SECOND AMENDMENT TO CREDIT AGREEMENT
Exhibit 10.28
SECOND AMENDMENT TO CREDIT AGREEMENT
This SECOND AMENDMENT dated as of April 23, 2019 (this “Second Amendment”) to the Credit Agreement referred to below by and among Chloe Ox Intermediate 3, LLC, a Delaware limited liability company (“Holdings”), Signify Health, LLC (f/k/a Chloe Ox Parent, LLC), a Delaware limited liability company (the “Borrower”), the other Guarantors from time to time party hereto, the lender party hereto (the “2019 Incremental Term Lender”) and UBS AG, Stamford Branch, as administrative agent and collateral agent (the “Administrative Agent”).
RECITALS
WHEREAS, Holdings, the Borrower, the other Guarantors from to time parties thereto, the several Lenders from time to time parties thereto and the Administrative Agent have entered into that certain Credit Agreement dated as of December 21, 2017, (as amended and restated by that certain First Amendment, dated as of June 22, 2018, and as further amended, restated, amended and restated, supplemented or otherwise modified from time to time prior to the date hereof, the “Credit Agreement”);
WHEREAS, pursuant to and in accordance with Section 2.14 of the Credit Agreement, the Borrower has requested (which request hereunder shall serve as notice pursuant to Section 2.14(a) of the Credit Agreement) that the 2019 Incremental Term Lender extend credit to the Borrower in the form of Incremental Term Loans on the Second Amendment Effective Date (as defined below) in an aggregate principal amount of $20,000,000 (the “2019 Incremental Term Loans” and the Incremental Term Commitments under this Second Amendment of the 2019 Incremental Term Lender, the “2019 Incremental Term Commitment”), which (x) will be added to (and form part of) the existing Class of Initial Term Loans and (y) will be used to (i) repay outstanding Revolving Credit Loans and (ii) pay the fees and expenses related to this Second Amendment and the incurrence of the 2019 Incremental Term Loans.
WHEREAS, as contemplated by Section 2.14 of the Credit Agreement, (x) the parties hereto have agreed, subject to the satisfaction of the conditions precedent to effectiveness set forth in Article IV hereof, to amend certain terms of the Credit Agreement as hereinafter provided to give effect to the incurrence of the 2019 Incremental Term Loans and (y) this Second Amendment shall constitute an Incremental Amendment;
WHEREAS, the 2019 Incremental Term Lender is prepared to provide the 2019 Incremental Term Loans in an amount equal to the 2019 Incremental Term Commitment set forth on Schedule 1 hereto subject to the terms and conditions set forth herein; and
NOW, THEREFORE, in consideration of the covenants and agreements contained herein, as well as other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
RULES OF CONSTRUCTION
SECTION 1.1 The rules of constructions specified in Sections 1.02 through 1.12 of the Credit Agreement shall apply to this Second Amendment, including the terms defined in the preamble and recitals hereto.
ARTICLE II
2019 INCREMENTAL TERM LOANS
SECTION 2.1 2019 Incremental Term Loans. Pursuant to Section 2.14 of the Credit Agreement, and subject solely to the satisfaction of the conditions precedent set forth in such Section 2.14 and Article IV hereof, on and as of the Second Amendment Effective Date:
(a) The 2019 Incremental Term Lender party hereto hereby agrees to make a term loan denominated in Dollars to the Borrower on the Second Amendment Effective Date in an aggregate principal amount not to exceed the amount of the 2019 Incremental Term Commitment. The full amount of the 2019 Incremental Term Loans shall be drawn by the Borrower in a single drawing on the Second Amendment Effective Date and amounts borrowed pursuant to this Second Amendment and repaid or prepaid may not be re-borrowed. The 2019 Incremental Term Loans (x) shall be added to, and thereafter constitute a part of, the existing Class of Initial Term Loans and (y) shall be subject to the same terms applicable to the Initial Term Loans as set forth in the Credit Agreement (as amended hereby). The 2019 Incremental Term Loans shall be subject to scheduled amortization as set forth in the Credit Agreement (as amended hereby) with the remaining outstanding principal amount due and payable in full on the Maturity Date for the existing Initial Term Loans.
(b) The 2019 Incremental Term Lender, the Administrative Agent and the Loan Parties party hereto agree that this Second Amendment shall constitute an Incremental Amendment pursuant to and in accordance with Section 2.14 of the Credit Agreement.
(c) Immediately upon the incurrence of the 2019 Incremental Term Loans on the Second Amendment Effective Date, (i) the 2019 Incremental Term Loans shall be added to (and form part of) each Borrowing of existing Initial Term Loans outstanding under the Credit Agreement immediately prior to the effectiveness of this Second Amendment on a pro rata basis (based on the principal amount of each Borrowing), so that each Term Lender will participate proportionately in each then outstanding Borrowing of Initial Term Loans, (ii) in connection with the foregoing, the Administrative Agent shall (and is hereby authorized to) take all necessary actions to ensure that all Term Lenders participate in each Borrowing of Initial Term Loans (after giving effect to the incurrence of 2019 Incremental Term Loans) on a pro rata basis (based upon the then outstanding principal amount of all Initial Term Loans held by the Term Lenders at such time), (iii) the 2019 Incremental Term Loans shall constitute a single Class of Term Loans with the Initial Term Loans and (iv) the 2019 Incremental Term Loans shall constitute “Initial Term Loans” for all purposes under, and subject to the provisions of, the Loan Documents.
(d) The 2019 Incremental Term Commitment of the 2019 Incremental Term Lender shall be automatically and permanently reduced to $0 upon the funding of the 2019 Incremental Term Loans to be made by the 2019 Incremental Term Lender on the Second Amendment Effective Date.
(e) The proceeds of the 2019 Incremental Term Loans shall be used by the Borrower to (i) repay outstanding Revolving Credit Loans and (ii) pay fees and expenses related to this Second Amendment and the incurrence of the 2019 Incremental Term Loans.
(f) The Borrower hereby designates that all of the 2019 Incremental Term Loans are being incurred in reliance on Section 2.14(d)(v)(B) of the Credit Agreement.
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ARTICLE III
AMENDMENTS TO CREDIT AGREEMENT
SECTION 3.1 Amendment to Credit Agreement. The Borrower, the Lenders party hereto, the Administrative Agent and other parties party hereto agree that on the Second Amendment Effective Date, the Credit Agreement shall be amended as follows:
(a) Section 1.01 of the Credit Agreement is hereby amended by adding in the appropriate alphabetical order the following new definitions:
“2019 Incremental Term Commitment” has the meaning provided in the Second Amendment.
“2019 Incremental Term Lender” has the meaning provided in the Second Amendment.
“2019 Incremental Term Loans” has the meaning provided in the Second Amendment.
“Second Amendment” means that certain Second Amendment to Credit Agreement, dated as of April 23, 2019, by and among Holdings, the Borrower, the other Guarantors party thereto, the Administrative Agent and the 2019 Incremental Term Lender.
“Second Amendment Effective Date” has the meaning provided in the Second Amendment.
(b) The definition of “Initial Term Commitment” appearing in Section 1.01 of the Credit Agreement is hereby amended by replacing the last sentence appearing therein with “The aggregate amount of the Initial Term Commitments is, as of the Second Amendment Effective Date, $280,000,000”.
(c) The definition of “Initial Term Loans” appearing in Section 1.01 of the Credit Agreement is hereby amended and restated in its entirety as follows:
““Initial Term Loans” means the term loans made by (x) the Lenders on the First Amendment Effective Date to the Borrower pursuant to Section 2.01(a) and (y) the 2019 Incremental Term Lender to the Borrower on the Second Amendment Effective Date pursuant to the Second Amendment.”
(d) Section 2.01(a) of the Credit Agreement is hereby amended and restated in its entirety as follows:
“(a) Term Borrowings. Subject to the terms and conditions expressly set forth herein, each Term Lender severally agrees to make to the Borrower on the Closing Date a Term Borrowing denominated in Dollars in an aggregate amount not to exceed at any time outstanding the amount of such Term Lender’s Term Commitment. On the First Amendment Effective Date, Initial Term Loans shall be made in accordance with the First Amendment. On the Second Amendment Effective Date, Initial Term Loans shall be made in accordance with the Second Amendment. Amounts borrowed under this Section 2.01(a), the First Amendment and the Second Amendment and repaid or prepaid may not be re-borrowed. Term Loans may be Base Rate Loans or Eurocurrency Rate Loans, as further provided herein.”
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(e) Section 2.07(a) of the Credit Agreement is hereby amended and restated in its entirety as follows:
“(a) Term Loans. The Borrower shall repay to the Administrative Agent for the ratable account of the Appropriate Lenders (A) with respect to the Initial Term Loans, on the last Business Day of each March, June, September and December, commencing with last Business Day of June 2019, an aggregate principal amount equal to $700,505.05 (which payments shall (x) be reduced as a result of the application of prepayments in accordance with the order of priority set forth in Section 2.05 (excluding prepayments under Section 2.05(a)(v) and Section 10.07(l)) and (y) not be made with respect to Initial Term Loans that were prepaid pursuant to Section 2.05(a)(v)) and (B) with respect to all Initial Term Loans, on the Maturity Date for the Initial Term Loans, the aggregate principal amount of all Initial Term Loans outstanding on such date, together with accrued interest thereon. In connection with any Incremental Term Loans that constitute part of the same Class as the Initial Term Loans, the Borrower and the Administrative Agent shall be permitted to adjust the rate of prepayment in respect of such Class such that the Term Lenders holding Initial Term Loans comprising such Class continue to receive a payment that is not less than the same amount that such Term Lenders would have received absent the incurrence of such Incremental Term Loans; provided, that if such Incremental Term Loans are to be “fungible” with the Initial Term Loans, notwithstanding any other conditions specified in this Section 2.07(a), the amortization for such “fungible” Incremental Term Loan may provide for amortization in such other percentage(s) to be agreed by the Borrower and the Administrative Agent to ensure that the Incremental Term Loans will be “fungible” with the Initial Term Loans.”
(f) Section 5.11(a) of the Credit Agreement is hereby amended by including the following new sentence at the end thereof:
“The proceeds of the 2019 Incremental Term Loans incurred on the Second Amendment Effective Date will be used to (i) repay outstanding Revolving Credit Loans and (ii) pay fees and expenses related to the Second Amendment and the transactions contemplated thereby.”
SECTION 3.2 Reference to and Effect on the Credit Agreement. On and after the Second Amendment Effective Date, (i) each reference in the Credit Agreement to “this Agreement,” “hereunder,” “hereof” or text of like import referring to the Credit Agreement shall mean and be a reference to the Credit Agreement as amended by this Second Amendment, (ii) all references in the Credit Agreement and each of the other Loan Documents shall be deemed to be references to the Credit Agreement, as modified hereby, (iii) the 2019 Incremental Term Lender shall constitute a “Lender”, a “Term Lender” and an “Incremental Term Lender”, in each case, under and as defined in the Credit Agreement, (iv) the 2019 Incremental Term Commitment shall constitute an “Initial Term Commitment” and a “Term Commitment”, in each case, under and as defined in the Credit Agreement, (v) the Second Amendment Effective Date shall constitute the “Incremental Facility Closing Date” under, and as defined in the Credit Agreement with respect to the 2019 Incremental Term Loans and (vi) this Second Amendment shall constitute an “Incremental Amendment” under, and as defined in, the Credit Agreement; provided that for purposes of Section 2.01(a) of the Credit Agreement the reference therein to Term Lenders and Initial
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Term Commitment shall not include the 2019 Incremental Term Lender and the 2019 Incremental Term Commitment, as applicable, and for purposes of Section 2.06(b) of the Credit Agreement the reference to Initial Term Loans and Initial Term Commitments therein shall not include the 2019 Incremental Term Commitment or the 2019 Incremental Term Loans. On and after the effectiveness of this Second Amendment, this Second Amendment shall for all purposes constitute a “Loan Document” under and as defined in the Credit Agreement and the other Loan Documents.
ARTICLE IV
CONDITIONS TO EFFECTIVENESS
The effectiveness of this Second Amendment (including the amendments contained in Article III) is subject to the satisfaction (or waiver) of the following conditions:
SECTION 4.1 This Second Amendment shall have been duly executed by Holdings, the Borrower, each Guarantor, the Administrative Agent and the 2019 Incremental Term Lender and delivered to the Administrative Agent.
SECTION 4.2 No Default or Event of Default shall exist or would result from the making of the 2019 Incremental Term Loans on the Second Amendment Effective Date or from the application of the proceeds therefrom.
SECTION 4.3 The representations and warranties of each Loan Party set forth in Article V of the Credit Agreement, Article V of this Second Amendment and in each other Loan Document shall be true and correct in all material respects on and as of the Second Amendment Effective Date with the same effect as though made on and as of such date, except to the extent such representations and warranties expressly relate to an earlier date, in which case they shall be true and correct in all material respects as of such earlier date; provided that any representation and warranty that is qualified as to “materiality,” “Material Adverse Effect” or similar language shall be true and correct in all respects on the Second Amendment Effective Date or on such earlier date, as the case may be.
SECTION 4.4 The Administrative Agent shall have received a Committed Loan Notice from the Borrower pursuant to Section 2.02 of the Credit Agreement with respect to the 2019 Incremental Term Loans (and the Administrative Agent hereby agrees to waive the three Business Day minimum notice period in respect of any request for Eurocurrency Rate Loans to be made on the Second Amendment Effective Date; provided that such request is delivered at least one Business Day prior to the Second Amendment Effective Date).
SECTION 4.5 The Administrative Agent shall have received an opinion from Ropes & Xxxx LLP, as counsel to the Loan Parties, in form and substance reasonably acceptable to the Administrative Agent.
SECTION 4.6 The Administrative Agent shall have received a solvency certificate from the chief financial officer of Borrower substantially in the form of Exhibit D to the Credit Agreement.
SECTION 4.7 All fees and expenses (to the extent invoiced at least three days prior to the Second Amendment Effective Date (except as otherwise reasonably agreed by the Borrower)) required to be paid pursuant to Section 10.04 of the Credit Agreement and that certain Engagement Letter, dated as of April 10, 2019 (the “Engagement Letter”), by and among the Borrower and UBS Securities LLC shall have been paid.
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SECTION 4.8 The Administrative Agent shall have received at least two Business Days prior to the Second Amendment Effective Date all documentation and other information about the Borrower and the Guarantors and the principals thereof that shall have been reasonably requested by the Administrative Agent in writing at least five days prior to the Second Amendment Effective Date and that the Lenders reasonably determine is required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including without limitation the PATRIOT Act and the Beneficial Ownership Regulation (as defined in the Engagement Letter), the results of which shall be satisfactory to the applicable Lenders.
SECTION 4.9 All proceeds of the 2019 Incremental Term Loans will be used for the purposes set forth in Section 2.1(f) hereof.
SECTION 4.10 The Administrative Agent shall have received such certificates of good standing from the applicable secretary of state of the state of organization of each Loan Party, copies of resolutions or other limited liability company action, incumbency certificates and/or other certificates of Responsible Officers of each Loan Party as the Administrative Agent may reasonably require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with the Second Amendment and attaching and certifying the Organization Documents of each Loan Party.
SECTION 4.11 All of the conditions specified in Section 2.14(d)(v) of the Credit Agreement (as modified by this Second Amendment) with respect to the effectiveness of this Second Amendment as an “Incremental Amendment” thereunder shall have been satisfied and the Administrative Agent shall have received a certificate, dated the Second Amendment Effective Date and signed on behalf of the Borrower by a Responsible Officer of the Borrower, certifying as to the matters set forth in Section 4.2, Section 4.3 and this Section 4.11.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
SECTION 5.1 Representations and Warranties. The Borrower and each of the Guarantors party hereto represent and warrant to the Lenders and the Administrative Agent that as of the Second Amendment Effective Date (a) the execution, delivery and performance of this Second Amendment is within such Loan Party’s corporate or other powers and has been duly authorized by all necessary corporate or other organizational action of such Loan Party, (b) this Second Amendment has been duly executed and delivered by each Loan Party that is a party thereto and (c) this Second Amendment constitutes a legal, valid and binding obligation of such Loan Party, enforceable against each Loan Party that is a party thereto in accordance with its terms, except as such enforceability may be limited by (i) Debtor Relief Laws and by general principles of equity, (ii) the need for filings and registrations necessary to create or perfect the Liens on the Collateral granted by the Loan Parties in favor of the Secured Parties and (iii) the effect of foreign Laws, rules and regulations as they relate to pledges of Equity Interests in or Indebtedness owed by Foreign Subsidiaries.
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ARTICLE VI
EFFECTS ON LOAN DOCUMENTS
SECTION 6.1 Except as specifically amended herein, all Loan Documents shall continue to be in full force and effect and are hereby in all respects ratified and confirmed.
(a) The execution, delivery and effectiveness of this Second Amendment shall not operate as a waiver of any right, power or remedy of any Lender or the Administrative Agent under any of the Loan Documents, nor constitute a waiver of any provision of the Loan Documents or in any way limit, impair or otherwise affect the rights and remedies of the Lenders or the Administrative Agent under the Loan Documents.
(b) The Borrower and the other parties hereto acknowledge and agree that, on and after the Second Amendment Effective Date, this Second Amendment and each of the other Loan Documents to be executed and delivered by a Loan Party shall constitute a Loan Document for all purposes of the Credit Agreement.
(c) On and after the Second 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 Loan Documents to “Credit Agreement”, “thereunder”, “thereof” or words of like import referring to the Credit Agreement shall mean and be a reference to the Credit Agreement, and this Second Amendment and the Credit Agreement shall be read together and construed as a single instrument.
(d) Nothing herein shall be deemed to entitle the Borrower to a further consent to, or a further waiver, amendment, modification or other change of, any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any other Loan Document in similar or different circumstances.
(e) Section headings used herein are for convenience of reference only, are not part of this Second Amendment and are not to affect the construction of, or to be taken into consideration in interpreting, this Second Amendment.
ARTICLE VII
MISCELLANEOUS
SECTION 7.1 APPLICABLE LAW. THIS SECOND AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. SECTIONS 10.15(b) AND 10.16 OF THE CREDIT AGREEMENT ARE INCORPORATED BY REFERENCE HEREIN AS IF SUCH SECTIONS APPEARED HEREIN, MUTATIS MUTANDIS.
SECTION 7.2 Execution in Counterparts; Severability. This Second Amendment may be executed in one or more counterparts, each of which shall be deemed an original, but all of which, when taken together, shall constitute one and the same instrument. Delivery by facsimile transmission or other electronic transmission of an executed counterpart of a signature page of this Second Amendment shall be effective as delivery of an original executed counterpart hereof.
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SECTION 7.3 Reaffirmation. Each of the Loan Parties party to the Security Agreement and the other Collateral Documents, in each case as amended, supplemented or otherwise modified from time to time, hereby (i) acknowledges and agrees that the 2019 Incremental Term Loans are Loans and the 2019 Incremental Term Lender is a Lender, and that all of its obligations under the Collateral Documents to which it is a party are reaffirmed and remain in full force and effect on a continuous basis, (ii) reaffirms each Lien granted by each Loan Party to the Collateral Agent for the benefit of the Administrative Agent and the Secured Parties (including the 2019 Incremental Term Lender) and reaffirms the guaranties made pursuant to the Credit Agreement, (iii) acknowledges and agrees that the grants of security interests by and the guaranties of the Loan Parties contained in the Credit Agreement and the Collateral Documents are, and shall remain, in full force and effect after giving effect to the Second Amendment, and (iv) agrees that the Secured Obligations include, among other things and without limitation, the prompt and complete payment and performance by the Borrower when due and payable (whether at the stated maturity, by acceleration or otherwise) of principal and interest on, and premium (if any) on, the 2019 Incremental Term Loans under the Credit Agreement.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to be duly executed and delivered by their respective proper and duly authorized officers as of the day and year first above written.
| CHLOE OX INTERMEDIATE 3, LLC, as Holdings | ||
| By: | /s/ Xxxxxxx Xxxxx | |
| Name: | Xxxxxxx Xxxxx | |
| Title: | Chief Financial Officer and Treasurer | |
| SIGNIFY HEALTH, LLC, as Borrower | ||
| By: | /s/ Xxxxxxx Xxxxx | |
| Name: | Xxxxxxx Xxxxx | |
| Title: | Chief Financial Officer and Treasurer | |
[Signature Page to Second Amendment]
| DRYNACHAN, LLC | ||
| By: | /s/ Xxxxxxx Xxxxx | |
| Name: | Xxxxxxx Xxxxx | |
| Title: | Chief Financial Officer and Treasurer | |
| ADVANCE HEALTH IPA, LLC | ||
| By: | /s/ Xxxxxxx Xxxxx | |
| Name: | Xxxxxxx Xxxxx | |
| Title: | Chief Financial Officer and Treasurer | |
| CENSEO HEALTH LLC | ||
| By: | /s/ Xxxxxxx Xxxxx | |
| Name: | Xxxxxxx Xxxxx | |
| Title: | Chief Financial Officer and Treasurer | |
| TAVHEALTH, LLC | ||
| By: | /s/ Xxxxxxx Xxxxx | |
| Name: | Xxxxxxx Xxxxx | |
| Title: | Executive Vice President, Chief Financial Officer and Treasurer | |
[Signature Page to Second Amendment]
| UBS AG, STAMFORD BRANCH, as Administrative Agent and Collateral Agent | ||
| By: | /s/ Xxxxxxx Xxxxx | |
| Name: | Xxxxxxx Xxxxx | |
| Title: | Director | |
| By: | /s/ Xxxxxxx Xxxx | |
| Name: | Xxxxxxx Xxxx | |
| Title: | Associate Director | |
| UBS AG, STAMFORD BRANCH, as 2019 Incremental Term Lender | ||
| By: | /s/ Xxxxxxx Xxxxx | |
| Name: | Xxxxxxx Xxxxx | |
| Title: | Director | |
| By: | /s/ Xxxxxxx Xxxx | |
| Name: | Xxxxxxx Xxxx | |
| Title: | Associate Director | |
[Signature Page to Second Amendment]
Schedule I
| 2019 Incremental Term Lender |
2019 Incremental Term Loans | |||
| UBS AG, STAMFORD BRANCH |
$ | 20,000,000 | ||
| Total: |
$ | 20,000,000 | ||
