Exhibit 10.06
POST CLOSING OBLIGATIONS AND FIRST AMENDMENT AND WAIVER
TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
This POST CLOSING OBLIGATIONS AND FIRST AMENDMENT AND WAIVER TO AMENDED
AND RESTATED LOAN AND SECURITY AGREEMENT (as the same may from time to time
be amended, restated, supplemented or otherwise modified, this "FIRST
AMENDMENT") is made as of July 29, 2002 by and among VistaCare, Inc., a
Delaware corporation, Vista Hospice Care, Inc., a Delaware corporation,
VistaCare USA, Inc., a Delaware corporation, FHI Health Systems, Inc., a
Delaware corporation, FHI GP, Inc., a Texas corporation, FHI LP, Inc., a
Nevada corporation, Family Hospice, Ltd., a Texas limited partnership, and
FHI Management, Ltd., a Texas limited partnership (together with each of
their successors and permitted assigns, collectively referred to as the
"BORROWERS" and each individually referred to as a "BORROWER"), and
Healthcare Business Credit Corporation, a Delaware corporation (together with
its successors and assigns, "LENDER").
WITNESSETH:
WHEREAS, Borrowers and Lender have entered into that certain Amended and
Restated Loan and Security Agreement dated as of June 3, 2002 (as the same may
from time to time be amended, restated, supplemented or otherwise modified, the
"LOAN AGREEMENT") in connection with, among other things, a $3,000,000 term loan
(the "LOAN") to be made by Lender to Borrowers;
WHEREAS, Borrowers and Lender have entered certain other agreements,
documents and instruments to be delivered by Borrowers in connection with the
Loan Agreement (collectively, together with the Loan Agreement, the "LOAN
DOCUMENTS");
WHEREAS, Borrowers have certain obligations under the Loan Documents that
are intended to be fulfilled, to Lender's satisfaction, subsequent to the
closing of the Loan;
WHEREAS, Borrowers have failed to fulfill some of the obligations and have
requested Lender to disburse the proceeds of the Loan notwithstanding such
failure;
WHEREAS, Borrowers advised Lender that Borrowers' Debt Service Coverage
Ratio at the end of the quarterly period ending December 31, 2001 was in
violation of Section 6.6(a) of the Loan Agreement;
WHEREAS, Borrowers advised Lender that Borrowers' Net Worth at the end of
the quarterly period ending December 31, 2001 was in violation of Section 6.6(b)
of the Loan Agreement;
WHEREAS, Borrowers have failed to deliver to Lender (i) the audited
financial statements as of and for the year ended December 31, 2001 as required
by Section 6.7(a)(i) of the Loan Agreement and (ii) the internally prepared
quarterly consolidating and consolidated financial statements along with
year-to-date information for the quarter ended March 31, 2002 as required by
Section 6.7(a)(ii) of the Loan Agreement;
WHEREAS, Borrowers have failed to deliver to Lender an Officers'
Certificate as required by Section 6.8 of the Loan Agreement in connection with
the delivery of the financial statements as required in Section 6.7(a)(ii) of
the Loan Agreement;
WHEREAS, Borrowers have requested that Lender waive the Events of Default
arising out of Borrowers' failure to comply with Section 6.6(a), Section 6.6(b),
Section 6.7(a)(i), Section 6.7(a)(ii) and Section 6.8 of the Loan
Agreement;
WHEREAS, Borrowers have requested and Lender has agreed to amend the terms
and conditions of the Loan Documents pursuant to the terms and conditions of
this Amendment; and
WHEREAS, Lender is willing to make the amendments and to grant the waivers
requested by Borrowers if Borrowers agree to fulfill such obligations within the
time periods set forth herein.
NOW, THEREFORE, in consideration of the foregoing and for the purpose of
inducing Lender to disburse the proceeds of the Loan and to grant the waiver
requested by Borrowers in accordance with the terms of the Loan Documents,
Borrowers hereby agree as follows:
1. Obligations. Borrowers hereby absolutely and unconditionally agree to
fulfill the following, to Lender's satisfaction on or before the date set forth
below:
(a) On or before the commencement of operations of Borrowers and at
the latest before 5:00 p.m. on August 2, 2002, Borrowers shall
deliver to Lender fully completed copies of Schedule II to the Loan
Agreement;
(b) On or before the commencement of operations of Borrowers and at
the latest before 5:00 p.m. on August 2, 2002, each Borrower shall
deliver to Lender fully executed copies of each Borrower's
Certificate of the Secretary, together with a fully executed
Unanimous Written Consent of the Directors of such Borrower;
(c) On or before the commencement of operations of Borrowers and at
the latest before 5:00 p.m. on August 2, 2002, each Borrower shall
deliver to Lender good standing certificates from each Borrower's
jurisdiction of organization and each jurisdiction where any
Borrower is authorized to transact business;
(d) On or before the commencement of operations of Borrowers and at
the latest before 5:00 p.m. on August 2, 2002, Borrowers shall
deliver to Lender the financial statements and collateral reports as
required by Section 6.7(a)(i);
(e) On or before the commencement of operations of Borrowers and at
the latest before 5:00 p.m. on August 2, 2002, Borrowers shall
deliver to Lender the financial statements and collateral reports as
required by Section 6.7(a)(ii); and
(f) On or before the commencement of operations of Borrowers and at
the latest before 5:00 p.m. on August 2, 2002, Borrowers shall
deliver to Lender the Officers' Certificate as required by Section
6.8.
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2. Amendments
2.1 The definition of Debt Service Coverage Ratio is hereby deleted and
replaced in its entirety with the following new definition:
"Debt Service Coverage Ratio means the ratio of (a) the sum of (i) net
income, plus (ii) interest expense, plus (iii) income taxes, plus (iv)
depreciation and amortization expenses, plus (v) any other non-cash items,
minus non-financed capital expenditures to (b) the sum of (i) interest
expense, plus (ii) the current portion of long-term debt, plus (iii) the
current portion of lease payments under capitalized leases, plus (iv)
Distributions, all as determined for Borrowers on a consolidated basis in
accordance with GAAP."
2.2 Section 6.6(a) of the Loan Agreement is hereby deleted in its
entirety and replaced with the following:
(a) "Borrowers shall maintain at all times a Debt Service Coverage
Ratio of at least 1.25 to 1.0 measured (i) as of March 31, 2002 for
the first quarter then ended on an annualized basis, (ii) as of June
30, 2002 for the two quarters then ended on an annualized basis,
(iii) as of September 30, 2002 for the three quarters then ended on
an annualized basis and (iv) beginning with the quarter ended
December 31, 2002 and thereafter on a rolling four-quarter basis."
2.3 Section 6.6(b) of the Loan Agreement is hereby deleted in its entirety
and replaced with the following:
(b) "Borrowers shall maintain a Net Worth measured quarterly at the
end of each fiscal quarter of at least Thirteen Million and No/100
Dollars ($13,000,000) until December 31, 2002, and Eighteen Million
and No/100 Dollars ($18,000,000) measured quarterly at the end of
each fiscal quarter thereafter."
3. Default. Borrowers understand and agree with Lender that Borrowers'
failure to comply with any or all of the obligations set forth in the foregoing
paragraph on or before the date provided shall be an immediate event of default
under the Loan Documents without any further notice or cure period.
4. Waiver. Lender hereby waives the Events of Default created as a result
of Borrowers' failure to comply with (a) Section 6.6(a) and Section 6.6(b) of
the Loan Agreement for the quarterly period ending December 31, 2001, (b)
Section 6.7(a)(i) of the Loan Agreement for the year ended December 31, 2001,
(c) Section 6.7(a)(ii) of the Loan Agreement for the quarter ended March 31,
2002 and (d) Section 6.8 of the Loan Agreement for the year ended December 31,
2001 and for the quarter ended March 31, 2002. This waiver is limited to the
Borrowers' failure to comply with Section 6.6(a), Section 6.6(b), Section
6.7(a)(i), Section 6.7(a)(ii) and Section 6.8 of the Loan Agreement for the
specific periods mentioned above and shall not be construed as a waiver of any
other presently existing or future Event of Default.
5. Fees. Prior to the effectiveness of this First Amendment, Borrowers
shall pay to Lender a nonrefundable amendment fee in an amount equal to Two
Thousand Five Hundred and No/100 Dollars ($2,500.00).
6. Governing Law; Forum. The validity, enforcement and interpretation of
this First Amendment shall for all purposes be governed by and construed in
accordance with the laws of the State of New Jersey, without regard to its
conflicts of law principles, and applicable United States federal law, and is
intended to be performed in accordance with, and only to the extent permitted
by, such laws. Borrowers hereby irrevocably submit generally and unconditionally
for Borrowers and in respect of Borrowers' property to the non-exclusive
jurisdiction of any local court, or any United States federal court, sitting in
the State of New Jersey over any suit, action or proceeding arising out of or
relating to this First Amendment. Borrowers hereby irrevocably waive, to the
fullest extent permitted by law, any objection that Borrowers may now or
hereafter have to the laying of venue in any such court and any claim that any
such court is an inconvenient forum. Borrowers hereby agree and consent that, in
addition to any methods of service of process provided for under applicable law,
all services of process in any such suit, action or proceeding in any local
court, or any United States federal court, sitting in the State of New Jersey,
may be made by certified or registered mail, return receipt requested, directed
to Borrowers, and service so made shall be complete five (5) business days after
the same shall have been so mailed. Nothing herein shall affect the right of
Lender to serve process in any
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manner permitted by law or limit the right of Lender to bring proceedings
against Borrower in any other court or jurisdiction.
7. Invalidity of Certain Provisions. If any provision of this First
Amendment or the application thereof to any party or circumstance shall, for any
reason and to any extent, be declared to be invalid or unenforceable, neither
the remaining provisions of this First Amendment nor the application of such
provision to any other party or circumstance shall be affected thereby, and the
remaining provisions of this First Amendment, or the applicability of such
provision to other parties or circumstances, as applicable, shall remain in
effect and be enforceable to the maximum extent permitted by applicable law.
8. Attorneys' Fees and Costs of Collection. Borrowers shall pay on demand
all reasonable attorneys' fees and costs, incurred through litigation and all
appeals and any bankruptcy proceedings, and all other actual costs and expenses,
incurred by Lender in the enforcement of or preservation of Lender's rights
under this First Amendment whether or not suit be brought.
9. Warranties. Borrowers make to Lender the following representations and
warranties:
(a) Authorization. Each of the Borrowers has the full right, power
and authority to enter into this First Amendment and carry out its
obligations hereunder. All requisite entity authorization for the
execution of this First Amendment by each of the Borrowers has been
obtained and remains in full force and effect.
(b) Enforceability. This First Amendment is a legal, valid and
binding obligation of each Borrower, enforceable in accordance with
its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency or similar laws affecting the rights of
creditors generally.
10. Time of Essence. Time shall be of the essence in this First Amendment
with respect to all of Borrowers' obligations hereunder.
11. Waiver of Jury Trial. TO THE MAXIMUM EXTENT PERMITTED BY LAW,
BORROWERS AND LENDER HEREBY EXPRESSLY WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY
ACTION, CAUSE OF ACTION, CLAIM, DEMAND OR PROCEEDING ARISING UNDER OR WITH
RESPECT TO THIS AGREEMENT, OR IN ANY WAY CONNECTED WITH, RELATED TO OR
INCIDENTAL TO THE DEALING OF BORROWERS AND LENDER WITH RESPECT TO THIS
AGREEMENT, OR THE TRANSACTIONS RELATED HERETO, IN EACH CASE WHETHER NOW EXISTING
OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE. TO
THE MAXIMUM EXTENT PERMITTED BY LAW, BORROWERS AND LENDER HEREBY AGREE THAT ANY
SUCH ACTION, CAUSE OF ACTION, CLAIM, DEMAND OR PROCEEDING SHALL BE DECIDED BY A
COURT TRIAL WITHOUT A JURY AND THAT LENDER OR BORROWERS MAY FILE AN EXECUTED
COPY OF THIS AGREEMENT WITH ANY COURT OR OTHER TRIBUNAL AS WRITTEN
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EVIDENCE OF THE CONSENT OF EACH OF BORROWERS AND LENDER TO THE WAIVER OF ITS
RIGHT TO TRIAL BY JURY. IT IS AGREED AND UNDERSTOOD THAT THIS WAIVER CONSTITUTES
A WAIVER OF TRIAL BY JURY OF ALL CLAIMS AGAINST ALL PARTIES TO SUCH ACTION OR
PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TO THIS
AGREEMENT. THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY EACH
BORROWER, AND EACH BORROWER HEREBY REPRESENTS THAT NO REPRESENTATIONS OF FACT OR
OPINION HAVE BEEN MADE BY ANY INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL BY JURY,
THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS AGREEMENT AND IN THE MAKING
OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL SELECTED BY EACH BORROWER OF ITS OWN
FREE WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH
COUNSEL.
12. Additional Waivers. EACH BORROWER EXPRESSLY AND UNCONDITIONALLY
WAIVES, IN CONNECTION WITH ANY SUIT, ACTION OR PROCEEDING BROUGHT BY LENDER ON
THIS AGREEMENT, ANY AND EVERY RIGHT IT MAY HAVE TO (I) INJUNCTIVE RELIEF; (II)
INTERPOSE ANY COUNTERCLAIM THEREIN UNLESS UNDER THE APPLICABLE RULES OF COURT,
SUCH COUNTERCLAIM MUST BE ASSERTED IN SUCH PROCEEDING, AND (III) HAVE THE SAME
CONSOLIDATED WITH ANY OTHER OR SEPARATE SUIT, ACTION OR PROCEEDING.
13. Miscellaneous. No act, delay, omission or course of dealing between
Lender and Borrowers, or any of them, will be a waiver or modification of any of
Lender's rights or remedies under this First Amendment, and no waiver, change,
modification or discharge of this First Amendment or any obligation created
hereby will be effective unless in writing signed by Lender.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the undersigned have executed this First Amendment as
of the date first above written.
BORROWERS: BORROWERS:
FHI LP, Inc. VistaCare, Inc.
By: /s/ Xxxx Xxxxxx By: /s/ Xxxx Xxxxxx
---------------------------- ----------------------------
Attest: /s/ Xxxxxxx Xxxxx Attest: /s/ Xxxxxxx Xxxxx
------------------------ ------------------------
(Corporate Seal) (Corporate Seal)
Family Hospice, Ltd. Vista Hospice Care, Inc.
By: /s/ Xxxx Xxxxxx By: /s/ Xxxx Xxxxxx
---------------------------- ----------------------------
Attest: /s/ Xxxxxxx Xxxxx Attest: /s/ Xxxxxxx Xxxxx
------------------------ ------------------------
(Corporate Seal) (Corporate Seal)
FHI Management, Ltd. VistaCare USA, Inc.
By: /s/ Xxxx Xxxxxx By: /s/ Xxxx Xxxxxx
---------------------------- ----------------------------
Attest: /s/ Xxxxxxx Xxxxx Attest: /s/ Xxxxxxx Xxxxx
------------------------ ------------------------
(Corporate Seal) (Corporate Seal)
FHI GP, Inc. FHI Health Systems, Inc.
By: /s/ Xxxx Xxxxxx By: /s/ Xxxx Xxxxxx
---------------------------- ----------------------------
Attest: /s/ Xxxxxxx Xxxxx Attest: /s/ Xxxxxxx Xxxxx
------------------------ ------------------------
(Corporate Seal) (Corporate Seal)
LENDER:
HEALTHCARE BUSINESS CREDIT
CORPORATION
By: /s/ Xxxx Xxxxxxx
-----------------------------
Attest: /s/ Xxxxxx Xxxxxxxxx
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