EXHIBIT 10.15
SECOND AMENDMENT TO FOURTH AMENDED
AND RESTATED LOAN AGREEMENT
THIS SECOND AMENDMENT TO FOURTH AMENDED AND RESTATED LOAN AGREEMENT, dated
as of December 31, 2000 (this "Amendment"), is made among US ONCOLOGY, INC., a
Delaware corporation with its principal offices in Houston, Texas and formerly
known as American Oncology Resources, Inc. (the "Borrower"), the undersigned
banks and other financial institutions party to the Loan Agreement (as
hereinafter defined) (each, a "Lender," and collectively, the "Lenders"), and
FIRST UNION NATIONAL BANK, as administrative agent for the Lenders to the extent
described in ARTICLE IX of the Loan Agreement (in such capacity, the
"Administrative Agent").
RECITALS
A. The Borrower, the Lenders, and the Administrative Agent have entered
into a Fourth Amended and Restated Loan Agreement, dated as of May 11, 1999, and
a first amendment thereto, dated as of September 25, 1999 (together with all
other amendments and modifications, the "Loan Agreement"). Capitalized terms not
otherwise defined herein shall have the meanings as defined in the Loan
Agreement .
B. The Borrower has requested certain amendments to the Loan Agreement so
that (i) the limited basket for other debt of the Borrower and its Subsidiaries
will be increased by $25,000,000, (ii) certain financial covenants will be
calculated on a rolling four quarter basis, and (iii) the Borrower will be
permitted to add back to EBITDA and Consolidated Net Worth the effect of certain
charges and expenses associated with the write-off or write-down of certain
assets, the closing of certain offices and the elimination of certain employment
positions, and the Lenders have agreed to make such amendments on the terms and
conditions set forth herein.
C. To effect such amendment, the Borrower, the Lenders, and the
Administrative Agent have entered into this Amendment.
STATEMENT OF AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrower, the Lenders, and the
Administrative Agent hereby agree as follows:
ARTICLE 1.
AMENDMENT
1.1 AMENDMENT TO SECTION 1.1 "DEFINED TERMS." SECTION 1.1 of the Loan
Agreement is hereby amended as follows:
(a) The definition of "Annualized EBITDA" is hereby amended and restated
in its entirety as follows:
"Annualized EBITDA" shall mean, with respect to the Borrower and
its Subsidiaries, on a consolidated basis, as of the last day of any
fiscal quarter, EBITDA for the period of four consecutive fiscal
quarters then ending.
(b) The definition of "Annualized EBITDAR" is hereby amended and restated
in its entirety as follows:
"Annualized EBITDAR" shall mean, with respect to the Borrower and
its Subsidiaries, on a consolidated basis, as of the last day of any
fiscal quarter, the sum of (i) EBITDA for the period of four
consecutive fiscal quarters then ending, plus (ii) Lease Expense for
the period of four consecutive fiscal quarters then ending.
(c) The definition of "Applicable Margin" is amended and restated in its
entirety as follows, effective on and after the date on which each of the
conditions set forth in Section 4.9 of this Amendment is satisfied:
"Applicable Margin" shall mean, at any time with respect to any
LIBOR Committed Loan of either Class, the applicable percentage points
as determined under the following matrix with reference to the ratio
of Consolidated Debt to Annualized EBITDA calculated as provided
below; provided that at any time on or after June 15, 2002, the
Applicable Margin shall be the applicable percentage points as
determined under the following matrix plus 0.40%:
Ratio of Consolidated Revolver A
Debt to Annualized EBITDA Applicable Margin
-------------------------- ------------------
Greater than 3.00 to 1.0 1.825%
Greater than 2.50 to 1.0 1.725%
but less than or equal
to 3.00 to 1.0
Greater than 2.00 to 1.0 1.60%
but less than or equal
to 2.50 to 1.0
Greater than 1.50 to 1.0 1.50%
but less than or equal
to 2.00 to 1.0
Greater than 1.00 to 1.0 1.375%
but less than or equal to
1.50 to 1.0
Less than or equal to 1.275%
1.00 to 1.0
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The Applicable Margin shall be reset from time to time in
accordance with the above matrix on the fifth (5th) day after receipt
by the Administrative Agent in accordance with SECTIONS 5.1(A) and (B)
of financial statements together with a Compliance Certificate
(reflecting the computation of the ratio of Consolidated Debt to
Annualized EBITDA as of the last day of the preceding fiscal quarter
or fiscal year, as appropriate).
(d) The definition of "Debt" is hereby amended by amending and restating
clause (x) in its entirety as follows:
(x) the principal balance outstanding under any synthetic lease,
tax retention operating lease, off-balance sheet loan or similar off-
balance sheet financing product, including without limitation the ELLF
and any Permitted Asset Securitization;
(e) The definition of "Consolidated Net Worth" is hereby amended and
restated in its entirety as follows:
"Consolidated Net Worth" shall mean, as of the last day of any
fiscal quarter, (i) the net worth of the Borrower and its Subsidiaries
as of such date, determined on a consolidated basis in accordance with
Generally Accepted Accounting Principles plus (ii) the amount by which
net income for the fiscal quarters ending December 31, 2000, March 31,
2001, June 30, 2001 and September 30, 2001 has been reduced on account
of (A) nonrecurring non-cash charges arising from the write-off of
corporate non-core and under performing assets and the write-down or
write-off of certain other assets (in an aggregate amount not to
exceed $200,000,000) and (B) cash expenses arising from the costs
associated with employee and corporate reorganization, including
without limitation the closing of offices and the elimination,
relocation and consolidation of certain employment positions, and
other related costs (in an aggregate amount not to exceed
$15,000,000).
(f) The definition of "EBITDA" is hereby amended and restated in its
entirety as follows :
"EBITDA" shall mean, for any period, an amount equal to, without
duplication, the sum of (a) net income (determined in accordance with
Generally Accepted Accounting Principles) earned in such period, plus
(b) to the extent net income has been reduced thereby, the sum of (i)
depreciation and amortization expense, plus (ii) Interest Expense,
plus (iii) federal and state income taxes, plus (c) to the extent net
income has been reduced thereby in the fiscal quarters ending December
31, 2000, March 31, 2001, June 30, 2001 and September 30, 2001,
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(A) nonrecurring non-cash charges arising from the write-off of
corporate non-core and under performing assets and the write-down or
write-off of certain other assets (in an aggregate amount not to
exceed $200,000,000) and (B) cash expenses arising from the costs
associated with employee and corporate reorganization, including
without limitation the closing of offices and the elimination,
relocation and consolidation of certain employment positions, and
other related costs (in an aggregate amount not to exceed
$15,000,000).
(g) The definition of "Debt Service" is hereby amended and restated in its
entirety as follows:
"Debt Service" shall mean, with respect to the Borrower and its
Subsidiaries on a consolidated basis as of the last day of any fiscal
quarter, the sum of (a) Fixed Charges for the period of four
consecutive fiscal quarters then ending, plus (b) current maturities
(due within twelve months) of all Debt (provided that the amount
outstanding under the Facility shall not be considered a current
maturity of Debt solely by reason of the Maturity Date falling within
such twelve month period).
(h) The definition of "Fixed Charges" is hereby amended and restated in
its entirety as follows:
"Fixed Charges" shall mean, with respect to the Borrower and its
Subsidiaries on a consolidated basis as of the last day of any period,
without duplication, the sum of Interest Expense and Lease Expense for
such period.
(i) The definition of "Permitted Liens" is hereby amended by amending and
restating clauses (g) and (m) in their entirety as follows:
(g) Purchase money liens (x) incurred in the purchase of real
property or equipment or in the improvement of real property, in each
case, as permitted under SECTION 6.10 hereof, provided that any such
lien (i) attaches to such asset concurrently with or within ten (10)
days after the acquisition thereof, (ii) shall not encumber any other
property of the Borrower or any Subsidiary, (iii) shall not exceed the
purchase price of such asset, and (iv) in the case of real property,
shall be incurred solely for the acquisition, construction or
improvement of cancer treatment centers or related imaging centers
within markets in which the Borrower or one of its Subsidiaries has an
existing office or (y) that have been disclosed to the Administrative
Agent and the Lenders and assumed in any Permitted Physician
Transaction in accordance with SECTION 5.14 or Physician Transaction
approved in accordance with SECTION 6.2 hereof;
(m) Liens granted pursuant to the ELLF or any other tax retention
operating lease or synthetic lease not prohibited by SECTION 6.3; and
(j) The definition of "Permitted Physician Transaction" is hereby amended
by amending and restating clauses (D) and (E) in their entirety as follows:
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(D) the Transaction Amount for such Physician Transaction shall
not exceed $75,000,000 (subject to the proviso below); and (E) in the
fiscal year of such Physician Transaction, the aggregate Transaction
Amount for all Permitted Physician Transactions in such year shall not
exceed $175,000,000;
1.2 AMENDMENT TO SECTION 6.3 "DEBT." SECTION 6.3 of the Loan Agreement is
hereby amended by amending and restating clause (vi) in its entirety as follows:
(vi) other Consolidated Debt (including, without limitation, Debt
secured by liens described in clauses (E) and (G) of the definition of
Permitted Liens and Capital Lease Obligations, but excluding Debt
otherwise permitted under this SECTION 6.3) in an aggregate principal
amount for the Borrower and its Subsidiaries at any time outstanding
not to exceed $100,000,000, provided, that other Consolidated Debt
permitted pursuant to this clause (VI) shall not include Debt incurred
in connection with an asset securitization;
1.3 AMENDMENT TO SECTION 6.9 "RESTRICTED PAYMENTS." SECTION 6.9 of the
Loan Agreement is hereby amended and restated in its entirety as follows:
6.9 Restricted Payments. Declare or pay any dividends upon any
of its Stock (other than dividends paid in Stock and dividends paid to
the Borrower or by a Subsidiary to another Subsidiary), or (b) (in the
case of the Borrower) purchase, redeem, retire or otherwise acquire,
directly or indirectly, any shares of its Stock, or any option,
warrant or other right to acquire shares of its Stock or make any
distribution of cash, property or assets other than Stock among the
holders of shares of its Stock.
1.4 AMENDMENT TO SECTION 6.12 "EBITDA TO INTEREST EXPENSE." SECTION 6.12
of the Loan Agreement is hereby amended and restated in its entirety as follows:
6.12 EBITDA to Interest Expense. Permit the ratio of Annualized
EBITDA as of the end of any fiscal quarter to Interest Expense for the
four consecutive fiscal quarters then ending to be less than 3.0 to
1.0.
1.5 AMENDMENT TO SECTION 6.13 "ANNUALIZED EBITDAR TO DEBT SERVICE RATIO."
SECTION 6.13 of the Loan Agreement is hereby amended and restated in its
entirety as follows:
6.13 Annualized EBITDAR to Debt Service Ratio. Permit the ratio
of Annualized EBITDAR to Debt Service as of the end of any fiscal
quarter to be less than 1.5 to 1.0.
1.6 AMENDMENT TO SECTION 6.14 "CONSOLIDATED DEBT TO ANNUALIZED EBITDA."
SECTION 6.14 of the Loan Agreement is hereby amended and restated in its
entirety as follows:
6.14 Consolidated Debt to Annualized EBITDA. Permit the ratio
of Consolidated Debt to Annualized EBITDA as of the end of any fiscal
quarter to be less than 3.25 to 1.0.
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ARTICLE 2.
REPRESENTATIONS AND WARRANTIES
The Borrower hereby represents and warrants that:
2.1 COMPLIANCE WITH LOAN AGREEMENT. The Borrower is in compliance with all
terms and provisions set forth in the Loan Agreement to be observed or
performed, except where the Borrower's failure to comply has been waived in
writing by the Required Lenders.
2.2 REPRESENTATIONS IN LOAN AGREEMENT. The representations and warranties
of the Borrower set forth in the Loan Agreement, except for those relating to a
specific date other than the date hereof, are true and correct in all material
respects on and as of the date hereof as if made on and as of the date hereof.
2.3 NO DEFAULT. No Default or Event of Default is continuing other than
those, if any, waived in writing by the Lenders.
2.4 CONTINUING SECURITY INTERESTS. All Obligations and advances by the
Lenders to the Borrower under the Loan Agreement, as amended hereby, the Notes
and the Swingline Note will continue to be secured by the Agent's, on behalf of
the Lenders, security interest in all of the Collateral granted under the Loan
Agreement, Security Agreements and other Loan Documents, and nothing herein
(other than the expressly permitted sharing of the Collateral with holders of
the Permitted Notes) will affect the validity, perfection or enforceability of
such security interests.
2.5 NO CONFLICTS. Neither the execution, delivery or performance of this
Amendment by the Borrower, nor compliance by the Borrower with the Loan
Agreement as amended hereby, (a) conflicts or will conflict with or results or
will result in any breach of, or constitutes or will constitute with the passage
of time or the giving of notice or both, a default under, (i) any Requirement of
Law or (ii) any written or oral agreement or instrument to which the Borrower or
any Guarantor is a party or by which it, or any of its property, is bound,
except where such conflict, breach or default would not have a Material Adverse
Effect, or (b) results or will result in the creation or imposition of any lien,
charge or encumbrance upon the properties of the Borrower or any Subsidiary
pursuant to any such agreement or instrument, except for Permitted Liens.
ARTICLE 3.
MODIFICATION OF LOAN DOCUMENTS
The other Loan Documents are amended as follows:
3.1 LOAN AGREEMENT. Any reference to the Loan Agreement in any of the
other Loan Documents shall mean, unless otherwise specifically provided, the
Loan Agreement as amended and supplemented by this Amendment, and as the Loan
Agreement is further amended,
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restated, supplemented or modified from time to time and any substitute or
replacement therefor or renewals thereof.
ARTICLE 4.
GENERAL
4.1 CONSENT OF GUARANTORS. This Amendment is expressly conditioned upon
the execution by each Guarantor of the Acknowledgement and Consent attached as
ANNEX 1 indicating the Guarantors' consent to this Amendment and confirming
their obligations pursuant to the Guaranty Agreement and Guarantors' Security
Agreement.
4.2 FULL FORCE AND EFFECT. As expressly amended hereby, the Loan Agreement
shall continue in full force and effect in accordance with the provisions
thereof, and no change or modification in any of the terms thereof except as
specifically set forth herein has been effected. As used in the Loan Agreement,
"hereinafter," "hereto," "hereof," and words of similar import shall, unless the
context otherwise requires, mean the Loan Agreement as amended by this
Amendment.
4.3 APPLICABLE LAW. This Amendment shall be governed by and construed in
accordance with the internal laws and judicial decisions of the State of North
Carolina.
4.4 COUNTERPARTS. This Amendment may be executed in two or more
counterparts, each of which shall constitute an original, but all of which when
taken together shall constitute but one instrument.
4.5 FEES, EXPENSES AND INDEMNITY. The Borrower will pay each Lender
executing this Amendment an upfront fee equal to 0.75% of such Lender's
aggregate Commitment (under both the Loan Agreement and the ELLF, whether drawn
or unutilized). The Borrower agrees to pay all out-of-pocket expenses incurred
by the Agent in connection with the preparation, execution and delivery of this
Amendment, including, without limitation, all reasonable attorneys' fees. The
provisions of SECTION 10.7 of the Loan Agreement shall apply fully to this
Amendment.
4.6 FURTHER ASSURANCE. The Borrower shall execute and deliver to the
Lenders such documents, certificates and opinions as the Lenders may reasonably
request to effect the amendment contemplated by this Amendment.
4.7 HEADINGS. The headings of this Amendment are for the purposes of
reference only and shall not affect the construction of this Amendment.
4.8 VALID AMENDMENT. The parties acknowledge that this Amendment complies
in all respects with SECTION 10.8 of the Loan Agreement, which sets forth the
requirements for amendments thereto.
4.9 CONDITIONS TO EFFECTIVENESS. This Amendment shall be effective as of
the date first set forth above upon (i) execution hereof by the Borrower, the
Agent and the Required
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Lenders, (ii) the delivery to the Agent of the fully-executed Acknowledgement
and Consent of the Guarantors, (iii) the payment of the fees and expenses
required by Section 4.5 hereof. (iv) the prior or concurrent effectiveness of an
amendment to the ELLF that increases the pricing thereunder by 30 basis points
at each pricing level, and (v) the prior or concurrent effectiveness of an
amendment to the Permitted Notes (in form and substance satisfactory to the
Agent) that modifies the financial covenants and related definitions and
provisions applicable to the Senior Notes in a manner that makes such covenants
equal to or less restrictive than the Loan Agreement financial covenants as
amended hereby (such modifications to include, without limitation, the
equivalent exclusion from financial covenant calculations of the charges and
expenses described in this Amendment).
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IN WITNESS WHEREOF, the Borrower, the Lenders, and the Agent have executed
this Amendment as of the date hereof.
US ONCOLOGY, INC.
By: ___________________________________
Name: _____________________________
Title: ____________________________
FIRST UNION NATIONAL BANK, as Administrative Agent
and a Lender
By: ___________________________________
Name: _____________________________
Title: _____________________________
BANK ONE, NA
By: ___________________________________
Name: _____________________________
Title: _____________________________
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COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK B.A.
"RABOBANK NEDERLAND",
NEW YORK BRANCH
By: ____________________________________
Name: ______________________________
Title:______________________________
By: ____________________________________
Name: ______________________________
Title:______________________________
BANKERS TRUST COMPANY
By: ____________________________________
Name: ______________________________
Title: ______________________________
XXXXX FARGO BANK (TEXAS), NATIONAL ASSOCIATION
By: ____________________________________
Name: ______________________________
Title: ______________________________
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CHASE BANK OF TEXAS, N.A.
By: ____________________________________
Name: ______________________________
Title: ______________________________
BANK OF AMERICA, N.A.
By: ____________________________________
Name: ______________________________
Title: ______________________________
CREDIT LYONNAIS NEW YORK BRANCH
By: ____________________________________
Name: ______________________________
Title: ______________________________
U.S. BANK NATIONAL ASSOCIATION
By: ____________________________________
Name: ______________________________
Title: ______________________________
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ANNEX 1
ACKNOWLEDGMENT AND CONSENT OF GUARANTORS
March __, 2001
First Union National Bank, as Administrative Agent
One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
RE: SECOND AMENDMENT TO FOURTH AMENDED AND RESTATED LOAN AGREEMENT, DATED AS OF
MARCH __, 2001 (THE "SECOND AMENDMENT"), BY AND BETWEEN US ONCOLOGY, INC.
(THE "BORROWER"), FIRST UNION NATIONAL BANK, AS AGENT, AND VARIOUS LENDERS
(COLLECTIVELY, THE "LENDERS")
Ladies and Gentlemen:
Each of the undersigned (individually, each "Guarantor," and collectively,
the "Guarantors") has either executed the Third Amended and Restated Guaranty
Agreement, dated as of June 15, 1999, or an Accession thereto (collectively, the
"Guaranty"), in favor of the Lenders and for the benefit of the Borrower,
guaranteeing the Borrower's obligations under a Fourth Amended and Restated Loan
Agreement dated May 11, 1999, by and among the Borrower, the Agent and the
Lenders (as amended, the "Loan Agreement"). Each Guarantor also has either
executed the Fourth Amended and Restated Guarantors' Security Agreement (the
"Security Agreement") dated as of June 15, 1999, or an Accession thereto,
pursuant to which each Guarantor has granted to the Agent, for the benefit of
the Lenders, a first priority security interest, subject to Permitted Liens, in
all of the Collateral described therein to secure its obligations under the
Guaranty.
Each Guarantor hereby acknowledges that the Borrowers and the Lenders have
amended the Loan Agreement by the Second Amendment referenced above. The
agreements of the Guarantors made herein are to induce the Lenders to continue
and amend the Loan Agreement, and each Guarantor acknowledges that the Lenders
would not amend the Loan Agreement in the absence of the agreements of the
Guarantors contained herein.
Each Guarantor hereby irrevocably approves of and consents to the Second
Amendment and all other Loan Documents contemplated thereby, agrees that its
obligations under the Guaranty shall not be diminished as a result of the
execution of the Second Amendment, and ratifies and confirms (i) that its
obligations under the Guaranty shall include a guarantee of the payment of the
Obligations (as defined in the Loan Agreement, as amended) of the Borrower,
subject to all of the qualifications and limitations set forth therein, (ii)
that such guarantee shall be secured by the Agent's security interest in the
Collateral granted under the Security
Agreement, and (iii) that the Guaranty, the Security Agreement and all other
Loan Documents to which such Guarantor is a party shall remain in full force and
effect.
Capitalized terms not defined herein shall have the meanings assigned to
such terms in the Loan Agreement.
This letter has been delivered in the State of North Carolina, and the
agreements contained herein shall be governed by the internal laws of the State
of North Carolina, without regard to the choice of law principles thereof. The
agreements contained herein shall be effective as of the date hereof.
Very truly yours,
US ONCOLOGY CORPORATE, INC. (FORMERLY KNOWN AS
AOR, INC.)
AORIP, INC.
AOR REAL ESTATE, INC.
AORT HOLDING COMPANY, INC.
AOR MANAGEMENT COMPANY OF ALABAMA, INC.
AOR MANAGEMENT COMPANY OF ARIZONA, INC.
AOR MANAGEMENT COMPANY OF FLORIDA, INC.
AOR MANAGEMENT COMPANY OF CENTRAL FLORIDA, INC.
AOR MANAGEMENT COMPANY OF INDIANA, INC.
AOR HOLDING COMPANY OF INDIANA, INC.
AOR MANAGEMENT COMPANY OF KANSAS, INC.
AOR MANAGEMENT COMPANY OF MISSOURI, INC.
AOR MANAGEMENT COMPANY OF NEVADA, INC.
AOR MANAGEMENT COMPANY OF NEW YORK, INC.
AOR MANAGEMENT COMPANY OF NORTH CAROLINA, INC.
AOR MANAGEMENT COMPANY OF OHIO, INC.
AOR MANAGEMENT COMPANY OF OKLAHOMA, INC.
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AOR MANAGEMENT COMPANY OF OREGON, INC.
AOR MANAGEMENT COMPANY OF PENNSYLVANIA, INC.
AOR MANAGEMENT COMPANY OF SOUTH CAROLINA, INC.
AOR MANAGEMENT COMPANY OF TEXAS, INC.
AOR MANAGEMENT COMPANY OF VIRGINIA, INC.
GREENVILLE RADIATION CARE, INC.
RMCC CANCER CENTER INC.
PHYSICIAN RELIANCE NETWORK, INC.
TOPS PHARMACY SERVICES, INC.
US ONCOLOGY RESEARCH, INC. (FORMERLY KNOWN AS PRN
RESEARCH, INC.)
NORTHWEST CANCER CENTER, INC.
PRN PHYSICIAN RELIANCE, LLC
PHYSICIAN RELIANCE HOLDINGS, LLC (FORMERLY KNOWN
AS PHYSICIAN RELIANCE INVESTMENTS, LLC)
AOR OF TEXAS MANAGEMENT LIMITED PARTNERSHIP
By: AOR Management Company of Texas, Inc.,
General Partner
AOR OF INDIANA MANAGEMENT PARTNERSHIP
By: AOR Management Company of Indiana,
Inc., General Partner, and
BY: AOR HOLDING COMPANY OF INDIANA, INC.,
GENERAL PARTNER
PHYSICIAN RELIANCE, L.P.
By: PRN Physician Reliance, LLC, General
Partner and
BY: PHYSICIAN RELIANCE HOLDINGS, LLC,
LIMITED PARTNER
By: ____________________________________
R. Xxxx Xxxx, Manager of PRN Physician
Reliance, LLC and Physician Reliance
Holdings, LLC and President of each other
entity
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