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EXHIBIT 4.6
FIRST AMENDMENT TO CREDIT AGREEMENT
AND
MODIFICATION OF LOAN DOCUMENTS
THIS FIRST AMENDMENT TO CREDIT AGREEMENT AND MODIFICATION OF LOAN
DOCUMENTS, dated March 26, 1997 (this "Amendment"), is by and between PRINCIPAL
HOSPITAL COMPANY, an Oregon corporation formerly known as Brim, Inc. (the
"Borrower"), the financial institutions from time to time party to the Credit
Agreement (as hereinafter defined) (the "Lenders") and FIRST UNION NATIONAL BANK
OF NORTH CAROLINA, as Agent for the Lenders (in such capacity, the "Agent"), and
amends the Credit Agreement dated as of December 17, 1997 between the Borrower,
the Lenders and the Agent (the "Credit Agreement"). Capitalized terms not
otherwise defined herein shall have the meanings assigned to such terms in the
Credit Agreement.
RECITALS
A. Pursuant to the Credit Agreement, the Lenders extended to the Borrower
Term Loans in the aggregate principal amount of $35,000,000 and Revolving Credit
Loans in the aggregate principal amount of up to $65,000,000.
B. The Borrower has requested that the Agent and the Lenders amend the
Credit Agreement to modify certain financial covenants, all in accordance with
the terms hereof.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrower, the Required Lenders
and the Agent, for themselves, their successors and assigns, agree as follows:
ARTICLE I
AMENDMENTS
1.1 Definitions. The defined terms "Annualized Capital Expenditures,"
"Annualized Cash Taxes," "Annualized Consolidated EBITDAR," "Annualized Facility
Rent Expense," "Annualized Interest Expense," "Annualized Lease Expense," and
"Consolidated EBITDAR" set forth in Article I are hereby deleted in their
entirety and there are substituted in their place the following:
"Annualized Capital Expenditures" shall mean (i) as of March 31, 1997,
Capital Expenditures for the fiscal quarter ending on such date, multiplied
by four (4), and (ii) as of June 30, 1997 and as of the last day of any
fiscal quarter thereafter, Capital Expenditures for the two (2) consecutive
fiscal quarters ending on such date, multiplied by two (2).
"Annualized Cash Taxes" shall mean (i) as of March 31, 1997, Cash
Taxes for the fiscal quarter ending on such date, multiplied by four (4),
and (ii) as of June 30, 1997 and as of the last day of any fiscal quarter
thereafter, Cash Taxes for the two (2) consecutive fiscal quarters ending
on such date, multiplied by two (2).
"Annualized Consolidated EBITDAR" shall mean (i) as of March 31, 1997,
Consolidated EBITDAR for the fiscal quarter ending on such date, multiplied
by four (4), and (ii) as of June 30, 1997 and as of the last day of any
fiscal quarter thereafter,
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Consolidated EBITDAR for the two (2) consecutive fiscal quarters ending on
such date, multiplied by two (2).
"Annualized Facility Rent Expense" shall mean (i) as of March 31,
1997, Facility Rent Expense for the fiscal quarter ending on such date,
multiplied by four (4), and (ii) as of June 30, 1997 and as of the last day
of any fiscal quarter thereafter, Facility Rent Expense for the two (2)
consecutive fiscal quarters ending on such date, multiplied by two (2).
"Annualized Interest Expense" shall mean (i) as of March 31, 1997,
Interest Expense for the fiscal quarter ending on such date, multiplied by
four (4), and (ii) as of June 30, 1997 and as of the last day of any fiscal
quarter thereafter, Interest Expense for the two (2) consecutive fiscal
quarters ending on such date, multiplied by two (2).
"Annualized Lease Expense" shall mean (i) as of March 31, 1997, Lease
Expense for the fiscal quarter ending on such date, multiplied by four (4),
and (ii) as of June 30, 1997 and as of the last day of any fiscal quarter
thereafter, Lease Expense for the two (2) consecutive fiscal quarters
ending on such date, multiplied by two (2).
"Consolidated EBITDAR" shall mean, with respect to the Borrower and
its Subsidiaries on a consolidated basis as of the last day of any period,
EBITDAR for the period ending on such date determined in accordance with
Generally Accepted Accounting Principles. Consolidated EBITDAR shall be
deemed to include, without duplication, historical Consolidated EBITDAR, of
any business acquired and operated by the Borrower or any Subsidiary after
the commencement of the relevant measurement period, as if such business
had been acquired by the Borrower or such Subsidiary as of the first day of
such measurement period, subject to pro forma expense adjustments as set
forth below; provided that such Consolidated EBITDAR is supported by
financial statements, tax returns or other financial data acceptable to the
Agent in its sole discretion. Calculations of Consolidated EBITDAR shall
exclude the results of operations of any entity disposed of by the Borrower
or any Subsidiary at any time after the first day of the relevant
measurement period. Consolidated EBITDAR shall be adjusted for pro forma
expense adjustments in connection with newly acquired entities, if and only
to the extent approved in writing by the Required Lenders.
1.2 Financial Covenants.
(a) Sections 6.9 through 6.11 and 6.13 through 6.14 are hereby deleted in
their entirety and there are substituted in their place the following:
6.9 Consolidated Adjusted Debt to Annualized Consolidated EBITDAR.
Permit the ratio of Consolidated Adjusted Debt to Annualized Consolidated
EBITDAR as of the end of any fiscal quarter beginning with the fiscal
quarter ending March 31, 1997 to and including the fiscal quarter ending
June 30, 1997, to be greater than or equal to 4.25 to 1.0; and as of the
end of any fiscal quarter thereafter, to be greater than or equal to 4.0 to
1.0.
6.10 Consolidated Adjusted Senior Debt to Annualized Consolidated
EBITDAR. Permit the ratio of Consolidated Adjusted Senior Debt to
Annualized Consolidated EBITDAR to be greater than or equal to 4.25 to 1.0
for any fiscal quarter beginning with the fiscal quarter ending March 31,
1997 to and including
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the fiscal quarter ending June 30, 1997; 4.00 to 1.0 thereafter to and
including the fiscal quarter ending September 30, 1997; 3.75 to 1.0
thereafter to and including the fiscal quarter ending March 31, 1998; 3.50
to 1.0 thereafter to and including the fiscal quarter ending September 30,
1998; and 3.00 to 1.0 for any fiscal quarter thereafter.
6.11 Minimum Consolidated EBITDAR. Permit Consolidated EBITDAR to be
less than $2,500,000.00 for the fiscal month ending January 31, 1997;
$3,900,000.00 for the two fiscal months ending February 28, 1997;
$5,500,000 for the fiscal quarter ending March 31, 1997; $7,200,000.00 for
the four fiscal months ending April 30, 1997; and $8,800,000.00 for the
five fiscal months ending May 31, 1997.
6.13 Annualized Consolidated EBITDAR to Annualized Interest Expense
and Annualized Lease Expense. Permit the ratio of Annualized Consolidated
EBITDAR to the sum of Annualized Interest Expense and Annualized Lease
Expense to be less than or equal to 2.0 to 1.0 for any fiscal quarter
beginning with the fiscal quarter ending March 31, 1997 to and including
the fiscal quarter ending September 30, 1997; 2.5 to 1.0 thereafter to and
including the fiscal quarter ending September 30, 1998; and 3.0 to 1.0 for
any fiscal quarter thereafter.
6.14 Fixed Charge Coverage. Permit the ratio of Annualized
Consolidated EBITDAR to Fixed Charges to be less than or equal to 1.1 to
1.0 for any fiscal quarter beginning with the fiscal quarter ending March
31, 1997 to and including the fiscal quarter ending December 31, 1997; and
1.0 to 1.0 for any fiscal quarter thereafter.
(b) The requirement that the Borrower submit calculations under Sections
6.9 through 6.11 and 6.13 through 6.14 of the Credit Agreement for the fiscal
quarter ending December 31, 1996 is hereby deleted.
ARTICLE II
LOAN DOCUMENTS
Any individual or collective reference to any of the Loan Documents in any
of the other Loan Documents to which the Borrower or any Guarantor is a party
shall mean, unless otherwise specifically provided, such Loan Document as
amended by this Amendment, and as it is further amended, restated, supplemented
or modified from time to time and any substitute or replacement therefor or
renewals thereof, including without limitation, all references to the Credit
Agreement, which shall mean the Credit Agreement as amended hereby and as
further amended from time to time.
ARTICLE III
CONDITIONS PRECEDENT
This Amendment and the obligations of the Lenders to continue to extend
credit under the terms of the Credit Agreement are subject to the satisfaction
of all of the following conditions precedent:
3.1 EXECUTION OF THIS AMENDMENT. This Amendment shall have been executed
and delivered by the Borrower, the Agent and the Required Lenders, it being
expressly understood that the terms of this Amendment require the express
consent of Lenders holding 66 2/3% or more of the sum of the aggregate
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principal amount of the Term Loans and Revolving Credit Commitments outstanding
as of the date hereof.
3.2 SECRETARY'S CERTIFICATES. The Lender shall have received certificates
of the Secretaries of the Borrower and Guarantors, each certifying and attaching
as applicable (a) any amendments filed since December 17, 1996 to the
certificate of incorporation or similar charter document of such corporation, as
certified as of a recent date by the Secretary of State or similar agency of
such corporation's state of incorporation, (b) any amendments to the bylaws of
such corporation adopted since December 17, 1996, (c) copies of the resolutions
of the Board of Directors of the Borrower and the Guarantors regarding the
execution and delivery of this Agreement and the Guarantor confirmation referred
to in SECTION 3.4 below, as applicable (or alternatively, a statement that no
such board authorization is required), and (d) the incumbency of the officers of
such Person authorized to sign this Amendment and the guarantor confirmation
referred to in SECTION 3.4 below.
3.3 NO DEFAULT. After giving effect to this Amendment, no Default or Event
of Default shall have occurred and be continuing, and the Agent and the Lenders
shall have received a certificate from the chief executive officer or the chief
financial officer of the Borrower to such effect.
3.4 GUARANTOR CONFIRMATION. The Agent and the Lenders shall have received
written confirmation by the Guarantors of their obligations under the Guaranty
Documents.
3.5 GOVERNMENTAL APPROVALS. All necessary approvals, authorizations and
consents, if any be required, of all governmental bodies (including courts)
having jurisdiction with respect to the transactions contemplated by this
Amendment shall have been obtained.
3.6 NO INJUNCTION, ETC. No action, proceeding, investigation, regulation or
legislation shall have been instituted, threatened or proposed before any court,
governmental agency or legislative body to enjoin, restrain or prohibit, or to
obtain substantial damages in respect of, or which is related to or arises out
of this Amendment or the consummation of the transactions contemplated hereby or
which, in the Lenders' sole discretion, would make it inadvisable to consummate
the transactions contemplated by this Amendment.
3.7 NO MATERIAL ADVERSE CHANGE. In the reasonable judgment of the Agent,
there shall not have occurred any material adverse change in the business,
business prospects, financial condition or results of operations of the Borrower
or any Guarantor, or any event, condition or state of facts that would be
reasonably expected materially and adversely to affect the business, business
prospects, financial condition or results or operations of the Borrower or any
Guarantor.
ARTICLE IV
GENERAL
4.1 FULL FORCE AND EFFECT. As expressly amended hereby, the Credit
Agreement and each Loan Document shall continue in full force and effect in
accordance with the provisions thereof on the date hereof. As used in the Credit
Agreement, "hereinafter," "hereto," "hereof" and words of similar import shall
mean, unless the context otherwise requires, the Credit Agreement as amended by
this Amendment.
4.2 REPRESENTATIONS AND WARRANTIES. After giving effect to this Amendment,
the representations and warranties set forth in the Credit Agreement are true
and correct as of the date hereof, except to the extent such representations and
warranties relate solely to or are specifically expressed as of a particular
date or period.
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4.3 RELEASE. The Borrower hereby releases and discharges the Agent and each
of the Lenders, their directors, officers, agents, and employees, from any and
all causes of action, suits, claims, demands, liabilities and obligations
whatsoever, in law or in equity, whether the same are now known or unknown or
whether the facts on which the same are based are now known or unknown, which
they ever had, now have or hereafter may have by reason of any matter, act or
omission whatsoever occurring on or before the date of this Amendment, except
for any claims arising out of any wanton or willful misconduct or gross
negligence on the part of the Agent or any Lender.
4.4 APPLICABLE LAW. This Amendment shall be governed by and construed in
accordance with the laws and judicial decisions of the State of North Carolina
without reference to conflicts of law principles.
4.5 COUNTERPARTS; TERMS. This Amendment may be executed in two or more
counterparts, each of which shall constitute an original, but all of which when
taken together shall constitute but one instrument.
4.6 EXPENSES. The Borrower agrees to pay all reasonable out-of-pocket
expenses incurred by the Agent and the Lenders in connection with the
preparation, execution and delivery of this Amendment, including, without
limitation, all fees and disbursements of Lenders' counsel.
4.7 HEADINGS. The headings of this Amendment are for the purposes of
reference only and shall not affect the construction of this Amendment.
4.8 VALID AMENDMENT. The parties acknowledge that, when executed and
delivered by the Borrower, the Agent and the Required Lenders, this Amendment
complies in all respects with SECTION 10.8 of the Credit Agreement, which sets
forth the requirements for amendments thereto.
(signatures begin next page)
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed in their corporate names by their duly authorized corporate officers as
of the date first above written.
[CORPORATE SEAL] PRINCIPAL HOSPITAL COMPANY
ATTEST: By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ ------------------------------
-------------------------- Title: President and CEO
_______________, Secretary ----------------------------
FIRST UNION NATIONAL BANK OF NORTH
CAROLINA, AS AGENT AND AS ISSUING BANK
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Title: Senior Vice President
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(signatures continued)
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LENDERS:
FIRST UNION NATIONAL BANK OF NORTH
CAROLINA
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Title: Senior Vice President
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AMSOUTH BANK OF ALABAMA
By: /s/ ▇▇▇▇▇ ▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇
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Title: Vice President
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▇▇▇▇▇▇ COMMERCIAL PAPER INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
Title: Authorized Signatory
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇, Vice President
BANQUE PARIBAS HOUSTON AGENCY
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: Vice President
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By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Title: Regional General Manager
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(signatures continued)
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▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: Assistant Vice President
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NATIONAL CITY BANK OF KENTUCKY
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: Vice President
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UNION BANK OF CALIFORNIA, N.A.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: Vice President
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FIRST AMERICAN NATIONAL BANK
By:
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Name:
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Title:
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