EXHIBIT 10.42
FIRST AMENDMENT TO GUARANTEE REIMBURSEMENT AGREEMENT
This First Amendment to Guarantee Reimbursement Agreement ("Amendment")
dated as of May 30, 1991, is entered into by and between National Medical
Enterprises, Inc., a Nevada corporation ("NME") and The Hillhaven Corporation, a
Nevada corporation ("New Hillhaven").
RECITALS
A. New Hillhaven and NME entered into that certain Guarantee
Reimbursement Agreement, dated as of January 31, 1990 (as the same may be
amended, restated, modified, supplemented, renewed or replaced from time to
time, the "Reimbursement Agreement"). Unless otherwise defined herein, the terms
defined in the Reimbursement Agreement are used herein as therein defined. The
Reimbursement Agreement provides, among other things, for the reimbursement by
New Hillhaven of all Obligations paid by NME after the Distribution Date.
B. New Hillhaven and certain of its Subsidiaries have entered into that
certain Master Loan Agreement, dated as of the date hereof (the "Master Loan
Agreement"), with THC Facilities Corp. (the "Lender") pursuant to which New
Hillhaven and such Subsidiaries (collectively, the "Borrowers") may borrow from
time to time amounts up to a total principal sum of $200,000,000 (the "THC
facilities Loans").
C. The THC Facilities Loans may be used by the Borrowers as follows: (l)
approximately $117,000,000 for the refinance of certain obligations described in
Appendix A to the Reimbursement Agreement, consisting of (a) the spinoff MP
Funding Loans, and (b) the Cardinal Put Option MP Funding Loans (collectively
referred to herein as the "MP Funding Loans" to the extent not refinanced with
THC Facilities Loans and "Refinance Loans" to the extent refinanced with THC
Facilities Loans), and (ii) approximately $83,000,000 to finance Parcels and
Projects (each as defined in the Master Loan Agreement) (collectively, the "New
THC Loans").
D. The Lender has entered into a Credit Agreement with Swiss Bank
Corporation and certain other banks (the "Banks"). It is necessary for the
Lender to enter into such Credit Agreement in order for the Lender to make the
THC Facilities Loans to the Borrowers. As an inducement to Swiss Bank
Corporation and the Banks to enter into the Credit Agreement with the Lender,
NME has agreed to guaranty the Lender's obligations under the Credit Agreement
up to the principal sum of $200,000,000, pursuant to that certain Guaranty,
dated as of the date hereof, in favor of Swiss Bank Corporation and the Banks.
E. New Hillhaven and NME desire to amend the Reimbursement Agreement (i)
to add the THC Facilities Loans as Obligations under the Reimbursement
Agreement, (ii) to provide for a special guarantee fee applicable to the New THC
Loans, and (iii) to modify the guarantee fee charged for the Refinance Loans
during the Interim Period (defined herein).
NOW THEREFORE, in consideration of the foregoing Recitals and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound, hereby agree to
amend, modify and supplement the Reimbursement Agreement as follows:
AGREEMENT
1. THC Facilities Loan Obligations.
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The obligations of the Borrowers pursuant to the Master Loan Agreement,
including, without limitation, the THC Facilities Loans (collectively, the "THC
Facilities Loan Obligations") hereby are added as, and shall be deemed to be,
"Obligations" under (and as defined in) in the Reimbursement Agreement, and all
terms, covenants, and conditions of the Reimbursement Agreement, except as
expressly provided herein, shall apply to the THC Facilities Loan Obligations.
2. Guarantee Fee.
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(a) New THC Loans. The guarantee fee provisions of Section 2 of the
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Reimbursement Agreement shall not apply to the New THC Loans. Instead, New
Hillhaven shall pay to NME a guarantee fee equal to 1% per annum of the daily
outstanding balance of said New THC Loans. Such guarantee fee shall be paid in
quarterly installments on the last business day of each fiscal quarter, with the
first installment due August 30, 1991. The principal amount of the New THC Loans
shall not be included as part of the outstanding Obligations under Section
2(c)(i) of the Reimbursement Agreement for purposes of calculating the guarantee
fee referred to in Section 2 of the Reimbursement Agreement.
(b) Refinance Loans. For the period commencing on the date of the
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Master Loan Agreement and continuing through May 31, 1995 (the "Interim
Period"), New Hillhaven shall pay NME a guarantee fee equal to 1% per annum on
the daily outstanding balance of the Refinance Loans rather than the guarantee
fee otherwise applicable to such Refinance Loans pursuant to the provisions of
Section 2 of the Reimbursement Agreement. In the event that any or all of the
Refinance Loans are refinanced with THC Facilities Loans after the date of the
Master Loan Agreement, the foregoing 1% guarantee fee shall be effective for
each Refinance Loan as of the date of such refinancing. Such guarantee fee shall
be paid in quarterly installments on the last business day of each fiscal
quarter, with the first installment due August 30, 1991. Commencing June l,
1995, the guarantee fee charged for the Refinance Loans shall revert back to the
guarantee fee applicable to such Refinance Loans and all other Obligations
(other than the New THC Loans) pursuant to the provisions of Section 2 of the
Reimbursement Agreement. During the Interim Period, the principal amount of the
Refinance Loans shall not be included as part of the outstanding Obligations
under Section 2(c)(l) of the Reimbursement Agreement for purposes of calculating
the guarantee fee referred to In Section 2 of the Reimbursement Agreement. From
and after May 31, 1995, the principal amount of the Refinance Loans shall be
Included as part of the outstanding Obligations under Section 2(c)(i) of the
Reimbursement Agreement for purposes of calculating the guarantee fee referred
to in Section 2 of the Reimbursement Agreement.
(c) MP Funding Loans. To the extent not refinanced by Refinance
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Loans, the Obligations consisting of MP Funding Loans shall continue to be
Obligations and shall be included as part of the outstanding Obligations under
Section 2(c)(i) of the Reimbursement Agreement for purposes of calculating the
guarantee fee referred to in Section 2 of the Reimbursement Agreement. The
guarantee fee payable with respect thereto shall be governed by the terms of the
Reimbursement Agreement.
3. Effect on Reimbursement Agreement.
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Except as expressly amended by this Amendment, all of the terms and
conditions of the Reimbursement Agreement shall remain in full force and effect.
4. Captions.
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The captions and headings used herein are for the convenience of reference
and shall not be construed in any manner to limit or modify any of the terms
hereof.
5. Governing Law.
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This Amendment shall be governed by and construed in accordance with the
laws of the State of California.
6. Counterparts.
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This Amendment may be executed in counterparts, each of which shall be an
original, but all of which together shall constitute but one and the same
instrument.
IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to
be duly executed on its behalf as of the date first set forth above.
NATIONAL MEDICAL ENTERPRISES, INC.
By:[SIGNATURE NOT LEGIBLE]
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Title: Sr. V.P.
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THE HILLHAVEN CORPORATION
By:[SIGNATURE NOT LEGIBLE]
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Title:[SIGNATURE NOT LEGIBLE]
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