EXHIBIT (B)(4)
EXECUTION COPY
THIRD AMENDMENT dated as of November 6, 1996 (this
"THIRD AMENDMENT"), to the Amended and Restated Credit
Agreement dated as of September 26, 1995 (as amended to
the date hereof, the "AMENDED CREDIT AGREEMENT"), among
Horizon/CMS Healthcare Corporation, a Delaware corporation
("HORIZON"), Continental Medical Systems, Inc., a
Delaware corporation ("CONTINENTAL"), and together with
Horizon, the "BORROWERS"), the lenders listed on the
signature pages thereto (the "LENDERS") and NationsBank
of Texas, N.A., as agent for the Lenders (in such
capacity, the "AGENT") and as issuing bank (in such
capacity, the "ISSUING BANK").
The parties hereto have agreed, subject to the terms and conditions
hereof, to amend the Amended Credit Agreement as provided herein.
Capitalized terms used and not otherwise defined herein shall have the
meanings assigned to such terms in the Amended Credit Agreement (the Amended
Credit Agreement, as amended and waived by, and together with, this Third
Amendment, and as hereinafter amended, modified, extended or restated from
time to time, being called the "AMENDED AGREEMENT").
Accordingly, the parties hereto hereby agree as follows:
SECTION 1.01. AMENDMENTS TO SECTION 1.01 AND RELATED AMENDMENT TO
COMPLIANCE CERTIFICATE. (a) The definition of "Total Funded Debt" in Section
1.01 of the Amended Agreement is hereby amended by adding the following
phrase after the words "account party" in cause (b) thereof:
", but excluding letters of credit issued in support of facility
lease agreements, to the extent that the costs associated with such
lease arrangements for any period are fully reflected in Rental Expense
of such person for such period"
(b) The form of Compliance Certificate attached as Exhibit G to the
Amended Agreement is hereby amended by adding the following language at the
end of Line I.3. of Exhibit G:
", but excluding letters of credit issued in support of facility
lease agreements, to the extent that the costs associated with such
lease agreements for such period are fully reflected in Rental Expense
for such period"
(c) The definition of "Rental Expense" in Section 1.01 of the Amended
Agreement is hereby amended by adding the following phrase after the words
"Consolidated Subsidiaries":
"(net of the aggregate amount of fixed and contingent rentals
receivable by such person and its Consolidated Subsidiaries)"
SECTION 1.02. AMENDMENT TO SECTION 6.04 and Adoption of Related Schedule.
(a) Section 6.04 of the Amended Agreement is hereby amended by deleting the
period at the end of paragraph (1) thereof and adding "; and" in lieu thereof
and by adding the following paragraph immediately after paragraph (1) thereof:
"(m) investments described on Schedule 6.04(a) hereto."
(b) Schedule 6.04(a) attached to this Third Amendment is hereby adopted as
Schedule 6.04(a) for purposes of the Amended Agreement.
SECTION 1.03. AMENDMENTS TO SECTION 6.05 AND ADOPTION OF RELATED SCHEDULE.
(a) Section 6.05(a) of the Amended Agreement is hereby amended by deleting
the period at the end of clause (D) thereof and adding "; and" in lieu
thereof and by adding the following clause immediately after clause (D)
thereof:
"(E) dispositions described on Schedule 6.05(b) hereto, so long as
100% of the Net Proceeds thereof remaining after the repayment of
existing debt, if any, relating to the assets being disposed of in such
described dispositions shall be promptly applied to the prepayment of
outstanding Loans, but shall not be applied to reduce the Commitments."
(b) Schedule 6.05(b) attached to this Third Amendment is hereby adopted
as Schedule 6.05(b) for purposes of the Amended Agreement.
SECTION 1.04. AMENDMENTS TO SCHEDULE 6.05(a) AND RELATED AMENDMENTS TO
SECTION 3.07 AND 6.02. (a) Schedule 6.05(a) attached to the Second
Amendment to the Amended Agreement is hereby amended by adding the following
information:
"Notwithstanding anything to the contrary set forth herein, the
following leased facilities will be subleased to GranCare, Inc. under
terms that mirror the terms of the master lease and that require the
sublessee to assume all the obligations of the lessee under the master
lease:
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# ANNUAL LEASE
FACILITY NAME AND ADDRESS BEDS LANDLORD RENT TERMINATION
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Canterbury Villa of Alliance
0000 X. Xxxxxxxx Xxxxxx Alliance Associates
Xxxxxxxx, XX 00000 100 Ltd. Partnership $ 466,000 02/13/00
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Colonial Manor
000 Xxxxxxxx Xxxxx Xxxxxx Xxxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000 100 Center $ 164,250 12/31/04
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Xxxxx Xxxxx Care Center
000 Xxxxx Xx.
Xxxxx, XX 00000 200 HRPT $1,045,400 5/31/97
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# ANNUAL LEASE
FACILITY NAME AND ADDRESS BEDS LANDLORD RENT TERMINATION
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Horizon Village Nursing &
Rehab Center
0000 Xxxxx Xxxx XX Xxxxxxxxxx Xxxxxx
Xxxxxx, XX 00000 222 Properties $ 943,332 10/31/97
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Heritage Care Center
100 Xxxxxx Xxxx Cardinal Nursing
Xxxxxx, XX 00000 50 Home, Inc. $ 87,300 06/30/00
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Imperial Skilled Care Center
0000 Xxx Xxxxxx Xxxxxx Xxxxxx Xxxxxxx
Xxxxxx, XX 00000 121 Center $ 200,385 12/31/04
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Xxxxxxxx Community Care
Center
0000 Xxxxx Xxxxxx Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000 221 Properties $ 843,756 10/31/97
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Ridge Crest Care Center
0000 Xxxxx Xxxxxx Xxxxxx Assoc. Ltd.
Xxxxxx, XX 00000 100 Partnership $ 416,400 03/22/99
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Horizon Xxxxxxx
0000 X. Xxxxxxxx Xxxx Nationwide Health 12/15/98
Xxxxxxxx, XX 00000 78 Properties $ 286,968 10/31/97
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Rosewood Manor
000 Xxxxxxxx Xxxxx Xxxxxxxxxx Xxxxxx
Xxxxxx, XX 00000 90 Properties $ 350,520 10/31/97
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Village Care Center
000 Xxxxxx Xxxxxx Xxxxxxxx Xxxxxxx
Xxxxxx, XX 00000 58 Home, Inc. $ 121,500 06/30/00
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Village Square Nursing Center
0000 Xxxxxx Xx. Xxxxxxx Xxxxxx
Xxxx Xxxxxx, XX 00000 50 Nursing Center, Inc. $ 186,000 08/31/02
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Xxxxxx Elms Nursing Home
000 X. Xxxxxxxxxxx Xx.
Xxxxxx, XX 00000 50 Hudson Care Corp. $ 180,000 03/31/01
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Auburn Manor
000 Xxxxx Xxxxxx
Xxxx. Xxxxx Xxxxx, XX Nationwide Health
43160 100 Properties $ 393,132 09/30/01
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Janesville Health Care Center
000 X. Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000 104 Mi-Conn Associates $ 362,400 03/31/06
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# ANNUAL LEASE
FACILITY NAME AND ADDRESS BEDS LANDLORD RENT TERMINATION
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Greenery Rehabilitation Center
00 Xxxxxxxx Xxxx Xxxxxx
Xxxxxxxx, XX 00000 201 HRPT $3,109,926 06/30/05
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Greenery Rehab & Skilled
Nursing Center of Hyannis
00 Xxxxx Xxx Xxxx
Xxxxxxx, XX 00000 142 HRPT $1,040,800 06/30/05
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Greenery Rehab & Skilled
Nursing Ctr. of Middleboro
00 Xxxxx Xxxxxx, X.X. Xxx 0000
Xxxxxxxxxx, XX 00000 124 HRPT $2,131,243 06/30/05
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Greenery Extended Care
Center of North Andover
00 Xxxx Xxxxxx
Xxxxx Xxxxxxx, XX 00000 122 HRPT $1,567,473 06/30/05
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Greenery Extended Care
Center
00 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000 173 HRPT $2,198,253 06/30/05
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(b) Section 3.07(c) of the Amended Agreement is hereby amended by deleting
the second sentence thereof and adding the following in lieu thereof:
"Each of Horizon and the Subsidiaries enjoys peaceful and undisturbed
possession under all material leases to which it is a party, except for
facilities which are listed on Schedule 6.05(a) as having been subleased
to GranCare, Inc. under terms that mirror the terms of the master lease
and that require the sublessee to assume all the obligations of the
lessee under the master lease. GranCare, Inc. has complied in all
material respects with all obligations under such subleases."
(c) Section 6.02 of the Amended Agreement is hereby amended by adding the
following phrase immediately prior to the semicolon at the end of paragraph
(b) thereof:
"and subleases of facilities which are listed on Schedule 6.05(a) as
having been subleased to GranCare, Inc., provided that the terms of each
such sublease mirrors the terms of the master lease and require the
sublessee to assume all the obligations of the lessee under the master
lease"
SECTION 1.05. AMENDMENT TO SECTION 6.06. Section 6.06 is hereby amended by
(a) deleting the "and" at the end of paragraph (v) of the proviso thereof,
(b) deleting the period at the end of paragraph (vi) of the proviso thereof,
(c) substituting in lieu thereof "; and" and (d) adding the following
paragraph immediately following paragraph (vi) of the proviso thereof:
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"(vii) so long as no Default or Event of Default has occurred and is
continuing at the time thereof or would occur immediately after giving
effect thereto, Horizon may repurchase shares of its Common Stock for
cash in an aggregate amount of up to $25,000,000.
SECTION 1.06. AMENDMENT TO SECTION 6.19(d). The table in Section 6.19(d)
is hereby amended (a) with respect to the second quarter of fiscal year 1997,
by deleting the ratio of "5.00:1.00" and by substituting in lieu thereof the
ratio of "5.25:1.00" and (b) with respect to the fourth quarter of fiscal
year 1997, by deleting the ratio of "4.50:1.00" and by substituting in lieu
thereof the ratio of "5.00:1.00".
SECTION 1.07. WAIVER. On and as of (but not before) the Third Amendment
Effective Date (as defined in Section 1.09), the failure of the Borrower to
comply with paragraph (B) of the proviso to Section 6.04(e) of the Amended
Agreement solely as a result of the acquisition of outstanding common stock
of Pacific Rehabilitation & Sports Medicine, Inc. ("PRSM") through a tender
offer and, ultimately, the merger of Horizon PRSM Corporation with and into
PRSM, with PRSM becoming a Wholly-Owned Subsidiary of Eagle Rehab Corporation
(a Wholly-Owned Subsidiary of Horizon) for aggregate consideration of up to
$78,000,000 shall be permanently waived. The preceding sentence shall be
limited precisely as written.
SECTION 1.08. REPRESENTATIONS AND WARRANTIES. The Borrowers hereby
represent and warrant to the Agent and the Lenders, as follows:
(a) The representations and warranties set forth in Article III of
the Amended Agreement, and in each other Loan Document, are true and
correct in all material respects on and as of the date hereof and on and
as of the Third Amendment Effective Date (as defined below) with the
same effect as if made on and as of the date hereof or the Third
Amendment Effective Date, as the case may be, except to the extent such
representations and warranties expressly relate solely to an earlier
date.
(b) Each of the Borrowers, the Subsidiary Pledgors and the Subsidiary
Guarantors is in compliance with all the terms and conditions of the
Amended Agreement and the other Loan Documents on its part to be
observed or performed and no Default or Event of Default has occurred or
is continuing under the Amended Agreement.
(c) The execution, delivery and performance by each of the Borrowers
of this Third Amendment have been duly authorized by such party.
(d) This Third Amendment constitutes the legal, valid and binding
obligation of each of the Borrowers, enforceable against it in
accordance with its terms.
(e) The execution, delivery and performance by each of the Borrowers
of this Third Amendment (i) do not conflict with or violate (A) any
provision of law, statute, rule or regulation, or of the certificate of
incorporation or by-laws of either of the Borrowers, (B) any order of
any Governmental Authority or
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(C) any provision of any indenture, agreement or other instrument to
which either of the Borrowers is a party or by which it or any of its
property may be bound and (ii) do not require any consents under, result
in a breach of or constitute (with notice or lapse of time or both) a
default under any such indenture, agreement or instrument.
SECTION 1.09. EFFECTIVENESS. This Third Amendment shall become effective
only upon satisfaction of the following considerations precedent (the first
date upon which each such condition has been satisfied being herein called
the "THIRD AMENDMENT EFFECTIVE DATE"):
(a) The Agent shall have received duly executed counterparts of this
Third Amendment which, when taken together, bear the authorized
signatures of the Borrowers and the Required Lenders.
(b) The Required Lenders shall be satisfied that the representations
and warranties set forth in Section 1.08 are true and correct on and as
of the Third Amendment Effective Date and that no Default or Event of
Default has occurred or is continuing.
(c) There shall not be any action pending or any judgment, order or
decree in effect which, in the judgment of the Required Lenders or their
counsel, is likely to restrain, prevent or impose materially adverse
conditions upon performance by any of the Borrowers, the Subsidiary
Pledgors or the Subsidiary Guarantors of its obligations under the Loan
Documents.
(d) Horizon shall have pledged and delivered to the Agent for the
benefit of the Secured Parties the promissory notes and preferred stock
described on Schedule 6.04(a), together with instruments of assignment
executed in blank.
(e) The Required Lenders shall have received such other documents,
legal opinions, instruments and certificates as they shall reasonably
request and such other documents, legal opinions, instruments and
certificates shall be satisfactory in form and substance to the Required
Lenders and their counsel. All corporate and other proceedings taken or
to be taken in connection with this Third Amendment and all documents
incidental thereto, whether or not referred to herein, shall be
satisfactory in form and substance to the Required Lenders and their
counsel.
(f) Horizon shall have paid in full all amounts due and payable as of
the Third Amendment Effective Date under the Amended Agreement and
upon receipt of the Required Lenders' consent shall have paid to the
Agent for the account of each Lender that consents to this Third
Amendment on or prior to November 6, 1996 an amendment fee in an
aggregate principal amount equal to (i) .06% of the consenting Lender's
Commitments, so long as a signature page to the Third Amendment executed
by such Lender is received by Fennebresque, Clark, Xxxxxxxx & Hay by
5:00 p.m., Charlotte time, on November 4, 1996 and (ii) .04% of the
consenting Lender's Commitments, so long as a signature page to the
Third Amendment executed by such Lender is received
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by Fennebresque, Clark, Xxxxxxxx & Hay after 5:00 p.m., Charlotte time,
on November 4, 1996 but by 5:00 p.m., Charlotte time, on November 6, 1996.
SECTION 1.10 APPLICABLE LAW. THIS THIRD AMENDMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, EXCEPT TO
THE EXTENT THAT THE FEDERAL LAWS OF THE UNITED STATES OF AMERICA MAY APPLY.
SECTION 1.11. EXPENSES. The Borrowers shall pay all reasonable
out-of-pocket expenses incurred by the Agent and the Required Lenders in
connection with the preparation, negotiation, execution, delivery and
enforcement of this Third Amendment, including, but not limited to, the
reasonable fees and disbursements of counsel. The agreement set forth in this
Section 1.11 shall survive the termination of this Third Amendment and the
Amended Agreement.
SECTION 1.12. COUNTERPARTS. This Third Amendment may be executed in any
number of counterparts, each of which shall constitute an original but all of
which when taken together shall constitute but one agreement.
SECTION 1.13. CREDIT AGREEMENT. Except as expressly set forth herein,
the amendments and waiver provided herein shall not by implication or
otherwise limit, constitute a waiver of, or otherwise affect the rights and
remedies of the Lenders, the Agent or the other Secured Parties under the
Amended Agreement or any other Loan Document, nor shall they constitute a
waiver of any Default or Event of Default, nor shall they alter, modify,
amend or in any way affect any of the terms, conditions, obligations,
covenants or agreements contained in the Amended Agreement or any other Loan
Document. Each of the amendments and waiver provided herein shall apply and
be effective only with respect to the provisions of the Amended Agreement
specifically referred to by such amendment or waiver, as the case may be.
Except as expressly amended herein, the Amended Agreement shall continue in
full force and effect in accordance with the provisions thereof. As used in
the Amended Agreement, the terms "Agreement", "herein", "hereinafter",
"hereunder", "hereto" and words of similar import shall mean, from and after
the date hereof, the Amended Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment
to be duly executed by their duly authorized officers, all as of the date
first above written.
HORIZON/CMS HEALTHCARE CORPORATION
as a Borrower
by /s/ XXXXXX X. XXXXXXXXX
---------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Senior Vice President
CONTINENTAL MEDICAL SYSTEMS, INC.
as a Borrower
by /s/ XXXXXX X. XXXXXXXXX
---------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Senior Vice President
NATIONSBANK OF TEXAS, N.A. as Agent, as
Issuing Bank and as a Lender
by /s/ XXXXXX XXXXX
---------------------------------------
Name: Xxxxxx Xxxxx
Title: SVP
BANK OF AMERICA NT & SA, as Managing Agent
and as a Lender
by /s/ XXXX XXXXXXX
---------------------------------------
Name: Xxxx Xxxxxxx
Title: Vice President
XXXXXX GUARANTY TRUST COMPANY OF NEW YORK,
as a Lender
by /s/ XXXXXX XXXXXXX
---------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Vice President
CREDIT LYONNAIS NEW YORK BRANCH,
as Co-Agent and as a Lender
by /s/ X. XXXXXXXX
---------------------------------------
Name: Farboud Tavangar
Title: Vice President
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LONG TERM CREDIT BANK OF JAPAN, LTD., LA
AGENCY, as Co-Agent and as a Lender
by /s/ T. XXXXXX XXXXXXX, XX
---------------------------------------
Name: T. Xxxxxx Xxxxxxx, XX
Title: Deputy General Manager
PNC BANK, NATIONAL ASSOCIATION, as Co-Agent
and as a Lender
by /s/ XXXXX X. XXXXXX
---------------------------------------
Name: Xxxxx X. Xxxxxx
Title: AVP
THE CHASE MANHATTAN BANK, as successor to
Chemical Bank, as a Lender
by /s/ XXXX XXX XXX
---------------------------------------
Name: Xxxx Xxx Xxx
Title: Vice President
XXXXX FARGO BANK (TEXAS), NATIONAL
ASSOCIATION, formerly First Interstate
Bank of Texas, N.A., as a Lender
by
---------------------------------------
Name:
Title:
TORONTO DOMINION (TEXAS) INC., as a Lender
by /s/ XXXX XXXXXXX
---------------------------------------
Name: Xxxx Xxxxxxx
Title: Vice President
BANKERS TRUST COMPANY, as a Lender
by /s/ XXXXXXXX XXXXX
---------------------------------------
Name: Xxxxxxxx Xxxxx
Title: Vice President
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BANQUE PARIBAS, as a Lender
by /s/ XXXXXXXX XXXXX
---------------------------------------
Name: XXXXXXXX XXXXX
Title: Vice President
by /s/ XXXXX XXXXXXXX
---------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Vice President
BANQUE NATIONALE de PARIS, as a Lender
by
---------------------------------------
Name:
Title:
by
---------------------------------------
Name:
Title:
DEUTSCHE BANK AG, LOS ANGELES AND/OR
CAYMAN ISLANDS BRANCHES, as a Lender
by
---------------------------------------
Name:
Title:
by
---------------------------------------
Name:
Title:
MELLON BANK, N.A., as a Lender
by /s/ XXXXXXX X. LOPATT
---------------------------------------
Name: Xxxxxxx X. Lopatt
Title: Vice President
FLEET NATIONAL BANK, f/k/a/ Fleet Bank of
Massachusetts, as a Lender
by
---------------------------------------
Name:
Title:
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KEYBANK NATIONAL ASSOCIATION as successor
to Society National Bank, as a Lender
by /s/ XXXXXX X. XXXX
------------------------------------
Name: Xxxxxx X. Xxxx
Title: Vice President
SUNWEST BANK OF ALBUQUERQUE, N.A., as a
Lender and as Issuing Bank
by /s/ XXXXX X. XXXXXXX
------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
THE BANK OF TOKYO TRUST COMPANY, as a Lender
by
------------------------------------
Name:
Title:
THE BOATMEN'S NATIONAL BANK OF ST. LOUIS,
as a Lender
by /s/ XXXX X. XXXXXXX
------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President
THE NIPPON CREDIT BANK, LTD., LOS ANGELES
AGENCY, as a Lender
by /s/ XXXXXXXX X. XXXXXX-XXXXXXXX
------------------------------------
Name: Xxxxxxxx X. Xxxxxx-Xxxxxxxx
Title: Vice President & Senior Manager
THE SUMITOMO BANK, LIMITED, as a Lender
by /s/ TATFUO UEDA
------------------------------------
Name: Tatfuo Ueda
Title: General Manager
THE SUMITOMO TRUST & BANKING CO., LTD., NEW
YORK BRANCH, as a Lender
by /s/ XXXXX X. XXXXXX
------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
Manager, Corporate Finance Dept.
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THE SUMITOMO BANK, LIMITED, CHICAGO
BRANCH, as a Lender
by /s/ XXXX X. XXXXXX
------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President & Manager
by /s/ XXXXX X. XXXXXX
------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
THE MITSUBISHI BANK, LTD., LOS ANGELES
BRANCH, as a Lender
by
------------------------------------
Name:
Title:
THE INDUSTRIAL BANK OF JAPAN, LIMITED,
as a Lender
by /s/ AKIJIRO YOSHINO
------------------------------------
Name: Akijiro Yoshino
Title: Executive Vice President,
Houston Office
NATIONSBANK, N.A., as a Lender
by /s/ XXXXX XXXXXX
------------------------------------
Name: Xxxxx Xxxxxx
Title: VP
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