EXHIBIT 10.41
FIRST AMENDMENT TO
LOAN AGREEMENT
This First Amendment to Loan Agreement ("Amendment") is entered into as
of the 27th day of June, 1997 by and among PHYSICIANS RESOURCE GROUP, INC.
("Borrower"), a Delaware corporation; the banks that have executed this
Amendment below (collectively "Lenders"); and NATIONSBANK OF TENNESSEE, N.A., in
its capacity as Agent for Lenders ("Agent").
R E C I T A L S:
WHEREAS, Lenders, Agent and Borrower have previously entered into that
Loan Agreement (the "Loan Agreement") dated as of March 14, 1997; and
WHEREAS, the parties wish to amend the Loan Agreement in certain
respects and to also evidence the Lenders' consent of a certain transaction
proposed by Borrower that would violate the Loan Agreement in the absence of a
waiver;
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency
of which are acknowledged, the parties agree as follows:
1. The Loan Agreement is hereby amended by revising the definition of
"Permitted Acquisition" therein to read in full as follows:
"PERMITTED ACQUISITION" means the purchase (by asset purchase,
stock purchase, merger or otherwise, subject to the other requirements
of this definition set forth below) by a Borrower Entity of either (i)
another physician practice management company whose primary business is
the ownership and management of Practices in a manner similar to that
of Borrower, or of another company in a business substantially related
thereto, or (ii) all or substantially all of the assets of a Practice
in the ordinary course of business (it being acknowledged that medical
records and certain other professional assets that are required by Law
to be owned by a Provider are not acquired in these transactions),
subject to the further satisfaction of the following requirements, as
applicable:
a. If Borrower wishes to have pre-acquisition earnings
approved as Acquisition EBITDA hereunder or the
approval of Lenders is required under any of the
other subsections of this definition, Borrower shall
have delivered to Agent and Lenders an Acquisition
Certificate in the form attached hereto as Exhibit
1.1, together with all required schedules and
exhibits thereto, within the time required by the
terms of the Acquisition Certificate.
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b. If the Total Consideration to be paid by Borrower
Entities in connection with any single acquisition
exceeds eight (8) times the Acquisition EBITDA (as
determined according to the best financial
information available) of the target Practice for the
most recent four fiscal quarters, the prior written
approval of the Required Lenders shall be required.
c. If Borrower's ratio of Funded Debt to Consolidated
Adjusted EBITDA, as last reported in financial
statements delivered to Agent and Lenders pursuant to
this Agreement, is less than 3.00:1.00, the prior
written approval of the Required Lenders shall be
required as to individual acquisitions for which the
Total Cash Consideration is greater than Five Million
and No/100 Dollars ($5,000,000.00) or for which the
Total Consideration is greater than Fifteen Million
and No/100 Dollars ($15,000,000.00).
d. If Borrower's ratio of Funded Debt to Consolidated
Adjusted EBITDA, as last reported in financial
statements delivered to Agent and Lenders pursuant to
this Agreement, is equal to or greater than
3.00:1.00, the prior written approval of the Required
Lenders shall be required as to individual
acquisitions for which the Total Cash Consideration
is greater than Three Million and No/100 Dollars
($3,000,000.00) or for which the Total Consideration
is greater than Ten Million and No/100 Dollars
($10,000,000.00).
e. Borrower shall not enter into any acquisition unless
both prior to and giving effect to the acquisition no
Event of Default shall exist under this Agreement.
All approvals of the Required Lenders under this
definition shall be requested by Borrower through the
delivery of the Acquisition Certificate to Lenders
and Agent and responses of the Lenders shall be
compiled by Agent.
2. Section 5.11.2 of the Loan Agreement is hereby amended by deleting
the period at the end of the second sentence thereof and inserting the following
language:
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in the case of Providers who are physicians and at least Three
Hundred Thousand and No/100 Dollars ($300,000.00) per
occurrence in the case of Providers who are not physicians.
3. Section 6.11 of the Loan Agreement is hereby amended by deleting the
word "and" in the final line thereof, deleting the period after the word "Loans"
in the final line thereof, and adding the following language:
, and (iv) advances to Providers in connection with Permitted
Acquisitions to the extent that, due to legal constraints,
some or all of the acquisition consideration must be paid by
the Provider rather than by a Borrower Entity, and further
provided that repayment of the advance is a shared obligation
of the Provider and the Borrower Entity making the related
acquisition on the same proportional basis that would apply
under a Service Agreement with respect to the acquisition of
equipment for use by the Provider.
4. Section 6.15 of the Loan Agreement is hereby amended by inserting
the phrase "and Permitted Minority Interest Investment Entities" in the sixth
line thereof following the defined term "Permitted Subsidiaries."
5. In addition to the foregoing amendments to the Loan Agreement, the
Lenders and Agent hereby consent to the following transaction and waive any
violation of Section 6.11 of the Loan Agreement that the transaction would cause
in the absence of a waiver:
Borrower is permitted to loan to Xx. Xxxxxxx Xxxxxxxxx the sum
of $500,000.00, unsecured, at an interest rate of 8% per
annum, due and payable in full (including accrued but unpaid
interest) one year from the closing date of the acquisition by
Dr. Westfield of Xx. Xxxxxx X. Xxxxxxxx'x ophthalmology
practice.
This waiver applies only to the specific transaction described herein and this
Amendment does not obligate Lenders or Agent to hereafter consent to any other
transaction, even if it is similar to that approved herein. Without limiting the
foregoing, this waiver does not permit the loan to Dr. Westfield to remain
outstanding beyond the maturity date approved above, and any extension of the
maturity date or other change in essential terms from those described above
would require an additional waiver, which may be issued or withheld, in the
Required Lenders' discretion.
6. As amended hereby, and subject to the waiver issued herein, the Loan
Agreement remains in full effect, and all agreements among the parties with
respect to the subject hereof are represented fully in this Amendment and the
other written documents among the parties. Borrower shall pay the reasonable
fees and expenses of Agent's counsel for the consideration, negotiation and
preparation of this Amendment. The validity, construction and enforcement hereof
shall be determined according to the substantive laws of the State of Tennessee.
7. The approval of the Required Lenders is required for this Amendment
to be
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effective, and all Lenders have joined in the execution hereof to evidence
their consent hereto. This Amendment may be executed in counterparts, each of
which shall constitute an original hereof.
Executed as of the date first written above.
PHYSICIANS RESOURCE GROUP, INC.,
a Delaware corporation, as Borrower
By:
Title:
NATIONSBANK OF TENNESSEE, N.A.,
a national banking association, as Agent
By: /s/ XXXXXXXXX X. XXXX
Xxxxxxxxx X. Xxxx,
Senior Vice President
NATIONSBANK OF TENNESSEE, N.A.,
a national banking association, as a Lender
By: /s/ XXXXXXXXX X. XXXX
Xxxxxxxxx X. Xxxx,
Senior Vice President
BANK ONE TEXAS,
a Texas banking corporation, as a Lender
By: /s/ XXXXX X. XXXXXXXXX
Xxxxx X. Xxxxxxxxx,
Vice President
AMSOUTH BANK OF TENNESSEE,
a Tennessee banking corporation, as a Lender
By: /s/ XXXXX X. WIND
Xxxxx X. Wind,
Vice President
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