Exhibit 4.3
________________________________________________________________________________
ATRIA COMMUNITIES, INC.
AS BORROWER
AND
THE LENDERS NAMED HEREIN
AS LENDERS
AND
PNC BANK, NATIONAL ASSOCIATION
AS ADMINISTRATIVE AGENT
PNC BANK, KENTUCKY, INC.
AS MANAGING AGENT
NATIONAL CITY BANK OF KENTUCKY
AS DOCUMENTATION AGENT
_____________________
AMENDMENT NO. 2
DATED AS OF
MARCH 27, 1997
TO
CREDIT AGREEMENT
DATED AS OF
AUGUST 15, 1996
_____________________
AMENDMENT NO. 2 TO CREDIT AGREEMENT
THIS AMENDMENT NO. 2 TO CREDIT AGREEMENT, dated as of March 27, 1997, among
ATRIA COMMUNITIES, INC., a Delaware corporation (herein, together with its
successors and assigns, the "BORROWER"); the Lenders who have executed this
Amendment as indicated by their signatures on the signature pages hereof,
constituting the Required Lenders (such Lenders and the other Lenders party to
the Credit Agreement, the "LENDERS"); PNC BANK, NATIONAL ASSOCIATION, a national
banking association, as administrative agent (the "ADMINISTRATIVE AGENT") for
the Lenders under the Credit Agreement (hereafter defined); PNC BANK, KENTUCKY,
INC., a Kentucky banking corporation, as managing agent (the "MANAGING AGENT")
for the Lenders under the Credit Agreement; and NATIONAL CITY BANK OF KENTUCKY,
a national banking association, as documentation agent (the "DOCUMENTATION
AGENT") for the Lenders under the Credit Agreement:
PRELIMINARY STATEMENTS:
(1) The Borrower, the Lenders named therein, and the Agents party hereto
entered into the Credit Agreement, dated as of August 15, 1996, and Amendment
No. 1 to Credit Agreement, dated as of January 15, 1997 (as so amended, the
"CREDIT AGREEMENT"; with the terms defined therein, or the definitions of which
are incorporated therein, being used herein as so defined).
(2) The Borrower, such Agents and the Lenders party hereto desire to amend
certain of the terms and provisions of the Credit Agreement, all as more fully
set forth below.
NOW, THEREFORE, the parties hereby agree as follows:
SECTION 1. AMENDMENTS TO CREDIT AGREEMENT.
1.1. DEFINITIONAL CHANGES. (A) ADDITIONAL DEFINED TERMS. The following
defined terms shall be inserted in section 10 of the Credit Agreement in
appropriate alphabetical order:
"AMERICAN ELDERSERVE ACQUISITION" shall mean the acquisition by the
Borrower of American ElderServe Corporation and its subsidiaries pursuant
to the terms of the Agreement and Plan of Merger, dated as of March 3,
1997, among the Borrower, Atria Communities Southeast, Inc., American
ElderServe Corporation, Andy L. Schoepf, Elizabeth A. Schoepf and Evely C.
Schoepf, for consideration consisting of (i) approximately 675,000 shares
of Common Stock of the Borrower, (ii) approximately $8,000,000 cash and
(iii) the assumption of the American ElderServe Assumed Debt and the
American ElderServe Assumed Finance Lease Obligations.
"AMERICAN ELDERSERVE ASSUMED DEBT" shall mean obligations of American
ElderServe Corporation and its Subsidiaries for borrowed money or
represented by bonds, notes or similar securities, with an aggregate
outstanding principal amount at the date of completion of the American
ElderServe Acquisition of approximately $15,000,000, all of which (except
for the Suburban Lodge Debt) will be permanently retired out of available
cash and/or refinanced by Loans under the Credit Agreement within 90 days
following the completion of the American ElderServe Acquisition.
"AMERICAN ELDERSERVE ASSUMED FINANCE LEASE OBLIGATIONS" shall mean
obligations of American ElderServe Corporation and its Subsidiaries arising
under a letter agreement dated April 25, 1996 between Health Care REIT,
Inc. and American ElderServe Corporation, providing for operating lease and
credit facilities, including all operating lease and related obligations
incurred pursuant to such letter agreement.
"DEVCO DEVELOPMENT AGREEMENT" shall mean the Development Agreement, to
be entered into contemporaneously with the completion of the American
ElderServe Acquisition, between the Borrower and Elder Healthcare
Developers, LLC, pursuant to which, among other things, Devco, LLC
undertakes to develop at least 15 Assisted Living Facilities in the
Southeast Region (as such terms are defined therein), as the same may be
from time to time modified, amended and/or supplemented.
"DEVCO JOINT VENTURE" shall mean Elder Healthcare Developers, LLC, a
Georgia limited liability company formed pursuant to an Operating
Agreement, to be entered into contemporaneously with the completion of the
American ElderServe Acquisition, between the Borrower and Schoepfco, LLC,
together with its successors and assigns.
"FIXED CHARGE COVERAGE RATIO" shall mean, for any Test Period, the
ratio of (x) EBITDA PLUS Total Rental Expense, to (y) Total Interest
Expense PLUS Total Rental Expense, in each case for such Test
Period.
"PROPERTY JOINT VENTURE" shall mean (i) the Devco Joint Venture; and
(ii) any other person, other than a Subsidiary of the Borrower, which is
organized to, or whose principal business activities relate to, the
ownership, leasing, development or operation of real property and/or
assisted living facilities, and in which the Borrower and its Subsidiaries
have invested, or to whom the Borrower and its Subsidiaries have loaned or
advanced any funds aggregating at least $1,000,000. Notwithstanding the
foregoing, the term Property Joint Venture shall not include the joint
venture investment in Atrium at Buckhead specified in clause (i) of section
8.5.
"SUBURBAN LODGE DEBT" shall mean a loan in the approximate principal
amount of $2,700,000 secured by The Suburban Lodge in Savannah, Georgia.
"TOTAL RENTAL EXPENSE" shall mean, for any period, total rental
expense (other than that which is attributable to Capitalized Leases and is
included in Total Interest Expense) of the Borrower and its Subsidiaries on
a consolidated basis, all as determined in accordance with GAAP.
(B) INTEREST COVERAGE RATIO. The definition of the term Interest Coverage
Ratio in section 10 of the Credit Agreement is deleted.
(C) PERMITTED ACQUISITIONS. A new clause (z) is added to the last
sentence of the definition of the term "Permitted Acquisition" in section 10 of
the Credit Agreement so that, as so amended, such sentence reads in its entirety
as follows:
Notwithstanding the above provisions of this definition, (x) the
acquisition for development of land which is not encumbered at the time of
acquisition by any Lien securing Indebtedness shall in no event constitute
a Permitted Acquisition, and any such acquisition shall not be subject to
the restrictions contained in section 8.2(d); (y) the acquisition of land
(or of a person substantially all of whose assets consist of land)
containing facilities the construction of which is less than 50% complete
(based on currently projected costs), including the amount of any Priority
Debt assumed in connection with any such acquisition, shall not be counted
against the $50,000,000 consideration limitation in any fiscal year which
is provided above; and (z) neither the American ElderServe Acquisition, nor
any acquisition of up to 15 assisted living facilities pursuant to the
Devco Joint Venture, shall count against the $25,000,000 or $50,000,000
consideration limitations which are provided above.
1.2. INDEBTEDNESS. Clause (c) of section 8.4 of the Credit Agreement is
amended to include reference to the American ElderServe Assumed Debt and the
American ElderServe Assumed Finance Lease Obligations, so that it reads in its
entirety as follows:
(c) the following: (i) Existing Indebtedness, and any refinancing,
extension, renewal or refunding of any such Existing Indebtedness, PROVIDED
that (A) the aggregate principal amount of any such Indebtedness in respect
of Residential Mortgage Bond programs of the Borrower and its Subsidiaries
(as described in the Registration Statement) currently in existence is not
increased above $50,000,000, and (B) the principal amount of any other such
Existing Indebtedness is not increased; (ii) the American ElderServe
Assumed Debt (including any guaranty by the Borrower or any Subsidiary of
any of the American ElderServe Assumed Debt), PROVIDED that the entire
American ElderServe Assumed Debt (and any such guaranty), other than the
Suburban Lodge Debt (and any such guaranty in respect thereof), is retired,
repaid or prepaid in full within 90 days following the date the American
ElderServe Acquisition is completed and not refinanced in whole or in part
with Indebtedness other than Loans made hereunder; and (iii) Contingent
Obligations of the Borrower and its Subsidiaries in respect of the American
ElderServe Assumed Finance Lease Obligations covering not more than
$25,000,000 of Approved Costs (as defined in the documents governing the
American ElderServe Assumed Finance Lease Obligations as in effect on the
date the American ElderServe Acquisition is completed);
1.3. LIENS. Clause (d) of section 8.3 of the Credit Agreement is amended
to include reference to Liens securing the American ElderServe Assumed Debt and
the American ElderServe Assumed Finance Lease Obligations, so that it reads in
its entirety as follows:
(d) Liens (i) in existence on the Closing Date which are listed, and
the Indebtedness secured thereby and the property subject thereto on the
Closing Date described, in Annex V; (ii) arising out of the refinancing,
extension, renewal or refunding of any Indebtedness secured by any such
Liens, PROVIDED that the principal amount of such Indebtedness is not
increased and such Indebtedness is not secured by any additional assets;
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(iii) in existence on the date the American ElderServe Acquisition is
completed, securing the American ElderServe Assumed Debt, but such Liens
shall be discharged upon payment of the American ElderServe Assumed Debt
applicable thereto as contemplated by section 8.4(c)(ii); and (iv) in
existence on the date the American ElderServe Acquisition is completed or
created thereafter pursuant to commitments in respect of the American
ElderServe Assumed Finance Lease Obligations in effect on such date,
covering land, facilities, equipment, inventory, working capital, accounts
receivable and other property of facilities financed by, and securing only,
the American ElderServe Assumed Finance Lease Obligations permitted by
section 8.4(c)(iii), but not any extensions or renewals of any such Liens;
1.4. ADVANCES, INVESTMENTS AND LOANS. Section 8.5 of the Credit Agreement
is amended by deleting the word "and" at the end of clause (h) thereof and by
replacing clause (i) thereof with the following three clauses:
(i) loans, advances and investments not otherwise permitted pursuant
to the preceding clauses, made by the Borrower or any Subsidiary Guarantor
in Atrium at Buckhead, a Georgia limited liability company in which the
Borrower has a 50% equity interest, for the purpose of financing a 74 unit
assisted living facility near Atlanta, Georgia, up to an aggregate of not
more than $9,000,000;
(j) loans, advances and investments not otherwise permitted pursuant
to the preceding clauses, made by the Borrower or any Subsidiary Guarantor
in any Property Joint Venture by means of cash or Cash Equivalents or
property transfers after the Closing Date and taking into account any
repayment of any such loans or advances or the return or other realization
in cash or Cash Equivalents of the amount of such investments, in
compliance with the following requirements:
(A) at the time of making any such loan, advance or investment
and after giving effect thereto, no Default or Event of Default shall
have occurred and be continuing;
(B) the Property Joint Venture to which such loan or advance is
made, or in which such investment is made, shall own or be committed
to acquire or develop one or more assisted living properties located
in the United States;
(C) the Borrower or a Subsidiary Guarantor shall have been
retained (or shall have a commitment to be retained upon completion of
any proposed development) to manage such property or properties,
subject to any termination of any existing management contracts
pertaining thereto;
(D) at least 80% of the aggregate amount so invested in any
Property Joint Venture will be in the form of secured loans or
advances having a final maturity date not to exceed three years from
the initial drawdown date but in no event extending beyond the
Revolving Loan Maturity Date (assuming the same will be extended as
provided in section 3.4, unless the Lenders through the Administrative
Agent have previously indicated that such extension will not be agreed
to) and bearing interest prior to maturity at an arms-length rate or
rates;
(E) at least 10 days prior to the date of any such loan, advance
or investment the Borrower shall have provided to the Administrative
Agent notice of such proposed loan, advance or investment, together
with copies of all documents (or proposed forms of documents) incident
thereto; and such documents shall be satisfactory in form and
substance to the Managing Agent;
(F) the aggregate amount of all such loans, advances and
investments made after the Closing Date shall not at any time exceed
$40,000,000;
(G) contemporaneously with or prior to the making of any such
loan, advance or other investment the Borrower shall have caused to be
delivered to the Administrative Agent a supplement or amendment to the
Pledge Agreement, pursuant to which the Borrower or any applicable
Subsidiary Guarantor has pledged to the Collateral Agent its interests
in the Property Joint Venture (including any promissory notes
evidincing any loans or advances to such Property Joint Venture); and
(H) contemporaneously with or prior to the making of any such
loan or advance the proceeds of which are to be used to acquire,
develop or operate any property or facility, the Borrower shall have
caused to be delivered to the Administrative Agent, (1) a guaranty
agreement, substantially in the form of the Subsidiary Guaranty, of
such Property Joint Venture, guaranteeing the Obligations, subject to
the effect of any limitations on the enforceability of such guaranty
arising under any fraudulent transfer laws, together with such
evidence as the Administrative Agent may reasonably
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request to establish the financial condition and solvency of such
person, (2) a subordination agreement pursuant to which all other
equity investors in such Property Joint Venture subordinate all
obligations owed by such Property Joint Venture to such guaranty and
any obligations in respect of any such loans or advances to such
Property Joint Venture, and (3) a mortgage and security agreement,
satisfactory in form and substance to the Administrative Agent,
pursuant to which such person has granted a first priority Lien on and
security interest in all of the assets and properties to be so
financed by such loans or advances, subject to no encumbrances which
are not acceptable to the Administrative Agent, accompanied by
boundary surveys, mortgagee title policies, environmental assessments
and other supporting documentation required by the Managing Agent,
acting in good faith and with due regard to the supporting document
requirements provided in section 7.10(a);
(k) loans, advances and investments not otherwise permitted pursuant
to the preceding clauses, made by the Borrower or any Subsidiary Guarantor
in cash or Cash Equivalents after the Closing Date and taking into account
any repayment of any such loans or advances or the return or other
realization in cash or Cash Equivalents of the amount of such investments,
in persons other than Property Joint Ventures, in compliance with the
following requirements:
(A) at the time of making any such loan, advance or investment
and after giving effect thereto, no Default or Event of Default shall
have occurred and be continuing;
(B) the person (including a joint venture) to which such loan or
advance is made, or in which such investment is made, shall own or be
committed to acquire one or more assisted living properties located in
the United States;
(C) the Borrower or a Subsidiary Guarantor shall have been
retained (or shall have a commitment to be retained upon completion of
any proposed development) to manage such property or properties,
subject to any termination of any existing management contracts
pertaining thereto;
(D) at least 10 days prior to the date of any such loan, advance
or investment involving $3,000,000 or more (including any commitments
in respect of future loans, advances or investments), the Borrower
shall have delivered to the Administrative Agent an officer's
certificate executed on behalf of the Borrower by an Authorized
Officer of the Borrower, which certificate shall (1) contain the date
such loan, advance or investment is scheduled to be consummated, (2)
specify the known or estimated amount thereof, (3) contain a
description, to the extent then known, of the property and/or assets
owned or proposed to be acquired by such person, (4) demonstrate that
at the time of making any such loan, advance or investment the
covenants contained in sections 8.10, 8.11, 8.12 and 8.13 shall be
complied with on a PRO FORMA basis as if the loan, advance or
investment so made had been made by the Borrower, and the Indebtedness
assumed and/or incurred to acquire and/or finance same has been
outstanding, for the 12 month period immediately preceding such loan,
advance or investment (without giving effect to any credit for
unobtained or unrealized gains in connection therewith), (5) confirms
that the property acquired or to be acquired by such person with the
proceeds of such loan, advance or investment is to be (or is to be
following completion of development thereof) managed by the Borrower
or a Subsidiary Guarantor, and (6) attach thereto a true and correct
copy of the then proposed loan agreement, purchase agreement or
similar agreement, partnership agreement and/or management contract
entered into in connection with such loan, advance or investment; and
(E) the aggregate amount of all such loans, advances and
investments made after the Closing Date, when taken together with the
aggregate principal amount of all loans, advances and investments at
the time outstanding made pursuant to clause (i) of this section 8.5
and made by the Borrower and the Subsidiary Guarantors to all
Subsidiaries which are not Subsidiary Guarantors, shall not exceed
$20,000,000.
1.5. CERTAIN LEASES. Section 8.6 of the Credit Agreement is amended to
read in its entirety as follows:
8.6. CERTAIN LEASES. The Borrower will not permit the aggregate
rental payments (exclusive of any supplemental or additional rental
payments in respect of taxes, maintenance or insurance) under all
noncancelable leases (other than Capital Leases) of real and/or personal
property having an original term (including any extensions or renewals at
the option of the lessee or lessor) of at least one year, to exceed
$4,000,000 on a combined basis for the Borrower, its Subsidiaries and the
Property Joint Ventures, in any period of 12 consecutive months.
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1.6. LEVERAGE RATIO. (a) Section 8.12(a) of the Credit Agreement is
amended by changing the dollar amount $1,000,000, which appears in clause (A) of
the definition of Cash Flow from Operations which is contained therein, to
$1,500,000, and by adding after clause (B) of such definition the following: ",
or (C) any such properties which are leased if there is any restriction on the
payment to the Borrower of the cash flow or dividends in respect thereof".
(b) A sentence is added at the end of section 8.12(b) of the Credit
Agreement so that, as so amended, section 8.12(b) of the Credit Agreement reads
in its entirety as follows:
(b) The Borrower will not, at any time following the termination of
the Parent Guaranty in accordance with its terms, permit the ratio of (i)
Total Indebtedness to (ii) EBITDA for any Test Period, to exceed 3.50 to
1.00. In addition, the Borrower will not, at any time following the
termination of the Parent Guaranty in accordance with its terms, permit the
ratio of (i) Total Indebtedness to (ii) EBITDA for any Test Period, to
exceed 3.50 to 1.00, EXCEPT that, solely for purposes of this sentence,
Total Indebtedness and EBITDA shall be computed on a combined basis for the
Borrower, its Subsidiaries and the Property Joint Ventures, notwithstanding
anything to the contrary contained in the definitions of those terms.
1.7. SUBSTITUTION OF FIXED CHARGE COVERAGE RATIO FOR INTEREST COVERAGE
RATIO. Section 8.13 of the Credit Agreement is amended to read in its entirety
as follows:
8.13. FIXED CHARGE COVERAGE RATIO. The Borrower will not permit the
Fixed Charge Coverage Ratio for any Test Period to be less than 2.00 to
1.00. In addition, the Borrower will not permit the Fixed Charge Coverage
Ratio (determined on a combined basis for the Borrower, its Subsidiaries
and the Property Joint Ventures, notwithstanding anything to the contrary
contained in the definition of the term Fixed Charge Coverage Ratio or any
other defined terms used in such definition) for any Test Period to be less
than 2.00 to 1.00.
1.8. LIMITATION ON CERTAIN RESTRICTIONS ON SUBSIDIARIES. Section 8.15 of
the Credit Agreement is amended by deleting the word "and" which appears at the
end of clause (ix) thereof and inserting at the end of clause (x) thereof before
the period at the end thereof the following: ", (xi) any restrictions contained
in the documents relating to the American ElderServe Assumed Debt at the time
the American ElderServe Acquisition was completed, which restrictions may remain
in place so long as the American ElderServe Assumed Debt is permitted to remain
outstanding under clause (c)(ii) of section 8.4, and (xii) any restrictions
contained in the documents relating to the American ElderServe Assumed Finance
Lease Obligations at the time the American ElderServe Acquisition was completed,
and any similar restrictions contained in any subsequent documents related
thereto which are not more restrictive than the restrictions in existence on
such date, PROVIDED that the American ElderServe Assumed Finance Lease
Obligations are within the limits prescribed in section 8.4(c)(iii)".
SECTION 2. AMENDMENTS TO OTHER CREDIT DOCUMENTS.
2.1. PLEDGE AGREEMENT. On the Effective Date (as hereinafter defined), the
Credit Parties named therein (including American ElderServe Corporation and its
Subsidiaries) and the Collateral Agent shall enter into Amendment No. 1 to
Pledge Agreement, substantially in the form attached hereto as Exhibit A
("AMENDMENT NO. 1 TO PLEDGE AGREEMENT"), and the additional stock, partnership
interests and/or membership interests to be pledged thereunder shall be pledged
to the Collateral Agent as provided therein.
2.2. SECURITY AGREEMENT. On the Effective Date, the Credit Parties named
therein (including American ElderServe Corporation and its Subsidiaries) and the
Collateral Agent shall enter into Amendment No. 1 to Security Agreement,
substantially in the form attached hereto as Exhibit B ("AMENDMENT NO. 1 TO
SECURITY AGREEMENT").
2.3. PARENT GUARANTY. On the Effective Date, the Credit Parties named
therein and the Administrative Agent shall enter into Amendment No. 1 to Parent
Guaranty, substantially in the form attached hereto as Exhibit C ("AMENDMENT NO.
1 TO PARENT GUARANTY").
2.4. SUBSIDIARY GUARANTY. On the Effective Date, the Credit Parties named
therein (including American ElderServe Corporation and its Subsidiaries) and the
Administrative Agent shall enter into Amendment No. 1 to Subsidiary Guaranty,
substantially in the form attached hereto as Exhibit D ("AMENDMENT NO. 1 TO
SUBSIDIARY GUARANTY").
2.5. CONSENT TO AMENDMENTS. The Lenders party hereto and the Agents party
hereto hereby consent to the execution and delivery of Amendment No. 1 to Pledge
Agreement,
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Amendment No. 1 to Security Agreement, Amendment No. 1 to Parent Guaranty, and
Amendment No. 1 to Subsidiary Guaranty, and to the amendments effected thereby.
2.6. FILINGS, RECORDINGS, ETC. Promptly following the Effective Date, the
Borrower will at its expense cause any and all UCC financing statements, notices
of secured transactions and other filings and recordings considered by the
Collateral Agent to be necessary or desirable in connection with the grant of
the security interests pursuant to Amendment No. 1 to Pledge Agreement and
Amendment No. 1 to Security Agreement to be executed, delivered, made, filed
and/or otherwise effected.
SECTION 3. REPRESENTATIONS AND WARRANTIES.
The Borrower represents and warrants as follows:
3.1. CURRENT FINANCIAL STATEMENTS. The Borrower has delivered to the
Administrative Agent and each Lender prior to the execution of this Amendment
true, correct and complete copies of the unaudited consolidated financial
statements of the Borrower and its consolidated subsidiaries for the fiscal
quarter ended September 30, 1996. Such unaudited consolidated financial
statements have been prepared in accordance with generally accepted accounting
principles, consistently applied (except as noted therein), and fairly present
the consolidated financial condition of the Borrower and its consolidated
subsidiaries at such date and the consolidated results of their operations and
cash flows for the period then ended, subject to normal audit adjustments which
are not expected to be material.
3.2. AMERICAN ELDERSERVE ACQUISITION AND JOINT VENTURE DOCUMENTS. The
Borrower has delivered to the Managing Agent and the Documentation Agent prior
to the execution of this Amendment true, correct and complete copies of the
following documents (the "ACQUISITION AND JOINT VENTURE DOCUMENTS") relating to
the acquisition by the Borrower of American ElderServe Corporation ("AMERICAN
ELDERSERVE") and its Subsidiaries and the establishment by the Borrower of a
development joint venture with certain of the principals of American ElderServe:
(a) Agreement and Plan of Merger, dated as of March 3, 1997, among
the Borrower, Atria Communities Southeast, Inc., American ElderServe
Corporation, Andy L. Schoepf, Elizabeth A. Schoepf and Evely C. Schoepf;
(b) Agreement for Purchase and Sale of Partnership Interest on
Plantation South at Auburn Partnership, for consideration of approximately
$286,009; Agreements for Purchase and Sale of Partnership Interest of
Plantation South on Cypresswood Limited Partnership, for aggregate
consideration of approximately $621,910; and Agreement for the Purchase and
Sale of Real Property (50% interest in Plantation South at Hartwell) for
consideration of approximately $250,000;
(c) consent letter of Health Care REIT, Inc., relating to
modification of the American ElderServe Assumed Finance Lease Obligations,
substantially in the form of the draft thereof dated March 26, 1997;
(d) Operating Agreement, to be entered into contemporaneously with
the completion of the American ElderServe Acquisition, between the Borrower
and Schoepfco, LLC, relating to the formation of Elder Healthcare
Developers, LLC, a Georgia limited liability company; and
(e) Development Agreement, to be entered into contemporaneously with
the completion of the American ElderServe Acquisition, between Elder
Healthcare Developers, LLC and the Borrower, relating to the development of
at least 15 Assisted Living Facilities in the Southeast Region (as such
terms are defined therein).
There are no "side letters" or similar documents which purport to modify or
waive any of the terms or conditions of any of the Acquisition and Development
Documents.
3.3. PRO FORMA BALANCE SHEET. The Borrower has delivered to the Managing
Agent, the Documentation Agent and each Lender prior to the execution of this
Amendment a PRO FORMA consolidated balance sheet of the Borrower and its
consolidated subsidiaries as of December 31, 1996. Such PRO FORMA consolidated
balance sheet has been prepared in accordance with generally accepted accounting
principles, consistently applied (except as noted therein), and fairly presents
the PRO FORMA consolidated financial condition of the Borrower and its
consolidated subsidiaries at such date as if the consummation of the acquisition
by the Borrower of American ElderServe Corporation in accordance with the
Acquisition and Joint Venture Documents had been completed on such date.
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3.4. NEW PARENT CREDIT AGREEMENT. The Borrower has delivered to the
Managing Agent and the Documentation Agent prior to the execution of this
Amendment true, correct and complete copies of (i) a Credit Agreement, dated as
of March 17, 1997, among the Parent, as Borrower, the banks referred to therein,
the Swingline Bank referred to therein, the LC Issuing Banks referred to
therein, Morgan Guaranty Trust Company of New York, as Documentation Agent and
Collateral Agent, and NationsBank, N.A., as Administrative Agent, providing for
credit facilities of up to $1,600,000,000 (the "NEW PARENT CREDIT AGREEMENT"),
and (ii) a proposed amendment thereof to be entered into on or about March 31,
1997 to inter alia increase the credit facilities thereunder to $1,750,000,000.
3.5. AUTHORIZATION, VALIDITY AND BINDING EFFECT. This Amendment has been
duly authorized by all necessary corporate action on the part of the Borrower,
has been duly executed and delivered by a duly authorized officer or officers of
the Borrower, and constitutes the valid and binding agreement of the Borrower,
enforceable against the Borrower in accordance with its terms.
3.6. REPRESENTATIONS AND WARRANTIES TRUE AND CORRECT. The representations
and warranties of the Borrower contained in the Credit Agreement, as amended
hereby, are true and correct on and as of the date hereof as though made on and
as of the date hereof, except to the extent that such representations and
warranties expressly relate to a specified date, in which case such
representations and warranties are hereby reaffirmed as true and correct when
made.
3.7. NO EVENT OF DEFAULT, ETC. No condition or event has occurred or
exists which constitutes or which, after notice or lapse of time or both, would
constitute an Event of Default.
3.8. COMPLIANCE. The Borrower is in full compliance with all covenants and
agreements contained in the Credit Agreement, as amended hereby, and the other
Credit Documents to which it is a party.
SECTION 4. RATIFICATIONS.
The terms and provisions set forth in this Amendment shall modify and
supersede all inconsistent terms and provisions set forth in the Credit
Agreement, and except as expressly modified and superseded by this Amendment,
the terms and provisions of the Credit Agreement are ratified and confirmed and
shall continue in full force and effect.
SECTION 5. AMENDMENT FEE.
Whether or not this Amendment becomes effective as provided in section 6
hereof, the Borrower will pay to the Administrative Agent in immediately
available funds, for PRO RATA distribution among the Lenders in accordance with
their respective Commitments, a nonrefundable amendment fee of $100,000 (i.e. 5
basis points on the Total Commitment) within two Business Days after the
Administrative Agent notifies the Borrower that the conditions specified in
clauses (a), (b) and (c) of section 6 hereof have been satisfied.
SECTION 6. BINDING EFFECT.
This Amendment shall become effective if and when, on a date (the
"EFFECTIVE DATE") or prior to April 30, 1997, the following conditions shall
have been satisfied:
(a) this Amendment shall have been executed by the Borrower, the
Administrative Agent, the Managing Agent and the Documentation Agent, and
counterparts hereof as so executed shall have been delivered to the
Administrative Agent;
(b) the Acknowledgment and Consent appended hereto shall have been
executed by the Credit Parties named therein, and counterparts thereof as
so executed shall have been delivered to the Administrative Agent;
(c) the Administrative Agent shall have been notified by Lenders
constituting the Required Lenders that such Lenders have executed this
Amendment (which notification may be by facsimile or other written
confirmation of such execution);
(d) the Borrower shall have contemporaneously completed the
acquisition of American ElderServe and its Subsidiaries and established the
development joint venture between the Borrower and certain of the
principals of American ElderServe, in accordance with the Acquisition and
Joint Venture Documents; there shall not have been any material amendment
to or other modification of any of the
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Acquisition and Joint Venture Documents from the versions thereof delivered
to the Agents pursuant to section 3.2, or any waiver of any material term
or condition thereof; and such Agents shall have received copies of all
such documents incident to the such transactions and the consummation
thereof, and all such documents shall be satisfactory in form and substance
to such Agents;
(e) Amendment No. 1 to Pledge Agreement, Amendment No. 1 to Security
Agreement, Amendment No. 1 to Parent Guaranty and Amendment No. 1 to
Subsidiary Guaranty shall each have been duly executed and delivered and
shall each be in full force and effect;
(f) the New Parent Credit Agreement shall have become effective in
accordance with its terms; and
(g) the Borrower shall have timely paid to the Administrative Agent
the amendment fee referred to in section 5 hereof;
and thereafter this Amendment shall be binding upon and inure to the benefit of
the Borrower, the Administrative Agent, the Managing Agent, the Documentation
Agent and each Lender and their respective permitted successors and assigns. The
Administrative Agent may assume that an authorization by a Lender to release its
signed counterpart of this Amendment is confirmation by such Lender that the
conditions specified above have been satisfied insofar as it is concerned,
subject to any disbursement to such Lender of its portion of any funds to which
it is entitled as referred to in the above conditions. After this Amendment
becomes effective, the Managing Agent will promptly furnish a copy of this
Amendment to each Lender and the Borrower and confirm the specific Effective
Date hereof.
SECTION 7. MISCELLANEOUS.
7.1. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties made in this Amendment shall survive the execution and delivery of
this Amendment, and no investigation by any Agent or any Lender or any
subsequent Loan or other Credit Event shall affect the representations and
warranties or the right of any Agent or any Lender to rely upon them.
7.2. REFERENCE TO CREDIT AGREEMENT. The Credit Agreement and any and all
other agreements, instruments or documentation now or hereafter executed and
delivered pursuant to the terms of the Credit Agreement as amended hereby, are
hereby amended so that any reference therein to the Credit Agreement shall mean
a reference to the Credit Agreement as amended hereby.
7.3. EXPENSES. As provided in the Credit Agreement, but without limiting
any terms or provisions thereof, the Borrower agrees to pay on demand all costs
and expenses incurred by the Administrative Agent, the Managing Agent or the
Documentation Agent in connection with the preparation, negotiation, and
execution of this Amendment, including without limitation the costs and fees of
the Documentation Agent's and the Administrative Agent's special legal counsel,
regardless of whether this Amendment becomes effective in accordance with the
terms hereof, and all costs and expenses incurred by the Administrative Agent,
the Managing Agent, the Documentation Agent or any Lender in connection with the
enforcement or preservation of any rights under the Credit Agreement, as amended
hereby.
7.4. SEVERABILITY. Any term or provision of this Amendment held by a court
of competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Amendment and the effect thereof shall be
confined to the term or provision so held to be invalid or unenforceable.
7.5. APPLICABLE LAW. This Amendment shall be governed by and construed in
accordance with the laws of the Commonwealth of Kentucky.
7.6. HEADINGS. The headings, captions and arrangements used in this
Amendment are for convenience only and shall not affect the interpretation of
this Amendment.
7.7. ENTIRE AGREEMENT. This Amendment is specifically limited to the
matters expressly set forth herein. This Amendment and all other instruments,
agreements and documentation executed and delivered in connection with this
Amendment embody the final, entire agreement among the parties hereto with
respect to the subject matter hereof and supersede any and all prior
commitments, agreements, representations and understandings, whether written or
oral, relating to the matters covered by this Amendment, and may not be
contradicted or varied by evidence of prior, contemporaneous or subsequent oral
agreements or discussions of the parties hereto. There are no oral agreements
among the parties hereto relating to the subject matter hereof or any other
subject matter relating to the Credit
8
Agreement.
7.8. COUNTERPARTS. This Amendment may be executed by the parties hereto
separately in one or more counterparts, each of which when so executed shall be
deemed to be an original, but all of which when taken together shall constitute
one and the same agreement.
[The balance of this page is intentionally blank.]
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IN WITNESS WHEREOF, this Amendment has been duly executed and delivered as
of the date first above written.
ATRIA COMMUNITIES, INC. THE BANK OF NEW YORK
BY:_______________________________ BY:_________________________________
CHIEF FINANCIAL OFFICER AND VICE PRESIDENT
VICE PRESIDENT OF DEVELOPMENT
PNC BANK, NATIONAL ASSOCIATION, THE CHASE MANHATTAN BANK
INDIVIDUALLY AND AS
ADMINISTRATIVE AGENT
BY:_______________________________ BY:_________________________________
VICE PRESIDENT VICE PRESIDENT
NATIONAL CITY BANK OF KENTUCKY, MORGAN GUARANTY TRUST COMPANY OF
INDIVIDUALLY AND AS NEW YORK
DOCUMENTATION AGENT
BY:_______________________________ BY:_________________________________
VICE PRESIDENT VICE PRESIDENT
PNC BANK, KENTUCKY, INC., AMSOUTH BANK OF ALABAMA
INDIVIDUALLY AND AS
MANAGING AGENT
BY:_______________________________ BY:_________________________________
VICE PRESIDENT VICE PRESIDENT
THE TORONTO-DOMINION BANK U.S BANK OF WASHINGTON,
NATIONAL ASSOCIATION
BY:_______________________________ BY:_________________________________
MGR. CREDIT ADMINISTRATION VICE PRESIDENT
BANK ONE, KENTUCKY, NA FIRST AMERICAN NATIONAL BANK
BY:_______________________________ BY:_________________________________
SENIOR VICE PRESIDENT SENIOR VICE PRESIDENT
NATIONSBANK, N.A. KEYBANK NATIONAL ASSOCIATION
BY:_______________________________ BY:_________________________________
VICE PRESIDENT ASSISTANT VICE PRESIDENT
FLEET NATIONAL BANK
BY:_______________________________
VICE PRESIDENT
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ACKNOWLEDGMENT AND CONSENT
For the avoidance of doubt, and without limitation of the intent and effect
of sections 5 and 6 of the Parent Guaranty and sections 6 and 10 of the
Subsidiary Guaranty (as each of such terms is defined in the Credit Agreement
referred to in the Amendment No. 2 to Credit Agreement (the "AMENDMENT"), to
which this Acknowledgment and Consent is appended), each of the undersigned
hereby unconditionally and irrevocably (i) acknowledges receipt of a copy of the
Credit Agreement and the Amendment, and (ii) consents to all of the terms and
provisions of the Credit Agreement as amended by the Amendment.
Capitalized terms which are used herein without definition shall have the
respective meanings ascribed thereto in the Credit Agreement referred to herein.
This Acknowledgment and Consent is for the benefit of the Lenders, the
Administrative Agent, the Collateral Agent, the Managing Agent, the
Documentation Agent, any other person who is a third party beneficiary of the
Parent Guaranty or the Subsidiary Guaranty, and their respective successors and
assigns. No term or provision of this Acknowledgment and Consent may be modified
or otherwise changed without the prior written consent of the Administrative
Agent, given as provided in the Credit Agreement. This Acknowledgment and
Consent shall be binding upon the successors and assigns of each of the
undersigned. This Acknowledgment and Consent may be executed by any of the
undersigned in separate counterparts, each of which shall be an original and all
of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, each of the undersigned has duly executed and delivered
this Acknowledgment and Consent as of the date of the Amendment referred to
herein.
SIGNATURES OF PARTIES TO THE PARENT GUARANTY
VENCOR, INC.
FIRST HEALTHCARE CORPORATION
NORTHWEST HEALTH CARE, INC.
MEDISAVE PHARMACIES, INC.
NATIONWIDE CARE, INC.
THERATX, INCORPORATED
(SUCCESSOR BY MERGER WITH
PEACH ACQUISITION CORP.)
VENCOR HOSPITALS ILLINOIS, INC.
VENCOR HOSPITALS SOUTH, INC.
VENCOR HOSPITALS EAST, INC.
VENCOR HOSPITALS CALIFORNIA, INC.
VENCOR HOSPITALS TEXAS, LTD.
BY: VCI SPECIALTY SERVICES, INC.,
ITS GENERAL PARTNER
VENTECH SYSTEMS, INC.
PASATIEMPO DEVELOPMENT CORP.
VCI SPECIALTY SERVICES, INC.
VENCOR PROPERTIES, INC.
BY:______________________________________
VICE PRESIDENT
SIGNATURES OF PARTIES TO THE SUBSIDIARY GUARANTY
LANTANA PARTNERS, LTD.
BY: HILLHAVEN PROPERTIES, LTD.,
A GENERAL PARTNER
PHILLIPPE ENTERPRISES, INC.
HILLHAVEN PROPERTIES, LTD.
CASTLE GARDENS RETIREMENT CENTER
BY: HILLHAVEN PROPERTIES, LTD.,
A GENERAL PARTNER
HILLCREST RETIREMENT CENTER, LTD.
BY: FAIRVIEW LIVING CENTERS, INC.,
A GENERAL PARTNER
SANDY RETIREMENT CENTER LIMITED PARTNERSHIP
BY: HILLHAVEN PROPERTIES, LTD.,
A GENERAL PARTNER
TOPEKA RETIREMENT CENTER, LTD.
BY: HILLHAVEN PROPERTIES, LTD.,
A GENERAL PARTNER
EVERGREEN WOODS, LTD.
BY: ATRIA COMMUNITIES, INC.,
A GENERAL PARTNER
FAIRVIEW LIVING CENTERS, INC.
TWENTY-NINE HUNDRED ASSOCIATES, LTD.
BY: TWENTY-NINE HUNDRED CORPORATION,
A GENERAL PARTNER
TWENTY-NINE HUNDRED CORPORATION
WOODHAVEN PARTNERS, LTD.
BY: HILLHAVEN PROPERTIES, LTD.,
A GENERAL PARTNER
TUCSON RETIREMENT CENTER LIMITED
PARTNERSHIP
BY: HILLHAVEN PROPERTIES, LTD.,
A GENERAL PARTNER
BY: _________________________________
VICE PRESIDENT
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