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EXHIBIT 10.39
AMENDMENT TO BUSINESS LOAN AGREEMENT
This Amendment to Business Loan Agreement ("Amendment") is made this 28th
day of August, 1995, by and between OIOPT Acquisition Corp., a Delaware
corporation ("Borrower"), and Bank One, Dayton, NA ("Bank One").
WITNESSETH:
WHEREAS, Borrower and Bank One entered into a Business Loan Agreement dated
July 14, 1993 (the "Agreement"); and WHEREAS, Borrower desires and Bank One has
agreed to amend certain financial covenants set forth in the Agreement.
NOW, THEREFORE, in consideration of the premises and the terms and conditions
set forth herein, Borrower and Bank One agree to amend the Agreement as
follows:
1. In Section 6.3, delete the first paragraph in its entirety and insert
the following in its place:
6.3 NET WORTH. Guarantor agrees to maintain a Net Worth
of not less than the amounts set forth for the
following periods:
Periods Amounts
------- -------
03/31/95 - 03/30/96 $8,000,000
03/31/96 - 03/30/97 $8,500,000
03/31/97 and all times thereafter $9,000,000
and a ratio of Total Debt (defined as any and all
debt of Guarantor) to Net Worth of not more than 2.0
to 1.0 at March 31, 1995 and all times thereafter.
2. Delete Section 6.4 in its entirety,and insert the following in its
place:
6.4 DEBT SERVICE COVERAGE RATIO. Guarantor agrees to
maintain a ratio of Cash Flow (defined as the sum of
net income, interest expense and non-cash charges) to
Debt Service (defined as the sum of CMLTD and
Interest Expense) of not less than 1.2 to 1.0, tested
each fiscal quarter for the most recently completed
four (4) fiscal quarter period, beginning December
31, 1995.
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3. In Section 6.6, delete the first paragraph and the sections referring
to Periods, Amounts and Ratios and insert the following in their place:
6.6 TANGIBLE NET WORTH. Borrower agrees to maintain a
Tangible Net Worth of not less than the amounts set
forth at the following dates:
Dates Amounts
----- -------
03/31/95 & 09/30/95 $745,000
03/31/96 & 09/30/96 $775,000
03/31/97 and all times thereafter $795,000
and a ratio of Debt to Tangible Net Worth of not more
than 1.75 to 1.0 at March 31, 1995 and all times
thereafter.
4. Delete Section 6.7 in its entirety and insert the following in its
place:
6.7 OPERATING INCOME RATIO. Borrower agrees to maintain a
ratio of Operating Income (defined as school
contribution before depreciation, interest and taxes)
to debt service (defined as principal plus interest) of
not less than 1.75 to 1.0, tested each fiscal quarter
for the most recently completed four (4) fiscal quarter
period.
5. In Section 6.10, line 9, the word "value" shall be defined as the
midpoint between the Alternative Use Market Value and the Continued
Use Market Value, as defined in the appraisal completed by the Gem
Real Estate dated July 21, 1994.
6. The following shall be included as a new Section 8.13:
8.13 REAPPRAISAL REQUIREMENT. In the event that the
Borrower and/or Guarantor is in default of any of the
covenants contained in the Loan Agreement, Borrower
and/or Guarantor will reimburse Bank One for any
reappraisal expenses incurred as a result of the loan
to OIOPT Acquisition Corp.
7. The following shall be included as a new Section 8.14:
8.14 Bank One, Dayton, NA hereby consents to the
additional debt taken on by the Guarantor in its form
of $2,200,000.00 term loan to Sirron Capital
Corporation, as defined in the Loan Agreement dated
March 31, 1995.
8. This Amendment is a modification only and not a novation. Except for
the above-quoted modification(s), the Agreement, any agreement or
security document, and all the terms and conditions thereof, shall be
and remain in full force and effect with the changes herein deemed to
be incorporated therein. This Amendment is to be considered attached
to the Agreement and made a part thereof. This Amendment shall not
release or affect the liability of any guarantor, surety or
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endorser of the Agreement or release any owner of collateral securing
the Agreement. The validity, priority and enforceability of the
Agreement shall not be impaired hereby. To the extent that any
provision of this Amendment conflicts with any term or condition set
forth in the Agreement, or any agreement or security document executed
in conjunction therewith, the provisions of this Amendment shall
supersede and control.
IN WITNESS WHEREOF, the parties have executed this Amendment effective as of
the day and year first written above.
OIOPT ACQUISITION CORP.-Borrower
By: /s/ Xxxxx Xxxxxx
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Its: V.P. Finance
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EDUCATIONAL MEDICAL, INC.-
Guarantor
By: /s/ Xxxxx Xxxxxx
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Its: V.P. Finance
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BANK ONE, DAYTON, NA
By: /s/ Xxxxx X. Xxxxx
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Its: Senior Commercial Banking Officer
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Bank One, Dayton, NA ("Bank One") July 14, 1993
Executed at Dayton, Ohio
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(City) (State)
FOR VALUE RECEIVED, the receipt of which is hereby acknowledged, and for the
purpose of inducing Bank One, its successors and assigns, to make, renew,
extend or continue a loan or to extend any other financial accommodation to
OIOPT Acquisition Corp. ("Debtor") whose address is
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0000 Xxxxxxxxx Xx. Xxxxxxx, Xxxx
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in such amounts, at such times, and on such terms as may be agreed upon by Bank
One and Debtor, the undersigned, jointly and severally, hereby absolutely and
unconditionally guarantee the prompt payment when due, whether by acceleration
or otherwise, of the principal of, interest on and all other sums payable in
connection with, and the prompt performance of all promises, covenants and
agreements contained in, any and all obligations of Debtor to Bank One, whether
as debtor, maker, comaker, drawer, endorser, guarantor, surety or otherwise
whatsoever, whether direct, indirect or contingent, whether guaranteed or
secured, due or to become due, direct or contingent, and whether now existing
or contemporaneously or hereafter arising and any and all renewals,
modifications, extensions or substitutions thereof ("Obligations").
[x] Liability hereunder is unlimited as to amount.
[ ] Liability hereunder shall not exceed the sum of
$___________________, plus accrued interest thereon at the
rate(s) specified in the Obligations plus fees, costs and
expenses incurred with respect thereto or in the collection
thereof, including reasonable attorneys' fees.
This Guaranty [ ] is [x] is not supported by other security documents.
1. All credits, deposits, accounts or moneys of any of the undersigned,
and all other property belonging to or in which any of the undersigned has any
interest, now or hereafter in the possession or control of Bank One shall be
held by Bank One as security for the payment of this Guaranty.
2. The undersigned, jointly and severally, hereby authorize any attorney
at law to appear for any one or more of us in an action on this Guaranty or on
any or all of the Obligations covered by this Guaranty at any time after this
Guaranty or any of the Obligations become due by the terms thereof, by
operation of law, or otherwise, in any court of record in or of the State of
Ohio or of elsewhere, to waive the issuing and service of process against us
and to confess judgment in favor of the legal holder of this Guaranty or of any
Obligation, direct or indirect, covered by this Guaranty for the amount that
may be due by the terms thereof, including interest at the rate mentioned
therein, and costs of suit, and to waive and release all errors in said
proceedings and judgment, and all petitions in error, and right of appeal from
the judgment rendered. The death, dissolution, termination of existence or the
like of any one or more of the undersigned shall not impair the authority
herein granted as to the survivor or survivors of the undersigned.
3. Bank One shall not be required, as a condition of the liability of the
undersigned, to resort to, enforce or exhaust any of its remedies against the
Debtor or any other party who may be liable for payment on any Obligation or to
resort to, xxxxxxxx, enforce or exhaust any of its remedies against any
property given or held as security for this Guaranty or any Obligation.
4. The undersigned hereby waive and grant to Bank One, without notice to
the undersigned and without in any way affecting the liability of the
undersigned, the right at any time and from time to time, to extend other and
additional credit, loans or financial accommodations to Debtor apart from the
Obligations, to deal in any manner it shall see fit with any Obligation of
Debtor to Bank One and with any security for such Obligation, including, but
not limited to, (i) accepting partial payments on account of any Obligation,
(ii) granting extensions or renewals of all or any part of any Obligation,
(iii) releasing, surrendering, exchanging, dealing with, abstaining from
taking, taking, perfecting, or accepting substitutes for any or all security
which it holds or may hold for any Obligation, (iv) modifying, waiving,
supplementing or otherwise changing any of the terms, conditions or provisions
contained in any Obligation and (v) the addition or release of any other party
or person liable hereon, liable on the Obligations or liable on any other
guaranty executed to guarantee any of Debtor's Obligations. The undersigned
jointly and severally hereby agree that any and all settlements, compromises,
compositions, accounts stated and agreed balances made in good faith between
Bank One and Debtor shall be binding upon them.
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WARNING: BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGMENT
MAY BE TAKEN AGAINST YOU WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT FROM YOU REGARDLESS OF
ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE
AGREEMENT, OR ANY OTHER CAUSE.
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Educational Medical, Inc.
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Xxxxx Xxxxxx
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V.P. - C.F.O.
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ADDITIONAL TERMS AND CONDITIONS OF THIS GUARANTY ARE CONTAINED ON THE REVERSE SIDE OF THIS DOCUMENT.
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CAT. NO. 03963 (11/91) Bank One is an affiliate of BANC ONE CORPORATION, Columbus, Ohio. (c) BANC ONE CORPORATION
1991 (Form to be used in the State of Ohio only)
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Additional Terms and Conditions of Guaranty
5. Any and all payments upon the Obligations made by the Debtor, or by
the undersigned, or by any other person, and proceeds of any and all collateral
securing the payment of the Obligations and the Guaranty may be applied by Bank
One upon such of the items of the Obligations as it may determine in its sole
discretion.
6. Any and all money now, or at any time hereafter, owing to the
undersigned from the holder of this Guaranty is hereby pledged for the security
of any Obligation covered by this Guaranty to the legal holder hereof, and may
at anytime be paid and applied to such Obligation whether the same be then due
or to become due.
7. Every right, power and discretion herein granted to Bank One shall be
for the benefit of the successors or assigns of Bank One and of any transferee
or assignee of any indebtedness covered by this Guaranty, and in the event any
such indebtedness shall be transferred or assigned, every reference herein to
Bank One shall be construed to mean, as to such indebtedness, the transferee or
assignee thereof. This Guaranty shall be binding upon our executors,
administrators, heirs, successors and assigns.
8. This Guaranty shall continue in force for so long as Debtor shall be
indebted to Bank One, and thereafter until Bank One shall have actually
received written notice of the termination hereof from the undersigned, it
being contemplated that Debtor may borrow, repay and subsequently borrow money
from, or become indebted to, Bank One from time to time, and the undersigned,
not having given notice of the termination hereof as herein provided for, shall
be deemed to have permitted this Guaranty to remain in full force and effect
for the purpose of inducing Bank One to make further loans to Debtor; provided,
however, no notice of termination of this Guaranty shall affect in any manner
the rights of Bank One arising under this Guaranty with respect to any
indebtedness incurred by Debtor prior to receipt by Bank One of written notice
of termination or indebtedness incurred after receipt of such written notice
pursuant to a written agreement entered into by Bank One prior to receipt of
such notice. The undersigned expressly waive notice of the incurring by Debtor
of any indebtedness to Bank One. The undersigned also waive presentment,
demand of payment, protest, notice of dishonor or nonpayment of or
nonperformance of any Obligation.
9. The undersigned hereby waive any claims or rights which they might now
have or hereafter acquire against Debtor or any other person primarily or
contingently liable on any Obligation of Debtor, which claims or rights arise
from the existence or performance of the undersigned's obligations under this
Guaranty or any other guaranty or under any instrument or agreement with
respect to any property constituting collateral or security for this Guaranty
or any other guaranty, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution, indemnification, or any right to
participate in any claim or remedy of Bank One or any other creditor which the
undersigned now has or hereafter acquires, whether such claim or right arises
in equity, under contract or statute, at common law, or otherwise.
10. The undersigned hereby represent and warrant that they have not
received any promissory note from Debtor or entered into any other written or
oral agreement with Debtor stating that the undersigned will be reimbursed by
Debtor if the undersigned make any payments under this Guaranty or any other
guaranty and further covenant that they have not received any property of the
Debtor as security for such reimbursement. The undersigned hereby covenant and
agree that they will not, at any time, accept any promissory note or enter into
any written or oral agreement with Debtor which has the effect of requiring
Debtor to reimburse the undersigned for any payments that they may make under
this Guaranty or any other guaranty, accept any property of the Debtor as
security for any such reimbursement, or make any claim for the reimbursement or
any claim that the undersigned should be subrogated to the rights of Bank One
or any other creditor against Debtor. The waivers, representations,
warranties, covenants and agreements contained in this paragraph and the
preceding paragraph are for the benefit of and may be enforced by Bank One or
any other creditor and Debtor and their respective successors and assigns,
including, without limitation, any trustee in bankruptcy of the Debtor.
11. The undersigned agree to repay all monies, including but not limited to
attorneys' fees, paid by Bank One in defense of any action asserted against
Bank One by Debtor, as a debtor-in-possession, or by a trustee in bankruptcy in
a proceeding brought under 11 U.S.C. Section 547 of the United States
Bankruptcy Code for the recovery of monies received by Bank One from Debtor as
a result of the undersigned's obligations hereunder. The undersigned further
agree to repay any monies paid by Bank One in settlement of any such action or
in satisfaction of any judgment rendered against Bank One in such an action.
12. Bank One's rights hereunder shall be reinstated and revived, and this
Guaranty shall be fully enforceable, with respect to any amount at any time
paid on account of the Obligations which thereafter shall be required to be
restored or returned by Bank One upon the bankruptcy, insolvency or
reorganization of the Debtor, the undersigned, or any other person, or as a
result of any other fact or circumstance, all as though such amount had not
been paid.
13. The undersigned jointly and severally agree to pay to Bank One all
costs and expenses, including reasonable attorneys' fees, incurred by Bank One
in the enforcement or attempted enforcement of this Guaranty, whether or not
suit is filed in connection therewith, or in the exercise by Bank One of any
right, privilege, power or remedy conferred by this Guaranty.
14. The undersigned have, to their own satisfaction, independently
investigated: (a) the Debtor's credit history; (b) the Debtor's payment history
with Bank One; (c) the Debtor's past, current, and projected financial
condition; and (d) the sufficiency of any collateral supporting Debtor's
Obligations. The undersigned represent and warrant that they have relied
exclusively on their own independent investigate of Debtor and the collateral
for their decision to guarantee Debtor's Obligations now existing or hereafter
arising. The undersigned agree that they have sufficient knowledge of the Debt
or and the collateral to make an informed decision about this Guaranty, and that
Bank One has no duty or obligation to disclose any information in its
possession or control about Debtor and the collateral to the undersigned.
15. As long as any indebtedness under any of the Obligations remains
unpaid or any credit is available to Debtor under any of the Obligations, the
undersigned agree to furnish to Bank One, at such times as reasonably requested
by Bank One, current financial statements on the undersigned, including income
tax returns, balance sheets, and statements of income and expense for such
period requested by Bank One. The undersigned warrant to Bank One that they
have adequate means to obtain from the Debtor on a continuing basis information
concerning the financial condition of the Debtor and that they are not relying
on Bank One to provide such information either now or in the future.
16. No postponement or delay on the part of Bank One in the enforcement of
any right hereunder shall constitute a waiver of such right. The failure of
any person or entity to sign this Guaranty shall not discharge the liability of
any of the undersigned.
17. This Guaranty remains fully enforceable irrespective of any claim,
defense or counterclaim which the Debtor may or could assert on any of the
Obligations including but not limited to failure of consideration, breach of
warranty, payment, statute of funds, statute of limitations, fraud, bankruptcy,
accord and satisfaction, and usury, same of which the undersigned hereby waive
along with any standing by the undersigned to assert any said claim, defense or
counterclaim.
18. This Guaranty contains the entire agreement of the parties and
supersedes all prior agreements and understandings, oral or written, with
respect to the subject matter hereof.
19. This Guaranty is governed by the laws of the State of Ohio.