EXHIBIT 10.20
AMENDMENT NO. 5
THIS AMENDMENT NO. 5 (the "Amendment") dated as of May 13, 1999, to the
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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 no otherwise defined shall have the meanings provided in the
Credit Agreement.
W I T N E S S E T H
WHEREAS, a credit facility has been established in favor of Pediatric
Services of America, Inc., a Georgia corporation (the "Borrower") pursuant to
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the terms of that Credit Agreement dated as of August 13, 1997 (as amended and
modified, the "Credit Agreement") among the Borrower, the Guarantors and Lenders
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identified therein, and NationsBank, N.A., as Administrative Agent;
WHEREAS, the Borrower has requested that the Lenders make certain
amendments to the Credit Agreement;
WHEREAS, the requested amendments require the consent of the Required
Lenders;
WHEREAS, the Required Lenders, for and on behalf of the Lenders, have
agreed to the requested amendments on the terms and 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 agrees as follows:
1. The Credit Agreement is amended and modified in the following respects:
1.1 The following definitions in Section 1.1 are amended and modified
to read as follows:
"Aggregate Revolving Committed Amount" means aggregate amount of
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Revolving Commitments in effect from time to time, being from May 13,
1999 (the date of Amendment No. 5), and
thereafter, SIXTY-FIVE MILLION DOLLARS ($65,000,000).
"EBITDA" means for any period, the sum of net income (exclusive
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of extraordinary gains and losses and related tax effects on any such
excluded gains and losses), plus, to the extent deducted in arriving
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at net income, the sum of the following: (a) interest expense
(including amortization of debt discount and premium, the interest
component under Capital Leases and the implied interest component
under Securitization Transactions) plus (b) all provisions for
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Federal, state or other domestic and foreign income taxes plus (c)
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depreciation and amortization, plus (d) special non-cash charges of up
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to (i) $21,000,000 for asset impairment and $4,000,000 of incremental
provision for doubtful accounts taken against earnings in the second
fiscal quarter of 1999, (ii) $5,000,000 for asset impairment and
$20,000,000 for incremental provision for doubtful accounts in the
third fiscal quarter of 1999, and (iii) $1,200,000 for non-recurring
costs related to the closing of locations in the fourth quarter of
1999, in each case determined in accordance with GAAP applied on a
consistent basis.
"Interest Payment Date" means the last day of each month and the
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Termination Date. If an Interest Payment Date falls on a date which
is not a Business Day, such Interest Payment Date shall be deemed to
be the next succeeding Business Day.
In addition, the definition of "Permitted Investments" is amended and
modified by deleting subsection (xiv), adding the word "and" before
"(xiii)", and a period after "(xiii)".
1.2 Amendment Fee. The Borrower agrees to pay to the Administrative
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Agent for the ratable benefit of the Lenders an amendment fee ("Amendment
Fee") in the amount of $325,000, fully earned on the date of this
Amendment, one-half of which shall be due and payable on May 13, 1999, and
one-half of which shall be due and payable on the earlier of (a) the date
all Obligations are paid in full and each Lender's Revolving Commitment is
terminated, and (b) August 15, 1999.
1.3 Borrower, Swing Line Lender, and Lenders hereby agree that the
Swing Line Commitment is terminated, effective immediately.
1.4 Notwithstanding anything in the Credit Agreement or in any other
Loan Document, the Borrower may not request, and Administrative Agent and
Lenders will not make, Eurodollar Loans, and each Eurodollar
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Loan outstanding on the date hereof shall be converted to a Base Rate Loan,
effective immediately.
1.5 Section 7.2 is amended by adding the following subparagraphs (f)
and (g):
(f) Promptly after each such development occurs, detailed
information with respect to significant developments in any material
transaction, and in any event, information with respect to progress in
connection with that transaction in a conference call held not less
frequently than once every other week, in addition to such other
written and verbal information with respect thereto as any Lender
shall reasonably request.
(g) Weekly Cash Report. On or before Wednesday of the following
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week, a weekly cash receipts and disbursements report for the
preceding week in form and substance satisfactory to Required Lenders.
1.6 The financial covenants in Section 7.9 are amended in their
entirety to read as follows:
7.9 Financial Covenants.
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(a) Consolidated Leverage Ratio. As of the end of each fiscal
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quarter to occur during the periods set forth below, the Consolidated
Leverage Ratio shall be not greater than:
January 1, 1999 through March 31, 1999 10.00:1.0
April 1, 1999 through June 30, 1999 13.00:1.0
July 1, 1999 through September 30, 1999 8.00:1.0
October 1, 1999 through December 31, 1999 6.00:1.0
January 1, 2000 through March 31, 2000 4.00:1.0
April 1, 2000 and thereafter 3.50:1.0
(b) Consolidated Fixed Charge Coverage Ratio. As of the end of
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each fiscal quarter to occur during the periods set forth below, the
Consolidated Fixed Charge Coverage Ratio shall be not less than:
January 1, 2000 and thereafter 1.40:1.0
(c) Consolidated Net Worth. On March 31, 2000, and at all times
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thereafter, Consolidated Net Worth shall be not less than the sum of
85% of Consolidated Net Worth as of the Closing Date
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plus on the last day of each fiscal quarter to occur after the Closing
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Date, 50% of Consolidated Net Income for the fiscal quarter then ended
(but not less than zero), such increases to be cumulative, plus 75% of
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the net proceeds from Equity Transactions (including for purposes
hereof, any increases in shareholder equity on account of acquisitions
made by issuance of stock or stock swap) occurring after the Closing
Date.
(d) Consolidated Senior Leverage Ratio. As of the end of each
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fiscal quarter to occur during the periods set forth below, the
Consolidated Senior Leverage Ratio shall be not greater than:
January 1, 1999 through March 31, 1999 5.00:1.0
April 1, 1999 through June 30, 1999 6.00:1.0
July 1, 1999 through September 30, 1999 4.00:1.0
October 1, 1999 through December 31, 1999 3.00:1.0
January 1, 2000 and thereafter 1.75:1.0
(e) Capital Expenditures. The aggregate amount of capital
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expenditures made or incurred by members of the Consolidated Group
during the fiscal quarters set forth below shall not exceed:
Fiscal Quarter ending on or about March 31, 1999 $900,000
Fiscal Quarter ending on or about June 30, 1999
and thereafter $1,500,000
The unused portion of capital expenditures permitted but not used in
any fiscal quarter may be carried over and used in the next fiscal
quarter (one quarter carry-over).
(f) Days Sales Outstanding. As of the end of each fiscal quarter
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to occur during the periods set forth below, Days Sales Outstanding of
the Consolidated Group for the lines of business set forth below shall
not be greater than:
medical services business
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January 1, 1999 through March 31, 1999 130 days
April 1, 1999 through June 30, 1999 105 days
July 1, 1999 through September 30, 1999 110 days
October 1, 1999 through December 31, 1999 and
thereafter 115 days
paramedical testing business
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January 1, 1999 through March 31, 1999 110 days
April 1, 1999 through June 30, 1999 110 days
July 1, 1999 through September 30, 1999 105 days
October 1, 1999 through December 31, 1999 and
thereafter 100 days
provided, however, that Days Sales Outstanding for the medical
services business assume a $20,000,000 special incremental charge in
the third fiscal quarter of 1999 for doubtful accounts; to the extent
such charge shall be less than $20,000,000, minimum Days Sales
Outstanding will increase to an amount demonstrated by the Borrower to
be reasonable and a direct result of not taking such charge in a
schedule attached to the Officer's Certificate required to be
delivered for that quarter pursuant to Section 7.2(b).
(g) Consolidated EBITDA. From January 1, 1999 through the end of
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each of the following months, Consolidated EBITDA on a cumulative
basis shall not be less than the following:
March, 1999 2,100,000
April, 1999 2,400,000
May, 1999 3,100,000
June, 1999 5,400,000
July, 1999 5,900,000
August, 1999 6,900,000
September, 1999 10,500,000
October, 1999 11,300,000
November, 1999 12,900,000
December, 1999 18,700,000
January, 2000 19,500,000
February, 2000 21,100,000
March, 2000 26,900,000
1.7 Subparagraph (h) of Section 8.1 is hereby amended in its entirety
to read as follows:
(h) other unsecured Indebtedness of the Company and/or the
Borrower incurred before May 6, 1999 of up to $10,000,000 in the
aggregate at any time outstanding; and
1.8 Subparagraphs (a) and (c) of Section 8.4 are hereby amended in
their entirety to read as follows:
(a) Enter into a transaction of merger or consolidation.
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(c) Other than in connection with the Non-Qualified Plan, after
May 6, 1999, acquire all or any portion of the capital stock or other
ownership interest in any Person or all or any substantial portion of
the assets, property and/or operations of a Person.
1.9 Section 8.10 is hereby amended in its entirety to read as
follows:
8.10 Restricted Payments.
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Other than with respect to the Non-Qualified Plan, and share
guaranty payments to Medical Equipment and Supply, Inc., in the amount
of $289,942.38 each on June 1, 1999, and July 15, 1999, and share
guaranty payments to Pediatric Nursing Service, Inc., in the amount of
$129,088.84, on May 20, 1999, make or permit any Restricted Payments.
2. In accordance with the provisions of Section 3.4(a) of the Credit
Agreement, the Revolving Commitments are hereby permanently reduced by FIVE
MILLION DOLLARS ($5,000,000) to a revised Aggregate Revolving Committed Amount
of SIXTY-FIVE MILLION DOLLARS ($65,000,000), subject to further reduction as
provided in the definition of "Aggregate Revolving Committed Amount" and as
otherwise provided in the Credit Agreement.
3. 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
Lenders the amount of $162,500, being one-half of the Amendment Fee.
4. Each of the Credit Parties hereby 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 consideration of the execution and
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delivery of this Agreement by the Required Lenders, (iv) after giving effect to
this Amendment, the representations and warranties in Section 6 of the Credit
Agreement are true and correct in all material respects (except (x) those which
expressly relate to an earlier period and, (y) with respect to Section 6.6, to
the extent disclosed to the Lenders in a letter dated March 15, 1999, describing
litigation which, if adversely determined, would reasonably be expected to have
a Material Adverse Effect), and (v) after giving effect to this Amendment, no
Default or Events of Default has occurred or is continuing.
5. The Borrower agrees to pay all reasonable costs and expenses of the
Administrative Agent and the Lenders in connection with the Credit Agreement,
including without limitation the reasonable fees and expenses of counsel and
financial consultants to the Administrative Agent and Lenders.
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. 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.
8. 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 - Signature Pages Follow]
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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.,
-------- a Georgia corporation
By: /s/ Xxxxx XxXxxxx
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Name: Xxxxx XxXxxxx
Title: Senior Vice President and Chief Financial Officer
GUARANTORS: PEDIATRIC SERVICES OF AMERICA, INC.,
---------- a Delaware corporation
By: /s/ Xxxxx XxXxxxx
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Name: Xxxxx 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 for 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
LENDERS: NATIONSBANK, N.A.,
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individually in its capacity as a Lender and in its capacity
as Administrative Agent
By: /s/ Xxx X. Xxxxxxx
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Name: Xxx X. Xxxxxxx
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Title: Managing Director
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TORONTO DOMINION (TEXAS), INC.
By:
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Name:
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Title:
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PNC BANK, NATIONAL ASSOCIATION
By: /s/ Xxxxxx X. XxXxxx
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Name: Xxxxxx X. XxXxxx
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Title: Senior Vice President
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SUNTRUST BANK, ATLANTA
By:
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Name:
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Title:
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MELLON BANK, N.A.
By: /s/ Xxxxxxx XxXxxxxx
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Name: Xxxxxxx XxXxxxxx
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Title: Asst Vice President
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BANK AUSTRIA CREDITANSTALT CORPORATE
FINANCE, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
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Name: Xxxxxx X. Xxxxxxxx
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Title: Executive Vice President
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By: /s/ Xxxx X. Xxxxx
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Name: Xxxx X. Xxxxx
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Title: Vice President
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