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Exhibit 10.3
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THIRD AMENDMENT TO
AMENDED AND RESTATED CREDIT AGREEMENT
By and Among
NEW AMERICAN HEALTHCARE CORPORATION,
as Borrower,
TORONTO DOMINION (TEXAS), INC.,
as Agent,
THE TORONTO-DOMINION BANK,
as Issuing Bank
and
THE FINANCIAL INSTITUTIONS PARTY HERETO
Dated as of October 27, 1998
Amending the Amended and Restated Credit Agreement dated as of
January 30, 1998 among the above-named parties
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THIRD AMENDMENT TO
AMENDED AND RESTATED CREDIT AGREEMENT
THIS THIRD AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (the
"Third Amendment") dated October 27, 1998 amends the Amended and Restated Credit
Agreement entered into as of January 30, 1998 as amended by that certain First
Amendment dated July 31, 1998 and that certain Second Amendment dated August 31,
1998 (as so amended, the "Original Agreement"), by and among NEW AMERICAN
HEALTHCARE CORPORATION, a Tennessee 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 THERETO (collectively, the "Banks";
individually, a "Bank").
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
used defined shall have the meanings ascribed to them in the Original Agreement.
2. Amendment of Original Agreement.
a. Definitions. The following definitions are hereby amended
and restated or added to Article I of the Original Agreement.
"Base Rate" means on any day the greater of the rate (rounded
upwards if necessary to the nearest whole one-sixteenth of one percent
(0.0625%)) equal to (a) the Prime Rate in effect on that day or
(b) the Federal Funds Rate plus 50 basis points in effect on that day,
plus (in either case) the applicable margin based upon the Borrower's
ratio of Funded Indebtedness to EBITDAR as calculated in accordance
with Section 7.18(a)(i) as follows:
Funded Indebtedness/EBITDAR Applicable Margin (bps)
--------------------------- -----------------------
> 4.0 75.00
-
> 3.5 < 4.0 50.00
-
> 3.0 < 3.5 25.00
-
> 2.5 < 3.0 0
-
> 2.0 < 2.5 0
-
< 2.0 0
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"CAPITAL EXPENDITURE" means any expenditure for the maintenance of
existing physical plants, furniture, fixtures and equipment and any other
expenditure that would be capitalized on the balance sheet of the Borrower
(consolidated with its Subsidiaries) as of the end of that period, in
conformity with GAAP, other than payment of the purchase price of any fixed
assets in connection with a Permitted Acquisition and/or Permitted Construction.
"DAYS SALES OUTSTANDING" Intentionally omitted.
"EXTENSION OPTION" means the option of the Borrower to extend the
Revolving Termination Date to October 31, 2004, provided that:
(i) the Borrower provides a written request to the Agent not less than
ninety (90) days prior to October 31, 2000; and
(ii) all of the Banks shall have approved such request in writing.
"FINAL MATURITY DATE" means October 31, 2003 or October 31, 2004, if
the Extension Option has been exercised pursuant to this Agreement.
"FIXED CHARGE COVERAGE RATIO" means the ratio of (a) EBITDAR, to (b)
the sum of (i) Maintenance Capital Expenditure Limit, (ii) Interest Expense,
(iii) scheduled principal payments actually made or coming due during the period
of measure and (iv) any payments of the Borrower and/or its Subsidiaries for
Hospital Operating Leases actually made or coming due during the period of
measure.
"FUNDED INDEBTEDNESS" means, without duplication, all obligations,
liabilities and indebtedness of the Borrower and its Subsidiaries of the types
described in clauses (a) through (g) of the definition of Indebtedness.
"HOSPITAL OPERATING LEASE" means an operating lease of a hospital
and/or other healthcare facility with an annual lease expense in excess of
Seventy Five Thousand Dollars ($75,000).
"INDEBTEDNESS" of any Person means, without duplication (a) any
obligation for borrowed money. (b) any obligation evidenced by bonds,
debentures, notes or other similar instruments; (c) any obligation to pay the
deferred purchase price of property or services (other than in the ordinary
course of business); (d) any Capitalized
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Lease Obligation; (e) any obligation or liability of others secured by a Lien on
property owned by such Person, whether or not such obligation or liability is
assumed; (f) obligations and amounts owed under synthetic or off-balance sheet
leases; (g) eight (8) times the annualized amounts payable on any Hospital
Operating Lease; (h) any Obligation under any Rate Contract; (i) any Guaranty;
and (j) any other obligation or liability which is required by GAAP to be shown
as part of the Consolidated Liabilities on a consolidated balance sheet of the
Borrower and its Subsidiaries.
"INTEREST COVERAGE RATIO" Intentionally omitted.
"LIBOR Rate" means the rate (rounded upwards if necessary to the
nearest whole one-sixteenth of one percent (0.0625%)) equal to (a) the product
of Base LIBOR times Statutory Reserves, plus (b) the applicable LIBOR margin
based upon the Borrower's ratio of Funded Indebtedness to EBITDAR as calculated
in accordance with Section 7.18(a)(i) as follows:
Funded Indebtedness/EBITDAR LIBOR (bps)
--------------------------- -----------
> 4.0 200.00
-
> 3.5 < 4.0 175.00
-
> 3.0 < 3.5 150.00
-
> 2.5 < 3.0 125.00
-
> 2.0 < 2.5 100.00
-
< 2.0 75.00
"MAINTENANCE CAPITAL EXPENDITURE LIMIT" means an amount equal to
thirty percent (30%) of Capital Expenditures.
"MAJORITY BANKS" means at any time Banks holding at least fifty-one
percent (51%) of the then aggregate outstanding principal amount of the Loans,
or, if no such principal amount is then outstanding, Banks having at least
fifty-one percent (51%) of the Commitment Percentages.
"PERMITTED ACQUISITIONS" means any acquisition by the Borrower or one
of its Subsidiaries of all or substantially all of the Capital Stock of a
corporation, all or substantially all of the ownership interests in any
partnership or joint venture, all or substantially all of the operating assets
of any Person, or assets which constitute all or substantially all of the
assets of a division or a separate or separable line of business, provided that:
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(i) the Borrower or its Subsidiary, as the case may be, is the
surviving entity in any acquisition involving a merger, reorganization or
recapitalization:
(ii) the corporation, partnership, operating assets or line of
business acquired is in a line of business consistent with the business plan of
the Borrower and its then current Subsidiaries;
(iii) no Event of Default or Incipient Default shall exist at the
time of such acquisition or would result on a pro forma basis after completion
of such acquisition;
(iv) not less than ten (10) days prior to such acquisition, the
Agent shall have received an Environmental Report with respect to any real
property to be so acquired;
(v) contemporaneously with the closing of such acquisition, the
Agent shall have received such documents and instruments as may be necessary to
grant or confirm to the Agent a Lien on or security interest in all of the
assets so acquired and all proceeds and revenues therefrom, including, one or
more Mortgages with respect to any real property or leasehold interest in real
property so acquired and (in case a Subsidiary is created or acquired in
connection with such Permitted Acquisition) a Stock Pledge Agreement (or
addendum to a previously executed Stock Pledge Agreement), a Subsidiary
Guaranty, a Security Agreement and (to the extent applicable) a Subsidiary Note,
and shall have received a title insurance policy with respect to any real
property so acquired which is substantially similar to the title insurance
policies delivered pursuant to Section 5.1(j)(ii)(B) hereof and, to the extent
applicable, landlord's waivers from landlords in any ground leases so acquired
which shall be in form and substance satisfactory to the Agent;
(vi) the Agent shall have received a certificate of an Authorized
Representative (to be delivered to the Agent not less than ten (10) days prior
to such acquisition) setting forth in reasonable detail the calculations
necessary to show compliance with the financial ratios set forth in Section 7.18
hereof for the twelve (12) months immediately preceding the date of the
acquisition, assuming that the proposed acquisition had occurred on the first
day of the first month of such twelve (12) month period;
(vii) not less than ten (10) days prior to such acquisition, the
Agent shall have received historical and pro forma financial statements for the
entity or line of business to be acquired;
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(viii) the Agent and the Banks shall have had the opportunity to
conduct an inspection of the entity or line of business to be acquired;
(ix) the Purchase Price of the acquisition is not in excess of
Thirty Million Dollars ($30,000,000);
(x) the Purchase Price of any acquisition of a leased hospital is
not in excess of Thirty Million Dollars ($30,000,000); provided, however, that
in no event may the Borrower enter into more than two such acquisitions of
leased hospitals without the approval of the Majority Banks;
(xi) in the event that the Purchase Price of the acquisition causes
the aggregate Purchase Price of all Permitted Acquisitions, which close after
the date of this Third Amendment, but on or before December 31, 1998, to exceed
Thirty Million Dollars ($30,000,000), and all acquisitions subsequent thereto
which close on or before December 31, 1998, the Majority Banks shall approve
each such acquisition; and
(xii) after December 31, 1998, in the event that the Purchase Price
of the acquisition causes the aggregate Purchase Price of all Permitted
Acquisitions during any calendar year to exceed Fifty Million Dollars
($50,000,000), and all acquisitions subsequent thereto during such calendar
year, the Majority Banks approve each such acquisition.
"PERMITTED CONSTRUCTION" means any new construction of an acute
care facility or hospital after the date hereof; provided however, that the
Borrower has provided to the Agent all documentation regarding the construction
of the new acute care facility or hospital as reasonably requested by the Agent
and the Majority Banks approve such new construction.
"PERMITTED PURPOSES" means the purposes for which Loans may be used
or Letters of Credit issued. The Permitted Purposes are as follows: (a) to make
Permitted Acquisitions; (b) to provide for Permitted Construction; and (c) to
provide funds for general corporate purposes, including (but not limited to)
initial and ongoing working capital, the completion of any construction or
development projects at acute care facilities or related businesses acquired by
the Borrower or any of its Subsidiaries which are in progress on the date of
acquisition, and capital improvements to acute care facilities or related
businesses acquired by the Borrower or
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any of its Subsidiaries which are made after the date of acquisition;
provided that the aggregate face amount of all Letters of Credit shall
not exceed Five Million Dollars ($5,000,000) at any one time, as
certified by the Borrower as a condition for the making of any Loan for
working capital purposes or the issuance of any Letter of Credit.
"PURCHASE PRICE" as used in the definition of Permitted
Acquisitions, means (i) cash paid to the seller in consideration of such
acquisition, (ii) long-term indebtedness of the seller assumed by the
Borrower or its Subsidiary in consideration of such acquisition, (iii)
initial working capital, (iv) initial capital expenditures identified as
such on the purchase date and made within twelve months of such date,
and (v) with respect to the acquisition of a leased hospital, the net
present value of all lease payments under the underlying lease(s) and
all other consideration paid in connection with the acquisition of the
leased hospital.
"REVOLVING TERMINATION DATE" means October 31, 2003 or such
earlier date, if any, that the Total Commitment Amount is reduced to
zero pursuant to SECTION 2.1(b); provided, however, that the Revolving
Termination Date shall be October 31, 2004 if the Extension Option is
granted.
"TOTAL COMMITMENT AMOUNT" means, as of any date, subject to
SECTION 2.1(b) hereof, an amount equal to One Hundred Thirty-Two Million
Five Hundred Thousand Dollars ($132,500,000); provided, however, that
beginning [December 31, 2001], the Total Commitment Amount means,
subject to SECTION 2.1(b) hereof, the amount set forth on Schedule A set
forth opposite the applicable quarter.
b. SECTION 2.2(c)/Commitment Fee. Section 2.2(c) of the Original
Agreement is amended and restated to read as follows:
Commitment Fee. The Borrower shall pay to the Agent for the
account of the Banks, in accordance with the Banks' Commitment
Percentages, a Commitment Fee equal to the amount listed below based
upon the Borrower's ratio of Funded Indebtedness to EBITDAR as
calculated in accordance with Section 7.18(a)(i) of the average daily
Available Commitment Amount as follows:
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Funded Indebtedness/ Commitment Fee
EBITDAR (bps)
-------------------- --------------
> 4.0 37.50
-
> 3.5 < 4.0 37.50
-
> 3.0 < 3.5 31.25
-
> 2.5 < 3.0 31.25
-
> 2.0 < 2.5 31.25
-
< 2.0 25.00
The Commitment Fee shall (i) accrue from the Closing Date to the
Revolving Termination Date and (ii) be payable quarterly in arrears on the
last day of each quarter commencing with the quarter ending September 30,
1998 and on the Revolving Termination Date.
c. SECTION 2.3(a) PAYMENT OF LOANS. Section 2.3(a) of the Original
Agreement is amended and restated to read as follows:
(a) Payment of Loans. The Borrower shall repay all Loans which are
outstanding on the Revolving Termination Date by paying those amounts set
forth on Schedule A set forth the applicable quarter.
d. SECTION 2.3(c)(iv). Section 2.3(c)(iv) of the Original Agreement
is amended and restated to read as follows:
(iv) In the event that the Borrower shall issue Equity Interests
to a Person in exchange for cash, or shall incur subordinated
Indebtedness, Borrower shall apply the proceeds so received in prepayment
of the Loans as follows:
(A) If the ratio of Senior Indebtedness to EBITDA,
calculated in accordance with this Agreement is greater than
2.5 : 1 on a pro-forma basis, then the Borrower shall prepay the
Loans in an amount necessary to reduce the ratio of Senior
Indebtedness to EBITDA to less than or equal to 2.5 : 1.
(B) Intentionally omitted.
e. SECTION 5.2(d). Section 5.2(d) of the Original Agreement is
amended and restated to read as follows:
(d) Loan Request. The Agent shall have received a Loan Request
which shall (i) describe the Permitted Purposes for which such Loan is
being requested and the amount of such Loan to be applied to each such
Permitted Purpose and (ii) constitute a certification by the
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Borrower that the conditions set forth in this SECTION 5.2 are or will be
satisfied on and as of the date of such Borrowing;
f. SECTION 7.2(a). Section 7.2(a) of the Original Agreement is
amended and restated to read as follows:
(a) To the Agent, with sufficient copies for distribution by the
Agent to each of the Banks, within forty-five (45) days after the end of
each month, commencing with the month ending October 31, 1998: an unaudited
monthly Board of Director package which should include, but not be limited
to, a statement of revenues and EBITDA and EBITDAR. All such statements
shall be prepared on a consolidated and consolidating basis for the
Borrower and its Subsidiaries, in reasonable detail, subject to year-end
audit adjustments and without footnotes, shall include appropriate
comparisons to the same period for the prior year, and shall be certified
by the Senior Vice President, Finance and Administration, of the Borrower
to have been prepared in accordance with GAAP consistently applied, subject
to year-end audit adjustments;
g. SECTION 7.2(b). Section 7.2(b) of the Original Agreement is
amended and restated to read as follows:
(b) To the Agent, with sufficient copies for distribution by the
Agent to each of the Banks, within forty-five (45) days after the end of
each fiscal quarter of the Borrower commencing with the fiscal quarter
ending September 30, 1998, the Company's most recent report on Form 10-Q
filed with the Securities and Exchange Commission. All such statements
shall be prepared on a consolidated and consolidating basis for the
Borrower and its Subsidiaries, in reasonable detail, subject to year-end
audit adjustments and without footnotes, shall include appropriate
comparisons to the same period for the prior year, and shall be certified
by the Senior Vice President, Finance and Administration, of the Borrower
to have been prepared in accordance with GAAP consistently applied, subject
to year-end audit adjustments;
h. SECTION 7.2(c), Section 7.2(c) of the Original Agreement is
amended and restated to read as follows:
(c) To the Agent, with sufficient copies for distribution by the
Agent to each of the Banks, within ninety (90) days after the close of each
fiscal year of the Borrower, commencing with the fiscal year ending
December 31, 1998, for the Borrower and its Subsidiaries on a consolidated
and consolidating basis the Borrower's most recent report on Form 10-K
filed with the Securities and Exchange Commission. All
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statements required by this SECTION 7.2(c) shall include appropriate
comparisons to the prior fiscal year. Such consolidated financial
statements shall be audited by KPMG Peat Marwick LLP or another independent
certified public accounting firm acceptable to the Majority Banks and shall
include a report of such accounting firm, which report shall be unqualified
and shall state that such financial statements fairly present the financial
position of the Borrower and its Subsidiaries as at the dates indicated and
the results of their operations and their cash flows for the periods
indicated in conformity with GAAP, consistently applied. Such accounting
firm shall also certify to the Agent and the Banks that in the course of
the regular annual examination of the business of the Borrower and its
Subsidiaries, which examination was conducted by such accounting firm in
accordance with generally accepted auditing standards, such accounting firm
has obtained no knowledge that an Event of Default or an Incipient Default
has occurred and is continuing as of the date of certification, or if, in
the opinion of such accounting firm, an Event of Default or an Incipient
Default has occurred and is continuing, a statement as to the nature
thereof. Such accounting firm shall also prepare a letter to management of
the Borrower in connection with the preparation of such audit report which
the Borrower shall deliver to the Agent and each Bank within five Banking
Days of receipt thereof;
i. SECTION 7.2(d). Section 7.2(d) of the Original Agreement is
amended and restated to read as follows:
(d) To the Agent, with sufficient copies for distribution by the
Agent to each of the Banks, (i) contemporaneously with each quarterly and
year-end financial report required by the foregoing SUBPARAGRAPHS (b) AND
(c), a certificate of a Responsible Officer (A) stating that, to the best
of such officer's knowledge after due inquiry, no Event of Default or
Incipient Default exists on the date of such certificate, or if any Event
of Default or Incipient Default then exists, setting forth the details
thereof and the action that the Borrower is taking or proposes to take with
respect thereto, (B) stating whether, since the date of the most recent
financial statements previously delivered pursuant to the foregoing
SUBPARAGRAPH (b) OR (c), there has been a change in the generally accepted
accounting principles applied in preparing the financial statements then
being delivered from those applied in preparing the most recent audited
financial statements so delivered which is material to the financial
statements then being delivered, (C) furnishing calculations demonstrating
compliance with the covenants contained in SECTION 7.18 hereof, and (D)
attaching management's summary of the results contained in such financial
statements, and (ii) contemporaneously with each such quarterly and annual
financial
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report, a certificate of a Responsible Officer furnishing calculations
demonstrating compliance with the covenant set forth in Section 8.11
hereof;
j. SECTION 7.2(o). Section 7.2(o) of the Original Agreement is amended
and restated to read as follows:
(o) To the Agent, with sufficient copies for distribution by the
Agent to each of the Banks, prior to commencement of each fiscal year of
the Borrower, a copy of the Borrower's annual budget for such fiscal year;
k. SECTION 7.18(a)(i). Section 7.18(a)(i) of the Original Credit
Agreement is amended and restated to read as follows:
(i) Maintain a ratio of Funded Indebtedness to EBITDAR of 5.00:1
through the Final Maturity Date.
l. SECTION 7.18(a)(ii). Section 7.18(a)(ii) of the Original Agreement
is amended and restated to read as follows:
(ii) Intentionally omitted.
m. SECTION 7.18(a)(iii). Section 7.18(a)(iii) of the Original Agreement
is amended and restated to read as follows:
(iii) Maintain the following Fixed Charge Coverage Ratio for each
of the applicable quarters ending during each of the periods set forth
below, such ratio to be calculated for the twelve (12) month period
preceding and including such mouth:
Fixed Charge
Period Coverage Ratio
------ --------------
October 31, 1998 to and
including December 31, 1999 1.50x
January 1, 2000 to and
including December 31, 2000 1.75x
January 1, 2001 and thereafter 2.00x
n. SECTION 7.18(a)(iv). Section 7.18(a)(iv) of the Original Agreement
is amended and restated to read as follows:
(iv) Intentionally omitted.
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o. SECTION 7.18(a)(v). Section 7.18(a)(v) of the Original Agreement is
amended and restated to read as follows:
(v) Prior to the Revolving Termination Date, maintain a minimum
Net Worth in an amount not less than (A) ninety percent (90%) of the actual
Net Worth as of September 30, 1998, plus (B) eighty-five percent (85%) of
Consolidated Net Income during the period from and including October 1,
1998 through and including the date of calculation, plus (C) ninety percent
(90%) of the aggregate amount of all increases in the stated capital and
additional paid in capital amounts of the Borrower resulting from the
issuance of equity securities or other capital investments during such
period.
p. SECTION 7.18(a)(vi). Section 7.18(a)(vi) of the Original Agreement
is amended and restated to read as follows:
(iv) Maintain the following ratio of Senior Indebtedness to
EBITDAR for each of the applicable quarters ending during each of the
periods set forth below:
SENIOR
PERIOD INDEBTEDNESS/EBITDAR
------ --------------------
October 31, 1998 to and <4.50x
including March 30, 2000
March 31, 2000 to and <4.00x
including March 30, 2001
March 31, 2001 and thereafter <3.50x
q. SECTION 7.18(b)(ii). Section 7.18(b)(ii) of the Original
Agreement is amended and restated to read as follows:
(ii) For purposes of calculating compliance with the
covenants set forth in SECTION 7.18(a) hereof, prior to the
Revolving Termination Date, EBITDAR of the Borrower and its
Subsidiaries for any twelve (12) month period shall be calculated
on the basis of EBITDAR of the Borrower and its Subsidiaries an
adjusted annualized rolling two (2) quarter basis; provided that
EBITDAR of any acute care facility or related business which the
Borrower or any of its Subsidiaries acquires (or proposes to
acquire in the case of calculating EBITDAR pursuant to
SUBPARAGRAPH (vi) of the definition of Permitted Acquisitions) on
or after the Closing Date shall be calculated on the basis of
EBITDAR of such acute care facility or related business as if
such acute care
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facility or related business was purchased on the first day of
the quarter in which such acute care facility or related business
was acquired; provided that with respect to the EBITDAR of any
acute care facility or related business acquired by the Borrower
or any of its Subsidiaries on or after the Closing Date, such
EBITDAR shall be calculated by excluding any profits or losses
associated with any business segments or such acute care facility
or related business which are sold immediately prior to the date
such acute care facility or related business is acquired by the
Borrower or which are to be sold immediately thereafter. Any such
business segments so excluded will be identified in the
compliance certificate delivered to the Agent and the Banks
pursuant to Section 7.2(d) hereof.
r. SECTION 7.21 / OPERATING LEASES. Section 7.21 of the Original
Agreement is amended and restated to read as follows:
Neither the Borrower nor any of its Subsidiaries shall
create, incur, assume, or suffer to exist, any obligation for the
payment of rent or hire for property or assets of any kind
whatsoever, whether real or personal, under leases or lease
agreements (other than Capitalized Lease Obligations and Hospital
Operating Leases) which would cause the aggregate amount of all
payments made by the Borrower and its Subsidiaries pursuant to
such leases or lease agreements to exceed five percent (5%) of
Net Revenues during any fiscal year. Any such leases referred to
in this Section 7.21 shall not be deemed to constitute
Indebtedness and shall not be subject to Section 8.6 hereof.
s. SECTION 8.5 / INVESTMENTS. Section 8.5 of the Original Agreement
is amended and restated to read as follows:
Neither the Borrower nor any of its Subsidiaries shall
make (or acquire as part of an acquisition) any Investment,
except Investments (a) in connection with a Permitted
Acquisition; (b) made by the Borrower in any of its Wholly-Owned
Subsidiaries, by any of its Subsidiaries in the Borrower or by
any of its Subsidiaries in any of its Wholly-Owned Subsidiaries
(provided, however, that Investments in Partial Subsidiaries must
be in the ordinary course of business and shall not exceed Two
Million Dollars ($2,000,000) per year); (c) constituting seller
financing undertaken on commercially reasonable terms,
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which Investments shall not in the aggregate exceed Two Hundred Fifty
Thousand Dollars ($250,000); (d) in connection with a purchase of land,
which shall not exceed a purchase price of Four Million Five Hundred
Thousand Dollars ($4,500,000), provided, however, that the Borrower,
working with the Agent, on behalf of the Banks, shall grant a first
lien on such property in such form and substance satisfactory to the
Agent and (e) Investments made in accordance with the Borrower's
corporate investment policy attached to the Original Agreement as
SCHEDULE 8.5.
t. SECTION 8.11 / CAPITAL EXPENDITURES. Section 8.11 of the Original
Agreement is amended and restated to read as follows:
The Borrower and its Subsidiaries, considered in the aggregate, shall
not during any fiscal year make Consolidated Capital Expenditures in excess of
the amount equal to (a) One Million Two Hundred Fifty Thousand Dollars
($1,250,000) multiplied by (b) the number of acute care facilities owned by the
Borrower and its Subsidiaries during such fiscal year. In the event that the
Borrower has budgeted an acute care facility to receive funds from Consolidated
Capital Expenditures in its annual budget provided to the Agent ("Budgeted
Consolidated Capital Expenditure") and such acute care facility did not utilize
the budgeted amount in the budgeted fiscal year, the Borrower may carryover for
the following fiscal year only the Budgeted Consolidated Capital Expenditure
for such acute care facility in an amount less than or equal to Five Hundred
Thousand Dollars ($500,000) ("Budgeted Carryover"). In the event that the
Borrower does not utilize the Budgeted Carryover in the fiscal year immediately
following the actual budgeted fiscal year, Borrower shall forfeit the Budgeted
Carryover. Notwithstanding anything above to the contrary, the Borrower and its
Subsidiaries, considered in the aggregate, shall be permitted to make
Consolidated Capital Expenditures in an amount less than or equal to Four
Million Five Hundred Thousand Dollars ($4,500,000) for the one-time purpose of
converting its management information system.
u. NEW SECTION 9.1(q) / DELISTING. There is hereby added to the
Original Agreement the following Section 9.l(q):
(q) Delisting from the Borrower's Primary Exchange. Any class
of the Borrower's equity securities shall be delisted from the
Borrower's primary exchange.
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3. RATIFICATION OF CREDIT AGREEMENT. Except as hereby amended, the
provisions of the Credit Agreement are hereby in all respects ratified and
confirmed.
4. COUNTERPARTS. This Third 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.
[The next page is the signature page.]
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IN WITNESS WHEREOF, each of the parties hereto has executed this First
Amendment to Credit Agreement by its duly authorized officers as of the date and
year first above written.
BORROWER: NEW AMERICAN HEALTHCARE CORPORATION
By: Xxxx XxXxxxxx, Xx.
--------------------------------------
Xxxx XxXxxxxx, Xx. Senior Vice
President Finance and Administration
AGENT/BANK: TORONTO DOMINION (TEXAS), INC.,
as Agent and as a Bank
By:
--------------------------------------
Xxxx Xxxx, Vice President
OTHER BANKS: NATIONSBANK, N.A.
By:
--------------------------------------
Xxxxxx Xxxxxxxx, Senior Vice President
FIRST UNION NATIONAL BANK
By:
--------------------------------------
Its:
----------------------------------
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FIRST AMERICAN NATIONAL BANK
By:
--------------------------------------
Xxxxx Xxxxxxx, Senior Vice President
PARIBAS
By:
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Xxxxx X. Xxxxxx, Director
By:
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Xxxxx X. May, Vice President
NATIONAL CITY BANK OF KENTUCKY
By:
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Xxxxx Xxxxx, Vice President
BANK ONE, N.A.
By:
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Xxxxx X. Xxxxxxxx, Vice President
-16-
18
AMSOUTH BANK
By:
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Xxxxx X. Wind, Vice President
-17-
19
SCHEDULE A
IF EXTENSION OPTION IS NOT EXERCISED IN ACCORDANCE WITH AGREEMENT
AMOUNT OF
PAY OFF COMMITMENT
QUARTER PER QUARTER (END OF PERIOD)
------- ----------- --------------
12/31/01 10,000,000 S 122,500,000
03/31/02 10,000,000 $ 112,500,000
06/20/02 10,000,000 $ 102,500,000
09/30/02 15,000,000 $ 87,500,000
12/31/02 15,000,000 $ 72,500,000
03/31/03 15,000,000 $ 57,500,000
06/30/03 15,000,000 $ 42,500,000
10/31/03 42,500,000 0
SCHEDULE A
IF EXTENSION OPTION IS EXERCISED IN ACCORDANCE WITH AGREEMENT
AMOUNT OF
PAY OFF COMMITMENT
QUARTER PER QUARTER (END OF PERIOD)
------- ----------- --------------
12/31/02 10,000,000 $ 122,500,000
03/31/03 10,000,000 $ 112,500,000
06/20/03 10,000,000 $ 102,500,000
09/30/03 15,000,000 $ 87,500,000
12/31/03 15,000,000 $ 72,500,000
03/31/04 15,000,000 $ 57,500,000
06/30/04 15,000,000 $ 42,500,000
10/31/04 42,500,000 0
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