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EXHIBIT 10.6
LOAN AND SECURITY AGREEMENT
among
AMERICAN SHARED-CURACARE
and
CURACARE, INC.
Borrower,
AMERICAN SHARED HOSPITAL SERVICES
Guarantor,
XXXXXX X. XXXXX, M.D.
Individual Guarantor
and
DVI BUSINESS CREDIT RECEIVABLES CORP.
Lender
Dated as of January 31, 1996
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TABLE OF CONTENTS
Page
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SECTION 1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1. Specific Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2. Generally Accepted Accounting Principles and Uniform Commercial Code . . . . . . . . . . . . . . . . 6
Section 1.3. Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2 LOAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.1. The Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.2. Revolving Nature of the Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.3. Integral Amounts of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.4. Notice of Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.5. Repayment of Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 2.6. Prepayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 2.7. Lender's Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 2.8. Interest on the Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 2.9. Conditions to the Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3 SECURITY INTEREST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 3.1. Grant of Security Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 4 SPECIFIC REPRESENTATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 4.1. Name of Guarantor; Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 4.2. Mergers and Consolidations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 4.3. Purchase of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 4.4. Change of Name or Identity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 4.5. Corporate Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 5 PROVISIONS CONCERNING ACCOUNTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 5.1. Office and Records of Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 5.2. Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 5.3. Returns and Repossessions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 5.4. Borrowing Base Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 5.5. Schedules of Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 5.6. Lender's Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 5.7. Disclaimer of Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 5.8. Post Default Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 5.9. Accounts Owed by Federal Government . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 5.10. Business Activity Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 6 PROVISIONS CONCERNING GENERAL INTANGIBLES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 6.1. Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
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SECTION 7 OTHER PROVISIONS CONCERNING COLLATERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 7.1. Title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 7.2. Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 7.3. Lender's Duty of Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 7.4. Reinstatement of Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 7.5. Lender Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 7.6. Inspection of Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 7.7. Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 8 REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 8.1. Corporate Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 8.2. Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 8.3. No Breach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 8.4. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 8.5. Deferred Compensation Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 8.6. Litigation and Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 8.7. Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 8.8. Laws and Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 8.9. Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 8.10. Health Care Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 8.11. Cumulative Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 9 COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 9.1. Encumbrance of Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 9.2. Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 9.3. Condition and Repair . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 9.4. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 9.5. Accounting System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 9.6. Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 9.7. Further Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 9.8. ERISA Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 9.9. Restrictions on Merger, Consolidation, Sale of Assets, Issuance of Stock, etc . . . . . . . . . . . 21
Section 9.10. Health Care Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 9.11. Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 9.12. Subordinated Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 9.13. Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 9.14. Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 9.15. Equipment Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 9.16. Lender Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 10 EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 11 REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 11.1. Specific Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 11.2. Power of Attorney . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 11.3. Expenses Secured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 11.4. Equitable Relief . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 11.5. Remedies Are Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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SECTION 12 INDEMNITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 12.1. General Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 13 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 13.1. Delay and Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 13.2. Complete Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 13.3. Severability; Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 13.4. Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 13.5. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 13.6. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 13.7. Waiver of Trial by Jury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 13.8. Termination of Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SCHEDULES
1.1. LIENS
3.1. GRANT OF SECURITY INTEREST
4.2. MERGERS AND CONSOLIDATIONS
4.3. PURCHASE OF ASSETS OUTSIDE ORDINARY COURSE OF BUSINESS
6.1. CONTRACTS
8.6. LITIGATION AND PROCEEDINGS
9.11 PERMITTED DISTRIBUTIONS
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LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT ("Agreement") is entered into as of
January 31, 1996 by and among DVI Business Credit Receivables Corp., a Delaware
corporation ("Lender"), American Shared-CuraCare, a California general
partnership ("AS-CuraCare") and CuraCare, Inc., a Delaware corporation
("CuraCare") (AS-CuraCare and CuraCare, collectively and individually referred
to as "Borrower"), American Shared Hospital Services, a California corporation
("Guarantor") and Xxxxxx X. Xxxxx, M.D. ("Individual Guarantor").
SECTION 1
DEFINITIONS
SECTION 1.1. SPECIFIC DEFINITIONS. The following definitions
shall apply:
(a) "Account Debtors" shall mean Borrower's and its
Affiliates' customers and all other persons who are obligated or indebted to
Borrower or any Affiliate in any manner, whether directly or indirectly,
primarily or secondarily, contingently or otherwise, with respect to Accounts.
(b) "Accounts" shall mean all accounts, contract rights,
instruments, documents, chattel paper and obligations in any form owing to
Borrower or any Affiliate arising out of the sale or lease of goods or the
rendition of services by Borrower or any Affiliate whether or not earned by
performance; all credit insurance, guaranties, letters of credit, advises of
credit and other security for any of the above; all merchandise returned to or
reclaimed by Borrower or any Affiliate; and Borrower's Books relating to any of
the foregoing.
(c) "Advance" shall mean an advance of loan proceeds
constituting all or a part of the Loan.
(d) "Affiliate" shall mean with respect to any Person,
any other Person which directly or indirectly Controls, is Controlled by or is
under common Control with that Person.
(e) "Borrower's Books" shall mean all of Borrower's and
its Affiliates' books and records including but not limited to: minute books,
ledgers; records indicating, summarizing or evidencing Borrower's and its
Affiliates' assets, liabilities and the Accounts; all information relating to
Borrower's and its Affiliates business operations or financial condition; and
all computer programs, disk or tape files, printouts, runs and other
computer-prepared information and the equipment containing such information;
provided, however, that confidential patient records shall not be included
therein, except to the extent otherwise provided by law.
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(f) "Base Rate" shall mean the rate of interest announced
publicly by Bank of America, NT&SA in San Francisco, California, from time to
time as its base rate.
(g) "Borrowing Base" shall mean, on the date of
determination thereof, an amount equal to the lesser of (i) the sum of
seventy-five percent (75%) of the Net Collectible Value for each Retail Account
and eighty percent (80%) of the Net Collectible Value for each Institutional
Account, and (ii) one hundred percent of Borrower's gross receipts from
Institutional and Retail Accounts during the preceding sixty (60) day period;
provided, however, that workers compensation and personal injury claims may
never exceed ten percent (10%) of the Borrowing Base.
(h) "Closing Date" shall mean the date of the first
Advance of the Loan.
(i) "Collateral" shall have the meaning specified in
Section 3.1 hereof.
(j) "Control" shall mean (i) the ownership of a majority
of the voting power of all classes of voting stock of a corporation, or (ii)
the ownership of a majority of the beneficial interest in income and capital of
a person other than a corporation.
(k) "Distribution" shall mean, with respect to any shares
of capital stock or any warrant or right to acquire shares of capital stock or
any other equity security, (i) the retirement, redemption, purchase or other
acquisition, directly or indirectly, for value by the issuer of any such
security, except to the extent that the consideration therefor consists of
shares of stock, (ii) the declaration or (without duplication) payment of any
dividend in cash, directly or indirectly, on or with respect to any such
security, (iii) any investment in the holder of five percent (5%) or more of
any such security if a purpose of such investment is to avoid characterization
of the transaction as a Distribution, and (iv) any other cash payment
constituting a distribution under applicable laws with respect to such
security.
(l) "Eligible Accounts" shall mean Borrower's accounts
receivable from commercial insurance, Medicare, Medi-Cal, managed care
providers, workers' compensation and personal injury claims (collectively
referred to as "Retail Accounts"), which have been due and payable for 90 or
fewer days, and Borrower's account receivable under contracts with hospitals
and other similar health service providers (referred to as "Institutional
Accounts") which have been due and payable for 90 or fewer days.
(m) "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended, and all references to sections thereof shall include
such sections and any predecessor provisions thereto, including any rules or
regulations issued in connection therewith.
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(n) "ERISA Affiliate" shall mean each trade or business
(whether or not incorporated) that together with Borrower would be deemed a
"contributing sponsor" to a single employee plan within the meaning of Section
4001 of ERISA.
(o) "Event of Default" shall have the meaning specified
in Section 10 hereof.
(p) "Governmental Authority" shall mean any governmental
or political subdivision or any agency, authority, bureau, central bank,
commission, department or instrumentality thereof, or any court, tribunal,
grand jury or arbitrator, in any case whether foreign or domestic.
(q) "Guaranty" shall mean the Unconditional Continuing
Guaranty executed by Guarantor unconditionally guaranteeing Borrower's
Obligations under this Agreement.
(r) "Health Care Laws" shall mean all federal, state and
local laws specifically relating to health care providers and health care
services, including, but not limited to, Section 1877(a) of the Social Security
Act as amended by the Omnibus Budget Reconciliation Act of 1993, 42 USC Section
1395nn.
(s) "Indebtedness" of a Person shall mean (i) all items
(except items of capital stock, capital or paid-in surplus or of retained
earnings) which, in accordance with generally accepted accounting principles,
would be included in determining total liabilities as shown on the liability
side of the balance sheet of such Person as of the date as of which
Indebtedness is to be determined, including any lease which, in accordance with
generally accepted accounting principles would constitute indebtedness; (ii)
all indebtedness secured by any mortgage, pledge, security, lien or conditional
sale or other title retention agreement to which any property or asset owned or
held by such Person is subject, whether or not the indebtedness secured thereby
shall have been assumed; and (iii) all indebtedness of others which such Person
has directly or indirectly guaranteed, endorsed (otherwise then for the
collection or deposit in the ordinary course of business), discounted or sold
with recourse or agreed (contingently or otherwise) to purchase or repurchase
or otherwise acquire, or in respect of which such Person has agreed to supply
or advance funds (whether by way of loan, stock or equity purchase, capital
contribution or otherwise) or otherwise to become directly or indirectly
liable.
(t) "Individual Guaranty" shall mean the Unconditional
Continuing Guaranty executed by Individual Guarantor unconditionally
guaranteeing Borrower's Obligations under this Agreement.
(u) "Intercreditor Agreement" shall mean that certain
Intercreditor Agreement dated on or about the date hereof among Guarantor,
AS-CuraCare, CuraCare, Lender, DVI Financial Services
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Inc. ("DVIFS") and General Electric Company, a New York corporation acting
through GE Medical Systems ("GE").
(v) "Lender Expenses" shall mean (i) all costs or
expenses (including, without limitation, taxes and insurance premiums) required
to be paid by Borrower or its Affiliates under this Agreement or under any of
the other Loan Documents that are paid or advanced by Lender; (ii) filing,
recording, publication and search fees paid or incurred by Lender in connection
with Lender's transactions with Borrower; (iii) costs and expenses incurred by
Lender to correct any Event of Default or enforce any provision of the Loan
Documents or in gaining possession of, maintaining, handling, preserving,
storing, shipping, selling, and preparing for sale or advertising to sell the
Collateral, whether or not a sale is consummated, after the occurrence of an
Event of Default; (iv) costs and expenses of suit incurred by Lender in
enforcing or defending the Loan Documents or any portion thereof; (v) all costs
or expenses incurred by Lender to convert any data submitted to Lender by
Borrower or Guarantor to an acceptable form; and (vi) Lender's reasonable
attorney fees and expenses incurred (before or after execution of this
Agreement) in advising Lender with respect to, or in structuring, drafting,
reviewing, negotiating, amending, terminating, enforcing, defending or
otherwise concerning, the Security Documents or any portion thereof,
irrespective of whether suit is brought; excluding, however, all costs,
expenses and fees incurred in connection with the consummation of the
transactions contemplated by this Agreement and the Loan Documents.
(w) "Lien" shall mean any security interest, mortgage,
pledge, assignment, lien or other encumbrance of any kind, including any
interest of a vendor under a conditional sale contract or consignment and any
interest of a lessor under a capital lease.
(x) "Loan" shall mean each loan or any other loan or
loans made by Lender to Borrower pursuant to this Agreement.
(y) "Loan Documents" shall mean (i) this Agreement; (ii)
the Note; (iii) the Security Documents; (iv) any other agreements or documents
hereafter delivered to secure repayment of the Loan; (v) the Lock Box Agreement
and (vi) any other certificates, documents or instruments delivered by Borrower
to Lender pursuant to the terms of this Agreement.
(z) "Lock Box Agreement" shall mean the letter of
direction with respect to those certain Lock Box Agreements between Borrower
and First Interstate Bank of California and between Borrower and Bank of
America NT & SA.
(aa) "Net Collectible Percentage" shall mean seventy
percent (70%) with respect to Retail Accounts and ninety-five percent (95%)
with respect to Institutional Accounts.
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(ab) "Net Collectible Value" shall mean, for each type of
Eligible Account, the Net Collectible Percentage times the aggregate current
outstanding amount for such type of Eligible Account.
(ac) "Note" shall mean the Secured Promissory Note
executed by Borrower pursuant to the terms of this Agreement.
(ad) "Obligations" shall mean (i) the due and punctual
payment of all amounts due or become due under the Note; (ii) the performance
of all obligations of Borrower under this Agreement, the Note and all other
Loan Documents (iii) all extensions, renewals, modifications, amendments and
refinancings of any of the foregoing; (iv) all Lender Expenses; (v) all loans,
advances, indebtedness and other obligations owed by Borrower to Lender of
every description whether now existing or hereafter arising (including those
owed by Borrower to others and acquired by Lender by purchase, assignment, or
otherwise) and whether direct or indirect, primary or as guarantor or surety,
absolute or contingent, liquidated or unliquidated, matured or unmatured,
whether or not secured by additional collateral; and (vi) all loans, advances,
indebtedness and other obligations owed by Borrower to Lender under the Other
Loan Document of every description whether now existing or hereafter arising
(including those owed by Borrower to others and acquired by Lender by purchase,
assignment or otherwise) and whether direct or indirect, primary or as
guarantor or surety, absolute or contingent, liquidated or unliquidated,
matured or unmatured, whether or not secured by additional collateral.
(ae) "Other Loan Document" shall mean that certain Loan
and Security Agreement dated on or about the date hereof among Borrower,
Guarantor, Individual Guarantor and DVIFS.
(af) "Permitted Liens" shall mean (i) Liens for property
taxes and assessments or governmental charges or levies and Liens securing
claims or demands of mechanics and materialmen, provided that payment thereof
is not yet due or is being contested as permitted in this Agreement; (ii) Liens
of or resulting from any judgment or award, the time for the appeal or petition
for rehearing of which has not expired, or in respect of which Borrower is in
good faith prosecuting an appeal or proceeding for a review and in respect of
which a stay of execution pending such appeal or proceeding for review has been
secured; (iii) Liens and priority claims incidental to the conduct of business
or the ownership of properties and assets (including warehouse's and attorney's
Liens and statutory landlord's Liens); deposits, pledges or Liens to secure the
performance of bids, tenders, or trade contracts, or to secure statutory
obligations; and surety or appeal bonds or other Liens of like general nature
incurred in the ordinary course of business and not in connection with the
borrowing of money; provided that in each case the obligation secured is not
overdue or, if overdue, is being contested in good faith by appropriate actions
or proceedings; and further provided that any such
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warehouse's or statutory landlord's Liens have been subordinated to the Liens
of Lender in a manner satisfactory to Lender; and (iv) Liens existing on the
date of this Agreement that secure indebtedness outstanding on such date and
that are disclosed on Schedule 1.1 hereto;
(ag) "Person" shall mean an individual, corporation,
partnership, limited liability company, trust, unincorporated association,
joint venture, joint-stock company, government (including political
subdivisions), Governmental Authority or any other entity.
(ah) "Proceeds" shall mean all proceeds and products of
Collateral and all additions and accessions to, replacements of, insurance or
condemnation proceeds of, and documents covering Collateral; all property
received wholly or partly in trade or exchange for Collateral; all claims
against third parties arising out of damage, destruction or decrease in value
of the Collateral; all leases of Collateral; and all rents, revenues, issues,
profits and proceeds arising from the sale, lease, license, encumbrance,
collection or any other temporary or permanent disposition of the Collateral or
any interest therein.
(ai) "Security Documents" shall mean the Guaranty, the
Individual Guaranty and any agreement or instrument entered into between
Borrower and Lender or executed by Borrower, Guarantor or Individual Guarantor
and delivered to Lender in connection with this Agreement.
(aj) "Senior-Subordinated Notes" shall mean Guarantor's 16
1/2% Senior Subordinated Exchangeable Notes Due 1996 and Borrower's 14 3/4%
Senior Subordinated Notes Due 1996.
(ak) "Termination Date" shall mean May 31, 1997.
(al) "Unmatured Default" shall mean any event or condition
that, with notice, passage of time, or a determination by Lender or any
combination of the foregoing would constitute an Event of Default.
SECTION 1.2. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES AND
UNIFORM COMMERCIAL CODE. All financial terms used in this Agreement, other
than those defined in this Section 1, have the meanings accorded to them under
generally accepted accounting principles. All other terms used in this
Agreement, other than those defined in this Section 1, have the meanings
accorded to them in the Uniform Commercial Code as enacted in any applicable
jurisdiction.
SECTION 1.3. CONSTRUCTION.
(a) Unless the context of this Agreement clearly requires
otherwise, the plural includes the singular, the singular includes the plural,
the part includes the whole, "including" is
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not limiting, and "or" has the inclusive meaning of the phrase "and/or." The
words "hereof," "herein," "hereby," "hereunder" and other similar terms in this
Agreement refer to this Agreement as a whole and not exclusively to any
particular provision of this Agreement.
(b) Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed or resolved against Lender or Borrower,
whether under any rule of construction or otherwise. On the contrary, this
Agreement has been reviewed by each of the parties and its counsel and shall be
construed and interpreted according to the ordinary meaning of the words used
so as to accomplish the purposes and intentions of all parties hereto fairly.
SECTION 2
LOAN
SECTION 2.1. THE LOAN. Subject to the terms and conditions
and relying on the representations and warranties set forth herein, Lender
agrees to advance to Borrower, individually or collectively, from time to time
and Borrower agrees to borrow from Lender, revolving loans in an amount not to
exceed the lesser of (i) Four Million Dollars ($4,000,000) (the "Commitment
Amount"), and (ii) the Borrowing Base, which shall be evidenced by a Note. The
proceeds of the Loan shall be used by Borrower to repay outstanding
indebtedness of Borrower to DVI Business Credit Corporation under a Loan and
Security Agreement dated as of May 17, 1995 in the principal amount of
$3,887,291 and as a part of Borrower's working capital. The Borrowing Base
shall be calculated on a daily basis on the reports delivered to Lender
pursuant to Section 5.4.
SECTION 2.2. REVOLVING NATURE OF THE LOAN. On a daily basis
the Borrowing Base will be recalculated by adding daily xxxxxxxx to the prior
week's Eligible Accounts and subtracting deposits and adjustments, if
applicable and then multiplying this amount by the Net Collectable Percentage.
The Loan may be repaid or prepaid pursuant to Sections 2.5 or 2.6 and shall be
mandatorily prepaid pursuant to Section 2.6 by the Borrower. Subject to the
provisions of this Agreement, any amounts repaid may be reborrowed, up to the
amounts available under Section 2.1 at the time of such Borrowing, until
prepaid the business day immediately preceding the Termination Date. Lender's
commitments to make Advances shall expire, and the amount of Loan then
outstanding shall mature and be repaid by Borrower, without further action on
the part of Lender, on the Termination Date.
SECTION 2.3. INTEGRAL AMOUNTS OF LOANS. Advances may be of
any minimum amount.
SECTION 2.4. NOTICE OF BORROWING. Whenever Borrower desires
to borrow under Section 2.1, Borrower shall deliver to
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Lender a Drawdown Request Form, in a form reasonably satisfactory to Lender,
signed by an authorized officer no later than 11:00 a.m. at least one (1)
business day in advance of the proposed funding date. The Drawdown Request
Form shall specify (i) the funding date (which shall be a business day) with
respect to the requested Loan and (ii) the amount of the proposed Advance.
SECTION 2.5. REPAYMENT OF LOAN. All receipts from Borrower's
and its Affiliates' accounts receivable shall be deposited on a daily basis in
a bank depository lock box in accordance with the terms of the Lock Box
Agreement. Lender will debit the lock box account at the end of each day in
payment of (i) Lender's fees then due and payable in accordance with Section
2.7, (ii) amounts then due and payable under the Other Loan Document, and (iii)
on the first day of each month with respect to interest accrued on the Loan
during the preceding month. Excess receipts remaining in the lock box account
after the payment of fees and interest shall be applied to the principal amount
of the Loan on a daily basis. Lender will credit Borrower's account in
accordance with the foregoing priorities with respect to all funds debited net
of fees from the lock box account on a daily basis. Notwithstanding the
foregoing, after the occurrence and during the continuance of an Event of
Default, receipts in the lock box will be distributed in accordance with the
relative priorities set forth in and the terms and conditions of the
Intercreditor Agreement.
SECTION 2.6. PREPAYMENT. The Loan shall be subject to
prepayment or redemption in whole or in part at the end of any month prior to
the Termination Date. This Loan Agreement may not be terminated, and will not
be terminated by any prepayment, without payment of the termination fee
required pursuant to Section 2.7. If any aging report or Borrowing Base report
delivered to Lender pursuant to Section 5.4 indicates that the outstanding Loan
amount exceeds the Borrowing Base, Borrower shall immediately prepay a portion
of the outstanding Loan amount such that after such prepayment the Borrowing
Base equals or exceeds the outstanding Loan amount.
SECTION 2.7. LENDER'S FEES. On or before May 17, 1996,
Borrower shall pay Lender a renewal fee of Forty Thousand Dollars ($40,000).
On or before the first day of each month Borrower shall pay Lender a monthly
maintenance fee of Two Thousand Five Hundred Dollars ($2,500). On or before
the first day of each month Borrower shall pay Lender an unutilized loan fee of
equal to one-half of one percent (0.5%) of the difference between the
Commitment Amount and the outstanding Loan amount as of the immediately
previous month-end. If Borrower elects to terminate this Agreement at any time
before the Termination Date, Borrower shall pay Lender a termination fee of
Eighty Thousand Dollars ($80,000) if terminated prior to May 17, 1996 and Forty
Thousand Dollars ($40,000) thereafter. Lender's fees will be deducted, when
due, directly from receipts from accounts receivable deposited in accordance
with Section 2.5.
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SECTION 2.8. INTEREST ON THE LOANS. All Advances shall bear
interest on the unpaid principal amount thereof from the date made until paid
in full at a fluctuating rate equal to the Base Rate plus five percent (5.0%).
The outstanding principal balance of all other Obligations shall bear interest
from the date such Obligations are due until paid in full at a fluctuating rate
equal to the Base Rate plus five percent (5.0%). Interest accrued but not paid
pursuant to Section 2.5 shall be treated as an Advance if not otherwise paid
within five (5) days of the end of the month in which it accrues.
SECTION 2.9. CONDITIONS TO THE CLOSING. The obligation of
Lender to make Advances under this Agreement is subject to Lender's
determination that Borrower as of the date of the Advance has satisfied, and
continues to satisfy, the following conditions:
(a) The representations and warranties set forth in this
Agreement shall be true and correct on and as of the date hereof and shall be
true and correct in all material respects as of the date of the Advance and
Borrower shall have performed all obligations which were to have been performed
by it hereunder.
(b) Borrower shall have executed and delivered to Lender
(or shall cause to be executed and delivered to Lender by the appropriate
Persons) the following:
(i) this Agreement;
(ii) the Note;
(iii) UCC-1 Financing Statements;
(iv) the Guaranty;
(v) the Individual Guaranty;
(vi) the Intercreditor Agreement;
(vii) the Lock Box Agreement;
(viii) evidence satisfactory to Lender that each of
CuraCare, Guarantor and the general partners of AS-CuraCare is a corporation
duly formed, validly existing and in good standing in the state in which it was
formed and in each state in which it is authorized to do business;
(ix) certified copies of resolutions of the Board
of Directors of CuraCare, Guarantor and the general partners of AS-CuraCare
authorizing the execution and delivery of Loan Documents to be executed by
Borrower and Guarantor;
(x) copies of the Articles of Incorporation of
each of CuraCare, Guarantor and the general partners of AS-Curacare, certified
by the Secretary of State;
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(xi) copies of the Bylaws of each of CuraCare,
Guarantor and the general partners of AS-CuraCare certified by an officer
thereof;
(xii) a copy of the Partnership Agreement of
CuraCare certified by a general partner;
(xiii) the written opinion of counsel to Borrower
issued on the Closing Date and satisfactory to Lender in scope and substance;
and
(xiv) a certificate from an officer of Borrower
indicating that the representations and warranties contained herein are true
and correct as of the Closing Date.
(c) Neither an Event of Default nor an Unmatured Default
shall have occurred and be continuing.
(d) None of Borrower, Guarantor or Individual Guarantor
shall have suffered a material or adverse change in its business, operations or
financial condition from that reflected in the Financial Statements of
Borrower, Guarantor and Individual Guarantor delivered to Lender or otherwise.
(e) Lender shall have received such additional supporting
documents, certificates and assurances as Lender shall reasonably request which
shall be satisfactory to Lender in form and substance.
SECTION 3
SECURITY INTEREST
SECTION 3.1. GRANT OF SECURITY INTEREST. In order to secure
prompt payment and performance of all Obligations, Borrower hereby grants to
Lender a continuing first-priority pledge and security interest in the
following property of Borrower, subject to terms of the Intercreditor Agreement
(the "Collateral"), whether now owned or existing or hereafter acquired or
arising and regardless of where located subject only to Permitted Liens. This
security interest in the Collateral shall attach to all Collateral without
further action on the part of Lender or Borrower.
The Collateral shall consist of the following, subject in each
case only to Permitted Liens and the terms and conditions of the Intercreditor
Agreement, together with such third-party consents, lien waivers and estoppel
certificates as Lender shall reasonably require:
(a) all of Borrower's presently existing and hereafter
arising Accounts, contract rights, instruments, notes, drafts, documents,
chattel paper and all other forms of obligations owing to Borrower arising out
of the sale or lease of goods or the
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rendition of services, whether or not earned by performance, and any and all
credit insurance, guarantees and other security therefor, as well as all
merchandise returned to or reclaimed by Borrower and all of Borrower's Books
relating to any of the foregoing, and the Proceeds of any of the foregoing,
including the pledge to it of the Accounts, cash and non-cash Proceeds subject
only to Permitted Liens;
(b) all of Borrower's equipment and machinery listed on
Schedule 3.1 and all machine tools, motors, tools, parts, attachments,
accessories, accessions, replacements, upgrades, substitutions, additions and
improvements related thereto, wherever located, and the Proceeds of any of the
foregoing, including cash and non-cash Proceeds; excluding, however, the
Leksell Gamma Unit including Radiator Unit, Collimator Helmets, Stereotactic
Head Frame, Operating Table, TV System, Dose Planning System, Cobalt Source and
all components thereof, together with any additions, accessions, modifications,
improvements, replacements, substitutions and accessories thereto and therefor
or hereafter acquired.
(c) all of Borrower's presently existing and hereafter
acquired general intangibles (including, without limitation, any and all choses
or things in action, goodwill, patents, trade names, trademarks, blueprints,
drawings, purchase orders, computer programs, computer discs, computer tapes,
literature, reports, catalogues, deposit accounts and tax refunds) other than
goods and accounts, as well as all of Borrower's Books relating to any of the
foregoing, and the Proceeds of any of the foregoing, including cash and
non-cash Proceeds;
(d) all of Borrower's presently existing and hereafter
acquired inventory including, without limitation, goods held for sale or lease
or to be furnished under a contract of service, wherever located, and any
documents of title representing any of the above, and the Proceeds of any of
the foregoing, including cash and non-cash Proceeds;
provided, however, anything in the foregoing notwithstanding the Collateral
does not include, and Lender takes no security interest in, equipment leased by
GE or any other equipment lessor to Borrower or Borrower's leasehold interest
in such equipment.
SECTION 4
SPECIFIC REPRESENTATIONS
SECTION 4.1. NAME OF GUARANTOR; BORROWER.
(a) The exact corporate name of Guarantor is American
Shared Hospital Services. Guarantor was incorporated under the laws of the
State of California. The following are all previous legal names of Guarantor:
None. Guarantor uses the
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following trade names: None. The following are all other trade names used by
Guarantor in the past: None.
(b) The exact corporate name of CuraCare is CuraCare,
Inc. CuraCare was incorporated under the laws of the State of Delaware. The
following are all previous legal names of CuraCare: None. CuraCare uses the
following trade names: None. The following are all other trade names used by
CuraCare in the past: None.
(c) The exact name of AS-CuraCare is American
Shared-CuraCare. AS-CuraCare was formed under the laws of the State of
California. The following are all previous legal names of AS-CuraCare: None.
AS-CuraCare uses the following trade names: None. The following are all other
trade names used by AS-CuraCare in the past: None.
SECTION 4.2. MERGERS AND CONSOLIDATIONS. Except as disclosed
on Schedule 4.2, no entity has merged into any of Borrower or its Affiliates or
been consolidated with Borrower or any Affiliate.
SECTION 4.3. PURCHASE OF ASSETS. Except as disclosed on
Schedule 4.3 no entity has sold substantially all of its assets to Borrower or
any Affiliate or sold assets to Borrower or any Affiliate outside the ordinary
course of such seller's business at any time in the past.
SECTION 4.4. CHANGE OF NAME OR IDENTITY. Borrower shall not
change its or its Affiliates' name, business structure or identity or use or
permit any Affiliate to use any new trade name with prior notifications of
Lender or merge or permit any Affiliate to merge into or consolidate with any
other entity.
SECTION 4.5. CORPORATE STRUCTURE. Guarantor is the direct or
indirect holder of one hundred percent (100%) of the ownership interests,
whether stock or partnership interests, of CuraCare and AS-CuraCare.
Individual Guarantor is the holder of twenty-five percent (25%) or more of the
common stock of Guarantor. Such common stock is the sole authorized class of
stock in Guarantor.
SECTION 5
PROVISIONS CONCERNING ACCOUNTS
SECTION 5.1. OFFICE AND RECORDS OF BORROWER. Borrower's and
Guarantor's chief executive offices are located at: Four Xxxxxxxxxxx Xxxxxx,
Xxxxx 0000, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000. Borrower and Guarantor maintain
all of their records with respect to Accounts at 0000 Xxxx Xxxx Xxxxxx,
Xxxxxxx, Xxxxxxxxxx 00000. Borrower and Guarantor have not at any time within
the past four (4) months maintained their chief executive office or their
records
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with respect to Accounts at any other location and shall not do so hereafter
except with the prior written consent of Lender.
SECTION 5.2. REPRESENTATIONS. Borrower and Guarantor
represent and warrant that each Account at the time of its assignment to Lender
(a) will be owned solely by Borrower, (b) will be for a liquidated amount
maturing as stated in Borrower's Books; (c) will be a bona fide existing
obligation created by the rendition of services to Account Debtors or their
insured by Borrower in the ordinary course of its business; and (d) will not be
subject to any known deduction, offset, counterclaim, return privilege, or
other condition, except as reflected on Borrower's Books. Borrower and
Guarantor shall neither redate any invoices nor reissue new invoices in full or
partial satisfaction of old invoices nor permit an Affiliate to do so.
Allowances, if any, as between Borrower and its customers will be on the same
basis and in accordance with the usual customary practices of Borrower as they
exist on the date of this Agreement.
SECTION 5.3. RETURNS AND REPOSSESSIONS. Borrower shall
notify Lender within five (5) business days of occurrence of all material
claims asserted by Account Debtors.
SECTION 5.4. BORROWING BASE REPORTS. Borrower shall on a
weekly basis execute and deliver to Lender, in a form satisfactory to Lender,
(i) a Borrowing Base report; (ii) a detailed aging of Accounts; and (iii) a
charges, collections and adjustment summary for the week. Borrower shall on a
daily basis execute and deliver to Lender an updated Borrowing Base report
reflecting additional daily xxxxxxxx, writeoffs and deposits and all of
Borrower's accounts receivable data in a computer disc or tape format
acceptable to Lender. Lender shall periodically review Borrower's actual
adjustments to cash receipts and writeoffs, as well as Borrower's payor
profile. To the extent Borrower's adjustments, writeoffs and payor profile
materially changes, Lender may, in its sole discretion, change the Net
Collectible Percentage attributable to each type of account by written notice
to Borrower of such change.
SECTION 5.5. SCHEDULES OF ACCOUNTS. From time to time,
Borrower shall provide Lender with schedules describing in the aggregate all
Accounts created or acquired by Borrower; provided, however, that Borrower's
failure to execute and deliver such schedules or assignments shall not affect
or limit Lender's security interests and other rights in and to the Accounts.
Together with each schedule, Borrower shall, if requested by Lender, furnish
Lender with copies of Borrower's sales journals or invoices, customer purchase
orders or the equivalent, and original shipping or delivery receipts for all
goods sold, and Borrower warrants the genuineness thereof.
SECTION 5.6. LENDER'S RIGHTS. Any officer, employee or agent
of Lender shall have the right, at any time or times hereafter, in the name of
Lender or its nominee (including
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Borrower), with prior notice to Borrower, to verify the validity, amount or any
other matter relating to any Accounts by mail, telephone or otherwise; and all
reasonable costs thereof shall be payable by Borrower to Lender. Lender, or
its designee may at any time after default by Borrower hereunder notify
customers or Account Debtors that Accounts have been assigned to Lender or of
Lender's security interest therein and after default by Borrower hereunder
collect the same directly and charge all reasonable collection costs and
expenses to Borrower's account.
SECTION 5.7. DISCLAIMER OF LIABILITY. Lender shall not be
liable to Borrower or any third person for the correctness, validity or
genuineness of any instruments or documents released or endorsed to Borrower by
Lender (which shall automatically be deemed to be without recourse to Lender in
any event) or for the existence, character, quantity, quality, condition, value
or delivery of any goods purporting to be represented by any such documents;
and Lender, by accepting a Lien on the Collateral or by releasing any
Collateral to Borrower, shall not be deemed to have assumed any obligation or
liability to any supplier or creditor of Borrower or to any other third party.
Borrower agrees to indemnify and defend Lender and hold it harmless in respect
to any claim or proceeding arising out of any matter referred to in this
Section 5.7.
SECTION 5.8. POST DEFAULT RIGHTS. If an Event of Default has
occurred and is continuing hereunder, no discount, credit or allowance shall be
granted or permitted by Borrower to any Account Debtor. Lender may, after
default by Borrower, settle or adjust disputes and claims directly with Account
Debtors for amounts and upon terms that Lender considers advisable, and in such
cases, Lender will credit Borrower's account with only the net amounts received
by Lender in payment of such disputed Accounts, after deducting all Lender
Expenses incurred in connection therewith.
SECTION 5.9. ACCOUNTS OWED BY FEDERAL GOVERNMENT. If any
Accounts shall arise out of a contract with the United States of America or any
department, agency, subdivision or instrumentality thereof, Borrower shall
promptly notify Lender thereof in writing and take all other action requested
by Lender to protect Lender's Lien on such Accounts under the provisions of the
federal laws on assignment of claims.
SECTION 5.10. BUSINESS ACTIVITY REPORTS. Borrower and its
Affiliates have filed and shall file all legally required notices and reports
of its business activities with the California taxing authorities and the
appropriate Governmental Authority of each other jurisdiction in which Borrower
or an Affiliate is legally required to file such a notice or report.
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SECTION 6
PROVISIONS CONCERNING GENERAL INTANGIBLES
SECTION 6.1. CONTRACTS.
(a) Schedule 6.1. is a true and complete list of all
material contracts and agreements to which Borrower or any Affiliate is a
party.
(b) Neither Borrower nor any of its Affiliates shall
amend, modify or supplement any contract or agreement included in the
Collateral or waive any provision thereof other than in accordance with
Borrower's standard business practice, nor shall such standard business
practice be materially changed without Lender's consent, which shall not be
unreasonably withheld.
(c) Borrower and its Affiliates shall remain liable to
perform all of its duties and obligations under any contracts and agreements
included in the Collateral to the same extent as if this Agreement had not been
executed; and Lender shall not have any obligation or liability under such
contracts and agreements by reason of this Agreement or otherwise.
(d) Borrower and its Affiliates need not pay any amount
due under any contract or agreement listed on Schedule 6.1, nor otherwise
perform any action required under the terms of any such contract or agreement,
if such payment or performance is being contested in good faith by appropriate
proceedings promptly initiated and diligently conducted, if Lender is notified
in advance of such contest, and if Borrower or an Affiliate establishes any
reserve or other appropriate provision required by generally accepted
accounting principles and deposits with Lender cash or an acceptable bond
reasonably requested by Lender.
SECTION 7
OTHER PROVISIONS CONCERNING COLLATERAL
SECTION 7.1. TITLE. Borrower has good and marketable title
to the Collateral, and the Liens granted to Lender pursuant to this Agreement
are fully perfected first-priority Liens, subject only to the terms of the
Intercreditor Agreement and the proper filing of any financing statement or
notice necessary to provide notice to third parties of the existence of such
Liens, in and to the Collateral with priority over the rights of every person
in the Collateral, free, clear, and unencumbered by any Liens in favor of any
person other than Lender except for Permitted Liens.
SECTION 7.2. FURTHER ASSURANCES. Borrower shall execute and
deliver to Lender, concurrent with Borrower's execution of this Agreement and
at any time or times hereafter at the request of Lender, all financing
statements, continuation financing
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statements, security agreements, chattel mortgages, assignments, endorsements
of certificates of title, applications for titles, affidavits, reports,
notices, schedules of accounts, letters of authority and all other documents
Lender may reasonably request, in form satisfactory to Lender, to perfect and
maintain perfected Lender's Liens in the Collateral and in order to consummate
fully all of the transactions contemplated under the Loan Documents. Borrower
and Guarantor hereby irrevocably make, constitute and appoint Lender (and any
of Lender's officers, employees or agents designated by Lender) as Borrower's
and its Affiliates' true and lawful attorney with power to sign the name of
Borrower and its Affiliates on any of the above-described documents or on any
other similar documents that need to be executed, recorded or filed in order to
perfect or continue perfected Lender's Liens in the Collateral. The
appointment of Lender as Borrower's and its Affiliates' attorney is irrevocable
as long as any Obligations are outstanding. Any person dealing with Lender
shall be entitled to rely conclusively on any written or oral statement of
Lender that this power of attorney is in effect.
SECTION 7.3. LENDER'S DUTY OF CARE. Lender shall have no
duty of care with respect to the Collateral except that Lender shall exercise
reasonable care with respect to the Collateral in Lender's custody. Lender
shall be deemed to have exercised reasonable care if such property is accorded
treatment substantially equal to that which Lender accords its own property or
if Lender takes such action with respect to the Collateral as the Borrower
shall request or agree to in writing provided that no failure to comply with
any such request nor any omission to do any such act requested by the Borrower
shall be deemed a failure to exercise reasonable care. Lender's failure to
take steps to preserve rights against any parties or property shall not be
deemed to be failure to exercise reasonable care with respect to the Collateral
in Lender's custody. All risk, loss, damage or destruction of the Collateral
shall be borne by Borrower.
SECTION 7.4. REINSTATEMENT OF LIENS. If, at any time after
payment in full by Borrower of all Obligations and termination of Lender's
Liens, any payments on Obligations previously made by Borrower or any other
Person must be disgorged by Lender for any reason whatsoever (including,
without limitation, the insolvency, bankruptcy, or reorganization of Borrower
or such other Person), this Agreement and Lender's Liens granted hereunder
shall be reinstated as to all disgorged payments as though such payments had
not been made, and Borrower shall sign and deliver to Lender all documents and
things necessary to perfect all terminated Liens.
SECTION 7.5. LENDER EXPENSES. If Borrower or an Affiliate
fails to pay any moneys (whether taxes, assessments, insurance premiums or
otherwise) due to third persons or entities, fails to make any deposits or
furnish any required proof of payment or deposit or fails to discharge any Lien
not permitted hereby, all as required under the terms of this Agreement, then
Lender may, to
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the extent that it determines that such failure by Borrower or its Affiliates
could have a material adverse effect on Lender's interests in the Collateral,
in its discretion and without prior notice to Borrower, make payment of the
same or any part thereof. Any amounts paid or deposited by Lender shall
constitute Lender Expenses, shall become part of the Obligations, shall bear
interest at the rate of eighteen percent (18%) per annum, and shall be secured
by the Collateral. Any payments made by Lender shall not constitute (a) an
agreement by Lender to make similar payments in the future or (b) a waiver by
Lender of any Event of Default under this Agreement. Lender need not inquire
as to, or contest the validity of, any such expense, tax, security interest,
encumbrance or Lien and the receipt of the usual official notice for the
payment of moneys to a governmental entity shall be conclusive evidence that
the same was validly due and owing.
Borrower shall immediately and without demand reimburse Lender
for all sums expended by Lender that constitute Lender Expenses, and Borrower
hereby authorizes and approves all advances and payments by Lender for items
constituting Lender Expenses.
SECTION 7.6. INSPECTION OF RECORDS. During usual business
hours, Lender shall have the right to inspect and verify Borrower's Books in
order to verify the amount or condition of, or any other matter relating to,
the Collateral and Guarantor's and Borrower's financial condition and Borrower
agrees to reimburse Lender for its costs and expenses in doing so and to copy
and make extracts therefrom. Guarantor and Borrower waive the right to assert
a confidential relationship, if any, it may have with any accounting firm or
service bureau in connection with any information requested by Lender pursuant
to this Agreement and agrees that Lender may directly contact any such
accounting firm or service bureau in order to obtain such information.
SECTION 7.7. WAIVERS. Except as specifically provided for
herein, Borrower waives demand, protest, notice of protest, notice of default
or dishonor, notice of payment and nonpayment, notice of any default,
nonpayment at maturity, release, compromise, settlement, extension or renewal
of any or all commercial paper, accounts, documents, instruments, chattel paper
and guaranties at any time held by Lender on which Borrower may in any way be
liable.
SECTION 8
REPRESENTATIONS AND WARRANTIES
As of the date hereof Guarantor and Borrower each hereby
warrants and represents to Lender the following:
SECTION 8.1. CORPORATE STATUS. Each of CuraCare, Guarantor
and AS-CuraCare's general partners is a corporation validly existing and in
good standing under the laws of the state of its incorporation; AS-CuraCare is
a general partnership validly
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existing under the laws of the State of California; and each of such entities
is qualified and licensed to do business and is in good standing in any state
in which the conduct of its business or its ownership of property requires that
it be so qualified or licensed, and has the power and authority (corporate and
otherwise) to execute and carry out the terms of the Loan Documents to which it
is a party, to own its assets and to carry on its business as currently
conducted.
SECTION 8.2. AUTHORIZATION. The execution, delivery, and
performance by Borrower and Guarantor of this Agreement and each Loan Document
have been duly authorized by all necessary corporate or partnership action.
Borrower, Guarantor and Individual Guarantor have duly executed and delivered
this Agreement and each Loan Document to which they are a party, and each of
them constitutes a valid and binding obligation of Borrower, Guarantor and
Individual Guarantor, as applicable, enforceable according to its terms except
as limited by equitable principles and by bankruptcy, insolvency or similar
laws affecting the rights of creditors generally.
SECTION 8.3. NO BREACH. The execution, delivery and
performance by Borrower, Guarantor and Individual Guarantor of this Agreement
and each Loan Document to which they or an Affiliate is a party (a) will not
contravene any law or any governmental rule or order binding on Collateral; (b)
will not violate any provision of the articles of incorporation, bylaws or
partnership agreement, as applicable, of Borrower or its Affiliates; (c) will
not violate any agreement or instrument by which Borrower, its Affiliates or
Individual Guarantor, as applicable, is bound; (d) do not require any notice to
consent by any governmental body; and (e) will not result in the creation of a
Lien on any assets of Borrower or its Affiliates except the Lien to Lender
granted herein.
SECTION 8.4. TAXES. All assessments and taxes, whether real,
personal or otherwise, due or payable by or imposed, levied or assessed against
Borrower, its Affiliates or any of their property have been paid in full before
delinquency or before the expiration of any extension period; and Borrower and
its Affiliates have made due and timely payment or deposit of all federal,
state, and local taxes, assessments or contributions required of it by law,
except only for items that Borrower or its Affiliates are currently contesting
diligently and in good faith and that have been fully disclosed in writing to
Lender.
SECTION 8.5. DEFERRED COMPENSATION PLANS. Borrower and each
ERISA Affiliate have made all required contributions to all deferred
compensation plans to which such person is required to contribute, and neither
Borrower nor any ERISA Affiliate has any liability for any unfunded benefits of
any single-employer or multi-employer plans. Neither Borrower nor any ERISA
Affiliate is or at any time has been a sponsor of, provided, or maintained for
any employees any defined benefit plan.
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SECTION 8.6. LITIGATION AND PROCEEDINGS. Except as set forth
on Schedule 8.6 attached hereto, there are no outstanding judgments against
Borrower, its Affiliates or any of their assets and there are no actions or
proceedings pending by or against Borrower or its Affiliates before any court
or administrative agency. Borrower has no knowledge or belief of any pending,
threatened, or imminent litigation, governmental investigations, or claims,
complaints, actions, or prosecutions involving Borrower or its Affiliates,
except for ongoing collection matters in which Borrower or its Affiliates are
the plaintiff and except as set forth in Schedule 8.6 hereto.
SECTION 8.7. BUSINESS. Borrower and its Affiliates have all
franchises, authorizations, patents, trademarks, copyrights and other rights
necessary to advantageously conduct their business. They are all in full force
and effect and are not in known conflict with the rights of others. Neither
Borrower nor any of its Affiliates is a party to or subject to any agreement or
restriction that is so unusual or burdensome that it might have a material
adverse effect on Borrower's or its Affiliates' business, properties or
prospects.
SECTION 8.8. LAWS AND AGREEMENTS. Borrower and its
Affiliates are in compliance with all material agreements applicable to it,
including obligations to contribute to any employee benefit plan or pension
plan regulated by ERISA. Borrower and its Affiliates are in material
compliance with all laws applicable to it. For purposes of this Section 8.8,
compliance with the GE Affected Debt (as defined in the Intercreditor
Agreement) shall mean that an "Event of Default", as such term is defined with
respect to the GE Affected Debt, has not occurred and is continuing with
respect thereto.
SECTION 8.9. FINANCIAL CONDITION. All financial statements
and information relating to Borrower and its Affiliates that have been or may
hereafter be delivered by Borrower to Lender are accurate and complete and have
been prepared in accordance with generally accepted accounting principles
consistently applied. Borrower and its Affiliates have no material obligations
or liabilities of any kind not disclosed in that financial information, and
there has been no material adverse change in the financial condition of
Borrower or its Affiliates since the date of the most recent financial
statements submitted to Lender.
SECTION 8.10. HEALTH CARE LAWS.
(a) Borrower and its Affiliates have obtained all
permits, licenses and other authorizations that are required under Health Care
Laws applicable to Borrower and such Affiliates are in compliance in all
material respects with all terms and conditions of the required permits,
licenses and authorizations, and are also in compliance in all material
respects with all other limitations,
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restrictions, conditions, standards, prohibitions, requirements, obligations,
schedules and timetables contained in such Health Care Laws.
(b) Borrower is not aware of, and has not received notice
of, any past, present or future events, conditions, circumstances, activities,
practices, incidents, actions or plans that may interfere with or prevent
compliance or continued compliance in any material respect with Health Care
Laws.
(c) There is no civil, criminal or administrative action,
suit, demand, claim, hearing, notice or demand letter, notice of violation,
investigation or proceeding pending or threatened against Borrower or its
Affiliates, relating in any way to Health Care Laws.
SECTION 8.11. CUMULATIVE REPRESENTATIONS. The warranties,
representations and agreements set forth herein shall be cumulative and in
addition to any and all other warranties, representations and agreements that
Borrower shall give, or cause to be given, to Lender, either now or hereafter.
SECTION 9
COVENANTS
SECTION 9.1. ENCUMBRANCE OF COLLATERAL. Borrower shall not
create, incur, assume or permit to exist any Lien on any Collateral now owned
or hereafter acquired by Borrower or its Affiliates, except for Liens to Lender
and Permitted Liens.
SECTION 9.2. BUSINESS. Borrower and its Affiliates shall
engage primarily in business of the same general character as that now
conducted by Borrower and its Affiliates.
SECTION 9.3. CONDITION AND REPAIR. Borrower and its
Affiliates shall maintain in good repair and working order all properties used
in their business and from time to time shall make all appropriate repairs and
replacements thereof.
SECTION 9.4. TAXES. Borrower and its Affiliates shall pay
all taxes, assessments and other governmental charges imposed upon it or any of
its assets or in respect of any of its franchises, business, income or profits
before any penalty or interest accrues thereon, and all claims (including,
without limitation, claims for labor, services, materials and supplies) for
sums that have become due and payable and that by law have or might become a
Lien or charge upon any of its assets, provided that (unless any material item
or property would be lost, forfeited or materially impaired as a result
thereof) no such charge or claim need be paid if it is being contested in good
faith by appropriate proceedings promptly initiated and diligently conducted,
if Lender is notified in advance of such contest, and if Borrower or an
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Affiliate establishes any reserve or other appropriate provision required by
generally accepted accounting principles with Lender and deposits cash or an
acceptable bond in an amount equal to twice the amount of such charge or claim.
Borrower and its Affiliates shall make timely payment or deposit of all FICA
payments and withholding taxes required of it by applicable laws and will, upon
request, furnish Lender with proof satisfactory to Lender indicating that
Borrower or an Affiliate has made such payments or deposits.
SECTION 9.5. ACCOUNTING SYSTEM. Borrower and its Affiliates
at all times hereafter shall maintain a standard and modern system of
accounting in accordance with generally accepted accounting principles
consistently applied, with ledger and account cards or computer tapes, disks,
printouts and records that contain information pertaining to the Collateral
that may from time to time be requested by Lender. Borrower shall not modify
or change its method of accounting or enter into any agreement hereafter with
any third-party accounting firm or service bureau for the preparation or
storage of Borrower's accounting records without said accounting firm's or
service bureau's agreeing to provide to Lender information regarding the
Collateral and Borrower's financial condition.
SECTION 9.6. FINANCIAL STATEMENTS. Guarantor shall submit
monthly financial statements, showing a comparison of actual expenditures to
budgeted amounts, with respect to Guarantor on a consolidated basis, to Lender
as soon as available, and in any event within twenty (20) days of the end of
each month. Guarantor shall provide Lender with copies of all reports filed by
it with the Securities and Exchange Commission. Additionally, Guarantor will
submit audited financial statements with respect to Guarantor on a consolidated
basis to Lender as soon as available, and in any event within ninety (90) days
of the end of each fiscal year. With all financial statements, Guarantor will
also deliver a certificate of its chief financial officer attesting that no
Event of Default or Unmatured Default under the Agreement has occurred and is
continuing.
SECTION 9.7. FURTHER INFORMATION. Guarantor or Borrower
shall promptly supply Lender with such other information concerning its affairs
as Lender may reasonably request from time to time hereafter and shall promptly
notify Lender of any material adverse change in Borrower's financial condition
and any condition or event that constitutes a breach of or event that
constitutes an Event of Default under this Agreement. In addition, Borrower
and Guarantor authorize Lender to contact credit reporting agencies concerning
Guarantor's, Borrower's and its Affiliates' credit standing.
SECTION 9.8. ERISA COVENANTS. Guarantor and Borrower shall,
and shall cause each ERISA Affiliate to, comply with all applicable provisions
of ERISA and all other laws applicable to any deferred compensation plans with
which Guarantor, Borrower or any ERISA Affiliate is associated, and shall
promptly notify Lender of
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the occurrence of any event that could result in any material liability of
Borrower to any person to any person whatsoever with respect to any such plan.
SECTION 9.9. RESTRICTIONS ON MERGER, CONSOLIDATION, SALE OF
ASSETS, ISSUANCE OF STOCK, ETC. Unless authorized by Lender, Guarantor and
Borrower shall not, nor shall they permit any Affiliate, to:
(a) merge or consolidate with any Person;
(b) sell, lease or otherwise dispose of its assets in any
transaction or series of related transactions (other than sales in the ordinary
course of business);
(c) liquidate, dissolve or effect a recapitalization or
reorganization in any form of transaction;
(d) acquire interests in excess of Two Hundred Forty
Thousand Dollars ($240,000) in the aggregate in any calendar year in any
business (whether by purchase of assets, purchase of stock, merger or
otherwise);
(e) become subject to any agreement or instrument which
by its terms would restrict Guarantor's or Borrower's right or ability to
perform any of its obligations to Lender pursuant to the terms of the Loan
Documents (Lender acknowledges that compliance with the terms of the
Intercreditor Agreement shall not constitute a breach of this clause 9.9(e));
or
(f) authorize or issue any additional stock or equity
interest other than the issuance by Guarantor of its common stock.
SECTION 9.10. HEALTH CARE COVENANTS.
(a) Borrower and its Affiliates shall comply in all
material respects with, and will obtain all permits required by all Health Care
Laws applicable to Borrower and such Affiliates.
(b) Borrower shall promptly furnish to Lender a copy of
any communication from any governmental authority concerning any possible
violation of any Health Care Laws or any occurrence of which Borrower or an
Affiliate would be required to notify any governmental authority with
jurisdiction over Health Care Laws.
SECTION 9.11. DISTRIBUTIONS. Except as set forth on Schedule
9.11 hereto, Guarantor shall not make any Distributions and shall prohibit its
Affiliates that are not directly or indirectly wholly-owned by Guarantor from
making any Distributions.
SECTION 9.12. SUBORDINATED OBLIGATIONS. Neither Borrower nor
any Affiliate shall voluntarily prepay any principal (including the making of
any sinking fund payment), interest or any other amount in respect of any
obligations that are subordinate to
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Borrower's Obligations to Lender, including without limitation, its Obligations
to GE pursuant to the Deferral Note issued pursuant to that certain Agreement
dated November 1, 1994 among GE and Guarantor and its Affiliates ("Subordinate
Obligations"). Notwithstanding the foregoing, Guarantor shall be permitted to
prepay or repurchase any Senior-Subordinated Notes upon receipt by Lender of
prior notice of such Prepayment or repurchase and certification by Guarantor
that such prepayment or repurchase will not impair Borrower's ability to
perform its obligations under this Agreement.
SECTION 9.13. AMENDMENTS. Neither Borrower nor its
Affiliates shall amend any provision of any Subordinate Obligation if such
amendment would (i) affect any of the subordination provisions thereof, (ii)
advance the date of any required payment or prepayment thereunder, (iii) make
covenants therein more burdensome, when considered in their entirety, to
Borrower or its Affiliates, or (iv) reduce any default or grace period therein
provided, or (v) otherwise have a material adverse effect on the interests of
Lender.
SECTION 9.14. CAPITAL EXPENDITURES. Neither Borrower nor its
Affiliates shall make capital expenditures (excluding for purposes of this
Section 9.14 expenditures permitted pursuant to Section 9.15) in excess of Two
Hundred Forty Thousand Dollars ($240,000) in any transaction (or group of
related transactions) or One Million Dollars ($1,000,000) in the aggregate in
any calendar year.
SECTION 9.15. EQUIPMENT LEASES. Neither Borrower nor its
Affiliates shall become the lessee under any operating or capital lease (or
series of operating or capital leases with respect to assets that are related
to the operation of a unit of equipment (including, without limitation, the
unit, associated van or modular building, and related component parts)), if
the aggregate payments thereunder during any one calendar year exceed Two
Hundred Forty Thousand Dollars ($240,000) with respect to such unit of
equipment and assets that are related to the operation of such unit of
equipment; provided, however, that Borrower and its Affiliates are expressly
permitted to remain lessee under, and make all payments required by, any leases
with GE, entered into on or about or prior to the date of this Agreement,
subject in each case to the terms of the Intercreditor Agreement of applicable;
provided, further, Borrower notifies Lender of the existence of such leases on
or prior to the Closing Date.
SECTION 9.16. LENDER CONSENTS. Borrower or Guarantor may
request that Lender consent to any action prohibited by Sections 9.9 and 9.11
through 9.15 by delivering a written request which specifies in reasonable
detail the nature of the proposed action. Lender agrees to consider such
request in a timely fashion and will provide Borrower or Guarantor with a
written response to such request. Nothing in this Section 9.16 shall be
construed to require Lender to approve any such request.
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SECTION 10
EVENTS OF DEFAULT
An Event of Default shall be deemed to exist if any of the
following events shall have occurred and be continuing:
(a) Borrower fails to make any payment of principal or
interest or any other payment on the Note or any other Obligation when due and
payable, by acceleration or otherwise, and such failure shall continue for five
(5) business days after the payment is due;
(b) Borrower fails to observe or perform any covenant,
condition or agreement to be observed or performed pursuant to the terms hereof
or any Loan Document to which it is a party and such failure is not cured as
soon as reasonably practicable and in any event within thirty (30) days after
written notice thereof by Lender; provided, however, that if such failure can
not be cured within such thirty (30) day period, Borrower shall not be in
default if the cure is commenced within such thirty (30) day period and
thereafter such cure is diligently pursued to completion;
(c) A court enters a decree or order for relief in
respect of Borrower or an Affiliate in an involuntary case under any applicable
bankruptcy, insolvency, or other similar law then in effect, or appoints a
receiver, liquidator, assignee, custodian, trustee, or sequestrator (or other
similar official) of Borrower or an Affiliate or for any substantial part of
their property, or orders the windup or liquidation of Borrower's or an
Affiliate's affairs; or a petition initiating an involuntary case under any
such bankruptcy, insolvency, or similar law is filed against Borrower or an
Affiliate and is pending for sixty (60) days without dismissal;
(d) Borrower or an Affiliate commences a voluntary case
under any applicable bankruptcy, insolvency or other similar law then in
effect, makes any general assignment for the benefit of creditors, fails
generally to pay its debts as such debts become due, or takes corporate action
in furtherance of any of the foregoing;
(e) Final judgment for the payment of money on any claim
in excess of $100,000 is rendered against Borrower or an Affiliate and remains
undischarged for twenty (20) days during which execution is not effectively
stayed;
(f) Guarantor or Individual Guarantor revoke or attempt
to revoke their guaranty of any of the Obligations, or becomes the subject of
an insolvency proceeding of the type described in clauses (c) or (d) above with
respect to Borrower or fails to observe or perform any covenant, condition or
agreement to be performed under any Loan Document to which it is a party;
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(g) Borrower or an Affiliate makes any payment on account
of any Subordinate Obligations, other than payments specifically permitted by
the terms of such subordination or this Agreement;
(h) Any person holding any Subordinate Obligations
becomes the subject of any proceeding resulting in the termination of the
subordination arrangement, terminates the subordination arrangement or asserts
that it is terminated.
(i) Any Collateral or any part thereof is sold, agreed to
be sold, conveyed or allocated by operation of law or otherwise;
(j) Borrower or an Affiliate defaults under the terms of
any Indebtedness or lease involving total payment obligations of Borrower or an
Affiliate in excess of $100,000 and such default is not cured within the time
period permitted pursuant to the terms and conditions of such Indebtedness or
lease, or an event occurs that gives any creditor or lessor the right to
accelerate the maturity of any such indebtedness or lease payments; provided,
however, with respect to any default under the GE Affected Debt (as defined in
the Intercreditor Agreement) an Event of Default shall not be deemed to exist
under this Agreement until such default constitutes an "Event of Default", as
such term is defined with respect to the GE Affected Debt;
(k) Demand is made for payment of any Indebtedness in
excess of $100,000 that was not originally payable upon demand when incurred
but the terms of which were later changed to provide for payment upon demand;
(l) Borrower or an Affiliate is enjoined, restrained or
in any way prevented by court order from continuing to conduct all or any
material part of its business affairs;
(m) A judgment or other claim in excess of $100,000
becomes a Lien upon any or all of Borrower's or its Affiliates' assets, other
than a Permitted Lien;
(n) A notice of Lien, levy or assessment in excess of
$100,000 is filed of record with respect to any or all of Borrower's or its
Affiliates' assets by the United States Government, or any department, agency,
or instrumentality thereof, or by any state, county, municipal or other
Government Agency; or any tax or debt owing at any time hereafter to any one or
more of such entities becomes a Lien upon any or all of Borrower's or its
Affiliates' assets and the same is not paid on the payment date thereof, except
to the extent such tax or debt is being contested by Borrower or an Affiliate
as permitted in Section 8.4;
(o) There is a material impairment of the value of the
Collateral or priority of Lender's Liens on the Collateral;
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(p) Any of Borrower's or its Affiliates' assets in excess
of $100,000 or any Collateral are seized, subjected to a distress warrant,
levied upon or come into the possession of any judicial officer;
(q) Any representation or warranty made in writing to
Lender by any officer of Borrower in connection with the transaction
contemplated in this Agreement is materially incorrect when made;
(r) Guarantor shall be in default with respect to any of
its Obligations to Lender and such default is not cured within the time
provided permitted pursuant to the terms and conditions of such Obligation;
(s) Borrower shall be in default with respect to any of
its Obligations to Lender or an Event of Default or an Unmatured Default occurs
under the Other Loan Document;
(t) If the aggregate dollar value of all judgments,
defaults, demands, claims and notices of Liens under clauses (e), (j), (k), (m)
and (n) hereof exceeds $250,000; or
(u) Borrower shall fail to direct all receipts from
Accounts to the Lock Box.
SECTION 11
REMEDIES
SECTION 11.1. SPECIFIC REMEDIES. Upon the occurrence of any
Event of Default, subject in each case to the terms of the Intercreditor
Agreement:
(a) Lender may cease advancing money or extending credit
to or for the benefit of Borrower under this Agreement, under the Other Loan
Document, or under any other agreement between Borrower and Lender.
(b) Lender may declare all Obligations to be due and
payable immediately, whereupon they shall immediately become due and payable
without presentment, demand, protest or notice of any kind, all of which are
hereby expressly waived by Borrower.
(c) Lender may set off against the Obligations all
Collateral, balances, credits, deposits, accounts, or moneys of Borrower or its
Affiliates then or thereafter held with Lender, including amounts represented
by certificates of deposit.
(d) Lender may enter any premises of Borrower or its
Affiliates, with or without judicial process, and take possession of the
Collateral; provided however, that Lender may only exercise such remedy if it
may do so without a breach of the peace. Lender
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may remove the Collateral and may remove or copy all records pertaining
thereto, or Lender may remain on such premises and use the premises for the
purpose of collecting, preparing and disposing of the Collateral, without any
liability for rent or occupancy charges. Borrower shall, upon request of
Lender, assemble the Collateral and any records pertaining thereto and make
them available at a place designated by Lender that is reasonably convenient to
both parties.
(e) Lender may dispose of the Collateral in its
then-existing condition or, at its election, may take such measures as it deems
necessary or advisable to improve, process, finish, operation, demonstrate and
prepare for sale the Collateral, and may store, ship, reclaim, recover,
protect, advertise for sale or lease and insure the Collateral. Lender may use
and operate equipment of Borrower or its Affiliates in order to process or
finish inventory included in the Collateral. If any Collateral consists of
documents, Lender may proceed either as to the documents or as to the goods
represented thereby.
(f) Lender may pay, purchase, contest or compromise any
encumbrance, charge or Lien that, in the opinion of Lender, appears to be prior
or superior to its Lien and pay all reasonable expenses incurred in connection
therewith.
(g) Lender may (i) notify Account Debtors to make payment
on Accounts directly to Lender; (ii) settle, adjust, compromise, extend or
renew Accounts, whether before or after legal proceedings to collect such
Accounts have commenced; (iii) prepare and file any bankruptcy proofs of claim
or similar documents against any Account Debtor; (iv) prepare and file any
notice, assignment, satisfaction, or release of Lien, UCC termination statement
or any similar document; (v) sell or assign Accounts, individually or in bulk,
upon such terms, for such amounts, and at such time or times as Lender deems
advisable; (vi) complete the performance required of Borrower or its Affiliates
under any contract or agreement to which Borrower or an Affiliate is a party
and out of which Accounts arise or may arise.
(h) Lender may (i) endorse Borrower's or its Affiliates'
name on all checks, notes, drafts, money orders or other forms of payment of or
security for Accounts or other Collateral; (ii) sign Borrower's or its
Affiliates' name on drafts drawn on Account Debtors or issuers of letters of
credit; and (iii) notify the postal authorities in Borrower's or its
Affiliates' name to change the address for delivery of Borrower's or its
Affiliates' mail to an address designated by Lender, receive and open all mail
addressed to Borrower or an Affiliate, copy all mail, return all mail relating
to Collateral, and hold all other mail available for pickup by Borrower or an
Affiliate.
(i) Lender may sell the Collateral at public or private
sale and is not required to repossess Collateral before selling it. Any
requirement of reasonable notice of any disposition of the
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Collateral shall be satisfied if such notice is sent to Borrower, ten (10) days
prior to such disposition by any of the methods provided in Section 13.5
hereof. Borrower shall be credited with the net proceeds of such sale only
when they are actually received by Lender, and Borrower shall continue to be
liable for any deficiency remaining after the Collateral is sold or collected.
(j) If the sale is to be a public sale, Lender shall also
give notice of the time and place by publishing a notice one time at least five
(5) days before the date of the sale in a newspaper of general circulation in
the county in which the sale is to be held.
(k) To the maximum extent permitted by applicable law,
Lender may be the purchaser of any or all of the Collateral at any public sale
and shall be entitled, for the purpose of bidding and making settlement or
payment of the purchase price for all or any portion of the Collateral sold at
any public sale, to use and apply all or any part of the Obligations as a
credit on account of the purchase price of any Collateral payable by Lender at
such sale.
SECTION 11.2. POWER OF ATTORNEY. Guarantor and Borrower
hereby appoints Lender (and any of Lender's officers, employees, or agents
designated by Lender) as Guarantor's and Borrower's attorney, with power
whether before or after the occurrence of an Event of Default: (a) to endorse
Borrower's or its Affiliates' name on any checks, notes, acceptances, money
orders, drafts or other forms of payment or security that may come into
Lender's possession; (b) to sign Borrower's or its Affiliates' name on drafts
against Account Debtors, on schedules and assignments of Accounts, on
verifications of Accounts, and on notices to Account Debtors; (c) to notify the
post office authorities to change the address for delivery of Borrower's or its
Affiliates' mail to an address designated by Lender, to receive and open all
mail addressed to Borrower or an Affiliate and to retain all mail relating to
the Collateral and forward all other mail to Borrower or an Affiliate; (d) to
send requests for verification of Accounts; (e) to execute UCC Financing
Statements; and (f) to do all things necessary to carry out this Agreement.
The appointment of Lender as Borrower's attorney and each and every one of
Lender's rights and powers, being coupled with an interest, are irrevocable as
long as any Obligations are outstanding. Lender agrees not to exercise the
power granted in clauses 11.2(a) through 11.2(c) prior to the occurrence of an
Event of Default and agrees not to exercise the power granted in clause 11.2(d)
prior to notification of Borrower of its intent to do so, but such limitations
do not limit the effectiveness of such power of attorney at any time. Any
person dealing with Lender shall be entitled to rely conclusively on any
written or oral statement of Lender that this power of attorney is in effect.
Lender may also use Borrower's stationery in connection with exercising its
rights and remedies and performing the Obligations of Borrower.
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SECTION 11.3. EXPENSES SECURED. All expenses, including
attorney fees, incurred by Lender in the exercise of its rights and remedies
provided in this Agreement, in the Other Loan Document or by law shall be
payable by Borrower to Lender, shall be part of the Obligations, and shall be
secured by the Collateral.
SECTION 11.4. EQUITABLE RELIEF. Borrower recognizes that in
the event Borrower fails to perform, observe, or discharge any of its
Obligations or liabilities under this Agreement, no remedy of law will provide
adequate relief to Lender, and Borrower agrees that Lender shall be entitled to
temporary and permanent injunctive relief in any such case without the
necessity of proving actual damages.
SECTION 11.5. REMEDIES ARE CUMULATIVE. No remedy set forth
herein is exclusive of any other available remedy or remedies, but each is
cumulative and in addition to every other right or remedy given under this
Agreement or under any other agreement between Lender and Borrower or Guarantor
or now or hereafter existing at law or in equity or by statute. Lender may
pursue its rights and remedies concurrently or in any sequence, and no exercise
of one right or remedy shall be deemed to be an election. No delay by Lender
shall constitute a waiver, election or acquiescence by it. Borrower on its
behalf waives any rights to require Lender to (i) proceed against Guarantor or
any other party; or (ii) proceed against or exhaust any security held from
Guarantor. Lender may at any time and from time to time, without notice to, or
consent of, Borrower, and without affecting or impairing the obligation of
Borrower hereunder do any of the following: (i) renew or extend any
Obligations of Guarantor, or of any other party at any time directly or
contingently liable for payment of any of the Obligations of Guarantor; (ii)
accept partial payments of the Obligations of Guarantor; (iii) settle, release
(by operation of law or otherwise), compound, compromise, collect or liquidate
any of the Obligations of Guarantor and the security therefor in any manner;
(iv) consent to the transfer or sale of any security or bid and purchase at any
sale of any security of Guarantor. Borrower expressly agrees that the validity
of this Agreement and the Obligations of Borrower shall not be terminated,
affected or impaired by reason of the waiving, delaying, exercising or
non-exercising, of any of Lender's rights against Guarantor or as a result of
the substitution, release, repossession, sale, disposition or destruction of
any Collateral securing any Obligations of Guarantor. Lender shall not be
released or discharged, either in whole or in part, by Lender's failure or
delay to perfect or continue the perfection of any security interest in any
Collateral which secures the Obligations of Guarantor or to protect the
property covered by such security interest.
29
34
SECTION 12
INDEMNITY
SECTION 12.1. GENERAL INDEMNITY. Borrower shall protect,
indemnify and defend and save harmless Lender and its directors, officers,
agents and employees from and against any and all loss, cost, liability
(including negligence, tort and strict liability), expense, damage, suits or
demands (including fees and disbursements of counsel) on account of any suit or
proceeding before any Governmental Authority which arises from the transactions
contemplated in this Agreement or otherwise arising in connection with or
relating to the Loan and any security therefor, unless such suit, claim or
damages are caused by the negligence or intentional malfeasance of Lender or
its directors, officer, agents or employees. Upon receiving knowledge of any
suit, claim or demand asserted by a third-party that Lender believes is covered
by this indemnity, Lender shall give Borrower timely notice of the matter and
an opportunity to defend it, at Borrower's sole cost and expense, with legal
counsel acceptable to Lender. Lender may, at its option, also require Borrower
to so defend the matter. This obligation on the part of Borrower shall survive
the termination of this Agreement and the repayment of the Note.
SECTION 13
MISCELLANEOUS
SECTION 13.1. DELAY AND WAIVER. No delay or omission to
exercise any right shall impair any such right or be a waiver thereof, but any
such right may be exercised from time to time and as often as may be deemed
expedient. A waiver on one occasion shall be limited to that particular
occasion.
SECTION 13.2. COMPLETE AGREEMENT. This Agreement and the
Schedules are the complete agreement of the parties hereto and supersede all
previous understandings relating to the subject matter hereof. This Agreement
may be amended only by an instrument in writing that explicitly states that it
amends this Agreement and is signed by the party against whom enforcement of
the amendment is sought. This Agreement may be executed in counterparts, each
of which will be an original and all of which will constitute a single
agreement.
SECTION 13.3. SEVERABILITY; HEADINGS. If any part of this
Agreement or the application thereof to any person or circumstance is held
invalid, the remainder of this Agreement shall not be affected thereby. The
section headings herein are included for convenience only and shall not be
deemed to be a part of this Agreement.
30
35
SECTION 13.4. BINDING EFFECT. This Agreement shall be
binding upon and inure to the benefit of the respective legal representatives,
successors and assigns of the parties hereto; however, Borrower may not assign
any of its rights or delegate any of its Obligations hereunder. Lender (and
any subsequent assignee) may transfer and assign this Agreement and deliver the
Collateral to the assignee, who shall thereupon have all of the rights of
Lender; and Lender (or such subsequent assignee who in turn assigns as
aforesaid) shall then be relieved and discharged of any responsibility or
liability with respect to this Agreement and said Collateral.
SECTION 13.5. NOTICES. Any notices under or pursuant to this
Agreement shall be deemed duly sent when delivered in hand or when mailed by
registered or certified mail, return receipt requested, or when delivered by
courier or when transmitted by telex, telecopy, or similar electronic medium to
the following addresses:
To Borrower: American Shared Hospital Services
Xxxx Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx, M.D.
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
To Lender: DVI Business Credit Receivables
Corp.
x/x XXX Financial Services Inc.
000 Xxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxx
Executive Vice President
Telephone: (215) 230-
Telecopier: (000) 000-0000
Copies to: Xxxxxxx X. Xxxx, Esq.
Xxxxxx, White & Xxxxxx
000 Xxxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Either party may change such address by sending notice of the change
to the other party; such change of address shall be effective only upon actual
receipt of the notice by the other party.
31
36
SECTION 13.6. GOVERNING LAW. ALL ACTS AND TRANSACTIONS
HEREUNDER AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE
GOVERNED, CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF
PENNSYLVANIA.
SECTION 13.7. WAIVER OF TRIAL BY JURY. LENDER, GUARANTOR
AND BORROWER HEREBY WAIVE THE RIGHT TO TRIAL BY JURY OF ANY MATTERS ARISING OUT
OF THIS AGREEMENT OR ANY OF THE SECURITY DOCUMENTS OR THE CONDUCT OF THE
RELATIONSHIP BETWEEN LENDER, GUARANTOR AND BORROWER.
SECTION 13.8. TERMINATION OF AGREEMENTS. Borrower,
Guarantor, Individual Guarantor and DVI Business Credit Corporation as Lender
("DVIBC") entered into a Loan and Security Agreement dated as of May 17, 1995
(the "DVIBC Agreement") pursuant to which Borrower issued to DVIBC a Promissory
Note due May 31, 1997 in the principal amount of $4,000,000 and Guarantor and
Individual Guarantor each separately guaranteed the obligations of Borrower
under the DVIBC Agreement. Upon the satisfactory completion of the Closing
pursuant to this Agreement, Borrower will have repaid the loan made pursuant to
the DVIBC Agreement in full, the Promissory Note will be cancelled and the
DVIBC Agreement and any loan documents executed in connection therewith will be
terminated.
32
37
IN WITNESS WHEREOF, Borrower, Guarantor and Lender have executed this
Agreement by their duly authorized officers as of the date first above written.
BORROWER: LENDER:
CURACARE, INC. DVI BUSINESS CREDIT RECEIVABLES CORP.
By: /s/ Xxxxxx X. Xxxxx, M.D. By: /s/ Xxxxxx X. Xxxxxxxxx
-------------------------------------------------- ------------------------------------------------
Xxxxxx X. Xxxxx, M.D. Xxxxxx X. Xxxxxxxxx
President Senior Vice President and CFO
AMERICAN SHARED-CURACARE
WITH RESPECT TO SECTION 13.9 ONLY
By: American Shared Hospital Services, general partner
DVI BUSINESS CREDIT CORPORATION
By: /s/ Xxxxxx X. Xxxxx, M.D.
------------------------------------------
Xxxxxx X. Xxxxx, M.D.
President By: /s/ Xxxxxxx Xxxxx
------------------------------------------------
Xxxxxxx Xxxxx
Executive Vice President
By: MMRI, Inc., general partner
By: /s/ Xxxxxx X. Xxxxx, M.D.
------------------------------------------
Xxxxxx X. Xxxxx, M.D.
President
GUARANTOR:
AMERICAN SHARED HOSPITAL SERVICES
By: /s/ Xxxxxx X. Xxxxx, M.D.
--------------------------------------------------
Xxxxxx X. Xxxxx, M.D.
President
INDIVIDUAL GUARANTOR:
/s/ Xxxxxx X. Xxxxx, M.D.
-----------------------------------------------------------
XXXXXX X. XXXXX, M.D.
33
38
SCHEDULE 1.1
TO
LOAN AND SECURITY AGREEMENT
DATED AS OF JANUARY 31, 1996
Liens
13.9. UCC FILINGS
AMERICAN SHARED HOSPITAL SERVICES
California, as of January 26, 1996:
(a) Secured Parties: NEMLC Leasing Corp.
GE Capital Corp.
Original File No.: 89081110
Original File Date: 03/31/89 (continued 03/07/94)
Related Filing: Assignment (03/07/94)
(b) Secured Party: Instrumentation Laboratory
Original File No.: 91176330
Original File Date: 08/19/91
(c) Secured Parties: Bankers Leasing Assoc. Inc.
Allied Bank/Coal City National
Original File No.: 91124632
Original File Date: 06/07/91
Related Filing: Assignment (12/02/91)
Note: CuraCare Inc. is also named as a debtor.
(d) Secured Party: American National Leasing Corp.
Assignee: Foothill Bank
Original File No.: 91184795
Original File Date: 08/26/91
(e) Secured Party: LB Credit Corp.
Original File No.: 92071345
Original File Date: 04/14/92
(f) Secured Party: Siemens Credit Corp.
Original File No.: 92185177
Original File Date: 08/24/92
Related Filing: Amendment (11/08/94)
(g) Secured Party: GE Co.
Original File No.: 92190116
Original File Date: 09/02/92
Note: American Shared is listed as a debtor and not
American Shared Hospital Services. American
Shared-CuraCare is also listed as a debtor.
(h) Secured Party: GE Co.
Original File No.: 92190131
Original File Date: 09/02/92
-34-
39
Related Filing: Amendment (01/19/95)
Note: American Shared is listed as a debtor and not
American Shared Hospital Services. American
Shared-CuraCare is also listed as a debtor.
(i) Secured Party: GE Co.
Original File No.: 92209889
Original File Date: 09/28/92
Note: American Shared is listed as a debtor and not
American Shared Hospital Services. American
Shared-CuraCare is also listed as a debtor.
(j) Secured Party: GE Co.
Original File No.: 92209890
Original File Date: 09/28/92
Note: American Shared is listed as a debtor and not
American Shared Hospital Services. American
Shared-CuraCare is also listed as a debtor.
(k) Secured Party: Virtual Leasing Inc.
Original File No.: 92259836
Original File Date: 12/07/92
(l) Secured Party: Leasing Is Us Inc.
Assignee: Colonial Pacific Leasing
Original File No.: 92264223
Original File Date: 12/11/92
Related Filing: Amendment (10/06/95)
Note: CuraCare is also listed as a debtor.
(m) Secured Party: Leasing Is Us Inc.
Assignee: First Concord Acceptance Corp.
Original File No.: 93196808
Original File Date: 09/27/93
Note: CuraCare is also listed as a debtor.
(n) Secured Party: Southern Pacific Thrift & Loan
Association, Leasing Division
Original File No.: 93253914
Original File Date: 12/17/93
Related Filing: Assignment (06/23/95)
Note: CuraCare is also listed as a debtor.
(o) Secured Party: Southern Pacific Thrift & Loan Association
Original File No.: 93254003
Original File Date: 12/17/93
Related Filing: Assignment (05/25/95)
Note: American Shared-CuraCare and CuraCare, Inc.
are also listed as debtors.
(p) Secured Party: GE Co.
Original File No.: 92262311
Original File Date: 12/11/92
-35-
40
Note: American Shared is listed as a
debtor and not American Shared
Hospital Services. American Shared-
CuraCare and CuraCare are also
listed as debtors.
(q) Secured Party: GE Co.
Original File No.: 93120676
Original File Date: 06/18/93
Related Filing: Amendment (01/19/95)
Note: American Shared is listed as a debtor and not
American Shared Hospital Services. American
Shared-CuraCare and CuraCare are also listed
as debtors.
(r) Secured Party: GE Co.
Original File No.: 93120677
Original File Date: 06/18/93
Note: American Shared is listed as a debtor and not
American Shared Hospital Services. American
Shared-CuraCare and CuraCare are also listed
as debtors.
(s) Secured Party: GE Co.
Original File No.: 93120678
Original File Date: 06/18/93
Related Filing: Amendment (01/19/95)
Note: American Shared is listed as a debtor and not
American Shared Hospital Services. American
Shared-CuraCare and CuraCare are also listed
as debtors.
(t) Secured Party: GE Co.
Original File No.: 93149265
Original File Date: 07/27/93
Note: American Shared is listed as a debtor and not
American Shared Hospital Services. American
Shared-CuraCare and CuraCare are also listed
as debtors.
(u) Secured Party: Siemens Medical Systems, Inc.
Assignee: Siemens Credit Corporation
Original File No.: 9507960564
Original File Date: 03/16/95
Note: American Shared Hospital is listed
as a debtor and not American Shared
Hospital Services. American
Shared-CuraCare is also listed as a
debtor.
(v) Secured Party: DVI Business Credit Corporation*
Original File No.: 9514360419
Original File Date: 05/18/95
(w) Secured Party: DVI Financial Services Inc.
Original File No.: 0000000000
-36-
41
Original File Date: 05/18/95
(x) Secured Party: General Electric Company
Original File No.: 9514460191
Original File Date: 05/19/95
(y) Secured Party: AT&T Capital Leasing Service, Inc.
Original File No.: 9523060564
Original File Date: 08/17/95
Note: CuraCare/Modesto is listed as the
debtor and not CuraCare Inc.
American Shared Hospital (not
American Shared Hospital Services)
is also listed as a debtor.
Illinois, as of February 7, 1996:
No filings on record.
Kansas, as of January 30, 1996:
No filings on record.
* to be terminated
Oklahoma, as of January 25, 1996:
No filings on record.
Pennsylvania, as of February 16, 1996:
No filings on record.
AMERICAN SHARED - CURACARE
California, as of January 26, 1996:
1. Secured Party: GE Co.
Original File No.: 89325363
Original File Date: 12/22/89 (continued 07/21/94)
Related Filings: Amendment (08/04/93)
Amendment (01/19/95)
2. Secured Party: GE Co.
Original File No.: 91017745
Original File Date: 02/01/91
Related Filing: Amendment (01/19/95)
3. Secured Party: GE Co.
Original File No.: 91017746
Original File Date: 02/01/91
Related Filing: Amendment (01/19/95)
-37-
42
4. Secured Party: GE Co.
Original File No.: 91017747
Original File Date: 02/01/91
5. Secured Party: GE Co.
Original File No.: 91060030
Original File Date: 03/22/91
6. Secured Party: GE Co.
Original File No.: 91076388
Original File Date: 04/09/91
Related Filing: Amendment (03/18/94)
7. Secured Party: GE Co.
Original File No.: 91076389
Original File Date: 04/09/91
8. Secured Party: GE Co.
Original File No.: 91150097
Original File Date: 07/15/91
9. Secured Party: GE Co.
Original File No.: 91169730
Original File Date: 08/09/91
Related Filing: Amendment (01/19/95)
10. Secured Party: GE Co.
Original File No.: 91169731
Original File Date: 08/09/91
Related Filing: Amendment (02/07/94)
11. Secured Party: GE Co.
Original File No.: 91169732
Original File Date: 08/09/91
Related Filing: Amendment (01/19/95)
12. Secured Party: GE Co.
Original File No.: 91169747
Original File Date: 08/09/91
Related Filings: Amendment (08/17/93)
Amendment (01/19/95)
13. Secured Party: GE Co.
Original File No.: 91169748
Original File Date: 08/09/91
14. Secured Party: GE Co.
Original File No.: 91169749
Original File Date: 08/09/91
Related Filing: Amendment (01/19/95)
-38-
43
15. Secured Party: GE Co.
Original File No.: 91243163
Original File Date: 11/14/91
16. Secured Party: GE Co.
Original File No.: 91260896
Original File Date: 12/11/91
17. Secured Party: GE Co.
Original File No.: 92010597
Original File Date: 01/21/92
18. Secured Party: GE Co.
Original File No.: 92044808
Original File Date: 03/06/92
19. Secured Party: GE Co.
Original File No.: 92190116
Original File Date: 09/02/92
Note: American Shared (not American Shared Hospital
Services) is also listed as a debtor.
20. Secured Party: GE Co.
Original File No.: 92190131
Original File Date: 09/02/92
Related Filing: Amendment (01/19/95)
Note: American Shared (not American Shared Hospital
Services) is also listed as a debtor.
21. Secured Party: GE Co.
Original File No.: 92209889
Original File Date: 09/28/92
Note: American Shared (not American Shared Hospital
Services) is also listed as a debtor.
22. Secured Party: GE Co.
Original File No.: 92209890
Original File Date: 09/28/92
Note: American Shared (not American Shared Hospital
Services) is also listed as a debtor.
23. Secured Party: GE Co.
Original File No.: 92215127
Original File Date: 10/05/92
24. Secured Party: GE Co.
Original File No.: 92219927
Original File Date: 10/13/92
25. Secured Party: GE Co.
Original File No.: 92235312
Original File Date: 11/09/92
26. Secured Party: GE Co.
-39-
44
Original File No.: 92272827
Original File Date: 12/31/92
27. Secured Party: GE Co.
Original File No.: 93109475
Original File Date: 06/08/93
28. Secured Party: GE Co.
Original File No.: 93120679
Original File Date: 06/18/93
29. Secured Party: GE Co.
Original File No.: 93165290
Original File Date: 08/17/93
30. Secured Party: GE Co.
Original File No.: 93180328
Original File Date: 09/07/93
31. Secured Party: Siemens Credit Corporation
Original File No.: 93206731
Original File Date: 10/12/93
Related Filing: Amendment (10/24/94)
32. Secured Party: Southern Pacific Thrift & Loan Association
Original File No.: 93254003
Original File Date: 12/17/93
Related Filing: Assignment (05/25/95)
Note: American Shared Hospital Services and
CuraCare, Inc. are also listed as debtors.
33. Secured Party: GE Co.
Original File No.: 94018207
Original File Date: 02/02/94
34. Secured Party: GE Co.
Original File No.: 94018219
Original File Date: 02/02/94
35. Secured Party: GE Co.
Original File No.: 94048340
Original File Date: 03/18/94
36. Secured Party: General Electric Company
Original File No.: 0000000000
Original File Date: 09/20/94
37. Secured Party: General Electric Company
Original File No.: 9502160483
Original File Date: 01/17/95
-40-
45
38. Secured Party: General Electric Company
Original File No.: 9502160496
Original File Date: 01/17/95
39. Secured Party: GE Co.
Original File No.: 92262311
Original File Date: 12/11/92
Note: American Shared (not American Shared
Hospital Services) and CuraCare are also listed as debtors.
40. Secured Party: GE Co.
Original File No.: 93120676
Original File Date: 06/18/93
Related Filing: Amendment (01/19/95)
Note: American Shared (not American Shared Hospital
Services) and CuraCare are also listed as
debtors.
41. Secured Party: GE Co.
Original File No.: 93120677
Original File Date: 06/18/93
Note: American Shared (not American Shared Hospital
Services) and CuraCare are also listed as
debtors.
42. Secured Party: GE Co.
Original File No.: 93120678
Original File Date: 06/18/93
Related Filing: Amendment (01/19/95)
Note: American Shared (not American Shared Hospital
Services) and CuraCare are also listed as
debtors.
43. Secured Party: GE Co.
Original File No.: 93149265
Original File Date: 07/27/93
Note: American Shared (not American Shared Hospital
Services) and CuraCare are also listed as
debtors.
44. Secured Party: Siemens Medical Systems, Inc.
Assignee: Siemens Credit Corporation
Original File No.: 9507960564
Original File Date: 03/16/95
Note: American Shared Hospital (not
American Shared Hospital Services)
is also listed as a debtor.
45. Secured Party: Siemens Medical Systems, Inc.
Assignee: Siemens Credit Corporation
Original File No.: 9507960757
Original File Date: 03/16/95
-41-
46
46. Secured Party: Siemens Medical Systems, Inc.
Assignee: Siemens Credit Corporation
Original File No.: 9508160752
Original File Date: 03/20/95
47. Secured Party: Siemens Medical Systems, Inc.
Assignee: Siemens Credit Corporation
Original File No.: 9508160761
Original File Date: 03/20/95
48. Secured Party: Siemens Medical Systems, Inc.
Assignee: Siemens Credit Corporation
Original File No.: 9508160769
Original File Date: 03/20/95
49. Secured Party: General Electric Company
Original File No.: 9508060519
Original File Date: 03/20/95
50. Secured Party: General Electric Company
Original File No.: 9427660194
Original File Date: 09/20/94
51. Secured Party: DVI Business Credit Corporation*
Original File No.: 9514360428
Original File Date: 05/18/95
52. Secured Party: DVI Financial Services Inc.
Original File No.: 9514360445
Original File Date: 05/18/95
53. Secured Party: General Electric Company
Original File No.: 9525160523
Original File Date: 09/07/95
54. Secured Party: General Electric Company
Original File No.: 9601760266
Original File Date: 01/16/96
* to be terminated
Illinois, as of January 30, 1996:
1. Secured Party: General Electric Co.
Original File No.: 2438685
Original File Date: 06/14/88 (continued 05/21/93)
Related Filings: Amendment (08/17/88)
Amendment (08/22/89)
2. Secured Party: Xxxx Atlantic Tricon Leasing Corp.
Original File No.: 2871965
Original File Date: 07/12/91
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47
3. Secured Party: General Electric Co.
Original File No.: 3057039
Original File Date: 11/30/92
4. Secured Party: General Electric Co.
Original File No.: 3135105
Original File Date: 06/18/93
5. Secured Party: General Electric Co.
Original File No.: 3163640
Original File Date: 09/03/93
6. Secured Party: General Electric Co.
Original File No.: 3307318
Original File Date: 09/19/94
7. Secured Party: General Electric Co.
Original File No.: 3352630
Original File Date: 01/17/95
8. Secured Party: General Electric Co.
Original File No.: 3352631
Original File Date: 01/17/95
9. Secured Party: General Electric Co.
Original File No.: 3352632
Original File Date: 01/17/95
10. Secured Party: General Electric Co.
Original File No.: 3352633
Original File Date: 01/17/95
11. Secured Party: General Electric Co.
Original File No.: 3377633
Original File Date: 03/17/95
12. Secured Party: General Electric Co.
Original File No.: 3492876
Original File Date: 01/16/96
13. Secured Party: Colonial Pacific Leasing
Original File No.: 3498112
Original File Date: 01/26/96
Kansas, as of January 30, 1996:
No filings on record.
Oklahoma, as of January 25, 1996:
No filings on record.
-43-
48
Pennsylvania, as of February 16, 1996:
No filings on record.
CURACARE, INC.
California, as of January 26, 1996:
1. Secured Party: GE Co.
Original File No.: 93120676
Original File Date: 06/18/93
Related Filing: Amendment (01/19/95)
Note: American Shared Hospital Services and
American Shared-CuraCare are also listed as
debtors.
2. Secured Party: GE Co.
Original File No.: 93120677
Original File Date: 06/18/93
Note: American Shared Hospital Services and
American Shared-CuraCare are also listed as
debtors.
3. Secured Party: GE Co.
Original File No.: 93120678
Original File Date: 06/18/93
Related Filing: Amendment (01/19/95)
Note: American Shared Hospital Services and
American Shared-CuraCare are also listed as
debtors.
4. Secured Party: GE Co.
Original File No.: 93149265
Original File Date: 07/27/93
Note: American Shared Hospital Services and
American Shared-CuraCare are also listed as
debtors.
5. Secured Party: Leasing Is Us Inc.
Assignee: First Concord Acceptance Corp.
Original File No.: 93196808
Original File Date: 09/27/93
Note: American Shared Hospital Services and
American Shared-CuraCare are also listed as
debtors.
6. Secured Parties: Bankers Leasing Assoc. Inc.
Allied Bank/Coal City National
Original File No.: 91124632
Original File Date: 06/07/91
Related Filing: Assignment (12/02/91)
Note: American Shared Hospital Services is also
listed as a debtor.
7. Secured Party: Southern Pacific Thrift & Loan Association,
Leasing Division
Original File No.: 93253914 Original
File Date: 12/17/93
-44-
49
Related Filing: Assignment (06/23/95)
Note: American Shared Hospital Services is
also listed as a debtor.
8. Secured Party: Southern Pacific Thrift & Loan Association
Original File No.: 93254003
Original File Date: 12/17/93
Related Filing: Assignment (05/25/95)
Note: American Shared Hospital Services is
also listed as a debtor.
9. Secured Party: Marcap Corp.
Original File No.: 90195480
Original File Date: 08/02/90 (continued 05/01/95)
10. Secured Party: Marcap Corp.
Original File No.: 90233618
Original File Date: 09/20/90 (continued 05/01/95)
11. Secured Party: Xxxxx Financial Services Inc.
Original File No.: 92048133
Original File Date: 03/09/92
Related Filing: Amendment (07/27/92)
12. Secured Party: Med One Financial Group
Original File No.: 92176641
Original File Date: 08/12/92
13. Secured Party: Macrolease International Corp.
Assignee: Xxxxx Financial Corp.
Original File No.: 92178346
Original File Date: 08/14/92
14. Secured Party: Hewlett-Packard Co.
Original File No.: 92208197
Original File Date: 09/24/92
15. Secured Party: GE Co.
Original File No.: 92262311
Original File Date: 12/11/92
Note: American Shared Hospital Services
and CuraCare are also listed as
debtors.
16. Secured Party: Leasing Is Us Inc.
Assignee: Colonial Pacific Leasing
Original File No.: 92264223
Original File Date: 12/11/92
Related Filing: Amendment (10/06/95)
Note: American Shared Hospital Services and
American Shared-CuraCare are also listed as
debtors.
17. Secured Party: GE Co.
Original File No.: 93171398
Original File Date: 08/24/93
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18. Secured Party: GE Co.
Original File No.: 93223874
Original File Date: 11/04/93
19. Secured Party: Comlease Inc.
Assignee: CA Thrift & Loan
Original File No.: 94003821
Original File Date: 01/07/94
Related Filing: Amendment (04/04/94)
20. Secured Party: Leasing Is Us Inc.
Assignee: Advanta Leasing Corp.
Original File No.: 94081248
Original File Date: 04/25/94
21. Secured Party: Hewlett-Packard Co.
Original File No.: 94144369
Original File Date: 07/15/94
22. Secured Party: Xxxxx Financial Services, Inc.
Original File No.: 9434860003
Original File Date: 11/28/94
23. Secured Party: IBM Credit Corporation
Original File No.: 9500461153
Original File Date: 12/16/94
24. Secured Party: General Electric Company
Original File No.: 9503160987
Original File Date: 01/27/95
25. Secured Party: Hewlett-Packard Co.
Original File No.: 93211066
Original File Date: 10/18/93
26. Secured Party: DVI Business Credit Corporation*
Original File No.: 0000000000
Original File Date: 05/18/95
27. Secured Party: DVI Financial Services Inc.
Original File No.: 9514360456
Original File Date: 05/18/95
Related Filing: Amendment (05/24/95)
28. Secured Party: General Electric Company
Original File No.: 9520960850
Original File Date: 07/27/95
* to be terminated
-46-
51
29. Secured Party: General Electric Company
Original File No.: 9520960859
Original File Date: 07/27/95
30. Secured Party: General Electric Company
Original File No.: 9521260421
Original File Date: 07/27/95
31. Secured Party: General Electric Company
Original File No.: 9530060031
Original File Date: 10/26/95
32. Secured Party: AT&T Capital Leasing Service, Inc.
Original File No.: 9523060564
Original File Date: 08/17/95
Note: CuraCare/Modesto is listed as the
debtor and not CuraCare Inc.
American Shared Hospital (not
American Shared Hospital Services)
is also listed as a debtor.
Illinois, as of January 30, 1996:
1. Secured Party: U.S. Concord Inc.
Original File No.: 2412847
Original File Date: 04/12/88 (continued 03/29/93)
Related Filing: Assignment (01/24/89)
2. Secured Party: Marcap Corp.
Original File No.: 2764031 (continued 05/03/95)
Original File Date: 09/20/90
3. Secured Party: Med One Financial Group
Original File No.: 2870444
Original File Date: 07/09/91
4. Secured Party: Xxxxx Financial Corp.
Original File No.: 3036107
Original File Date: 10/01/92
5. Secured Party: General Electric Co.
Original File No.: 3353337
Original File Date: 01/18/95
6. Secured Party: General Electric Co.
Original File No.: 3358931
Original File Date: 01/31/95
-47-
52
Kansas, as of January 30, 1996:
No filings on record.
Oklahoma, as of January 25, 1996:
1. Secured Party: U.S. Concord Inc.
Original File No.: 028447
Original File Date: 05/12/88 (continued 03/30/93)
Related Filing: Assignment from Foothill Capital Corporation
(01/23/89)
Pennsylvania, as of February 16, 1996:
No filings on record.
-48-
53
SCHEDULE 3.1
TO
LOAN AND SECURITY AGREEMENT
DATED AS OF JANUARY 31, 1996
Grant of Security Interest
Tag No. Description Fac No. Serial No. Present Location
------- ----------- ------- ---------- ----------------
10216 &
10215 Mobile ADAC SPECT 1520 904073 Xxxxxxx Xxxxxxxxxx
00000 &
13000 Mobile ADAC SPECT 1521 904093 Xxxxxxx Xxxxxxxxxx
00000 Acuson 128 2454 3900 Xxxxxxxx XX
00000 Acuson 128 4521 2712 Xxx Xxxxxxx, XX
00000 H-P 500, Incl. color flow upgrade 1530 2543A02139 Xxxxxxx, XX
00000 H-P 1000 4620 2434A01305 Xxxxxxxxxx, XX
00000 H-P 1000 1534 2434A01306 Xxxxx Xxxx, XX
00000 H-P 1000 4620 2527A01930 Xxxxxxxxxx, XX
00000 Xxxxxxxx Cineview echo 1534 19101372 Xxxxx Xxxx, XX
00000 ATL UM-9 4520 103186 Xxxxxxxxx, XX
00000 ATL UM-9 4522 102685 Enterprise, AL
10136 ATL UM-9 4626 103187 Xxxxxxx, XX
00000 ATL UN-9 4521 100957 Xxxxxx, XX
00000 Hitachi EUB 450 4626 SE12845-803 Xxxxxxx, XX
00000 MRI Siemens GBS2 8015 Xxxxxx, XX
00000 ImageVue Digital Alys 4620 32340023 Xxxxxxxxxx, XX
00000 Picker 1200 SX in X & X 0000 000 Xxxxxxx, XX
00000 Picker 1200 SX in X & X 0000 000 Xxxxx Xxxxxx, XX
00000 Picker 1200 SX in X & X 0000 000 Xxxxxxxxxx, XX
00000 Picker 1200 SX in Calumet 1592 529M Xxxxxxxx, XX
00000 Picker 1200 SX Calumet 4670 5616 Xxxxxxxxx, XX
00000 Toshiba TCT 80AX in E & W 3575 3602266 Xxxxxxxx, XX
00000 Toshiba TCT 80AX in E & W 3672 4572512 Wylie, TX
54
10150(1) Toshiba TCT 80AX in E & W 3673 2582106 Windsor, NC
15032(2) Toshiba TCT 80AX in E & W 4674 4612413 Xxxxxxxxx, OK
(1) Customer has a $1.00 buyout option exercisable December 7, 1997
(2) Customer has a $1.00 buyout option exercisable February 28, 199
55
SCHEDULE 4.2
TO
LOAN AND SECURITY AGREEMENT
DATED AS OF JANUARY 31, 1996
Mergers and Consolidations
NONE
56
SCHEDULE 4.3
TO
LOAN AND SECURITY AGREEMENT
DATED AS OF JANUARY 31, 1996
Purchase of Assets Outside Ordinary Course of Business
NONE
57
SCHEDULE 6.1
TO
LOAN AND SECURITY AGREEMENT
DATED AS OF JANUARY 31, 1996
Material Contracts
1. Four Embarcadero Center Office Lease dated August 30,
1994 by and between Four Embarcadero Center Venture and ASHS.
2. Equipment Lease Agreement #000-0000000-000 dated
September 28, 1993, as amended, between Siemens Credit Corporation ("Siemens")
and AS-CuraCare.
3. Equipment Service Agreement #000-0000000-000 dated
March 1, 1995, as amended, between Siemens and AS-CuraCare.
4. Equipment Lease Agreement #000-0000000-000 dated
August 14, 1992, as amended, between Siemens and ASHS.
5. Agreement effective as of November 1, 1994, as
amended effective as of October 1, 1995, by and among General Electric Company
acting through GE Medical Systems ("GE") and ASHS, together with (a)
correspondence from GE regarding the transactions contemplated by the Loan
Documents and (b) the Intercreditor Agreement.
6. Operating Agreement for GK Financing, LLC effective
as of October 17, 1995, as amended.
58
SCHEDULE 8.6
TO
LOAN AND SECURITY AGREEMENT
DATED AS OF JANUARY 31, 1996
Litigation and Proceedings
1. Pursuant to a stipulation for settlement, settling a complaint for
Rent and other Damages for Breach of Lease filed November 17, 1994 in
San Francisco County Superior Court by 444 MLHIRP Partnership
("MLHIRP"), Plaintiff v. American Shared Hospital Services ("ASHS")
and DOES 1 through 10, Defendants, filed with the court on September
22, 1995, ASHS agreed to pay the following to MLHIRP until MLHIRP has
received $170,000: (i) $35,000 on or before August 25, 1995; (ii) 50%
of any funds received by ASHS in reimbursement of its security deposit
with its current landlord; and (iii) $6,428.57 per month, commencing
September 1, 1995. If ASHS defaults under the stipulation, ASHS has
stipulated to a judgment of $350,000 less any funds previously paid to
the stipulation.
2. Complaint for amounts owing to subcontractors by virtue of non-payment
by the general contractor on the E.H.S. Trinity Hospital construction
project. Liens have been filed against the project (not the property
of American Shared Hospital Services, CuraCare, Inc., and/or American
Shared CuraCare) in an amount of $78,471.79. The Company believes
that the claims are without merit and has filed a claim against the
general contractor for $165,652.79. The contractor has filed a
counter complaint to foreclose its lien of $165,652.79 which
complaint, the Company believes to be without merit.
3. Other litigation from time to time and in the normal course of
business of American Shared Hospital Services, CuraCare, Inc., and/or
American Shared - CuraCare resulting from Workers Compensation
incidents, vehicle accidents, and general and professional liability,
which matters are covered by the Companies, insurance policies and/or
for which the Companies have set aside financial reserves.
59
SCHEDULE 9.11
TO
LOAN AND SECURITY AGREEMENT
DATED AS OF JANUARY 31, 1996
Permitted Distributions
1. Guarantor entered into an Assignment and Assumption Agreement, dated
as of December 31, 1995, with American Shared Radiosurgery Services ("ASRS"), a
wholly owned subsidiary of Guarantor, pursuant to which, Guarantor assigned to
ASRS all of its rights, title and interest in to the contract between Guarantor
and the Regents of the University of California dated July 3, 1990 as amended
August 1, 1995 (the "Contract"), relating to the lease and operation of the
Gamma Knife located at The University of California at San Francisco.
In turn ASRS has assigned its rights in the Contract to GK Financing,
LLC ("GKF") an affiliate of Guarantor, pursuant to an Assignment and Assumption
Agreement, dated as of December 31, 1995.
2. Individual Guarantor owned the Gamma Knife located at USC University
Hospital ("USC") and had rights in a related customer contract with USC.
Individual Guarantor granted to Guarantor an option to acquire the Gamma Knife
and the related customer contract. Guarantor subsequently permitted Individual
Guarantor to extend a similar option directly to GKF, which exercised that
option effective February 3, 1996. As a result of the preceding transactions,
GKF now owns the Gamma Knife located at USC and the related underlying customer
contract with USC.
3. Under the Operating Agreement for GKF, effective as of October 17,
1995, between ASRS and GKV Investments, Inc., as amended, GKF shall make
monthly guaranteed payments to ASRS commencing January 1996 until and including
September 1998 in the amounts set forth on Exhibit H thereto and, with the
prior approval of GKF's Policy Committee, monthly net cash flow distributions
to ASRS commencing January 1996 until and including September 1998 in the
amounts set forth on Exhibit I thereto. In addition to such distributions,
after repayments of all amounts loaned by any member to GKF, GKF will
distribute, on an annual basis, the balance of its net cash flow, in excess of
agreed-upon cash reserves, to its members according to their percentage
ownership interest in GKF.
