EXHIBIT 10.80
THIRTEENTH AMENDMENT TO
DEBTOR-IN-POSSESSION CREDIT AGREEMENT
November 15, 2001
Reference is made to that certain Debtor-In-Possession Credit
Agreement dated as of January 20, 2000 (as heretofore amended, the "DIP CREDIT
AGREEMENT"), by and among Mariner Health Group, Inc., a Delaware corporation
("MHG"), as debtor and debtor-in-possession, and each of MHG's subsidiaries
listed on the signature pages thereof, each as debtor and debtor-in-possession
(each such subsidiary and MHG individually referred to herein as a "BORROWER"
and, collectively, on a joint and several basis, as the "BORROWERS"); the
Lenders listed on the signature pages thereof; First Union National Bank, as
syndication agent; PNC Capital Markets, Inc. and First Union Securities, Inc.,
as co-arrangers; and PNC Bank, National Association, as collateral agent and
administrative agent (in such capacity, "ADMINISTRATIVE AGENT"), and as an
issuing bank for Letters of Credit thereunder. Capitalized terms used herein
without definition herein shall have the meanings assigned to such terms in the
DIP Credit Agreement and the Borrowing Order.
Borrowers and Lenders desire to amend the DIP Credit
Agreement to (i) extend the maturity date of the DIP Credit Agreement, (ii)
make certain amendments to Section 5.01 with respect to the financial reporting
obligations of the MHG Companies, and (iii) make certain amendments to Section
7.07 with respect to the amount of Overhead Payments payable to MPAN each
month. The Lenders are prepared to do so solely on the terms and conditions
herein.
NOW, THEREFORE, for and in consideration of the foregoing
premises, the mutual covenants and agreements hereinafter set forth and other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Borrowers and the Lenders hereby agree as follows:
First, the Borrowers and the undersigned Lenders hereby agree
that the definition of "Stated Maturity Date" is hereby amended by deleting the
reference to "December 31, 2001" contained therein and substituting therefor
"April 1, 2002"
Second, Section 1.01 of the Agreement is hereby amended by
adding the following new definition in its appropriate alphabetical order:
"YEAR 2002 OPERATING BUDGET" has the meaning set
forth in Section 7.07.
Third, Section 5.01 of the Agreement is hereby amended by
deleting subsection (c) thereof in its entirety and by substituting the
following new subsection (c) in lieu thereof:
(c) as soon as available and in any event
within 90 days after the end of each Fiscal Year (including
the Fiscal Year ended December 31, 1999), (i) the
consolidated balance sheet of MHG and its Consolidated
Subsidiaries as at the end of such Fiscal Year and the
related consolidated statements of income, stockholders'
equity and cash flows of MHG and its Consolidated
Subsidiaries for such Fiscal Year, all in reasonable detail
and certified by a Financial Officer of MHG that they fairly
present the financial condition of MHG and its Consolidated
Subsidiaries as at the dates indicated and the results of
their operations and their cash flows for the periods
indicated and (ii) except for such financial statements
relating to Fiscal Years ending on or after December 31, 2001
(for which no such report shall be required unless the
Administrative Agent, by written notice to MHG, requests an
auditor's report for such Fiscal Year, in which event such
auditor's report shall be provided on or before the later of
(i) the 90th day after MHG's receipt of such request and (ii)
the 90th day after the end of the Fiscal Year in question), a
report thereon of Ernst & Young, LLP or other nationally
recognized firm of independent public accountants, which
report shall state that such consolidated financial
statements fairly present the consolidated financial position
of MHG and its Consolidated Subsidiaries as at the dates
indicated and the results of their operations and their cash
flows for the periods indicated in conformity with GAAP
(except as otherwise disclosed in such financial statements)
and that the examination by such accountants in connection
with such consolidated financial statements has been made in
accordance with generally accepted auditing standards;
Fourth, the Borrowers and the undersigned Lenders hereby
agree that Section 7.07 is hereby amended by deleting such section in its
entirety and by substituting the following paragraph as a new Section 7.07:
"No MHG Company will declare or make any Restricted Payment
on or after the Closing Date other than (i) as permitted by Section
7.15 and clauses (a), (b) and (c) of the proviso to Section 7.05; and
(ii) as long as no Specified Default has occurred and is continuing or
would result therefrom, MHG may make weekly payments to MPAN on the
last Business Day of each of the first four weeks of each month after
the Closing Date, in an amount in each such week not to exceed 1.25%
of "Revenues" projected in the Fiscal Year 2002 operating budget for
MHG and its Consolidated Subsidiaries (a copy of which has been
provided to the Agents and the Lenders) (the "YEAR 2002 OPERATING
BUDGET") for the month in which such week occurs, provided, however,
that beginning on November 1, 2001 through and including August 31,
2002 (the "REDUCTION PERIOD"), each such weekly payment shall be
reduced by $250,000, such that the total amount of weekly payments
made in any full calendar month during the Reduction Period shall be
equivalent to 5% of "Revenues" projected in the Year 2002 Operating
Budget less $1,000,000 (the amount so payable in each such week being
the "OVERHEAD PAYMENT" payable for such week); provided, however, that
(a) in the event 5% of "net inpatient revenues" of the Borrowers for
any month, as reflected in the inpatient income statement delivered
pursuant to Section 5.01(a)(ii)(A), exceeds the aggregate amount of
Overhead Payments (prior to giving effect to the weekly reductions
made during the Reduction Period described above) payable during such
month, the Borrowers shall pay
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the amount of such excess to MPAN at the time of the next Overhead
Payment, and (b) in the event 5% of "net inpatient revenues" of the
Borrowers for any month, as reflected in the inpatient income
statement delivered pursuant to Section 5.01(a)(ii)(A), is less than
the aggregate amount of Overhead Payments (prior to giving effect to
the weekly reductions made during the Reduction Period described
above) payable during such month, the Borrowers shall deduct the
amount of the difference from the payments of the next succeeding
Overhead Payment or Overhead Payments payable to the full extent
thereof; provided, further, that if the Borrowers fail to deliver the
inpatient income statement required at the time required pursuant to
Section 5.01(a)(ii)(A), no further payment of Overhead Payments shall
be made until such statement is delivered; provided, further, that if
payment of Overhead Payments shall be prohibited hereunder solely
pursuant to the preceding proviso or due to the occurrence and the
continuation of a Specified Default, the amount of such prohibited
payments may accrue at the rate set forth above and may be deemed
owing and may be paid only at any subsequent time that no Specified
Default shall have occurred and be continuing or the statement
referred to in the preceding proviso is delivered, as the case may be;
and provided, further, that the calculation of the total Overhead
Payments payable in any given month for purposes of the first proviso
to this Section shall not give effect to any payment pursuant to
clause (a) of such proviso made in such month or any deduction
pursuant to clause (b) of such proviso made in such month, or any
payment of Overhead Payments accrued in respect of a prior month
pursuant to the third proviso to this Section but paid during the
given month; and (iii) payment to MPAN of any management fees from the
Oakwood Facilities as and when received by the Borrowers, net of any
costs of the Borrowers incurred with respect to the Oakwood
Facilities. In the event of a sale of or other termination of MPAN's
supervisory services with respect to any Healthcare Facility in any
month, the aggregate amount of any Overhead Payments payable with
respect to such month shall be adjusted to reflect the exclusion of
the "Revenues" attributable to such Healthcare Facility from the
amount of "Revenues" on which Overhead Payments are calculated.
Anything contained herein or in any other Financing Document to the
contrary notwithstanding, the provisions of this Section 7.07
restricting payment of Overhead Payments by the Borrowers during the
continuance of Specified Defaults and permitting payment of Overhead
Payments by the Borrowers during the continuance of other Events of
Default shall not be deemed or construed as in any way limiting the
rights and remedies otherwise available to the Agents and the Lenders
under the Financing Documents and under Applicable Law upon and after
the occurrence of any Default or Event of Default. Nothing in this
Agreement or any of the other Financing Documents shall be construed
as or deemed a waiver, release or discharge by any party hereto of any
right to modify, assume or assign the management agreement of the
Borrowers with respect to the Oakwood Facilities. The Borrowers shall
not make any Investments (including any working capital investments)
in the Oakwood Facilities after the Closing Date."
On and after the Thirteenth Amendment Effective Date (as
defined below), each reference in the DIP Credit Agreement to "this Agreement",
"hereunder", "hereof", "herein" or words of like import referring to the DIP
Credit Agreement, and each reference in the other Financing Documents to the
"DIP Credit Agreement", "thereunder", "thereof" or words of like import
referring to the DIP Credit
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Agreement, shall mean and be a reference to the DIP Credit Agreement as amended
through the date thereof, including by this Thirteenth Amendment to
Debtor-In-Possession Credit Agreement (this "THIRTEENTH AMENDMENT"; the DIP
Credit Agreement, as so amended, being the "AMENDED AGREEMENT").
Without limiting the generality of the provisions of Section
11.05 of the DIP Credit Agreement, the amendment set forth above shall be
limited precisely as written, and nothing in this Thirteenth Amendment shall be
deemed to prejudice any right or remedy that the Administrative Agent or any
Lender may now have or may have in the future under or in connection with the
DIP Credit Agreement or any of such other Financing Documents. Except as
specifically amended by this Thirteenth Amendment, the DIP Credit Agreement and
such other Financing Documents shall remain in full force and effect and are
hereby ratified and confirmed.
In order to induce Lenders to enter into this Thirteenth
Amendment, each Borrower, by its execution of a counterpart of this Thirteenth
Amendment, represents and warrants that, subject to obtaining the approval of
the Court to the execution, delivery and performance of this Thirteenth
Amendment, (a) such Borrower has the corporate or other power and authority and
all material Governmental Approvals required to enter into this Thirteenth
Amendment and to carry out the transactions contemplated by, and perform its
obligations under, the Amended Agreement, (b) the execution and delivery of
this Thirteenth Amendment and the performance of the Amended Agreement have
been duly authorized by all necessary corporate or other action on the part of
such Borrower, (c) the execution and delivery by such Borrower of this
Thirteenth Amendment and the performance by such Borrower of the Amended
Agreement do not and will not contravene, or violate, any Applicable Laws
(including an applicable order of the Court) or any provision of its
Organizational Documents, or constitute a default under any agreement or other
instrument binding upon it (which default, in the case of such instruments or
agreements, would give rise to rights enforceable on a post-Petition Date
basis) or result in or require the imposition of any Liens (other than the
Liens created by the Collateral Documents) on any of its assets, (d) the
execution and delivery by such Borrower of this Thirteenth Amendment and the
performance by such Borrower of the Amended Agreement do not and will not
require any action by or in respect of, or filing with, any governmental body,
agency or official, (e) this Thirteenth Amendment and the Amended Agreement
have been duly executed and delivered by such Borrower and constitute the valid
and binding obligations of such Borrower, enforceable in accordance with their
respective terms, except as may be limited by general principles of equity, and
(f) after giving effect to this Thirteenth Amendment, no event has occurred and
is continuing or will result from the consummation of the transactions
contemplated by this Thirteenth Amendment that would constitute a Default.
This Thirteenth Amendment 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 an original, but all such
counterparts together shall constitute but one and the same instrument. This
Thirteenth Amendment shall become effective (the date of such effectiveness
being the "THIRTEENTH AMENDMENT EFFECTIVE DATE") as of November 1, 2001
provided the following conditions shall have been met: (a) the Borrowers and
each of the Lenders shall have executed counterparts of this Thirteenth
Amendment and the Borrowers and the Administrative Agent shall have received
written or telephonic notification of such execution and authorization of
delivery thereof, (b) the Administrative Agent shall have received from the
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Borrowers, for distribution to the undersigned Lenders in accordance with their
respective Percentages, an amendment fee of 1% of the aggregate Tranche A
Commitments of such Lenders after giving effect to this Thirteenth Amendment,
(c) PNC Bank, National Association, as administrative agent under the Existing
Credit Facilities (the "PREPETITION AGENT"), shall have received an adequate
protection payment from the Borrower in the amount of seven million five
hundred thousand dollars ($7,500,000), for the ratable benefit of each of the
Existing Lenders, in partial satisfaction of the Prepetition Indebtedness due
under the Existing Credit Facilities (to be applied by the Prepetition Agent in
accordance with the terms of the Existing Credit Facilities), (d) the Court
shall have entered an order, in form and substance satisfactory to the Lenders,
approving this Thirteenth Amendment, the amendment fee and the adequate
protection payment referenced above, and (e) the Administrative Agent shall
have received evidence satisfactory to it that all outstanding statements of
O'Melveny & ▇▇▇▇▇ LLP, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇, and Deloitte Consulting,
L.L.C. that are received by MHG prior to 12:00 Noon (New York City time) on
November 2, 2001 have been paid in full.
THIS THIRTEENTH AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING
WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE
OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
[Remainder of page intentionally left blank]
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BORROWERS: MARINER HEALTH GROUP, INC.
AID & ASSISTANCE, INC.
BEECHWOOD HERITAGE RETIREMENT COMMUNITY, INC.
BRIDE BROOK NURSING & REHABILITATION CENTER,
INC.
COMPASS PHARMACY SERVICES, INC.
COMPASS PHARMACY SERVICES OF MARYLAND, INC.
COMPASS PHARMACY SERVICES OF TEXAS, INC.
CYPRESS NURSING FACILITY, INC.
LONG RIDGE NURSING AND REHABILITATION CENTER,
INC.
LONGWOOD REHABILITATION CENTER, INC.
MARINER HEALTH AT BONIFAY, INC.
MARINER HEALTH CARE, INC.
MARINER HEALTH CARE OF ATLANTIC SHORES, INC.
MARINER HEALTH CARE OF DELAND, INC.
MARINER HEALTH CARE OF FORT ▇▇▇▇▇, INC.
MARINER HEALTH CARE OF GREATER LAUREL, INC.
MARINER HEALTH CARE OF INVERNESS, INC.
MARINER HEALTH CARE OF LAKE WORTH, INC.
MARINER HEALTH CARE OF MACCLENNY, INC.
MARINER HEALTH CARE OF METROWEST, INC.
MARINER HEALTH CARE OF NASHVILLE, INC.
MARINER HEALTH CARE OF NORTH HILLS, INC.
MARINER HEALTH CARE OF ORANGE CITY, INC.
MARINER HEALTH CARE OF PALM CITY, INC.
MARINER HEALTH CARE OF PINELLAS POINT, INC.
MARINER HEALTH CARE OF PORT ORANGE, INC.
MARINER HEALTH CARE OF SOUTHERN CONNECTICUT,
INC.
MARINER HEALTH CARE OF TOLEDO, INC.
MARINER HEALTH CARE OF TUSKAWILLA, INC.
MARINER HEALTH CARE OF WEST HILLS, INC.
MARINER HEALTH CENTRAL, INC.
MARINER HEALTH HOME CARE, INC.
MARINER HEALTH OF FLORIDA, INC.
MARINER HEALTH OF JACKSONVILLE, INC.
MARINER HEALTH OF MARYLAND, INC.
MARINER HEALTH OF ORLANDO, INC.
MARINER HEALTH OF PALMETTO, INC.
MARINER HEALTH OF SEMINOLE COUNTY, INC.
MARINER HEALTH OF TAMPA, INC.
MARINER HEALTH RESOURCES, INC.
MARINER PHYSICIAN SERVICES, INC.
MARINER PRACTICE CORPORATION
MARINER - REGENCY HEALTH PARTNERS, INC.
MARINERSELECT STAFFING SOLUTIONS, INC.
MARINER SUPPLY SERVICES, INC.
MEDREHAB, INC.
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MEDREHAB OF INDIANA, INC.
MEDREHAB OF LOUISIANA, INC.
MEDREHAB OF MISSOURI, INC.
MERRIMACK VALLEY NURSING & REHABILITATION
CENTER, INC.
METHUEN NURSING & REHABILITATION CENTER, INC.
MHC REHAB. CORP.
MHC TRANSPORTATION, INC.
MYSTIC NURSING & REHABILITATION CENTER, INC.
NATIONAL HEALTH STRATEGIES, INC.
PARK TERRACE NURSING & REHABILITATION CENTER,
INC.
▇▇▇▇▇▇▇▇▇ NURSING & REHABILITATION CENTER, INC.
PINNACLE CARE CORPORATION
PINNACLE CARE CORPORATION OF HUNTINGTON
PINNACLE CARE CORPORATION OF NASHVILLE
PINNACLE CARE CORPORATION OF SENECA
PINNACLE CARE CORPORATION OF SUMTER
PINNACLE CARE CORPORATION OF ▇▇▇▇▇▇▇▇ BAY
PINNACLE CARE CORPORATION OF WILMINGTON
PINNACLE CARE MANAGEMENT CORPORATION
PINNACLE PHARMACEUTICALS, INC.
PINNACLE PHARMACEUTICAL SERVICES, INC.
PINNACLE REHABILITATION, INC.
PINNACLE REHABILITATION OF MISSOURI, INC.
PRISM CARE CENTERS, INC.
PRISM HEALTH GROUP, INC.
PRISM HOME CARE COMPANY, INC.
PRISM HOME CARE, INC.
PRISM HOME HEALTH SERVICES, INC.
PRISM HOSPITAL VENTURES, INC.
PRISM REHAB SYSTEMS, INC.
REGENCY HEALTH CARE CENTER OF SEMINOLE COUNTY,
INC.
SASSAQUIN NURSING & REHABILITATION CENTER, INC.
TAMPA MEDICAL ASSOCIATES, INC.
THE OCEAN PHARMACY, INC.
TRI-STATE HEALTH CARE, INC.
WINDWARD HEALTH CARE, INC.
BY: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President for each of the
foregoing Borrowers
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IHS REHAB PARTNERSHIP, LTD.
BY: MARINER HEALTH CARE OF NASHVILLE, INC.,
its General Partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior VP and Treasurer
MARINER HEALTH PROPERTIES IV, LTD.
BY: MARINER HEALTH OF FLORIDA, INC.,
its General Partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior VP and Treasurer
MARINER HEALTH PROPERTIES VI, LTD.
BY: MARINER HEALTH OF FLORIDA, INC.,
its General Partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior VP and Treasurer
SEVENTEENTH STREET ASSOCIATES LIMITED PARTNERSHIP
BY: TRI-STATE HEALTH CARE, INC.,
its General Partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior VP and Treasurer
S-3
ALLEGIS HEALTH AND LIVING CENTER AT HERITAGE
HARBOUR, L.L.C.
BY: MARINER HEALTH OF MARYLAND, INC.,
its General Partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior VP and Treasurer
S-4
AGENTS AND LENDERS: PNC BANK, NATIONAL ASSOCIATION,
Individually as a Continuing Lender and as
Administrative Agent, Collateral Agent and
LC Issuing Bank
By:
-------------------------------------------------
Name:
Title:
FIRST UNION NATIONAL BANK,
individually as a Continuing Lender and
as Syndication Agent
By:
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Name:
Title:
S-2
CREDIT LYONNAIS NEW YORK BRANCH,
individually as a Continuing Lender
By:
-------------------------------------------------
Name:
Title:
S-3
BANK AUSTRIA CREDITANSTALT CORPORATE FINANCE, INC.
individually as a Continuing Lender
By:
-------------------------------------------------
Name:
Title:
By:
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Name:
Title:
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