EXHIBIT 10.4
SECOND AMENDMENT TO CREDIT AGREEMENT AND FIRST AMENDMENT TO
THE FIRST AMENDMENT TO CREDIT AGREEMENT
SECOND AMENDMENT TO CREDIT AGREEMENT AND FIRST
AMENDMENT TO THE FIRST AMENDMENT TO CREDIT AGREEMENT (this
"Amendment") dated as of December 31, 2002, among Vanguard Health
Systems, Inc. (the "Borrower"), the lenders from time to time
party to the Credit Agreement referred to below (the "Lenders"),
and Bank of America, N.A., as Administrative Agent (the
"Administrative Agent"). Unless otherwise indicated, all
capitalized terms used herein and not otherwise defined herein
shall have the respective meanings provided to such terms in the
Credit Agreement referred to below.
W I T N E S S E T H:
WHEREAS, the Borrower, the Lenders, the Joint Lead
Arrangers, the Administrative Agent, the Syndication Agent and
the Co-Documentation Agents are parties to a Credit Agreement,
dated as of July 30, 2001 (as amended, modified or supplemented
to the date hereof, the "Credit Agreement"); and
WHEREAS, subject to the terms and conditions of this
Amendment, the parties hereto wish to amend the Credit Agreement
as herein provided;
NOW, THEREFORE, it is agreed:
I. Amendments to the Credit Agreement
1. Section 1.01(d)(iv) of the Credit Agreement is hereby
restated in its entirety as follows:
"(iv) shall not, in the case of Incremental Term
Loans provided pursuant to the Incremental Term Loan
Commitment Agreement delivered in connection with the First
Amendment, exceed $150,000,000 in aggregate principal amount
for all such Incremental Term Loans made by all Incremental
Term Loan Lenders party to such Incremental Term Loan
Commitment Agreement. Once repaid or prepaid, Incremental
Term Loans may not be reborrowed."
2. The introductory clause of Section 1.13(a) of the
Credit Agreement is hereby amended by inserting the text "and
with the prior written consent of the Required Lenders"
immediately following the text "in consultation with the
Administrative Agent" appearing therein.
3. Section 1.13(a) of the Credit Agreement is hereby
further amended by deleting the text "and (x)" appearing in
clause (ii) thereof and inserting the text ", (x) and (xi)" in
lieu thereof.
4. Section 1.13(a)(iv) of the Credit Agreement is hereby
restated in its entirety as follows:
"(iv) the aggregate amount of all Incremental Term
Loan Commitments permitted to be provided under this Section
1.13 pursuant to the Incremental Term Loan Commitment
Agreement delivered in connection with the First Amendment
shall not exceed $150,000,000;"
5. Section 1.13(a) of the Credit Agreement is hereby
further amended by deleting the text "and" appearing at the end
of clause (x) thereof, redesignating existing clause (xi) thereof
as clause (xii) thereof and inserting the following new clause
(xi) immediately following clause (x) thereof:
"(xi) prior to any particular request for
Incremental Term Loan Commitments made as contemplated
above, the Borrower shall obtain the prior written consent
of the Required Lenders thereto (and to the incurrence of
Incremental Term Loans pursuant thereto), which consent must
also be as to the amount of Incremental Term Loan
Commitments to be requested and Incremental Term Loans to be
incurred pursuant thereto; and"
6. Section 2.04(a) of the Credit Agreement is hereby
amended by inserting the text "with a Revolving Loan Commitment"
immediately following the text "each Lender" appearing within the
first sentence of such Section 2.04(a).
7. Section 3.01 of the Credit Agreement is hereby amended
by: (i) redesignating existing clause (f) thereof as clause (g)
thereof and (ii) inserting the following new clause (f)
immediately following existing clause (e) thereof:
"(f) The Borrower agrees to pay to the Administrative
Agent upon any prepayment of the principal of Incremental B
Term Loans pursuant to each of Section 4.01 (including,
without limitation prepayments made with the proceeds of
Indebtedness which are not required to be applied to repay
Loans and/or reduce Commitments pursuant to Section 4.02(d))
and Section 4.02(d), in each case for the ratable
distribution to each Lender holding Incremental B Term
Loans, a fee in an amount equal to (x) if such prepayment is
made prior to the first anniversary of the First Amendment
Effective Date, 2.0% of the aggregate principal amount of
such prepayment and (y) if such prepayment is made on or
after the first anniversary of the First Amendment Effective
Date and prior to the second anniversary of the First
Amendment Effective Date, 1.0% of the aggregate principal
amount of such prepayment. All such prepayment fees shall
be due and payable upon the date of any such prepayment. In
determining whether a prepayment fee is due (in whole, in
part or not at all) in respect of any prepayment of the
principal of Incremental B Term Loans where Borrower has
cash proceeds available to it for such prepayment from more
than one source, all prepayments made with cash proceeds
pursuant to the provisions of Sections 4.02(a), 4.02(b),
4.02(c), 4.02(e), 4.02(f) and 4.02(g) shall be considered to
be made prior to any prepayments made (or considered to be
made) pursuant to the provisions of Section 4.01 and
4.02(d). For the avoidance of doubt, mandatory prepayments
made by the Borrower pursuant to Sections 4.02(a),
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4.02(b), 4.02(c), 4.02(e), 4.02(f) and 4.02(g) shall not be
subject to prepayment fees contemplated under this Section
3.01(f)."
8. Section 4.01(a) of the Credit Agreement is hereby
amended by inserting the text "except as otherwise provided in
this Agreement" immediately after the text "without premium or
penalty" appearing in the introductory clause of such Section
4.01(a).
9. Section 4.01 is hereby further amended by inserting the
following new clause (c) at the end thereof:
"(c) Each prepayment of Incremental B Term Loans
pursuant to this Section 4.01 shall be subject to the
payment of the fee described in Section 3.01(f)."
10. Section 4.02(b) is hereby amended by deleting the
reference to "(i)" appearing at the beginning of the first
sentence of such Section 4.02(b).
11. Section 4.02 is hereby further amended by inserting the
following new clause (k) at the end thereof:
"(k) Each prepayment of Incremental B Term Loans made
pursuant to Section 4.02(d) shall be subject to the payment
of the fee described in Section 3.01(f)."
12. Section 9.09 of the Credit Agreement is hereby amended
by: (i) deleting the text "Consolidated Leverage Ratio." in the
title appearing at the beginning of Section 9.09 and inserting in
lieu thereof the text "Consolidated Leverage Ratio and
Consolidated Senior Leverage Ratio. (a)", (ii) inserting the text
"(c)" immediately preceding the last paragraph of such Section
9.09 and (iii) inserting the following new clause (b) immediately
following the end of the table set forth in Section 9.09:
"(b) The Borrower will not permit the Consolidated Senior
Leverage Ratio solely as of the last day of any Test Period
ending (x) on or prior to December 31, 2003 to be greater
than 2.75:1.00 and (y) on or after March 31, 2004 to be
greater than 2.50:1.00."
13. The definitions of "Convertible Subordinated Debt" and
"Convertible Subordinated Debt Documents" appearing in Section
11.01 of the Credit Agreement are hereby amended by deleting each
reference to "2012" in such definitions and in each case
inserting the text "2013" in lieu thereof.
14. Section 11.01 of the Credit Agreement is hereby further
amended by inserting in the appropriate alphabetical order the
following new definition:
"Term Loan" shall mean the Incremental Term Loan.
15. Section 13.04(b) is hereby amended by restating clause
(x) of the first sentence thereof in its entirety as follows:
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"(x) assign all or a portion of its Revolving Loan
Commitment (and related outstanding Obligations hereunder) and/or
its outstanding Incremental Term Loans to (i) its parent company
and/or any affiliate of such Lender which is at least 50% owned
by such Lender or its parent company or to one or more other
Lenders or (ii) in the case of any Lender that is a fund that
invests in loans, any other fund that invests in loans and is
managed or advised by the same investment advisor of any Lender
or by an Affiliate of such investment advisor, to the extent that
each Person that becomes a Lender pursuant to an assignment
permitted by this clause 13.04(b) will upon its becoming party to
this Credit Agreement represent, that it is an Eligible
Transferee which makes or acquires loans in the ordinary course
of its business and that it will make or acquire the Loans for
its own account in the ordinary course of such business, or".
16. Section 13.04(b) is hereby further amended by inserting
the following parenthetical immediately following the text
"$3,500" appearing within subsection (v) of the first proviso
thereof.
"(provided that contemporaneous assignments by a Lender to
two or more Eligible Transferees that are funds that invest in
loans which are managed or advised by the same investment advisor
(or an Affiliate thereof) shall be treated as one assignment for
the purposes of the aforementioned assignment fee)"
17. Section 13.04(c) is hereby amended by deleting the text
"with the consent of" appearing within such Section 13.04(c) and
inserting the text "with prior notification to" in lieu thereof.
18. Section 13.12(a) of the Credit Agreement is hereby
amended by: (i) deleting the text "or" immediately prior to
subsection (v) and inserting a comma in lieu thereof and (ii)
inserting the following subsection (vi) immediately following
subsection (v) thereof:
"or (vi) amend, modify or waive any provisions of Section
13.06(a) providing for payments to be made ratably to the Lenders
(it being understood that, with the consent of the Required
Lenders, additional extensions of credit pursuant to this
Agreement may be included in determining any ratable share
pursuant to Section 13.06(a) and adjustments to any such Section
may be made consistent therewith);"
II. Amendments to the First Amendment
1. Section 9 of the "Terms and Conditions for Incremental
Term Loan Commitment Agreement-Annex I" appearing as Exhibit A to
the First Amendment to Credit Agreement is hereby amended by
deleting the reference to "January 3, 2003" thereof and inserting
the text "February 3, 2003" in lieu thereof.
2. Section 3 of the "Terms and Conditions for Incremental
Term Loan Commitment Agreement-Annex I" appearing as Exhibit A to
the First Amendment to Credit Agreement is hereby amended by
deleting the reference to "2009" thereof and inserting the text
"2010" in lieu thereof.
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III. Miscellaneous Provisions.
1. In order to induce the Lenders to enter into this
Amendment, the Borrower hereby represents and warrants that:
(a) no Default or Event of Default exists as of the
Second Amendment Effective Date (as defined below), both
before and immediately after giving effect to this
Amendment; and
(b) all of the representations and warranties
contained in the Credit Agreement and the other Credit
Documents are true and correct in all material respects on
the Second Amendment Effective Date, both before and after
giving effect to this Amendment, with the same effect as
though such representations and warranties had been made on
and as of the Second Amendment Effective Date (it being
understood that any representation or warranty made as of a
specific date or for a given period shall be true and
correct in all material respects as of such specified date
or such given period, as the case may be).
2. This 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 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 shall be lodged with the Borrower and the
Administrative Agent.
4. THIS 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. This Amendment shall become effective as of December
31, 2002 (the "Second Amendment Effective Date"), provided that
on or prior to the earlier of the date on which the First
Amendment becomes effective or February 3, 2003, the Borrower 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.
Notwithstanding anything to the contrary contained in this
Amendment, in the event that the First Amendment does not become
effective pursuant to the terms thereof on or prior to February
3, 2003, then the amendments to the Credit Agreement made
pursuant to this Amendment shall have no further force and effect
(as if such amendments had never taken effect).
6. From and after the Second Amendment Effective Date, all
references in the Credit Agreement and each of 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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IN WITNESS WHEREOF, each of the parties hereto has
caused a counterpart of this Amendment to be duly executed and
delivered as of the date first above written.
VANGUARD HEALTH SYSTEMS, INC.
By: /s/ Joseph D. Moore
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Title: Executive Vice President,
Chief Financial Officer & Treasurer
BANK OF AMERICA, N.A.,
Individually and as Administrative Agent
By: /s/ Kevin Wagley
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Title: Principal
MORGAN STANLEY SENIOR FUNDING, INC.
By: /s/ Henry F. D'Alessandro
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Title: Executive Director
WACHOVIA BANK, NATIONAL ASSOCIATION
(f/k/a First Union National Bank)
By: /s/ Harry E. Ellis
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Title: Managing Director Senior Vice President
LASALLE BANK NATIONAL ASSOCIATION
By: /s/ Sarah Rusher
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Title: First Vice President
CREDIT SUISSE FIRST BOSTON
By: /s/ Jennifer A. Pieza
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Title: Associate
By: /s/ William Fox
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Title:
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ Charles Heidsieck
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Title: Senior Vice President