LOAN AGREEMENT
This Agreement made this 25th day of November, 1996, by and between FLEET
NATIONAL BANK, a national banking association with an address at 000 Xxxx
Xxxxxx, Xxxxxxxx, XX 00000 (the "Lender") and PHYSICIANS CARE FOR
CONNECTICUT, INC., a Connecticut corporation located at 0000 Xxxxxxxx Xxxxxx,
Xxxxxxxx, Xxxxxxxxxxx 00000 (the "Borrower").
SECTION 1. The Loan Transaction.
1.1 The Line of Credit
a. Amount. Lender will loan to Borrower and Borrower may borrow,
repay and reborrow from Lender up to Six Hundred Fifty Thousand
Dollars ($650,000) (the "Loan").
b. Note. The obligation of Borrower to repay the Loan made pursuant
to this Section 1.1 with interest (the "Loan Obligations") will
be evidenced by a line of credit note (the "Note") in the form
annexed hereto as EXHIBIT 1.1b.
c. Repayment. The Loan Obligations shall be payable as stated in
the Note and if not sooner paid in full will be immediately due
and payable on November 22, 1997.
1.2 Obligations. The Loan Obligations, together with all other
obligations of Borrower to Lender under this Agreement and any
document referred to herein or related to this transaction whether
now existing or hereafter arising, including, without limitation,
principal, interest, reasonable attorneys' fees and costs of
collection, shall be referred to as the "Obligations".
1.3 Guaranty. The payment and performance of the Obligations shall be
unconditionally guaranteed by Hartford County Medical Association,
Incorporated (the "Guarantor") pursuant to a Guaranty Agreement
(the "Guaranty") dated the date of this Agreement.
1.4 Pledge Agreement. The Guaranty shall be fully secured by a pledge
of securities pursuant to a Pledge Agreement dated the date of this
Agreement (the "Pledge Agreement") executed by the Guarantor. The
Lender will release the pledge of the securities pursuant to the
Pledge Agreement upon a pledge by the Borrower of similar securities
pursuant to a new pledge agreement executed by the Borrower
containing the same basic provisions as in the Pledge Agreement and
which is otherwise satisfactory to Lender in its reasonable
discretion.
SECTION 2. Representations, Warranties and General Covenants. On the date
hereof and in order to induce Lender to enter into this Agreement, Borrower
represents, warrants and covenants the following:
2.1 Organization and Qualification. Borrower is and will continue to
be a corporation duly organized, validly existing and in good
standing under the laws of the State of Connecticut, and is and
will continue to be duly qualified and licensed to do business in
each state where failure to be so qualified would have a material
adverse effect on the Borrower.
2.2 Corporate Records. The Certificate of Incorporation and all
amendments thereto of Borrower have been duly filed and are in
proper order. All books and records of Borrower, including but
not limited to its minute books, bylaws, and books of account, are
accurate and up to date and will be so maintained.
2.3 Power and Authority. Borrower has the power to execute, deliver and
carry out this Agreement and to incur the Obligations and has taken
all necessary action to authorize the execution, delivery and
performance by Borrower of this Agreement and the other documents
executed in connection with this Agreement and the incurring of the
Obligations.
2.4 No Legal Bar. The execution and delivery of this
Agreement and compliance by Borrower with the terms and
provisions hereof or of any of the other agreements or
instruments referred to herein (i) will not, on the date hereof,
violate any provision of any existing law or regulation or any
writ or decree of any court or governmental instrumentality, or
any agreement or instrument to which Borrower is a party or which
is binding upon it or its assets, and (ii) will not result in
the creation or imposition of any hen, security interest, charge
or encumbrance of any nature whatsoever upon or in any of its
assets, except as contemplated by this Agreement. No consent of
any other party, and no consent, license, approval or
authorization of or registration or declaration with any
governmental bureau or agency, is required in connection with the
execution, delivery, performance, validity and enforceability of
this Agreement except for those which have been obtained or
completed prior to the closing of the transactions contemplated
herein; and this Agreement and the Note are valid, binding and
enforceable against Borrower in accordance with their terms.
2.5 Title. Borrower has good and marketable title to all of its
property and assets (the "Property").
2.6 No Material Litigation. Borrower represents that no material
litigation or administrative proceeding of or before any
governmental body is presently pending or, to the knowledge of
Borrower, threatened against Borrower or any of its property.
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2.7 No Default. Borrower is not in default with respect to the payment
or performance of any of its obligations or in the performance of
any covenants or conditions to be performed by it pursuant to the
terms and provisions of any indenture, agreement or instrument to
which it is a party or by which it may be bound, including, without
limitation, leases of or mortgages on the premises, if any, on
which the Property is or may be located, except in any such case
where such default would not have a material adverse effect on the
financial condition of the Borrower, and Borrower has received no
notice of default thereunder.
2.8 Compliance with Laws. Borrower has complied with and will continue
to comply, except where non-compliance would not have a material
adverse effect on the Borrower, with all applicable statutes and
regulations of the United States of America, and all states,
counties, municipalities and agencies of any governmental authority
thereof, including those with respect to:
a. Any restrictions, specifications or other requirements pertaining
to the services it performs;
b. The conduct of its business operations;
c. The use, maintenance and operation of the real and personal
properties owned or leased by it in the operation of its
business; and
d. The management storage and disposal of hazardous materials,
substances and wastes.
2.9 No Secondary Liabilities. There are no outstanding contracts or
agreements of guaranty or suretyship made by Borrower, or to which
it is a party, or to which. any of its assets are subject, except as
set forth on the financial statements previously provided to Lender.
2.10 Taxes. Borrower has filed or caused to be filed or obtained
extensions for the filing of, and will continue to file and cause to
be filed, all federal, state and local tax returns required by law
to be filed, and has paid and will continue to pay all taxes shown
to be due and payable on such returns or on any assessment made
against it, except if being contested in good faith, and adequate
provision has been made therefor on its books of account. No claims
are being asserted with respect to such taxes which are not
reflected in the financial statements previously provided to Lender.
2.11 Financial Condition. Borrower has submitted to Lender various
financial statements and information, and represents that all of
such financial information is true and correct to the best of the
knowledge and belief of Borrower; that such financial information
fairly presents the financial condition and results of the
operations of Borrower as of the date thereof and for the period
indicated therein; that such financial statements have been prepared
in accordance with generally accepted accounting principles and
practices
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consistently maintained throughout the period involved; that, as of
the date of such financial information, there were no material
unrealized or anticipated losses from any unfavorable commitments
of Borrower; and that there has been no material adverse change in
the business or assets or in the condition, financial or otherwise,
of Borrower from that set forth in such financial statements.
2.12 Accuracy of Representations. No representation or warranty by
Borrower contained in any certificate or other document furnished
or to be furnished by Borrower pursuant hereto or in connection with
the transactions contemplated hereunder, contains, or at the time
of delivery will contain, any untrue statement of material fact or
omits or will omit to state a material fact necessary to make it not
misleading.
2.13 Trade Names. Borrower operates its business under the name
"Physicians Care for Connecticut" and has no other trade names.
2.14 Director and Officer Debt. Borrower does not owe any money to or
have any outstanding liabilities to any director, trustee or officer
of Borrower other than liabilities to officers for services rendered
in the ordinary course of the Borrower's business.
2.15 Pension Plans. To the extent that any present or future pension
plan of Borrower is subject to state or federal statutes or
regulations, Borrower represents and warrants that it shall at
all times be in compliance in all material respects with such
statutes and regulations and will furnish Lender with copies of such
reports as it may be required to furnish under such statutes or
regulations.
2.16 Environmental Contamination. To the best of Borrower's knowledge,
there does not now exist on, under or within any property owned or
operated by the Borrower any known discharge, spillage, uncontrolled
loss, seepage or filtration of oil, petroleum or hazardous or toxic
substances or wastes which could have a material adverse effect on
the property, financial condition or operations of Borrower.
SECTION 3. Affirmative Covenants. Borrower covenants and agrees that, so long
as any of the Obligations shall remain outstanding, Borrower will perform and
observe each and all of the covenants and agreements herein set forth.
3.1 Payments Under this Agreement and Other Agreements. Borrower
will make punctual payment of all monies and will faithfully and
fully keep and perform all of the terms, conditions, covenants and
agreements contained on Borrower's part to be paid, kept or
performed hereunder, and will be bound in all respects as debtor
under this Agreement; and will make punctual payment of all monies
and will faithfully and fully keep and perform all of the material
terms, conditions, covenants and agreements on its part to be paid,
kept or performed under the terms of any lease or mortgage of the
premises where the Property is located or is to be located wherein
Borrower is lessee or mortgagor, and
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will promptly notify Lender in the event of any default on the part
of Borrower or receipt by Borrower of any notice of alleged default
under any such lease or mortgage.
3.2 Information, Access to Books, and Inspection. Borrower will furnish
to Lender such information regarding the business affairs and
financial condition of Borrower as Lender may reasonably request,
and upon at least 24 hours prior notice, give any representative or
agent of Lender access during normal business hours to, and permit
him or her to examine and copy, and make extracts from, any and all
books, records and documents in the possession of Borrower relating
to its affairs and to inspect any of the properties of Borrower.
3.3 Payment of Liabilities. Borrower will pay and discharge at or before
their due date all taxes, assessments, rents, claims, debts and
charges, except where the same may be contested in good faith and
Borrower maintains, in accordance with generally accepted accounting
principles and practice, appropriate reserves satisfactory to Lender
for the accrual of any of the same.
3.4 Payment of Taxes. Borrower will pay promptly when due
all taxes and assessments upon the Property or for its use or
operation or upon this Agreement or upon any note or notes
evidencing the Obligations. If not paid by Borrower, at Lender's
option, in its sole and absolute discretion, Lender may discharge
taxes, liens or security interests or other encumbrances at any
time levied or placed on the Property, including but not limited
to payments on premises leased by Borrower. Borrower agrees to
reimburse Lender on demand for any payment made with interest at
the prime rate contained in the Note, or any expense incurred by
Lender pursuant to the foregoing authorization. Nothing herein
contained shall obligate Lender to make such payment nor shall
the making of one or more such payments constitute: (i) an
agreement on Lender's part to take any farther or similar action;
or (ii) a waiver of any default by Borrower under the terms
thereof or of this Agreement. Borrower may in good faith contest
any of such taxes in the manner provided by law as long as
Borrower establishes a reserve on its financial statements, as
Lender may reasonably require, equal to the amount of the
contested charges, interest and penalties.
3.5 Corporate Existence, Properties, Insurance. (a)
Borrower will do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate
existence, rights and franchises, and comply in all material
respects with all laws applicable thereto; at all times maintain,
preserve and protect all franchises, patents, and trade names and
preserve all the remainder of its property used or useful in the
conduct of its business and keep the same in good condition and
repair (normal wear and tear and obsolescence excepted), and from
time to time make, or cause to be made, all needful and proper
repairs, renewals, replacements, betterments and improvements
thereto, and will pay or cause to be paid, except when the same
may be contested in good faith, all rent due on premises where
any property is held or may be held, so that the business carried
on in connection therewith may be continuously conducted.
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(b) Borrower will have and maintain, or shall cause
to be in place and maintained, insurance at all times with
respect to all Property against risks of fire (including
so-called extended coverage), theft and such other risks as is
customary for entities engaged in the same business as the
Borrower in companies licensed to do business in Connecticut.
Borrower will furnish Lender with certificates or other evidence
satisfactory to Lender of compliance with the foregoing insurance
provisions. Borrower will also at all times maintain necessary
workers' compensation insurance and such other insurance as may
be required by law or as may be reasonably required in
writing by Lender.
3.6 Notices. Borrower will promptly give notice in
writing to Lender of the occurrence of any event which
constitutes or which with notice or lapse of time, or both, would
constitute an Event of Default hereunder. Borrower will give
Lender written notice of any court or governmental orders,
notices, claims, investigations, litigation and proceedings
affecting Borrower in which the amounts involved exceed $ 10,000
in any one instance or $50,000 in the aggregate and are not
covered by insurance or malpractice trust funds, and of any
dispute which may exist between Borrower and any governmental
regulatory body or any other party.
3.7 Financial Statements and Reports.
a. Borrower will furnish to Lender, within one hundred
twenty (120) days after the close of each fiscal year of
Borrower, a balance sheet of Borrower as at the close of each
such fiscal year and statements of income and retained earnings
and source and application of funds for the year then ended,
prepared in conformity with generally accepted accounting
principles, applied on a basis consistent with that of the
preceding year or containing disclosure of the effect on
financial position or results of operations of any change in the
application of accounting principles during the year and audited
by a firm of independent certified public accountants selected by
Borrower and reasonably acceptable to Lender. Each annual
statement will be accompanied by: (i) a certificate from the
chief financial officer or the ???? executive officer of Borrower
certifying to the accuracy of such statement and further
certifying that Borrower is not in default under any of the
terms, covenants or provisions of this Agreement and that no
events have occurred which, after notice by Lender or lapse of
time or both, would constitute such a default; or (ii) a
statement specifying the nature and period of existence of any
such default or event.
b. Borrower will furnish to Lender, within forty-five
(45) days after the close of each fiscal quarter of Borrower, a
balance sheet of Borrower as at the close of each such fiscal
quarter and statements of income and retained earnings and source
and application of funds for the year to date, prepared in
conformity with generally accepted accounting principles, applied
on a basis consistent with that of the
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preceding year or containing disclosure of the effect on
financial position or results of operations of any change in the
application of accounting principles during the year. Each
quarterly statement will be accompanied by: (i) a certificate
from the chief financial officer or the chief executive officer
of Borrower certifying to the accuracy of such statement and
further certifying that Borrower is not in default under any of
the terms, covenants or provisions of this Agreement and that no
events have occurred which, after notice by Lender or lapse of
time or both, would constitute such a default; or (ii) a
statement specifying the nature and period of existence of any
such default or event.
c. Borrower shall furnish to Lender at least 30 days prior to the
end of each fiscal year an annual budget for the upcoming fiscal
year of the Borrower in form satisfactory to Lender.
d. Borrower will cause to be furnished to Lender, within one hundred
twenty (120) days . after the close of each fiscal year of
Guarantor, the financial statements required to be delivered
pursuant to the Guaranty.
e. Borrower shall promptly furnish to Lender such other information
as Lender shall reasonably request.
3.8 Minimum Collateral Pledged. The Collateral Value (as defined in
the Pledge Agreement) shall at all times equal or exceed the maximum
permitted principal amount under the Note (including both
outstanding and available amounts).
3.9 Direct Debit of Principal and Interest. Borrower agrees that Lender
may directly debit Borrower's accounts held by Lender for any
principal or interest payment on any Obligation when such Obligation
becomes due and payable.
3.10 Good Standing Certificate of Guarantor. Borrower will furnish to
Lender within 60 days of the date of this Agreement a good standing
certificate for the Guarantor issued by the Connecticut Secretary
of State.
SECTION 4. Negative Covenants. So long as any Obligations remain outstanding
and unpaid, Borrower covenants and agrees that it will not, without the express
written consent of Lender:
4.1. Limitation on Fundamental Changes. Merge or consolidate with or
into any other firm or corporation; dissolve or liquidate; change
substantially its fine of business; change its name; or convey,
sell, lease or otherwise dispose of all or substantially all of
its property, assets or business; provided, however, that Lender
will not unreasonably withhold consent to a name change of Borrower.
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4.2. Limitation on Liens. Incur or permit to exist any
hen, mortgage, security interest, pledge, charge or other
encumbrance against its Property whether now owned or hereafter
acquired (including, without limitation, any lien or encumbrance
relating to any response, removal or clean-up of any toxic
substances or hazardous wastes), except: (a) hens, mortgages,
security interests, charges or other encumbrances in favor of the
Lender or specifically permitted in writing by the Lender; (b)
pledges or deposits in connection with or to secure worker's
compensation or unemployment insurance; and (c) tax hens which
are being contested in good faith with the prior written consent
of the Lender and against which, if requested by the Lender, the
Borrower shall maintain reserves in amounts and in form (book,
cash, bond or otherwise) satisfactory to Lender.
4.3. Limitation on Advances and Investments. Make or
suffer to exist any advances or loans in excess of $10,000 to, or
any material investments in (by transfers of property,
contributions to capital, purchase of stock or securities or
evidence of indebtedness, acquisition of assets or business or
otherwise but excluding accounts receivable arising in the
ordinary course of Borrower's business) any person, firm or
corporation, including officers or employees of the Borrower.
4.4. Limitation on Other Borrowing. Incur, create, assume
or permit to exist any indebtedness or liability on account of
deposits or advances or any indebtedness or liability for
borrowed money or any other indebtedness or liability evidenced
by notes, bonds, debentures or similar obligations or
incorporated in any lease or license agreement.
4.5. Limitation on Contingent Liabilities. Become liable
as guarantor, surety, endorser or otherwise for, or agree to
purchase, repurchase or assume, any obligation of any person,
firm or corporation, except for endorsement of commercial paper
for deposit, collection, or discount in the ordinary course of
business.
SECTION 5. Events of Default.
5.1 The occurrence of any of the following events with respect to
Borrower will constitute an Event of Default by Borrower under
this Agreement:
a. Failure to make any payment of principal or interest on the
Obligations within 10 days of the date when due.
b. Any warranty or representation or other statement made or
furnished to Lender by or on behalf of Borrower or Guarantor
herein or in any document or instrument furnished in connection
herewith proves to have been false or misleading in any material
respect when made or furnished.
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c. Dissolution, termination of existence, insolvency,
appointment of a receiver, trustee, custodian or similar
fiduciary, assignment for the benefit of creditors of or the
commencement of any proceedings under any bankruptcy or
insolvency laws by or against Borrower or Guarantor and if
against the Borrower or Guarantor the continuation of such
proceeding for more than sixty (60) days, or the making by
Borrower or Guarantor of any offer of settlement, extension or
composition to its creditors generally.
d. Breach of or failure in the due observance or
performance in any material respect of any covenant condition or
agreement (not otherwise specified in this section 5. 1) on the
part of Borrower to be observed or performed pursuant to this
Agreement or any other agreement or instrument between Lender and
Borrower.
e. The issuance, filing or levy against Borrower of an
attachment, injunction, execution, tax lien or judgment for the
payment of money in excess of $ 1 0,000 which is not discharged
in full or stayed within thirty (30) days after issuance, filing
or levy.
f. Default in the payment of any sum due under any
indebtedness for borrowed money .owed by Borrower to any person
or entity or any other default under such indebtedness which
results in such indebtedness being due prior to its stated
maturity.
g. Any material loss, theft, substantial damage,
destruction, sale (other than in the ordinary course of
business), exchange, or other disposition not in the ordinary
course of business, or any encumbrance on all or substantially
all of the Property, the making of any levy, seizure or
attachment thereof or thereon, or the placing of any lien or
liens thereon by the United States of America or any federal,
state or local government agency or authority.
h. The occurrence of a default beyond any applicable
grace period under or demand for the payment of any other note-
or obligation of Borrower or Guarantor to Lender.
i. The occurrence of a default beyond any applicable
grace period pursuant to the Guaranty or the Pledge Agreement or
any claim by Guarantor that the Guaranty or Pledge Agreement is
no longer in full force and effect.
5.2 Upon the happening of any event of default specified above, the
entire unpaid balance owed under the Note and this Agreement, or any
note or other documents relating to the same, plus any other sums
owed hereunder or under any such note, shall, at Lender's option,
automatically become and shall thereafter be immediately due and
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payable without presentment, demand, protest, notice of protest, or
other notice of dishonor of any kind, all of which are hereby
expressly waived by Borrower.
SECTION 6. Miscellaneous.
6.1 Setoff. All sums at any time standing to Borrower's
credit on Lender's books and all of Borrower's property at any
time in Lender's possession or upon or in which Lender has a hen
or security interest shall be security for all Obligations. In
addition to and not in limitation of the above, with respect to
any deposits or property of Borrower in Lender's possession or
control, now or in the future, Lender shall have the right after
a default hereunder to setoff all or any portion thereof, at any
time, against any Obligations hereunder, even though unmatured,
without prior notice or demand to Borrower.
6.2 No Waiver. No course of dealing between Borrower and
Lender and no failure to exercise or delay in exercising on the
part of Lender any right, power or privilege under the terms of
this Agreement or under the terms of any other agreements,
instruments or other documents between Lender and Borrower shall
operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or privilege hereunder or thereunder
preclude any other or further privilege. The rights and remedies
provided herein or in any other agreement are cumulative and not
exclusive or in derogation of any rights or remedies provided
herein and therein and by law or otherwise.
6.3 Survival of Agreements. All agreements,
representations and warranties made herein, in any agreement and
in any statements, notices, invoices, certificates, schedules,
documents or other instruments delivered to Lender in connection
with this Agreement or any other agreement shall survive the
making of the loans and advances hereunder.
6.4 Further Documents. Borrower agrees that, at any time
or from time to time upon written request of Lender, Borrower
will execute and deliver such further documents and do such other
acts and things as Lender may reasonably request in order to
fully effect the purposes of this Agreement and the documents
referred to herein.
6.5 Entire Agreement. This Agreement and the documents of
even date executed in connection ,with this transaction
constitute the entire agreement of the parties relating to this
transaction, and may not be amended orally but only by a writing
signed by the parties.
6.6 Successors. All rights of Lender hereunder shall inure to the
benefit of its successors and assigns, and all Obligations of
Borrower shall bind its successors and assigns.
6.7 Payments. The acceptance of any check, draft, money order or
preauthorized electronic transfer tendered in full or partial
payment of any Obligation hereunder is conditioned upon and subject
to the receipt of final payment in cash.
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6.8 Exhibits. All exhibits referred to herein and annexed hereto are
hereby incorporated into this Agreement and made a part hereof.
6.9 Counsel Fees and Expenses. Borrower agrees to pay all fees and
expenses, including reasonable attorneys' fees and recording and
filing fees, which Lender may hereafter incur in reasonably
protecting, enforcing, increasing or releasing any security held
by Lender.
6.10 Descriptive Headings. The descriptive headings of the
several sections of this Agreement are inserted for convenience
only and shall not be deemed to affect the meaning or
construction of any of the provisions hereof.
6.11 Notices. Any written notice required or permitted by
this Agreement may be delivered by hand delivery, by overnight
courier service or by United States certified or registered mail,
postage prepaid, return receipt requested. The date of receipt
of any notice shall be deemed to be, and shall be effective from,
the time of actual receipt, if hand delivered or sent by over
night courier and three days after the same is deposited in the
United States mail as provided above if sent by United States
mail. Notices should be sent as follows:
If to the Lender:
Fleet National Bank
000 Xxxx Xxxxxx - CT MO H04A
Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: Xxxxxxx Xxxxxx, Vice President
If to the Borrower:
Physicians Care for Connecticut, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx, Chief Executive Officer
Any address for notice herein may be changed by a notice in writing
to the other party in accordance with the terms hereof.
6.12 Severability. If any provision of this Agreement or
application thereof to any person or circumstance shall to any
extent be invalid, the remainder of this Agreement or the
application of such provision to persons, entities or
circumstances other than those as to which it is held invalid,
shall not be affected thereby and each provision of this
Agreement shall be valid and enforceable to the fullest extent
permitted by law.
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6.13 Governing Law. This Agreement shall be governed by and construed
under the laws of the State of Connecticut.
6.14 WAIVER OF RIGHT TO PREJUDGMENT REMEDY NOTICE AND
HEARING BORROWER ACKNOWLEDGES THAT LENDER MAY HAVE RIGHTS AGAINST
BORROWER, NOW OR IN THE FUTURE, IN ITS CAPACITY AS CREDITOR OR IN
ANY OTHER CAPACITIES. SUCH RIGHTS MAY INCLUDE THE RIGHT TO
DEPRIVE BORROWER OF OR AFFECT THE USE OF OR POSSESSION OR
ENJOYMENT OF BORROWER'S PROPERTY, AND IN THE EVENT LENDER DEEMS
IT NECESSARY TO EXERCISE ANY OF SUCH RIGHTS PRIOR TO THE
RENDITION OF A FINAL JUDGMENT AGAINST BORROWER, OR OTHERWISE,
BORROWER MAY BE ENTITLED TO NOTICE AND/OR BEARING UNDER THE
CONSTITUTION OF THE UNITED STATES AND/OR STATE OF CONNECTICUT,
CONNECTICUT STATUTES (TO DETERMINE WHETHER OR NOT LENDER HAS
PROBABLE CAUSE TO SUSTAIN THE VALIDITY OF LENDER'S CLAM, OR THE
RIGHT TO NOTICE AND/OR BEARING UNDER OTHER APPLICABLE STATE OR
FEDERAL LAWS PERTAINING TO PREJUDGMENT REMEDIES, PRIOR TO THE
EXERCISE BY LENDER OF ANY SUCH RIGHTS. BORROWER EXPRESSLY WAIVES
ANY SUCH RIGHT TO PREJUDGMENT REMEDY NOTICE OR BEARING TO WHICH
BORROWER MAY BE ENTITLED. TIES SHALL BE A CONTINUING WAIVER AND
REMAIN IN FULL FORCE AND EFFECT SO LONG AS BORROWER IS OBLIGATED
TO LENDER.
6.15 WAIVER OF RIGHT TO TRIAL BY JURY. BORROWER AND LENDER
KNOWINGLY AND VOLUNTARILY HEREBY WAIVE, AFTER CONSULTATION WITH
LEGAL COUNSEL, TRIAL BY JURY AND THE RIGHT TO TRIAL BY JURY,
WHETHER UNDER THE CONSTITUTION OF THE UNITED STATES AND/OR THE
STATE OF CONNECTICUT, STATUTES OR OTHER APPLICABLE LAW, IN ALL
ACTIONS OR PROCEEDINGS BETWEEN THEM IN ANY COURT ARISING OUT OF
OR RELATING TO THIS AGREEMENT, ITS VALIDITY OR INTERPRETATION.
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In Witness Whereof, the parties have caused this Agreement to be duly
executed and delivered by the proper and duly authorized officers as of the
date and year first above written.
WITNESS: PHYSICIANS CARE FOR CONNECTICUT, INC.
_______________________________ By____________________________________
Xxxxxx X. Xxxxxx
Its Chief Executive Officer
FLEET NATIONAL BANK
_______________________________
_______________________________ By____________________________________
Xxxxxxx Xxxxxx
Its Vice President
STATE OF CONNECTICUT )
) ss. Hartford
COUNTY OF HARTFORD )
On this the 25th day of november, 1996, before me, the undersigned
officer, personally appeared Xxxxxx X. Xxxxxx, who acknowledged himself to be
the Chief Executive Officer of PHYSICIANS CARE FOR CONNECTICUT, INC., and
that he, as such officer, being authorized so to do, executed the foregoing
instrument for the purposes therein contained, by signing the name of the
corporation by himself as such officer.
In witness whereof, I hereunto set my hand.
_______________________________________
Name:__________________________________
Commissioner of the Superior Court
STATE OF CONNECTICUT )
) ss. Hartford
COUNTY OF HARTFORD )
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On this the 25th day of November, 1996, before me, the undersigned
officer, personally appeared Xxxxxxx Xxxxxx, who acknowledged herself to be a
Vice President of FLEET NATIONAL BANK, a corporation, and that she, as such
officer, being authorized so to do, executed the foregoing instrument for the
purposes therein contained, by signing the name of the corporation by herself
as such officer.
In witness whereof, I hereunto set my hand.
________________________________________
Name: __________________________________
Commissioner of the Superior Court
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Exhibit 1.1b
LINE OF CREDIT NOTE
$650,000.00 Hartford, Connecticut
November 25, 1996
FOR VALUE RECEIVED, the undersigned, PHYSICIANS CARE FOR CONNECTICUT, INC., a
Connecticut corporation located at 0000 Xxxxxxxx Xxxxxx, Xxxxxxxx,
Xxxxxxxxxxx 00000 (the "Borrower"), hereby promises to pay to the order of
FLEET NATIONAL BANK, a national banking association, (the "Lender"), at its
office at 000 Xxxx Xxxxxx Xxxxxxxx, Xxxxxxxxxxx 00000 or at such other place
as the holder hereof may designate, the principal amount advanced hereunder
and remaining unpaid, up to a maximum amount of SIX HUNDRED FlFTY THOUSAND
AND NO/100 DOLLARS ($650,000.00) (the "Principal Amount") in lawful money of
the United States, together with interest on the Principal Amount, beginning
on the date hereof, before and after maturity or judgment, at a per annum
rate determined as provided below.
1. Interest Rate: Each advance under this Note (each a "Loan Advance")
shall bear interest at a per annum rate equal to either (a) a floating rate
equal to Lender's Prime Rate (as hereinafter defined) or (b) a fixed rate
equal to one hundred (100) basis points above the LIBOR Rate (as determined
for each Interest Period applicable thereto) for available Interest Periods
of thirty (3 0), sixty (60) or ninety (90) days. The Borrower shall elect
either option (a) or (b) as provided below.
2. Requests for Advances: Whenever Borrower desires an advance,
Borrower shall notify Lender (which notice shall be irrevocable) by
telephone, facsimile or in writing, of the desired borrowing. Such notice
(the "Notice of Borrowing") shall specify the date of the proposed borrowing,
the amount requested, whether the advance shall be a Prime Rate Loan or a
LIBOR Rate Loan, and, if a LIBOR Rate Loan, the duration of the initial
available Interest Period. Each Notice of Borrowing for advances which are
Prime Rate Loans must be received by Lender no later than 1 1:00 a.m.,
Hartford, Connecticut time on the day such borrowing is requested, and each
Notice of Borrowing for advances which are LIBOR Rate Loans must be received
by Lender no later than 10:00 a.m., Hartford, Connecticut time at least three
(3) Business Days' prior to the day such borrowing is requested. Any Notice
of Borrowing that is not in writing shall be followed by a written
confirmation by the Borrower, provided that if such written confirmation
differs in any respect from the action taken by Lender, the records of Lender
shall control, absent manifest error. Lender shall enter each Loan Advance
as a debit on a loan account maintained by Borrower with Lender (the "Loan
Account"). Lender may also record in the Loan Account, in accordance with
customary banking procedures, all fees, accrued and unpaid interest, late
fees, usual and customary bank charges for the maintenance and administration
of accounts maintained by Borrower and other fees and charges which are
properly chargeable to Borrower in connection
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with the Loan Advances and all payments, subject to collection, made by
Borrower on account of or to Lender. Borrower may repay and reborrow advances
that are made under this Note, subject, however, to the prepayment terms
contained below. Borrower's right to request advances under this Note shall
terminate on the Termination Date.
3. Election and Continuation of Interest Periods. Any Prime Rate Loan
shall continue as a Prime Rate Loan until the Borrower elects to convert it
to a LIBOR Rate Loan as provided below. Any LIBOR Rate Loan may be continued
as such upon the expiration of the then current Interest Period by the
Borrower giving irrevocable written notice to Lender of the duration of the
next available Interest Period to be applicable to any such LIBOR Rate Loan
not less than three (3) Business Days prior to the last Business Day of the
then current Interest Period with respect to such LIBOR Rate Loan, provided
that no LIBOR Rate Loan may be continued as such: (i) at a time when any
Event of Default (or event or condition which would constitute an Event of
Default but for the giving of notice or passage of time or both) has occurred
and is continuing and (H) after the date that is thirty (30) days prior to
the Termination Date. Unless Borrower elects to convert to a different
interest rate as provided below, if a LIBOR Rate Loan is not continued as a
LIBOR Rate Loan, all as provided above, then any such loan shall
automatically be converted to a Prime Rate Loan on the last day of the then
expiring Interest Period.
4. Conversion of Loans to a Different Interest Rate. The Borrower may
elect from time to time to convert (a) a LIBOR Rate Loan to a Prime Rate Loan
or (b) a Prime Rate Loan to a LIBOR Rate Loan as provided in this section.
Borrower shall exercise such election by giving the Lender not less than
three (3) Business Days prior irrevocable written notice of such election;
provided that any such conversion of a LIBOR Rate Loan to a Prime Rate Loan
shall only be made on the last Business Day of the then current Interest
Period with respect thereto. Any such notice of conversion to a LIBOR Rate
Loan shall specify the length of the available Interest Period applicable
thereto.
5. Payments of Interest. Interest on this Note shall be calculated on
the basis of a 3 60 day year and the actual number of days elapsed. Monthly
payments of interest shall be due and payable in arrears on the first day of
each month, commencing December 1, 1996, until this Note is paid in full.
6. Payments of Principal. If not sooner paid, the aggregate
outstanding Principal Amount of this Note, together with all accrued and
unpaid interest thereon and any other fees or charges then due, shall be due
and payable on the Termination Date.
7. Definitions. As used in this Note and not defined elsewhere in this
Note, the following terms shall have the following meanings:
a. "Business Day" means any day other than a day on which commercial
banks in Hartford, Connecticut are required or permitted by law to close.
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b. "Interest Period" means with respect to advances bearing interest
at the LIBOR Rate, an available period of thirty (30), sixty (60) or ninety
(90) days, provided that:
(1) if any Interest Period would otherwise end on a day that is
not a Business Day, such Interest Period shall end on the immediately preceding
Business Day;
(2) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period) shall end on the
last Business Day of a calendar month; and
(3) any Interest Period that would otherwise extend beyond the
Termination Date shall end on the Termination Date.
c. "LIBOR Rate" means, with respect to any LIBOR Rate Loan for each
applicable Interest Period, the rate per annum determined by the Lender to be
equal to the quotient of (a) the London Interbank Offered Rate for such LIBOR
Rate Loan for such Interest Period, divided by (b) one (1) minus -the Reserve
Percentage for such Interest Period, expressed as follows:
LIBOR Rate = London Interbank Offered Rate
------------------------------
1 - Reserve Percentage
d. "LIBOR Rate Loan" means an advance that bears interest at a rate
equal to the LIBOR Rate plus one hundred (I 00) basis points.
e. "London Interbank Offered Rate" means, with respect to any
applicable Interest Period for a LIBOR Rate Loan, the rate per annum at which
the Eurodollar office of the Lender is offered, in the London interbank
Dollar deposits market, at or about I 1:00 a.m. London time, two (2) business
days prior to the first day of such Interest Period, Dollar deposits, for a
period, and in an amount comparable to such Interest Period and principal
amount of the LIBOR Rate Loan which shall be made by the Lender and
outstanding during such Interest Period.
f. "Prime Rate" means the rate of interest announced from time to
time by Lender at its office in Hartford, Connecticut as its prime rate.
Such Prime Rate may not be the lowest or best rate that is made available by
Lender to its commercial borrowers.
g. "Prime Rate Loan" means an advance that bears interest at a
rate equal to Lender's Prime Rate.. The interest rate on each Prime Rate Loan
shall change, without notice to Borrower, each time that Lender's Prime Rate
changes so that the rate of interest on a Prime Rate Loan is at all times
equal to Lender's Prime Rate.
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h. "Reserve Percentage" means the maximum marginal percentage as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for determining the reserve requirement for Lender in respect of
eurodollar deposits having a maturity equal to the Interest Period as the
Borrower may elect pursuant to the terms of this Note. With respect to the
LIBOR Rate, any change in the interest rate because of a change in the
Reserve Percentage shall become effective, without notice or demand, on the
date on which such change in the Reserve Percentage becomes effective.
"Termination Date" means November 22, 1997.
8. Illegality. Notwithstanding any other provisions hereof, if any
applicable law or governmental regulation, guideline, order or directive, or
any change therein or in the interpretation or application thereof by any
governmental authority charged with the interpretation or the administration
thereof (whether or not having the force of law) shall make it unlawful for
the Lender to make or maintain LIBOR Rate Loans as contemplated by this Note:
(i) the obligation of the Lender to continue LIBOR Rate Loans shall forthwith
be cancelled, and (ii) such amounts then outstanding shall be automatically
converted, without notice, to Prime Rate Loans on the last day of the then
current Interest Period or within such earlier time as required by law. If
any such conversion of LIBOR Rate Loans is made on a day that is not the last
Business Day of the then current Interest Period applicable thereto, Borrower
shall pay the Lender such amount or amounts required pursuant to Section 13
below.
9. Basis for Determining LIBOR Inadequate or Unfair. In the event that
the Lender shall have determined (which determination, absent manifest error,
shall be conclusive and binding upon Borrower) that (i) by reason of
circumstances affecting the Interbank LIBOR market, adequate and reasonable
means do not exist for determining the LIBOR Rate, or (H) Dollar deposits in
the relevant amount and for the relevant maturity are no longer available to
the Lender in the Interbank LIBOR market, or (iii) the 'continuation of LIBOR
Rate Loans has been made impractical or unlawful by the occurrence of a
contingency that materially and adversely affects the Interbank LIBOR market,
or (iv) the LIBOR Rate will not adequately and fairly reflect the cost to the
Lender of maintaining LIBOR Rate Loans, or (v) the LIBOR Rate shall no longer
represent the effective cost to the Lender of U.S. Dollar deposits in the
relevant market for deposits in which it regularly participates, the Lender
shall give the Borrower notice of such determination as soon as practicable.
If such notice is given all LIBOR Rate Loans shall be automatically
converted, without notice, to Prime Rate Loans effective on the last Business
Day of the then current Interest Period applicable thereto. Until such
notice has been withdrawn, the LIBOR Rate shall not be continued.
10. Costs and Expenses. The Borrower shall pay a taxes levied or
assessed on this Note or the debt evidenced hereby against the Lender,
together with all costs, expenses and attorneys' and other professional fees
incurred in any action to collect and/or enforce this Note or to enforce the
Loan Agreement between Borrower and Lender dated the same date as this Note
(the "Loan Agreement") or any other agreement relating to this Note or the
Loan Agreement or
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any other agreement or in any litigation or controversy arising from or
connected with the Loan Agreement or any other agreement, or this Note.
11. Increased Costs. In the event that applicable law, treaty or
regulation or directive from any government governmental agency or regulatory
authority, or any change therein or in the interpretation or application
thereof, or compliance by the Lender with any request or directive (whether
or not having the force of law) from any central bank or government,
governmental agency or regulatory authority, shall:
a. subject the Lender to any tax of any kind whatsoever (except
taxes on the overall net income of the Lender) with respect to the Loan
Agreement, this Note or any of the loans made by it, or change the basis of
taxation of payments to the Lender in respect thereof (except for changes in
the rate of tax on the overall net income of the Lender);
b. impose, modify or hold applicable any reserve, special deposit,
compulsory loan or similar requirements against assets held by, deposits or
other liabilities in or for the account ot advances, loans or other
extensions of credit by, or any other acquisition of funds by, any office of
the Lender, including (without limitation) pursuant to Regulations of the
Board of Governors of the Federal Reserve System; or
c. in the opinion of the Lender, cause this Note, any loan made
under this Note or under the Loan Agreement to be included in any
calculations used in the computation of regulatory capital standards; or
d. impose on the Bank any other condition;
and the result of any of the foregoing is to increase the cost to the Lender,
by an amount that the Lender deems to be material, of making, converting
into, continuing and/or maintaining the loans made pursuant to this Note (the
"Loans") or to reduce the amount of any payment (whether of principal,
interest or otherwise) in respect of any of such Loans, then, in any case,
the Borrower shall promptly pay the Lender, upon its demand, such additional
amounts necessary to compensate the Lender for such additional costs or such
reduction in payment, as the case may be (collectively the "Additional
Costs"). The Lender shall certify the amount of such Additional Costs to the
Borrower, and such certification, absent manifest error, shall be deemed
conclusive.
12. Capital Adequacy Protection. If, after the date hereof, the Lender
shall have determined that the adoption of any applicable law, governmental
rule, regulation or order regarding capital adequacy of banks or bank holding
companies, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof,
or compliance by the Lender with any request or, directive regarding capital
adequacy (whether or not having the force of law and whether or not failure
to comply therewith would be unlawful, so long as the Lender believes in good
faith that such has the force of law or that the failure to so comply would
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be unlawful) of any such authority, central bank or comparable agency, has or
would have the effect of reducing the rate of return on any of the Lenders
capital as a consequence of the Lender's obligations hereunder to a level
below that which the Lender could have achieved but for such adoption, change
or compliance (taking into consideration the Lender's policies with respect
to capital adequacy immediately before such adoption, change or compliance
and assuming that the Lender's capital was fully utilized prior to such
adoption, change or compliance) by an amount deemed by the Lender in its
judgment to be material, then, promptly upon demand, the Borrower shall
immediately pay to the Lender, from time to time as specified by the Lender,
such additional amounts as shall be sufficient to compensate the Lender for
such reduced return, together with interest on each such amount from the date
of such specification by the Lender until payment in full thereof at the
highest rate of interest (other than the default rate of interest) due on the
Loans. A certificate of the Lender setting forth the amount to be paid to the
Lender shall, in the absence of manifest error, be deemed conclusive. In
determining such amount, the Lender shall use any reasonable averaging and
attribution methods. The Borrower may, however, avoid paying such amounts
for future rate of return reductions if, within the maximum borrowings
permitted herein, the Borrower borrows such amounts as will cause the Lender
to avoid any such future rate of return reductions which would otherwise be
caused by such changed capital adequacy requirements or the Borrower agrees
to a reduction in the Loans to achieve the same result.
13. Indemnity. The Borrower agrees to indemnify the Lender and to hold
the Lender harmless from any loss (including any of the additional costs
referred to above and any lost profits) or expense that it may sustain or
incur as a consequence of (i) a default by the Borrower in the payment of the
principal of or interest due on this Note, or (ii) the making of a prepayment
of the Principal Amount bearing interest at the LIBOR Rate on a day which is
not the last day of the then cur-rent Interest Period applicable thereto,
including, but not limited to, in each case any such loss or expense arising
from the reemployment of funds obtained by it or from fees, interest or other
amounts payable to terminate the deposits from which such funds were
obtained. The Lender shall prepare a certificate as to any additional
amounts payable to it pursuant to this Section 13, which certificate shall be
submitted by the Lender to the Borrower and shall, absent manifest error, be
deemed conclusive.
14. Lawful Interest. Notwithstanding any provisions of this Note, it is
the understanding and agreement of the Borrower and Lender that the maximum
rate of interest to be paid by the Borrower to the Lender shall not exceed
the highest or the maximum rate of interest permissible to be charged by a
commercial lender such as the Lender to a commercial borrower such as the
Borrower under the laws of the State of Connecticut. Any amount paid in
excess of such rate shall be considered to have been payments in reduction of
principal.
15. Late Charge. Without limiting the Lender's rights and remedies with
respect to the Event of Default that will have occurred, the Borrower hereby
agrees to pay a "late charge" equal to five percent (5%) of any installment
of interest or other amount due to the Lender which is not paid within ten
(10) days of the due date thereof to defray the extra expense involved in
handling such delinquent payment.
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16. Prepayments.
a. The Borrower may, at its option and upon two (2) Business Days'
prior written notice (which notice shall be irrevocable), prepay the
Principal Amount of a LIBOR Rate Loan or a Prime Rate Loan on the following
conditions: (a) the Borrower shall pay all accrued interest on the Principal
Amount being paid to the date of the prepayment and, in the case of
prepayments in fun, all fees, charges, costs, expenses and other amounts then
due hereunder; and (b) such Principal Amount of a LIBOR Rate Loan shall only
be prepaid on the last Business Day of the then current Interest Period with
respect thereto. In its notice, the Borrower shall specify the date and
amount of the prepayment. In the event that any prepayment of the Principal
Amount of a LIBOR Rate Loan is required or permitted on a date other than the
last Business Day of the then current Interest Period with respect thereto,
the Borrower shall indemnify the Lender therefore as provided in this Note.
b. In the event that Borrower makes a prepayment and does not
specify in its notice of prepayment whether the prepayment is to be applied
to a LIBOR Rate Loan or a Prime Rate Loan, then Lender shall apply such
prepayment in such order as Lender in its sole discretion shall determine.
17. Events of Default. The Borrower agrees that the occurrence of an
Event of Default under the Loan Agreement shall constitute an Event of
Default under this Note. Reference is hereby made to the Loan Agreement for
the other terms and conditions relating to the loan evidenced by this Note
which are incorporated in this Note by reference. Upon the occurrence of any
Event of Default, the availability of advances hereunder shall, at the option
of the Lender, be automatically terminated and the Lender, at its option, may
declare all advances outstanding hereunder, together with accrued interest
thereon and all applicable late charges, other amounts due under this Note
and all other liabilities and obligations of the Borrower to the Lender to be
immediately due and payable, whereupon the same shall become immediately due
and payable; all of the foregoing without demand, presentment protest or
notice or any kind, all of which are hereby expressly waived by the Borrower.
Failure to exercise such option shall not constitute a waiver of the right
to exercise the same in the event of any subsequent default. Upon the
occurrence of any Event of Default, without in any way affecting the Lender's
other rights and remedies, or after maturity or judgment, the interest rate
applicable to the outstanding principal balance of this Note shall
automatically change without notice to a floating per annum rate equal to
five percentage points (5.0%) above the otherwise applicable rate.
18. Lien and Right of Setoff. The Borrower hereby gives the Lender a
lien and right of setoff for all liabilities arising hereunder upon and
against all the deposits, credits and property of Borrower now or hereafter
in the possession, custody, safekeeping or control of the Lender or in
transit to it. Lender may, upon the occurrence of an Event of Default@
without notice and without first resorting to any collateral which may now or
hereafter secure
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this Note, apply or set off the same, or any part thereof, to any liability
of the Borrower, even though unmatured.
19. No Waiver. Failure by the Lender to insist upon the strict
performance by Borrower of any terms and provisions herein shall not be
deemed to be a waiver of any terms and provisions herein, and the Lender
shall retain the right thereafter to insist upon strict performance by the
Borrower of any and all terms and provisions of this Note or any agreement
securing the repayment of this Note.
20. Governing Law. This Note shall be governed by the laws of the State
of Connecticut.
21. Prejudgment Remedy and Other Waivers. THE BORROWER ACKNOWLEDGES
THAT THE LOAN EVIDENCED BY THIS NOTE IS A COMMERCIAL TRANSACTION AND WAIVES
ITS RIGHT TO NOTICE AND BEARING UNDER CHAPTER 903a OF THE CONNECTICUT GENERAL
STATUTES, OR AS OTHERWISE ALLOWED BY ANY STATE OR FEDERAL LAW WITH RESPECT TO
ANY PREJUDGMENT REMEDY WHICH LENDER MAY DESIRE TO USE, AND FURTHER, WAIVES
DILIGENCE, DEMAND, PRESENTMENT FOR PAYMENT, NOTICE OF NONPAYMENT, PROTEST AND
NOTICE OF PROTEST, AND NOTICE OF ANY RENEWALS OR EXTENSIONS OF THIS NOTE, AND
ALL RIGHTS UNDER ANY STATUTE OF ??????????. THE BORROWER ACKNOWLEDGES THAT IT
MAKES THIS WAIVER KNOWINGLY, VOLUNTARILY, WITHOUT DURESS AND ONLY AFTER
CONSIDERATION OF THE RAMIFICATIONS OF THIS WAIVER WITH ITS ATTORNEYS.
22. Jury Waiver. THE BORROWER HEREBY WAIVES TRIAL BY JURY IN ANY COURT
AND IN ANY SUIT, ACTION OR PROCEEDING ON ANY MATTER ARISING IN CONNECTION
WITH OR IN ANY WAY RELATED TO THE FINANCING TRANSACTIONS OF WHICH THIS NOTE
IS A PART AND/OR THE ENFORCEMENT OF ANY OF THE LENDER'S RIGHTS AND REMEDIES,
INCLUDING WITHOUT LIMITATION, TORT CLAIMS. THE BORROWER ACKNOWLEDGES THAT IT
MAKES THIS WAIVER KNOWINGLY, VOLUNTARILY, WITHOUT DURESS AND ONLY AFTER
CONSIDERATION OF THE RAMIFICATIONS OF THIS WAIVER WITH ITS ATTORNEYS.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed
this 25th day of November, 1996.
PHYSICIANS CARE FOR CONNECTICUT, INC.
By /s/ Xxxxxx X. Xxxxxx
--------------------------------------
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Xxxxxx X. Xxxxxx
Title: Chief Executive Officer
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