Document:

EX-10.1

 

Exhibit 10.1

SECOND AMENDMENT TO

CONVERTIBLE SUBORDINATED PROMISSORY NOTES

THIS SECOND AMENDMENT TO CONVERTIBLE SUBORDINATED PROMISSORY NOTES (this “Amendment”) is made and
entered into as of August 8, 2006 by and between Orion HealthCorp, Inc., a Delaware corporation
(the “Company”), and Brantley Partners IV, L.P. (“Payee”).

WHEREAS, on June 1, 2005 the Company issued to Payee that certain Convertible Subordinated
Promissory Note in the original principal amount of $1,025,000 due April 19, 2006 (the “First
Note”);

WHEREAS, on June 1, 2005 the Company issued to Payee that certain Convertible Subordinated
Promissory Note in the original principal amount of $225,000 due April 19, 2006 (the “Second Note”
and collectively with the First Note, the “Notes”);

WHEREAS, on May 9, 2006, the Company and Payee entered into that certain First Amendment to
Convertible Subordinated Promissory Notes, which extended the maturity date for the Notes to August
15, 2006; and

WHEREAS, the Company and Payee desire to further amend the Notes on the terms and conditions set
forth herein.

NOW, THEREFORE, in consideration of the agreements and promises contained herein, and for other
good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:

1. Amended Terms. The maturity date set forth in the preamble of each Note shall be extended until
October 15, 2006.

2. Remainder of Agreement. All other terms and provisions of the Notes shall remain unchanged and
in full force and effect.

3. Miscellaneous. This Amendment may be executed in any number of counterparts, each of which shall
be deemed to be an original, and all of which together shall constitute one in the same instrument,
and facsimile transmissions of the signature provided for below may be relied upon, and shall have
the same force and effect, as the originals of such signatures. The terms and conditions hereof,
along with the Notes, constitute the entire agreement between the parties hereto with respect to
the subject matter of this Amendment and supersede all previous communications, either oral or
written, representations or warranties of any kind whatsoever, except as expressly set forth
herein. All issues concerning this Amendment shall be governed by and construed in accordance with
the laws of the State of Georgia, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of Georgia or any other jurisdiction) that would cause the
application of the law of any jurisdiction other than the State of Georgia.

IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first written above.

	 	 	 	 	 	 	 
	 	 	ORION HEALTHCORP, INC.
	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Terrence L. Bauer
 

Terrence L. Bauer
	 	 
	 

	 	Title:
	 	Chief Executive Officer and President	 	 
	 
	 	 	 	 	 	 
	 	 	BRANTLEY PARTNERS IV, L.P.
	 	 
	 
	 	 	 	 	 	 
	 	 	By: Brantley Venture Management IV, L.P., its

general partner
	 	 
	 
	 

	 	By:

Name:
	 	/s/ Paul H. Cascio
 

Paul H. Cascio
	 	 
	 

	 	Title:
	 	General PartnerEX-10.46

 

Exhibit 10.46

	 	 	 
	L. B. Foster Company
	 	 
	Leased Vehicle / Car Allowance Policy

	 	SP-P-10
	Revised 10/01/06;
	 	 
	     Supersedes 01/10/06
	 	 

	1.	 	GENERAL POLICY; PURPOSE
	 
	 	 	It is the policy of the L.B. Foster Company to provide a leased vehicle or vehicle
allowance to employees that have a need for business travel generally holding one of the
following positions:

	 	•	 	Chairman and President;
	 
	 	•	 	Corporate Officer;
	 
	 	•	 	Sales Managers and Sales Positions;
	 
	 	•	 	An eligible employee in which the position requires frequent business
travel by automobile

	2.	 	ELIGIBILITY

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Monthly
	 	 	 	 	 	 	Deduction
	 	 	 	 	 	 	for Leased
	Class:	 	Group:	 	Policy:	 	Vehicle:
	A

	 	Chairman, President
and CEO
	 	$800 monthly Car Allowance.
or Leased Car
	 	$	100	 
	 
	 	 	 	 	 	 	 	 
	B

	 	Corporate Officers
	 	$700 monthly Car Allowance.
or Leased Car
	 	$	85	 
	 
	 	 	 	 	 	 	 	 
	C

	 	Sales Managers (Level

30 or higher)
	 	Leased Car or $600 monthly Car
Allowance.
	 	$	75	 
	 
	 	 	 	 	 	 	 	 
	D

	 	Outside Sales
personnel and other
eligible participants
who are required to
drive in excess of
12,000 business miles
annually.
	 	Leased Car
or $500 monthly Car Allowance
	 	$	60	 

	3.	 	ELIGIBLE DRIVER
	 
	 	 	Except in emergencies, driving of a Company vehicle shall be limited to employee and the
employee’s spouse over the age of twenty-five (25).

	4.	 	RESPONSIBILITY 

	 	A.	 	Car Allowance guidelines

(i) The monthly car allowance amount is set by employee class on an annual
basis and is paid as additional taxable income in the employee’s regular
paycheck. An employee receiving a car allowance is responsible for the
payment of any and all associated federal, state, and local taxes.

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(ii) Employees on a monthly car allowance, that drive personal vehicles for
business reasons, will be reimbursed for those miles at the established IRS
reimbursement rate.

(iii) An employee receiving a car allowance is required to have available,
as required by business needs, a late model four (4) door vehicle. The
vehicle is to be clean externally and internally and is presentable for
Company business at all times.

	 	B.	 	Leased Car Program Guidelines

(i) An eligible employee, as identified in section 1. General Policy,
within class A, B, C and D may choose between a Company leased vehicle, if
they are required to travel at minimum 12,000 business miles per year, or a
monthly car allowance.

(ii) Participants are to log all business miles and submit for reimbursement
via their weekly expense reports. The Company will establish and publish
the reimbursement rate at least annually. Reimbursement rates will be
established to cover the employee’s cost of gas that is attributable to cost
of required business miles using the leased vehicle provided by the Company.
The Company will only reimburse employees for authorized Business miles;
personal miles are not reimbursable.

(iii) Eligible employees may not opt out of the Company leased vehicle
option until the current car has reached 60 months of service or the vehicle
has reached 80,000 miles. In addition, the Company may require the employee
to continue driving the vehicle if the book value exceeds the Fair Market
Value of the vehicle until such time that the disposal of the car will not
result in a financial loss to the Company.

• Employees that have Company leased vehicles prior
to 01/01/06 may receive a car allowance per their class should
they no longer be required, by their position in the Company to
drive 12,000 annual business miles. Sales Managers and Sales
Positions driving less than 12,000 annual business miles are
eligible for a car allowance.

	 	•	 	Employees not in a Sales Manager or Sales Position
hired after 01/01/06 who may have been required at some
point to drive 12,000 business miles and was entitled to
a Company provided leased vehicle, and no longer, due the
requirements of their position are no longer required to
drive in excess of 12,000 business miles, shall lose the
benefit of the Company Leased car and will not be
eligible to receive a car allowance.

(iv) When a new Company Leased vehicle is ordered, the employee may purchase
options at his/her expense, beyond Company established base options,
available on his or her vehicle model. Payment is due before delivery of
the vehicle. The leasing company will provide information regarding payment
and applicable sales and or state tax.

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(v) It shall be the responsibility of each employee receiving a Company
leased vehicle to monitor and report odometer readings as of each November
1st and on the date his/her vehicle is replaced to validate personal
mileage. These odometer readings are to be turned into the Payroll
Department during the first week of November on the Company Automobile
Odometer Form. (Attachment SP-P-10.1)

(vi) If a “Leased Vehicle Odometer form (SP-P-10.1)” is not
received, by the announced day, mileage estimates from expense reports,
fuel, and maintenance records will be used to determine personal and
business miles. It shall be the responsibility of each employee to
maintain records documenting all business and personal mileage usage in
accordance with record keeping requirements which may, from time to time, be
required by the Internal Revenue Service, and to note this on the Company
Automobile Odometer Form. (Attachment SP-P-10.1)

(vii) The driver is responsible for operating the vehicle in a safe manner.
The use of seat belts is mandatory for the driver and all passengers.
Operating a motor vehicle while under the influence of alcohol or illegal
drugs is prohibited.

(viii) It is the employee’s responsibility to notify their Manager or the
Human Resources Department of any change in the employee’s physical status
or if the employee is taking any medications labeled with a warning that the
medication could impair his/her driving.

(ix) Although the use of cellular phones while driving is not encouraged,
the Company suggests a “hands-free” device be used in the vehicle while
driving.

(x) If any driver of a Company leased vehicle or an employee receiving a car
allowance, is issued a citation for DUI (driving under the influence), their
Company vehicle/car allowance privileges will be suspended until the outcome
of the charge is determined in a court of law. If convicted for DUI, that
driver will have his/her Company leased vehicle/car allowance privileges
revoked for a minimum one (1) year period. Pre-trial suspension will be
counted towards the one (1) year.

(xi). If any employee is issued a second DUI citation, the privilege of a
company-leased vehicle will be removed permanently. In addition, other
disciplinary actions may be levied up to and including termination.
Decisions on reinstatement of Company car privileges after a suspension will
be based on continued business need of the position, consultations with the
Risk Manager and compliance with Foster’s current automobile insurance
carrier’s requirements.

(xii) Leased vehicle participants are required to adhere to the
maintenance schedule under the leased vehicle maintenance program.

(xiii) While assigned to an employee, Company vehicles must be carefully
maintained and kept clean in a manner properly representing the Company.
When returned from employee use, vehicles should be clean and free of
alteration or damage beyond normal wear and tear.

3

 

(xiv) All participants in this program shall be required to execute
SP-P-10.2 (Acknowledgment of Driver Requirements) and SP-P-10.1 (Company
Automobile Odometer form) on an annual basis.

	 	 	 	Failure to adhere to these policies can result in loss of Company car privileges,
and/or disciplinary actions up to and including termination.
	 
	 	C.	 	Accounting and Payroll Departments
	 
	 	 	 	It shall be the responsibility of the Accounting and Payroll Departments to maintain
and verify the records of all Leased Vehicle Plan participants with regard to payroll
deductions, individual taxability calculations and W-2 reporting.
	 
	 	D.	 	Transportation Department
	 
	 	 	 	It shall be the responsibility of the Transportation Department to
monitor the fleet of Company leased automobiles in service, to provide lease
values, to ensure that the appropriate forms are provided to each driver, and
acquire and dispose of all Company leased automobiles.
	 
	 	E.	 	Human Resources Department

	 	•	 	The Vice President, Human Resources shall be responsible for the
interpretation and application of the provisions of the Leased Vehicle Plan.
	 
	 	•	 	The Human Resources Department shall obtain a copy of a newly hired
employee’s driver’s license prior to authorizing the use of a company
vehicle.
	 
	 	•	 	The Human Resources Department shall be responsible for obtaining an
application and completing a Motor Vehicle Record (MVR) check on all new
hires that may be required to drive as part of their assigned duties and no
less than annually thereafter. Any employee with excessive violations or
accidents may lose their leased vehicle privileges based on the requirements
of the fleet insurance carrier.
	 
	 	•	 	The Human Resources Department will be responsible for investigating all
accidents.

	 	F.	 	Division Management and the Vice President of Human Resources will be responsible
for approving any car assignments or allowance and may, at his or her discretion, reject
assignment of a Company vehicle or authorizing the receipt of a car allowance.

	5.	 	PRACTICE 

	 	A.	 	Pursuant to the Tax Reform Act of 1984, the value of the personal use of an
employer provided automobile must be included in the employee’s income and subjected to
withholding tax.

4

 

	 	B.	 	The annual lease value of an automobile shall be based the manufacture’s
invoice price plus 4%.
	 
	 	C.	 	The percentage of personal usage of the annual lease value shall represent an
additional non-cash item which shall be included as employee taxable income.
	 
	 	D.	 	The annual lease value shall include all maintenance and insurance but will not
include the annual fuel cost for the leased vehicle.
	 
	 	E.	 	Fuel shall be valued at the current calendar year IRS established rate, per
personal mile driven for employees driving company leased vehicles.
	 
	 	F.	 	The driver of a company-leased vehicle is to use the maintenance card to charge
maintenance and repair expenses. Those expenses that cannot be charged through the
maintenance program shall be reimbursed through the Weekly Expense Report. For body
damage and repairs refer to 10(c).
	 
	 	G.	 	The Company will reimburse employees for Manager Approved Business Miles.
Employees are to submit approved miles, via the weekly expense report.
	 
	 	H.	 	90 days prior to turning in a Company leased vehicle, all maintenance expenses
must be approved by Transportation.
	 
	 	I.	 	Employees who receive a car allowance will be reimbursed via the Company
expense report at the per mile rate established by the IRS annually for approved
business miles.
	 
	 	J.	 	Monthly deductions for Company leased vehicles shall be classified on the
employee pay stub as federal withholding tax.
	 
	 	K.	 	The annualized dollar value of the Company automobile personal use benefit will
appear as additional earnings on the employee pay stub and W-2.

	6.	 	TRANSFER
	 
	 	 	The transfer of any Company provided automobile between employees must be authorized by the
Human Resources Department and Division Officer(s).

	7.	 	REPLACEMENT 

	 	A.	 	Company leased vehicles may be eligible for replacement not earlier than 60
months or 80,000 miles, whichever occurs first. Replacement Vehicle orders will not be
approved and entered by the Transportation Department until the vehicle has reached
77,000 miles. The employee’s Manager may require the eligible employee to continue
driving the vehicle if the book value exceeds the Fair Market Value of the vehicle
until such time that the disposal of the car will not result in a financial loss to the
Company.

5

 

	 	B.	 	All vehicle lease terms will be set based on the anticipated annual business
miles the position is required to drive.
	 
	 	C.	 	Drivers and their immediate family members may purchase the employee’s assigned
vehicle at lease end for the current wholesale fair market value (established by the
Transportation Department) plus all taxes, title, licensing, delivery and any other
related costs. The value of the vehicle will then be adjusted for any driver-paid
options.
	 
	 	D.	 	Vehicles not purchased will be disposed of by the Transportation Department.
	 
	 	E.	 	Any employee who purchases a vehicle under this standard practice is
responsible for all financing, pick up of vehicle, sales tax, and must sign an “As Is”
bill of sale that will be placed in their personnel file. Payment in full to the
leasing Company is required prior to release of the vehicle’s title. The final sales
transaction is solely between the leasing company and the purchaser of the vehicle and
L.B. Foster has no involvement in the title transfer.

	8.	 	TERMINATION OF EMPLOYMENT
	 
	 	 	The immediate supervisor of a terminated employee shall be responsible for ensuring that
the terminated employee deposits the leased vehicle and keys at the Company facility prior
to or on the day of termination. The employee is to complete form SP-P-10.1 and return it
to the Payroll Department or they will be charged 100% personal mileage usage for that
year.

	9.	 	ACCIDENT/LOSS RESPONSIBILITY/INSURANCE

	 	A.	 	Personal property -The Corporate Vehicle Insurance Plan does not cover personal
articles. Employees must secure their own insurance.
	 
	 	B.	 	Company property — Samples, literature, equipment, and supplies which are in
the direct possession of an employee shall be the responsibility of the employee if
lost, stolen, or damaged.
	 
	 	C.	 	Accident and loss reports — All accidents regardless of fault or amount of
damage and property losses must be reported immediately to the employee’s manager and
the Insurance Department by personal contact and by use of the Preliminary Property
Loss Report. Refer to SP-F-I.5 for the automobile accident claim procedures and
SP-F-I.6 for reporting property loss.

	10.	 	TRAFFIC VIOLATIONS 

	 	A.	 	Employees will be solely responsible for any fines and fees associated with
traffic or parking violations or any other motor vehicle infraction. Failure to
reimburse the Company (for any delinquent fine or fee) within 60 days of notification
of the amount due will result in deduction from the employee’s paycheck.
	 
	 	B.	 	Employees must notify the Human Resources department regarding any status
changes in their driving license due to traffic violations. Failure of such
notification may result in discipline up to and including termination.

6

 

This policy is subject to changes by the Company at any time with or without notice.

	 	 	 	 	 	 	 
	 	 	/s/ Stan Hasselbusch
	 	11/03/06
	 
	 	 

Stan Hasselbusch
	 	 

Date
	 	 
	 

	 	President & CEO	 	 	 	 

7

 

	 	 	 
	

	 	SP-P-10.1

Leased Vehicle Odometer Form

***Form must be received by November 10th or 100% personal use will be used. ***

	 	 	 	 	 	 	 	 	 	 	 
	Employee:

	 	 	 	 	 	Cost Center	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 
	Employee #:

	 	 	 	 	 	Driver’s License #:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 

Your assigned vehicle is used for:    o Business and personal use    o100% Personal use

	 	 	 	 	 	 	 	 	 
	Your license plate #:

	 	 	 	State in which licensed:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 

 

PART A: Current Leased Vehicle Information

     (To be completed by all employees assigned a leased vehicle)

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Car #:

	 	 	 	 	 	 	 	Year, make, and model:	 	 	 	 	 	 
	 

	 	 	 	 

	 	 	 	 	 	 	 	 

	 	 

License plate #:                                            

Odometer

	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	Reading
	 	Change
	 	Business
	 	Personal
	 

	 	 
	 	 
	 	 
	 	 
	 	 
	November 1,

	 	 	 	 	 	N/A
	 	N/A
	 	N/A
	 

	 	 
	 	 
	 	 
	 	 
	 	 

Or the date vehicle was put into service.

	 	 	 	 	 	 	 	 	 	 	 
	October 31,
	 	 	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	 	 

 

PART B: Replaced Leased Vehicle Information

     (To be completed by all employees who were assigned more than one leased vehicle between
November 1st and October 31st)

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Car #:

	 	 	 	 	 	 	 	Year, make, and model:	 	 	 	 	 	 
	 

	 	 	 	 

	 	 	 	 	 	 	 	 

	 	 

License plate #:                                            

Odometer

	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	Reading
	 	Change	 	Business
	 	Personal
	 

	 	 
	 	 
	 	 
	 	 
	 	 
	November 1,

	 	 	 	 	 	N/A
	 	N/A
	 	N/A
	 

	 	 
	 	 
	 	 
	 	 
	 	 
	Date vehicle 

retired
	 	 	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	 	 

 

I certify to the best of my knowledge that this form represents a true and accurate
reading of my L. B. Foster leased vehicle as of _________
_________________

I also understand that I may be subject to tax penalties if I cannot substantiate the business use
of this automobile and I further authorize the Company to obtain a State Motor Vehicle Driver
History Report on me including any medical information contained therein.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Signature

	 	 	 	 	 	 	 	Date	 	 	 	 
	 

	 	 	 	 

	 	 	 	 	 	 

	 	 

 

 

	 	 	 
	

	 	SP-P-10.2

Acknowledgment

Please check off the appropriate box indicating your choice and sign at the bottom.

Company Leased Vehicle o

	 	 	 
	I,

	 	, acknowledge that I have read and will comply with all
requirements contained within the Company’s leased vehicle policy.

     Print Name

Monthly Car Allowance o    Class A, B, and C only

	 	 	 
	I,

	 	, acknowledge that I have valid proof of insurance and I have attached a copy of the insurance to this acknowledgement.

     Print Name

	 	 	 
	 
	Driver’s signature

	 	Date

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