LOAN MODIFICATION NO. 1
AMONG: Pacific Rehabilitation & Sports Medicine, Inc.
("Borrower")
AND: Bank of America Oregon (the "Bank")
EFFECTIVE DATE: April 19, 1995
This Loan Modification No. 1 (the "Modification") is
entered into on the above date by the Borrower and the Bank.
1. BACKGROUND. The Borrower entered into a Business
Loan Agreement (Receivables) with the Bank dated as of December
23, 1994 (the "Agreement"). The Borrower is entering into this
Modification to state the terms and conditions of certain
modifications to the Agreement. Capitalized terms used in this
Modification shall, unless otherwise defined in this
Modification, have the meaning given to such terms in the
Agreement.
2. MODIFICATIONS TO THE AGREEMENT.
2.1 Section 1.1 of the Agreement is deleted and in its
place is inserted the following:
1.1 "Borrowing Base" means:
(a) The lesser of:
(i) Twelve Million Dollars ($12,000,000); or
(ii) 70% of the balance due on Acceptable
Receivables minus the sum of (A) the bad
debt allowance for accounts receivable
contained in the Borrower's most recent
Form 10-K Annual Report ("10-K") or Form
10-Q Quarterly Report ("10-Q") provided
to the Bank and (B) contractual
allowances provided by the Borrower or
any Subsidiary as set forth in the
Borrower's most recent 10-K or 10-Q
provided to the Bank; or
(iii) 70% of the amount resulting from the
following computation:
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(A) 100% of the sum of the Borrower's
net revenue for the previous three
months as established by generally
accepted accounting principles
consistently applied ("Net
Revenue");
(B) Multiplied by 130 if the Borrowing
Base is calculated on or before
June 30, 1995; multiplied by 125 if
the Borrowing Base is calculated
between July 1, 1995 and September
30, 1995; multiplied by 120 if the
Borrowing Base is calculated after
September 30, 1995;
(C) Divided by 91.
For the purposes of this Agreement, the Borrower's
Net Revenue and Acceptable Receivables (as defined below) include
the Net Revenues and accounts receivable of the Borrower's
subsidiaries, and any subsidiary of a subsidiary, including, but
not limited to, Leeward Back and Neck, Inc., and PR Acquisition
Corporation (hereinafter referred to individually and
collectively as the "Subsidiary")."
3. NO OTHER MODIFICATIONS.
3.1 Except as expressly modified by this
Modification, the terms of the Agreement shall remain unchanged
and in full force and effect. The Bank's agreement to modify the
Agreement pursuant to this Modification shall not obligate Bank
to make any further modifications to the Agreement, or
Modification, or any other loan document. Nothing in this
Modification shall constitute a satisfaction of any indebtedness
of Borrower to Bank. It is the intention of Bank and the
Borrower to retain as liable parties all makers and endorsers of
the Agreement and Modification or any other loan document. No
maker, endorser, or guarantor shall be released by virtue of this
Modification. The terms of this paragraph shall apply not only
to this Modification, but also to all subsequent loan
modification agreements.
4. REPRESENTATIONS AND WARRANTIES.
4.1 Borrower represents and warrants to Bank that
the execution, delivery and performance of this Modification are
within Borrower's corporate powers, and have been duly authorized
and are not in contravention of law or the terms of Borrower's
charter, bylaws, or other incorporation papers, or of any
undertaking of Borrower of which either Borrower is a party or by
which it is bound.
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4.2 Borrower understands and agrees that in
entering into this Modification, Bank is relying upon Borrower's
representations, warranties, and agreements as set forth in the
Agreement, and other loan documents. Borrower hereby reaffirms
all representations and warranties in the Agreement, all of which
are true with respect to each such corporation as the date of
this Modification.
BORROWERS: PACIFIC REHABILITATION &
SPORTS MEDICINE, INC.
By: /s/ XXXXX XXXXXXXXX
---------------------------------
Xxxxx Xxxxxxxxx
Its: President and
Chief Executive Officer
LENDER: BANK OF AMERICA OREGON
By: /s/ XXXXXX X. XXXXXX
---------------------------------
Xxxxxx X. XxXxxx
Its: Vice President
The undersigned guarantors consent to the modifications
to the Agreement Modification, and ratify the provisions of the
Continuing Guaranty executed by each guarantor for the benefit of
Bank and confirm that all provisions of its Continuing Guaranty
are in full force and effect.
LEEWARD BACK AND NECK, INC.
By: /s/ XXXXX XXXXXXXXX
---------------------------------
Xxxxx Xxxxxxxxx
Its: President and
Chief Executive Officer
P.R. ACQUISITION CORPORATION
By: /s/ XXXXX XXXXXXXXX
---------------------------------
Xxxxx Xxxxxxxxx
Its: President and
Chief Executive Officer
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