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EXHIBIT 10.5
THIRD AMENDMENT TO SECOND
AMENDED AND RESTATED CREDIT AGREEMENT
THIS THIRD AMENDMENT (this "Amendment") to the Second Amended and
Restated Credit Agreement referred to below is made as of August 20, 1999 by and
among NEW AMERICAN HEALTHCARE CORPORATION, a Delaware corporation (the
"Borrower"), TORONTO DOMINION (TEXAS), INC., as agent for the financial
institutions party hereto (in such capacity, the "Agent"), THE TORONTO-DOMINION
BANK, as Issuing Bank and THE FINANCIAL INSTITUTIONS PARTY HERETO (collectively,
the "Banks"; individually, a "Bank").
WITNESSETH
WHEREAS, the Borrower, the Agent, the Issuing Bank and the Banks are
party to that certain Second Amended and Restated Credit Agreement, dated as of
May 14, 1999 (as amended, supplemented or otherwise modified from time to time,
prior to the date hereof, the "Credit Agreements");
WHEREAS, the Agent, the Issuing Bank and the Banks have agreed to amend
the Credit Agreement in the manner, and on the terms and conditions, provided
for herein; and
WHEREAS, the Agent, the Issuing Bank and the Banks have also agreed to
waive compliance with certain financial covenants in the manner, and on the
terms and conditions, provided for herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. CERTAIN DEFINITIONS. Capitalized terms used herein and not
otherwise defined shall have the meanings ascribed to them in the Credit
Agreement.
2. AMENDMENTS. (a) Section 7.18(a)(i) of the Credit Agreement is hereby
amended by deleting the last sentence thereof in its entirety and inserting in
lieu thereof a new sentence to read as follows:
"Borrower shall not be required to comply with this SECTION 7.18(a)(i)
until the earlier of (A) December 31, 1999 and (B) the Agent's
timely receipt of the mandatory permanent reduction in the amount of
Twelve Million Dollars ($12,000,000), payable in accordance with
SECTION 2.3(c)(iv) hereof."
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(b) Section 7.18(a)(ii) of the Credit Agreement is hereby
amended by inserting immediately after the word "below" the following
parenthetical: "(other than the fiscal quarter ending September 30, 1999)".
(c) Section 7.18(a)(iv) of the Credit Agreement is hereby
amended and restated in its entirety to read as follows:
"(iv) Have, at the end of each month set forth below, EBITDAR
for the month then ended of not less than the following, provided that
if in any month the amount of such EBITDAR exceeds the amount
designated below as "budget" EBITDAR, Borrower may carryover such
excess amount to the immediately succeeding month in calculating
"required" EBITDAR, provided that such carryover may only be used in
such succeeding month and for purposes of future carryovers shall be
deemed to have been applied first.
Month Budget Requirement
----- ------ -----------
July-99 $1,167,000 $ 856,000
August-99 $1,213,000 $ 896,000
September-99 $1,440,000 $1,079,000
October-99 $1,326,000 $ 990,000
November-99 $1,353,000 $1,008,000
December-99 $1,491,000 $1,119,000
January-00 $1,498,000 $1,125,000
February-00 $1,781,000 $1,351,000
Notwithstanding anything, to the contrary, solely for purposes of
calculating compliance with this SECTION 7.18(A)(IV), EBITDAR shall not
include any EBITDAR of Borrower and its Subsidiaries which is
attributable to the Xxxxxxxxx Medical Center, the Delta Medical Center
and the Picuyune Hospital. Upon the earlier of (A) December 31, 1999
and (B) the Agent's timely receipt of the mandatory permanent reduction
in the amount of Twelve Million Dollars ($12,000,000), payable in
accordance with SECTION 2.3(C)(IV) hereof, Borrower shall not be
required to comply with this SECTION 7.18(A)(IV)."
3. RATIFICATION OF CREDIT AGREEMENT. Except as amended hereby, the
Credit Agreement and all other Loan Documents shall continue to be in full force
and effect and are hereby in all respects ratified and confirmed.
4. REPRESENTATIONS AND WARRANTIES. Borrower hereby represents and
warrants to the Banks that it is not aware of any Incipient Default or Event of
Default. Borrower acknowledges that the Banks are relying on the foregoing
representation and warranty in making their decision to enter into this
Amendment.
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5. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
6. EFFECTIVENESS. This Amendment shall become effective upon receipt by
the Agent of (a) nine original copies of this Amendment duly executed and
delivered by the Borrower, the Agent, the Issuing Bank and the Majority Banks
and (b) amendment fees (in immediately available funds) for the account of the
Banks signatory hereto, based upon their respective Commitments under the Credit
Agreement, determined at the rate of 10.0 basis points for each such Bank,
which fees shall be nonrefundable when paid.
7. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, each of which shall be an original with the same effect as if the
signatures thereto and hereto were upon the same instrument.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, each of the parties hereto has executed this
Amendment as of date and year first above written.
NEW AMERICAN HEALTHCARE CORP.
By: /s/ Xxxx X. XxXxxxxxx Xx.
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Name: Xxxx X. XxXxxxxxx Xx.
Title: Senior Vice President
TORONTO DOMINION (TEXAS), INC.,
As Agent and a Bank
By:
------------------------------------
Name:
Title:
THE TORONTO-DOMINION BANK,
as Issuing Bank
By:
------------------------------------
Name:
Title:
BANK OF AMERICA, N.A. F/K/A
NATIONSBANK, N.A.
By:
------------------------------------
Name:
Title:
[SIGNATURES CONTINUED ON NEXT PAGE]
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FIRST UNION NATIONAL BANK
By:
------------------------------------
Name:
Title:
FIRST AMERICAN NATIONAL BANK
By: /s/ Xxxxx Xxxxxxx
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Name: Xxxxx Xxxxxxx
Title: Senior Vice President
NATIONAL CITY BANK OF KENTUCKY
By:
------------------------------------
Name:
Title:
BANK ONE, N.A.
By:
------------------------------------
Name:
Title:
AMSOUTH BANK
By:
------------------------------------
Name:
Title:
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The undersigned Guarantors hereby (i) acknowledge
and consent to the amendments to the Credit
Agreement effected by this Amendment and (ii)
confirm and agree that their obligations under their
respective Guaranties shall continue without any diminution
thereof and shall remain in full force and effect on and after
the effectiveness of this Amendment.
NAHC OF MISSOURI, INC.
NAHC OF TENNESSEE, INC.
NAHC OF TEXAS, INC.
NAHC II OF TEXAS, INC.
NAHC FINANCIAL, INC.
NAHC OF IOWA, INC.
NAHC OF OREGON, INC.
NAHC II OF OREGON, INC.
NAHC III OF OREGON, INC.
NAHC OF WYOMING, INC.
NAHC COMPANY, INC.
NAHC GEORGIA HOLDINGS, INC.
NAHC OF MISSISSIPPI, INC.
NAHC OF WASHINGTON, INC.
MEMORIAL HOSPITAL OF ADEL, INC.
By: /s/ Xxxx X. XxXxxxxxx Xx.
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Name: Xxxx X. XxXxxxxxx Xx.
Title: Vice President-Sec
NAHC LIMITED PARTNERSHIP
By: New American Healthcare Corporation,
Its General Partner
By: /s/ Xxxx X. XxXxxxxxx Xx.
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Name: Xxxx X. XxXxxxxxx Xx.
Title: Senior Vice President
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WELSH, CARSON, XXXXXXXX & XXXXX VII, L.P.
By: WCAS VII Partners,
as General Partner
By:
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Name:
Title:
