EXHIBIT 10.93
THIRD AMENDMENT
TO
CREDIT AGREEMENT
AND
NOTE MODIFICATION AGREEMENT
This THIRD AMENDMENT TO CREDIT AGREEMENT AND NOTE MODIFICATION AGREEMENT
dated as of August 15, 1996 (this "Amendment") amending the Credit Agreement
dated as of May 15, 1993, as heretofore amended by the First Amendment and the
Second Amendment described below, the "Credit Agreement") among RAMSAY HEALTH
CARE, INC. (the "Company"), a Delaware corporation, GREENBRIER HOSPITAL, INC.
("Greenbrier"), a Louisiana corporation, HOUMA PSYCHIATRIC HOSPITAL, INC.
("Houma"), a Louisiana corporation, HSA OF OKLAHOMA, INC. ("HSA"), an Oklahoma
corporation, CAROLINA TREATMENT CENTER, INC. ("Carolina"), a South Carolina
corporation, GULF COAST TREATMENT CENTER, INC. ("Gulf Coast"), a Florida
corporation, and ATLANTIC TREATMENT CENTER, INC. ("Atlantic"), a Florida
corporation, as Borrowers (collectively, the Borrowers"), GREAT PLAINS HOSPITAL,
INC., a Missouri corporation, and THE HAVEN HOSPITAL, INC., a Delaware
corporation, as Guarantors (collectively, the "Guarantors"), SOCIETE GENERALE, a
French banking corporation acting by and through its New York Branch, FIRST
UNION NATIONAL BANK OF NORTH CAROLINA, a national banking association, and
HIBERNIA NATIONAL BANK, a national banking association, as Lenders
(collectively, the "Lenders"), and SOCIETE GENERALE, as the issuer of the
Letters of Credit described in the Credit Agreement (in such capacity, the
"Issuing Bank") and as agent for the Lenders as provided in the Credit Agreement
(in such capacity, the "Agent"), and modifying the Subsidiary Borrower Notes
described in the Credit Agreement,
W I T N E S S E T H:
A. Pursuant to the Credit Agreement, at the request of the Borrowers, the
Issuing Bank issued the Letters of Credit to support certain Bonds theretofore
issued to finance certain hospital assets for the benefit of the Borrowers.
Subsequent to the original issuance of the Letters of Credit, (i) the Letter of
Credit issued for the account of Atlantic was terminated in connection with the
sale of Atlantic's hospital assets and (ii) the other Letters of Credit have
been reduced in connection with the sale of Atlantic's hospital assets and (ii)
the other Letters of Credit have been reduced in connection with mandatory
sinking fund payments of principal of the Bonds supported by such Letters of
Credit. As of the date of this Amendment, the outstanding Letters of Credit and
the respective amounts thereof are as follows:
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Letter of Interest
Account Credit Principal Interest Coverage
Party Amount Component Component Calculation
Greenbrier $5,344,375.00 $5,100,000.00 $244,375.00 115 days @ 15%
360-day year
Houma 3,665,410.95 3,500,000.00 165,410.95 115 days @ 15%
365-day year
HSA 3,132,330.00 3,000,000.00 132,330.00 115 days @ 14%
365-day year
Carolina 4,401,250.00 4,200,000.00 201,250.00 115 days @ 15%
360-day year
Gulf Coast 3,765,000.00 3,600,000.00 165,000.00 110 days @ 15%
360-day year
TOTAL $20,308,365.95 $19,400,000.00 $908,365.95
B. The Credit Agreement also provided for Revolving Credit Loans by the
Lenders to the Company up to a maximum aggregate outstanding principal balance
of $4,000,000 to provide working capital for conducting the operations of the
company and certain of its consolidated subsidiaries. Pursuant to Section 2.04
(g) of the Credit Agreement, (i) by letter dated April 12, 1995, the Company
irrevocably elected to permanently reduce the Revolving Credit Maximum
Commitment Amount from $4,000,000 to $2,000,000 and (ii) by letter dated
December 27, 1995, the Company irrevocably elected to reduce the Revolving
Credit Commitment Amount to zero and terminate the Revolving Credit Commitment.
C. As of the date of this Amendment, the maximum credit available to be
outstanding for the benefit of the Borrowers pursuant to the Credit Agreement
(the Maximum Credit Availability as defined herein) is $20,308,365.95 (up to
$20,308,365.95 under the Letters of Credit or, in the event of conversion to one
or more Term Loans, up to $19,400,000 under the Term Loan Commitments).
D. Pursuant to a Consent and Amendment dated as of April 12, 1995 among the
Borrowers, the Guarantors, the Lenders, the Issuing Bank and the Agent (the
"First Amendment"), (i) the Agent, on behalf of the Lenders, consented to the
consummation of certain sale-leaseback transactions between two wholly-owned
subsidiaries of the Company and Capstone Capital Corporation and (ii) Section
2.04 (f) of the Credit Agreement was amended by adding the following provision
to the end of such section:
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" ;provided that no proceeds of the Revolving Credit Loans shall be used by
the Company to fund working capital or other capital needs of Mesa Psychiatric
Hospital, Inc."
E. Pursuant to a Second Amendment dated as of September 15, 1995 among the
Borrowers, the Guarantors, the Lenders, the Issuing Bank and the Agent (the
"second Amendment"), the Banks agreed (1) to extend the stated expiration date
of the Letters of Credit to February 15, 1997 and (2) to certain amendments to
the Credit Agreement.
F. The Borrowers have requested the Lenders, the Agent and the Issuing Bank
(collectively in such capacities, the "Banks") (1) to extend the stated
expiration date of the Letters of Credit from February 15, 1997 to August 15,
1997, and (2) to agree to certain amendments to the Credit Agreement. Upon the
terms and conditions set forth in this Amendment, the Banks are willing (i) to
extend the stated expiration date of the Letters of Credit and (ii) to agree to
certain amendments to the Credit Agreement, all as hereinafter provided.
NOW, THEREFORE, in consideration of the foregoing and the understandings
herein set forth and intending to be legally bound, the Borrowers, the
Guarantors, the Lenders, the Issuing Bank and the Agent hereby agree as follows:
1. Definitions. As used in this Amendment and in the Credit Agreement, the
term "Agreement" shall mean the Credit Agreement as amended by the First
Amendment, the Second Amendment and this Amendment. All terms used herein and
not otherwise defined shall have the meanings ascribed to such terms in the
Credit Agreement.
2. Extension of Letters of Credit. The Borrowers hereby request the Banks
to extend the stated expiration date of the Letters of Credit to August 15,
1997. Subject to the payment of the extension fee set forth in section 3 of this
Amendment and to the other conditions precedent hereinafter set forth, the
Issuing Bank will extend the stated expiration date of the Letters of Credit to
August 15, 1997, such extension to be effected through the issuance by the
Issuing Bank to the Greenbrier Trustee, the Houma Trustee, the HSA Trustee, the
Carolina Trustee and the Gulf Coast Trustee, respectively, of an Amendment No. 2
to each of the outstanding Letters of Credit effective as of August 15, 1996.
3. Extension Fee. On the date of execution and delivery of this Amendment,
the Company shall pay to the Agent in immediately available funds a non
refundable extension fee in the amount of $35,000. Such extension fee shall be
shared by the Lenders pro rata on the basis of their respective Percentages.
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4. Amendments to Credit Agreement.
4.1. The definitions of the following terms set forth in Section 1.01 of
the Credit Agreement are hereby amended and restated in full as follows:
"Commitment Fee Rate" means, at any time, (i) three percent (3%) per
annum if the Debt Service and Lease Payment Coverage Ratio of the
Consolidated Companies for the most recent 12-month period for which
financial statements of the Consolidated Companies have been provided to
the Agent pursuant to Section 7.12 is greater than 1.25 to 1, (ii) three
and one-half percent (3 1/2%) per annum if such Debt Service and Lease
Payment Coverage Ratio is equal to or less than 1.25 to 1 and equal to or
greater than 1.00 to 1, and (iii) four percent (4%) per annum if such Debt
Service and Lease Payment Coverage Ratio is less than 1.00 to 1; provided
that, if and so long as such Dept Service and Lease Payment Coverage Ratio
of the Consolidated Companies is greater than 1.25 to 1 and no Event of
Default has occurred and is continuing, the Commitment Fee Rate shall be
reduced by one-quarter percent (1/4%) for each permanent reduction from and
after August 15, 1996 of $3,000,000 in the Maximum Credit Availability.
4.2. Section 2.03(f) (1) of the Credit Agreement is hereby amended and
restated in full as follows:
(1) Amortization and Maturity. The principal of each Term Loan shall
be due and payable in full, together with all unpaid accrued interest
thereon, on the 366th day after the date of conversion to such Term Loan.
All payments shall be applied first to the payment of interest due and
payable on the respective Term Loan and then to the reduction of the
outstanding principal balance thereof.
4.3. Section 7.16(a) of the Credit Agreement is hereby amended and restated
in full as follows:
(a) Consolidated Maximum Annual Debt Service and Lease Payment
Coverage Ratio. The Obligors will maintain, and the Company will cause
the other Consolidated Companies to maintain, as to the Consolidated
Companies on a consolidated basis, as of the end of each fiscal
quarter of the Consolidated Companies for the 12-month period then
ended, a Maximum Annual Debt Service and Lease Payment Coverage Ratio
of at least the following amounts from and after the date indicated:
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From and Maximum Annual Debt Service
after June 30 and Least Payment Coverage Ratio
1996 1.00 to 1
1997 1.20 to 1
4.4. Section 7.16 (e) of the Credit Agreement is hereby amended and
restated in full as follows:
(e) Consolidated Tangible Net Worth. The Obligors will mainain,
and the company will cause the other Consolidated Companies to
maintain, at all times a Consolidated Tangible Net Worth of at least
the following amounts from and after the date indicated:
From and Consolidated
after June 30 Tangible Net Worth
1996 $48,000,000
1997 $50,000,000
4.5. Section 7.24 of the Credit Agreement is hereby amended and restated in
full as follows:
Section 7.24. Management Agreements. The Obligors will not pay, and
the Company will not permit any of the other Consolidated Companies to pay,
any Ramsay Management Fees, except Ramsay Management Fees payable by the
Company to any Xxxx Xxxxxx Affiliate pursuant to the Ramsay Management
Agreement; provided that (i) the Company's obligation to pay Ramsay
Management Fees shall be subordinate to all amounts now or hereafter owing
by the Company to the Agent, the Issuing Bank or the Lenders under the
Credit Documents and (ii) the Company's obligations to pay Ramsay
Management Fees for services rendered during each Fiscal Year shall accrue
and may be paid in common stock of the Company at any time, but shall not
be paid in cash or other property (except such common stock) until after
all of the Letters of Credit have terminated and the Obligors have paid all
of their obligations under the Credit Documents. The Company will cause
Ramsay Health Care Pty. Ltd to execute and deliver to the Agent and the
Lenders on the Closing Date a Ramsay Management Fee Subordination Agreement
(the "Ramsay Management Fee Subordination Agreement") pursuant to which
Ramsay Health Care Pty. Ltd will subordinate all present and future claims
to Ramsay Management Fees owing under the Ramsay Management Agreement (or
any successor management agreement) to all amounts now or hereafter owing
by any Obligor under the Credit Documents. The Company will not (i) amend,
modify or supplement the Ramsay Management Agreement, other than one or
more extensions of the term thereof on
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the same terms and conditions as are in effect on the Closing Date and
other than an assignment thereof by a Xxxx Xxxxxx Affiliate to another Xxxx
Xxxxxx Affiliate (in each case subject to the Ramsay Management Fee
Subordination Agreement), (ii) enter into any other management agreement
with Xxxx X. Xxxxxx or any Xxxx Xxxxxx Affiliate, or (iii) enter into any
management agreement with any other Person (other than a Consolidated
Company) with respect to the management by such person of material
operations of any Obligor or of the Consolidated Companies taken as a
whole.
4.6. Section 7.34 of the Credit Agreement is hereby amended and restated in
full as follows:
Section 7.34. Reduction of Maximum Credit Availability. The Borrowers
will cause the Maximum Credit Availability to be reduced to not more than
$17,145,835.32 by December 31, 1996, and to not more than $15,000,000 by
July 1, 1997, through permanent reductions in the total of the Letter of
Credit Amounts of the Letters of Credit as a result of mandatory sinking
fund redemptions and/or optional redemptions of Bonds.
5. Modifications to Subsidiary Borrower Notes.
5.1. The definitions of the following terms set forth in each of the
Subsidiary Borrower Notes are hereby modified and amended and restated in full
as follows:
"Base Rate Increment" means one percent (1%) per annum.
"Eurodollar Rate Increment" means two and three-quarters percent (2
3/4%) per annum.
The modifications set forth in this Section 5.1 were made, and are hereby
deemed to have been made, effective as of September 15, 1995.
5.2. Section 6(a) of each of the Subsidiary Borrower Notes is hereby
modified and amended and restated in full as follows:
(a) Amortization and Maturity. The principal of the Term Loan shall be due
and payable in full, together with all unpaid accrued interest thereon, on the
366th day after the date of conversion to the Term Loan. All payments shall be
applied first to the payment of interest due and payable on the Term Loan and
then to the reduction of the outstanding principal balance thereof.
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5.3. All references in each of the Subsidiary Borrower Notes to the Credit
Agreement shall be deemed to mean the Credit Agreement, as defined in and
amended by this Amendment and as the same may hereafter be amended.
6. Conditions Precedent. As conditions precedent to the Banks' execution
and delivery of this Amendment, the Agent shall have received the following in
form and substance satisfactory to the Banks:
(a) A certificate of the president, chief executive officer or chief
financial officer of each Obligor as of the date of execution and delivery
by the Obligors of this Amendment stating that (1) the representations and
warranties contained in Section 7 of this Amendment are true and correct,
(2) all obligations, covenants, agreements and conditions contained in the
Agreement to be performed or satisfied by such Obligor on or prior to the
date of execution and delivery by the Obligors of this Amendment have been
performed or satisfied in all respects, (3) since June 30, 1995, there has
been no material adverse change in the properties, business, operations,
assets, condition (financial or otherwise) or prospects of such Obligor
(or, in the case of the certificate of the respective officer of the
Company, the Consolidated Companies taken as a whole) other than as
disclosed in such certificate, and (4) after giving effect to this
Amendment, no Default or Event of Default has occurred and is continuing;
(b) An opinion of Xxxxxx & Xxxxxx, New York, New York, counsel to the
Obligors, to the effect that (1) the execution and delivery by the Obligors
of this Amendment has been duly authorized by all requisite corporate
action, (2) this Amendment has been duly executed and delivered by the
Obligors and constitutes the legal, valid and binding obligation of the
Obligors enforceable against the Obligors in accordance with its terms,
except to the extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting the rights of creditors generally and by the application of
general principles of equity, and (3) the execution and delivery of this
Amendment does not conflict with or constitute a default under the Life
Company Indenture or the Consolidated Companies' Operating Leases with
Capstone Capital Corporation and Charter Canyon Behavioral Health System,
Inc. or the Consolidated Companies have otherwise obtained all requisite
consents of the parties to such agreements in connection with this
Amendment; and
(c) Such other documents, certificates and opinions of counsel as the
Agent may reasonably request.
7. Representations and Warranties. The Obligors hereby represent and
warrant that:
(a) The representations and warranties made by the Obligors in the Credit
Agreement and all documents delivered in connection therewith are true and
correct on and as of the date of execution and delivery by the Obligors of this
Amendment, except to the extent that such
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representations and warranties expressly relate to an earlier date. After
giving effect to this Amendment, no Default or Event of Default has occurred and
is continuing on the date of execution and delivery by the Obligors of this
Amendment.
(b) This Amendment has been duly authorized by all requisite action on
behalf of the Obligors and constitutes the legal, valid and binding obligation
of the Obligors, enforceable in accordance with its terms, except as the same
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other laws or equitable principles affecting creditors' rights generally.
(c) The Obligors have obtained all consents and approvals necessary to
their execution and delivery of this Amendment.
8. Costs and Expenses. The Obligors hereby agree to pay on demand all costs
and expenses of the Agent and the Issuing Bank in connection with the
preparation, execution and delivery of this Amendment and the amendments
extending the Letters of Credit being delivered pursuant to section 2 of this
Amendment, including without limitation the reasonable fees and expenses of
counsel for the Agent and the Issuing Bank with respect thereto.
9. Counterparts. This Amendment may be executed in one or more counterparts
each of which shall constitute an original Amendment and all of which together
shall constitute one and the same Amendment.
10. Effect. Upon the execution and delivery of this Amendment, the Credit
Agreement shall be and be deemed to be amended as set forth in this Amendment.
All of the provisions of the Credit Agreement shall remain in full force and
effect as amended by this Amendment.
11. Governing Law. This Amendment shall be governed by, and construed in
accordance with, the laws of the State of New York, without regard to principles
of conflicts of law. The foregoing choice of law is made pursuant to Section
5-1401 of the General Obligations Law of the State of New York.
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IN WITNESS WHEREOF, the Obligors, the Lenders, the Issuing Bank and the
Agent have caused this Agreement to be duly executed and delivered as of the
date first above written.
(CORPORATE SEAL) RAMSAY HEALTH CARE, INC.
Attest ____________________________ By _________________________________
Assistant Secretary President
(CORPORATE SEAL) GREENBRIER HOSPITAL, INC.
Attest ____________________________ By _________________________________
Assistant Secretary President
(CORPORATE SEAL) HOUMA PSYCHIATRIC HOSPITAL, INC.
Attest ____________________________ By _________________________________
Assistant Secretary President
(CORPORATE SEAL) HSA OF OKLAHOMA, INC.
Attest ____________________________ By _________________________________
Assistant Secretary President
(CORPORATE SEAL) CAROLINA TREATMENT CENTER, INC.
Attest ____________________________ By _________________________________
Assistant Secretary President
This execution page is part of the Third Amendment to Credit Agreement and Note
Modification Agreement dated as of August 15, 1996 amending the Credit Agreement
dated as of May 15, 1993, as amended, among Ramsay Health Care, Inc., Greenbrier
Hospital, Inc., Houma Psychiatric Hospital, Inc., HSA of Oklahoma, Inc.,
Carolina Treatment Center, Inc., Gulf Coast Treatment Center, Inc. and Atlantic
Treatment Center, Inc., as Borrowers, Great Plains Hospital, Inc. and the Haven
Hospital, Inc., as Guarantors, Societe Generale, New York Branch, First Union
National Bank of North Carolina and Hibernia National Bank, as Lenders, Societe
Generale, as Issuing Bank, and Societe Generale, as Agent, and modifying the
Subsidiary Borrower Notes described therein.
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(CORPORATE SEAL) GULF COAST TREATMENT, INC.
Attest ____________________________ By _________________________________
Assistant Secretary President
(CORPORATE SEAL) ATLANTIC TREATMENT CENTER, INC.
Attest ____________________________ By _________________________________
Assistant Secretary President
(CORPORATE SEAL) GREAT PLAINS HOSPITAL, INC.
Attest ____________________________ By _________________________________
Assistant Secretary President
(CORPORATE SEAL) THE HAVEN HOSPITAL, INC.
Attest ____________________________ By _________________________________
Assistant Secretary President
This execution page is part of the Third Amendment to Credit Agreement and Note
Modification Agreement dated as of August 15, 1996 amending the Credit Agreement
dated as of May 15, 1993, as amended, among Ramsay Health Care, Inc., Greenbrier
Hospital, Inc., Houma Psychiatric Hospital, Inc., HSA of Oklahoma, Inc.,
Carolina Treatment Center, Inc., Gulf Coast Treatment Center, Inc. and Atlantic
Treatment Center, Inc., as Borrowers, Great Plains Hospital, Inc. and the Haven
Hospital, Inc., as Guarantors, Societe Generale, New York Branch, First Union
National Bank of North Carolina and Hibernia National Bank, as Lenders, Societe
Generale, as Issuing Bank, and Societe Generale, as Agent, and modifying the
Subsidiary Borrower Notes described therein.
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SOCIETE GENERALE, NEW YORK
BRANCH, as Lender, Issuing
Bank and Agent
By ____________________________
Title _________________________
This execution page is part of the Third Amendment to Credit Agreement and Note
Modification Agreement dated as of August 15, 1996 amending the Credit Agreement
dated as of May 15, 1993, as amended, among Ramsay Health Care, Inc., Greenbrier
Hospital, Inc., Houma Psychiatric Hospital, Inc., HSA of Oklahoma, Inc.,
Carolina Treatment Center, Inc., Gulf Coast Treatment Center, Inc. and Atlantic
Treatment Center, Inc., as Borrowers, Great Plains Hospital, Inc. and the Haven
Hospital, Inc., as Guarantors, Societe Generale, New York Branch, First Union
National Bank of North Carolina and Hibernia National Bank, as Lenders, Societe
Generale, as Issuing Bank, and Societe Generale, as Agent, and modifying the
Subsidiary Borrower Notes described therein.
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XXXXX XXXXX XXXX XX XXXXX
XXXXXXXX, as Lender
By ____________________________
Title ___________________________
This execution page is part of the Third Amendment to Credit Agreement and Note
Modification Agreement dated as of August 15, 1996 amending the Credit Agreement
dated as of May 15, 1993, as amended, among Ramsay Health Care, Inc., Greenbrier
Hospital, Inc., Houma Psychiatric Hospital, Inc., HSA of Oklahoma, Inc.,
Carolina Treatment Center, Inc., Gulf Coast Treatment Center, Inc. and Atlantic
Treatment Center, Inc., as Borrowers, Great Plains Hospital, Inc. and the Haven
Hospital, Inc., as Guarantors, Societe Generale, New York Branch, First Union
National Bank of North Carolina and Hibernia National Bank, as Lenders, Societe
Generale, as Issuing Bank, and Societe Generale, as Agent, and modifying the
Subsidiary Borrower Notes described therein.
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HIBERNIA NATIONAL BANK, as
Lender
By ____________________________
Title ___________________________
This execution page is part of the Third Amendment to Credit Agreement and Note
Modification Agreement dated as of August 15, 1996 amending the Credit Agreement
dated as of May 15, 1993, as amended, among Ramsay Health Care, Inc., Greenbrier
Hospital, Inc., Houma Psychiatric Hospital, Inc., HSA of Oklahoma, Inc.,
Carolina Treatment Center, Inc., Gulf Coast Treatment Center, Inc. and Atlantic
Treatment Center, Inc., as Borrowers, Great Plains Hospital, Inc. and the Haven
Hospital, Inc., as Guarantors, Societe Generale, New York Branch, First Union
National Bank of North Carolina and Hibernia National Bank, as Lenders, Societe
Generale, as Issuing Bank, and Societe Generale, as Agent, and modifying the
Subsidiary Borrower Notes described therein.
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