EXHIBIT 10.4
EXECUTION
SEVENTH AMENDMENT TO
DEBTOR-IN-POSSESSION CREDIT AGREEMENT
AND CONSENT
April 26, 2000
Reference is made to that certain Debtor-In-Possession Credit
Agreement dated as of September 13, 1999 (as heretofore amended, supplemented or
otherwise modified, the "DIP Credit Agreement"), by and among Vencor, Inc., a
Delaware corporation ("Vencor"), and Vencor Operating, Inc., a Delaware
corporation ("Vencor Opco"), each as debtor and debtor-in-possession, and each
of Vencor's subsidiaries listed on the signature pages thereof, each as debtor
and debtor-in-possession (each such subsidiary, Vencor and Vencor Opco
individually referred to herein as a "Borrower" and, collectively, on a joint
and several basis, as the "Borrowers"); the Lenders listed on the signature
pages thereof; and Xxxxxx Guaranty Trust Company of New York, as arranger,
collateral agent and administrative agent (in such capacity, "Administrative
Agent") for the Lenders, and as an issuing bank for Letters of Credit
thereunder. Capitalized terms used herein without definition herein shall have
the meanings assigned to such terms in the DIP Credit Agreement and the
Borrowing Order.
Borrowers have (i) requested that Lenders make certain amendments to
the DIP Credit Agreement, as more fully set forth below, and (ii) submitted to
Lenders an amendment and supplement to the Cash Plan, attached hereto as Annex A
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(the "Cash Plan Supplement"), setting forth, for May 2000 and June 2000, a
consolidated cash forecast for the Borrowers. Accordingly:
1. The Borrowers and the undersigned Lenders hereby agree that:
(a) Section 1.01 of the DIP Credit Agreement is hereby amended
by inserting the following definition therein in alphabetical order:
"Surplus Property Sale Procedures Order" means the order of
the Court entitled "Order Establishing Procedures for the
Debtors' Sale of Certain Surplus Personal Property Pursuant to
Sections 363(b) and (f) of the Bankruptcy Code Without Further
Court Approval" entered in the Chapter 11 Cases on April 17,
2000, as in effect on its date of entry.
(b) Section 5.10 of the DIP Credit Agreement is hereby amended
by deleting the reference to "May 1, 2000" contained therein and
substituting therefor "June 15, 2000";
(c) Section 7.03(b) of the DIP Credit Agreement is hereby
amended by deleting the first sentence therefrom in its entirety and
substituting therefor the following:
"No Vencor Company (other than an Excluded Partnership) will make
any Asset Sale without (i) prior written approval of Required
Lenders and (ii) an appropriate approval of the Court, to the
extent such Court approval is required pursuant to the Bankruptcy
Code or any order of the Court; provided that (x) the foregoing
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shall not prohibit transactions permitted by Section 7.12; (y)
clause (i) above shall not apply to any Asset Sale of any
Properties Held For Sale so long as (A) the consideration
received from such Asset Sale shall be in an amount at least
equal to the fair market value thereof (or, in the case of the
Cessna Plane, in an amount in excess of the amount expended for
the purchase thereof), (B) the sole consideration received shall
be cash, and (C) the Net Cash Proceeds of such Asset Sale shall
be applied as required by Section 2.08(a)(ii); and (z) after the
date of entry of the Surplus Property Sale Procedures Order,
clause (i) above shall not apply to any sale of Surplus Property
(as defined in the Surplus Property Sale Procedures Order)
consummated in accordance with the Proposed Sale Procedures (as
defined in the Surplus Property Sale Procedures Order), so long
as (A) the gross proceeds of any such sale individually do not
exceed $150,000, and the gross proceeds of all such sales in the
aggregate do not exceed $3,000,000, (B) at the time of such sale,
no Default shall have occurred and be continuing or would result
therefrom, (C) the sole consideration received from any such sale
which is an Asset Sale shall be cash in an amount no less than
the fair market value of the assets sold, and (D) the Net Cash
Proceeds of any such Asset Sale shall be applied to repay
outstanding Loans, if any, and to reduce the Commitments in
accordance with Section 2.08 of the DIP Credit Agreement; and
provided, further, that nothing in this Section 7.03(b) shall
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prohibit, after the Fifth Amendment Effective Date, (x) the sale
at auction (or by any other manner approved by the Court) of
approximately 70 vehicles associated with the Borrowers' Vencare
business line and (y) the sale of two durable medical equipment
storefronts (and the assumption and assignment of the related
leases) previously associated with the Borrowers' Vencare
business line to any Person other than a Subsidiary or an
Affiliate of any Borrower, in each case so long as (1) at the
time of such sale, no Default shall have occurred and be
continuing or would result therefrom, (2) the consideration
received by the Borrowers for such assets shall be in cash in an
aggregate amount no less than the aggregate fair market value
thereof, (3) such sale is approved by the Court to the extent
such approvals are required pursuant to the Bankruptcy Code or an
order of the Court, and (4) within five Business Days of
Borrowers' receipt of the Net Cash Proceeds of such Asset Sale,
said Net Cash Proceeds shall be applied to repay outstanding
Loans, if any, and to reduce the Commitments in accordance with
Section 2.08."
(d) Section 2.13 of the DIP Credit Agreement is hereby amended by
deleting clause (v) in its entirety therefrom and substituting
therefor the following:
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"(v) the prior written consent of Required Lenders (except
in the case of Asset Sales permitted to be consummated under
Section 7.03(b) without the prior written approval of Required
Lenders) and the approval of the Court (to the extent such Court
approval is required pursuant to the Bankruptcy Code or an order
of the Court) with respect to such Asset Sale shall have been
obtained."
2. Each of the undersigned Lenders hereby (i) acknowledges that the
substance of the Cash Plan Supplement is satisfactory to such Lender and
(ii) consents to supplementing the Cash Plan with the forecast for May 2000
and June 2000 contained in the Cash Plan Supplement.
On and after the Seventh Amendment Effective Date (as defined below),
each reference in the DIP Credit Agreement to "this Agreement", "hereunder",
"hereof", "herein" or words of like import referring to the DIP Credit
Agreement, and each reference in the other Financing Documents to the "DIP
Credit Agreement", "thereunder", "thereof" or words of like import referring to
the DIP Credit Agreement, shall mean and be a reference to the DIP Credit
Agreement as amended by this Seventh Amendment to Debtor-In-Possession Credit
Agreement and Consent (this "Seventh Amendment"; the DIP Credit Agreement, as so
amended, being the "Amended Agreement").
Without limiting the generality of the provisions of Section 11.05 of
the DIP Credit Agreement, the amendment and the consent set forth in paragraphs
1 and 2 above shall be limited precisely as written, and nothing in this Seventh
Amendment shall be deemed to (a) constitute a consent to any other supplement to
the Cash Plan or any other document, transaction, occurrence, event or condition
under Section 5.01(m) of the DIP Credit Agreement or any other term, provision
or condition of the DIP Credit Agreement or any of such other Financing
Documents, or (b) prejudice any right or remedy that the Administrative Agent or
any Lender may now have or may have in the future under or in connection with
the DIP Credit Agreement or any of such other Financing Documents. Except as
specifically amended by this Seventh Amendment, the DIP Credit Agreement and
such other Financing Documents shall remain in full force and effect and are
hereby ratified and confirmed.
In order to induce Lenders to enter into this Seventh Amendment, each
Borrower, by its execution of a counterpart of this Seventh Amendment,
represents and warrants that (a) such Borrower has the corporate or other power
and authority and all material Governmental Approvals required to enter into
this Seventh Amendment and to carry out the transactions contemplated by, and
perform its obligations under, the Amended Agreement, (b) the execution and
delivery of this Seventh Amendment and the performance of the Amended Agreement
have been duly authorized by all necessary corporate or other action on the part
of such Borrower, (c) the execution and delivery by such Borrower of this
Seventh Amendment and the performance by such Borrower of the Amended Agreement
do not and will not contravene, or constitute a default under, any Applicable
Laws (including an applicable order of the Court) or any provision of its
Organizational Documents, or of any agreement or other instrument binding upon
it or result in or require the imposition of any Liens (other than the Liens
created by the Collateral Documents) on any of its assets, (d) the execution and
delivery by such Borrower of this Seventh Amendment and the performance by such
Borrower of the Amended Agreement do not and will
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not require any action by or in respect of, or filing with, any governmental
body, agency or official, (e) this Seventh Amendment and the Amended Agreement
have been duly executed and delivered by such Borrower and constitute the valid
and binding obligations of such Borrower, enforceable in accordance with their
respective terms, except as may be limited by general principles of equity, (f)
for purposes of the Borrowing Order (i) this Seventh Amendment constitutes a
non-material modification of the DIP Credit Agreement and the Financing
Documents, and (ii) notice of this Seventh Amendment has been given to and
received by counsel to the Committee (as defined in the Borrowing Order), and
(g) after giving effect to this Seventh Amendment, no event has occurred and is
continuing or will result from the consummation of the transactions contemplated
by this Seventh Amendment that would constitute a Default.
This Seventh Amendment may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument. This Seventh
Amendment shall become effective (the date of such effectiveness being the
"Seventh Amendment Effective Date") on April 30, 2000; provided that (a) the
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Borrowers and Required Lenders shall have executed counterparts of this Seventh
Amendment and the Borrowers and the Administrative Agent shall have received
written or telephonic notification of such execution and authorization of
delivery thereof; (b) the Administrative Agent shall have received evidence
satisfactory to it that all outstanding statements of O'Melveny & Xxxxx LLP,
Xxxxx Xxxx & Xxxxxxxx and Xxxxxxxx & Xxxxx that are received by Vencor prior to
12:00 Noon (New York City time) on April 26, 2000 have been paid in full; and
(c) no objections to this Seventh Amendment shall have been served on the
Administrative Agent by the Committee.
Pursuant to paragraph 3 of the Borrowing Order, this Seventh Amendment
shall become effective upon the Seventh Amendment Effective Date without the
need for any further order of the Court and upon compliance with the notice
requirement of paragraph 3 of the Borrowing Order and the Committee having
submitted no objection thereto.
THIS SEVENTH AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT
LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
[Remainder of page intentionally left blank]
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BORROWERS:
Advanced Infusion Systems, Inc.
American X-Rays, Inc.
C.P.C. of Louisiana, Inc.
Community Behavioral Health System, Inc.
Community Psychiatric Centers of Arkansas, Inc.
Community Psychiatric Centers of California
Community Psychiatric Centers of Florida, Inc.
Community Psychiatric Centers of Idaho, Inc.
Community Psychiatric Centers of Indiana, Inc.
Community Psychiatric Centers of Kansas, Inc.
Community Psychiatric Centers of Mississippi, Inc.
Community Psychiatric Centers of Missouri, Inc.
Community Psychiatric Centers of North Carolina, Inc.
Community Psychiatric Centers of Oklahoma, Inc.
Community Psychiatric Centers of Utah, Inc.
Community Psychiatric Centers Properties Incorporated
Community Psychiatric Centers Properties of Oklahoma,
Inc.
Community Psychiatric Centers Properties of Texas, Inc.
Community Psychiatric Centers Properties of Utah, Inc.
Courtland Gardens Health Center, Inc.
CPC Investment Corp.
CPC Managed Care Health Services, Inc.
CPC of Georgia, Inc.
CPC Properties of Arkansas, Inc.
CPC Properties of Illinois, Inc.
CPC Properties of Indiana, Inc.
CPC Properties of Kansas, Inc.
CPC Properties of Louisiana, Inc.
CPC Properties of Mississippi, Inc.
CPC Properties of Missouri, Inc.
CPC Properties of North Carolina, Inc.
First Rehab, Inc.
Florida Hospital Properties, Inc.
Health Care Holdings, Inc.
Health Care Technology, Inc.
Helian ASC of Northridge, Inc.
Helian Health Group, Inc.
Helian Recovery Corporation
Homestead Health Center, Inc.
Horizon Healthcare Services, Inc.
Interamericana Health Care Group
S-1
X.X. Xxxxxx Hospital, Inc.
Lafayette Health Care Center, Inc.
MedEquities, Inc.
Medisave of Tennessee, Inc.
Medisave Pharmacies, Inc.
Old Orchard Hospital, Inc.
Palo Alto Surgecenter Corporation
Peachtree-Parkwood Hospital, Inc.
PersonaCare, Inc.
PersonaCare Living Center of Clearwater, Inc.
PersonaCare of Bradenton, Inc.
PersonaCare of Clearwater, Inc.
PersonaCare of Connecticut, Inc.
PersonaCare of Georgia, Inc.
PersonaCare of Huntsville, Inc.
PersonaCare of Little Rock, Inc.
PersonaCare of Ohio, Inc.
PersonaCare of Owensboro, Inc.
PersonaCare of Pennsylvania, Inc.
PersonaCare of Pompano East, Inc.
PersonaCare of Pompano West, Inc.
PersonaCare of Reading, Inc.
PersonaCare of San Antonio, Inc.
PersonaCare of San Xxxxx, Inc.
PersonaCare of Shreveport, Inc.
PersonaCare of St. Petersburg, Inc.
PersonaCare of Warner Xxxxxxx, Inc.
PersonaCare of Wisconsin, Inc.
PersonaCare Properties, Inc.
ProData Systems, Inc.
Recovery Inns of America, Inc.
Respiratory Care Services, Inc.
Stamford Health Facilities, Inc.
THC-Chicago, Inc.
THC-Hollywood, Inc.
THC-Houston, Inc.
THC-Minneapolis, Inc.
THC-North Shore, Inc.
THC-Orange County, Inc.
THC-San Diego, Inc.
THC-Seattle, Inc.
TheraTx Healthcare Management, Inc.
TheraTx Health Services, Inc.
TheraTx Management Services, Inc.
TheraTx Medical Supplies, Inc.
TheraTx Rehabilitation Services, Inc.
TheraTx Staffing, Inc.
S-2
Transitional Hospitals Corporation, a Delaware
Corporation
Transitional Hospitals Corporation, a Nevada
Corporation
Transitional Hospitals Corporation of Indiana, Inc.
Transitional Hospitals Corporation of Louisiana, Inc.
Transitional Hospitals Corporation of Michigan, Inc.
Transitional Hospitals Corporation of Nevada, Inc.
Transitional Hospitals Corporation of New Mexico, Inc.
Transitional Hospitals Corporation of Tampa, Inc.
Transitional Hospitals Corporation of Texas, Inc.
Transitional Hospitals Corporation of Wisconsin, Inc.
Xxxxxx Nursing Center, Inc.
Xxxxxxxx Enterprises, Inc.
VC-OIA, Inc.
VC-TOHC, Inc.
XX-XX, Inc.
Vencare, Inc.
Vencare Rehab Services, Inc.
Vencor Facility Services, Inc.
Vencor Holdings, L.L.C.
Vencor Home Care Services, Inc.
Vencor Hospice, Inc.
Vencor Hospitals East, L.L.C.
Vencor Hospitals West, L.L.C.
Vencor, Inc.
Vencor Insurance Holdings, Inc.
Vencor Investment Company
Vencor Nevada, L.L.C.
Vencor Nursing Centers East, L.L.C.
Vencor Nursing Centers Central L.L.C.
Vencor Nursing Centers North, L.L.C.
Vencor Nursing Centers South, L.L.C.
Vencor Nursing Centers West, L.L.C.
Vencor Operating, Inc.
Vencor Pediatric Care, Inc.
Vencor Provider Network, Inc.
Ventech Systems, Inc.
by: Vencor Operating, Inc., as agent and attorney-in-
fact for each of the foregoing entities
By:__________________________
Name:
Title:
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EXECUTION
Stamford Health Associates, L.P.
BY: Stamford Health Facilities, Inc., Its General
Partner
By:__________________________
Name:
Title:
Vencor Home Care and Hospice Indiana Partnership
BY: Vencor Home Care Services, Inc., Its General
Partner
By:__________________________
Name:
Title:
BY: Vencor Hospice, Inc., Its General Partner
By:__________________________
Name:
Title:
Vencor Hospitals Limited Partnership
BY: Vencor Operating, Inc., Its General Partner
By:_________________________
Name:
Title:
BY: Vencor Nursing Centers Limited Partnership, Its
General Partner
BY: Vencor Operating, Inc., Its General
Partner
By:_____________________
Name:
Title:
Vencor Nursing Centers Central Limited Partnership
BY: Vencor Operating, Inc., Its General Partner
By:_________________________
Name:
Title:
BY: Vencor Nursing Centers Limited Partnership, Its
General Partner
By: Vencor Operating, Inc., Its General
Partner
By:_____________________
Name:
Title:
Vencor Nursing Centers Limited Partnership
By: Vencor Operating, Inc., Its General Partner
By:__________________________
Name:
Title:
By: Vencor Hospitals Limited Partnership, Its
General Partner
BY: Vencor Operating, Inc., Its General
Partner
By:______________________
Name:
Title:
AGENTS AND LENDERS:
XXXXXX GUARANTY TRUST COMPANY OF NEW YORK, as Arranger,
Collateral Agent and Administrative Agent and as a
Lender
By:____________________________
Name:
Title:
ABLECO FINANCE LLC, as a Lender
By:__________________________
Name:
Title:
APPALOOSA INVESTMENT LIMITED PARTNERSHIP I, as a Lender
By: _______________________________
Name:
Title:
BANKERS TRUST COMPANY, as a Lender
By: _________________________
Name:
Title:
CHASE SECURITIES INC, AS AGENT FOR THE CHASE MANHATTAN
BANK, as a Lender
By: ____________________
Name:
Title:
XXXXXXX XXXXX CREDIT PARTNERS L.P., as a Lender
By: ____________________________
Name:
Title:
PARIBAS, as a Lender
By: ______________________
Name:
Title:
By: ____________________________________
Name:
Title:
XXX XXXXXX PRIME RATE INCOME TRUST, as a Lender
By: XXX XXXXXX INVESTMENT ADVISORY CORP.
By: _________________________
Name:
Title:
FRANKLIN MUTUAL ADVISERS LLC, as a Lender
By: ______________________
Name:
Title:
FRANKLIN FLOATING RATE TRUST, as a Lender
By: ____________________
Name:
Title:
FOOTHILL CAPITAL CORPORATION, as a Lender
By: ______________________
Name:
Title:
FOOTHILL INCOME TRUST II, L.P., as a Lender
By: FIT II GP, LLC, its general partner
By: ______________________
Name:
Title:
ACKNOWLEDGEMENT AND CONSENT OF SUBSIDIARY GUARANTOR
By its execution of a counterpart of this Seventh Amendment, the
undersigned, as a Subsidiary Guarantor under that certain Guaranty Agreement
dated as of September 13, 1999 (the "Guaranty") for the benefit of Lenders, and
as an Original Lien Grantor under that certain Security Agreement dated as of
September 13, 1999 (the "Security Agreement") between the undersigned, the
Borrowers and Collateral Agent, as Secured Party, hereby acknowledges that it
has read this Seventh Amendment and consents to the terms thereof and further
hereby confirms and agrees that, notwithstanding the effectiveness of this
Seventh Amendment, the obligations of the undersigned under the Guaranty and the
Security Agreement shall not be impaired or affected and each of the Guaranty
and the Security Agreement is, and shall continue to be, in full force and
effect and is hereby confirmed and ratified in all respects.
CARIBBEAN BEHAVIORAL HEALTH
SYSTEMS, INC.
By: ___________________
Name:
Title:
Annex A
Vencor, Inc
Cash Plan
Period: Weeks Beginning May 1, 2000 to June 26, 2000
Prepared: April 25, 2000
(in millions)
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CASH FLOW FORECAST: (Revised by Company on April 25, 2000)
Week Beginning: 5/1/2000 5/8/2000 5/15/2000 5/22/2000 5/29/2000 6/5/2000 6/12/2000 6/19/2000 6/26/2000
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Projected Receipts:
Facility Receipts $ 22.3 $ 28.3 $ 41.6 $ 38.7 $ 29.6 $ 22.2 $ 32.6 $ 41.5 $ 40.0
Agency Receipts 13.7 15.5 16.6 16.6 10.2 15.1 15.8 15.8 15.1
PIP Receipts - 11.3 - 11.3 - 11.3 - 11.3 -
Misc Receipts - - - - - - - - -
------ ------ ------ ------ ------ ------ ------ ------ ------
Subtotal Receipts $ 36.0 $ 55.1 $ 58.2 $ 66.6 $ 39.8 $ 48.6 $ 48.4 $ 68.6 $ 55.1
Projected Disbursements:
Accounts Payable $(24.7) $(23.7) $(21.6) $(20.6) $(18.4) $(25.8) $(25.8) $(22.7) $(22.7)
Ventas (15.2) - - - - (15.2) - - -
Scheduled Medicare Payments - - - - - - - -
Payroll (19.2) (16.8) (19.2) (16.0) (15.8) (22.4) (16.8) (20.2) (17.6)
Taxes (5.9) (8.9) (5.9) (8.7) (5.9) (9.6) (5.9) (9.6) (5.6)
VEBA Funding (1.5) (1.5) (1.5) (1.5) (1.5) (1.2) (1.1) (1.1) (1.1)
Vendor Deposits (2.1) (2.1) (2.1) (2.1) (2.1) (2.1) (2.1) (2.1) (2.1)
Executive Retention - - - - - - - - -
Restructuring Costs (1.0) - - - (0.1) (1.0) - - (0.1)
------ ------ ------ ------ ------ ------ ------ ------ ------
Subtotal Uses of Cash $(69.6) $(53.0) $(50.3) $(48.9) $(43.8) $(77.3) $(51.7) $(55.7) $(49.2)
------ ------ ------ ------ ------ ------ ------ ------ ------
Daily Cash Flow before Next Day
Funding Requirements $(33.6) $ 2.1 $ 7.9 $ 17.7 $ (4.0) $(28.7) $ (3.3) $ 12.9 $ 5.9
Reduce (Borrow) Next Day Funding - - - - - - - - -
Requirement ------ ------ ------ ------ ------ ------ ------ ------ ------
Subtotal Net Sources (Uses) of Cash $(33.6) $ 2.1 $ 7.9 $ 17.7 $ (4.0) $(28.7) $ (3.3) $ 12.9 $ 5.9
------ ------ ------ ------ ------ ------ ------ ------ ------
Forecasted Revolver (Borrowing) $(33.6) $ 2.1 $ 7.9 $ 17.7 $ (4.0) $(28.7) $ (3.3) $ 12.9 $ 5.9
Repayment
Beginning Revolver $ - $ - $ - $ - $ - $ - $ - $ - $ -
Activity - - - - - - - - -
------ ------ ------ ------ ------ ------ ------ ------ ------
Ending Revolver $ - $ - $ - $ - $ - $ - $ - $ - $ -
====== ====== ====== ====== ====== ====== ====== ====== ======
Beginning Cash $131.5 $ 97.9 $100.0 $107.9 $125.6 $121.6 $ 92.9 $ 89.6 $102.5
Net Change in Cash (33.6) 2.1 7.9 17.7 (4.0) (28.7) (3.3) 12.9 5.9
------ ------ ------ ------ ------ ------ ------ ------ ------
Ending Cash $ 97.9 $100.0 $107.9 $125.6 $121.6 $ 92.9 $ 89.6 $102.5 $108.4
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COVENANT COMPUTATION:
Cumulative Net Cash Flow $(33.6) $(31.5) $(23.6) $ (5.9) $ (9.9) $(38.6) $(41.9) $(29.0) $(23.1)
Permitted Variance (1) (18.0) (18.0) (18.0) (18.0) (18.0) (18.0) (18.0) (18.0) (18.0)
------ ------ ------ ------ ------ ------ ------ ------ ------
Compliance with Cash Plan $(51.6) $(49.5) $(41.6) $(23.9) $(27.9) $(56.6) $(59.9) $(47.0) $(41.1)
====== ====== ====== ====== ====== ====== ====== ====== ======
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(1) The Borrower is allowed to disburse up to $52,500,000 above the permitted
variance if, and only if, such disbursements are required to be made to
repay obligations owing to Medicare or its agents.
