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NOVACARE, INC.
0000 XXXX XXXXX XXXXXX
XXXX XX XXXXXXX, XX 00000
March 30, 1998
PNC Bank, National Association,
as Agent
One PNC Plaza
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
Attn: Xxxxxx Xxxxxxx, Vice President
RE: Sixteenth Amendment to Credit Agreement (the "Sixteenth
Amendment")
Dear Xxxxxx:
We refer to that certain Credit Agreement, dated as of May 27, 1994, as
amended (the "Credit Agreement"), by and among NovaCare, Inc. ("NovaCare") and
certain of its Subsidiaries, the Banks party thereto and PNC Bank, National
Association, as agent for the Banks ("Agent"). Defined terms used herein, not
otherwise defined herein, shall have the meanings given to them under the Credit
Agreement as amended hereby.
The Borrowers and Guarantors, the Banks and the Agent hereby desire to
amend the Credit Agreement, as hereinafter provided.
The parties hereto in consideration of their mutual covenants and
agreements hereinafter set forth, and intending to be legally bound hereby,
covenant and agree as follows:
AGREEMENT
1. Amendment of Credit Agreement
The parties hereto do hereby modify and amend the Credit Agreement as
follows:
(a) Section 1.01 [Certain Definitions] is hereby amended by
inserting between the definitions of "Event of Default" and "Excluded Entities"
the following new definition of "Excess Cash", as following:
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"Excess Cash shall mean as of any date of determination
the amount of cash on hand of NovaCare and its Subsidiaries, as determined
on a consolidated basis in accordance with GAAP, in excess of
$14,261,000."
(b) Section 5.05 [RESERVED] is hereby amended by deleting
"[RESERVED]" and inserting in lieu thereof, the following:
"5.05 Mandatory Prepayments.
(a) Excess Cash. For any fiscal quarter in which there is
Excess Cash determined as of the last day of such fiscal quarter, NovaCare
shall make a mandatory prepayment of principal on the Revolving Credit
Loans equal to the amount of the Excess Cash as follows:
(i) first to Revolving Credit Loans subject to the
Revolving Credit Base Rate Option, within three (3) Business Days of the
end of such fiscal quarter, and then
(ii) to Revolving Credit Loans subject to a Revolving
Credit Euro-Rate Option, on the last day of the applicable Euro-Rate
Interest Period with respect to any Revolving Credit Loans to which a
Revolving Credit Euro-Rate Option applies."
(c) Section 8.02 [Negative Covenants] is hereby amended by
deleting in its entirety subsection (n) and inserting in lieu thereof, the
following:
"(n) Funded Debt to Cash Flow From Operations.
(A) For the fiscal quarter ending March 31, 1998,
the Loan Parties shall not permit the ratio of (i) Consolidated Funded Debt
minus Excess Cash, to (ii) Consolidated Cash Flow from Operations, calculated as
of the end of each fiscal quarter for the four fiscal quarters then ended, to
exceed 3.25 to 1.0."
(B) For any fiscal quarter ending after March 31,
1998, the Loan Parties shall not permit the ratio of Consolidated Funded Debt to
Consolidated Cash Flow from Operations, calculated as of the end of each fiscal
quarter for the four fiscal quarters then ended, to exceed 3.00 to 1.0
2. Conditions of Effectiveness.
The effectiveness of this Sixteenth Amendment is expressly conditioned
upon (i) the Agent's receipt of counterparts of this Sixteenth Amendment duly
executed by the Borrowers, the Guarantors, the Banks.
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This Sixteenth Amendment shall be dated as of and shall be effective as of
the date and year first above written which shall be the date of satisfaction of
all conditions precedent to effectiveness as set forth in this Section 2.
3. Consent of Required Banks.
Pursuant to Section 11.01 of the Credit Agreement, this Sixteenth
Amendment shall require the written consent of the Required Banks.
4. Full Force and Effect.
Except as expressly modified and amended by this Sixteenth Amendment, the
Credit Agreement and the other Loan Documents are hereby ratified and confirmed
and shall remain in full force and effect.
5. Costs, Expenses, Disbursements.
The Borrowers hereby agree to reimburse the Agent and the Banks on demand
for all costs, expenses and disbursements relating to this Sixteenth Amendment
which are payable by the Borrowers as provided in Section 10.05 of the Credit
Agreement.
6. Counterparts.
This Sixteenth Amendment may be executed by different parties hereto in
any number of separate counterparts, each of which, when so executed and
delivered, shall be an original, and all of such counterparts shall together
constitute one and the same instrument.
7. Governing Law.
This Sixteenth Amendment shall be deemed to be a contract under the laws
of the Commonwealth of Pennsylvania and for all purposes shall be governed by
and construed and enforced in accordance with the internal laws of the
Commonwealth of Pennsylvania without regard to its conflict of laws principles.
[SIGNATURES BEGIN ON NEXT PAGE]
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[Signature Page 1 of 8 to Sixteenth Amendment]
IN WITNESS WHEREOF, the parties hereto, by their officers thereunto duly
authorized, have executed this Amendment as of the day and year first above
written.
BORROWERS AND GUARANTORS:
ATTEST: NOVACARE, INC., a Delaware
corporation, and each of the other
BORROWERS listed on Schedule 6.01(c)
of the Credit Agreement (which
Schedule is attached hereto as Exhibit
I) and each of the GUARANTORS listed
on Schedule 6.01(c) of the Credit
Agreement (which Schedule is attached
hereto as Exhibit I), other than those
listed below
By: /s/ Xxxxxxx Xxxxxxxx By: /s/ Xxxxxxx X. XxXxxxxx
-------------------- -----------------------------------
Xxxxxxx X. XxXxxxxx [Name],
----------------------------------------
[Seal] the Vice President and Treasurer [Title]
------------------------------------------
of each Borrower and Guarantor listed on
Schedule 6.01(c) of the Credit Agreement
(which Schedule is attached hereto as
Exhibit I), other than those listed below,
which is a corporation and of each general
partner of each Borrower and Guarantor which
is a partnership
Address for Notices for each of the
foregoing Borrowers and Guarantors:
0000 Xxxx Xxxxx Xxxxxx
Xxxx xx Xxxxxxx, XX 00000
Telecopier No. (000) 000-0000
Attention: Chief Financial Officer
Telephone No. (000) 000-0000
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[Signature Page 2 of 8 to Sixteenth Amendment]
AGENT:
PNC BANK, NATIONAL ASSOCIATION, as Agent
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------------------
Title: Assistant Vice President
------------------------------------
Address for Notices:
One PNC Plaza
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
Telecopier No. (000) 000-0000
Attention: Regional Healthcare Group
Telephone No. (000) 000-0000
BANKS:
PNC BANK, NATIONAL ASSOCIATION
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------------------
Title: Assistant Vice President
------------------------------------
Address for Notices:
One PNC Plaza
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
Telecopier No. (000) 000-0000
Attention: Regional Healthcare Group
Telephone No. (000) 000-0000
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[Signature Page 3 of 8 to Sixteenth Amendment]
CORESTATES BANK, N.A.
By: /s/ Xxxxxxx X. XxXxxxx
----------------------------------------
Name: Xxxxxxx X. XxXxxxx
--------------------------------------
Title: Vice President
--------------------------------------
Address for Notices:
0000 Xxxxxxxx Xxxxxx
X.X. Xxx 0000
FC 1-8-3-22
Xxxxxxxxxxxx, XX 00000
Telecopier No. (000) 000-0000
Attention: Xxxxxx X. XxXxxxx
Vice President
Telephone No. (000) 000-0000
FIRST UNION NATIONAL BANK
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxx
---------------------------------------
Title: Senior Vice President
--------------------------------------
Address for Notices:
One First Union Center
000 X. Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Telecopier No. (000) 000-0000
Attention: Xxxxxxx Xxxxx
Assistant Vice President
Telephone No. (000) 000-0000
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[Signature Page 4 of 8 to Sixteenth Amendment]
FLEET NATIONAL BANK
By: /s/ Xxxx X. Xxxx
----------------------------------------
Name: Xxxx X. Xxxx
--------------------------------------
Title: Assistant Vice President
-------------------------------------
Address for Notices:
Health Care and Institutions Group
One Federal Street - MA OFDO7B
Xxxxxx, XX 00000
Telecopier No. (000) 000-0000
Attention: Xxxxxxx X. Xxxxx
Vice President
Telephone No. (000) 000-0000
MELLON BANK, N.A.
By:_________________________________________
Name:_______________________________________
Title:______________________________________
Address for Notices:
Healthcare Banking
Plymouth Meeting/Exec. Campus
000 X. Xxxxxxxxxx Xxxx
Xxxxx 000/XXX #00X-0000
Xxxxxxxx Xxxxxxx, XX 00000
Telecopier No. (000) 000-0000
Attention: Xxxxxxx Xxxxxxxx
Assistant Vice President
Telephone No. (000) 000-0000
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[Signature Page 5 of 8 to Sixteenth Amendment]
NATIONSBANK, N.A.
By: /s/ Xxxxx Xxxxxx
----------------------------------------
Name: Xxxxx Xxxxxx
--------------------------------------
Title: Vice President
--------------------------------------
Address for Notices:
Healthcare Finance Group
Xxx XxxxxxxXxxx Xxxxx
Xxxxx Xxxxx
Xxxxxxxxx, XX 00000-0000
Telecopier No. (000) 000-0000
Attention: Xxxxx Xxxxxx
Vice President
Telephone No. (000) 000-0000
THE BANK OF NEW YORK
By: /s/ Xxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxx X. Xxxxxx
--------------------------------------
Title: Vice President
--------------------------------------
Address for Notices:
Northeast Division
Xxx Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Telecopier No. (000) 000-0000
Attention: Xxxxx Xxxxxx
Vice President
Telephone No. (000) 000-0000
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[Signature Page 6 of 8 to Sixteenth Amendment]
SUNTRUST BANK, CENTRAL FLORIDA, N.A.
By: /s/ Xxxxx X. Xxxxxxx
----------------------------------------
Name: Xxxxx X. Xxxxxxx
---------------------------------------
Title: Vice President
--------------------------------------
Address for Notices:
Healthcare Banking Group
0-1101, Tower 10
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Telecopier No. (000) 000-0000
Attention: Xxxxx X. Xxxxxx
First Vice President
Telephone No. (000) 000-0000
BANK ONE, KENTUCKY, NA
By: /s/ Xxxx X. Xxxxxx
----------------------------------------
Name: Xxxx X. Xxxxxx
---------------------------------------
Title: Senior Vice President
--------------------------------------
Address for Notices:
Internal Zip KY1-2216
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Telecopier No. (000) 000-0000
Attention: Xxxx Xxxxxx
Xx. Vice President
Telephone No. (000) 000-0000
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[Signature Page 7 of 8 to Sixteenth Amendment]
THE FUJI BANK, LIMITED
NEW YORK BRANCH
By:_________________________________________
Name:_______________________________________
Title:______________________________________
Address for Notices:
Xxx Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No. (000) 000-0000
Attention: Xxxxx Xxxxx
Assistant Vice President
Telephone No. (000) 000-0000
CRESTAR BANK
By: /s/ Xxxxx XxXxxxx
________________________________________
Name: Xxxxx XxXxxxx
_______________________________________
Title: Vice President
______________________________________
Address for Notices:
000 Xxxx Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxx, XX 00000-0000
Telecopier No. (000) 000-0000
Attention: Xxxxx XxXxxxx
Vice President
Telephone No. (000) 000-0000
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[Signature Page 8 of 8 to Sixteenth Amendment]
BANK OF TOKYO - MITSUBISHI TRUST COMPANY
By:_________________________________________
Name:_______________________________________
Title:______________________________________
Address for Notices:
US Corp. Banking Division
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telecopier No. (000) 000-0000
Attention: Xxx Xxxxx
Vice President
Telephone No. (000) 000-0000
AMSOUTH BANK
By: /s/ J. Xxx XxXxxxx
________________________________________
Name: J. Xxx XxXxxxx
_______________________________________
Title: Assistant Vice President
______________________________________
Address for Notices:
0000 0xx Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Telecopier No. (000) 000-0000
Attention: Xxx XxXxxxx
Commercial Banking Officer
Telephone No. (000) 000-0000
00
XXXXX XX XXXXXXX
XXXXXX XX XXXXXX
Xx the 24th day of March, 1998 personally appeared Xxxxx X. Xxxxxxx,
as the Vice President of SunTrust Bank, Central Florida, National Association,
and before me executed the attached Sixteenth Amendment and Consent dated as of
March 30, 1998 to the Credit Agreement between NovaCare, Inc., with SunTrust
Bank, Central Florida, National Association, as Lender.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal, in the
state and county aforesaid.
/s/ Xxxx X. Xxxxxxx
____________________________________________________
Signature of Notary Public, State of Georgia
Xxxx X. Xxxxxxx
(Print, Type or Stamp Commissioned Name of Notary Public)
Personally known /X/; OR Produced Identification / /
Type of identification produced:________________________
________________________________________________________
Notary Public, Dekalb County, Georgia
My Commission Expires May 12, 2001
