Exhibit 10.11
RESTRUCTURED LOAN AGREEMENT
THIS RESTRUCTURED LOAN AGREEMENT (this "Restructured Loan Agreement")
is entered into as of December 1, 2006, by and between Lyon Financial Services,
Inc. dba U.S. Bank Portfolio Services ("USBPS"), as successor servicer for DVI
Financial Services, Inc. ("DVIFS"), for the benefit of those special purpose
entities listed on Schedule I to this Restructured Loan Agreement (collectively,
the "SPE's" or "Payees"), and as Agent for U. S. Bank, N.A., as Trustee, 0000
Xxxxxx Xxxxxx - Xxxxx 000, Xxxxxxxx, XX 00000 and Orion HealthCorp, Inc.
("Orion") (f/k/a SurgiCare, Inc.), 0000 Xxx Xxxxxxx Xxxx, Xxxxx 000, Xxxxxxx,
Xxxxxxx 00000.
RECITALS
WHEREAS, DVIFS and each of SurgiCare, Inc., Integrated Physician
Solutions, Inc., Tuscarawas Ambulatory Surgery, Inc., SurgiCare Memorial
Village, L.P. and Bellaire Surgical, Inc. (collectively the "Affiliates")
entered into various loans and other financial accommodations (collectively, the
"Transactions") for the benefit of the SPE's, and the documents evidencing and
securing the Transactions, including, without limitation, a certain Master Loan
Agreements 2858, 3032 and 2375, Secured Promissory Notes, a Security Agreement,
a Restated Security Agreement and a Restated Loan Agreement (collectively, the
"Transaction Documents"), and
WHEREAS, U.S. Bank National Association (the "Trustee") is the Trustee
for the noteholders (the "Noteholders"), which purchased notes issued by Payees
pursuant to certain indentures and amended and restated indentures between
Payees and the Trustee, and
WHEREAS, USBPS is the Successor Servicer for Payees and Agent for the
Trustee with respect to the Transactions and has the power and authority to
enter into this Restructured Loan Agreement on behalf of Payees herein, and
WHEREAS, at the closing of the transactions contemplated by this
Restructured Loan Agreement, Orion will assume the reduced and restructured debt
owed to Payees by Orion and some or all of the Affiliates, and
WHEREAS, USBPS, on behalf of Payees, and Orion have agreed to
compromise and settle the indebtedness incurred by Orion and some or all of the
Affiliates and to amend and modify the terms thereof.
NOW THEREFORE, in consideration of the mutual representations,
warranties, covenants and agreements contained herein and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the parties
agree as follows:
1. Incorporation of Recitals. The foregoing Recitals are hereby
incorporated herein by reference.
2. Compromise and Payment. On the Closing Date (as defined below), in
full and final satisfaction of all of the indebtedness and all other obligations
incurred by Orion and/or the Affiliates owing to USBPS, Payees or the Trustee,
Orion shall issue an unsecured subordinated promissory note payable to USBPS as
Successor Servicer for the benefit of Payees, in the original principal amount
of $2,750,000 (the "Note") substantially in the form attached hereto as Exhibit
A.
3. The Closing. The closing of the transactions contemplated herein
shall take place at the offices of Xxxxxxx Xxxxxxxxxxx Xxxxxx & Xxxxxxx LLP,
0000 XX Xxxxx, 000 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxx 00000, within three (3)
business days following the satisfaction or waiver of the conditions set forth
in Section 4 hereof, or at such other time or place as agreed upon by the
parties, but in no event later than December 31, 2006 (the "Closing Date").
4. Conditions to Closing. (a) USBPS' and Payees' Obligation to Close.
USBPS' and Payees' obligation to close the transactions contemplated by this
Restructured Loan Agreement are subject to the fulfillment by Orion on or prior
to the Closing Date of each of the following conditions (unless waived in
writing by USBPS):
(i) delivery to USBPS of the Note duly executed by Orion; and
(ii) delivery to USBPS of the confession of judgment (the
"Confession of Judgment") in the form attached hereto as Exhibit B, duly
executed by Orion.
(b) Orion's Obligation to Close. Orion's obligation to close
the transactions contemplated by this Restructured Loan Agreement are subject to
the delivery to Orion and the holders of the Senior Debt (as defined below) of
the documents to effect the subordination referred to in Section 8 below.
5. Notices. Any notices required by the Loan Documents shall hereafter
be made to the addresses of the parties set forth above, or to such other
address as a party may hereafter specify by written notice given in accordance
with the requirements of this Restructured Loan Agreement.
6. Entire Agreement; No Oral Modification. This Restructured Loan
Agreement and the Note contain the entire agreement between USBPS, Payees and
Trustee on the one hand and Orion and the Affiliates on the other hand with
respect to the subject matter hereof and all of the Transaction Documents are
hereby amended and restated in their entirety by the Loan Documents. In the
event of any conflict between this Restructured Loan Agreement and the Note, the
provisions of this Restructured Loan Agreement shall prevail. To the extent
inconsistent with this Restructured Loan Agreement, all prior agreements,
understanding, representations and statements, oral or written, with respect to
the transactions contemplated herein, are superseded by this Restructured Loan
Agreement. Neither this Restructured Loan Agreement nor any provision hereof may
be waived, modified, amended, discharged or terminated except by an instrument
signed by the party against whom the enforcement of such waiver, modification,
amendment, discharge or termination is sought, and then only to the extent set
forth in such instrument.
7. Further Assurances. (a) Orion agrees to deliver to USBPS, its
successors and assigns, upon the request of USBPS, such information,
documentation, certificates, acknowledgments, consents and other instruments,
which USBPS may reasonably determine to be necessary or proper to protect its or
Payees' rights hereunder. Orion agrees to take any and all other action and
execute and deliver to USBPS all documents reasonably requested by USBPS from
time to time for the purpose of fully effectuating the purposes of this
Restructured Loan Agreement.
2
(b) From and after the Closing Date, USBPS and each Payee
hereby authorize Orion to file, at Orion's sole cost and expense, any and all
amendments to financing statements, termination statements and other release
documents reasonably required to terminate and release any security interests
heretofore granted in any assets of Orion or any of the Affiliates, which are
recorded as held by DVIFS, USBPS, any Payee or the Trustee, or any of them. From
and after the Closing Date, USBPS hereby agrees to indemnify Orion from any
claims, losses or other damages arising under or resulting from any and all
promissory notes evidencing indebtedness heretofore made by Orion and/or the
Affiliates in favor of USBPS and/or any Payee or any predecessor-in-interest
thereto not otherwise returned to Orion and marked "satisfied and canceled."
8. Subordination. USBPS and Payees acknowledge and agree that their
rights under the Loan Documents are subordinate to all Senior Debt (as defined
below) and agree to take any and all other action and execute and deliver to
Orion or holders of Senior Debt all documents reasonably requested from time to
time for the purpose of fully effectuating such subordination.
9. Definitions.
(a) "Governmental Authority" means any governmental or
political subdivision, any agency, authority, bureau, central bank, commission,
department or instrumentality thereof, or any court, tribunal, grand jury or
arbitrator, in any case, whether foreign or domestic.
(b) "Loan Documents" means this Restructured Loan Agreement,
the Note, the Confession of Judgment and any other certificates, documents,
instruments or riders delivered by Orion to USBPS and/or Payees or by USBPS
and/or Payees to Orion pursuant to the terms of, or otherwise in connection with
this Restructured Loan Agreement, as the same may be amended, increased,
decreased, modified, replaced, supplemented, renewed or extended from time to
time.
3
(c) "Senior Debt" means all Obligations (as defined in the
Credit Agreement among Orion, its subsidiaries party thereto, the lenders party
thereto and Xxxxx Fargo Foothill, Inc., of even date herewith). Senior Debt does
not include HBCC.
IN WITNESS WHEREOF, the parties hereto have executed this Restructured
Loan Agreement as of the latest date set forth below.
Payees
U.S. Bank Portfolio Services, as successor servicer for DVI Orion HealthCorp.,
Inc. Financial Services, Inc.
By: /s/Xxxx Xxx By: /s/Xxxxxxxx X. Xxxxx
---------------------- ----------------------
Name: Xxxx Xxx Name: Xxxxxxxx X. Xxxxx
---------------------- ----------------------
Title: Director of Operations Title: President
---------------------- ----------------------
Date: December 1, 2006 Date: December 1, 2006
---------------------- ----------------------
4
Schedule 1
List of Payees
DVI Receivables XIX, LLC
DVI Receivables XVII, LLC
DVI Receivables XVI, LLC
DVI Receivables XIV, LLC
DVI Receivables VIII, LLC
5
Exhibit A
UNSECURED SUBORDINATED PROMISSORY NOTE
$2,750,000.00 December 1, 2006
This Note is issued pursuant to a Restructured Loan Agreement dated
December 1, 2006 (the "Loan Agreement"), wherein Orion HealthCorp, Inc.
("Orion") (f/k/a SurgiCare, Inc) executed and delivered to by and between Lyon
Financial Services, Inc. dba U.S. Bank Portfolio Services ("USBPS"), as
successor servicer for DVI Financial Services, Inc. ("DVIFS"), for the benefit
of those special purpose entities listed on Schedule I hereto (collectively, the
"SPE's" or "Payees"), and as Agent for U. S. Bank, N.A., as Trustee an agreement
to assume the reduced and restructured debt owed to Payees by Orion and/or
affiliates of Orion.
Indebtedness. For value received, Orion promises to pay to the order of
USBPS as successor servicer for DVIFS, for the benefit of the SPE's, and as
agent for U.S. Bank, N.A. as Trustee the principal sum of Two Million Seven
Hundred Fifty Thousand and 00/100 Dollars ($2,750,000.00), without interest. All
payments on this Note ("Note") shall be made to Payees c/o U.S. Bank Portfolio
Services, a division of Lyon Financial Services, Inc., 0000 Xxxxxx Xxxxxx, Xxxxx
000, Xxxxxxxx, Xxxxxxxxx, or at such other place as the holder of this Note may
from time to time designate in writing.
1. Payments and Maturity.
(a) The principal sum shall be payable as follows: (i) first payment of
$15,000.00, (ii) twenty one months at $5,000.00 per month, (iii) sixty months at
$7,500.00 per month, and (iv) a balloon payment of $2,180,000.00, as set forth
on the Amortization Schedule annexed hereto as Exhibit A and made a part hereof,
commencing on December 1, 2006, and continuing on the same date of each month
thereafter until October 1, 2013 (the "Maturity Date"), at which time all sums
payable hereunder shall be due and payable in full.
(b) Orion may prepay the principal sum of this Note in whole or in part
on any payment date, without notice, premium or penalty, provided such payment
is accompanied by all late charges and any other obligations then due Payees.
All partial principal prepayments shall be applied to the last maturing
principal installments due hereunder and shall be accompanied by the payment of
all late charges and any other obligations then due Payees.
(c) Subject to any applicable subordination agreement, the unpaid
principal sum shall accelerate and be due and payable upon the occurrence of a
Default (as defined below).
(d) During the continuance of a Default, all payments with respect to
the Indebtedness shall be applied first to the payment of any reasonable,
out-of-pocket enforcement and collection costs and expenses of USBPS, then to
late charges and other obligations due Payees and thereafter to the principal
sum. All payments shall be made in lawful money of the United States of America.
(e) If Orion fails to make any payment due hereunder when the same is
due and payable and such failure continues for ten (10) calendar days, Orion
will pay, on demand, a one-time late fee equal to five cents ($.05) for each one
dollar ($1.00) of such late payment to offset Payees' expenses incurred in
enforcing Orion's obligations hereunder, but in no event more than the maximum
amount permitted by law.
6
2. Default. The occurrence of any of the following events shall
constitute a default (each a "Default") under this Note:
(a) Orion shall fail to make a principal payment under this Note when
such payment becomes due, and such failure continues for five (5) days; or
(b) Orion shall fail to observe any covenant, condition or agreement to
be observed or performed hereunder or under the Loan Agreement and such failure
is not cured within fifteen (15) days of receipt of written notice thereof; or
(c) An Event of Default (as defined in the credit agreement with Senior
Creditor (as defined below) referred to in section 5 below) has occurred and is
continuing and Senior Creditor has accelerated the payment date of the debt due
thereunder; or
(d) Orion shall make an assignment of all or substantially all of its
assets for the benefit of creditors in connection with, or in lieu of, an
insolvency proceeding; Orion shall file a petition commencing a voluntary
bankruptcy case under the Federal bankruptcy laws and the petition shall not be
withdrawn or dismissed within sixty (60) days, after the commencement of the
case; there is commenced against Orion any bankruptcy or similar insolvency
proceeding that remains undismissed for a period of sixty (60) days; or Orion
shall be adjudicated insolvent or bankrupt and an order of relief or other order
approving any such judgment shall be entered; or a trustee, receiver or similar
official shall be appointed for, or take charge of, Orion to marshal all or
substantially all of its assets; or
(e) Orion shall be in default under the terms of the Loan Agreement.
3. Remedies.
(a) Upon the occurrence of a Default, Payees shall have all of the
rights and remedies provided to it at law or in equity. The remedies of Payees
shall be cumulative and concurrent, and may be pursued singularly, successively,
or together, at the sole discretion of USBPS, and may be exercised as often as
occasion therefore shall arise.
(b) If, after the occurrence of a Default, this Note is placed in the
hands of any attorney for collection, Orion promises to pay all reasonable
out-of-pocket costs of collection incurred by USBPS.
(c) No Default shall be waived by Payees except in writing by USBPS on
Payees' behalf, and in USBPS's sole and absolute discretion. No delay on the
part of USBPS in the exercise of any right or remedy nor any other prior
practice or course of conduct shall operate as a waiver of such rights or
remedies. No modification, discharge, termination or release of Orion from any
of its obligations under this Note shall be binding upon Payees unless set forth
in a writing signed by or on behalf of Payees.
(d) Upon the occurrence and during the continuance of an Event of
Default, Payees (or USBPS on Payees' behalf), at their option and without
further notice to Orion, may declare immediately due and payable the remaining
principal balance of this Note. Following an Event of Default, Payees may
exercise any remedy provided in the Loan Agreement or as otherwise provided at
law, in equity or otherwise, all of which remedies are cumulative and
concurrent.
7
(e) Orion shall enter into the confession of judgment, in form attached
hereto as Exhibit B, and Payees shall have the rights and remedies provided
thereunder.
4. Limitation on Interest: In no event whatsoever, whether by reason of
acceleration of this Note or otherwise, shall the amount paid or agreed to be
paid by Orion to Payees for the use, forbearance or detention of the principal
due under this Note exceed the highest rate lawful under applicable usury laws.
If Orion pays or Payees receives a sum of money, which would result in the
interest exceeding the highest lawful rate, then such excess payment shall be
deemed to have been a payment of additional principal in reduction of the
Indebtedness hereunder.
5. Subordination. Orion covenants and agrees, and Payees, by the
acceptance of USBPS hereof on their behalf, covenant and agree for themselves,
their successors and assigns, that Payees' right to receive payment under this
Note from Orion is subordinate to all Obligations (as defined in the Credit
Agreement among Orion, its subsidiaries party thereto, the lenders party thereto
and Xxxxx Fargo Foothill, Inc. ("Senior Creditor"), of even date herewith).
USBPS agrees for itself, its successors and assigns and for and on behalf of
Payees to enter into and be bound by any subordination agreement or similar
documentation reasonably requested by Senior Creditor to reflect the foregoing
subordination.
6. Notices. All notices or other communications permitted or required
under this Note will be in writing and will be sufficiently given if and when
hand delivered to the authorized persons representing the respective entities at
the address set forth as set forth below, or if sent by documented overnight
delivery service or registered or certified mail, postage prepaid, return
receipt requested, or by telegram, telex or telecopy, receipt acknowledged,
addressed as set forth below or to such other person or persons and/or at such
other address or addresses as will be furnished in writing by any party hereto
to the others. Any such notice or communication will be deemed to have been
given as of the date received, in the case of personal delivery, or on the date
shown on the receipt or confirmation therefor in all other cases.
To Orion: Orion HealthCorp, Inc.
0000 Xxx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxx, XX 00000
Telecopier: (000) 000-0000
To USBPS
or Payees : U.S. Bank Portfolio Services, a division of
Lyon Financial Services, Inc., Servicer, and
as Agent for U.S. Bank, N.A. as Trustee
0000 Xxxxxx Xxxxxx---Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Xxxx Xxx
Telecopier: (000) 000-0000
8
7. General Terms.
(a) Nothing in this Note shall constitute Orion and Payees as
partners with one another or agents for one another or render either of them
liable for any debts or obligations of the other. The use of any gender shall
include all genders, and the use of any number shall include the singular or the
plural, as the case may be.
(b) Payees may assign this Note and their right to payment
hereunder without the consent of Orion subject to compliance with all applicable
law.
(c) This Note, and the terms and provisions hereof, shall be
binding upon and Orion and Payees and their respective successors, heirs,
executors, personal representatives and assigns.
8. Governing Law. This Note shall be governed and construed in
accordance with the laws of the State of Pennsylvania (without giving effect to
Pennsylvania conflicts of laws principles).
9. Jurisdiction. THE PARTIES TO THIS NOTE, (A) AGREE TO SUBMIT FOR
THEMSELVES, IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND ANY
SCHEDULE OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT HEREOF OR
THEREOF, TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE COMMONWEALTH OF
PENNSYLVANIA IN BUCKS COUNTY, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE
EASTERN DISTRICT OF PENNSYLVANIA_, AND APPELLATE COURTS FROM ANY THEREOF, (B)
CONSENT THAT ANY ACTION OR PROCEEDING SHALL BE BROUGHT IN SUCH COURTS, AND WAIVE
ANY OBJECTION THAT EACH MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH
ACTION OR PROCEEDING IN ANY SUCH COURT, (C) AGREE THAT SERVICE OF PROCESS OF ANY
SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY CERTIFIED MAIL (OR ANY
SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO THE APPROPRIATE PARTY
AT ITS ADDRESS AS SET FORTH HEREIN, AND SERVICE MADE SHALL BE DEEMED TO BE
COMPLETED UPON THE EARLIER OF ACTUAL RECEIPT OR FIVE (5) DAYS AFTER THE SAME
SHALL HAVE BEEN POSTED AS AFORESAID, AND (D) AGREE THAT NOTHING HEREIN OR IN ANY
EXHIBIT OR SCHEDULE SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW. ORION AND PAYEE EACH HEREBY UNCONDITIONALLY
WAIVES ITS RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF, DIRECTLY OR INDIRECTLY, THIS AGREEMENT, ANY EXHIBIT AND THE
TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY, ANY OF THE RELATED DOCUMENTS, ANY
DEALINGS BETWEEN THE PARTIES HERETO RELATING TO THE SUBJECT MATTER HEREOF OR
THEREOF, AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN ORION AND
PAYEE.
10. Amendment. This Note may be amended only by an instrument in
writing that explicitly states that it amends this Note and is signed by the
party against whom enforcement of the amendment is sought.
Executed as of the date first above written.
Orion HealthCorp, Inc.
By:_________________________
Name:_______________________
Its:__________________________
9
Schedule 1
List of Payees
DVI Receivables XIX, LLC
DVI Receivables XVII, LLC
DVI Receivables XVI, LLC
DVI Receivables XIV, LLC
DVI Receivables VIII, LLC
10
EXHIBIT A
AMENDED AND RESTATED RIDER A TO LOAN AND UNSECURED PROMISSORY
NOTE (PAYMENT STREAM)
December 1, 2006
Orion HealthCorp, Inc. ("Obligor") agrees to pay the following as full
payment of the sum due under thato certain Master Loan Agreement 2858 dated
October 17, 2000, and Secured Promissory Note 2858-001 dated October 17, 2000
given by Obligors to DVI Financial Services, Inc. and amended thereafter,
including by that certain Restructured Loan Agreement dated December 1, 2006,
given by Obligor to Lyon Financial Services, Inc. dba U.S. Bank Portfolio
Services, as Successor Servicer for DVI Financial Services, Inc., for the
benefit of those special purpose entities listed therein, and as Agent for U.S.
Bank, N.A. as Trustee:
Payment No.(s) Date(s) Due Amount of Each Payment
1 Commencing on December 1, 2006 $15,000.00 (plus applicable tax)
2 through 22 Commencing on January 1, 2007 and $5,000.00 (plus applicable tax)
continuing on the same day of each
month thereafter through and
including September 1, 2008
23 through 82 Commencing on October 1, 2009 and $7,500.00 (plus applicable tax)
continuing on the same day of each
month thereafter through and
including September 1, 2013
83 Commencing on October 1, 2013 $2,180,000.00 (plus applicable tax)
The "Maturity Date" for the Schedule is October 1, 2013
Lyon Financial Services, Inc. dba X.X.Xxxx Portfolio
Services as Successor Servicer for DVI Financial Services
Inc., for the benefit of those certain special purpose entities,
and as Agent for U.S. Bank, N.A. as Trustee
By:______________________________________
Name: Xxxx Xxx
Its: Director of Operations
Orion HealthCorp, Inc.
By:______________________________________
Name:____________________________________
Its:_____________________________________
11
EXHIBIT B
CONFESSION OF JUDGMENT
ORION HEALTHCORP, INC. ("DEBTOR") COVENANTS AND AGREES THAT UPON ANY
EVENT OF DEFAULT HEREUNDER RELATING TO THE RESTRUCTURED LOAN AGREEMENT MADE AS
OF DECEMBER __, 2006 BY AND BETWEEN LYON FINANCIAL SERVICES, INC. DBA U.S. BANK
PORTFOLIO SERVICES AS SUCCESSOR SERVICER FOR DVI FINANCIAL SERVICES, INC. AND AS
AGENT FOR U.S. BANK, N.A., AS TRUSTEE ("USBPS") (FOR THE BENEFIT OF CERTAIN
SPECIAL PURPOSE ENTITIES REFERRED TO THEREIN) AND DEBTOR (THE "AGREEMENT") OR
THE UNSECURED SUBORDINATED PROMISSORY NOTE DATED DECEMBER __, 2006 (THE "LOAN")
BY DEBTOR, USBPS MAY CAUSE JUDGMENT TO BE ENTERED AGAINST DEBTOR ON ANY PORTION
OF THE LOAN THAT THEN REMAINS UNPAID AND FOR THAT PURPOSE DEBTOR HEREBY
IRREVOCABLY AUTHORIZES AND EMPOWERS ANY ATTORNEY OR THE PROTHONOTARY OR CLERK OF
ANY COURT OF RECORD, AFTER THE OCCURRENCE OF ANY EVENT OF DEFAULT HEREUNDER OR
IN THE NOTE OR THE AGREEMENT, TO APPEAR FOR THE DEBTOR, AND, WITH OR WITHOUT
COMPLAINT FILED, CONFESS JUDGMENT, OR A SERIES OF JUDGMENTS, AGAINST DEBTOR IN
FAVOR OF USBPS, OR ANY HOLDER HEREOF, FOR ALL SUMS THEN DUE, INCLUDING
PRINCIPAL, INTEREST, ACCRUED INTEREST AND ALL OTHER AMOUNTS SUCH AS LATE
CHARGES, FEES, TOGETHER WITH THE COSTS OF SUIT AND ACTUAL ATTORNEYS' FEES, AND
FOR SO DOING, THIS AGREEMENT OR A COPY THEREOF SHALL BE A SUFFICIENT WARRANT.
DEBTOR HEREBY FOREVER WAIVES AND RELEASES ALL PROCEDURAL ERRORS IN SAID
PROCEEDINGS AND ALL RIGHTS OF APPEAL AND ALL RELIEF FROM ANY AND ALL
APPRAISEMENT, STAY OR EXEMPTION LAWS OF ANY STATE NOW IN FORCE OR HEREINAFTER
ENACTED. INTEREST ON ANY SUCH JUDGMENT SHALL ACCRUE AT THE DEFAULT RATE
HEREUNDER.
NO SINGLE EXERCISE OF THE FOREGOING POWER TO CONFESS JUDGMENT, OR A
SERIES OF JUDGMENTS, SHALL BE DEEMED TO EXHAUST THE POWER, WHETHER OR NOT ANY
SUCH EXERCISE SHALL BE HELD BY ANY COURT TO BE INVALID, VOIDABLE OR VOID, BUT
THE POWER SHALL CONTINUE UNDIMINISHED AND IT MAY BE EXERCISED FROM TIME TO TIME
AS USBPS SHALL ELECT UNTIL SUCH TIME AS USBPS SHALL HAVE RECEIVED PAYMENT IN
FULL OF THE PRINCIPAL, INTEREST AND ALL OTHER SUMS DUE UNDER THIS AGREEMENT, THE
LOAN AND THE AGREEMENT. DEBTOR HEREBY WAIVES ANY RIGHT THE DEBTOR MAY HAVE TO
NOTICE OR TO A HEARING IN CONNECTION WITH ANY SUCH CONFESSION OF JUDGMENT,
EXCEPT ANY NOTICE AND/OR HEARING REQUIRED HEREUNDER OR UNDER APPLICABLE LAW WITH
THE RESPECT TO EXECUTION UPON THE JUDGMENT. DEBTOR SPECIFICALLY AGREES THAT THIS
POWER TO CONFESS JUDGMENT HAS BEEN CALLED TO THEIR ATTENTION OR THAT DEBTOR HAS
BEEN REPRESENTED BY INDEPENDENT COUNSEL. DEBTOR ACKNOWLEDGES THAT IN ADDITION TO
GIVING USBPS THE RIGHT TO CONFESS JUDGMENT WITHOUT ADVANCE NOTICE OR HEARING,
THE CONFESSION OF JUDGMENT PROVISION HEREIN ALSO CONTAINS LANGUAGE THAT WOULD
PERMIT USBPS, AFTER THE ENTRY OF JUDGMENT, TO EXECUTE UPON THE JUDGMENT BY
FORECLOSING UPON, ATTACHING, LEVYING ON, TAKING POSSESSION OF OR OTHERWISE
SEIZING DEBTOR'S PROPERTY IN FULL OR PARTIAL PAYMENT OF THE JUDGMENT. HOWEVER,
USBPS MUST PROVIDE DEBTOR NOTICE UNDER APPLICABLE LAW WITH RESPECT TO EXECUTING
UPON THE CONFESSED JUDGMENT. IN EXECUTING THIS AGREEMENT, DEBTOR ACKNOWLEDGES
THAT THEY ARE FULLY AWARE OF THEIR RIGHTS TO ADVANCE NOTICE AND A HEARING AFTER
JUDGMENT IS ENTERED AND BEFORE EXECUTION OF THE JUDGMENT, AND THAT DEBTOR
KNOWINGLY, INTELLIGENTLY AND VOLUNTARILY WAIVES THESE RIGHTS AND EXPRESSLY
AGREES AND CONSENTS TO USBPS' EXECUTING UPON THE JUDGMENT IN ANY MANNER
PERMITTED BY APPLICABLE LAW.
12
BY SIGNING THIS AGREEMENT, DEBTOR ACKNOWLEDGES AND UNDERSTANDS THAT
THIS AGREEMENT CONTAINS A CONFESSION OF JUDGMENT PROVISION THAT WOULD PERMIT
USBPS TO ENTER JUDGMENT AGAINST DEBTOR IN COURT, AFTER A DEFAULT ON THIS
AGREEMENT AND/OR THE LOAN, WITHOUT ADVANCE NOTICE TO DEBTOR AND WITHOUT OFFERING
DEBTOR AN OPPORTUNITY TO DEFEND AGAINST THE ENTRY OF JUDGMENT. IN EXECUTING THIS
AGREEMENT, BEING FULLY AWARE OF DEBTOR'S RIGHTS TO ADVANCE NOTICE AND TO A
HEARING TO CONTEST THE VALIDITY OF ANY JUDGMENT OR OTHER CLAIMS THAT USBPS MAY
ASSERT AGAINST DEBTOR UNDER THIS AGREEMENT, THE LOAN AND THE AGREEMENT, DEBTOR
IS KNOWINGLY, INTELLIGENTLY AND VOLUNTARLIY WAIVING THESE RIGHTS, INCLUDING ANY
RIGHT TO ADVANCE NOTICE OF THE ENTRY OF JUDGMENT, AND DEBTOR EXPRESSLY AGREES
AND CONSENTS TO USBPS' ENTERING JUDGMENT AGAINST DEBTOR BY CONFESSION AS
PROVIDED FOR IN THIS CONFESSION OF JUDGMENT PROVISION. DEBTOR FURTHER
ACKNOWLEDGES AND AGREES THAT THEY HEREBY WAIVE ANY AND ALL COMMON LAW, EQUITABLE
OR STATUTORY DEFENSES RELATED TO THE ENTRY, RE-ENTRY OR SUBSEQUENT JUDGMENTS BY
CONFESSION ON THE UNDERLYING LOAN OR THE AGREEMENT, AND/OR THIS AGREEMENT, AND
DEBTORS AGREES TO REFRAIN FROM FILLING ANY PLEADINGS OR ACTIONS TO OPEN, STRIKE
OR CHALLENGE ANY SUCH JUDGMENTS BY CONFESSION.
Initials: _________
DEBTOR
DEBTOR FURTHER UNDERSTANDS THAT IN ADDITION TO GIVING USBPS THE RIGHT
TO ENTER JUDGMENT AGAINST DEBTOR WITHOUT ADVANCE NOTICE OR A HEARING, THE
CONFESSION OF JUDGMENT PROVISION IN THIS AGREEMENT ALSO CONTAINS LANGUAGE THAT
WOULD PERMIT USBPS, AFTER ENTRY OR RE-ENTRY OF JUDGMENT, TO EXECUTE UPON SAID
JUDGMENTS BY FORECLOSING UPON, ATTACHING, LEVYING ON, TAKING POSSESSION OF OR
OTHERWISE SEIZING DEBTOR'S PROPERTY, IN FULL OR PARTIAL PAYMENT OF THE
JUDGMENTS.
Initials: _________
DEBTOR
13
DISCLOSURE FOR CONFESSION OF JUDGMENT FOR ORION
I AM EXECUTING ON THIS _____ DAY OF DECEMBER, 2006, ON BEHALF OF ORION
HEALTHCORP, INC. (HEREINAFTER "DEBTOR"), A RESTRUCTURED LOAN AGREEMENT BETWEEN
LYON FINANCIAL SERVICES, INC. DBA U.S. BANK PORTFOLIO SERVICES AS SUCCESSOR
SERVICER FOR DVI FINANCIAL SERVICES, INC. AND AS AGENT FOR U.S. BANK, N.A., AS
TRUSTEE ("USBPS") (FOR THE BENEFIT OF CERTAIN SPECIAL PURPOSE ENTITIES REFERRED
TO THEREIN), WITH OFFICES AT 0000 XXXXXX XXXXXX, XXXXX 000, XXXXXXXX, XXXXXXXXX
00000 AND DEBTOR.
A. I UNDERSTAND THAT THE RESTRUCTURED LOAN AGREEMENT CONTAINS A
CONFESSION OF JUDGMENT PROVISION THAT WOULD PERMIT USBPS TO
ENTER JUDGMENT AGAINST DEBTOR IN COURT, AFTER A DEFAULT,
WITHOUT ADVANCE NOTICE TO DEBTOR AND WITHOUT OFFERING DEBTOR
AN OPPORTUNITY TO DEFEND AGAINST THE ENTRY OF JUDGMENT. IN
EXECUTING THE RESTRUCTURE AGREEMENT, BEING FULLY AWARE OF
DEBTOR'S RIGHTS TO ADVANCE NOTICE AND TO A HEARING TO CONTEST
THE VALIDITY OF ANY JUDGMENT OR OTHER CLAIMS THAT USBPS MAY
ASSERT AGAINST DEBTOR UNDER THE RESTRUCTURED LOAN AGREEMENT,
DEBTOR IS KNOWINGLY, INTELLIGENTLY, AND VOLUNTARILY WAIVING
THESE RIGHTS, INCLUDING ANY RIGHT TO ADVANCE NOTICE OF THE
ENTRY OF JUDGMENT, AND DEBTOR EXPRESSLY AGREES AND CONSENTS TO
USBPS' ENTERING JUDGMENT AGAINST DEBTOR BY CONFESSION AS
PROVIDED FOR IN THE CONFESSION OF JUDGMENT PROVISION.
INITIALS:_________ DEBTOR
B. DEBTOR FURTHER UNDERSTANDS THAT IN ADDITION TO GIVING USBPS
THE RIGHT TO ENTER JUDGMENT AGAINST DEBTOR WITHOUT ADVANCE
NOTICE OF A HEARING, THE CONFESSION OF JUDGMENT PROVISION IN
THE RESTRUCTURED LOAN AGREEMENT ALSO CONTAINS LANGUAGE THAT
WOULD PERMIT USBPS, AFTER ENTRY OF JUDGMENT, AGAIN WITHOUT
EITHER ADVANCE NOTICE OR A HEARING, TO EXECUTE ON THE JUDGMENT
BY FORECLOSING UPON, ATTACHING, LEVYING ON, TAKING POSSESSION
OF OR OTHERWISE SEIZING DEBTOR'S PROPERTY, IN FULL OR PARTIAL
PAYMENT OF THE JUDGMENT. IN EXECUTING THE RESTRUCTURED LOAN
AGREEMENT, BEING FULLY AWARE OF DEBTOR'S RIGHTS TO ADVANCE
NOTICE AND A HEARING AFTER JUDGMENT IS _ENTERED_ AND BEFORE
EXECUTION ON THE JUDGMENT, DEBTOR IS KNOWINGLY INTELLIGENTLY
AND VOLUNTARILY WAIVING THESE RIGHTS, AND DEBTOR EXPRESSLY
AGREES AND CONSENTS TO USBPS' IMMEDIATELY EXECUTING ON THE
JUDGMENT, IN ANY MANNER PERMITTED BY APPLICABLE STATE AND
FEDERAL LAW, WITHOUT GIVING DEBTOR ANY ADVANCE NOTICE.
INITIALS:_________ DEBTOR
C. AFTER HAVING READ AND DETERMINED WHICH OF THE FOLLOWING
STATEMENTS ARE APPLICABLE, AND BY PLACING THE INITIALS NEXT TO
EACH STATEMENT WHICH APPLIES IN HIS CAPACITY AS AN OFFICER OF
DEBTOR, DEBTOR REPRESENTS THAT:
INITIALS_________
DEBTOR
14
INITIALS
_____ 1. DEBTOR WAS REPESENTED BY INDEPENDENT LEGAL COUNSEL
(OR HAD THE OPPORTUNITY TO RETAIN INDEPENDENT LEGAL
COUNSEL AND DECLINED TO DO SO).
_____ 2. A REPRESENTATIVE OF USBPS SPECIFICALLY CALLED THE
CONFESSION OF JUDGMENT PROVISION IN THE RESTRUCTURED
LOAN AGREEMENT TO DEBTOR'S ATTENTION.
D. DEBTOR CERTIFIES THAT ITS ANNUAL INCOME EXCEEDS $10,000; THAT
THE BLANKS IN THIS DISCLOSURE WERE FILLED IN WHEN INITIALED
AND SIGNED ON BEHALF OF DEBTOR; AND THAT DEBTOR RECEIVED A
COPY AT THE TIME OF SIGNING. THIS DISCLOSURE IS GIVEN UNDER
SEAL AND IT IS INTENDED THAT THIS DISCLOSURE IS AND SHALL
CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT
ACCORDING TO LAW.
DEBTOR:
ORION HEALTHCORP, INC. (Obligor)
__________ By:_____________________________
Dated
Signed, acknowledged and delivered in the presence of:
X__________________________________________
Witness
15
