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EIGHTH AMENDMENT TO
DEBTOR-IN-POSSESSION CREDIT AGREEMENT
January 19, 2001
Reference is made to that certain Debtor-In-Possession Credit
Agreement dated as of January 20, 2000 (as heretofore amended, the "DIP CREDIT
AGREEMENT"), by and among Mariner Health Group, Inc., a Delaware corporation
("MHG"), as debtor and debtor-in-possession, and each of MHG's subsidiaries
listed on the signature pages thereof, each as debtor and debtor-in-possession
(each such subsidiary and MHG individually referred to herein as a "BORROWER"
and, collectively, on a joint and several basis, as the "BORROWERS"); the
Lenders listed on the signature pages thereof; First Union National Bank, as
syndication agent; PNC Capital Markets, Inc. and First Union Securities, Inc.,
as co-arrangers; and PNC Bank, National Association, as collateral agent and
administrative agent (in such capacity, "ADMINISTRATIVE AGENT"), and as an
issuing bank for Letters of Credit thereunder. Capitalized terms used herein
without definition herein shall have the meanings assigned to such terms in the
DIP Credit Agreement and the Borrowing Order.
Borrowers and Lenders desire to amend the DIP Credit Agreement to (i)
extend the maturity date and reduce the Commitments under the DIP Credit
Agreement, (ii) make certain amendments to Section 2.06 of the DIP Credit
Agreement to include a utilization fee, (iii) make certain amendments to
Section 5.01 of the DIP Credit Agreement with respect to certain financial
reporting requirements of the Borrowers, and (iv) make certain amendments to
Section 5.10 of the DIP Credit Agreement with respect to the filing of a plan
of reorganization and disclosure statement for the Borrowers. The Lenders are
prepared to do so solely on the terms and conditions herein.
NOW, THEREFORE, for and in consideration of the foregoing premises,
the mutual covenants and agreements hereinafter set forth and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Borrowers and the Lenders hereby agree as follows:
First, the Borrowers and the undersigned Lenders hereby agree that the
definition of "Stated Maturity Date" is hereby amended by deleting the
reference to "January 19, 2001" contained therein and substituting therefor
"July 19, 2001."
Second, the Borrowers and the undersigned Lenders hereby agree that
the following definitions shall be inserted in Section 1.1 in alphabetical
order:
"EIGHTH AMENDMENT" means that certain Eighth Amendment to
Debtor-In-Possession Credit Agreement dated as of January 19, 2001, by
and among the Borrowers, the Collateral Agent, the Administrative
Agent, the Syndication Agent and the Lenders party thereto.
"EIGHTH AMENDMENT EFFECTIVE DATE" has the meaning assigned to
that term in the Eighth Amendment.
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"NEW COMMITMENT SCHEDULE" means the Commitment Schedule
attached to the Eighth Amendment as Annex A.
Third, the Borrowers and the undersigned Lenders hereby agree that
Section 2.01(a) is hereby amended by adding the following sentence at the end
thereof:
"Notwithstanding anything to the contrary contained herein,
on and as of the Eighth Amendment Effective Date the Tranche A
Commitment of each Lender shall be adjusted so that after giving
effect to such adjustment, the Tranche A Commitments of all Lenders
shall equal $25,000,000 and the Tranche A Commitment of each Lender
shall be as set forth on the New Commitment Schedule."
Fourth, the Borrowers and the undersigned Lenders hereby agree that
Section 2.01(b) is hereby amended by adding the following sentence at the end
thereof:
"Notwithstanding anything to the contrary contained herein,
on and as of the Eighth Amendment Effective Date the Tranche B
Commitment of each Lender shall be reduced to zero."
Fifth, the Borrowers and the undersigned Lenders hereby agree that
Section 2.06 of the DIP Credit Agreement is hereby amended by adding a new
subparagraph (e) at the end thereof as follows:
"(e) Utilization Fee. On and after the Eighth Amendment
Effective Date, the Borrowers shall pay to the Administrative Agent, for
distribution to the Lenders in accordance with each Lender's Percentage, a
utilization fee calculated daily and equal to the product of .25% per annum
(expressed as a daily rate) multiplied by the average daily excess of the
Outstanding Tranche A Amount over $5 million, and such amount shall be payable
in arrears on the last Business Day of each month after the Eighth Amendment
Effective Date and on the Commitment Termination Date."
Sixth, the Borrowers and the undersigned Lenders hereby agree that
Section 5.01(q) of the DIP Credit Agreement is hereby amended by deleting such
paragraph in its entirety and by substituting the following paragraph as a new
Section 5.01(q):
"(q) promptly after the same is available but in no event
later than 5:00 p.m. (Eastern Time) (i) (y) on the fifteenth day of
every calendar month commencing February 15, 2000, and (z) five
Business Days after a Financial Officer of MHG has delivered a
statement pursuant to Section 5.01(r)(ii)(B) indicating that the
Borrowers believe that the projections and financial information set
forth in the Cash Budget do not represent reasonable good faith
estimates as of the date of such statement, a supplement to the Cash
Budget setting forth, for the period commencing the week immediately
following the date such delivery is required and ending thirteen weeks
later (or on the Stated Maturity Date, if earlier), a consolidated
cash forecast for the Borrowers in substantially the form of the Cash
Budget and in substance satisfactory to Required Lenders and (ii) on
the fifth Business Day after the end of each week a report containing
for such week (A) beginning cash balance, (B) cash receipts, (C) cash
disbursements and (D) ending cash balance.
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Seventh, the Borrowers and the undersigned Lenders hereby agree that
Section 5.10 of the DIP Credit Agreement is hereby amended by deleting the
reference to "December 18, 2000" contained therein and substituting therefor
"February 20, 2001."
As of the Eighth Amendment Effective Date, without any further action
by any Borrower or Lender:
(i) Each of Bank One, N.A. and Comerica Bank (each a
"NON-CONTINUING LENDER") shall no longer be a Lender under the DIP
Credit Agreement, and, other than those rights and obligations of a
Lender which survive and continue pursuant to the terms of the DIP
Credit Agreement following the termination of a Lender's status as a
Lender, the rights and obligations of each Non-Continuing Lender under
the DIP Credit Agreement and the other Financing Documents shall be
terminated.
(ii) Each Person designated as a Continuing Lender on the
signature pages hereof (each, a "CONTINUING LENDER") shall remain a
Lender for all purposes of the DIP Credit Agreement and shall continue
to be vested with all the rights, powers, privileges and duties of a
Lender under the DIP Credit Agreement.
(iii) The Administrative Agent agrees to cause each of the
Non-Continuing Lenders to cancel and return all of its Notes to the
Administrative Agent, and to cause each of the Continuing Lenders to
cancel and return its Tranche B Note to the Administrative Agent, all
for re-delivery by the Administrative Agent to MHG as promptly as
practicable.
On and after the Eighth Amendment Effective Date (as defined below),
each reference in the DIP Credit Agreement to "this Agreement", "hereunder",
"hereof", "herein" or words of like import referring to the DIP Credit
Agreement, and each reference in the other Financing Documents to the "DIP
Credit Agreement", "thereunder", "thereof" or words of like import referring to
the DIP Credit Agreement, shall mean and be a reference to the DIP Credit
Agreement as amended through the date thereof, including by this Eighth
Amendment to Debtor-In-Possession Credit Agreement (this "EIGHTH AMENDMENT";
the DIP Credit Agreement, as so amended, being the "AMENDED AGREEMENT").
Without limiting the generality of the provisions of Section 11.05 of
the DIP Credit Agreement, the amendment set forth above shall be limited
precisely as written, and nothing in this Eighth Amendment shall be deemed to
prejudice any right or remedy that the Administrative Agent or any Lender may
now have or may have in the future under or in connection with the DIP Credit
Agreement or any of such other Financing Documents. Except as specifically
amended by this Eighth Amendment, the DIP Credit Agreement and such other
Financing Documents shall remain in full force and effect and are hereby
ratified and confirmed.
In order to induce Lenders to enter into this Eighth Amendment, each
Borrower, by its execution of a counterpart of this Eighth Amendment,
represents and warrants that, subject to obtaining the approval of the Court to
the execution, delivery and performance of this Eighth Amendment, (a) such
Borrower has the corporate or other power and authority and all material
Governmental Approvals required to enter into this Eighth Amendment and to
carry out the
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transactions contemplated by, and perform its obligations under, the Amended
Agreement, (b) the execution and delivery of this Eighth Amendment and the
performance of the Amended Agreement have been duly authorized by all necessary
corporate or other action on the part of such Borrower, (c) the execution and
delivery by such Borrower of this Eighth Amendment and the performance by such
Borrower of the Amended Agreement do not and will not contravene, or violate,
any Applicable Laws (including an applicable order of the Court) or any
provision of its Organizational Documents, or constitute a default under any
agreement or other instrument binding upon it (which default, in the case of
such instruments or agreements, would give rise to rights enforceable on a
post-Petition Date basis) or result in or require the imposition of any Liens
(other than the Liens created by the Collateral Documents) on any of its
assets, (d) the execution and delivery by such Borrower of this Eighth
Amendment and the performance by such Borrower of the Amended Agreement do not
and will not require any action by or in respect of, or filing with, any
governmental body, agency or official, (e) this Eighth Amendment and the
Amended Agreement have been duly executed and delivered by such Borrower and
constitute the valid and binding obligations of such Borrower, enforceable in
accordance with their respective terms, except as may be limited by general
principles of equity, and (f) after giving effect to this Eighth Amendment, no
event has occurred and is continuing or will result from the consummation of
the transactions contemplated by this Eighth Amendment that would constitute a
Default.
This Eighth 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 Eighth
Amendment shall become effective (the date of such effectiveness being the
"EIGHTH AMENDMENT EFFECTIVE DATE") as of January 19, 2001 provided the
following conditions shall have been met: (a) the Borrowers and Continuing
Lenders shall have executed counterparts of this Eighth Amendment and the
Borrowers and the Administrative Agent shall have received written or
telephonic notification of such execution and authorization of delivery
thereof, (b) the Administrative Agent shall have received from the Borrowers,
for distribution to the undersigned Continuing Lenders in accordance with their
respective Percentages, an amendment fee of 1.00% of the aggregate Tranche A
Commitments of such Lenders after giving effect to this Eighth Amendment, (c)
the Court shall have entered an order, in form and substance satisfactory to
the Lenders, approving this Eighth Amendment and the payment of such amendment
fee, (d) the Administrative Agent shall have received evidence satisfactory to
it that all outstanding statements of O'Melveny & Xxxxx LLP, Xxxxxxxx
Xxxxxxxxx, P.C., Xxxxxxx Xxxxxxxxx Xxxxxxx & Xxxxxxx, L.L.P., Xxxxxxxx Xxxxx
Xxxxxx & Xxxxx, Deloitte Consulting and Care Consulting, L.L.C. that are
received by MHG prior to 12:00 Noon (New York City time) on January 6, 2001
have been paid in full, and (e) the Borrowers shall have paid to the
Non-Continuing Lenders all fees and interest accrued and owing to them pursuant
to the terms of the DIP Credit Agreement through the Eighth Amendment Effective
Date.
THIS EIGHTH 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.
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BORROWERS: MARINER HEALTH GROUP, INC.
AID & ASSISTANCE, INC.
BEECHWOOD HERITAGE RETIREMENT COMMUNITY, INC.
BRIDE BROOK NURSING & REHABILITATION CENTER, INC.
COMPASS PHARMACY SERVICES, INC.
COMPASS PHARMACY SERVICES OF MARYLAND, INC.
COMPASS PHARMACY SERVICES OF TEXAS, INC.
CYPRESS NURSING FACILITY, INC.
LONG RIDGE NURSING AND REHABILITATION CENTER, INC.
LONGWOOD REHABILITATION CENTER, INC.
MARINER HEALTH AT BONIFAY, INC.
MARINER HEALTH CARE, INC.
MARINER HEALTH CARE OF ATLANTIC SHORES, INC.
MARINER HEALTH CARE OF DELAND, INC.
MARINER HEALTH CARE OF FORT XXXXX, INC.
MARINER HEALTH CARE OF GREATER LAUREL, INC.
MARINER HEALTH CARE OF INVERNESS, INC.
MARINER HEALTH CARE OF LAKE WORTH, INC.
MARINER HEALTH CARE OF MACCLENNY, INC.
MARINER HEALTH CARE OF METROWEST, INC.
MARINER HEALTH CARE OF NASHVILLE, INC.
MARINER HEALTH CARE OF NORTH HILLS, INC.
MARINER HEALTH CARE OF ORANGE CITY, INC.
MARINER HEALTH CARE OF PALM CITY, INC.
MARINER HEALTH CARE OF PINELLAS POINT, INC.
MARINER HEALTH CARE OF PORT ORANGE, INC.
MARINER HEALTH CARE OF SOUTHERN CONNECTICUT, INC.
MARINER HEALTH CARE OF TOLEDO, INC.
MARINER HEALTH CARE OF TUSKAWILLA, INC.
MARINER HEALTH CARE OF WEST HILLS, INC.
MARINER HEALTH CENTRAL, INC.
MARINER HEALTH HOME CARE, INC.
MARINER HEALTH OF FLORIDA, INC.
MARINER HEALTH OF JACKSONVILLE, INC.
MARINER HEALTH OF MARYLAND, INC.
MARINER HEALTH OF ORLANDO, INC.
MARINER HEALTH OF PALMETTO, INC.
MARINER HEALTH OF SEMINOLE COUNTY, INC.
MARINER HEALTH OF TAMPA, INC.
MARINER HEALTH RESOURCES, INC.
MARINER PHYSICIAN SERVICES, INC.
MARINER PRACTICE CORPORATION
MARINER - REGENCY HEALTH PARTNERS, INC.
MARINERSELECT STAFFING SOLUTIONS, INC.
MARINER SUPPLY SERVICES, INC.
MEDREHAB, INC.
MEDREHAB OF INDIANA, INC.
MEDREHAB OF LOUISIANA, INC.
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MEDREHAB OF MISSOURI, INC.
MERRIMACK VALLEY NURSING & REHABILITATION CENTER, INC.
METHUEN NURSING & REHABILITATION CENTER, INC.
MHC REHAB. CORP.
MHC TRANSPORTATION, INC.
MYSTIC NURSING & REHABILITATION CENTER, INC.
NATIONAL HEALTH STRATEGIES, INC.
PARK TERRACE NURSING & REHABILITATION CENTER, INC.
XXXXXXXXX NURSING & REHABILITATION CENTER, INC.
PINNACLE CARE CORPORATION
PINNACLE CARE CORPORATION OF HUNTINGTON
PINNACLE CARE CORPORATION OF NASHVILLE
PINNACLE CARE CORPORATION OF SENECA
PINNACLE CARE CORPORATION OF SUMTER
PINNACLE CARE CORPORATION OF XXXXXXXX BAY
PINNACLE CARE CORPORATION OF WILMINGTON
PINNACLE CARE MANAGEMENT CORPORATION
PINNACLE PHARMACEUTICALS, INC.
PINNACLE PHARMACEUTICAL SERVICES, INC.
PINNACLE REHABILITATION, INC.
PINNACLE REHABILITATION OF MISSOURI, INC.
PRISM CARE CENTERS, INC.
PRISM HEALTH GROUP, INC.
PRISM HOME CARE COMPANY, INC.
PRISM HOME CARE, INC.
PRISM HOME HEALTH SERVICES, INC.
PRISM HOSPITAL VENTURES, INC.
PRISM REHAB SYSTEMS, INC.
REGENCY HEALTH CARE CENTER OF SEMINOLE COUNTY, INC.
SASSAQUIN NURSING & REHABILITATION CENTER, INC.
TAMPA MEDICAL ASSOCIATES, INC.
THE OCEAN PHARMACY, INC.
TRI-STATE HEALTH CARE, INC.
WINDWARD HEALTH CARE, INC.
BY:
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Xxxx X. Xxxxxx
Vice President for each of the foregoing Borrowers
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IHS REHAB PARTNERSHIP, LTD.
BY: MARINER HEALTH CARE OF NASHVILLE, INC.,
its General Partner
By:
----------------------------------------------------
Name:
--------------------------------------------------
Title:
-------------------------------------------------
MARINER HEALTH PROPERTIES IV, LTD.
BY: MARINER HEALTH OF FLORIDA, INC.,
its General Partner
By:
----------------------------------------------------
Name:
--------------------------------------------------
Title:
-------------------------------------------------
MARINER HEALTH PROPERTIES VI, LTD.
BY: MARINER HEALTH OF FLORIDA, INC.,
its General Partner
By:
----------------------------------------------------
Name:
--------------------------------------------------
Title:
-------------------------------------------------
SEVENTEENTH STREET ASSOCIATES LIMITED PARTNERSHIP
BY: TRI-STATE HEALTH CARE, INC., its General Partner
By:
----------------------------------------------------
Name:
--------------------------------------------------
Title:
-------------------------------------------------
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ALLEGIS HEALTH AND LIVING CENTER AT HERITAGE HARBOUR,
L.L.C.
BY: MARINER HEALTH OF MARYLAND, INC.,
its General Partner
By:
----------------------------------------------------
Name:
--------------------------------------------------
Title:
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AGENTS AND LENDERS: PNC BANK, NATIONAL ASSOCIATION,
Individually as a Continuing Lender and as
Administrative Agent, Collateral Agent and LC
Issuing Bank
By:
----------------------------------------------------
Name:
--------------------------------------------------
Title:
-------------------------------------------------
FIRST UNION NATIONAL BANK,
individually as a Continuing Lender and as
Syndication Agent
By:
----------------------------------------------------
Name:
--------------------------------------------------
Title:
-------------------------------------------------
CREDIT LYONNAIS NEW YORK BRANCH,
individually as a Continuing Lender
By:
----------------------------------------------------
Name:
--------------------------------------------------
Title:
-------------------------------------------------
BANK AUSTRIA CREDITANSTALT-CORPORATE FINANCE,
individually as a Continuing Lender
By:
----------------------------------------------------
Name:
--------------------------------------------------
Title:
-------------------------------------------------
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ANNEX A
NEW COMMITMENT SCHEDULE
TRANCHE A LOAN PERCENTAGE
LENDER COMMITMENT (%)
------ -------------- ----------
PNC Bank, National Association $11,073,369.57 44.29347826
First Union National Bank $11,073,369.56 44.29347826
Credit Lyonnais New York Branch $1,766,304.35 7.065217396
Bank Austria Creditanstalt-Corporate Finance $1,086,956.52 4.347826084
-------------- -----------
TOTAL $25,000,000.00 100.00%
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