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EXHIBIT 10.4
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), dated as
of March 16, 2000, is entered into by and among EXTENDICARE HEALTH SERVICES,
INC., a Delaware corporation (the "Borrower"), each of the Persons identified as
a "Guarantor" on the signature pages hereto, each of the Persons identified as a
"Lender" on the signature pages hereto and BANK OF AMERICA, N.A., formerly
NationsBank, N.A. (in such capacity, the "Agent").
RECITALS
A. The Borrower, the Guarantors, the Lenders and the Agent, are
party to that certain Credit Agreement dated as of November 26, 1997 (as
previously amended prior to the date hereof, the "Credit Agreement"). Unless
otherwise defined herein or the context otherwise requires, capitalized terms
used in this Amendment, including its preamble and recitals, have the meanings
provided in the Credit Agreement.
B. The Credit Parties have requested that the Required Lenders amend
the Credit Agreement.
C. The Required Lenders have agreed to amend the Credit Agreement as
set forth herein.
NOW, THEREFORE, in consideration of the agreements herein contained,
the parties hereto hereby agree as follows:
1. Amendments.
(a) The following definitions appearing in Section 1.1 of the Credit
Agreement are hereby amended and restated in their entireties to read as
follows:
"Adjusted Senior Funded Indebtedness" means, at any time, the sum
of (i) total Funded Indebtedness (other than Subordinated Indebtedness)
of the Consolidated Parties on a consolidated basis plus (ii) Adjusted
Consolidated Rental Expense plus (iii) future cash payments requested
or required by a Fiscal Intermediary to be made by the Consolidated
Parties to such Fiscal Intermediary related to (a) amounts in dispute
between the Consolidated Parties and such Fiscal Intermediary, (b)
amounts on appeal with the PRRB or (c) amounts in the process of being
appealed to the PRRB.
"Adjusted Total Funded Indebtedness" means, at any time, the sum
of (i) total Funded Indebtedness (including without limitation
Subordinated Indebtedness) of the Consolidated Parties on a
consolidated basis plus (ii) Adjusted Consolidated Rental Expense plus
(iii) future cash payments requested or required by a Fiscal
Intermediary to
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be made by the Consolidated Parties to such Fiscal Intermediary related
to (a) amounts in dispute between the Consolidated Parties and such
Fiscal Intermediary, (b) amounts on appeal with the PRRB or (c) amounts
in the process of being appealed to the PRRB.
"Consolidated EBITDA" means, for any period, the sum of (i)
Consolidated Net Income for such period, plus (ii) an amount which, in
the determination of Consolidated Net Income for such period, has been
deducted for (A) Consolidated Interest Expense, (B) total federal,
state, local and foreign income, value added and similar taxes, (C)
depreciation and amortization expense, (D) provisions (not to exceed an
aggregate amount of $30,000,000) recorded as deductions from revenue
relating to issues identified in cost reports filed for cost reporting
periods through December 31, 1998 (including the 1995 base year cost
report upon which subsequent prospective rates are determined) which
are related to amounts (1) in dispute between the Consolidated Parties
and a Fiscal Intermediary, (2) on appeal to the PRRB or (3) in the
process of being appealed to the PRRB, (E) provisions expensed during
such period for estimated future payments of general and professional
liability litigation claims, provided that such amounts do not exceed
an aggregate amount of (I) $55,000,000 during fiscal year 2000 and (II)
an amount set forth in the annual budget of the Consolidated Parties
delivered pursuant to Section 7.1(d) and approved by the Required
Lenders for each fiscal year thereafter, and (F) all other non-cash
charges, all as determined in accordance with GAAP; provided, however,
(x) Consolidated EBITDA shall not include revenues related to any
recoveries by the Consolidated Parties from Fiscal Intermediaries of
any amounts described in subclause (D) of clause (ii) above and (y) to
the extent not otherwise deducted from Consolidated EBITDA,
Consolidated EBITDA for any period shall be reduced by cash payments
made by the Consolidated Parties of general and professional liability
litigation claims during such period.
(b) The following new definitions are hereby added to Section 1.1 of
the Existing Credit Agreement in the appropriate alphabetical order to read as
follows:
"Fiscal Intermediary" means (i) any contractor of the U.S.
Department of Health and Human Services Health Care Financing
Administration responsible for administration of the Federal Medicare
Program or (ii) any state agency or other contractor responsible for
administration of the Federal Medicaid Program.
"PRRB" means the Provider Reimbursement Review Board established
by the U.S. Congress and which is responsible for resolving Medicare
payment disputes involving health care providers.
(c) Amendment to Section 2.1. The last sentence of Section 2.1(a) of
the Existing Credit Agreement is hereby amended and restated in its entirety to
read as follows:
Notwithstanding anything to the contrary contained herein, the Borrower shall
maintain at least $25,000,000 of undrawn availability under the Revolving
Committed Amount which may only be accessed with the approval of the Required
Lenders.
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(d) Amendment to Section 7.1. Clause (l) of the Existing Credit
Agreement is hereby reidentified as clause (n), and new clauses (l) and (m) are
hereby added to Section 7.1 of the Existing Credit Agreement to read as follows:
(l) Reimbursement Requests. Immediately upon receipt by a
Consolidated Party of a notice, request or demand from a Fiscal
Intermediary for recoupment, offset, payment or repayment by any of the
Consolidated Parties to such Fiscal Intermediary, the Borrower shall
notify the Agent and deliver a copy of such request to the Agent.
(m) Monthly Financial Statements. Upon the request of any
Lender, the Borrower shall deliver to such Lender within 20 days of
such request, internally prepared financial statements for the fiscal
month most recently ended.
2. Effective Date. This Amendment shall be and become effective when
all of the following conditions shall have been satisfied:
(a) The Agent shall have received executed counterparts (or
other evidence of execution, including facsimile signatures,
satisfactory to the Agent) of this Amendment, which collectively shall
have been duly executed on behalf of each of the Credit Parties and the
Required Lenders; and
(b) The Agent shall have received, for the account of each
Lender approving this Amendment on or before 5:00 P.M., EST, March 16,
2000, an amendment fee equal to 25 basis points on such Lender's
Commitments.
3. Construction. This Amendment is a Credit Document executed
pursuant to the Credit Agreement and shall (unless otherwise expressly indicated
therein) be construed, administered and applied in accordance with the terms and
provisions of the Credit Agreement.
4. References. At such time as this Amendment shall become effective
pursuant to the terms of paragraph 2 above, all references in the Credit
Documents to the "Credit Agreement" shall be deemed to refer to the Credit
Agreement as amended by this Amendment.
5. Representations and Warranties. Each Credit Party hereby
represents and warrants that (i) each Credit Party that is party to this
Amendment: (a) has the requisite corporate power and authority to execute,
deliver and perform this Amendment, as applicable and (b) is duly authorized to,
and has been authorized by all necessary corporate action, to execute, deliver
and perform this Amendment, (ii) the representations and warranties contained in
Section 6 of the Credit Agreement are true and correct in all material respects
on and as of the date hereof upon giving effect to this Amendment as though made
on and as of such date (except for those which expressly relate to an earlier
date) and (iii) no Default or Event of Default exists under the Credit Agreement
on and as of the date hereof upon giving effect to this Amendment.
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6. Acknowledgment. The Guarantors acknowledge and consent to all of
the terms and conditions of this Amendment and agree that this Amendment does
not operate to reduce or discharge the Guarantors' obligations under the Credit
Agreement (as amended by this Amendment) or the other Credit Documents. The
Guarantors further acknowledge and agree that the Guarantors have no claims,
counterclaims, offsets, or defenses to the Credit Documents and the performance
of the Guarantors' obligations thereunder or if the Guarantors did have any such
claims, counterclaims, offsets or defenses to the Credit Documents or any
transaction related to the Credit Documents, the same are hereby waived,
relinquished and released in consideration of the Lenders' execution and
delivery of this Amendment.
7. Counterparts. This Amendment may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same agreement.
8. Binding Effect. This Amendment, the Credit Agreement and the
other Credit Documents embody the entire agreement between the parties and
supersede all prior agreements and understandings, if any, relating to the
subject matter hereof. These Credit Documents represent the final agreement
between the parties and may not be contradicted by evidence of prior,
contemporaneous or subsequent oral agreements of the parties. Except as
expressly modified and amended in this Amendment, all the terms, provisions and
conditions of the Credit Documents shall remain unchanged and shall continue in
full force and effect.
9. GOVERNING LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
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IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Amendment to be duly executed and delivered as of the date first above
written.
BORROWER: EXTENDICARE HEALTH SERVICES, INC.,
By:_________________________________
Name: Xxxx X. Xxxxxxxx
Title: Vice President-Finance
GUARANTORS: EXTENDICARE HOLDINGS, INC.
EXTENDICARE HEALTH FACILITY
HOLDINGS, INC.
EXTENDICARE HEALTH FACILITIES, INC.
COVENTRY CARE, INC.
NORTHERN HEALTH FACILITIES, INC.
EXTENDICARE HOMES, INC.
EXTENDICARE HEALTH NETWORK, INC.
THE PROGRESSIVE STEP CORPORATION
EXTENDICARE OF INDIANA, INC.
UNITED REHABILITATION SERVICES, INC.
EDGEWOOD NURSING CENTER, INC.
ELDER CREST, INC.
HAVEN CREST, INC.
MEADOW CREST, INC.
OAK HILL HOME OF REST AND CARE, INC.
EXTENDICARE GREAT TRAIL, INC.
FIR LANE TERRACE CONVALESCENT
CENTER, INC.
UNITED PROFESSIONAL SERVICES, INC.
ADULT SERVICES UNLIMITED, INC.
ARBORS EAST, INC.
ARBORS AT TOLEDO, INC.
HEALTH POCONOS, INC.
XXXXXXXX PROPERTIES, INC.
By:_________________________________
Name: Xxxx X. Xxxxxxxx
Title: Vice President-Finance
[Signatures continue.]
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INDIANA HEALTH AND REHABILITATION
CENTER PARTNERSHIP
By: Extendicare Homes, Inc.,
as General Partner
By:_______________________________________
Name: Xxxx X. Xxxxxxxx
Title: Vice President-Finance
By: Extendicare of Indiana, Inc.,
as General Partner
By:________________________________________
Name: Xxxx X. Xxxxxxxx
Title: Vice President-Finance
CONCORDIA MANOR, LLC
FIRST COAST HEALTH AND
REHABILITATION CENTER, LLC
XXXXXXX HEIGHTS REHABILITATION
CENTER, LLC
TREASURE ISLE CARE CENTER, LLC
By: Extendicare Homes, Inc., as sole member
By:________________________________________
Name: Xxxx X. Xxxxxxxx
Title: Vice President-Finance
XXXXXXX STREET, WV, LLC
NEW CASTLE CARE, LLC
By: Fir Lane Terrace Convalescent Center, Inc.,
as sole member
By:________________________________________
Name: Xxxx X. Xxxxxxxx
Title: Vice President-Finance
[Signatures continue.]
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ALPINE HEALTH AND REHABILITATION
CENTER, LLC
COLONIAL CARE, LLC
GREENBRIAR CARE, LLC
GREENBROOK CARE, LLC
HERITAGE CARE, LLC
LADY LAKE CARE, LLC
NEW HORIZON CARE, LLC
NORTH REHABILITATION CARE, LLC
PALM COURT CARE, LLC
XXXXXX MANOR, LLC
ROCKLEDGE CARE, LLC
SOUTH HERITAGE HEALTH AND
REHABILITATION CENTER, LLC
THE OAKS RESIDENTIAL AND
REHABILITATION CENTER, LLC
WINTER HAVEN HEALTH AND
REHABILITATION CENTER, LLC
By: Extendicare Health Facilities, Inc.,
as sole member
By:________________________________________
Name: Xxxx X. Xxxxxxxx
Title: Vice President-Finance
[Signatures continue.]
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XXXXXX XX XXXXXXX POINT,
LLC ARBORS AT TAMPA, LLC
JACKSONVILLE CARE, LLC
KISSIMMEE CARE, LLC ORANGE
PARK CARE, LLC PORT
CHARLOTTE CARE, LLC SAFETY
HARBOR CARE, LLC SARASOTA
CARE, LLC SEMINOLE CARE,
LLC WINTER HAVEN CARE, LLC
BLANCHESTER CARE, LLC
CANTON CARE, LLC COLUMBUS
HEALTH CARE LLC DAYTON
CARE, LLC DELAWARE CARE,
LLC FAIRLAWN CARE, LLC
GALLIPOLIS CARE, LLC
XXXXXXXX CARE, LLC LONDON
CARE, LLC MARIETTA CARE,
LLC TOLEDO CARE, LLC
WATERVILLE CARE, LLC WEST
JEFFERSON CARE, LLC
By: Northern Health Facilities, Inc.,
as sole member
By:________________________________________
Name: Xxxx X. Xxxxxxxx
Title: Vice President-Finance
[Lenders' signatures follow.]
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LENDERS: BANK OF AMERICA, N.A.,
formerly NationsBank, N.A.,
individually in its capacity as a
Lender and in its capacity as Agent
By:_________________________________
Name:_______________________________
Title:______________________________
ROYAL BANK OF CANADA
By:_________________________________
Name:_______________________________
Title:______________________________
FIRSTAR BANK MILWAUKEE, N.A.
By:_________________________________
Name:_______________________________
Title:______________________________
CREDIT LYONNAIS NEW YORK BRANCH
By:_________________________________
Name:_______________________________
Title:______________________________
XXXXXX COMMERCIAL PAPER I
By:_________________________________
Name:_______________________________
Title:______________________________
DLJ CAPITAL FUNDING, INC.
By:_________________________________
Name:_______________________________
Title:______________________________
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XXX XXXX XX XXXX XXXXXX
By:_________________________________
Name:_______________________________
Title:______________________________
KEY CORPORATE CAPITAL INC.
By:_________________________________
Name:_______________________________
Title:______________________________
LASALLE BANK NATIONAL ASSOCIATION
By:_________________________________
Name:_______________________________
Title:______________________________
TORONTO DOMINION (TEXAS), INC.
By:_________________________________
Name:_______________________________
Title:______________________________
BANK ONE, N.A.
By:_________________________________
Name:_______________________________
Title:______________________________
BANK ONE DAYTON
By:_________________________________
Name:_______________________________
Title:______________________________
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BANK OF MONTREAL
By:_________________________________
Name:_______________________________
Title:______________________________
THE FUJI BANK, LTD., CHICAGO BRANCH
By:_________________________________
Name:_______________________________
Title:______________________________
U.S. BANK NATIONAL ASSOCIATION
By:_________________________________
Name:_______________________________
Title:______________________________
BANK OF TOKYO-MITSUBISHI
TRUST COMPANY
By:_________________________________
Name:_______________________________
Title:______________________________
COMERICA BANK
By:_________________________________
Name:_______________________________
Title:______________________________
AMSOUTH BANK
By:_________________________________
Name:_______________________________
Title:______________________________
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XXX XXXXXX PRIME
RATE INCOME TRUST
By:_________________________________
Name:_______________________________
Title:______________________________
XXX XXXXXX SENIOR
INCOME TRUST
By:_________________________________
Name:_______________________________
Title:______________________________
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By:_________________________________
Name:_______________________________
Title:______________________________
XXXXXXX X XXXXX SONS
By:_________________________________
Name:_______________________________
Title:______________________________
BANKBOSTON, N.A.
By:_________________________________
Name:_______________________________
Title:______________________________
INDOSUEZ CAPITAL FUNDING III,
LIMITED
By: Indosuez Capital Luxembourg SA,
as Collateral Manager
By:_________________________________
Name:_______________________________
Title:______________________________
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MARINER LDC
By:_________________________________
Name:_______________________________
Title:______________________________
PARIBAS CAPITAL FUNDING LLC
By:_________________________________
Name:_______________________________
Title:______________________________
CRESCENT/MACH I PARTNERS, L.P.
By: TCW Asset Management Company,
its Investment Manager
By:_________________________________
Name:_______________________________
Title:______________________________
KZH CRESCENT LLC
By:_________________________________
Name:_______________________________
Title:______________________________
KZH CRESCENT-2 LLC
By:_________________________________
Name:_______________________________
Title:______________________________
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ROYALTON COMPANY
By: Pacific Investment Management Company,
as its Investment Advisor
By:_________________________________
Name:_______________________________
Title:______________________________
CAPTIVA III FINANCE LTD.
By:_________________________________
Name:_______________________________
Title:______________________________
XXXXXXX NATIONAL LIFE INSURANCE
COMPANY
By: PPM America, Inc., as attorney-in-fact,
on behalf of Xxxxxxx National Life
Insurance Company
By:_________________________________
Name:_______________________________
Title:______________________________
ARCHIMEDES FUNDING LLC
By:_________________________________
Name:_______________________________
Title:______________________________
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SENIOR DEBT PORTFOLIO
By: By Boston Management and Research, as
Investment Advisor
By:_________________________________
Name:_______________________________
Title:______________________________
XXXXX XXXXX INSTITUTIONAL SENIOR
LOAN FUND
By: Xxxxx Xxxxx Management, as
Investment Advisor
By:_________________________________
Name:_______________________________
Title:______________________________
CYPRESSTREE INVESTMENT PARTNERS I, LTD.
By: CypressTree Investment Management Company, Inc., as
Portfolio Manager
By:_________________________________
Name:_______________________________
Title:______________________________
XXXX XXXXXXX MUTUAL LIFE
By:_________________________________
Name:_______________________________
Title:______________________________
XXXX XXXXXXX VARIABLE LIFE
By:_________________________________
Name:_______________________________
Title:______________________________
X-00
00
XXXXXXXX XXXX XXXX
By:_________________________________
Name:_______________________________
Title:______________________________
CITY NATIONAL BANK
By:_________________________________
Name:_______________________________
Title:______________________________
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