AMENDMENT AND CONFIRMATION
OF
COLLATERAL ACCOUNT AGREEMENT,
COMPANY PLEDGE AGREEMENT
AND
COMPANY SECURITY AGREEMENT
This AMENDMENT AND CONFIRMATION OF COLLATERAL AMOUNT
AGREEMENT, COMPANY PLEDGE AGREEMENT AND COMPANY SECURITY AGREEMENT (this
"Amendment and Confirmation") is dated as of December 20, 1996 and is made by
REGENCY HEALTH SERVICES, INC., a Delaware corporation ("Company"), in favor of
NATIONSBANK OF TEXAS, N.A., as agent for and representative of (in such capacity
herein called "Secured Party") the financial institutions ("Lenders") party to
the Amended and Restated Credit Agreement referred to below.
RECITALS
WHEREAS, Company, Secured Party and certain of the Lenders
have entered into a Credit Agreement dated as of December 28, 1995 (said Credit
Agreement, as amended by the First Amendment and Waiver to Credit Agreement
dated as of April 22, 1996, and the Second Amendment to Credit Agreement and
Approval dated as of June 20, 1996, the "Existing Credit Agreement");
WHEREAS, in connection with the Existing Credit Agreement,
Company executed and delivered in favor of Secured Party (i) that certain
Collateral Account Agreement (the "Collateral Account Agreement"), (ii) that
certain Company Pledge Agreement dated as of December 25, 1995 (as amended, the
"Company Pledge Agreement") and (iii) that certain Company Security Agreement
dated as of December 25, 1995 (as amended, the "Company Security Agreement";
and, together with the Collateral Account Agreement and Company Pledge
Agreement, the "Company Collateral Documents");
WHEREAS, Company, Secured Party and Lenders will enter into
that certain Amended and Restated Credit Agreement dated as of the date hereof
which increases the Commitments from $50,000,000 to $100,000,000 and amends and
restates the Existing Credit Agreement in its entirety (as amended, amended and
restated, supplemented or otherwise modified from time to time, the "Amended and
Restated Credit Agreement");
WHEREAS, Company and Secured Party desire to enter into this
Amendment and Confirmation in order to, among other things, amend the Company
Collateral Documents and confirm the continuation of Company's obligations under
the Company Collateral Documents in respect of the Obligations (including,
without limitation, Obligations in respect of the increased Commitments) under
the Amended and Restated Credit Agreement;
WHEREAS, it is a condition precedent to the initial extensions
of credit by Lenders under the Amended and Restated Credit Agreement that
Company shall have executed and delivered this Agreement.
NOW, THEREFORE, in consideration of the premises and in order
to induce Lenders to make Loans and issue Letters of Credit under the Amended
and Restated Credit Agreement and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, Company hereby agrees
with Secured Party as follows:
SECTION 1. Definitions. Unless otherwise indicated or the
context clearly requires otherwise, capitalized terms used in this Amendment and
Confirmation without definition shall have the respective meanings given thereto
in the Amended and Restated Credit Agreement.
SECTION 2. Amendments to the Company Collateral Documents.
2.1. Collateral Account Agreement. Paragraph A of the
Preliminary Statements of the
Collateral Account Agreement is hereby amended by deleting such paragraph in its
entirety and substituting
therefor the following:
"A. Secured Party and Lenders have entered into
a Credit Agreement dated as of
December 28, 1995, as amended by the First Amendment and Waiver to Credit
Agreement dated as of April 22, 1996, and the Second Amendment to Credit
Agreement and Approval dated as of June 20, 1996, as amended and restated in
full by the Amended and Restated Credit Agreement dated as of December 20, 1996
(said Credit Agreement, as so amended and restated and as it may hereafter be
amended, amended and restated, supplemented or otherwise modified from time to
time, being the "Credit Agreement", the terms defined therein and not otherwise
defined herein being used herein as therein defined) with Pledgor and
NationsBanc Capital Markets, Inc., as Arranger, pursuant to which Lenders have
made certain commitments, subject to the terms and conditions set forth in the
Credit Agreement, to extend certain credit facilities to Pledgor."
2.2. Company Pledge Agreement.
A. Preliminary Statements. Paragraphs B and C of the
Preliminary Statements of the Company
Pledge Agreement are hereby amended by deleting such paragraphs in their
entirety and substituting therefor the
following:
"B. Secured Party, NationsBanc Capital Markets, Inc.,
as Arranger, and Lenders have entered into a Credit Agreement dated as
of December 28, 1995, as amended by the First Amendment and Waiver to
Credit Agreement dated as of April 22, 1996, and the Second Amendment
to Credit Agreement and Approval dated as of June 20, 1996, as amended
and restated in full by the Amended and Restated Credit Agreement dated
as of December 20, 1996 (said Credit Agreement, as so amended and
restated and as it may hereafter be amended, amended and restated,
supplemented or otherwise modified from time to time, being the "Credit
Agreement", the terms defined therein and not otherwise defined herein
being used herein as therein defined) with Pledgor pursuant to which
Lenders have made certain commitments, subject to the terms and
conditions set forth in the Credit Agreement, to extend certain credit
facilities to Pledgor.
C. Pledgor may from time to time enter into one
or more Hedge Agreements
(collectively, the "Lender Interest Rate Agreements") with one or more Lenders
(in such capacity, collectively, "Interest Rate Exchangers") in accordance with
the terms of the Credit Agreement, and it is desired that the obligations of
Pledgor under the Lender Interest Rate Agreements, including without limitation
the obligation of Pledgor to make payments thereunder in the event of early
termination thereof, together with all obligations of Pledgor under the Credit
Agreement and the other Loan Documents, be secured hereunder."
B. Additional Pledged Collateral. Schedule I
of the Company Pledge Agreement is
hereby amended by adding thereto the following Pledged Stock (as defined in the
Company Pledge Agreement):
Class of Stock/ Stock Number of Shares
Stock Issuer Par Value Certificate Nos. (% of Outstanding)
Regency - Common Stock/ 1,000
North Carolina, Inc. No Par Value 1 100%
Regency - Tennesee, Inc. Common Stock/ 100
No Par Value 1 100%
2.3. Company Security Agreement. Paragraphs A and B of the
Preliminary Statements of the
Company Security Agreement are hereby amended by deleting such paragraphs in
their entirety and substituting
therefor the following:
"A. Secured Party, NationsBanc Capital Markets, Inc.,
as Arranger, and Lenders have entered into a Credit Agreement dated as
of December 28, 1995, as amended by the First Amendment and Waiver to
Credit Agreement dated as of April 22, 1996, and the Second Amendment
to Credit Agreement and Approval dated as of June 20, 1996, and as
amended and restated in full by the Amended and Restated Credit
Agreement dated as of December 20, 1996 (said Credit Agreement, as so
amended and restated, and as it may hereafter be amended, amended and
restated, supplemented or otherwise modified from time to time, being
the "Credit Agreement", the terms defined therein and not otherwise
defined herein being used herein as therein defined) with Grantor
pursuant to which Lenders have made certain commitments, subject to the
terms and conditions set forth in the Credit Agreement, to extend
certain credit facilities to Grantor.
B. Grantor may from time to time enter into one
or more Hedge Agreements
(collectively, the "Lender Interest Rate Agreements") with one or more Lenders
(in such capacity, collectively, "Interest Rate Exchangers") in accordance with
the terms of the Credit Agreement, and it is desired that the obligations of
Grantor under the Lender Interest Rate Agreements, including without limitation
the obligation of Grantor to make payments thereunder in the event of early
termination thereof, together with all obligations of Grantor under the Credit
Agreement and the other Loan Documents, be secured hereunder."
SECTION 3. Confirmation. Company hereby acknowledges that it
has reviewed the terms and provisions of the Amended and Restated Credit
Agreement, the Company Collateral Documents and this Amendment and Confirmation
and fully understands the ramifications of this Amendment and Confirmation.
Company hereby confirms that the Collateral Account Agreement, Company Security
Agreement and Company Pledge Agreement will continue to secure to the fullest
extent possible the payment and performance of all "Secured Obligations," as
defined in the Collateral Account Agreement, Company Security Agreement and
Company Pledge Agreement, and that all such "Secured Obligations" shall include,
without limitation, all Obligations (including, without limitations, all
Obligations in respect of the increased Commitments) under the Amended and
Restated Credit Agreement.
Company acknowledges and agrees that each Company Collateral
Document shall continue in full force and effect and that all of its obligations
thereunder shall be valid and enforceable and shall not be impaired or limited
by the execution or effectiveness of the Amended and Restated Credit Amendment
or this Amendment and Confirmation.
SECTION 4. MISCELLANEOUS
A. Reference to and Effect on Company Collateral Documents. On
and after the date hereof, each reference in the Collateral Account Agreement,
Company Pledge Agreement or the Company Security Agreement to "this Agreement",
"hereunder", "hereof", "herein" or words of like import referring to the
Collateral Account Agreement, Company Pledge Agreement or the Company Security
Agreement, and each reference in the other Loan Documents to the Collateral
Account Agreement, Company Pledge Agreement or the Company Security Agreement,
or "thereunder," "thereof" or words of like import referring to the Collateral
Account Agreement, Company Pledge Agreement or the Company Security Agreement
shall mean and be a reference to the Collateral Account Agreement, Company
Pledge Agreement or the Company Security Agreement, as applicable, as amended
and confirmed by this Amendment and Confirmation.
B. Fees and Expenses. Company acknowledges that all reasonable
costs, fees and expenses as described in subsection 11.2 of the Existing Credit
Agreement incurred by Administrative Agent and its counsel with respect to this
Amendment and Confirmation and the documents and transactions contemplated
hereby shall be for the account of Company.
C. Headings. Section and subsection headings in this
Amendment are included herein for
convenience of reference only and shall not constitute a part of this Amendment
and Confirmation for any other
purpose or be given any substantive effect.
D. Applicable Law. THIS AMENDMENT AND CONFIRMATION AND
THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS
OF THE STATE OF CALIFORNIA, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
E. Counterparts; Effectiveness. This Amendment and
Confirmation may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed and
delivered shall be deemed an original, but all such counterparts together shall
constitute but one and the same instrument; signature pages may be detached from
multiple separate counterparts and attached to a single counterpart so that all
signature pages are physically attached to the same document. This Amendment and
Confirmation shall become effective upon the execution and delivery of a
counterpart hereof by Company and upon the Closing of the Amended and Restated
Credit Agreement.
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IN WITNESS WHEREOF, Company has caused this Amendment and
Confirmation to be duly executed and delivered by its officers thereunto duly
authorized as of the date first written above.
REGENCY HEALTH SERVICES, INC.,
as Pledgor under the Collateral Account
Agreement and Company Pledge Agreement
and as Grantor under the Company
Security Agreement
By: __________________________
Title:
Agreed and Accepted:
NATIONSBANK OF TEXAS, N.A.,
as Secured Party under the
Collateral Account Agreement,
Company Pledge Agreement and
Company Security Agreement
By: __________________________
Title:
