EXHIBIT 10.5
WAIVER AND SIXTH AMENDMENT TO
CREDIT AGREEMENT
THIS WAIVER AND SIXTH AMENDMENT TO CREDIT AGREEMENT is made and dated
as of October 11, 2000 (the "Sixth Amendment") among SIERRA HEALTH SERVICES,
INC. (the "Company"), the Banks party to the Credit Agreement referred to below,
and BANK OF AMERICA, N.A., a national banking association, as Administrative
Agent (the "Agent"), and amends that certain Credit Agreement dated as of
October 30, 1998, as amended by that certain First Amendment dated as of
November 23, 1998, that certain Second Amendment to Credit Agreement dated as of
January 15, 1999, that certain Third Amendment to Credit Agreement dated as of
December 14, 1999, that certain Waiver and Fourth Amendment to Credit Agreement
dated as of August 14, 2000 and that certain Waiver and Fifth Amendment to
Credit Agreement dated as of September 15, 2000 (as further amended or modified
from time to time, the "Credit Agreement").
RECITALS
WHEREAS, the Company has requested that the Agent and the Banks waive
certain financial covenants and amend certain other provisions of the Credit
Agreement, and the Agent and the Banks are willing to do so, on the terms and
conditions specified herein;
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereby agree as follows:
1. Terms. All terms used herein shall have the same meanings as in the
Credit Agreement unless otherwise defined herein.
2. Waiver. By their execution hereof, the Banks hereby waive compliance by the
Company with Section 8.14(a) to (c) inclusive of the Credit Agreement for the
period from June 30, 2000 through 5:00 p.m., Eastern Time, October 31, 2000.
This waiver shall be limited precisely as provided for herein and shall not be
deemed to be a waiver or modification of any other term or provision of the
Credit Agreement or to be a consent to any other transaction or further action
on the part of the Company or any of its Subsidiaries which would require the
consent of the Banks under the Credit Agreement.
3. Amendments. The Credit Agreement is hereby amended as follows:
3.1 Amendment to Section 7.18.
(a) Clause (c) of Section 7.18 of the Credit Agreement is hereby amended by
deleting the date "October 11, 2000" and replacing it with "October 31, 2000."
4. Representations and Warranties. The Company represents and warrants to the
Agent and the Banks that, on and as of the date hereof, and after giving effect
to this Sixth Amendment:
4.1 Authorization. The execution, delivery and performance by the Company of
this Sixth Amendment has been duly authorized by all necessary corporate action,
and this Sixth Amendment has been duly executed and delivered by the Company.
4.2 Binding Obligation. This Sixth Amendment constitutes the legal, valid and
binding obligation of the Company, enforceable against it in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, or similar laws affecting the enforcement of creditors' rights
generally or by equitable principles relating to enforceability.
4.3 No Legal Obstacle to Amendment. The execution, delivery and performance of
this Sixth Amendment will not (a) contravene the Organization Documents of the
Company; (b) constitute a breach or default under any contractual restriction or
violate or contravene any law or governmental regulation or court decree or
order binding on or affecting the Company which individually or in the aggregate
does or could reasonably be expected to have a Material Adverse Effect; or (c)
result in, or require the creation or imposition of, any Lien on any of the
Company's properties. No approval or authorization of any governmental authority
is required to permit the execution, delivery or performance by the Company of
this Sixth Amendment or the transactions contemplated hereby or thereby.
4.4 Incorporation of Certain Representations. After giving effect to the terms
of this Sixth Amendment, the representations and warranties of the Company set
forth in Article VI of the Credit Agreement are true and correct in all respects
on and as of the date hereof as though made on and as of the date hereof, except
to the extent such representations relate solely to an earlier specified date.
4.5 Default. After giving effect to the terms of this Sixth Amendment, no
Default or Event of Default under the Credit Agreement has occurred and is
continuing.
5. Conditions, Effectiveness. The effectiveness of this Sixth Amendment
shall be subject to the compliance by the Company with its agreements herein
contained, and to the delivery of the following to Agent in form and substance
satisfactory to Agent on or before October 12, 2000:
5.1 Execution of Sixth Amendment. The Company, the Agent and the Majority
Banks shall have signed a copy hereof and the same shall have been delivered to
the Agent.
5.2 Security Agreement and Guaranty Affirmations. The Agent shall have received
affirmation letters in respect of the Security Agreement and Guaranty,
substantially in the form of Exhibit A, from each party thereto.
5.3 Fees and Expenses. All invoiced fees and expenses of E&Y Restructuring LLC
and all Attorney Costs of Xxxxx, Xxxxx & Xxxxx shall have been paid or provided
for and, after giving effect thereto, E&Y Restructuring LLC shall hold a
retainer in the amount of $100,000 and Xxxxx, Xxxxx & Xxxxx shall hold a
retainer in the amount of $100,000 for the payment of future fees and expenses.
6. Miscellaneous.
6.1 Effectiveness of the Credit Agreement and the Notes. Except as hereby
expressly amended, the Credit Agreement, the Loan Documents and the Notes shall
each remain in full force and effect, and are hereby ratified and confirmed in
all respects on and as of the date hereof.
6.2 Waivers. This Sixth Amendment is limited solely to the matters expressly set
forth herein and is specific in time and in intent and does not constitute, nor
should it be construed as, a waiver or amendment of any other term or condition,
right, power or privilege under the Credit Agreement or under any agreement,
contract, indenture, document or instrument mentioned therein; nor does it
preclude or prejudice any rights of the Agent or the Banks thereunder, or any
exercise thereof or the exercise of any other right, power or privilege, nor
shall it require the Majority Banks to agree to an amendment, waiver or consent
for a similar transaction or on a future occasion, nor shall any future waiver
of any right, power, privilege or default hereunder, or under any agreement,
contract, indenture, document or instrument mentioned in the Credit Agreement,
constitute a waiver of any other right, power, privilege or default of the same
or of any other term or provision.
6.3 Counterparts. This Sixth Amendment may be executed in any number of
counterparts, and all of such counterparts taken together shall be deemed to
constitute one and the same instrument.
6.4 Governing Law. This Sixth Amendment shall be governed by and construed
in accordance with the laws of the State of California.
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IN WITNESS WHEREOF, the parties hereto have caused this Sixth Amendment
to be duly executed and delivered as of the date first written above.
SIERRA HEALTH SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Chairman & CEO
BANK OF AMERICA, N.A., as Administrative Agent
By: /s/ Xxxxx Xxxxx
Name: Xxxxx Xxxxx
Title: Vice President
BANK OF AMERICA, N.A., as a Bank
By: /s/ Xxxxx Xxxx Strand
Name: Xxxxx Xxxx Strand
Title: Managing Director
FIRST UNION NATIONAL BANK, as a Bank
By: /s/ J. Xxxx Xxxxxxx, Xx.
Name: J. Xxxx Xxxxxxx, Xx.
Title: Vice President
CREDIT LYONNAIS NEW YORK BRANCH, as
a Bank
By: /s/ Xxxxxxx X. Xxxxxxxxx
Name: Xxxxxxx X. Xxxxxxxxx
Title: Sr. Vice President
BANK ONE, NA, as a Bank
By: /s/ Xxxxxx Xxxxxx
Name: Xxxxxx Xxxxxx
Title: First Vice President
XXXXX FARGO BANK, N.A., as a Bank
By: /s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Relationship Manager
UNION BANK OF CALIFORNIA, N.A., as a Bank
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Vice President
DEUTSCHE BANK AG, NEW YORK AND/OR CAYMAN
ISLANDS BRANCHES, as a Bank
By: /s/ Xxxx Xxxxx
Name: Xxxx Xxxxx
Title: Managing Director
By: /s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Vice President
EXHIBIT A to
Sixth Amendment
to Credit Agreement
October 11, 2000
Sierra Health-Care Options, Inc.
Nevada Administrators, Inc.
Behavioral Healthcare Options, Inc.
Sierra Home Medical Products, Inc.
Family Healthcare Services
Family Home Hospice, Inc.
Sierra Medical Management, Inc.
Sierra Health Holdings, Inc.
Southwest Medical Associates, Inc.
Northern Nevada Health Network, Inc.
Intermed, Inc.
Mohave Valley Hospital, Inc.
Tolemac, Inc.
M.E.G.A., Inc.
CII Financial, Inc.
Southwest Realty, Inc.
Prime Holdings, Inc.
c/o Sierra Health Services, Inc.
0000 Xxxxx Xxxxxx Xxx
Xxx Xxxxx, Xxxxxx 00000
Re: Sierra Health Services, Inc.
Gentlemen:
Please refer to (1) the Credit Agreement, dated as of October 30, 1998,
as amended by that certain First Amendment dated as of November 23, 1998, that
certain Second Amendment dated as of January 15, 1999, that certain Third
Amendment to Credit Agreement dated as of December 14, 1999, that certain Waiver
and Fourth Amendment to Credit Agreement dated as of August 14, 2000 and that
certain Waiver and Fifth Amendment to Credit Agreement dated a of September 15,
2000 (as so amended, the "Credit Agreement"), by and among Sierra Health
Services, Inc., as the borrower, the commercial lending institutions party
thereto (collectively, the "Lenders") and Bank of America, N.A., as agent
(herein, in such capacity, called the "Agent"), (2) the Security Agreement dated
August 23, 2000 from each of the addressees in favor of the Lenders and the
Agent (the "Security Agreement") and (3) the Guaranty dated August 23, 2000 from
each of the addressees in favor of the Lenders and the Agent (the "Guaranty").
Pursuant to a waiver and amendment dated of even date herewith, a copy of which
is attached hereto, certain terms of the Credit Agreement were amended. We
hereby request that you (i) acknowledge and reaffirm all of your obligations and
undertakings under the Security Agreement and Guaranty and (ii) acknowledge and
agree that the Security Agreement and Guaranty is and shall remain in full force
and effect in accordance with the terms thereof.
Please indicate your agreement to the foregoing by signing in the space
provided below, and returning the executed copy to the undersigned.
BANK OF AMERICA, N.A., as Agent
By: /s/ Xxxxx Xxxxx
Title: Vice President
Acknowledged and Agreed to
as of the date hereof
SIERRA HEALTH-CARE OPTIONS, INC.
By: /s/ Xxxxx X. Xxxxx
Its: Secretary
NEVADA ADMINISTRATORS, INC.
By: /s/ X. Xxxxxxxxxx
Its: Secretary
BEHAVIORAL HEALTHCARE OPTIONS, INC.
By: /s/ Xxxxx Xxxxx
Its: Secretary
SIERRA HOME MEDICAL PRODUCTS, INC.
By: /s/ Xxxx Xxxxxxxxx
Its: Secretary
FAMILY HEALTHCARE SERVICES
By: /s/ X. Xxxxxxxxx
Its: Secretary
FAMILY HOME HOSPICE, INC.
By: /s/ X. Xxxxxxxxx
Its: Secretary
SIERRA MEDICAL MANAGEMENT, INC.
By: /s/ Xxxx X. Xxxxxx
Its: Secretary
SIERRA HEALTH HOLDINGS, INC.
By: /s/ Xxxx XxxXxxxxx
Its: Secretary
SOUTHWEST MEDICAL ASSOCIATES, INC.
By: /s/ Xxxxx Xxxxxxxx
Its: Treasurer
NORTHERN NEVADA HEALTH NETWORK, INC.
By: /s/ Xxxxx X. Xxxxxx
Its: Secretary
INTERMED, INC.
By: /s/ X. Xxxxxxxxx
Its: Secretary
MOHAVE VALLEY HOSPITAL, INC.
By: /s/ Xxxxx X. Xxxxxx
Its: Secretary
TOLEMAC, INC.
By: /s/ Xxxxx X. Xxxxxx
Its: Secretary
M.E.G.A., INC.
By: /s/ Xxxxx Xxxxxxx
Its: Secretary
CII FINANCIAL, INC.
By: /s/ X. Xxxxxxxxxx
Its: Secretary
SOUTHWEST REALTY, INC.
By: /s/ Xxxxx Xxxxxxx
Its: Secretary
PRIME HOLDINGS, INC.
By: /s/ Xxxxx Xxxxxxx
Its: Secretary
