EXHIBIT 10.17
AMENDMENT TO NOTE PURCHASE AGREEMENTS
THIS AMENDMENT TO NOTE PURCHASE AGREEMENTS (this "Amendment") dated as of
March 23, 2001 is made among US ONCOLOGY, INC., a Delaware corporation (the
"Company"), and the undersigned holders (the "Holders") of the Company's 8.42%
Senior Secured Notes due November 2006 (the "Notes").
RECITALS
A. The Company and the Holders have each entered into a Note Purchase
Agreement dated November 24, 1999 (each a "Note Purchase Agreement" and
collectively, the "Note Purchase Agreements") with respect to the purchase and
sale of $100,000,000 of Notes. Capitalized terms not otherwise defined herein
shall have the meanings set forth in the Note Purchase Agreements.
B. The Company has requested certain amendments to the Note Purchase
Agreements so that the Company will be permitted to add back to Consolidated
Income Available for Fixed Charges and Consolidated Net Worth the effect of
certain charges associated with the write-off of certain assets, the closing of
certain offices and the elimination of certain employment positions, and the
Holders have agreed to make such amendments on the terms and conditions set
forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Holders hereby
agree as follows:
ARTICLE 1.
AMENDMENTS
1.1 AMENDMENT TO SCHEDULE B - DEFINED TERMS. SCHEDULE B of each of the
Note Purchase Agreements is hereby amended as follows:
(a) The definition of "Consolidated Fixed Charges" is hereby amended
and restated in its entirety as follows:
"CONSOLIDATED FIXED CHARGES" means for the immediate past four
fiscal quarters the sum of consolidated interest expense (which includes
capitalized interest and the interest component of Capitalized Leases) plus
actual rent payments under operating leases and including in all instances
interest expense and rent pursuant to the ELLF and any other tax retention
operating lease or synthetic lease.
(b) The definition of "Consolidated Income Available for Fixed
Charges" is hereby amended and restated in its entirety as follows:
"CONSOLIDATED INCOME AVAILABLE FOR FIXED CHARGES" means with
respect to any period, Consolidated Net Income for such period plus (to the
extent deducted in calculating Consolidated Net Income):
(a) all provisions for income taxes;
(b) Consolidated Fixed Charges for such period; and
(c) if such period includes any of the fiscal quarters ending
December 31, 2000, March 31, 2001, June 30, 2001 and September 30, 2001,
the amount by which Consolidated Net Income for such fiscal quarters has
been reduced on account of (i) 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 (ii) 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).
(c) The definition of "Consolidated Net Worth" is hereby amended and
restated in its entirety as follows:
"CONSOLIDATED NET WORTH" means (i) the stockholders' equity of
the Company determined in accordance with GAAP plus (ii) the amount by
which Consolidated 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).
(d) The definition of "Consolidated Operating Cash Flow" is hereby amended
and restated in its entirety as follows:
"CONSOLIDATED OPERATING CASH FLOW" means Consolidated Net Income
for the immediately preceding four fiscal quarters plus (to the extent
deducted in calculating Consolidated Net Income):
(a) provisions for federal, state and local income taxes;
(b) interest expense and lease payments made by the Company and
its Subsidiaries pursuant to the ELLF and any other tax retention operating
lease or synthetic lease that is treated as a Capitalized Lease;
(c) nonrecurring items to the extent deducted in calculating
Consolidated Net Income; and
(d) depreciation and amortization;
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all determined in accordance with GAAP.
(e) The definition of "Indebtedness" is hereby amended and
restated in its entirety as follows:
"INDEBTEDNESS" with respect to any Person means, at any time,
without duplication,
(a) its liabilities for borrowed money and its redemption
obligations in respect of mandatorily redeemable Preferred Stock;
(b) liabilities for the deferred purchase price of property
acquired by such Person (excluding accounts payable arising in the ordinary
course of business, but including, without limitation, all liabilities
created or arising under any conditional sale or other title retention
agreement with respect to any such property);
(c) all liabilities appearing on its balance sheet in accordance
with GAAP in respect of Capital Rentals under any Capitalized Lease;
(d) all liabilities for borrowed money secured by any Lien with
respect to any property owned by such Person (whether or not it has assumed
or become liable for such liabilities);
(e) all liabilities in respect of letters of credit or
instruments serving a similar function issued or accepted for its account
by banks or other financial institutions (whether or not representing
obligations for borrowed money) ;
(f) the principal balance outstanding under any synthetic lease,
tax retention operating lease, off-balance sheet loan or similar off-
balance sheet financing product, including the ELLF and any Permitted Asset
Securitization; and
(g) all Guaranties by such Person with respect to liabilities of
the type described in (a) through (f) herein.
Indebtedness of any Person shall include all obligations of such Person of
the character described in clauses (a) through (g) to the extent such Person
remains legally liable in respect thereof notwithstanding that any such
obligation is deemed to be extinguished under GAAP.
(f) The definition of "Priority Debt" is hereby amended and restated
in its entirety as follows:
"PRIORITY DEBT" means the sum, without duplication, of (i)
Indebtedness of the Company secured by Liens not otherwise permitted by
clauses (a) through (i) of Section 10.5; and (ii) Indebtedness of
Subsidiaries not otherwise permitted by clauses (a) through (c) of Section
10.12 (but excluding the Indebtedness evidenced by the Subsidiary
Guarantees); provided however, that the Indebtedness with respect to the
ELLF shall not be deemed Priority Debt but any amendments, modifications,
renewals, replacements or refinancings thereof shall constitute Priority
Debt.
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(g) The following new definition is hereby added to SCHEDULE B:
"ELLF" means the Company's End Loaded Lease Facility as set forth
in the Participation Agreement dated December 27, 1997 among the Company
and the other parties thereto and as in effect on the effective date of the
Amendment (with a maximum aggregate amount of $75,000,000) and without
regard to any amendments, modifications, renewals, replacements or
refinancings thereof.
(h) The parties acknowledge that the addbacks identified in item (c)
of the new definition of "Consolidated Income Available for Fixed Charges" shall
be considered nonrecurring items for purposes of calculating Consolidated
Operating Cash Flow.
1.2 AMENDMENT TO SECTION 10.5. SECTION 10.5 of each of the Note Purchase
Agreements is hereby amended by deleting the "and" at the end of clause (i),
replacing the "." at the end of clause (j) with "; and" and adding a new clause
(k) as follows:
(k) Liens granted pursuant to the ELLF or any other tax retention
operating lease or synthetic lease.
ARTICLE 2.
REPRESENTATIONS AND WARRANTIES
The Company hereby represents and warrants that:
2.1 COMPLIANCE WITH NOTE PURCHASE AGREEMENTS. The Company is in compliance
with all terms and provisions set forth in the Note Purchase Agreements to be
observed or performed.
2.2 REPRESENTATIONS IN NOTE PURCHASE AGREEMENTS. The representations and
warranties of the Company set forth in the Note Purchase Agreements, 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.
2.4 CONTINUING SECURITY INTERESTS. All amounts owing by the Company under
the Note Purchase Agreements and the Notes will continue to be secured by the
security interest in favor of the Collateral Agent on behalf of the Holders in
all of the collateral granted under the Security Documents and nothing herein
(other than the expressly permitted sharing of collateral with the Banks) 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 Company, nor compliance by the Company with the Note Purchase
Agreements 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 statute or
other rule or regulation of any Governmental Authority or (ii) any written or
oral agreement or instrument to which the Company or any of its Subsidiaries is
a
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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 Company or any of its Subsidiaries
pursuant to any such agreement or instrument, except for Permitted Liens.
ARTICLE 3.
GENERAL
3.1 EFFECTIVENESS. Upon satisfaction of the conditions set forth in
Section 3.10 below, this Amendment shall be effective as of December 31, 2000.
3.2 MODIFICATION OF OTHER AGREEMENTS. Any reference to the Note Purchase
Agreements in any of the Notes or Security Documents shall mean, unless
otherwise specifically provided, the Note Purchase Agreements as amended and
supplemented by this Amendment, and as the Note Purchase Agreements are further
amended, restated, supplemented or modified from time to time and any substitute
or replacement therefor or renewals thereof.
3.3 CONSENT OF SUBSIDIARIES. This Amendment is expressly conditioned upon
the execution by each Guarantor of the Acknowledgement and Consent attached as
ANNEX 1 indicating such Guarantors' consent to this Amendment and confirming
their obligations pursuant to the Security Documents.
3.4 FULL FORCE AND EFFECT. As expressly amended hereby, the Note Purchase
Agreements 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.
3.5 APPLICABLE LAW. This Amendment shall be governed by and construed in
accordance with the internal laws and judicial decisions of the State of Texas.
3.6 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.
3.7 FEES, EXPENSES AND INDEMNITY. The Company will pay each Holder
executing this Amendment an upfront fee equal to 0.50% of the principal amount
of Notes held by such Holder on the date hereof. The Company agrees to pay all
out-of-pocket expenses incurred by the Holders in connection with the
preparation, execution and delivery of this Amendment, including, without
limitation, all reasonable attorneys' fees. The provisions of Section 16.1 of
the Note Purchase Agreements shall apply fully to this Amendment.
3.8 FURTHER ASSURANCE. The Company shall execute and deliver to the
Holders such documents, certificates and opinions as the Holders may reasonably
request to effect the amendment contemplated by this Amendment.
3.9 HEADINGS. The headings of this Amendment are for the purposes of
reference only and shall not affect the construction of this Amendment.
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3.10 CONDITIONS TO EFFECTIVENESS. This Amendment shall be effective as of
the date first set forth above upon (i) execution hereof by the Company and the
Required Holders, (ii) the delivery to the Holders of the fully-executed
Acknowledgement and Consent of the Guarantors, (iii) the payment of the fees
required by Section 3.7 hereof, and (iv) the prior or concurrent effectiveness
of an amendment to the Bank Loan Agreement (in form and substance satisfactory
to the Holders) amending the definitions and financial covenants therein to
include the equivalent exclusion from relevant financial covenant calculations
of the charges and expenses described in this Amendment.
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IN WITNESS WHEREOF, the Company and the Holders have executed this
Amendment as of the date hereof.
COMPANY:
US ONCOLOGY, INC.
By: ___________________________________
Name: _________________________________
Title: _________________________________
HOLDERS:
XXXX XXXXXXX LIFE INSURANCE COMPANY
(formerly known as Xxxx Xxxxxxx Mutual Life
Insurance Company)
By: ____________________________________
Name: __________________________________
Title:__________________________________
XXXX XXXXXXX VARIABLE LIFE
INSURANCE COMPANY
By: ____________________________________
Name: __________________________________
Title:__________________________________
INVESTORS PARTNER LIFE INSURANCE COMPANY
By: ____________________________________
Name: __________________________________
Title:__________________________________
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THE NORTHERN TRUST COMPANY, as Trustee of the
Lucent Technologies, Inc. Master Pension Trust
By: Xxxx Xxxxxxx Life Insurance Company,
(formerly known as Xxxx Xxxxxxx Mutual Life
Insurance Company), as Investment
Manager
By: ____________________________________
Name: __________________________________
Title:__________________________________
ALLSTATE LIFE INSURANCE COMPANY
By: ____________________________________
Name: __________________________________
By: ____________________________________
Name: __________________________________
Authorized Signatories
RELIASTAR LIFE INSURANCE COMPANY
By: ING Investment Management LLC,
as Agent
By: ____________________________________
Name: __________________________________
Title:__________________________________
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RELIASTAR LIFE INSURANCE COMPANY OF
NEW YORK
By: ING Investment Management LLC,
as Agent
By: ____________________________________
Name: __________________________________
Title:__________________________________
SECURITY CONNECTICUT LIFE INSURANCE
COMPANY
By: ING Investment Management LLC,
as Agent
By: ____________________________________
Name: __________________________________
Title:__________________________________
CONNECTICUT GENERAL LIFE INSURANCE
COMPANY
By: CIGNA Investments, Inc.
By: ____________________________________
Name: __________________________________
Title:__________________________________
GENERAL ELECTRIC CAPITAL ASSURANCE
COMPANY
By: ____________________________________
Name: __________________________________
Title:__________________________________
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FIRST COLONY LIFE INSURANCE COMPANY
By: ____________________________________
Name: __________________________________
Title:__________________________________
COLONIAL PENN INSURANCE COMPANY
By: ____________________________________
Name: __________________________________
Title:__________________________________
UNION FIDELITY LIFE INSURANCE
COMPANY
By: ____________________________________
Name: __________________________________
Title:__________________________________
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
By: ____________________________________
Name: __________________________________
Title:__________________________________
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C.M. LIFE INSURANCE COMPANY
By: Xxxxx X. Xxxxxx & Company Inc.
Its Investment Sub-Advisor
By: ____________________________________
Name: __________________________________
Title:__________________________________
NATIONWIDE LIFE INSURANCE COMPANY
By: ____________________________________
Name: __________________________________
Title:__________________________________
NATIONWIDE LIFE AND ANNUITY
INSURANCE COMPANY
By: ____________________________________
Name: __________________________________
Title:__________________________________
OHIO NATIONAL LIFE INSURANCE COMPANY
By: ____________________________________
Name: __________________________________
Title:__________________________________
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ANNEX 1
ACKNOWLEDGMENT AND CONSENT OF GUARANTORS
March 23, 2001
First Union National Bank, as Collateral Agent
One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
RE: AMENDMENT TO NOTE PURCHASE AGREEMENTS DATED AS OF MARCH 23, 2001 (THE
"AMENDMENT"), BY AND AMONG US ONCOLOGY, INC. (THE "COMPANY") AND THE
HOLDERS (THE "HOLDERS") OF THE COMPANY'S 8.42% SENIOR SECURED NOTES DUE
NOVEMBER 2006
Ladies and Gentlemen:
Each of the undersigned (individually, each "Guarantor," and collectively,
the "Guarantors") has either executed the Guaranty Agreement dated as of
November 24, 1999 or an Accession thereto (collectively, the "Guaranty"), in
favor of the Holders and for the benefit of the Company, guaranteeing the
Company's obligations under certain Note Purchase Agreements dated November 24,
1999 (as amended, the "Note Purchase Agreements"). Each Guarantor also has
either executed the Guarantors' Security Agreement dated as of November 24, 1999
or an Accession thereto (the "Security Agreement") pursuant to which each
Guarantor has granted to the Collateral Agent, for the benefit of the Holders, 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 Company and the Holders have
amended the Note Purchase Agreements by the Amendment referenced above. The
agreements of the Guarantors made herein are to induce the Holders to amend the
Note Purchase Agreements, and each Guarantor acknowledges that the Holders would
not amend the Note Purchase Agreement in the absence of the agreements of the
Guarantors contained herein.
Each Guarantor hereby irrevocably approves of and consents to the
Amendment, agrees that its obligations under the Guaranty shall not be
diminished as a result of the execution of the Amendment, and ratifies and
confirms (i) that its obligations under the Guaranty shall include a guarantee
of the payment of the obligations of the Company under the Note Purchase
Agreements, the Notes and the Security Documents, subject to all of the
qualifications and limitations set forth therein, (ii) that such guarantee shall
be secured by the Collateral Agent's security interest in the Collateral granted
under the Guarantors' Security Agreement, and (iii) that the Guaranty, the
Guarantors' 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 Note Purchase Agreements.
This letter has been delivered in the State of Texas, and the agreements
contained herein shall be governed by the internal laws of the State of Texas,
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.
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.
[signatures continue on following page]
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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.
NORTHWEST CANCER CENTER, INC.
PRN PHYSICIAN RELIANCE, LLC
PHYSICIAN RELIANCE HOLDINGS, 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: ____________________________________
________________, Manager of Physician
Reliance Holdings, LLC and Treasurer of each
other entity
