SECOND AMENDMENT
SECOND AMENDMENT, dated as of September 25, 2000 (this "Amendment"), to the
Credit Agreement, dated as of August 11, 1998 (as amended, supplemented or
otherwise modified from time to time, 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"), CHASE SECURITIES INC., as arranger, MORGAN STANLEY
SENIOR FUNDING, INC. and BT ALEX. BROWN INCORPORATED, as co-arrangers, MORGAN
STANLEY 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").
W I T N E S S E T H:
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, to amend certain provisions of
the Credit Agreement and to grant certain consents, in each case 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 used
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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. Amendment to Subsection 1.1 of the Credit Agreement. 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:
Alternate
Base Rate Eurodollar
Loans Loans
Term Loans: 2.25% 3.25%
Revolving Credit Loans: 2.25% 3.25%
Swing Line Loans: 2.25% Not applicable;
2.2. Amendments to Subsection 7.9 of the Credit Agreement.
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(a) Subsection 7.9(a) of the Credit Agreement is hereby amended by deleting the
ratio "6.50 to 1.00" under the column titled "Ratio" (corresponding to the
First Fiscal Quarter of Fiscal Year 2001) and substituting in lieu thereof the
ratio "5.75 to 1.00".
(b) Subsection 7.9(c) of the Credit Agreement is hereby amended by deleting the
number "$24,700,000" under the column titled "Consolidated EBITDA"
(corresponding to the Fourth Fiscal Quarter of Fiscal Year 2000) and
substituting in lieu thereof the number "$23,200,000".
2.3. Amendment to Schedule III to the Credit Agreement. Schedule III to the
Credit Agreement is hereby amended in its entirety to read as set forth in
Schedule III hereto.
SECTION 3. Changes of Commitment Amounts. The Company, for itself and as agent
for the other Borrowers, hereby notifies the Administrative Agent and each
Lender, pursuant to subsection 3.3 of the Credit Agreement, that, effective on
the date hereof, the total Revolving Credit Commitments shall be permanently
reduced from $250,000,000 to $150,000,000, and each Lender, by its execution and
delivery of its respective Lender Consent Letter, hereby consents and agrees
that such permanent reduction shall be effective on the date hereof and that
such reduction shall be made pro rata according to the respective Revolving
Credit Percentages of the Lenders.
SECTION 4. Consent and Release of Certain Collateral. In connection with the
acquisition by HHC Beachwood, Inc., HHC Broadview, Inc. and HHC Westbay, Inc.
(each an affiliate of Investcorp) of the four nursing home facilities that
Harborside of Cleveland Limited Partnership ("Cleveland") currently leases from
the current owners of such facilities, which acquisition is to be funded
principally by a mortgage insured by the Department of Housing and Urban
Development (the "HUD Transaction"), each Lender, by its execution and delivery
of its respective Lender Consent Letter, hereby consents and agrees that the
Liens in favor of the Administrative Agent, on behalf of the Secured Parties, in
the Medicare/Medicaid provider agreements and nursing home licenses owned by
Cleveland as well as any right, privilege, estate or benefit pertaining thereto
(the "Released Collateral") shall be released and the Administrative Agent, on
behalf of the Secured Parties, shall execute and deliver such instruments and
documents necessary to release the Lien on the Released Collateral, including,
without limitation any Uniform Commercial Code amendment, release, partial
release or termination statements; provided, however, that (a) in no event shall
the foregoing release be construed as a release of the security interest of the
Administrative Agent, for the benefit of the Secured Parties, in any Accounts
(as defined in the Collateral Agreement) and (b) in the event that the foregoing
mortgage insured by the Department of Housing and Urban Development is repaid in
full, the Company shall execute and deliver, and cause its Subsidiaries to
execute and deliver, to the Administrative Agent, for the benefit of the Secured
Parties, all such instruments and documents as are necessary, or in the
reasonable opinion of the Administrative Agent desirable, to obtain a legal,
valid and enforceable security interest in favor of the Administrative Agent,
for the benefit of the Secured Parties, in the Released Collateral, and for such
security interest to constitute, subject to the existence of Permitted Liens and
the provisions of the Intercreditor Agreement, perfected first priority liens
on, and security interests in, such Released Collateral. Each Lender, by its
execution and delivery of its Lender Consent Letter, hereby further consents to
the encumbrance of the Released Collateral with Liens required in connection
with the HUD Transaction.
SECTION 5. Additional Borrowings and Acquisitions. To induce the
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 March 31, 2001:
(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 March 30,
1999, (iii) 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;
(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 and (ii) to finance
capital expenditures permitted under the Credit Agreement;
(d) the Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, acquire any other Person (whether through a purchase
of stock, merger, consolidation or otherwise) or all or any substantial
portion of the assets, or any business or product line, of any other Person;
provided that the Company and its Subsidiaries may acquire the 100-bed Brevard
facility in Rockledge, Florida so long as the Acquisition Consideration
therefor is not in excess of $4,375,000;
(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 the proviso to clause (d) above, (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 5 shall constitute an Event of Default
under the Credit Agreement.
SECTION 6. Inspection of Property; Discussions; Appraisals. To induce the
Administrative Agent to enter into this Amendment, and the Lenders to execute
and deliver Lender Consent Letters, each Borrower covenants and agrees that it
shall:
(a) permit representatives of the Administrative Agent (for itself and on behalf
of any Lender) upon reasonable notice, and at the reasonable expense of the
Company, to visit and inspect any properties of the Company, any of its
Subsidiaries or the Trust and examine and make abstracts from any of their
respective books and records, and to discuss the business, operations, assets
and financial and other condition of such Persons with officers and employees
thereof and with their independent certified public accountants with prior
reasonable notice to, and coordination with, the chief financial officer or
the treasurer of the Company; and
(b) pay, promptly upon the request of the Administrative Agent, for the
reasonable costs and expenses in connection with any appraisal ordered by the
Administrative Agent, in its discretion, to determine the current market value
of all skilled nursing facilities owned by the Company, any of its
Subsidiaries and the Trust.
SECTION 7. Conditions to Effectiveness. This Amendment shall become effective
as of the date set forth above (the "Amendment Effective Date") when (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, (c)
the Company shall have paid to the Administrative Agent, for the ratable account
of each Lender which shall have executed and delivered its respective Lender
Consent Letter, an amendment fee in an amount equal to 0.10% of the sum of each
such Lender's Revolving Credit Commitment then outstanding (it being understood
that such amendment fee shall be calculated after giving effect to the permanent
reduction of Revolving Credit Commitments set forth in Section 3 of this
Amendment) and (d) the HUD Transaction shall have been consummated on or prior
to December 31, 2000.
SECTION 8. Representation and Warranties. The representations and 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 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 9. Payment of Expenses. The Company agrees to pay or 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 10. Reference to and Effect on the Credit Documents. On and 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 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 11. Counterparts. This Amendment may be executed by one or 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 12. Governing Law. This Amendment and the rights and obligations of
the parties hereto shall be governed by, and construed and interpreted in
accordance with, the law of the State of New York.
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: ______________________________________
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: ______________________________________
Title:
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: ______________________________________
Title:
HARBORSIDE FUNDING LIMITED PARTNERSHIP
By: HARBORSIDE HEALTHCARE LIMITED PARTNERSHIP,
as General Partner
By: KHI CORP., as General Partner
By: _____________________________________
Title:
BRIDGEWATER ASSISTED LIVING LIMITED PARTNERSHIP
By: NEW JERSEY HARBORSIDE CORP.,
as General Partner
By: _____________________________________
Title:
HARBORSIDE NEW HAMPSHIRE LIMITED PARTNERSHIP
HARBORSIDE TOLEDO LIMITED PARTNERSHIP
HHCI LIMITED PARTNERSHIP
By: HARBORSIDE TOLEDO CORP.,
as General Partner
By: _____________________________________
Title:
HARBORSIDE HEALTHCARE ADVISORS LIMITED PARTNERSHIP
HARBORSIDE HEALTHCARE LIMITED PARTNERSHIP
HARBORSIDE HOMECARE LIMITED PARTNERSHIP
By: KHI CORP., as General Partner
By: ______________________________________
Title:
HARBORSIDE PROPERTIES TRUST I,
a Massachusetts business trust
By: ______________________________________
Name: _________________________, in his
capacity as trustee and not individually
THE CHASE MANHATTAN BANK,
as Administrative Agent
By: ______________________________________
Title:
Schedule III to the
Credit Agreement
Pricing and Commitment Fee Grid
Applicable
Applicable Margin for
Margin for Eurodollar Commitment
Leverage Ratio ABR Loans Loans Fee
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Greater than or equal to 5.5 2.250% 3.250% 0.500%
Less than 5.5 to 1.0, but greater than or
equal to 5.0 to 1.0 2.000% 3.000% 0.500%
Less than 5.0 to 1.0, but greater than or
equal to 4.5 to 1.0 1.750% 2.750% 0.500%
Less than 4.5 to 1.0, but greater than or
equal to 4.0 to 1.0 1.500% 2.500% 0.375%
Less than 4.0 to 1.0, but greater than or
equal to 3.5 to 1.0 1.250% 2.250% 0.375%
Less than 3.5 to 1.0, but greater than or
equal to 3.0 to 1.0 1.000% 2.000% 0.300%
Less than 3.0 to 1.0 0.750% 1.750% 0.250%
LENDER CONSENT LETTER
HARBORSIDE HEALTHCARE CORPORATION CREDIT AGREEMENT
DATED AS OF AUGUST 11, 1998
To: The Chase Manhattan Bank, as Administrative Agent
270 Park Avenue
New York, New York 10017
Ladies and Gentlemen:
Reference is made to the Credit Agreement, dated as of August
11, 1998 (as amended, supplemented or otherwise modified from time to time, 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"), Chase Securities Inc.,
as arranger, Morgan Stanley Senior Funding, Inc. and BT Alex. Brown
Incorporated, as co-arrangers, Morgan Stanley 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 that the Lenders amend the Credit
Agreement and grant certain consents, in each case on the terms described in the
Second Amendment to the Credit Agreement in the form attached hereto as Exhibit
A (the "Second Amendment").
Pursuant to subsection 9.1 of the Credit Agreement, the
undersigned Lender hereby consents to the execution by the Administrative Agent
of the Second Amendment.
Very truly yours,
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(NAME OF LENDER)
By:___________________________________________________
Name:
Title:
Dated as of September 25, 2000
