EXHIBIT 10.59
AMENDMENT NO. 5 TO AMENDED AND
RESTATED PARTICIPATION AGREEMENT
This AMENDMENT NO. 5 TO AMENDED AND RESTATED PARTICIPATION AGREEMENT
(this "Amendment"), is entered into as of December 20, 2002, among BEVERLY
ENTERPRISES, INC., a Delaware corporation ("BEI"), as the Representative,
Construction Agent, Parent Guarantor and a Lessee (in its capacity as
Representative, the "Representative"); in its capacity as Construction Agent,
the "Construction Agent"; in its capacity as Parent Guarantor, the "Parent
Guarantor" and together with the Guarantors listed on the signature page to the
Guaranty (each a "Guarantor") and the Structural Guarantors, collectively, the
"Guarantors"; and, in its capacity as Lessee, a "Lessee"); certain subsidiaries
of BEI that are signatories hereto, as Lessees; BANK OF MONTREAL GLOBAL CAPITAL
SOLUTIONS, INC. (formerly known as BMO LEASING (U.S.), INC.), a Delaware
corporation, as a Lessor (together with any permitted successors and assigns
thereto, each a "Lessor" and collectively the "Lessors") and as Agent Lessor for
the Lessors (in such capacity, the "Agent Lessor"); the various financial
institutions as are or may from time to time become lenders (the "Lenders")
under the Loan Agreement; BANK OF MONTREAL, a Canadian banking organization
("BMO"), as Administrative Agent (in such capacity, the "Administrative Agent")
for the Lenders, as Arranger and Syndication Agent (all of the parties of this
preamble, collectively, the "Parties").
RECITALS:
The Parties entered into an Amended and Restated Participation
Agreement dated as of August 28, 1998 (the "Original Participation Agreement"
and as amended by the Prior Amendments and this Amendment, the "Participation
Agreement " ), amending and restating the Participation Agreement dated as of
March 21, 1997.
The Parties entered into a Master Amendment No. 1 to Amended and
Restated Participation Agreement and Amended and Restated Master Lease and
Open-End Mortgage, dated as of September 30, 1999 (the "First Amendment"), which
amended the Original Participation Agreement.
The Parties entered into an Amendment No. 2 to Amended and Restated
Participation Agreement, dated as of November 1, 1999 (the "Second Amendment"),
which amended the Original Participation Agreement as amended by the First
Amendment.
The Parties entered into a Master Amendment No. 3 to Amended and
Restated Participation Agreement, dated as of April 25, 2001 (the "Third
Amendment"), which amended the Original Participation Agreement as amended by
the First Amendment and the Second Amendment.
The Parties entered into an Amendment No. 4 to Amended and Restated
Participation Agreement, dated as of December 31, 2001 (the "Fourth Amendment"
and
together with the First Amendment, Second Amendment and Third Amendments,
collectively the "Prior Amendments"), which amended the Original Participation
Agreement as amended by the First Amendment, the Second Amendment and the Third
Amendment.
The Parties wish to further amend certain provisions of the Original
Participation Agreement, as amended by the Prior Amendments, as set forth
herein.
AGREEMENT:
NOW, THEREFORE, in consideration of the premises made hereunder, and
for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties hereto, intending to be legally bound, hereby
agree as follows:
1. Defined Terms; References. Unless otherwise expressly defined
herein, all capitalized terms used herein and defined in Appendix A to the
Participation Agreement shall be used herein as so defined. Unless otherwise
expressly stated herein, all Section and Article references herein shall refer
to Sections and Articles of the Participation Agreement.
2. Defined Terms. (a) The definition of "Consolidated EBITDA" contained
in Appendix A to the Participation Agreement is hereby amended by deleting such
definition in its entirety and replacing the same with the following:
"Consolidated EBITDA" means, for any period, Consolidated Net Income of
the Representative and its Consolidated Subsidiaries for such period
plus, without duplication, any amounts deducted in determining such
Consolidated Net Income in respect of (a) Consolidated Interest Charges
for such period, (b) Consolidated Tax Charges for such period, (c)
expenses for such period of the types classified as "depreciation and
amortization" on the consolidated statement of operations included in
the Base Financials, (d) non-cash charges for such period under the
FASB Statement No. 142, Goodwill and Other Intangible Assets, (e)
non-cash expenses for such period arising from the grant of stock
options to officers, directors and employees of the Representative and
its Consolidated Subsidiaries and (f) non-cash charges in the fiscal
quarter ending December 31, 2002 arising from the Representative's
change in its methodology for establishing patient liability reserves
from a discounted to a non-discounted basis.
3. Negative Covenants of the Representative. Section 10.2(a) of the
Participation Agreement is hereby amended by deleting such section in its
entirety and replacing the same with the following:
(a) Minimum Consolidated Net Worth. Permit Consolidated Net
Worth of the Representative to be less than:
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(i) on any date prior to December 31, 2002, an amount equal to 85% of
Consolidated Net Worth at December 31, 2001 plus (a) 50% of the
aggregate positive Consolidated Net Income (excluding any consolidated
net loss) of the Representative and its Consolidated Subsidiaries for
each fiscal quarter ending after December 31, 2001 plus (b) 50% of the
aggregate net proceeds, including the fair market value of property
other than cash (as determined in good faith by the Representative's
board of directors), received by the Representative from the issuance
and sale after December 31, 2001 of any capital stock of the
Representative (other than the proceeds of any issuance and sale of any
capital stock (x) to a Subsidiary or (y) which is required to be
redeemed, or is redeemable at the option of the holder, if certain
events or conditions occur or exist or otherwise) or in connection with
the conversion or exchange of any Indebtedness of the Representative
into capital stock of the Representative after December 31, 2001 plus
(c) the excess (if any) of the aggregate amount of Specified 2001
Charges (exclusive of charges against reserves established on or prior
to September 30, 2001) over $290,000,000; and
(ii) on any date on or after December 31, 2002, an amount equal to (a)
the greater of (x) 85% of Consolidated Net Worth at December 31, 2002
and (y) $135,000,000 plus (b) 50% of the aggregate positive
Consolidated Net Income (excluding any consolidated net loss) of the
Representative and its Consolidated Subsidiaries for each fiscal
quarter ending after December 31, 2002 plus (c) 50% of the aggregate
net proceeds, including the fair market value of property other than
cash (as determined in good faith by the Representative's board of
directors), received by the Representative from the issuance and sale
after December 31, 2002 of any capital stock of the Representative
(other than the proceeds of any issuance and sale of any capital stock
(x) to a Subsidiary or (y) which is required to be redeemed, or is
redeemable at the option of the holder, if certain events or conditions
occur or exist or otherwise) or in connection with the conversion or
exchange of any Indebtedness of the Representative into capital stock
of the Representative after December 31, 2002.
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4. Representations and Warranties. To induce the Administrative Agent,
the Agent Lessor and the Participants to execute and deliver this Amendment,
each of the Beverly Entities that is a party hereto represents and warrants
(which representations and warranties shall survive the execution and delivery
of this Amendment) to each of the Administrative Agent, the Agent Lessor and the
Participants that:
(a) this Amendment has been duly authorized, executed and
delivered by it and this Amendment constitutes the legal, valid and
binding obligation, contract and agreement of such Beverly Entity
enforceable against it in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws or equitable principles relating to or
limiting creditors' rights generally;
(b) the Original Participation Agreement, as amended by the
Prior Ame ndments and this Amendment, constitutes the legal, valid and
binding obligation, contract and agreement of such Beverly Entity
enforceable against it in accordance with their respective terms,
except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws or equitable principles
relating to or limiting creditors' rights generally;
(c) the execution, delivery and performance by such Beverly
Entity of this Amendment (i) has been duly authorized by all requisite
corporate action and, if required, shareholder action, (ii) does not
require the consent or approval of any governmental or regulatory body
or agency, and (iii) will not (A) violate (l) any provision of law,
statute, rule or regulation or its certificate of incorporation or
bylaws, (2) any order of any court or any rule, regulation or order of
any other agency or government binding upon it, or (3) any provision of
any material indenture, agreement or other instrument to which it is a
party or by which its properties or assets are or may be bound,
including, without limitation, the Morgan Credit Agreement (as the same
has been amended or modified), or (B) result in a breach or constitute
(alone or with due notice or lapse of time or both) a default under any
indenture, agreement or other instrument referred to in clause
(iii)(A)(3) of this subsection (c);
(d) as of the date hereof and after giving effect to this
Amendment on its effective date pursuant to Section 5, no Default or
Event of Default has occurred which is continuing; and
(e) all the representations and warranties contained in
Section 8.2 of the Participation Agreement (after giving effect to this
Amendment) are true and correct in all material respects with the same
force and effect
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as if made by such Beverly Entity on and as of the date hereof and on
the effective date of this Amendment pursuant to Section 5.
5. Conditions to Effectiveness of this Amendment. This Amendment shall
not become effective until, and shall become effective when, each and every one
of the following conditions shall have been satisfied to the satisfaction of the
Agent Lessor, the Administrative Agent and each Required Participant (the
conditions precedent are for the benefit of the Agent Lessor, the Administrative
Agent and each Participant only):
(a) The Agent Lessor, the Administrative Agent and the
Required Participants shall have received executed counterparts of this
Amendment, duly executed by the Beverly Entities party hereto;
(b) The Agent Lessor, the Administrative Agent and the
Participants shall have received evidence satisfactory to them that the
Morgan Credit Agreement has been amended as of December 20, 2002 in
form and substance satisfactory to the Agent Lessor, the Administrative
Agent and the Participants; and
(c) The representations and warranties of the Beverly Entities
set forth in Section 4 hereof are true and correct.
(d) Unless all of the Lenders shall have consented to this
Amendment, the modifications in this Amendment shall not apply for the
purposes of the definition of Pricing Ratio contained in Schedule IV to
the Participation Agreement.
6. Payment of Fees and Expenses. The Representative agrees to pay upon
or prior to the effectiveness of this Amendment, the reasonable fees and
expenses of Mayer, Brown, Roe, & Maw, counsel to the Lessors, in connection with
the negotiation, preparation, approval, execution and delivery of this Amendment
and all reasonable fees and expenses attendant to any filing, registration,
recording or perfection of any Lien contemplated hereby.
7. Counterparts. This Amendment may be executed in counterparts, each
of which shall constitute an original, but all of which when taken together
shall constitute but one instrument.
8. Governing Law. This Amendment shall be governed by and construed in
accordance with the la ws of the State of New York.
9. Successors and Assigns. This Amendment shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and assigns.
THERE IS NO FURTHER TEXT ON THIS PAGE
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IN WITNESS WHEREOF, the Parties have caused this Amendment to be duly
executed by their respective authorized officers as of the day and year first
above written.
BEVERLY ENTERPRISES, INC., a
Representative, Construction Agent, Parent
Guarantor and Lessee
By:
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Name:
Title:
BANK OF MONTREAL, as Arranger,
Administrative Agent and as a Lender
By: /s/ EDWARD P. MCGUIRE
----------------------------------
Name: Edward P. McGuire
Title: Vice President
BANK OF MONTREAL GLOBAL
CAPITAL SOLUTIONS, INC. as Agent
Lessor and as a Lessor
By: /s/ THOMAS A. BATTERHAM
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Name: Thomas A. Batterham
Title: Vice President
GENERAL ELECTRIC CAPITAL
CORPORATION, as a Lender
By: /s/ WILLIAM E. MAGEE
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Name: William E. Magee
Title: Duly Authorized Signatory
TORONTO-DOMINION (TEXAS), INC.,
as a Lender
By:
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Name:
Title:
BANK OF AMERICA, NATIONAL
ASSOCIATION, as a Lender
By: /s/ LARRY GORDON
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Name: Larry Gordon
Title: Principal
VANTAGE HEALTHCARE
CORPORATION, as Lessee and Structural
Guarantor
By:
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Name:
Title:
PETERSEN HEALTH CARE, INC., as
Lessee and Structural Guarantor
By:
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Name:
Title:
BEVERLY SAVANA CAY MANOR,
INC., as Lessee and Structural Guarantor
By:
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Name:
Title:
BEVERLY ENTERPRISES- GEORGIA,
INC., as Lessee and Structural Guarantor
By:
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Name:
Title:
BEVERLY ENTERPRISES-
CALIFORNIA, INC., as Lessee and
Structural Guarantor
By:
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Name:
Title:
BEVERLY ENTERPRISES - ARKANSAS,
INC., as Lessee and Structural Guarantor
By:
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Name:
Title:
BEVERLY ENTERPRISES - FLORIDA,
INC., as Lessee and Structural Guarantor
By:
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Name:
Title:
BEVERLY HEALTH AND
REHABILITATION SERVICES, INC., as
Lessee and Structural Guarantor
By:
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Name:
Title:
BEVERLY ENTERPRISES -
WASHINGTON, INC., as Lessee and
Structural Guarantor
By:
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Name:
Title: