EXHIBIT 10.14
SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT
THIS SECOND AMENDMENT, made this 12th day of April, 2000, is by and
among Bank of America, N.A., the successor to NationsBank, N.A. (the "Bank"),
Wilmington Surgery Center, L.P., a Tennessee limited partnership (the
"Borrower") and Symbion Ambulatory Resource Centres, Inc., a Tennessee
corporation and the successor to Ambulatory Resource Centres, Inc. (the
"Guarantor").
RECITALS
Bank has previously made a loan to the Borrower, an Affiliate of
Guarantor, pursuant to a Loan and Security Agreement dated May 24, 1999 (as
amended from time to time, the "Loan Agreement"). The Loan Agreement was amended
pursuant to an Amendment to Loan Agreements dated June 25, 1999 among Bank,
Borrower, Guarantor and ARC Kentucky, LLC. Capitalized terms not otherwise
defined in this Second Amendment shall have the meaning provided in the Loan
Agreement. Borrower has requested that Bank make certain changes to the Loan
Agreement. The Bank is willing to do so, subject, among other things, to the
execution of this Amendment and compliance with the terms hereof.
NOW, THEREFORE, the parties to this Second Amendment hereby agree as
follows:
Article I. Amendment to Loan Agreement. The parties hereto amend
the Loan Agreement as follows:
Section 1.1. The following definitions are hereby added to
Section 1 of the Loan Agreement in appropriate alphabetical order:
'"COMPLIANCE DATE" means, provided no Event of
Default occurs between April 12, 2000 and such date and
provided no Unmatured Default exists at such date, the date on
which Borrower has delivered certificates to Bank evidencing
to Bank's reasonable satisfaction, for two consecutive
Quarterly Periods (the second of which must be a Quarterly
Period ending at or after September 30, 2000), that (A)
Borrower has complied with the covenants set forth in
Paragraph 6.15(b) through (e), and (B) the ratio of Borrower's
Cash Flow to Borrower's Debt Service has been greater than
1.10:1.00.
"COMPLIANCE QUARTER" means the second of the two
consecutive Quarterly Periods referenced above in the
definition of Compliance Date.
"CONSOLIDATED FUNDED DEBT" means, at any date, with
respect to Symbion and its Subsidiaries, all of the following
obligations
(without duplication) as of such date: (a) all obligations for
borrowed money, (b) all obligations evidenced by bonds,
debentures, notes or other similar instruments, (c) all
obligations to pay the deferred purchase price of property,
except trade accounts payable or other short term liabilities
other than indebtedness for borrowed money arising in the
ordinary course of business, (d) all obligations as lessee
under capitalized leases, (e) all obligations to purchase
securities or other property which arise out of or in
connection with the sale of the same or substantially similar
securities or property, such as bankers acceptances or similar
instruments, (f) all contingent and non-contingent obligations
to reimburse any bank or other person in respect of amounts
payable or paid under a letter of credit or similar
instrument, (g) all debt of others secured by a lien on any
asset of Symbion and/or any of its Subsidiaries, whether or
not such debt is assumed, and (h) all Guarantee Obligations.
"DE NOVO LOSSES" means, at any date, the aggregate,
cumulative losses of each Subsidiary operating a surgery
center which has been accepting patients for less than nine
(9) months.
"EXCESS CASH" means, at any date, for any Person,
such Person's cash on hand less the amount of the Required
Cash Availability at such date.
"NON-RECOURSE DEBT" means, at any date, that portion
of Consolidated Funded Debt which is not a corporate
obligation of Symbion, and is included within the definition
of Consolidated Funded Debt solely because it is Indebtedness
of a Subsidiary.
"QUARTERLY COMPLIANCE DATE" means the last day of the
second consecutive Quarterly Period referenced above in the
definition of Compliance Date.
"REQUIRED CASH AVAILABILITY" means, at any date, for
any Person, an amount equal to such Person's anticipated
operating expenses for the succeeding two weeks.'
Section 1.2 Section 6.15 of the Loan Agreement is hereby
deleted in its entirety and replaced with the following:
"6.15 Financial Ratios. The Borrower will maintain or
cause to be maintained, the following financial ratios and
covenants:
(a) for each Quarterly Period, (i) beginning with
the Quarterly Period ending March 31, 2000, a ratio of
Borrower's Cash Flow to the sum of Borrower's Debt Service
minus $26,786, of not less
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than 1.05:1.00, and (ii) beginning with the first Quarterly
Period ending after the Compliance Quarter, a ratio of
Borrower's Cash Flow to the sum of Borrower's Debt Service of
not less than 1.10:1.00;
(b) At all times, Borrower's cash on hand shall be
greater than Borrower's Required Cash Availability. Promptly
following a request from Bank, Borrower shall provide evidence
reasonably satisfactory to Bank to document compliance with
this covenant;
(c) At all times, the sum of Borrower's Shareholder's
Equity plus the outstanding principal balance of all
Indebtedness for money borrowed from Guarantor by Borrower
shall be greater than $4,000,000;
(d) At all times, the Shareholders' Equity of
Symbion, calculated on a consolidated basis, shall be greater
than $25,000,000 plus eighty-five percent (85%) of (i) the
aggregate amount of any new equity raised by Symbion after
June 25, 1999 and (ii) the aggregate, cumulative, positive Net
Income of Symbion (without any credit or deduction in the
event Net Income is a negative number) after June 25, 1999;
(e) At the end of each Quarterly Period, beginning
with the Quarterly Period ending September 30, 1999 and
continuing through and including the Quarterly Period ending
September 30, 2000, the ratio of (i) the sum of (A) Symbion's
Consolidated Funded Debt less (B) Symbion's Excess Cash to
(ii) the sum of (X) EBITDA for such Quarterly Period, plus (Y)
the lesser of (1) $125,000 or (2) the De Novo Losses at such
date, giving Pro-Forma Effect to any Acquisition made and any
Indebtedness incurred therewith as of the date of
determination, shall be less than 3.75:1.00; and
(f) At the end of each Quarterly Period beginning
with the Quarterly Period ending December 31, 2000 and
continuing through each Quarterly Period ending thereafter,
the ratio of (i) the sum of (A) Symbion's Consolidated Funded
Debt less (B) Symbion's Excess Cash to (ii) Symbion's
consolidated EBITDA for such Quarterly Period, giving
Pro-Forma Effect to any Acquisition made and any Indebtedness
incurred therewith as of the date of determination, shall be
less than 3.50:1.00; provided, however, if the result of such
ratio is greater than or equal to 3.50:1.00 and less than
3.75:1.00, the Borrower shall be in compliance with this
covenant for such Quarterly Period if the ratio of (i) the sum
of (A) Symbion's Consolidated Funded Debt less (B) Symbion's
Excess Cash less (C) Symbion's Non-Recourse Debt to (ii)
Symbion's consolidated EBITDA for such Quarterly Period,
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giving Pro-Forma Effect to any Acquisition made and any
Indebtedness incurred therewith as of the date of
determination, shall be less than 3.50:1.00."
Section 1.3. The following is hereby added to the Loan
Agreement as Section 6.17:
"6.17 Cash Collateral. On or before April 21, 2000
Borrower shall purchase a certificate of deposit issued by
Bank in the amount of not less than $750,000, and Borrower
shall maintain such certificate of deposit until no longer
required to do so pursuant to this Paragraph 6.17. Borrower
hereby acknowledges that Bank shall be entitled to exercise
full rights of setoff with respect to the certificate of
deposit. Provided no Event of Default occurs between April 12,
2000 and the Compliance Date and provided no Unmatured Default
exists at the Compliance Date, upon the Compliance Date,
Borrower shall no longer be required to maintain the
certificate of deposit, and this Paragraph 6.17 shall be
inapplicable and such funds shall be returned to Borrower in
full. Until the Compliance Date, Borrower shall not make any
payment of principal or interest owed on any indebtedness of
Borrower to Guarantor, Symbion or any other Affiliate of
Borrower."
Section 1.4. The following is hereby added to the Loan
Agreement as Section 6.18:
"6.18 Symbion Financing. If, after April 12, 2000,
Symbion enters into any financing arrangement which imposes
covenants upon Symbion that are more restrictive than, or in
addition to, the covenants imposed by the Loan Agreement,
Borrower will promptly notify Bank, and Borrower, Guarantor
and Symbion will promptly execute any documentation reasonably
requested by Bank to add such covenants to the Loan
Agreement."
Article II. General.
Section 2.1 Loan Agreement. Except as amended hereby, the
provisions of the Loan Agreement shall remain in full force and effect.
References in the Loan Agreement and the other Loan Documents shall be
references to the Loan Agreement as amended by this Second Amendment.
Section 2.2 Symbion Indebtedness. If Symbion enters into any
financing arrangement after April 12, 2000 which imposes covenants upon Symbion
that are more restrictive than, or in addition to, the covenants imposed by the
Loan Agreement, such covenants shall be incorporated by reference into the Loan
Agreement, unless, within ten (10) days after Symbion enters into such financing
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arrangement, Borrower, Guarantor and Symbion execute the documentation
referenced in Section 1.5 of this Second Amendment.
Section 2.3 Governing Law. This Second Amendment shall be
governed by and construed in accordance with the laws of the State of Tennessee
without reference to its choice of law rules.
Section 2.4 Execution in Counterparts. This Second Amendment
may be executed in one or more counterparts, each of which shall be considered
an original instrument, but all of which shall be considered one and the same
agreement, and shall become binding when one or more counterparts have been
signed by each of the parties and delivered to each of the parties.
Section 2.5 Representations. Borrower hereby makes the
following representations and warranties:
(a) as of the date hereof, Borrower has no defense
against payment of any or all of the Obligations;
(b) as of the date hereof, no Event of Default or
Unmatured Default has occurred or is continuing (after giving
effect to this Amendment).
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
BANK OF AMERICA, N.A. WILMINGTON SURGERY CENTER, L.P.,
a Tennessee limited partnership
By: Ambulatory Resource Centers of
Wilmington, Inc., its General Partner
BY: /s/ Xxxxxxxxx X. Xxxx BY:/s/ Xxxxxxx X. Xxxx
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TITLE: Senior Vice President TITLE: President and Chief Executive Officer
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SYMBION AMBULATORY RESOURCE
CENTRES, INC.
BY: /s/ Xxxxxxx X. Xxxx
TITLE: President and Chief Executive Officer
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