Exhibit 10.50
$3,000,000.00
AMENDMENT NO. 3
TO
LOAN AND SECURITY AGREEMENT
originally dated as of February 18, 1998
by and among
PHC OF MICHIGAN, INC.
PHC OF UTAH, INC.
PHC OF VIRGINIA, INC.
(collectively, "Borrower")
and
XXXXXX HEALTHCARE FINANCE, INC.
f/k/a HCFP FUNDING, INC.
("Lender")
Amended as of December 6, 2001
AMENDMENT NO. 3 TO LOAN AND SECURITY AGREEMENT
THIS AMENDMENT NO. 3 TO LOAN AND SECURITY AGREEMENT (this "Amendment") is made
as of this 5th day of December, 2001, by and among PHC OF MICHIGAN, INC., a
Massachusetts corporation ("PHCMI"), PHC OF VIRGINIA, INC., a Massachusetts
corporation ("PHCVA") and PHC OF UTAH, INC., a Massachusetts corporation ("PHCU"
and, collectively with PHCMI, the "Borrower"), and XXXXXX HEALTHCARE FINANCE,
INC. f/k/a HCFP FUNDING, INC., a Delaware corporation ("Lender").
RECITALS
WHEREAS, pursuant to that certain Loan and Security Agreement dated as of
February 18, 1998 (as previously amended by that certain Amendment No. 1 to Loan
and Security Agreement dated as of February 17, 2000, that certain Amendment No.
2 to Loan and Security Agreement dated May __, 2001, as amended hereby and as it
may be further amended, modified and restated from time to time, collectively,
the "Loan Agreement") by and among Lender, Borrower, PHCVA, PHC of Rhode Island,
Inc. and Pioneer Counseling of Virginia, Inc., Lender agreed to make available
to Borrower a revolving credit loan (the "Loan"); and
WHEREAS, Borrower and Lender desire, among other things, to extend the initial
Term (as defined below) of the Loan Agreement and to make certain other changes
to the Loan Agreement identified herein.
NOW, THEREFORE, in consideration of the foregoing, the terms and conditions set
forth in this Amendment, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Lender and Borrower hereby
agree as follows:
Section 1. Definitions. Unless otherwise defined in this Amendment, all
capitalized terms shall have the meanings assigned to such terms in the Loan
Agreement.
Section 2. Extension of Term of Loan Agreement. On and as of the Effective
Date, the initial Term of the Loan Agreement shall be extended from February 18,
2003 to November 30, 2004.
Section 3. Amendments to Loan Agreement. On the Effective Date, the Loan
Agreement shall be modified as follows:
(a) Section 1.42 of the Loan Agreement shall be modified by deleting the
"or" before subparagraph (p) thereof, and by deleting the "." at the
end of subparagraph (p) thereof and replacing it with a new
subparagraph (q) as follows:
"or (q) the Account is an Account of PHCVA."
(b) New Section 1.46 shall be added to the Loan Agreement as follows:
"Section 1.46. Termination Fee. "Termination Fee " shall mean a fee payable
upon termination of the Agreement, as yield maintenance for the loss of bargain
and not as a penalty, equal to (a) if the date of notice of a termination is on
or before November 30, 2002, three percent (3%) of the Maximum Loan Amount, (b)
if the date of a notice of termination is on or before November 30, 2003, two
percent (2%) of the Maximum Loan Amount and (c) if the date of notice of
termination is before November 30, 2004, one percent (1%) of the Maximum Loan
Amount."
(c) INTENTIONALLY DELETED.
(d) Section 2.1(d) of the Loan Agreement shall be amended to add the
following new sentence at the end of such subsection:
"At Borrower's request, and subject to the approval of Lender's credit committee
in its sole discretion and so long as there is not then occurring or continuing
any Event of Default or event which, with the giving of notice or lapse of time
or both could constitute an Event of Default, Lender may elect to make advances
under the Loan in excess of the Borrowing Base; provided that to the extent
Lender makes any such advance to Borrower, any commitment fee charged by Lender
with respect to any such advance shall be equal not more than two and one-half
percent (2.5%) of the aggregate amount of such advance."
(e) The second sentence of Section 2.3 of the Loan Agreement shall be
amended and restated in its entirety to read as follows:
"Borrower shall ensure that all collections of Accounts are paid directly from
Account Debtors into the Lockbox, and that all funds paid into the Lockbox
(except, to the extent set forth below, for funds representing collections of
Accounts or otherwise of PHCVA) are immediately transferred into a depository
account maintained by Lender at Bank One Arizona, N.A. or First Union National
Bank, N.A., as determined by Lender in its sole discretion and communicated to
Borrower (the "Concentration Account"); provided that, notwithstanding the
foregoing, (a) so long as no Event of Default is then occurring or continuing,
Borrower shall be entitled, with respect to any funds representing collections
of Accounts or otherwise of PHCVA, to direct the Lockbox Bank to promptly
transfer such funds only back to PHCVA for use by PHCVA in its sole discretion,
provided, that on the occurrence of any Event of Default, Borrower shall
immediately instruct the Lockbox Bank that all collections of Accounts or
otherwise of PHCVA shall, immediately as of the date of such notice to the
Lockbox Bank and during the continuance of any such Event of Default shall be
transferred into the Concentration Account, and (b) PHCVA shall be entitled to
receive collections of Accounts directly from any of its Account Debtors,
provided that PHCVA holds such collections of Accounts in trust for the benefit
of Lender and immediately remits such collections, in the form received, to the
Lockbox Bank, and, provided further, that so long as PHCVA complies with the
requirements of the foregoing proviso with respect to collections of Accounts
received by it directly, PHCVA shall not be in breach of the requirements of
this Section 2.3."
(f) Section 2.8(a) of the Loan Agreement shall be amended and restated in
its entirety to read as follows:
"(a) Subject to Lender's right to cease making Revolving Credit Loans
to Borrower upon or after any Event of Default, this Agreement
shall be in effect until November 30, 2004, and this Agreement
shall automatically renew itself for one-year periods thereafter,
unless terminated as provided in this Section 2.8."
(g) Section 2.8(c) of the Loan Agreement shall be amended and restated in
its entirety to read as follows:
"Upon at least thirty (30) days prior written notice to Lender, Borrower may
terminate this Agreement prior to November 30, 2004, provided that, at the
effective date of such termination, Borrower shall pay to Lender (in addition to
the then outstanding principal, accrued interest and other Obligations owing
under the terms of this Agreement and any other Loan Documents) as yield
maintenance for the loss of bargain and not as a penalty, an amount equal to the
applicable Termination Fee."
Section 5. Fee. Lender hereby waives any requirement that Borrower pay to
Lender a commitment or other fee in connection with the modifications to the
Loan Agreement set forth in this Amendment.
Section 6. Costs. Borrower shall be responsible for the payment of all
costs of Lender incurred in connection with the preparation of this Amendment,
including but not limited to the reasonable fees of Lender's in-house counsel.
Section 7. Effective Date. The obligation of Lender to enter into and
perform this Amendment and to continue to make Revolving Credit Loans under the
Loan Agreement (as amended hereby) is subject to satisfaction of all of the
following conditions precedent, in each case to Lender's sole satisfaction (the
date of satisfaction of all of such conditions precedent to Lender's sole
satisfaction, the "Effective Date"): . (a) Lender shall have received an
original of this Amendment duly executed by an authorized officer of Borrower;
(b) Lender shall have received that certain Consolidating Amended and
Restated Secured Term Note duly executed by an authorized officer of
Borrower (the "Consolidating Term Note");
(c) Lender shall have received that certain Amended and Restated
Consolidated Mortgage made by Borrower as mortgagor and Lender as
mortgagee (the "Amended Mortgage") covering the real property commonly
known as 00000 00 Xxxx Xxxx, Xxx Xxxxxxxxx, Xxxxxxxx 00000, which is
more particularly described on Exhibit "A" to the Amended Mortgage
(the "Real Property");
(d) Lender shall have received that certain Third Amended And Restated
Cross-Collateralization and Cross-Default Agreement duly executed by
an authorized officer of Borrower;
(v) (e) Lender shall have received all financing statements and other
documents, certificates and agreements reasonably deemed necessary or
appropriate by Lender to effectuate the transactions contemplated by
this Amendment;
(f) all representations, warranties and covenants contained in this
Amendment, the Loan Agreement or the other Loan Documents or in the
Consolidating Term Note or in any documents entered into in connection
with the transactions contemplated by the Consolidating Term Note
(collectively, the "Term Loan Documents") of, by or on behalf of
Borrower shall be true and correct in all material respects; and
(g) no Event of Default shall have occurred or be continuing under this
Amendment, the Loan Agreement or the other Loan Documents, the
Consolidating Term Note or the Term Loan Documents.
Section 8. Reference to the Effect on the Loan Agreement.
(a) Upon the effectiveness of this Amendment, each reference in the Loan
Agreement to "this Agreement," "hereunder," "hereof," "herein" or
words of similar import shall mean and be a reference to the Loan
Agreement as amended by this Amendment.
(b) Except as specifically amended above, the Loan Agreement, and all
other Loan Documents, shall remain in full force and effect, and are
hereby ratified and confirmed.
(c) The execution, delivery and effectiveness of this Amendment shall not,
except as expressly provided in this Amendment, operate as a waiver of
any right, power or remedy of Lender, nor constitute a waiver of any
provision of the Loan Agreement, or any other documents, instruments
and agreements executed or delivered in connection with the Loan
Agreement.
Section 9. Governing Law. This Amendment shall be governed by and construed
in accordance with the laws of the State of Maryland without regard to any
otherwise applicable conflicts of law principles.
Section 10. Headings. Section headings in this Amendment are included for
convenience of reference only and shall not constitute a part of this Amendment
for any other purpose.
Section 11. Counterparts. This Amendment may be executed in counterparts,
and both counterparts taken together shall be deemed to constitute one and the
same instrument.
Section 12. Reaffirmation of Guaranty. Guarantor, by its signature below as
such, for valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, hereby consents and joins in this Amendment and hereby
declares to and agrees with Lender that its Guaranty of the Obligations is and
shall continue in full force and effect for the benefit of Lender with respect
to the Obligations, as amended by this Amendment, that there are no offsets,
claims, counterclaims, crossclaims or defenses of the Guarantor with respect to
the Guaranty nor, to the Guarantor's knowledge, with respect to the Obligations,
that the Guaranty is not released, diminished or impaired in any way by this
Amendment or the transactions contemplated hereby, and that the Guaranty is
hereby ratified and confirmed in all respects. Guaranty hereby acknowledges that
without the foregoing consent and reaffirmation, Lender would not execute this
Amendment or otherwise consent to its terms.
[SIGNATURES FOLLOW]
IN WITNESS WHEREOF, the parties have caused this Amendment No. 3 to Loan and
Security Agreement to be executed as of the date first written above.
LENDER:
XXXXXX HEALTHCARE FINANCE, INC.
f/k/a HCFP FUNDING, INC., a Delaware
corporation
By: /s/ Xxxxx Xxxxxxxx
Name: Xxxxx Xxxxxxxx
Title: Vice President
BORROWER:
PHC OF MICHIGAN, INC., a Massachusetts
corporation
By: /s/ Xxxxx X. Shear
Name: Xxxxx X. Shear
Title: CEO
PHC OF UTAH, INC., a Massachusetts
corporation
By: /s/ Xxxxx X. Shear
Name: Xxxxx X. Shear
Title: CEO
PHC OF VIRGINIA, INC., a Massachusetts
corporation
By: /s/ Xxxxx X. Shear
Name: Xxxxx X. Shear
Title: CEO
[GUARANTOR'S ACKNOWLEDGEMENT SIGNATURE APPEARS
ON NEXT PAGE]
GUARANTOR:
PHC, INC., a Massachusetts corporation
By: /s/ Xxxxx X. Shear
Name: Xxxxx X. Shear
Title: CEO
