EXHIBIT 10.19
AMENDMENT NO. 4
THIS AMENDMENT NO. 4 (the "Amendment") dated as of January 8, 1999, to the
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Credit Agreement referenced below, is by and among PEDIATRIC SERVICES OF
AMERICA, INC., a Georgia corporation, PEDIATRIC SERVICES OF AMERICA, INC., a
Delaware corporation, the subsidiaries and affiliates identified herein, the
lenders identified herein, and NATIONSBANK, N.A., as Administrative Agent.
Terms used but not otherwise defined shall have the meanings provided in the
Credit Agreement.
W I T N E S S E T H
WHEREAS, a $75 million credit facility has been established in favor of
Pediatric Services of America, Inc., a Georgia corporation (the "Borrower")
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pursuant to the terms of that Credit Agreement dated as of August 13, 1997 (as
amended and modified, the "Credit Agreement") among the Borrower, the Guarantors
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and Lenders identified therein, and NationsBank, N.A., as Administrative Agent;
WHEREAS, the Borrower has given notice that it was in non-compliance with
the financial covenants contained in Sections 7.9(a) regarding the Consolidated
Leverage Ratio, 7.9(d) regarding the Consolidated Senior Leverage Ratio and
7.9(f) regarding the Days Sales Outstanding for the paramedical testing business
for the fourth fiscal quarter ending September 30, 1998, and the Borrower has
not been able to provide monthly financial statements for October and November
of 1998 (the "Acknowledged Events of Default");
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WHEREAS, the Lenders agreed to forbear as to the Acknowledged Events of
Default pursuant to Amendment No. 3 dated December 24, 1998 ("Amendment No. 3");
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WHEREAS, the Borrower has requested that the Lenders make certain
amendments to the financial covenants under the Credit Agreement and provide a
waiver of the Acknowledged Events of Default;
WHEREAS, the requested amendments and waiver require the consent of the
Required Lenders;
WHEREAS, the Required Lenders, for and on behalf of the Lenders, have
agreed to the requested amendments and waiver on the terms and conditions set
forth herein;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. Modifications to the Credit Agreement. The Credit Agreement is amended
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and modified in the following respects:
1.1 The following definitions in Section 1.1 are amended and modified
to read as follows:
"Aggregate Revolving Committed Amount" means the aggregate amount of
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Revolving Commitments in effect from time to time, being (i) from January
8, 1999 (being the date of Amendment No. 4) through June 29, 1999, SEVENTY
MILLION DOLLARS ($70,000,000), and (ii) on June 30, 1999 and thereafter,
SIXTY-FIVE MILLION DOLLARS ($65,000,000).
"Applicable Percentage" means (i) 350 basis points (3.50%) in the case
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of Eurodollar Loans and the Letter of Credit Fee, (ii) 250 basis points
(2.50%) in the case of Base Rate Loans, and (iii) 50 basis points (0.50%)
in the case of the Commitment Fee.
"Termination Date" means October 1, 2000.
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1.2 The financial covenants in Section 7.9 are amended in their
entirety to read as follows:
7.9 Financial Covenants.
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(a) Consolidated Leverage Ratio. As of the end of each fiscal quarter
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to occur during the periods set forth below, the Consolidated Leverage
Ratio shall be not greater than:
For the fiscal quarter and period ending December 31, 1998 7.50:1.0
January 1, 1999 through March 31, 1999 5.85:1.0
April 1, 1999 through June 30, 1999 5.00:1.0
July 1, 1999 through September 30, 1999 4.50:1.0
October 1, 1999 through June 29, 2000 4.00:1.0
June 30, 2000 and thereafter 3.50:1.0
(b) Consolidated Fixed Charge Coverage Ratio. As of the end of each
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fiscal quarter to occur during the periods set forth below, the
Consolidated Fixed Charge Coverage Ratio shall be not less than:
For the fiscal quarter and period ending December 31, 1998 1.40:1.0
January 1, 1999 through March 31, 1999 1.25:1.0
April 1, 1999 through September 30, 1999 1.40:1.0
October 1, 1999 and thereafter 1.45:1.0
(c) Consolidated Net Worth. At all times, Consolidated Net Worth
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shall be not less than the sum of 85% of Consolidated Net Worth as of the
Closing Date plus on the last day of each fiscal quarter to occur after the
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Closing Date, 50% of Consolidated Net Income for the fiscal quarter then
ended (but not less than zero), such increases to be cumulative, plus 75%
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of the net proceeds from Equity Transactions (including for purposes
hereof, any increases in shareholder equity on account of acquisitions made
by issuance of stock or stock swap) occurring after the Closing Date.
(d) Consolidated Senior Leverage Ratio. As of the end of each fiscal
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quarter to occur during the periods set forth below, the Consolidated
Senior Leverage Ratio shall be not greater than:
For the fiscal quarter and period ending December 31, 1998 3.40:1.0
January 1, 1999 through March 31, 1999 2.55:1.0
April 1, 1999 through June 30, 1999 2.00:1.0
July 1, 1999 and thereafter 1.75:1.0
(e) Capital Expenditures. The aggregate amount of capital
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expenditures made or incurred by members of the Consolidated Group during
the fiscal quarters set forth below shall not exceed:
Fiscal Quarter ending on or about September 30, 1998 $3,600,000
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Fiscal Quarter ending on or about December 31, 1998 $2,750,000
Fiscal Quarter ending on or about March 31, 1999 $2,250,000
Fiscal Quarter ending on or about June 30, 1999 $2,250,000
Fiscal Quarter ending on or about September 30, 1999 $2,250,000
The unused portion of capital expenditures permitted but not used in any
fiscal quarter may be carried over and used in the next fiscal quarter (one
quarter carry-over).
(f) Days Sales Outstanding. As of the end of each fiscal quarter to
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occur during the periods set forth below, Days Sales Outstanding of the
Consolidated Group for the lines of business set forth below shall not be
greater than:
medical services business
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September 30, 1998 through December 30, 1998 130 days
December 31, 1998 through March 30, 1999 128 days
March 31, 1999 through September 29, 1999 125 days
September 30, 1999 and thereafter 122 days
paramedical testing business
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for the period ending December 31, 1998 120 days
January 1, 1999 through March 31, 1999 95 days
April 1, 1999 through June 30, 1999 80 days
July 1, 1999 and thereafter 65 days
2. In accordance with the provisions of Section 3.4(a) of the Credit
Agreement, the Revolving Commitments are hereby permanently reduced by FIVE
MILLION DOLLARS ($5,000,000) to a revised Aggregate Revolving Committed Amount
of SEVENTY MILLION DOLLARS ($70,000,000), subject to further reduction as
provided in the definition of "Aggregate Revolving Committed Amount" and as
otherwise provided in the Credit Agreement.
3. The Lenders hereby agree and provide:
(a) The Forbearance Period as referenced in Amendment No. 3 is hereby
terminated upon the effectiveness of this Amendment.
(b) Subject only to the condition that the financial condition and
performance of the Consolidated Group as reflected in the final annual
audited financial statements shall not differ in any meaningful respect
from that reflected in the preliminary annual financial statements
previously delivered to the Administrative Agent and the Lenders, the
Acknowledged Events of Default are hereby waived.
4. This Amendment shall be effective upon satisfaction of the following
conditions:
(a) execution of this Amendment by the Credit Parties and the
Required Lenders;
(b) receipt by the Administrative Agent of legal opinions of counsel
to the Credit Parties relating to this Amendment; and
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(c) receipt by the Administrative Agent for the ratable benefit of
the Consenting Lenders of the remaining portion of the Forbearance and
Amendment Fee (16.6667 basis points) as referenced in Amendment No. 3.
5. Representations and Warranties. Each of the Credit Parties hereby
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represents and warrants that (i) it has the requisite corporate power and
authority to execute, deliver and perform this Agreement, (ii) it is duly
authorized to, and has been authorized by all necessary corporate action, to
execute, deliver and perform under this Agreement, (iii) it has no claims,
counterclaims, offsets or defenses to the Credit Documents, and the performance
of its obligations thereunder, or if it has any such claims, counterclaims,
offsets or defenses, they are hereby waived, relinquished and released in
consideration of the execution and delivery of this Agreement by the Required
Lenders, (iv) after giving effect to this Amendment, the representations and
warranties in Section 6 of the Credit Agreement are true and correct in all
material respects (except those which expressly relate to an earlier period),
and (v) after giving effect to this Amendment, no Default or Events of Default
has occurred and is continuing.
6. Except as modified hereby, all of the terms and provisions of the
Credit Agreement (including Schedules and Exhibits) shall remain in full force
and effect.
7. The Borrower agrees to pay all reasonable costs and expenses of the
Administrative Agent in connection with the preparation, execution and delivery
of this Amendment, including without limitation the reasonable fees and expenses
of ▇▇▇▇▇ & ▇▇▇ ▇▇▇▇▇, PLLC.
8. This Amendment may be executed in any number of counterparts, each of
which when so executed and delivered shall be deemed an original and it shall
not be necessary in making proof of this Amendment to produce or account for
more than one such counterpart.
9. This Amendment shall be deemed to be a contract made under, and for all
purposes shall be construed in accordance with the laws of the State of North
Carolina.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of
this Amendment to be duly executed and delivered as of the date first above
written.
BORROWER: PEDIATRIC SERVICES OF AMERICA, INC.
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a Georgia corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President and
Chief Financial Officer
GUARANTORS: PEDIATRIC SERVICES OF AMERICA, INC.
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a Delaware corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President and Chief Financial Officer
PSA LICENSING CORPORATION,
a Delaware corporation
PSA PROPERTIES CORPORATION,
a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
for each of the foregoing
PEDIATRIC SERVICES OF AMERICA (CONNECTICUT), INC.,
a Connecticut corporation
PREMIER MEDICAL SERVICES, INC.
a Nevada corporation
PEDIATRIC HOME NURSING SERVICES, INC.,
a New York corporation
PEDIATRIC PARTNERS, INC.,
a Delaware corporation
PARAMEDICAL SERVICES OF AMERICA, INC.,
a California corporation
PREMIER NURSE STAFFING, INC.,
a Nevada corporation
PREMIER CERTIFIED HOME HEALTH SERVICES, INC.,
a Nevada corporation
ARO HEALTH SERVICES, INC.,
a Washington corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
for each of the foregoing
LENDERS: NATIONSBANK, N.A.,
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individually in its capacity as a
Lender and in its capacity as Administrative Agent
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President
TORONTO DOMINION (TEXAS), INC.
By:
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Name:
Title:
PNC BANK, NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
SUNTRUST BANK, ATLANTA
By:
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Name:
Title:
By:
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Name:
Title:
MELLON BANK, N.A.
By:
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Name:
Title:
CREDITANSTALT AG
By: /s/ ▇▇▇▇▇▇ ▇. Biringet
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Name: ▇▇▇▇▇▇ ▇. Biringet
Title: Executive Vice President
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Associate
