EXHIBIT 10.5
INCREMENTAL TERM LOAN COMMITMENT AGREEMENT
BANK OF AMERICA, N.A.
CREDIT LYONNAIS NEW YORK BRANCH
KZH CYPRESSTREE-1 LLC
KZH ING-2 LLC
KZH STERLING LLC
KZH SOLEIL-2 LLC
KZH SOLEIL LLC
January 3, 2003
Vanguard Health Systems, Inc.
00 Xxxxxx Xxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Re: Incremental Term Loan Commitments
Ladies and Gentlemen:
Reference is hereby made to the Credit Agreement, dated
as of July 30, 2001 (as amended, modified or supplemented from
time to time, the "Credit Agreement"), among Vanguard Health
Systems, Inc. (the "Borrower" or "you"), the lenders from time to
time party thereto (the "Lenders"), Banc of America Securities
LLC and Xxxxxx Xxxxxxx Senior Funding, Inc., as Joint Lead
Arrangers and Book Managers, Bank of America, N.A., as
Administrative Agent (in such capacity, the "Administrative
Agent"), Xxxxxx Xxxxxxx Senior Funding, Inc., as Syndication
Agent and Wachovia Bank, National Association (formerly known as
First Union National Bank) and General Electric Capital
Corporation, as Co-Syndication Agents. Unless otherwise defined
herein, capitalized terms used herein shall have the respective
meanings set forth in the Credit Agreement (for this purpose,
after giving effect to the First Amendment to Credit Agreement,
dated October 8, 2002 (the "First Amendment") and Second
Amendment to Credit Agreement dated as of December 31, 2002).
Each Lender (each an "Incremental Term Loan Lender")
party to this letter agreement (this "Agreement") hereby
severally agrees to provide the Incremental Term Loan Commitment
set forth opposite its name on Annex I attached hereto (for each
such Incremental Term Loan Lender, its "Incremental Term Loan
Commitment"). Each Incremental Term Loan Commitment provided
pursuant to this Agreement shall be subject to the terms and
conditions set forth in the Credit Agreement, including Section
1.13 thereof.
Each Incremental Term Loan Lender, the Borrower and the
Administrative Agent acknowledge and agree that the Incremental
Term Loan Commitments provided pursuant to this Agreement shall
constitute Incremental Term Loan Commitments of the respective
Tranche specified in Annex I attached hereto and, upon the
incurrence of Incremental Term Loans pursuant to such Incremental
Term Loan Commitments, shall constitute Incremental Term Loans
under such specified Tranche for all purposes of the Credit
Agreement and the other Credit Documents.
Each Incremental Term Loan Lender and the Borrower
further agree that, with respect to the Incremental Term Loan
Commitments provided by such Incremental Term Loan Lender
pursuant to this Agreement, such Incremental Term Loan Lender
shall receive such upfront fees, if any, as are specified in
Annex I attached hereto, which upfront fee shall be due and
payable to such Incremental Term Loan Lender upon the Agreement
Effective Date (as defined below) or as otherwise specified in
said Annex I.
Each Incremental Term Loan Lender party to this
Agreement (i) confirms that it has received a copy of the Credit
Agreement and the other Credit Documents, together with copies of
the financial statements referred to therein and such other
documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this Agreement
and, to the extent applicable, to become a Lender under the
Credit Agreement, (ii) agrees that it will, independently and
without reliance upon the Administrative Agent or any other
Lender and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under the Credit
Agreement, (iii) appoints and authorizes the Administrative Agent
and the Collateral Agent to take such action as agent on its
behalf and to exercise such powers under the Credit Agreement and
the other Credit Documents as are delegated to the Administrative
Agent and the Collateral Agent, as the case may be, by the terms
thereof, together with such powers as are reasonably incidental
thereto, (iv) agrees that it will perform in accordance with
their terms all of the obligations which by the terms of the
Credit Agreement are required to be performed by it as a Lender,
and (v) in the case of each lending institution organized under
the laws of a jurisdiction outside the United States, attaches
the applicable forms described in Section 4.04(b) of the Credit
Agreement certifying as to its entitlement to a complete
exemption from United States withholding taxes with respect to
all payments to be made under the Credit Agreement and the other
Credit Documents. Upon the date of (i) the execution of a
counterpart of this Agreement by such Incremental Term Loan
Lenders, the Administrative Agent, the Borrower, the Majority
Lenders of each Tranche (if any) required to consent to the
provision of the Incremental Term Loan Commitments to be provided
pursuant to this Agreement as provided in Section 1.13(a)(ix) and
1.13(a)(x), as the case may be, of the Credit Agreement, (ii) the
delivery to the Administrative Agent of a fully executed copy
(including by way of counterparts and by facsimile) hereof, (iii)
the payment of any fees required in connection herewith and (iv)
the satisfaction of all conditions precedent set forth in Section
7 of Annex I hereto (such date, the "Agreement Effective Date"),
each Incremental Term Loan Lender party hereto (i) shall be
obligated to make the Incremental Term Loans provided to be made
by it as provided in this Agreement on the terms, and subject to
the conditions, set forth in the Credit Agreement and (ii) to the
extent provided in this Agreement, shall have the rights and
obligations of a Lender thereunder and under the other Credit
Documents. The maximum number of drawings with respect to the
Incremental Term Loan Commitments provided pursuant to this
Agreement shall be as specified in Annex I attached hereto.
Furthermore, any undrawn Incremental Term Loan Commitments
provided pursuant to this Agreement shall expire on the date
specified in Annex I attached hereto.
The Borrower acknowledges and agrees that (i) it shall
be liable for all Obligations with respect to the Incremental
Term Loan Commitments provided hereby including, without limita
tion, any Loans made pursuant thereto and (ii) all such
Obligations (including any
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such Loans) shall be entitled to the benefits of the Security
Documents. Attached hereto as Annex II are executed resolutions
of the Borrower authorizing the incurrence of the Incremental
Term Loans to be incurred pursuant to the Incremental Term Loan
Commitments provided hereunder.
Each Subsidiary Guarantor acknowledges and agrees that
all Obligations with respect to the Incremental Term Loan
Commitments provided hereby and any Loans made pursuant thereto
shall (i) be fully guaranteed pursuant to the Subsidiaries
Guaranty in accordance with the terms and provisions thereof and
(ii) be entitled to the benefits of the Security Documents, and
attached hereto as Annex III are resolutions from each such
Subsidiary Guarantor covering the matters set forth in preceding
clauses (i) and (ii).
The Obligations to be incurred pursuant to the
Incremental Term Loan Commitments provided hereunder are
permitted by, and constitute "Senior Indebtedness" and
"Designated Senior Indebtedness" (or any similar terms) under (i)
the Convertible Subordinated Debt and (ii) the Senior
Subordinated Note Documents, and, after the issuance of any
Permitted Subordinated Notes, the Permitted Senior Subordinated
Note Documents, and attached hereto as Annex IV are calculations
showing that such Obligations are permitted by the terms of the
documentation referred to in this clause (ii).
Attached hereto as Annex V is an opinion of Waller,
Lansden, Xxxxxx & Xxxxx counsel to the Borrower, delivered as
required pursuant to Section 1.13(b)(v) of the Credit Agreement.
You may accept this Agreement by executing the enclosed
copies in the space provided below, and returning a copy of same
to us before the close of business on January 2, 2003. If you do
not so accept this Agreement by such time, our Incremental Term
Loan Commitments set forth in this Agreement shall be deemed
cancelled.
After the execution and delivery to the Administrative
Agent of a fully executed copy of this Agreement (including by
way of counterparts and by facsimile) by the parties hereto and
the effectiveness hereof in accordance with the provisions
herein, this Agreement shall constitute a Credit Document and may
only be changed, modified or varied by written instrument in
accordance with the requirements for the modification of Credit
Documents pursuant to Section 13.12 of the Credit Agreement.
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THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
Very truly yours,
BANK OF AMERICA, N.A.
By: /s/ Xxxxx Xxxxxx
-----------------------------------
Title: Principal
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ Xxxxxx Xxx
-----------------------------------
Title: Senior Vice President
KZH CYPRESSTREE-1 LLC
By: /s/ Xxxxx Xxx
-----------------------------------
Title: Authorized Agent
KZH ING-2 LLC
By: /s/ Xxxxx Xxx
-----------------------------------
Title: Authorized Agent
KZH STERLING LLC
By: /s/ Xxxxx Xxx
-----------------------------------
Title: Authorized Agent
KZH SOLEIL LLC
By: /s/ Xxxxx Xxx
-----------------------------------
Title: Authorized Agent
KZH SOLEIL-2 LLC
By: /s/ Xxxxx Xxx
-----------------------------------
Title: Authorized Agent
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Agreed and Accepted
this 3rd day of January 2003
VANGUARD HEALTH SYSTEMS, INC.
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Title: Executive Vice President, Chief Financial Officer & Treasurer
BANK OF AMERICA, N.A.,
as Administrative Agent
By: /s/ Xxxxx Xxxxxx
-----------------------------------
Title: Principal
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Each Subsidiary Guarantor acknowledges and agrees to the
foregoing provisions of this Incremental Term Loan Commitment
Agreement, specifically including the acknowledgments and
agreements made by it pursuant to the seventh paragraph of the
Incremental Term Loan Commitment Agreement.
VHS ACQUISITION CORPORATION
VHS OUTPATIENT CLINICS, INC.
VHS OF PHOENIX, INC.
VHS OF ARROWHEAD, INC.
PLEASANT PROPERTIES, INC.
VHS OF SOUTH PHOENIX, INC.
VHS IMAGING CENTERS, INC.
VHS OF ANAHEIM, INC.
VHS OF ORANGE COUNTY, INC.
VHS HOLDING COMPANY, INC.
VHS OF HUNTINGTON BEACH, INC.
VHS OF ILLINOIS, INC.
XXXXXXX HEALTH PROVIDERS, INC.
XXXXXXX MANAGEMENT SERVICES,
INC.
MIDWEST CLAIMS PROCESSING, INC.
PROS TEMPORARY STAFFING, INC.
WATERMARK PHYSICIAN SERVICES,
INC.
VHS GENESIS LABS, INC.
XXXXXXX MEDICAL RECORDS, INC.
VANGUARD HEALTH MANAGEMENT,
INC.
TRINITY MEDCARE, INC.
V-II ACQUISITION CO., INC.
VANGUARD HEALTH FINANCIAL
COMPANY, INC.
VHS OF RANCOCAS, INC.
VHS PHOENIX HEALTH PLAN, INC.
HOSPITAL DEVELOPMENT OF WEST
PHOENIX, INC.
HOSPITAL DEVELOPMENT COMPANY
NUMBER 1, INC.
HOSPITAL DEVELOPMENT COMPANY
NUMBER 2, INC.
each as a Guarantor
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Title: Executive Vice President, Chief
Financial Officer & Treasurer
Duly authorized to sign on behalf of
each of the foregoing entities
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VOLUNTEER INSURANCE LTD.
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Title: President
VHS ACQUISITION SUBSIDIARY
NUMBER 1, INC.
VHS ACQUISITION SUBSIDIARY
NUMBER 2, INC.
VHS ACQUISITION SUBSIDIARY
NUMBER 3, INC.
VHS ACQUISITION SUBSIDIARY
NUMBER 4, INC.
VHS ACQUISITION SUBSIDIARY
NUMBER 5, INC.
VHS ACQUISITION SUBSIDIARY
NUMBER 6, INC.
VHS ACQUISITION SUBSIDIARY
NUMBER 7, INC.
VHS ACQUISITION SUBSIDIARY
NUMBER 8, INC.
VHS ACQUISITION SUBSIDIARY
NUMBER 9, INC.
VHS ACQUISITION SUBSIDIARY
NUMBER 10, INC.
VHS ACQUISITION SUBSIDIARY
NUMBER 11, INC.
VHS ACQUISITION SUBSIDIARY
NUMBER 12, INC.,
each as a Guarantor
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Title: Executive Vice President, Chief
Financial Officer & Treasurer
Duly authorized to sign on behalf of
each of the foregoing entities
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THE ANAHEIM VHS LIMITED PARTNERSHIP,
as a Guarantor
By: VHS of Anaheim, Inc.,
its General Partner
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Title: Executive Vice President, Chief
Financial Officer & Treasurer
THE HUNTINGTON BEACH VHS
LIMITED PARTNERSHIP, as a Guarantor
By: VHS of Huntington Beach, Inc.,
its General Partner
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Title: Executive Vice President, Chief
Financial Officer & Treasurer
HEALTHCARE COMPLIANCE, L.L.C.,
as a Guarantor
By: Vanguard Health Management, Inc.,
its Member
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Title: Executive Vice President, Chief
Financial Officer & Treasurer
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VHS SAN ANTONIO PARTNERS, L.P.,
as a Guarantor
By: VHS Acquisition Subsidiary
Number 5, Inc.,
its General Partner
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Title: Executive Vice President, Chief
Financial Officer & Treasurer
THE VHS ARIZONA IMAGING CENTERS
LIMITED PARTNERSHIP, as a Guarantor
By: VHS Imaging Centers, Inc.,
its General Partner
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Title: Executive Vice President, Chief
Financial Officer & Treasurer
VHS ACQUISITION PARTNERSHIP
NUMBER 1, L.P., as a Guarantor
By: VHS Acquisition Subsidiary
Number 6, Inc.,
its General Partner
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Title: Executive Vice President, Chief
Financial Officer & Treasurer
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VHS ACQUISITION COMPANY NUMBER 1, LLC
By: VHS Acquisition Subsidiary
Number 8, Inc.,
its Managing Member
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Title: Executive Vice President, Chief
Financial Officer & Treasurer
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Annex I
TERMS AND CONDITIONS FOR
INCREMENTAL TERM LOAN COMMITMENT AGREEMENT
1. Incremental Term Loan Commitment Amounts (as of the
Agreement Effective Date):
Amount of Incremental
Name of Lender Term Loan Commitment
-------------- ---------------------
Bank of America, N.A. $135,620,000
Credit Lyonnais New York Branch $5,000,000
KZH ING-2 LLC $2,500,000
KZH CypressTree-1 LLC $2,500,000
KZH Soleil-2 LLC $1,620,000
KZH Sterling LLC $1,500,000
KZH Soleil LLC $1,260,000
Total $150,000,000
2. Designation of Tranche of Incremental Term Loan Commitments
(and Incremental Term Loans to be funded thereunder): B
3. Maturity Date: January 3, 2010 (the "Incremental Term Loan
Maturity Date").
4. Dates for, and amounts of, Scheduled Incremental Term Loan
Repayments:
Date Amount
March 31, 2003 0.25% of the initial
agreement principal amount of
Incremental Term Loans
hereunder
June 30, 2003 0.25% of the initial
agreement principal amount of
Incremental Term Loans
hereunder
September 30, 0.25% of the initial
2003 agreement principal amount of
Incremental Term Loans
hereunder
December 31, 2003 0.25% of the initial
agreement principal amount of
Incremental Term Loans
hereunder
March 31, 2004 0.25% of the initial
agreement principal amount of
Incremental Term Loans
hereunder
June 30, 2004 0.25% of the initial
agreement principal amount of
Incremental Term Loans
hereunder
September 30, 0.25% of the initial
2004 agreement principal amount of
Incremental Term Loans
hereunder
December 31, 2004 0.25% of the initial
agreement principal amount of
Incremental Term Loans
hereunder
March 31, 2005 0.25% of the initial
agreement principal amount of
Incremental Term Loans
hereunder
June 30, 2005 0.25% of the initial
agreement principal amount of
Incremental Term Loans
hereunder
September 30, 0.25% of the initial
2005 agreement principal amount of
Incremental Term Loans
hereunder
December 31, 2005 0.25% of the initial
agreement principal amount of
Incremental Term Loans
hereunder
March 31, 2006 0.25% of the initial
agreement principal amount of
Incremental Term Loans
hereunder
June 30, 2006 0.25% of the initial
agreement principal amount of
Incremental Term Loans
hereunder
September 30, 0.25% of the initial
2006 agreement principal amount of
Incremental Term Loans
hereunder
December 31, 2006 0.25% of the initial
agreement principal amount of
Incremental Term Loans
hereunder
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March 31, 2007 0.25% of the initial
agreement principal amount of
Incremental Term Loans
hereunder
June 30, 2007 0.25% of the initial
agreement principal amount of
Incremental Term Loans
hereunder
September 30, 0.25% of the initial
2007 agreement principal amount of
Incremental Term Loans
hereunder
December 31, 2007 0.25% of the initial
agreement principal amount of
Incremental Term Loans
hereunder
March 31, 2008 0.25% of the initial
agreement principal amount of
Incremental Term Loans
hereunder
June 30, 2008 0.25% of the initial
agreement principal amount of
Incremental Term Loans
hereunder
September 30, 0.25% of the initial
2008 agreement principal amount of
Incremental Term Loans
hereunder
December 31, 2008 0.25% of the initial
agreement principal amount of
Incremental Term Loans
hereunder
March 31, 2009 23.5% of the initial
aggregate principal amount of
Incremental Term Loans
hereunder
June 30, 2009 23.5% of the initial
aggregate principal amount of
Incremental Term Loans
hereunder
September 30, 23.5% of the initial
2009 aggregate principal amount of
Incremental Term Loans
hereunder
Incremental Term 23.5% of the initial
Loan Maturity aggregate principal amount of
Date Incremental Term Loans
hereunder
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5. Rules for application of voluntary and mandatory
prepayments:
As provided in Sections 4.01(a)(vi)(A) and
4.02(h)(iv)(A), as the case may be, i.e., (1) first, to
reduce the Scheduled Incremental Term Loan Repayments
which will become due within twelve months after the
date of such prepayment in direct order of maturity of
the dates of such Scheduled Incremental Term Loan
Repayments and (2) second, to the extent in excess of
the amount required to be applied as provided in the
preceding clause (1), to reduce the then remaining
Scheduled Incremental Term Loan Repayments on a pro
rata basis (based on the then remaining principal
amounts of such Scheduled Incremental Term Loan
Repayments).
6. Interest Rates:
Applicable Margin for Incremental B Term Loans
maintained as (i) Base Rate Loans shall be 3.25% and
(ii) Eurodollar Loans shall be 4.25%.
It is understood and agreed that prior to the earlier
of (i) the 90th day following the incurrence of the
Incremental Term Loans hereunder and (ii) the date upon
which the Administrative Agent shall determine in its
sole discretion that the primary syndication of the
Incremental Term Loans has been completed, Incremental
Term Loans maintained as Eurodollar Loans may only be
incurred having (x) one week Interest Periods, each of
which shall begin and end on the same day of the week,
or (y) any otherwise allowed Interest Period (pursuant
to Section 1.09 of the Credit Agreement) so long as the
Borrower pays any breakage costs incurred by any Lender
in connection with such primary syndication.
7. Other Conditions:
(a) The structure and all terms of, and the
documentation for, each component of the BHS
Acquisition shall be as set forth in the BHS Acquisition
Agreement (as defined in Section I.1 of the First
Amendment) and the documentation related thereto, in
each case delivered on October 7, 2002 to the Lenders
and the Incremental Term Loan Lenders party to the Incremental
Term Loan Commitment Agreement to which this Annex I is
attached, with such amendments, modifications or waivers
thereto as may be agreed to by the Administrative Agent or
the Required Lenders (for this purpose determined including
each Lender's Revolving Loan Commitments as well as such
Lender's Incremental Term Loan Commitments and Incremental
Term Loans (the "Aggregate Required Lenders")) and such
documentation shall be in full force andeffect. The BHS
Acquisition shall have been consummated in accordance with
the respective documentation therefore in all material
respects and in accordance with all applicable laws.
(b) After giving effect to the BHS Acquisition and
financings incurred in connection therewith, the Borrower
and its Subsidiaries will have no
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outstanding Indebtedness or preferred stock other than:
(w) the PIK Preferred Stock, (x) the BHS PIK Preferred
Stock, (y) Indebtedness outstanding under the
Credit Agreement and (z) Indebtedness outstanding as
permitted pursuant to Section 9.04 of the Credit Agreement
on the Agreement Effective Date.
(c) The Borrower shall have received cash proceeds in
an amount equal to at least $50,000,000 from either the MSCP
Group or management or both in consideration of common equity
issued by the Borrower to them.
(d) The Borrower shall have issued to the seller of BHS
the Convertible Subordinated Debt, and each of the
Convertible Subordinated Debt Documents shall be in the form
delivered on October 7, 2002 to the Lenders and the
Incremental Term Loan Lenders party to the Incremental Term
Loan Commitment Agreement to which this Annex I is attached,
with such amendments, modifications or waivers thereto as may
be agreed to by the Administrative Agent or the Aggregate
Required Lenders.
(e) VHS Acquisition Subsidiary Number 5, Inc. shall have
issued 19.9% of its capital stock to the seller of BHS and
the documentation related thereto shall be in the form
delivered on October 7, 2002 to the Lenders and the
Incremental Term Loan Lenders party to the Incremental Term
Loan Commitment Agreement to which this Annex I is attached,
with such amendments, modifications or waivers thereto as may
be agreed to by the Administrative Agent or the Aggregate
Required Lenders.
(f) The Borrower shall have utilized approximately
$45,000,000 of its cash on hand (subject to adjustments to
such amount in connection with Special Capital
Expenditures (as defined below) and any purchase price
adjustment in connection with the BHS Acquisition) to
finance, in part, the BHS Acquisition and to pay
fees and expenses in connection therewith prior to the
utilization of the Incremental Term Loans to be incurred
pursuant to the Incremental Term Loan Commitment Agreement to
which this Annex I is attached for such purpose. No Loans
other than the Incremental Term Loans to be incurred pursuant
to the Incremental Term Loan Commitment Agreement to which
this Annex I is attached shall be incurred to finance any
part of the BHS Acquisition or to pay any fees or expenses in
connection therewith. For the purposes of this Section 7,
the term "Special Capital Expenditures" shall mean both (i)
BHS' cost of Capital Expenditures made after July 15, 2002
and prior to the Agreement Effective Date, in an amount not
to exceed $3,500,000, in connection with making those repairs
related to life and safety issues which state regulators have
requested that BHS make as soon as practicable and (ii) BHS'
cost of other non-routine capital expenditures made after
July 15, 2002 that are approved in writing by both BHS and
Borrower.
(g) All necessary governmental (domestic and foreign)
and third party approvals and/or consents required in
connection with the transactions contemplated by the BHS
Acquisition and otherwise referred to in the First
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Amendment shall have been obtained and
remain in effect. Additionally, there shall not exist any
judgment, order, injunction or other restraint prohibiting or
imposing materially adverse conditions upon the BHS
Acquisition or the transactions contemplated by the
Incremental Term Loan Commitment Agreement to which this Annex I
is attached.
(h) No litigation by any entity (private or
governmental) shall be pending or threatened with respect to
the BHS Acquisition, the Incremental Term Loans to be
incurred pursuant to the Incremental Term Loan Commitment
Agreement to which this Annex I is attached
or the Credit Agreement or any documentation executed in
connection therewith, or could reasonably be expected to have
a material adverse effect on the business, property, assets,
liabilities (actual or contingent), operations or condition
(financial or otherwise) of the Borrower and its Subsidiaries
taken as a whole.
(i) The Administrative Agent shall have received legal
opinions from counsel, and covering matters, acceptable to
the Administrative Agent. None of the Incremental Term Loans
to be incurred pursuant to the Incremental Term Loan
Commitment Agreement to which this Annex I is attached or any
other financing to the Borrower (and neither the guaranties
thereof nor the security thereof) shall cause a violation or
breach of any agreement relating to any existing Indebtedness
of the Borrower or any of its Subsidiaries (including,
without limitation, the Senior Subordinated Notes and the
Convertible Subordinated Debt), or any other material
contract, of the Borrower or any of its Subsidiaries.
(j) All costs, fees, expenses (including, without
limitation, legal fees and expenses) and other compensation
contemplated by the First Amendment and the Incremental Term
Loan Commitment Agreement to which this Annex I is attached,
payable to the Lender and the Administrative Agent shall have
been paid to the extent due.
(k) The existing and new Subsidiary Guarantors shall
have executed and delivered (or acknowledged) the
Subsidiaries Guaranty. Each new Subsidiary Guarantor which
is required to execute a counterpart of the Subsidiaries
Guaranty shall be required to sign a counterpart of each of
the Security Documents and, to the extent required, enter
into Mortgages, and thereby provide a security interest in
all of the Collateral owned by each such new Subsidiary
Guarantor to secure all Obligations (including the
Incremental Term Loans) owed by each such new
Subsidiary Guarantor under the Credit Documents to which it
is a party.
(l) The shareholders of the VHS Acquisition Subsidiary
Number 5, Inc. shall have executed a Shareholders Agreement
which shall provide that VHS Acquisition Subsidiary Number 5,
Inc. may take any action required by the Credit Agreement
including, without limitation, becoming a party to the
Subsidiaries Guaranty and the Security Documents, which
Shareholders Agreement shall be in the form delivered on
October 7, 2002 to the Lenders and the Incremental Term
Loan Lenders party to the Incremental Term Loan Commitment
Agreement to
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which this Annex I is attached, with such amendments,
modifications or waivers thereto as may be agreed to
by the Administrative Agent or the Aggregate Required
Lenders.
(m) The Borrower shall have issued to the seller of BHS
the BHS PIK Preferred Stock, and the BHS PIK Preferred Stock
Document shall be in the form delivered on October 7, 2002 to
the Lenders and the Incremental Term Loan Lenders party to
the Incremental Term Loan Commitment Agreement to which this
Annex I is attached, with such amendments, modifications or
waivers thereto as may be agreed to by the Administrative
Agent or the Aggregate Required Lenders.
(n) The Lenders shall have received from the chief
financial officer of the Borrower a solvency certificate, in
form of Exhibit L to the Credit Agreement.
(o) The Required Lenders (for this purpose excluding any
Lender's Incremental Term Loans and Incremental Term Loan
Commitments provided pursuant to the Incremental Term Loan
Commitment Agreement to which this Annex I is attached) shall
have executed and delivered the First Amendment.
(p) The Borrower shall be in compliance with each of
Section 9.08 and 9.09 of the Credit Agreement (after giving
effect to the First Amendment), with the calculations
necessary to determine such compliance to be made on a Pro
Forma Basis after giving effect to the BHS Acquisition, the
incurrence of the Incremental Term Loans pursuant to the
Incremental Term Loan Commitment Agreement to which this
Annex I is attached and all other transactions consummated in
connection therewith, and the Borrower shall have delivered
to the Administrative Agent and each Lender (including, for
this purpose each Incremental Term Loan Lender) an officer's
certificate from the Chief FinancialOfficer of the Borrower
certifying as to the matters above and setting forth in
reasonable detail the calculations necessary to certify to
such matters.
(q) All representations and warranties contained in the
Credit Agreement and the other Credit Documents shall be true
and correct in all material respects as of the Agreement
Effective Date (although any representations and warranties
which specifically relate to a given date or period shall be
true and correct in all material respects as of the
respective date or for the respective period, as the case may
be).
(r) No Default or Event of Default shall exist and be
continuing on the Agreement Effective Date.
8. Maximum Number of Drawings permitted with respect to the
Incremental Term Loan Commitments provided pursuant to the
Incremental Term Loan Commitment Agreement to which this Annex I
is attached: 1
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9. Expiration date of any undrawn Incremental Term Loan
Commitments provided pursuant to the Incremental Term Loan
Commitment Agreement pursuant to which this Annex 1 is attached:
5:30 pm (EST) February 3, 2003, or, if earlier, the termination
of that certain Purchase and Sale Agreement, dated as of October
8, 2002, among the Borrower, VHS San Antonio Partners, L.P. and
the Baptist Health System.
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