EXHIBIT 10.1
FIRST AMENDMENT TO CREDIT AGREEMENT
FIRST AMENDMENT TO CREDIT AGREEMENT (this “First Amendment”), dated as of August 15, 2005, among VANGUARD HEALTH HOLDING COMPANY I, LLC, a Delaware limited liability company (“VHS Holdco I”), VANGUARD HEALTH HOLDING COMPANY II, LLC, a Delaware limited liability company (“VHS Holdco II”), VANGUARD HOLDING COMPANY II, INC., a Delaware corporation (the “Co-Borrower” and, together with VHS Holdco II, the “Borrowers” and each, a “Borrower”), the lenders party to the Credit Agreement referred to below from time to time (the “Lenders”) and BANK OF AMERICA, N.A., as Administrative Agent (in such capacity, the “Administrative Agent”). Unless otherwise defined herein, capitalized terms used herein and defined in the Credit Agreement are used herein as therein defined.
W I T N E S S E T H :
WHEREAS, VHS Holdco I, the Borrowers, the Lenders, the Administrative Agent, the Syndication Agent, the Co-Documentation Agents and the Joint Lead Arrangers have entered into a Credit Agreement, dated as of September 23, 2004 (the “Credit Agreement”);
WHEREAS, the Borrowers wish to amend the Credit Agreement to enable them to (i) prepay the outstanding aggregate principal amount, and all accrued and unpaid interest on, the Existing Senior Subordinated Notes and (ii) convert and/or refinance in full all of the Initial Term Loans outstanding on the Repricing Amendment Effective Date (as defined below) (the “Existing Term Loans to be Refinanced”) through (x) the conversion of such Existing Term Loans to be Refinanced into Replacement Term Loans and/or (y) the incurrence of Replacement Term Loans as more fully provided herein, in each case with the same terms as were theretofore applicable to the Existing Term Loans to be Refinanced except as amended by this First Amendment; and
WHEREAS, the parties hereto wish to amend the Credit Agreement as herein provided;
NOW, THEREFORE, it is agreed:
A. Amendment Relating to the Prepayment of Existing Senior Subordinated Notes.
1. Section 9.11(i) of the Credit Agreement is hereby amended by deleting the text “any Existing Senior Subordinated Notes,” appearing therein.
B. Amendments Relating to the Repricing of Initial Term Loans.
1. (a) On September 26, 2005 (subject to (i) the receipt by the Administrative Agent of a Notice of Borrowing in form and substance reasonably satisfactory to the Administrative Agent and substantially in accordance with the requirements of Section 1.03 of the Credit Agreement (with appropriate adjustments to reflect a request for the Borrowing of Replacement Term Loans instead of “Term Loans”), (ii) the receipt by the Administrative Agent of a notice of prepayment of the Existing Term Loans to be Refinanced in accordance with the relevant requirements of Section 4.01(a) of the Credit Agreement, and (iii) the satisfaction of the relevant conditions specified in Section 6 of the Credit Agreement and the occurrence of the Repricing Amendment Effective Date on or prior to such date), each Lender with a “Replacement Term Loan Commitment” as shown on Schedule 11.01 attached hereto (each, a “Replacement Term Loan Commitment”) hereby agrees to make a Replacement Term Loan in the respective principal amount set forth on Schedule 11.01 attached hereto, in each case in accordance with the relevant requirements of the Credit Agreement except that (i) the date of the making of the Replacement Term Loans described in this paragraph, other than those Existing Term Loans to be Refinanced being converted into Replacement Term Loans, shall be as set forth above and (ii) each Lender with a Replacement Term Loan Commitment with Existing Term Loans to be Refinanced outstanding immediately prior to the occurrence of the Repricing Amendment Effective Date shall convert its theretofore outstanding Existing Term Loans to be Refinanced (in a principal amount up to, but not in excess of, the Replacement Term Loan Commitment of such Lender as specified on Schedule 11.01 attached hereto) into Replacement Term Loans hereunder without any requirement that it make cash proceeds available to the Borrower (except to the extent that the Replacement Term Loan Commitment of such Lender exceeds the principal amount of its theretofore outstanding Existing Term Loans to be Refinanced). The Borrower shall direct the Administrative Agent to apply (and the Administrative Agent shall apply) all cash proceeds of Replacement Term Loans made hereunder to refinance then outstanding Existing Term Loans to be Refinanced pursuant to the Credit Agreement (before giving effect to this First Amendment) other than those Existing Term Loans to be Refinanced being converted into Replacement Term Loans.
(b) It is understood and agreed by each of the parties hereto that (x) the aggregate principal amount of Replacement Term Loans outstanding after giving effect to the Repricing Amendment Effective Date shall be equal to the aggregate amount of Existing Term Loans to be Refinanced which were outstanding immediately prior to giving effect thereto, (y) the Replacement Term Loans being made pursuant to this First Amendment (whether by conversion or the making of cash proceeds available to the Borrower to refinance Existing Term Loans to be Refinanced) shall constitute Initial Term Loans for all purposes of the Credit Agreement, and (z) on the Repricing Amendment Effective Date, the Replacement Term Loan Commitments shall terminate after giving effect to the incurrence of (and conversion of Existing Term Loans to be Refinanced into) Replacement Term Loans.
(c) Notwithstanding anything herein to the contrary, in the event that the aggregate principal amount of Existing Term Loans to be Refinanced immediately prior to the incurrence of the Replacement Term Loans (and/or the conversion of Existing Term Loans to be Refinanced) as provided above in this Section B.1 is less than $795,687,500 (with the difference of (x) $795,687,500 less (y) the aggregate principal amount of Existing Term Loans to be Refinanced outstanding immediately prior to such incurrence (and/or conversion) herein referred to as the “Reduction Amount”), then the aggregate amount of the Replacement Term Loan Commitments shall be reduced by the Reduction Amount, with such reduction to be applied to reduce the Replacement Term Loan Commitment of each Lender with such a commitment on a pro rata basis based on the relative amounts of each such Lender’s Replacement Term Loan Commitment existing immediately prior to such reduction. In connection with any reduction to the Replacement Term Loan Commitments as contemplated above in this clause (c), Schedule 11.01 (as amended pursuant to this First Amendment) shall be automatically adjusted to reflect such pro rata reduction.
(d) Any Lender holding outstanding Existing Term Loans to be Refinanced immediately prior to the Repricing Amendment Effective Date, that does not (in its sole discretion) provide a Replacement Term Loan Commitment pursuant hereto, shall have its outstanding Existing Term Loans to be Refinanced repaid in full on the Repricing Amendment Effective Date (if same occurs).
2. On the Repricing Amendment Effective Date, (x) the Interest Period applicable to each Borrowing of Existing Term Loans to be Refinanced existing on the Repricing Amendment Effective Date immediately prior to the incurrence of the Replacement Term Loans and maintained as Eurodollar Loans under the Credit Agreement shall, simultaneously with the incurrence of (and conversion of Existing Term Loans to be Refinanced into) Replacement Term Loans, be broken, (y) the Administrative Agent shall (and is hereby authorized to) take all appropriate actions to ensure that all Lenders with outstanding Term Loans (after giving effect to the incurrence of Replacement Term Loans pursuant to this Amendment) participate in each new Borrowing of Term Loans on a pro rata basis (based upon the principal amount of the Term Loans held by each such Lender (after giving effect to the Amendment Effective Date) and (z) the Borrower shall be obligated to pay to the respective Lenders breakage or other costs of the type referred to in Section 1.11 of the Credit Agreement (if any) incurred in connection with the actions taken pursuant to preceding clauses (x) and (y).
3. Section 4.02(b) of the Credit Agreement is hereby amended by deleting the text “December 31, 2004” appearing therein and inserting the text “December 31, 2005” in lieu thereof.
4. Section 8 of the Credit Agreement is hereby amended by inserting the following new subsection 8.15 at the end of said Section:
“Section 8.15 First Amendment Mortgage Amendments. Within 60 days following the Repricing Amendment Effective Date, if and to the extent requested by the Collateral Agent, the Borrower shall have delivered to the Collateral Agent, or caused to be delivered to the Collateral Agent, fully executed counterparts of amendments (the “First Amendment Mortgage Amendments”), in form and substance reasonably satisfactory to the Administrative Agent, to each of the Mortgages covering the Mortgaged Properties, together with evidence that counterparts of each of the First Amendment Mortgage Amendments have been delivered to the title company insuring the Lien on the Mortgages for recording in all places to the extent necessary or desirable, in the judgment of the Collateral Agent, effectively to maintain a valid and enforceable perfected mortgage lien, superior to and prior to the rights of all third parties and subject to no other Liens (except as are permitted by Section 9.01), on the Mortgaged Properties in favor of the Collateral Agent for the benefit of the Secured Parties securing all of the Obligations (including the Replacement Term Loans), provided that the actions required to be taken by the Borrower pursuant to this Section 8.15 shall not be required in the event that each Lender holding outstanding Term Loans immediately prior to the Repricing Amendment Effective Date provides a Replacement Term Loan Commitment pursuant to the First Amendment.”
5. The definition of “Applicable Margin” appearing in Section 11.01 of the Credit Agreement is hereby amended by deleting clause (b) appearing therein in its entirety and inserting the following in lieu thereof:
“(b) with respect to Initial Term Loans, (x) maintained as Eurodollar Loans, 2.25% and (y) maintained as Base Rate Loans, 1.25%; and”.
6. Section 11.01 of the Credit Agreement is hereby further amended by inserting in the appropriate alphabetical order the following new definitions:
“First Amendment” shall mean the First Amendment to this Agreement, dated as of August 15, 2005.
“Preliminary Amendment Effective Date” shall have the meaning provided in the First Amendment.
“Repricing Amendment Effective Date” shall have the meaning provided in the First Amendment.
“Replacement Term Loan Commitment” shall have the meaning provided in the First Amendment.
7. Schedule 11.01 to the Credit Agreement is hereby amended by deleting same in its entirety and inserting in lieu thereof a new Schedule 11.01 in the form of Schedule 11.01 attached hereto.
C. Miscellaneous Provisions
1. In order to induce the Lenders to enter into this First Amendment, VHS Holdco I and the Borrowers hereby represent and warrant to each of the Lenders that both immediately before and immediately after giving effect to the Preliminary Amendment Effective Date (as defined below) (i) all of the representations and warranties contained in the Credit Agreement and in the other Credit Documents are true and correct in all material respects on and as of the Preliminary Amendment Effective Date with the same effect as though such representations and warranties had been made on and as of such date (unless such representations and warranties relate to a specific earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date) and (ii) there exists no Default or Event of Default on the Preliminary Amendment Effective Date.
2. This First Amendment is limited as specified and shall not constitute a modification, acceptance or waiver of any other provision of the Credit Agreement or any other Credit Document.
3. This First Amendment may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which counterparts when executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. A complete set of counterparts executed by all the parties hereto shall be lodged with Holdings, the Borrowers and the Administrative Agent.
4. THIS FIRST AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
5. The amendment set forth in Section A of this First Amendment shall become effective on the date (the “Preliminary Amendment Effective Date”) when:
(i) VHS Holdco I, each Borrower, each Subsidiary Guarantor and the Required Lenders shall have signed a counterpart hereof (whether the same or different counterparts) and shall have delivered (including by way of facsimile transmission) the same to the Administrative Agent at the Notice Office.
6. The amendments set forth in Section B of this First Amendment shall become effective on September 26, 2005 (the “Repricing Amendment Effective Date”) provided that each of the following conditions shall have been satisfied:
(i) The Preliminary Amendment Effective Date shall have occurred;
(ii) each Lender with a Replacement Term Loan Commitment as shown on Schedule 11.01 attached hereto, as adjusted pursuant to Section B.1.(c) of this First Amendment (which in aggregate total amount shall equal the aggregate principal amount of the Existing Term Loans to be Refinanced outstanding on the Repricing Amendment Effective Date), shall have signed a counterpart hereof (whether the same or different counterparts) and shall have delivered (including by way of facsimile transmission) the same to the Administrative Agent at the Notice Office;
(iii) there shall have been delivered to the Administrative Agent for the account of each of the Lenders that have requested same an appropriate Initial Term Note executed by the Borrowers in each case in the amount, maturity and otherwise as provided in the Credit Agreement;
(iii) all accrued and unpaid interest on all Existing Term Loans to be Refinanced that are to be repaid in cash by the incurrence of new Replacement Term Loans (as opposed to by conversion of Existing Term Loans to be Refinanced into Replacement Term Loans) shall have been paid in full and all costs of the type described in Section 1.11 of the Credit Agreement shall have been paid in full in connection with the repayment (including by way of conversion of Existing Term Loans to be Refinanced into Replacement Term Loans) of the Existing Term Loans to be Refinanced on the Repricing Amendment Effective Date;
(iv) the principal of all outstanding Existing Term Loans to be Refinanced which are not being converted into Replacement Term Loans in accordance with the terms of this First Amendment shall concurrently be paid in full with the proceeds of Replacement Term Loans made pursuant to Section B.1 of this First Amendment;
(v) there shall have been delivered to Administrative Agent copies of resolutions of the board of directors of the Borrowers approving and authorizing the execution, delivery and performance of this First Amendment and the Credit Documents as amended by this First Amendment, certified as of the Repricing Amendment Effective Date by the chairman of the board, the chief executive officer, the chief financial officer, the president, any vice president or the treasurer of the Borrowers, and attested to by the secretary or any assistant secretary of the respective Borrower as being in full force and effect without modification or amendment;
(vi) the Administrative Agent shall have received (i) from Simpson, Thacher & Bartlett LLP, special counsel to the Credit Parties, an opinion addressed to the Administrative Agent, the Collateral Agent and each of the Lenders and dated the Repricing Amendment Effective Date, which opinion shall be in form and substance reasonably satisfactory to the Administrative Agent and (ii) from Ronald P. Soltman, Esq., General Counsel to the Credit Parties, an opinion addressed to the Administrative Agent, the Collateral Agent and each of the Lenders and dated the Repricing Amendment Effective Date, which opinion shall be in form and substance reasonably satisfactory to the Administrative Agent;
(vii) the Administrative Agent shall have received an officer’s certificate signed by the chairman of the board or the chief financial officer of each Borrower, and attested to by the secretary or the assistant secretary of the respective Borrower, certifying that (i) the incurrence of the Replacement Term Loans does not violate the New Senior Subordinated Note Indenture and (ii) both immediately before and immediately after giving effect to the Repricing Amendment Effective Date (x) all of the representations and warranties contained in the Credit Agreement and in the other Credit Documents are true and correct in all material respects on and as of the Repricing Amendment Effective Date with the same effect as though such representations and warranties had been made on and as of such date (unless such representations and warranties relate to a specific earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date) and (y) there exists no Default or Event of Default on the Repricing Amendment Effective Date; and
(viii) the Initial Sub-Tranche 3 Term Loan Commitments shall have been reduced to zero.
7. By executing and delivering a copy hereof, each Credit Party hereby agrees that all Loans (including, without limitation, the Replacement Term Loans) shall be fully guaranteed pursuant to the Guaranties in accordance with the terms and provisions thereof and shall be fully secured pursuant to the applicable Security Documents.
8. From and after Preliminary Amendment Effective Date, all references in the Credit Agreement and in the other Credit Documents to the Credit Agreement shall be deemed to be references to the Credit Agreement as modified hereby.
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