THIRD AMENDMENT
Exhibit 10.1
THIRD AMENDMENT
THIS THIRD AMENDMENT (this “Amendment”) dated as of December 15, 2011 to the Credit Agreement referenced below is by and among Acadia Healthcare Company, Inc. (f/k/a Acadia Healthcare Company, LLC), a Delaware corporation (the “Borrower”), the Guarantors identified on the signature pages hereto, the Lenders identified on the signature pages hereto and Bank of America, N.A., in its capacity as Administrative Agent (in such capacity, the “Administrative Agent”).
W I T N E S S E T H
WHEREAS, revolving credit and term loan facilities have been extended to the Borrower pursuant to the Credit Agreement (as amended, modified, supplemented, increased and extended from time to time, the “Credit Agreement”) dated as of April 1, 2011 among the Borrower, the Guarantors identified therein, the Lenders identified therein and the Administrative Agent;
WHEREAS, the Borrower has requested certain modifications to the Credit Agreement; and
WHEREAS, the Required Lenders and the Required Revolving Lenders have agreed to the requested modifications to the Credit Agreement on the terms and conditions set forth herein.
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
| 1. | Defined Terms. Capitalized terms used herein but not otherwise defined herein shall have the meanings provided to such terms in the Credit Agreement. |
| 2. | Amendments. The Credit Agreement is amended as follows: |
| 2.1 | Clause (d) of the definition of “Excluded Equity Issuance” in Section 1.01 is amended to read as follows: |
(d) the Net Cash Proceeds of which are used by the Borrower to prepay the Senior Unsecured Indebtedness to the extent such prepayment is permitted under Section 8.17(b);
| 2.2 | Immediately upon the occurrence of the Specified Equity Issuance (and only if the Specified Equity Issuance occurs), clause (h) of the definition of “Permitted Acquisition” in Section 1.01 is amended to read as follows: |
(h) the aggregate amount of Indebtedness incurred to finance all such Acquisitions and Indebtedness assumed in all such Acquisitions occurring during any fiscal year shall not exceed $25 million; provided that if at least 80% of the aggregate cash and non-cash consideration for any such Acquisition is financed with an Excluded Equity Issuance then any Indebtedness incurred or assumed in such Acquisition shall not be included in any calculation of this clause (h) (including any calculation of this clause (h) made in connection with subsequent Acquisitions).
| 2.3 | Clause (c) of the definition of “Senior Unsecured Indebtedness Standard Terms” in Section 1.01 is amended to read as follows: |
(a) at any time (i) no single Affiliate of the Borrower shall hold more than 5% of such Indebtedness and (ii) all Affiliates of the Borrower shall not hold in the aggregate more than 15% of such Indebtedness.
| 2.4 | The definition of “Specified Equity Issuance” is added to Section 1.01 to read as follows: |
“Specified Equity Issuance” means the Equity Issuance described in the Registration Statement on Form S-1 filed by the Borrower with the SEC on November 23, 2011, as may be amended, with respect to the public offering of 8.33 million common shares of the Borrower (which amount does not include the underwriters’ over-allotment option to purchase up to an additional 1.25 million common shares from the Borrower); provided that the Borrower receives Net Cash Proceeds of at least $59.3 million from such Equity Issuance (it being understood that if the Borrower receives Net Cash Proceeds of less than $59.3 million from such Equity Issuance then such Equity Issuance shall not be deemed the Specified Equity Issuance).
| 2.5 | Section 8.08(a) is amended to renumber clause (vi) as clause (vii) and to insert a new clause (vi) to read as follows: |
, (vi) the issuance of Equity Interests to any Affiliate or to any former, current or future director, manager, officer, employee or consultant (or any Affiliates of any of the foregoing) of the Borrower or any of its Subsidiaries,
| 2.6 | Immediately upon the occurrence of the Specified Equity Issuance (and only if the Specified Equity Issuance occurs), the table in Section 8.11(a) is amended to read as follows: |
| Fiscal Quarter Ending | Maximum Consolidated Leverage Ratio | |||
| June 30, 2011 | 4.25:1.0 | |||
| September 30, 2011 | 6.25:1.0 | |||
| December 31, 2011 | 6.00:1.0 | |||
| March 31, 2012 | 5.75:1.0 | |||
| June 30, 2012 | 5.75:1.0 | |||
| September 30, 2012 | 5.75:1.0 | |||
| December 31, 2012 | 5.25:1.0 | |||
| March 31, 2013 | 5.25:1.0 | |||
| June 30, 2013 | 5.25:1.0 | |||
| September 30, 2013 | 5.25:1.0 | |||
| December 31, 2013 | 4.75:1.0 | |||
| March 31, 2014 | 4.75:1.0 | |||
| June 30, 2014 | 4.75:1.0 | |||
| September 30, 2014 | 4.75:1.0 | |||
| December 31, 2014 and each fiscal quarter ending thereafter | 4.00:1.0 | |||
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| 2.7 | Section 8.17(b) is amended to read as follows: |
(b) Make (or give any notice with respect thereto) any voluntary or optional payment or prepayment or redemption or acquisition for value of (including without limitation, by way of depositing money or securities with the trustee with respect thereto before due for the purpose of paying when due), refund, refinance or exchange of any Senior Unsecured Indebtedness or Deficiency Note, other than (i) the payment, prepayment, redemption, refund, refinance or exchange of Bridge Senior Unsecured Indebtedness with (A) the Net Cash Proceeds of any concurrent issuance of Bridge Senior Unsecured Indebtedness or Permanent Senior Unsecured Indebtedness, (B) the Net Cash Proceeds of any concurrent Equity Issuance or (C) the proceeds of any Disposition or Recovery Event to the extent such proceeds are not required to prepay the Loans and/or Cash Collateralize the L/C Obligations pursuant to Section 2.05(b)(ii) or (ii) the purchase, payment, prepayment or redemption of Permanent Senior Unsecured Indebtedness with up to $59.3 Million of the Net Cash Proceeds of the Specified Equity Issuance (plus an amount equal to accrued but unpaid interest on the Permanent Senior Unsecured Indebtedness) so long as such Net Cash Proceeds are used to make such purchase, payment, prepayment or redemption within 120 days of the receipt of such Net Cash Proceeds by the Borrower or any Subsidiary.
3. Conditions Precedent. This Amendment shall become effective on the date on which each of the following conditions is satisfied:
(a) Amendment. Receipt by the Administrative Agent of counterparts of this Amendment executed by the Borrower, the Guarantors, the Required Lenders and the Required Revolving Lenders.
(b) Payment of Fees. The Borrower shall have paid to the Administrative Agent, for the account of each Lender that approves this Amendment, an amendment fee equal to 0.05% on the amount of the Revolving Commitment of such Lender plus the outstanding principal amount of the Term Loan held by such Lender.
(c) Payment of Expenses. The Borrower shall have paid all other accrued reasonable and documented out-of-pocket expenses of the Lead Arranger and the Administrative Agent in connection with this Amendment, in each case to the extent required by Section 11.04 of the Credit Agreement.
4. Amendment is a “Loan Document”. This Amendment is a Loan Document and all references to a “Loan Document” in the Credit Agreement and the other Loan Documents (including, without limitation, all such references in the representations and warranties in the Credit Agreement and the other Loan Documents) shall be deemed to include this Amendment.
5. Reaffirmation of Obligations. Each Loan Party (a) acknowledges and consents to all of the terms and conditions of this Amendment, (b) affirms all of its obligations under the Loan Documents and (c) agrees that this Amendment does not operate to reduce or discharge such Loan Party’s obligations under the Loan Documents.
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6. Reaffirmation of Security Interests. Each Loan Party (a) affirms that each of the Liens granted in or pursuant to the Loan Documents are valid and subsisting and (b) agrees that this Amendment does not in any manner impair or otherwise adversely effect any of the Liens granted in or pursuant to the Loan Documents.
7. No Other Changes. Except as modified hereby, all of the terms and provisions of the Loan Documents shall remain in full force and effect.
8. Counterparts; Delivery. This Amendment may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of this Amendment by facsimile or other electronic imaging means shall be effective as an original.
9. Governing Law. This Amendment shall be deemed to be a contract made under, and for all purposes shall be construed in accordance with, the laws of the State of New York.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to be duly executed as of the date first above written.
| BORROWER: | ACADIA HEALTHCARE COMPANY, INC., a Delaware corporation | |||
| By: | /s/ Brent Turner | |||
| Name: | Brent Turner | |||
| Title: | Vice President | |||
| GUARANTORS: | ACADIA MANAGEMENT COMPANY, INC., a Delaware corporation | |||
| ACADIA-YFCS HOLDINGS, INC., a Delaware corporation | ||||
| YOUTH & FAMILY CENTERED SERVICES, INC., a Georgia corporation | ||||
| ACADIA HOSPITAL OF LONGVIEW, LLC, | ||||
| a Delaware limited liability company | ||||
| KIDS BEHAVIORAL HEALTH OF MONTANA, INC., a Montana corporation | ||||
| ACADIA VILLAGE, LLC, a Delaware limited liability company | ||||
| LAKEVIEW BEHAVIORAL HEALTH SYSTEM LLC, | ||||
| a Delaware limited liability company | ||||
| ACADIA RIVERWOODS, LLC, a Delaware limited liability company | ||||
| ACADIA LOUISIANA, LLC, a Delaware limited liability company | ||||
| ACADIA ABILENE, LLC, a Delaware limited liability company | ||||
| ACADIA HOSPITAL OF LAFAYETTE, LLC, | ||||
| a Delaware limited liability company | ||||
| YFCS MANAGEMENT, INC., a Georgia corporation | ||||
| YFCS HOLDINGS-GEORGIA, INC., a Georgia corporation | ||||
| OPTIONS COMMUNITY BASED SERVICES, INC., an Indiana corporation | ||||
| OPTIONS TREATMENT CENTER ACQUISITION CORPORATION, | ||||
| an Indiana corporation | ||||
| RESOLUTE ACQUISITION CORPORATION, an Indiana corporation | ||||
| RESOURCE COMMUNITY BASED SERVICES, INC., an Indiana corporation | ||||
| RTC RESOURCE ACQUISITION CORPORATION, an Indiana corporation | ||||
| SUCCESS ACQUISITION CORPORATION, an Indiana corporation | ||||
| ASCENT ACQUISITION CORPORATION, an Arkansas corporation | ||||
| SOUTHWOOD PSYCHIATRIC HOSPITAL, INC., a Pennsylvania corporation | ||||
| MEMORIAL HOSPITAL ACQUISITION CORPORATION, | ||||
| a New Mexico corporation | ||||
| MILLCREEK MANAGEMENT CORPORATION, a Georgia corporation | ||||
| REHABILITATION CENTERS, INC., a Mississippi corporation | ||||
| LAKELAND HOSPITAL ACQUISITION CORPORATION, | ||||
| a Georgia corporation | ||||
| PSYCHSOLUTIONS ACQUISITION CORPORATION, a Florida corporation | ||||
| By: | /s/ Brent Turner | |||
| Name: | Brent Turner | |||
| Title: | Vice President | |||
[SIGNATURE PAGES CONTINUE]
| YOUTH AND FAMILY CENTERED SERVICES OF NEW MEXICO, INC., a New Mexico corporation SOUTHWESTERN CHILDREN’S HEALTH SERVICES, INC., an Arizona corporation YOUTH AND FAMILY CENTERED SERVICES OF FLORIDA, INC., a Florida corporation PEDIATRIC SPECIALTY CARE, INC., an Arkansas corporation CHILD & YOUTH PEDIATRIC DAY CLINICS, INC, an Arkansas corporation MED PROPERTIES, INC., an Arkansas corporation ASCENT ACQUISITION CORPORATION-CYPDC, an Arkansas corporation ASCENT ACQUISITION CORPORATION-PSC, an Arkansas corporation MEDUCARE TRANSPORT, L.L.C., an Arkansas limited liability company PEDIATRIC SPECIALTY CARE PROPERTIES, LLC, an Arkansas limited liability company CHILDRENS MEDICAL TRANSPORTATION SERVICES, LLC, an Arkansas limited liability company MILLCREEK SCHOOLS INC., a Mississippi corporation HABILITATION CENTER, INC., an Arkansas corporation MILLCREEK SCHOOL OF ARKANSAS, INC., an Arkansas corporation PSYCHSOLUTIONS, INC., a Florida corporation WELLPLACE, INC., a Massachusetts corporation DETROIT BEHAVIORAL INSTITUTE, INC., a Massachusetts corporation RENAISSANCE RECOVERY, INC., a Massachusetts corporation PHC OF MICHIGAN, INC., a Massachusetts corporation NORTH POINT PIONEER, INC., a Massachusetts PHC MEADOWWOOD, INC., a Delaware corporation PHC OF UTAH, INC., a Massachusetts corporation PHC OF VIRGINIA, INC., a Massachusetts corporation PHC OF NEVADA, INC., a Massachusetts corporation SEVEN HILLS HOSPITAL, INC., a Delaware corporation BEHAVIORAL HEALTH ONLINE, INC., a Massachusetts corporation REBOUND BEHAVIORAL HEALTH, LLC, a South Carolina limited liability company PSYCHIATRIC RESOURCE PARTNERS, INC., a Delaware limited liability company SUNCOAST BEHAVIORAL, LLC, a Delaware limited liability company ACADIA MERGER SUB, LLC, a Delaware limited liability company | ||||
| By: | /s/ Brent Turner | |||
| Name: | Brent Turner | |||
| Title: | Vice President | |||
[SIGNATURE PAGES FOLLOW]
| ADMINISTRATIVE AGENT: | BANK OF AMERICA, N.A., as Administrative Agent | |||||
| By: /s/ Denise Jones | ||||||
| Name: | Denise Jones | |||||
| Title: | Assistant Vice President | |||||
[SIGNATURE PAGES FOLLOW]
| LENDERS: | BANK OF AMERICA, N.A., as a Lender, L/C Issuer and Swing Line Lender | |||||||||
| By: /s/ Suzanne B. Smith | ||||||||||
| Name: | Suzanne B. Smith | |||||||||
| Title: | Senior Vice President | |||||||||
| FIFTH THIRD BANK | ||||||||||
| By: /s/ William D. Priester | ||||||||||
| Name: | William D. Priester | |||||||||
| Title: | Sr. Relationship Manager | |||||||||
| GENERAL ELECTRIC CAPITAL CORPORATION | ||||||||||
| By: /s/ John Dale | ||||||||||
| Name: | John Dale | |||||||||
| Title: | Duly Authorized Signatory | |||||||||
| CITIGROUP GLOBAL MARKETS, INC. | ||||||||||
| By: /s/ Dina Garthwaite | ||||||||||
| Name: | Dina Garthwaite | |||||||||
| Title: | Vice President | |||||||||
| REGIONS BANK | ||||||||||
| By: /s/ Helen C. Hartz | ||||||||||
| Name: | Helen C. Hartz | |||||||||
| Title: | Vice President | |||||||||
| RAYMOND JAMES BANK, FSB | ||||||||||
| By: /s/ Alexander L. Rody | ||||||||||
| Name: | Alexander L. Rody | |||||||||
| Title: | Senior Vice President | |||||||||
| ROYAL BANK OF CANADA | ||||||||||
| By: /s/ Sharon M. Liss | ||||||||||
| Name: | Sharon M. Liss | |||||||||
| Title: | Authorized Signatory | |||||||||
| FIRST TENNESSEE BANK | ||||||||||
| By: /s/ Cathy Wind | ||||||||||
| Name: | Cathy Wind | |||||||||
| Title: | Senior Vice President | |||||||||
[SIGNATURE PAGES FOLLOW]
| CAPSTAR BANK | ||||||||
| By: /s/ Timothy B. Fouts | ||||||||
| Name: | Timothy B. Fouts | |||||||
| Title: | Senior Vice President | |||||||
| GE CAPITAL FINANCIAL INC. | ||||||||
| By: /s/ Heather-Leigh Glade | ||||||||
| Name: | Heather-Leigh Glade | |||||||
| Title: | Duly Authorized Signatory | |||||||
