EX-99.1 2 0002.txt EXHIBIT 99.1 Exhibit 99.1 SECOND AMENDMENT AND WAIVER TO REVOLVING CREDIT AND GUARANTY AGREEMENT SECOND AMENDMENT AND WAIVER, dated as of February 14, 2001 (the "Amendment"), to the REVOLVING CREDIT AND GUARANTY AGREEMENT, dated as of June 22, 2000, among THE MULTICARE COMPANIES, INC. a Pennsylvania corporation (the "Borrower"), a debtor and debtor-in-possession under Chapter 11 of the Bankruptcy Code, and each of the direct and indirect subsidiaries of the Borrower party thereto (each a "Guarantor" and collectively, the "Guarantors"), each of which Guarantors is a debtor and debtor-in-possession in a case pending under chapter 11 of the Bankruptcy Code, MELLON BANK, N.A., a national banking association ("Mellon"), as Arranger, FIRST UNION NATIONAL BANK, as Syndication Agent, GOLDMAN SACHS CREDIT PARTNERS L.P., as Documentation Agent, THE CHASE MANHATTAN BANK, as Co-Agent, each of the other financial institutions from time to time party thereto (each of the foregoing financial institutions, together with Mellon, the "Banks") and MELLON BANK, N.A., a national banking association, as administrative agent (in such capacity, the "Agent") for the Banks. Unless otherwise defined herein, all terms that are defined in the Credit Agreement (or defined below) shall have the same meanings herein. W I T N E S S E T H: WHEREAS, the Borrower, the Guarantors, the Banks and the Agent are parties to that certain Revolving Credit and Guaranty Agreement, dated as of June 22, 2000, as amended by that certain First Amendment to Revolving Credit and Guaranty Agreement, dated as of August 10, 2000 (as amended, and as the same may be further amended, modified or supplemented from time to time, the "Credit Agreement"); and WHEREAS, the Borrower, the Guarantors, the Banks and the Agent have agreed to amend the Credit Agreement as set forth herein; and WHEREAS, from and after the Effective Date (as hereinafter defined) of this Amendment, the Credit Agreement shall be amended, subject to and upon terms and conditions set forth herein, as follows: NOW, THEREFORE, it is agreed: SECTION 1. Waiver. The Banks hereby waive (x) compliance by the Borrower and the Guarantors with the provisions of Section 5.01(a) of the Credit Agreement with respect to the fiscal year ended September 30, 2000 and Sections 5.01(b) and 5.01(d) of the Credit Agreement with respect to the fiscal quarter ended December 31, 2000, provided that the financial reports and certificate required to be delivered pursuant thereto shall be delivered no later than April 2, 2001 and (y) any default or Event of Default under the Credit Agreement (including, without limitation, under Section 6.05) that was occasioned by the following asset impairment and other non-recurring charges which were recorded by the Borrower in the fiscal year ended September 30, 2000: (i) SFAS 121 and provisions for terminated operations, and other asset impairments representing the write-down of goodwill and other long-lived assets of acquired operations which are not deemed recoverable in an aggregate amount of $174,700,000; (ii) debt restructuring and reorganization charges representing costs associated with the Cases, employee severance costs and investments in formerly managed operations in an aggregate amount of $5,200,000; (iii) benefit-related costs in the amount of $8,900,000; and (iv) costs associated with accounts receivable which are deemed uncollectible in the amount of $1,500,000. SECTION 2. Amendment to Section 6.05. The table appearing in Section 6.05 is hereby in its entirety to read as follows: "Three Month Period Ending EBITDA -------------------------- ----------- January 31, 2001 $ 7,900,000 February 28, 2001 $ 7,000,000 March 31, 2001 $ 7,700,000 April 30, 2001 $ 9,000,000 May 31, 2001 $11,300,000 June 30, 2001 $11,000,000 July 31, 2001 $11,500,000 August 31, 2001 $11,800,000 September 30, 2001 $12,000,000 October 31, 2001 $11,600,000 November 30, 2001 $11,100,000 December 31, 2001 $11,000,000" SECTION 3. Amendment to Section 7.01. Section 7.01(m) of the Credit Agreement is hereby amended by inserting the phrase ", unexpired leases of personal property" immediately following the words "assumed executory contracts" appearing in clause (v) thereof. SECTION 4. Representations and Warranties. The Borrower and the Guarantors hereby represent and warrant that all of the representations and warranties contained in the Loan Documents are true and correct on and as of the date hereof as if made on and as of such date, both before and after giving effect to this Amendment, and that no Event of Default or Default has occurred and is continuing or exists or would occur or exist after giving effect to this Amendment. 2 SECTION 5. Conditions to Effectiveness. This Amendment shall not become effective until the date (the "Effective Date") on which this Amendment shall have been executed by the Borrower, the Guarantors, the Required Banks and the Agent, and the Agent shall have received evidence satisfactory to it of such execution, provided that, notwithstanding the occurrence of the Effective Date, the effect of the amendments (but not the waivers) set forth herein shall terminate and be of no further force or effect if on or before April 2, 2001 the Bankruptcy Court shall not have entered an order reasonably satisfactory in form and substance to the Agent approving the payment by the Borrower to the Banks of an amendment fee in an amount equal to 3/10 of 1% of the Total Commitment, such fee to be payable as an administrative expense upon the effectiveness of a Reorganization Plan for the Borrower. SECTION 6. Ratification. Except to the extent hereby amended, the Credit Agreement and each of the Loan Documents remain in full force and effect and are hereby ratified and affirmed. SECTION 7. Costs and Expenses. The Borrower agrees that its obligations set forth in Section 10.05 of the Credit Agreement shall extend to the preparation, execution and delivery of this Amendment, including the reasonable fees and disbursements of special counsel to the Agent. SECTION 8. References. This Amendment shall be limited precisely as written and shall not be deemed (a) to be a consent granted pursuant to, or a waiver or modification of, any other term or condition of the Credit Agreement or any of the instruments or agreements referred to therein or (b) to prejudice any right or rights which the Agent or the Banks may now have or have in the future under or in connection with the Credit Agreement or any of the instruments or agreements referred to therein. Whenever the Credit Agreement is referred to in the Credit Agreement or any of the instruments, agreements or other documents or papers executed or delivered in connection therewith, such reference shall be deemed to mean the Credit Agreement as modified by this Amendment. SECTION 9. Counterparts. This Amendment may be executed in any number of counterparts and by the 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 but one and the same instrument. A fax copy of a counterpart signature page shall serve as the functional equivalent of a manually executed copy of all purposes. SECTION 10. Applicable Law. This Amendment shall be governed by, and construed in accordance with, the laws of the Commonwealth of Pennsylvania applicable to contracts made and to be performed wholly within such State. 3 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the day and the year first above written. BORROWER: THE MULTICARE COMPANIES, INC. By: ___________________________________ Name: Title: GUARANTORS: ADS APPLE VALLEY LIMITED PARTNERSHIP, by ADS Apple Valley, Inc., its General Partner ADS HINGHAM LIMITED PARTNERSHIP, by ADS Hingham Nursing Facility, Inc., its General Partner ADS RECUPERATIVE CENTER LIMITED PARTNERSHIP, by ADS Recuperative Center, Inc., its General Partner CARE HAVEN ASSOCIATES LIMITED PARTNERSHIP, by Glenmark Associates, Inc. and GMA Partnership Holding Company, Inc., its General Partners CUMBERLAND ASSOCIATES OF RHODE ISLAND, L.P., by Health Resources of Cumberland, Inc., its General Partner GLENMARK PROPERTIES I, LIMITED PARTNERSHIP, by Glenmark Associates, Inc. and GMA Partnership Holding Company, Inc., its General Partners GROTON ASSOCIATES OF CONNECTICUT, L.P., by Health Resources of Groton, Inc., its General Partner 4 MIDDLETOWN (RI) ASSOCIATES OF RHODE ISLAND, L.P., by Health Resources of Middletown (R.I.), Inc., its General Partner POINT PLEASANT HAVEN LIMITED PARTNERSHIP, by Glenmark Associates, Inc., its General Partner RALEIGH MANOR LIMITEDPARTNERSHIP, by Glenmark Associates, Inc., its General Partner Address for notices: 101 East State Street Kennett Square, PA 19348 Attention: George V. Hager, Jr. Executive Vice President and Chief Financial Officer Telephone: (610) 444-8419 Facsimile: (610) 925-4100 ROMNEY HEALTH CARE CENTER LTD. LIMITED PARTNERSHIP, by Glenmark Associates, Inc., its General Partner SISTERVILLE HAVEN LIMITED PARTNERSHIP, by Glenmark Associates, Inc., its General Partner TEAYS VALLEY HAVEN LIMITED PARTNERSHIP, by Glenmark Associates, Inc., its General Partner THE STRAUSS GROUP - HOPKINS HOUSE, L.P., by Encare of Wyncote, Inc., its General Partner THE STRAUS GROUP - QUAKERTOWN MANOR, L.P., by Encare of Quakertown, Inc., its General Partner 5 WALLINGFORD ASSOCIATES OF CONNECTICUT, L.P., by Health Resources of Wallingford, Inc., its General Partner WARWICK ASSOCIATES OF RHODE ISLAND, L.P., by Health Resources of Warwick, Inc., its General Partner By:_________________________________ On behalf of each of the foregoing as ____________of the General Partner HOLLY MANOR ASSOCIATES OF NEW JERSEY, L.P., by Encare of Mendham, L.L.C., its General Partner, by Century Care Management, Inc., its authorized manager MERCERVILLE ASSOCIATES OF NEW JERSEY, L.P., by Breyut Convalescent Center, L.L.C., its General Partner, by Century Care Management, Inc., its authorized manager POMPTON ASSOCIATES, L.P., by Pompton Care, L.L.C., its General Partner, by Century Care Management, Inc., its authorized manager THE STRAUS GROUP - OLD BRIDGE, L.P., by Health Resources of Emery, L.L.C., its General Partner, by Century Care Management, Inc., its authorized manager THE STRAUS GROUP - RIDGEWOOD, L.P., A New Jersey limited partnership, by Health Resources of Ridgewood, L.L.C., its General Partner, by Century Care Management, Inc., its authorized manager By:__________________________ On behalf of each of the foregoing as ______________ of the manager Address for notices: 101 East State Street Kennett Square, PA 19348 6 Attention: George V. Hager, Jr. Executive Vice President And Chief Financial Officer Telephone: (610) 444-8419 Facsimile: (610) 925-4100 ACADEMY NURSING HOME, INC. ADS APPLE VALLEY, INC. ADS CONSULTING, INC. ADS HINGHAM ALF, INC. ADS HINGHAM NURSING FACILITY, INC. ADS HOME HEALTH, INC. ADS/MULTICARE, INC. ADS PALM CHELMSFORD, INC. ADS RECUPERATIVE CENTER, INC. ADS RESERVOIR WALTHAM, INC. ADS SENIOR HOUSING, INC. ADS VILLAGE MANOR, INC. ANR, INC. APPLEWOOD HEALTH RESOURCES, INC. ASL, INC. AUTOMATED PROFESSIONAL ACCOUNTS, INC. BERKS NURSING HOMES, INC. BETHEL HEALTH RESOURCES, INC. BRIGHTWOOD PROPERTY, INC. 7 CENTURY CARE CONSTRUCTION, INC. CENTURY CARE MANAGEMENT, INC. CHATEAU VILLAGE HEALTH RESOURCES, INC. CHG INVESTMENT CORP., INC CHNR-1, INC. COLONIAL HALL HEALTH RESOURCES, INC. COLONIAL HOUSE HEALTH RESOURCES, INC. CONCORD HEALTH GROUP, INC. CONCORD HOME HEALTH, INC. CONCORD REHAB, INC. CONCORD SERVICE CORPORATION CVNR, INC. DELM NURSING, INC. ELMWOOD HEALTH RESOURCES, INC. ENCARE OF PENNYPACK, INC. ENCARE OF QUAKERTOWN, INC. ENCARE OF WYNCOTE, INC. ENR, INC. GLENMARK ASSOCIATES, INC. GMA - BRIGHTWOOD, INC. 8 GMA - CONSTRUCTION, INC. GMA - MADISON, INC. GMA PARTNERSHIP HOLDING COMPANY, INC. GMA UNIONTOWN, INC. HEALTH RESOURCES OF BOARDMAN, INC. HEALTH RESOURCES OF CEDAR GROVE, INC. HEALTH RESOURCES OF COLCHESTER, INC. HEALTH RESOURCES OF COLUMBUS, INC. HEALTH RESOURCES ON CRANBURY, INC. HEALTH RESOURCES OF CUMBERLAND, INC. HEALTH RESOURCES OF EATONTOWN, INC. HEALTH RESOURCES OF FARMINGTON, INC. HEALTH RESOURCES OF GARDNER, INC. HEALTH RESOURCES OF GLASTONBURY, INC. HEALTH RESOURCES OF GROTON, INC. HEALTH RESOURCES OF LAKEVIEW, INC. HEALTH RESOURCES OF LEMONT, INC. HEALTH RESOURCES OF LYNN, INC. HEALTH RESOURCES OF KARAMENTA AND MADISON, INC. HEALTH RESOURCES OF MARCELLA, INC. 9 HEALTH RESOURCES OF MIDDLETOWN (R.I.), INC. HEALTH RESOURCES OF MORRISTOWN, INC. HEALTH RESOURCES OF NORFOLK, INC. HEALTH RESOURCES OF NORWALK, INC. HEALTH RESOURCES OF PENNINGTON, INC. HEALTH RESOURCES OF ROCKVILLE, INC. HEALTH RESOURCES OF SOUTH BRUNSWICK, INC. HEALTH RESOURCES OF TROY HILLS, INC. HEALTH RESOURCES OF WALLINGFORD, INC. HEALTH RESOURCES OF WARWICK, INC. HEALTHCARE REHAB SYSTEMS, INC. HORIZON ASSOCIATES, INC. HORIZON MOBILE, INC. HORIZON REHABILITATION, INC. HR OF CHARLESTON, INC. HRWV HUNTINGTON, INC. LAKEWOOD HEALTH RESOURCES, INC. LAUREL HEALTH RESOURCES, INC. LEHIGH NURSING HOMES, INC. LWNR, INC. MABRI CONVALESCENT CENTER, INC. 10 MARKGLEN, INC. MARSHFIELD HEALTH RESOURCES, INC. MONTGOMERY NURSING HOMES, INC. MULTICARE AMC, INC. MULTICARE HOME HEALTH OF ILLINOIS, INC. NURSING AND RETIREMENT CENTER OF THE ANDOVERS, INC. PHC OPERATING CORP. POCAHONTAS CONTINUOUS CARE CENTER, INC. PRESCOTT NURSING HOME, INC. PROGRESSIVE REHABILITATION CENTERS, INC. PROVIDENCE HEALTH CARE, INC. REST HAVEN NURSING HOME, INC. RIDGELAND HEALTH RESOURCES, INC. RIVER PINES HEALTH RESOURCES, INC. RIVERSHORES HEALTH RESOURCES, INC. RLNR, INC. ROSE HEALTHCARE, INC. ROSE VIEW MANOR, INC. RSNR, INC. RVNR, INC. 11 SENIOR LIVING VENTURES, INC. SCHUYLKILL NURSING HOMES, INC. SCHUYLKILL PARTNERSHIP ACQUISITION CORPORATION SENIOR SOURCE, INC. SNOW VALLEY HEALTH RESOURCES, INC. STAFFORD CONVALESCENT CENTER, INC. S.T.B. INVESTORS, LTD. SVNR, INC. THE ADS GROUP, INC. TRI-STATE MOBILE MEDICAL SERVICES, INC. WESTFORD NURSING AND RETIREMENT CENTER, INC. WILLOW MANOR NURSING HOME, INC. ARCADIA ASSOCIATES BREYUT CONVALESCENT CENTER, INC. CONCORD COMPANION CARE, INC. CONCORD HEALTHCARE SERVICES, INC. DAWN VIEW MANOR, INC. ELDERCARE RESOURCES CORP. ENCARE OF MENDHAM, INC. GENESIS ELDERCARE CORP. GLENMARK ASSOCIATES - DAWN VIEW MANOR, INC. 12 GLENMARK LIMITED LIABILITY COMPANY I GLENMARK PROPERTIES, INC. HEALTH RESOURCES OF ACADEMY MANOR, INC. HEALTH RESOURCES OF ARCADIA, INC. HEALTH RESOURCES OF BRIDGETON, INC. HEALTH RESOURCES OF BROOKLYN, INC. HEALTH RESOURCES OF CINNAMINSON, INC. HEALTH RESOURCES OF ENGLEWOOD, INC. HEALTH RESOURCES OF EWING, INC. HEALTH RESOURCES OF JACKSON, INC. HEALTH RESOURCES OF LAKEVIEW, L.L.C. HEALTH RESOURCES OF MONTCLAIR, INC. HEALTH RESOURCES OF NORTH ANDOVER, INC. HEALTH RESOURCES OF RIDGEWOOD, INC. HEALTH RESOURCES OF SOLOMONT/ BROOKLINE, INC. HEALTH RESOURCES OF VOORHEES, INC. HEALTH RESOURCES OF WESTWOOD, INC. HELSTAT, INC. HMNH REALTY, INC. HNCA, INC. 13 LRC HOLDING COMPANY MHNR, INC. MNR, INC. NORTH MADISON, INC. NORTHWESTERN MANAGEMENT SERVICES, INC. POMPTON CARE, INC. PROVIDENCE FUNDING CORPORATION PROVIDENCE MEDICAL, INC. ROEPHEL CONVALESCENT CENTER, INC. ROXBOROUGH NURSING HOME, INC. SCOTCHWOOD MASS. HOLDING CO., INC. THE ASSISTED LIVING ASSOCIATES OF BERKSHIRE, INC. ASSISTED LIVING ASSOCIATES OF LEHIGH, INC. THE ASSISTED LIVING ASSOCIATES OF SANATOGA, INC. THE ASSISTED LIVING ASSOCIATES OF WALL, INC. THE HOUSE OF CAMPBELL, INC. TMC ACQUISITION CORP. WESTFORD NURSING AND RETIREMENT CENTER LIMITED PARTNERSHIP By:__________________________________ On behalf of each of the foregoing as _____________________________________ 14 Addresses for notices: 101 East State Street Kennett Square, PA 19348 Attention: George V. Hager, Jr. Executive Vice President and Chief Financial Officer Telephone: (610) 444-8419 Facsimile: (610) 925-4100 BREYUT CONVALESCENT CENTER, L.L.C. by Century Care Management, Inc., its authorized manager ENCARE OF MENDHAM, L.L.C., by Century Care Management, Inc., its authorized manager HEALTH RESOURCES OF BRIDGETON, L.L.C., by Century Care Management, Inc., its authorized manager HEALTH RESOURCES OF CINNAMINSON, L.L.C., by Century Care Management, Inc., its authorized manager HEALTH RESOURCES OF CRANBURY, L.L.C., by Century Care Management, Inc., its authorized manager HEALTH RESOURCES OF EMERY, L.L.C., by Century Care Management, Inc., its authorized manager HEALTH RESOURCES OF ENGLEWOOD, L.L.C., by Century Care Management, Inc., its authorized manager HEALTH RESOURCES OF EWING, L.L.C., by Century Care Management, Inc., its authorized manager 15 HEALTH RESOURCES OF FAIRLAWN, L.L.C., by Century Care Management, Inc., its authorized manager HEALTH RESOURCES OF JACKSON, L.L.C., by Century Care Management, Inc., its authorized manager HEALTH RESOURCES OF RIDGEWOOD, L.L.C., by Century Care Management, Inc., its authorized manager HEALTH RESOURCES OF WEST ORANGE, L.L.C., by Century Care Management, Inc., its authorized manager POMPTON CARE, L.L.C., by Century Care Management, Inc., its authorized manager ROEPHEL CONVALESCENT CENTER, L.L.C., by Century Care Management, Inc., its authorized manager TOTAL REHABILITATION CENTER, L.L.C., by Century Care Management, Inc., its authorized manager. By:_________________________________ On behalf of each of the foregoing ___________________of the manager Address for notices: 101 East State Street Kennett Square, PA 19348 Attention: George V. Hager, Jr. Executive Vice President and Chief Financial Officer Telephone: (610) 444-8419 Facsimile: (610) 925-4100 16 AGENT: MELLON BANK, N.A., Individually and as Agent By: _________________________ Title: FIRST UNION NATIONAL BANK By: _________________________ Title: GOLDMAN SACHS CREDIT PARTNERS, L.P. By: _________________________ Title: THE CHASE MANHATTAN BANK By: Chase Securities, Inc., as its Agent By: _________________________ Title: FOOTHILL CAPITAL CORP. By: _________________________ Title: TD SECURITIES By: _________________________ Title: 17 THE BANK OF NOVA SCOTIA By: _________________________ Title: METROPOLITAN LIFE INSURANCE COMPANY By: __________________________ Title CREDIT LYONNAIS NEW YORK BRANCH By: _________________________ Title: SILVER OAK CAPITAL, L.L.C. By: _________________________ Title: AG CAPITAL FUNDING, L.P. By: Angelo, Gordon & Co., L.P. as Investment Advisors By: _________________________ Title: OAK HILL SECURITIES FUND, L.P. By: _________________________ Title: OAK HILL SECURITIES FUND II, L.P. By: _________________________ Title: 18