EXHIBIT 10.5
THIRD AMENDMENT TO
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
THIS THIRD AMENDMENT TO AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
(this "Third Amendment") is made and entered into as of March 4, 2003 (the
"Third Amendment Date") by and among AMSURG CORP., a Tennessee corporation (the
"Borrower"), the several banks and other financial institutions from time to
time party hereto (the "Lenders"), and SUNTRUST BANK, in its capacity as
Administrative Agent for the Lenders (the "Administrative Agent").
RECITALS:
1. The Borrower, Administrative Agent and certain lenders entered
into that certain Amended and Restated Revolving Agreement dated May 5, 2000, as
amended by that certain First Amendment to Amended and Restated Revolving
Agreement dated June 22, 2001 and as further amended by that certain Second
Amendment to Amended and Restated Revolving Agreement dated February 5, 2003 (as
amended, the "Agreement").
2. The Borrower desires that the credit facility established
under the Agreement be extended and as a result, certain lenders to the
Agreement may no longer be a party thereto and additional lenders may be
involved in the extended credit facility.
3. Subject to the terms and conditions of this Amendment, the
Lenders severally, to the extent of their respective Commitments, are willing to
extend the credit facilities to Borrower under the Agreement.
4. The Borrower, Administrative Agent and the Lenders desire to
amend the Agreement as provided herein.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the Borrower, the Lenders and the Administrative Agent
agree as follows:
1. Capitalized terms used herein, but not expressly defined
herein, shall have the meaning given to such terms in the Agreement. In addition
thereto, henceforth, the terms "Third Amendment" and "Third Amendment Date" as
defined hereinabove in the preamble hereto, shall be deemed incorporated by
reference into Section 1.1. of the Agreement in the appropriate alphabetical
order, and made a part thereof.
2. The definition of "Applicable Margin" in Section 1.1 of the
Agreement is hereby amended and restated as follows:
"APPLICABLE MARGIN" shall mean with respect to the Letter of
Credit Fee and all Revolving Loans outstanding on any date, the number
of basis points per annum determined by reference to the applicable
Leverage Ratio in effect on such date in accordance with the table set
forth below, provided, that a change in the Applicable Margin resulting
from a change in the Leverage Ratio shall be effective on the second
Business Day after which the Borrower is required to deliver the
financial statements required by Section 5.1 (a) or (b) and the
compliance certificate required by Section 5.1 (c); provided further,
that if at any time the Borrower shall have failed to deliver such
financial statements and such certificate, the Applicable Margin shall
be at Level 4 until such time as such financial statements and
certificate are delivered, at which time the Applicable Margin shall be
determined as provided above.
Xxxxx 0 Xxxxx 0 Xxxxx 0 Xxxxx 0
-------------- ----------------- ----------------- ---------------
Leverage Ratio Less than l.0x Greater than or Greater than or Greater than or
equal to l.0x and equal to 1.5x and equal to 2. Ox
Less than 1.5x Less than 2.0x
-------------- ----------------- ----------------- ---------------
Applicable 150 175 200 225
Margin for basis points basis points basis points basis points
Eurodollar Loans
and Letter of
Credit Fee
-------------- ----------------- ----------------- ---------------
Applicable 50 75 100 125
Margin for Base basis points basis points basis points basis points
Rate Loans
-------------- ----------------- ----------------- ---------------
Commitment Fee 50.0 50.0 50.0 50.0
basis points basis points basis points basis points
-------------- ----------------- ----------------- ---------------
3. The definition of "Arranger" in Section 1.1 of the Agreement
is hereby amended and restated as follows:
"ARRANGER" shall mean SunTrust Xxxxxxxx Xxxxxxxx, a division
of SunTrust Capital Markets, Inc.
4. The definition of "Assignment and Security Agreement" in
Section 1.1 of the Agreement is hereby amended and restated as follows:
"ASSIGNMENT AND SECURITY AGREEMENT" shall mean that certain
Assignment and Security Agreement, substantially in the form of Exhibit
E attached hereto, whereby Borrower (a) assigns to Administrative Agent
on behalf of Lenders any and all documents executed in connection with
all Intercompany Loans and Third Party Notes (except as may be excluded
pursuant to Section 5.11 herein), including without limitation any
notes, loan agreements, security agreements, guaranties, and financing
statements, and (b) pledges to Administrative Agent on behalf of
Lenders any and all collateral pledged in connection therewith.
Borrower hereby grants Lenders or any of them permission to file any
applicable financing statements.
2
5. The definition of "Maturity Date" in Section 1.1 of the
Agreement is hereby amended and restated as follows:
"Maturity Date" shall mean the earliest of (i) Xxxxx 0, 0000,
(xx) the date on which the Revolving Commitments are terminated
pursuant to Section 2.6. and (iii) the date on which all amounts
outstanding under this Agreement have been declared or have
automatically become due and payable.
6. The definition of "Permitted Investments" in Section 1.1 of
the Agreement is hereby amended by deleting the word "and" at the end of
subsection (iv), by substituting the punctuation "." at the end of subsection
(v) with "; and" and by adding the following subsection immediately after
subsection (v):
(vi) funds held in the grantor trust properly established
by Borrower (which shall be subject to the claims of Lenders and
general creditors of Borrower) for the non-qualified deferred
compensation plan adopted by Borrower entitled the AmSurg Supplemental
Executive Retirement Savings Plan (the "Rabbi Trust"), provided that
the funds in the Rabbi Trust must be invested solely in any one or
more of the Permitted Investments described in clauses (i) through (v)
above.
7. The definition of "Revolving Commitment" in Section 1.1 of the
Agreement is hereby amended and restated as follows:
"Revolving Commitment" shall mean, with respect to each
Lender, the obligation of such Lender to make Revolving Loans to the
Borrower and to participate in Letters of Credit in an aggregate
principal amount not exceeding the amount set forth with respect to
such Lender on Schedule 1.1 (attached to the Third Amendment of this
Agreement and as may hereinafter be amended or supplemented from time
to time), or in the case of a Person becoming a Lender after the Third
Amendment Date, the amount of the assigned "Revolving Commitment", as
provided in the Assignment and Acceptance Agreement executed by such
Person as an assignee, as the same may be changed pursuant to terms
hereof.
8. Section 2.9(b) entitled "Mandatory Prepayments" of the
Agreement is hereby amended and restated in its entirety as follows:
(b) Mandatory Prepayments. The Borrower shall be required
to make mandatory principal prepayments of the Revolving Loans in an
amount equal to (i) 100% of the net cash proceeds in excess of
$1,000,000 received by the Borrower and any of its Subsidiaries from
any sale or other disposition by the Borrower and any of its
Subsidiaries of any assets, and (ii) 100% of net cash proceeds received
from the issuance, sale, or disposition of the Borrower's capital stock
(common, preferred, or special), converted into or exchanged for
capital stock, and any rights, options, warrants, and similar
instruments, any equity offering or debt issuance. In addition to the
mandatory principal payments of
3
Revolving Loans from the sale of assets as described above, the
Aggregate Revolving Commitments shall be permanently reduced, on a pro
rata basis, by an amount equal to 50% of the net proceeds received by
the Borrower and any of its Subsidiaries from any sale or other
disposition by the Borrower and any of its Subsidiaries of any assets
that exceeds $15,000,000.00.
9. Section 5.11 entitled "Intercompany Loans and Third Party
Notes" of the Agreement is hereby amended and restated in its entirety as
follows:
SECTION 5.11 INTERCOMPANY LOANS AND THIRD PARTY NOTES.
Within fifteen (15) days after receipt of the same, the Borrower shall
deliver to the Administrative Agent on behalf of all Lenders
appropriate Assignment and Security Agreements, together with all
notes, loan agreements, security agreements, guaranties, and financing
statements evidenced thereby, obtained by the Borrower in connection
with any Intercompany Loans and Third Party Notes made and/or received
by Borrower at any time after the Closing Date; provided, however,
that promissory notes dated after the Third Amendment Date (a)
evidencing Intercompany Loans in an amount of less than $200,000.00
shall be excluded from such delivery and assignment subject to a
maximum exclusion of $3,000,000.00 in the aggregate of such
Intercompany Loans and (b) evidencing Third Party Notes in an amount of
less than $100,000.00 shall be excluded from such delivery and
assignment subject to a maximum exclusion of $1,000,000.00 in the
aggregate of such Third Party Notes.
10. Article VI of the Agreement shall be amended and restated in
its entirety as follows:
ARTICLE VI.
FINANCIAL COVENANTS
The Borrower covenants and agrees that so long as any Lender
has a Commitment hereunder or the principal of or interest on or any
Loan remains unpaid or any fee or any LC Disbursement remains unpaid or
any Letter of Credit remains outstanding:
SECTION 6.1 LEVERAGE RATIO. The Borrower, on a
consolidated basis and as calculated at the end of each calendar
quarter, shall maintain, a Leverage Ratio of not greater than 2.50:1.0.
SECTION 6.2 CONSOLIDATED TOTAL FUNDED DEBT TO
CAPITALIZATION RATIO. The Borrower shall maintain, on a consolidated
basis and as calculated as of the end of each calendar quarter, a ratio
of Consolidated Total Funded Debt to Capitalization not to exceed 0.45
to 1.0.
SECTION 6.3 FIXED CHARGE COVERAGE RATIO. The Borrower
shall maintain, on a consolidated basis and as calculated at the end of
each calendar quarter on a rolling four quarter basis a ratio of (a)
the sum of (i) Adjusted
4
EBITDA, plus (ii) Consolidated Lease Expense, less (iii) the
maintenance portion of Capital Expenditures, less cash taxes paid, to
(b) the sum of (i) Consolidated Interest Expense, plus (ii)
Consolidated Lease Expense, plus (iii) current maturities of long term
Indebtedness, plus (iv) ten percent (10%) of the outstanding principal
amount of the Revolving Loans, of not less than 1.50 to 1.0.
For the purpose of calculating the Fixed Charge Coverage Ratio
as set forth above, the Borrower shall calculate the ratio in a manner
consistent with the calculation of Adjusted EBITDA, provided that such
calculations are done in a manner reasonably calculated to comply with
GAAP and the calculations are detailed and measured to the
Administrative Agent's reasonable satisfaction.
SECTION 6.4 CONSOLIDATED NET WORTH. The Borrower, on a
consolidated basis, shall maintain at all times a Consolidated Net
Worth, as measured on the last day of each fiscal quarter, of not less
than (a) $194,728,000.00 plus (b) fifty percent (50%) of its cumulative
positive Consolidated Net Income since December 31, 2002 plus (c) one
hundred percent (100%) of the net proceeds received from the issuance,
sale, or disposition of the Borrower's capital stock (common,
preferred, or special), converted into or exchanged for capital stock,
and any rights, options, warrants, and similar instruments from
December 31, 2002 to any date of determination less (d) up to
$25,000,000.00 for permitted treasury stock purchases, if applicable,
from December 31, 2002 to any date of determination.
11. Section 7.1(e) of the Agreement shall be amended and restated
in its entirety as follows:
(e) Indebtedness that does not exceed $15,000,000 in the
aggregate, inclusive of all amounts referenced in Section 7.1(b) above,
but specifically excluding all Indebtedness arising under the Loan
Documents.
12. Section 7.13 entitled "Acquisitions" of the Agreement shall be
amended and restated in its entirety as follows:
SECTION 7.13 ACQUISITIONS.
(a) Without the prior written consent of the Required
Lenders, the Borrower may not make any Acquisition unless such
Acquisition satisfies all of the following conditions:
(i) the total consideration (including cash,
stock, personal property, debt assumed, and other Property)
exchanged for such Acquisition does not exceed $10,000,000;
(ii) the ratio of: total consideration (including
cash, stock, personal property, and other Property) exchanged
for such Acquisition to annual pre-tax income after GAAP
adjustments less minority interest as reflected on the
Acquisition Pro-Forma does not exceed 6.5 to 1.0;
5
(iii) the aggregate number of Acquisitions, in a
rolling twelve (12) month period does not exceed twelve (12);
provided, however that if the sum of the aggregate Revolving
Credit Exposure of all Lenders plus the pro forma cost of any
proposed Acquisition is less than $50,000,000.00, the
limitations set forth in this Section 7.13(a)(iii) shall not
apply;
(iv) at least five (5) Business Days before such
Acquisition, the Borrower delivers to Administrative Agent and
Lenders the Acquisition Informational Package; and
(v) simultaneously with the Acquisition, the
Borrower shall deliver to Administrative Agent the
documentation and agreements required by Section 5.10 herein.
(b) The Borrower may not make an Acquisition that does
not comply with subsection (a) hereof unless the Borrower obtains the
prior approval in writing of the Required Lenders as evidenced by an
Acquisition Approval Letter and satisfaction of the following
conditions:
(i) at least fifteen (15) Business Days prior to
the proposed Acquisition the Borrower delivers to
Administrative Agent and Lenders the Acquisition Informational
Package (it being understood that the Lenders shall use
reasonable efforts to notify the Borrower within ten (10)
Business Days after receipt of the Acquisition Informational
Package of their decision to approve or disapprove the
proposed Acquisition); and
(ii) if the Required Lenders approve the
Acquisition, then simultaneously with the Acquisition, the
Borrower shall deliver to Administrative Agent the
documentation and agreements required by Section 5.10 herein.
13. Section 10.1 entitled "Notices" of the Agreement, shall be
amended by replacing "SunTrust Equitable Securities" with "SunTrust Xxxxxxxx
Xxxxxxxx" at the same address but to the attention of Syndicated Finance.
14. Effect and Effective Date of Amendments. The effective date of
the amendments to the Agreement set forth hereinabove shall be the Third
Amendment Date. Except as set forth expressly herein, all terms of the
Agreement shall remain unchanged. It is intended by the Parties that this Third
Amendment shall not constitute a novation of the Agreement.
15. Restatement of Representations and Warranties. To induce all
other parties to enter into this Third Amendment (A) each party hereby restates
and renews each and every representation and warranty heretofore made by it
under, or in connection with, the execution and delivery of, the Agreement; (B)
each party hereby restates, ratifies and reaffirms each and every term and
condition set forth in the Agreement, as amended hereby, and in the Security
Documents, as amended hereby, effective as of the date hereof; and (C) each
party hereby
6
certifies that no Default or Event of Default has occurred and is continuing
(after giving effect to this Third Amendment).
16. Conditions Precedent. The following shall constitute express
conditions precedent to any obligations of the Lenders hereunder becoming
effective:
(a) the Administrative Agent shall have received a fully
executed, original of this Third Amendment;
(b) each Lender whose Revolving Commitment is being
altered as a result of this Third Amendment shall have received an
Amended and Restated Revolving Credit Note executed by Borrower in
conformity herewith, in exchange for such Lender's existing Revolving
Credit Note;
(c) each Lender issuing a new Revolving Commitment shall
have received a Revolving Credit Note executed by Borrower in a form
acceptable to Lender;
(d) each Lender not a party to this Third Amendment shall
have delivered to Borrower and Administrative Agent a payoff letter and
Assignment and Acceptance setting forth the amount owed such Lender by
Borrower and such other documentation as Administrative Agent may
request;
(e) the secretary or assistant secretary of the Borrower
shall have executed and delivered to the Administrative Agent a
certificate, in form satisfactory to the Administrative Agent,
confirming corporate authority and officer incumbency in respect of the
execution of this Third Amendment and the new Revolving Credit Notes or
Amended and Restated Revolving Credit Notes described above;
(f) legal counsel to the Borrower shall have issued its
opinion in respect of the foregoing, in a form satisfactory to the
Administrative Agent;
(g) the Administrative Agent shall have received and
approved the unaudited consolidated financial statements of Borrower
and its Subsidiaries for the fiscal year ended 2002, including balance
sheets, income and cash flow statements which have been prepared in
conformity with GAAP and such other financial information as the
Administrative Agent may request;
(h) there shall not have occurred a material adverse
change since the date of the most recently filed public filing made
with the Securities and Exchange Commission, in the business, assets,
liabilities (actual or contingent), operations, conditions (financial
or otherwise) or prospects of Borrower and its Subsidiaries taken as a
whole or in the facts and information regarding such entities as
represented to date;
(i) there exists no Default or Event of Default under the
Agreement, Security Documents or any related documentation or
instruments;
7
(j) the Administrative Agent shall have received
certified copies of the articles of incorporation or other charter
documents of the Borrower, together with certificates of good standing
or existence, as may be available from the Secretary of State of the
jurisdiction of incorporation of the Borrower and each other
jurisdiction where the Borrower is required to be qualified to do
business as a foreign corporation;
(k) the Administrative Agent shall have received
certified copies of all required consents, approvals, authorizations,
registrations, and filings required to be made or obtained by the
Borrower and all Loan Parties in connection with this Agreement;
(1) the Administrative Agent shall have received duly
executed Notices of Borrowing, if applicable;
(m) receipt by Administrative Agent of all government,
shareholder and third-party consents and approvals necessary or
desirable in connection with the transactions contemplated hereby in a
form acceptable to Administrative Agent;
(n) receipt by Administrative Agent of all fees and other
amounts due and payable on or prior to the Third Amendment Date,
including reimbursement or payment of all out-of-pocket expenses
(including reasonable fees, charges and disbursements of counsel to the
Administrative Agent and filing fees, recording costs, indebtedness tax
and similar expenses) required to be reimbursed or paid by the Borrower
hereunder; and
(o) receipt of all other documents and information as
Administrative Agent may request.
17. The Borrower agrees that its obligations are valid and
binding, enforceable in accordance with their respective terms, subject to no
defense, counterclaim, or objection.
18. This Third Amendment may be executed in any number of separate
counterparts (including by telecopy), and all of said counterparts taken
together shall be deemed to constitute one and the same instrument and will be
effective on the Third Amendment Date upon execution by Borrower, Administrative
Agent and the Lenders.
[SIGNATURE PAGES TO FOLLOW]
8
IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment
to be duly executed by their respective authorized officers as of the day and
year first above written.
BORROWER:
AMSURG CORP.
By: /s/ Xxxxx X. Xxxxxxxxx
------------------------------
Title: Vice President, Controller
--------------------------
SUNTRUST BANK
as Administrative Agent, as
Issuing Bank, and as a Lender
By: /s/ Xxxx X. Xxxxxxx
------------------------------
Title: Director
---------------------------
BANK OF AMERICA, N.A.
as Syndication Agent and as a
Lender
By: /s/ Xxxxxxxxx X. Xxxx
------------------------------
Title: Senior Vice President
----------------------------
NAME OF LENDER:
U.S. BANK, NATIONAL ASSOCIATION,
as a Lender
By: /s/ X.X. Xxxxxxx
------------------------------
Title: Senior Vice President
----------------------------
NAME OF LENDER:
KEY CORPORATE CAPITAL INC.,
as a Lender
By: /s/ Xxxx X. Xxxxxxxxxxxx
------------------------------
Title: Senior Vice President
----------------------------
NAME OF LENDER:
STANDARD FEDERAL BANK N.A.,
as a Lender
By: /s/ Xxxxx X. Xxxxxxxxx
------------------------------
Xxxxx X. Xxxxxxxxx
Title: First Vice President
----------------------------
SCHEDULE 1.1
REVOLVING COMMITMENT AMOUNTS
OF LENDERS
LENDER REVOLVING COMMITMENT
------ --------------------
SunTrust Bank $25,000,000
Bank of America, N.A. 22,500,000
US Bank National Association 20,000,000
Key Corporate Capital Inc. 20,000,000
Standard Federal Bank N.A. 12,500,000