Exhibit 10.19(B)
Exhibit A
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FIRST AMENDMENT
FIRST AMENDMENT, dated as of March 30, 1999 (this "Amendment"), to the
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Credit Agreement, dated as of August 11, 1998 (the "Credit Agreement"), among
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HARBORSIDE HEALTHCARE CORPORATION, a Delaware corporation (the "Company"), the
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other entities listed on the signature pages thereof, as joint and several
borrowers thereunder (the Company and such other entities being, collectively,
the "Borrowers"), the banks and other financial institutions or entities parties
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thereto (the "Lenders"), XXXXXX XXXXXXX SENIOR FUNDING, INC. and BT ALEX. XXXXX
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INCORPORATED, as co-arrangers, XXXXXX XXXXXXX SENIOR FUNDING, INC., as
syndication agent, BANKERS TRUST COMPANY, as documentation agent, and THE CHASE
MANHATTAN BANK, as administrative agent for the Lenders (in such capacity, the
"Administrative Agent").
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W I T N E S S E T H:
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WHEREAS, pursuant to the Credit Agreement, the Lenders have agreed to
make, and have made, certain loans and other extensions of credit to the
Borrowers; and
WHEREAS, the Borrowers have requested, and, upon this Amendment
becoming effective, the Required Lenders will have agreed, that certain
provisions of the Credit Agreement be amended in the manner provided for in this
Amendment.
NOW, THEREFORE, in consideration of the premises and the agreements
hereinafter set forth, the parties hereto hereby agree as follows:
SECTION 1. Defined Terms. Terms defined in the Credit Agreement and
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used herein shall have the meanings given to them in the Credit Agreement.
SECTION 2. Amendments to the Credit Agreement.
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2.1. Amendments to Subsection 1.1 of the Credit Agreement. (A)
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Subsection 1.1 of the Credit Agreement is hereby amended by deleting the table
appearing in the definition of "Applicable Margin" and substituting in lieu of
such table the following table:
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Alternate
Base Rate Eurodollar
Loans Loans
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Term Loans: 1.75% 2.75%
Revolving Credit Loans: 1.75% 2.75%
Swing Line Loans: 1.75% Not applicable;
(B) Subsection 1.1 of the Credit Agreement is hereby amended by
deleting the parenthetical phrase "(other than Liens permitted pursuant to
subsection 7.2(f))" appearing in the definition of "Leverage Ratio" and
substituting in lieu thereof the following parenthetical phrase: "(other than
Liens securing Indebtedness permitted pursuant to subsection 7.1)".
(C) Subsection 1.1 of the Credit Agreement is hereby amended by
adding thereto the following definition in its appropriate alphabetical order:
"Restriction Termination Date": as defined in subsection 7.9(e).
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2.2. Amendment to Subsection 6.1 of the Credit Agreement. Subsection
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6.1 of the Credit Agreement is hereby amended (i) by deleting the word "and" at
the end of paragraph (c) thereof, (ii) by deleting the semicolon at the end of
paragraph (d) thereof and substituting in lieu thereof "and" and (iii) by adding
thereto the following paragraph:
(e) as soon as available, but in any event not later than 45 days
after the end of each calendar month, the unaudited consolidated balance
sheet of the Company and its Subsidiaries as at the end of each such month
and the related unaudited consolidated statements of income and cash flows
of the Company and its Subsidiaries for such monthly period and the portion
of the fiscal year of the Company through such date, setting forth in each
case in comparative form the figures for the corresponding month in, and
year to date portion of, the previous year, and the figures for such
periods in the budget prepared by the Company and furnished to the
Administrative Agent, certified by the chief financial officer, controller
or treasurer of the Company as being fairly stated in all material
respects;
2.3. Amendments to Section 7 of the Credit Agreement. (A)
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Subsection 7.6(g)(ii)(A) is hereby amended by (i) deleting the ratio "4.25 to
1.00" therein and substituting in lieu thereof the ratio "3.75 to 1.00" and
(ii) adding to the end of subsection 7.6(g)(ii)(A) the following proviso:
provided, further, that for purposes of calculating Consolidated EBITDA
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pursuant to this clause (A) on and after March 30, 1999, such calculation
shall be made (1) during the quarter in which the Restriction Termination
Date occurs, by multiplying Consolidated
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EBITDA for the period of the two most recently ended consecutive fiscal
quarters by a fraction the numerator of which is 365 and the denominator of
which is the actual number of days elapsed during such period, (2) during
the quarter immediately after the quarter in which the Restriction
Termination Date occurs, by multiplying Consolidated EBITDA for the period
of three most recently ended consecutive fiscal quarters by a fraction the
numerator of which is 365 and the denominator of which is the actual number
of days elapsed during such period and (3) thereafter, by multiplying
Consolidated EBITDA for the period of four fiscal quarters ending as at the
last day of the most recently ended fiscal quarter by 1,
(B) Subsection 7.9 of the Credit Agreement is hereby amended by
deleting said subsection in its entirety and substituting in lieu thereof the
following:
7.9 Debt to EBITDA; Minimum EBITDA.
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(a) At the last day of any fiscal quarter set forth below, permit the
ratio (the "Leverage Ratio") of Consolidated Indebtedness as of such day to
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Consolidated EBITDA for the period of four fiscal quarters ending on such
day to be greater than the ratio set forth below for such fiscal quarter:
Fiscal Year Fiscal Quarter Ratio
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1998 Fourth 6.85 to 1.00
1999 First 6.85 to 1.00
Second 6.85 to 1.00
Third 6.85 to 1.00
Fourth 6.85 to 1.00
2000 First 6.85 to 1.00
Second 6.85 to 1.00
Third 6.85 to 1.00
Fourth 6.50 to 1.00
2001 First 6.50 to 1.00
Second 6.50 to 1.00
Third 6.50 to 1.00
Fourth 6.25 to 1.00
2002 First 6.25 to 1.00
Second 6.25 to 1.00
Third 6.25 to 1.00
Fourth 6.00 to 1.00
Thereafter 6.00 to 1.00
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(b) At the last day of the first fiscal quarter of 1999, permit
Consolidated EBITDA for the fiscal quarter ending on such day to be less
than -$2,000,000.
(c) At the last day of any fiscal quarter set forth below, permit
Consolidated EBITDA for the period of four fiscal quarters ending on such
day (or, in the case of the second, third and fourth fiscal quarters of
1999 referred to below, for the period of one, two or three quarters,
respectively, then ended) to be less than the amount set forth below for
such fiscal quarter:
Fiscal Year Fiscal Quarter Consolidated EBITDA
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1999 Second $ 2,400,000
Third 6,600,000
Fourth 11,300,000
2000 First 16,400,000
Second 19,700,000
Third 22,200,000
Fourth 24,700,000
(d) For purposes of calculating Consolidated EBITDA for any period
set forth in subsections 7.9(a), (b) and (c), the Consolidated EBITDA of
any Acquired Business acquired during such period (as the Consolidated
EBITDA of such Acquired Business may be adjusted (i) for those items that
occur by reason of such acquisition that would be substantially in
conformity with the calculation of Consolidated EBITDA in accordance with
Regulation S-X, (ii) in accordance with the adjustment to EBITDA for the
fiscal year ending December 31, 1997 described in the Confidential
Information Memorandum in an aggregate approximate amount of $1,300,000,
(iii) to reflect a full year of occupancy of newly constructed beds and
(iv) for any cost reduction resulting from the termination of any contracts
of the Acquired Business which are in existence at the time of the
acquisition of such Acquired Business and any additional costs incurred in
connection with the services that were terminated) shall be included on a
pro forma basis for such period (assuming the consummation of such
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acquisition and the incurrence, assumption or guarantee of any Indebtedness
in connection therewith occurred on the first day of such period).
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(e) Notwithstanding the foregoing, the Company shall not be required
to comply with the Leverage Ratio covenants for fiscal years 1999 and 2000
set forth in paragraph (a) of this subsection 7.9, but shall instead be
required to comply with the minimum Consolidated EBITDA covenants set forth
in paragraphs (b) and (c) of this subsection 7.9 until such time as the
Company elects to and does furnish to the Administrative Agent a
certificate of the chief financial officer of the Company certifying that
(i) for the two consecutive fiscal quarters immediately preceding such
certification, the Borrowers have satisfied the financial covenants set
forth in subsections 7.9 and 7.10 of the Credit Agreement (as in effect
without giving effect to any suspension of covenant compliance set forth
herein and, for purposes of determining such compliance, with Consolidated
EBITDA being deemed to be equal to the product of Consolidated EBITDA for
such two-quarter period multiplied by a fraction the numerator of which is
365 and the denominator of which is the actual number of days elapsed
during such period) and attaching computations showing such compliance,
(ii) at the last day of the period of the two consecutive fiscal quarters
immediately preceding such certification, the ratio of (A) Consolidated
Senior Indebtedness as of such day to (B) the product of Consolidated
EBITDA for such period multiplied by a fraction the numerator of which is
365 and the denominator of which is the actual number of days elapsed
during such period is less than or equal to 3.75 to 1.00 and attaching
computations showing such ratio and (iii) no Default or Event of Default
has occurred and is then continuing (the earlier of (x) the date on which
the Administrative Agent receives such certificate and computations and (y)
January 1, 2001 being the "Restriction Termination Date"). From and after
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the Restriction Termination Date, the Company shall be subject to the
Leverage Ratio covenants set forth in paragraph (a) of this subsection 7.9,
but shall no longer be subject to the minimum Consolidated EBITDA covenants
set forth in paragraphs (b) and (c) of this subsection 7.9; provided,
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however, that for purposes of calculating Consolidated EBITDA for the
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quarter ending immediately after the Restriction Termination Date,
Consolidated EBITDA shall be deemed to be equal to the product of
Consolidated EBITDA for the period of three consecutive fiscal quarters
ending as at the last day of such quarter multiplied by a fraction the
numerator of which is 365 and the denominator of which is the actual number
of days elapsed during such period.
(C) Subsection 7.10 of the Credit Agreement is hereby amended by
adding at the end of such subsection the following sentence:
Notwithstanding the foregoing, the Company shall not be required to comply
with the Coverage Ratio covenants for fiscal years 1999 and 2000 set forth
above, but shall instead be required to comply with the minimum
Consolidated EBITDA covenants set forth in paragraphs (b) and (c) of
subsection 7.9 until the Restriction Termination Date. From and after the
Restriction Termination Date, the Company shall be subject to the Coverage
Ratio covenants set forth above, but shall no longer be subject to the
minimum
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Consolidated EBITDA covenants set forth in paragraphs (b) and (c)
of subsection 7.9; provided, however, that for purposes of calculating
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Consolidated EBITDA for the quarter ending immediately after the
Restriction Termination Date, Consolidated EBITDA shall be deemed to be
equal to the product of Consolidated EBITDA for the period of three
consecutive fiscal quarters ending as at the last day of such quarter
multiplied by a fraction the numerator of which is 365 and the denominator
of which is the actual number of days elapsed during such period.
2.4. Amendment to Schedule III to the Credit Agreement. Schedule III
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to the Credit Agreement is hereby amended in its entirety to read as set forth
in Schedule III hereto.
SECTION 3. Additional Borrowings and Acquisitions. To induce the
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Administrative Agent to enter into this Amendment, and the Lenders to execute
and deliver Lender Consent Letters, each Borrower covenants and agrees that,
from and after the date hereof and until the Restriction Termination Date (as
defined in subsection 7.9(e) of the Credit Agreement as amended hereby):
(a) it will not be entitled to utilize the credit facilities provided
for in the Credit Agreement if, after giving effect to such utilization,
the sum of (i) the aggregate principal amount of all outstanding Loans,
(ii) the aggregate undrawn amount of all outstanding Letters of Credit
issued after Xxxxx 00, 0000, (xxx) the aggregate amount of all outstanding
L/C Obligations in respect of Letters of Credit issued after March 30, 1999
and (iv) the aggregate principal amount of all Synthetic Lease Obligations
shall exceed $58,450,000; provided, however, that in the event that the
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Company furnishes to the Administrative Agent a certificate of the chief
financial officer of the Company certifying that, at the last day of a
fiscal quarter commencing after March 30, 1999 and ending prior to such
certification, Consolidated EBITDA for such quarter is at least $6,750,000,
and attaching computations as to such amount, then the Borrowers shall be
entitled to utilize an additional $5,000,000 aggregate principal amount of
the credit facilities provided for in the Credit Agreement to finance
acquisitions;
(b) Harborside of Dayton Limited Partnership, a Massachusetts limited
partnership and a Borrower under the Credit Agreement, shall not make any
request pursuant to Section 1.2 of the Participation Agreement, dated as of
August 11, 1998, among the Company, the Trust, the Synthetic Investors, the
Lenders and the Administrative Agent, that loans or advances be made to the
Trust under the Synthetic Lease Facility;
(c) the Borrowers shall use the proceeds of Revolving Credit Loans
solely (i) for general corporate purposes other than acquisitions, (ii) to
finance capital expenditures permitted under the Credit Agreement and (iii)
in the circumstances described in the proviso to clause (a) above, to
finance up to $5,000,000 in the aggregate for the purpose of effecting
acquisitions;
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(d) the Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create, incur or assume any
Indebtedness in connection with any acquisition of any other Person
(whether through a purchase of stock, merger, consolidation or otherwise)
or of all or any substantial portion of the assets, or any business or
product line, of any other Person, except for Indebtedness created,
incurred or assumed in connection with acquisitions made in the
circumstances described in the proviso to clause (a) above;
(e) the Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create, incur or assume any
Indebtedness, except (i) Indebtedness, in an aggregate principal amount not
to exceed the amount set forth in clause (a) above, of the Credit Parties
pursuant to the Credit Documents, (ii) Indebtedness of the Company and its
Subsidiaries owing to any Investor or any Affiliate thereof in an aggregate
principal amount at any one time outstanding not in excess of $15,000,000
and (iii) Indebtedness permitted by subsections 7.1(c), 7.1(g) and 7.1(m)
of the Credit Agreement; and
(f) any failure by any Borrower to comply with any of the covenants
and agreements set forth in this Section 3 shall constitute an Event of
Default under the Credit Agreement.
SECTION 4. 1998 Annual Financial Statements. Each Lender, by its
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execution and delivery of a Lender Consent Letter consenting to this Amendment,
agrees that, notwithstanding anything to the contrary contained in subsection
6.1(a) of the Credit Agreement, the Company shall be required to furnish the
financial statements for the Company's 1998 fiscal year required to be delivered
pursuant to subsection 6.1(a) of the Credit Agreement within 95 days after the
end of such fiscal year.
SECTION 5. Conditions to Effectiveness. This Amendment shall become
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effective as of the date set forth above (the "Amendment Effective Date") when
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(a) each Borrower shall have executed and delivered to the Administrative Agent
this Amendment, (b) the Required Lenders shall have executed and delivered to
the Administrative Agent Lender Consent Letters (or facsimile transmissions
thereof) consenting to the execution of this Amendment by the Administrative
Agent and (c) the Company shall have paid to the Administrative Agent, for the
ratable account of the Lenders which shall have executed and delivered its
signature page hereto to the Administrative Agent by 3:00 p.m., New York City
time, on Tuesday, March 30, 1999, an amendment fee in an amount equal to 0.25%
of the sum of each such Lender=s Revolving Credit Commitment.
SECTION 6. Representation and Warranties. The representations and
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warranties made by the Borrowers in the Credit Documents are true and correct in
all material respects on and as of the Amendment Effective Date, before and
after giving effect to the effectiveness of this Amendment, as if made on and as
of the Amendment Effective Date, except to the extent such
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representations and warranties expressly relate to a specific earlier date, in
which case such representations and warranties were true and correct in all
material respects as of such earlier date.
SECTION 7. Payment of Expenses. The Company agrees to pay or
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reimburse the Administrative Agent for all of its out-of-pocket costs and
reasonable expenses incurred in connection with this Amendment and any other
documents prepared in connection herewith and the transactions contemplated
hereby, including, without limitation, the reasonable fees and disbursements of
counsel to the Administrative Agent.
SECTION 8. Reference to and Effect on the Credit Documents. On and
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after the Amendment Effective Date, each reference in the Credit Agreement to
"this Agreement", "hereunder", "hereof" or words of like import referring to the
Credit Agreement, and each reference in the other Credit Documents to "the
Credit Agreement", "thereunder", "thereof" or words of like import referring to
the Credit Agreement, shall mean and be a reference to the Credit Agreement as
amended hereby. The execution, delivery and effectiveness of this Amendment
shall not, except as expressly provided herein, operate as a waiver of any
right, power or remedy of any Lender or the Administrative Agent under any of
the Credit Documents. Except as expressly amended herein, all of the provisions
of the Credit Agreement and the other Credit Documents are and shall remain in
full force and effect in accordance with the terms thereof and are hereby in all
respects ratified and confirmed.
SECTION 9. Counterparts. This Amendment may be executed by one or
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more of the parties to this Amendment on any number of separate counterparts,
and all of said counterparts taken together shall be deemed to constitute one
and the same instrument. Delivery of an executed signature page of this
Amendment by facsimile transmission shall be effective as delivery of a manually
executed counterpart hereof. A set of the copies of this Amendment signed by
all the parties shall be lodged with the Company and the Administrative Agent.
SECTION 10. Governing Law. This Amendment and the rights and
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obligations of the parties hereto shall be governed by, and construed and
interpreted in accordance with, the law of the State of New York.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered by their respective proper and duly authorized
officers as of the day and year first above written.
HARBORSIDE HEALTHCARE CORPORATION
By:
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Title:
BAY TREE NURSING CENTER CORP.
BELMONT NURSING CENTER CORP.
COUNTRYSIDE CARE CENTER CORP.
HARBORSIDE HEALTH I CORPORATION
HARBORSIDE TOLEDO CORP.
KHI CORP.
MARYLAND HARBORSIDE CORP.
NEW JERSEY HARBORSIDE CORP.
OAKHURST MANOR NURSING CENTER
CORP.
ORCHARD RIDGE NURSING CENTER CORP.
SAILORS, INC.
SUNSET POINT NURSING CENTER CORP.
WEST BAY NURSING CENTER CORP.
By:
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Title:
10
HARBORSIDE ACQUISITION LIMITED
PARTNERSHIP IV
HARBORSIDE ACQUISITION LIMITED
PARTNERSHIP V
HARBORSIDE ACQUISITION LIMITED
PARTNERSHIP VI
HARBORSIDE ACQUISITION LIMITED
PARTNERSHIP VII
HARBORSIDE ACQUISITION LIMITED
PARTNERSHIP VIII
HARBORSIDE ACQUISITION LIMITED
PARTNERSHIP IX
HARBORSIDE ACQUISITION LIMITED
PARTNERSHIP X
HARBORSIDE ATLANTRIX LIMITED
PARTNERSHIP
HARBORSIDE CONNECTICUT LIMITED
PARTNERSHIP
HARBORSIDE HEALTHCARE BALTIMORE
LIMITED PARTNERSHIP
HARBORSIDE HEALTHCARE NETWORK
LIMITED PARTNERSHIP
HARBORSIDE MASSACHUSETTS LIMITED
PARTNERSHIP
HARBORSIDE NORTH TOLEDO LIMITED
PARTNERSHIP
HARBORSIDE OF CLEVELAND LIMITED
PARTNERSHIP
HARBORSIDE OF DAYTON LIMITED
PARTNERSHIP
HARBORSIDE OF FLORIDA LIMITED
PARTNERSHIP
HARBORSIDE OF OHIO LIMITED
PARTNERSHIP
HARBORSIDE REHABILITATION LIMITED
PARTNERSHIP
HARBORSIDE RHODE ISLAND LIMITED
PARTNERSHIP
RIVERSIDE RETIREMENT LIMITED
PARTNERSHIP
By: HARBORSIDE HEALTH I CORPORATION,
as General Partner
By:
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Title:
11
HARBORSIDE FUNDING LIMITED
PARTNERSHIP
By: HARBORSIDE HEALTHCARE LIMITED
PARTNERSHIP, as General Partner
By: KHI CORP., as General Partner
By:
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Title:
BRIDGEWATER ASSISTED LIVING LIMITED
PARTNERSHIP
By: NEW JERSEY HARBORSIDE CORP.,
as General Partner
By:
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Title:
HARBORSIDE NEW HAMPSHIRE LIMITED
PARTNERSHIP
HARBORSIDE TOLEDO LIMITED
PARTNERSHIP
HHCI LIMITED PARTNERSHIP
By: HARBORSIDE TOLEDO CORP.,
as General Partner
By:
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Title:
12
HARBORSIDE HEALTHCARE ADVISORS
LIMITED PARTNERSHIP
HARBORSIDE HEALTHCARE LIMITED
PARTNERSHIP
HARBORSIDE HOMECARE LIMITED
PARTNERSHIP
By: KHI CORP., as General Partner
By:
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Title:
HARBORSIDE PROPERTIES TRUST I,
a Massachusetts business trust
By:
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Name: , in his
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capacity as trustee and not individually
THE CHASE MANHATTAN BANK,
as Administrative Agent
By:
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Title:
Schedule III to the
Credit Agreement
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Pricing and Commitment Fee Grid
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Applicable Margin
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Leverage Ratio Eurodollar Commitment
ABR Loans Loans Fee
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Greater than or equal to 5.5 1.750% 2.750% 0.500%
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Less than 5.5 to 1.0, but greater than 1.500% 2.500% 0.500%
or equal to 5.0 to 1.0
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Less than 5.0 to 1.0, but greater than 1.250% 2.250% 0.500%
or equal to 4.5 to 1.0
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Less than 4.5 to 1.0, but greater than 1.000% 2.000% 0.375%
or equal to 4.0 to 1.0
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Less than 4.0 to 1.0, but greater than 0.750% 1.750% 0.375%
or equal to 3.5 to 1.0
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Less than 3.5 to 1.0, but greater than 0.500% 1.500% 0.300%
or equal to 3.0 to 1.0
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Less than 3.0 to 1.0 0.250% 1.250% 0.250%
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LENDER CONSENT LETTER
HARBORSIDE HEALTHCARE CORPORATION CREDIT AGREEMENT
DATED AS OF AUGUST 11, 1998
To: The Chase Manhattan Bank, as Administrative Agent
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Reference is made to the Credit Agreement, dated as of August 11, 1998
(the "Credit Agreement"), among Harborside Healthcare Corporation, a Delaware
corporation (the "Company"), the other entities listed on the signature pages
thereof, as joint and several borrowers thereunder (the Company and such other
entities being, collectively, the "Borrowers"), the banks and other financial
institutions or entities parties thereto (the "Lenders"), Xxxxxx Xxxxxxx Senior
Funding, Inc. and BT Alex. Xxxxx Incorporated, as co-arrangers, Xxxxxx Xxxxxxx
Senior Funding, Inc., as syndication agent, Bankers Trust Company, as
documentation agent, and The Chase Manhattan Bank, as administrative agent for
the Lenders (in such capacity, the "Administrative Agent"). Unless otherwise
defined herein, capitalized terms used herein and defined in the Credit
Agreement are so used as so defined.
The Borrowers have requested certain amendments to the Credit
Agreement on the terms described in the First Amendment to the Credit Agreement
in the form attached hereto as Exhibit A (the "First Amendment").
Pursuant to Section 9.1 of the Credit Agreement, the undersigned
Lender hereby consents to the execution by the Administrative Agent of the First
Amendment.
Very truly yours,
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(NAME OF LENDER)
By:
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Name:
Title:
Dated as of March 30, 1999
