EXHIBIT 10.32
SIXTH AMENDMENT TO CREDIT AGREEMENT AND WAIVER
THIS SIXTH AMENDMENT TO CREDIT AGREEMENT AND WAIVER (this "AMENDMENT"),
dated as of May 31, 2000, is by and among INSIGHT HEALTH SERVICES CORP. (the
"BORROWER"), the subsidiaries of the Borrower identified on the signature
pages hereto (the "GUARANTORS"), the several lenders identified on the
signature pages hereto (each a "LENDER" and, collectively, the "LENDERS")
and BANK OF AMERICA, N.A., formerly NationsBank N.A., as agent for the
Lenders (in such capacity, the "AGENT").
W I T N E S S E T H
WHEREAS, the Borrower, the Guarantors, the Lenders and the Agent
entered into that certain Credit Agreement dated as of October 14, 1997, as
amended by that First Amendment to Credit Agreement dated as of November 17,
1997, as amended by that Second Amendment to Credit Agreement dated as of
December 19, 1997, as amended by that Third Amendment to Credit Agreement
dated as of March 23, 1998, as amended by that Fourth Amendment and
Restatement of Credit Agreement dated as of June 12, 1998 and as amended by
that Fifth Amendment to Credit Agreement dated as of December 15, 1999 (as so
amended, the "EXISTING CREDIT AGREEMENT");
WHEREAS, the Borrower and the Guarantors have requested that certain
provisions of the Existing Credit Agreement be amended; and
WHEREAS, the parties have agreed to amend the Existing Credit
Agreement as set forth herein.
NOW, THEREFORE, in consideration of the agreements hereinafter set
forth, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
PART 1
DEFINITIONS
SUBPART 1.1 CERTAIN DEFINITIONS. Unless otherwise defined herein
or the context otherwise requires, the following terms used in this
Amendment, including its preamble and recitals, have the following meanings:
"AMENDED CREDIT AGREEMENT" means the Existing Credit Agreement
as amended hereby.
"AMENDMENT NO. 6 EFFECTIVE DATE" is defined in Subpart 4.1.
"WILKES-BARRE" means that certain outpatient medical diagnostic
imaging center located at 150 Mundy Street, Wilkes-Barre,
Pennsylvania.
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SUBPART 1.2 OTHER DEFINITIONS. Unless otherwise defined herein or
the context otherwise requires, terms used in this Amendment, including its
preamble and recitals, have the meanings provided in the Amended Credit
Agreement.
PART 2
AMENDMENTS TO EXISTING CREDIT AGREEMENT
Effective on (and subject to the occurrence of) the Amendment No. 6
Effective Date, the Existing Credit Agreement is hereby amended in accordance
with this PART 2. Except as so amended, the Existing Credit Agreement and all
other Credit Documents shall continue in full force and effect.
SUBPART 2.1 AMENDMENTS TO SECTION 1.1.
A. The following definitions set forth in Section 1.1 of the
Existing Credit Agreement are hereby amended in their entireties to
read as follows:
"APPLICATION PERIOD", (i) in respect of any Asset
Disposition by any Consolidated Party, shall have the meaning
assigned to such term in Section 8.5 and (ii) in respect of any
Asset Disposition by any Unrestricted Joint Venture which is a
Restricted Subsidiary (as defined in the Subordinated Note Indenture),
means 359 days following the consummation of such Asset Disposition.
"ASSET DISPOSITION" means (i) the disposition of any or
all of the assets (including without limitation the Capital Stock of
a Subsidiary) of any Consolidated Party, whether by sale, lease,
transfer or otherwise, other than (a) the sale of inventory in the
ordinary course of business for fair consideration, (b) the sale or
disposition of machinery and equipment no longer used or useful in
the conduct of such Person's business and (c) any Equity Issuance
and (ii) any Asset Sale (as defined in the Subordinated Note
Indenture).
"CENTRAL COAST" means St. John's Regional Medical Center,
LLC, a California limited liability company.
"EXCLUDED ASSET DISPOSITION" means (i) any Asset
Disposition by any Consolidated Party to any Credit Party if (a) the
Credit Parties shall cause to be executed and delivered such
documents, instruments and certificates as the Agent may request so
as to cause the Credit Parties to be in compliance with the terms of
Section 7.13 after giving effect to such Asset Disposition and (b)
after giving effect such Asset Disposition, no Default or Event of
Default exists and (ii) any transaction constituting a Permitted
Investment.
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"NET CASH PROCEEDS" means, with respect to any Person, the
aggregate cash proceeds received by such Person in respect of
any Asset Disposition, Equity Issuance or Debt Issuance, net of
(a) direct costs (including, without limitation, legal,
accounting and investment banking fees, and sales commissions),
(b) taxes paid or payable as a result thereof and (c) amounts
required to be paid to any Person (other than any Consolidated
Party or Unrestricted Joint Venture) owning a beneficial
interest in any assets that are subject to an Asset Disposition;
it being understood that "Net Cash Proceeds" shall include,
without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received by such
Person in any Asset Disposition, Equity Issuance or Debt
Issuance.
"PERMITTED INVESTMENTS" means Investments which are either
(i) cash or Cash Equivalents; (ii) accounts receivable created,
acquired or made by any Consolidated Party in the ordinary
course of business and payable or dischargeable in accordance
with customary trade terms; (iii) Investments consisting of
Capital Stock, obligations, securities or other property
received by any Consolidated Party in settlement of accounts
receivable (created in the ordinary course of business) from
bankrupt obligors; (iv) Investments existing as of the Closing
Date and set forth in SCHEDULE 1.1B; (v) Guaranty Obligations
permitted by Section 8.1; (vi) transactions permitted by Section
8.9; (vii) advances or loans to directors, officers, employees,
agents, customers or suppliers made in the ordinary course of
business for reasonable business and which do not exceed
$1,000,000 in the aggregate at any one time outstanding for all
of the Consolidated Parties; (viii) Investments in any Credit
Party; (ix) Permitted Acquisitions; (x) Investments in Joint
Ventures not to exceed $25,000,000 and (xi) the purchase of
Eligible Assets with the proceeds of any Asset Disposition as
contemplated by Section 8.5.
"RESTRICTED JOINT VENTURE" means any Joint Venture in
existence on the Closing Date and identified on SCHEDULE 1.1A.
"SUBSIDIARY" means, as to any Person at any time, (a) any
corporation more than 50% of whose Capital Stock of any class or
classes having by the terms thereof ordinary voting power to
elect a majority of the directors of such corporation
(irrespective of whether or not at such time, any class or
classes of such corporation shall have or might have voting
power by reason of the happening of any contingency) is at such
time owned by such Person directly or indirectly through
Subsidiaries, and (b) any partnership, association, joint
venture or other entity of which such Person directly or
indirectly through Subsidiaries owns at such time more than 50%
of the Capital Stock; PROVIDED, HOWEVER, that the term
"Subsidiary" (i) shall not include any Unrestricted Joint
Venture and (ii) shall include Wilkes-Barre Imaging, LLC.
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"UNRESTRICTED JOINT VENTURE" means any Joint Venture which
is not a Restricted Joint Venture; PROVIDED, HOWEVER, the term
"Unrestricted Joint Venture" shall not include Wilkes-Barre
Imaging, LLC.
B. Clause (xiii) appearing in the definition of "Permitted
Liens" appearing in Section 1.1 of the Existing Credit Agreement is
hereby amended in its entirety to read as follows:
(xiii) Liens on any Property owned by any Subsidiary of the
Borrower which is a Restricted Joint Venture;
SUBPART 2.2 AMENDMENTS TO SECTION 1.3 Section 1.3 of the Existing
Credit Agreement is amended in its entirety to read as follows:
1.3 ACCOUNTING TERMS.
Except as otherwise expressly provided herein, all
accounting terms used herein shall be interpreted, and all
financial statements and certificates and reports as to
financial matters required to be delivered to the Lenders
hereunder shall be prepared, in accordance with GAAP applied on
a consistent basis. All calculations made for the purposes of
determining compliance with this Credit Agreement (i) shall
(except as otherwise expressly provided herein) be made by
application of GAAP applied on a basis consistent with the most
recent annual or quarterly financial statements delivered
pursuant to Section 7.1 (or, prior to the delivery of the first
financial statements pursuant to Section 7.1, consistent with
the financial statements as at June 30, 1997) but, in any event,
after elimination for minority interests; PROVIDED, HOWEVER, if
(a) the Borrower shall object to determining such compliance on
such basis at the time of delivery of such financial statements
due to any change in GAAP or the rules promulgated with respect
thereto or (b) the Agent or the Required Lenders shall so object
in writing within 60 days after delivery of such financial
statements, then such calculations shall be made on a basis
consistent with the most recent financial statements delivered
by the Borrower to the Lenders as to which no such objection
shall have been made, and (ii) shall exclude income statement
items (whether positive or negative) attributable to ownership
interests held by any Consolidated Party in any Unrestricted
Joint Venture.
Notwithstanding the above, the parties hereto acknowledge
and agree that, for purposes of all calculations made under the
financial covenants set forth in Section 7.11 (including without
limitation for purposes of the definitions of "Applicable
Percentage" and "Pro Forma Basis" set forth in Section 1.1),
(i)(A) income statement items (whether positive or negative)
attributable to the Property disposed of in any Asset
Disposition as contemplated by Section 8.5 or to any Operating
Leases of
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GE Financed Machinery which were converted into Capital
Leases, as applicable, shall be excluded to the extent
relating to any period occurring prior to the date of
such transaction, (B) Indebtedness which is retired in
connection with any such Asset Disposition shall be
excluded and deemed to have been retired as of the first
day of the applicable period and (C) for purposes of
calculating interest expense, Indebtedness attributable
to Capital Leases which were formerly Operating Leases of
GE Financed Machinery shall be deemed to have been
incurred on the first day of the applicable period and if
such Indebtedness has a floating or formula rate, such
Indebtedness shall have an implied rate of interest for
the applicable period determined by utilizing the rate
which is or would be in effect with respect to such
Indebtedness as at the relevant date of determination,
and (ii) income statement items (whether positive or
negative) attributable to any Property acquired in any
Investment transaction (including without limitation any
Permitted Acquisition) contemplated by Section 8.6 shall
be included to the extent relating to any period
applicable in such calculations occurring after the date
of such transaction (and, notwithstanding the foregoing,
during the first four fiscal quarters following the date
of such transaction, shall be included on an annualized
basis).
SUBPART 2.3 AMENDMENTS TO SECTION 6.13. The first sentence of Section
6.13 of the Existing Credit Agreement is hereby amended in its entirety to
read as follows:
Set forth on SCHEDULE 6.13 is a complete and accurate list of all
Subsidiaries of each Consolidated Party and all Unrestricted Joint
Ventures of each Consolidated Party.
SUBPART 2.4 AMENDMENTS TO SECTIONS 7.12, 7.13, 8.7, 8.8, 8.12 AND 8.15.
The clause "which is not a Joint Venture" as it appears in Sections 7.12,
7.13, 8.7, 8.8, 8.12 and 8.15 of the Existing Credit Agreement is amended in
its entirety in each such Section to read "which is not a Restricted Joint
Venture".
SUBPART 2.5 AMENDMENTS TO SECTION 7.14. The clause "Joint Ventures" as it
appears in Section 7.14 of the Existing Credit Agreement is amended in its
entirety each time it appears in such Section to read "Restricted Joint
Ventures".
SUBPART 2.6 AMENDMENTS TO SECTION 8.1(c). Section 8.1(c) of the Existing
Credit Agreement is amended in its entirety to read as follows:
8.1 INDEBTEDNESS.
The Credit Parties will not permit any Consolidated Party to
contract, create, incur, assume or permit to exist any Indebtedness, except:
************
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(c)(i) purchase money Indebtedness (including Capital Leases
and Synthetic Leases) hereafter incurred by any Consolidated Party
which is not a Restricted Joint Venture other than Open MRI or
Central Coast to finance the purchase of fixed assets PROVIDED that
(A) the total of all such Indebtedness for all such Persons taken
together shall not exceed an aggregate principal amount of
$10,000,000 (excluding any such Indebtedness of any Consolidated
Party other than Open MRI or Central Coast referred to in
subsection (b) above) at any one time outstanding; (B) such
Indebtedness when incurred shall not exceed the purchase price of
the asset(s) financed; and (C) no such Indebtedness shall be
refinanced for a principal amount in excess of the principal
balance outstanding thereon at the time of such refinancing;
(ii) purchase money Indebtedness (including Capital Leases and
Synthetic Leases) hereafter incurred by Open MRI to finance the
purchase of fixed assets PROVIDED that (A) the total outstanding
principal of all such Indebtedness (including any such Indebtedness
of Open MRI referred to in subsection (b) above), taken together
with the aggregate original equipment cost of all Property leased
by Open MRI under Operating Leases, shall not exceed at any time an
aggregate principal amount of $20,000,000; (B) such Indebtedness
when incurred shall not exceed the purchase price of the asset(s)
financed; and (C) no such Indebtedness shall be refinanced for a
principal amount in excess of the principal balance outstanding
thereon at the time of such refinancing;
(iii) purchase money Indebtedness (including Capital Leases and
Synthetic Leases) hereafter incurred by Central Coast to finance
the purchase of fixed assets PROVIDED that (A) the total
outstanding principal of all such Indebtedness shall not exceed at
any time an aggregate principal amount of $6,000,000 (including any
such Indebtedness of Central Coast referred to in subsection (b)
above); (B) such Indebtedness when incurred shall not exceed the
purchase price of the asset(s) financed; and (C) no such
Indebtedness shall be refinanced for a principal amount in excess
of the principal balance outstanding thereon at the time of such
refinancing;
(iv) obligations of the Credit Parties (other than Open MRI)
arising under Capital Leases with respect to the GE Financed
Machinery; PROVIDED that (A) the total outstanding principal of all
such Indebtedness shall not exceed at any time an aggregate
principal amount of $57,300,000; (B) such Indebtedness when
incurred shall not exceed the purchase price of the asset(s)
financed; and (C) no such Indebtedness shall be refinanced for a
principal amount in excess of the principal balance outstanding
thereon at the time of such refinancing;
SUBPART 2.7 AMENDMENTS TO SECTIONS 8.16(a) AND 8.18. The clause "which
are not Joint Ventures" as it appears in Sections 8.16(a) and 8.18 of the
Existing Credit Agreement is amended in its entirety in each such Section to
read "which are not Restricted Joint Ventures".
PART 3
CERTAIN WAIVERS REGARDING ACQUISITION OF WILKES-BARRE
Solely with respect to the Acquisition of Wilkes-Barre by InSight Health
Corp., the Required Lenders agree as follows:
(a) The requirement that the maximum amount of proceeds of
Acquisition Loans used to finance the Acquisition of Wilkes-Barre not
exceed $15,000,000, as set forth in clause (vii) of the definition of
"Permitted Acquisition" appearing in Section 1.1 of the Amended Credit
Agreement, is hereby waived.
(b) Notwithstanding anything to the contrary contained in the
Amended Credit Agreement (including, without limitation, Sections 8.5 and
8.12), in connection with and as partial consideration for the
Acquisition of Wilkes-Barre, Wilkes-Barre Imaging, LLC shall be permitted
to issue or transfer shares of its Capital Stock to Roy Assael in an
amount not to exceed 10% of the total outstanding Capital Stock of
Wilkes-Barre Imaging, LLC (the "Minority Interest"). Furthermore, (i) any
requirement that the Credit Parties prepay the Loans pursuant to Section
3.3(b)(v) in connection with the issuance of such Capital Stock to Roy
Assael is hereby waived and (ii) notwithstanding anything to the contrary
contained in Section 7.12, Section 7.13 or any of the Collateral
Documents, any requirement that the Minority Interest be pledged as
Collateral to secure the Credit Party Obligations is waived for so long
as such Minority Interest is not held by a Credit Party.
PART 4
CONDITIONS TO EFFECTIVENESS
SUBPART 4.1 AMENDMENT NO. 6 EFFECTIVE DATE. This Amendment shall be and
become effective as of the date hereof (the "AMENDMENT NO. 6 EFFECTIVE DATE")
when all of the conditions set forth in this PART 4 shall have been satisfied,
and thereafter this Amendment shall be known, and may be referred to, as
"AMENDMENT NO. 6."
SUBPART 4.2 EXECUTION OF COUNTERPARTS OF AMENDMENT. The Agent shall have
received counterparts (or other evidence of execution, including telephonic
message, satisfactory to the Agent) of this Amendment, which collectively
shall have been duly executed on behalf of each of the Borrower, the
Guarantors and the Required Lenders.
SUBPART 4.3 AMENDMENT FEE. The Agent shall have received for the account
of each Lender approving this Amendment an amendment fee equal to 0.125% of
each such Lender's Commitment.
SUBPART 4.4 OTHER ITEMS. The Agent shall have received such other
documents, agreements or information which may be reasonably requested by the
Agent.
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PART 5
MISCELLANEOUS
SUBPART 5.1 REPRESENTATIONS AND WARRANTIES. Borrower hereby represents
and warrants to the Agent and the Lenders that (a) after giving effect to this
Amendment, (i) no Default or Event of Default exists under the Credit
Agreement or any of the other Credit Documents and (ii) the representations
and warranties set forth in Section 6 of the Amended Credit Agreement are,
subject to the limitations set forth therein, true and correct in all material
respects as of the date hereof (except for those which expressly relate to an
earlier date) and (b) the transactions contemplated in this Amendment are not
prohibited by the Subordinated Note Indenture (as in effect immediately prior
to the Amendment No. 6 Effective Date.
SUBPART 5.2 REAFFIRMATION OF CREDIT PARTY OBLIGATIONS. Each Credit Party
hereby ratifies the Credit Agreement and acknowledges and reaffirms (i) that
it is bound by all terms of the Credit Agreement and (ii) that it is
responsible for the observance and full performance of the Credit Party
Obligations.
SUBPART 5.3 CROSS-REFERENCES. References in this Amendment to any Part or
Subpart are, unless otherwise specified, to such Part or Subpart of this
Amendment.
SUBPART 5.4 INSTRUMENT PURSUANT TO EXISTING CREDIT AGREEMENT. This
Amendment is a Credit Document executed pursuant to the Existing Credit
Agreement and shall (unless otherwise expressly indicated therein) be
construed, administered and applied in accordance with the terms and
provisions of the Existing Credit Agreement.
SUBPART 5.5 REFERENCES IN OTHER CREDIT DOCUMENTS. At such time as this
Amendment No. 6 shall become effective pursuant to the terms of SUBPART 4.1,
all references in the Existing Credit Documents to the "Credit Agreement"
shall be deemed to refer to the Credit Agreement as amended by this Amendment
No. 6.
SUBPART 5.6 COUNTERPARTS. This Amendment may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an
original and all of which shall constitute together but one and the same
agreement.
SUBPART 5.7 GOVERNING LAW. THIS AMENDMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK.
SUBPART 5.8 SUCCESSORS AND ASSIGNS. This Amendment shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns.
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IN WITNESS WHEREOF the parties hereto have caused this Amendment to
be duly executed on the date first above written.
BORROWER: INSIGHT HEALTH SERVICES CORP.
By: /s/ Thomas V. Croal
-------------------------------------
Name: Thomas V. Croal
Title: Executive Vice President,
Chief Financial Officer
GUARANTORS: INSIGHT HEALTH CORP.
RADIOLOGY SERVICES CORP.
OPEN MRI, INC.
MAXUM HEALTH CORP.
RADIOSURGERY CENTERS, INC.
QUEST FINANCIAL SERVICES, INC.
MAXUM HEALTH SERVICES CORP.
DIAGNOSTIC SOLUTIONS CORP.
MAXUM HEALTH SERVICES
OF NORTH TEXAS, INC.
MAXUM HEALTH SERVICES
OF ARLINGTON, INC.
MAXUM HEALTH SERVICES
OF DALLAS, INC.
NDDC, INC.
SIGNAL MEDICAL SERVICES, INC.
MISSISSIPPI MOBILE TECHNOLOGY, INC.
By: /s/ Thomas V. Croal
-------------------------------------
Name: Thomas V. Croal
Title: Executive Vice President,
Chief Financial Officer
[Signatures Continue]
SIXTH AMENDMENT
INSIGHT HEALTH SERVICES CORP.
LENDERS: BANK OF AMERICA, N.A. formerly NationsBank,
N.A., individually in its capacity as a
Lender and in its capacity as Agent
By: /s/ Scott Singhoff
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Name: Scott Singhoff
Title: Managing Director
THE BANK OF NOVA SCOTIA
By: /s/ R.P. Reynolds
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Name: R.P. Reynolds
Title: Director
FLEET NATIONAL BANK
By: /s/ Walter J. Marullo
----------------------------------------
Name: Walter J. Marullo
Title: Vice President
PARIBAS
By: /s/ Sean T. Conlon
----------------------------------------
Name: Sean T. Conlon
Title: Managing Director
By: /s/ Eric Voravong
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Name: Eric Voravong
Title: Vice President
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEINBANK B.A., "RABOBANK
NEDERLAND"
By:
----------------------------------------
Name:
Title:
[Signatures Continue]
SIXTH AMENDMENT
INSIGHT HEALTH SERVICES CORP.
BHF (USA) CAPITAL CORPORATION
By: /s/ Dan Dobrjanskyj
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Name: Dan Dobrjanskyj
Title: Assistant Vice President
By: /s/ Richard Cameron
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Name: Richard Cameron
Title: Vice President
DRESDNER BANK AG. NEW YORK BRANCH AND
GRAND CAYMAN BRANCH
By: /s/ A. Nesi
----------------------------------------
Name: A. Nesi
Title: First Vice President
By: /s/ D. A. Ritzier
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Name: Debra A. Ritzier
Title: Assistant Vice President
IMPERIAL BANK, A CALIFORNIA BANKING
CORPORATION
By: /s/ R. Vadalma
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Name: Ray Vadalma
Title: Senior Managing Director
UNION BANK OF CALIFORNIA, N.A.
By: /s/ Ronald A. Launsbach
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Name: Ronald A. Launsbach
Title: Vice President
BANK POLSKA KASA OPIEKA, S.A.
By: /s/ Barry W. Henry
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Name: Barry W. Henry
Title: Vice President
Senior Lending Officer
SIXTH AMENDMENT
INSIGHT HEALTH SERVICES CORP.