EXECUTION
EXHIBIT 10.3
TWELFTH AMENDMENT AND CONSENT TO
DEBTOR-IN-POSSESSION CREDIT AGREEMENT
September 22, 2000
Reference is made to that certain Debtor-In-Possession Credit
Agreement dated as of September 13, 1999 (as heretofore amended, supplemented or
otherwise modified, the "DIP Credit Agreement"), by and among Vencor, Inc., a
Delaware corporation ("Vencor"), and Vencor Operating, Inc., a Delaware
corporation ("Vencor Opco"), each as debtor and debtor-in-possession, and each
of Vencor's subsidiaries listed on the signature pages thereof, each as debtor
and debtor-in-possession (each such subsidiary, Vencor and Vencor Opco
individually referred to herein as a "Borrower" and, collectively, on a joint
and several basis, as the "Borrowers"); the Lenders listed on the signature
pages thereof; and Xxxxxx Guaranty Trust Company of New York, as arranger,
collateral agent and administrative agent (in such capacity, "Administrative
Agent") for the Lenders, and as an issuing bank for Letters of Credit
thereunder. Capitalized terms used herein without definition herein shall have
the meanings assigned to such terms in the DIP Credit Agreement.
The Borrowers have requested that Lenders (i) extend the termination
date of the Commitments, (ii) extend the deadline for filing a plan of
reorganization acceptable to the Required Lenders in the Cases, (iii) amend
certain financial covenants, (iv) consent to the Cash Plan Supplement (as
defined below), and (v) make certain other amendments to the DIP Credit
Agreement, in each case as more fully set forth below. Accordingly, Borrowers
and the undersigned Lenders hereby agree as follows:
1. The definition of "Borrowing Base" in Section 1.01 of the DIP
Credit Agreement is hereby amended by adding at the end of the table contained
therein the additional row as follows:
October 2000 $57,843,913
2. The definition of "Stated Maturity Date" in Section 1.01 of the
DIP Credit Agreement is hereby amended by deleting the reference to "September
30, 2000" contained therein and substituting therefor "October 31, 2000".
3. Section 5.01(b) of the DIP Credit Agreement is hereby amended by
adding at the end of the table contained therein the additional row as follows:
September 2000
(preliminary
balance sheet and October 31, 2000
income statement
only)
4. Section 5.10 of the DIP Credit Agreement is hereby amended by
deleting the reference to "September 29, 2000" contained therein and
substituting therefor "October 31, 2000".
5. Section 6.01 of the DIP Credit Agreement is hereby amended by
adding at the end of the table contained therein the additional row as follows:
October 2000 $240,000,000
6. Section 6.03 of the DIP Credit Agreement is hereby amended by
adding at the end of the table contained therein the additional row as follows:
October 2000 2,500
7. Section 6.06 of the DIP Credit Agreement is hereby amended by
adding at the end of the table contained therein the additional row as follows:
October 2000 $65,000,000
8. The Borrowers have also submitted to Lenders an amendment and
supplement to the Cash Plan, attached hereto as Annex A (the "Cash Plan
-------
Supplement"), setting forth, for September 2000 and October 2000, a consolidated
cash forecast for the Borrowers. Each of the undersigned Lenders hereby (i)
acknowledges that the substance of the Cash Plan Supplement is satisfactory to
such Lender and (ii) consents to supplementing the Cash Plan with the forecast
for September 2000 and October 2000 contained in the Cash Plan Supplement.
On and after the Twelfth Amendment Effective Date (as defined below),
each reference in the DIP Credit Agreement to "this Agreement", "hereunder",
"hereof", "herein" or words of like import referring to the DIP Credit
Agreement, and each reference in the other Financing Documents to the "DIP
Credit Agreement", "thereunder", "thereof" or words of like import referring
to the DIP Credit Agreement, shall mean and be a reference to the DIP Credit
Agreement as amended by this Twelfth Amendment and Consent to Debtor-In-
Possession Credit Agreement (this "Twelfth Amendment"; the DIP Credit Agreement,
as so amended, being the "Amended Agreement").
Without limiting the generality of the provisions of Section 11.05 of
the DIP Credit Agreement, the amendments and the consent set forth in the
paragraphs above shall be limited precisely as written, and nothing in this
Twelfth Amendment shall be deemed to (a) constitute a consent to any other
supplement to the Cash Plan or any other document, transaction, occurrence,
event or condition under Section 5.01(m) of the DIP Credit Agreement or any
other term, provision or condition of the DIP Credit Agreement or any of such
other
2
Financing Documents, or (b) prejudice any right or remedy that the
Administrative Agent or any Lender may now have or may have in the future under
or in connection with the DIP Credit Agreement or any of such other Financing
Documents. Except as specifically amended by this Twelfth Amendment, the DIP
Credit Agreement and such other Financing Documents shall remain in full force
and effect and are hereby ratified and confirmed.
In order to induce Lenders to enter into this Twelfth Amendment, each
Borrower, by its execution of a counterpart of this Twelfth Amendment,
represents and warrants that (a) such Borrower has the corporate or other power
and authority and all material Governmental Approvals required to enter into
this Twelfth Amendment and to carry out the transactions contemplated by, and
perform its obligations under, the Amended Agreement, (b) the execution and
delivery of this Twelfth Amendment and the performance of the Amended Agreement
have been duly authorized by all necessary corporate or other action on the part
of such Borrower, (c) the execution and delivery by such Borrower of this
Twelfth Amendment and the performance by such Borrower of the Amended Agreement
do not and will not contravene, or constitute a default under, any Applicable
Laws (including an applicable order of the Court) or any provision of its
Organizational Documents, or of any agreement or other instrument binding upon
it or result in or require the imposition of any Liens (other than the Liens
created by the Collateral Documents) on any of its assets, (d) the execution and
delivery by such Borrower of this Twelfth Amendment and the performance by such
Borrower of the Amended Agreement do not and will not require any action by or
in respect of, or filing with, any governmental body, agency or official (except
for the Court and such as shall have been made at or before the time required
and shall be in full force and effect on and after the date when made), (e) this
Twelfth Amendment and the Amended Agreement have been duly executed and
delivered by such Borrower and constitute the valid and binding obligations of
such Borrower, enforceable in accordance with their respective terms, except as
may be limited by general principles of equity, (f) for purposes of the
Borrowing Order notice of this Twelfth Amendment has been given to and received
by counsel to the Committee (as defined in the Borrowing Order), and (g) after
giving effect to this Twelfth Amendment, no event has occurred and is continuing
or will result from the consummation of the transactions contemplated by this
Twelfth Amendment that would constitute a Default.
This Twelfth Amendment may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument. This Twelfth
Amendment shall become effective (the date of such effectiveness being the
"Twelfth Amendment Effective Date") upon the earliest date on or prior to
September 22, 2000 that (a) the Borrowers and Lenders shall have executed
counterparts of this Twelfth Amendment and the Borrowers and the Administrative
Agent shall have received written or telephonic notification of such execution
and authorization of delivery thereof; (b) the Administrative Agent shall have
received evidence satisfactory to it that all outstanding statements of
O'Melveny & Xxxxx LLP, Xxxxx Xxxx & Xxxxxxxx and Xxxxxxxx & Xxxxx that are
received by Vencor prior to 12:00 Noon (New York City time) on September 20,
2000 have been paid in full, and (c) the Court shall have approved this Twelfth
Amendment in its entirety.
THIS TWELFTH AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
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CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW
OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
[Remainder of page intentionally left blank.]
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BORROWERS:
Advanced Infusion Systems, Inc.
American X-Rays, Inc.
C.P.C. of Louisiana, Inc.
Community Behavioral Health System, Inc.
Community Psychiatric Centers of Arkansas, Inc.
Community Psychiatric Centers of California
Community Psychiatric Centers of Florida, Inc.
Community Psychiatric Centers of Idaho, Inc.
Community Psychiatric Centers of Indiana, Inc.
Community Psychiatric Centers of Kansas, Inc.
Community Psychiatric Centers of Mississippi, Inc.
Community Psychiatric Centers of Missouri, Inc.
Community Psychiatric Centers of North Carolina, Inc.
Community Psychiatric Centers of Oklahoma, Inc.
Community Psychiatric Centers of Utah, Inc.
Community Psychiatric Centers Properties Incorporated
Community Psychiatric Centers Properties of Oklahoma, Inc.
Community Psychiatric Centers Properties of Texas, Inc.
Community Psychiatric Centers Properties of Utah, Inc.
Courtland Gardens Health Center, Inc.
CPC Investment Corp.
CPC Managed Care Health Services, Inc.
CPC of Georgia, Inc.
CPC Properties of Arkansas, Inc.
CPC Properties of Illinois, Inc.
CPC Properties of Indiana, Inc.
CPC Properties of Kansas, Inc.
CPC Properties of Louisiana, Inc.
CPC Properties of Mississippi, Inc.
CPC Properties of Missouri, Inc.
CPC Properties of North Carolina, Inc.
First Rehab, Inc.
Florida Hospital Properties, Inc.
Health Care Holdings, Inc.
Health Care Technology, Inc.
Helian ASC of Northridge, Inc.
Helian Health Group, Inc.
Helian Recovery Corporation
Homestead Health Center, Inc.
Horizon Healthcare Services, Inc.
S-1
Interamericana Health Care Group
X.X. Xxxxxx Hospital, Inc.
Lafayette Health Care Center, Inc.
MedEquities, Inc.
Medisave of Tennessee, Inc.
Medisave Pharmacies, Inc.
Old Orchard Hospital, Inc.
Palo Alto Surgecenter Corporation
Peachtree-Parkwood Hospital, Inc.
PersonaCare, Inc.
PersonaCare Living Center of Clearwater, Inc.
PersonaCare of Bradenton, Inc.
PersonaCare of Clearwater, Inc.
PersonaCare of Connecticut, Inc.
PersonaCare of Georgia, Inc.
PersonaCare of Huntsville, Inc.
PersonaCare of Little Rock, Inc.
PersonaCare of Ohio, Inc.
PersonaCare of Owensboro, Inc.
PersonaCare of Pennsylvania, Inc.
PersonaCare of Pompano East, Inc.
PersonaCare of Pompano West, Inc.
PersonaCare of Reading, Inc.
PersonaCare of San Antonio, Inc.
PersonaCare of San Xxxxx, Inc.
PersonaCare of Shreveport, Inc.
PersonaCare of St. Petersburg, Inc.
PersonaCare of Warner Xxxxxxx, Inc.
PersonaCare of Wisconsin, Inc.
PersonaCare Properties, Inc.
ProData Systems, Inc.
Recovery Inns of America, Inc.
Respiratory Care Services, Inc.
Stamford Health Facilities, Inc.
THC-Chicago, Inc.
THC-Hollywood, Inc.
THC-Houston, Inc.
THC-Minneapolis, Inc.
THC-North Shore, Inc.
THC-Orange County, Inc.
THC-San Diego, Inc.
THC-Seattle, Inc.
TheraTx Healthcare Management, Inc.
TheraTx Health Services, Inc.
TheraTx Management Services, Inc.
TheraTx Medical Supplies, Inc.
S-2
TheraTx Rehabilitation Services, Inc.
TheraTx Staffing, Inc.
Transitional Hospitals Corporation, a Delaware
Corporation
Transitional Hospitals Corporation, a Nevada
Corporation
Transitional Hospitals Corporation of Indiana, Inc.
Transitional Hospitals Corporation of Louisiana, Inc.
Transitional Hospitals Corporation of Michigan, Inc.
Transitional Hospitals Corporation of Nevada, Inc.
Transitional Hospitals Corporation of New Mexico, Inc.
Transitional Hospitals Corporation of Tampa, Inc.
Transitional Hospitals Corporation of Texas, Inc.
Transitional Hospitals Corporation of Wisconsin, Inc.
Xxxxxx Nursing Center, Inc.
Xxxxxxxx Enterprises, Inc.
VC-OIA, Inc.
VC-TOHC, Inc.
XX-XX, Inc.
Vencare, Inc.
Vencare Rehab Services, Inc.
Vencor Facility Services, Inc.
Vencor Holdings, L.L.C.
Vencor Home Care Services, Inc.
Vencor Hospice, Inc.
Vencor Hospitals East, L.L.C.
Vencor Hospitals West, L.L.C.
Vencor, Inc.
Vencor Insurance Holdings, Inc.
Vencor Investment Company
Vencor Nevada, L.L.C.
Vencor Nursing Centers East, L.L.C.
Vencor Nursing Centers Central L.L.C.
Vencor Nursing Centers North, L.L.C.
Vencor Nursing Centers South, L.L.C.
Vencor Nursing Centers West, L.L.C.
Vencor Operating, Inc.
Vencor Pediatric Care, Inc.
S-3
Vencor Provider Network, Inc.
Ventech Systems, Inc.
By: Vencor Operating, Inc., as agent and attorney-in-
fact for each of the foregoing entities
By:
------------------------------------------
Name:
Title:
Stamford Health Associates, L.P.
By: Stamford Health Facilities, Inc., Its General
Partner
By:
------------------------------------------
Name:
Title:
Vencor Home Care and Hospice Indiana Partnership
By: Vencor Home Care Services, Inc., Its General
Partner
By:
------------------------------------------
Name:
Title:
By: Vencor Hospice, Inc., Its General Partner
By:
------------------------------------------
Name:
Title:
S-4
Vencor Hospitals Limited Partnership
By: Vencor Operating, Inc., Its General Partner
By:
------------------------------------------
Name:
Title:
By: Vencor Nursing Centers Limited Partnership,
Its General Partner
By: Vencor Operating, Inc., Its General
Partner
By:
-------------------------------------
Name:
Title:
Vencor Nursing Centers Central Limited
Partnership
By: Vencor Operating, Inc., Its General Partner
By:
------------------------------------------
Name:
Title:
By: Vencor Nursing Centers Limited Partnership,
Its General Partner
By: Vencor Operating, Inc., Its General
Partner
By:
-------------------------------------
Name:
Title:
S-5
Vencor Nursing Centers Limited Partnership
By: Vencor Operating, Inc., Its General Partner
By:
------------------------------------------
Name:
Title:
By: Vencor Hospitals Limited Partnership, Its
General Partner
By: Vencor Operating, Inc., Its General
Partner
By:
-------------------------------------
Name:
Title:
S-6
AGENTS AND LENDERS:
XXXXXX GUARANTY TRUST COMPANY OF NEW YORK,
as Arranger, Collateral Agent and Administrative
Agent and as a Lender
By:
-----------------------------------------------
Name:
Title:
S-7
ABLECO FINANCE LLC, as a Lender
By:
--------------------------------------------
Name:
Title:
S-8
APPALOOSA INVESTMENT LIMITED
PARTNERSHIP I, as a Lender
By:
--------------------------------------------
Name:
Title:
S-9
BANKERS TRUST COMPANY, as a Lender
By:
--------------------------------------------
Name:
Title:
S-10
CHASE SECURITIES INC., AS AGENT FOR THE
CHASE MANHATTAN BANK, as a Lender
By:
--------------------------------------------
Name:
Title:
S-11
XXXXXXX XXXXX CREDIT PARTNERS L.P., as a
Lender
By:
--------------------------------------------
Name:
Title:
S-12
XXX XXXXXX PRIME RATE INCOME TRUST, as a
Lender
By: XXX XXXXXX INVESTMENT ADVISORY
CORP.
By:
--------------------------------------
Name:
Title:
XXX XXXXXX SENIOR FLOATING RATE FUND, as a
Lender
By: XXX XXXXXX INVESTMENT ADVISORY
CORP.
By:
--------------------------------------
Name:
Title:
XXX XXXXXX SENIOR INCOME TRUST, as a Lender
By: XXX XXXXXX INVESTMENT ADVISORY
CORP.
By:
--------------------------------------
Name:
Title:
S-13
FRANKLIN MUTUAL ADVISERS LLC, as a Lender
By:
--------------------------------------
Name:
Title:
S-14
FRANKLIN FLOATING RATE TRUST, as a Lender
By:
--------------------------------------
Name:
Title:
S-15
FOOTHILL CAPITAL CORPORATION, as a Lender
By:
--------------------------------------
Name:
Title:
S-16
FOOTHILL INCOME TRUST II, L.P., as a Lender
By: FIT II GP, LLC, its general partner
By:
--------------------------------------
Name:
Title:
S-17
ACKNOWLEDGEMENT AND CONSENT OF SUBSIDIARY GUARANTOR
By its execution of a counterpart of this Twelfth Amendment, the
undersigned, as a Subsidiary Guarantor under that certain Guaranty Agreement
dated as of September 13, 1999 (the "Guaranty") for the benefit of Lenders, and
as an Original Lien Grantor under that certain Security Agreement dated as of
September 13, 1999 (the "Security Agreement") between the undersigned, the
Borrowers and Collateral Agent, as Secured Party, hereby acknowledges that it
has read this Twelfth Amendment and consents to the terms thereof and further
hereby confirms and agrees that, notwithstanding the effectiveness of this
Twelfth Amendment, the obligations of the undersigned under the Guaranty and the
Security Agreement shall not be impaired or affected and each of the Guaranty
and the Security Agreement is, and shall continue to be, in full force and
effect and is hereby confirmed and ratified in all respects.
CARIBBEAN BEHAVIORAL HEALTH
SYSTEMS, INC.
By:
--------------------------------------
Name:
Title:
S-18
Annex A
Vencor, Inc.
Cash Plan
Period: Weeks Beginning September 4, 2000 to October 30, 2000
Prepared: September 1, 2000
(in millions)
--------------------------------------------------------------------------------
CASH FLOW FORECAST: (Prepared by Company on August 15, 2000)
Week Beginning: 9/4/00 9/11/00 9/18/00 9/25/00 10/2/00 10/9/00 10/?/00 10/16/00 10/23/00
------- ------- ------- ------- -------- ------- ------- -------- --------
Projected Receipts:
Facility Receipts $ 28.8 $ 38.0 $ 39.6 $ 39.5 $ 28.6 $ 33.5 $ 41.3 $ 42.9 $ 12.7
Agency Receipts 16.1 16.1 16.3 17.5 12.8 16.3 17.0 18.5 6.4
PIP Receipts - 11.4 - 11.4 - 11.4 - 11.4 -
Misc Receipts - - - - - - - - -
------- ------- ------- ------ ------- ------- ------- ------- -------
Subtotal Receipts $ 44.9 $ 65.5 $ 55.9 $ 68.4 $ 41.4 $ 61.2 $ 58.3 $ 72.8 $ 19.1
Projected Disbursements:
Accounts Payable $ (23.3) $ (21.4) $ (24.5) $(24.5) $ (22.1) $ (22.8) $ (23.2) $ (24.0) $ (7.9)
Ventas (15.2) - - - (15.2) - - - -
Scheduled Medicare Payments - - - - - - - - -
Payroll (15.8) (19.0) (19.8) (18.2) (19.0) (19.8) (20.0) (18.2) (5.5)
Taxes (8.8) (6.5) (8.5) (7.1) (6.0) (8.9) (9.5) (8.9) (3.7)
VEBA Funding (1.1) (1.1) (1.1) (1.1) (1.1) (1.1) (1.1) (1.1) -
Vendor Deposits (7.1) (2.2) (2.0) (2.0) (4.2) - (2.1) (2.1) (2.1)
Executive Retention - - - - - - - - -
Restructuring Costs - - - (0.1) (1.0) - - - (0.1)
------- ------- ------- ------ ------- ------- ------- ------- -------
Subtotal Uses of Cash $ (71.3) $ (50.2) $ (55.9) $(53.0) $ (68.6) $ (52.6) $ (55.9) $ (54.3) $ (19.3)
------- ------- ------- ------ ------- ------- ------- ------- -------
Daily Cash Flow before Next Day
Funding Requirements $ (26.4) $ 15.3 $ - $ 15.4 $ (27.2) $ 8.6 $ 2.4 $ 18.5 $ (0.2)
Reduce (Borrow) Next Day
Funding Requirement - - - - - - - - -
------- ------- ------- ------ ------- ------- ------- ------- -------
Subtotal Net Sources
(Uses) of Cash $ (26.4) $ 15.3 $ - $ 15.4 $ (27.2) $ 8.6 $ 2.4 $ 18.5 $ (0.2)
------- ------- ------- ------ ------- ------- ------- ------- -------
Forecasted Revolver
(Borrowing) Repayment $ (26.4) $ 15.3 $ - $ 15.4 $ (27.2) $ 8.6 $ 2.4 $ 18.5 $ (0.2)
Beginning Revolver $ - $ - $ - $ - $ - $ - $ - $ - $ -
Activity - - - - - - - - -
------- ------- ------- ------ ------- ------- ------- ------- -------
Ending Revolver $ - $ - $ - $ - $ - $ - $ - $ - $ -
======= ======= ======= ====== ======= ======= ======= ======= =======
Beginning Cash $ 156.9 $ 130.5 $ 145.8 145.8 $ 161.2 $ 134.0 $ 142.6 $ 145.0 $ 163.5
Net Change in Cash (26.4) 15.3 - 15.4 (27.2) 8.6 2.4 18.5 (0.2)
------- ------- ------- ------ ------- ------- ------- ------- -------
Ending Cash $ 130.5 $ 145.8 $ 145.8 161.2 $ 134.0 $ 142.6 $ 145.0 $ 163.5 $ 163.3
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COVENANT COMPUTATION:
Cumulative Net Cash Flow $ (26.4) $ (11.1) $ (11.1) $ 4.3 $ (22.9) $ (14.3) $ (11.9) $ 6.6 $ 6.4
Permitted Variance (18.0) (18.0) (18.0) (18.0) (18.0) (18.0) (18.0) (18.0) (18.0)
------- ------- ------- ------ ------- ------- ------- ------- -------
Compliance with Cash Plan $ (44.4) $ (29.1) $ (29.1) $(13.7) $ (40.9 $ (32.3) $ (29.9) $ (11.4) $ (11.6)
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