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EXHIBIT 10
SIXTH AMENDMENT
This SIXTH AMENDMENT (the "Amendment") dated March 16, 1999 is entered
into by and among QUORUM HEALTH GROUP, INC., a corporation organized under the
laws of Delaware (the "Borrower"), the LENDERS referred to in the Credit
Agreement (the "Lenders") and FIRST UNION NATIONAL BANK (f/k/a First Union
National Bank of North Carolina) as Agent for the Lenders (hereinafter defined
the "Agent").
STATEMENT OF PURPOSE
The Borrower, the Lenders and the Agent are parties to that certain
Credit Agreement dated as of April 22, 1997 (such agreement, as previously
amended, and as further amended from time to time, herein referred to as the
"Credit Agreement") pursuant to which the Lenders have agreed to extend certain
credit facilities to the Borrower. Capitalized terms used in this Amendment not
otherwise defined herein have the respective meanings attributed to such terms
in the Credit Agreement.
Pursuant to the Credit Agreement, the Lenders have made Extensions of
Credit to the Borrower. In consideration of making further Extensions of Credit
under the Credit Agreement, and as a condition thereof, the Lenders have
requested that the Borrower and certain of its Subsidiaries pledge to the Agent,
for the ratable benefit of itself and the Lenders, certain shares of capital
stock, partnership interests and limited liability company and other ownership
interests owned by the Borrower and such Subsidiaries. The Borrower and such
Subsidiaries have agreed to such pledges pursuant to the terms hereof.
Additionally the Borrower has requested that the Lenders amend the
Credit Agreement as more fully described below. Subject to the terms and
conditions set forth below, and in consideration for the pledges referred to
above, the Lenders are willing to agree to the requested amendments.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged by the parties hereto, the Borrower,
each of the Lenders and the Agent agree as follows:
1. AMENDMENTS TO ARTICLE I.
(a) Section 1.1 is hereby amended by deleting the following
defined terms and substituting the corresponding new defined term
therefore:
"Base Rate Loan" means any Loan bearing interest at a rate
based upon the Base Rate as provided in Section 4.1(a).
"LIBOR Rate Loan" means any Loan bearing interest at a rate
based upon the LIBOR Rate as provided in Section 4.1(a).
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"Loan Documents" means, collectively, this Agreement, the
Notes, the Guaranty, the Pledge Agreements, and any Hedging Agreements
executed by any Lender, the Applications and each other document,
instrument and agreement executed and delivered in connection with this
Agreement or otherwise referred to herein or contemplated hereby, all
as may be amended, restated or otherwise modified.
"Subordinated Debt" means the collective reference to Debt on
Schedule 6.1(t) hereof designated as Subordinated Debt (including,
without limitation, the 1995 Senior Subordinated Notes) and any other
Debt of the Borrower or any Subsidiary subordinated in right and time
of payment to the Obligations on terms and conditions (including such
subordination terms) satisfactory to the Required Lenders and approved
in writing by the Agent; provided that, for purposes of this
definition, any Subordinated Debt that (a) does not have scheduled
principal payments or a maturity date prior to the date which is
eighteen (18) months after the Termination Date of this Agreement, (b)
does not contain restrictive covenants or other terms more restrictive
than those contained in this Agreement and (c) contains subordination
provisions no less favorable to the holders of the Borrower's Senior
Debt than the subordination provisions contained in the Borrower's 1995
Senior Subordinated Notes, shall be deemed satisfactory to the Required
Lenders and approved by the Agent.
(b) Section 1.1 is hereby amended by inserting the following
new defined term in correct alphabetical order therein:
"Applicable Margin" shall have the meaning assigned thereto in
Section 4.1(c).
"Collateral" means any assets purported to be pledged by any
Loan Party or Subsidiary thereof, whether pursuant to any Pledge
Agreement or otherwise, to the Lenders or the Agent for the ratable
benefit of the Agent and the Lenders in order to secure the Obligations
or any portion thereof. Any reference to the term "collateral"
contained in the Credit Agreement (other than those references
contained in Sections 2.7(b), 4.5, 6.1(e) and 11.2(b)) as of the
effective date of the Sixth Amendment is hereby replaced with the term
"Collateral".
"Pledge Agreements" means the collective reference to the
Pledge Agreements executed in connection with the Sixth Amendment by
the Borrower or any Subsidiary thereof in favor of the Agent for the
ratable benefit of the Agent and the other Lenders, substantially in
the form of Exhibit A attached to the Sixth Amendment as amended,
restated or otherwise modified; "Pledge Agreement" means any such
Pledge Agreement.
"Pledgors" means the collective reference to each Person
executing a Pledge Agreement in connection with the Sixth Amendment;
"Pledgor" means any such Person.
"Sixth Amendment" means the Sixth Amendment to the Agreement,
dated as of March 16, 1999.
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(c) Section 1.1 is hereby amended by deleting the term "LIBOR
Margin". Any reference to the term "LIBOR Margin" contained in the
Credit Agreement as of the effective date of the Sixth Amendment is
hereby replaced with the phrase "Applicable Margin for LIBOR Rate
Loans".
2. AMENDMENTS TO ARTICLE II. Article II is hereby amended by
inserting the following new Section 2.11 in correct order therein:
"SECTION 2.11 Security. The Obligations of the Borrower and
each of the Guarantors under this Agreement shall be secured by the
Collateral described in the Pledge Agreements."
3. AMENDMENTS TO ARTICLE IV.
(a) Section 4.1(a) is hereby deleted and the following new Section
4.1(a) is hereby substituted in lieu thereof:
(a) Interest Rate Options. Subject to the provisions of this
Section 4.1, at the election of the Borrower in accordance with Article
II, the unpaid principal balance of (i) any Revolving Credit Loan shall
bear interest at (A) the Base Rate plus the Applicable Margin as set
forth below or (B) the LIBOR Rate plus the Applicable Margin as set
forth below, (ii) any Competitive Bid Loan shall bear interest at the
applicable Competitive Bid Rate established pursuant to Section 2.4 and
(iii) any Swingline Loan shall bear interest at the Swingline Rate. Any
Revolving Credit Loan as to which the Borrower has not duly specified
an interest rate as provided herein shall be deemed a Base Rate Loan."
(b) Section 4.1(c) is hereby deleted and the following new
Section 4.1(c) is hereby substituted in lieu thereof:
(c) Applicable Margin. The Applicable Margin provided for in
Section 4.1(a) with respect to the Loans (the "Applicable Margin")
shall (i) from the effective date of the Sixth Amendment until the
delivery of the applicable Margin Certificate and related financial
statements for the fiscal quarter ending on March 31, 1999 equal 0.250%
for Base Rate Loans and 1.150% for LIBOR Rate Loans, and (ii) for each
fiscal quarter thereafter be determined by reference to the Total
Leverage Ratio as of the end of the fiscal quarter immediately
preceding the delivery of the applicable Margin Certificate as follows:
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Applicable Margin for
Total Leverage Ratio Base Rate Loans LIBOR Rate Loans
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greater than or equal to 4.00 to 1.00 0.750% 1.550%
less than 4.00 to 1.00 but greater
than or equal to 3.50 to 1.00 0.250% 1.150%
less than 3.50 to 1.00 but greater
than or equal to 3.00 to 1.00 0.000% 0.950%
less than 3.00 to 1.00 but greater
than or equal to 2.50 to 1.00 0.000% 0.750%
less than 2.50 to 1.00 but greater
than or equal to 2.00 to 1.00 0.000% 0.650%
less than 2.00 0.000% 0.550%
Adjustments, if any, in the Applicable Margin shall be made by the
Administrative Agent on the fifth (5th) Business Day after receipt by
the Agent of quarterly financial statements for the Borrower and its
Subsidiaries and the accompanying Officer's Compliance Certificate
setting forth the Total Leverage Ratio of the Borrower and its
Consolidated Entities as of the most recent fiscal quarter end. Subject
to Section 4.1(d), in the event the Borrower fails to deliver such
financial statements and certificate within the time required by
Section 7.1(c), the Applicable Margin shall be the highest Applicable
Margin set forth above until five (5) Business Days after receipt by
the Agent of such financial statements and certificate."
(c) Section 4.3(a) is hereby amended by deleting (i) the last
sentence of such Section and (ii) the pricing grid contained therein,
and substituting the following in lieu thereof:
"The Facility Fee Rate, from the effective date of the Sixth
Amendment until the receipt of the initial Margin Certificate and
related financial statements for the fiscal quarter ending on March 31,
1999, shall be 0.350% and thereafter shall be determined by reference
to the Total Leverage Ratio of the Borrower and its Consolidated
Entities set forth in the most recently delivered Margin Certificate as
follows:
Total Leverage Ratio Facility Fee Rate (%)
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greater than or equal to 4.00 to 1.00 0.450%
less than 4.00 to 1.00 but greater
than or equal to 3.50 to 1.00 0.350%
less than 3.50 to 1.00 but greater
than or equal to 3.00 to 1.00 0.300%
less than 3.00 to 1.00 but greater
than or equal to 2.50 to 1.00 0.250%
less than 2.50 to 1.00 but greater
than or equal to 2.00 to 1.00 0.225%
less than 2.00 0.200%"
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4. AMENDMENTS TO ARTICLE VI. From and after the effective date of the
Sixth Amendment, the copies of Schedule 6.1(a) and Schedule 6.1(b) delivered in
connection with the closing of the Sixth Amendment shall be deemed substituted
for the copies of such Schedules delivered on the Closing Date.
5. AMENDMENTS TO ARTICLE VIII. Article VIII is hereby amended by
deleting Section 8.11 and the following new Section 8.11 is substituted in lieu
thereof:
SECTION 8.11 Wholly-Owned Entities. Within thirty (30) days after the
creation or acquisition of any Wholly-Owned Entity (a) cause it to execute and
deliver to the Agent a supplement to the Guaranty Agreement delivered on the
Closing Date substantially in the form of Exhibit A to such Guaranty Agreement,
(b) a supplement substantially in the form attached as Exhibit A to the Pledge
Agreement, or if applicable, a separate Pledge agreement substantially in the
form of the Pledge Agreement executed by the parent of such new Subsidiary and
(c) cause to be delivered to the Agent such other documents as the Agent or
Required Lenders shall reasonably request in connection therewith, including
without limitation, officers' certificates, financial statements, opinions of
counsel, resolutions, charter documents, certificates of existence and authority
to do business and any other closing certificates and documents described in
Section 5.2.
6. Amendments to Article IX.
(a) Section 9.1 is hereby deleted and the following new Section 9.1 is
substituted in lieu thereof:
"Total Leverage Ratio. As of any fiscal quarter end, permit the ratio
of (i) Total Debt as of such date to (ii) EBITDA for the period of four (4)
consecutive fiscal quarters ending on such date (the "Total Leverage Ratio"), to
exceed 4.00 to 1.00; provided that, upon issuance by the Borrower, of new
Subordinated Debt in an aggregate principal amount of at least $150,000,000
after the date of the Sixth Amendment, the Total Leverage Ratio shall not exceed
4.50 to 1.00 as of any fiscal quarter end."
(b) Section 9.2 is hereby amended by deleting the phrase
"[Intentionally Omitted]" and inserting the following in lieu thereof:
"Senior Leverage Ratio. As of any fiscal quarter end during any period
set forth below, permit the ratio of (i) Senior Debt as of such date to (ii)
EBITDA, for the period of four (4) consecutive fiscal quarters ending on such
date, to exceed the corresponding ratio set forth below:
Period Ratio
------ -----
Sixth Amendment effective 4.00 to 1.00
date through June 30, 2000
Thereafter 3.75 to 1.00
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(c) Section 9.5 is hereby deleted and the following new Section 9.5
substituted in lieu thereof:
"Consolidated Net Worth. As of any fiscal quarter end, permit
Consolidated Net Worth to be less than the sum of (a) $500,000,000 plus (b) 80%
of cumulative positive Consolidated Net Income (calculated without excluding any
non-cash losses) after the Closing Date plus (c) 90% of the proceeds from any
equity offerings (net of offering and professional fees and expenses) and any
other capital contributions since the Closing Date less (d) the amount of any
stock repurchases or redemptions permitted pursuant to Section 10.7(e); provided
that in no event shall Consolidated Net Worth to be less than $500,000,000."
7. AMENDMENT FEE. In consideration of the amendments set forth herein,
the Borrower agrees to pay to the Agent, for the ratable benefit of the Lenders,
an amendment fee of 15 basis points on the Aggregate Commitment.
8. Conditions. The effectiveness of this Amendment shall be conditioned
upon receipt by the Agent of:
(a) a copy of (i) this Amendment duly executed by the Agent, the
Borrower and the Required Lenders and (ii) updated copies of Schedule 6.1(a) and
Schedule 6.1(b);
(b) payment of the Amendment Fee; and
(c) contemporaneous consent to this Amendment by the lenders under the
Quorum ELLF Credit Agreement and the execution and delivery of all requisite
amendments thereto.
9. Conditions Subsequent. The following items shall be delivered by the
Borrower to the Agent by March 31, 1999; provided that if such items are not
delivered, then such non-delivery shall constitute an immediate Event of Default
under the Credit Agreement:
(a) a copy of each Pledge Agreement pledging the capital
stock, limited liability company ownership interests, partnership
interests and other equity interests in each entity identified on
Schedule 1 hereto, the First Union National Bank, as collateral agent
and each issuer of any capital stock pledged thereunder;
(b) a certificate of the secretary or assistant secretary of
the Borrower and each other Pledgor certifying that attached thereto is
a true and complete copy of the articles of incorporation of such
Borrower or such Pledgor, as applicable, and all amendments thereto,
certified as of a recent date by the appropriate Governmental Authority
in its jurisdiction of incorporation; that attached thereto is a true
and complete copy of the bylaws of the
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Borrower or such Pledgor, as applicable, as in effect on the date of
such certification; that attached thereto is a true and complete copy
of resolutions duly adopted by the Board of Directors of the Borrower
or such Pledgor, as applicable, authorizing the transactions
contemplated hereunder and the execution, delivery and performance of
this Amendment, the Pledge Agreements and the other Loan Documents to
which it is a party; and as to the incumbency and genuineness of the
signature of each officer of the Borrower or such Pledgor executing the
Amendment, any Pledge Agreement or any other Loan Documents to which it
is a party;
(c) certificates as of a recent date of the good standing of
the Borrower and each Pledgor under the laws of its jurisdiction of
organization or formation;
(d) a favorable opinion of counsel to the Borrower addressed
to the Agent and the Lenders in form and substance reasonably
satisfactory to the Administrative Agent;
(e) original stock certificates evidencing the capital stock
pledged pursuant to the Pledge Agreements, together with an undated
stock for each certificate duly executed in blank by the registered
owner thereof;
(f) all necessary approvals, authorizations and consents, if
any be required, of any Person and of all Governmental Authorities and
courts having jurisdiction with respect to the transactions
contemplated by the Pledge Agreements.
10. Bringdown; References to Credit Agreement. The Borrower
hereby represents and warrants that immediately prior to giving effect
to this Amendment and upon and after the effectiveness hereof (a) the
representations and warranties contained in Article VI of the Credit
Agreement are true and correct in all material respects as of the date
hereof (except and to the extent that such representations and
warranties relate to an earlier date, in which case such
representations and warranties shall be true and correct as of such
earlier date) and (b) no Default or Event of Default has occurred and
is continuing as of the date hereof. All references in the Loan
Documents to "Credit Agreement" shall refer to the Credit Agreement as
amended by this Amendment and as the Credit Agreement may be further
amended from time to time.
11. Miscellaneous. Except as amended hereto, the Credit
Agreement shall remain in full force and effect in accordance with its
terms. This Amendment may be executed in one or more counterparts each
of which shall be deemed to be an original and all of which, when taken
together, shall constitute one and the same instrument and no single
counterpart of this Amendment need be executed by all the parties
hereto. The covenants and agreements contained in this Amendment shall
apply to and inure to the benefit of and be binding upon the parties
hereto and their respective successors and assigns. This Amendment
shall be governed by the laws of the State of North Carolina.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the Borrower, the Lenders and the Agent have
executed this Amendment to Credit Agreement as of the date first above written.
QUORUM HEALTH GROUP, INC.
By:
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Name:
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Title:
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[Signature Pages Continue]
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FIRST UNION NATIONAL BANK
By:
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Name:
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Title:
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[Signature Pages Continue]
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TORONTO DOMINION (TEXAS), INC.
By:
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Name:
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Title:
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[Signature Pages Continue]
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SCOTIABANC INC.
By:
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Name:
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Title:
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[Signature Pages Continue]
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AMSOUTH BANK
By:
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Name:
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Title:
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[Signature Pages Continue]
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CITICORP USA, INC.
By:
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Name:
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Title:
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[Signature Pages Continue]
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SUNTRUST BANK, NASHVILLE, N.A.
By:
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Name:
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Title:
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[Signature Pages Continue]
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NATIONSBANK, N.A.
By:
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Name:
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Title:
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[Signature Pages Continue]
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MELLON BANK, N.A.
By:
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Name:
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Title:
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[Signature Pages Continue]
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BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By:
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Name:
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Title:
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[Signature Pages Continue]
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FLEET NATIONAL BANK, N.A.
By:
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Name:
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Title:
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[Signature Pages Continue]
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ABN AMRO BANK N.V.
By:
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Name:
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Title:
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By:
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Name:
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Title:
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COOPERATIEVE CENTRALE RAIFFEISEN
BOERENLEENBANK B.A.
"RABOBANK NEDERLAND,"
NEW YORK BRANCH
By:
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Name:
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Title:
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By:
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Name:
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Title:
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[Signature Pages Continue]
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NATIONAL CITY BANK OF KENTUCKY
By:
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Name:
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Title:
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▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇, N.A.
By:
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Title:
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PARIBAS
By:
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Name:
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Title:
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By:
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Name:
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Title:
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LTCB TRUST COMPANY
By:
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Name:
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Title:
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[Signature Pages Continue]
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THE SUMITOMO BANK, LIMITED
By:
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Name:
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Title:
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[Signature Pages Continue]
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CREDIT LYONNAIS
By:
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Name:
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Title:
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BANK ONE, NA
By:
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Name:
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Title:
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THE SANWA BANK LIMITED,
By:
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Name:
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Title:
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[Signature Pages Continue]
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FBTC LEASING CORP.
By:
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Name:
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Title:
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[Signature Pages Continue]
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THE SUMITOMO TRUST AND
BANKING CO., LTD.,
NEW YORK BRANCH
By:
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Name:
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Title:
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[Signature Pages Continue]
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KBC BANK N.V.
By:
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Name:
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Title:
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[Signature Pages Continue]
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FIRST TENNESSEE BANK,
NATIONAL ASSOCIATION
By:
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Name:
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Title:
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[Signature Pages Continue]
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FIRST AMERICAN NATIONAL BANK
By:
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Name:
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Title:
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[Signature Pages Continue]
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BANK OF TOKYO - MITSUBISHI
TRUST COMPANY
By:
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Name:
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Title:
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By:
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Name:
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Title:
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BANK HAPOALIM B.M.
By:
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Name:
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Title:
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[Signature Pages Continue]
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SOUTHTRUST BANK, N.A.
By:
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Name:
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Title:
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