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EXHIBIT 10.17
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HEALTHCARE RECOVERIES, INC.
as the Borrower
And
THE FINANCIAL INSTITUTIONS NAMED HEREIN
as Lenders
And
NATIONAL CITY BANK OF KENTUCKY
as Administrative Agent
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AMENDMENT NO.2
dated as of
March 1, 1999
to
CREDIT AGREEMENT
dated as of
February 1, 1998
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AMENDMENT NO. 2 TO CREDIT AGREEMENT
THIS AMENDMENT NO. 2 TO CREDIT AGREEMENT, dated as of March 1, 1999 ("THIS
AMENDMENT"), among the following:
(i) HEALTHCARE RECOVERIES, INC., a Delaware corporation (herein,
together with its successors and assigns, the "BORROWER");
(ii) the financial institutions listed on the signature pages
hereof (the "LENDERS"); and
(iii) NATIONAL CITY BANK OF KENTUCKY, a national banking
association, as Administrative Agent (the "ADMINISTRATIVE AGENT") for the
Lenders under the Credit Agreement:
PRELIMINARY STATEMENTS:
(1) The Borrower, the Lenders named therein, and the Administrative
Agent entered into the Credit Agreement, dated as of February 1, 1998,
as amended by Amendment No. 1 thereto, dated as of May 15, 1998 (as so
amended, the "CREDIT AGREEMENT"; with the terms defined therein, or the
definitions of which are incorporated therein, being used herein as so defined).
(2) The parties hereto desire to amend certain of the terms of the
Credit Agreement, as more fully set forth below.
NOW, THEREFORE, the parties hereby agree as follows:
1. AMENDMENTS.
1.1. REPRESENTATIONS AS TO USE OF PROCEEDS. Section 7.7(b) of the Credit
Agreement is amended to read in its entirety as follows:
(b) No part of the proceeds of any Credit Event will be used
directly or indirectly to purchase or carry Margin Stock, or to extend
credit to others for the purpose of purchasing or carrying any Margin
Stock, in violation of the provisions of Regulation T, U or X of the Board
of Governors of the Federal Reserve System. The Borrower is not engaged
in the business of extending credit for the purpose of purchasing or
carrying any Margin Stock. At no time would more than 25% of the value of
the assets of the Borrower or of the Borrower and its consolidated
Subsidiaries that are subject to any "arrangement" (as such term is used
in section 221.2(g) of such Regulation U) hereunder be represented by
Margin Stock.
1.2. DIVIDENDS; STOCK REPURCHASES, ETC. Section 9.6 of the Credit
Agreement is amended to read in its entirety as follows:
9.6. DIVIDENDS; STOCK REPURCHASES, ETC. The Borrower will not
(a) directly or indirectly declare, order, pay or make any dividend (other than
dividends payable solely in capital stock of the Borrower) or other
distribution on or in respect of any capital stock of any class of the
Borrower, whether by reduction of capital or otherwise, or (b) directly or
indirectly make, or
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permit any of its Subsidiaries to directly or indirectly make, any purchase,
redemption, retirement or other acquisition of any capital stock of any class of
the Borrower (other than for a consideration consisting solely of capital stock
of the same class of the Borrower) or of any warrants, rights or options to
acquire or any securities convertible into or exchangeable for any capital stock
of the Borrower, except that if no Event of Default shall have occurred and be
continuing or would result therefrom,
(i) the Borrower shall be permitted to declare and pay cash
dividends of up to 100% of the net after tax proceeds of any extraordinary or
other non-recurring cash gain, if such dividend is declared and paid within 90
days following the recognition of such gain; and
(ii) the Borrower and its Subsidiaries shall be permitted to
purchase and/or repurchase for cash consideration shares of common stock of the
Borrower (and any associated rights), if the aggregate amount expended for such
purposes subsequent to December 31, 1998 does not exceed $10,000,000.
1.3. MINIMUM CONSOLIDATED NET WORTH. Section 9.11 of the Credit Agreement
is amended to read in its entirety as follows:
9.11. MINIMUM CONSOLIDATED NET WORTH. The Borrower will not
permit its Consolidated Net Worth at any time to be less than $33,500,000,
except that
(i) effective as of the end of the Borrower's fiscal quarter
ended March 31, 1999, and as of the end of each fiscal quarter
thereafter, the foregoing amount (as it may from time to time be
increased or decreased as herein provided), shall be increased by 75%
of the consolidated net income of the Borrower and its Subsidiaries
for the fiscal quarter ended on such date, if any, as determined in
conformity with GAAP (there being no reduction in the case of any
such consolidated net income which reflects a deficit),
(ii) the foregoing amount (as it may from time to time be
increased or decreased as herein provided), shall be increased by an
amount equal to 50% of the cash proceeds (net of underwriting
discounts and commissions and other customary fees and costs
associated therewith) from any sale or issuance of equity by the
Borrower after December 31, 1998 (other than any sale or issuance to
management or employees pursuant to employee benefit plans of general
application),
(iii) the foregoing amount (as it may from time to time be
increased or decreased as herein provided), shall be increased by an
amount equal to 50% of the increase in Consolidated Net Worth
attributable to the issuance of common stock or other equity
interests subsequent to December 31, 1998 as consideration in any
Acquisitions permitted under section 9.2, and
(iv) the foregoing amount (as it may from time to time be
increased or decreased as herein provided), shall be decreased by 90%
of the aggregate amount expended by the Borrower and its Subsidiaries
subsequent to December 31, 1998 for the purchase or repurchase of
shares of common stock of the Borrower (and any associated rights).
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1.4. Advances, Investments, Loans and Guaranty Obligations. Clause (p) of
section 9.5 of the Credit Agreement is amended to read in its
entirety as follows:
(p) any other loans, advances, investments (whether in the form of
cash or contribution of property, and if in the form of a contribution of
property, such property shall be valued for purposes of this clause (p) at
the fair value thereof as reasonably determined by the Borrower) and
Guaranty Obligations, including, without limitation, in or to or for the
benefit of, Subsidiaries, joint ventures, or other persons, not otherwise
permitted by the foregoing clauses, made after the end of the most recent
fiscal quarter of the Borrower for which financial statements were
furnished to the Lenders prior to the Effective Date (such loans, advances
and investments and Guaranty Obligations, collectively, "BASKET
INVESTMENTS AND GUARANTEES"), shall be permitted to be incurred if (i) no
Event of Default shall have occurred and be continuing, or would result
therefrom, (ii) the aggregate Basket Investments and Guarantees
outstanding at any time does not exceed $10,000,000, and (iii) no more
than $750,000 of the aggregate Basket Investments and Guarantees
outstanding at any time consists of loans or advances to, and Guaranty
Obligations incurred to support Indebtedness of, officers, directors and
employees of the Borrower and its Subsidiaries.
SECTION 2. REPRESENTATIONS AND WARRANTIES.
The Borrower represents and warrants as follows:
2.1. AUTHORIZATION, VALIDITY AND BINDING EFFECT. This Amendment has been
duly authorized by all necessary corporate action on the part of the Borrower,
has been duly executed and delivered by a duly authorized officer or officers of
the Borrower, and constitutes the valid and binding agreement of the Borrower,
enforceable against the Borrower in accordance with its terms.
2.2. REPRESENTATIONS AND WARRANTIES TRUE AND CORRECT. The representations
and warranties of the Borrower contained in the Credit Agreement, as amended
hereby, are true and correct on and as of the date hereof as though made on and
as of the date hereof, except to the extent that such representations and
warranties expressly relate to a specified date, in which case such
representations and warranties are hereby reaffirmed as true and correct when
made.
2.3. NO EVENT OF DEFAULT, ETC. No condition or event has occurred or
exists which constitutes or which, after notice or lapse of time or both, would
constitute an Event of Default.
2.4. COMPLIANCE. The Borrower is in full compliance with all covenants
and agreements contained in the Credit Agreement, as amended hereby.
SECTION 3. EFFECTIVENESS
This Amendment shall become effective on and as of the date (the
"EFFECTIVE DATE"), on or before March 31, 1999 if the following conditions are
satisfied:
(a) this Amendment shall have been executed by the Borrower and the
Administrative Agent, and counterparts hereof as so executed shall have
been delivered to the Administrative Agent; and
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(b) the Administrative Agent shall have been notified by the
Required Lenders that such Lenders have executed this Amendment (which
notification may be by facsimile or other written confirmation of such
execution).
The Administrative Agent shall notify the Borrower and each Lender in writing
of the effectiveness hereof.
SECTION 4. RATIFICATIONS.
The terms and provisions set forth in this Amendment shall modify and
supersede all inconsistent terms and provisions set forth in the Credit
Agreement, and except as expressly modified and superseded by this Amendment,
the terms and provisions of the Credit Agreement are ratified and confirmed and
shall continue in full force and effect.
SECTION 5. MISCELLANEOUS.
5.1. SUCCESSORS AND ASSIGNS. This Amendment shall be binding upon and
inure to the benefit of the Borrower, each Lender and the Administrative Agent
and their respective permitted successors and assigns.
5.2. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties made in this Amendment shall survive the execution and delivery of
this Amendment, and no investigation by the Administrative Agent or any Lender
or any subsequent Loan or issuance of a Letter of Credit shall affect the
representations and warranties or the right of the Administrative Agent or any
Lender to rely upon them.
5.3. REFERENCE TO CREDIT AGREEMENT. The Credit Agreement and any and all
other agreements, instruments or documentation now or hereafter executed and
delivered pursuant to the terms of the Credit Agreement as amended hereby, are
hereby amended so that any reference therein to the Credit Agreement shall
mean a reference to the Credit Agreement as amended hereby.
5.4. EXPENSES. As provided in the Credit Agreement, but without limiting
any terms or provisions thereof, the Borrower agrees to pay on demand all costs
and expenses incurred by the Administrative Agent in connection with the
preparation, negotiation, and execution of this Amendment, including without
limitation the costs and fees of the Administrative Agent's special legal
counsel, regardless of whether this Amendment becomes effective in accordance
with the terms hereof, and all costs and expenses incurred by the
Administrative Agent or any Lender in connection with the enforcement or
preservation of any rights under the Credit Agreement, as amended hereby.
5.5. SEVERABILITY. Any term or provision of this Amendment held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Amendment and the effect thereof shall be
confined to the term or provision so held to be invalid or unenforceable.
5.6. APPLICABLE LAW. This Amendment shall be governed by and construed
in accordance with the laws of the Commonwealth of Kentucky.
5.7. HEADINGS. The headings, captions and arrangements used in this
Amendment are for convenience only and shall not affect the interpretation of
this Amendment.
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5.8. ENTIRE AGREEMENT. This Amendment is specifically limited to the
matters expressly set forth herein. This Amendment and all other instruments,
agreements and documentation executed and delivered in connection with this
Amendment embody the final, entire agreement among the parties hereto with
respect to the subject matter hereof and supersede any and all prior
commitments, agreements, representations and understandings, whether written
or oral, relating to the matters covered by this Amendment, and may not be
contradicted or varied by evidence of prior, contemporaneous or subsequent
oral agreements or discussions of the parties hereto. There are no oral
agreements among the parties hereto relating to the subject matter hereof
or any other subject matter relating to the Credit Agreement.
5.9. COUNTERPARTS. This Amendment may be executed by the parties hereto
separately in one or more counterparts, each of which when so executed shall be
deemed to be an original, but all of which when taken together shall constitute
one and the same agreement
IN WITNESS WHEREOF, this Amendment has been duly executed and delivered as
of the date first above written.
HEALTHCARE RECOVERIES, INC. NATIONAL CITY BANK OF KENTUCKY,
individually as a Lender, a Letter of
Credit Issuer and as Administrative Agent
By: /s/ Xxxxxxx X. Xxxxxx
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Chief Financial Officer By: /s/ Xxxxx Xxxxx
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Vice President
BANK ONE, KENTUCKY, N. A. FIRST AMERICAN NATIONAL BANK
By: /s/ Xxxxxx X. Xxxxxxxx By: /s/ Xxxx Xxxx
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Senior Vice President Vice President
PNC BANK, N. A. LASALLE NATIONAL BANK
By: /s/ Xxxxxxxx X. Xxxxxxxxxx By: /s/ Xxxxx X. Xxxxxxxx
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Vice President First Vice President
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