Exhibit 10.49
THIRD AMENDMENT dated as of May 31, 2001
(this "Amendment") to the Credit Agreement dated as of
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September 22, 2000 (the "Credit Agreement") as amended by the
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First Amendment dated as of December 28, 2000 and the Second
Amendment dated as of January 18, 2001, among Select Medical
Corporation, a Delaware corporation (the "Company"), Canadian
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Back Institute Limited, an Ontario corporation and a wholly
owned subsidiary of the Company ("CBIL" and, together with the
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Company, the "Borrowers"), the Lenders party thereto, The
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Chase Manhattan Bank, as US Agent and US Collateral Agent, The
Chase Manhattan Bank of Canada, as Canadian Agent and Canadian
Collateral Agent, Banc of America Securities, LLC, as
Syndication Agent, and CIBC, Inc., as Documentation Agent.
WHEREAS, the Borrowers have requested that the Lenders (such
term and each other capitalized term used but not otherwise defined herein
having the meaning assigned to it in the Credit Agreement) approve amendments to
certain provisions of the Credit Agreement;
WHEREAS, the undersigned Lenders are willing, on the terms and
subject to the conditions set forth herein, to approve such amendments to the
Credit Agreement;
NOW, THEREFORE, in consideration of these premises, the
Borrowers and the undersigned Lenders hereby agree as follows:
SECTION 1. Amendments. Effective as of the Amendment Effective
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Date (as defined in Section 4 hereof), the Credit Agreement is hereby amended as
follows:
(a) Clause (d) of the definition of "Prepayment Event" in
Section 1.01 is amended by inserting the words "(but in any event the term
"Prepayment Event" shall include Indebtedness incurred under Section
6.05(d)(iii))" at the end of such clause.
(b) The following definition is inserted in an appropriate
alphabetical position in Section 1.01:
"Qualified Subordinated Indebtedness" means
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Subordinated Indebtedness of the Company (a) that shall contain
covenants and events of default in the aggregate not less favorable to
the Company than those set forth in the Preliminary Offering Memorandum
dated May [ ], 2001 (the "Offering Memorandum") relating to
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the offering of senior subordinated notes by the Company, (b) that
shall contain subordination provisions in the aggregate at least as
favorable to the Lenders as those set forth in the Offering Memorandum
and (c) that shall mature no earlier than, and, except as set forth in
the Offering Memorandum, require no amortization, redemption,
repurchase, prepayment or defeasance earlier than, six months following
the latest of the US Term Maturity Date, the Canadian Term Maturity
Date and the Revolving Maturity Date and (d) 100% of the Net Proceeds
of which shall be applied as set forth in Section 2.11(c).
(c) Section 2.11(c) is amended by amending and restating in
its entirety the last sentence of such Section as follows:
Notwithstanding the foregoing, (a) in the event that Net Proceeds of
the Planned IPO are received by or on behalf of the Company or any
Subsidiary, the prepayment requirements of this Section 2.11(c) with
respect to such Net Proceeds shall be limited to the prepayment of US
Term Loans in an amount equal to the sum of (i) US$24,000,000 plus (ii)
50% of the excess of such Net Proceeds over US$138,000,000 and (b) in
the event that Net Proceeds of the issuance of Qualified Subordinated
Indebtedness are received by or on behalf of the Company, the
prepayment requirements of this Section 2.11(c) with respect to such
Net Proceeds shall be as follows: (i) first, within five Business Days
after such Net Proceeds are received, US$90,000,000 shall be applied to
repay the Senior Subordinated Notes; (ii) second, within five Business
Days after such Net Proceeds are received, an amount not less than
US$35,000,000 shall be applied to prepay US Term Loans; (iii) third,
within five Business Days after such Net Proceeds are received, the
lesser of the amount outstanding of the Revolving Borrowings on such
date and the amount of any remaining Net Proceeds shall be applied to
prepay Revolving Borrowings (which prepayment shall not reduce the
Revolving Commitments hereunder unless the Company shall elect to
reduce such Commitments pursuant to Section 2.08(b)); and (iv)
thereafter, any remaining Net Proceeds may be retained by the Company
for general corporate purposes.
(d) Section 2.20 is amended and restated in its entirety to
read as follows:
SECTION 2.20. Increase in Revolving Commitments. The
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Company may, by written notice to the
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US Agent, executed by the Company and one or more financial institutions
(any such financial institution referred to in this Section being called a
"Prospective Revolving Lender"), which may include any Lender, cause the
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Revolving Commitments of the Prospective Revolving Lenders to be increased
(or cause Revolving Commitments to be extended by the Prospective Revolving
Lenders, as the case may be) in an amount for each Prospective Revolving
Lender set forth in such notice, provided, however, that (a) the aggregate
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amount of the Lenders' Revolving Commitments after giving effect to such
increase shall in no event exceed US$185,000,000, (b) each Prospective
Revolving Lender, if not already a Lender hereunder, shall be subject to
the approval of the US Agent (which approval shall not be unreasonably
withheld) and (c) each Prospective Revolving Lender, if not already a
Lender hereunder, shall become a party to this Agreement by completing and
delivering to the US Agent a duly executed Accession Agreement. Increases
and new Revolving Commitments created pursuant to this Section shall become
effective (A) in the case of Prospective Revolving Lenders already parties
hereunder, on the date specified in the notice delivered pursuant to this
Section and (B) in the case of Prospective Revolving Lenders not already
parties hereunder, on the effective date of the Accession Agreement. Upon
the effectiveness of any Accession Agreement to which any Prospective
Revolving Lender is a party, (i) such Prospective Revolving Lender shall
thereafter be deemed to be a party to this Agreement and shall be entitled
to all rights, benefits and privileges accorded a Lender hereunder and
subject to all obligations of a Lender hereunder and (ii) Schedule 2.01
shall be deemed to have been amended to reflect the Revolving Commitment of
the additional Lender as provided in such Accession Agreement. Upon the
effectiveness of any increase pursuant to this Section in the Revolving
Commitment of a Lender already a party hereunder, Schedule 2.01 shall be
deemed to have been amended to reflect the increased Revolving Commitment
of such Lender. Notwithstanding the foregoing, no increase in the aggregate
Revolving Commitments (or in the Revolving Commitment of any Lender) shall
become effective under this Section unless, on the date of such increase,
the conditions set forth in paragraphs (a) and (b) of Section 4.02 shall be
satisfied (with all references in such paragraphs to a Borrowing being
deemed to be references to such increase) and the US Agent shall have
received a certificate to that effect dated such date and executed by a
Financial Officer of the Company.
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Following any increase of a Lender's Revolving Commitment or any
extension of a new Revolving Commitment pursuant to this paragraph, any
Revolving Loans outstanding prior to the effectiveness of such increase
or extension shall continue outstanding until the ends of the
respective Interests Periods applicable thereto, and shall then be
repaid or refinanced with new Revolving Loans made pursuant to Sections
2.01 and 2.03.
(e) Section 5.15 is amended by deleting in its entirety
paragraph (a) thereof and deleting "(b)" appearing immediately prior to the
words "The Company and CBIL shall pay and perform".
(f) Section 6.05(d) is amended and restated in its entirety to
read as follows:
(d) (i) the Senior Subordinated Notes; (ii) any other
Subordinated Indebtedness of the Company the proceeds of which are
solely applied to repay the Senior Subordinated Notes; provided that
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the terms of any such other Subordinated Indebtedness (including
maturity, amortization, redemption, repurchase or prepayment
requirements, covenants and events of default and subordination
provisions) shall (x) be in the aggregate not less favorable to the
Company than those of the Senior Subordinated Notes, (y) contain
subordination provisions at least as favorable to the Lenders as those
contained in the Senior Subordinated Notes and (z) mature no earlier
than, and require no amortization, redemption, repurchase or prepayment
earlier than, the Senior Subordinated Notes; and (iii) Qualified
Subordinated Indebtedness in an aggregate principal amount not to
exceed US$225,000,000;
(g) Section 6.15 is amended and restated in its entirety to
read as follows:
SECTION 6.15. Subordinated Indebtedness. The Company
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will not, and will not permit any Subsidiary to, make or agree to make,
directly or indirectly, any payment or other distribution (whether in
cash, securities or other property) of or in respect of the principal
of or interest on the Senior Subordinated Notes or any other
Subordinated Indebtedness, or any payment or other distribution
(whether in cash, securities or other property), including any sinking
fund or similar deposit, on account of the purchase, redemption,
retirement,
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defeasance, cancellation or termination of the Senior Subordinated
Notes or any other Subordinated Indebtedness, except (i) scheduled and
other mandatory payments of interest and principal in respect thereof
(other than any prepayments of the Senior Subordinated Notes Due 2009
with the proceeds of any offering or issuance of Equity Interests or
Indebtedness), (ii) the prepayment of the Senior Subordinated Notes
with the proceeds of other Subordinated Indebtedness, including
Qualified Subordinated Indebtedness, permitted under Section 6.05(d)
and (iii) after an Initial Public Offering, the prepayment of Senior
Subordinated Notes with up to US$25,000,000 (or US$45,000,000 if such
Initial Public Offering is the Planned IPO) of the Net Proceeds from
such Initial Public Offering, provided that, in the case of clauses
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(ii) and (iii) above, (A) the Net Proceeds from such Initial Public
Offering are applied first to prepay US Term Loans and, unless such
Initial Public offering is the Planned IPO, amounts owed in respect of
Canadian Term Loans and outstanding B/As in accordance with Section
2.11(c), (B) the Net Proceeds from the issuance of Qualified
Subordinated Indebtedness are applied to prepay Senior Subordinated
Notes, US Term Loans and Revolving Borrowings in accordance with
Section 2.11(c) and (C) the Leverage Ratio does not exceed 3.5 to 1.0
(calculated on a pro forma basis to give effect to the application of
such Net Proceeds in accordance with Section 2.11 and to any prepayment
of Senior Subordinated Notes); provided that, in any case, no payment
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shall be made in respect of the Senior Subordinated Notes or any other
Subordinated Indebtedness that is prohibited by the subordination
provisions applicable thereto. Notwithstanding the forgoing proviso, it
is agreed that any prepayment of the Senior Subordinated Notes with
proceeds from an issuance of Qualified Subordinated Indebtedness
permitted by clause (ii) of the preceding sentence or with proceeds
from an Initial Public Offering permitted by clause (iii) of the
preceding sentence shall not be received in trust for, held for the
benefit of, or paid over, delivered or transferred to, the Lenders.
SECTION 2. Increase in Revolving Commitments of Certain
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Existing Lenders. In the event that the Amendment Effective Date (as defined in
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Section 4 below) shall have occurred, effective as of the date on which US Term
Loans are prepaid with Net Proceeds of the issuance of Qualified Subordinated
Indebtedness pursuant to Section 2.11(c) of the Credit Agreement, each of the US
Term Lenders that executes a separate signature block appearing on its signature
page
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hereto set forth therein for such purpose agrees that its Revolving Commitment
shall be automatically increased without any further action on the part of any
Person on such date in an amount equal to (i) the aggregate principal amount of
such US Term Lender's outstanding US Term Loans prepaid on such date with the
Net Proceeds of the issuance of Qualified Subordinated Indebtedness plus (ii)
in the case of CIBC, Inc. and First Union National Bank, the additional amount
appearing on such US Term Lender's signature page hereto. On the date of such
prepayment, Schedule 2.01 shall be deemed to be modified to reflect the
increase in the Revolving Commitment of each such US Term Lender, subject to
such US Term Lender's indicating its agreement to the terms of this Section 2
on its signature page hereto (and the last sentence of the definition of
"Revolving Commitment" shall be deemed to be modified to reflect the resulting
increase in the aggregate Revolving Commitments pursuant to this Section 2).
Following any increase of any of the Lenders' Revolving Commitments pursuant to
this Section 2, any Revolving Loans outstanding prior to the effectiveness of
such increase shall continue outstanding until the ends of the respective
Interest Periods applicable thereto, and shall then be repaid or refinanced
with new Revolving Loans made pursuant to Sections 2.01 and 2.03.
SECTION 3. Representations and Warranties. Each of the
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Borrowers represents and warrants to each of the Lenders that, after giving
effect to the amendments contemplated hereby, (a) the representations and
warranties of such Borrower set forth in the Credit Agreement are true and
correct in all material respects on and as of the date of this Amendment,
except to the extent such representations and warranties expressly relate to an
earlier date (in which case such representations and warranties shall be true
and correct in all material respects as of the earlier date) and (b) no Default
has occurred and is continuing.
SECTION 4. Effectiveness. This Amendment shall become
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effective as of the date (the "Amendment Effective Date") when the following
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conditions shall have been satisfied:
(a) The Administrative Agent (or its counsel) shall have
received copies hereof that, when taken together, bear (i) the
signatures of the Borrowers and the Required Lenders, (ii) the
signatures of US Term Lenders having outstanding US Term Loans
representing more than 50% of the total outstanding US Term Loans on
the Amendment Effective Date, (iii) the signatures of Canadian Term
Lenders having outstanding Canadian Term Loans and outstanding accepted
B/As representing more
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than 50% of the sum of the total outstanding Canadian Term Loans and
accepted B/As on the Amendment Effective Date and (iv) the signatures
of each Lender increasing its Revolving Commitment pursuant to Section
2 of this Amendment.
(b) The Company shall have received gross cash proceeds from
the issuance of the Qualified Subordinated Indebtedness of at least
$125,000,000.
(c) The Administrative Agent shall have received a certificate
of the President, a Vice President or a Financial Officer of the
Company, confirming compliance as of the Amendment Effective Date with
the conditions set forth in paragraphs (a) and (b) of Section 4.02 of
the Credit Agreement.
(d) The Administrative Agent and the Lenders shall have
received all fees, expenses and other consideration presented for
payment on or before the date hereof.
The Administrative Agent shall notify the Borrower and the Lenders of the
occurrence of the Amendment Effective Date and shall distribute to the Borrower
and the Lenders an updated Schedule 2.01 on the date when such Schedule may be
modified pursuant to Section 2 hereof.
SECTION 5. Applicable Law. THIS AMENDMENT SHALL BE CONSTRUED
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IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
SECTION 6. No Other Amendments. Except as expressly set forth
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herein, this Amendment shall not by implication or otherwise limit, impair,
constitute a waiver of, or otherwise affect the rights and remedies of any
party under, the Credit Agreement, nor alter, modify, amend or in any way
affect any of the terms, conditions, obligations, covenants or agreements
contained in the Credit Agreement, all of which are ratified and affirmed in
all respects and shall continue in full force and effect. This Amendment shall
apply and be effective only with respect to the provisions of the Credit
Agreement specifically referred to herein.
SECTION 7. Counterparts. This Amendment may be executed in two
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or more counterparts, each of which shall constitute an original, but all of
which when taken together shall constitute but one contract. Delivery of an
executed counterpart of a signature page of this Amendment by
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facsimile transmission shall be as effective as delivery of a manually executed
counterpart of this Amendment.
SECTION 8. Headings. Section headings used herein are for
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convenience of reference only, are not part of this Amendment and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Amendment.
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IN WITNESS WHEREOF, the Borrower and the undersigned Lenders
have caused this Amendment to be duly executed by their duly authorized
officers, all as of the date first above written.
SELECT MEDICAL CORPORATION,
by: Michael E. Tarvin
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Name: Michael E. Tarvin
Title: Senior Vice President
CANADIAN BACK INSTITUTE LIMITED,
by: Michael E. Tarvin
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Name: Michael E. Tarvin
Title: Vice President
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To approve the Amendment:
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THE CHASE MANHATTAN BANK,
individually and as US Agent
and US Collateral Agent,
by: Dawn Lee Lum
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Name: Dawn Lee Lum
Title: Vice President
To increase the Revolving
Commitment of The Chase
Manhattan Bank pursuant to
Section 2 of the Amendment:
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THE CHASE MANHATTAN BANK,
individually,
by: Dawn Lee Lum
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Name: Dawn Lee Lum
Title: Vice President
To approve the Amendment:
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THE CHASE MANHATTAN BANK OF
CANADA, individually and as
Canadian Agent and Canadian
Collateral Agent,
by: Chris (illegible) Collins
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Name:
Title:
To approve the Third Amendment
dated as of May 31, 2001 (the
"Amendment") to the Credit
Agreement dated as of September 22,
2000 (the "Credit Agreement"), as
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amended, among Select Medical
Corporation, a Delaware corporation
(the "Company"), Canadian Back
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Institute Limited, an Ontario
corporation and a wholly owned
subsidiary of the Company ("CBIL"
----
and, together with the Company, the
"Borrowers"), the Lenders party
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thereto, The Chase Manhattan Bank,
as US Agent and US Collateral
Agent, The Chase Manhattan Bank of
Canada, as Canadian Agent and
Canadian Collateral Agent, Banc of
America Securities, LLC, as
Syndication Agent, and CIBC, Inc.,
as Documentation Agent:
Name of Institution:
Bank of America, N.A.
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by Kevin Wagley
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Name: Kevin Wagley
Title: Principal
by ________________________________
Name:
Title:
To approve the increase in the
above named institution's Revolving
Commitment pursuant to Section 2 of
the Amendment:
by ________________________________
Name:
Title:
by ________________________________
Name:
Title:
To approve the Third Amendment
dated as of May 31, 2001 (the
"Amendment") to the Credit
Agreement dated as of September 22,
2000 (the "Credit Agreement"), as
----------------
amended, among Select Medical
Corporation, a Delaware corporation
(the "Company"), Canadian Back
-------
Institute Limited, an Ontario
corporation and a wholly owned
subsidiary of the Company ("CBIL"
----
and, together with the Company, the
"Borrowers"), the Lenders party
---------
thereto, The Chase Manhattan Bank,
as US Agent and US Collateral
Agent, The Chase Manhattan Bank of
Canada, as Canadian Agent and
Canadian Collateral Agent, Banc of
America Securities, LLC, as
Syndication Agent, and CIBC, Inc.,
as Documentation Agent:
Name of Institution:
Merrill Lynch Capital Corporation
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by Chris Berosak
---------------------------------
Name: Chris Berosak
Title: Vice President
by ________________________________
Name:
Title:
To approve the increase in the
above named institution's Revolving
Commitment pursuant to Section 2 of
the Amendment:
by Chris Berosak
---------------------------------
Name: Chris Berosak
Title: Vice President
by ________________________________
Name:
Title:
To approve the Third Amendment
dated as of May 31, 2001 (the
"Amendment") to the Credit
Agreement dated as of September 22,
2000 (the "Credit Agreement"), as
----------------
amended, among Select Medical
Corporation, a Delaware corporation
(the "Company"), Canadian Back
-------
Institute Limited, an Ontario
corporation and a wholly owned
subsidiary of the Company ("CBIL"
----
and, together with the Company, the
"Borrowers"), the Lenders party
---------
thereto, The Chase Manhattan Bank,
as US Agent and US Collateral
Agent, The Chase Manhattan Bank of
Canada, as Canadian Agent and
Canadian Collateral Agent, Banc of
America Securities, LLC, as
Syndication Agent, and CIBC, Inc.,
as Documentation Agent:
Name of Institution:
PNC Bank National Association
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by Marie T. Boyer
---------------------------------
Name: Marie T. Boyer
Title: Vice President
by ________________________________
Name:
Title:
To approve the increase in the
above named institution's Revolving
Commitment pursuant to Section 2 of
the Amendment:
by Marie T. Boyer
---------------------------------
Name: Marie T. Boyer
Title: Vice President
by ________________________________
Name:
Title:
To approve the Third Amendment
dated as of May 31, 2001 (the
"Amendment") to the Credit
Agreement dated as of September 22,
2000 (the "Credit Agreement"), as
----------------
amended, among Select Medical
Corporation, a Delaware corporation
(the "Company"), Canadian Back
-------
Institute Limited, an Ontario
corporation and a wholly owned
subsidiary of the Company ("CBIL"
----
and, together with the Company, the
"Borrowers"), the Lenders party
---------
thereto, The Chase Manhattan Bank,
as US Agent and US Collateral
Agent, The Chase Manhattan Bank of
Canada, as Canadian Agent and
Canadian Collateral Agent, Banc of
America Securities, LLC, as
Syndication Agent, and CIBC, Inc.,
as Documentation Agent:
Name of Institution:
Societe Generale
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by Richard Bernal
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Name: Richard Bernal
Title: Director, Corporate Banking
by________________________________
Name:
Title:
To approve the increase in the
above named institution's Revolving
Commitment pursuant to Section 2 of
the Amendment:
by Richard Bernal
----------------------------------
Name: Richard Bernal
Title: Director, Corporate Banking
by________________________________
Name:
Title:
To approve the Third Amendment
dated as of May 31, 2001 (the
"Amendment") to the Credit
Agreement dated as of September 22,
2000 (the "Credit Agreement"), as
----------------
amended, among Select Medical
Corporation, a Delaware corporation
(the "Company"), Canadian Back
-------
Institute Limited, an Ontario
corporation and a wholly owned
subsidiary of the Company ("CBIL"
----
and, together with the Company, the
"Borrowers"), the Lenders party
---------
thereto, The Chase Manhattan Bank,
as US Agent and US Collateral
Agent, The Chase Manhattan Bank of
Canada, as Canadian Agent and
Canadian Collateral Agent, Banc of
America Securities, LLC, as
Syndication Agent, and CIBC, Inc.,
as Documentation Agent:
CIBC, INC.
by Douglas J. (illegible)
---------------------------------
Name: Douglas J. (illegible)
Title: Executive Director
To approve the increase in the
above named institution's Revolving
Commitment pursuant to Section 2 of
the Amendment, and an additional
US$5,000,000 increase in such
Revolving Commitment:
by Douglas J. (illegible)
---------------------------------
Name: Douglas J. (illegible)
Title: Executive Director
To approve the Third Amendment
dated as of May 31, 2001 (the
"Amendment") to the Credit
Agreement dated as of September 22,
2000 (the "Credit Agreement"), as
----------------
amended, among Select Medical
Corporation, a Delaware corporation
(the "Company"), Canadian Back
-------
Institute Limited, an Ontario
corporation and a wholly owned
subsidiary of the Company ("CBIL"
----
and, together with the Company, the
"Borrowers"), the Lenders party
---------
thereto, The Chase Manhattan Bank,
as US Agent and US Collateral
Agent, The Chase Manhattan Bank of
Canada, as Canadian Agent and
Canadian Collateral Agent, Banc of
America Securities, LLC, as
Syndication Agent, and CIBC, Inc.,
as Documentation Agent:
FIRST UNION NATIONAL BANK
by Jeanette A. Griffin
---------------------------------
Name: Jeanette A. Griffin
Title: Vice President
To approve the increase in the
above named institution's Revolving
Commitment pursuant to Section 2 of
the Amendment, and an additional
US$15,000,000 increase in such
Revolving Commitment:
by Jeanette A. Griffin
---------------------------------
Name: Jeanette Griffin
Title: Vice President