SEVENTH AMENDMENT TO
AMENDED AND RESTATED CREDIT AGREEMENT
-------------------------------------
THIS SEVENTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT is dated
as of the 10th day of December, 1993, among CONTINENTAL MEDICAL SYSTEMS, INC.,
a Delaware corporation ("Borrower"), the Lenders party to the Credit Agreement
described below, NATIONSBANK OF TENNESSEE, N.A. , a national banking
association, successor by assignment to Maryland National Bank, as Co-Agent,
and CITIBANK, N.A., a national banking association, as Agent (the "Agent").
WITNESSETH:
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WHEREAS, the Borrower, Lenders, and Agent entered into an Amended and
Restated Credit Agreement dated as of August 28, 1991, as amended as of
December 31, 1991, March 31, 1992, July 8, 1992, September 23, 1992, February
26, 1993 and March 26, 1993 (the "Credit Agreement");
WHEREAS, the Borrower has requested an increase in the commitments under
the Credit Agreement to $235,000,000, the addition of another lender and other
amendments to the Credit Agreement; and
WHEREAS, the Agent and the Lenders have agreed to make such amendments
upon the terms and conditions set forth below;
NOW, THEREFORE, for valuable consideration hereby acknowledged, the
Borrower, the Lenders and the Agent agree as follows:
Section 1. Definitions. Unless otherwise defined herein, terms are used
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herein as defined in the Credit Agreement.
Section 2. Amendment of Section 1.01. Section 1.01 of the Credit
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Agreement is hereby amended by (a) deleting the definitions of "Total
Liabilities" and "Tangible Net Worth," (b) adding the following new
definitions of "Future Minimum Rent Obligations" and "Net Stock Repurchase
Amount," and (c) deleting the definitions of "Co-Agent," "Commitment,"
"Conversion Date," "EBDIT," "Fixed Charge Coverage Ratio," "Interest Coverage
Ratio," "Quarterly Compliance Certificate," "Related Business," "Specified
Percentage," and "Total Senior Debt" and inserting in place thereof the
following new definitions thereof (all in the appropriate alphabetical order):
"Co-Agent" means NationsBank of Tennessee, N.A., a national banking
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association.
"Commitment" means $235,000,000, as reduced from time to time
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pursuant to Section 2.04 hereof.
"Conversion Date" means the last Business Day of December 1996, as
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extended (if extended) pursuant to Section 2.05 hereof.
"EBDIT" means, for any Person and its Subsidiaries determined on a
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consolidated basis, the sum of pre-Tax income (before deduction of minority
interests), plus depreciation, amortization, and interest expense, all
determined in accordance with GAAP, minus Dividends paid in cash pursuant to
Section 6.08 hereof to the extent not otherwise deducted in the calculation
of income, and adjusted (a) to exclude (i) any extraordinary or non-
recurring non-cash items deducted from or included in the calculation of
pre-Tax income, (ii) the proportionate share of such income for the period
prior to sale that is attributable to any equity interest in a consolidated
Subsidiary that has been sold, and (iii) the income statement effect
attributable to any consolidated Subsidiary (or any business or entity
included therein) of which substantially all assets have been sold and (b)
to include, in the case of any acquisition of any business or entity that
becomes or is included in a consolidated Subsidiary of the Borrower in
accordance with Section 6.06(b) or (c) hereof, the sum of pre-Tax income
(before deduction of minority interests), plus depreciation, amortization
and interest expense of such business or entity, during the period, if any,
that such business or entity was not included in the consolidated financial
statements of the Borrower and its Subsidiaries, all determined in
accordance with GAAP and adjusted to exclude any extraordinary or non-
recurring non-cash items deducted from or included in the calculation of
pre-Tax income during such period.
"Fixed Charge Coverage Ratio" means, for the Borrower and its
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Subsidiaries determined on a consolidated basis and calculated for the four
fiscal quarters ending on the date of calculation, the ratio of (a) EBDIT
(as adjusted below), (i) plus operating lease payments, (ii) minus Dividends
paid in cash to minority interests (as adjusted below), Capital Expenditures
not financed by borrowed money or by Capital Leases (excluding the costs of
any acquisition permitted under Section 6.06(e) hereof), and Taxes paid in
cash, and (iii), in the case of any acquisition of any business or entity
that becomes or is included in a consolidated Subsidiary of the Borrower in
accordance with Section 6.06(b) or (c) hereof, plus (A) operating lease
payments of such business or entity for the period, if
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any, during such four fiscal quarters that such business or entity was not
included in the consolidated financial statements of the Borrower and its
Subsidiaries, and minus (B) Capital Expenditures not financed by borrowed
money or by Capital Leases for such business or entity and Taxes paid in
cash for such business or entity, determined on a pro forma basis for such
period as if such business or entity had been separately taxable, to (b)
principal paid with respect to Debt (excluding revolving lines of credit
that do not mature within one year and Debt refinanced in accordance with
this Agreement), interest expensed with respect to Debt, and operating lease
payments, plus, in the case of any such acquisition, (i) (without
duplication) interest expensed with respect to Debt incurred or assumed by
the Borrower or any of its Subsidiaries in connection with such acquisition,
determined on a pro forma basis for the period, if any, during such four
fiscal quarters that such business or entity was not included in the
consolidated financial statements of the Borrower and its Subsidiaries as if
the acquisition had been made at the beginning of such period and assuming,
in the case of variable rate interest, that the interest rate of such Debt
equaled the average interest rate payable under this Agreement during such
period, and (ii) operating lease payments of such business or entity for
such period. Solely for determining compliance with Section 6.01(c) hereof,
the following adjustments shall be made as to each rehabilitation hospital
located on or constituting part of real property leased by the Borrower or
any Subsidiary under an operating lease if such operating lease does not
expressly provide that the Agent may become the owner of or assign to
another Person the Borrower's or such Subsidiary's interest in such lease
and related agreements, so long as the Agent becomes the owner or the
assignee is reasonably acceptable to the lessor or the lessor's lender,
unless such lease was in effect on August 28, 1991:
1. there shall be excluded from EBDIT 50% of the EBDIT attributable
to such rehabilitation hospital (accounting for such rehabilitation
hospital as a separate Subsidiary or division of the Borrower); and
2. in the case of a Subsidiary which operates such a rehabilitation
hospital, only 50% of the Dividends paid in cash to minority interests
and attributable to such rehabilitation hospital shall be deducted
from EBDIT.
3
"Future Minimum Rent Obligations" means, as of any date, the present
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value of all future minimum lease payments under all non-cancelable
operating leases of facilities and equipment of the Borrower and its
Subsidiaries (exclusive of contingent lease payments), on a consolidated
basis. For the purposes of the foregoing, such minimum lease payments under
any operating lease shall be determined in accordance with GAAP, and the
present value of such minimum lease payments shall be determining using as a
discount rate the base lease rate of the lessor specified in or reasonably
implied from such lease (or, in the absence of such specification or
implication, the average of all base lease rates in such leases which
specify or reasonably imply a base lease rate) compounded monthly.
"Interest Coverage Ratio" means, for the Borrower and its Subsidiaries
-----------------------
determined on a consolidated basis and calculated for the four fiscal
quarters ending on the date of calculation, the ratio of (a) EBDIT (as
adjusted below), plus operating lease payments, plus, in the case of any
acquisition of any business or entity that becomes or is included in a
consolidated Subsidiary of the Borrower in accordance with Section 6.06(b)
or (c) hereof, operating lease payments of such business or entity for the
period, if any, during such four fiscal quarters that such business or
entity was not included in the consolidated financial statements of the
Borrower and its Subsidiaries, to (b) interest expensed with respect to Debt
and operating lease payments, plus, in the case of any such acquisition, (i)
(without duplication) interest expensed with Debt incurred or assumed by the
Borrower or any of its Subsidiaries in connection with such acquisition,
determined on a pro forma basis for the period, if any, during such four
fiscal quarters that such business or entity was not included in the
consolidated financial statements of the Borrower and its Subsidiaries as if
the acquisition had been made at the beginning of such period and assuming,
in the case of variable rate interest, that the interest rate of such Debt
equaled the average interest rate payable under this Agreement during such
period, and (ii) operating lease payments of such business or entity for
such period. Solely for determining compliance with Section 6.01(d) hereof,
EBDIT shall be adjusted to exclude therefrom 50% of the EBDIT attributable
to each rehabilitation hospital (accounting for such rehabilitation hospital
as a separate Subsidiary or division of the Borrower) located on or
constituting part of real property leased by the Borrower or any Subsidiary
under an operating lease if such operating lease does not expressly provide
that the Agent may become the owner of or assign to another Person
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the Borrower's or such Subsidiary's interest in such lease and related
agreements, so long as the Agent becomes the owner or the assignee is
reasonably acceptable to the lessor's lender, unless such lease was in
effect on August 28, 1991.
"Net Stock Repurchase Amount" means, as of any date, the aggregate
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purchase price for all repurchases of capital stock of the Borrower made
during the period of determination pursuant to the last proviso in Section
6.08 hereof, less the aggregate net cash proceeds, if any, received by the
Borrower from the sales of any such repurchased capital stock held in
treasury and the issuance of shares of capital stock of the Borrower
during such period.
"Quarterly Compliance Certificate" means a certificate of the chief
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financial officer or the treasurer of the Borrower, substantially in the
form of Exhibit 1 to the Seventh Amendment to this Agreement, (a) certifying
that such individual has no knowledge that a Default or Event of Default has
occurred and is continuing, or if a Default or Event of Default has occurred
and is continuing, a statement as to the nature thereof and the action being
taken or proposed to be taken with respect thereto, (b) setting forth
detailed calculations with respect to the representations set forth in
Section 5.13 hereof and the covenants described in Sections 6.01, 6.05(a),
6.06(b), 6.07, 6.08 and 6.10(iv) hereof and (c) in the case of the
calculations for Section 6.01(g) hereof, providing the elements of such
calculations for Future Minimum Rent Obligations.
"Related Business" means the provision of medical rehabilitation
----------------
programs and services (whether in an inpatient or outpatient setting or on a
contract services basis), the provision of therapy services and locum tenens
services and the provision of management services for healthcare
institutional, physician and other providers, including without limitation
the operation of inpatient and outpatient centers, residential care centers,
transitional living centers and ambulatory surgery centers, the provision of
home healthcare, diagnostic testing and laboratory services, and the
provision of practice management and other healthcare provider management
services, and activities incidental to or supporting the competitive
position of the Borrower and its Subsidiaries in any of such businesses.
"Specified Percentage" means, as to any Lender, the percentage
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indicated beside its name on the signature pages of the Seventh Amendment
to this Agreement, or
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specified in a notice by the Agent to the Borrower in connection with an
assignment pursuant to Section 9.04 hereof or a reduction in the Commitment
pursuant to Section 2.04(a) hereof.
"Total Senior Debt" means for the Borrower and its Subsidiaries
-----------------
determined on a consolidated basis, the aggregate amount owing with
respect to all Debt for borrowed money, except Subordinate Debt.
Section 3. Amendment of Section 2.03. Section 2.03 of the Credit Agree-
-------------------------
ment is hereby amended by adding the following new subsection (g):
(g) The Borrower agrees to pay to the Agent, for the account of each
Lender (other than Corestates Bank, N.A., for which the applicable fee is
the subject of a separate letter agreement), an amendment fee equal to
0.1875% times the dollar amount represented by such Lender's Specified
Percentage of the Commitment after giving effect to the Seventh Amendment to
this Agreement. The Lenders acknowledge that no amendment fee shall be
payable pursuant to subsection (f) of this Section 2.03.
Section 4. Amendment of Section 2.05. Section 2.05 of the Credit
-------------------------
Agreement is hereby amended by deleting the word "September" in subsection (b)
thereof and inserting in place thereof the word "December."
Section 5. Amendment of Section 5.06. Section 5.06 of the Credit
-------------------------
Agreement is hereby amended by deleting the period at the end of the second
sentence thereof and inserting in place thereof the following: ", except that
the Borrower may repurchase shares of its capital stock in accordance with
Section 6.08 hereof."
Section 6. Amendment of Section 6.01. Section 6.01 of the Credit
-------------------------
Agreement is hereby amended by (a) deleting the texts of subsections (a) and
(b) in their entirety and inserting in place thereof the phrase
"[Intentionally Omitted]," (b) deleting the date "June 30, 1994" from
subsections (c) and (d) thereof and inserting in place thereof the words "the
Conversion Date," and (c) deleting subsection (f) and inserting in place
thereof new subsections (f) and (g) to read as follows:
(f) Total Senior Debt shall not at any time exceed 6.5 times the net
income of the Borrower and its Subsidiaries for the most recent four fiscal
quarters, determined in accordance with GAAP on a consolidated basis, minus
Dividends paid in cash pursuant to Section 6.08 hereof, plus $80,000,000 for
any calculation
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made from April 1, 1992 through September 30, 1992, and adjusted (i) to
exclude (A) the effect of any extraordinary or non-recurring non-cash items,
(B) the proportionate share of net income for the period prior to sale that
is attributable to any equity interest in a Subsidiary that has been sold,
and (C) the net income attributable to any Subsidiary (or any business or
entity included therein) of which substantially all assets have been sold
and (ii) to include, in the case of any acquisition of any business or
entity that becomes or is included in a Subsidiary of the Borrower in
accordance with Section 6.06(b) or (c) hereof, (A) the net income of such
business or entity, determined in accordance with GAAP and adjusted to
exclude the effect of any extraordinary or non-recurring non-cash items, for
the period, if any, during such four fiscal quarters that such business or
entity was not included in consolidated financial statements of the Borrower
and its Subsidiaries, less (B) (without duplication) interest expense (net
of any related Tax savings associated with such expense) for any Debt
incurred or assumed by the Borrower or any of its Subsidiaries in connection
with such acquisition, determined on a pro forma basis for such period as if
such acquisition had been made at the beginning of such period and assuming,
in the case of variable rate interest, that the interest rate of such Debt
equaled the average interest rate payable under this Agreement during such
period. Notwithstanding any provision in this Section 6.01(f) to the
contrary, net income of the Borrower and its Subsidiaries shall be adjusted
to exclude 50% of the net income attributable to each rehabilitation
hospital (accounting for such rehabilitation hospital as a separate
Subsidiary or division of the Borrower) located on or constituting part of
real property leased by the Borrower or any Subsidiary under an operating
lease if such operating lease does not expressly provide that the Agent may
become the owner of or assign to another Person the Borrower's or such
Subsidiary's interest in such lease and related agreements, so long as the
Agent becomes the owner, or the assignee is reasonably acceptable to the
lessor or the lessor's lender, unless such lease was in effect on August 28,
1991.
(g) The ratio of (i) the sum of (A) Total Debt and (B) Future Minimum
Rent Obligations to (ii) the sum of (A) Total Debt, (B) Future Minimum Rent
Obligations and (C) shareholders' equity (including minority interests of
operating subsidiaries) shall not be greater than the following at the end
of any fiscal quarter of the Borrower ending during the following periods:
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Period Ratio
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December 31, 1993 0.750 to 1
through June 29, 1994
June 30, 1994 0.725 to 1
through June 29, 1995
June 30, 1995 0.700 to 1
through June 29, 1996
June 30, 1996 0.675 to 1
through June 29, 1997
June 30, 1997 0.650 to 1
and thereafter
Section 7. Amendment of Section 6.02. Section 6.02 of the Credit
-------------------------
Agreement is hereby amended by deleting the phrase "Total Liabilities," from
subsection (k) thereof.
Section 8. Amendment of Section 6.08. Section 6.08 of the Credit
-------------------------
Agreement is hereby amended by deleting the period at the end thereof and
inserting in place thereof the following:
; and provided also that, in addition to the foregoing, the Borrower
may repurchase shares of its capital stock so long as no Default or
Event of Default shall then exist or would result therefrom (after
giving pro forma effect thereto as if such repurchase had occurred at
the end of the fiscal quarter of the Borrower then most recently ended
for the purposes Section 6.01 hereof) and provided that, after giving
effect thereto, (i) the Net Stock Repurchase Amount during the period
beginning January 1, 1994 and ending on the date of determination shall
not exceed $50,000,000, less the aggregate amount of any loans or
guarantees made pursuant to Section 6.10(iv) hereof outstanding as of
the date of determination and (ii) the Net Stock Repurchase Amount
during any fiscal year of the Borrower may not exceed the sum of
$10,000,000 plus, in the case of fiscal years after fiscal 1994, (to
the extent not theretofore utilized for any other fiscal year) 50% of
the sum of the respective amounts, if any, by which $10,000,000
exceeded the Net Stock Repurchase Amount during each preceding fiscal
year commencing with fiscal 1994.
Section 9. Amendment of Section 6.10. Section 6.10 of the Credit
-------------------------
Agreement is hereby amended by deleting the first sentence thereof in its
entirety and inserting in place thereof the following:
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The Borrower shall not, and shall not permit any of its Subsidiaries
to, make any Investment, except (i) Investments in Cash Equivalents, (ii)
loans made to Borrowing Subsidiaries in accordance with Section 6.19 hereof,
(iii) Investments in a minority equity interest in a Person in accordance
with Section 6.06(b) and (c) hereof, so long as no Default or Event of
Default shall then exist or result therefrom, and (iv) loans from the
Borrower or any of its Subsidiaries made to, or guaranties by the Borrower
or any of its Subsidiaries of loans made by others to, any entity in which
the Borrower or any of its Subsidiaries has a minority equity interest or to
which the Borrower or any of its Subsidiaries provides as part of a Related
Business contract services, provided that such loans and guaranties do not
exceed in aggregate amount $50,000,000, less the then Net Stock Repurchase
Amount, at any time outstanding, and provided further that the following
conditions are satisfied: (A) no Default or Event of Default shall then
exist or result therefrom, (B) the use of the proceeds of any such loans
(whether from the Borrower, any of its Subsidiaries or others) shall be
reasonably expected by the Borrower to further a Related Business of the
Borrower or any of its Subsidiaries, (C) the Borrower or its Subsidiary
shall have customary rights of subrogation in respect of any such guaranty,
(D) any such loan (whether from the Borrower, any of its Subsidiaries or
others) shall be payable in equal installments (whether annually or more
frequently) under no more than a 30-year amortization schedule with a final
maturity of no more than ten years, and (E) such loan and such entity's
obligations in respect of such guaranty shall be evidenced by a promissory
note or other repayment agreement which shall be pledged to the Agent,
together with all evidences thereof, pursuant to a security agreement,
creating a first priority security interest, substantially in the form of
the Amended and Restated Security Agreement of Borrower.
Section 10. Amendment of Section 6.18. Section 6.18 of the Credit
-------------------------
Agreement is hereby amended by inserting before the phrase "and for other
general corporate purposes" the following phrase: "to repurchase shares of
its capital stock to the extent permitted by the last proviso in Section 6.08
hereof."
Section 11. Amendment of Pledge Agreement. Section 1.01 of the Amended
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and Restated Pledge Agreement of Borrower is hereby amended by inserting after
the words "Insurance Subsidiary" the following phrase: "or the Pledgor."
9
Section 12. New Lender; Outstanding Amounts. Immediately prior to the
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close of business on December 31, 1993, (i) The Dai-ichi Kangyo Bank, Limited
will assign all of its interests, representing $10,000,000 in the aggregate of
the Commitment, in all outstanding Advances and Letters of Credit to Citibank,
N.A., (ii) Maryland National Bank will assign all of its interests,
representing $30,000,000 in the aggregate of the Commitment, as Co-Agent, in
all outstanding Advances and Letters of Credit to NationsBank of Tennessee,
N.A., (iii) and NationsBank of Tennessee, N.A. will then assign a portion of
its interests, representing $10,000,000 in the aggregate of the Commitment, in
all outstanding Advances and Letters of Credit to Corestates Bank, N.A., each
pursuant to Section 9.04(a) of the Credit Agreement. In addition, effective
as of the close of business on such date, the $10,000,000 increase in the
Commitment under the Credit Agreement effected by this Seventh Amendment will
be assumed by Corestates Bank, N.A. Each of such assignments and such
assumption are subject to the satisfaction of the conditions set forth in
Section 13(b) hereof. At all times before such assignments and such
assumption, the Lenders shall fund all Advances and participate in all Letters
of Credit under the Credit Agreement, and be entitled to all interest, fees
and other amounts payable in respect thereof, as provided in the Credit
Agreement prior to the effectiveness of the amendments effected by this
Seventh Amendment. From and after such assignments and such assumption, the
Lenders shall fund all Advances and participate in all Letters of Credit under
the Credit Agreement, and be entitled to all interest, fees and other amounts
payable in respect thereof, in accordance with their Specified Percentages
(after giving effect to the amendments effected by this Seventh Amendment).
The Borrower shall cause all Advances outstanding immediately prior to such
assignment and such assumption to be Base Rate Advances. Effective as of the
close of business on December 31, 1993, the Borrower shall prepay all Advances
then outstanding pursuant to Section 2.06(a) of the Credit Agreement from the
proceeds of simultaneous Advances pursuant to Section 2.01(a) of the Credit
Agreement. The Lenders shall make such adjustments among themselves as the
Agent may reasonably request to give effect to the foregoing.
Section 13. Effectiveness of Seventh Amendment; Conditions to Amendments.
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(a) This Seventh Amendment shall be effective pursuant to Section 9.01
of the Credit Agreement upon the execution of this Seventh Amendment by
the Agent and all of the Lenders.
(b) The amendments effected by Sections 2 through 11 of this Seventh
Amendment shall become effective on
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the close of business on December 31, 1993, provided that the following
shall be satisfied, in a manner acceptable to the Agent, on or before such
date:
(i) The Borrower shall have delivered a Note payable to the
order of Corestates Bank, N.A., in the maximum principal amount of such
Lender's Specified Percentage of the Commitment (after giving effect to
the amendments effected by this Seventh Amendment), which Note shall be
duly executed, with all blanks appropriately completed.
(ii) The Borrower and each corporate Subsidiary executing the
Consent and Agreement attached hereto shall have delivered to the Agent
a Secretary's Certificate certifying (A) that the copies of its
certificate or articles of incorporation and bylaws previously
delivered to the Agent are in full force and effect, without amendment
in any material respect which affects the transaction contemplated by
this Seventh Amendment, (B) that the copy of its resolutions
authorizing the execution and delivery of this Seventh Amendment and
the other documents contemplated thereby is true and correct, and that
such resolutions are in full force and effect, and (C) that the
certificates previously delivered to the Agent certifying the
incumbency, name, and signature of each officer authorized to sign Loan
Papers on its behalf are true and complete, and in full force and
effect. Each Subsidiary of the Borrower that is a partnership and is
executing such Consent and Agreement shall have delivered to the Agent
a Certificate of a General Partner certifying (1) that the copy of its
partnership agreement previously delivered to the Agent is in full
force and effect, without amendment in any material respect which
affects the transaction contemplated by this Seventh Amendment, and (2)
that the certificates previously delivered to the Agent certifying the
incumbency, name, and capacity of each person authorized to sign Loan
Papers on its behalf are true and complete, and in full force and
effect. The Agent, Lenders, and Issuing Bank may conclusively rely on
certificates delivered pursuant to this paragraph until the Agent
receives notice in writing to the contrary.
(iii) All of the Subsidiary Guarantors and Borrowing
Subsidiaries shall have executed and delivered the Consent and
Agreement attached to this Seventh Amendment.
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(iv) The Agent shall have received an opinion of counsel to
the Borrower and its Subsidiaries, in form and substance satisfactory
to the Agent, (A) that this Seventh Amendment and the other Loan Papers
delivered pursuant to this Seventh Amendment have been duly authorized,
executed and delivered by the Borrower and its Subsidiaries and
constitute the legal, valid, and binding obligations of the Borrower
and its Subsidiaries, enforceable in accordance with their respective
terms (subject as to enforcement of remedies to any applicable
bankruptcy, reorganization, moratorium, or similar Laws or principles
of equity affecting enforcement of creditors' rights generally), (B)
that the execution, delivery and performance of this Seventh Amendment
and such Loan Papers do not violate any law of the Commonwealth of
Pennsylvania or any federal Law of the United States of America or
constitute a breach of or a default under, or result in or require the
creation of any Lien under, any indenture, instrument, or other
agreement, known to such counsel, pursuant to which the Borrower has
borrowed money or issued securities, and (C) as to such other matters
as the Agent deems appropriate.
(v) On December 31, 1993, (A) no Default or Event of Default
under the Credit Agreement (before and after giving effect to the
transactions contemplated hereby) shall exist, (B) the representations
and warranties set forth in Article V of the Credit Agreement shall be
true and correct (before and after giving effect to the transactions
contemplated hereby), and (C) the Borrower shall have complied with all
agreements and conditions to be complied with by it under the Credit
Agreement and other Loan Papers by such date; and the Borrower shall
have delivered to the Agent a certificate of a duly authorized officer
to such effect.
(vi) The Agent shall have received certificates from the
Secretaries of State and other appropriate officials of the States of
Delaware and Pennsylvania, to the effect that the Borrower is in good
standing and duly organized.
(vii) The Borrower shall have paid the fees required by Section
2.03(g) of the Credit Agreement, as amended hereby.
(viii) The Agent shall have received such other documents,
instruments, and certificates as it shall
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deem necessary or appropriate in connection with this Seventh Amendment
and the transactions contemplated hereby.
Section 14. Representations and Warranties. The Borrower represents and
------------------------------
warrants that this Seventh Amendment has been duly authorized, executed and
delivered by the Borrower and constitutes the Borrower's legal, valid, and
binding obligation, enforceable in accordance with its terms (subject as to
enforcement of remedies to any applicable bankruptcy, reorganization,
moratorium, or similar laws or principles of equity affecting the enforcement
of creditors' rights generally). The Borrower further represents and warrants
that (a) there exists no Default or Event of Default under the Credit
Agreement on the date hereof (before and after giving effect to the
transactions contemplated hereby), (b) the representations and warranties set
forth in Article V of the Credit Agreement are true and correct on the date
hereof (before and after giving effect to the transactions contemplated
hereby), and (c) it has complied with all agreements and conditions to be
complied with by it under the Credit Agreement and other Loan Papers by the
date hereof.
Section 15. Entire Agreement; Ratification. This Seventh Amendment
------------------------------
embodies the entire agreement of the parties, and may not be contradicted by
evidence of prior, contemporaneous, or subsequent oral agreements of any
parties. This Seventh Amendment supersedes any prior agreements or
understandings with respect to the subject matter hereof. Except as modified
or supplemented in connection herewith, the Credit Agreement and all other
Loan Papers shall continue in full force and effect.
SECTION 16. GOVERNING LAW. THIS SEVENTH AMENDMENT SHALL BE GOVERNED BY
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AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE
UNITED STATES OF AMERICA.
Section 17. Counterparts. This Seventh Amendment may be executed in any
------------
number of counterparts, all of which taken together shall constitute one and
the same instrument. In making proof hereof, it shall not be necessary to
produce or account for any counterpart other than one signed by the party
against which enforcement is sought.
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IN WITNESS WHEREOF, this Seventh Amendment to Amended and Restated Credit
Agreement is executed as of the date first set forth above.
BORROWER: CONTINENTAL MEDICAL SYSTEMS, INC.
By /s/ Dennis L. Lehman
----------------------------
Title: Dennis L. Lehman
Senior Vice President
AGENT: CITIBANK, N.A., as Agent
By /s/ Barbara A. Cohen
----------------------------
Title: Barbara A. Cohen
Vice President
LENDERS:
Specified CITIBANK, N.A., individually
Percentage: 25.5319149%
By /s/ Barbara A. Cohen
----------------------------
Title: Barbara A. Cohen
Vice President
Specified NATIONSBANK OF TENNESSEE, N.A.
Percentage: 19.1489362% (formerly known as Sovran
Bank/Tennessee)
By /s/ Patrick J. Neal
----------------------------
Title: Patrick J. Neal
Assistant Vice President
Specified MELLON BANK
Percentage: 10.6382979%
By /s/ Amy L. Evans
----------------------------
Title: Amy L. Evans
Assistant Vice President
14
Specified PNC BANK, NATIONAL ASSOCIATION
Percentage: 12.7659574% (formerly known as Pittsburgh
National Bank)
By /s/ Frank Taucher
----------------------------
Title Frank Taucher
Vice President
Specified THE BANK OF CALIFORNIA, N.A.
Percentage: 10.6382979%
By /s/ Richard Lopatt
----------------------------
Title Richard Lopatt
Vice President
Specified THE CHASE MANHATTAN BANK, N.A.
Percentage: 12.7659574%
By /s/ Elliott Jones
----------------------------
Title Elliott Jones
Managing Director
Specified CORESTATES BANK, N.A.
Percentage: 8.5106383%
By /s/ Paul Hogan
----------------------------
Title Paul Hogan
Assistant Vice President
15
CONSENT AND AGREEMENT
The undersigned, being all of the Subsidiary Guarantors and Borrowing
Subsidiaries (each as defined in the Credit Agreement), hereby consent and
agree to the foregoing Seventh Amendment to the Credit Agreement and hereby
confirm their respective guarantees and grants of security interests and other
obligations under the Loan Papers (as defined in the Credit Agreement), which
shall remain in full force and effect and be applicable to the Credit
Agreement and the Loan Papers, as amended by the foregoing Seventh Amendment,
including without limitation the Note referred to in Section 13(b)(i) of the
foregoing Seventh Amendment and the increase in the amount of the Commitment
(as defined in the Credit Agreement) effected by the foregoing Seventh
Amendment.
ADVANCED CARE MEDICINE, INC.
APCO MEDICAL LABORATORIES, INC.
AURORA REHABILITATION HOSPITAL, INC.
(SPECIFIED DEBT)
BATON ROUGE REHAB, INC.
BRAINTREE REHABILITATION VENTURES,
INC.
CAPITAL REHABILITATION HOSPITAL, INC.
(formerly New London Rehabilitation
Hospital, Inc.)
CENTRAL ARIZONA REHABILITATION
HOSPITAL, INC.
CENTRAL ARKANSAS OUTPATIENT CENTERS,
INC.
CHICO REHABILITATION HOSPITAL, INC.
CLEAR LAKE REHABILITATION HOSPITAL,
INC.
CMS ALEXANDRIA REHABILITATION, INC.
CMS BATON ROUGE REHABILITATION, INC.
CMS BEAUMONT REHABILITATION, INC.
CMS CONTRA COSTA CLINIC, INC. (formerly
Unit Management Group, Inc., formerly
Northeast Wisconsin Rehabilitation
Hospital, Inc.)
CMS DENVER REHABILITATION, INC.
CMS DEVELOPMENT AND MANAGEMENT
COMPANY, INC.
CMS ELIZABETHTOWN, INC.
CMS FAYETTEVILLE REHABILITATION, INC.
CMS FORT WORTH REHABILITATION, INC.
CMS FRESNO REHABILITATION, INC.
CMS HOUSTON REHABILITATION, INC.
CMS KANSAS CITY REHABILITATION, INC.
CMS OF OHIO, INC.
[SIGNATURES CONTINUED ON NEXT PAGE]
16
CMS OUTPATIENT CENTERS OF NORTH TEXAS,
INC.
CMS OUTPATIENT CENTERS OF SOUTH TEXAS,
INC.
CMS PENNSYLVANIA, INC.
(formerly CMS Pennsylvania
Rehabilitation, Inc.)
CMS REHABILITATION CENTER OF HIALEAH,
INC.
CMS RUSTON REHABILITATION, INC.
CMS SAN DIEGO REHAB, INC.
CMS SHERWOOD REHABILITATION, INC.
CMS SOUTH MIAMI REHAB, INC.
CMS SPORTSMED CLINIC, INC.
(formerly CMS Los Gatos, Inc.)
CMS TOPEKA REHABILITATION, INC.
CMS TRI-CITIES REHABILITATION
HOSPITAL, INC.
CMS TUSTIN REHABILITATION, INC.
CMS UNIT MANAGEMENT, INC.
CMS WICHITA REHABILITATION, INC.
CMS WORK-ABLE, INC.
CMS WORK-ABLE OF PARAGOULD, INC.
CMS WORKNET OF BATON ROUGE, INC.
CMSI SYSTEMS OF TEXAS, INC.
COLORADO OUTPATIENT CENTERS, INC.
(formerly CMS Kokomo Rehabilitation,
Inc.)
COMMUNI-CARE OF AMERICA, INC.
(SPECIFIED DEBT)
COMMUNI-CARE/PRO REHAB MANAGEMENT,
INC. (formerly, Alta Petens, Inc.)
(SPECIFIED DEBT)
COMPHEALTH, INC.
COMPHEALTH MEDICAL STAFFING, INC.
CONTINENTAL MEDICAL OF ARIZONA, INC.
CONTINENTAL MEDICAL OF COLORADO, INC.
CONTINENTAL MEDICAL OF KENTUCKY, INC.
CONTINENTAL MEDICAL OF PALM BEACH,
INC.
CONTINENTAL MEDICAL SYSTEMS OF
FLORIDA, INC.
CONTINENTAL REHAB OF W.F., INC.
CONTINENTAL REHABILITATION HOSPITAL OF
ARIZONA, INC.
ELIZABETHTOWN MANAGEMENT COMPANY, INC.
FAIRFIELD REHABILITATION HOSPITAL,
INC.
[SIGNATURES CONTINUED ON NEXT PAGE]
17
FAIRLAND NURSING AND RETIREMENT HOME,
INC.
GREAT PLAINS REHABILITATION HOSPITAL,
INC.
HARTFORD REHABILITATION HOSPITAL, INC.
HCA WESLEY REHABILITATION CLINIC OF
LIBERAL, INC. (formerly CMS Chico
Rehabilitation, Inc.)
HCA WESLEY REHABILITATION HOSPITAL,
INC. (SPECIFIED DEBT)
HIALEAH CONVALESCENT CENTERS, INC.
INDIANA OUTPATIENT CENTERS, INC.
K.C. REHABILITATION HOSPITAL, INC.
(SPECIFIED DEBT)
KANSAS OUTPATIENT CENTERS, INC.
KENTFIELD HOSPITAL CORPORATION
KOKOMO REHABILITATION HOSPITAL, INC.
LAFAYETTE REHABILITATION HOSPITAL, INC.
(formerly New Bern Rehabilitation
Hospital, Inc.)
LOUISIANA OUTPATIENT CENTERS, INC.
MANAGEMENT CARE THERAPY SERVICES, INC.
MARYLAND REHABILITATION HOSPITAL, INC.
MEMPHIS REHABILITATION HOSPITAL, INC.
NEVADA REHABILITATION HOSPITAL, INC.
NEW ALBANY REHABILITATION HOSPITAL,
INC.
NORTHEAST OKLAHOMA REHABILITATION
HOSPITAL, INC.
NORTH LOUISIANA REHABILITATION CENTER,
INC. (SPECIFIED DEBT)
NORTHEAST ARKANSAS REHABILITATION
UNIT, INC.
NORTHERN VIRGINIA REHABILITATION
HOSPITAL, INC. (formerly Iliff
Nursing Home, Inc.)
ORANGE REHABILITATION HOSPITAL, INC.
P.G. REHABILITATION HOSPITAL, INC.
PALM SPRINGS REHABILITATION HOSPITAL,
INC.
PARK MANOR NURSING HOME, INC.
PIKEVILLE REHABILITATION HOSPITAL,
INC.
PINELLAS-RODRIGUEZ REHABILITATIVE
ASSOCIATES LIMITED, INC.
PRO THERAPY OF AMERICA, INC.
PRO-REHAB, INC. (SPECIFIED DEBT)
PROFESSIONAL MANAGEMENT RESOURCES, INC.
PROFESSIONAL THERAPY INTERNATIONAL,
INC.
PROFESSIONAL THERAPY STAFFING, INC.
[SIGNATURES CONTINUED ON NEXT PAGE]
18
RCM MANAGEMENT COMPANY, INC.
REHAB JOINT VENTURES, INC.
REHAB RESOURCES, INC. (formerly Rehab
America Management Services, Inc.)
REHABILITATIVE ASSOCIATES, INC.
REHABILITATION HOSPITAL OF COLORADO
SPRINGS, INC.
REHABILITATION HOSPITAL OF FORT WAYNE,
INC.
REHABILITATION HOSPITAL OF NEVADA - LAS
VEGAS, INC. (formerly SR Sub, Inc.)
REHABILITATION HOSPITAL OF PLANO, INC.
REHABWORKS, INC.
REHABWORKS OF CALIFORNIA, INC.
(formerly, California Therapy, Inc.)
RIVERDALE GARDENS NURSING HOME, INC.
RMS CLINICS, INC. (formerly Continental
Rehabilitation of Alexandria, Inc.)
ROMANO REHABILITATION HOSPITAL, INC.
SD ACQUISITION CORPORATION
SD PARTNERS, INC.
SAN BERNARDINO REHABILITATION
HOSPITAL, INC.
SELECTIVE REHABILITATIVE SERVICES,
INC.
SHERWOOD REHABILITATION HOSPITAL, INC.
SIERRA PAIN AND OCCUPATIONAL
REHABILITATION CENTER, INC.
(formerly Coastal Empire
Rehabilitation Hospital, Inc.)
SOUTHEAST TEXAS REHABILITATION
HOSPITAL, INC.
TARRANT COUNTY REHABILITATION
HOSPITAL, INC.
TERRE HAUTE REHABILITATION HOSPITAL,
INC.
THE KELTON CORPORATION
THE NURSING HOME AT CHEVY CHASE, INC.
THE REHAB SOURCE, INC.
TULSA REHABILITATION HOSPITAL, INC.
TYLER REHABILITATION HOSPITAL, INC.
WESTERN NEURO CARE, INC.
WESTERN NEUROLOGIC RESIDENTIAL
CENTERS, INC.
WESTERN NEURO RESIDENTIAL, INC.
WICHITA FALLS REHABILITATION HOSPITAL,
INC.
BEAUMONT REHAB ASSOCIATES LIMITED
PARTNERSHIP (SPECIFIED DEBT)
By Southeast Texas Rehabilitation
Hospital, Inc., General Partner
[SIGNATURES CONTINUED ON NEXT PAGE]
19
CENTRAL ARIZONA REHAB ASSOCIATES, L.P.
By Central Arizona Rehabilitation
Hospital, Inc., General Partner
CENTRAL ARKANSAS REHABILITATION
ASSOCIATES, L.P. (SPECIFIED DEBT)
By Sherwood Rehabilitation
Hospital, Inc., General Partner
CENTRAL LOUISIANA REHAB ASSOCIATES,
L.P. (SPECIFIED DEBT)
By CMS Alexandria Rehabilitation,
Inc., General Partner
CMS REHAB OF W.F., L.P. (SPECIFIED DEBT)
By Continental Rehab of W.F.,
Inc., General Partner
CMS REHABILITATION CENTER OF SOUTH
MIAMI (SPECIFIED DEBT)
By CMS South Miami Rehab, Inc.,
General Partner
COLLIN COUNTY REHAB ASSOCIATES LIMITED
PARTNERSHIP (SPECIFIED DEBT)
By Rehabilitation Hospital of
Plano, Inc., General Partner
HELMWOOD ASSOCIATES LIMITED PARTNERSHIP
(SPECIFIED DEBT)
By CMS Elizabethtown, Inc.,
General Partner
HOUSTON REHABILITATION ASSOCIATES
(SPECIFIED DEBT)
By Romano Rehabilitation Hospital,
Inc., General Partner
KOKOMO REHABILITATION HOSPITAL, L.P.
By Kokomo Rehabilitation Hospital,
Inc., General Partner
LAKEVIEW REHABILITATION GROUP PARTNERS
(SPECIFIED DEBT)
By Continental Medical Of Kentucky,
Inc., General Partner
LIFELINES REHABILITATION SERVICES
(SPECIFIED DEBT)
By Rehab Joint Ventures, Inc.,
General Partner
[SIGNATURES CONTINUED ON NEXT PAGE]
20
MARYLAND REHAB ASSOCIATES, L.P.
By Maryland Rehabilitation
Hospital, Inc., General Partner
NORTHEAST OKLAHOMA REHAB ASSOCIATES,
L.P.
By Northeast Oklahoma Rehabilitation
Hospital, Inc., General Partner
NORTHWEST ARKANSAS REHABILITATION
ASSOCIATES (SPECIFIED DEBT)
By CMS Fayetteville
Rehabilitation, Inc., General
Partner
PHYSICAL THERAPY AND SPORTS MEDICINE
CENTER PARTNERSHIP (SPECIFIED DEBT)
By Pro Therapy of America, Inc.,
General Partner
PRIDE/BRAINTREE JOINT VENTURE
By Braintree Rehabilitation
Ventures, Inc., General Partner
REHAB HOSPITAL OF FORT WAYNE GENERAL
PARTNERSHIP (SPECIFIED DEBT)
By Rehabilitation Hospital of Fort
Wayne, Inc.
REHABILITATION HOSPITAL OF NEVADA -
LAS VEGAS, L.P.
By Rehabilitation Hospital of Nevada-
Las Vegas, Inc., General Partner
RENO REHAB ASSOCIATES, LIMITED
PARTNERSHIP
By Nevada Rehabilitation Hospital,
Inc., General Partner
SAN BERNARDINO REHABILITATION HOSPITAL
(SPECIFIED DEBT)
By San Bernardino Rehabilitation
Hospital, Inc., General Partner
[SIGNATURES CONTINUED ON NEXT PAGE]
21
SAN DIEGO HEALTH ASSOCIATES LIMITED
PARTNERSHIP
By SD Acquisition Corporation,
General Partner
SAN DIEGO REHAB LIMITED PARTNERSHIP
(SPECIFIED DEBT)
By San Diego Rehabilitation
Associates, General Partner
By CMS San Diego Rehab, Inc.,
General Partner
SAN DIEGO REHABILITATION ASSOCIATES
(SPECIFIED DEBT)
By CMS San Diego Rehab, Inc.,
General Partner
SAN JOAQUIN VALLEY REHABILITATION
HOSPITAL, A DELAWARE LIMITED
PARTNERSHIP (SPECIFIED DEBT)
By Orange Rehabilitation Hospital,
Inc., General Partner
SOUTH DADE NURSING HOME, LTD.
(SPECIFIED DEBT)
By Continental Medical Systems of
Florida, Inc., General Partner
SOUTHERN ARIZONA REGIONAL
REHABILITATION HOSPITAL, L.P.
(SPECIFIED DEBT)
By Continental Rehabilitation
Hospital of Arizona, Inc.,
General Partner
SPORTSMED ASSOCIATES (SPECIFIED DEBT)
By CMS Sportsmed Clinic, Inc.,
General Partner
TERRE HAUTE REGIONAL REHABILITATION
HOSPITAL, L.P. (SPECIFIED DEBT)
By Terre Haute Rehabilitation
Hospital, Inc., General Partner
TRI-CITIES REHABILITATION HOSPITAL,
L.P. (SPECIFIED DEBT)
By CMS Tri-Cities Rehabilitation
Hospital, Inc., General Partner
TULSA REHAB HOSPITAL, L.P.
By Tulsa Rehabilitation Hospital,
Inc., General Partner
[SIGNATURES CONTINUED ON NEXT PAGE]
22
TYLER REHAB ASSOCIATES, L.P.
(SPECIFIED DEBT)
By Tyler Rehabilitation Hospital,
Inc., General Partner
By: /s/ Dennis L. Lehman
------------------------------------
Dennis L. Lehman, Vice President
ACMED THERAPY TECHNOLOGIES CORP.
CHS THERAPY TECHNOLOGIES CORP.
CMS CAPITAL VENTURES, INC.
CMS REHAB TECHNOLOGIES CORP.
COA THERAPY TECHNOLOGIES CORP.
REHAB CONCEPTS CORP.
RWI THERAPY TECHNOLOGIES CORP.
VTA THERAPY TECHNOLOGIES CORP. (formerly
CMS Appleton Rehabilitation, Inc.)
By: /s/ William L. Pegler
------------------------------------
William L. Pegler, Vice President
ENCOMPUS, INC.
By: /s/ Brad E. Hollinger
------------------------------------
Brad E. Hollinger, Vice President
KANSAS REHABILITATION HOSPITAL, INC.
(SPECIFIED DEBT)
By: /s/ Thomas C. Kanavy
------------------------------------
Thomas C. Kanavy, Vice President
CMS SAN DIEGO SURGICAL, INC.
VTA MANAGEMENT SERVICES, INC.
By: /s/ David G. Nation
------------------------------------
David G. Nation, Vice President
23
CMS PHYSICIAN SERVICES, INC.
(formerly CMS Washington
Rehabilitation, Inc.)
By: /s/ Dennis L. Lehman
---------------------------------
Dennis L. Lehman, Treasurer
(The Exhibit to the Seventh Amendment to the Amended and Restated
Credit Agreement has been omitted)
24