Exhibit 10.1
AMENDMENT NO. 4
THIS AMENDMENT NO. 4 dated as of June 28, 2002 (this "Amendment") to the
Credit Agreement referenced below is by and among TRIAD HOSPITALS, INC., a
Delaware corporation (the "Borrower"), and Bank of America, N.A., as
Administrative Agent on behalf of itself and the Lenders.
W I T N E S S E T H
WHEREAS, a $1.2 billion credit facility was established in favor of the
Borrower pursuant to the terms of that Amended and Restated Credit Agreement
dated as of April 27, 200l (as amended and modified from time to time, the
"Credit Agreement") among the Borrower, the lenders identified therein, Xxxxxxx
Xxxxx & Co., as Syndication Agent, The Chase Manhattan Bank and Citicorp USA,
Inc., as Co-Documentation Agents, and Bank of America, N.A., as Administrative
Agent;
WHEREAS, the Borrower has requested certain modifications to the Credit
Agreement; and
WHEREAS, the Lenders have agreed to the requested modifications on the
terms and conditions set forth herein and have directed the Administrative Agent
to enter into this Amendment for and on their behalf;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Defined Terms. Capitalized terms used herein but not otherwise defined
herein shall have the meanings provided to such terms in the Credit Agreement.
2. Amendments. The Credit Agreement is amended in the following respects:
2.1 In Section 1.1, the following definitions are amended in their
entirety to read as follows:
"Debt Transaction" means, with respect to any member of the
Consolidated Group, any issuance of Subordinated Debt in accordance
with Section 9.1(i) not constituting a refinancing in accordance with
Section 9.8(d).
"Pro Forma Compliance Certificate" means a certificate of an Executive
Officer of the Borrower delivered to the Administrative Agent in
connection with (i) any incurrence of Subordinated Debt permitted
under Section 9.1 or Section 9.8, (ii) any Asset Disposition (other
than the Approved Asset Dispositions or the QHR Disposition) permitted
under Section 9.5 if the aggregate net book value of the assets sold,
leased or otherwise disposed of in any Asset Disposition exceeds $5
million or (iii) any Acquisition permitted under Section 9.4 if the
aggregate consideration (including cash consideration and the fair
value of any non-cash consideration and indebtedness assumed) therefor
exceeds $5 million, as applicable, and containing reasonably detailed
calculations, upon giving effect to the applicable transaction on a
Pro Forma Basis, of the Consolidated Fixed Charge Coverage Ratio, the
Consolidated Total Leverage Ratio, the Consolidated Senior Leverage
Ratio and Consolidated Net Worth as of the most recent fiscal quarter
end preceding the date of the applicable transaction with respect to
which the Administrative Agent shall have received the Required
Financial Information.
"Revolving Loan" shall have the meaning assigned to such term in
Section 2.1(a) and, for purposes of Section 3.3(c), shall include
any additional tranches of Revolving Loans permitted pursuant to
Section 9.1(a).
"Subordinated Debt" means (i) the Senior Subordinated Notes and
(ii) any other Indebtedness of a member of the Consolidated Group
which by its terms is expressly subordinated in right of payment
to the prior payment of the loans and obligations under the
Credit Agreement and the other Credit Documents on the terms and
conditions and evidenced by documentation satisfactory to the
Administrative Agent.
"Term Loans" means the Tranche A Term Loan, the Tranche B Term
Loan and, for purposes of Section 3.3(c), any additional tranches
of Term Loans permitted pursuant to Section 9.1(a).
2.2 In Section 1.1 clause (iii) the definition of "Excluded Property"
is amended to read as follows:
(iii) which has a fair market value of less than $15 million.
2.3 In Section 1.1, clauses (iv) and (vii) of the definition of
"Permitted Acquisitions" are amended, respectively, to read as follows:
(iv) if the aggregate consideration (including cash
consideration and the fair value of any non-cash consideration
and indebtedness assumed) for such Acquisition exceeds $5
million, the Borrower shall have delivered to the Administrative
Agent a Pro Forma Compliance Certificate demonstrating that, upon
giving effect to such Acquisition on a Pro Forma Basis, the
Borrower shall be in compliance with all of the covenants set
forth in Section 8.11;
(vii) if after giving effect to such Acquisition the Consolidated
Total Leverage Ratio will be greater than 3.25:1.0 on a Pro
Forma Basis, the aggregate consideration (including cash
consideration and the fair value of any non-cash consideration
and indebtedness assumed) paid in connection with all
Acquisitions in any fiscal year shall not exceed an amount equal
to the sum of (A) $100 million, plus (B) the portion of Net
Proceeds from Asset Dispositions not required as a mandatory
prepayment under Section 3.3(b)(ii) up to $50 million (to the
extent not used in connection with a previous Permitted
Acquisition), plus (C) the portion of Net Proceeds from Debt
Transactions not required as a mandatory prepayment on the Loans
hereunder under Section 3.3(b)(iii) (to the extent not used in
connection with a previous Permitted Acquisition or the
prepayment, redemption, defeasance or acquisition of Indebtedness
permitted under Section 9.8(d)), plus (D) the portion of Net
Proceeds from Equity Transactions not required as a mandatory
prepayment on the Loans hereunder under Section 3.3(b)(iv) (to
the extent not used in connection with a previous Permitted
Acquisition, Capital Expenditures permitted under Section 8.11(f)
or the prepayment, redemption, defeasance or acquisition of
Indebtedness permitted under Section 9.8(d)), minus (E) the
amount expended pursuant to clause (xi) of the definition of
Permitted Investments in the twelve (12) months preceding any
such Acquisition); provided, however, with respect to any
Acquisition, if the Consolidated Total Leverage Ratio as of the
end of the immediately preceding fiscal quarter determined on a
Pro Forma Basis giving effect to such Acquisition (and any other
Acquisition consummated after the end of the immediately
preceding fiscal quarter) is
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less than or equal to 3.25:1.0, then such Acquisition shall not
be included in any calculation of the limitations set forth in
this clause (vii);
2.4 In Section 1.1 in the definition of "Permitted Investments",
clause (xvii) is renumbered as (xviii), a new clause (xvii) is added and
clauses (vi), (xvi) and (xviii) are amended, respectively, to read as follows:
(vi) advances or loans to customers and suppliers in the
ordinary course of business that do not exceed $25 million at any
time outstanding;
(xvi) Investments by members of the Consolidated Group (other
than Exempt Subsidiaries) made in any Exempt Subsidiary after the
date it is designated as an Exempt Subsidiary provided that on
the date such Investment is made (and after giving effect to such
Investment), the aggregate assets of all Exempt Subsidiaries do
not exceed twenty percent (20%) of the consolidated assets of the
Consolidated Group;
(xvii) deposits made by members of the Consolidated Group in
connection with self-retention or self-insurance of general
liability, medical malpractice, professional liability, property
or workers' compensation liability which are required by
providers of general liability, medical malpractice, professional
liability, property or workers' compensation insurance to members
of the Consolidated Group; and
(xviii) Investments of a nature not contemplated in the foregoing
subsections in an amount not to exceed at any time three percent
(3%) of the consolidated assets of the Consolidated Group at such
time.
2.5 In Section 1.1, in the definition of "Permitted Liens" clauses
(xvii) and (xviii) are renumbered as clauses (xix) and (xx), clause (vi) is
amended as hereafter provided, and new clauses (xvii) and (xviii) are added to
read as follows:
(vi) Liens incurred or deposits made by any member of the
Consolidated Group in connection with any self-retention or
self-insurance of general liability, medical malpractice,
professional liability, property or workers' compensation
liability by such members of the Consolidated Group with respect
to general liability, medical malpractice, professional
liability, property or workers' compensation which are required
by providers of general liability, medical malpractice,
professional liability, property or workers' compensation
insurance to the members of the Consolidated Group;
(xvii) Liens securing Indebtedness permitted under Section
9.1(h), provided that such Liens cover specific Property of the
Credit Parties and are not blanket Liens;
(xviii) Liens securing obligations not otherwise permitted by the
foregoing clauses, provided that (A) the aggregate amount of
obligations secured by such Liens shall not exceed $10 million
and (B) such Liens cover specific Property of the Credit Parties
and are not blanket Liens;
2.6 In Section 1.1, the second sentence of the definition of "Pro
Forma Basis" is amended to read as follows:
As used herein, "transaction" shall mean (i) any merger or
consolidation permitted under Section 9.4, (ii) any Asset
Disposition permitted under Section 9.5, (iii) any Acquisition
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permitted under the definition of "Permitted Acquisition",
(iv) any merger, consolidation, Asset Disposition or
Acquisition occurring in any applicable period prior to the
Closing Date, (v) any Debt Transaction and (vi) any Equity
Transaction.
2.7 In Section 1.1, the definition of "Pro Forma Basis" is amended
to delete the "and" at the end of clause (A) thereof, to replace the "." at the
end of clause (B) thereof with "; and" and to add a new clause (C) thereto to
read as follows:
(C) for purposes of any such calculation in respect of any
such Debt Transaction or Equity Transaction, any Indebtedness
retired concurrent with the consummation of such Debt
Transaction or Equity Transaction shall be excluded and deemed
to have been retired as of the first day of the applicable
period.
2.8 In the second paragraph of Section 1.3, the "and" at the end
of clause (i) thereof is replaced with "," and the "." at the end of clause (ii)
thereof is replaced with the following:
and (iii) in connection with any Debt Transaction or Equity
Transaction, any Indebtedness retired concurrent with the
consummation of such Debt Transaction or Equity Transaction
shall be excluded and deemed to have been retired as of the
first day of the applicable period.
2.9 The LOC Committed Amount as referenced and defined in Section
2.1(b) is increased from $50 million to $100 million.
2.10 The Swingline Committed Amount as referenced and defined in
Section 2.1(c) is increased from $20 million to $30 million.
2.11 In Section 2.2(a)(iii) the reference to "11:00 A.M.
(Charlotte, North Carolina time)" is amended to read "12:00 Noon (Charlotte,
North Carolina time)".
2.12 In Section 3.3(b), clauses (iii) and (iv) thereof are amended,
respectively, to read as follows:
(iii) Debt Transactions. In connection with any Debt
Transaction, to the extent the aggregate Net Proceeds from all
Debt Transactions consummated after the date of the Fourth
Amendment to Credit Agreement exceed $100 million, the Loans
shall be prepaid as hereafter provided in an amount equal to
the percentage shown below of such Net Proceeds in excess of
$100 million based on the Consolidated Total Leverage Ratio
after giving effect to such Debt Transaction and the
application of proceeds in connection therewith on a Pro Forma
Basis:
Percentage of Net Proceeds in
Consolidated Total excess of $100 million
Leverage Ratio to be applied as Prepayment
****4.0:l.0 100%
****3.5:l.0 but *4.0:l.0 75%
*3.5:l.0 50%
(iv) Equity Transactions. In connection with any Equity
Transaction, the Loans shall be prepaid as hereafter provided
in an amount equal to the percentage shown below of
**** greater than or equal to sign
* less than sign
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Net Proceeds therefrom based on the Consolidated Total
Leverage Ratio after giving effect to such Equity Transaction
and the application of proceeds in connection therewith on a
Pro Forma Basis:
Consolidated Total Percentage of Net Proceeds
Leverage Ratio to be applied as Prepayment
***3.0:1.0 50%
****3.0:1.0 25%
2.13 Section 3.3(c) is hereby amended to delete all references to
"the Tranche A Term Loan and the Tranche B Term Loan" therein, and replace "the
Term Loans" therefor.
2.14 Clauses (c) and (e) of Section 8.1 are amended to read as
follows:
(c) [Reserved].
(e) Annual Business Plan and Budgets. By the 15th day of the
first month of each fiscal year of the Borrower, an annual
business plan and budget of the members of the Consolidated
Group containing, among other things, pro forma financial
statements for the coming fiscal year.
2.15 Clause (f) of Section 8.11 is amended to read as follows:
(f) Capital Expenditures. Consolidated Capital Expenditures
for each fiscal year shall not exceed an amount equal to the
sum of (i) $375 million plus (ii) the unused amount available
for Consolidated Capital Expenditures under this Section
8.11 for the immediately preceding fiscal year (excluding
any carry forward available from any prior fiscal year),
plus (iii) the amount of any Net Proceeds from Asset
Dispositions permitted to be retained by the Borrower
pursuant to Section 3.3(b)(ii)(B) to the extent that the
Borrower applies such amount to Consolidated Capital
Expenditures within twelve (12) months of the date of such
Approved Asset Disposition, plus (iv) the amount of any Net
Proceeds from Equity Transactions permitted to be retained
by the Borrower pursuant to Section 3.3(b)(iv) (to the
extent not used in connection with any Permitted Acquisition
or the prepayment, redemption, defeasance or acquisition of
Indebtedness permitted under Section 9.8(d)), plus (v) the
amount of any Consolidated Capital Expenditures which
constitute Permitted Acquisitions hereunder.
2.16 In the proviso at the end of Section 8.12, the reference to
"16% of the consolidated assets of the Consolidated Group" is hereby amended to
read "twenty percent (20%) of the consolidated assets of the Consolidated
Group".
2.17 The second sentence in the second paragraph of Section 8.13 is
amended in its entirety to read as follows:
Each Credit Party shall, and shall cause each of its
Subsidiaries to, take such action (including but not limited
to the actions set forth in Section 5.1(r)) at its own expense
as requested by the Administrative Agent to ensure that the
Administrative Agent has a first priority perfected Lien to
secure such party's obligations under the Credit Documents in
that portion of the collateral that is required to be pledged
pursuant to this Section 8.13, subject in each case only to
Permitted Liens.
______________
*** greater than sign
**** less than or equal to sign
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2.18 In Section 9.1, clauses (a) and (g) are amended to read as
follows, clauses (h) and (i) are renumbered as clauses (l) and (m) and new
clauses (h), (i), (j) and (k) are added, to read as follows:
(a) Indebtedness existing or arising under this Credit Agreement
or the other Credit Documents, including establishment of
additional tranches of Indebtedness under the Credit Agreement
(the specific terms and mechanics of which would be the subject
of a separate amendment to this Credit Agreement), provided that
in the case of establishment of any such additional tranche the
Borrower shall have delivered to the Administrative Agent a Pro
Forma Compliance Certificate demonstrating that, upon giving
effect to such additional Indebtedness (assuming, in the case of
a delayed draw term loan or revolving loan facility or similar
facility, that the entire amount available under such tranche is
advanced on date established) on a Pro Forma Basis, the Borrower
shall be in compliance with all of the covenants set forth in
Section 8.11;
(g) the Senior Notes in an aggregate principal amount up to
$700.0 million and other unsecured Funded Debt in an aggregate
outstanding principal amount of up to $25 million at any time;
(h) other secured Funded Debt in an aggregate principal amount of
up to $25 million at any time;
(i) Subordinated Debt, provided that (i) the Borrower shall have
delivered to the Administrative Agent a Pro Forma Compliance
Certificate demonstrating that, upon giving effect to such
Subordinated Debt on a Pro Forma Basis, the Borrower shall be in
compliance with all of the covenants set forth in Section 8.11,
(ii) the aggregate principal amount of such Subordinated Debt
shall not exceed an amount equal to the sum of (A) $300 million
plus (B) if the Consolidated Total Leverage Ratio is less than
3.25:1.0 as of the end of the immediately preceding fiscal
quarter, the amount of Subordinated Debt that would cause the
Consolidated Total Leverage Ratio to be equal to 3.25:1.0 as of
the end of the immediately preceding fiscal quarter determined on
a Pro Forma Basis after giving effect to such Subordinated Debt
(and any other Subordinated Debt consummated after the end of the
immediately preceding fiscal quarter), and (iii) the Borrower
shall prepay the Loans with the Net Proceeds of such Subordinated
Debt to the extent required under Section 3.3(b)(iii);
(j) Subordinated Debt that refinances other Subordinated Debt to
the extent permitted under Section 9.8(d); and
(k) guaranty obligations in respect of patient receivables sold,
assigned, turned over, conveyed or otherwise disposed of to
collection agencies or other third parties, provided that the
aggregate amount of the obligations guarantied shall not exceed
$25 million at any time outstanding.
2.19 In Section 9.5(iv), clause (F) thereof is deleted in its
entirety, the word "and" is added immediately before clause (E) thereof and
clause (E) thereof is amended to read as follows:
(E) if the net book value of the assets sold, leased or otherwise
disposed of in any Asset Disposition exceeds $5 million, the
Borrower shall have demonstrated compliance with the financial
covenants hereunder on a Pro Forma Basis after giving effect to
the disposition and shall have delivered to the Administrative
Agent a Pro Forma
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Compliance Certificate (including reaffirmation of the
representations and warranties hereunder as of such date
before and after giving effect to such transaction) in
connection therewith.
2.20 In clause (d) of Section 9.8, the proviso at the end thereof
is amended to read as follows:
provided, however, that the Borrower may refinance
Subordinated Debt with Subordinated Debt that has terms that
are not materially less favorable to the Borrower and its
Subsidiaries and has a weighted average maturity that is
greater than that of the Subordinated Debt being refinanced
so long as the Borrower shall have delivered to the
Administrative Agent a Pro Forma Compliance Certificate
demonstrating that, upon giving effect to such refinancing
on a Pro Forma Basis, the Borrower shall be in compliance
with all of the covenants set forth in Section 8.11;
provided, further, that to the extent any Net Proceeds
received from any Debt Transaction or Equity Transaction are
not required to be applied towards the prepayment of the Loans
under Section 3.3(b)(iii) and (iv) (and are not otherwise used
in connection with any Permitted Acquisition or Capital
Expenditures permitted under Section 8.11(f)), the Borrower
may use such Net Proceeds to repurchase, defease or reacquire
the Senior Notes and the Senior Subordinated Notes.
2.21 Section 9.15 is amended to read as follows:
9.15 [Reserved].
3. The Guarantors join in the execution of this Amendment for
purposes of acknowledging and consenting to the terms of this Amendment and
reaffirming their guaranty obligations under the Guaranty Agreement.
4. The Borrower affirms that the representations and warranties
in the Credit Agreement and the other Credit Documents are true and correct in
all material respects as of the date hereof (except those which expressly relate
to an earlier period or date and except to the extent that changes in facts and
conditions on which such representations and warranties are based are required
or permitted under the Credit Agreement).
5. This Amendment shall be effective upon receipt by the
Administrative Agent of the following:
(a) executed copies of Consents from the requisite
Lenders, and executed signature pages to this Amendment from each of
the parties hereto; and
(b) the amendment fee payable to the Lenders consenting
to this Amendment and any other fees payable in connection with this
Amendment.
6. Except as modified hereby, all of the terms and provisions of
the Credit Agreement (including Schedules and Exhibits) shall remain in full
force and effect.
7. The Borrower agrees to pay all reasonable costs and expenses
of the Administrative Agent in connection with the preparation, execution and
delivery of this Amendment, including without limitation the reasonable fees and
expenses of Xxxxx & Xxx Xxxxx, PLLC.
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8. This Amendment may be executed in any number of counterparts, each
of which when so executed and delivered shall be deemed an original, and it
shall not be necessary in making proof of this Amendment to produce or account
for more than one such counterpart.
9. This Amendment shall be deemed to be a contract made under, and for
all purposes shall be construed in accordance with, the laws of the State of New
York.
[Signature Pages Follow]
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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 and year first
above written.
BORROWER: TRIAD HOSPITALS, INC.,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxxxxxx
-------------------------------------
Name: XXXXX X. XXXXXXXXXX
Title: SENIOR VICE PRESIDENT & TREASURER
ADMINISTRATIVE AGENT: BANK OF AMERICA, N.A.,
as Administrative Agent and on
behalf of the Lenders
By:______________________________________
Name:
Title:
Consented to by:
GUARANTORS: [TO BE ADDED]
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 and year
first above written.
BORROWER: TRIAD HOSPITALS, INC.,
a Delaware corporation
By:_________________________________
Name:
Title:
ADMINISTRATIVE AGENT: BANK OF AMERICA, N.A.,
as Administrative Agent and on
behalf of the Lenders
By: /s/ Xxxxx X. Xxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxx
Title: Principal
Consented to by:
GUARANTORS: [TO BE ADDED]
CONSENT TO AMENDMENT NO. 4
TRIAD HOSPITALS, INC.
June 28, 0000
Xxxx xx Xxxxxxx, X.X., as Administrative Agent
0000 Xxxxxx Xxxxxx
XX0-000-00-00
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxx
Facsimile: (000) 000-0000
Re: Amended and Restated Credit Agreement dated as of April 27, 2001 (as
amended and modified, the "Credit Agreement") among Triad Hospitals,
Inc., a Delaware corporation, as Borrower, the lenders identified
therein, Xxxxxxx Xxxxx & Co., as Syndication Agent, The Chase Manhattan
Bank and Citicorp USA, Inc., as Co-Documentation Agents, and Bank of
America, N.A., as Administrative Agent. Terms used but not otherwise
defined shall have the meanings provided in the Credit Agreement.
Amendment No. 4 dated as of June 28, 2002 (the "Subject Amendment") to
the Credit Agreement
Ladies and Gentlemen:
This should serve to confirm our receipt of, and consent to, the Subject
Amendment. We hereby authorize and direct you, as Administrative Agent for the
Lenders, to enter into the Subject Amendment on our behalf in accordance with
the terms of the Credit Agreement upon your receipt of such consent and
direction from the Required Lenders, and agree that the Borrower may rely upon
such authorization.
Very truly yours,
____________________________
[Name of Lender]
By:_________________________
Name:
Title:
