THIRD AMENDMENT
to
CREDIT AGREEMENT
among
BMJ MEDICAL MANAGEMENT, INC.
as Borrower
THE LENDERS NAMED HEREIN
and
PARIBAS, as Agent for the lenders
Dated as of October 14, 1998
THIRD AMENDMENT
to
CREDIT AGREEMENT
THIS THIRD AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), dated as of
October 14, 1998, is executed and entered into by and among BMJ Medical
Management, Inc., a Delaware corporation (the "Borrower"), the Lenders set forth
on the signature pages hereof, and Paribas, in its capacity as agent for the
Lenders (the "Agent").
RECITALS:
A. The Borrower, the Lenders and the Agent are parties to that
certain Credit Agreement dated June 30, 1998 as amended as of July 20, 1998 and
as of September 3, 1998 (hereinafter called the "Agreement"; terms defined by
the Agreement where used in this Amendment, shall have the same meanings herein
as are prescribed by the Agreement).
B. By letter dated September 22, 1998, the Borrower reduced the
Lenders' Tranche A Commitments pursuant to Section 2.12 of the Agreement
effective September 24, 1998.
C. The Borrower, the Lenders and the Agent have agreed to amend
the Agreement as provided hereinbelow.
NOW THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
Section 1. Section References. Unless otherwise expressly stated
herein, all Section references herein shall refer to Sections of the Agreement.
Section 2. Amendment to Section 5.1 ("Information Covenants").
Section 5.1 is hereby amended to add a new subsection (a) as setforth below,
with the existing subsections of such Section 5.1 being renumbered as
appropriate:
(a) Monthly Financial Statements. Beginning with October 1998, within 45
days after the close of each of month, the consolidated balance sheet of the
Borrower and its Subsidiaries as at the end of such month and the related
consolidated statements of income, cash flow and retained earnings
1
for such month and for the elapsed portion of the fiscal year ended with the
last day of such month, and in each case setting forth comparative figures for
the related periods in the prior fiscal year.
Section 3. Amendment to Section 6. 1 (a) ("Leverage Ratio").
Section 6. 1 (a) is hereby amended to state that the Leverage Ratio for the
fiscal quarter ending September 30, 1998 may not exceed 5.0:1.O. The maximum
Leverage Ratio for each fiscal quarter ending after September 30, 1998 shall
remain unchanged.
Section 4. Amendment to Section 6. 1 (b) ("Interest Coverage
Ratio"). Section6.1(b)isherebyamendedtostatethattheratioofProForma Consolidated
EBITDA to Consolidated Interest Expense for the fiscal quarter ending September
30, 1998 may not be less than 2.0:1.O. The minimum ratio of Pro Forma
Consolidated EBITDA to Consolidated Interest Expense for each fiscal quarter
ending after September 30, 1998 shall remain unchanged.
Section 5. Amendment to Section 6.8 ("Capital Expenditures").
Section 6.8 is hereby amended to read in its entirety as follows:
The Borrower shall not make or incur (or commit to make or
incur) and shall not permit any of its Subsidiaries to make or incur
(or commit to make or incur) Capital Expenditures in fiscal year 1999
which exceed, in the aggregate, $5,000,000, and for any fiscal year
thereafter, $3,000,000; provided that Qualified Acquisitions shall not
be treated as Capital Expenditures for purposes of this Section 6.8;
and provided further that if the maximum amount set forth above for
any period exceeds the aggregate amount of Capital Expenditures made or
incurred (or committed to be made or incurred) during such period, then
the maximum amount set forth above for the following period (but not
any subsequent periods) shall be increased by the amount of such
excess.
Section 6. Amendment to Schedule 1. Schedule 1 is hereby deleted
in its entirety and replaced with Schedule 1 attached hereto.
Section 7. Amendment Fee. The Borrower hereby agrees to pay to
the Agent for the account of the Lenders an amendment fee of ten (10) basis
points on each Lender's Commitment. Such fee shall be due and payable on the
effective date of this Amendment.
2
Section 8. Conditions Precedent. The effectiveness of this
Amendment is subject to the satisfaction of each of the following conditions
precedent:
(a) The Agent shall have received all of the
following, each dated the date of this Amendment (unless otherwise indicated),
in form and substance satisfactory to the Agent:
(i) Amendment Documents. This Amendment and
any other instrument, document or certificate required by the Agent to be
executed or delivered by the Borrower or any other Person in connection with
this Amendment, duly executed by such Persons (the "Amendment Documents");
(11) Resolutions. Resolutions of the board
of directors of the Borrower, certified by its Secretary or Assistant Secretary,
which authorize the execution, delivery and performance by the Borrower of this
Amendment and the other Amendment Documents to which the Borrower is or is to be
a party hereunder;
(iii) Consent of the Required Lenders. The
written consent of the Required Lenders to this Amendment; and
(iv) Additional Information. The Agent shall
have received such additional documents, instruments and information as the
Agent may reasonably request to effect the transactions contemplated hereby.
(b) The representations and warranties contained
herein and in the Agreement shall be true and correct as of the date hereof
as if made on the date hereof (except for those which by their terms
specifically refer to a different date).
(c) All corporate proceedings taken in connection
with the transactions contemplated by this Amendment and all other
agreements, documents and instruments executed and/or delivered pursuant hereto,
and all legal matters incident thereto, shall be satisfactory to the Agent.
(d) No Default or Event of Default shall have
occurred and be continuing.
3
Section 9. Representations and Warranties. The Borrower hereby
represents and warrants to the Agent and the Lenders that as of the date of and
after giving effect to this Amendment, (a) the execution, delivery and
performance of this Amendment and any and all other Amendment Documents executed
and/or delivered in connection herewith have been authorized by all requisite
corporate action on the part of the Borrower and will not violate the Borrower's
certificate of incorporation or bylaws, (b) all representations and warranties
set forth in the Agreement and in any other Loan Document are true and correct
as if made again on and as of such date (except those, if any, which by their
terms specifically relate only to a different date), (c) no Default or Event of
Default has occurred and is continuing, and (d) the Agreement (as amended by
this Amendment), and all other Loan Documents are and remain legal, valid,
binding and enforceable obligations in accordance with the terms thereof
Section 1O. Survival of Representations and Warranties. All
representations and warranties made in this Amendment or any other Loan Document
shall survive the execution and delivery of this Amendment and the other Loan
Documents, and no investigation by the Agent or the Lenders, or any closing,
shall affect the representations and warranties or the right of the Agent and
the Lenders to rely upon them.
Section 11. Reference to Agreement. Each of the Loan
Documents, including the Agreement, and any and all other agreements, documents
or instruments now or hereafter executed and/or delivered pursuant to the terms
hereof or pursuant to the terms of the Agreement as amended hereby, are hereby
amended so that any reference in such Loan Documents to the Agreement whether
direct or indirect, shall mean a reference to the Agreement as amended hereby.
Section 12. Governing Law. This Amendment shall be deemed to be
a contract made under and governed by and construed in accordance with the
internal laws (as opposed to the conflicts of laws provisions) of the State of
New York.
Section 13. Execution. This Amendment may be executed in
counterparts, each of which shall be an original and all of which, collectively,
shall constitute one instrument.
Section 14. Limited Effect. This Amendment relates only to the
specific matters covered herein, shall not be considered to be a waiver of any
rights
4
any Lender may have under the Agreement, and shall not be considered to create a
course of dealing or to otherwise obligate any Lender to execute similar
amendments or grant any waivers under the same or similar circumstances in the
future.
Section 15. Ratification By Guarantors. Each of the Guarantors
hereby agrees to this Amendment and acknowledges that such Guarantor's Guarantee
shall remain in full force and effect without modification thereto.
[signature pages follow]
5
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed by their officers hereunder duly authorized as of
the date first above written.
BMJ MEDICAL MANAGEMENT,
INC., as the Borrower
BY: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: CFO
GUARANTORS:
BMJ of Bakersfield Inc.
BMJ of Bethlehem, Inc.
BMJ BROG. Inc.
BMJ Capital Corp.
BMJ of ▇▇▇▇▇▇▇▇, Inc.
BMJ of Glendale, Inc.
BMJ IPA of Florida, Inc.
BMJ of Lake Tahoe, Inc.
BMJ of Nevada, Inc.
BMJ of North Broward, Inc.
BMJ of San Antonio, Inc.
BMJ of Santa ▇▇▇▇▇▇▇, Inc.
Orthopaedic Management Network, Inc.
Valley Sports Surgeons, Inc.
All By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
Name: CFO
Title:
S-1
BMJ Surgical Associates of Bakers-
field, Limited Partnership
By: BMJ of Bakersfield, Inc. its general
partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------
Name:
Title:
Surgical Associates of Lake Tahoe,
Limited Partnership
By: BMJ of Lake Tahoe, Inc., its general
partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------
Name:
Title:
Surgical Associates of North Broward,
Limited Partnership
BY: BMJ of North Broward, Inc., its
general partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------
Name:
Title:
S-2
PARIBAS, as Agent and as a Lender
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------
Name:
Title:
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇
-----------------------
Name: VICE PRESIDENT
Title:
S-3
FLEET CAPITAL CORPORATION, as
a Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: VICE PRESIDENT
S-4
THE ING CAPITAL SENIOR SE-
CURED HIGH INCOME FUND, L.P.
as a Lender
By: ING Capital Advisors, Inc., as in-
vestment Advisor
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: VICE PRESIDENT & PORTFOLIO
MANAGER
S-5
SILICON VALLEY BANK, as a
Lender
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: SVP
(3rd Amendment)
S-6
PARIBAS CAPITAL FUNDING LLC,
as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: DIRECTOR
S-7
Schedule 1 to
Credit Agreement
----------------
Lenders and Commitments
-----------------------
Revolving Tranche A Tranche B
Name of Lender Commitment Commitment Commitment
-------------- ---------- ---------- ----------
Paribas $5,565,000 $3,158,600 $5,000,000
Fleet Capital
Corporation $5,145,000 $2,913,800 $3,000,000
The ING Capital
Senior Secured
High Income Fund,
L.P. $0 $0 $10,000,000
Silicon Valley Bank $4,290,000 $2,427,600 $2,000,000
Paribas Capital Funding LLC $0 $0 $5,000,000