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Exhibit 99.2
SEVENTH AMENDMENT, WAIVER AND AGREEMENT, dated as of June 8, 1998 (this
"Agreement"), among: (i) FPA MEDICAL MANAGEMENT, INC., a Delaware corporation
(the "Borrower"); (ii) the several banks and other financial institutions listed
on the signature pages of this Agreement (individually, a "Lender," and
collectively, the "Lenders"); (iii) BANKBOSTON, N.A., as Administrative Agent
(the "Administrative Agent"); and (iv) XXXXXX COMMERCIAL PAPER INC., as
Arranger.
W I T N E S S E T H :
WHEREAS, the parties to this Agreement are parties to the Credit
Agreement, dated as of June 30, 1997, as amended by (i) the Global Amendment and
Assignment and Acceptance, dated as of July 21, 1997, (ii) the Consent and
Waiver, dated as of August 12, 1997, (iii) the Second Amendment, Consent and
Waiver, dated as of November 21, 1997, (iv) the Third Amendment and Consent,
dated as of December 31, 1997, (v) the Fourth Consent, dated as of March 31,
1998, (vi) the Fifth Consent and Waiver, dated as of April 24, 1998 and (vii)
the Sixth Amendment, Waiver and Agreement (the "Sixth Amendment"), dated as of
May 14, 1998 (as amended, supplemented or otherwise modified prior to the date
hereof, the "Credit Agreement"); and
WHEREAS, pursuant to the Credit Agreement, the Lenders have agreed to
make certain loans and other extensions of credit to the Borrower; and
WHEREAS, the Borrower has requested, and upon this Agreement becoming
effective, the Lenders have agreed, that certain provisions of the Credit
Agreement be modified in the manner provided for in this Agreement;
NOW, THEREFORE, in consideration of the premises, the parties hereto
agree as follows:
SECTION 1. DEFINITIONS.
1.1 Defined Terms. Unless otherwise defined herein and except as set
forth in this Agreement, terms defined in the Credit Agreement are used herein
as therein defined, and the following terms shall have the following meanings:
"Agreement Effective Period" shall mean the period beginning on the
Effective Date and ending on July 8, 1998.
"Effective Date" shall mean the first date on which the conditions
precedent specified in subsection 5.1 of this Agreement shall have been
satisfied or the satisfaction thereof shall have been waived in accordance with
the terms hereof.
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SECTION 2. AMENDMENTS TO CREDIT AGREEMENT.
2.1 Amendment to Section 6.1 of the Credit Agreement. Section 6.1 of the
Credit Agreement is hereby amended (1) by adding the word "and" immediately
after the semicolon at the end of paragraph (b) thereof and (2) by adding
thereto the following paragraph immediately after the end of paragraph (b)
thereof:
"(c) as soon as available, but in any event not later than 30
days after the end of each fiscal month of the Borrower (or, in the case
of financial statements for the fiscal month of April 1998, no later
than June 17, 1998), the unaudited consolidated balance sheet of the
Borrower and its Subsidiaries as at the end of such month and the
related unaudited consolidated statements of income and retained
earnings and of cash flows of the Borrower and its Subsidiaries for such
month and the portion of the fiscal year through the end of such month,
setting forth in each case in comparative form the figures for the
previous year and, to the extent applicable, the Budget (as defined in
the Seventh Amendment), certified by a Responsible Officer of the
Borrower as being fairly stated in all material respects (subject to
normal year-end audit adjustments);"
2.2 Amendment to Section 6.2 of the Credit Agreement. Section 6.2 of the
Credit Agreement is hereby amended by deleting clause (z) of paragraph (b)
thereof in its entirety and substituting in lieu thereof the following:
"(z) in the case of monthly, quarterly or annual financial
statements, a certificate containing all information reasonably
necessary for determining compliance by the Borrower and its
Subsidiaries with the provisions of this Agreement (including but not
limited to calculations demonstrating compliance with Sections 2.9 and
7.1) as of the last day of such fiscal month, fiscal quarter or fiscal
year, as the case may be;
2.3 Amendment to Section 8 of the Credit Agreement. Paragraph (c) of
Section 8 of the Credit Agreement is hereby amended (1) by deleting the
semicolon and the word "or" at the end thereof and (2) by adding thereto the
following:
"or Section 4 of the Seventh Amendment, Waiver and Agreement (the
"Seventh Amendment") dated as of June 8, 1998, among the Borrower, the
Administrative Agent and the Lenders; or"
SECTION 3. WAIVERS.
3.1 Waivers Relating to Section 7.1(c) of the Credit Agreement. Subject
to the continuing satisfaction of each of the covenants set forth in Section 4
hereof, the Lenders hereby waive any Default or Event of Default under the
Credit Agreement during the Agreement Effective Period as a result of (i) the
Borrower's failure to comply with Section 7.1(c) of the Credit Agreement for the
period of four consecutive fiscal quarters
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ending March 31, 1998 and for the period of four consecutive fiscal quarters
ending June 30, 1998 and (ii) the Borrower's failure to give notice of its
failure to comply with Section 7.1(c) of the Credit Agreement for the period of
four consecutive fiscal quarters ending March 31, 1998.
3.2 Waivers Relating to Section 7.9(c) of the Credit Agreement. Subject
to the continuing satisfaction of each of the covenants set forth in Section 4
hereof, the Lenders hereby waive any Default or Event of Default under the
Credit Agreement during the Agreement Effective Period as a result of (i) the
Borrower's failure to comply with the limitation on Permitted Acquisitions
during fiscal year 1998 set forth in Section 7.9(c) of the Credit Agreement, due
to the inclusion by the Borrower of the full amount of contingent consideration
payments relating to certain Permitted Acquisitions in the calculation of the
aggregate cost of all Permitted Acquisitions for such period and (ii) the
Borrower's failure to give notice of such failure.
SECTION 4. ADDITIONAL AGREEMENTS AND COVENANTS BY THE BORROWER .
4.1 Cooperation with Consultants. Consistent with the terms of Section
4.1(d) of the Sixth Amendment, the Borrower hereby confirms, reaffirms and
restates its agreement to assist and cooperate with representatives of the
consulting firm of Xxxxxxxx & Xxxxx, LLC (or such other consulting firm as may
be retained by the Administrative Agent or its counsel from time to time),
acting on behalf of the Administrative Agent, in their review of the preparation
and presentation of the financial statements of the Borrower and its
Subsidiaries required to be delivered to the Administrative Agent and the
Lenders pursuant to the Credit Agreement, and in their performance of such other
tasks as directed by the Administrative Agent or its counsel. Consistent with
the terms of the Sixth Amendment, and in accordance with Section 10.5 of the
Credit Agreement, the Borrower hereby confirms, reaffirms and restates its
agreement to pay on demand, or to reimburse the Administrative Agent or the
Lenders on demand for, the reasonable fees and disbursements of Xxxxxxxx &
Xxxxx, LLC or any other consultant engaged by the Administrative Agent or its
counsel in connection with the foregoing.
4.2 Inspection of Property; Books and Records; Discussions.
Notwithstanding anything to the contrary in the Credit Agreement, the Borrower
hereby agrees to permit, at any reasonable time, and as often as may reasonably
be desired, representatives of Xxxxxxxx & Xxxxx, LLC (or such other consulting
firm as may be retained by the Administrative Agent or its counsel from time to
time), acting on behalf of the Administrative Agent, to visit and inspect any
properties of the Borrower and its Subsidiaries and to examine and make
abstracts from any of the books and records of the Borrower and its Subsidiaries
and to discuss the business, operations, properties and financial and other
condition of the Borrower and its Subsidiaries with senior officers of the
Borrower and its Subsidiaries and with its independent certified public
accountants.
4.3 Delivery of Detailed Budget. The Borrower shall deliver to
the Administrative Agent and each Lender a detailed budget (the "Budget") and
any other
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information delineated on Schedule A attached hereto, at the times and in the
forms outlined thereon. The Budget and all such other information shall be
accompanied by a certificate of a Responsible Officer of the Borrower stating
that the Budget is based on reasonable estimates, information and assumptions
and that such Responsible Officer has no reason to believe that such Budget or
such other information is incorrect or misleading in any material respect.
4.4 Limitations on Borrowings. (a) Consistent with the terms of Section
4.2 (a) of the Sixth Amendment, the Borrower hereby agrees that, notwithstanding
anything to the contrary in the Credit Agreement, during the Agreement Effective
Period, the Borrower shall not have the right to, and shall not, request a
borrowing of Revolving Credit Loans or Swing Line Loans, or the issuance of a
Letter of Credit.
(b) Consistent with the terms of Section 4.2(b) of the Sixth Amendment,
the Borrower hereby agrees that, notwithstanding anything to the contrary in the
Credit Agreement, during the Agreement Effective Period, (i) all outstanding
Eurodollar Loans shall automatically be converted to Base Rate Loans at the end
of the current Interest Periods with respect thereto and (ii) no outstanding
Base Rate Loans may be converted to Eurodollar Loans at any time.
4.5 Limitation on Acquisitions. Consistent with the terms of Section 4.3
of the Sixth Amendment, the Borrower hereby agrees that, notwithstanding
anything to the contrary in the Credit Agreement, during the Agreement Effective
Period, the Borrower shall not have the right to, and shall not, consummate any
Permitted Acquisitions.
4.6 Commitment for Additional Capital. The Borrower hereby agrees to
exercise all reasonable efforts to deliver a capital plan for the Borrower and
its Subsidiaries to the Administrative Agent and the Lenders on or prior to June
30, 1998.
SECTION 5. MISCELLANEOUS.
5.1 Effectiveness. This Agreement shall become effective on the
date on which (i) the Administrative Agent shall have received counterparts of
this Agreement, duly executed and delivered by the Borrower, the Administrative
Agent and the Lenders required to execute this Agreement pursuant to Section
10.1 of the Credit Agreement and (ii) the Borrower shall have paid all fees and
expenses due and owing under the Credit Agreement, including the reasonable
out-of-pocket costs and expenses and retainers of Xxxxxxxx & Xxxxx, LLC and of
counsel to the Administrative Agent for which invoices have been delivered to
the Borrower.
5.2 Amendments and Waivers. This Agreement may be amended,
modified or supplemented and waivers of or consents to departures from the
provisions hereof or thereof may be given provided the same are in writing and
signed by the Borrower, the Administrative Agent and the Lenders required to
execute this Agreement pursuant to Section 10.1 of the Credit Agreement.
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5.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay
in exercising, on the part of the Administrative Agent or any Lender any right,
remedy, power or privilege hereunder or under the Credit Agreement, shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder or under the Credit Agreement
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and privileges
provided herein and under the Credit Agreement are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.
5.4 Payment of Fees and Expenses. The Borrower hereby agrees to pay all
reasonable costs, fees and expenses of the Administrative Agent, including
reasonable attorney's fees, in connection with the preparation, execution and
delivery of this Agreement.
5.5 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of each of the parties hereto and their respective
successors and assigns, except that the Borrower may not assign or transfer any
of its rights under this Agreement without the prior written consent of the
Lenders required to execute this Agreement pursuant to Section 10.1 of the
Credit Agreement.
5.6 Representations and Warranties. After giving effect to the
amendments contained herein, the Borrower hereby confirms, reaffirms and
restates on the date hereof the representations and warranties set forth in
Section 4 of the Credit Agreement; provided that each reference in such Section
4 to "this Agreement" shall be deemed to be a reference both to this Agreement
and to the Credit Agreement as modified by this Agreement.
5.7 Continuing Effect; No Other Amendments or Waivers. Except as
expressly amended or waived hereby, all of the terms and provisions of the
Credit Agreement and the other Loan Documents are and shall remain in full force
and effect. The amendments and waivers contained herein shall not constitute an
amendment or waiver of any other provision of the Credit Agreement or the other
Loan Documents or for any purpose except as expressly set forth herein.
5.8 Counterparts. This Agreement may be executed in any number of
counterparts by the parties hereto, each of which counterparts when so executed
shall be an original, but all the counterparts shall together constitute one and
the same instrument.
5.9 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
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FPA MEDICAL MANAGEMENT, INC.
By: /s/ Xxxxx X. Xxxxxxxx
Title: Executive Vice President
BANKBOSTON, N.A., as Administrative Agent
and as a Lender
By: /s/
Title: Director
XXXXXX COMMERCIAL PAPER INC., as
Arranger and as a Lender
By: /s/ Xxxxxxx Xxxxxxx
Title: Authorized Signatory
ALLIED IRISH BANKS, P.L.C.,
CAYMAN ISLANDS BRANCH
By: /s/ Xxxxxx Xxxxxx
Title: Vice President
By: /s/
Title: Executive Vice President
COMMERCIAL LOAN FUNDING TRUST I
By: Xxxxxx Commercial Paper Inc., not in
its individual capacity but solely as
Administrative Agent
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By: /s/ Xxxxxxxx Xxxxxxx
Title: Authorized Signatory
DEBT STRATEGIES FUND, INC.
By:
Title:
IMPERIAL BANK
By: /s/ Xxxxx XxXxxxxx
Title: Senior Vice President
INDOSUEZ CAPITAL FUNDING II LIMITED
By: Indosuez Capital as Portfolio
Advisor
By:
Title:
THE LONG-TERM CREDIT BANK OF JAPAN,
LTD., LOS ANGELES AGENCY
By: /s/ X. Xxxxx
Title: Deputy General Manager
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XXXXXXX XXXXX DEBT STRATEGIES
PORTFOLIO
By: Xxxxxxx Xxxxx Asset Management, L.P.
as Investment Advisor
By:
Title:
XXXXXXX XXXXX PRIME RATE PORTFOLIO
By: Xxxxxxx Xxxxx Asset Management, L.P.
as Investment Advisor
By:
Title:
XXXXXXX XXXXX SENIOR FLOATING RATE
FUND, INC.
By:
Title:
THE MITSUBISHI TRUST AND BANKING
CORPORATION, LOS ANGELES AGENCY
By: /s/ Yasushi Satomi
Title: Senior Vice President
NATEXIS BANQUE - BFCE
By:
Title:
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By:
Title:
OCTAGON LOAN TRUST,
Octagon Credit Investors, as Manager
By: /s/ Xxxxx X. Xxxxxxxx
Title: Managing Director
THE ROYAL BANK OF SCOTLAND PLC
By: /s/ X. Xxxxxx
Title: Vice President
THE SANWA BANK LIMITED,
LOS ANGELES BRANCH
By:
Title:
SENIOR HIGH INCOME PORTFOLIO, INC.
By:
Title:
SUNTRUST BANK, CENTRAL FLORIDA, N.A.
By: /s/ Xxxxx X. Sammotz
Title: Vice President
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XXX XXXXXX AMERICAN CAPITAL PRIME
RATE INCOME TRUST
By: /s/ Xxxxxxx X. Xxxxxxx, Xx.
Title:
XXX XXXXXX CLO I, LIMITED
By: Xxx Xxxxxx American Capital Management,
Inc., as Collateral Manager
By: /s/ Xxxxxxx X. Xxxxxxx, Xx.
Title:
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SCHEDULE A
1. Delivery of Detailed Budget: The Borrower shall deliver to the Administrative
Agent and each Lender on or prior to July 2, 1998 the Budget for the Borrower
and its Subsidiaries on a region-by-region and on a consolidated basis,
including, without limitation, a projected balance sheet of the Borrower and its
Subsidiaries as of the end of each fiscal month, for the months of June 1998
through December 1998, and the related statements of projected cash flow,
projected changes in financial position and projected income for each such
monthly period, and, as soon as available, significant revisions, if any, of
such projections with respect to each monthly period.
2. Delivery of Cash Flow Forecasts: During the Agreement Effective Period, the
Borrower shall deliver to the Administrative Agent and each Lender on the
Wednesday of every calendar week, commencing on Wednesday, June 17, 1998, before
5:00 p.m., New York City time, a forecast, in a form satisfactory to the
Administrative Agent, of the cash flows, cash balances and line availability of
the Borrower and its Subsidiaries for the period of six consecutive calendar
weeks beginning in the week in which the applicable Wednesday occurs, together
with a comparison of the actual cash flows, cash balances and line availability
of the Borrower and its Subsidiaries for the immediately preceding week to the
most recently forecasted cash flows of the Borrower and its Subsidiaries.
