EXHIBIT 10.18
AMENDMENT NO.3
THIS AMENDMENT NO. 3 (the "Amendment") dated as of December __, 1998, to
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the Credit Agreement referenced below, is by and among PEDIATRIC SERVICES OF
AMERICA, INC., a Georgia corporation, PEDIATRIC SERVICES OF AMERICA, INC., a
Delaware corporation, the subsidiaries and affiliates identified herein, the
lenders identified herein, and NATIONSBANK, N.A., as Administrative Agent.
Terms used but not otherwise defined shall have the meanings provided in the
Credit Agreement.
WITNESSETH
WHEREAS, a $75 million credit facility has been established in favor of
Pediatric Services of America, Inc., a Georgia corporation (the "Borrower")
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pursuant to the terms of that Credit Agreement dated as of August 13, 1997 (as
amended and modified, the "Credit Agreement") among the Borrower, the Guarantors
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and Lenders identified therein, and NationsBank, N.A., as Administrative Agent;
WHEREAS, the Borrower has given notice that it was in non-compliance with
the financial covenants contained in Sections 7.9(a) regarding the Consolidated
Leverage Ratio, 7.9(d) regarding the Consolidated Senior Leverage Ratio and
7.9(f) regarding the Days Sales Outstanding for the third fiscal quarter ending
September 30, 1998, and the Borrower has not been able to provide monthly
financial statements for October and November of 1998 (the "Acknowledged Events
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of Default"):
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WHEREAS, the Borrower has requested that the Lenders forbear from
exercising their remedies, and that the Lenders further continue to make
Extensions of Credit under the Credit Agreement;
WHEREAS, the requested forbearance and continuation of Extensions of Credit
require the consent of the Required Lenders;
WHEREAS, the Required Lenders, for and on behalf of the Lenders, have
agreed to the requested forbearance and continuation of Extensions of Credit on
the terms and the conditions set forth herein:
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged the parties agree as follows:
1. Forbearance. The Administrative Agent and the Lenders agree, subject
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to the terms and conditions set forth herein, to forbear exercising their rights
and remedies arising exclusively as a result of the Acknowledged Events of
Default until the earlier of January 29, 1999 or the breach by the Borrower or
the other Credit Parties of this Agreement (the "Forbearance Termination Date");
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provided that (i) this forbearance is expressly limited to the Acknowledged
Events of Default, and shall not extend to any other Event of Default which may
exist or arise after the date hereof, and (ii) the Administrative Agent and the
Lenders shall be free to exercise any and all rights and remedies available
under the Credit Agreement in respect of the Acknowledged Events of Default at
any time on and after the Forbearance Termination Date and at any time in
respect of any Events of Default other than the Acknowledged Events of Default.
Nothing contained herein shall be deemed to constitute a waive of any rights or
remedies which may exist under the Credit Documents or under applicable law.
2. Modifications to the Credit Agreement. Notwithstanding provisions to
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the contrary in the Credit Agreement and the other Credit Documents.
(a) Extensions of Credit. The Lenders will make Extensions of Credit
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under the Credit Agreement from the date hereof to the Forbearance
Termination Date (the "Forbearance Period") notwithstanding the existence
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of the Acknowledged Events of Default; provided that the aggregate
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outstanding principal amount of Obligations shall not exceed SIXTY-FIVE
MILLION DOLLARS ($65,000,000) and during the Forbearance Period, references
to the Aggregate Revolving Committed Amount shall be deemed to be SIXTY-
FIVE MILLION DOLLARS ($65,000,000).
(b) Applicable Percentages. During the Forbearance Period, the
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Eurodollar Margin and Letter of Credit Fee (as referenced in the definition
of "Applicable Percentage") shall be 350 basis points (3.50%), the Base
Rate Margin (as referenced in the definition of "Applicable Percentage")
shall be 250 basis points (2.50%) and the Commitment Fee (as referenced in
the definition of "Applicable Percentage") shall be 50 basis points
(0.50%).
(c) Monthly Financial Statements. The Borrower will provide promptly
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to the Administrative Agent and the Lenders copies of the monthly financial
statements for October and November.
3. Forbearance and Amendment Fee. In consideration of the forbearance and
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the other agreements provided herein and the agreement of the Lenders to work
toward a more permanent waiver and amendment by the end of the Forbearance
Period, the Borrower agrees to pay to the Lenders which consent to this
Amendment and to a subsequent waiver and amendment by the end of the Forbearance
Period (the "Consenting Lenders") a fee (the "Forbearance and Amendment Fee") of
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twenty-five basis points (0.25%) on the Revolving Commitments of such Lenders.
The Forbearance and Amendment Fee shall be payable as follows: (i) eight and
one-third basis points (0.08333%) payable on the date of this Forbearance
Agreement and (ii) the remaining sixteen and two-thirds basis points (0.16667%)
payable on the effective date of a subsequent waiver and amendment. Amounts paid
shall be deemed earned on receipt and shall be non-refundable.
4. This Amendment shall be effective upon satisfaction of the following
conditions:
(a) execution of this Amendment by the Credit Parties and the
Required Lenders:
(b) receipt by the Administrative Agent of legal opinions of counsel
to the Credit Parties relating to this Amendment; and
(c) receipt by the Administrative Agent for the ratable benefit of
the Consenting Lenders of the portion of the Forbearance and Amendment Fee
(8.33 basis points) payable with this Forbearance Agreement.
5. Representations and Warranties. Each of the Credit Parties hereby
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represents and warrants that (i) it has the requisite corporate power and
authority to execute, deliver and perform this Agreement, (ii) it is duly
authorized to, and has been authorized by all necessary corporate action, to
execute, deliver and perform under this Agreement, (iii) it has no claims,
counterclaims, offsets or defenses to the Credit Documents, and the performance
of its obligations thereunder, or if it has any such claims, counterclaims,
offsets or defenses, they are hereby waived, relinquished and released in
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consideration of the execution and delivery of this Agreement by the Required
Lenders, (iv) except as to the Acknowledged Events of Default which are the
subject hereof, the representations and warranties in Section 6 of the Credit
Agreement are true and correct in all material respects (except those which
expressly relate to an earlier period), and (v) except as to the Acknowledged
Events of Default which are the subject hereof, no Default or Events of Default
has occurred and is continuing.
6. Except as modified hereby, all of the terms and provisions of the
Credit Agreement (including Schedules and Exhibits) shall remain in full force
and effect.
7. The Borrower agrees to pay all reasonable costs and expenses of the
Administrative Agent in connection with the preparation, execution and delivery
of this Amendment, including without limitation the reasonable fees and expenses
of Xxxxx & Xxx Xxxxx, PLLC.
8. 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.
9. 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
North Carolina.
[Remainder of Page Intentionally Left Blank]
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LENDERS: NATIONSBANK, N.A.,
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individually in its capacity as a
Lender and in its capacity as Administrative Agent
By: /s/ Xxxxxx X. Xxxxxxxx
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Name: Xxxxxx X. Xxxxxxxx
Title: Senior Vice President
TORONTO DOMINION (TEXAS), INC.
By: /s/ Xxxx X. Xxxxx
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Name: Xxxx X. Xxxxx
Title: Vice President
PNC BANK, NATIONAL ASSOCIATION
By: /s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
SUNTRUST BANK, ATLANTA
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
Title: Vice President
By: /s/ Don Kimitor
Name: Don Kimitor
Title: Vice President
MELLON BANK, N.A.
By: /s/ Xxxxxxx Xxxxxxxxx
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Name: Xxxxxxx Xxxxxxxxx
Title: First Vice President
CREDITANSTALT AG
By: /s/ Xxxx X. Xxxxx
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Name: Xxxx X. Xxxxx
Title: Vice President
By: /s/ Xxxx X. Xxxxxx
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Name: Xxxx X. Xxxxxx
Title: Senior Associate
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of
this Amendment to be duly executed and delivered as of the date first above
written.
BORROWER: PEDIATRIC SERVICES OF AMERICA, INC.
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a Georgia corporation
By: /s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President and
Chief Financial Officer
GUARANTORS: PEDIATRIC SERVICES OF AMERICA, INC.
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a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President and Chief Financial Officer
PSA LICENSING CORPORATION,
a Delaware corporation
PSA PROPERTIES CORPORATION,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: President
for each of the foregoing
PEDIATRIC SERVICES OF AMERICA (CONNECTICUT), INC.,
a Connecticut corporation
PREMIER MEDICAL SERVICES, INC.
a Nevada corporation
PEDIATRIC HOME NURSING SERVICES, INC.,
a New York corporation
PEDIATRIC PARTNERS, INC.,
a Delaware corporation
PARAMEDICAL SERVICES OF AMERICA, INC.,
a California corporation
PREMIER NURSE STAFFING, INC.,
a Nevada corporation
PREMIER CERTIFIED HOME HEALTH SERVICES, INC.,
a Nevada corporation
ARO HEALTH SERVICES, INC.,
a Washington corporation
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Title: President
for each of the foregoing
