Exhibit 10.8
FIRST AMENDMENT TO DEBTOR-IN-POSSESSION CREDIT AGREEMENT
AND
FIRST AMENDMENT TO SECURITY AGREEMENT
October 21, 1999
Reference is made to (i) that certain Debtor-in-Possession Credit
Agreement dated as of September 13, 1999 (as heretofore amended, supplemented or
otherwise modified, the "DIP Credit Agreement"), by and among VENCOR, INC., a
Delaware corporation ("Vencor"), and VENCOR OPERATING, INC., a Delaware
corporation ("Vencor Opco"), each as debtor and debtor-in-possession, and EACH
OF VENCOR'S SUBSIDIARIES LISTED ON THE SIGNATURE PAGES THEREOF, each as debtor
and debtor-in-possession (each such subsidiary, Vencor and Vencor Opco
individually referred to herein as a "Borrower" and, collectively, on a joint
and several basis, as "Borrowers"); THE LENDERS LISTED ON THE SIGNATURE PAGES
THEREOF (each individually referred to herein as a "Lender" and collectively as
"Lenders"); ▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF NEW YORK, as arranger (in such
capacity, "Arranger"), collateral agent and administrative agent for the
Lenders, and as an issuing bank for Letters of Credit thereunder, and (ii) that
certain Security Agreement dated as of September 13, 1999 (as heretofore
amended, supplemented or otherwise modified, the "Security Agreement"), among
the Borrowers, the Subsidiary Guarantor and ▇▇▇▇▇▇ Guaranty Trust Company of New
York, as collateral agent (in such capacity, "Collateral Agent"). Capitalized
terms used herein without definition herein shall have the meanings assigned to
such terms in either the DIP Credit Agreement or Security Agreement, as
appropriate.
Borrowers and Lenders desire to amend the DIP Credit Agreement to: (i)
provide for the ability of the Borrowers to post cash or make deposits with
bonding companies for the issuance of bonds necessitated by either regulatory or
judicial requirements for an aggregate amount of $5,000,000, and (ii) comply
with the terms of Section 5.13 of the DIP Credit Agreement. Accordingly,
Borrowers and the undersigned Lenders hereby agree that:
1. the definition of "Permitted Encumbrances" set forth in Section
1.01 of the DIP Credit Agreement is hereby amended by (i) deleting the "and" at
the end of subparagraph (b) thereof; (ii) deleting the "." immediately after
subparagraph (c) thereof, and substituting therefor "; and"; and (iii) adding a
new subparagraph (d) at the end thereof as follows:
" (d) any other Liens incurred in the ordinary course of business in
connection with any obligation of any Vencor Company to post cash or make
deposits with any bonding company for the issuance of bonds necessitated by
either regulatory or judicial requirements in an aggregate amount of up to
$5,000,000.";
2. Section 2.05(a)(i) of the DIP Credit Agreement is hereby amended
by adding immediately after the reference to "$15,000,000" and before the semi-
colon, the phrase "(less any amounts posted in cash or deposited with any
bonding company by any Vencor Company as permitted under subparagraph (d) of the
definition of Permitted Encumbrances)"; and
3. Section 5.13 of the DIP Credit Agreement is hereby amended by
deleting in its entirety and substituting therefor the following:
"Section 5.13 Government Settlement. The Borrowers shall
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cause all existing disputes with the United States with respect
to Medicare and/or under the False Claims Act to be settled in a
manner satisfactory to Determining Lenders by the close of
business on Monday, November 29, 1999 or such later date that
Determining Lenders may otherwise consent to (such date, in any
event, being the "Default Date"). Notwithstanding anything to the
contrary herein, failure to cause such disputes to be so settled
by the Default Date shall be deemed a Material Adverse Effect and
an immediate Event of Default on such Default Date for all
purposes hereunder and under the other Financing Documents."
Borrowers, Subsidiary Guarantor and Lenders further desire to amend
the Security Agreement to reflect the provisions of the Borrowing Order which
require all proceeds of the Collateral to be held in trust by the Borrowers, or
any of their successors or assigns, for the benefit of the Secured Parties.
Accordingly, Borrowers, Subsidiary Guarantor and the undersigned Lenders hereby
agree that Section 12 of the Security Agreement is hereby amended by adding
immediately after subsection (d) thereof a new subsection (e) as follows:
"(e) Upon the giving of the Enforcement Notice, without
limiting any of the rights or remedies of the Collateral Agent,
or any Secured Party, to collect directly from any account debtor
or obligor, including the U.S. (as defined in the Interim
Borrowing Order), all proceeds of the Collateral received by any
Lien Grantor or any successors or assigns, including any trustee
appointed or elected in any Chapter 11 Case or any superseding
chapter 7 cases, shall be held in trust for the Collateral Agent
for the benefit of the Secured Parties."
On and after the First Amendment Effective Date (as defined below),
each reference in the DIP Credit Agreement and the Security Agreement to "this
Agreement", "hereunder", "hereof", "herein" or words of like import referring to
such DIP Credit Agreement or Security Agreement, respectively, and each
reference in the other Financing Documents to the "DIP Credit Agreement" or
"Security Agreement", "thereunder", "thereof" or words of like import referring
to such DIP Credit Agreement or Security Agreement, as the case may be, shall
mean and be a reference to such DIP Credit Agreement or Security Agreement, as
the case may be, as amended by this Amendment (such DIP Credit Agreement and
Security Agreement, as so amended, being the "Amended Agreements"). Except as
specifically amended by this Amendment, the DIP Credit Agreement, Security
Agreement and such other Financing Documents shall remain in full force and
effect and are hereby ratified and confirmed. The execution, delivery and
performance of this Amendment shall not, except as expressly provided herein,
constitute a waiver of any provision of, or operate as a waiver of any right,
power or
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remedy of any Agent or any Lender under the DIP Credit Agreement, Security
Agreement or any of such other Financing Documents.
In order to induce Lenders to enter into this Amendment, each Borrower
and Subsidiary Guarantor (for purposes of this paragraph only, hereinafter
collectively referred to as the Lien Grantors, as defined in the Security
Agreement), by its execution of a counterpart of this Amendment, represents and
warrants that (a) such Lien Grantor has the corporate power and authority and
all material governmental licenses, authorizations, consents, registrations and
approvals required to enter into this Amendment and to carry out the
transactions contemplated by, and perform its obligations under, the Amended
Agreements, (b) the execution and delivery of this Amendment and the performance
of the Amended Agreements have been duly authorized by all necessary corporate
action on the part of such Lien Grantor, (c) the execution and delivery by such
Lien Grantor of this Amendment and the performance by such Lien Grantor of the
Amended Agreements do not and will not (i) contravene any provision of such Lien
Grantor's charter, articles or certificate of incorporation or by-laws, any
unanimous agreement of all the shareholders of such Lien Grantor or any
applicable United States federal law, or any applicable law of any state, or any
other jurisdiction in which such Lien Grantor's material assets are located,
(ii) constitute, or result in a breach of, or a default under, or be in conflict
with, any material deed, indenture, mortgage, franchise, license, judgment,
agreement or instrument to which such Lien Grantor is a party or by which such
Lien Grantor is bound, (iii) result in any Lien on any of such Lien Grantor's
property or assets, or (iv) require any approval of stockholders or any approval
or consent of any Person under any document referred to in clause (iii) above,
(d) the execution and delivery by such Lien Grantor of this Amendment and the
performance by such Lien Grantor of the relevant Amended Agreements do not and
will not require any registration with, consent or approval of, or notice to, or
other action to, with or by, any Governmental Authority or regulatory body, (e)
this Amendment and the Amended Agreements have been duly executed and delivered
by such Lien Grantor and are the legally valid and binding obligations of such
Lien Grantor, enforceable against such Lien Grantor in accordance with their
respective terms, (f) for purposes of the Borrowing Order (i) this Amendment
constitutes a non-material modification of the DIP Credit Agreement, the
Security Agreement and the Financing Documents, and (ii) notice of this
Amendment has been given to and received by the Committee (as defined in the
Borrowing Order), (g) with respect to the Borrowers, after giving effect to this
Amendment, the representations and warranties contained in Article 4 of the DIP
Credit Agreement are and will be true, correct and complete in all material
respects on and as of the First Amendment Effective Date to the same extent as
though made on and as of that date, except to the extent such representations
and warranties specifically relate to an earlier date, in which case they were
true, correct and complete in all material respects on and as of such earlier
date, (h) with respect to the Borrowers and the Subsidiary Guarantor, after
giving effect to this Amendment, the representations and warranties contained in
Section 2 of the Security Agreement are and will be true, correct and complete
in all material respects on and as of the First Amendment Effective Date to the
same extent as though made on and as of that date, except to the extent such
representations and warranties specifically relate to an earlier date, in which
case they were true, correct and complete in all material respects on and as of
such earlier date, and (i) after giving effect to this Amendment, no event has
occurred and is continuing or will result from the consummation of the
transactions contemplated by this Amendment that would constitute an Event of
Default.
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This Amendment may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument. This Amendment shall
become effective (the date of such effectiveness being the "First Amendment
Effective Date") with respect to the DIP Credit Agreement and the Security
Agreement upon the execution of a counterpart hereof by the Borrowers, the
Subsidiary Guarantor and Required Lenders and receipt by the Borrowers, the
Subsidiary Guarantor and Agent of written or telephonic notification of such
execution and authorization of delivery thereof; provided that, in addition to
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the foregoing conditions to effectiveness, the amendment to Section 5.13 of the
DIP Credit Agreement set forth in numbered paragraph 3 above shall become
effective upon the execution and delivery of a counterpart hereof by Determining
Lenders.
THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
[Remainder of page intentionally left blank]
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BORROWERS:
Advanced Infusion Systems, Inc.
American X-Rays, Inc.
C.P.C. of Louisiana, Inc.
Community Behavioral Health System, Inc.
Community Psychiatric Centers of Arkansas, Inc.
Community Psychiatric Centers of California
Community Psychiatric Centers of Florida, Inc.
Community Psychiatric Centers of Idaho, Inc.
Community Psychiatric Centers of Indiana, Inc.
Community Psychiatric Centers of Kansas, Inc.
Community Psychiatric Centers of Mississippi, Inc.
Community Psychiatric Centers of Missouri, Inc.
Community Psychiatric Centers of North Carolina, Inc.
Community Psychiatric Centers of Oklahoma, Inc.
Community Psychiatric Centers of Utah, Inc.
Community Psychiatric Centers Properties Incorporated
Community Psychiatric Centers Properties of Oklahoma, Inc.
Community Psychiatric Centers Properties of Texas, Inc.
Community Psychiatric Centers Properties of Utah, Inc.
Courtland Gardens Health Center, Inc.
CPC Investment Corp.
CPC Managed Care Health Services, Inc.
CPC of Georgia, Inc.
CPC Properties of Arkansas, Inc.
CPC Properties of Illinois, Inc.
CPC Properties of Indiana, Inc.
CPC Properties of Kansas, Inc.
CPC Properties of Louisiana, Inc.
CPC Properties of Mississippi, Inc.
CPC Properties of Missouri, Inc.
CPC Properties of North Carolina, Inc.
First Rehab, Inc.
Florida Hospital Properties, Inc.
Health Care Holdings, Inc.
Health Care Technology, Inc.
Helian ASC of Northridge, Inc.
Helian Health Group, Inc.
Helian Recovery Corporation
Homestead Health Center, Inc.
Horizon Healthcare Services, Inc.
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Interamericana Health Care Group
▇.▇. ▇▇▇▇▇▇ Hospital, Inc.
Lafayette Health Care Center, Inc.
MedEquities, Inc.
Medisave of Tennessee, Inc.
Medisave Pharmacies, Inc.
Old Orchard Hospital, Inc.
Palo Alto Surgecenter Corporation
Peachtree-Parkwood Hospital, Inc.
PersonaCare, Inc.
PersonaCare Living Center of Clearwater, Inc.
PersonaCare of Bradenton, Inc.
PersonaCare of Clearwater, Inc.
PersonaCare of Connecticut, Inc.
PersonaCare of Georgia, Inc.
PersonaCare of Huntsville, Inc.
PersonaCare of Little Rock, Inc.
PersonaCare of Ohio, Inc.
PersonaCare of Owensboro, Inc.
PersonaCare of Pennsylvania, Inc.
PersonaCare of Pompano East, Inc.
PersonaCare of Pompano West, Inc.
PersonaCare of Reading, Inc.
PersonaCare of San Antonio, Inc.
PersonaCare of San ▇▇▇▇▇, Inc.
PersonaCare of Shreveport, Inc.
PersonaCare of St. Petersburg, Inc.
PersonaCare of Warner ▇▇▇▇▇▇▇, Inc.
PersonaCare of Wisconsin, Inc.
PersonaCare Properties, Inc.
ProData Systems, Inc.
Recovery Inns of America, Inc.
Respiratory Care Services, Inc.
Stamford Health Facilities, Inc.
THC-Chicago, Inc.
THC-Hollywood, Inc.
THC-Houston, Inc.
THC-Minneapolis, Inc.
THC-North Shore, Inc.
THC-Orange County, Inc.
THC-San Diego, Inc.
THC-Seattle, Inc.
TheraTx Healthcare Management, Inc.
TheraTx Health Services, Inc.
TheraTx Management Services, Inc.
TheraTx Medical Supplies, Inc.
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TheraTx Rehabilitation Services, Inc.
TheraTx Staffing, Inc.
Transitional Hospitals Corporation, a Delaware Corporation
Transitional Hospitals Corporation, a Nevada Corporation
Transitional Hospitals Corporation of Indiana, Inc.
Transitional Hospitals Corporation of Louisiana, Inc.
Transitional Hospitals Corporation of Michigan, Inc.
Transitional Hospitals Corporation of Nevada, Inc.
Transitional Hospitals Corporation of New Mexico, Inc.
Transitional Hospitals Corporation of Tampa, Inc.
Transitional Hospitals Corporation of Texas, Inc.
Transitional Hospitals Corporation of Wisconsin, Inc.
▇▇▇▇▇▇ Nursing Center, Inc.
▇▇▇▇▇▇▇▇ Enterprises, Inc.
VC-OIA, Inc.
VC-TOHC, Inc.
▇▇-▇▇, Inc.
Vencare, Inc.
Vencare Rehab Services, Inc.
Vencor Facility Services, Inc.
Vencor Holdings, L.L.C.
Vencor Home Care Services, Inc.
Vencor Hospice, Inc.
Vencor Hospitals East, L.L.C.
Vencor Hospitals West, L.L.C.
Vencor, Inc.
Vencor Insurance Holdings, Inc.
Vencor Investment Company
Vencor Nevada, L.L.C.
Vencor Nursing Centers East, L.L.C.
Vencor Nursing Centers Central L.L.C.
Vencor Nursing Centers North, L.L.C.
Vencor Nursing Centers South, L.L.C.
Vencor Nursing Centers West, L.L.C.
Vencor Operating, Inc.
Vencor Pediatric Care, Inc.
Vencor Provider Network, Inc.
Ventech Systems, Inc.
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by: Vencor Operating, Inc., as agent and attorney-in-
fact for each of the foregoing entities
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
Stamford Health Associates, L.P.
by: Stamford Health Facilities, Inc., Its General
Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
Vencor Home Care and Hospice Indiana Partnership
by: Vencor Home Care Services, Inc., Its General
Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
by: Vencor Hospice, Inc., Its General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
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Vencor Hospitals Limited Partnership
by: Vencor Operating, Inc., Its General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
by: Vencor Nursing Centers Limited Partnership,
Its General Partner
by: Vencor Operating, Inc., Its General
Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
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Vencor Nursing Centers Central Limited Partnership
by: Vencor Operating, Inc., Its General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
by: Vencor Nursing Centers Limited Partnership, Its
General Partner
by: Vencor Operating, Inc., Its General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
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Vencor Nursing Centers Limited Partnership
by: Vencor Operating, Inc., Its General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
by: Vencor Hospitals Limited Partnership,
Its General Partner
by: Vencor Operating, Inc., Its General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
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SUBSIDIARY GUARANTOR:
CARIBBEAN BEHAVIORAL HEALTH SYSTEMS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
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AGENTS AND LENDERS:
▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF NEW YORK, as Arranger,
Collateral Agent and Administrative Agent and as a
Lender
By: /s/ Houston ▇. ▇▇▇▇▇▇▇▇
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Name: Houston ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
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ABLECO FINANCE LLC, as a Lender
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Chief Credit Officer
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APPALOOSA INVESTMENT LIMITED PARTNERSHIP I, as a Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
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BANKERS TRUST COMPANY, as a Lender
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Director
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CHASE SECURITIES INC, AS AGENT FOR THE CHASE MANHATTAN
BANK, as a Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Authorized Signatory
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▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P., as a Lender
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title:
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PARIBAS, as a Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: Director
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
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▇▇▇ ▇▇▇▇▇▇ PRIME RATE INCOME TRUST, as a Lender
By: ▇▇▇ ▇▇▇▇▇▇ INVESTMENT ADVISORY CORP.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
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FRANKLIN MUTUAL ADVISERS LLC, as a Lender
By: ______________________________________________
Name:
Title:
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FRANKLIN FLOATING RATE TRUST, as a Lender
By: ______________________________________________
Name:
Title:
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