EXHIBIT 10.2
FOURTH AMENDMENT TO AMENDED AND RESTATED
SUBORDINATED NOTE AND WARRANT PURCHASE AGREEMENT
This Fourth Amendment to Amended and Restated Note and Warrant Purchase
Agreement (the "Amendment") is entered into as of the ___ day of September,
2002, by and among RAMSAY YOUTH SERVICES, INC., a Delaware corporation (the
"COMPANY"), each of the Subsidiaries of the Company listed on the signature
pages hereto, as guarantors (the "SUBSIDIARY GUARANTORS"), SUNTRUST BANKS, INC.,
a Georgia corporation ("SUNTRUST"), and ING CAPITAL LLC, a Delaware limited
liability company ("ING"; SunTrust and ING individually, a "PURCHASER" and,
collectively, the "PURCHASERS") and FLEET CAPITAL CORPORATION, or any successor
thereto as Agent (the "AGENT") under the Senior Credit Agreement on behalf of
and for the benefit of itself and the Senior Lenders.
W I T N E S S E T H:
WHEREAS, Company, the Subsidiary Guarantors (excluding Ramsay Youth
Services of Georgia, Inc.) and the Purchasers are parties to that certain
Amended and Restated Subordinated Note and Warrant Purchase Agreement, dated as
of June 19, 2000, as amended by that certain First Amendment to Amended and
Restated Subordinated Note and Warrant Purchase Agreement and First Amendment to
Amended and Restated Subordination Agreement, dated as of July 31, 2000, as
further amended by that certain Second Amendment to Amended and Restated
Subordinated Note and Warrant Purchase Agreement, dated as of April 16, 2001,
and as further amended by that certain Third Amendment to Amended and Restated
Subordinated Note and Warrant Purchase Agreement and Second Amendment to the
Amended and Restated Subordination Agreement, dated as of February 25, 2002 (as
amended, restated, modified or otherwise supplemented from time to time, the
"PURCHASE AGREEMENT"; capitalized terms used herein but not otherwise defined
shall have the meanings given to such terms in the Purchase Agreement);
WHEREAS, the Company formed a wholly-owned subsidiary, Ramsay Youth
Services of Georgia, Inc., a Delaware corporation ("RYSG"), for the purpose of
commencing operations in Georgia, including the execution and delivery of that
certain Commercial Lease (the "Macon Lease") dated September __, 2002, between
RYSG and Ramsay Hospital Properties, Inc. ("Landlord");
WHEREAS, the Company will guarantee the obligations of RYSG under the
Macon Lease pursuant to the terms of that certain Guarantee, dated the date of
the Macon Lease (the "Guarantee");
WHEREAS, Landlord is affiliated with the Controlling Shareholder;
WHEREAS, RYSG shall, by execution of this Amendment, join in as a
Subsidiary Guarantor under the Purchase Agreement, and shall be bound by the
terms and conditions of the Purchase Agreement, including but not limited to,
the guaranty obligations of Article 4 of the Purchase Agreement;
WHEREAS, Company has requested that the Purchasers make certain
amendments to the Purchase Agreement and the Purchasers are willing to do so on
the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the terms and conditions contained
herein, the parties hereto, intending to be legally bound, hereby agree as
follows:
SECTION 1.
1.1 ADDITIONAL DEFINITIONS. Article 1 of the Purchase Agreement
(Definitions) is hereby amended by adding the following definitions:
"Guarantee of Macon Lease" shall mean that certain Guarantee, dated
September __, 2002, by Ramsay Youth Services, Inc., whereby the Company
guarantees the obligations of Ramsay Youth Services of Georgia, Inc. under the
Macon Lease.
"Macon Lease" shall mean that certain Commercial Lease, dated September
__, 2002, between Ramsay Hospital Properties, Inc. and Ramsay Youth Services of
Georgia, Inc.
1.2 AMENDMENT TO SCHEDULE 6.1.1 OF THE PURCHASE AGREEMENT. Schedule
6.1.1 of the Purchase Agreement (list of Subsidiaries) is hereby amended and
restated in its entirety by substituting the attached Schedule 6.1.1 hereto.
1.3 AMENDMENT TO SECTION 8.6 OF THE PURCHASE AGREEMENT. Section 8.6
(Debt) of the Purchase Agreement is hereby amended by adding a subsection (j)
and amending subsection (i) as follows:
(i) Debt under the Guarantee of Macon Lease; and
(j) Debt not included in paragraphs (a) through (i) above which by its
terms is unsecured and does not exceed at any time, in the aggregate, the sum of
$750,000.
1.4 AMENDMENT TO SECTION 8.7 OF THE PURCHASE AGREEMENT. Section 8.7
(Lease Obligations) of the Purchase Agreement is hereby amended and restated as
follows:
Section 8.7 LEASE OBLIGATIONS. Create or suffer to exist any
obligations for the payment of rent for any property under operating leases or
agreements to lease (other than Capital Leases or the Macon Lease) except for
rental obligations of the Company and its Subsidiaries, on a consolidated basis,
not to exceed $750,000 in any twelve month period.
1.5 CONSENT TO MACON LEASE. The Purchasers hereby consent to (i) the
execution by RYSG of the Macon Lease with Landlord upon terms no less favorable
than would be obtained by the Company or its Subsidiaries in a comparable arms'
length transaction with a Person other than an Affiliate, and (ii) the
consummation of the transactions contemplated in the Macon Lease. Nothing
contained in this consent shall obligate the Purchasers to grant any future
consent pursuant to Section 8.5 (Transactions with Affiliates) of the Purchase
Agreement.
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1.6 GUARANTY OF OBLIGATIONS. RYSG hereby agrees to be bound by the
terms and conditions of the Purchase Agreement, including but not limited to,
the guaranty obligations under Article 4 of the Purchase Agreement.
SECTION 2. CONDITIONS TO EFFECTIVENESS OF AMENDMENT. This Amendment
shall become effective (the "AMENDMENT EFFECTIVE DATE") when each Purchaser
shall have received a duly executed counterpart of this Amendment executed by
each party hereto.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF BORROWERS. To induce
Lenders to enter into this Amendment, the Company hereby represents and warrants
to each Lender as follows:
3.1 REAFFIRMATION OF REPRESENTATIONS AND WARRANTIES. Each
representation and warranty of the Company or any Subsidiary Guarantor contained
in the Purchase Agreement, Subordination Agreement and the other Loan Documents,
as amended hereby, is true and correct on the date hereof and will be true and
correct after giving effect to the amendments set forth in SECTION 1 hereof.
3.2 CORPORATE AUTHORITY; NO CONFLICTS. The execution, delivery and
performance of this Amendment (i) is within the Company's and each Subsidiary
Guarantor's respective corporate powers, (ii) has been duly authorized by all
necessary corporate and shareholder action, (iii) does not require the consent,
approval, authorization of, or registration or filing with, any Person under any
Material Contract, with any Person under the organizational documents of the
Consolidated Companies, or with any governmental authority other than such
consents, approvals, authorizations, registrations or filings which have been
made or obtained and are in full force and effect, and (iv) will not cause a
breach or default under any of the Consolidated Companies Material Contracts or
organizational documents of any of the Consolidated Companies except as could
not reasonably be expected to have a Material Adverse Effect.
3.3 ENFORCEABILITY. This Amendment has been duly executed and delivered
for the benefit of or on behalf of the Company and constitutes the legal, valid
and binding obligation of Company and each of the Subsidiary Guarantors,
enforceable against it in accordance with its terms, except as the
enforceability hereof may be limited by bankruptcy, insolvency, reorganization,
moratorium and other laws affecting creditors' rights and remedies in general,
and by general principles of equity. or similar laws affecting creditor's rights
generally, and after giving effect to this Amendment, all of the representations
and warranties set forth in Article 6 of the Purchase Agreement are true and
correct in all material respects and no Default or Event of Default has occurred
and is continuing as of the date hereof.
SECTION 4. MISCELLANEOUS.
4.1 SURVIVAL. Except as expressly provided herein, the Purchase
Agreement and the Subordination Agreement shall continue in full force and
effect, and the unamended terms and conditions of the Purchase Agreement and the
Subordination Agreement are expressly incorporated herein and ratified and
confirmed in all respects. This Amendment is not intended to be or to create,
nor shall it be construed as, a novation or an accord and satisfaction.
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4.2 EFFECT OF AMENDMENT. From and after the date hereof, references to
the Purchase Agreement shall be references to the Purchase Agreement as amended
hereby.
4.3 ENTIRE UNDERSTANDING. This Amendment constitutes the entire
agreement among the parties hereto with respect to the subject matter hereof.
Neither this Amendment nor any provision hereof may be changed, waived,
discharged, modified or terminated orally, but only by an instrument in writing
signed by the parties required to be a party thereto pursuant to Section 10.4 of
the Purchase Agreement.
4.4 LEGAL EXPENSES. The Company hereby agrees to pay promptly all
reasonable fees and expenses of counsel to each Purchaser incurred by such
Purchaser in connection with the preparation, negotiation and execution of this
Amendment and all related documents.
4.5 GOVERNING LAW. THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
AND BE GOVERNED BY THE LAW (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW
PRINCIPLES THEREOF) OF THE STATE OF GEORGIA.
4.6 COUNTERPARTS. This Amendment may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
together shall constitute one and the same instrument.
4.7 HEADINGS. The headings, captions and arrangements used in this
Amendment are, unless specified otherwise, for convenience only and shall not be
deemed to limit, amplify or modify the terms of this Amendment, nor affect the
meaning thereof.
4.8 CONSENT AND REAFFIRMATION OF SUBSIDIARY GUARANTY. Each undersigned
Subsidiary Guarantor, including, but not limited to, RYSG, hereby (i)
acknowledges receipt of a copy of the foregoing Amendment, (ii) consents to the
Company's execution and delivery thereof, (iii) agrees to be bound thereby and
(iv) affirms that nothing contained therein shall modify in any respect
whatsoever its guaranty of the obligations of the Company to the Purchasers
pursuant to the terms of its Guaranty in favor of the Purchasers (the
"GUARANTY") and reaffirms that the Guaranty is and shall continue to remain in
full force and effect. Although each Subsidiary Guarantor has been informed of
the matters set forth herein and has acknowledged and agreed to same, each
Subsidiary Guarantor understands that the Purchasers have no obligation to
inform any Subsidiary Guarantor of such matters in the future or to seek any
Subsidiary Guarantor's acknowledgment or agreement to future amendments or
waivers, and nothing herein shall create such duty.
(SIGNATURE PAGES FOLLOW)
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their respective authorized officers on the date and year first
above written.
COMPANY:
RAMSAY YOUTH SERVICES, INC.
By:
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Executive Vice President
SUBSIDIARY GUARANTORS:
▇▇▇▇▇▇▇ PSYCHIATRIC HOSPITAL, INC.
BOUNTIFUL PSYCHIATRIC HOSPITAL, INC.
EAST CAROLINA PSYCHIATRIC SERVICES CORPORATION
GREAT PLAINS HOSPITAL, INC.
GULF COAST TREATMENT CENTER, INC.
HAVENWYCK HOSPITAL, INC.
H. C. CORPORATION
HSA HILL CREST CORPORATION
HSA OF OKLAHOMA, INC.
MICHIGAN PSYCHIATRIC SERVICES, INC.
RAMSAY EDUCATIONAL SERVICES, INC.
RAMSAY LOUISIANA, INC.
RAMSAY MANAGED CARE, INC.
RAMSAY YOUTH SERVICES OF ALABAMA, INC.
RAMSAY YOUTH SERVICES OF FLORIDA, INC.
RAMSAY YOUTH SERVICES OF SOUTH CAROLINA, INC.
RHCI SAN ANTONIO, INC.
TRANSITIONAL CARE VENTURES, INC.
TRANSITIONAL CARE VENTURES (TEXAS), INC.
By:
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Vice President
RAMSAY YOUTH SERVICES OF GEORGIA, INC.
By:
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇
President
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H. C. PARTNERSHIP
By: H.C. CORPORATION, General Partner
By: HSA HILL CREST CORPORATION, General Partner
By:
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Vice President
PURCHASERS:
SUNTRUST BANKS, INC.
By:
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Name:
Title:
ING CAPITAL LLC
By:
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Name:
Title:
AGENT:
FLEET CAPITAL CORPORATION
By:
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Name:
Title:
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