Exhibit 10.54
THIRD AMENDED AND RESTATED CROSS-COLLATERALIZATION
AND CROSS-DEFAULT AGREEMENT
BY AND AMONG
PHC, INC.
PHC OF MICHIGAN, INC.
PHC OF UTAH, INC.
PHC OF VIRGINIA, INC.
(collectively, "Borrower")
AND
HELLER HEALTHCARE FINANCE, INC.
("Lender")
December 6, 2001
Prepared by and after recording,
return to:
Katherine R. Lofft, Esq.
Heller Healthcare Finance, Inc.
2 Wisconsin Circle, 4th Floor
Chevy Chase, Maryland 20815
THIRD AMENDED AND RESTATED CROSS-COLLATERALIZATION
AND CROSS-DEFAULT AGREEMENT
THIS THID AMENDED AND RESTATED CROSS-COLLATERALIZATION AND CROSS-DEFAULT
AGREEMENT made as of the 6th day of December, 2001, is executed by and among
PHC, INC., a Massachusetts corporation ("PHC"), PHC OF MICHIGAN, INC., a
Massachusetts corporation having its principal place of business at 200 Lake
Street, Suite 102, Peabody, Massachusetts 01960 ("PHCM"), PHC OF UTAH, INC., a
Massachusetts corporation ("PHCU"), PHC OF VIRGINIA, INC., a Massachusetts
corporation ("PHCVA" and collectively with PHCM and PHCU, the "Borrower"), and
HELLER HEALTHCARE FINANCE, INC. f/k/a HCFP Funding, Inc., a Delaware corporation
having its principal office at 2 Wisconsin Circle, 4th Floor, Chevy Chase,
Maryland 20815 ("HHF"), the assignee of HealthCare Financial Partners-Funding
II, L.P. ("HCFPII")) (collectively, the "Lender").
RECITALS
WHEREAS, Borrower, together with PHC of Rhode Island, Inc. ("PHCRI") and Pioneer
Counseling of Virginia, Inc. ("Pioneer" and, collectively with Borrower and
PHCRI, the "Original Borrower"), and HCFP Funding, Inc. ("HCFP Funding"), HCFPII
and U.S. Bank National Association entered into that certain
Cross-Collateralization and Cross-Default Agreement (the "Agreement") dated as
of July 13, 1998, and recorded in the official records of the Macomb County,
Michigan registrar of deeds (the "Macomb County Records") at Liber 09402 Page
208 on March 7, 2000, pursuant to which Original Borrower agreed, among other
things, to cross-collateralize the Loans (as defined therein) with one another
and to provide for the cross-default of the Loans with one another (as amended
and restated by that certain Amended and Restated Cross-Collateralization and
Cross-Default Agreement dated as of May 26, 2000 by and among the Original
Borrower and HHF and by that certain Second Amended and Restated
Cross-Collateralization and Cross-Default Agreement dated as of March ___, 2001
by and among PHC, Original Borrower and HHF, as amended and restated hereby and
as it may be further amended, restated, supplemented or modified from time to
time, the "Agreement").
WHEREAS, Borrower is currently indebted to Lender pursuant to the following
existing loans (collectively, the "Existing Loans"):
(a) a secured term loan (as it may be increased or decreased from
time to time, the "December 2001 Secured Term Loan") from Lender
to the Original Borrower in the maximum aggregate principal
amount of Two Million Six Hundred Eighty-Eight Thousand Five
Hundred Ninety-Eight and No/100 Dollars ($2,688,598.00), which
December 2001 Secured Term Loan is evidenced by that certain
Consolidating Amended and Restated Secured Term Note dated of
even date herewith and executed by Borrower in favor of Lender
(as it may be amended, modified or restated from time to time,
the "Consolidating Term Note"); and
(b) a revolving credit loan (as it may be increased or decreased from
time to time, the "February 1998 Revolving Loan") from Lender to
the Original Borrower in the original maximum aggregate principal
sum of Four Million and No/100 Dollars ($4,000,000.00), which
February 1998 Revolving Loan is evidenced by that certain Loan
and Security Agreement dated as of February 20, 1998 by and among
the Original Borrowers and HCFP Funding (as it may be amended,
modified or restated from time to time, the "Loan Agreement") and
that certain Revolving Credit Note dated as of February 20, 1998
made by Original Borrowers in favor of HCFP Funding (as it may be
amended, modified or restated from time to time, the "Revolving
Credit Note"), and the maximum aggregate principal sum of which
February 1998 Revolving Loan has been reduced to Three Million
and No/100 Dollars ($3,000,000.00);
WHEREAS, to secure all of the Existing Loans, PHCM has executed that certain
Amended and Restated Consolidated Mortgage dated of even date herewith (the
"Amended Consolidated Mortgage"), which Consolidated Mortgage, among other
things, secures all of the Existing Loans with a lien on the PHCM property
described therein;
WHEREAS, Lender has agreed to maintain the Existing Loans, provided that each of
the entities comprising Borrower agrees to execute this Agreement providing for,
among other things, the cross-collateralization and cross-defaulting of all of
the Existing Loans, and that each of the entities comprising Borrower further
agrees that this Agreement shall be submitted promptly for recording in the
Macomb County Records together with the Amended Consolidated Mortgage; and
WHEREAS, the entities comprising Borrower are all affiliated entities under
common control and ownership (except that PHC is a public company) and will
receive direct and indirect benefits from the continuance of the Existing Loans
and of the financing arrangements represented thereby, which benefits, among
others, provide adequate consideration for them to enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing Recitals, to induce Lender to
continue the Existing Loans and the financing arrangements represented thereby
and by the other Loan Documents (as defined below) and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Borrower agrees with Lender and Lender agrees with Borrower, as
follows:
1. Loan Documents. As used in this Agreement, the term "Loan Documents"
shall mean any and all loan documents evidencing or securing any or all of the
February 1998 Revolving Loan and the December 2001 Secured Term Loan.
2. Cross-Collateralization. Each of the Existing Loans is hereby
cross-collateralized with each of the other Existing Loans, and Borrower agrees
that the collateral described in the Loan Documents with respect to any Existing
Loan shall, in addition to securing such Existing Loan as described in such Loan
Documents, secure the obligations of any or all of the entities comprising
Borrower, as the case may be, under all of the other Existing Loans and the
respective Loan Documents relating thereto, including without limitation: (a)
the obligation of any Borrower or its Affiliates to pay the principal and
interest on any or all of the Existing Loans, as the case may be, as the same
may hereafter be renewed, modified, amended or extended, and to pay all other
indebtedness or other fees, expenses or other charges with respect thereto, and
to perform all of the terms and conditions under the Loan Documents in respect
of any or all of the Existing Loans, and (b) the obligation of PHC with respect
to the real property encumbered by the Amended Consolidated Mortgage that
secures all of the Existing Loans as set forth above.
3. Cross-Default. Each of the Existing Loans is hereby cross-defaulted with
each of the other Existing Loans, and Borrower agrees that the occurrence of an
Event of Default as defined in, and pursuant to any of the Loan Documents with
respect to any Existing Loan, which Event of Default is not cured within the
applicable period as set forth therein, shall constitute an immediate Event of
Default (without need of notice or the expiration of any additional cure period
other than as specified in such Loan Documents) under all of the other Existing
Loans and the respective Loan Documents relating thereto.
4. Severability. In case any provision of this Agreement shall be invalid,
illegal, or unenforceable, such provision shall be deemed to have been modified
to the extent necessary to make it valid, legal and enforceable. The validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
5. No Modification Except in Writing. None of the terms of this Agreement
may be waived, altered, amended or otherwise changed except by an instrument in
writing duly executed by all of the parties hereto.
6. Further Assurances. Each entity comprising Borrower shall execute and
deliver such further instruments and perform such further acts as may be
requested by Lender from time to time to confirm the provisions of this
Agreement and the Loan Documents, to carry out more effectively the purposes of
this Agreement and the Loan Documents, or to confirm the priority of any lien
created by any of the Loan Documents.
7. Enforceability. Each entity comprising Borrower represents and warrants
to Lender that this Agreement and the Loan Documents are the legal, valid and
binding obligations of each entity constituting Borrower, jointly and severally,
and are enforceable against each such entity in accordance with their respective
terms.
8. Recording; Binding Effect.
(a) This Agreement will be recorded in the Macomb County Records and
the official records of the City of Salem, Virginia. In
connection with the recordation of this Agreement, all necessary
recording, intangible, or documentary stamp taxes will be duly
paid by the Borrower. THIS AGREEMENT IS BEING GIVEN AS ADDITIONAL
COLLATERAL TO SECURE THE OBLIGATIONS OF THE RESPECTIVE ENTITIES
COMPRISING BORROWER UNDER THEIR RESPECTIVE LOAN DOCUMENTS.
(b) This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective heirs, administrators,
successors and assigns.
9. Controlling Law. This Agreement shall be governed by the laws of the
State of Maryland without regard to any otherwise applicable conflicts of law
principles.
10. Release. Except for Lender's obligations, if any, to Borrower under the
Loan Documents, each entity comprising Borrower, on behalf of itself and its
partners, affiliates, successors and assigns (collectively, the "Releasing
Parties"), hereby releases and forever discharges Lender and each of its
parents, subsidiaries and affiliated corporations and partnerships (including
the partners therein and thereof), and the partners, partners of partners,
subsidiaries, divisions, affiliates, officers, directors, shareholders,
trustees, employees, agents, attorneys and advisors of each of the foregoing,
and each of their respective heirs, successors and assigns (collectively, the
"Released Parties", all of whom are intended to be the beneficiaries of this
release) from any and all claims and causes of action of whatever kind and
nature based upon acts or omissions by any of them, whether such claims, causes
of action, acts or omissions are or were known or unknown, suspected or
unsuspected, which the Releasing Parties or any of them may have or have had, in
whole or in part, prior to the date of this Agreement.
11. WAIVER OF JURY TRIAL. EACH ENTITY COMPRISING BORROWER HEREBY WAIVES ANY
RIGHT TO A TRIAL BY JURY ON ANY CLAIM, COUNTERCLAIM, SETOFF, DEMAND, ACTION OR
CAUSE OF ACTION (A) ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT OR
THE EXISTING LOANS, OR (B) IN ANY WAY CONNECTED WITH OR PERTAINING OR RELATED TO
OR INCIDENTAL TO ANY DEALINGS OF LENDER AND/OR BORROWER WITH RESPECT TO THE LOAN
DOCUMENTS OR IN CONNECTION WITH THIS AGREEMENT OR THE EXERCISE OF ANY PARTY'S
RIGHTS AND REMEDIES UNDER THIS AGREEMENT OR OTHERWISE, OR THE CONDUCT OR THE
RELATIONSHIP OF THE PARTIES HERETO, IN ALL OF THE FOREGOING CASES WHETHER NOW
EXISTING OR HEREAFTER ARISING AND WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE. EACH ENTITY COMPRISING BORROWER AGREES THAT LENDER MAY FILE A COPY OF
THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY, AND
BARGAINED AGREEMENT OF BORROWER IRREVOCABLY TO WAIVE THEIR RIGHTS TO TRIAL BY
JURY, AND THAT, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY DISPUTE OR
CONTROVERSY WHATSOEVER (WHETHER OR NOT MODIFIED HEREIN) BETWEEN BORROWER AND
LENDER SHALL INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE
SITTING WITHOUT A JURY.
IN WITNESS WHEREOF, each party hereto has caused this Agreement to be
properly executed on the date of the respective notarial acknowledgment set
forth below.
BORROWER:
WITNESS: PHC, INC., a Massachusetts corporation
/s/ Paula C. Wurts
Name:
/s/ Janet Esterkes By: /s/ Bruce A. Shear
Name: Name: Bruce A. Shear
Title: President
WITNESS: PHC OF MICHIGAN, INC., a Massachusetts
corporation
/s/ Paula C. Wurts
Name:
/s/ Janet Esterkes By: /s/ Bruce A. Shear
Name: Name: Bruce A. Shear
Title: President
WITNESS: PHC OF UTAH, INC., a Massachusetts
corporation
/s/ Paula C. Wurts
Name:
/s/ Janet Esterkes By: /s/ Bruce A. Shear
Name: Name: Bruce A. Shear
Title: President
[SIGNATURES CONTINUED ON NEXT PAGE]
WITNESS: PHC OF VIRGINIA, INC., a Massachusetts
corporation
/s/ Paula C. Wurts
Name:
/s/ Janet Esterkes By: /s/ Bruce A. Shear
Name: Name: Bruce A. Shear
Title: President
LENDER:
HELLER HEALTHCARE FINANCE, INC. f/k/a HCFP
FUNDING, INC., a Delaware
corporation, the assignee of HealthCare
Financial Partners-Funding II, L.P.
WITNESS:
__________________________ By: /s/ Brett Robinson
Name: Name: Brett Robinson
Title: Vice President
_________________________
Name:
NOTARY ACKNOWLEDGMENT
STATE OF MASSACHUSETTS)
COUNTY OF ESSEX)
Before me, a Notary Public in and for said County and State, on this day
personally appeared Bruce A. Shear known to me (or proved to me on the oath of
____________) to be the person whose name is subscribed to the foregoing
instrument, and known to me to be the managing member of PHC, INC., a
Massachusetts corporation, and acknowledged to me that he executed said
instrument for the purposes and consideration therein expressed, as the act of
said corporation.
Given under my hand and seal this 10th day of December, 2001:
Paula C. Wurts
Notary Public
My Commission Expires: November 29, 2002.
NOTARY ACKNOWLEDGMENT
STATE OF MASSACHUSETTS)
COUNTY OF ESSEX)
Before me, a Notary Public in and for said County and State, on this day
personally appeared Bruce A. Shear known to me (or proved to me on the oath of
____________) to be the person whose name is subscribed to the foregoing
instrument, and known to me to be the managing member of PHC OF MICHIGAN, INC.,
a Massachusetts corporation, and acknowledged to me that he executed said
instrument for the purposes and consideration therein expressed, as the act of
said corporation.
Given under my hand and seal this 10th day of December, 2001:
Paula C. Wurts
Notary Public
My Commission Expires: November 29, 2002.
NOTARY ACKNOWLEDGMENT
STATE OF MASSACHUSETTS)
COUNTY OF ESSEX)
Before me, a Notary Public in and for said County and State, on this day
personally appeared Bruce A. Shear known to me (or proved to me on the oath of
____________) to be the person whose name is subscribed to the foregoing
instrument, and known to me to be the managing member of PHC OF UTAH, INC., a
Massachusetts corporation, and acknowledged to me that he executed said
instrument for the purposes and consideration therein expressed, as the act of
said corporation.
Given under my hand and seal this 10th day of December, 2001:
Paula C. Wurts
Notary Public
My Commission Expires: November 29, 2002.
NOTARY ACKNOWLEDGMENT
STATE OF MASSACHUSETTS)
COUNTY OF ESSEX)
Before me, a Notary Public in and for said County and State, on this day
personally appeared Bruce A. Shear known to me (or proved to me on the oath of
____________) to be the person whose name is subscribed to the foregoing
instrument, and known to me to be the managing member of PHC OF VIRGINIA, INC.,
a Massachusetts corporation, and acknowledged to me that he executed said
instrument for the purposes and consideration therein expressed, as the act of
said corporation.
Given under my hand and seal this 10th day of December, 2001:
Paula C. Wurts
Notary Public
My Commission Expires: November 29, 2002.
NOTARY ACKNOWLEDGMENT
STATE OF ____________________)
COUNTY OF __________________)
Before me, a Notary Public in and for said County and State, on this day
personally appeared Bruce A. Shear known to me (or proved to me on the oath of
____________) to be the person whose name is subscribed to the foregoing
instrument, and known to me to be the of HELLER HEALTHCARE FINANCE, INC., a
Delaware corporation, and acknowledged to me that he executed said instrument
for the purposes and consideration therein expressed, as the act of said
corporation.
Given under my hand and seal this _____ day of ________, 2001:
________________________________
Notary Public
My Commission Expires: _________________________
This Instrument prepared by, and upon recording should be returned to:
Katherine R. Lofft, Esq.
Heller Healthcare Finance, Inc.
2 Wisconsin Circle, 4th Floor
Chevy Chase, Maryland 20815