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FIRST AMENDMENT TO
CREDIT AGREEMENT AND CONSENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT AND CONSENT (this
"AMENDMENT") made and entered into as of May 19, 1998, by and among AMERICAN
PHYSICIAN PARTNERS, INC., a Delaware corporation (the "BORROWER"), GENERAL
ELECTRIC CAPITAL CORPORATION, a New York corporation for itself, as Lender, and
as Agent for Lenders (the "AGENT"), and the other Lenders signatory from time
to time to the Credit Agreement referred to below (each a "LENDER").
W I T N E S S E T H:
WHEREAS, the Borrower, Lenders and the Agent are parties to a certain
Credit Agreement, dated November 26, 1997 (the "CREDIT AGREEMENT"; capitalized
terms used herein and not otherwise defined herein shall have the meanings
given such terms in the Credit Agreement as amended by this Amendment), whereby
the Lenders have made available certain revolving credit facilities to the
Borrower, subject to the terms, covenants and conditions contained in the
Credit Agreement; and
WHEREAS, the Borrower has requested that the Lenders increase their
Revolving Loan Commitments so that the aggregate Revolving Credit Commitment is
increased to $160,000,000 from the current level of $115,000,000, and that all
of the Lenders consent to amend the Credit Agreement to permit such increase;
and
WHEREAS, certain Lenders have agreed to increase their commitments and
the remaining Lenders have agreed to give their consents to such increase all
upon the terms and conditions specified herein; and
WHEREAS, the Borrower, the Agent and the Lenders have further agreed
to amend the Credit Agreement, as set forth in this Amendment.
NOW THEREFORE, in consideration of the premises and mutual
covenants contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. AMENDMENTS TO CREDIT AGREEMENT. Effective on the date on
which the Agent shall notify the Borrower that the conditions to the
effectiveness specified in Section 6 hereto have been satisfied, (the
"EFFECTIVE Date"), the Credit Agreement is hereby amended as follows:
(a) By deleting "One Hundred Fifteen Million Dollars
($115,000,000)" where it appears in the second line of the first recital
paragraph of the Credit Agreement and inserting in lieu thereof "One Hundred
Sixty Million Dollars ($160,000,000)";
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(b) By deleting the second paragraph (including the chart) of
Section 1.5(a) of the Credit Agreement and inserting in lieu thereof the
following:
The Applicable Revolver Index Margin, Applicable Revolver
LIBOR Margin and the Applicable L/C Margin will be 1.00%, 2.00%
and 2.00% per annum, respectively, as of the Effective Date.
Commencing with the date that the Borrower delivers consolidated
quarterly Financial Statements for the first Fiscal Quarter that
ends at least six (6) months after the Effective Date, the
Applicable Margins will be adjusted (up or down) prospectively on
a quarterly basis based upon the Borrower and its Restricted
Subsidiaries' Total Debt Leverage Ratio for the applicable test
period ended on the last day of such Fiscal Quarter. Adjustments
in Applicable Margins will be determined by reference to the
following grids:
IF TOTAL DEBT LEVEL OF
LEVERAGE RATIO IS: APPLICABLE MARGINS:
----------------- ------------------
<1.50 Level I
>1.50, but < 2.00 Level II
-
>2.00, but < 2.50 Level III
-
>2.50, but < 3.00 Level IV
-
>3.00 Level V
-
APPLICABLE MARGINS
------------------
LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V
------- -------- --------- -------- -------
Applicable Revolver 0.50% 0.75% 1.00% 1.25% 1.50%
Index Margin
Applicable Revolver LIBOR 1.50% 1.75% 2.00% 2.25% 2.50%
Margin
Applicable L/C Margin 1.50% 1.75% 2.00% 2.25% 2.50%
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(c) By deleting the second sentence of Section 6.1(a) of the
Credit Agreement and inserting in lieu thereof the following:
Notwithstanding the foregoing clause (y) of this Section
6.1(a), (1) any Restricted Subsidiary may merge or consolidate with
any other Restricted Subsidiary, (2) any Credit Party or any Permitted
Joint Venture Holding Company may acquire Stock in any Permitted Joint
Venture, subject to the requirements of Section 6.1(b), and (3) any
Credit Party may acquire all or substantially all of the assets or
100% of the Stock of any radiology practice or practice group or
imaging center or other business providing similar services, including
services ancillary to such practice or practice group (provided that
the requirement to acquire all or substantially allof the assets of
any practice or practice group shall not be deemed to require the
acquisition of assets customarily retained by a Managed Practice
following such an acquisition), or of a Person (a "PPM") that owns,
operates or manages such groups or businesses (the "Acquisition
Target") in a transaction that meets each of the following conditions
(each, a "Permitted Acquisition"):
(i) Agent shall receive at least fifteen (15)
days' prior written notice of such proposed Permitted
Acquisition, which notice shall include a reasonably detailed
description of the Acquisition Target and the terms of such
proposed Permitted Acquisition;
(ii) such Permitted Acquisition shall involve an
Acquisition Target operating solely within one or more of the
50 states of the United States of America or the District of
Columbia, shall be consensual, shall have been approved by the
Acquisition Target board of directors or other governing
authority or its authorized legal representative and shall
not, in the case where the Acquisition Target is a PPM,
involve an aggregate consideration (including, without
limitation, but without duplication, cash paid, stock issued
or Indebtedness or liabilities issued or assumed; the "Total
Consideration") in an amount that exceeds $25,000,000;
(iii) the Agent shall have received on or within 10
days following the closing date of any such Permitted
Acquisition: (A)(1) with respect to a Practice Acquisition,
copies of each of the Service Agreements, acquisition or
merger agreements, professional employment and non-competition
agreements and all other agreements executed in connection
with such acquisition, the terms and conditions of which
agreements shall be substantially similar to the terms and
conditions of the Service Agreements, Acquisition
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Agreements and other Related Transaction Documents executed in
connection with the Related Transactions (which terms and
conditions shall include, without limitation, the duration of
the Service and Employment Agreements, the termination and
practice repurchase provisions, practice governance provisions
and provisions regarding the assignability as security to the
Agent and which terms and conditions the Borrower shall use
its reasonable best efforts to cause to include limitations on
Managed Practice liabilities), and (2) with respect to other
acquisitions, copies of the acquisition or merger agreements
and all other agreements executed in connection with such
acquisition, and (B) such opinions, certificates, lien search
results and other documents as may be reasonably requested by
Agent;
(iv) at least five (5) Business Days prior to the
closing date of any such proposed Permitted Acquisition for
which the Total Consideration to be paid by the Borrower and
its Restricted Subsidiaries equals or exceeds $3,500,000,
Borrower shall have delivered to Agent, in form and substance
satisfactory to Agent, a certificate of the chief financial
officer of Borrower in the form of Exhibit 6.1(a) to the
effect that: (A) at the time of such Permitted Acquisition and
after giving effect thereto, no Default or Event of Default
will have occurred and be continuing;and (B) on a pro forma
basis Borrower would have been in compliance with the
financial covenants set forth in Annex E as of the most recent
test period for which such covenants were tested, which
covenants shall be calculated (in addition to the assumptions
specified in Annex E) as if: (x) such acquisition and all
other acquisitions closed or to be closed following such test
period and prior to the proposed closing date of the proposed
Permitted Acquisition had occurred at the beginning of such
test period and Borrower had received income attributable to
such Acquisition Target and such other acquired entities based
on the actual performance of such Acquisition Target and such
other acquired entities over such period (adjusted to reflect
the pro forma effect of Borrower's physician compensation
model as appropriate) and had incurred the Indebtedness and
expenses incurred to purchase such Acquisition Target and such
other acquired entity at the beginning of such period and
repaid, retired, disposed of or refinanced any Indebtedness
repaid, retired, disposed of or refinanced or to be repaid,
retired, disposed of or refinanced in such acquisition at the
beginning of such period, and (y) any disposition of Stock or
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of all or substantially all of the assets of any Subsidiary or
Permitted Joint Venture by Borrower or any of its Subsidiaries
and any termination of a Service Agreement (which Service
Agreement is not contemporaneously replaced by a Service
Agreement with the same Managed Practice that provides
substantially the same EBITDA to Borrower and its Subsidiaries
as the terminated Service Agreement) that have occurred or are
to occur following such test period and prior to the proposed
closing date of the proposed Permitted Acquisition had
occurred at the beginning of such test period and the Borrower
had not received any EBITDA attributable to such entity
disposed of or to such terminated Service Agreement over such
period and had incurred any Indebtedness or expense incurred
in connection with such disposition or termination at the
beginning of such period and had repaid, retired, disposed of
or refinanced any Indebtedness that was or is to be repaid,
retired or disposed of or refinanced in connection with such
disposition or termination (to the extent that the Borrower
and its Subsidiaries have been, or are to be, released from
all liability with respect thereto) at the beginning of such
period; and
(v) on or prior to the date of such Permitted
Acquisition, Agent shall have received, in form and substance
satisfactory to Agent, such documents and instruments as it
shall require to evidence the joinder of any new Subsidiary,
other than a Permitted Joint Venture, to the Subsidiary
Guaranty and Subsidiary Pledge and Security Agreement and the
perfection of all liens created thereunder (subject, in the
case of an Acquired Permitted Joint Venture, to the provisions
of Subsection 6.1(b)(iv)).
In the case of any proposed Permitted Acquisition under clause (3) of
the immediately preceding sentence where the Borrower's Senior Debt
Leverage Ratio, both before and after giving effect to such
acquisition and the incurrence of any Indebtedness to be incurred in
connection therewith, is greater than or equal to 1.50 to 1.00, in
addition to the requirements set forth in subclauses (i) through (v),
the prior written consent of Requisite Lenders will be required if:
(x) the Total Consideration to be paid in conjunction
with such acquisition equals or exceeds $15,000,000;
or
(y) the Total Consideration to be paid in conjunction
with such acquisition, taken together with the Total
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Consideration to be paid in conjunction with all
acquisitions made during the preceding twelve months,
equals or exceeds $50,000,000 (but no such consent
shall be required in the case of any Permitted
Acquisition which involves a Total Consideration of
$3,500,000 or less);
(d) By deleting "One Hundred Fifteen Million Dollars
($115,000,000)" where it appears in the sixth line of the definition of
"Commitments" and inserting in lieu thereof "One Hundred Sixty Million Dollars
($160,000,000)";
(e) By amending the definition of the term "Revolving Credit
Availability" contained in Annex A to the Credit Agreement to read as follows:
"Revolving Credit Availability" shall mean an amount
equal to three (3) times EBITDA of the Borrower and its
Subsidiaries as calculated for the most recently ended twelve
(12) month period for which financial statements are required
to be delivered pursuant to paragraph (a)(i) of Annex D,
provided that EBITDA for purposes of determining the Revolving
Credit Availability will be computed to include, on a pro
forma basis, the EBITDA of the Borrower and its Subsidiaries
attributable to any entity the stock or assets of which were
acquired by the Borrower or any Subsidiary of the Borrower, or
which came under the management of the Borrower or any
Subsidiary of the Borrower, subsequent to the first day of
such twelve (12) month period or are to be acquired with the
proceeds of a Revolving Credit Advance, as if such entity had
been owned and/or managed by the Borrower or such Subsidiary
during such period which computation shall be made for such
period as provided in paragraph (d)(i) of Annex E, and,
provided further that EBITDA for purposes of determining the
Revolving Credit Availability will be computed to exclude the
EBITDA of the Borrower and its Subsidiaries attributable to
any entity 100% of the stock or substantially all of the
assets of which were disposed of by the Borrower or any
Subsidiary of the Borrower or attributable to any Managed
Practice the Service Agreement with respect to which was
terminated and not replaced with a Service Agreement with the
same entity generating substantially the same EBITDA,
subsequent to the first day of such twelve (12) month period.
(f) By deleting "One Hundred Fifteen Million Dollars
($115,000,000)" where it appears in the seventh line of the definition of
"Revolving Loan Commitment" in Annex A to the Credit Agreement and inserting in
lieu thereof "One Hundred Sixty Million Dollars ($160,000,000)";
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(g) By deleting the reference to "2.65 to 1.00" contained in the
second column of subsection (a) of Annex E to the Credit Agreement and
substituting in lieu thereof "2.00 to 1.00, unless and until the Borrower
shall have issued at least $100,000,000 in principal amount of Subordinated
Debt in accordance with Section 6.3(a) (iii), whereupon such requirement shall
reduce to 1.75 to 1.00";
(h) By amending subsection (c) of Annex E to the Credit Agreement
to read as follows:
(c) Maximum Senior Debt Leverage Ratio. Each of (i) the
Borrower and its Restricted Subsidiaries and (ii) the Borrower and its
Subsidiaries, on a consolidated basis shall have at the end of each
Fiscal Quarter a Senior Debt Leverage Ratio not in excess of 3.00 to
1.00.; and
(i) By amending the Revolving Loan Commitments of the Lenders and
the Swingline Lenders to read as set forth on the signature pages hereof.
2. CONSENT AND WAIVER. The Agent and the Lenders hereby approve
of and consent to this Amendment and the increases in the Commitments provided
herein.
3. REPRESENTATIONS AND WARRANTIES. The Borrower hereby
represents and warrants to the Agent and the Lenders that (a) this Amendment,
the Confirmation of Guaranty attached hereto and each Replacement Note has been
duly authorized, executed and delivered by the Borrower and each Credit Party
signatory thereto, (b) no Default or Event of Default has occurred and is
continuing as of this date, and (c) all of the representations and warranties
made by the Borrower or any Credit Party in the Credit Agreement are true and
correct in all material respects on and as of the date of this Amendment
(except to the extent that any such representations or warranties expressly
referred to a specific prior date).
4. RATIFICATION. The Borrower hereby ratifies and reaffirms each
and every term, covenant and condition set forth in the Credit Agreement and
all other documents delivered by the Borrower in connection therewith
(including without limitation the other Financing Documents to which the
Borrower is a party), effective as of the date hereof.
5. ESTOPPEL. To induce the Agent and the Lenders to enter into
this Amendment, the Borrower hereby acknowledges and agrees that, as of the
date hereof, there exists no right of offset, defense or counterclaim in favor
of the Borrower or any Credit Party as against the Agent or any Lender with
respect to the obligations of the Borrower or such Credit Party to any of such
parties under the Credit Agreement or the other Financing Documents, either
with or without giving effect to this Amendment.
6. CONDITIONS TO EFFECTIVENESS. This Amendment shall become
effective, upon the Effective Date, subject to the receipt of the following
items, which in the case of documents to be delivered shall be in form and
substance satisfactory to the Agent and the Lenders in their sole discretion:
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(a) the Agent shall have received this Amendment, duly executed,
completed and delivered by the Agent, the Lenders and the Borrower and the
attached confirmation of Guaranty, duly executed by each other Credit Party;
(b) the Agent shall have received, for the account of each Lender,
a duly completed and executed Revolving Credit Note for the amount of such
Lender's Revolving Credit Commitment as increased by this Amendment, which Note
shall be in the same form as the Revolving Credit Note previously issued to
such Lender and shall be in replacement thereof (each a "Replacement Note");
(c) the Agent shall have received (i) satisfactory evidence that
the Credit Parties have obtained all required consents and approvals of all
Persons including all requisite Governmental Authorities, to the execution,
delivery and performance of this Amendment, the Confirmation of Guaranty and
the Replacement Notes or (ii) an officer's certificate in form and substance
satisfactory to Agent affirming that no such consents or approvals are
required;
(d) Borrower shall have paid to the Agent for the account of the
Agent and the Lenders the fees required to be paid on the Effective Date in the
respective amounts specified in that certain letter from GE Capital to the
Borrower dated May 8, 1998 setting forth certain fees to be payable to the
Agent and the Lenders in connection with this Amendment;
(e) the Agent shall have received for the Borrower and each of its
Subsidiaries, such Person's (i) charter and all amendments thereto (or evidence
satisfactory to the Agent that there have been no changes to such documents
since the same were delivered to the Agent and the Lenders at the Closing, and
that the same continue in full force and effect), (ii) good standing
certificates (including verification of tax status) in its state of
incorporation and (iii) good standing certificates (including verification of
tax status) and certificates of qualification to conduct business in each
jurisdiction where its ownership or lease of property or the conduct of its
business requires such qualification, each dated a recent date prior to the
Effective Date and certified by the applicable Secretary of State or other
authorized Governmental Authority;
(f) the Agent shall have received for Borrower and each of its
Subsidiaries, (i) such Person's bylaws, together with all amendments thereto
(or evidence satisfactory to the Agent that there have been no changes to such
documents since the same were delivered to the Agent and the Lenders at the
Closing), and (ii) resolutions of such Person's Board of Directors (or other
governing body), approving and authorizing the execution, delivery and
performance of this Amendment, the Replacement Notes and/or the Confirmation of
Guaranty attached hereto, to the extent that such Person is a party, each
certified as of the Effective Date by such Person's corporate secretary or an
assistant secretary as being in full force and effect without any modification
or amendment;
(g) the Agent shall have received for Borrower and each of its
Subsidiaries, signature and incumbency certificates of the officers of each
such Person executing this Amendment, any Replacement Note or the Confirmation
of Guaranty and/or any of the other
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documents to be delivered in connection herewith, certified as of the Effective
Date by such Person's corporate secretary or an assistant secretary as being
true, accurate, correct and complete;
(h) the Agent shall have received duly executed originals of the
opinion of Xxxxxx and Xxxxx, L.L.P. counsel for Borrower and its Subsidiaries,
together with any local counsel opinions requested by Agent, each in form and
substance satisfactory to the Lenders, dated the Effective Date;
(i) the Agent shall have received duly executed originals of a
certificate of the Chief Executive Officer and Chief Financial Officer of
Borrower, dated the Effective Date, stating that, since December 31, 1997 (i)
no event or condition has occurred or is existing which could reasonably be
expected to have a Material Adverse Effect; (ii) there has been no material
adverse change in the industry in which Borrower operates; (iii) no Litigation
has been commenced which, if successful, would have a Material Adverse Effect
or could challenge any of the transactions contemplated by the Agreement (as
amended by this Amendment) and the other Loan Documents; (iv) there have been
no Restricted Payments made by Borrower or any of its Subsidiaries; and (v)
there has been no material increase in liabilities, liquidated or contingent,
and no material decrease in assets of Borrower or any of its Subsidiaries;
(j) each Lender shall have received (i) prepayment of its portion
of the Revolving Loan to the extent that its share of the outstanding
Revolving Loan on the Effective Date would exceed its Pro Rata Share of the
Revolving Loan as advanced by this Amendment, together with any amounts owing
to such Lender pursuant to Section 1.10(b) of the Credit Agreement and (ii)
each Lender shall have made additional Revolving Credit Advances to the
Borrower (which may be applied to make any repayments required pursuant to
clause (ii) of this paragraph) to the extent necessary to insure its portion of
the Revolving Credit Loan to equal its Pro Rata Share thereof as amended by
this Amendment; and
(k) the Agent shall have received such other certificates,
documents and agreements respecting this Amendment, the Replacement Notes or
the Confirmation of Guaranty or any Credit Party, as Agent may, in its sole
discretion, request.
7. REIMBURSEMENT OF EXPENSES. The Borrower hereby agrees that it
shall reimburse the Agent and the Lenders on demand for all costs and expenses
(including without limitation attorney's fees) incurred by such parties in
connection with the negotiation, documentation and consummation of this
Amendment and the other documents executed in connection herewith and therewith
and the transactions contemplated hereby and thereby.
8. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA FOR CONTRACTS TO
BE PERFORMED ENTIRELY WITHIN SAID STATE.
9. SEVERABILITY OF PROVISIONS. Any provision of this Amendment
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to
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the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof or affecting the validity or enforceability of such
provision in any other jurisdiction. To the extent permitted by Applicable
Law, the Borrower hereby waives any provision of law that renders any provision
hereof prohibited or unenforceable in any respect.
10. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, all of which shall be deemed to constitute but one original and
shall be binding upon all parties, their successors and permitted assigns.
11. ENTIRE AGREEMENT. The Credit Agreement as amended by this
Agreement embodies the entire agreement between the parties hereto relating to
the subject matter hereof and supersedes all prior agreements, representations
and understandings, if any, relating to the subject matter hereof.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, the parties have caused this Amendment to be duly
executed by their respective officers thereunto duly authorized, as of the date
first above written.
AMERICAN PHYSICIAN PARTNERS, INC.
By:
---------------------------------
Name:
-----------------------------
Title:
----------------------------
GENERAL ELECTRIC CAPITAL
CORPORATION,
as Agent and Lender
Revolving Loan Commitment
(including a Swing Line Commitment
of $5,000,000):
$66,000,000 By:
---------------------------------
Title:
------------------------------
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BANK ONE, TEXAS, N.A.,
as Lender
Revolving Loan Commitment: By:
$25,000,000 ---------------------------------
Title:
------------------------------
BANQUE PARIBAS,
as Lender
By:
---------------------------------
Title:
------------------------------
Revolving Loan Commitment: By:
$14,500,000 ---------------------------------
Title:
------------------------------
CREDIT LYONNAIS NEW YORK BRANCH,
as Lender
Revolving Loan Commitment: By:---------------------------------
$20,000,000
Title:
------------------------------
TORONTO DOMINION (TEXAS), INC.,
as Lender
Revolving Loan Commitment: By:
$19,500,000 ---------------------------------
Title:
------------------------------
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COOPERATIEVE CENTRALE
RAIFFEISEN - BOERENLEENBANK B.A.
"RABOBANK NEDERLAND," NEW YORK
BRANCH,
as Lender
By:
---------------------------------
Title:
------------------------------
Revolving Loan Commitment: By:
$15,000,000 ---------------------------------
Title:
------------------------------
CONFIRMATION OF GUARANTY
Each of the undersigned Guarantors hereby acknowledges, consents and
agrees to the terms of the foregoing First Amendment to Credit Agreement and
Consent and agrees and confirms that its obligations under the Guaranty to
which it is a party will continue in full force and effect and extend to all
Obligations now outstanding or hereafter incurred pursuant to the terms of the
Credit Agreement as amended and modified hereby.
This ___ day of May, 1998.
ADVANCED IMAGING PARTNERS,
INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
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ADVANCED RADIOLOGY, LLC
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
IDE IMAGING PARTNERS, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
M&S IMAGING PARTNERS, L.P.
By: M&S IMAGING PARTNERS, INC.,
as General Partner
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
M&S IMAGING PARTNERS, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
MID ROCKLAND IMAGING
PARTNERS, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
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PACIFIC IMAGING PARTNERS, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
RADIOLOGY AND NUCLEAR MEDICINE
IMAGING PARTNERS, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
TOTAL IMAGING PARTNERS, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
VALLEY IMAGING PARTNERS, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
M&S IMAGING INVESTMENTS, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
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Location of Execution:
