WCMA® REDUCING REVOLVERSM LOAN AND SECURITY AGREEMENT
EXHIBIT
10.3
![]() |
WCMA® REDUCING REVOLVERSM LOAN AND SECURITY AGREEMENT |
WCMA
REDUCING
REVOLVERSM LOAN AND SECURITY AGREEMENT NO. 81V-02074 (“Loan Agreement”) dated as of
September 22, 2006, between CONTINUCARE MDHC, LLC, a limited liability company organized and
existing under the laws of the State of Florida having its principal office at 0000 Xxxxxxxxx
Xxxxxx Xxxxx, Xxxxx 000, Xxxxx, XX 00000 (“Customer”), and XXXXXXX XXXXX BUSINESS FINANCIAL
SERVICES INC., a corporation organized and existing under the laws of the State of Delaware having
its principal office at 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, XX 00000 (“MLBFS”).
Pursuant to that certain WORKING CAPITAL MANAGEMENT® ACCOUNT AGREEMENT NO. 81V-02074 and the
accompanying Program Description (as the same may be, or have been, amended, modified or
supplemented, the “WCMA Agreement”) between Customer and MLBFS’ affiliate, XXXXXXX LYNCH, PIERCE,
XXXXXX & XXXXX INCORPORATED (“MLPF&S”), Customer opened, or shall prior to the Activation Date
open, a Working Capital Management Account pursuant to the “WCMA Service” and the “WCMA Program”
described in the WCMA Agreement and any documents incorporated therein. The WCMA Agreement is by
this reference incorporated as a part hereof. In conjunction therewith, Customer has requested that
MLBFS make a reducing revolving credit facility available to Customer (the “Reducing Revolver”) in
the amount and upon the terms hereafter specified, and, subject to the terms and conditions
hereafter set forth, MLBFS has agreed to provide a Reducing Revolver
for Customer.
Accordingly, and in consideration of the premises and of the mutual covenants of the parties
hereto, Customer and MLBFS hereby agree as follows:
1.1 Specific Terms. In addition to terms defined elsewhere in this Loan Agreement, when used herein
the following terms shall have the following meanings:
“Anti-Terrorism and Anti-Money Laundering Laws” shall mean (a) all applicable laws, regulations,
executive orders and government guidance on the prevention and detection of money laundering
(including 18 U.S.C. §§ 1956 and 1957), drug trafficking, terrorist-related activities, or
financial or other fraud; (b) the Bank Secrecy Act (31 U.S.C. §§ 5311 et seq. and 12 U.S.C.
§§1818(s), 1829(b) and 1951-1959) and its implementing regulations, and (c) all regulations and any
other requirements of any governmental authority (including, without limitation, the United States
Department of the Treasury Office of Foreign Assets Control) addressing, relating to, or attempting
to eliminate drug trafficking, terrorist acts and acts of war.
“Activation Date” shall mean the date upon which
MLBFS shall cause the WCMA Line of Credit to be
fully activated under MLPF&S’ computer system as part of the WCMA Program.
“Bankruptcy Event” shall mean any of the following: (i) a proceeding under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt, liquidation, winding up or
receivership law or statute shall be commenced, filed or consented to by any Credit Party; or (ii)
any such proceeding shall be filed against any Credit Party and shall not be dismissed or withdrawn
within sixty (60) days after filing; or (iii) any Credit Party shall make a general assignment for
the benefit of creditors; or (iv) any Credit Party shall generally fail to pay or admit in writing
its inability to pay its debts as they become due; or (v) any Credit Party shall be adjudicated a
bankrupt or insolvent; or (vi) any Credit Party shall take advantage of any other law or procedure
for the relief of debtors or shall take any action for the purpose of or with a view towards
effecting any of the foregoing; or (vii) a receiver, trustee, custodian, fiscal agent or similar
official for any Credit Party or for any substantial part of any of their respective property or
assets shall be sought by such Credit Party or appointed.
“Business Day” shall mean any day other than a Saturday, Sunday, federal holiday or other day on
which the New York Stock Exchange is regularly closed.
“Business Guarantor” shall mean every Guarantor that is not a natural person.
“Business Guarantor” shall mean every Guarantor that is not a natural person.
“Certificate of Compliance” shall mean, as applicable, that duly executed certificate,
substantially the same form as Exhibit B attached hereto to the extent such certificate shall be
applicable, of the president, chief financial officer or chief executive officer of Customer,
certifying as to the matters set forth in such certificate.
“Closing Date” shall mean the date upon which all conditions precedent to MLBFS’ obligation to make
the Loan shall have been met to the satisfaction of MLBFS.
“Collateral” shall mean all Accounts, Chattel Paper, Contract Rights, Inventory, Equipment,
Fixtures, General Intangibles, Deposit Accounts, Documents, Instruments, Investment Property and
Financial Assets of Customer, howsoever arising, whether now owned or existing or hereafter
acquired or arising, and wherever located; together with all parts thereof (including spare parts),
all accessories and accessions thereto, all books and records (including computer records) directly
related thereto, all proceeds thereof (including, without limitation, proceeds in the form of
Accounts and insurance proceeds), and the additional collateral described in Section 4.6 (b)
hereof.
“Commitment
Expiration Date” shall mean September 29, 2006.
“Commitment Fee” shall mean a fee of $30,000.00 due to MLBFS in connection with this Loan
Agreement.
“Credit Party” and “Credit Parties” shall mean, individually or collectively, the Customer, all
Guarantors and all Pledgers.
1
“Default” shall mean either an “Event of Default” as defined in Section 4.5 hereof, or an event
which with the giving of notice, passage of time, or both, would constitute such an Event of
Default.
“Default Rate” shall mean an annual interest rate equal to the lesser of: (i) two percentage points
over the Interest Rate; or (ii) the highest interest rate allowed by applicable law.
“Event
of Loss” shall mean the occurrence whereby any tangible Callateral is damaged beyond repair,
lost, totally destroyed or confiscated.
“Excess Interest” shall mean any amount or rate of interest (including the Default Rate and, to the
extent that they may be deemed to constitute interest, any prepayment fees, late charges and other
fees and charges) payable, charged or received in connection with any of the Loan Documents which
exceeds the maximum amount or rate of interest permitted under
applicable law.
“GAAP” shall mean the generally accepted accounting principles in effect in the United States of
America from time to time.
“General Funding Conditions” shall mean each of the following conditions precedent to the
obligation of MLBFS to make the Loan or any Subsequent WCMA Loan hereunder: (i) Customer shall have
validly subscribed to and continued to maintain the WCMA Account with MLPF&S, and the WCMA Account
shall then be reflected as an active “commercial” WCMA Account (i.e., one with line of credit
capabilities) on MLPF&S’ WCMA computer system; (ii) no Default or Event of Default shall have
occurred and be continuing or would result from the making of the Loan or such Subsequent WCMA Loan
by MLBFS; (iii) there shall not have occurred and be continuing any material adverse change in the
business or financial condition of any Credit Party; (iv) all representations and warranties of all
of the Credit Parties herein or in any of the Loan Documents shall
then be true and correct in all
material respects; (v) MLBFS shall have received this Loan Agreement and all of the other Loan
Documents (including, without limitation, each of the Loan Documents described in the definition of
“Real Property Funding Condition”), duly executed and filed or recorded where applicable, all of
which shall be in form and substance reasonably satisfactory to MLBFS; (vi) the Commitment Fee
shall have been paid in full; (vii) MLBFS shall have received, as and to the extent applicable,
copies of invoices, bills of sale, loan payoff letters and/or other evidence reasonably
satisfactory to it that the proceeds of the Loan will satisfy the Loan Purpose; (viii) MLBFS shall
have received evidence reasonably satisfactory to it as to the ownership of the Collateral and the
perfection and priority of MLBFS’ liens and security interests thereon, as well as the ownership of
and the perfection and priority of MLBFS’ liens and security interests on any other collateral for
the Obligations furnished pursuant to any of the Loan Documents; (ix) MLBFS shall have received
evidence reasonably satisfactory to it of the insurance required hereby or by any of the Loan
Documents; and (x) any additional conditions specified in the “WCMA Reducing Revolver Loan
Approval” letter executed by MLBFS with respect to the transactions contemplated hereby shall have
been met to the reasonable satisfaction of MLBFS.
“Guarantor” shall mean each Person obligated under a guaranty, endorsement or other undertaking by
which such Person guarantees or assumes responsibility in any capacity for the payment or
performance of any of the Obligations.
“Individual Guarantor” shall mean each Guarantor who is a natural person.
“Interest Due Date” shall mean the first Business Day of each calendar month during the term
hereof.
“Interest Rate” shall mean a variable per annum rate of interest equal to the sum of 2.40%, plus
the One-Month LIBOR. “One-Month LIBOR” shall mean, as of the date of any determination, the
interest rate then most recently published in the “Money
Rates” section of The Wall Street Journal as the one-month London Interbank Offered Rate (or if more than one such rate is published, the
highest of such rates). The interest Rate will change as of the date of publication in The Watt
Street Journal of a One-Month LIBOR that is different from that published on the preceding Business
Day. In the event that The Wall Street Journal shall, for any reason, fail or cease to publish the
One-Month LIBOR, MLBFS will choose a reasonably comparable index or source to use as the basis for
the Interest Rate.
“Loan” shall mean the specific Reducing Revolver by MLBFS to Customer pursuant to this Agreement
for the Loan Purpose and in the Loan Amount.
“Loan Amount” shall mean an amount equal to the lesser of: (i) 75% of the aggregate fair market
value of the Real Properties, as determined by the appraisal required to be furnished by Customer
to MLBFS pursuant hereto, (ii) the aggregate amount which Customer shall request be advanced by
MLBFS on account of the Loan Purpose on the Closing Date, or (iii) $6,000,000.00.
“Loan Documents” shall mean this Loan Agreement, any indenture, any guaranty of any of the
Obligations and all other security and other instruments, assignments, certificates, certifications
and agreements of any kind relating to any of the Obligations, whether obtained, authorized,
authenticated, executed, sent or received concurrently with or subsequent to this Loan Agreement,
or which evidence the creation, guaranty or collateralization of any of the Obligations or the
granting or perfection of liens or security interests upon any Collateral or any other collateral
for the Obligations, including any modifications, amendments or restatements of the foregoing.
“Loan Purpose” shall mean the purpose for which the proceeds of the Loan will be used; to wit: to
finance the acquisition of the Real Properties as hereafter defined, and to refinance equipment
debt and working capital debt being assumed with the acquisition of Miami-Dade Health Centers and
affiliated companies.
“Location of Tangible Collateral” shall mean the address of Customer set forth at the beginning of
this Loan Agreement, together with any other address or addresses set forth on an exhibit hereto as
being a Location of Tangible Collateral.
“Maximum WCMA Line of Credit” shall mean the maximum aggregate line of credit which MLBFS will
extend to Customer subject to the terms and conditions hereof, as the same shall be reduced each
month in accordance with the terms hereof. On the Closing Date, the Maximum WCMA Line of Credit
will equal the Loan Amount.
2
“Obligations” shall mean all liabilities, indebtedness and other obligations of Customer and
Continucare Corporation (“CC”) to MLBFS, howsoever created, arising or evidenced, whether now
existing or hereafter arising, whether direct or indirect, absolute or contingent, due or to become
due, primary or secondary or joint or several, and, without limiting the generality of the
foregoing, shall include principal, accrued interest (including without limitation interest
accruing after the filing of any petition in bankruptcy), all advances made by or on behalf of
MLBFS under the Loan Documents, collection and other costs and expenses incurred by or on behalf of
MLBFS, whether incurred before or after judgment, and all present and future liabilities,
indebtedness and obligations of Customer under this Loan Agreement (as amended from time to time)
and under that certain WCMA Reducing Revolver Loan and Security Agreement No. 81V-02075 (as amended
from time to time), and of CC under that certain WCMA Loan and Security Agreement No. 81V-07064 (as
amended from time to time).
“Permitted Liens” shall mean with respect to the Collateral: (i) liens for current taxes not yet
due and payable, other non-consensual liens arising in the ordinary course of business for sums not
due, and, if MLBFS’ rights to and interest in the Collateral are not materially and adversely
affected thereby, any such liens for taxes or other non-consensual liens arising in the ordinary
course of business being contested in good faith by appropriate proceedings; (ii) liens in favor of
MLBFS; (iii) liens which will be discharged with the proceeds of the initial WCMA Loan; and (iv)
any other liens expressly permitted in writing by MLBFS.
“Person” shall mean any natural person and any corporation, partnership (general, limited or
otherwise), limited liability company, trust, association, joint venture, governmental body or
agency or other entity having legal status of any kind.
“Xxxxxxx” shall mean each Person who at any time provides collateral, or otherwise now or
hereinafter agrees to grant MLBFS a security interest in any assets as security for Customer’s
Obligations.
“Real Properties” shall mean the parcels of real property and improvements thereon commonly known
as 000 Xxxxxxxxxx Xxxxxx, Xxxxxxxxx, XX 00000 and 0000 Xxxx Xxxxxx,
Xxxxxxx, XX 00000.
“Real Property Funding Condition” shall mean that Customer, at Customer’s expense, shall have
furnished or caused to be furnished to MLBFS all of the following, in form and substance reasonably
satisfactory to MLBFS: (i) a first mortgage or deed of trust upon each of the Real Properties in
favor of MLBFS (including an assignment of rents and a security agreement granting to MLBFS a first
security interest upon all fixtures now or hereafter located upon each of the Real Properties);
(ii) a policy or commitment for a policy of ALTA mortgagee’s title insurance insuring MLBFS’ lien
upon each of the Real Properties for the full amount of the Loan, issued by Chicago Title Insurance
Company, Lawyers Title Insurance Company or one of their agents, or another title company selected
by MLBFS, with such special endorsements as may reasonably be required by MLBFS and subject only to
exceptions reasonably acceptable to MLBFS; (iii) if the Real Property is over 25 years old, a
Property Condition Report prepared by an engineer selected by MLBFS setting forth any deferred
maintenance on each of the Real Properties and capital improvements required to maintain the Real
Properties during the term of the credit facilities being provided by MLBFS; (iv) a Phase 1
Environmental Audit Report on each of the Real Properties, prepared by an environmental specialist
selected by MLBFS, disclosing no conditions that are reasonably unacceptable to MLBFS; (v) an
appraisal of each of the Real Properties prepared by an M.A.I. appraiser selected by MLBFS
demonstrating an aggregate fair market value of $6,670,000.00; (vi) a current as-built ALTA survey
of each of the Real Properties certified in favor of MLBFS and the title insurance company; and
(vii) such other agreements, documents and instruments in connection with each of the Real
Properties or MLBFS’ lien thereon as MLBFS or the title insurance company may reasonably require.
“Subsequent WCMA Loan” shall mean each WCMA Loan other than the Loan, including, without
limitation, each WCMA Loan to pay accrued interest.
“Termination Date” shall mean the first to occur of: (i) the last Business Day of the sixtieth
(60th) full calendar month following the Closing Date, or (ii) if earlier, the date of termination
of the WCMA Line of Credit pursuant to the terms hereof.
“WCMA Account” shall mean and refer to the Working Capital Management Account of Customer with
MLPF&S identified as WCMA Account No. 81V-02074 and any successor Working Capital Management
Account of Customer with MLPF&S.
“WCMA Line of Credit” shall mean the line of credit funded by MLBFS through the WCMA Account.
“WCMA Loan” shall mean each advance made by MLBFS pursuant to the WCMA Line of Credit, including
the Loan and each Subsequent WCMA Loan.
“WCMA Loan Balance” shall mean an amount equal to the aggregate unpaid principal balance of all
WCMA Loans.
“UCC” shall mean the Uniform Commercial Code of Illinois as in effect in Illinois from time to
time.
1.2 Other Terms. Except as otherwise defined herein: (i) all terms used in this Loan Agreement
which are defined in the UCC shall have the meanings set forth in the UCC, and (ii) capitalized
terms used herein which are defined in the WCMA Agreement (including, without limitation, “Money
Accounts”, “Minimum Money Accounts Balance”, and “WCMA Directed Reserve Program”) shall have the
meanings set forth in the WCMA Agreement; and (iii) accounting terms not defined herein shall have
the meaning ascribed to them in GAAP.
1.3 UCC Filing. Customer hereby authorizes MLBFS to file a record or records (as defined or
otherwise specified under the UCC), including, without limitation, financing statements, in all
jurisdictions and with all filing offices as MLBFS may determine, in its sole discretion, are
necessary or advisable to perfect the security interest granted to MLBFS herein. Such financing
statements may describe the Collateral in the same manner as described herein or may contain an
indication or description of collateral that describes such property in any other manner as MLBFS
may determine, in its sole discretion, is necessary, advisable or prudent to ensure the perfection
of the security interest in the Collateral granted to the MLBFS herein.
3
2.1 Commitment. Subject to the terms and conditions hereof, MLBFS hereby agrees to make the Loan
to Customer, and Customer hereby agrees to borrow the Loan from MLBFS. Except as otherwise provided
in Section 3.1 hereof, the entire proceeds of the Loan will be disbursed by MLBFS out of the WCMA
Line of Credit either directly to the applicable third party or parties on account of the Loan
Purpose or to reimburse Customer for amounts directly expended by it for the Loan Purpose; all as
directed by Customer in a Closing Certificate to be executed and delivered to MLBFS prior to the
date of funding.
2.2 Conditions of MLBFS’ Obligation. The Closing Date and MLBFS’ obligations to activate the WCMA
Line of Credit, as hereafter set forth, and make the Loan on the Closing Date are subject to the
prior fulfillment of each of the following conditions: (a) not less than two Business Days prior to
any requested funding date, MLBFS shall have received a Closing Certificate, duly executed by
Customer, setting forth, among other things, the amount of the Loan and the method of payment and
payee(s) of the proceeds thereof; (b) after giving effect to the Loan, the WCMA Loan Balance will
not exceed either the Maximum WCMA Line of Credit or the Loan Amount; (c) the Commitment Expiration
Date shall not then have occurred; and (d) each of the General Funding Conditions and the Real
Property Funding Condition shall then have been met or satisfied to the reasonable satisfaction of
MLBFS.
2.3 Commitment Fee. In consideration of the agreement by MLBFS to extend the Loan and any
Subsequent WCMA Loans to Customer in accordance with and subject to the terms hereof, Customer has
paid or shall, on or before the Closing Date pay, the Commitment Fee to MLBFS. Customer
acknowledges and agrees that the Commitment Fee has been fully earned by MLBFS, and that it will
not under any circumstances be refundable.
2.4 Use of Loan Proceeds. Unless otherwise agreed by MLBFS in writing, the proceeds of the Loan
shall be used solely for the Loan Purpose. The Proceeds of each Subsequent WCMA Loan initiated by
Customer shall be used by Customer solely for working capital in the ordinary course of its
business, or, with the prior written consent of MLBFS, for other lawful business purposes of
Customer not prohibited hereby. Customer agrees that under no circumstances will the proceeds of
the Loan or any Subsequent WCMA Loan be used: (i) for personal, family or household purposes of any
person whatsoever, or (ii) to purchase, carry or trade in securities, or repay debt incurred to
purchase, carry or trade in securities, whether in or in connection with the WCMA Account, another
account of Customer with MLPF&S or an account of Customer at any other broker or dealer in
securities, or (iii) unless otherwise consented to in writing by MLBFS, to pay any amount to
Xxxxxxx Xxxxx and Co., Inc. or any of Its subsidiaries, other xxxx Xxxxxxx Xxxxx Bank USA, Xxxxxxx
Xxxxx Bank & Trust Co. or any subsidiary of either of them (including MLBFS and Xxxxxxx Xxxxx
Credit Corporation).
3.1
Activation of the WCMA Line of Credit. Subject to the terms and conditions hereof, on the
Closing Date MLBFS will activate a WCMA Line of Credit for Customer
in the Loan Amount. The Loan
will be funded out of the WCMA Line of Credit immediately after such activation (or, if and to the
extent otherwise expressly contemplated in the definition of Loan
Purpose or otherwise directed in
the Closing Certificate and hereafter expressly agreed by MLBFS, all or part of the Loan may be
made available as a WCMA Line of Credit and funded by Customer.)
3.2 Subsequent WCMA Loans. Subject to the terms and conditions hereof, during the period from and
after the Closing Date to the Termination Date: (a) Customer may repay the WCMA Loan Balance in
whole or in part at any time without premium or penalty, and request a re-borrowing of amounts
repaid on a revolving basis, and (b) in addition to Subsequent WCMA Loans made automatically to pay
accrued interest, as hereafter provided, MLBFS will make such Subsequent WCMA Loans as Customer may
from time to time request or be deemed to have requested in accordance with the terms hereof.
Customer may request Subsequent WCMA Loans by use of WCMA Checks,
FTS, Visa â charges, wire
transfers, or such other means of access to the WCMA Line of Credit as may be permitted by MLBFS
from time to time; it being understood that so long as the WCMA Line of Credit shall be in effect,
any charge or debit to the WCMA Account which but for the WCMA Line of Credit would under the terms
of the WCMA Agreement result in an overdraft, shall be deemed a request by Customer for a
Subsequent WCMA Loan.
3.3 Conditions of Subsequent WCMA Loans. Notwithstanding the foregoing, MLBFS shall not be
obligated to make any Subsequent WCMA Loan, and may without notice refuse to honor any such request
by Customer, if at the time of receipt by MLBFS of Customer’s request: (a) the making of such
Subsequent WCMA Loan would cause the Maximum WCMA Line of Credit, as reduced pursuant to the
provisions of Section 3.6 hereof, to be exceeded; or (b) the Termination Date shall have occurred;
or (c) an event shall have occurred and be continuing which shall have caused any of the General
Funding Conditions to not then be met or satisfied to the reasonable satisfaction of MLBFS. The
making by MLBFS of any Subsequent WCMA Loan (including, without limitation, the making of a
Subsequent WCMA Loan to pay accrued interest or late charges, as hereafter provided) at a time when
any one or more of said conditions shall not have been met shall not in any event be construed as a
waiver of said condition or conditions or of any Default, and shall not prevent MLBFS at any time
thereafter while any condition shall not have been met from refusing to honor any request by
Customer for a Subsequent WCMA Loan.
3.4 WCMA Note. Customer hereby promises to pay to the order of MLBFS, at the times and in the
manner set forth in this Loan Agreement, or in such other manner and at such place as MLBFS may
hereafter designate in writing: (a) the WCMA Loan Balance; (b) interest at the Interest Rate on the
outstanding WCMA Loan Balance (computed for the actual number of days elapsed on the basis of a
year consisting of 360 days), from and including the date on which the Loan is made until the date
of payment of all WCMA Loans in full; and (c) on demand, all other sums payable pursuant to this
Loan Agreement, including, but not limited to, any late charges. Except as otherwise expressly set
forth herein, Customer hereby waives presentment, demand for payment, protest and notice of
protest, notice of dishonor, notice of acceleration, notice of intent to accelerate and all other
notices and formalities in connection with this WCMA Note and this Loan Agreement.
3.5 Interest. (a) An amount equal to accrued interest on the daily WCMA Loan Balance shall be
payable by Customer monthly on each Interest Due Date, commencing with the first Interest Due Date
after the Closing Date shall occur. Unless otherwise hereafter directed in writing by MLBFS on or
after the
4
Termination Date, such interest will be automatically charged to the WCMA Account on the applicable
interest Due Date, and, to the extent not paid with free credit balances or the proceeds of sales
of any Money Accounts then in the WCMA Account, as hereafter provided, such interest will be paid
by a Subsequent WCMA Loan and added to the WCMA Loan Balance. All interest shall be computed for
the actual number of days elapsed on the basis of a year consisting of 360 days.
(b) Upon the occurrence and during the continuance of any Default, but without limiting the rights
and remedies otherwise available to MLBFS hereunder or waiving such Default, the interest payable
by Customer hereunder shall at the option of MLBFS accrue and be payable at the Default Rate. The
Default Rate, once implemented, shall continue to apply to the Obligations under this Loan
Agreement and be payable by Customer until the date MLBFS gives written notice that such Default
has been cured to the satisfaction of MLBFS.
(c) Notwithstanding any provision to the contrary in any of the Loan Documents, no provision of
the Loan Documents shall require the payment or permit the collection of Excess interest. If any
Excess Interest is provided for, or is adjudicated as being provided for, in the Loan Documents,
then; (i) Customer shall not be obligated to pay any Excess Interest; and (ii) any Excess Interest
that MLBFS may have received hereunder or under any of the Loan Documents shall, at the option of
MLBFS, be either applied as a credit against the then unpaid WCMA Loan Balance, or refunded to the
payor thereof.
3.6 Periodic Reduction of Maximum WCMA Line of Credit. Commencing on the last Business Day of the
first full calendar month following the Closing Date, and continuing on the last Business Day of
each calendar month thereafter to and including the last Business Day of the fifty-ninth (59th)
such calendar month, the Maximum WCMA Line of Credit shall be reduced by an amount equal to one-two
hundred fortieth (1/240th) of the Loan Amount per month. Unless the WCMA Line of Credit shall have
been earlier terminated pursuant to the terms hereof, on the last Business Day of the sixtieth
(60th) such calendar month, the WCMA Line of Credit shall, without further action of either of the
parties hereto, be terminated, Customer shall pay to MLBFS the entire WCMA Loan Balance, if any,
and all other Obligations, and the WCMA Account, at the option of Customer, will either be
converted to a WCMA Cash Account (subject to any requirements of MLPF&S) or terminated. No failure
or delay on the part of MLBFS in entering into the WCMA computer system any scheduled reduction in
the Maximum WCMA Line of Credit pursuant to this Section shall have the effect of preventing or
delaying such reduction.
3.8
Method of Making Payments. All payments required or permitted to be made pursuant to this Loan
Agreement shall be made in lawful money of the United States. Unless otherwise hereafter directed
by MLBFS, such payments may be made by the delivery of checks (other than WCMA Checks), or by means
of FTS or wire transfer of funds (other than funds from the WCMA Line of Credit) to MLPF&S for
credit to the WCMA Account. Payments to MLBFS from funds in the WCMA Account shall be deemed to be
made by Customer upon the same basis and schedule as funds are made available for investment in the
Money Accounts in accordance with the terms of the WCMA Agreement. The acceptance by or on behalf
of MLBFS of a check or other payment for a lesser amount than shall be due from Customer,
regardless of any endorsement or statement thereon or transmitted therewith, shall not be deemed an
accord and satisfaction or anything other than a payment on account, and MLBFS or anyone acting on
behalf of MLBFS may accept such check or other payment without prejudice to the rights of MLBFS to
recover the balance actually due or to pursue any other remedy under this Loan Agreement or
applicable law for such balance. All checks accepted by or on behalf of MLBFS in connection with
this Loan Agreement are subject to final collection.
3.9 Irrevocable Instructions to MLPF&S. In order to minimize the WCMA Loan Balance, Customer
hereby irrevocably authorizes and directs MLPF&S, effective on the Closing Date and continuing
thereafter so long as this Loan Agreement shall be in effect: (a) to immediately and prior to
application for any other purpose pay to MLBFS to the extent of any WCMA Loan Balance or other
amounts payable by Customer hereunder all available free credit balances from time to time in the
WCMA Account; and (b) if such available free credit balances are insufficient to pay the WCMA Loan
Balance and such other amounts, and there are in the WCMA Account at any time any investments in
Money Accounts (other than any investments constituting any Minimum Money Accounts Balance under
the WCMA Directed Reserve Program), to immediately liquidate such investments and pay to MLBFS to
the extent of any WCMA Loan Balance and such other amounts the available proceeds from the
liquidation of any such Money Accounts.
3.10 Late Charge. Any payment or deposit required to be made by Customer pursuant to the Loan
Documents not paid or made within ten (10) days of the applicable due date shall be subject to a
late charge in an amount equal to the lesser of: (a) 5% of the overdue amount, or (b) the maximum
amount permitted by applicable law. Such late charge shall be payable on demand, or, without
demand, may in the sole discretion of MLBFS be paid by a Subsequent WCMA Loan and added to the WCMA
Loan Balance in the same manner as provided herein for accrued interest with respect to the WCMA
Line of Credit.
3.11 Prepayment. Customer may prepay the Loan and any Subsequent WCMA Loan at any time in whole or
in part without premium or penalty.
3.12 Option of Customer to Terminate. Customer will have the option to terminate the WCMA Line of
Credit at any time upon written notice to MLBFS. Concurrently with any such termination, Customer
shall pay to MLBFS the entire WCMA Loan Balance and all other Obligations.
3.13 Limitation of Liability. MLBFS shall not be responsible, and shall have no liability to
Customer or any other party, for any delay or failure of MLBFS to honor any request of Customer for
a WCMA Loan or any other act or omission of MLBFS, MLPF&S or any of their affiliates due to or
resulting from any system failure, error or delay in posting or other clerical error, loss of
power, fire, Act of God or other cause beyond the reasonable control of MLBFS, MLPF&S or any of
their affiliates unless directly arising out of the willful wrongful act or active gross negligence
of MLBFS. In no event shall MLBFS be liable to Customer or any other party for any incidental or
consequential damages arising from any act or omission by MLBFS, MLPF&S or any of their affiliates
in connection with the WCMA Line of Credit or this Loan Agreement.
5
3.14 Statements. MLPF&S will include in each monthly statement it issues under the WCMA Program
information with respect to WCMA Loans and the WCMA Loan Balance. Any questions that Customer may
have with respect to such information or the Loan should be directed to MLBFS; and any questions
with respect to any other matter in such statements or about or affecting the WCMA Program should
be directed to MLPF&S.
Customer represents and warrants to MLBFS that:
(a) Compliance
with Anti-Terrorism, Embargo, Sanctions and Anti-Money Laundering Laws. Without
limiting the generality of any other provision in this Loan Agreement (i) each Credit Party has
taken all reasonable measures, in accordance with all applicable Anti-Terrorism and Anti-Money
Laundering Laws with respect to each holder of a direct or indirect interest in such Credit Party,
to assure that funds invested by such holders in the Credit Parties are derived from legal sources;
(ii) to Customer’s knowledge after making due inquiry, neither any of the Credit Parties nor any
holder of a direct or indirect interest in the Credit Parties: (a) is under investigation by any
governmental authority for, or has ever been charged with, or convicted of, any violation of any
Anti-Terrorism and Anti-Money Laundering Laws or any other criminal activity, (b) has been assessed
civil penalties under any Anti-Terrorism and Anti-Money Laundering Laws, (c) has had any of its
funds seized or forfeited in an action under any Anti-Terrorism and Anti-Money Laundering Laws or
(d) is a Person with whom a citizen of the United States is prohibited to engage in transactions
pursuant to any Anti-Terrorism and Anti-Money Laundering Laws; (iii) each Credit Party has taken
reasonable steps, consistent with industry practice for comparable organizations and in any event
as required by law, to ensure that such Credit Parties are and shall be in compliance with all
Anti-Terrorism and Anti-Money Laundering Laws; provided
however, Sections (i) and (ii) of
this provision shall not apply to the extent that such Person’s interest is in or through an entity
whose securities are traded on a national securities exchange.
(b) Organization and Existence. Customer is a limited liability company, duly organized and
validly existing under the laws of the State of Florida; and, where applicable, each Business
Guarantor is duly organized, validly existing and in good standing under the laws of the state of
its formation and is qualified to do business and in good standing in each other state where the
nature of its business or the property owned by it make such qualification necessary.
(i) Tax
Returns. All federal, state and local tax returns, reports and statements required to be
filed by any Credit Party have been filed with the appropriate governmental agencies and all taxes
due and payable by any Credit Party have been timely paid (except to the extent that any such
failure to
6
file or pay will not materially and adversely affect (i) either the liens and security interests of
MLBFS hereunder or under any of the Loan Documents, (ii) the financial condition of any Credit
Party or (iii) its continued operations).
Each of the foregoing representations and warranties: (i) has been and will be relied upon as an
inducement to MLBFS to make any WCMA Loan, and (ii) is continuing and shall be deemed remade by
Customer on the Closing Date, and concurrently with each request by Customer for a Subsequent WCMA
Loan.
(a) Customer shall furnish or cause to be furnished to MLBFS during the term of this Loan
Agreement all of the following:
(i) Annual Financial Statements. Within 120 days after the close of each fiscal year of Customer, a
copy of the annual audited financial statements of Continucare
Corporation, Including in reasonable
detail, a balance sheet and statement of retained earnings as at the close of such fiscal year and
statements of profit and loss and cash flow for such fiscal year;
(ii) Certificate of Compliance. Within 45 days after the close of each fiscal quarter of Customer,
a Certificate of Compliance, duly executed by an authorized officer of Customer, in the form of
Exhibit B attached hereto, or such other form as reasonably required by MLBFS from time to time;
(i) Interim
Financial Statements. Within 45 days after the close of each fiscal quarter of Customer,
a copy of the interim financial statements of Continucare Corporation for such fiscal quarter
(including in reasonable detail both a balance sheet as of the close of such fiscal period, and
statement of profit and loss for the applicable fiscal period);
(ii) Paid Tax Bills. A copy of each real estate tax xxxx on or issued in connection with the Real
Property, together with evidence of payment of such tax xxxx; and
(iii) Other Information. Such other information as MLBFS may from time to time reasonably request
relating to Customer, any Credit Party or the Collateral.
4.3 Other Covenants. Customer further covenants and agrees during the term of this Loan Agreement
that:
(a) Compliance with Anti-Terrorism, Embargo, Sanctions and Anti-Money Laundering Laws. Each
Credit Party (i) shall take all reasonable measures in
accordance with all, applicable
Anti-Terrorism and Anti-Money Laundering Laws with respect to each holder of a direct or indirect
interest in such Credit Party, to assure that funds invested by such holders in the Credit Parties
are derived from legal sources; (ii) shall not violate any Anti-Terrorism and Anti-Money Laundering
Laws, and (iii) shall take reasonable steps, consistent with industry practice for comparable
organizations and in any event as required by law, to ensure that such Credit Parties are and shall
be in compliance with all Anti-Terrorism and Anti-Money Laundering Laws; provided however,
Sections (i) and (ii) of this provision shall not apply to the extent that such Person’s interest
is in or through an entity whose securities are traded on a national securities exchange.
(b) Financial Records; Inspection. Each Credit Party (other than any Individual Guarantor) will:
(i) maintain at its principal place of business complete and accurate books and records, and
maintain all of its financial records in a manner consistent with the financial statements
heretofore furnished to MLBFS, or prepared on such other basis as may be approved in writing by
MLBFS; and (ii) permit MLBFS or its duly authorized representatives, upon reasonable notice and at
reasonable times, to inspect its properties (both real and personal), operations, books and
records.
7
any Collateral, in each case as contemplated by the Loan Documents; or (iii) any agreement,
instrument or document to which it is a party or by which it is bound, if any such violation will
materially and adversely affect either the liens and security interests of MLBFS hereunder or under
any of the Loan Documents, the financial condition of any Credit Party, or its continued
operations.
(j) Minimum Tangible Net Worth. Continucare Corporation and Continucare MDHC, LLC’s consolidated
“Tangible Net Worth” shall at all times exceed $14,000,000.00. For the purposes hereof, the term
“Tangible Net Worth” shall mean Continucare Corporation and Continucare MDHC, LLC’s consolidated
net worth as shown on Continucare Corporation and Continucare MDHC, LLC’s consolidated regular
financial statements prepared in accordance with GAAP, but excluding an amount equal to: (i) any
Intangible Assets, and (ii) any amounts now or hereafter directly or indirectly owing to
Continucare Corporation or Continucare MDHC, LLC by officers, shareholders or affiliates of
Continucare Corporation or Continucare MDHC, LLC. “Intangible Assets” shall mean the total amount
of goodwill, patents, trade names, trade or service marks, copyrights, experimental expense,
organization expense, unamortized debt discount and expense, the excess of cost of shares acquired
over book value of related assets, and such other assets as are properly classified as “intangible
assets” of Continucare Corporation or Confinucare MDHC, LLC determined in accordance with GAAP.
(k) Debt Service Coverage Ratio. Continucare Corporation and Continucare MDHC, LLC’s consolidated
“Debt Service Coverage Ratio” shall at all times exceed 1.25 to 1. For purposes hereof, “Debt
Service Coverage Ratio” shall mean the ratio of: (a) income before interest (including payments in
the nature of interest under capital leases), taxes, depreciation, amortization, and other non-cash
charges, to (b) the sum of the aggregate principal and interest paid or accrued, the aggregate
rental under capital leases paid or accrued, any dividends and other distributions paid or payable
to shareholders, and taxes paid in cash; all as determined on a trailing 12-month basis as set
forth in Continucare Corporation and Continucare MDHC, LLC’s regular consolidated quarterly
financial statements prepared in accordance with GAAP.
(a) Pledge of Collateral. To secure payment and performance of the Obligations, Customer hereby
pledges, assigns, transfers and sets over to MLBFS, and grants to MLBFS first liens and security
interests in and upon all of the Collateral, subject only to priorities afforded to Permitted
Liens.
(c) Performance of Obligations. Customer shall perform all of its obligations owing on account of
or with respect to the Collateral; it being understood that nothing herein, and no action or
inaction by MLBFS, under this Loan Agreement or otherwise, shall be deemed an assumption by MLBFS
of any of Customer’s said obligations.
8
The occurrence of any of the following events shall constitute an “Event of Default” under this
Loan Agreement:
(a) Anti-Terrorism, Embargo, Sanctions and Anti-Money Laundering Laws. (i) Any Credit Party (a)
becomes under investigation by any governmental authority for any violation of any Anti-Terrorism
and Anti-Money Laundering Laws, (b) is assessed civil penalties under any Anti-Terrorism and
Anti-Money Laundering Laws, (c) has any of its funds seized or forfeited in an action under any
Anil-Terrorism and Anti-Money Laundering Laws, or (d) is identified as a Person with whom a citizen
of the United States is prohibited to engage in transactions by any Anti-Terrorism and Anti-Money
Laundering Laws; (ii) any
9
representation or warranty made by any Credit Party in this Loan Agreement or any of the other Loan
Documents with respect to any Anti-Terrorism and Anti-Money Laundering Laws shall at any time prove
to have been incorrect when made or (ii) any Credit Party shall default in the performance or
observance of any covenant or agreement related to any Anti-Terrorism and Anti-Money Laundering
Laws contained in any of the Loan Documents.
10
of any Bankruptcy Event the WCMA Loan Balance and other Obligations shall automatically become due
and payable without any action on the part of MLBFS.
11
law any bonds and any surety or security relating thereto required by any statute, court rule or
otherwise as an incident to such possession, and any demand for possession prior to the
commencement of any suit or action.
4.7 Miscellaneous.
12
(i) Governing Law. This Loan Agreement and, unless otherwise expressly provided therein, each of
the Loan Documents, shall be governed in all respects by the laws of the State of Illinois, not
including its conflict of law provisions.
(k) Term. This Loan Agreement shall become effective on the date accepted by MLBFS at its office in
Chicago, Illinois, and, subject to the terms hereof, shall continue in effect so long thereafter
as: (i) the WCMA Line of Credit shall be in effect, (ii) there shall be any moneys outstanding
under this Loan Agreement, or (iii) there shall be any other Obligations outstanding. Customer
hereby waives notice of acceptance of this Loan Agreement by MLBFS.
(n) Jurisdiction; Waiver. Customer acknowledges that this Loan Agreement is being accepted by MLBFS
in partial consideration of MLBFS’ right and option, in its sole discretion, to enforce the Loan
Documents in either the State of Illinois or in any other jurisdiction where Customer or any
Collateral may be located. Customer irrevocably submits itself to jurisdiction in the State of
Illinois and venue in any state or federal court in the County of Xxxx for such purposes, and
Customer waives any and all rights to contest said jurisdiction and venue and the convenience of
any such forum, and any and all rights to remove such action from state to federal court. Customer
further waives any rights to commence any action against MLBFS in any jurisdiction except in the
County of Xxxx and State of Illinois. Customer agrees that all such service of process shall be
made by mail or messenger directed to it in the same manner as provided for notices to Customer in
this Loan Agreement and that service so made shall be deemed to be completed upon the earlier of
actual receipt or three (3) days after the same shall have been posted to Customer or Customer’s
agent. Nothing contained herein shall affect the right of MLBFS to serve legal process in any other
manner permitted by law or affect the right of MLBFS to bring any action or proceeding against
Customer or its property in the courts of any other jurisdiction. Customer waives, to the extent
permitted by law, any bond or surety or security upon such bond which might, but for this waiver,
be required of MLBFS. Customer further waives the right to bring any non-compulsory counterclaims.
13
This Loan Agreement and the other Loan Documents are executed under seal and are intended to take
effect as sealed instruments.
IN WITNESS WHEREOF, this Loan Agreement has been executed as of the
day and year first above written.
CONTINUCARE MDHC, LLC
BY CONTINUCARE CORPORATION, ITS SOLE MEMBER
By:
|
/s/ Xxxxxxx X. Xxxxxxxxx, Xx. | /s/ Xxxxxxxx X. Xxxxxxxxx | ||||
Signature (1) | Signature (2) | |||||
Xxxxxxx X. Xxxxxxxxx, Xx. | Xxxxxxxx X. Xxxxxxxxx | |||||
Printed Name | Printed Name | |||||
CEO | CFO | |||||
Title | Title |
STATE OF Florida
|
} | |||||
} | SS. | |||||
COUNTY OF Dade
|
} |
The foregoing instrument was acknowledged before me this day of Sept. 26 AD, 2006 by Xxxxxxx
Xxxxxxxxx, Xxxxxxxx Xxxxxxxxx CONTINUCARE MDHC, LLC, a Florida limited liability company, on behalf
of the limited liability company. Said person is personally known to
me or has
produced as identification.
/s/ Xxxx Xxxxxx
|
||||
Xxxx Xxxxxx
|
||||
My Commission Expires:
|
![]() |
By: |
||||
14
EXHIBIT A
ATTACHED TO AND HEREBY MADE A PART OF WCMA REDUCING REVOLVER LOAN AND SECURITY AGREEMENT NO.
81V-02074 BETWEEN XXXXXXX XXXXX BUSINESS FINANCIAL SERVICES INC. AND CONTINUCARE MDHC, LLC
Additional Locations of Tangible Collateral: