EXHIBIT 10.6

 

FOURTH AMENDMENT TO

AMENDED AND RESTATED CREDIT AGREEMENT

 

THIS FOURTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this
“Amendment”), dated as of January 10, 2003, is entered into by and among AMN
HEALTHCARE, INC., a Nevada corporation (the “Borrower”), AMN HEALTHCARE
SERVICES, INC. (formerly known as AMN Holdings, Inc.), a Delaware corporation
(the “Parent”), the Subsidiary Guarantors signatory hereto, the lenders
identified on the signature pages hereto as the Lenders (the “Lenders”) and BANK
OF AMERICA, N. A., as Agent for the Lenders (in such capacity, the “Agent”).

 

RECITALS

 

A. The Borrower, the Parent, the Subsidiary Guarantors, the Lenders and the
Agent, are party to that certain Amended and Restated Credit Agreement dated as
of November 16, 2001, as amended by that certain First Amendment to Amended and
Restated Credit Agreement dated as of April 8, 2002, as amended by that certain
Second Amendment to Amended and Restated Credit Agreement dated as of May 2,
2002 and as amended by that certain Third Amendment to Amended and Restated
Credit Agreement dated as of November 8, 2002 (as amended, the “Existing Credit
Agreement”).

 

B. The Credit Parties have requested that the Lenders amend the Existing Credit
Agreement as provided herein.

 

C. The Lenders have agreed to amend the Existing Credit Agreement on the terms
and conditions hereinafter set forth.

 

NOW, THEREFORE, in consideration of the agreements herein contained, the parties
hereto hereby agree as follows:

 

PART I

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. 4 Effective Date” is defined in Part III.

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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 Existing Credit Agreement.

 

PART II

AMENDMENTS TO EXISTING CREDIT AGREEMENT

 

Effective on (and subject to the occurrence of) the Amendment No. 4 Effective
Date, the Existing Credit Agreement is hereby amended in accordance with this
Part II.

 

SUBPART 2.1 Amendments to Section 1.1. Section 1.1 of the Existing Credit
Agreement is hereby amended in the following respects:

 

(a) The definition of “Applicable Percentage” appearing in Section 1.1 of the
Existing Credit Agreement is hereby amended and restated in its entirety to read
as follows:

 

“Applicable Percentage” means, for purposes of calculating the applicable
interest rate for any day for any Loan, the applicable rate of the Standby
Letter of Credit Fee for any day for purposes of Section 3.5(c)(i) or the
applicable rate of the Trade Letter of Credit Fee for any day for purposes of
Section 3.5(c)(ii), the appropriate applicable percentage corresponding to the
Leverage Ratio in effect as of the most recent Calculation Date:

 

           

Applicable Percentages

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Pricing

Level

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Leverage Ratio

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Eurodollar Loans

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Base Rate Loans

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For Standby Letter of Credit Fee

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For Trade Letter of Credit Fee

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I

  

³

0.75 to 1.0

    

1.75

%

  

0.75

%

    

1.75

%

  

0.875

%

II

  

<

 0.75 to 1.0

    

1.50

%

  

0.50

%

    

1.50

%

  

0.75

%

The Applicable Percentages shall be determined and adjusted quarterly on the
date (each a “Calculation Date”) five Business Days after the date by which the
Credit Parties are required to provide the Required Financial Information for
the most recently ended fiscal quarter or fiscal year, as the case may be, of
the Consolidated Parties; provided, however, that (i) the initial Applicable
Percentages shall be based on Pricing Level II (as shown above) and shall remain
at Pricing Level II until the Calculation Date for the fiscal year of the
Consolidated Parties ending on December 31, 2002, on and after which time the
Pricing Level shall be determined by the Leverage Ratio as of the last day of
the most recently ended fiscal quarter or fiscal year, as the case may be, of
the Consolidated Parties preceding the applicable Calculation Date and (ii) if
the Credit Parties fail to provide the Required Financial Information to the
Agent as required for the fiscal quarter or fiscal year, as the case may be, of
the Consolidated Parties preceding the applicable Calculation Date, the
Applicable Percentage from such Calculation Date shall be based on Pricing Level
I until such time as the Required Financial Information is provided, whereupon
the Pricing

 

2

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Level shall be determined by the Leverage Ratio as of the last day of the most
recently ended fiscal quarter or fiscal year, as the case may be, of the
Consolidated Parties preceding such Calculation Date. Each Applicable Percentage
shall be effective from one Calculation Date until the next Calculation Date.
Any adjustment in the Applicable Percentages shall be applicable to all existing
Loans and Letters of Credit as well as any new Loans and Letters of Credit made
or issued.

 

(b) The definition of “Consolidated Capital Expenditures” appearing in Section
1.1 of the Existing Credit Agreement is hereby amended and restated in its
entirety to read as follows:

 

“Consolidated Capital Expenditures” means, as of any date for the four fiscal
quarter period ending on such date with respect to the Consolidated Parties on a
consolidated basis, all capital expenditures, as determined in accordance with
GAAP; provided, however, that Consolidated Capital Expenditures shall not
include (i) Eligible Reinvestments made with proceeds of any Involuntary
Disposition and (ii) up to $10,000,000 in capital expenditures related to a new
headquarter building.

 

(c) The definition of “Excess Cash Flow” appearing in Section 1.1 of the
Existing Credit Agreement is hereby amended and restated in its entirety to read
as follows:

 

“Excess Cash Flow” means, with respect to any fiscal year period of the
Consolidated Parties on a consolidated basis, an amount equal to (a)
Consolidated EBITDA minus (b) Consolidated Capital Expenditures minus (c)
capital expenditures related to the new headquarter building in an amount not to
exceed $10,000,000 minus (d) Consolidated Cash Interest Expense minus (e) to the
extent not taken into account in the calculation of Excess Cash Flow for any
prior fiscal year, Federal, state and other income taxes accrued or paid
(without duplication) by the Parent and the Consolidated Parties on a
consolidated basis minus (f) Consolidated Scheduled Funded Debt Payments minus
(g) increases in Consolidated Net Working Capital minus (h) the cash amount of
all Investments of the types referred to in clauses (ix) and (xiii) of the
definition of “Permitted Investments” set forth in this Section 1.1 plus (i)
decreases in Consolidated Net Working Capital.

 

(d) The definition of “Fixed Charge Coverage Ratio” appearing in Section 1.1 of
the Existing Credit Agreement is hereby amended and restated in its entirety to
read as follows:

 

“Fixed Charge Coverage Ratio” means, as of the end of any fiscal quarter of the
Consolidated Parties for the four fiscal quarter period ending on such date with
respect to the Consolidated Parties on a consolidated basis, the ratio of (a)
the sum of (i) Consolidated EBITDA for such period minus (ii) Consolidated
Capital Expenditures for such period minus (iii) Consolidated Cash Taxes for
such period minus (iv) the cash amount of all Restricted Payments made pursuant
to clause (k) of Section 8.7 to (b) the sum of (i) Consolidated Cash Interest
Expense for such period

 

3

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plus (ii) Consolidated Scheduled Funded Debt Payments for such period (other
than Consolidated Scheduled Funded Debt Payments for any period prior to the
Closing Date).

 

(e) The definition of “Maturity Date” appearing in Section 1.1 of the Existing
Credit Agreement is hereby amended and restated in its entirety to read as
follows:

 

“Maturity Date” means December 31, 2006.

 

(f) Clause (vii) of the definition of “Permitted Acquisition” appearing in
Section 1.1 of the Existing Credit Agreement is amended and restated in its
entirety to read as follows:

 

(vii) the total Qualifying Consideration for any such Acquisition shall not
exceed an amount equal to (A) $200,000,000 plus (B) 50% of Excess Cash Flow for
each fiscal year ended after December 31, 2002 minus (C) the aggregate amount of
Qualifying Consideration paid with respect to all Acquisitions occurring after
December 31, 2002 minus (D) the aggregate amount expended under Section 8.7(f);
provided, further, however, prior to and after giving effect to all Permitted
Acquisitions, on a pro forma basis, the Unused Revolving Committed Amount shall
not be less than $25,000,000.

 

SUBPART 2.2 Amendments to Section 2.1. Section 2.1(a) of the Existing Credit
Agreement is hereby amended and restated in its entirety to read as follows:

 

2.1 Revolving Loans.

 

(a) Revolving Commitment. Subject to the terms and conditions hereof and in
reliance upon the representations and warranties set forth herein, each Lender
severally agrees to make available to the Borrower such Lender’s Commitment
Percentage of revolving credit loans requested by the Borrower in Dollars
(“Revolving Loans”) from time to time from the Closing Date until the Maturity
Date, or such earlier date as the Revolving Commitments shall have been
terminated as provided herein; provided, however, that the sum of the aggregate
outstanding principal amount of Revolving Loans shall not exceed SEVENTY-FIVE
MILLION DOLLARS ($75,000,000) (as such aggregate maximum amount may be reduced
from time to time as provided in Section 3.4, the “Revolving Committed Amount”);
provided, further, (A) with regard to each Lender individually, such Lender’s
outstanding Revolving Loans shall not exceed such Lender’s Commitment Percentage
of the Revolving Committed Amount, and (B) the sum of the aggregate outstanding
principal amount of Revolving Loans plus LOC Obligations plus Swingline Loans
shall not exceed the Revolving Committed Amount. Revolving Loans may consist of
Base Rate Loans or Eurodollar Loans, or a combination thereof, as the Borrower
may request; provided, however, that no more than 6 Eurodollar Loans which are
Revolving Loans shall be outstanding hereunder at any time (it being understood
that, for purposes hereof, Eurodollar Loans with different

 

4

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Interest Periods shall be considered as separate Eurodollar Loans, even if they
begin on the same date, although borrowings, extensions and conversions may, in
accordance with the provisions hereof, be combined at the end of existing
Interest Periods to constitute a new Eurodollar Loan with a single Interest
Period). Revolving Loans hereunder may be repaid and reborrowed in accordance
with the provisions hereof.

 

SUBPART 2.3 Amendments to Section 7.1. Section 7.1(b) of the Existing Credit
Agreement is hereby amended and restated in its entirety to read as follows:

 

7.1 Information Covenants.

 

(b) Quarterly Statements. As soon as available, and in any event within 45 days
after the close of each of the first three fiscal quarters of the Parent, (i) a
consolidated and consolidating balance sheet and income statement of the Parent
as of the end of such fiscal quarter, together with related consolidated
statements of retained earnings and cash flows for such fiscal quarter, in each
case setting forth in comparative form figures for the corresponding period of
the preceding fiscal year, all such financial information described above to be
in reasonable form and detail and reasonably acceptable to the Agent, and
accompanied by a certificate of an Executive Officer of the Borrower to the
effect that such quarterly financial statements fairly present in all material
respects the financial condition of the Parent and have been prepared in
accordance with GAAP, subject to changes resulting from audit and normal
year-end audit adjustments and the absence of footnotes (the Lenders agree that,
to the extent that the requirements of this clause (i) are contained in the
quarterly report of the Parent for such fiscal quarter on Form 10-Q as filed
with the SEC (the “Quarterly Report”), the obligations of the Credit Parties
under this clause (i) will be satisfied by delivering to the Agent, within 45
days after the end of such fiscal quarter, the Quarterly Report, with copies for
each Lender) and (ii) a disclosure statement (the “Disclosure Statement”) in
reasonable form and detail and reasonably acceptable to the Agent setting forth
the adjustments to the financial statements delivered pursuant to clause (i)
above necessary to determine the consolidated and consolidating balance sheet
and income statement and the related consolidated statements of retained
earnings and cash flows of the Consolidated Parties as of the end of such fiscal
quarter, and accompanied by a certificate of an Executive Officer of the
Borrower to the effect that such Disclosure Statement when combined with the
Quarterly Report present in all material respects the financial condition of the
Consolidated Parties and have been prepared in accordance with GAAP, subject to
changes resulting from audit and normal year-end audit adjustments and the
absence of footnotes.

 

SUBPART 2.4 Amendments to Section 7.11. Section 7.11(a) of the Existing Credit
Agreement is hereby amended and restated in its entirety to read as follows:

 

5

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7.11 Financial Covenants.

 

(a) Leverage Ratio. The Credit Parties shall not permit the Leverage Ratio as of
the last day of any fiscal quarter of the Consolidated Parties to be greater
than 1.50 to 1.00.

 

SUBPART 2.5 Replacement of Schedule 2.1(a). Schedule 2.1(a) of the Existing
Credit Agreement is hereby deleted in its entirety and a new schedule in the
form of Schedule 2.1(a) attached hereto is substituted therefor.

 

PART III

CONDITIONS TO EFFECTIVENESS

 

This Amendment shall be and become effective as of the date (the “Amendment No.
4 Effective Date”) when all of the conditions set forth in this Part III shall
have been satisfied.

 

SUBPART 3.1 Execution of Counterparts of Amendment. The Agent shall have
received counterparts of this Amendment, which collectively shall have been duly
executed on behalf of each of the Borrower, each of the Guarantors and the
Lenders.

 

SUBPART 3.2 Corporate Documents. The Agent shall have received the following:

 

(i) Resolutions. Copies of resolutions of the Board of Directors of each Credit
Party approving and adopting this Amendment, the transactions contemplated
therein and authorizing execution and delivery thereof, certified by a secretary
or assistant secretary of such Credit Party to be true and correct and in force
and effect as of the Amendment No. 4 Effective Date.

 

(ii) Good Standing. Copies of certificates of good standing, existence or its
equivalent with respect to each Credit Party certified as of a recent date by
the appropriate Governmental Authorities of the state or other jurisdiction of
incorporation.

 

(iii) Incumbency. An incumbency certificate of each Credit Party certified by a
secretary or assistant secretary to be true and correct as of the Amendment No.
4 Effective Date.

 

SUBPART 3.3 Execution of Revolving Notes. Receipt by the Agent for each
applicable Lender of a duly executed new Revolving Note.

 

SUBPART 3.4 Opinions of Counsel. The Agent shall have received a legal opinion
of (i) Paul, Weiss, Rifkind, Wharton & Garrison and (ii) a legal opinion of
special Nevada counsel for the Borrower, each in form and substance reasonably
satisfactory to the Agent.

 

6

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SUBPART 3.5 Amendment Fee. The Agent shall have received for the account of each
Lender an amendment fee equal to (a) 1.25% of the Revolving Commitment of each
such Lender (after giving effect to any such increase) that increases its
Revolving Commitment by an amount greater than or equal to $5,000,000 or (b)
0.75% of the Revolving Commitment of each such Lender (after giving effect to
any such increase) that increases its Revolving Commitment by less than
$5,000,000.

 

SUBPART 3.6 Other Items. The Agent shall have received such other documents,
agreements or information which may be reasonably requested by the Agent.

 

PART IV

MISCELLANEOUS

 

SUBPART 4.1 Construction. 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 Amended Credit Agreement.

 

SUBPART 4.2 Representations and Warranties. Each Credit Party hereby represents
and warrants that (i) each Credit Party that is party to this Amendment: (a) has
the requisite corporate power and authority to execute, deliver and perform this
Amendment, as applicable and (b) is duly authorized to, and has been authorized
by all necessary corporate action, to execute, deliver and perform this
Amendment, (ii) the representations and warranties contained in Section 6 of the
Amended Credit Agreement are true and correct in all material respects on and as
of the date hereof upon giving effect to this Amendment as though made on and as
of such date (except for those which expressly relate to an earlier date) and
(iii) no Default or Event of Default exists under the Existing Credit Agreement
on and as of the date hereof upon giving effect to this Amendment.

 

SUBPART 4.3 Acknowledgment. The Guarantors acknowledge and consent to all of the
terms and conditions of this Amendment and agree that this Amendment does not
operate to reduce or discharge the Guarantors’ obligations under the Amended
Credit Agreement or the other Credit Documents. The Guarantors further
acknowledge and agree that the Guarantors have no claims, counterclaims,
offsets, or defenses to the Credit Documents and the performance of the
Guarantors’ obligations thereunder or if the Guarantors did have any such
claims, counterclaims, offsets or defenses to the Credit Documents or any
transaction related to the Credit Documents, the same are hereby waived,
relinquished and released in consideration of the Lenders’ execution and
delivery of this Amendment.

 

SUBPART 4.4 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 4.5 Binding Effect. This Amendment, the Amended Credit Agreement and the
other Credit Documents embody the entire agreement between the parties and
supersede all prior agreements and understandings, if any, relating to the
subject matter hereof. These Credit Documents represent the final agreement
between the parties and may not be contradicted by

 

7

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evidence of prior, contemporaneous or subsequent oral agreements of the parties.
Except as expressly modified and amended in this Amendment, all the terms,
provisions and conditions of the Credit Documents shall remain unchanged and
shall continue in full force and effect.

 

SUBPART 4.6 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

SUBPART 4.7 Severability. If any provision of this Amendment is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

8

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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:

     

AMN HEALTHCARE, INC.

           

By:

 

/s/    DONALD R. MYLL         

--------------------------------------------------------------------------------

           

Name:

 

DONALD R. MYLL

           

Title:

 

CFO, CAO & Treasurer

 

PARENT:

     

AMN HEALTHCARE SERVICES, INC

           

By:

 

/s/    DONALD R. MYLL         

--------------------------------------------------------------------------------

           

Name:

 

DONALD R. MYLL

           

Title:

 

CFO, CAO & Treasurer

 

SUBSIDIARY

GUARANTORS:

     

WORLDVIEW HEALTHCARE, INC.

           

By:

 

/s/    DONALD R. MYLL         

--------------------------------------------------------------------------------

           

Name:

 

DONALD R. MYLL

           

Title:

 

CFO, CAO

 

       

O’GRADY-PEYTON INTERNATIONAL (USA), INC.

           

By:

 

/s/    DONALD R. MYLL         

--------------------------------------------------------------------------------

           

Name:

 

DONALD R. MYLL

           

Title:

 

CAO

 

       

INTERNATIONAL HEALTHCARE RECRUITERS, INC.

           

By:

 

/s/    DONALD R. MYLL         

--------------------------------------------------------------------------------

           

Name:

 

DONALD R. MYLL

           

Title:

 

CFO & Treasurer

 

[Signatures Continued]

--------------------------------------------------------------------------------

 

AGENT:

     

BANK OF AMERICA, N. A.,

in its capacity as Agent

           

By:

 

/s/    CHARLES GRABER

--------------------------------------------------------------------------------

           

Name:

 

CHARLES GRABER

           

Title:

 

Vice President

 

LENDERS:

     

BANK OF AMERICA, N. A.,

           

By:

 

/s/    ROBERT KLAWINKSKI

--------------------------------------------------------------------------------

           

Name:

 

ROBERT KLAWINSKI

           

Title:

 

Managing Director

 

[Signatures Continued]

--------------------------------------------------------------------------------

 

GENERAL ELECTRIC CAPITAL

CORPORATION

By:

 

/s/    CURTIS R. HART

--------------------------------------------------------------------------------

Name:

 

CURTES R. HART

Title:

 

Duly Authorized Signatory

 

UNION BANK OF CALIFORNIA, N.A

By:

 

/s/    DOUGLAS S. LAMBELL

--------------------------------------------------------------------------------

Name:

 

DOUGLAS S. LAMBELL

Title:

 

Vice President/SCM

--------------------------------------------------------------------------------

 

Schedule 2.1(a)

 

LENDER ADDRESSES AND COMMITMENTS

 

Operations Contact

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Credit Contact

--------------------------------------------------------------------------------

  

Revolving Commitment

--------------------------------------------------------------------------------

  

Commitment Percentage

--------------------------------------------------------------------------------

 

Bank of America

101 N. Tryon Street

15th Floor

Charlotte, NC 28255

Attn: Sam Maynard

Ph: (704) 386-9368

Fax: (704) 409-0283

  

Bank of America, N.A.

John A. Fulton

Associate

NC1-007-17-11

100 North Tryon Street

Charlotte, NC 28255

Fax: 704-388-6002

Phone: 704-386-2998

Email: john.a.fulton@bankofamerica.com

  

$

26,250,000

  

35.0000000

%

Union Bank of California, N.A.

445 South Figueroa Street

15th Floor

Los Angeles, CA 90071

Attn: Ruby Gonzales

Ph: (323) 720-7055

Fax: (323) 720-6198

  

Union Bank of California N.A.

Doug Lambell

4th Floor

530 B Street

San Diego, CA 92101

Work Email: douglas.lambell@uboc.com

Fax Phone : (619) 230-3766

Office Phone : (619) 230-3029

  

$

22,500,000

  

30.0000000

%

General Electric Capital Corporation

Lisa Labon

120 Long Ridge Rd.

Stamford, CT 06927

Fax: (312) 419-5726

Ph: (312) 419-5559

  

General Electric Capital Corporation

Care Of: GE Capital Commercial Finance

Ken A. Brown

Suite 2700

10 S. LaSalle St

Chicago, IL 60603

Work

Email: ken.brown@gecapital.com

Fax Phone : (312) 419-7711

Office Phone : (312) 419-5747

  

$

26,250,000

  

35.0000000

%

         

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

  

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

TOTAL:

       

$

75,000,000

  

100

%

         

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

  

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