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EXHIBIT 10.9
AMERIPATH, INC.
AMENDMENT NO. 1
This Agreement, dated as of August 30, 1996 , is among Ameripath,
Inc., a Delaware corporation (the "Company"), its Subsidiaries set forth on the
signature pages hereto and The First National Bank of Boston, both in its
capacity as a Lender and in its capacity as agent for itself and the other
Lenders. The parties agree as follows:
1. Reference to Credit Agreement; Definitions. This Agreement amends
the Credit Agreement dated as of May 29, 1996, among the parties hereto (as in
effect prior to giving effect to this Agreement, the "Credit Agreement"). The
terms defined in the Credit Agreement as amended hereby (the "Amended Credit
Agreement") are used with the meanings so defined.
2. Amendment of Credit Agreement. Effective upon the date hereof, the
Credit Agreement is amended as follows:
2.1. Addition of New Defined Terms. The following new
defined terms and Sections are added to the Credit Agreement by
inserting them in Section 1 in the order indicated:
"1.10A. "Annualized Interest Expense" means, for any
period, the product of the Revolving Loan outstanding as of
the last day of such period multiplied by then current
Applicable Rate plus the product of outstanding amounts under
any instrument of Subordinated Indebtedness as of the last day
of such period multiplied by the then current annual interest
rate on such instrument of Subordinated Indebtedness.
"1.37A. "Consolidated EBITDA" means, for any period,
an amount equal to the sum of (a) Consolidated Net Income of
the Company and its Subsidiaries for such period plus (b) all
amounts deducted in computing such Consolidated Net Income in
respect of (i) taxes based upon or measured by income, (ii)
Consolidated Interest Expense and (iii) depreciation and
amortization.
1.39A. "consolidated Operating Cash Flow" means, for
any period, the total of (i) Consolidated EBITDA minus (ii)
taxes, based upon or measured by net taxable income, paid in
cash by the Company and its Subsidiaries minus (iii) Capital
Expenditures.
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1.43A. "Consolidated Total Debt Service"
means, for any period, the sum of (i) Consolidated
Interest Expense plus (ii) the aggregate amount of
all mandatory scheduled payments, prepayments and
sinking fund payments paid or accrued by the Company
and its Subsidiaries during such period with respect
to contingent obligations under agreements relating
to Permitted Acquisitions or with respect to
principal paid or accrued by the Company in respect
of Subordinated Indebtedness and Contingent Notes."
2.2. Amendment to Section 1.4. The definition of "Acquired
Party EBITDA Adjustment" in Section 1.4 of the Credit Agreement is
amended to read in its entirety as follows:
"1.4. Acquired Party EBITDA Adjustment" means (a) for
any calculation made with respect to Sections 6.5 or 6.9.5 of
this Agreement for which two or less full fiscal quarters of
the Net Income of an Acquired Party has been included in, and
only to the extent not already included in, Consolidated Net
Income, an amount equal to the product of (i) the number of
fiscal quarters in the applicable period in which none of the
Net Income of such Acquired Party was included in Consolidated
Net Income, multiplied by (ii) one-fourth of Pro Forma EBITDA
of such Acquired Party as of the date of the Acquisition of
such Acquired Party or (b) for any calculation made with
respect to Section 6.5 or 6.9.5 of this Agreement for which
more than two fiscal quarters but less than one full year of
the Net Income of an Acquired Party has been included in, and
only to the extent not already included in, Consolidated Net
Income, an amount equal to the product of (X) the number of
fiscal quarters in the applicable period in which none of the
Net Income of such Acquired Party was included in Consolidated
Net Income, multiplied by (i) the amount of actual EBITDA of
such Acquired Party for each full fiscal quarter following its
Acquisition by a Borrower, divided by (ii) the number of full
fiscal quarters for which EBITDA of the Acquired Party was
included in Consolidated Net Income.
2.3. Amendment to Section 1.11. The definition of
"Applicable Rate" in Section 1.11 of the Credit Agreement is amended
to read in its entirety as follows:
"1.11. "Applicable Rate" means, at any date, the sum
of:
(a) the rate for such portion of the Revolving Loan shown in
Exhibit 1 that corresponds to the current ratio of
Consolidated Total Debt to Consolidated Adjusted EBITDA for
the most recently completed period of four consecutive fiscal
quarters (it being understood that the such ratio could change
on any Closing Date due to the occurrence of a Permitted
Acquisition and the resulting
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inclusion of an Acquired Party's Pro Forma EBITDA in
Consolidated Adjusted EBITDA and additional Financing Debt in
Consolidated Total Debt);
plus (b) an additional 3.00% effective on the day the Agent
notifies the Company that the interest rates hereunder are
increasing as a result of the occurrence and continuance of an
Event of Default until the earlier of such time as (i) such
Event of Default is no longer continuing or (ii) such Event of
Default is deemed no longer to exist, in each case pursuant to
Section 8.3."
2.4. Amendment to Section 1.125. The definition of
"Required Lenders" in Section 1.125 of the Credit Agreement is amended
to read in its entirety as follows:
"1.125. "Required Lenders" means, with respect to
any approval, consent, modification, waiver or other action to
be taken by the Agent or the Lenders under the Credit
Documents which require action by the Required Lenders, such
Lenders as own at least a majority of the Percentage
Interests; provided, however, that with respect to any matters
referred to in the proviso to Section 12.6, Required Lenders
means such Lenders as own at least the respective portions of
the Percentage Interests required by Section 12.6."
2.5 Amendment to Section 2.1.2: Section 2.1.2 of the
Credit Agreement is amended to read in its entirety as follows:
"2.1.2. Maximum Amount of Revolving Credit. The term
"Maximum Amount of Revolving Credit" means, on any date, the
lesser of (a) $75,000,000 or (b) the amount (in an integral
multiple of $1,000,000) to which the then applicable amount
shall have been irrevocably reduced from time to time by
notice from the Company to the Agent."
2.6. Amendment to Section 6.5. Section 6.5 of the Credit
Agreement is amended to replace existing Sections 6.5.2 through 6.5.4
with the following text and to add new a Section 6.5.5 immediately
after Section 6.5.4 to read in its entirety as follows:
"6.5.2 Consolidated Senior Debt Coverage. At all
times, Consolidated Senior Debt shall not exceed 350% of
Consolidated Adjusted EBITDA for the most recently completed
period of four consecutive fiscal quarters; provided, that, at
all times following the earlier to occur of (a) the completion
of a firm commitment underwritten initial public offering of
the Company's stock or (b) December 31, 1997, Consolidated
Senior Debt shall not exceed 325% of Consolidated Adjusted
EBITDA for the most recently completed period of four
consecutive fiscal quarters.
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6.5.3. Consolidated Total Debt Coverage. At all
times, the amount of (a) Consolidated Total Debt minus (b)
that portion of the outstanding principal amount of any
Contingent Notes to the extent that such portion is not
required to be reflected on the financial statements of any
Borrower in accordance with GAAP, shall not exceed 425% of
Consolidated Adjusted EBITDA for the most recently completed
period of four consecutive fiscal quarters.
6.5.4. Consolidated Interest Expense. On the last
day of each fiscal quarter of the Borrowers, Consolidated EBIT
shall be at least 250% of the Annualized Interest Expense for
the period of four consecutive fiscal quarters then ended.
6.5.5. Consolidated Operating Cash Flow. On the last
day of each fiscal quarter of the Company, Consolidated
Operating Cash Flow shall be at least 150% of Consolidated
Total Debt Service for the period of four consecutive fiscal
quarters then ending."
2.7. Amendment of Clause (d) of Section 6.9.5. Clause (d) of
Section 6.9.5 of the Credit Agreement is amended to exclude Section
6.5.5 from the reference in clause (d)(i) to those financial tests set
forth in Section 6.5 that the Borrower must show pro forma compliance
with as of the date of any Permitted Acquisition.
2.8. Amendment of Section 8.2. Section 8.2 of the Credit
Agreement is amended to add new Section 8.2.6 by inserting the
following text immediately after Section 8.2.5:
"8.2.6. Exercise of Call Right. The Company shall,
upon the reasonable request of the Agent, exercise its rights
to purchase the share of stock of Ameripath Kentucky, Inc.
owned by ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, M.D. pursuant to Section 3 of
the Shareholders' Agreement among Ameripath Kentucky, Inc.,
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, M.D. and the Company."
2.9. Amendment of Section 12.1. Section 12.1 of the Credit
Agreement is amended to read in its entirety as follows:
"12.1. Interests in Credits. The percentage
interest of each Lender in the Revolving Loan and Letters of
Credit, and the related Commitments, shall be computed based
on the maximum principal amount for each Lender as follows:
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Lender Maximum Principal Amount Percentage Interest
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The First National Bank of Boston $60,000,000 80%
NationsBank, N.A. (South) $15,000,000 20%
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Total $75,000,000 100%
The foregoing percentage interests, as from time to time in
effect and reflected in the Register, are referred to as the
"Percentage Interests" with respect to all or any portion of
the Revolving Loan and Letters of Credit, and the related
Commitments.
2.10. Amendment of Section 12.6(a). Clause (a) of Section
12.6 of the Credit Agreement is amended to read in its entirety as
follows:
(a) Without the written consent of Lenders owning
at least a majority of the Percentage Interests (other than
Delinquent Lenders during the existence of a Delinquency
Period so long as such Delinquent Lender is treated the same
as the other Lenders with respect to any actions enumerated
below), no written modification of, amendment to, consent with
respect to, waiver of compliance with or waiver of a Default
under any of the Credit Documents, or under Sections 6.5
through 6.20, the related defined terms or this Section
12.6(b) shall be made.
3. Consent and Waiver. Notwithstanding provisions of Section
6.13.1 (Issuance of Stock by Subsidiaries) and 10.1 (Credit Security) of the
Credit Agreement to the contrary, the undersigned Lenders consent to ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇, M.D. holding one share of Ameripath Kentucky, Inc., so long as the
Shareholders' Agreement among ▇▇. ▇▇▇▇▇▇▇▇▇▇, the Company and Ameripath
Kentucky, Inc. remain in full force and effect.
4. Representation and Warranty. In order to induce the Lenders
to enter into this Agreement, the Company and its Subsidiaries represent and
warrant to each of the Lenders that:
4.1. Legal Existence, Organization. Each of the Company and
its Subsidiaries is duly organized and validly existing and in good
standing under the laws of the jurisdiction of its incorporation, with
all power and authority, corporate or otherwise, necessary to (a)
enter into and perform this Agreement and the Amended Credit Agreement
and (b) own its properties and carry on the business now conducted or
proposed to be conducted by it. Each of the Company and its
Subsidiaries has taken, or shall have taken, all corporate or other
action required to make the provisions of this
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Agreement and the Credit Agreement the valid and enforceable
obligations they purport to be.
4.2. Enforceability. Each of the Company and its
Subsidiaries has duly executed and delivered this Agreement. Each of
this Agreement and the Credit Agreement is the legal, valid and
binding obligation of the Company and its Subsidiaries and is
enforceable in accordance with its terms.
4.3. No Legal Obstacle to Agreements. Neither the execution,
delivery or performance of this Agreement, nor the performance of the
Amended Credit Agreement, nor the consummation of any other
transaction referred to in or contemplated by this Agreement, nor the
fulfillment of the terms hereof or thereof, has constituted or
resulted in or will constitute or result in:
(a) any breach or termination of the provisions of
any agreement, instrument, deed or lease to which the Company
or any of its Subsidiaries is a party or by which it is bound,
or of the Charter or By-laws of the Company or any such
Subsidiaries;
(b) the violation of any law, judgment, decree or
governmental order, rule or regulation applicable to the
Company or any of its Subsidiaries;
(c) the creation under any agreement, instrument,
deed or lease of any Lien (other than Liens on the Credit
Security which secure the Lender Obligations) upon any of the
assets of the Company or any of its Subsidiaries; or
(d) any redemption, retirement or other repurchase
obligation of the Company or any of its Subsidiaries under any
Charter, By-law, agreement, instrument, deed or lease.
No approval, authorization or other action by, or declaration to or
filing with, any governmental or administrative authority or any other
Person is required to be obtained or made by the Company or any of
its Subsidiaries in connection with the execution, delivery or
performance of this Agreement or the performance of the Credit
Agreement, or the consummation of the transactions contemplated hereby
or thereby.
4.4. Defaults. Immediately before and after giving effect to
the amendments set forth herein, no Default or Event of Default will
exist.
4.5. Incorporation of Representations and Warranties. The
representations and warranties set forth in Sections 7.3 and 9 of the
Credit Agreement are true and correct on the date hereof as if
originally made on and as of the date hereof.
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5. General. The Amended Credit Agreement and all of the Credit
Documents are each confirmed as being in full force and effect. This
Agreement, the Amended Credit Agreement and the other Credit Documents referred
to herein or therein constitute the entire understanding of the parties with
respect to the subject matter hereof and thereof and supersede all prior and
current understandings and agreements, whether written or oral. The invalidity
or enforceability of any provision hereof shall not affect the validity or
enforceability of any other term or provision hereof. The headings in this
Agreement are for convenience of reference only and shall not alter, limit or
otherwise affect the meaning hereof. Each of this Agreement and the Amended
Credit Agreement is a Credit Document and may be executed in any number of
counterparts, which together shall constitute one instrument, and shall bind
and inure to the benefit of the parties and their respective successors and
assigns, including as such successors and assigns all holders of any Note.
This Agreement shall be governed by and construed in accordance with the laws
(other than the conflict of law rules) of The Commonwealth of Massachusetts.
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Each of the undersigned has caused this Agreement to be executed and
delivered by its duly authorized officer as an agreement under seal as of the
date first above written.
AMERIPATH, INC.
By /s/
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Title:
AMERICAN LABORATORY ASSOCIATES,
AMERIPATH FLORIDA, INC.
▇▇▇▇▇▇▇ & ASSOCIATES PATHOLOGY, INC.
FLORIDA PATHOLOGY ASSOCIATES,
INC. AMERIPATH ALABAMA, INC.
By /s/
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As Vice President of each of the
foregoing corporations
THE FIRST NATIONAL BANK OF BOSTON
By /s/
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Title:
The undersigned hereby consents to the foregoing:
NATIONSBANK, N.A. (South)
By /s/
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Title: Vice President
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