EXHIBIT 10.1
VICAR OPERATING, INC.
FIRST AMENDMENT TO
CREDIT AND GUARANTY AGREEMENT
This FIRST AMENDMENT, dated as of February 17, 2006 (this "FIRST
AMENDMENT") is entered into by and among VICAR OPERATING, INC., a Delaware
corporation ("COMPANY"), VCA ANTECH, INC., a Delaware corporation (formerly
known as Veterinary Centers of America, Inc., "HOLDINGS"), CERTAIN SUBSIDIARIES
OF COMPANY, as Guarantors (the "GUARANTORS"), the Lenders party hereto, XXXXXXX
XXXXX CREDIT PARTNERS L.P. ("GSCP"), as Joint Lead Arranger, Joint Bookrunner
and as Sole Syndication Agent (in such capacity, "SYNDICATION Agent"), XXXXX
FARGO BANK, N.A. ("XXXXX FARGO"), as Joint Lead Arranger, Joint Bookrunner,
Administrative Agent (together with its permitted successors in such capacity,
"ADMINISTRATIVE AGENT") and as Collateral Agent (together with its permitted
successor in such capacity, "COLLATERAL AGENT"), and Union Bank of California,
N.A., as Documentation Agent ("DOCUMENTATION AGENT") and is made with respect to
that certain Credit and Guaranty Agreement, dated as of May 16, 2005 (the
"CREDIT AGREEMENT"), by and among Company, Holdings, the Guarantors, the Lenders
party thereto from time to time, GSCP, as Joint Lead Arranger, Joint Bookrunner
and as Sole Syndication Agent, and Xxxxx Fargo, as Joint Lead Arranger,
Administrative Agent and as Collateral Agent. Capitalized terms used herein not
otherwise defined herein or otherwise amended hereby shall have the meanings
ascribed thereto in the Credit Agreement.
RECITALS:
WHEREAS, Holdings and Company have requested that Requisite Lenders agree
to make certain amendments to the Credit Agreement to (i) increase the amount of
Permitted Acquisitions, (ii) increase the amount of Consolidated Capital
Expenditures, and (ii) make certain other amendments to the Credit Agreement.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
SECTION I. AMENDMENTS TO CREDIT AGREEMENT
A. AMENDMENTS TO SECTION 1: DEFINITIONS.
(a) Section 1.1 of the Credit Agreement is hereby amended by adding
thereto the following definitions in proper alphabetical order:
"FIRST AMENDMENT" means that certain First Amendment to Credit and Guaranty
Agreement dated as of February 17, 2006 by and among the Company, Holdings, the
Guarantors and the Lenders and Agents party thereto.
"FIRST AMENDMENT EFFECTIVE DATE" means the date of satisfaction of all of
the conditions set forth in Section II of the First Amendment.
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(b) Section 1.1 of the Credit Agreement is hereby further amended by
deleting the definitions of "CONSOLIDATED CAPITAL EXPENDITURES"
and "PERMITTED ACQUISITIONS" in their entirety and substituting
therefor the following:
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, the aggregate of
the expenditures of Company and its Subsidiaries during such period determined
on a consolidated basis that, in accordance with GAAP, are or should be included
in "purchase of property and equipment" or similar items reflected in the
consolidated statement of cash flows of Company and its Subsidiaries excluding,
(i) any acquisition of assets that constitutes a Permitted Acquisition and (ii)
any expenditures made by Company pursuant to Sections 2.13(a) and 2.13(b)
hereof; PROVIDED, HOWEVER, that notwithstanding any of the foregoing to the
contrary, Consolidated Capital Expenditures shall include expenditures of
Company and its Subsidiaries with respect to assets constituting a fee interest
in real property acquired by Company or its Subsidiaries other than in
connection with a Permitted Acquisition.
"PERMITTED ACQUISITION" means any acquisition by Company or any of its
Subsidiaries, whether by purchase, merger or otherwise, of (y) all or
substantially all of the assets of, or 51% or more of the Capital Stock of, or a
business line or unit or a division of, any Person or (z) any additional
portion, or all, of the Capital Stock of any Permitted Partially-Owned
Subsidiary; PROVIDED,
(i) immediately prior to, and after giving effect thereto, no
Default or Event of Default shall have occurred and be
continuing or would result therefrom;
(ii) all transactions in connection therewith shall be
consummated, in all material respects, in accordance with
all applicable laws and in conformity with all applicable
Governmental Authorizations;
(iii) in the case of the acquisition of Capital Stock, (i) at
least 51% of the Capital Stock (except for any such
Securities in the nature of directors' qualifying shares
required pursuant to applicable law) acquired or otherwise
issued by such Person or any newly formed Subsidiary of
Company in connection with such acquisition shall be owned
by Company or a Guarantor Subsidiary thereof, (ii) in the
case of acquisitions where Company owns more than 51% but
less than 100% of such Subsidiary, Company shall designate
such Subsidiary as a Permitted Partially-Owned Subsidiary,
and (iii) except in the case of a Permitted Partially-Owned
Subsidiary, Company shall have taken, or caused to be taken,
as of the date such Person becomes a Subsidiary of Company,
each of the actions set forth in Sections 5.10 and/or 5.11,
as applicable;
(iv) Any Person or assets so acquired shall be located
exclusively in the United States or Canada;
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(v) Holdings and its Subsidiaries shall be in compliance with
the financial covenants set forth in Section 6.8 on a pro
forma basis after giving effect to such acquisition as of
the last day of the Fiscal Quarter most recently ended (as
determined in accordance with Section 6.8(f));
(vi) Company shall have delivered to Administrative Agent (A) at
least five Business Days prior to such proposed acquisition,
a Compliance Certificate evidencing compliance with Section
6.8 as required under clause (v) above, together with all
relevant financial information with respect to such acquired
assets, including, without limitation, the aggregate
consideration for such acquisition and any other information
required to demonstrate compliance with Section 6.8;
PROVIDED, HOWEVER, that Company shall not be required to
comply with the provisions of this clause (vi) with respect
to acquisitions unless the consideration of such acquisition
is greater than $10,000,000;
(vii) any Person or assets or division as acquired in accordance
herewith shall be in a business or lines of business the
same as, related, complementary or ancillary to, the
business or lines of business in which Company and/or its
Subsidiaries are engaged as of the Closing Date; and
(viii) notwithstanding any of the foregoing to the contrary,
"Permitted Acquisition" shall include any acquisition of any
assets constituting a fee interest in real property in
connection with such Permitted Acquisition; PROVIDED that an
acquisition of a fee interest in real property "in
connection with" a Permitted Acquisition shall include a fee
interest in real property acquired subsequent to the closing
date of such Permitted Acquisition so long as the Company or
its Subsidiary is obligated as of the closing date of such
Permitted Acquisition to purchase the fee interest on a date
certain within one year of the closing date of such
Permitted Acquisition.
B. AMENDMENTS TO SECTION 5.
Section 5.11 of the Credit Agreement is hereby amended by adding the
following sentence at the end of the section:
"Notwithstanding anything herein to the contrary, in the event the any
Credit Party acquires a Real Estate Asset with a value in excess of $1,500,000,
such Credit Party shall take all such actions as are necessary to deliver to the
Collateral Agent, for the benefit of the Secured Parties, an enforceability
opinion relating to the form of Mortgage to be recorded in such state and such
other matters as Collateral Agent may reasonably request, in each case in form
and substance reasonably satisfactory to Collateral Agent."
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C. AMENDMENTS TO SECTION 6.
(a) Section 6.8 of the Credit Agreement is hereby amended by deleting
subsection (e) in its entirety and replacing it with the
following:
"(e) MAXIMUM CONSOLIDATED CAPITAL EXPENDITURES. Holdings shall
not, and shall not permit its Subsidiaries to, make or incur
Consolidated Capital Expenditures (i) in an aggregate amount
in excess of $40,000,000 for Holdings and its Subsidiaries
in Fiscal Year 2005 and (ii) in any Fiscal Year beginning
with the Fiscal Year 2006, in an aggregate amount for
Holdings and its Subsidiaries in excess of $65,000,000 in
any Fiscal Year; PROVIDED, that 50% of any unutilized amount
for any Fiscal Year may be utilized in the next succeeding
Fiscal Year, but in no event shall any amount from any
Fiscal Year prior to the immediately preceding Fiscal Year
be utilized in the calculations of the foregoing;"
(b) Section 6.9 of the Credit Agreement is hereby amended by deleting
subsection (h) in its entirety and replacing it with the
following:
"(h) Permitted Acquisitions, the consideration for which
constitutes (i) $110,000,000 or less in the aggregate during
the period from the Closing Date through the end of Fiscal
Year 2005 or (ii) $75,000,000 or less in the aggregate in
any Fiscal Year thereafter; PROVIDED, that $20,000,000 of
any unutilized amount for any Fiscal Year may be utilized in
the next immediately succeeding Fiscal Year (but not in any
Fiscal Years thereafter); PROVIDED, FURTHER, however, that
with respect to any acquisition the consideration of which
is greater than $25,000,000, Company shall not make such
acquisition without the prior consent of Administrative
Agent and Syndication Agent, such consent not to be
unreasonably withheld; PROVIDED, FURTHER, HOWEVER, that with
respect to any Permitted Acquisitions made in Canada, such
Permitted Acquisitions shall not exceed $35,000,000 in the
aggregate. In addition, with respect to Permitted
Acquisitions of any additional portion or all of the Capital
Stock in any of the Permitted Partially-Owned Subsidiaries
the consideration shall not exceed $7,500,000 in the
aggregate in any Fiscal Year; PROVIDED, that all Permitted
Acquisitions of any additional portion or all of the Capital
Stock in any of the Permitted Partially-Owned Subsidiaries
shall reduce the $75,000,000 amount set forth above on a
dollar for dollar basis;"
SECTION II. CONDITIONS PRECEDENT TO EFFECTIVENESS
The effectiveness of the amendments set forth at Section I hereof is
subject to the satisfaction, or waiver, of the following conditions on or before
the date hereof (the "First Amendment Effective Date"):
(a) Company, Holdings and Requisite Lenders shall have indicated
their consent by the execution and delivery of the signature
pages hereof to the Administrative Agent.
(b) Company shall have paid all fees and other amounts due and
payable on or prior to the First Amendment Effective Date,
including, to the extent invoiced, reimbursement or other payment
of all out-of-pocket expenses required to be reimbursed or paid
by the Company hereunder or under any other Credit Document.
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(c) Administrative Agent and Lenders shall have received such other
documents and information regarding Credit Parties and the Credit
Agreement as Administrative Agents or Lenders may reasonably
request.
SECTION III. REPRESENTATIONS AND WARRANTIES
A. CORPORATE POWER AND AUTHORITY. Each Credit Party has all requisite
corporate power and authority to enter into this First Amendment and
to carry out the transactions contemplated by, and perform its
obligations under the Credit Agreement and the other Credit Documents.
B. AUTHORIZATION OF AGREEMENTS. The execution and delivery of this First
Amendment and the performance of the Credit Agreement and the other
Credit Documents have been duly authorized by all necessary corporate
or partnership (as applicable) action on the part of each Credit
Party.
C. NO CONFLICT. The execution and delivery by each Credit Party of this
First Amendment and the performance by each Credit Party of the Credit
Agreement and the other Credit Documents do not (i) violate (A) any
provision of any law, statute, rule or regulation, or of the
certificate or articles of incorporation or partnership agreement,
other constitutive documents or by-laws of each Credit Party or any of
its Subsidiaries except to the extent such violation could not
reasonably be expected to have a Material Adverse Effect, (B) any
applicable order of any court or any rule, regulation or order of any
Governmental Authority except to the extent such violation could not
reasonably be expected to have a Material Adverse Effect or (C) any
provision of any indenture, certificate of designation for preferred
stock, agreement or other instrument to which each Credit Party or any
of its Subsidiaries is a party or by which any of them or any of their
property is or may be bound except to the extent such violation could
not reasonably be expected to have a Material Adverse Effect, (ii) be
in conflict with, result in a breach of or constitute (alone or with
notice or lapse of time or both) a default under any such indenture,
certificate of designation for preferred stock, agreement or other
instrument, where any such conflict, violation, breach or default
referred to in clause (i) or (ii) of this Section III.C., individually
or in the aggregate could reasonably be expected to have a Material
Adverse Effect, (iii) result in or require the creation or imposition
of any Lien upon any of the properties or assets of each Credit Party
(other than any Liens created under any of the Credit Documents in
favor of Collateral Agent on behalf of Lenders), or (iv) require any
approval of stockholders or partners or any approval or consent of any
Person under any contractual obligation of each Credit Party, except
for such approvals or consents which will be obtained on or before the
First Amendment Effective Date.
D. GOVERNMENTAL CONSENTS. No action, consent or approval of, registration
or filing with or any other action by any Governmental Authority is
required in connection with the execution and delivery by each Credit
Party of this First Amendment and the performance by each Credit Party
of the Credit Agreement and the other Credit Documents, except for
such actions, consents and approvals the failure to obtain or make
which could not reasonably be expected to result in a Material Adverse
Effect or which have been obtained and are in full force and effect.
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E. BINDING OBLIGATION. This First Amendment and the Credit Agreement have
been duly executed and delivered by each Credit Party and each
constitutes a legal, valid and binding obligation of each Credit Party
enforceable against each Credit Party in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
moratorium, reorganization or other similar laws affecting creditors'
rights generally and except as enforceability may be limited by
general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
F. INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM CREDIT AGREEMENT.
The representations and warranties contained in Section 4 of the
Credit Agreement are and will be true, correct and complete in all
material respects on and as of the First Amendment Effective Date to
the same extent as though made on and as of that date, except to the
extent such representations and warranties specifically relate to an
earlier date, in which case they were true, correct and complete in
all material respects on and as of such earlier date.
G. ABSENCE OF DEFAULT. No event has occurred and is continuing or will
result from the consummation of the transactions contemplated by this
First Amendment that would constitute an Event of Default or a
Default.
SECTION IV. ACKNOWLEDGMENT AND CONSENT
Each of Holdings and each Domestic Subsidiary of Holdings (other than
Company and certain Permitted Partially-Owned Subsidiaries) has (i) guaranteed
the Obligations and (ii) created Liens in favor of Lenders on certain Collateral
to secure its obligations under the Credit Agreement and the Collateral
Documents subject to the terms and provisions of the Credit Agreement. Each of
Holdings and each Domestic Subsidiary of Holdings who has guaranteed the
Obligations together with the Company are collectively referred to herein as the
"CREDIT SUPPORT PARTIES", and the Credit Agreement and the Collateral Documents
are collectively referred to herein as the "CREDIT SUPPORT DOCUMENTS".
Each Credit Support Party hereby acknowledges that it has reviewed the
terms and provisions of the Credit Agreement and this First Amendment and
consents to the amendment of the Credit Agreement effected pursuant to this
First Amendment. Each Credit Support Party hereby confirms that each Credit
Support Document to which it is a party or otherwise bound and all Collateral
encumbered thereby will continue to guarantee or secure, as the case may be, to
the fullest extent possible in accordance with the Credit Support Documents the
payment and performance of all "Obligations" under each of the Credit Support
Documents, as the case may be (in each case as such terms are defined in the
applicable Credit Support Document), including without limitation the payment
and performance of all such "Obligations" under each of the Credit Support
Documents, as the case may be, in respect of the Obligations of the Company now
or hereafter existing under or in respect of the Credit Agreement and hereby
pledges and assigns to the Collateral Agent, and grants to the Collateral Agent
a continuing lien on and security interest in and to all Collateral as
collateral security for the prompt payment and performance in full when due of
the "Obligations" under each of the Credit Support Documents to which it is a
party (whether at stated maturity, by acceleration or otherwise).
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Each Credit Support Party acknowledges and agrees that any of the Credit
Support Documents to which it is a party or otherwise bound shall continue in
full force and effect and that all of its obligations thereunder shall be valid
and enforceable and shall not be impaired or limited by the execution or
effectiveness of this First Amendment. Each Credit Support Party represents and
warrants that all representations and warranties contained in the Credit
Agreement, this First Amendment and the Credit Support Documents to which it is
a party or otherwise bound are true, correct and complete in all material
respects on and as of the First Amendment Effective Date to the same extent as
though made on and as of that date, except to the extent such representations
and warranties specifically relate to an earlier date, in which case they were
true, correct and complete in all material respects on and as of such earlier
date.
Each Credit Support Party acknowledges and agrees that (i) notwithstanding
the conditions to effectiveness set forth in this First Amendment, such Credit
Support Party is not required by the terms of the Credit Agreement or any other
Credit Document to consent to the amendments to the Credit Agreement effected
pursuant to this First Amendment and (ii) nothing in the Credit Agreement, this
First Amendment or any other Credit Document shall be deemed to require the
consent of such Credit Support Party to any future amendments to the Credit
Agreement.
SECTION V. MISCELLANEOUS
A. BINDING EFFECT. This First Amendment shall be binding upon the parties
hereto and their respective successors and assigns and shall inure to
the benefit of the parties hereto and the successors and assigns of
Lenders. No Credit Party's rights or obligations hereunder or any
interest therein may be assigned or delegated by any Credit Party
without the prior written consent of all Lenders.
B. SEVERABILITY. In case any provision in or obligation hereunder shall
be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
C. REFERENCE TO CREDIT AGREEMENT. On and after the First Amendment
Effective Date, each reference in the Credit Agreement to "this
Agreement", "hereunder", "hereof", "herein" or words of like import
referring to the Credit Agreement, and each reference in the other
Credit Documents to the "Credit Agreement", "thereunder", "thereof" or
words of like import referring to the Credit Agreement shall mean and
be a reference to the Credit Agreement as amended by this First
Amendment.
D. EFFECT ON CREDIT AGREEMENT. Except as specifically amended by this
First Amendment, the Credit Agreement and the other Credit Documents
shall remain in full force and effect and are hereby ratified and
confirmed.
E. EXECUTION. The execution, delivery and performance of this First
Amendment shall not, except as expressly provided herein, constitute a
waiver of any provision of, or operate as a waiver of any right, power
or remedy of any Agent or Lender under, the Credit Agreement or any of
the other Credit Documents.
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F. HEADINGS. Section headings herein are included herein for convenience
of reference only and shall not constitute a part hereof for any other
purpose or be given any substantive effect.
G. APPLICABLE LAW. THIS FIRST AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
H. COUNTERPARTS. This First Amendment may be executed in any number of
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. As set forth herein, this
First Amendment shall become effective upon the execution of a
counterpart hereof by each of the parties hereto and receipt by
Company, Holdings and Administrative Agent and Syndication Agent of
written or telephonic notification of such execution and authorization
of delivery thereof.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
COMPANY: VICAR OPERATING, INC.
By:
----------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chief Executive Officer
and President
By:
----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Financial office and
Assistant Secretary
HOLDINGS: VCA ANTECH, INC.
By:
----------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chief Executive Officer
and President
By:
----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Financial office and
Assistant Secretary
GUARANTORS:
ALBANY VETERINARY CLINIC
ANIMAL CARE CENTER AT MILL RUN, INC.
ANIMAL CARE CENTERS OF AMERICA, INC.
XXXXXX PETCARE CENTER, INC.
ASSOCIATES IN PET CARE, INC.
DIAGNOSTIC VETERINARY SERVICE, INC.
EAST MILL PLAIN ANIMAL HOSPITAL, INC.
EDGEBROOK, INC.
FLORIDA VETERINARY LABORATORIES, INC.
INDIANA VETERINARY DIAGNOSTIC LAB, INC.
XXXXXXXXX VETERINARY CLINIC, INC.
NATIONAL PETCARE CENTERS, INC.
PET'S CHOICE, INC.
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PETS' RX, INC.
PRESTON PARK ANIMAL HOSPITAL, INC.
SOUND TECHNOLOGIES, INC.
SOUTH COUNTY VETERINARY CLINIC, INC.
THE PET PRACTICE OF MICHIGAN, INC.
TOMS RIVER VETERINARY HOSPITAL, P.A.
VCA - XXXXX, INC.
VCA ALABAMA, INC.
VCA ALBANY ANIMAL HOSPITAL, INC.
VCA ALL PETS ANIMAL COMPLEX, INC.
VCA ANIMAL HOSPITALS, INC.
VCA CENTERS-TEXAS, INC.
VCA CENVET, INC.
VCA CLARMAR ANIMAL HOSPITAL, INC.
VCA CLINICAL VETERINARY LABS, INC.
VCA CLINIPATH LABS, INC.
VCA CLOSTER, INC.
VCA DOVER ANIMAL HOSPITAL, INC.
VCA KANEOHE ANIMAL HOSPITAL, INC.
VCA XXXXXX-XXXXXXXXX #152
VCA MISSOURI, INC.
VCA NORTHWEST VETERINARY DIAGNOSTICS, INC.
VCA OF NEW YORK, INC.
VCA PROFESSIONAL ANIMAL LABORATORY, INC.
VCA REAL PROPERTY ACQUISITION CORPORATION
VCA TEXAS HOLDINGS, INC.
VCA TEXAS MANAGEMENT, INC.
WEST LOS ANGELES VETERINARY MEDICAL GROUP, INC.
By:
----------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chief Executive Officer
and President
By:
----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Financial office and
Assistant Secretary
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VETERINARY CENTERS OF AMERICA-TEXAS, L.P.
By: VCA Centers-Texas, Inc., General Partner
By:
--------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chief Executive Officer
and President
By:
--------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Financial office and
Assistant Secretary
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SOLE SYNDICATION AGENT,
JOINT LEAD ARRANGER, JOINT
BOOKRUNNER AND A LENDER: XXXXXXX XXXXX CREDIT PARTNERS L.P.,
By: /s/ Xxxxx Xxxxxxx
-------------------------------
Authorized Signatory
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ADMINISTRATIVE AGENT,
COLLATERAL AGENT, JOINT
LEAD ARRANGER, JOINT
BOOKRUNNER AND A LENDER: XXXXX FARGO BANK, N.A.
By: /s/ S. Xxxxxxx St. Geme
------------------------------
Name: S. Xxxxxxx St. Geme
Title: Vice President
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