EXHIBIT 10.41
AMENDMENT NO. 13 TO CREDIT AGREEMENT
THIS AMENDMENT NO. 13 TO CREDIT AGREEMENT (the "Amendment")
dated as of March 11, 1997 by and among Mariner Health Group, Inc., a Delaware
corporation (the "Borrower"), The Chase Manhattan Bank (as successor to Chemical
Bank), CoreStates Bank, N.A., Creditanstalt-Bankverein, First Union National
Bank of North Carolina, Mellon Bank, N.A., NationsBank of Tennessee, N.A., PNC
Bank, National Association and Toronto Dominion (New York), Inc. (collectively,
the "Banks"), and PNC Bank, National Association, in its capacity as agent for
the Banks (the "Agent").
W I T N E S S E T H:
WHEREAS, the parties hereto are parties to that certain Credit
Agreement dated as of May 18, 1994, as amended (the "Credit Agreement"),
pursuant to which the Banks provided a $250,000,000 revolving credit facility to
the Borrower; and
WHEREAS, the Borrower, the Banks and the Agent desire to amend
the Credit Agreement as hereinafter provided.
NOW, THEREFORE, the parties hereto, in consideration of their
mutual covenants and agreements hereinafter set forth and intending to be
legally bound hereby, covenant and agree as follows:
1. Definitions.
(a) Defined terms used herein unless otherwise defined herein
shall have the meanings ascribed to them in the Credit Agreement as amended by
this Amendment.
2. Amendment of Credit Agreement.
(a) Section 1.01 [Certain Definitions.] is hereby amended by
deleting in its entirety the definition of "Adjusted Consolidated Net Income"
and inserting in lieu thereof the following:
"Adjusted Consolidated Net Income shall mean for any
period of determination an amount equal to the net income of the Borrower and
its Subsidiaries for such period determined and consolidated in accordance with
GAAP, plus up to $826,000 of loss determined in accordance with GAAP
attributable to the sale of the approximately 38,700 square foot office building
located in Nashville, Tennessee during the fiscal quarter ending December
30,1996, plus the following expenses to the extent such expenses are deducted in
computing such net income: (i) up to $9,230,000 of extraordinary, nonrecurring
charges incurred by the Loan Parties in connection with the Convalescent Merger
incurred in the following amounts during the following fiscal quarters: $757,000
during the fiscal quarter beginning January 1,
1995 and ending March 31, 1995; $8,410,000 during the fiscal quarter beginning
April 1, 1995 and ending June 30, 1995; $54,000 during the fiscal quarter
beginning July 1, 1995 and ending September 30, 1995; and $9,000 during the
fiscal quarter beginning October 1, 1995 and ending December 31, 1995; (ii) up
to $1,138,000 of extraordinary, nonrecurring deferred financing charges incurred
by the Loan Parties in connection with the Fourth Amendment during the fiscal
quarter beginning April 1, 1995 and ending June 30, 1995; (iii) up to $6,543,000
of extraordinary, nonrecurring charges incurred by the Loan Parties during the
fiscal quarters beginning January 1, 1996 and ending June 30, 1996, in
connection with one or more Permitted Acquisitions consummated during such
period, including without limitation, in connection with the Convalescent
Merger; and (iv) such other extraordinary nonrecurring charges as approved by
the Required Banks pursuant to Section 8.01(m)."
(b) Section 1.01 [Certain Definitions.] is hereby amended by
deleting in its entirety the definition of "Consolidated Net Income" and
inserting in lieu thereof the following:
"Consolidated Net Income shall mean for any period of
determination an amount equal to the net income of the Borrower and its
Restricted Subsidiaries for such period determined in accordance with GAAP, but
without regard to net income attributable to Excluded Entities, plus up to
$826,000 of loss determined in accordance with GAAP attributable to the sale of
the approximately 38,700 square foot office building located in Nashville,
Tennessee during the fiscal quarter ending December 30, 1996, plus the following
expenses to the extent such expenses are deducted in computing such net income:
(i) up to $9,230,000 of extraordinary, nonrecurring charges incurred by the Loan
Parties in connection with the Convalescent Merger incurred in the following
amounts during the following fiscal quarters: $757,000 during the fiscal quarter
beginning January 1, 1995 and ending March 31, 1995; $8,410,000 during the
fiscal quarter beginning April 1, 1995 and ending June 30, 1995; $54,000 during
the fiscal quarter beginning July 1, 1995 and ending September 30, 1995; and
$9,000 during the fiscal quarter beginning October 1, 1995 and ending December
31, 1995; (ii) up to $1,138,000 of extraordinary, nonrecurring deferred
financing charges incurred by the Loan Parties in connection with the Fourth
Amendment during the fiscal quarter beginning April 1, 1995 and ending June 30,
1995; (iii) up to $6,543,000 of extraordinary, nonrecurring charges incurred by
the Loan Parties during the fiscal quarters beginning January 1, 1996 and ending
June 30, 1996, in connection with one or more Permitted Acquisitions consummated
during such period, including without limitation, in connection with the
Convalescent Merger; and (iv) such other extraordinary nonrecurring charges as
approved by the Required Banks pursuant to Section 8.01(m)."
(c) Section 1.01 [Certain Definitions.] is hereby amended by
inserting after the definition of "Subsidiary", the following new definition of
"Thirteenth Amendment Effective Date":
"Thirteenth Amendment Effective Date shall mean March 11,
1997, the effective date of Amendment No. 13 to this Agreement."
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(d) Section 2.01 [Revolving Credit Commitments; Limitation on
Borrowings.] is hereby amended by deleting in its entirety subsection (c)
[Limitation on Borrowings.] thereof and inserting in lieu thereof the following:
"(c) Limitation on Borrowings. Notwithstanding the
provisions of Sections 2.01(a) and 2.01(b) of this Agreement, the outstanding
principal amount of Revolving Credit Loans to the Borrower shall not exceed at
any time an amount such that after giving effect to such borrowings, the ratio
of (i) Total Indebtedness to (ii) Consolidated Cash Flow from Operations
exceeds: (A) 3.75 to 1.0 from and including the Convalescent Merger Effective
Date through but not including the Subordinated Indebtedness Incurrence Date;
(B) 4.5 to 1.0 from the Subordinated Indebtedness Incurrence Date through but
not including the Allegis Acquisition Effective Date; (C) 5.25 to 1.0 from the
Allegis Acquisition Effective Date through and including June 30, 1997; (D) 5.00
to 1.0 from July 1, 1997 through and including December 31, 1997; (E) 4.75 to
1.0 from January 1, 1998 through and including March 31, 1998; and (F) 4.5 to
1.0 from April 1, 1998 and thereafter.
For purposes of such ratio, the amount determined under
clause (i) shall be as of the date of determination and the amount determined
under clause (ii) shall be for the twelve-month period ending on the last day of
the month which precedes such date of determination.
Notwithstanding the provisions of this subsection (c), at
no time shall the outstanding principal amount of proceeds of Revolving Credit
Loans made to the Borrower which are used by the Borrower or any Subsidiary of
the Borrower to, directly or indirectly, make an investment in or loan to
Ansonia, exceed Two Million Dollars ($2,000,000). Notwithstanding the provisions
of this subsection (c), at no time shall proceeds of Revolving Credit Loans be
used by the Borrower or any Subsidiary of the Borrower to, directly or
indirectly, make an investment in or loan to Pinnacle Rehab of Gwinnette or
Pinancle's Kansas Joint Venture. Notwithstanding the provisions of this
subsection (c), until all required governmental licenses and approvals have been
obtained from governmental regulatory authorities for the operation of Regency
Nursing and Rehabilitation Center located in Olathe, Kansas, by Regency Health
Properties VI, Ltd., no proceeds of Revolving Credit Loans shall be used by the
Borrower or any Subsidiary of the Borrower to, directly or indirectly, make an
investment in or loan to Regency Health Properties VI, Ltd."
(e) Section 8.01 [Affirmative Covenants.] is hereby amended
by deleting in its entirety subsection (m) [Approval of Financial Statements in
Permitted Acquisitions; Notice of Permitted Acquisition.] thereof and inserting
in lieu thereof the following:
"(m) Approval of Financial Statements in Permitted
Acquisitions; Notice of Permitted Acquisition.
(i) Approval of Financial Statements. The Borrower
shall deliver to the Banks a certificate in the form of Exhibit 8.01(m)(i)
hereof (the "Acquisition Approval Certificate") before making a Permitted
Acquisition if they desire that the cash flow of the business to be acquired
during periods prior to the acquisition shall be included when they
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compute Cash Flow from Operations under this Agreement. The Borrower shall
attach to such Acquisition Approval Certificate copies of the historical
financial statements of the business to be acquired including the annual and
interim balance sheets and income statements for at least three (3) fiscal years
prior to the Permitted Acquisition and pro forma statements which shall include
a combined balance sheet as of the acquisition date and cash flow statements for
the preceding year. The pro forma statements shall set forth: (1) Consolidated
Cash Flow from Operations of the Loan Parties and the acquired business,
adjusted in accordance with clause (A) of the definition of Consolidated Cash
Flow from Operations, for the Acquisition Income Reporting Period in connection
with such Permitted Acquisition, and (2) Total Indebtedness on the date of the
Permitted Acquisition after giving effect to the acquisition and the Loans to be
made on such date, and (3) the ratio of the amount in clause (2) to the amount
in clause (1), which ratio shall not exceed (A) 3.75 to 1.0 from and including
the Convalescent Merger Effective Date through but not including the
Subordinated Indebtedness Incurrence Date; (B) 4.5 to 1.0 from the Subordinated
Indebtedness Incurrence Date through but not including the Allegis Acquisition
Effective Date; (C) 5.25 to 1.0 from the Allegis Acquisition Effective Date
through and including June 30, 1997; (D) 5.00 to 1.0 from July 1, 1997 through
and including December 31, 1997; (E) 4.75 to 1.0 from January 1, 1998 through
and including March 31, 1998; and (F) 4.5 to 1.0 from April 1, 1998 and
thereafter. The Acquisition Approval Certificate shall confirm the accuracy of
the foregoing computations and that, after giving effect to the Permitted
Acquisition and the Loans made on the date thereof, no Event of Default shall
exist and the Loan Parties shall be in compliance with all of their covenants
hereunder, assuming, for purposes of Borrower's financial covenants, that all
items of income, expense and cash flow are reported for the Acquisition Income
Reporting Period and that all balance sheet items (such as Indebtedness) are
measured on the date of such Permitted Acquisition. The Loan Parties may make
the Permitted Acquisition prior to receiving the Required Banks' approval of
Borrower's Acquisition Approval Certificate with respect thereto; provided that
the Loan Parties may not, until they have received such approval, include the
cash flow of the business to be acquired for periods prior to the acquisition in
their net income when they compute Consolidated Cash Flow from Operations. The
Banks shall use their best efforts to respond to the Borrower's request for
approval of each Acquisition Approval Certificate within two (2) Business Days
following the Banks' receipt of such certificate and shall not unreasonably
withhold or delay such approval. The Borrower may request that extraordinary,
nonrecurring expenses under GAAP incurred in connection with such Permitted
Acquisition be excluded from the Consolidated Net Income of the Loan Parties and
from the net income of the business to be acquired when they compute
Consolidated Cash Flow from Operations pursuant to clause (1) above. Examples of
such expenses include, without limitation, transaction costs, debt prepayments
and similar charges, brokers' fees, attorneys' fees and accountants' fees. The
foregoing expenses shall be excluded from net income in such computations of
Consolidated Cash Flow from Operations if the Required Banks agree in writing to
such request.
(ii) Notice. The Borrower shall deliver to the
Banks a notice in the form of Exhibit 8.01(m)(ii) (the "Acquisition Notice
Certificate") at least two (2) Business Days before making any Permitted
Acquisition except for: (1) a Permitted Acquisition described in Section
8.01(m)(i) with respect to which the Borrower is delivering an Acquisition
Approval Certificate, or (2) a Permitted Acquisition if the Purchase Price in
connection therewith is less
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than $2,500,000. The Acquisition Notice Certificate shall set forth the ratio of
(1) Consolidated Cash Flow From Operations (excluding the cash flow of the
acquired business) for the Acquisition Income Reporting Period in connection
with such Permitted Acquisition, and (2) Total Indebtedness on the date of the
Permitted Acquisition after giving effect to the acquisition and the Loans to be
made on such date, which ratio shall not exceed (A) 3.75 to 1.0 from and
including the Convalescent Merger Effective Date through but not including the
Subordinated Indebtedness Incurrence Date; (B) 4.5 to 1.0 from the Subordinated
Indebtedness Incurrence Date through but not including the Allegis Acquisition
Effective Date; (C) 5.25 to 1.0 from the Allegis Acquisition Effective Date
through and including June 30, 1997; (D) 5.00 to 1.0 from July 1, 1997 through
and including December 31, 1997; (E) 4.75 to 1.0 from January 1, 1998 through
and including March 31, 1998; and (F) 4.5 to 1.0 from April 1, 1998 and
thereafter. The Acquisition Notice Certificate also shall confirm that, after
giving effect to the Permitted Acquisition and the Loans made on the date
thereof, no Event of Default shall exist and the Loan Parties shall be in
compliance with all of their covenants hereunder, assuming, for purposes of
Borrower's financial covenants, that all items of income, expense and cash flow
are reported for the Acquisition Income Reporting Period and that all balance
sheet items (such as Indebtedness) are measured on the date of such Permitted
Acquisition.
(iii) Additional Information. With respect to any
Acquisition Approval Certificate or Acquisition Notice Certificate, the Borrower
shall provide to the Banks, as the Banks may reasonably request detailed
calculations and information supporting the financial calculations therein and
the financial statements attached thereto."
(f) Section 8.01 [Affirmative Covenants.] is hereby amended
by deleting in its entirety subsection (o) [Westbury Associates, Ltd.] thereof
and inserting in lieu thereof the following:
"(o) Westbury Associates, Ltd. Borrower shall, on or
before December 31, 1997, cause Westbury Associates, Ltd. to become a
wholly-owned Subsidiary of Borrower."
(g) Section 8.02 [Negative Covenants.] is hereby amended by
deleting clause (iv) of subsection (d) [Loans and Investments.] thereof and
inserting the following in lieu thereof:
"(iv) Restricted Investments not to exceed in the
aggregate for the Borrower and the other Loan Parties Fifty Million Dollars
($50,000,000) outstanding at any time; provided that (i) the Excluded Entity in
which the Restricted Investment is made is engaged in a business which is
ancillary and related to the business of the Loan Parties; (ii) the Loan Party
making a Restricted Investment is either a shareholder, member or partner of the
Excluded Entity in which a Restricted Investment is made; (iii) the stock,
equity interests in a limited liability company or partnership interests owned
by a Loan Party in the Excluded Entity in which a Restricted Investment is made
are pledged to the Agent on a first priority basis for the benefit of the Banks;
(iv) to the extent that any Excluded Entity incurs Indebtedness payable to any
person other than a Loan Party (the "Third Party Lender") in excess of
$5,000,000, prior to incurring
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such Indebtedness, the Borrower shall cause the Third Party Lender to enter into
an intercreditor agreement with the Agent on behalf of the Banks, in form and
substance satisfactory to the Agent in its sole discretion with respect to the
Indebtedness of such Excluded Entity payable to the Third Party Lender and any
Indebtedness of such Excluded Entity payable to either the Banks or any Loan
Party; and (v) to the extent that any individual Restricted Investment exceeds
$7,500,000 or any series of related Restricted Investments in the aggregate
exceed $7,500,000, prior to making any such Restricted Investment, the Borrower
shall have obtained the written approval of the Required Banks; and"
(h) Section 8.02 [Negative Covenants.] is hereby amended by
deleting subsection (e) [Dividends and Related Distributions.] thereof and
inserting the following in lieu thereof:
"(e) Dividends and Related Distributions. The
Borrower shall not, and shall not permit any of its Subsidiaries to, make or
pay, or agree to become or remain liable to make or pay, any dividend or other
distribution of any nature (whether in cash, property, securities or otherwise)
on account of or in respect of their respective shares of capital stock or
partnership interests, as the case may be, or on account of the purchase,
redemption, retirement or acquisition of their respective shares of capital
stock (or warrants, options or rights therefor) or partnership interests, as the
case may be, except (i) dividends or distributions in respect of a partnership
interest payable by any Subsidiary to the Borrower, (ii) dividends payable by
the Borrower solely in shares of capital stock of the Borrower, and (iii) up to
$500,000 of distributions per year payable in the aggregate by the Subsidiaries
of the Borrower which are limited liability companies or partnerships to non
Affiliate members of such limited liability companies or non Affiliate limited
partners of such partnerships, so long as after giving effect thereto no Event
of Default or Potential Default has occurred and is continuing. Notwithstanding
the foregoing, the Borrower may purchase or redeem its stock up to an aggregate
of $15 million of such stock for the period of the Thirteenth Amendment
Effective Date through June 30, 1997, up to an aggregate of $20 million
(including in such aggregate amount all purchases or redemptions in prior
periods) of such stock for the period of the Thirteenth Amendment Effective Date
through September 30, 1997, and up to an aggregate of $25 million (including in
such aggregate amount all purchases or redemptions in prior periods) of such
stock for the period of the Thirteenth Amendment Effective Date through December
30, 1997, provided that, after giving effect to each such purchase or
redemption, no Potential Default or Event of Default has occurred and is
continuing and, without limiting the generality of the foregoing, that: (x)
after giving effect to each such purchase or redemption the Borrower is in
compliance (and the Borrower demonstrates such compliance to the Agent in detail
satisfactory to the Agent) with the Minimum Net Worth covenant set forth in
Section 8.02(t); and (y) after giving effect to each such purchase or redemption
the ratio of Total Indebtedness to Consolidated Cash Flow from Operations does
not exceed 4.85 to 1.0 (and the Borrower demonstrates such compliance to the
Agent in detail satisfactory to the Agent). For purposes of clause (y) in the
preceding sentence, Total Indebtedness shall be calculated as of each date of
determination (after giving effect to each purchase or redemption of the
Borrower's stock) and Consolidated Cash Flow from Operations shall be calculated
as of each date of determination (after giving effect to each purchase or
redemption of the Borrower's stock) for the four fiscal quarters then ended."
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(i) Section 8.02 [Negative Covenants.] is hereby amended by
deleting the first paragraph of subsection (f) [Liquidations, Mergers,
Consolidations, Acquisitions.] thereof and inserting the following in lieu
thereof:
"(f) Liquidations, Mergers, Consolidations,
Acquisitions. The Borrower shall not, and shall not permit any of the other Loan
Parties to, dissolve, liquidate or wind-up its affairs, or become a party to any
merger or consolidation, or acquire by purchase, lease or otherwise all or
substantially all of the assets or capital stock of any other person, provided
that (i) any wholly-owned Subsidiary may consolidate or merge into the Borrower
or any other wholly-owned Subsidiary; (ii) a Subsidiary that is not a Material
Subsidiary may be dissolved, liquidated or wound up provided that from the date
of this Agreement through the Expiration Date, the total assets of the
non-Material Subsidiaries which so dissolve, liquidate or wind up shall not
exceed $25,000,000 in the aggregate; (iii) the Borrower or a Restricted
Subsidiary of the Borrower may acquire all of the capital stock of another
corporation so long as (u) the Purchase Price for such acquisition shall not
exceed $75,000,000, (v) the aggregate Purchase Price for such acquisition
together with all previous acquisitions permitted under clauses (iii) and (iv)
of this Section 8.02(f) shall not exceed $70,000,000 during the fiscal year
ending December 31, 1995 or $200,000,000 during any fiscal year commencing after
December 31, 1995 (subject to the provisions of this paragraph and the second
paragraph of this Section 8.02(f) below), (w) such acquired corporation,
simultaneous with the acquisition thereof by a Loan Party, executes and delivers
to the Agent for the benefit of the Banks a Guaranty Agreement and a Pledge
Agreement substantially in the form of Exhibits 1.01(G) and 1.01(P),
respectively, and also delivers to the Agent such opinions of counsel and other
documents in connection therewith as the Agent may reasonably request, (x) all
of the issued and outstanding capital stock of such acquired corporation owned
by a Loan Party is pledged to the Agent for the benefit of the Banks pursuant to
a Pledge Agreement substantially in the form of Exhibit 1.01(P) hereto, (y)
after giving effect to such proposed acquisition, no Event of Default shall have
occurred and be continuing, and (z) after giving effect to such proposed
acquisition (and without limiting the generality of the preceding clause
(iii)(y)), the Borrower is in compliance with the Leverage Ratio set forth in
Section 8.02(r) and the Borrower demonstrates such compliance pursuant to
Section 8.01(m) (if Section 8.01(m) requires such demonstration of compliance);
and (iv) the Borrower or any Restricted Subsidiary may merge or consolidate
with, or acquire all or substantially all of the assets of another person so
long as (w) the Purchase Price for such acquisition, merger or consolidation
shall not exceed $75,000,000, (x) the aggregate Purchase Price for such
acquisition together with all previous acquisitions permitted under clauses
(iii) and (iv) of this Section 8.02(f) shall not exceed $70,000,000 during the
fiscal year ending December 31, 1995 or $200,000,000 during any fiscal year
commencing after December 31, 1995 (subject to the provisions of this paragraph
and the second paragraph of this Section 8.02(f) below), (y) after giving effect
to such proposed acquisition, merger or consolidation, no Event of Default shall
have occurred and be continuing, and (z) after giving effect to such proposed
acquisition, merger or consolidation, the Borrower is in compliance with the
Leverage Ratio set forth in Section 8.02(r) and the Borrower demonstrates such
compliance pursuant to Section 8.01(m) (if Section 8.01(m) requires such
demonstration of compliance). The Purchase Price paid in connection with the
Convalescent Merger shall be excluded from the computation of the dollar
limitations on the Purchase Price permitted to be paid in connection with the
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mergers or other acquisitions contained in clauses (iii)(u) and (v) and (iv)(w)
and (x) above. The Purchase Price paid in connection with the MedRehab Merger
shall be excluded from the computation of the dollar limitations on the Purchase
Price permitted to be paid in connection with the mergers or other acquisitions
contained in clauses (iii)(u) and (v) and (iv)(w) and (x) above. The Purchase
Prices paid in connection with the Regency Merger and the Allegis Acquisition
shall be included in the computation of the dollar limitations on the Purchase
Price permitted to be paid in connection with mergers or other acquisitions
contained in clauses (iii)(u) and (v) and (iv)(w) and (x) above. For purposes of
the preceding clauses (iii)(z) and (iv)(z), the Leverage Ratio set forth in
Section 8.02(r) shall be calculated as follows: (i) Total Indebtedness shall be
determined as of the date of the proposed acquisition, after giving effect
thereto, and (ii) Consolidated Cash Flow from Operations shall be calculated for
the twelve-month period ending on the last day of the fiscal quarter of the
Borrower which precedes such date of acquisition."
(j) Section 8.02 [Negative Covenants.] is hereby amended by
deleting subsection (p) [Capital Expenditures and Leases.] thereof in its
entirety and inserting the following in lieu thereof:
"(p) Capital Expenditures and Leases. The Borrower
shall not, and shall not permit any of its Subsidiaries to make any payments on
account of the purchase of any assets which if purchased would constitute fixed
assets or on account of the lease of any assets which if leased would constitute
a capital lease, in the aggregate exceeding: (i) $11,100,000 during the fiscal
year of January 1, 1995 through December 31, 1995; (ii) $30,000,000 during the
fiscal year of January 1, 1996 through December 31, 1996; (iii) $82,000,000
during the fiscal year of January 1, 1997 through December 31, 1997; and (iv)
$50,000,000 in each fiscal year thereafter, and all such purchases of fixed
assets or payments pursuant to such capital leases shall be made under usual and
customary terms and in the ordinary course of business."
(k) Section 8.02 [Negative Covenants.] is hereby amended by
deleting subsection (r) [Maximum Leverage Ratio.] thereof in its entirety and
inserting the following in lieu thereof:
"(r) Maximum Leverage Ratio. The Borrower shall not
at any time permit the ratio of Total Indebtedness to Consolidated Cash Flow
from Operations to exceed (A) 3.0 to 1.0 from the Fourth Amendment Effective
Date through but not including the Convalescent Merger Effective Date; (B) 3.75
to 1.0 from and including the Convalescent Merger Effective Date through but not
including the Subordinated Indebtedness Incurrence Date; (C) 4.5 to 1.0 from the
Subordinated Indebtedness Incurrence Date through but not including the Allegis
Acquisition Effective Date; (D) 5.25 to 1.0 from the Allegis Acquisition
Effective Date through and including June 30, 1997; (E) 5.00 to 1.0 from July 1,
1997 through and including December 31, 1997; (F) 4.75 to 1.0 from January 1,
1998 through and including March 31, 1998; and (G) 4.5 to 1.0 from April 1, 1998
and thereafter. For purposes of this Section 8.02(r), Total Indebtedness shall
be calculated as of each date of determination and Consolidated Cash Flow from
Operations shall be calculated as of each date of determination for the four
fiscal quarters then ended."
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(l) The following schedule to the Credit Agreement is hereby
amended and restated to read as set forth on the schedule attached hereto
bearing the same numerical reference and name as the original schedule:
Schedule 6.01(a) and (c) Qualifications to do Business,
Subsidiaries and Excluded Entities
Schedule 6.01 (bb) Regency Facilities Indebtedness; Lien
Releases; Intercreditor Agreements;
Non-Disturbance Agreements; Consents to
Leasehold Mortgages and Second Liens
Schedule 6.01(cc) Allegis Facilities Indebtedness; Lien
Releases; Intercreditor Agreements;
Non-Disturbance Agreements; Consents to
Leasehold Mortgages and Second Liens
(m) Each of the following exhibits to the Credit Agreement is
hereby amended and restated to read as set forth on the exhibit attached hereto
bearing the same numerical reference as the original exhibit:
Exhibit 2.05 Revolving Credit Loan Request
Exhibit 8.01(m)(i) Acquisition Approval Certificate
Exhibit 8.01(m)(ii) Acquisition Notice Certificate
Exhibit 8.03(d)(3) Compliance Certificate for Quarter
Ending 9/30/96 and Thereafter
3. Conditions of Effectiveness of This Amendment. The effectiveness of
this Amendment is expressly conditioned upon satisfaction of each of the
following conditions precedent:
(a) Representations and Warranties; No Defaults. The
representations and warranties of the Borrower contained in Article VI of the
Credit Agreement shall be true and accurate on the date hereof with the same
effect as though such representations and warranties had been made on and as of
such date (except representations and warranties which relate solely to an
earlier date or time, which representations and warranties shall be true and
correct on and as of the specific dates or times referred to therein), the
Borrower shall have performed and complied with all covenants and conditions
hereof; no Event of Default or Potential Default under the Credit Agreement
shall have occurred and be continuing or shall exist and there shall be
delivered to the Agent for the benefit of each Bank a certificate of an
Authorized Officer of the Borrower dated as of the date hereof certifying as to
each of the foregoing.
(b) Organization, Authorization and Incumbency. There shall
be delivered to the Agent for the benefit of each Bank a certificate dated as of
the date hereof and signed by the Secretary or an Assistant Secretary of each
Loan Party, certifying as appropriate as to:
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(i) all action taken by such Loan Party in
connection with this Amendment and the other Loan Documents;
(ii) the names of the officer or officers
authorized to sign this Amendment and the other documents executed and delivered
in connection herewith and described in this Section 3 and the true signatures
of such officer or officers and, in the case of the Borrower, specifying the
Authorized Officers permitted to act on behalf of the Borrower for purposes of
the Loan Documents and the true signatures of such officers, on which the Agent
and each Bank may conclusively rely; and
(iii) copies of its organizational documents,
including its certificate of incorporation and bylaws if it is a corporation and
its certificate of partnership and partnership agreement if it is a partnership,
in each case as in effect on the date hereof, certified by the appropriate state
official where such documents are filed in a state office together with
certificates from the appropriate state officials as to the continued existence
and good standing of each of the Loan Parties in each state where organized;
provided that each of the Loan Parties may, in lieu of delivering copies of the
foregoing organizational documents, certify that the organizational documents
which it previously delivered remain in effect and have not been amended.
(c) Opinions of Counsel. There shall be delivered to the
Agent for the benefit of each Bank a written opinion dated the date hereof of
Xxxxx, Xxxxxxx & Xxxxxxxxx, counsel for the Loan Parties, in form and substance
satisfactory to the Agent.
(d) Fees and Expenses. The Borrower shall pay or cause to be
paid to the Agent for itself and for the account of the Banks to the extent not
previously paid all fees accrued through the date hereof and the costs and
expenses of the Agent and the Banks including, without limitation, fees of the
Agent's counsel in connection with this Amendment.
(e) Acknowledgment. Each of the Loan Parties, other than the
Borrower, shall have executed the Confirmation of Guaranty in the form attached
hereto as Exhibit 1 hereto.
(f) Legal Details; Counterparts. All legal details and
proceedings in connection with the transactions contemplated by this Amendment
shall be in form and substance satisfactory to the Agent, and the Agent shall
have received all such other counterpart originals or certified or other copies
of such documents and proceedings in connection with such transactions, in form
and substance satisfactory to the Agent. Further, the Agent shall have received
counterpart signature pages to this Amendment duly executed by each Loan Party,
the Agent and each Bank.
4. Completion of Outstanding Items. On or before March 31, 1997, the
Borrower shall have completed the outstanding conditions to the effectiveness of
Amendment Nos. 1 through 12 to the Credit Agreement and delivered to the Agent
for the benefit of the Banks evidence of the same satisfactory to the Agent, in
its sole discretion, it being expressly agreed that satisfaction of such
outstanding conditions has not been waived by the Banks.
-10-
5. Amendment to Certain Other Loan Documents.
(a) Schedule 1 to that certain Guaranty Agreement made by
each Subsidiary of the Borrower party thereto, for the benefit of the Banks,
dated as of May 18, 1994, as amended, is hereby amended and restated to read as
set forth on the Schedule attached hereto bearing the same numerical reference
and name.
(b) Schedule A to each of the following Pledge Agreements is
hereby amended and restated to read as set forth on the schedule attached hereto
bearing the same name:
(i) Schedule A to the Pledge Agreement (Borrower),
dated as of May 18, 1994, as amended, by the Borrower, as pledgor, in favor of
the Agent;
(ii) Schedule A to the Pledge Agreement
(Subsidiaries Pledging Stock), dated as of May 18, 1994, as amended, among
certain Subsidiaries of the Borrower, as pledgor, in favor of the Agent;
(iii) Schedule A to the Amended and Restated Pledge
Agreement (Subsidiaries Pledging Partnership Interests) dated as of June 1,
1996, as amended, among certain Subsidiaries of the Borrower, as pledgor, in
favor of the Agent; and
(iv) Schedule A to the Pledge Agreement
(Subsidiaries Pledging Limited Liability Company Interests), dated as of October
3, 1996, among certain Subsidiaries of the Borower, as pledgor, in favor of the
Agent.
6. Force and Effect. Except as expressly modified by this Amendment,
the Credit Agreement and the other Loan Documents are hereby ratified and
confirmed and shall remain in full force and effect after the date hereof.
7. Governing Law. This Amendment shall be deemed to be a contract under
the laws of the Commonwealth of Pennsylvania and for all purposes shall be
governed by and construed and enforced in accordance with the internal laws of
the Commonwealth of Pennsylvania without regard to its conflict of laws
principles.
[INTENTIONALLY BLANK]
-11-
[SIGNATURE PAGE 1 OF 2 TO AMENDMENT NO. 13]
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first above written.
MARINER HEALTH GROUP, INC.
By:
-------------------------
Name:
-------------------------
Title:
-------------------------
PNC BANK, NATIONAL ASSOCIATION,
individually and as Agent
By:
-------------------------
Name:
-------------------------
Title:
-------------------------
THE CHASE MANHATTAN BANK (as
successor to Chemical Bank)
By:
-------------------------
Name:
-------------------------
Title:
-------------------------
CORESTATES BANK, N.A.
By:
-------------------------
Name:
-------------------------
Title:
-------------------------
CREDITANSTALT - BANKVEREIN
By:
-------------------------
Name:
-------------------------
Title:
-------------------------
By:
-------------------------
Name:
-------------------------
Title:
-------------------------
[SIGNATURE PAGE 2 OF 2 TO AMENDMENT NO. 13]
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA
By:
-------------------------
Name:
-------------------------
Title:
-------------------------
MELLON BANK, N.A.
By:
-------------------------
Name:
-------------------------
Title:
-------------------------
NATIONSBANK OF TENNESSEE, N.A.
By:
-------------------------
Name:
-------------------------
Title:
-------------------------
TORONTO DOMINION (NEW YORK), INC.
By:
-------------------------
Name:
-------------------------
Title:
-------------------------
EXHIBIT 1
________________, 1997
To: Mariner Health Group, Inc.
and each of its subsidiaries
Reference is made to that certain Credit Agreement, dated as of May 18, 1994, as
amended (the "Credit Agreement"), by and among Mariner Health Group, Inc., a
Delaware corporation, the Banks party thereto and PNC Bank, National Association
("Agent"). All terms used herein unless otherwise defined herein shall have the
meanings as set forth in the Credit Agreement.
The Borrower, the Banks and the Agent have entered into that certain Amendment
No. 13 to the Credit Agreement, dated as of the date hereof (the "Amendment No.
13"), a copy of which has been delivered to each Loan Party.
This agreement will confirm that each Loan Party has read and understands
Amendment No. 13. Each Loan Party hereby ratifies and confirms each of the Loan
Documents to which it is a party by signing below as indicated, including
without limitation each Guaranty Agreement and each Pledge Agreement to which it
is a party, including, without limitation, all schedules thereto, as amended by
Amendment No. 13.
Very truly yours,
PNC BANK, NATIONAL ASSOCIATION,
as Agent
By:
------------------------------
[SIGNATURE PAGE TO
CONFIRMATION OF GUARANTY
DATED _______________, 1997]
Intending to be legally bound hereby,
the undersigned have accepted and agreed
to the foregoing as of the date and year
first above written.
MARINER HEALTH GROUP, INC. and each
Subsidiary thereof which is a
corporation and which is listed as a
"Company" on Schedule 6.01(c) of the
Credit Agreement both for itself and, if
applicable, as general partner of each
Subsidiary of Mariner Health Group, Inc.
which is a partnership and which is
listed as a "Company" on Schedule
6.01(c).
By:
----------------------------------
Title:
-------------------------------
of each of the foregoing corporations
