind or the happening of any event or occurrence similar or
dissimilar.
(c) Applicable Interest Limitations: In no contingency or event
whatsoever shall the aggregate of all amounts deemed interest hereunder and
charged or collected pursuant to the terms of this Agreement exceed the highest
rate permissible under applicable law. In the event that any court of competent
jurisdiction determines LENDER has charged or received interest hereunder in
excess of the highest applicable rate, LENDER may, in its sole discretion, apply
and set off such excess interest received by LENDER against other Obligations
due or to become due and such rate shall automatically be reduced to the maximum
rate permitted by such law.
(d) Rate Selection and Change: BORROWERS shall select and change
its selection of interest rates as among the Prime Rate and the LIBOR Rate to
apply to the aggregate amount of all Advances outstanding as of such date,
subject to the requirements herein stated:
(i) At the time the initial Loan is made; and
(ii) Two days (2) prior to each Funding Date.
2.5. Payments:
(a) All accrued interest on the Loans bearing interest at the
Prime Rate shall be due and payable weekly on the Funding Date, at the Maturity
Date and upon payment in full
14
beginning with the first of such dates to occur after the date of the first Loan
hereunder, and to each Loan to which the LIBOR Rate applies, on the last
Business Day of each month of each year until maturity, at the Maturity Date or
Term Loan Maturity Date, as applicable, and upon payment in full. After the
Maturity Date or Term Loan Maturity Date, as applicable, interest shall be
payable on demand. Any Unused Line Fees shall be due and payable monthly on the
first Funding Date of each month with respect to Unused Line Fees which accrued
during the prior month.
(b) If at any time the aggregate principal amount of all Advances
outstanding exceeds the Borrowing Base then in effect, BORROWERS shall
immediately make such principal prepayments of the Loans (subject to the terms
of Section 2.3(e)) as is necessary to eliminate such excess.
(c) Except as set forth below, the entire outstanding principal
balance of all of the Advances, together with all unpaid accrued interest
thereon and any unpaid Unused Line Fees, shall be due and payable on the
Maturity Date. The outstanding principal balance of the Term Loan, together with
all unpaid accrued interest thereon, shall be due and payable on the Term Loan
Maturity Date. BORROWERS shall repay the Term Loan to LENDER on the last
Business Day of each month commencing May 1, 2002 through and including the Term
Loan Maturity Date in consecutive monthly payments of principal, each payment in
the amount of Eighty Three Thousand Three Hundred Thirty Three and No/100
Dollars ($83,333.00), and interest accrued thereon.
(d) Subject to the terms of Sections 2.3(c) and 2.3(e) above,
BORROWERS may prepay the principal of the Loans on any Funding Date by giving
LENDER written notice of the proposed prepayment two (2) Business Days prior to
such Funding Date.
(e) All payments and prepayments shall be applied first to any
unpaid interest and fees and thereafter to the principal of the Loans and to
other amounts due LENDER, in the order provided in Section 2.7(f) hereof. Except
as otherwise provided herein, all payments of principal, interest, fees, or
other amounts payable by BORROWERS hereunder shall be remitted to LENDER in
immediately available funds not later than 11:00 a.m. (Eastern Time) on the day
due. Whenever any payment is stated as due on a day which is not a Business Day,
the maturity of such payment shall be extended to the next succeeding Business
Day and interest shall continue to accrue during such extension.
2.6. Use of Proceeds: The extensions of credit under and proceeds of the
Total Facility shall be used to repay existing indebtedness of BORROWERS and for
working capital and general corporate purposes, including acquisitions. The
proceeds of the Term Loan shall be used to repay the Interim Advance and for
working capital and general corporate purposes.
2.7. Lockboxes and Collections:
(a) BORROWERS will enter into lockbox agreements in respect of the
Government Lockbox and Commercial Lockbox in such form and with the Lockbox Bank
or
15
such other bank as is acceptable to LENDER. BORROWERS shall instruct the Lockbox
Bank maintaining the Government Lockbox and the Commercial Lockbox to initiate,
or accept an initiation from LENDER which effectuates, a daily transfer of all
available funds to an account of LENDER to be designated by LENDER (the
"COLLECTION ACCOUNT").
(b) BORROWERS will cause all Collections with respect to all of
the Accounts, other than Government Accounts, to be sent directly to the
Commercial Lockbox, and will cause all Collections with respect to all of the
Government Accounts to be sent directly to the Government Lockbox (which may be
effectuated by electronic transfer directly to the Government Lockbox). In the
event that a BORROWER receives any Collections that should have been sent to the
Commercial Lockbox or the Government Lockbox, such BORROWER will, promptly upon
receipt and in any event within one (1) Business Day of receipt, forward such
Collections directly to the Commercial Lockbox or Government Lockbox, as
applicable, in the form received, and if requested by LENDER, promptly notify
LENDER of such event. Until so forwarded, such Collections not generated from
Government Accounts shall be held in trust for the benefit of LENDER.
(c) No BORROWER shall withdraw any amounts from the accounts into
which the Collections remitted to the Commercial Lockbox are deposited nor shall
any BORROWER change the procedures under the agreements governing the Commercial
Lockbox and related accounts.
(d) BORROWERS will cooperate with LENDER in the identification and
reconciliation on a daily basis of all amounts received in the Commercial
Lockbox and the Government Lockbox. If more than five percent (5%) of the
Collections since the most recent Funding Date is not identified or reconciled
to the satisfaction of LENDER within ten (10) Business Days of receipt, LENDER
shall not be obligated to make further Loans until such amount is identified or
is reconciled to the reasonable satisfaction of LENDER, as the case may be. In
addition, if any such amount cannot be identified or reconciled to the
satisfaction of LENDER, LENDER may utilize its own staff or, if it deems
necessary, engage an outside auditor, in either case at BORROWERS' expense
(which in the case of LENDER's own staff shall be in accordance with LENDER's
then prevailing customary charges (plus expenses)), to make such examination and
report as may be necessary to identify and reconcile such amount.
(e) No BORROWER will send to or deposit in the Commercial Lockbox
or the Government Lockbox any funds other than payments made with respect to
Accounts.
(f) Prior to the occurrence of an Event of Default, on the
Business Day following the day on which Collections are deposited in the
Collection Account, LENDER shall cause such Collections to be applied to reduce
the aggregate outstanding amount of the Advances, provided that, on each Funding
Date, LENDER shall cause all Collections on deposit in the Collection Account on
the day immediately preceding such Funding Date to be disbursed in the following
order of priority:
16
(i) to LENDER for any costs and expenses of LENDER required
to be paid or reimbursed by BORROWERS under this Agreement or under any of the
other Loan Documents;
(ii) to LENDER in an amount equal to the unpaid accrued
interest on the aggregate outstanding Advances as of such Funding Date;
(iii) to LENDER in an amount equal to any unpaid accrued
Unused Line Fees which are then due and payable as of such Funding Date;
(iv) to LENDER in the amount of any Borrowing Base
Deficiency, if any;
(v) subject to Section 2.3(c) and 2.3(e), to LENDER, the
amount of any prepayment of principal of which BORROWERS have given notice to
LENDER in accordance with Section 2.5(d) hereof; and
(vi) to LENDER for the aggregate outstanding amount of the
Advances and any and all other fees due and payable hereunder.
In addition, promptly upon request of BORROWERS, so long as no Event of Default
shall have occurred, LENDER shall disburse to BORROWERS the amount, if any, by
which the collected balance in the Collection Account exceeds the aggregate
outstanding principal amount of the Advances and all interest and other amounts
that will be payable on the next Funding Date. Following the occurrence of an
Event of Default, LENDER may apply all Collections to BORROWERS' Obligations in
such order as LENDER may in its sole discretion determine.
2.8. Fees: As of the Closing, LENDER shall have fully earned, and
BORROWERS shall have paid to LENDER, a non-refundable commitment fee
("COMMITMENT FEE") equal to Two Hundred Thousand and No/100 Dollars
($200,000.00). Subject to the terms and conditions of this Agreement and so long
as no Event of Default or Unmatured Event of Default has occurred hereunder, if
LENDER makes any Advance under either the Tranche A Facility or the Tranche B
Facility, BORROWERS shall pay to LENDER a non-refundable commitment fee under
each of the Tranche A Facility and the Tranche B Facility, each of which will be
deemed to be fully earned by LENDER as of such date and each of which shall be
in an amount equal to Fifty Thousand and No/100 Dollars ($50,000.00). On each
Funding Date, LENDER shall have fully earned and BORROWERS shall pay to LENDER a
nonrefundable monitoring fee ("MONITORING FEE") equal to one quarter of one
percent (.25%), per annum, of the Total Facility Commitment. As of the date
hereof, LENDER shall have fully earned, and BORROWERS shall have paid to LENDER,
a non-refundable term loan commitment fee ("TERM LOAN COMMITMENT FEE") equal to
Thirty Thousand and No/100 Dollars ($30,000.00).
17
SECTION 3. COLLATERAL
3.1. Description: To secure the payment, promptly when due, and the
punctual performance, of all of the Obligations, each BORROWER assigns to LENDER
to the extent assignable under federal, state or local law, including without
limitation administrative pronouncements, and grants to LENDER a security
interest in, all of such BORROWER'S right, title and interest in and to the
following property of such BORROWER whether now owned or hereafter acquired
(collectively, the "COLLATERAL"):
(i) Accounts, Contract Rights, etc. - All now owned and
hereafter acquired, created, or arising accounts (including, without limitation,
the Accounts), accounts receivable, notes receivable, contract rights, chattel
paper, documents (including documents of title), instruments and letters of
credit;
(ii) General Intangibles - All now owned and hereafter
acquired, created or arising general intangibles of every kind and description,
including, but not limited to, all existing and future customer lists, telephone
lists and directories, choses in action, loans, claims, books, records, patents
and patent applications, copyrights, trademarks, tradenames, tradestyles,
trademark applications, blueprints, drawings, designs and plans, trade secrets,
contracts, contract rights, distributorship agreements, licenses, license
agreements, formulae, tax and any other types of refunds, rights (if any) to or
in employee or other pension, retirement or similar plans and any assets thereof
(to the extent permitted by applicable law and subject always to the rights of
the beneficiaries thereof), or any portion thereof, including, without
limitation, refunds for overpayments, distributions upon termination, reversion
of any surplus assets or otherwise, returned and unearned insurance premiums,
rights and claims under insurance policies including, without limitation, credit
insurance and key man life insurance policies, computer information, software,
records and data, and rights, remedies and guarantees evidencing, securing or
otherwise relating to any BORROWER'S accounts including, without limitation, all
rights of enforcement and collection;
(iii) Deposit Accounts and Related Property - All now existing
and hereafter acquired or arising deposit accounts, Commercial Lockboxes,
Governmental Lockboxes, Collection Accounts, investment accounts, commercial
paper, investment securities, investment property, and certificates of deposit,
of every nature, wherever located, and all funds received thereby, deposited
therein or associated therewith, any checks or instruments from time to time
representing or evidencing the same and all documents and records associated
therewith;
(iv) Property in LENDER's Possession - All Property, now or
hereafter in LENDER's possession; and
(v) Proceeds - The collections and proceeds (including,
without limitation, insurance proceeds), whether cash or non-cash, of all of the
foregoing.
3.2. Lien Documents: At Closing and thereafter as LENDER reasonably deems
necessary, each BORROWER shall duly authorize, execute and deliver to LENDER or
shall have duly
18
authorized, executed and delivered (all in form and substance reasonably
satisfactory to LENDER):
(a) Financing Statements - Financing statements pursuant to the
UCC, which LENDER may file in any jurisdiction where any Collateral is or may be
located and in any other jurisdiction that LENDER deems appropriate; and
(b) Other Agreements - Any other agreements, documents,
instruments and writings, including, without limitation, security agreements and
assignment agreements, lawfully and reasonably required by LENDER to evidence,
perfect or protect LENDER's liens and security interest in the Collateral.
3.3. Other Actions: In addition to the foregoing, each BORROWER shall do
anything further that may be lawfully and reasonably required by LENDER to
perfect its security interests and to effectuate the intentions and objectives
of this Agreement, including, but not limited to, the execution and delivery of
continuation statements, amendments to financing statements, security
agreements, contracts and any other documents required hereunder. At LENDER's
request, each BORROWER shall also immediately deliver (with execution by such
BORROWER of all necessary documents or forms to reflect LENDER's security
interest therein) to LENDER all items for which LENDER determines it should have
physical possession in order to perfect and protect LENDER's security interest
therein, duly endorsed or assigned to LENDER without restriction.
3.4. Searches: LENDER shall, as LENDER may reasonably request from time
to time and at BORROWERS' expense, obtain the following searches (the results of
which are to be consistent with the warranties made by BORROWERS in this
Agreement):
(a) UCC Searches: With respect to each BORROWER, UCC searches with
the Secretary of State and local filing office of each state where such BORROWER
is organized and where such BORROWER maintains its chief executive office, a
place of business, or assets;
(b) Judgments, Etc.: Judgment, federal and state tax lien and
corporate tax lien searches against each BORROWER in all applicable filing
offices of each state searched under subparagraph (a) above.
BORROWERS shall, prior to or at Closing and at BORROWERS' expense, obtain and
deliver to LENDER good standing or equivalent certificates showing each BORROWER
to be in good standing in its state of incorporation or organization and
authorized to transact business and in good standing as a foreign corporation in
each other state or foreign country in which it is doing and presently intends
to do business for which such BORROWER'S failure to be so qualified might have
material adverse effect on such BORROWER'S business, financial condition,
Property or LENDER's rights hereunder.
3.5. Filing Security Agreement: A carbon, photographic or other
reproduction or other copy of this Agreement is sufficient as and may be filed
in lieu of a financing statement.
19
3.6. Power of Attorney: Each of the officers of LENDER is hereby
irrevocably made, constituted and appointed the true and lawful attorney-in-fact
for each BORROWER (without requiring any of them to act as such) with full power
of substitution to do the following (such power to be deemed coupled with an
interest): (1) after an Event of Default or Unmatured Event of Default occurs
hereunder, endorse the name of such BORROWER upon any and all checks, drafts,
money orders and other instruments for the payment of monies that are payable to
such BORROWER and constitute Collections on the Collateral; (2) execute in the
name of such BORROWER any financing statements, schedules, assignments,
instruments, documents and statements that such BORROWER is obligated to give
LENDER hereunder or that LENDER deems is necessary to perfect LENDER's security
interest or lien in the Collateral; (3) after an Event of Default or Unmatured
Event of Default occurs hereunder, to verify validity, amount or any other
matter relating to the Collateral by mail, telephone, telecopy or otherwise; and
(4) after an Event of Default or Unmatured Event of Default occurs hereunder, do
such other and further acts and deeds in the name of such BORROWER that LENDER
may reasonably deem necessary or desirable to enforce its right with respect to
any Collateral.
SECTION 4. CLOSING AND CONDITIONS PRECEDENT TO ADVANCES
Closing under this Agreement and the making of each Loan are subject to
the following conditions precedent (all documents to be in form and substance
satisfactory to LENDER and LENDER's counsel):
4.1. Resolutions, Opinions, and Other Documents: Prior to the Closing,
BORROWERS shall have delivered to LENDER the following:
(a) a duly and fully executed Agreement, Revolving Credit Note and
Term Note;
(b) each instrument, document and agreement required to be
executed under any provision of this Agreement or any of the other Loan
Documents;
(c) certified copies of (i) resolutions of each BORROWER'S board
of directors or partners, as applicable, authorizing the execution of this
Agreement, the Revolving Credit Note, the Term Note and each document required
to be delivered by this Agreement and (ii) each BORROWER'S Articles of
Incorporation and By-laws or Certificate of Limited Partnership and Partnership
Agreement, as applicable, or certifications that such documents have not been
amended since being delivered under the Existing Credit Agreement;
(d) incumbency certificates identifying all Authorized Officers of
each BORROWER, with specimen signatures;
(e) payment by BORROWERS of the Commitment Fee, the Term Loan
Commitment Fee and all Expenses associated with the Total Facility and the Term
Loan incurred to the Closing Date;
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(f) LENDER shall have received copies of each of the
accreditations, licenses, certifications required by Section 5.3 below and all
Contracts requested by LENDER;
(g) a balance sheet as of March 31, 2002 and related statement of
income and statement of cash flows for the month and fiscal year then ended,
prepared in accordance with GAAP; and
(h) all other instruments, certificates, documents, information
and reports required or requested to be executed and/or delivered by BORROWERS
under any provision of this Agreement or any of the Loan Documents.
4.2. Additional Preconditions to Loans: LENDER's obligation to make the
initial Loan and each subsequent Loan shall be subject to the satisfaction of
each of the following conditions:
(a) After giving effect to such Loan (excluding the Term Loan):
(i) the aggregate principal amount of all Advances
outstanding shall not exceed the Borrowing Base then in effect; and
(ii) the ENV of all Eligible Accounts shall not exceed any of
the Concentration Limits.
(b) All representations and warranties of BORROWERS shall be
deemed reaffirmed as of the making of such Loan and shall be true both before
and after giving effect to such Loan and no Event of Default or Unmatured Event
of Default shall have occurred and be continuing, BORROWERS shall be in
compliance with this Agreement and the other Loan Documents, and BORROWERS shall
have certified such matters to LENDER.
(c) Each BORROWER shall have signed and delivered to LENDER
notices, in the form of EXHIBIT 4.2A, directing the Obligors (other than
Obligors with respect to Government Accounts) to make payment to the Commercial
Lockbox; and, in the form of EXHIBIT 4.2B, directing the Obligors with respect
to Government Accounts to make payment to the Government Lockbox.
(d) BORROWERS shall have taken all actions necessary to permit
LENDER to record all of the Eligible Accounts in LENDER's Value Track
System(TM).
(e) The lockbox arrangements required by Section 2.7 hereof shall
be in effect, and the amounts received in the lockboxes shall have been
identified or reconciled to LENDER's satisfaction, as required by Section 2.7(d)
hereof.
(f) BORROWERS shall have taken such other actions, including the
delivery of documents and opinions, as LENDER may reasonably request.
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4.3. Absence of Certain Events: As of the Closing Date and prior to each
Loan, no Event of Default or Unmatured Event of Default hereunder shall have
occurred and be continuing.
4.4. Compliance with this Agreement: BORROWERS shall have performed and
complied with all agreements, covenants and conditions contained herein
including, without limitation, the provisions of Sections 6 and 7 hereof, which
are required to be performed or complied with by BORROWERS before or at the
Closing Date and as of the date of each Advance and the Term Loan.
4.5. Closing Certificate: LENDER shall have received a certificate dated
the Closing Date and signed by the chief financial officer of each BORROWER
certifying that all of the conditions specified in this Section have been
fulfilled and that there has not occurred any material adverse change in the
operations and conditions (financial or otherwise) of such BORROWER since March
31, 2002.
4.6. Closing: Subject to the conditions of this Section 4, the Initial
Credit Facility and the Term Loan shall be made available on the date (the
"CLOSING DATE") this Agreement is duly executed and all of the conditions
contained in Section 4.1 hereof are completed (the "CLOSING").
4.7. Non-Waiver of Rights: By completing the Closing hereunder, or by
making Advances hereunder, LENDER does not thereby waive a breach of any
warranty, representation or covenant made by BORROWERS hereunder or under any
agreement, document, or instrument delivered to LENDER or otherwise referred to
herein, and any claims and rights of LENDER resulting from any breach or
misrepresentation by BORROWERS are specifically reserved by LENDER.
SECTION 5. REPRESENTATIONS AND WARRANTIES
To induce LENDER to complete the Closing and make the Loans under the
Total Facility and to make the Term Loan to each BORROWER, each BORROWER
represents and warrants to LENDER that:
5.1. Organization and Validity:
(a) Such BORROWER is duly organized as either a corporation or a
partnership and validly existing under the laws of its state of incorporation or
formation, is duly qualified, is validly existing and in good standing and has
lawful power and authority to engage in the business it conducts in each state
and other jurisdiction where the nature and extent of its business requires
qualification, except where the failure to so qualify would not have a material
adverse effect on such BORROWER'S business, financial condition, Property or
prospects. A list of all states and other jurisdictions where such BORROWER is
qualified to do business is attached hereto as SCHEDULE 2 and made a part
hereof.
(b) The execution, delivery and performance of this Agreement, the
other Loan Documents and all related agreements and each document required by
any Section hereof will not violate any law, government rule or regulation,
which violation could have a material
22
adverse effect on the business, financial condition, Property or prospects of
the BORROWERS, taken as a whole, or the charter, minutes, partnership agreement
or bylaw provisions of BORROWER, violate or result in a default (immediately or
with the passage of time) under any contract, agreement or instrument to which
such BORROWER is a party, or by which such BORROWER is bound, which violation or
default could have a material adverse effect on the business, financial
condition, Property or prospects of the BORROWERS, taken as a whole. Such
BORROWER is not in violation of nor has knowingly caused any Person to violate
any term of any agreement or instrument to which it or such Person is a party or
by which it may be bound or of its charter, minutes, partnership agreement or
bylaws, which violation could have a material adverse effect on the business,
financial condition, Property or prospects of the BORROWERS, taken as a whole.
(c) Such BORROWER has all requisite power and authority to enter
into and perform this Agreement and the other Loan Documents and to incur the
Obligations herein provided for, and has taken all proper and necessary
corporate action or other necessary action to authorize the execution, delivery
and performance of this Agreement and the other Loan Documents.
(d) This Agreement, the Revolving Credit Note, the Term Loan Note
and the other Loan Documents, when delivered, will be valid and binding upon all
such BORROWER party thereto and enforceable in accordance with their respective
terms.
5.2. Places of Business: Each BORROWER'S jurisdiction of organization,
chief executive office and the only other places of business of each such
BORROWER are located at the corresponding addresses set forth on SCHEDULE 2.
Except as disclosed on SCHEDULE 2: (i) no BORROWER has changed any such location
in the last five (5) years (ii) no BORROWER has changed its name in the last
five (5) years and (iii) during such period, no BORROWER used, nor does any
BORROWER now use, any fictitious or trade name.
5.3. Operation of Facilities: Each BORROWER owns or leases and operates
facilities to provide health care services and (a) maintains Medicare and
Medicaid provider status and is the holder of the provider identification
numbers identified on SCHEDULE 2 hereto, all of which are current and valid and
such BORROWER has not allowed, permitted, authorized or caused any other Person
to use any such provider identification number, and (b) has obtained all
material licenses, accreditations and approvals of governmental authorities and
all other Persons necessary for such BORROWER to own its assets, to carry on its
business, to execute, deliver and perform the Loan Documents, and to receive
payments from the Obligors and, if organized as a not-for-profit entity, has and
maintains its status, if any, as an organization exempt from federal taxation
under Section 501(c)(3) of the Internal Revenue Code. No BORROWER has been
notified by any such governmental authority or other Person during the
immediately preceding twenty four (24) month period that such Person has
rescinded or not renewed, or intends to rescind or not renew, any such license
or approval.
5.4. Pending Litigation: There are no judgments or judicial or
administrative orders, proceedings or investigations (civil or criminal)
pending, or to the knowledge of such BORROWER,
23
threatened, against any BORROWER in any court or before any governmental
authority or arbitration board or tribunal, other than as set forth on SCHEDULE
2 hereto, none of which, if adversely determined, would have a material adverse
effect on such BORROWER. No BORROWER is in default with respect to any order of
any court, governmental authority, regulatory agency or arbitration board or
tribunal. No Shareholder or executive officer of any BORROWER has been indicted
or convicted in connection with or is engaging in any criminal conduct, or is
currently subject to any lawsuit or proceeding or under investigation in
connection with any anti-racketeering or other conduct or activity.
5.5. Medicaid and Medicare Cost Reporting: The Medicaid and Medicare cost
reports of each facility and of the home office of each BORROWER for all cost
reporting periods have been submitted when and as required to (i) as to
Medicaid, the state agency, or other HCFA-designated agent or agent of such
state agency, charged with such responsibility or (ii) as to Medicare, the
Medicare intermediary or other HCFA-designated agent charged with such
responsibility.
5.6. Title to Collateral: Such BORROWER has good and marketable title to
all the Collateral it respectively purports to own, free from liens, claims and
encumbrances, except those of LENDER and those listed on SCHEDULE 2 hereto
("PERMITTED LIENS").
5.7. Governmental Consent: Neither the nature of any BORROWER or of any
BORROWER'S business or Property, nor any relationship between any BORROWER and
any other Person, nor any circumstance affecting any BORROWER in connection with
the issuance or delivery of any Loan Document, is such as to require a consent,
approval or authorization of, or filing, registration or qualification with, any
governmental authority on the part of any such BORROWER in connection with the
execution and delivery of this Agreement or the issuance or delivery of the
Revolving Credit Note, the Term Loan Note or other Loan Documents; except for
instances in which the lack of such consent, approval or authorization of, or
filing, registration or qualification with, any governmental authority on the
part of any such BORROWER would not have a material adverse effect on the
business, financial condition, Property or prospects of the BORROWERS, taken as
a whole.
5.8. Taxes: All tax returns required to be filed by BORROWERS, or any of
them, in any jurisdiction have in fact been filed, and all taxes, assessments,
fees and other governmental charges upon BORROWERS, or any of them, or upon any
of their respective Property, income or franchises, which are shown to be due
and payable on such returns have been paid, except for those taxes being
contested in good faith with due diligence by appropriate proceedings. No
BORROWER is aware of any proposed additional tax assessment or tax to be
assessed against or applicable to any BORROWER that could reasonably be expected
to have a material adverse effect on such BORROWER'S business, financial
condition, Property or prospects.
5.9. Financial Statements: BORROWERS' internally-prepared balance sheets
as of December 31, 2000 and the related income statements and statements of cash
flows for the fiscal year then ended (complete copies of which have been
delivered to LENDER) have been prepared in accordance with GAAP and present
fairly, accurately and completely the financial position of
24
BORROWERS as of such dates and the results of their operations for such fiscal
year. The fiscal year for each BORROWER currently ends on the date set forth on
SCHEDULE 2 hereto. Each BORROWER'S federal tax identification number is as set
forth on SCHEDULE 2 hereto.
5.10. Full Disclosure: Neither the financial statements referred to in
Section 5.9, nor this Agreement, the other Loan Documents or related agreements
and documents or any written statement furnished by any BORROWER to LENDER in
connection with the negotiation of the Total Facility and the Term Loan and
contained in any financial statements or documents relating to any BORROWER
contain any untrue statement of a material fact or omit a material fact
necessary to make the statements contained therein or herein not misleading.
5.11. Guarantees, Contracts, etc.:
(a) No BORROWER owns nor holds equity or long term debt
investments in, has any outstanding advances to, or serves as guarantor, surety
or accommodation maker for the obligations of, or has any outstanding borrowings
from, any Person except as described in SCHEDULE 2 hereto.
(b) No BORROWER is a party to any contract or agreement, or
subject to any charter or other corporate restriction, which unduly materially
and adversely affects its business, financial condition, Property or prospects.
(c) Except as otherwise specifically provided in this Agreement,
no BORROWER has agreed or consented to cause or permit any of the Collateral to
be subject in the future (upon the happening of a contingency or otherwise) to a
lien or encumbrance not permitted by this Agreement.
5.12. Compliance with Laws:
(a) No BORROWER is in violation of, has received written notice
that it is in violation of, or has knowingly caused any Person to violate, any
applicable statute, regulation or ordinance of the United States of America, or
of any state, city, town, municipality, county or of any other jurisdiction, or
of any agency, or department thereof (including without limitation,
environmental laws and regulations) which may materially and adversely affect
its business, financial condition, Property or prospects.
(b) Each BORROWER is current with all reports and documents
required to be filed with any state or federal securities commission (if any) or
similar agency and is in compliance in all material respects with all applicable
rules and regulations of such commissions.
5.13. Other Associations: No BORROWER is engaged in nor has an interest in
any joint venture or partnership with any other Person or has any subsidiaries
or Affiliates, except as described on SCHEDULE 2 hereto.
5.14. Environmental Matters: Except as disclosed on SCHEDULE 2 hereto, no
BORROWER has knowledge:
25
(a) of the presence of any Hazardous Substances on any of the real
property where any BORROWER conducts operations or has its personal property, or
(b) of any on-site spills, releases, discharges, disposal or
storage of Hazardous Substances that have occurred or are presently occurring on
any of such real property or where any Collateral is located, or
(c) of any spills, releases, discharges or disposal of Hazardous
Substances that have occurred, are presently occurring on any other real
property as a result of the conduct, action or activities of any BORROWER.
5.15. Capital Stock and Equity Interests: The authorized and outstanding
shares of capital stock and other equity interests of each BORROWER is as set
forth on SCHEDULE 2 hereto. All of the capital stock and equity interests of
such BORROWER have been duly and validly authorized and issued and are fully
paid and non-assessable and have been sold and delivered to the holders thereof
in compliance with, or under valid exemption from, all Federal and state laws
and the rules and regulations of all regulatory bodies thereof governing the
sale and delivery of securities. Except for the rights and obligations set forth
in SCHEDULE 2, there are no subscriptions, warrants, options, calls,
commitments, rights or agreements by which any BORROWER or any of the
Shareholders of any BORROWER is bound relating to the issuance, transfer, voting
or redemption of shares of its capital stock, partnership units or any
pre-emptive rights held by any Person with respect to the shares of capital
stock or partnership units of any such BORROWER. Except as set forth in SCHEDULE
2, no BORROWER has issued any securities convertible into or exchangeable for
shares of its capital stock or partnership units or any options, warrants or
other rights to acquire such shares or partnership units or securities
convertible into or exchangeable for such shares or partnership units.
5.16. Lockboxes; Lockbox Agreements: The Government Lockbox and the
Commercial Lockbox are the only lockbox accounts maintained by BORROWERS, and
each Obligor of an Eligible Account has been directed by the notice attached as
EXHIBIT 4.2A to this Agreement, and is required to, remit all payments with
respect to such Account for deposit in the Commercial Lockbox (other than the
Obligors of Government Accounts which have been directed by the notice attached
as EXHIBIT 4.2B to this Agreement to remit all payments with respect to such
Accounts for deposit in the Government Lockbox). Each agreement relating to each
Government Lockbox and each Commercial Lockbox is in full force and effect as of
the date hereof and has not been amended, restated or modified.
5.17. Borrowing Base Reports: Each Borrowing Base Report signed by
BORROWERS, on behalf of BORROWERS, contains and will contain an accurate summary
of all Eligible Accounts of BORROWERS contained in the Borrowing Base as of its
date.
5.18. Security Interest: Each BORROWER has granted to LENDER a valid,
perfected first priority and only security interest in the Accounts and the
other Collateral subject to no other liens, claims or encumbrances, other than
Permitted Liens.
26
5.19. Accounts:
(a) No BORROWER has done nor shall do anything to interfere with
the collection of the Accounts and no BORROWER shall amend or waive the terms or
conditions of any Account or any related Contract in any material adverse manner
without Lender's prior written consent.
(b) Each BORROWER has made and will continue to make all payments
to Obligors necessary to prevent any Obligor from offsetting any earlier
overpayment to such BORROWER against any amounts such Obligor owes on an
Account.
5.20. Pension Plans: Each pension or profit sharing plan, if any, to which
any BORROWER is a party has been and will be funded in accordance with the
obligations of such BORROWER set forth in such plan.
5.21. Representations and Warranties for each Loan: As of each date that
BORROWERS shall request any Loan, each BORROWER shall be deemed to make, with
respect to each Eligible Account included in the Borrowing Base, each of the
following representations and warranties:
(a) Such Account satisfies each of the conditions of an Eligible
Account.
(b) All information relating to such Account that have been
delivered to LENDER are true and correct in all material respects. With respect
to each such Account that has been billed, the corresponding BORROWER has
delivered to the Obligor all requested supporting claim documents and all
information set forth in the ▇▇▇▇ and supporting claim documents is true,
complete and correct in all material respects.
(c) There is no lien or adverse claim (other than Permitted Liens)
in favor of any third party, nor any filing against any BORROWER, as debtor,
covering or purporting to cover any interest in such Account.
(d) Such Account is (i) owed by the Obligor identified by
BORROWERS as being obligated to do so for an amount not less than such Account's
Estimated Net Value and, to BORROWERS' knowledge, is recognized as such by the
Obligor, (ii) to BORROWER'S knowledge, the legally enforceable obligation of
such Obligor and (iii) an account receivable or general intangible within the
meaning of the UCC, or is a right to payment under a policy of insurance or
proceeds thereof, and is not evidenced by any instrument or chattel paper. To
BORROWERS' knowledge, there is no payor other than the Obligor identified by
BORROWERS as the payor primarily liable on such Account.
(e) No such Account (i) requires the approval of any Person for
such Account to be assigned to LENDER hereunder (except as the same may have
been obtained or such requirement for approval may not be enforceable), (ii) is
subject to any legal action, proceeding or investigation (pending or
threatened), dispute, set-off, counterclaim, defense, abatement, suspension,
deferment, deductible, reduction or termination by the Obligor or (iii) is past,
or
27
within one hundred and eighty (180) days of, the statutory limit for collection
applicable to the Obligor.
(f) Such BORROWER does not have any guaranty of, letter of credit
support for, or collateral security for, such Account, other than any such
guaranty, letter of credit or collateral security as has been assigned to
LENDER.
(g) The services constituting the basis of such Account (i) were
provided as a result of a written or documented verbal certification from an
attending physician or a medical director of VistaCare, Inc., (ii) at the time
such services were rendered, all such services were covered by the insurance
policy or Contract obligating the applicable Obligor to make payment with
respect to such Account (and the corresponding BORROWER has verified such
determination) and (iii) the patient received such services in the ordinary
course of such BORROWER'S business.
(h) The fees and charges charged for the services constituting the
basis for such Account were when rendered and are currently consistent with (i)
the usual, customary and reasonable fees charged by BORROWERS or (ii) pursuant
to negotiated fee contracts, or imposed fee schedules, with or by the applicable
Obligors.
(i) The Obligor with respect to such Account is located in the
United States, and is (i) a party which in the ordinary course of its business
or activities agrees to pay for healthcare services received by individuals,
including commercial insurance companies and non-profit insurance companies
issuing health, or other types of insurance, employers or unions, self-insured
healthcare organizations, preferred provider organizations, and health insured,
prepaid maintenance organizations, (ii) a state, an agency or instrumentality of
a state or a political subdivision of a state or (iii) the United States or an
agency or instrumentality of the United States.
(j) The insurance policy or Contract obligating an Obligor to make
payment (i) does not prohibit the transfer of such payment obligation from the
patient to the corresponding BORROWER and (ii) is and was in full force and
effect and applicable to the patient at the time the services constituting the
basis for such Account were performed.
(k) The representations and warranties made by BORROWERS in the
Loan Documents and all financial or other information delivered to LENDER with
respect to BORROWERS and such Account do not contain any untrue statement of
material fact or omit to state a material fact necessary to make the statement
made not misleading.
(l) If requested by LENDER, a copy of each related Contract to
which each BORROWER is a party has been delivered to LENDER unless any such
BORROWER shall have, prior to the related Funding Date, certified in an
Officer's Certificate that such delivery is prohibited by the terms of the
Contract or by law, and the circumstances of such prohibition.
(m) If such Account has not been billed, the services giving rise
to such Account have been properly recorded in the corresponding BORROWER'S
accounting system.
28
(n) Such Account was (or if unbilled, will be) in any event billed
no later than forty-five (45) days after the last day of the month in which the
services or goods giving rise to such Account were rendered or provided, as
applicable, and each ▇▇▇▇ contains an express direction requiring the Obligor to
remit payments to either the Government Lockbox or Commercial Lockbox, as
applicable.
(o) Such Account has an Estimated Net Value which, when added to
the Estimated Net Value of all other Accounts owing by the same Obligor and
which constitute Eligible Accounts included in the Borrowing Base, does not
exceed any applicable Concentration Limits.
(p) Neither such Account nor the related Contract contravenes any
laws, rules or regulations applicable thereto (including, without limitation,
laws, rules and regulations relating to usury, consumer protection,
truth-in-lending, fair credit billing, fair credit reporting, equal credit
opportunity, fair debt collection practices and privacy), and no party to such
related Contract is in violation of any such law, rule or regulation in
connection with such Contract.
(q) As of the applicable Funding Date, to BORROWERS' knowledge, no
Obligor on such Account is bankrupt, insolvent, or is unable to make payment of
its obligations when due, and no other fact exists which would cause any
BORROWER reasonably to expect that the amount billed to the related Obligor for
such Account will not be paid in full when due.
5.22. Interrelatedness of BORROWERS: The business operations of each
BORROWER are interrelated and complement one another, and such companies and
partnerships have a common business purpose, with intercompany bookkeeping and
accounting adjustments used to separate their respective Properties, liabilities
and transactions. To permit their uninterrupted and continuous operation, such
companies and partnerships now require and will from time to time hereafter
require funds for general business purposes. The proceeds of the Term Loan and
of Advances under the Total Facility will directly or indirectly benefit each
BORROWER hereunder, jointly and severally, regardless of which BORROWER requests
or receives part or all of the proceeds of such Term Loan or Advance, as
applicable.
SECTION 6. BORROWERS' AFFIRMATIVE COVENANTS
Each BORROWER covenants that until all of BORROWERS' Obligations to LENDER
are paid and satisfied in full and the Total Facility and the Term Loan have
been terminated:
6.1. Payment of Taxes and Claims: Each BORROWER shall pay, before they
become delinquent, all taxes, assessments and governmental charges or levies
imposed upon it or upon such BORROWER'S Property, except for those being
contested in good faith with due diligence by appropriate proceedings and for
which appropriate reserves have been maintained under GAAP.
29
6.2. Maintenance of Insurance, Financial Records and Legal Existence:
(a) Property Insurance - Each BORROWER shall maintain or cause to
be maintained insurance on its Property against fire, flood, casualty and such
other hazards in such amounts, with such deductibles and with such insurers as
are customarily used by companies operating in the same industry as such
BORROWER. The policies of all such casualty insurance shall contain standard
lender loss payable and additional insured clauses issued in favor of LENDER
pursuant to which all losses thereunder shall be paid to LENDER as LENDER's
interests may appear. Such policies shall expressly provide that the requisite
insurance cannot be altered or canceled without thirty (30) days prior written
notice to LENDER and shall insure LENDER notwithstanding the act or neglect of
the insured. At or prior to Closing, BORROWER shall furnish LENDER with
insurance certificates certified as true and correct and being in full force and
effect as of the Closing Date or such other evidence of insurance as LENDER may
require, provided that such BORROWER shall furnish to LENDER such insurance
certificates naming LENDER as loss payee and as additional insured no later than
sixty (60) days subsequent to the Closing Date. In the event BORROWER fails to
procure or cause to be procured any such insurance or to timely pay or cause to
be paid the premium(s) on any such insurance, LENDER may do so for BORROWER, but
BORROWER shall continue to be liable for the same. BORROWER hereby appoints
LENDER as its attorney-in-fact, exercisable at LENDER's option, to endorse any
check which may be payable to BORROWER in order to collect the proceeds of such
insurance.
(b) Public Liability and Business Interruption Insurance -
BORROWERS shall maintain, and shall deliver to LENDER upon LENDER's request
evidence of public liability and business interruption insurance in such amounts
as is customary for companies in the same or similar businesses located in the
same or similar area.
(c) Financial Records - BORROWERS shall keep current and accurate
books of records and accounts in which full and correct entries will be made of
all of its business transactions, and will reflect in its financial statements
adequate accruals and appropriations to reserves, all in accordance with GAAP.
No BORROWER shall change its respective fiscal year end date without the prior
written notice to LENDER.
(d) Existence and Rights - Each BORROWER shall do (or cause to be
done) all things necessary to preserve and keep in full force and effect its
legal existence, good standing, rights and franchises.
(e) Compliance with Laws - Each BORROWER shall be in compliance
with any and all laws, ordinances, governmental rules and regulations, and court
or administrative orders or decrees to which it is subject, whether federal,
state or local (including without limitation environmental or
environmental-related laws, statutes, ordinances, rules, regulations and
notices) and shall obtain and maintain any and all licenses, permits,
franchises, certificates of needs or other governmental authorizations necessary
to the ownership of its Property or to the conduct of its businesses, which
violation or failure to obtain may materially adversely affect the business,
Property, financial conditions or prospects of such BORROWER.
30
6.3. Business Conducted: The BORROWERS shall continue in the primary
business presently engaged in by them, it being agreed that the BORROWERS may
engage in businesses reasonably related to their primary business.
6.4. Litigation: BORROWERS shall give prompt notice to LENDER of any
litigation claiming in excess of $250,000 from BORROWERS, or any of them, or
which may otherwise have a material adverse effect on the business, financial
condition, Property or prospects of BORROWERS, or any of them.
6.5. Taxes: BORROWERS shall pay all taxes (other than taxes based upon or
measured by LENDER's income or revenues), if any, solely in connection with the
Loans and/or the recording of any financing statements or other Loan Documents.
The obligations of BORROWERS under this section shall survive the payment of
BORROWERS' Obligations under this Agreement and the termination of this
Agreement.
6.6. Financial Covenants: BORROWERS shall perform and comply with each of
the following financial covenants as reflected and computed from their financial
statements:
(a) BORROWERS shall maintain at all times, a Debt Service Coverage
Ratio of at least 1.25 to 1.0 measured quarterly on a rolling four-quarter basis
beginning with the quarter ending March 31, 2002.
(b) BORROWERS shall maintain as of Closing and at all times
thereafter a Net Worth measured quarterly at the end of each fiscal quarter of
at least Eighteen Million and No/100 Dollars ($18,000,000.00).
6.7. Financial and Business Information: BORROWERS shall deliver to
LENDER the following (all to be in form and substance satisfactory to LENDER):
(a) Financial Statements and Collateral Reports:
(i) as soon as available but in any event, within one
hundred and fifty (150) days after the end of each fiscal year of BORROWERS,
deliver financial statements of BORROWERS for such year which present fairly
BORROWERS' financial condition including the balance sheet of BORROWERS as at
the end of such fiscal year, an income statement and a statement of cash flows
for such fiscal year, all on a consolidated and consolidating basis, setting
forth in the consolidated statements in comparative form, the corresponding
figures as at the end of and for the previous fiscal year, all in reasonable
detail, including all supporting schedules, and audited by independent public
accountants of recognized standing, selected by BORROWERS and reasonably
satisfactory to LENDER, and prepared in accordance with GAAP;
(ii) as soon as available but in any event within forty-five
(45) days after the end of each fiscal quarter, deliver to LENDER BORROWERS'
internally prepared quarterly consolidated and consolidating financial
statements along with year to date information,
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including balance sheet, income statement and statements of cash flows with
respect to the periods measured;
(iii) promptly upon request, deliver such other information
concerning BORROWERS as LENDER may from time to time request, including Medicare
and Medicaid cost reports and audits, annual reports, security law filings and
reports to any security holders;
(iv) not more than (60) days after the commencement of each
fiscal year deliver to LENDER final annual consolidated and consolidating
projections for BORROWERS, including balance sheets, income statements and
statements of cash flows, all prepared on a monthly basis;
(v) at least thirty (30) days prior to the beginning of each
fiscal year deliver to LENDER preliminary fiscal year annual consolidated and
consolidating projections for BORROWERS, including balance sheets, income
statements and statements of cash flows, all prepared on a monthly basis; and
(vi) and such other data, reports, statements and information
(financial or otherwise), as LENDER may reasonably request.
(b) Notice of Event of Default - promptly upon becoming aware of
the existence of any condition or event which constitutes an Event of Default or
Unmatured Event of Default under this Agreement, a written notice specifying the
nature and period of existence thereof and what action BORROWERS are taking (and
propose to take) with respect thereto;
(c) Notice of Claimed Default - promptly upon receipt by any
BORROWER of a notice of default, oral or written, given to such BORROWER by any
creditor for borrowed money in excess of $50,000.
6.8. Officers' Certificates: Along with the set of financial statements
delivered to LENDER at the end of each fiscal quarter and fiscal year pursuant
to Section 6.7(a) hereof, deliver to LENDER a certificate (in the form of
EXHIBIT 6.8 attached hereto and made a part hereof) from the chief financial
officer of each BORROWER setting forth:
(a) Covenant Compliance - the information (including reasonably
detailed calculations) required in order to establish whether BORROWERS are in
compliance with the requirements of Sections 6.6 as of the end of the period
covered by the financial statements then being furnished (and any exhibits
appended thereto) under Section 6.7; and
(b) Event of Default - that the signer in his capacity as an
officer of such BORROWER has reviewed the relevant terms of this Agreement, and
has made (or caused to be made under his supervision) a review of the
transactions and conditions of such BORROWER from the beginning of the
accounting period covered by the financial statements being delivered therewith
to the date of the certificate, and that such review has not disclosed the
existence during such period of any condition or event which constitutes an
Event of Default or Unmatured
32
Event of Default or if any such condition or event existed or exists, specifying
the nature and period of existence thereof and what action such BORROWER has
taken or proposes to take with respect thereto.
6.9. Inspection: Provided that no Event of Default or Unmatured
Event of Default exists, no more frequently than once per fiscal quarter,
BORROWERS will permit any of LENDER's officers or other representatives to visit
and inspect any BORROWER'S location(s) or where any Collateral is kept during
regular business hours to examine and audit all of such BORROWER'S books of
account, records, reports and other papers, to make copies and extracts
therefrom and to discuss its affairs, finances and accounts with its officers,
employees and independent certified public accountants and attorneys. BORROWERS
shall pay to LENDER all reasonable fees based on standard rates for such
inspections, currently at the rate of $800 per day, per person (plus
out-of-pocket expenses).
6.10. Tax Returns and Reports: At LENDER's request from time to time,
BORROWERS shall promptly furnish LENDER with copies of the annual federal and
state income tax returns of BORROWERS.
6.11. Material Adverse Developments: Each BORROWER agrees that immediately
upon it or any of its officers becoming aware of any development or other
information which would reasonably be expected to materially and adversely
affect the businesses, financial condition, Property, prospects of a BORROWER or
a BORROWER'S ability to perform under this Agreement, it shall give to LENDER
telephonic or facsimile notice specifying the nature of such development or
information and such anticipated effect. In addition, such verbal communication
shall be confirmed by written notice thereof to LENDER on the next Business Day
after such verbal notice is given.
6.12. Places of Business; Jurisdiction of Organization; Name: Each
BORROWER shall give thirty (30) days prior written notice to LENDER of any
changes in the location of any of its chief executive office or any other places
of business, any changes in its jurisdiction of organization, change of name or
the establishment of any new, or the discontinuance of any existing place of
business.
6.13. Notice of Action: Each BORROWER will promptly notify LENDER in the
event of any legal action, dispute, setoff, counterclaim, defense or reduction
that is or may be asserted by an Obligor with respect to any Account that may
have a material adverse effect on the collectibility of such Account or all
Accounts collectively.
6.14. Verification of Information: At the reasonable request of LENDER,
BORROWERS will promptly provide and verify the accuracy of information
concerning BORROWERS and their Affiliates of the type provided by or on behalf
of BORROWERS and their Affiliates to LENDER in connection with LENDER's decision
to enter into this Agreement. BORROWERS agree to provide complete and accurate
copies of such documents and other materials and such other information
concerning BORROWERS and their Affiliates as LENDER may reasonably request in
connection with any securitization of, and sale of securities backed by, the
Eligible Accounts (the "SECURITIES").
33
Such information may be relied upon by LENDER and any party arranging the
offering of such Securities by LENDER or its assignee. Such information provided
by or on behalf of BORROWERS and their Affiliates will be true and complete in
all material respects and will not omit to state a material fact necessary to
make the statements contained in such information, in light of the circumstances
under which they were made, not misleading. The BORROWERS shall not be required
to review, and assume no liability or responsibility for, the offering documents
or other disclosure materials prepared in connection with the issuance of the
Securities.
6.15. Value Track System(TM): BORROWERS shall permit LENDER to interface
its Value Track System(TM) to BORROWERS' data files and will reasonably assist
LENDER in completing and maintaining such interface such that the interface can
interpret, track and reconcile the Accounts Detail File provided by BORROWERS.
SECTION 7. BORROWERS' NEGATIVE COVENANTS
Each BORROWER covenants that until all of BORROWERS' Obligations to LENDER
are paid and satisfied in full and the Total Facility and the Term Loan have
been terminated, that:
7.1. Merger, Consolidation, Dissolution or Liquidation:
(a) No BORROWER shall sell, lease, license, transfer or otherwise
dispose of its Property other than (i) to another BORROWER, (ii) with respect to
Property sold in the ordinary course or ordinary operation of such BORROWER'S
business, (iii) in a transaction permitted under subsection (b) below, and (iv)
sales of assets for fair market value in an aggregate amount not to exceed
$100,000 per year, in each case without LENDER's prior written consent.
(b) No BORROWER shall merge or consolidate with, or acquire, any
other Person or commence a dissolution or liquidation, other than through a
merger with another BORROWER, provided, that any BORROWER may effect any such
transaction if, after giving effect to such merger or acquisition, the projected
pro forma Debt Service Coverage Ratio for the immediately succeeding twelve (12)
month period is not less than 1.25:1.00.
7.2. Liens and Encumbrances: No BORROWER shall: (i) execute a negative
pledge agreement with any Person covering any of the Collateral, or (ii) cause
or permit or agree or consent to cause or permit in the future (upon the
happening of a contingency or otherwise) the Collateral, whether now owned or
hereafter acquired, to be subject to any lien, claim or encumbrance other than:
(i) Permitted Liens,
(ii) purchase money liens and liens of a capital lease upon
any Property acquired by or held by a BORROWER in the ordinary course of
business not to exceed Two Hundred Seventy Five Thousand and No/100 Dollars
($275,000.00) per transaction or series of related transactions, provided that
in no event shall the aggregate amount secured by
34
such purchase money liens and liens of capital leases exceed One Million and
No/100 Dollars ($1,000,000.00) in any fiscal year,
(iii) liens on property of a Person existing at the time such
Person is merged into or consolidated with a BORROWER or becomes a subsidiary of
a BORROWER, provided that such liens do not extend to any assets other than
those of the Person so merged into or consolidated with such BORROWER or Person,
provided that such liens do not include any accounts receivable of a BORROWER,
(iv) the replacement, renewal or extension of liens permitted
by clauses (ii) or (iii) above, without any increase of the indebtedness secured
thereby.
7.3. Negative Pledge: No BORROWER shall pledge, grant or permit any lien
(other than Permitted Liens) to exist on the common stock or membership units of
its Subsidiaries and Affiliates.
7.4. Transactions With Affiliates or Subsidiaries:
(a) No BORROWER shall enter into any transaction with any
subsidiary or other Affiliate (other than another BORROWER) including, without
limitation, the purchase, sale, lease or exchange of Property, or the loaning,
capitalization or giving of funds to any such Affiliate or any subsidiary,
unless (i) such subsidiary or Affiliate is engaged in a business substantially
related to the business permitted to be conducted by such BORROWER hereunder and
(ii) the transaction is in the ordinary course of and pursuant to the reasonable
requirements of such BORROWER'S business and upon terms substantially the same
and no less favorable to such BORROWER as it would obtain in a comparable
arm's-length transactions with any Person not an Affiliate or a subsidiary and
(iii) such transaction is not prohibited hereunder.
(b) Subject in any event to the limitations of Section 7.4(a)
above, except with the prior written consent of LENDER, no BORROWER shall create
or acquire any subsidiary unless such subsidiary engages in a business permitted
to be conducted by BORROWERS hereunder, and if required by LENDER, such
subsidiary becomes a BORROWER hereunder.
7.5. Guarantees: Except as set forth on Exhibit 5.11 hereto and excepting
the endorsement in the ordinary course of business of negotiable instruments for
deposit or collection, no BORROWER shall become or be liable, directly or
indirectly, primary or secondary, matured or contingent, in any manner, whether
as guarantor, surety, accommodation maker, or otherwise, for the existing or
future indebtedness of any kind of any other Person.
7.6. Loans to Other Persons: No BORROWER shall make or be permitted to
have outstanding any loans, advances or extensions of credit to any Person
(other than advances to employees or loans, advances or extensions of credit to
another BORROWER in an aggregate amount outstanding not to exceed $200,000 at
any point in time).
35
7.7. Change in Ownership: Each BORROWER, other than VistaCare, Inc.,
shall remain wholly-owned, directly or indirectly, by VistaCare, Inc. No Change
of Control (as defined below) shall occur with respect to VistaCare, Inc. For
the purposes of this Section 7.7, a Change of Control shall have occurred if any
Person or two or more Persons acting in concert (in each case, other than
present holders of the voting stock of VistaCare, Inc.) shall have acquired
beneficial ownership (within the meaning of Rule 13d-3 of the Securities and
Exchange Commission under the Securities Exchange Act of 1934), directly or
indirectly, of the voting stock of VistaCare, Inc. (or other securities
convertible into such voting stock) representing fifty one percent (51%) or more
of the combined voting power of all voting stock (including securities
convertible into such voting stock) of VistaCare, Inc. without the consent of
LENDER, which consent may not be unreasonably withheld or delayed.
7.8. Distributions: BORROWERS shall not, following an Event of Default or
Unmatured Event of Default, declare or pay or make any forms of Distributions to
its Shareholders, their successors or assigns, nor may any BORROWER declare or
pay or make any forms of Distributions if in each case, after giving effect to
such Distributions, an Event of Default or Unmatured Event of Default will
result.
7.9. Change in Business: The BORROWERS shall not change their primary
business from that engaged in by the BORROWERS on the Closing Date, it being
agreed that the BORROWERS may engage in businesses reasonably related to their
primary business.
7.10. Adverse Transactions: No BORROWER shall enter into any transaction
which is reasonably likely to materially and adversely affect the Collateral or
such BORROWER'S ability to repay the Obligations in full as and when due.
SECTION 8. DEFAULT
8.1. Events of Default: Each of the following events shall constitute an
event of default ("EVENT OF DEFAULT") and LENDER shall thereupon have the option
to declare the Obligations immediately due and payable, all without demand,
notice, presentment or protest or further action of any kind (it also being
understood that the occurrence of any of the events or conditions set forth in
subparagraphs (j), (k), (l) or (r) shall automatically cause an acceleration of
the Obligations):
(a) Payments - if BORROWERS fail to make any payment of principal
or interest on the date when such payment is due and payable and such failure
continues for a period of one (1) Business Day; provided however, that the one
(1) Business Day grace period shall not be applicable if such payments are due
and payable due to maturity, acceleration or demand, whether following an Event
of Default or otherwise; or
(b) Other Charges - if BORROWERS fail to pay any other charges,
fees, Expenses or other monetary obligations owing to LENDER, arising out of or
incurred in connection with this Agreement on the date when such payment is due
and payable, whether upon maturity, acceleration, demand or otherwise and such
failure continues for a period of five
36
(5) Business Days after the earlier of a BORROWER becoming aware of such failure
or a BORROWER receiving written notice from LENDER of such failure; provided
however, that the five (5) Business Day grace period shall not be applicable if
such payments are due and payable due to maturity, acceleration or demand,
whether following an Event of Default, or otherwise; or
(c) Particular Covenant Defaults - if any BORROWER fails to
perform, comply with or observe any covenant or undertaking contained in this
Agreement not otherwise described in this Section 8.1, and such failure
continues for a period of fifteen (15) days after the earlier of a BORROWER
becoming aware of such failure or a BORROWER receiving written notice from
LENDER of such failure; or
(d) Financial Information - if any statement, report, financial
statement, or certificate made or delivered by a BORROWER or any of their
officers, employees or agents, to LENDER is not true and correct, in all
material respects, when made; or
(e) Uninsured Loss - if there shall occur any uninsured damage to
or loss, theft, or destruction in excess of $50,000 with respect to any portion
of any BORROWER'S Property; or
(f) Warranties or Representations - if any warranty,
representation or other statement by or on behalf of BORROWERS, or any of them,
contained in or pursuant to this Agreement, any of the Loan Documents, or in any
document, agreement or instrument furnished in compliance with, relating to, or
in reference to this Agreement, is false, erroneous, or misleading in any
material respect when made; or
(g) Agreements with Others - if BORROWERS, or any of them, shall
default beyond any grace period under any agreement with any creditor for
borrowed money having an outstanding principal amount of $100,000 or more and
(i) such default consists of the failure to pay any principal, premium or
interest with respect to such indebtedness or (ii) such default consists of the
failure to perform any covenant or agreement with respect to such indebtedness,
if the effect of such default is to cause or permit BORROWERS', or any of their
obligations which are the subject thereof to become due prior to its maturity
date or prior to its regularly scheduled date of payment;
(h) Other Agreements with LENDER - if BORROWERS, or any of them,
breach or violate the terms of, or if a default or an event of default, occurs
under, any other existing or future agreement (related or unrelated) between or
among BORROWERS, or any of them and LENDER, including without limitation, the
Loan Documents and any lease agreements or finance agreements with any affiliate
of LENDER; or
(i) Judgments - if any final judgment for the payment of money in
excess of $100,000 which is not covered by insurance or an appeal bond, or for
which BORROWERS have not established a cash or cash equivalent reserve in the
amount of such judgment, shall be rendered and shall remain unsatisfied and
unstayed for a period of at least ten (10) days;
37
(j) Assignment for Benefit of Creditors, etc. - if BORROWERS, or
any of them, make or propose an assignment for the benefit of creditors
generally, offers a composition or extension to creditors, or makes or sends
notice of an intended bulk sale of any business or assets now or hereafter owned
or conducted by any BORROWER which might materially and adversely affect such
BORROWER; or
(k) Bankruptcy, Dissolution, etc. - upon the commencement of any
action for the dissolution or liquidation of BORROWERS, or any of them, or the
commencement of any proceeding to avoid any transaction entered into by
BORROWERS, or any of them, or the commencement of any case or proceeding for
reorganization or liquidation of BORROWERS, or any of their debts under the
Bankruptcy Code or any other state or federal law, now or hereafter enacted for
the relief of debtors, whether instituted by or against any BORROWER; provided,
however, that BORROWERS shall have sixty (60) days to obtain the dismissal or
discharge of involuntary proceedings filed against a BORROWER, it being
understood that during such sixty (60) day period, LENDER shall be not obligated
to make Advances hereunder and LENDER may seek adequate protection in any
bankruptcy proceeding; or
(l) Receiver - upon the appointment of a receiver, liquidator,
custodian, trustee or similar official or fiduciary for BORROWERS, or any of
them, or for any of any BORROWER'S Property; or
(m) Execution Process, Seizure, etc. - the issuance of any
execution or distraint process affecting any material portion of the Property of
any BORROWER, or any material portion of the Property of any BORROWER is seized
by any governmental entity, federal, state or local; or
(n) Pension Benefits, etc. - if BORROWERS fail to comply with
ERISA, so that grounds exist to permit the appointment of a trustee under ERISA
to administer BORROWERS' employee plans or to allow the Pension Benefit Guaranty
Corporation to institute proceedings to appoint a trustee to administer such
plan(s), or to permit the entry of a lien to secure any deficiency or claim; or
(o) Investigations - any indication or evidence received by LENDER
that reasonably leads it to believe BORROWERS, or any of them, have directly or
indirectly been engaged in any type of activity which would be reasonably likely
to adversely affect any Collateral or result in the forfeiture of any Collateral
to any governmental entity, federal, state or local; or
(p) Material Adverse Events -
(i) LENDER reasonably determines that an event which
adversely affects the collectibility of a material portion of the Accounts has
occurred; or
(ii) a material adverse change occurs in the business or
condition of BORROWERS, or any of them, which impairs BORROWERS' ability to
repay the Obligations in full as and when due; or
38
(q) Lockbox Instructions - any instruction or agreement regarding
the Commercial Lockbox or the Government Lockbox or the bank accounts related
thereto is amended or terminated by any BORROWER without the written consent of
LENDER, or if any BORROWER fails, within one Business Day of receipt, to forward
Collections it receives with respect to any Accounts to the Commercial Lockbox
or the Government Lockbox, as the case may be.
8.2. Cure: Nothing contained in this Agreement or the Loan Documents
shall be deemed to compel LENDER to accept a cure of any Event of Default
hereunder, except as outlined in Section 8.1(c) hereof.
8.3. Rights and Remedies on Default:
(a) In addition to all other rights, options and remedies granted
or available to LENDER under this Agreement or the Loan Documents, or otherwise
available at law or in equity, upon or at any time after the occurrence and
during the continuance of an Event of Default or Unmatured Event of Default,
LENDER may, in its discretion, withhold or cease making Advances under the Total
Facility.
(b) In addition to all other rights, options and remedies granted
or available to LENDER under this Agreement or the Loan Documents (each of which
is also then exercisable by LENDER), LENDER may, in its discretion, upon or at
any time after the occurrence and during the continuance of an Event of Default,
terminate the Total Facility and accelerate the Term Loan.
(c) In addition to all other rights, options and remedies granted
or available to LENDER under this Agreement or the Loan Documents (each of which
is also then exercisable by LENDER), LENDER may, upon or at any time after the
occurrence and during the continuance of an Event of Default, exercise all
rights under the UCC and any other applicable law or in equity, and under all
Loan Documents permitted to be exercised after the occurrence of an Event of
Default, including the following rights and remedies (which list is given by way
of example and is not intended to be an exhaustive list of all such rights and
remedies):
(i) Subject to all applicable laws and regulations governing
payment of Medicare and Medicaid receivables, the right to "take possession" of
the Collateral, and notify all Obligors of LENDER's security interest in the
Collateral and require payment under the Accounts to be made directly to LENDER
and LENDER may, in its own name or in the name of the applicable BORROWER,
exercise all rights of a secured party with respect to the Collateral and
collect, ▇▇▇ for and receive payment on all Accounts, and settle, compromise and
adjust the same on any terms as may be satisfactory to LENDER, in its sole and
absolute discretion for any reason or without reason and LENDER may do all of
the foregoing with or without judicial process (including without limitation
notifying the United States postal authorities to redirect mail addressed to
BORROWERS, or any of them, to an address designated by LENDER); or
(ii) Require BORROWERS at BORROWERS' expense, to assemble all
or any part of the Collateral and make it available to LENDER at any place
designated by LENDER, which
39
may include providing LENDER or any entity designated by LENDER with access
(either remote or direct) to BORROWERS' information system for purposes of
monitoring, posting payments and rebilling Accounts to the extent deemed
desirable by LENDER in its sole discretion; or
(iii) The right to reduce or modify the Revolving Loan
Commitment, the Borrowing Base or any portion thereof or the Advance Rates or to
modify the terms and conditions upon which LENDER may be willing to consider
making Advances under the Total Facility or to take additional reserves in the
Borrowing Base for any reason.
(d) BORROWERS hereby agree that a notice received by them at least
ten (10) days before the time of any intended public sale or of the time after
which any private sale or other disposition of the Collateral is to be made,
shall be deemed to be reasonable notice of such sale or other disposition. If
permitted by applicable law, any Collateral which threatens to speedily decline
in value or which is sold on a recognized market may be sold immediately by
LENDER without prior notice to BORROWERS. Each BORROWER covenants and agrees not
to interfere with or impose any obstacle to LENDER's exercise of its rights and
remedies with respect to the Collateral.
8.4. Nature of Remedies: All rights and remedies granted LENDER hereunder
and under the Loan Documents, or otherwise available at law or in equity, shall
be deemed concurrent and cumulative, and not alternative remedies, and LENDER
may proceed with any number of remedies at the same time until all Obligations
are satisfied in full. The exercise of any one right or remedy shall not be
deemed a waiver or release of any other right or remedy, and LENDER, upon or at
any time after the occurrence and during the continuance of an Event of Default,
may proceed against BORROWERS, or any of them, at any time, under any agreement,
with any available remedy and in any order.
8.5. Set-Off: If any bank account or other Property held by or with
LENDER, or any Affiliate of LENDER, or any participant is attached or otherwise
liened or levied upon by any third party, LENDER (and such participant) shall
have and be deemed to have, without notice to BORROWERS, the immediate right of
set-off and may apply the funds or other amounts or property thus set off
against any of BORROWERS' Obligations hereunder.
SECTION 9. MISCELLANEOUS
9.1. GOVERNING LAW: THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND ALL
RELATED AGREEMENTS AND DOCUMENTS, SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF NEW JERSEY. THE PROVISIONS
OF THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND ALL OTHER AGREEMENTS AND
DOCUMENTS REFERRED TO HEREIN ARE TO BE DEEMED SEVERABLE, AND THE INVALIDITY OR
UNENFORCEABILITY OF ANY PROVISION SHALL NOT AFFECT OR IMPAIR THE REMAINING
PROVISIONS WHICH SHALL CONTINUE IN FULL FORCE AND EFFECT.
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9.2. Integrated Agreement: The Revolving Credit Note, the Term Loan Note,
the other Loan Documents, all related agreements and this Agreement shall be
construed as integrated and complementary of each other and as augmenting and
not restricting LENDER's rights and remedies. If, after applying the foregoing,
an inconsistency still exists, the provisions of this Agreement shall constitute
an amendment thereto and shall control.
9.3. Waiver and Indemnity:
(a) No omission or delay by LENDER in exercising any right or
power under this Agreement or any related agreements and documents will impair
such right or power or be construed to be a waiver of any default, or Event of
Default or an acquiescence therein, and any single or partial exercise of any
such right or power will not preclude other or further exercise thereof or the
exercise of any other right, and as to any BORROWER no waiver will be valid
unless in writing and signed by LENDER and then only to the extent specified.
(b) Each BORROWER releases and shall indemnify, defend and hold
harmless LENDER, and its respective officers, employees and agents, of and from
any claims, demands, liabilities, obligations, judgments, injuries, losses,
damages and costs and expenses (including, without limitation, reasonable legal
fees) resulting from (i) acts or conduct of a BORROWER under, pursuant or
related to this Agreement and the other Loan Documents, (ii) any BORROWER'S
breach, or alleged breach, or violation of any representation, warranty,
covenant or undertaking contained in this Agreement or the other Loan Documents,
and (iii) any BORROWER'S failure, or alleged failure, to comply with any or all
laws, statutes, ordinances, governmental rules, regulations or standards,
whether federal, state or local, or court or administrative orders or decrees
(including without limitation environmental laws, etc.), and all costs,
expenses, fines, penalties or other damages resulting therefrom, unless, in each
case resulting from acts or conduct of LENDER constituting willful misconduct or
gross negligence.
(c) LENDER shall not be liable for, and BORROWERS hereby agree
that LENDER's liability in the event of a breach by LENDER of this Agreement
shall be limited to BORROWERS' direct damages suffered and shall not extend to,
any consequential or incidental damages. In the event BORROWERS bring suit
against LENDER in connection with the transactions contemplated hereunder, and
LENDER is found not to be liable, BORROWERS shall indemnify and hold LENDER
harmless from all costs and expenses, including attorneys' fees, incurred by
LENDER in connection with such suit.
9.4. Time: Whenever BORROWERS, or any of them, shall be required to make
any payment, or perform any act, on a day which is not a Business Day, such
payment may be made, or such act may be performed, on the next succeeding
Business Day. Time is of the essence in BORROWERS' performance under all
provisions of this Agreement and all related agreements and documents.
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9.5. Expenses of LENDER:
(a) At Closing and from time to time thereafter, BORROWERS will
pay all reasonable expenses of LENDER on demand (including, without limitation,
search costs, audit fees, appraisal fees, and the fees and expenses of legal
counsel for LENDER) relating to this Agreement, and all related agreements and
documents, including, without limitation, expenses incurred in the analysis,
negotiation, preparation, closing, administration and enforcement of this
Agreement and the other Loan Documents, the enforcement, protection and defense
of the rights of LENDER in and to the Loans and Collateral or otherwise
hereunder, and any reasonable expenses relating to extensions, amendments,
waivers or consents pursuant to the provisions hereof, or any related agreements
and documents or relating to agreements with other creditors, or termination of
this Agreement (collectively, the "EXPENSES"). Any Expenses not paid upon demand
by LENDER shall bear interest at the per annum rate equal to the interest rate
applicable to the Advances.
(b) In addition, at any time following the date of this Agreement,
BORROWERS effect any changes which results in a change in the format or sequence
of BORROWERS' data, BORROWERS shall pay to LENDER its reasonable charge for
implementing such changes as are necessary to accommodate the changes in the
format or sequence of the data such that the Value Track System(TM) is capable
of importing such data, including an hourly fee of $100.
9.6. Confidentiality: Except as provided in Section 9.18 hereof or to the
extent required by law or applicable regulations, BORROWERS and LENDER agree to
maintain the confidentiality of this Agreement and other Loan Documents and not
to disclose the contents hereof or provide a copy hereof to any third party,
except as required by law and (i) accountants, lawyers and financial advisers of
the parties who are informed of and agree to be bound by this Section 9.6, and
(ii) that copies hereof may be provided to any assignee or participant (or
potential assignee or participant) of LENDER's interests herein, any investors
or prospective investors who acquire or may acquire Securities backed by
Accounts and any parties which facilitate the issuance of such Securities,
including rating agencies, guarantors and insurers. LENDER agrees to maintain
the confidentiality of patient information obtained as a result of its interests
in, or duties with respect to, the Accounts.
9.7. Notices:
(a) Any notices or consents required or permitted by this
Agreement shall be in writing and shall be deemed given if delivered in person
or if sent by telecopy or by nationally recognized overnight courier, or via
first class, Certified or Registered mail, postage prepaid, to the address of
such party set forth on the signature pages hereof, unless such address is
changed by written notice hereunder.
(b) Any notice sent by LENDER or BORROWERS, or any of them, by any
of the above methods shall be deemed to be given when so received.
42
(c) LENDER shall be fully entitled to rely upon any facsimile
transmission or other writing purported to be sent by any Authorized Officer
(whether requesting an Advance or otherwise) as being genuine and authorized.
9.8. Headings: The headings of any paragraph or Section of this Agreement
are for convenience only and shall not be used to interpret any provision of
this Agreement.
9.9. Survival: All warranties, representations, and covenants made by any
or all BORROWERS herein, in any Loan Document, or in any agreement referred to
herein or on any certificate, document or other instrument delivered by it or on
its behalf under this Agreement, shall be considered to have been relied upon by
LENDER, and shall survive the delivery to LENDER of any Loan Document,
regardless of any investigation made by LENDER or on its behalf. All statements
in any such certificate or other instrument prepared and/or delivered for the
benefit of LENDER shall constitute warranties and representations by BORROWERS
hereunder. Except as otherwise expressly provided herein, all covenants made by
any or all BORROWERS hereunder, in any Loan Document or under any other
agreement or instrument shall be deemed continuing until all Obligations are
satisfied in full.
9.10. Successors and Assigns:
(a) This Agreement shall inure to the benefit of and be binding
upon the successors and assigns of each of the parties. No BORROWER may
transfer, assign or delegate any of its duties or obligations hereunder.
(b) The LENDER may at any time assign all of its Advances and
commitments hereunder to any other Person with the consent of BORROWERS, which
consent shall not be unreasonably withheld or delayed.
9.11. Duplicate Originals: Two or more duplicate originals of this
Agreement may be signed by the parties, each of which shall be an original but
all of which together shall constitute one and the same instrument. This
Agreement may be executed in counterparts, all of which counterparts taken
together shall constitute one completed fully executed document.
9.12. Modification: No modification hereof or any agreement referred to
herein shall be binding or enforceable unless in writing and signed by BORROWERS
and LENDER.
9.13. Signatories: Each individual signatory hereto represents and
warrants that such signatory is duly authorized to execute this Agreement on
behalf of such signatory's principal and that such signatory executes the
Agreement in such capacity and not as a party.
9.14. Third Parties: No rights are intended to be created hereunder, or
under any related agreements or documents for the benefit of any third party
donee, creditor or incidental beneficiary of any BORROWER. Nothing contained in
this Agreement shall be construed as a delegation to LENDER of any BORROWER'S
duty of performance, including, without limitation, such BORROWER'S duties under
any account or contract with any other Person.
43
9.15. Waivers:
(a) BORROWERS each hereby irrevocably, unconditionally and fully
subordinate in favor of LENDER, any and all rights they or any of them, may have
at any time (whether arising directly or indirectly, by operation of law or
contract) to assert or receive payment on any claim against each other or any of
them, on account of payments made under this Agreement, including without
limitation, any and all rights of subrogation, reimbursement, exoneration,
contribution or indemnity. Each BORROWER waives any event or circumstances which
might constitute a legal or equitable defense of, or discharge of, such
BORROWER. Furthermore, each BORROWER agrees that if any payment on the
Obligations is recovered from or repaid by LENDER in whole or in part in any
bankruptcy, insolvency or similar proceeding instituted by or against any
BORROWER, the remaining BORROWERS and/shall be obligated to the same extent as
if the recovered or repaid payment had never been originally made on such
Obligation.
(b) Each BORROWER hereby consents and agrees that LENDER, at any
time or from time to time in its discretion may: (i) settle, compromise or grant
releases for liabilities of other BORROWERS, and/or any other Person or Persons
liable for any Obligations, (ii) exchange, release, surrender, sell, subordinate
or compromise any Collateral to the extent allowed under federal, state or local
law, including without limitation administrative pronouncements, of any party
now or hereafter securing any of the Obligations, and (iii) following an Event
of Default, apply any and all payments received at any time against the
Obligations in any order as LENDER may determine; all of the foregoing in such
manner and upon such terms as LENDER may see fit, without notice to or further
consent from such BORROWER who hereby agrees and shall remain bound upon this
Agreement notwithstanding any such action on LENDER's part.
(c) The liability of each BORROWER hereunder is absolute and
unconditional and shall not be reduced, impaired or affected in any way by
reason of (i) any failure to obtain, retain or preserve, or the lack of prior
enforcement of, any rights against any Person or Persons (including other
BORROWERS) or in any Property, (ii) the invalidity or unenforceability of any
Obligations or rights in any Collateral, (iii) any delay in making demand upon
other BORROWERS or any delay in enforcing, or any failure to enforce, any rights
against other BORROWERS or in any Collateral even if such rights are thereby
lost, (iv) any failure, neglect or omission to obtain, perfect or retain any
lien upon, protect, exercise rights against, or realize on, any Property of any
BORROWER, or any other party securing the Obligations, (v) the existence or
non-existence of any defenses which may be available to the other BORROWERS with
respect to the Obligations or (vi) the commencement of any bankruptcy,
reorganization, liquidation, dissolution or receivership proceeding or case
filed by or against any of BORROWERS.
9.16. CONSENT TO JURISDICTION: EACH BORROWER AND LENDER HEREBY IRREVOCABLY
CONSENT TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED IN THE STATE
OF NEW JERSEY IN ANY AND ALL ACTIONS AND PROCEEDINGS WHETHER ARISING HEREUNDER
OR UNDER ANY OTHER AGREEMENT OR UNDERTAKING. BORROWERS WAIVE ANY OBJECTION TO
IMPROPER VENUE AND FORUM NON-CONVENIENS TO PROCEEDINGS IN ANY SUCH COURT AND ALL
RIGHTS TO TRANSFER FOR ANY REASON. EACH
44
BORROWER IRREVOCABLY AGREES TO SERVICE OF PROCESS BY CERTIFIED MAIL, RETURN
RECEIPT REQUESTED TO THE ADDRESS OF THE APPROPRIATE PARTY SET FORTH HEREIN.
9.17. WAIVER OF JURY TRIAL: EACH BORROWER AND LENDER HEREBY WAIVE ANY AND
ALL RIGHTS IT MAY HAVE TO A JURY TRIAL IN CONNECTION WITH ANY LITIGATION
COMMENCED BY OR AGAINST LENDER WITH RESPECT TO RIGHTS AND OBLIGATIONS OF THE
PARTIES HERETO OR UNDER THE LOAN DOCUMENTS, WHETHER SOUNDING IN TORT, CONTRACT
OR OTHERWISE.
9.18. Publication: BORROWERS grant LENDER the right to publish and/or
advertise information to the effect that this transaction has closed, which
information may include, without limit, (i) the names of BORROWERS and LENDER,
(ii) the size of the transaction and (iii) those items of information commonly
included within a "tombstone advertisement" of the type customarily published in
financial or business periodicals.
9.19. Discharge of Taxes, BORROWER'S Obligations, Etc.: LENDER, in its
sole discretion, shall have the right at any time, and from time to time, with
prior notice to BORROWERS, if BORROWERS fail to do so five (5) Business Days
after requested in writing to do so by LENDER, to: (a) pay for the performance
of any of BORROWERS' obligations hereunder, and (b) discharge taxes or liens, at
any time levied or placed on any of BORROWERS' Property in violation of this
Agreement unless BORROWERS are in good faith with due diligence by appropriate
proceedings contesting such taxes or liens. Expenses and advances shall be
deemed Advances hereunder and shall be deemed Advances hereunder and shall bear
interest at the same rate applied to the Loans until reimbursed to LENDER. Such
payments and advances made by LENDER shall not be construed as a waiver by
LENDER of an Event of Default under this Agreement.
9.20. Injunctive Relief: The parties acknowledge and agree that, in the
event of a breach or threatened breach of any party's obligations hereunder, may
have no adequate remedy in money damages and, accordingly, shall be entitled to
an injunction (including without limitation, a temporary restraining order,
preliminary injunction, writ of attachment, or order compelling an audit)
against such breach or threatened breach, including without limitation,
maintaining the cash management and collection procedure described herein.
However, no specification in this Agreement of a specific legal or equitable
remedy shall be construed as a waiver or prohibition against any other legal or
equitable remedies in the event of a breach or threatened breach of any
provision of this Agreement.
SECTION 10. SPECIAL INTER-BORROWER PROVISIONS
10.1. Certain BORROWER Acknowledgments and Agreements:
(a) Each BORROWER acknowledges that it will enjoy significant
benefits from the business conducted by the other BORROWERS because of, inter
alia, their combined ability to bargain with other Persons including without
limitation their ability to receive the Total Facility and the Term Loan on
favorable terms granted by this Agreement and other Loan Documents
45
which would not have been available to an individual BORROWER acting alone. Each
BORROWER has determined that it is in its best interest to procure the Total
Facility and the Term Loan which each BORROWER may utilize directly and which
receive the credit support of the other BORROWERS as contemplated by this
Agreement and the other Loan Documents.
(b) LENDER has advised BORROWERS that it is unwilling to enter
into this Agreement and the other Loan Documents and make available the Total
Facility and the Term Loan extended hereby to any BORROWER unless each BORROWER
agrees, among other things, to be jointly and severally liable for the due and
proper payment of the Obligations of each other BORROWER under this Agreement
and other Loan Documents. Each BORROWER has determined that it is in its best
interest and in pursuit of its purposes that it so induce LENDER to extend
credit pursuant to this Agreement and the other documents executed in connection
herewith (i) because of the desirability to each BORROWER of the Total Facility
and the Term Loan, the interest rates and the modes of borrowing available
hereunder, (ii) because each BORROWER may engage in transactions jointly with
other BORROWERS and (iii) because each BORROWER may require, from time to time,
access to funds under this Agreement for the purposes herein set forth.
(c) Each BORROWER has determined that it has and, after giving
effect to the transactions contemplated by this Agreement and the other Loan
Documents (including, without limitation, the inter-BORROWER arrangement set
forth in this Section 10.1), will have assets having a fair saleable value in
excess of the amount required to pay its probable liability on its existing
debts as they fall due for payment and that the sum of its debts is not and will
not then be greater than all of its Property at a fair valuation, that such
BORROWER has, and will have, access to adequate capital for the conduct of its
business and the ability to pay its debts from time to time incurred in
connection therewith as such debts mature and that the value of the benefits to
be derived by such BORROWER from the access to funds under this Agreement
(including, without limitation, the inter-BORROWER arrangement set forth in this
Section 10.1) is reasonably equivalent to the obligations undertaken pursuant
hereto.
(d) VistaCare, Inc. (on behalf of each BORROWER) shall maintain
records specifying (a) all Obligations incurred by each BORROWER, (b) the date
of such incurrence, (c) the date and amount of any payments made in respect of
such Obligations and (d) all inter-BORROWER obligations pursuant to this Section
10. VistaCare, Inc. shall make copies of such records available to LENDER, upon
request.
10.2. Maximum Amount Of Joint and Several Liability: To the extent that
applicable law otherwise would render the full amount of the joint and several
obligations of any BORROWER hereunder and under the other Loan Documents invalid
or unenforceable, such BORROWER'S obligations hereunder and under the other Loan
Documents shall be limited to the maximum amount which does not result in such
invalidity or unenforceability, provided, however, that each BORROWER'S
obligations hereunder and under the other Loan Documents shall be presumptively
valid and enforceable to their fullest extent in accordance with the terms
hereof or thereof, as if this Section 10.2 were not a part of this Agreement.
10.3. Authorization of VistaCare, Inc. by BORROWERS:
46
(a) Each of BORROWERS hereby irrevocably authorizes VistaCare,
Inc. to give notices, make requests, make payments, receive payments and
notices, give receipts and execute agreements, make agreements or take any other
action whatever on behalf of such BORROWER under and with respect to any Loan
Document and each BORROWER shall be bound thereby. This authorization is coupled
with an interest and shall be irrevocable, and LENDER may rely on any notice,
request, information supplied by VistaCare, Inc., every document executed by
VistaCare, Inc., every agreement made by VistaCare, Inc. or other action taken
by VistaCare, Inc. in respect of BORROWERS or any thereof as if the same were
supplied, made or taken by any or all BORROWERS. Without limiting the generality
of the foregoing, the failure of one or more BORROWERS to join in the execution
of any writing in connection herewith shall not, unless the context clearly
requires, relieve any such BORROWER from obligations in respect of such writing.
(b) BORROWERS acknowledge that the credit provided hereunder is on
terms more favorable than any BORROWER acting alone would receive and that each
BORROWER benefits directly and indirectly from all Advances hereunder. Each of
the other BORROWERS, shall be jointly and severally liable for all Obligations,
regardless of, inter alia, which BORROWER requested (or received the proceeds
of) a particular Advance.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
47
IN WITNESS WHEREOF, this Agreement has been duly executed as of the day
and year first above written.
ADDRESS FOR NOTICES TO BORROWERS: BORROWERS:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇ VistaCare, Inc.
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Executive President ---------------------
Fax: Attest: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇, Secretary
-----------------------------
(Corporate Seal)
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇ Vista Hospice Care, Inc.
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Executive President ---------------------
Fax: Attest: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇, Secretary
-----------------------------
(Corporate Seal)
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇, Inc.
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Executive President ---------------------
Fax: Attest: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇, Secretary
-----------------------------
(Corporate Seal)
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇ FHI Health Systems, Inc.
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Executive President ---------------------
Fax: Attest: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇, Secretary
----------------------------
(Corporate Seal)
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇ FHI GP, Inc.
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Executive President ------------------------
Fax: Attest: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇, Secretary
-----------------------------
(Corporate Seal)
1
ADDRESS FOR NOTICES TO BORROWERS: BORROWERS:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇ FHI LP, Inc.
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Executive President ---------------------
Fax: Attest: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇, Secretary
------------------------------
(Corporate Seal)
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇ Family Hospice, Ltd.
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: c/o ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Executive President ----------------------
Fax: Attest: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇, Secretary
-----------------------------
(Corporate Seal)
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇ FHI Management, Ltd.
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Executive President -----------------------
Fax: Attest: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇, Secretary
-----------------------------
(Corporate Seal)
Address for notices: LENDER:
Healthcare Business Credit Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇ HEALTHCARE BUSINESS CREDIT CORPORATION
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, President By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------
Fax: ▇▇▇-▇▇▇-▇▇▇▇ Title: Vice President
----------------------------
2
EXHIBIT 2.1(c)(i)
REVOLVING CREDIT NOTE
$30,000,000 April 16, 2001
FOR VALUE RECEIVED, VistaCare, Inc., a Delaware corporation, Vista
Hospice Care, Inc., a Delaware corporation, VistaCare USA, Inc., a Delaware
corporation, FHI Health Systems, Inc., a Delaware corporation, FHI GP, Inc., a
Texas corporation, FHI LP, Inc., a Nevada corporation, Family Hospice, Ltd., a
Texas limited partnership, and FHI Management, Ltd., a Texas limited partnership
(together with each of their successors and permitted assigns, collectively
referred to as the "BORROWERS" and each individually referred to as a
"BORROWER") hereby, jointly and severally, promise to pay to the order of
Healthcare Business Credit Corporation, a Delaware corporation ("LENDER"), the
principal amount of Thirty Million and No/100 Dollars ($30,000,000.00), or so
much thereof as shall have been advanced as Loans under the Loan Agreement
referred to below and shall be outstanding, such payment to be made at such time
or times and in the manner specified in the Loan Agreement; provided, however,
that all Loans shall be repaid in full on or before the Maturity Date.
This Revolving Credit Note (as the same may be amended, restated,
supplemented or otherwise modified from time to time, the "NOTE") is issued
under and secured by that certain Loan and Security Agreement dated as of even
date herewith among Borrowers and Lender (as from time to time amended,
restated, supplemented or otherwise modified, the "LOAN AGREEMENT"). Terms used
herein and not defined herein are used with the respective meanings set forth in
the Loan Agreement.
Interest on the outstanding principal amount of each Loan evidenced by
this Note shall accrue at the rate or rates specified in, and be payable in
accordance with the terms of, the Loan Agreement.
Borrower may prepay this Note only in accordance with the terms and
conditions of the Loan Agreement.
The Loan Agreement provides for the acceleration of the payment of
principal of and interest on such Loans upon the happening of certain Events of
Default as defined in the Loan Agreement.
Borrower waives presentment, demand for payment, notice of dishonor or
acceleration, protest and notice of protest, and any and all other notices or
demands in connection with this Note, except any notice expressly required by
the Loan Agreement.
This Note shall be governed by and construed in accordance with the
internal laws of the state of New Jersey.
[SIGNATURE PAGE FOLLOWS]
BORROWERS
VistaCare, Inc. FHI GP, Inc.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------ ------------------
Attest: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ Attest: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------ ------------------
(Corporate Seal) (Corporate Seal)
Vista Hospice Care, Inc. FHI LP, Inc.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------ ------------------
Attest: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ Attest: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------ ------------------
(Corporate Seal) (Corporate Seal)
VistaCare USA, Inc. Family Hospice, Ltd.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------ ------------------
Attest: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ Attest: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------ ------------------
(Corporate Seal) (Corporate Seal)
FHI Health Systems, Inc. FHI Management, Ltd.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------ ------------------
Attest: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ Attest: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------ ------------------
(Corporate Seal) (Corporate Seal)
EXHIBIT 2.1 (c)(ii)
TERM LOAN NOTE
$3,000,000 June 3, 2002
FOR VALUE RECEIVED, VistaCare, Inc., a Delaware corporation, Vista
Hospice Care, Inc., a Delaware corporation, VistaCare USA, Inc., a Delaware
corporation, FHI Health Systems, Inc., a Delaware corporation, FHI GP, Inc., a
Texas corporation, FHI LP, Inc., a Nevada corporation, Family Hospice, Ltd., a
Texas limited partnership, and FHI Management, Ltd., a Texas limited partnership
(together with each of their successors and permitted assigns, collectively
referred to as the "BORROWERS" and each individually referred to as a
"BORROWER") hereby, jointly and severally, promise to pay to the order of
Healthcare Business Credit Corporation, a Delaware corporation ("LENDER"), the
principal amount of Three Million and No/100 Dollars ($3,000,000.00), or such
lesser amount as then may be owing by Borrowers to Lender under the Loan
Agreement referred to below, such payment to be made at such time or times and
in the manner specified in the Loan Agreement; provided, however, that the Term
Loan shall be repaid in full on or before the Term Loan Maturity Date.
This Term Loan Note (as the same may be amended, restated, supplemented
or otherwise modified from time to time, the "TERM LOAN NOTE") is issued under
and secured by that certain Amended and Restated Loan and Security Agreement
dated as of even date herewith among Borrowers and Lender (as from time to time
amended, restated, supplemented or otherwise modified, the "LOAN AGREEMENT").
Terms used herein and not defined herein are used with the respective meanings
set forth in the Loan Agreement.
Interest on the outstanding principal amount of the Term Loan evidenced
by this Term Loan Note shall accrue at the rate or rates specified in, and be
payable in accordance with the terms of, the Loan Agreement.
Borrowers may prepay this Term Loan Note only in accordance with the
terms and conditions of the Loan Agreement.
The Loan Agreement provides for the acceleration of the payment of
principal of and interest on such Term Loan upon the happening of certain Events
of Default as defined in the Loan Agreement.
Each Borrower waives presentment, demand for payment, notice of
dishonor or acceleration, protest and notice of protest, and any and all other
notices or demands in connection with this Term Loan Note, except any notice
expressly required by the Loan Agreement.
This Term Loan Note shall be governed by and construed in accordance
with the internal laws of the state of New Jersey.
BORROWERS: BORROWERS:
FHI LP, Inc. VistaCare, Inc.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------- --------------------
Attest: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇, Secretary Attest: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇, Secretary
----------------------------- -----------------------------
(Corporate Seal) (Corporate Seal)
Family Hospice, Ltd. Vista Hospice Care, Inc.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------- --------------------
Attest: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇, Secretary Attest: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇, Secretary
----------------------------- -----------------------------
(Corporate Seal) (Corporate Seal)
FHI Management, Ltd. VistaCare USA, Inc.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------- --------------------
Attest: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇, Secretary Attest: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇, Secretary
----------------------------- -----------------------------
(Corporate Seal) (Corporate Seal)
FHI Health Systems, Inc.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------
Attest: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇, Secretary
----------------------------
(Corporate Seal)
FHI GP, Inc.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------
Attest: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇, Secretary
----------------------------
(Corporate Seal)
EXHIBIT 2.2(c)
FORM OF LOAN REQUEST
____________, __________
Healthcare Business Credit Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: Loan and Security Agreement
Ladies and Gentlemen:
Pursuant to Section 2.2(c) of that certain Loan and Security Agreement
dated as of April , 2001 (as the same may from time to time be amended,
restated, supplemented or otherwise modified, the "LOAN AGREEMENT") among
VistaCare, Inc., a Delaware -- corporation, Vista Hospice Care, Inc., a Delaware
corporation, VistaCare USA, Inc., a Delaware corporation, FHI Health Systems,
Inc., a Delaware corporation, FHI GP, Inc., a Texas corporation, FHI LP, Inc., a
Nevada corporation, Family Hospice, Ltd., a Texas limited partnership, and FHI
Management, Ltd., a Texas limited partnership (together with each of their
successors and permitted assigns, collectively referred to as the "BORROWERS"
and each individually referred to as a "BORROWER") and Healthcare Business
Credit Corporation ("LENDER"), Borrowers hereby request the following Loan:
(1) The date of the proposed Loan is ____________ (which day is a
Funding Date under the Loan Agreement); and
(2) The aggregate amount of the proposed Loan is $ ____________ (which
amount does not exceed the Borrowing Base Excess set forth on the attached
Borrowing Base Report).
Each Borrower hereby certifies that on and as of the date hereof, and
on and as of the Funding Date of the proposed Loan, before and after giving
effect to such Loan:
(a) The representations and warranties of each Borrower contained in
the Loan Agreement and the other Loan Documents are and will be true and
correct;
(b) Each Borrower is and will be in compliance with all the terms,
covenants and conditions of the Loan Agreement;
(c) Each Borrower has paid all taxes, assessments and governmental
charges or levies imposed upon it or its Property (including, without
limitation, all payroll and other withholding taxes); and
(d) No Event of Default or Unmatured Event of Default exists or will
result from the proposed Loan.
Capitalized terms used herein but not defined herein have the meanings
assigned such terms in the Loan Agreement.
Very truly yours,
VistaCare, Inc. FHI GP, Inc.
By: By:
------------------------ --------------------------
Attest: Attest:
------------------------ --------------------------
(Corporate Seal) (Corporate Seal)
Vista Hospice Care, Inc. FHI LP, Inc.
By: By:
------------------------ --------------------------
Attest: Attest:
------------------------ --------------------------
(Corporate Seal) (Corporate Seal)
VistaCare USA, Inc. Family Hospice, Ltd.
By: By:
------------------------ --------------------------
Attest: Attest:
------------------------ --------------------------
(Corporate Seal) (Corporate Seal)
FHI Health Systems, Inc. FHI Management, Ltd.
By: By:
------------------------ --------------------------
Attest: Attest:
------------------------ --------------------------
(Corporate Seal) (Corporate Seal)
EXHIBIT 4.2A
FORM OF NOTICE TO COMMERCIAL OBLIGORS
Date: ______________
Re: ________________________ ("Borrower")
Ladies and Gentlemen:
As you are aware, Borrower has established a lockbox (the "Lockbox")
for collection of accounts receivable (the "Accounts") on which [NAME OF
OBLIGOR] owes payment to Borrower. Accordingly, you are hereby instructed to
continue to remit all payments on Accounts of which you are the obligor to
Borrower to the following address:
[NAME OF LOCKBOX BANK]
Lockbox Account #___
Post Office Box No. ___
[ADDRESS OF LOCKBOX BANK]
Borrower has entered into an agreement with Healthcare Business Credit
Corporation (the "Lender") under which the Accounts will be assigned to the
Lender. Lender may, in turn, from time to time, assign or pledge its interest in
such Accounts as it deems appropriate.
It is contemplated that the Accounts will continue to be serviced by
Borrower.
Sending payment on such Accounts to the above Lockbox will discharge
your obligation on such Accounts (to the extent of such payment), whether or not
the Accounts have been assigned to Lender or any assignee thereof.
This direction may not be changed or revoked without the prior written
consent of Lender.
Very truly yours,
___________________________
Name:
Title:
EXHIBIT 4.2B
FORM OF NOTICE TO GOVERNMENT OBLIGORS
Date: ________________________
Re: _____________________________ ("Borrower")
Ladies and Gentlemen:
Borrower has established a lockbox (the "Lockbox") in its name for the
collection of accounts receivable (the "Accounts") due to it under the Medicare
and Medicaid programs. Accordingly, you are hereby instructed to remit all
payments on Accounts of which you are the obligor to Borrower to the following
address:
[NAME OF LOCKBOX BANK] ("Lockbox Bank")
Lockbox Account # ___
Post Office Box No. ___
[ADDRESS OF LOCKBOX BANK]
OR
[ELECTRONIC TRANSFER INSTRUCTIONS]
Borrower shall continue this payment arrangement only so long as the following
requirements are met:
1. The Lockbox Bank is neither providing financing to the
Borrower nor acting on behalf of another party in connection
with the provision of such financing; and
2. Borrower has sole control of the account, and the Lockbox Bank
is subject only to the Borrower's instructions regarding the
account.
Sending payment on such Accounts to this Lockbox will discharge your
obligation on such Accounts (to the extent of such payment).
Very truly yours,
___________________________
By: _______________________
Name:
Title:
EXHIBIT 5.11
GUARANTEES
None.
EXHIBIT 6.8
CERTIFICATE OF THE SECRETARY
The undersigned ▇▇▇▇▇▇▇ ▇▇▇▇▇, certifies that he is the duly elected,
qualified and acting Secretary of VistaCare, Inc. (the "Corporation"), a
corporation duly organized and existing under the laws of Delaware, and that as
such Secretary he is the keeper of the corporate records and seal of the
Corporation.
The undersigned further certifies:
1. The Certificate of Incorporation of the Corporation and the By-Laws
of the Corporation have not been amended since being delivered under the
Existing Credit Agreement.
2. Attached hereto as Exhibit A is a complete and correct copy of
resolutions adopted by the Board of Directors of the Corporation by unanimous
written consent as of May 30, 2002; such resolutions have not been amended,
modified or revoked and are in full force and effect on the date hereof.
3. That the person named below is the duly elected, qualified and
acting incumbent of the office of the Corporation set out at the left of his
name, and the signature at the right of said name is the genuine signature of
said officer:
Title Name Signature
----- ---- ---------
Executive Vice President ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------
Chief Financial Officer ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------
IN WITNESS WHEREOF, I have hereunto set my hand this 30th day of May, 2002.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------
▇▇▇▇▇▇▇ ▇▇▇▇▇, Secretary
UNANIMOUS WRITTEN CONSENT OF DIRECTORS
OF
VISTACARE, INC.
MAY 30, 2002
The undersigned, being the duly elected, qualified and acting directors
of VistaCare, Inc., a Delaware corporation (the "Company"), hereby adopt the
following resolutions as of the date first set forth above, with the same force
and effect as though adopted at a duly called and held meeting of the Board of
Directors of the Company.
RESOLVED: That the Company enter into an Amended and Restated
Loan and Security Agreement dated as of June 3, 2002
(the "Loan Agreement") with each of the other
Borrowers named therein and Healthcare Business
Credit Corporation, a Delaware corporation
("Lender"), with an aggregate revolving credit line
of up to $33,000,000, and pursuant to which the
Company has executed and delivered or shall execute
and deliver certain promissory notes evidencing such
borrowings as required by the Loan Agreement; and
that the officers the Company (each, an "Officer",
and together, the "Officers") be, and each of them
acting singly hereby is, authorized in the name and
on behalf of the Company to take any actions deemed
necessary or appropriate by such Officer to carry out
the provisions of the Loan Agreement and to execute
and deliver the Loan Agreement, such notes and all
other documents and instruments contemplated by the
Loan Agreement; and that each Officer of the Company
is hereby authorized to borrow on behalf of the
Company the amount permitted or provided to be
borrowed by the Company under the Loan Agreement
pursuant to these resolutions; and that such Loan
Agreement be in substantially the form presented to
the Board of Directors of the Company, with such
changes as the Officer or Officers executing the same
may, in his or their discretion deem appropriate, the
execution and delivery thereof to be conclusive
evidence of such determination and of the due
authorization of the Board of Directors of the
Company.
FURTHER
RESOLVED: That the Revolving Credit Note, the Tranche A Note
and the Tanche B Note, each as defined in the Loan
Agreement be, and each of them hereby is, approved as
adopted; and that the Officers be, and each of them
acting singly hereby is, authorized in the name and
on behalf of the Company to execute and deliver the
Revolving Credit Note, the Tranche A Note and the
Tranche B Note and to execute and deliver any and all
other documents and instruments contemplated therein,
with such changes as the Officer or Officers
executing the same may, in his or their discretion
deem appropriate, the execution and delivery thereof
to be conclusive evidence
of such determination and the due authorization of
the Board of Directors of the Company.
FURTHER
RESOLVED: That the Term Note, as defined in the Loan Agreement
be, and it hereby is, approved and adopted; and that
the Officers be, and each of them acting singly
hereby is, authorized in the name and on behalf of
the Company to execute and deliver the Term Note, and
to execute and deliver any and all other documents
contemplated therein, with such changes as the
Officer or Officers executing the same may, in his or
their discretion deem appropriate, the execution and
delivery thereof to be conclusive evidence of such
determination and the due authorization of the Board
of Directors of the Company.
FURTHER
RESOLVED: That the one or more Depository Agreements, as
defined in the Loan Agreement be, and each of them
hereby is, approved and adopted; and that the
Officers be, and each of them acting singly hereby
is, authorized in the name and on behalf of the
Company to execute and deliver the Depository
Agreements, and to execute and deliver any and all
other documents and instruments contemplated therein,
with such changes as the Officer or Officers
executing the same may, in his or their discretion
deem appropriate, the execution and delivery thereof
to be conclusive evidence of such determination and
of the due authorization and approval of the Board of
Directors of the Company.
FURTHER
RESOLVED: That the Company, in connection with the Loan
Agreement, grant to the Lender a security interest in
its assets pursuant to the Loan Agreement and in
connection therewith to enter into such other
agreements as may be requested by the Lender; and
that the Officers be, an each of them acting singly
hereby is, authorized to execute from time to time
agreements, any documents and amendments as are
deemed necessary or appropriate by Lender to
collateralize the borrowings under the Loan Agreement
and maintain a prior and perfected interest in the
Collateral, as defined in the Loan Agreement, in
favor of the Lender.
FURTHER
RESOLVED: That any actions previously taken by any Officers in
connection with the foregoing resolutions are
approved and ratified in all respects and that the
Officers be, and each of them acting singly hereby
is, authorized in the name and on behalf of the
Company to execute and deliver such other agreements,
documents and instruments as may be necessary or
desirable in connection with the transactions
contemplated by the foregoing resolutions, such
agreements, documents and instruments to be in the
form that the Officer or Officers executing the same
may, in his or their
discretion, deem appropriate and that the Officers
be, and each of the acting singly hereby is,
authorized to take all such further action as may be
necessary or desirable to carry out the foregoing
resolutions and the transactions contemplated
thereby.
IN WITNESS WHEREOF, this written consent has been executed as of the
date first written above.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. Fine
-----------------
▇▇▇▇▇ ▇. Fine
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
CERTIFICATE OF THE SECRETARY
The undersigned ▇▇▇▇▇▇▇ ▇▇▇▇▇, certifies that he is the duly
elected, qualified and acting Secretary of VistaCare USA, Inc. (the
"Corporation"), a corporation duly organized and existing under the laws of
Delaware, and that as such Secretary he is the keeper of the corporate records
and seal of the Corporation.
The undersigned further certifies:
1. The Certificate of Incorporation of the Corporation and the
By-Laws of the Corporation have not been amended since being delivered under the
Existing Credit Agreement.
2. Attached hereto as Exhibit A is a complete and correct copy of
resolutions adopted by the Board of Directors of the Corporation by unanimous
written consent as of May 30, 2002; such resolutions have not been amended,
modified or revoked and are in full force and effect on the date hereof.
3. That the person named below is the duly elected, qualified and
acting incumbent of the office of the Corporation set out at the left of his
name, and the signature at the right of said name is the genuine signature of
said officer:
Title Name Signature
----- ---- ---------
Executive Vice President ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------
Chief Financial Officer ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------
IN WITNESS WHEREOF, I have hereunto set my hand this 30th day of May, 2002.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇, Secretary
CERTIFICATE OF THE SECRETARY
The undersigned ▇▇▇▇▇▇▇ ▇▇▇▇▇, certifies that he is the duly
elected, qualified and acting Secretary of FHI Health Systems, Inc. (the
"Corporation"), a corporation duly organized and existing under the laws of
Delaware, and that as such Secretary he is the keeper of the corporate records
and seal of the Corporation.
The undersigned further certifies:
1. The Certificate of Incorporation of the Corporation and the
By-Laws of the Corporation have not been amended since being delivered under the
Existing Credit Agreement.
2. Attached hereto as Exhibit A is a complete and correct copy of
resolutions adopted by the Board of Directors of the Corporation by unanimous
written consent as of May 30, 2002; such resolutions have not been amended,
modified or revoked and are in full force and effect on the date hereof.
3. That the person named below is the duly elected, qualified and
acting incumbent of the office of the Corporation set out at the left of his
name, and the signature at the right of said name is the genuine signature of
said officer:
Title Name Signature
----- ---- ---------
Executive Vice President ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------
Chief Financial Officer ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------
IN WITNESS WHEREOF, I have hereunto set my hand this 30th day of May, 2002.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇, Secretary
CERTIFICATE OF THE SECRETARY
The undersigned ▇▇▇▇▇▇▇ ▇▇▇▇▇, certifies that he is the duly
elected, qualified and acting Secretary of FHI GP, Inc. (the "Corporation"), a
corporation duly organized and existing under the laws of Texas, and that as
such Secretary he is the keeper of the corporate records and seal of the
Corporation.
The undersigned further certifies:
1. The Certificate of Incorporation of the Corporation and the
By-Laws of the Corporation have not been amended since being delivered under the
Existing Credit Agreement.
2. Attached hereto as Exhibit A is a complete and correct copy of
resolutions adopted by the Board of Directors of the Corporation by unanimous
written consent as of May 30, 2002; such resolutions have not been amended,
modified or revoked and are in full force and effect on the date hereof.
3. That the person named below is the duly elected, qualified and
acting incumbent of the office of the Corporation set out at the left of his
name, and the signature at the right of said name is the genuine signature of
said officer:
Title Name Signature
----- ---- ---------
Executive Vice President ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------
Chief Financial Officer ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------
IN WITNESS WHEREOF, I have hereunto set my hand this 30th day of May, 2002.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇, Secretary
CERTIFICATE OF THE SECRETARY
The undersigned ▇▇▇▇▇▇▇ ▇▇▇▇▇, certifies that he is the duly
elected, qualified and acting Secretary of FHI LP, Inc. (the "Corporation"), a
corporation duly organized and existing under the laws of Nevada, and that as
such Secretary he is the keeper of the corporate records and seal of the
Corporation.
The undersigned further certifies:
1. The Certificate of Incorporation of the Corporation and the
By-Laws of the Corporation have not been amended since being delivered under the
Existing Credit Agreement.
2. Attached hereto as Exhibit A is a complete and correct copy of
resolutions adopted by the Board of Directors of the Corporation by unanimous
written consent as of May 30, 2002; such resolutions have not been amended,
modified or revoked and are in full force and effect on the date hereof.
3. That the person named below is the duly elected, qualified and
acting incumbent of the office of the Corporation set out at the left of his
name, and the signature at the right of said name is the genuine signature of
said officer:
Title Name Signature
----- ---- ---------
Executive Vice President ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------
Chief Financial Officer ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------
IN WITNESS WHEREOF, I have hereunto set my hand this 30th day of May, 2002.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇, Secretary
CERTIFICATE OF THE SECRETARY
The undersigned ▇▇▇▇▇▇▇ ▇▇▇▇▇, certifies that he is the duly
elected, qualified and acting Secretary of Vista Hospice Care, Inc. (the
"Corporation"), a corporation duly organized and existing under the laws of
Delaware, and that as such Secretary he is the keeper of the corporate records
and seal of the Corporation.
The undersigned further certifies:
1. The Certificate of Incorporation of the Corporation and the
By-Laws of the Corporation have not been amended since being delivered under the
Existing Credit Agreement.
2. Attached hereto as Exhibit A is a complete and correct copy of
resolutions adopted by the Board of Directors of the Corporation by unanimous
written consent as of May 30, 2002; such resolutions have not been amended,
modified or revoked and are in full force and effect on the date hereof.
3. That the person named below is the duly elected, qualified and
acting incumbent of the office of the Corporation set out at the left of his
name, and the signature at the right of said name is the genuine signature of
said officer:
Title Name Signature
----- ---- ---------
Executive Vice President ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------
Chief Financial Officer ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------
IN WITNESS WHEREOF, I have hereunto set my hand this 30th day of May, 2002.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇, Secretary
OMNIBUS UNANIMOUS WRITTEN CONSENT OF DIRECTOR
OF
VISTA HOSPICE CARE, INC.
VISTACARE USA, INC.
FHI HEALTH SYSTEMS, INC.
FHI GP, INC.
AND FHI LP, INC.
MAY 30, 2002
The undersigned, being the duly elected, qualified and acting directors of
Vista Hospice Care, Inc., a Delaware corporation, VistaCare USA, Inc. a Delaware
corporation, FHI Health Systems, Inc., a Delaware corporation, FHI GP, Inc., a
Texas corporation, and FHI LP, Inc., a Nevada corporation (collectively, the
"Companies", and each individually, a "Company"), hereby adopts the following
resolutions as of the date first set forth above, with the same force and effect
as though adopted at a duly called and held meeting of the Board of Directors of
each Company.
RESOLVED: That each of the Companies enter into an Amended and Restated
Loan and Security Agreement dated as of June 3, 2002 (the
"Loan Agreement") with each of the other Borrowers named
therein (together with the Companies, the "Borrowers") and
Healthcare Business Credit Corporation, a Delaware corporation
("Lender"), with an aggregate revolving credit line of up to
$30,000,000 and a term loan of $3,000,000, and pursuant to
which each of the Borrowers has executed and delivered or
shall execute and deliver certain promissory notes evidencing
such borrowings as required by the Loan Agreement; and that
the officers of each of the Companies (each, an "Officer", and
together, the "Officers") be, and each of them acting singly
hereby is, authorized in the name and on behalf of their
respective Companies to take any actions deemed necessary or
appropriate by such Officer to carry out the provisions of the
Loan Agreement and to execute and deliver the Loan Agreement,
such notes and all other documents and instruments
contemplated by the Loan Agreement; and that each Officer of
the Companies is hereby authorized to borrow on behalf of such
Officer's Company the amount permitted or provided to be
borrowed by the Company under the Loan Agreement pursuant to
these resolutions; and that such Loan Agreement be in
substantially the form presented to the Board of Directors of
the Company, with such changes as the Officer or Officers
executing the same may, in his or their discretion deem
appropriate, the execution and delivery thereof to be
conclusive evidence of such determination and of the due
authorization of the Board of Directors of the Company.
FURTHER
RESOLVED: That the Revolving Credit Note, the Tranche A Note and the
Tranche B Note, each as defined in the Loan Agreement be, and
each of them hereby
is, approved as adopted; and that the Officers be, and each of
them acting singly hereby is, authorized in the name and on
behalf of their respective Company to execute and deliver the
Revolving Credit Note, the Tranche A Note and the Tranche B
Note and to execute and deliver any and all other documents
and instruments contemplated therein, with such changes as the
Officer or Officers executing the same may, in his or their
discretion deem appropriate, the execution and delivery
thereof to be conclusive evidence of such determination and
the due authorization of the Board of Directors of each of the
Companies.
FURTHER
RESOLVED: That the Term Note, as defined in the Loan Agreement be, and
it hereby is, approved and adopted; and that the Officers be,
and each of them acting singly hereby is, authorized in the
name and on behalf of their respective Company to execute and
deliver the Term Note, and to execute and deliver any and all
other documents contemplated therein, with such changes as the
Officer or Officers executing the same may, in his or their
discretion deem appropriate, the execution and delivery
thereof to be conclusive evidence of such determination and
the due authorization of the Board of Directors of each of the
Companies.
FURTHER
RESOLVED: That the one or more Depository Agreements, as defined in the
Loan Agreement be, and each of them hereby is, approved and
adopted; and that the Officers be, and each of them acting
singly hereby is, authorized in the name and on behalf of the
Company to execute and deliver the Depository Agreements, and
to execute and deliver any and all other documents and
instruments contemplated therein, with such changes as the
Officer or Officers executing the same may, in his or their
discretion deem appropriate, the execution and delivery
thereof to be conclusive evidence of such determination and of
the due authorization and approval of the Board of Directors
of each of the Companies.
FURTHER
RESOLVED: That the Companies, in connection with the Loan Agreement,
grant to the Lender a security interest in its assets pursuant
to the Loan Agreement and in connection therewith to enter
into such other agreements as may be requested by the Lender;
and that the Officers be, an each of them acting singly hereby
is, authorized to execute from time to time agreements, any
documents and amendments as are deemed necessary or
appropriate by Lender to collateralize the borrowings under
the Loan Agreement and maintain a prior and perfected interest
in the Collateral, as defined in the Loan Agreement, in favor
of the Lender.
FURTHER
RESOLVED: That each of the companies shall, and that the Officers be,
and each of them acting singly hereby is, authorized to
execute such resolutions, consents and other approvals as may
be necessary, desireable or helpful to authorize any Borrower
of which such Company is a partner or shareholder.
FURTHER
RESOLVED: That any actions previously taken by any Officers in
connection with the foregoing resolutions are approved and
ratified in all respects and that the Officer be, and each of
them acting singly hereby is, authorized in the name and on
behalf of their respective Companies to execute and deliver
such other agreements, documents and instruments as may be
necessary or desirable in connection with the transactions
contemplated by the foregoing resolutions, such agreements,
documents and instruments to be in the form that the Officer
or Officers executing the same may, in his or their
discretion, deem appropriate and that the Officers be, and
each of the acting singly hereby is, authorized to take all
such further action as may be necessary or desirable to carry
out the foregoing resolutions and the transactions
contemplated thereby.
IN WITNESS WHEREOF, this written consent has been executed as of the date
first written above.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
CERTIFICATE OF THE GENERAL PARTNER
The undersigned FHI GP, Inc., certifies that it is the sole General
Partner of FHI Management, Ltd. (the "Partnership"), a limited partnership duly
organized and existing under the laws of Texas, and that as such General Partner
it is the keeper of the records of the Partnership.
The undersigned further certifies:
1. The Certificate of Limited Partnership of the Partnership and
the Limited Partnership Agreement of the Partnership have not been amended since
being delivered under the Existing Credit Agreement.
2. Attached hereto as Exhibit A is a complete and correct copy of
resolutions adopted by the General Partner of the Partnership as of May 30,
2002; such resolutions have not been amended, modified or revoked and are in
full force and effect on the date hereof.
3. That the person named below is the duly elected, qualified and
acting incumbent of the office of the General Partner set out at the left of his
name, and the signature at the right of said name is the genuine signature of
said officer:
Title Name Signature
----- ---- ---------
Executive Vice President ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------
Chief Financial Officer ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------
IN WITNESS WHEREOF, I have hereunto set my hand this 30th day of May, 2002.
FHI GP, INC.,
As Sole General Partner of FHI Management, Ltd.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇, Secretary
CERTIFICATE OF THE GENERAL PARTNER
The undersigned FHI GP, Inc., certifies that it is the sole General
Partner of Family Hospice, Ltd. (the "Partnership"), a limited partnership duly
organized and existing under the laws of Texas, and that as such General Partner
it is the keeper of the records of the Partnership.
The undersigned further certifies:
1. The Certificate of Limited Partnership of the Partnership and
the Limited Partnership Agreement of the Partnership have not been amended since
being delivered under the Existing Credit Agreement.
2. Attached hereto as Exhibit A is a complete and correct copy of
resolutions adopted by the General Partner of the Partnership as of May 30,
2002; such resolutions have not been amended, modified or revoked and are in
full force and effect on the date hereof.
3. That the person named below is the duly elected, qualified and
acting incumbent of the office of the General Partner set out at the left of his
name, and the signature at the right of said name is the genuine signature of
said officer:
Title Name Signature
----- ---- ---------
Executive Vice President ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------
Chief Financial Officer ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------
IN WITNESS WHEREOF, I have hereunto set my hand this 30th day of May, 2002.
FHI GP, INC.,
As Sole General Partner of Family Hospice, Ltd.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇, Secretary
OMNIBUS CONSENT OF GENERAL PARTNER
OF
FAMILY HOSPICE, LTD.
AND
FHI MANAGEMENT, LTD.
MAY 30, 2002
The undersigned, being the sole General Partner of Family Hospice, Ltd., a
Texas limited partnership and FHI Management, Ltd., a Texas limited partnership
(each a "Partnership" and collectively, the "Partnerships"), hereby consents to
the following resolutions of the Partnerships as of the date first set forth
above.
RESOLVED: That each of the Partnerships enter into an Amended and
Restated Loan and Security Agreement dated as of June 3, 2002
(the "Loan Agreement") with each of the other Borrowers named
therein (together with the Partnerships, the "Borrowers") and
Healthcare Business Credit Corporation, a Delaware corporation
("Lender"), with an aggregate revolving credit line of up to
$30,000,000 and a term loan of $3,000,000, and pursuant to
which each of the Borrowers has executed and delivered or
shall execute and deliver certain promissory notes evidencing
such borrowings as required by the Loan Agreement; and that
each of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (each, an
"Officer", and together, the "Officers") be, and each of them
acting singly hereby is, authorized in the name and on behalf
of the Partnerships to take any actions deemed necessary or
appropriate by such Officer to carry out the provisions of the
Loan Agreement and to execute and deliver the Loan Agreement,
such notes and all other documents and instruments
contemplated by the Loan Agreement; and that each Officer of
the Partnerships is hereby authorized to borrow on behalf of
such Officer's Partnership the amount permitted or provided to
be borrowed by the Partnership under the Loan Agreement
pursuant to these resolutions; and that such Loan Agreement be
in substantially the form presented to the General Partner,
with such changes as the Officer or Officers executing the
same may, in his or their discretion deem appropriate, the
execution and delivery thereof to be conclusive evidence of
such determination and of the due authorization of the General
Partner.
FURTHER
RESOLVED: That the Revolving Credit Note, the Tranche A Note and the
Tanche B Note, each as defined in the Loan Agreement be, and
each of them hereby is, approved as adopted; and that the
Officers be, and each of them acting singly hereby is,
authorized in the name and on behalf of the Partnerships to
execute and deliver the Revolving Credit Note, the Tranche A
Note and the Tranche B Note and to execute and deliver any and
all other documents and instruments contemplated therein, with
such changes as the
Officer or Officers executing the same may, in his or their
discretion deem appropriate, the execution and delivery
thereof to be conclusive evidence of such determination and
the due authorization of the General Partner.
FURTHER
RESOLVED: That the Term Note, as defined in the Loan Agreement be, and
it hereby is, approved and adopted; and that the Officers be,
and each of them acting singly hereby is, authorized in the
name and on behalf of the Partnerships to execute and deliver
the Term Note, and to execute and deliver any and all other
documents contemplated therein, with such changes as the
Officer or Officers executing the same may, in his or their
discretion deem appropriate, the execution and delivery
thereof to be conclusive evidence of such determination and
the due authorization of the General Partner.
FURTHER
RESOLVED: That the one or more Depository Agreements, as defined in the
Loan Agreement be, and each of them hereby is, approved and
adopted; and that the Officers be, and each of them acting
singly hereby is, authorized in the name and on behalf of the
Partnerships to execute and deliver the Depository Agreements,
and to execute and deliver any and all other documents and
instruments contemplated therein, with such changes as the
Officer or Officers executing the same may, in his or their
discretion deem appropriate, the execution and delivery
thereof to be conclusive evidence of such determination and of
the due authorization and approval of the General Partner.
FURTHER
RESOLVED: That each of the Partnerships, in connection with the Loan
Agreement, grant to the Lender a security interest in its
assets pursuant to the Loan Agreement and in connection
therewith to enter into such other agreements as may be
requested by the Lender; and that the Officers be, an each of
them acting singly hereby is, authorized to execute from time
to time agreements, any documents and amendments as are deemed
necessary or appropriate by Lender to collateralize the
borrowings under the Loan Agreement and maintain a prior and
perfected interest in the Collateral, as defined in the Loan
Agreement, in favor of the Lender.
FURTHER
RESOLVED: That any actions previously taken by any Officer of the
Partnerships in connection with the foregoing resolutions are
approved and ratified in all respects and that the Officer be,
and each of them acting singly hereby is, authorized in the
name and on behalf of the Partnerships to execute and deliver
such other agreements, documents and instruments as may be
necessary or desirable in connection with the transactions
contemplated by the foregoing resolutions, such agreements,
documents and instruments to be in the form that the Officer
or Officers executing the same may, in his
or their discretion, deem appropriate and that the Officers of
the Partnerships be, and each of the acting singly hereby is,
authorized to take all such further action as may be necessary
or desirable to carry out the foregoing resolutions and the
transactions contemplated thereby.
IN WITNESS WHEREOF, this consent has been executed as of the date first written
above.
FHI GP, INC.,
as Sole General Partner
of Family Hospice, Ltd.
and FHI Management, Ltd.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President