EXHIBIT 10.21
FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT
THIS FIRST AMENDMENT, made this 12th day of April, 2000, is by and
among Bank of America, N.A. (the "Bank"), ARC of Bellingham, L.P., a Tennessee
limited partnership (the "Borrower"), and Symbion Ambulatory Resource Centres,
Inc., a Tennessee corporation (the "Guarantor").
RECITALS
Bank has previously made a loan to the Borrower, an Affiliate of
Guarantor, pursuant to a Loan and Security Agreement dated September 7, 1999 (as
amended from time to time, the "Loan Agreement"). Capitalized terms not
otherwise defined in this Amendment shall have the meaning provided in the Loan
Agreement. Borrower has requested that Bank make certain changes to the Loan
Agreement. The Bank is willing to do so, subject, among other things, to the
execution of this Amendment and compliance with the terms hereof, including,
without limitation, a $500,000 paydown and permanent reduction in availability
under the Note.
NOW, THEREFORE, the parties to this First Amendment hereby agree as
follows:
Article I. Amendment to Loan Agreement. The parties hereto amend the Loan
Agreement as follows:
Section 1.1. The following definitions are hereby added to
Section 1 of the Loan Agreement in appropriate alphabetical order:
'"COMPLIANCE DATE" means, provided no Event of Default occurs
between April 12, 2000 and such date and provided no Unmatured Default
exists at such date, the date on which Borrower has delivered
certificates to Bank evidencing to Bank's reasonable satisfaction, for
two consecutive Quarterly Periods (the second of which must be a
Quarterly Period ending at or after September 30, 2000), that (A)
Borrower has complied with the covenants set forth in Paragraph 6.15(b)
through (e), and (B) the ratio of Borrower's Cash Flow to Borrower's
Debt Service has been greater than 1.10:1.00.
"COMPLIANCE QUARTER" means the second of the two consecutive
Quarterly Periods referenced above in the definition of Compliance
Date.
"CONSOLIDATED FUNDED DEBT" means, at any date, with respect to
Symbion and its Subsidiaries, all of the following obligations (without
duplication) as of such date: (a) all obligations for borrowed money,
(b) all obligations evidenced by bonds, debentures, notes or
other similar instruments, (c) all obligations to pay the deferred
purchase price of property, except trade accounts payable or other
short term liabilities other than indebtedness for borrowed money
arising in the ordinary course of business, (d) all obligations as
lessee under capitalized leases, (e) all obligations to purchase
securities or other property which arise out of or in connection with
the sale of the same or substantially similar securities or property,
such as bankers acceptances or similar instruments, (f) all contingent
and non-contingent obligations to reimburse any bank or other person in
respect of amounts payable or paid under a letter of credit or similar
instrument, (g) all debt of others secured by a lien on any asset of
Symbion and/or any of its Subsidiaries, whether or not such debt is
assumed, and (h) all Guarantee Obligations.
"DE NOVO LOSSES" means, at any date, the aggregate, cumulative
losses of each Subsidiary operating a surgery center which has been
accepting patients for less than nine (9) months.
"EXCESS CASH" means, at any date, for any Person, such
Person's cash on hand less the amount of the Required Cash Availability
at such date.
"NON-RECOURSE DEBT" means, at any date, that portion of
Consolidated Funded Debt which is not a corporate obligation of
Symbion, and is included within the definition of Consolidated Funded
Debt solely because it is Indebtedness of a Subsidiary.
"QUARTERLY COMPLIANCE DATE" means the last day of the second
consecutive Quarterly Period referenced above in the definition of
Compliance Date.
"REQUIRED CASH AVAILABILITY" means, at any date, for any
Person, an amount equal to such Person's anticipated operating expenses
for the succeeding two weeks.'
Section 1.2. The following definition is hereby deleted in its
entirety from the Loan Agreement and replaced with the following:
'"DEBT SERVICE" means $53,571 (the imputed principal
amortization associated with the Loan) plus the sum of the following
incurred by Borrower during any particular fiscal quarter: (A)
scheduled principal payments on Indebtedness, (B) Rental Expense, and
(C) Interest Expense paid to any party other than Guarantor.'
Section 1.3 Section 6.15 of the Loan Agreement is hereby deleted
in its entirety and replaced with the following:
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"6.15 Financial Ratios. The Borrower will maintain or cause
to be maintained, the following financial ratios and covenants:
(a) for each Quarterly Period, (i) beginning with the
Quarterly Period ending December 31, 1999, a ratio of Borrower's Cash
Flow to the sum of Borrower's Debt Service minus $26,786, of not less
than 1.05:1.00, and (ii) beginning with the first Quarterly Period
ending after the Compliance Quarter, a ratio of Borrower's Cash Flow to
the sum of Borrower's Debt Service of not less than 1.10:1.00;
(b) At all times, Borrower's cash on hand shall be
greater than Borrower's Required Cash Availability. Promptly following
a request from Bank, Borrower shall provide evidence reasonably
satisfactory to Bank to document compliance with this covenant;
(c) Beginning on the date by which Borrower has
closed sales of limited partnership interests in the aggregate amount
of more than $500,000, and at all times thereafter, the sum of
Borrower's Shareholder's Equity plus the outstanding principal balance
of all Indebtedness for money borrowed from Guarantor by Borrower shall
be greater than $1,000,000;
(d) At all times, the Shareholders' Equity of
Symbion, calculated on a consolidated basis, shall be greater than
$25,000,000 plus eighty-five percent (85%) of (i) the aggregate amount
of any new equity raised by Symbion after June 25, 1999 and (ii) the
aggregate, cumulative, positive Net Income of Symbion (without any
credit or deduction in the event Net Income is a negative number) after
June 25, 1999;
(e) At the end of each Quarterly Period, beginning
with the Quarterly Period ending September 30, 1999 and continuing
through and including the Quarterly Period ending September 30, 2000,
the ratio of (i) the sum of (A) Symbion's Consolidated Funded Debt less
(B) Symbion's Excess Cash to (ii) the sum of (X) EBITDA for such
Quarterly Period, plus (Y) the lesser of (1) $125,000 or (2) the De
Novo Losses at such date, giving Pro-Forma Effect to any Acquisition
made and any Indebtedness incurred therewith as of the date of
determination, shall be less than 3.75:1.00; and
(f) At the end of each Quarterly Period beginning
with the Quarterly Period ending December 31, 2000 and continuing
through each Quarterly Period ending thereafter, the ratio of (i) the
sum of (A) Symbion's Consolidated Funded Debt less (B) Symbion's
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Excess Cash to (ii) Symbion's consolidated EBITDA for such Quarterly
Period, giving Pro-Forma Effect to any Acquisition made and any
Indebtedness incurred therewith as of the date of determination, shall
be less than 3.50:1.00; provided, however, if the result of such ratio
is greater than or equal to 3.50:1.00 and less than 3.75:1.00, the
Borrower shall be in compliance with this covenant for such Quarterly
Period if the ratio of (i) the sum of (A) Symbion's Consolidated Funded
Debt less (B) Symbion's Excess Cash less (C) Symbion's Non-Recourse
Debt to (ii) Symbion's consolidated EBITDA for such Quarterly Period,
giving Pro-Forma Effect to any Acquisition made and any Indebtedness
incurred therewith as of the date of determination, shall be less than
3.50:1.00."
Section 1.4. The following is hereby added to the Loan Agreement
as Section 6.17:
"6.17 Cash Collateral. On or before April 21, 2000 Borrower
shall purchase a certificate of deposit issued by Bank in the amount of
not less than $750,000, and Borrower shall maintain such certificate of
deposit until no longer required to do so pursuant to this Paragraph
6.17. Borrower hereby acknowledges that Bank shall be entitled to
exercise full rights of setoff with respect to the certificate of
deposit. Provided no Event of Default occurs between April 12, 2000 and
the Compliance Date and provided no Unmatured Default exists at the
Compliance Date, upon the Compliance Date, Borrower shall no longer be
required to maintain the certificate of deposit, and this Paragraph
6.17 shall be inapplicable and such funds shall be returned to Borrower
in full. Until the Compliance Date, Borrower shall not make any payment
of principal or interest owed on any indebtedness of Borrower to
Guarantor, Symbion or any other Affiliate of Borrower."
Section 1.5. The following is hereby added to the Loan Agreement
as Section 6.18:
"6.18 Symbion Financing. If, after April 12, 2000, Symbion
enters into any financing arrangement which imposes covenants upon
Symbion that are more restrictive than, or in addition to, the
covenants imposed by the Loan Agreement, Borrower will promptly notify
Bank, and Borrower, Guarantor and Symbion will promptly execute any
documentation reasonably requested by Bank to add such covenants to the
Loan Agreement."
Article II. General.
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Section 2.1 Principal Paydown. Effective on the date of this
Amendment, Borrower has made a one time principal payment in the amount of
$500,000.00 which shall be applied to the Note and shall permanently reduce the
amount thereof.
Section 2.2 Symbion Indebtedness. If Symbion enters into any
financing arrangement after April 12, 2000 which imposes covenants upon Symbion
that are more restrictive than, or in addition to, the covenants imposed by the
Loan Agreement, such covenants shall be incorporated by reference into the Loan
Agreement, unless, within ten (10) days after Symbion enters into such financing
arrangement, Borrower, Guarantor and Symbion execute the documentation
referenced in Section 1.5 of this First Amendment.
Section 2.3 Loan Agreement. Except as amended hereby, the
provisions of the Loan Agreement shall remain in full force and effect.
References in the Loan Agreement and the other Loan Documents shall be
references to the Loan Agreement as amended by this First Amendment.
Section 2.4 Governing Law. This First Amendment shall be governed
by and construed in accordance with the laws of the State of Tennessee without
reference to its choice of law rules.
Section 2.5 Execution in Counterparts. This First Amendment may
be executed in one or more counterparts, each of which shall be considered an
original instrument, but all of which shall be considered one and the same
agreement, and shall become binding when one or more counterparts have been
signed by each of the parties and delivered to each of the parties.
Section 2.6 Representations. Borrower hereby makes the following
representations and warranties:
(a) as of the date hereof, Borrower has no defense against
payment of any or all of the Obligations;
(b) as of the date hereof, no Event of Default or Unmatured
Default has occurred or is continuing (after giving effect to this Amendment).
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
BANK OF AMERICA, N.A. ARC OF BELLINGHAM, L.P.
--------------------
By: Ambulatory Resource Centres of
Washington, Inc., its General Partner
BY: /s/ Xxxxxxxxx X. Xxxx BY: /s/ Xxxxxxx X. Xxxx
-------------------------- ----------------------------------------
TITLE: Senior Vice President TITLE: President and Chief Executive Officer
----------------------- -------------------------------------
SYMBION AMBULATORY RESOURCE
CENTRES, INC.
BY: /s/ Xxxxxxx X. Xxxx
-----------------------------------------
TITLE: President and Chief Executive Officer
--------------------------------------
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