Exhibit 4(r)
AMENDMENT No. 7 entered into as of September 19, 2000 (this
"Amendment"), to the Credit Agreement dated as of February
12, 1998 (as amended, supplemented or otherwise modified
from time to time, the "CREDIT AGREEMENT"), among Magellan
Health Services, Inc., a Delaware corporation (the "PARENT
BORROWER"); Charter Behavioral Health System of New Mexico,
Inc., a New Mexico corporation; Merit Behavioral Care
Corporation, a Delaware corporation; each other wholly owned
domestic subsidiary of the Parent Borrower that becomes a
"Subsidiary Borrower" pursuant to Section 2.23 of the Credit
Agreement (each, a "SUBSIDIARY BORROWER" and, collectively,
the "SUBSIDIARY BORROWERS" (such term is used herein as
modified in Article I of the Credit Agreement); the Parent
Borrower and the Subsidiary Borrowers are collectively
referred to herein as the "BORROWERS"); the Lenders (as
defined in Article I of the Credit Agreement); The Chase
Manhattan Bank, a New York banking corporation, as
administrative agent (in such capacity, the "ADMINISTRATIVE
AGENT") for the Lenders, as collateral agent (in such
capacity, the "COLLATERAL AGENT") for the Lenders and as an
issuing bank (in such capacity, an "ISSUING BANK"); First
Union National Bank, a national banking corporation, as
syndication agent (in such capacity, the "SYNDICATION
AGENT") for the Lenders and as an issuing bank (in such
capacity, an "ISSUING BANK"); and Credit Lyonnais New York
Branch, a licensed branch of a bank organized and existing
under the laws of the Republic of France, as documentation
agent (in such capacity, the "DOCUMENTATION AGENT") for the
Lenders and as an issuing bank (in such capacity, an
"ISSUING BANK" and, together with The Chase Manhattan Bank
and First Union National Bank, each in its capacity as an
issuing bank, the "ISSUING BANKS").
A. The Lenders and the Issuing Banks have extended credit to
the Borrowers, and have agreed to extend credit to the Borrowers, in each case
pursuant to the terms and subject to the conditions set forth in the Credit
Agreement.
B. Capitalized terms used but not defined herein have the
meanings assigned to them in the Credit Agreement (as amended hereby).
C. The Borrowers and the Required Lenders have agreed to amend
certain provisions of the Credit Agreement as set forth herein on the terms and
subject to the conditions set forth in this Amendment.
Accordingly, in consideration of the mutual agreements herein
contained and other good and valuable consideration, the sufficiency and receipt
of which are hereby acknowledged, the parties hereto agree as follows:
SECTION 1. AMENDMENTS TO SECTION 1.01. (a) The definition of
the term "Excess Cash Flow" is hereby amended by (i) adding after the words "the
term `Net Cash Proceeds'" the following text: "arising as a result of any
Condemnation Event or Casualty Event" and (ii)(A) replacing the term "and" with
a "," prior to clause (ii) of the
proviso at the end of such defined term and (B) adding the following text at
the end of such clause (ii): "and (iii) for avoidance of doubt, any proceeds
resulting from the Mentor Sale."
(b) The definition of the term "Permitted
Acquisition" is amended by replacing clause (e) with the following text:
(e) the amounts paid for all Permitted Acquisitions
(including, without limitation, any Indebtedness incurred or
assumed in connection therewith, but excluding (i) any capital
stock or other equity interests issued or delivered as part of
the consideration for such Permitted Acquisition, (ii)
Permitted CBHS Lease Transaction Amounts, and (iii) the
Permitted Premier Acquisition and the Permitted CBHS Joint
Venture Acquisitions/Sales) (x) after the Closing Date shall
not exceed, in the event the Leverage Ratio as of the last day
of the most recently ended fiscal quarter for which financial
statements have been delivered, or were required to have been
delivered, by the Parent Borrower pursuant to Section 5.04(a)
or 5.04(b), prior to such Permitted Acquisition, on a pro
forma basis after giving effect to all such Permitted
Acquisitions, is greater than or equal to 4.00:1.00,
$100,000,000, and (y) after the completion of the Mentor Sale
shall not exceed, in the event the Leverage Ratio as of the
last day of the most recently ended fiscal quarter for which
financial statements have been delivered, or were required to
have been delivered, by the Parent Borrower pursuant to
Section 5.04(a) or 5.04(b), prior to such Permitted
Acquisition, on a pro forma basis after giving effect to all
such Permitted Acquisitions, is greater than or equal to the
applicable Leverage Ratio shown below, the respective sublimit
amount shown for such Leverage Ratio:
LEVERAGE RATIO PERMITTED ACQUISITIONS SUBLIMIT
-------------- -------------------------------
Greater than 5.00:1.00 $2,500,000
Greater than 4.50:1.00, but less than or equal to $10,000,000
5:00:1.00
Greater than 3.75:1.00, but less than or equal to $25,000,000
4.50:1.00
Less than or equal to 3.75:1.00 No Sublimit
(c) The definition of the term "Permitted Stock Repurchases or
Dividends" is hereby amended to replace the word "and" prior to clause (y) in
the second clause (B) of the first sentence thereof with a "," and adding the
following text after such clause (y):
and (z) in the case of Permitted Stock Repurchases or
Dividends as described in clauses (a) or (b) above made
after the completion of the Mentor Sale, and so long as the
Leverage Ratio as of the last day of the most recently ended
fiscal quarter for which financial statements have been
delivered, or were required to have been delivered, by the
Parent Borrower pursuant to Section 5.04(a) or 5.04(b),
prior to such ▇▇▇▇▇▇▇▇▇
▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ or Dividend, is greater than or equal to
4.00:1.00, $2,000,000,
(d) Section 1.01 of the Credit Agreement is hereby amended by
adding the defined terms "Permitted CBHS Joint Venture Acquisition/Sale" and
"Permitted Premier Acquisition" to read in the entirety as follows:
"PERMITTED CBHS JOINT VENTURE ACQUISITION/SALE" shall mean the
acquisition by the Parent Borrower or any of its Subsidiaries of the partnership
or limited liability company interests of any other partners or limited
liability company members of any CBHS Joint Venture, to the extent such
acquisition is (i) made in contemplation of a CBHS Joint Venture Sale in respect
of such CBHS Joint Venture or the assets owned or used by it, (ii) effected for
an amount paid by the Parent Borrower or such Subsidiaries that is to be
recouped by the Parent Borrower or such Subsidiaries in the contemplated CBHS
Joint Venture Sale, and (iii) preceded or promptly followed by a closing of the
contemplated CBHS Joint Venture Sale pursuant to which such amount is recouped;
PROVIDED, HOWEVER, that to the extent any such amount is not so recouped, such
excess amount shall be included in determining the Parent Borrower's compliance
with the limitations on Permitted Acquisitions set forth in clause (e) of the
definition thereof.
"PERMITTED PREMIER ACQUISITION" shall mean the acquisition by
the Parent Borrower or any of its Subsidiaries of Premier Behavioral Systems of
Tennessee, LLC ("Premier") through the redemption or purchase of the limited
liability company interests held by other member(s) of Premier, to the extent
such redemption or purchase is effected directly or indirectly from funds or
other property of Premier paid or distributed for such purpose; PROVIDED,
HOWEVER, to the extent any funds or other property of the Parent Borrower or any
Subsidiary are used to effect such redemption or purchase, the amount of such
funds or property shall be included in determining the Parent Borrower's
compliance with the limitations on Permitted Acquisitions set forth in clause
(e) of the definition thereof.
SECTION 2. AMENDMENT TO SECTION 2.13(B). Section 2.13(b) of
the Credit Agreement is hereby amended by substituting the date "September 30,
2001" for the date "September 30, 2002" in clause (i) of such Section.
SECTION 3. REPRESENTATIONS AND WARRANTIES. Each Borrower
represents and warrants to the Administrative Agent and to each of the Lenders
that:
(a) This Amendment has been duly authorized, executed and
delivered by it and constitutes a legal, valid and binding obligation of each
Loan Party party hereto, enforceable against such Loan Party in accordance with
its terms.
(b) Before and after giving effect to this Amendment, the
representations and warranties set forth in Article III of the Credit Agreement
are true and correct in all material respects on and as of the date hereof with
the same effect as if made on and as of the date hereof, except to the extent
such representations and warranties expressly relate to an earlier date.
(c) Before and after giving effect to this Amendment, no Event
of Default or Default has occurred and is continuing.
3
SECTION 4. CONDITIONS TO EFFECTIVENESS. This Amendment shall
be deemed agreed to by the parties to the Credit Agreement when the
Administrative Agent shall have received counterparts of this Amendment that,
when taken together, bear the signatures of the Borrowers and the Required
Lenders, but this Amendment shall not become effective until the date that the
Mentor Sale is completed.
SECTION 5. CREDIT AGREEMENT. Except as specifically amended
hereby, the Credit Agreement shall continue in full force and effect in
accordance with the provisions thereof as in existence on the date hereof. After
the date hereof, any reference to the Credit Agreement shall mean the Credit
Agreement as amended hereby. This Amendment shall be a Loan Document for all
purposes.
SECTION 6. APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED
BY, CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 7. COUNTERPARTS. 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 agreement. Delivery of an
executed signature page to this Amendment by facsimile transmission shall be
effective as delivery of a manually signed counterpart of this Amendment.
SECTION 8. EXPENSES. The Parent Borrower agrees to reimburse
the Administrative Agent for its out-of-pocket expenses in connection with this
Amendment, including the reasonable fees, charges and disbursements of Cravath,
Swaine & ▇▇▇▇▇, counsel for the Administrative Agent.
4
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed by their respective authorized officers as of the
day and year first written above.
MAGELLAN HEALTH SERVICES, INC.,
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: SVP & Treasurer
CHARTER BEHAVIORAL HEALTH SYSTEM OF NEW MEXICO,
INC.,
By /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Treasurer
MERIT BEHAVIORAL CARE CORPORATION,
By /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Treasurer
THE CHASE MANHATTAN BANK, individually and as
Administrative Agent, Collateral Agent and an
Issuing Bank,
By /s/ ▇▇▇▇ ▇▇▇ ▇▇▇
----------------------------
Name: ▇▇▇▇ ▇▇▇ ▇▇▇
Title: Vice President
FIRST UNION NATIONAL BANK, individually and as
Syndication Agent and an Issuing Bank,
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: SVP
5
ML CLO XV PILGRIM AMERICA (CAYMAN) LTD.
BY: PILGRIM INVESTMENTS, INC.
AS ITS INVESTMENT MANAGER
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇, CFA
------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇, CFA
Title: Vice President
PILGRIM AMERICA HIGH INCOME INVESTMENTS LTD.
BY: PILGRIM INVESTMENTS, INC.
AS ITS INVESTMENT MANAGER
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇, CFA
------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇, CFA
Title: Vice President
PILGRIM PRIME RATE TRUST
BY: PILGRIM INVESTMENTS, INC.
AS ITS INVESTMENT MANAGER
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇, CFA
------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇, CFA
Title: Vice President
HIGHLAND CAPITAL MANAGEMENT, L.P.,
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President
▇▇▇▇▇▇▇ ▇▇▇▇▇ SENIOR FLOATING RATE FUND, INC.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Authorized Signatory
6
▇▇▇▇▇▇▇ ▇▇▇▇▇ DEBT STRATEGIES PORTFOLIO
BY: ▇▇▇▇▇▇▇ ▇▇▇▇▇ INVESTMENT MANAGERS, L.P.,
AS INVESTMENT ADVISOR,
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Authorized Signatory
▇▇▇▇▇▇▇ ▇▇▇▇▇ GLOBAL INVESTMENT
SERIES: INCOME STRATEGIES PORTFOLIO
BY: ▇▇▇▇▇▇▇ ▇▇▇▇▇ INVESTMENT MANAGERS, L.P.,
AS INVESTMENT ADVISOR,
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Authorized Signatory
INDOSUEZ CAPITAL FUNDING IV, L.P.
BY: INDOSUEZ CAPITAL
AS PORTFOLIO ADVISOR,
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
BLACK DIAMOND CLO 1998-1 LTD.,
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Director
BLACK DIAMOND INTERNATIONAL FUNDING, LTD.,
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Director
7
▇▇▇ ▇▇▇▇▇▇ PRIME RATE INCOME TRUST
BY: ▇▇▇ ▇▇▇▇▇▇ INVESTMENT ADVISORY CORP.,
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Manager Operations & Compliance
SENIOR DEBT PORTFOLIO
BY: BOSTON MANAGEMENT AND RESEARCH
AS INVESTMENT ADVISOR,
By /s/ ▇▇▇▇▇ ▇. Page
------------------------------
Name: ▇▇▇▇▇ ▇. Page
Title: Vice President
▇▇▇▇▇ ▇▇▇▇▇ INSTITUTIONAL SENIOR LOAN FUND
BY: ▇▇▇▇▇ ▇▇▇▇▇ MANAGEMENT
AS INVESTMENT ADVISOR,
By /s/ ▇▇▇▇▇ ▇. Page
------------------------------
Name: ▇▇▇▇▇ ▇. Page
Title: Vice President
ARCHIMEDES FUNDING II, LTD.,
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President & Portfolio Manager
SUMMIT BANK,
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ I
BY: GENERAL RE-NEW ENGLAND ASSET MANAGEMENT, INC.,
AS COLLATERAL MANAGER,
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
BANK POLSKA KASA OPIEKI S.A., NEW YORK BRANCH,
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Senior Lending Officer
C.M. LIFE INSURANCE COMPANY,
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Managing Director
MASSMUTUAL HIGH YIELD PARTNERS II LLC,
BY: HYP MANAGEMENT, INC.
AS MANAGING MEMBER
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Managing Director
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY,
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Managing Director
9
MASSMUTUAL/▇▇▇▇▇ CBO LLC
BY: MASSMUTUAL/▇▇▇▇▇ CBO IM, INC.
AS LLC MANAGER
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Managing Director
MASSMUTUAL CORPORATE VALUE PARTNERS LTD.
BY: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ AND COMPANY INC. UNDER DELEGATED
AUTHORITY FROM MASS. MUTUAL LIFE INSURANCE COMPANY,
AS MANAGER,
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Managing Director
KZH HIGHLAND-2 LLC,
By /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇
Title: Authorized Agent
KZH PAMCO LLC,
By /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇
Title: Authorized Agent
CREDIT LYONNAIS NEW YORK BRANCH,
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President
10
KZH ING-2 LLC,
By /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇
Title: Authorized Agent
KZH ING-3 LLC,
By /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇
Title: Authorized Agent
KZH PONDVIEW LLC,
By /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇
Title: Authorized Agent
KZH SHOSHONE LLC,
By /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇
Title: Authorized Agent
KZH SOLEIL LLC,
By /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇
Title: Authorized Agent
BANK OF TOKYO-MITSUBISHI TRUST CO.,
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
By /s/ ▇.▇. ▇▇▇▇▇
------------------------------
Name: ▇.▇. ▇▇▇▇▇
Title: Vice President
GENERAL ELECTRIC CAPITAL CORPORATION,
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Duly Authorized Signatory
KZH CRESCENT-2 LLC,
By /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇
Title: Authorized Agent
TCW LEVERAGED INCOME TRUST, L.P.
BY: TCW ADVISERS (BERMUDA), LTD.,
AS GENERAL PARTNER,
By /s/ ▇▇▇▇ ▇▇▇▇
------------------------------
Name: ▇▇▇▇ ▇▇▇▇
Title: Managing Director
By: TCW INVESTMENT MANAGEMENT COMPANY,
AS INVESTMENT ADVISER,
By /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇
Title: Assistant Vice President
12
TCW LEVERAGED INCOME TRUST II, L.P.
BY: TCW ADVISERS (BERMUDA), LTD.,
AS GENERAL PARTNER,
By /s/ ▇▇▇▇ ▇▇▇▇
------------------------------
Name: ▇▇▇▇ ▇▇▇▇
Title: Managing Director
By: TCW INVESTMENT MANAGEMENT COMPANY,
AS INVESTMENT ADVISER,
By /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇
Title: Assistant Vice President
SEQUILS I, LTD.
BY: TCW ADVISORS, INC.
AS ITS COLLATERAL MANAGER,
By /s/ ▇▇▇▇ ▇▇▇▇
------------------------------
Name: ▇▇▇▇ ▇▇▇▇
Title: Managing Director
By /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇
Title: Assistant Vice President
13
