EXHIBIT 10.3
SECOND AMENDMENT
THIS SECOND AMENDMENT (this "Amendment") dated as of June 4, 2004 to the
Credit Agreement referenced below is by and among PSYCHIATRIC SOLUTIONS, INC., a
Delaware corporation (the "Borrower"), the Guarantors identified on the
signature pages hereto, the Lenders identified on the signature pages hereto and
BANK OF AMERICA, N.A., as Administrative Agent.
WITNESSETH
WHEREAS, a revolving credit facility of up to $50 million has been
extended to the Borrower pursuant to the terms of that Credit Agreement (as
amended, modified and supplemented from time to time, the "Credit Agreement")
dated as of January 6, 2004 among the Borrower, the Guarantors identified
therein, the Lenders identified therein and the Administrative Agent; and
WHEREAS, the Borrower has requested that the Lenders agree to certain
modifications of the Credit Agreement and the Lenders have agreed to the
requested modifications on the terms and conditions set forth herein.
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Defined Terms. Capitalized terms used herein but not otherwise defined
herein shall have the meanings provided to such terms in the Credit Agreement.
2. Amendments. The Credit Agreement is amended in the following respects:
(a) Schedule 2.01 to the Credit Agreement is replaced with the new
Schedule 2.01 attached hereto.
(b) The definitions of "Aggregate Revolving Commitments", "Borrowing Base"
and "Consolidated Total Leverage Ratio" are amended to read as follows:
"Aggregate Revolving Commitments" means the Revolving Commitments of
all the Lenders. The amount of the Aggregate Revolving Commitments
in effect on the effective date of the Second Amendment to this
Agreement is ONE HUNDRED TWENTY-FIVE MILLION DOLLARS ($125,000,000).
"Borrowing Base" means an amount equal to the sum of (a) eighty
percent (80%) of the net book value of Eligible Accounts plus (b)
the lesser of (i) eighty percent (80%) of the net book of Eligible
Unbilled Accounts and (ii) $10 million plus (c) twenty-five percent
(25%) of the net book value of Fixed Assets, in each case as set
forth in the most recent Borrowing Base Certificate delivered by the
Borrower in accordance with Section 7.02(c).
"Consolidated Total Leverage Ratio" means, as of any date of
determination, the ratio of (a) the sum of (i) Consolidated Funded
Indebtedness as of such date minus (ii) if positive, the sum of (A)
the aggregate amount of cash and Cash Equivalents of the Borrower
and its Subsidiaries on such date minus (B) the aggregate amount of
Loans outstanding on such date to (b) Consolidated EBITDA for the
period of the four fiscal quarters most recently ended.
(c) Clause (vii)(A) of the definition of "Permitted Acquisitions" is
amended to read as follows:
(A) the Total Consideration paid by the Borrower or any Subsidiary
for any Acquisition (or any series of related Acquisitions) shall
not exceed $20 million and the Total Consideration paid by the
Borrower and its Subsidiaries for all Acquisitions in any fiscal
year shall not exceed (x) for the period from the closing of the
Heartland Acquisition through December 31,2004, an amount equal to
sixty percent (60%) of Consolidated EBITDA on a Pro Forma Basis for
the period of four consecutive fiscal quarters immediately preceding
the date of determination, and (y) for each fiscal year ending after
December 31,2004, an amount equal to Consolidated EBITDA on a Pro
Forma Basis for the period of four consecutive fiscal quarters
immediately preceding the date of determination,
(d) The following definitions are added to Section 1.01 of the Credit
Agreement:
"Fixed Assets" means, as of any date of determination, plant,
property and equipment of the Borrower and its Subsidiaries on a
consolidated basis on such day as determined in accordance with
GAAP.
"Heartland Acquisition" means the acquisition by the Borrower of
certain of the assets of Heartland Healthcare.
(e) Section 7.02(a) of the Credit Agreement is amended to read as
follows:
(a) [Reserved.]
(f) Section 7.02(c) of the Credit Agreement is amended to read as
follows:
(c) within fifteen (15) days after the end of each fiscal quarter, a
certificate (the "Borrowing Base Certificate") from a Responsible
Officer of the Borrower setting forth the Borrowing Base and its
components as of the end of the immediately preceding fiscal quarter
substantially in the form attached as Exhibit E;
(g) Section 8.03(h) of the Credit Agreement is amended to read as
follows:
(h) Earn-Out Obligations in an aggregate amount not to exceed
$15,000,000 at any one time outstanding, provided that such Earn-Out
Obligations are subordinated to the Obligations in a manner and to
an extent acceptable to the Administrative Agent;
(h) Section 8.11(e) of the Credit Agreement is amended to read as
follows:
(e) Consolidated Growth Capital Expenditures. Permit Consolidated
Growth Capital Expenditures in an aggregate amount in any fiscal
year in excess of twenty percent (20%) of the net book value of
Fixed Assets as of the end of the immediately preceding fiscal year.
3. Joinder of New Lenders. Each of Fifth Third Bank, Union Planters Bank, N.A.,
First Tennessee Bank National Association, US Bank National Association, Bank
One, N.A. and LaSalle Bank National Association (each a "New Lenders") hereby
agrees to provide a Revolving Commitment under the Credit Agreement in the
amount set forth on the new Schedule 2.01 to the Credit Agreement attached
hereto. The Borrower, the Guarantors and each New Lender hereby acknowledge,
agree and confirm that each
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New Lender shall from and after the date hereof be deemed to be a party to the
Credit Agreement and a "Lender" for all purposes of the Credit Agreement, and
shall have all of the rights and obligations of a Lender under the Credit
Agreement as if such New Lender had executed the Credit Agreement.
4. Conditions Precedent. This Amendment shall become effective as of the
date hereof upon satisfaction of each of the following conditions:
(a) receipt by the Administrative Agent of counterparts of this
Amendment executed by the Borrower, the Guarantors and the Lenders;
(b) receipt by the Administrative Agent of a Revolving Note for each
New Lender executed by the Borrower; and
(c) receipt by the Administrative Agent of all fees due in
connection with this Amendment.
5. Reaffirmation of Representations and Warranties. The Borrower
represents and warrants that the representations and warranties set forth in the
Loan Documents are true and correct as of the date hereof (except those that
expressly relate to an earlier period).
6. Reaffirmation of Guaranty. Each Guarantor (i) acknowledges and consents
to all of the terms and conditions of this Amendment, (ii) affirms all of its
obligations under the Loan Documents and (iii) agrees that this Amendment and
all documents executed in connection herewith do not operate to reduce or
discharge such Guarantor's obligations under the Credit Agreement or the other
Loan Documents.
7. Reaffirmation of Security Interests. The Borrower and each Guarantor
(i) affirms that each of the Liens granted in or pursuant to the Loan Documents
are valid and subsisting and (ii) agrees that this Amendment shall in no manner
impair or otherwise adversely effect any of the Liens granted in or pursuant to
the Loan Documents.
8. No Other Changes. Except as modified hereby, all of the terms and
provisions of the Loan Documents shall remain in full force and effect.
9. Counterparts. This Amendment may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original and it shall not be necessary in making proof of this Amendment to
produce or account for more than one such counterpart.
10. Governing Law. This Amendment shall be deemed to be a contract made
under, and for all purposes shall be construed in accordance with, the laws of
the State of New York.
[Signature Pages Follow]
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ADMINISTRATIVE AGENT: BANK OF AMERICA, N.A.,
as Administrative Agent
By: /s/ Xxxxxxx Xxxxxxxx
--------------------
Name: Xxxxxxx Xxxxxxxx
Title: Vice President
LENDERS: BANK OF AMERICA, N.A.,
as a Lender, L/C Issuer and Swing Line Lender
By: /s/ Xxxxxxxxx X. Xxxx
---------------------
Name: Xxxxxxxxx X. Xxxx
Title: SVP
XXXXXX COMMERCIAL PAPER, INC.
By: /s/ Xxxxxxx Xxxxx
-----------------------
Name: Xxxxxxx Xxxxx
Title: Authorized Signatory
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ Xxxxx Xxxxxx
-----------------------
Name: Xxxxx Xxxxxx
Title: Duly Authorized Signatory
AMSOUTH BANK
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
SUNTRUST BANK
By: /s/ Xxxx X. Xxxxxxx
--------------------
Name: Xxxx X. Xxxxxxx
Title: Director
FIFTH THIRD BANK
By: /s/ Xxxxx Xxxxxxx
--------------------
Name: Xxxxx Xxxxxxx
Title: VP
UNION PLANTERS BANK, N.A.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------
Name: Xxxxx X. Xxxxxxxx
Title: Senior Vice President
FIRST TENNESSEE BANK NATIONAL ASSOCIATION
By: /s/ X. X. Xxxxxx
------------------------------------
Name: X. X. Xxxxxx
Title: Vice President
US BANK NATIONAL ASSOCIATION
By: /s/ X. Xxxxxx Choppin
------------------------------------
Name: X. Xxxxxx Choppin
Title: Senior Vice President
BANK ONE, N.A.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: First Vice President &
Corporate Division Manager
LASALLE BANK NATIONAL ASSOCIATION
By: /s/ Xxxxx Xxxxxx
------------------------------------
Name: Xxxxx Xxxxxx
Title: First Vice President
