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EXHIBIT 10.2
FIFTH AMENDMENT TO CREDIT AGREEMENT
ENTERED into by and between CHILDREN'S COMPREHENSIVE SERVICES, INC., a
Tennessee corporation (the "Borrower"), SUNTRUST BANK, successor-in-interest to
SunTrust Bank, Nashville, N.A., in its capacity as agent for Lenders ("Agent"),
SUNTRUST BANK, successor-in-interest to SunTrust Bank, Nashville, N.A. ("STB"),
and AMSOUTH BANK, successor-in-interest to First American National Bank
("AMSOUTH") (STB and AMSOUTH shall be referred to herein as "Lenders"), as of
this 21st day of April, 2000.
RECITALS
1. The Borrower, the Lenders, and the Agent entered into a Credit
Agreement dated as of December 1, 1998, as amended by a First Amendment to
Credit Agreement dated as of December 31, 1998, a Second Amendment to Credit
Agreement dated as of April 20, 1999, a Third Amendment to Credit Agreement
dated as of September 27, 1999, and Fourth Amendment to Credit Agreement dated
as of January 15, 2000 (herein collectively the "Credit Agreement").
2. The Borrower, the Lenders, and the Agent desire to amend the
Credit Agreement as set forth herein.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereto agree as follows:
1. The definition of "Acquisition" as used in Section 1.1 of the
Credit Agreement shall be amended and restated as follows:
"Acquisition" shall mean the acquisition by any Consolidated
Company of any of the following: (a) the controlling interest in any
Person, (b) a Consolidated Company, or (c) substantially all of the
Property of any Person, or (d) assets or Property of any Person in
which the consideration paid or exchanged exceeds $2,000,000.
2. The definition of "Applicable Margin" as used in Section 1.1
of the Credit Agreement shall be amended and restated as follows:
Applicable Margin" shall mean the number of basis points per
annum determined in accordance with the table set forth below based on
the fiscal quarter-end ratio of Borrower's Funded Debt to EBITDA:
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TIER I TIER II TIER III TIER IV
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Ratio of Funded < 1.5 to 1.0 >=1.5 to 1.0 and >=2.00 to 1.0 and >=2.5 to 1.0
Debt to EBITDA < 2.00 to 1.0 < 2.5 to 1.0
Applicable 30 basis points; 30 basis points 50 basis points 50 basis points
Margin for per annum per annum per annum per annum
Facility Fee
Applicable 125 basis points 167.5 basis points 200 basis points 250 basis points
Margin for per annum per annum per annum per annum
Eurodollar
Advances
Applicable 25 basis points 67.5 basis points 100 basis points 150 basis points
Margin for Base per annum per annum per annum per annum
Rate Advances
3. The definition of "Consolidated EBITDA" as used in Section
1.1 of the Credit Agreement shall be amended and restated as follows:
"Consolidated EBITDA" shall mean for any fiscal period of
Borrower, an amount equal to the sum of (A) Consolidated EBIT, plus (B)
depreciation and amortization expenses to the extent deducted in
determining such Consolidated EBIT as determined on a consolidated
basis in accordance with GAAP, plus (C) for the fiscal quarter ending
March 31, 2000 only an amount equal to the Borrower's write-down of
uncollectible receivables related to Helicon, Inc. and the costs
associated with a loan guarantee of Borrower related to Helicon, Inc.,
not to exceed in the aggregate $2,368,000 plus (D) the historical
consolidated EBITDA of any Person adjusted for known and detailed
expense cuts acceptable to Agent for such period which accrued prior to
the date such Person became a Consolidated Company or was merged into
and consolidated with the Borrower or any other Consolidated Company or
such Person's assets were acquired by the Borrower or any other
Consolidated Company (and the underlying records of such Person shall
be audited to the extent the Borrower is required pursuant to
Regulation S-X of the SEC to present audited financial information for
such Person in documents filed by it with the SEC). If audited
financial records are not available for acquired companies, pro-forma
financial statements (subject to review and acceptance by the Agent)
will be substituted.
4. Section 7.1(a) of the Credit Agreement is amended and
restated as follows:
(a) Funded Debt to EBITDA. Suffer or permit, as of the
last day of any fiscal quarter, the ratio of (A) Consolidated Funded
Debt to (B) the sum of (i) Consolidated EBITDA minus (ii) dividends
paid, to exceed 3.0 to 1.0, as calculated for the most recently
concluded fiscal quarter and the immediately three (3) preceding fiscal
quarters.
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5. Section 7.1(b) of the Credit Agreement is amended and restated
as follows:
(b) Fixed Charge Coverage Ratio. (i) From the date hereof
through the fiscal quarter ending December 31, 2001 and as calculated
for the most recently concluded fiscal quarter and the immediately
three (3) preceding fiscal quarters, suffer or permit, the ratio of (A)
the sum of (1) Consolidated EBIT, plus, (2) for the fiscal quarter
ending March 31, 2000 only an amount equal to the Borrower's write-down
of uncollectible receivables related to Helicon, Inc. and costs
associated with a loan guarantee of Borrower related to Helicon, Inc.,
not to exceed in the aggregate $2,368,000, plus (3) Consolidated Rental
Expense, minus (4) dividends paid, to (B) the sum of (1) Consolidated
Interest Expense, plus (2) Consolidated Rental Expense, plus (3)
principal payments paid on the Term Loans to be less than 2.5 to 1.0,
and (ii) commencing with the fiscal quarter ending March 31, 2002 and
throughout the term of this Agreement, as calculated for the most
recently concluded fiscal quarter and the immediately three (3)
preceding fiscal quarters, suffer or permit, as of the last day of any
fiscal quarter, the ratio of (A) the sum of: (1) Consolidated EBIT,
plus (2) Consolidated Rental Expense, minus (3) dividends paid to (B)
the sum of (1) Consolidated Interest Expense, plus (2) Consolidated
Rental Expense, plus (3) principal payments paid on Term Loans to be
less than 2.0 to 1.0.
6. Section 7.1(c) of the Credit Agreement is amended and
restated as follows:
(c) Consolidated Funded Debt to Total Capitalization
Ratio. Permit, as of last day of any fiscal quarter, the ratio of
Consolidated Funded Debt to Total Capitalization to be greater than .45
to 1.0.
7. Section 7.8(g) of the Credit Agreement shall be deleted.
8. Section 7.12 of the Credit Agreement shall be amended and
restated as follows:
SECTION 7.12 ACQUISITIONS.
(a) Without the prior written consent of the Required
Lenders, the Borrower will not, and will not permit any Consolidated
Company, to make, Acquisitions where the total aggregate consideration
paid in such Acquisitions exceeds during any four (4) consecutive
fiscal quarters an amount equal to $10,000,000. For the purpose hereof,
the consideration paid shall include the sum of: (A) all cash paid
and/or Debt assumed, plus (B) the principal amount of any promissory
notes given, plus (C) the value of any stock given, and (D) the value
of any other Property given or transferred in respect of such
Acquisition. Provided further that for the purpose of this provision,
Borrower's Acquisition in Mecklenberg County, North Carolina to be
completed prior to July 31, 2000 shall be excluded.
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(b) The Borrower will not, and will not permit any
Consolidated Company, to make Acquisitions where the consideration paid
to the seller is in excess of $5,000,000, provided that this provision
may be waived by the Required Lenders at the request of Borrower and in
the sole discretion of Required Lenders, and provided that in
connection with any request by the Borrower that the Required Lenders
waive this provision, the Borrower provides to the Agent and the
Lenders an information package to include, but not be limited to,
historical financial statements on the Person being acquired showing
the impact of the acquisition on the Borrower's historical operating
performance and existing balance sheet, projections detailing the
expected performance of the Consolidated Companies going forward, a
detailed listing of the assets being purchased in the transaction, a
certificate executed by Borrower's chief financial officer showing the
effect on a pro forma basis of any Acquisition on the financial
covenants set forth in Section 7.1. herein, any other information
requested by Agent, and a statement that the proposed acquisition will
not create a Default or Event of Default. For the purpose hereof, the
consideration paid shall include the sum of: (A) all cash paid and/or
Debt assumed, plus (B) the principal amount of any promissory notes
given, plus (C) the value of any stock given, and (D) the value of any
other Property given or transferred in respect of such Acquisition.
For the purposes of this provision, Borrower's Acquisition in
Mecklenberg County, North Carolina to be completed prior to July 31,
2000 shall be excluded.
9. The Credit Agreement shall be amended to include new Section
7.16 to read as follows:
7.16 TREASURY STOCK.
Neither the Borrower nor any of its Subsidiaries shall
purchase shares of its own stock or the stock of any Subsidiary.
10. The Credit Agreement is not amended in any other respect.
11. The Borrower reaffirms its obligations as set forth in the
Credit Agreement, as amended hereby, and the Borrower agrees that its
obligations thereunder are valid and binding, enforceable in accordance with its
terms, subject to no defense, counterclaim, or objection.
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ENTERED INTO as of the date first above written.
BORROWER:
CHILDREN'S COMPREHENSIVE
SERVICES, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
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Title: VP-Finance/CEO
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AGENT:
SUNTRUST BANK, Agent
By: /s/ Xxxxxxx X. Xxxxx
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Title: Corporate Banking Officer
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LENDERS:
SUNTRUST BANK
By: /s/ Xxxxxxx X. Xxxxx
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Title: Corporate Banking Officer
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AMSOUTH BANK, successor-in-interest to
FIRST AMERICAN NATIONAL BANK
By: /s/ Xxxxxxx X. Xxxxx
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Title: Senior Vice President
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