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Exhibit 10(r)
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS AMENDMENT TO CREDIT AGREEMENT dated as of September 30, 1999
("this Amendment") is entered into by RESPONSE ONCOLOGY, INC., a Tennessee
corporation ("Response"), RESPONSE ONCOLOGY MANAGEMENT OF SOUTH FLORIDA, INC., a
Tennessee corporation ("Management"), RESPONSE ONCOLOGY OF TAMARAC, INC., a
Florida corporation ("Tamarac") and RESPONSE ONCOLOGY OF FORT LAUDERDALE, INC.,
a Florida corporation ("Fort Lauderdale"; Response, Management, Tamarac and Fort
Lauderdale are sometimes together referred to as the "Borrowers"), AMSOUTH BANK,
an Alabama banking corporation ("AmSouth"), UNION PLANTERS BANK NATIONAL
ASSOCIATION, a national banking association ("UP"), and BANK OF AMERICA, N.A., a
national banking association and formerly known as NationsBank, N.A.
(collectively, the "Lenders"), and AMSOUTH BANK, an Alabama banking corporation,
as agent for the Lenders (the "Agent").
Recitals
A. The Borrowers, the Agent and the Lenders are parties to that certain
Credit Agreement dated as of June 10, 1999 (the "Agreement") pursuant to which
the Lenders have made available to the Borrowers (i) a revolving credit facility
in an aggregate principal amount outstanding not to exceed $7,000,000, and (ii)
a term loan facility in the principal amount of $35,000,000.
B. The Borrowers have applied to the Lenders for modifications to
certain provisions of the Agreement.
C. The Lenders are willing to make such modification as requested only
if, among other things, the Borrowers enter into this Amendment.
Agreement
NOW, THEREFORE, in consideration of the foregoing Recitals, the
Borrowers, the Lenders and the Agent hereby agree as follows:
1. Capitalized terms used in this Amendment and not otherwise
defined herein have the respective meanings attributed thereto in the Agreement.
2. The definition of "Applicable Commitment Fee." "Applicable LIBO Rate
Margin," and "Applicable Prime Rate Margin" shall be amended to read, in its
entirety, as follows:
"Applicable Commitment Fee," "Applicable LIBO Rate Margin,"
and "Applicable Prime Rate Margin" mean, with respect to any Loan and
the commitment
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fee respecting the Revolving Credit Loan, during any Effective Period,
the percentage rate per annum set forth below:
Prime Rate LIBOR Commitment Fee
Margin Margin in Basis Points
1.00% 3.25% 62.5 bps
3. The reference in Section 2.1 of the Agreement to "$7,000,000" shall
be amended to read "$6,000,000".
4. The repayment grid set forth in Section 2.10 of the Agreement is
hereby amended to read, in its entirety, as follows:
Date Quarterly Payment
---- -----------------
July 1, 1999 1,250,000
October 1, 1999 1,250,000
November 15, 1999 416,667
December 1, 1999 416,667
January 1, 2000 416,667
April 1, 2000 1,250,000
July 1, 2000 1,500,000
October 1, 2000 1,500,000
January 1, 2001 1,500,000
April 1, 2001 1,500,000
July 1, 2001 1,500,000
October 1, 2001 1,500,000
January 1, 2002 1,500,000
April 1, 2002 1,500,000
June 10, 2002 Balance Due in Full
5. The "Revolving Credit Commitment" for AmSouth and UP is hereby
amended as set forth on the attached signature page for such financial
institution.
6. Section 6.1.7 of the Agreement is hereby amended to read, in its
entirety, as follows:
6.1.7 Purchase Money Debt. Purchase Money Debt, including
Assumed Debt, existing on the date of this Amendment and set forth on
Schedule 6.1.7 attached hereto.
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7. Section 6.11 of the Agreement is hereby amended to read, in its
entirety, as follows:
6.11 Advances. No Consolidated Entities shall extend any loans
to any other Persons except for the loans (including Provider Loans)
existing on the date of this Agreement and set forth on Schedule 6.11
attached hereto.
8. Section 7.2 of the Agreement is hereby amended to read, in its
entirety, as follows:
7.2 Total Funded Debt to Consolidated EBITDA. Borrower shall
maintain a ratio of Total Funded Debt divided by Consolidated EBITDA,
measured as of the end of each fiscal quarter for the previous four
consecutive fiscal quarters, of no greater than 4.0:1.0 through the
fiscal quarter ending September 30, 1999, of no greater than 4.25:1.0
through the fiscal quarter ended December 31, 1999 and of no greater
than 3.00:1.00 thereafter.
9. Section 7.5 of the Agreement is hereby amended to read, in its
entirety, as follows:
7.5 Capital Expenditures. Borrower shall not incur Capital
Expenditures for any fiscal year without the prior written consent of
the Lenders, other than those Capital Expenditures listed on Exhibit A.
10. The Lenders agree to waive (a) the failure by the Borrowers to
comply with the financial covenants set forth in Sections 7.3 and 7.4 for the
fiscal quarters ending September 30, 1999 and December 31, 1999 and (b) any and
all Defaults, Events of Default and remedies the Lenders and Agent may have that
arise from Borrowers' failure to comply with the above-referenced financial
covenants.
11. The following Section 7.7 is hereby added to the Agreement and
shall read as follows:
7.7 Minimum EBITDA. EBITDA for the Borrower shall not be less
than (a) $1,464,000 for the three months ending September 30, 1999, (b)
$500,000 for the months of October, November and December, 1999,
provided, however, any excess EBITDA above the minimum set forth in
this subparagraph (b) may be carried forward to the next succeeding
month for October, November and December so long as EBITDA for the
three months ending December 31, 1999 exceeds $1,500,000, and (c)
$600,000 for the months of January, February and March, 2000; provided,
however, any excess EBITDA above the minimum set forth in this
subparagraph (c) may be carried forward to the next succeeding month
for January, February and March so long as EBITDA for the three months
ending March 31, 2000 exceeds $1,800,000.
12. Section 8.1.1 of the Agreement is hereby amended to read, in its
entirety, as follows:
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8.1.1 Payments. Borrowers' failure to make payment of any
amount of the Obligations.
13. Section 8.1.5 of the Agreement is hereby amended to read, in its
entirety, as follows:
8.1.5 Reporting Requirements. The failure of Borrowers or any
other party to timely perform any covenant in the Credit Documents
requiring the furnishing of notices, financing reports or other
information to Lenders; and provided, however, that during any period
of time that a report is delinquent, Agent may at its option increase
the Pricing Values to their highest levels permitted under this
Agreement.
14. As consideration for the Lenders' agreement to make the
modification set forth in this Amendment, the Borrowers shall pay a fee in the
amount of $19,250 to the Agent for the account of each of the Lenders. This fee
shall be due and payable upon the execution of this Amendment and shall be fully
earned and non-refundable.
15. Notwithstanding the execution of this Amendment, all of the
indebtedness evidenced by each of the Notes shall remain in full force and
effect, as modified hereby, and nothing contained in this Amendment shall be
construed to constitute a novation of the indebtedness evidenced by any of the
Notes or to release, satisfy, discharge, terminate or otherwise affect or impair
in any manner whatsoever (a) the validity or enforceability of the indebtedness
evidenced by any of the Notes; (b) the liens, security interests, assignments
and conveyances affected by the Agreement or the Loan Documents, or the priority
thereof; (c) the liability of any maker, endorser, surety, guarantor or other
person that may now or hereafter be liable under or on account of any of the
Notes or the Agreement or the Loan Documents; or (d) any other security or
instrument now or hereafter held by the Agent or the Lenders as security for or
as evidence of any of the above-described indebtedness.
16. All references in the Loan Documents to "Credit Agreement" shall
refer to the Agreement as amended by this Amendment, and as the Agreement may be
further amended from time to time.
17. The Borrowers hereby certify that the organizational documents of
the Borrowers have not been amended since June 10, 1999.
18. The Borrowers hereby represent and warrant to the Agent and the
Lenders that all representations and warranties contained in the Agreement are
true and correct as of the date hereof, and the Borrowers hereby certify that no
Event of Default nor any event that, upon notice or lapse of time or both, would
constitute an Event of Default, has occurred and is continuing.
19. Except as hereby amended, the Agreement shall remain in full
force and effect as written. This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which when
taken together shall constitute one and the same instrument. The covenants and
agreements contained in this Amendment shall apply to and inure
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to the benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns.
20. Nothing contained herein shall be construed as a waiver,
acknowledgment or consent to any breach of or Event of Default under the
Agreement and the Loan Documents not specifically mentioned herein.
21. This Amendment shall be governed by the laws of the State of
Alabama.
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IN WITNESS WHEREOF, each of the Borrowers, the Lenders and the Agent
has caused this Amendment to be executed and delivered by its duly authorized
corporate officer as of the day and year first above written.
RESPONSE ONCOLOGY, INC.
By: /s/
-----------------------------------
Its: CFO
RESPONSE ONCOLOGY MANAGEMENT
OF SOUTH FLORIDA, INC.
By: /s/
-----------------------------------
Its: CFO
RESPONSE ONCOLOGY OF TAMARAC, INC.
By: /s/
-----------------------------------
Its: CFO
RESPONSE ONCOLOGY OF FORT LAUDERDALE,
INC.
By: /s/
-----------------------------------
Its: CFO
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AMSOUTH BANK
By: /s/
-----------------------------------
Its: Vice President
Revolving Credit Commitment: $3,692,400
UNION PLANTERS BANK NATIONAL
ASSOCIATION
By: /s/
-----------------------------------
Its: Vice President
Revolving Credit Commitment: $2,307,600
BANK OF AMERICA, N.A. (formerly known as
NationsBank, N.A.)
By: /s/
-----------------------------------
Its: Senior Vice President
AMSOUTH BANK, as Agent
By: /s/
-----------------------------------
Its: Vice President
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RESPONSE ONCOLOGY, INC.
CAPITAL EXPENDITURES
Through January 31, 2000
Exhibit A
LOCATION DESCRIPTION AMOUNT
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Oncology & Hematology Consultants, PLLC Chemistry Analyzer $ 57,000
Hematology Oncology Associates of the Treasure Coast PA Server 4,000
X. Xxxxxxxx, M.D., PA Satellite Office Build Out 20,350
X. Xxxxxxxx, M.D., PA Server/PC's/Cabling 22,233
X. Xxxxxxxx, M.D., PA Medical Manager Software/Installation 22,935
Oncology & Hematology Group of South Florida, PA AVI Pumps (14 Refurbished) 4,550
Oncology & Hematology Group of South Florida, PA Computers(3) 3,000
IMPACT Center of Hollywood CBC Analyzer 18,500
IMPACT Center of Lehigh Valley iMac/Router 2,500
IMPACT Center of Youngstown iMac/Router 2,500
IMPACT Center of St. Xxxxxx iMac/Router 2,500
IMPACT Center of Colorado Springs iMac/Router 2,500
IMPACT Center of Pensacola iMac/Router 2,500
IMPACT Center of Albuquerque iMac/Router 2,500
Tampa Pharmacy iMac/Router 2,500
Bayonne Hospital iMac/Router 2,500
Mercy Hospital Cancer Center iMac/Router 2,500
North Shore Hematology Oncology iMac/Router 2,500
IMPACT Center of Washington iMac/Router 2,500
IMPACT Center of Little Rock iMac/Router 2,500
IMPACT Center of Nashville iMac 1,000
Corporate Notebook/Docking Station 3,300
Corporate PC's(3) 3,000
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Total $189,868
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