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Exhibit 10.16
AMENDMENT NO. 1 TO SECURITY AGREEMENT
This AMENDMENT NO. 1 TO SECURITY AGREEMENT (this "Amendment"), dated as
of June 30, 2001, is entered into by and among TEAM HEALTH, INC., a Tennessee
corporation (the "Borrower"), the SUBSIDIARY GUARANTORS listed on the signature
pages hereof (the "Subsidiary Guarantors", and together with the Borrower, the
"Grantors") and FLEET NATIONAL BANK, as administrative agent (in such capacity,
the "Administrative Agent") for the Secured Parties.
R E C I T A L S:
A. The Grantors and the Administrative Agent have entered into that
certain Security Agreement, dated as of March 12, 1999 (the "Agreement"). Each
capitalized term used but not otherwise defined herein shall have the meaning
ascribed to such term by the Agreement.
B. The Grantors and the Administrative Agent wish to amend the
Agreement on the terms and conditions set forth below.
NOW THEREFORE, in consideration of the premises and the mutual
agreements herein contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Amendment of the Agreement. Upon the Effective Date (as defined in
Section 3 of this Amendment), the Agreement shall be amended as follows:
1.1 Sections 1(a), (b), (c) and (h) of the Agreement are
hereby amended by deleting each such Sections and replacing each in its
entirety to read as follows:
"(a) all of such Grantor's "equipment," as such term is
defined in the UCC, now owned or hereafter acquired, wherever
located, and, in any event, shall include, without limitation,
all machinery and equipment in all of its forms, whether now
owned or hereafter acquired, wherever located, all fixtures
and all parts thereof and all accessions thereto
(collectively, the "Equipment");"
"(b) all of such Grantor's "inventory," as such term is
defined in the UCC, now owned or hereafter acquired, wherever
located, and, in any event, shall include, without limitation,
all inventory in all of its forms, whether now owned or
hereafter acquired, wherever located, now or hereafter
existing (including, without limitation, (i) raw materials and
work in process, (ii) finished goods, (iii) materials used or
consumed in the manufacture or production thereof, (iv) goods
in which such Grantor has an interest in mass or a joint or
other interest or right of any kind (including, without
limitation, goods in which such Grantor has an interest or
right as consignee) and (v) goods that are returned to or
repossessed by such Grantor), and all accessions thereto,
products thereof and documents therefor (collectively,
"Inventory");"
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"(c) all of such Grantor's "accounts" (including, without
limitation, health-care-insurance receivables), "contract
rights", "chattel paper", "instruments", "deposit accounts"
and "Letter-of-credit rights", as each such term is defined in
the UCC, now owned or hereafter acquired, wherever located,
and, in any event, shall include, without limitation, all
accounts, contract rights, chattel paper, instruments, deposit
accounts, letter-of-credit rights, lockbox accounts and other
claims of any kind, whether now owned or hereafter acquired,
whether or not arising out of or in connection with the sale
or lease of goods or the rendering of services, and all rights
now or hereafter existing in and to all security agreements,
leases and other contracts securing or otherwise relating to
any such accounts, contract rights, chattel paper,
instruments, deposit accounts, letter-of-credit rights,
lockbox accounts or claims (any and all such accounts,
contract rights, chattel paper, instruments, deposit accounts
and claims, to the extent not referred to in clause (d), (e)
or (f) below, being the "Receivables", and any and all such
leases, security agreements and other contracts being the
"Related Contracts"); provided, however, that the Collateral
shall not include (i) those rights to payment under agreements
with Medicare, Medicaid or CHAMPUS to the extent, if any, that
(and only for so long as) the grant of a lien or security
interest in, or an assignment thereof would cause an
immediate, actual forfeiture of such Grantor's rights
thereunder or is prohibited by law and (ii) contracts (but not
excluding accounts receivable arising therefrom or related
thereto, except to the extent expressly consented to in
writing by the Administrative Agent) entered into by such
Grantor to the extent, if any, that (and only for so long as)
the grant of a lien or a security interest in, or assignment
thereof would cause an immediate, actual forfeiture of any of
such Grantor's rights thereunder or an immediate default
thereunder or is prohibited by law;"
"(h) without limitation of any of the foregoing, all of such
Grantor's "general intangibles", as such term is defined in
the UCC, now owned or hereafter acquired, wherever located,
and, in any event, shall include, without limitation, general
intangibles, including, without limitation, choses in action,
claims and causes of action or rights of recovery or set-off
of every kind and character, and the business of such Grantor
as a going concern;
1.2 Section 1(i) of the Agreement is hereby amended by (i)
deleting the reference therein to "clauses (a) - (h)" and replacing it
with a reference to "clauses (a) - (j)" and (ii) renumbering
Section1(i) to Section 1(k).
1.3 Section 1 of the Agreement is hereby amended by adding a
new Section 1(i) to the Agreement reading as follows:
"(i) all such Grantor's "commercial tort claims," as such term
is defined in the UCC, as described on Schedule VI;"
1.4 Section 1 of the Agreement is hereby amended by adding a
new Section 1(j) to the Agreement reading as follows:
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"(j) all of such Grantor's "documents," as such term is
defined in the UCC, now owned or hereafter acquired, wherever
located; and"
1.5 Section 1 of the Agreement is hereby amended by adding the
definition of the term "UCC" to the end of Section 1 reading as
follows:
"As used in this Agreement, the term "UCC" shall mean the
Uniform Commercial Code as now or hereafter in effect in the
State of New York; provided, that, in the event that, by
reason of mandatory provisions of law, any or all of the
attachment, perfection or priority of, or remedies with
respect to, the Administrative Agent's security interest in
any Collateral is governed by the Uniform Commercial Code as
enacted and if effect in a jurisdiction other than such state,
the term "UCC" shall mean the Uniform Commercial Code as
enacted and if effect in such other jurisdiction solely for
purposes of the provisions thereof relating to such
attachment, perfection, priority or remedies and for purposes
of definitions related to such provisions."
1.6 Section 12 of the Agreement is hereby amended by adding a
new Section 12(c) to the Agreement reading as follows:
"(c) Each Grantor hereby agrees that it will not (i) in one
transaction or a series of related transaction, merge into or
consolidate with any other entity, or sell all or
substantially all of its assets, (ii) change the state of its
incorporation or formation or (iii) change its corporate name
or legal identity; in each case, without providing the
Administrative Agent with thirty (30) days' prior written
notice."
1.7 Section 14 of the Agreement is hereby amended in its
entirety to read as follows:
"Section 14. Revised Article 9. The parties to this Agreement
acknowledge that revisions to Article 9 of the Uniform
Commercial Code ("Revised Article 9") will become effective in
various states on July 1, 2001 and that Revised Article 9 may
be adopted and become effective in one or more other states at
any time thereafter. In anticipation of the effectiveness of
Revised Article 9 and its resulting application to the Loan
Documents or any matters contemplated thereby, the
Administrative Agent and each Grantor hereby agree as follows:
(a) In applying the law of any state at any time on and after
the date Revised Article 9 is enacted (A) the Collateral
includes, without limitation, each of the following categories
as defined by Revised Article 9, and all property of such
Grantor included therein at any time owned or acquired: goods;
inventory; equipment; documents; instruments; accounts;
chattel paper; deposit accounts; letter-of-credit rights;
commercial tort claims; investment property; general
intangibles; supporting obligations; and all products and
proceeds of the foregoing; in each case wherever located, and
whenever owned or acquired, and (B) the Administrative Agent's
Lien in all such property created under this
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Agreement, as amended, shall continue in full force and effect
on and under and pursuant to Revised Article 9.
(b) The Administrative Agent may, at any time and from time to
time, file financing statements, continuation statements, and
amendments thereto that describe the Collateral as "all
assets" of such Grantor, or words of similar effect, and which
contain any other information required pursuant to Revised
Article 9 for the sufficiency of filing office acceptance of
any financing statement, continuation statement, or amendment,
and such Grantor agrees to furnish any such information to the
Administrative Agent promptly upon request. Any such financing
statement, continuation statement, or amendment may be signed
by the Administrative Agent on behalf of such Grantor and may
be filed at any time in any jurisdiction whether or not
Revised Article 9 is then in effect in that jurisdiction.
(c) Such Grantor shall, at any time and from time to time,
whether or not Revised Article 9 is in effect in any
particular jurisdiction, take such steps as the Administrative
Agent may reasonably request (A) to obtain an acknowledgement,
in form and substance reasonably satisfactory to the
Administrative Agent, of any bailee having possession of any
of the Collateral, stating that the bailee holds such
Collateral for the Administrative Agent, (B) to obtain
"control" of any letter-of-credit rights, or electronic
chattel paper (as such terms are defined by Revised Article 9
with corresponding provisions thereof defining what
constitutes "control" for such items of Collateral), with any
agreements establishing control to be in form and substance
reasonably satisfactory to the Administrative Agent, and (C)
otherwise to insure the continued perfection and priority of
the Administrative Agent's security interest in any of the
Collateral and of the preservation of its rights therein,
whether in anticipation of or following the effectiveness of
Revised Article 9 in any jurisdiction. If such Grantor shall
at any time, whether or not Revised Article 9 is in effect in
any particular jurisdiction, acquire a "commercial tort claim"
(as such term is defined in Revised Article 9) in excess of
$100,000, such Grantor shall promptly notify the
Administrative Agent thereof in writing, therein providing a
reasonable description and summary thereof, and upon delivery
thereof to the Administrative Agent, such Grantor shall be
deemed to thereby grant to the Administrative Agent (and such
Grantor hereby grants to the Administrative Agent) a security
interest and Lien in and to such commercial tort claim and all
proceeds thereof, all upon the terms of and governed by this
Agreement.
(d) Nothing contained in this Section 14 shall be construed to
narrow the scope of the Administrative Agent's Liens or the
perfection or priority thereof or to impair or otherwise limit
any of the rights, powers, privileges, or remedies of the
Administrative Agent or any Secured Party under the Loan
Documents."
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1.8 The Agreement is hereby amended by adding a new Schedule
VI, entitled "Commercial Tort Claims", attached hereto.
2. Reaffirmation and Grant of Security Interests.
2.1 Reaffirmation. Each Grantor hereby reaffirms all of its
obligations under the Agreement, as amended hereby, to the
Administrative Agent and the other Secured Parties.
2.2 Grant of Security Interests. Each of the Grantors hereby
assigns and pledges to the Administrative Agent, for the benefit of the
Administrative Agent and the ratable benefit of the Secured Parties,
and hereby grants to the Administrative Agent, for the benefit of the
Administrative Agent and the ratable benefit of the Secured Parties, a
security interest in the Collateral (as defined in the Agreement, as
amended hereby) to secure the payment of all the Secured Obligations.
3. Conditions Precedent to Amendments. This Amendment shall be
effective on the date (the "Effective Date") the Grantors and the Administrative
Agent shall have duly executed and delivered this Amendment to the
Administrative Agent.
4. Representations and Warranties. Each Grantor represents and
warrants to the Administrative Agent:
(a) The execution and delivery by such Grantor of this
Amendment and the performance by such Grantor of its obligations under
this Amendment are within the corporate powers of such Grantor, have
been duly authorized by all necessary corporate action on the part of
such Grantor, have received all necessary governmental approval (if any
shall be required), and do not and will not (i) violate any provision
of law or any order, decree or judgment of any court or other
government agency which is binding on such Grantor, (ii) contravene or
conflict with, or result in a breach of, any provision of any
organizational documents of such Grantor or of any agreement,
indenture, instrument or other document which is binding on such
Grantor or (iii) result in or require the creation or imposition of any
Lien on any property of such Grantor (other than Liens in favor of the
Administrative Agent).
(b) Each of the representations and warranties of such Grantor
contained in the Loan Documents, as amended hereby, is true and correct
in all material respects on and as of the date hereof as if made on the
date hereof, other than any such representations or warranties that, by
their terms, refer to a specific date other than the date hereof, in
which case, as of such specific date.
(c) As of the date hereof, after giving effect to this
Amendment, no Default under the Agreement or any other Loan Document
has occurred and is continuing.
5. Miscellaneous.
5.1 From and after the date hereof, each reference in the
Agreement to "this Agreement," "hereunder," "hereof," "herein," or
words of like import, and each reference
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to the Agreement in any of the other Loan Documents shall mean and be a
reference to the Agreement as amended hereby.
5.2 Except as specifically set forth above, the Agreement and
the Exhibits thereto shall remain unaltered and in full force and
effect and the respective terms, conditions or covenants thereof are
hereby in all respects ratified and confirmed. This Amendment shall
constitute a Collateral Document and a Loan Document for all purposes
under the Credit Agreement and the other Loan Documents.
5.3 This Amendment may be executed in any number of separate
counterparts, each of which, when so executed, shall be deemed an
original, and all of said counterparts taken together shall be deemed
to constitute but one and the same instrument.
5.4 THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK,
EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY
INTERESTS HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY
PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER
THAN THE STATE OF NEW YORK.
[signature pages follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized as of the date
first above written.
TEAM HEALTH, INC.
By:_______________________________________________
Name: H. Xxxx Xxxxxxxxxx
Title: President
Address: 0000 Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
TEAM HEALTH HOLDINGS, L.L.C.
By:_______________________________________________
Name: H. Xxxx Xxxxxxxxxx
Title: President and Chief Executive Officer
Address: c/o Madison Dearborn Partners
Three First Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
CLINIC MANAGEMENT SERVICES, INC.
EMERGICARE MANAGEMENT, INCORPORATED
HOSPITAL BASED PHYSICIAN SERVICES, INC.
TEAM RADIOLOGY, INC.
By:_______________________________________________
Name: H. Xxxx Xxxxxxxxxx
Title: President
Address: 0000 Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
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ALLIANCE CORPORATION
XXXXXXX X. XXXXXXXXXXX, INC.
CLINIC MANAGEMENT SERVICES, INC.
XXXXXX & XXXXXX, INC.
DRS. SHEER, XXXXXX AND ASSOCIATES, INC.
EMERGENCY COVERAGE CORPORATION
EMERGENCY MANAGEMENT SPECIALISTS, INC.
EMERGENCY PHYSICIAN ASSOCIATES, INC.
EMERGENCY PHYSICIANS OF MANATEE, INC.
EMERGENCY PROFESSIONAL SERVICES, INC.
INPHYNET CONTRACTING SERVICES, INC.
INPHYNET JOLIET, INC.
INPHYNET LOUISIANA, INC.
INPHYNET SOUTH BROWARD, INC.
XXXXXXXX XXXXXXX, INC.
IMBS, INC.
INPHYNET ANESTHESIA OF WEST VIRGINIA, INC.
INPHYNET HOSPITAL SERVICES, INC.
INPHYNET MEDICAL MANAGEMENT INSTITUTE, INC.
XXXX X. XXXXXXX, INC.
MED: ASSURE SYSTEMS, INC.
METROAMERICAN RADIOLOGY, INC.
NEO-MED, INC.
NORTHWEST EMERGENCY PHYSICIANS
INCORPORATED
PARAGON ANESTHESIA, INC.
PARAGON CONTRACTING SERVICES, INC.
PARAGON IMAGING CONSULTANTS, INC.
QUANTUM PLUS, INC.
XXXXX, XXXXXXXXXX & XXXXXXX CO.
XXXXXXXXX MARGULIES XXXXXXXX XXXXXXXXXX
RADIOLOGY ASSOCIATES OF HOLLYWOOD, INC.
SARASOTA EMERGENCY MEDICAL CONSULTANTS,
INC.
SOUTHEASTERN EMERGENCY PHYSICIANS OF
MEMPHIS, INC.
SOUTHEASTERN EMERGENCY PHYSICIANS, INC.
TEAM HEALTH FINANCIAL SERVICES, INC.
THBS, INC.
THE EMERGENCY ASSOCIATES FOR MEDICINE, INC.
VIRGINIA EMERGENCY PHYSICIANS, INC.
By:_______________________________________________
Name: H. Xxxx Xxxxxxxxxx
Title: Vice President
Address: 0000 Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
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XXXXXXX XXXXXXX PARTNERSHIP
By: Xxxxxxxx Xxxxxxx, Inc., its general partner
Xxxx X. Xxxxxxx, Inc., its general partner
By:_______________________________________________
Name: H. Xxxx Xxxxxxxxxx
Title: Vice President
Address: 0000 Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
MT. DIABLO EMERGENCY PHYSICIANS, a California
General Partnership
By: Xxxxxxxx Xxxxxxx, Inc., its general partner
Xxxx X. Xxxxxxx, Inc., its general partner
By:_______________________________________________
Name: H. Xxxx Xxxxxxxxxx
Title: Vice President
Address: 0000 Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
PARAGON HEALTHCARE LIMITED PARTNERSHIP
By: InPhyNet Hospital Services, Inc.,
its sole general partner
By:_______________________________________________
Name: H. Xxxx Xxxxxxxxxx
Title: Vice President
Address: 0000 Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
TEAM HEALTH BILLING SERVICES, L.P.
By: Team Health, Inc., its sole general partner
By:_______________________________________________
Name: H. Xxxx Xxxxxxxxxx
Title: President
Address: 0000 Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
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TEAM HEALTH SOUTHWEST L.P.
By: Team Radiology, Inc., its sole general partner
By:_______________________________________________
Name: H. Xxxx Xxxxxxxxxx
Title: President
Address: 0000 Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
FLEET NATIONAL BANK,
as Administrative Agent,
By:_______________________________________________
Title: Director
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SCHEDULE VI
COMMERCIAL TORT CLAIMS
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PARTIES CASE NO./COURT DESCRIPTION OF DISPUTE
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1. [to be provided by Grantors]
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