Exhibit 10.45
[Pioneer Behavioral Health Letterhead]
June 26, 2001
Heller Healthcare Finance, Inc.
f/k/a HCFP Funding, Inc.
2 Wisconsin Circle, 4th Floor
Chevy Chase, Maryland 20815
Attention: David Moore, Senior Vice President
Dear Mr. Moore:
Reference is made to that certain Loan and Security Agreement originally
dated as of February 18, 1998 by and among the Borrowers identified therein and
Heller Healthcare Finance, Inc. f/k/a HCFP Funding, Inc., as Lender (as
previously amended, as amended hereby and as otherwise amended, modified or
supplemented from time to time, the "Loan Agreement"). All capitalized terms
used but not defined in this letter shall have the meaning given them in the
Loan Agreement.
We are writing to request that Lender agree to lend, and Lender hereby
agrees to make, to Borrower a Revolving Credit Loan in the form of an "overline
advance" (i.e., an advance that exceeds the Borrowing Base). We acknowledge that
the Lender has agreed to provide such overline advance, provided the Borrower
agree to the terms and conditions set forth herein. Accordingly, the Borrower
and Lender hereby agree as follows:
1. The aggregate amount of the overline advance shall not exceed Four
Hundred Thousand and No/100 Dollars ($400,000.00) (the "Overline Loan"). The
Overline Loan shall bear interest at the Base Rate as specified in the Loan
Agreement.
2. Except as expressly modified by the terms of this letter agreement, the
Overline Loan will be treated for all purposes as a Revolving Credit Loan under
the Loan Agreement, and all principal, interest, fees and other costs and
expenses relating to the Overline Loan (the "Overline Obligations") shall be
treated as additional Obligations under the Loan Agreement and the other Loan
Documents. The Maximum Loan Amount shall be inclusive of, and shall not be
deemed to be increased by, the Overline Obligations.
3. The Overline Loan shall be repaid in full by Borrower making weekly
installment payments of principal to Lender, each of which payments shall be
equal to $25,000 and which payments shall commence on July 13, 2001 and continue
to be made on a weekly basis thereafter until the earlier of (a) the date on
which the aggregate principal amount of the Overline Loan and all other Overline
Obligations have been repaid in full by Borrower and (b) November 2, 2001, on
which date, unless earlier repaid, the aggregate principal amount of the
Overline Loan and all other Overline Obligations shall be due and payable (the
"Maturity Date").
4. In consideration for Lender's agreement to make the Overline Loan to
Borrower, Borrower hereby agrees to pay to Lender an overline fee (the "Overline
Fee") equal to one percent (10%) of the amount of the Overline Loan actually
advanced by Lender hereunder, provided that the Overline Fee shall in any event
be not less than $30,000. The Overline Fee shall constitute a portion of the
Obligations evidenced and secured by the Loan Documents and shall be due and
payable promptly following demand therefor by Lender. To the extent that
Borrower shall not have paid the Overline Fee promptly following demand therefor
by Lender, the Overline Borrower shall be deemed to have authorized and hereby
does authorize Lender to deduct the amount of such Overline Fee from the
proceeds of the any subsequent Revolving Credit Loan(s) made by Lender to
Borrower under the Loan Agreement.
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5. Any breach by Borrower of any of the provisions of this letter
agreement, including but not limited to any failure of Borrower to repay the
Overline Obligations on or before the Maturity Date as required hereunder, shall
constitute an immediate and automatic Event of Default under the Loan Agreement
without further action or notice by Lender. Upon the occurrence of such an Event
of Default, and in addition to the other rights to which Lender may be entitled
under the Loan Agreement, or at law or in equity, upon such failure, Lender
shall be entitled to apply amounts transferred to the Concentration Account
pursuant to Section 2.3 of the Loan Agreement in satisfaction of Borrower's
obligations with respect to the Overline Loan and the Overline Obligations.
6. Except as specifically modified hereby, the Loan Agreement, and all
other Loan Documents, shall remain in full force and effect, and are hereby
ratified and confirmed.
7. The execution, delivery and effectiveness of this letter agreement shall
not, except as expressly provided herein, operate as a waiver of any right,
power or remedy of Lender, nor constitute a waiver of any provision of the Loan
Agreement, or any other documents, instruments and agreements executed or
delivered in connection therewith, nor shall it be construed as a waiver of any
other Event of Default, whether now existing of hereafter arising. Lender hereby
reserves all of its rights and remedies under the Loan Documents and applicable
law.
8. This letter agreement shall be governed by and construed in accordance
with the laws of the State of Maryland without regard to any otherwise
applicable conflicts of law provisions thereof.
9. This letter agreement may be executed in counterparts, each of which
shall be deemed to be an original and all of which together shall constitute one
and the same instrument.
10. By execution and delivery of this letter agreement, the Borrower agrees
to be legally bound by the provisions hereof.
Very truly yours,
PHC of Michigan, Inc., PHC of Utah, Inc. and
Pioneer Counseling of Virginia, Inc.,, each a
Massachusetts corporation
By: /s/ Paula C. Wurts
Name: Paula C. Wurts
Title: Chief Financial Officer
ACKNOWLEDGED AND AGREED TO
AS OF THE 27 DAY OF JUNE, 2001:
HELLER HEALTHCARE FINANCE, INC.
f/k/a HCFP FUNDING, INC.
a Delaware corporation
By: /s/ Brett Robinson
Name: Brett Robinson
Title: Vice President
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