AMENDMENT NO. 2 TO LOAN AGREEMENT
AMENDMENT NO. 2 TO LOAN AGREEMENT (this "Amendment No. 2"), made and
entered into effective the 31st day of December, 2000, by and among:
OMEGA HEALTHCARE INVESTORS, INC. and certain of its subsidiaries
(individually, a "Borrower" and collectively, the "Borrowers"),
The lenders that have executed the signature pages hereto (individually, a
"Lender" and collectively, the "Lenders"); and
THE PROVIDENT BANK, an Ohio banking corporation, as Agent for the
Lenders (in such capacity, together with its successors in such capacity, the
"Agent").
PRELIMINARY STATEMENTS
(A) The Borrowers have entered into a certain Loan Agreement dated August
11, 2000, as amended by that certain Amendment No. 1 to Loan Agreement dated
November 30, 2000 (hereinafter referred to, as amended, as the "Loan Agreement")
with the Agent and the Lenders; and
(B) The Borrowers have requested that the Lenders and the Agent amend
certain provisions of the Loan Agreement, and the Lenders and the Agent are
willing to do so, all on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the agreements and provisions contained
herein, the parties hereto hereby agree as follows:
1. Definitions. Capitalized terms used but not otherwise defined herein
shall have the meanings ascribed to such terms in the Loan Agreement.
2. Certain Amendments to the Loan Agreement. The Loan Agreement is hereby
amended as follows:
2.1 The definition of "LIBOR Margin" contained in Article 1, Section
1.2, is hereby deleted in its entirety and the following is substituted
therefor:
"LIBOR Margin" means one of the following percentages, depending on
the Leverage Ratio, as determined by Agent as of the Computation Date for
the immediately preceding fiscal quarter:
Leverage Ratio LIBOR Margin
-------------- ------------
Greater than or equal to 5.0:1 3.75%
Greater than or equal to 4.5:1, but less 3.50%
than 5.0:1
Greater than or equal to 4.0:1, but less 3.25%
than 4.5:1
Less than 4.0:1 3.00%
2.2 The definition of "Prime Margin" contained in Article 1,
Section 1.2, is hereby deleted in its entirety and the following is substituted
therefor:
"Prime Margin" means one of the following percentages, depending on
the Leverage Ratio, as determined by Agent as of the Computation Date for
the immediately preceding fiscal quarter:
Leverage Ratio Prime Margin
-------------- ------------
Greater than or equal to 5.0:1 2.75%
Greater than or equal to 4.5:1, but 2.50%
less than 5.0:1
Greater than or equal to 4.0:1, but 2.25%
less than 4.5:1
Less than 4.0:1 2.00%
2.3 Section 7.9 (Financial Covenants) of the Loan Agreement is amended
by deleting subparagraph (a)(v) thereof in its entirety and substituting
the following provision therefor:
"A Leverage Ratio of (A) not greater than 5.50:1.00 on and
from December 31, 2000 through and including September 29,
2001; (B) not greater than 5.25:1.00 on and from September 30,
2001 and through and including March 30, 2002; (C) not greater
than 5.00:1.00 on and from March 31, 2002 to and through
September 29, 2002; and (D) not greater than 4.75:1.00 on
September 30, 2002 and thereafter."
3. Representations and Warranties. In order to induce the Lenders and the
Agent to enter into this Amendment No. 2, each of the Borrowers hereby
represents and warrants to the Lenders and the Agent, as to itself with respect
to the Loan Documents to which it is a party, that:
3.1 No Default. After giving effect to this Amendment No. 2, no
Default or Event of Default shall have occurred or be continuing.
3.2 Existing Representations and Warranties. As of the date hereof and
after giving effect to this Amendment No. 2, each and every one of the
representations and warranties set forth in the Loan Documents are true,
accurate and complete in all respects and with the same effect as though
made on the date hereof, and each is hereby incorporated herein in full by
reference as if restated herein in its entirety, except for changes in the
ordinary course of business which are not prohibited by the Loan Agreement
(as amended hereby) and which do not, either singly or in the aggregate,
have a Material Adverse Effect.
3.3 Authority; Enforceability. (i) The execution, delivery and
performance by each Borrower of this Amendment No. 2 are within its
organizational powers and have been duly authorized by all necessary action
(corporate or otherwise) on the part of each Borrower, (ii) this Amendment
No. 2 is the legal, valid and binding obligation of each Borrower,
enforceable against each Borrower in accordance with its terms, and (iii)
this Amendment No. 2 and the execution, delivery and performance by each
Borrower hereof does not: (A) contravene the terms of any Borrower's
organization documents, (B) conflict with or result in any breach or
contravention of, or the creation of any Lien under, any document
evidencing any contractual obligation to which any Borrower is a party or
any order, injunction, writ or decree to which any Borrower or its property
is subject, or (C) violate any requirement of law.
4. Reference to and Effect Upon the Loan Agreement.
4.1 Effect. Except as specifically set forth herein, the Loan
Agreement and the other Loan Documents shall remain in full force and
effect in accordance with their terms and are hereby ratified and
confirmed.
4.2 No Waiver; References. The execution, delivery and effectiveness
of this Amendment No. 2 shall not operate as a waiver of any right, power
or remedy of the Agent or any Lender under the Loan Agreement, nor
constitute a waiver of any provision of the Loan Agreement, except as
specifically set forth herein. Upon the effectiveness of this Amendment No.
2, each reference in:
(i) the Loan Agreement to "this Agreement", "hereunder",
"hereof", "herein" or words of similar import shall mean and be a
reference to the Loan Agreement as amended hereby;
(ii) the other Loan Documents to the "Loan Agreement" shall mean
and be a reference to the Loan Agreement as amended hereby; and
(iii) the Loan Documents to the "Loan Documents" shall be deemed
to include this Amendment No. 2.
5. Additional Optional Changes. Within ninety (90) days following the
execution hereof, the Borrowers may choose to further modify their credit
relationship with the Agent and the Lenders by adding sufficient Facilities as
Real Property Collateral such that, following such additions, (i) Aggregate
EBITDAR shall be not less than $24,450,000.00 and (ii) the ratio of aggregate
rental payments made with respect to all Facilities serving as Real Property
Collateral to the sum of all interest payable on the Obligations shall, on a
four fiscal quarter basis, be not less than 2.00-to-1.00. Such addition of
Facilities as Real Property Collateral shall be made in accordance with the
requirements set forth in Section 3.5 of the Loan Agreement, and must be
completed before the expiration of said ninety (90) day period. In the event
that the Borrowers choose to make such modification in the credit relationship,
and comply with the requirements of Section 3.5 of the Loan Agreement and
herein, the "LIBOR Margin" and the "Prime Margin" shall be modified as follows:
"LIBOR Margin" means one of the following percentages, depending on
the Leverage Ratio, as determined by Agent as of the Computation Date for
the immediately preceding fiscal quarter:
Leverage Ratio LIBOR Margin
-------------- ------------
Greater than or equal to 5.25:1, but less 3.50%
than 5.5:1
Greater than or equal to 5.0:1, but less 3.25%
than 5.25:1
Greater than or equal to 4.5:1, but less 3.00%
than 5.0:1
Greater than or equal to 4.0:1, but less 2.75%
than 4.5:1
Less than 4.0:1 2.50%
"Prime Margin" means one of the following percentages, depending on
the Leverage Ratio, as determined by Agent as of the Computation Date for
the immediately preceding fiscal quarter:
Leverage Ratio Prime Margin
-------------- ------------
Greater than or equal to 5.25:1, but less than 2.50%
5.5:1
Greater than or equal to 5.0:1, but less than 2.25%
5.25:1
Greater than or equal to 4.5:1, but less than 2.00%
5.0:1
Greater than or equal to 4.0:1, but less than 1.75%
4.5:1
Less than 4.0:1 1.50%
Any modification of the credit relationship between the Borrowers and the Agent
and the Lenders shall be formalized by a written amendment to the Loan Agreement
(containing such provisions as the Agent shall deem appropriate) at the time
such modification is made. If the Borrowers do not elect to modify the credit
relationship as set forth herein, or fail to comply with the requirements of
Section 3.5 of the Loan Agreement and those set forth herein, then the
provisions of this Amendment shall continue in fill force and effect.
6. Miscellaneous.
6.1 Expenses. The Borrowers agree to pay the Agent upon demand for all
reasonable expenses, including reasonable attorneys' fees and expenses of
the Agent, incurred by the Agent in connection with the preparation,
negotiation and execution of this Amendment No. 2.
6.2 Law. THIS AMENDMENT NO. 2 SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF OHIO.
6.3 Successors. This Amendment No. 2 shall be binding upon the
Borrowers, the Lenders and the Agent and their respective successors and
assigns, and shall inure to the benefit of the Borrowers, the Lenders and
the Agent and the successors and assigns of the Lenders and the Agent.
6.4 Execution in Counterparts. This Amendment No. 2 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
to be an original and all of which taken together shall constitute one and
the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 2 to
be executed and delivered by their respective officers thereunto duly authorized
effective as of the date first written above.
LENDERS AND AGENT:
THE PROVIDENT BANK, as Lender and Agent
By: /s/ STEVEN J. BLOEMER
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Its: Vice President
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ONE VALLEY BANK
By: /s/ TIMOTHY PAXTON
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Its: Senior Vice President
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GREAT AMERICAN INSURANCE COMPANY
By: /s/ RONALD C. HAYES
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Its: Assistant Vice President
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GREAT AMERICAN LIFE INSURANCE COMPANY
By: /s/ MARK F. MUETHING
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Its: Executive Vice President
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[Signatures continued on following page.]
BORROWERS:
OMEGA HEALTHCARE INVESTORS, INC.
STERLING ACQUISITION CORP.
DELTA INVESTORS I, LLC
By: /s/ SUSAN A. KOVACH
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Its: Vice President General Counsel
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and Secretary
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Susan A. Kovach, as an executive officer of all of the aforementioned
Borrower, has executed this Amendment No. 2 and intending that all of the
Borrowers above named are bound and are to be bound by the one signature as if
(s)he had executed this Amendment No. 2 separately for each of the above named
Borrowers.