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EXHIBIT 10.63
EXECUTION VERSION
SIXTH AMENDMENT
TO CREDIT AGREEMENT
AMONG
XXXXXXX ENTERPRISES, INC.,
XXXXXXX HEALTH AND REHABILITATION SERVICES, INC.,
(FORMERLY KNOWN AS XXXXXXX CALIFORNIA CORPORATION)
THE SUBSIDIARY GUARANTORS LISTED HEREIN,
THE LENDERS LISTED HEREIN,
AND
THE NIPPON CREDIT BANK, LTD.
LOS ANGELES AGENCY, AS AGENT
Dated as of July 25, 1995
THIS SIXTH AMENDMENT dated as of July 25, 1995 (this
"Amendment"), is entered into by and among XXXXXXX ENTERPRISES, INC., a
Delaware corporation ("BEI"), XXXXXXX HEALTH AND REHABILITATION SERVICES, INC.
(formerly known as Xxxxxxx California Corporation), a California corporation
("Borrower"), the SUBSIDIARY GUARANTORS listed on the signature pages hereof
(together with BEI, the "Guarantors"), the LENDERS listed on the signature
pages hereof (such lenders, together with each Person that may or has become a
party to the Credit Agreement (as hereinafter defined) pursuant to subsection
10.8 thereof, are referred to herein individually as a "Lender" and
collectively as the "Lenders"), and THE NIPPON CREDIT BANK, LTD., Los Angeles
Agency ("Nippon"), as agent for the Lenders (in such capacity, the "Agent").
This Amendment amends the Credit Agreement dated as of March 2, 1993 by and
among BEI, Borrower, Agent and Lenders, as amended by that certain First
Amendment to Credit Agreement dated as of May 6, 1994, as further amended by
that certain Second Amendment to Credit Agreement dated as of May 19, 1994, as
further amended by that certain Third Amendment to Credit Agreement dated as of
November 1, 1994, as further amended by that certain Fourth Amendment to Credit
Agreement dated as of November 9, 1994, and as further amended by that certain
Fifth Amendment to Credit Agreement dated as of December 30, 1994 (as so
amended, the "Credit Agreement"), as set forth herein.
RECITALS
WHEREAS, Borrower desires to amend the Credit Agreement in
certain respects;
WHEREAS, Lenders and Agent have agreed to approve such
amendments;
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WHEREAS, the Obligations of the Borrower under the Credit
Agreement are secured by the Collateral Documents, including inter alia, that
certain Mortgage, Assignment of Leases and Rents, Security Agreement, Financing
Statement and Fixture Filing dated March 2, 1993 and filed on March 8, 1993,
now appearing of record at Page 837 of Book 808 in the office of the Recorder
of Xxxxxxxxxx County, Arkansas in favor of Nippon Credit Trust Company, as
Collateral Agent (the "Collateral Agent") from Xxxxxxx Enterprises - Arkansas
Inc., a Wholly-Owned Subsidiary of the Borrower (the "Arkansas Mortgage");
WHEREAS, the Borrower has requested the Lenders and the Agent
to authorize the release by the Collateral Agent of the Arkansas Mortgage;
WHEREAS, the Lenders and the Agent are willing so to authorize
the release of the Arkansas Mortgage upon the terms and subject to the
conditions set forth herein, including the amendment of the Credit Agreement in
certain respects and the grant by Xxxxxxx Enterprises - Arkansas Inc. in favor
of the Collateral Agent of a first priority Lien in all the right, title and
interest of Xxxxxxx Enterprises - Arkansas Inc. in and to that certain real
property known as West Memphis Nursing and Rehabilitation, 000 Xxxx Xxxxxxxx,
Xxxx Xxxxxxx, Xxxxxxxx 00000 and more described in Annex "A" attached hereto
(the "Replacement Arkansas Property");
WHEREAS, Guarantors desire to reaffirm the effectiveness
respectively of the Subsidiary Guaranty Agreement and the BEI Guaranty
Agreement;
AGREEMENT
NOW, THEREFORE, in consideration of the terms and conditions
herein contained, BEI, Borrower, Guarantors, Agent and Lenders agree as
follows:
1. Definitions. Interpretation. All capitalized terms defined
above and elsewhere in this amendment shall be used herein as so defined.
Unless otherwise defined herein, all other capitalized terms used herein shall
have the respective meanings given to those terms in the Credit Agreement, as
amended by this Amendment. The rules of construction set forth in Section I of
the Credit Agreement shall, to the extent not inconsistent with the terms of
this Amendment, apply to this Amendment and are hereby incorporated by
reference.
2. Amendment to Credit Agreement. Subject to conditions set forth
in paragraph 5 hereof, the Credit Agreement is hereby amended as follows:
(a) The introductory paragraph is amended by deleting
"XXXXXXX CALIFORNIA CORPORATION" appearing in the third line
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thereof and replacing it with "XXXXXXX HEALTH AND REHABILITATION
SERVICES, INC. (formerly known as Xxxxxxx California Corporation)."
(b) Subsection 1.1 is amended by changing the
definition of "Borrower" set forth therein to read in its
entirety as follows:
"Borrower" means Xxxxxxx Health and Rehabilitation
Services, Inc. (formerly known as Xxxxxxx California
Corporation), a California corporation.
(c) Subsection 5.11(c) is amended by deleting such
subsection in its entirety and replacing it with the following:
(c) Capital contributions to Xxxxxxx Funding Corp.,
if, after giving effect thereto, the aggregate capital of
Xxxxxxx Funding Corp. does not exceed 25% of the maximum
amount of Permitted Receivables Financing Securities that
Xxxxxxx Funding Corp. is able to issue under its Receivables
Financing Program as it may exist from time to time;
(d) Subsection 5.13 C. is amended by deleting such
subsection in its entirety and replacing it with the following:
C. Neither BEI nor any of its Subsidiaries will
create, assume or suffer to exist any Lien on any patient
accounts receivable of BEI or any of its Subsidiaries that
are rights to payment for goods sold or services rendered at
any facility that constitutes a portion of the Collateral,
except for Liens on patient accounts receivable of BEI and its
Subsidiaries granted to secure Permitted Receivables Financing
Securities; provided, that the net amount of all uncollected
accounts receivable owing to BEI or any of its Subsidiaries
over which such a Lien is granted, together, without
duplication, with the net amount of all uncollected accounts
receivable owing to BEI or any of its Subsidiaries that are
assigned to secure such a Permitted Receivables Financing
Securities shall not exceed at any time 175% of the aggregate
principal amount of all Permitted Receivables Financing
Securities then outstanding.
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(e) Section 5.24 is amended by deleting such section in
its entirety and replacing it with the following:
5.24 Permitted Receivables Financing Securities
The aggregate principal amount of all Permitted
Receivables Financing Securities outstanding at any time
shall not exceed $100,000,000.
(f) Schedule C is amended by deleting such schedule in
its entirety and replacing it with the new Schedule C set forth in
Annex "B" attached hereto.
3. RELEASE AND REPLACEMENT OF THE ARKANSAS MORTGAGE.
Upon the satisfaction of the conditions set forth in
Section 5, and upon the concurrent delivery by Xxxxxxx Enterprises - Arkansas
Inc. to the Collateral Agent of a Mortgage in substantially the form of Annex
"C" attached hereto the effect of which is to grant to the Collateral Agent a
first priority Lien on the Replacement Arkansas Property (the "Replacement
Arkansas Mortgage"), the Agent shall execute and deliver to the Collateral
Agent a Collateral Release Request in the form of Annex "D" attached hereto.
4. Representations and Warranties. In order to induce
the Agent and the Lenders to enter into this Amendment each of BEI and Borrower
represents and warrants to the Agent and the Lenders that:
(a) The representations and warranties of each
Loan Party contained in the Credit Agreement are true,
correct and complete in all material respects on and as of
the date hereof to the same extent as though made on and as
of the date hereof except to the extent that such
representations and warranties specifically relate to an
earlier date, in which case they are true, correct and
complete in all material respects as of such earlier date;
(b) No event has occurred and is continuing or
would result from the execution of this Amendment that
constitutes an Event of Default or Potential Event of Default;
(c) Each Loan Party has performed in all material
respects all agreements and satisfied all conditions that the
Credit Agreement and this Amendment provide shall be performed
by it on or before the date hereof;
(d) The execution, delivery and performance of
this Amendment, the Replacement Arkansas Mortgage, and the
Credit Agreement as amended by this Amendment, by each Loan
Party which is a party thereto are within the corporate power
and authority of each such Loan Party and, as of the Sixth
Amendment Effective Date (as hereinafter defined), will be
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duly authorized by all necessary corporate action on the part
of each Loan Party, and this Amendment as of the Sixth
Amendment Effective Date, are duly executed and delivered by
each of such Loan Parties which is a party thereto and will
constitute a valid and binding agreement of each of such Loan
Parties, enforceable against such Loan Parties in accordance
with their terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws or
equitable principles relating or limiting creditors' rights
generally or by equitable principles relating to
enforceability. The Credit Agreement constitutes and, as of
the Sixth Amendment Effective Date, the Credit Agreement, as
amended by this Amendment, and the Replacement Arkansas
Mortgage will constitute, a valid and binding agreement of
each applicable Loan Party, enforceable against each
applicable Loan Party in accordance with their respective
terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws or equitable
principles, relating to or limiting creditors' rights
generally or by equitable principles relating to
enforceability.
(e) The execution and delivery by each applicable
Loan Party of this Amendment and the Replacement Arkansas
Mortgage, and the performance by each such Loan Party of the
Credit Agreement as amended by this Amendment, and the
Replacement Arkansas Mortgage, do not and will not (i)
violate any provision of any law or any governmental rule or
regulation applicable to any Loan Party, the Certificate or
Articles of Incorporation or Bylaws of any Loan Party or any
order, judgment or decree of any court or other agency of
government binding on any Loan Party, (ii) conflict with,
result in a breach of or constitute (with due notice or lapse
of time or both) a default under any instrument that is
material, individually or in the aggregate, and that is
binding on such Loan Party, (iii) result in or require the
creation or imposition of any Lien upon any of the properties
or assets of any Loan Party (other than any Liens created
under the Replacement Arkansas Mortgage and any of the other
Loan Documents in favor of Agent on behalf of Lenders), or (iv)
require any approval or consent of any Person under any
instrument that is material, individually or in the
aggregate, and that is binding on such Loan Party.
(f) The execution and delivery by each applicable
Loan Party of this Amendment and the Replacement Arkansas
Mortgage, and the performance by each such Loan Party of the
Credit Agreement as amended by this Amendment, and the
Replacement Arkansas Mortgage, do not and will not require
any registration with, consent or approval of, or notice to,
or other action to, with or by, any federal, state or other
governmental authority or regulatory body.
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(g) The Replacement Arkansas Mortgage and the other
Collateral Documents, when executed and delivered in accordance with
this Amendment, will create valid security interests in and mortgage
liens on the Collateral purported to be covered thereby, which
security interests and mortgage liens, when recorded or filed pursuant
to the requirements hereof and in the credit Agreement, will remain
perfected security interests and mortgage xxxxx, prior to all Liens
other than Permitted Liens.
5. CONDITIONS TO EFFECTIVENESS. Section 2 of this Amendment
shall become effective only upon the satisfaction of all of the following
conditions precedent (the date of satisfaction of such conditions being
referred to herein as the "Sixth Amendment Effective Date"):
(a) On or before the Sixth Amendment Effective Date,
Borrower shall deliver to the Lenders (or to the Agent for the Lenders
with sufficient originally executed copies, as appropriate, for each
Lender and its counsel) the following, each, unless otherwise noted,
dated the Sixth Amendment Effective Date, duly executed and delivered
by the parties thereto:
(i) Signature and incumbency certificates of each
of BEI, Borrower, Xxxxxxx Enterprises - Arkansas Inc. and
each Subsidiary Guarantor of its respective officers
executing this Amendment and/or the Replacement Arkansas
Mortgage certified by such party's respective secretary or
assistant secretary; and
(ii) Executed counterparts of this Amendment.
(b) On or before the Sixth Amendment Effective Date,
the Borrower shall have delivered to the Agent the Replacement
Arkansas Mortgage, duly executed by Xxxxxxx Enterprises - Arkansas
Inc., together with the following:
(i) evidence satisfactory to the Agent of the
filing of proper financing statements and fixture filings
duly filed under the Uniform Commercial Code (or any
equivalent or similar legislation) in form and substance
satisfactory to the Agent in each jurisdiction as may be
reasonably necessary or desirable, in each case to
effectively perfect the first priority security interests
in the Replacement Arkansas Mortgage and any other
Collateral created by the Replacement Arkansas Mortgage;
(ii) evidence satisfactory to the Agent of
the filing of amendments to that certain UCC-1 financing
statement number 840810 filed with the Secretary of State
of the State of Arkansas amending such financing statement
to (a) release the security interest in the
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Collateral created by the Arkansas Mortgage and (b) include a
first priority security interest in the Collateral created by the
Replacement Arkansas Mortgage;
(iii) evidence that a counterpart of the Replacement
Arkansas Mortgage has been duly recorded in all places that are
reasonably necessary effectively to create a valid and
enforceable first priority Lien on the Replacement Arkansas
Property in favor of the Agent or the Collateral Agent subject
only to Permitted Liens;
(iv) a title insurance policy with respect to the
Replacement Arkansas Property in the form of an American Land
Title Association Standard Loan Policy Form 1970, with ALTA
Endorsement Form 1 coverage, insuring that on the Sixth Amendment
Effective Date, Xxxxxxx Enterprises - Arkansas Inc. owns fee
simple title to such real property and that the Replacement
Arkansas Mortgage is a valid first priority Lien on such
Replacement Arkansas Property in an amount equal to at least
$2,400,000. Such title insurance policy shall contain CLTA
Endorsements 100, 104, 110.9, 111.5, 116, 116.1 (for properties
for which surveys presently exist), 116.4 and 123.2 (or ALTA
Endorsements corresponding thereto) and CLTA Endorsements or ALTA
Endorsements relating to usury, subdivisions, mortgagee's alien
status, morgagee's conduct of business and tie-in provisions, to
the extent available or applicable. Except as approved by the
Agent in writing prior to the Sixth Amendment Effective Date, no
such title insurance policy shall contain any survey exceptions,
exceptions for rights of parties in possession, easements not of
record or installments of taxes or special assessments (other
than taxes and special assessments not then payable), or any
other exceptions to coverage not approved by the Agent. Each such
title insurance policy shall contain such reinsurance agreements
as the Agent may reasonably require; and
(v) evidence of the insurance required by the terms of
the Replacement Arkansas Mortgage.
(c) On or before the Sixth Amendment Effective Date, all
corporate and other proceedings taken or to be taken in connection
with the transactions contemplated hereby and all documents incidental
thereto not previously found acceptable by the Agent, acting on behalf
of the Lenders, and its counsel shall be satisfactory in form and
substance to the Agent and such counsel, and the Agent and such
counsel shall
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have received all such counterpart originals or certified
copies of such documents as the Agent may reasonably request.
(d) On or before the Sixth Amendment Effective Date,
the Borrower shall have caused payment to the Agent of all
amounts regarding the costs and expenses reasonably incurred by
Agent in connection with this Amendment.
6. Acknowledgment and Agreement of Guarantors. Each Guarantor
acknowledges that it has reviewed the terms and provisions of the Credit
Agreement and this Amendment and consents to the amendment of the Credit
Agreement effected pursuant to this Amendment. Each Guarantor hereby confirms
that the Guaranty Agreement and the Collateral Documents to which it is a party
or otherwise bound and all Collateral encumbered thereby will continue to
guaranty or secure, as the case may be, to the fullest extent possible the
payment and performance of all Obligations, Guarantied Obligations (as defined
in the applicable Guaranty Agreements) and Secured Obligations (as defined in
the Collateral Documents), as the case may be, including, without limitation,
the payment and performance of all Obligations of Borrower now or hereafter
existing under or in respect of the Credit Agreement as amended by this
Amendment and the Notes defined therein.
Each Guarantor acknowledges and agrees that any of the Guaranty
Agreements and the Collateral Documents to which it is a party or otherwise
bound shall continue in full force and effect and that all of its obligations
thereunder shall be valid and enforceable and shall not be impaired or limited
by the execution or effectiveness of this Amendment. Each Guarantor represents
and warrants that all representations and warranties contained in the Credit
Agreement as amended by this Amendment and the Guaranty Agreements and the
Collateral Documents to which it is a party or otherwise bound are true,
correct and complete in all material respects on and as of the Sixth Amendment
Effective Date to the same extent as though made on and as of that date except
to the extent that such representations and warranties specifically relate to
an earlier date, in which case they are true, correct and complete in all
material respects as of such earlier date.
Each guarantor acknowledges and agrees that in addition to all the
other waivers agreed to and made by Guarantor as set forth in the Guaranty
Agreement and the Collateral Documents to which it is a party or otherwise
bound, and pursuant to the provisions of California Civil Code Section 2856,
"Guarantor waives all rights and defenses arising out of an election of
remedies by the creditor, even though that election of remedies, such as a
nonjudicial foreclosure with respect to security for a guaranteed obligation,
has destroyed the Guarantor's rights of subrogation and reimbursement against
the principal by the
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operation of Section 580d of the Code of Civil Procedure or otherwise."
Each Guarantor acknowledges and agrees that (i) notwithstanding the
conditions to effectiveness set forth in this Amendment, such Guarantor is not
required by the terms of the Credit Agreement or any other Loan Document to
consent to the amendments to the credit Agreement effected pursuant to this
Amendment or any other Loan Document and (ii) that neither the terms of the
Credit Agreement, any other Loan Document nor this Amendment shall be deemed to
require the consent of any Guarantor to any future amendments to the credit
Agreement.
7. APPRAISAL OF REPLACEMENT ARKANSAS PROPERTY. Within fifteen (15)
days after the Sixth Amendment Effective Date, Borrower shall obtain and
deliver to Agent an appraisal of the Replacement Arkansas Property in form,
scope and substance satisfactory to Agent, to be conducted by an independent
appraisal firm approved by Agent showing that the appraisal value of the
Replacement Arkansas Property equals or exceeds the appraisal value of the real
property on which the Agent had a first priority Lien pursuant to the Arkansas
Mortgage.
8. EFFECTIVENESS; COUNTERPARTS. 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 (other than the provisions of Section 2) shall
become effective upon the execution of a counterpart hereof by all Lenders and
each of the Loan Parties and receipt of written or telephonic notification of
such execution and authorization of delivery thereof.
9. FEES AND EXPENSES. The borrower acknowledges that all costs, fees
and expenses as described in subsection 10.4 of the Credit Agreement incurred by
the Agent and its counsel with respect to this Amendment and the documents and
transactions contemplated hereby shall be for the account of the Borrower.
10. EFFECT OF AMENDMENT. It is hereby agreed that, except as
specifically provided herein, this Amendment does not in any way affect or
impair the terms and conditions of the Credit Agreement, and all terms and
conditions of the Credit Agreement are to remain in full force and effect
unless otherwise specifically amended or changed pursuant to the terms and
conditions of this Amendment.
11. APPLICABLE LAW. This Amendment and the rights and obligations of
the parties hereto and all other aspects hereof shall be deemed to be made
under, shall be governed by, and shall be construed and enforced in accordance
with, the laws of the State of New York without regard to principles of
conflicts of laws.
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WITNESS the due execution hereof by the respective duly authorized
officers of the undersigned as of the date first written above.
BEI:
XXXXXXX ENTERPRISES, INC.
By:
-------------------------------------
Title:
----------------------------------
Borrower:
XXXXXXX HEALTH AND REHABILITATION
SERVICES, INC.
By:
-------------------------------------
Title:
----------------------------------
Agent:
THE NIPPON CREDIT BANK, LTD.,
LOS ANGELES AGENCY,
as Agent and as a Lender
By:
-------------------------------------
Title:
----------------------------------
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Lenders:
THE NIPPON CREDIT BANK, LTD.,
LOS ANGELES AGENCY,
as Agent and as a Lender
By:
------------------------------------
Title:
---------------------------------
TORONTO-DOMINION (TEXAS), INC.
as a Lender
By:
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Title:
---------------------------------
[Signatures Continued]
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The Subsidiary Guarantors:
American Transitional Care
Centers of Texas, Inc.
American Transitional Care
Dallas-Ft. Worth, Inc.
American Transitional Health
Care, Inc.
American Transitional
Hospitals, Inc.
American Transitional
Hospitals of Indiana, Inc.
American Transitional
Hospitals of Oklahoma, Inc.
American Transitional
Hospitals of Tennessee, Inc.
ATH Del Oro, Inc.
ATH Heights, Inc.
ATH Tucson, Inc.
Xxxxxxx Enterprises -
Alabama, Inc.
Xxxxxxx Enterprises -
Arkansas, Inc.
Xxxxxxx Enterprises -
Florida, Inc.
Xxxxxxx Enterprises -
Georgia, Inc.
Xxxxxxx Enterprises
Japan Limited
Xxxxxxx Enterprises -
Maryland, Inc.
Xxxxxxx Enterprises -
Massachusetts, Inc.
Xxxxxxx Enterprises -
Minnesota, Inc.
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Xxxxxxx Enterprises -
Mississippi, Inc.
Xxxxxxx Enterprises -
Missouri, Inc.
Xxxxxxx Enterprises -
Nebraska, Inc.
Xxxxxxx Enterprises -
North Carolina, Inc.
Xxxxxxx Enterprises -
Oregon
Xxxxxxx Enterprises -
Wisconsin, Inc.
Commercial Management,
Inc.
Hallmark Convalescent
Homes, Inc.
Hospital Facilities
Corporation
Moderncare of Lumberton,
Inc.
Nebraska City S-C-H, Inc.
South Dakota - Xxxxxxx
Enterprises, Inc.
Vantage Healthcare
Corporation
AGI-Camelot, Inc.
AGI-XxXxxxxx County
Health Care, Inc.
Xxxxxxx Enterprises -
Arizona, Inc.
Xxxxxxx Enterprises -
California, Inc.
Xxxxxxx Enterprises -
Colorado, Inc.
Xxxxxxx Enterprises -
Connecticut, Inc.
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00
Xxxxxxx Xxxxxxxxxxx -
Xxxxxx Xxxxxxx, Inc.
Xxxxxxx Enterprises -
Hawaii, Inc.
Xxxxxxx Enterprises -
Idaho, Inc.
Xxxxxxx Enterprises -
Illinois, Inc.
Xxxxxxx Enterprises -
Indiana, Inc.
Xxxxxxx Enterprises -
Kansas, Inc.
Xxxxxxx Enterprises -
Kentucky, Inc.
Xxxxxxx Enterprises -
Louisiana, Inc.
Xxxxxxx Enterprises -
Michigan, Inc.
Xxxxxxx Enterprises -
New Jersey, Inc.
Xxxxxxx Enterprises -
Ohio, Inc.
Xxxxxxx Enterprises -
Pennsylvania, Inc.
Xxxxxxx Enterprises -
South Carolina, Inc.
Xxxxxxx Enterprises -
Tennessee, Inc.
Xxxxxxx Enterprises -
Texas, Inc.
Xxxxxxx Enterprises -
Utah, Inc.
Xxxxxxx Enterprises -
Virginia, Inc.
Xxxxxxx Enterprises -
Washington, Inc.
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Xxxxxxx Enterprises -
West Virginia, Inc.
Xxxxxxx Indemnity, Ltd.
Xxxxxxx Manor Inc. of
Hawaii
Xxxxxxx Savana Cay Manor,
Inc.
Columbia-Valley Nursing
Home, Inc.
Computran Systems, Inc.
Continental Care Centers
of Council Bluffs, Inc.
Forest City Building Ltd.
Home Medical Systems,
Inc.
Kenwood View Nursing
Home, Inc.
Liberty Nursing Homes,
Incorporated
Medical Arts Health
Facility of
Lawrenceville, Inc.
Nursing Home Operators,
Inc.
Xxxxxxxx Health Care,
Inc.
Pharmacy Corporation of
America
Salem No. 1, Inc.
South Alabama Nursing
Home, Inc.
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Xxxxxx County Health
Facility, Incorporated
Alliance Health Services,
Inc.
Healthcare Prescription
Services, Inc.
Xxxxxxxxxx Drugs, Inc.
Insta-Care Holdings, Inc.
By: /s/ [ILLEGIBLE]
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Title: Sr. Vice President and Treasurer
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