EXHIBIT 10.45
FIRST AMENDMENT dated as of December 28, 2000 (this
"Amendment") to the Credit Agreement dated as of September 22, 2000
--------
(the "Credit Agreement"), among Select Medical Corporation, a Delaware
----------------
corporation (the "Company"), Canadian Back Institute Limited, an
-------
Ontario corporation and a wholly owned subsidiary of the Company
("CBIL" and, together with the Company, the "Borrowers"), the Lenders
---- ---------
party thereto, The Chase Manhattan Bank, as US Agent and US Collateral
Agent, The Chase Manhattan Bank of Canada, as Canadian Agent and
Canadian Collateral Agent, Banc of America Securities, LLC, as
Syndication Agent, and CIBC, Inc., as Documentation Agent.
WHEREAS, the Borrowers have requested that the Lenders (such term and
each other capitalized term used but not otherwise defined herein having the
meaning assigned to it in the Credit Agreement) approve amendments to certain
provisions of the Credit Agreement;
WHEREAS, the undersigned Lenders are willing, on the terms and subject
to the conditions set forth herein, to approve such amendments to the Credit
Agreement;
NOW, THEREFORE, in consideration of these premises, the Borrowers and
the undersigned Lenders hereby agree as follows:
SECTION 1. Amendments. Effective as of the Amendment Effective Date
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(as defined in Section 4 hereof), the Credit Agreement is hereby amended as
follows:
(a) The following definitions are inserted in appropriate alphabetical
positions in Section 1.01:
"Houston Joint Venture" means the joint venture between Select
---------------------
Specialty Hospitals, Inc., Select Specialty Hospital - Houston, Inc. and
various investors formed as a Delaware limited partnership with the name
Select - Houston Partners, L.P.
"Planned IPO" means an Initial Public Offering yielding gross
-----------
cash proceeds of at least $150,000,000 with respect to which registration
statement on form S-1 has been filed with the SEC bearing Registration
Number 333-48856.
(b) The last sentence of the definition of Collateral and Guarantee
Requirement in Section 1.01 is amended by deleting the word "and" at the end of
clause (ii) thereof and substituting in lieu thereof a comma, and inserting
immediately preceding the period at the end of such sentence the words ", and
(iv) the Obligations guaranteed by, and secured by any Mortgage on real property
of, the Houston Joint Venture may, at the Company's election, be limited to an
amount equal to the aggregate loans and advances made by the Company to the
Houston Joint Venture".
(c) Section 2.11(c) is amended by inserting the following sentence at
the end of such Section:
Notwithstanding the foregoing, in the event that Net Proceeds of the
Planned IPO are received by or on behalf of the Company or any Subsidiary,
the prepayment requirements of this Section 2.11(c) with respect to such
Net Proceeds shall be limited to the prepayment of US Term Loans in an
amount equal to the sum of (i) $24,000,000 plus (ii) 50% of the excess of
such Net Proceeds over $138,000,000.
(d) The words "within 90 days after the Effective Date" are deleted
from Section 5.15(a) and the words "on or before March 31, 2001" are substituted
in lieu thereof.
(e) The word "and" at the end of Section 6.11(d) is deleted, the
period at the end of Section 6.11(e) is deleted and replaced with "; and", and a
new Section 6.11(f) is inserted immediately following Section 6.11(e) which
shall read as follows:
(f) after the Planned IPO, redeem shares of the Company's class A
preferred stock with up to $53,000,000 in Net Proceeds from such Planned
IPO, provided that the Net Proceeds from such Planned IPO are applied first
--------
to prepay US Term Loans in accordance with the last sentence of Section
2.11(c).
(f) Section 6.15 is amended and restated in its entirety to read as
follows:
SECTION 6.15. Subordinated Indebtedness. The Company will not,
--------------------------
and will not permit any Subsidiary to, make or agree to make, directly or
indirectly, any payment or other distribution (whether in cash, securities
or other property) of or in respect of the principal of or interest on the
Senior Subordinated Notes or any other Subordinated
3
Indebtedness, or any payment or other distribution (whether in cash,
securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, defeasance,
cancellation or termination of the Senior Subordinated Notes or any other
Subordinated Indebtedness, except (i) scheduled and other mandatory
payments of interest and principal in respect thereof (other than any
prepayments of the Senior Subordinated Notes Due 2009 with the proceeds of
any offering or issuance of Equity Interests or Indebtedness), (ii) the
prepayment of the Senior Subordinated Notes with the proceeds of other
Subordinated Indebtedness permitted under Section 6.05(d) and (iii) after
an Initial Public Offering, the prepayment of Senior Subordinated Notes
with up to US$25,000,000 (or US$45,000,000 if such Initial Public Offering
is the Planned IPO) of the Net Proceeds from such Initial Public Offering,
provided that (A) the Net Proceeds from such Initial Public Offering are
--------
applied first to prepay US Term Loans and, unless such Initial Public
offering is the Planned IPO, amounts owed in respect of Canadian Term Loans
and outstanding B/As in accordance with Section 2.11(c) and (B) the
Leverage Ratio does not exceed 2.5 to 1.0 (calculated on a pro forma basis
to give effect to the application of such Net Proceeds in accordance with
Section 2.11 and to any prepayment of Senior Subordinated Notes); provided
--------
that, in any case, no payment shall be made in respect of the Senior
Subordinated Notes or any other Subordinated Indebtedness that is
prohibited by the subordination provisions applicable thereto.
Notwithstanding the forgoing proviso, it is agreed that any prepayment of
the Senior Subordinated Notes with proceeds from an Initial Public Offering
permitted by clause (iii) of the preceding sentence shall not be received
in trust for, held for the benefit of, or paid over, delivered or
transferred to, the Lenders.
SECTION 2. Increase in Revolving Commitments. In the event that the
----------------------------------
Amendment Effective Date (as defined in Section 4 below) shall have occurred,
effective as of the date on which US Term Loans are prepaid with Net Proceeds of
the Planned IPO pursuant to Section 2.11(c) of the Credit Agreement, each of the
US Term Lenders that executes a separate signature block appearing on its
signature page hereto set forth therein for such purpose agrees that its
Revolving Commitment shall be automatically increased
4
without any further action on the part of any Person on such date in an amount
equal to the aggregate principal amount of such US Term Lender's outstanding US
Term Loans prepaid on such date with the Net Proceeds of the Planned IPO. On the
date of such prepayment, Schedule 2.01 shall be deemed to be modified to reflect
the increase in the Revolving Commitment of each US Term Lender that indicates
its agreement to the terms of this Section 2 on its signature page hereto (and
the last sentence of the definition of "Revolving Commitment" shall be deemed to
be modified to reflect the resulting increase in the aggregate Revolving
Commitments pursuant to this Section 2). Following any increase of any of the
Lenders' Revolving Commitments pursuant to this Section 2, any Revolving Loans
outstanding prior to the effectiveness of such increase shall continue
outstanding until the ends of the respective Interest Periods applicable
thereto, and shall then be repaid or refinanced with new Revolving Loans made
pursuant to Sections 2.01 and 2.03.
SECTION 3. Representations and Warranties. Each of the Borrowers
-------------------------------
represents and warrants to each of the Lenders that, after giving effect to the
amendments contemplated hereby, (a) the representations and warranties of such
Borrower set forth in the Credit Agreement are true and correct in all material
respects on and as of the date of this Amendment, except to the extent such
representations and warranties expressly relate to an earlier date (in which
case such representations and warranties shall be true and correct in all
material respects as of the earlier date) and (b) no Default has occurred and is
continuing.
SECTION 4. Effectiveness. This Amendment shall become effective as
--------------
of the date (the "Amendment Effective Date") when the following conditions shall
------------------------
have been satisfied:
(a) The Administrative Agent (or its counsel) shall have received
copies hereof that, when taken together, bear (i) the signatures of the
Borrowers and the Required Lenders, (ii) the signatures of Canadian Term
Lenders having outstanding Canadian Term Loans and outstanding accepted
B/As representing more than 50% of the sum of the total outstanding
Canadian Term Loans and accepted B/As on the Amendment Effective Date and
(iii) the signatures of each Lender increasing its Revolving Commitment
pursuant to Section 2 of this Amendment.
5
(b) The Company shall have received gross cash proceeds from the
Planned IPO of at least $150,000,000.
(c) The Administrative Agent shall have received a certificate of the
President, a Vice President or a Financial Officer of the Company,
confirming compliance as of the Amendment Effective Date with the
conditions set forth in paragraphs (a) and (b) of Section 4.02 of the
Credit Agreement.
(d) The Administrative Agent and the Lenders shall have received all
fees, expenses and other consideration presented for payment on or before
the date hereof.
Notwithstanding the foregoing, the amendments to the Credit Agreement contained
in Sections 1(b), 1(d) and 1(e) and the insertion of the definition of "Houston
Joint Venture" pursuant to Section 1(a) (and only such amendments) shall become
effective on the date when the conditions specified in clauses (a)(i), (c) and
(d) of this Section 3 are satisfied. The Administrative Agent shall notify the
Borrower and the Lenders of the occurrence of the Amendment Effective Date and
shall distribute to the Borrower and the Lenders an updated Schedule 2.01 on the
date when such Schedule may be modified pursuant to Section 2 hereof.
SECTION 5. Houston Joint Venture. The undersigned Lenders
---------------------
acknowledged that if the Houston Joint Venture is made a party to the US
Guarantee Agreement it may do so as a "Schedule II Guarantor" by an amendment
thereto and the Deed of Trust executed by Select - Houston Partners, L.P. to
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ for the benefit of the Collateral Agent may be amended to
reflect the amendment to the Credit Agreement contained in Section 1(b) hereto.
SECTION 6. Applicable Law. THIS AMENDMENT SHALL BE CONSTRUED IN
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ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
SECTION 7. No Other Amendments. Except as expressly set forth
--------------------
herein, this Amendment shall not by implication or otherwise limit, impair,
constitute a waiver of, or otherwise affect the rights and remedies of any party
under, the Credit Agreement, nor alter, modify, amend or in any way affect any
of the terms, conditions, obligations, covenants or agreements contained in the
Credit Agreement, all of which are ratified and affirmed in all respects and
shall continue in full force and effect. This Amendment
6
shall apply and be effective only with respect to the provisions of the Credit
Agreement specifically referred to herein.
SECTION 8. Counterparts. This Amendment may be executed in two or
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more counterparts, each of which shall constitute an original, but all of which
when taken together shall constitute but one contract. Delivery of an executed
counterpart of a signature page of this Amendment by facsimile transmission
shall be as effective as delivery of a manually executed counterpart of this
Amendment.
SECTION 9. Headings. Section headings used herein are for
---------
convenience of reference only, are not part of this Amendment and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Amendment.
7
IN WITNESS WHEREOF, the Borrower and the undersigned Lenders have
caused this Amendment to be duly executed by their duly authorized officers, all
as of the date first above written.
SELECT MEDICAL CORPORATION,
by:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
CANADIAN BACK INSTITUTE LIMITED,
by:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
To approve the Amendment:
-------------------------
THE CHASE MANHATTAN BANK,
individually and as US Agent
and US Collateral Agent,
by: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
__________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
To increase the Revolving
Commitment of The Chase
Manhattan Bank pursuant to
Section 2 of the Amendment:
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THE CHASE MANHATTAN BANK,
individually,
by: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
__________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
To approve the Amendment:
-------------------------
THE CHASE MANHATTAN BANK OF
CANADA, individually and as
Canadian Agent and Canadian
Collateral Agent,
by: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
__________________________
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
by: /s/ ▇▇▇▇▇ ▇▇▇▇
__________________________
Name: ▇▇▇▇▇ ▇▇▇▇
Title: Vice President
To approve the First Amendment
dated as of December 28, 2000
(the "Amendment") to the
Credit Agreement dated as of
September 22, 2000 (the
"Credit Agreement"), among
----------------
Select Medical Corporation, a
Delaware corporation (the
"Company"), Canadian Back
-------
Institute Limited, an Ontario
corporation and a wholly owned
subsidiary of the Company
("CBIL" and, together with the
----
Company, the "Borrowers"),
---------
the Lenders party thereto, The
Chase Manhattan Bank, as US
Agent and US Collateral Agent,
The Chase Manhattan Bank of
Canada, as Canadian Agent and
Canadian Collateral Agent,
Banc of America Securities,
LLC, as Syndication Agent, and
CIBC, Inc., as Documentation
Agent:
Name of Institution:
Canadian Imperial
Bank of Commerce
__________________
by /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
_____________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Commercial Lending
Specialist
by /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
_____________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Associate Commercial
Lending Specialist
To approve the increase in the
above named institution's
Revolving Commitment pursuant
to Section 2 of the Amendment:
by _____________________
Name:
Title:
by _____________________
Name:
Title:
To approve the First Amendment
dated as of December 28, 2000
(the "Amendment") to the
Credit Agreement dated as of
September 22, 2000 (the
"Credit Agreement"), among
----------------
Select Medical Corporation, a
Delaware corporation (the
"Company"), Canadian Back
-------
Institute Limited, an Ontario
corporation and a wholly owned
subsidiary of the Company
("CBIL" and, together with the
----
Company, the "Borrowers"), the
---------
Lenders party thereto, The
Chase Manhattan Bank, as US
Agent and US Collateral Agent,
The Chase Manhattan Bank of
Canada, as Canadian Agent
and Canadian Collateral Agent,
Banc of America Securities,
LLC, as Syndication Agent, and
CIBC, Inc., as Documentation
Agent:
Name of Institution:
CIBC, Inc.
_____________________________
by /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
__________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Executive Director
by __________________________
Name:
Title:
To approve the increase in the
above named institution's
Revolving Commitment pursuant
to Section 2 of the Amendment:
by /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
__________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Executive Director
by __________________________
Name:
Title:
To approve the First Amendment
dated as of December 28, 2000
(the "Amendment") to the
Credit Agreement dated as of
September 22, 2000 (the
"Credit Agreement"), among
----------------
Select Medical Corporation, a
Delaware corporation (the
"Company"), Canadian Back
-------
Institute Limited, an Ontario
corporation and a wholly owned
subsidiary of the Company
("CBIL" and, together with the
----
Company, the "Borrowers"), the
---------
Lenders party thereto, The
Chase Manhattan Bank, as US
Agent and US Collateral Agent,
The Chase Manhattan Bank of
Canada, as Canadian Agent and
Canadian Collateral Agent,
Banc of America Securities,
LLC, as Syndication Agent, and
CIBC, Inc., as Documentation
Agent:
Name of Institution:
First Union National Bank
_________________________
by /s/ ▇▇▇▇▇ ▇. Law
____________________
Name: ▇▇▇▇▇ ▇. Law
Title: Vice President
by ____________________
Name:
Title:
To approve the increase in the
above named institution's
Revolving Commitment pursuant
to Section 2 of the Amendment:
by /s/ ▇▇▇▇▇ ▇. Law
____________________
Name: ▇▇▇▇▇ ▇. Law
Title: Vice President
by ____________________
Name:
Title:
To approve the First Amendment
dated as of December 28, 2000
(the "Amendment") to the
Credit Agreement dated as of
September 22, 2000 (the
"Credit Agreement"), among
----------------
Select Medical Corpoartion, a
Delaware corporation (the
"Company"), Canadian Back
-------
Institute Limited, an Ontario
corporation and a wholly owned
subsidiary of the Company
("CBIL" and, together with the
----
Company, the "Borrowers"), the
---------
Lenders party thereto, The
Chase Manhattan Bank, as US
Agent and US Collateral Agent,
The Chase Manhattan Bank of
Canada, as Canadian Agent and
Canadian Collateral Agent,
Banc of America Securities,
LLC, as Syndication Agent, and
CIBC, Inc., as Documentation
Agent:
Name of Institution
▇▇▇▇▇▇ Guaranty Trust Company
_____________________________
by /s/ ▇. ▇▇▇▇▇▇▇▇▇
____________________
Name: ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
by /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
______________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Director
To approve the increase in the
aboved named institution's
Revolving Commitment pursuant
to Section 2 of the Amendment:
by /s/ ▇. ▇▇▇▇▇▇▇▇▇
____________________
Name: ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
by /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
______________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Director
To approve the First Amendment
dated as of December 28, 2000
(the "Amendment") to the
Credit Agreement dated as of
September 22, 2000 (the
"Credit Agreement"), among
----------------
Select Medical Corporation, a
Delaware corporation (the
"Company"), Canadian Back
-------
Institute Limited, an Ontario
corporation and a wholly owned
subsidiary of the Company
("CBIL" and, together with the
----
Company, the "Borrowers"), the
---------
Lenders party thereto, The
Chase Manhattan Bank, as US
Agent and US Collateral Agent,
The Chase Manhattan Bank of
Canada, as Canadian Agent and
Canadian Collateral Agent,
Banc of America Securities,
LLC, as Syndication Agent, and
CIBC, Inc., as Documentation
Agent:
Name of Institution:
Societe Generale
_______________________
by /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
____________________
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
by ____________________
Name:
Title:
To approve the increase in the
above named institution's
Revolving Commitment pursuant
to Section 2 of the Amendment:
by /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
____________________
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
by ____________________
Name:
Title:
To approve the First Amendment
dated as of December 28, 2000
(the "Amendment") to the
Credit Agreement dated as of
September 22, 2000 (the
"Credit Agreement"), among
----------------
Select Medical Corporation, a
Delaware corporation (the
"Company"), Canadian Back
-------
Institute Limited, an Ontario
corporation and a wholly owned
subsidiary of the Company
("CBIL" and, together with the
----
Company, the "Borrowers"), the
---------
Lenders party thereto, The
Chase Manhattan Bank, as US
Agent and US Collateral Agent,
The Chase Manhattan Bank of
Canada, as Canadian Agent and
Canadian Collateral Agent,
Banc of America Securities,
LLC, as Syndication Agent, and
CIBC, Inc., as Documentation
Agent:
Name of Institution:
Summit Bank
_______________________
by /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
______________________
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Regional Vice President
by ____________________
Name:
Title:
To approve the increase in the
above named institution's
Revolving Commitment pursuant
to Section 2 of the Amendment:
by /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
______________________
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Regional Vice President
by ____________________
Name:
Title:
To approve the First Amendment
dated as of December 28, 2000
(the "Amendment") to the
Credit Agreement dated as of
September 22, 2000 (the
"Credit Agreement"), among
----------------
Select Medical Corporation, a
Delaware corporation (the
"Company"), Canadian Back
-------
Institute Limited, an Ontario
corporation and a wholly owned
subsidiary of the Company
("CBIL" and, together with the
----
Company, the "Borrowers"), the
---------
Lenders party thereto, The
Chase Manhattan Bank, as US
Agent and US Collateral Agent,
The Chase Manhattan Bank of
Canada, as Canadian Agent and
Canadian Collateral Agent,
Banc of America Securities,
LLC, as Syndication Agent, and
CIBC, Inc., as Documentation
Agent:
Name of Institution:
▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Corporation
_________________________________
by /s/ ▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇
_____________________
Name: ▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇
Title: Vice President
by ____________________
Name:
Title:
To approve the increase in the
above named institution's
Revolving Commitment pursuant
to Section 2 of the Amendment:
by /s/ ▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇
_____________________
Name: ▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇
Title: Vice President
by ____________________
Name:
Title:
To approve the First Amendment
dated as of December 28, 2000
(the "Amendment") to the
Credit Agreement dated as of
September 22, 2000 (the
"Credit Agreement"), among
----------------
Select Medical Corporation, a
Delaware corporation (the
"Company"), Canadian Back
-------
Institute Limited, an Ontario
corporation and a wholly owned
subsidiary of the Company
("CBIL" and, together with the
----
Company, the "Borrowers"), the
---------
Lenders party thereto, The
Chase Manhattan Bank, as US
Agent and US Collateral Agent,
The Chase Manhattan Bank of
Canada, as Canadian Agent and
Canadian Collateral Agent,
Banc of America Securities,
LLC, as Syndication Agent, and
CIBC, Inc., as Documentation
Agent:
Name of Institution:
PNC Bank, National Association
______________________________
by /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
____________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title:
by ____________________
Name:
Title:
To approve the increase in the
above named institution's
Revolving Commitment pursuant
to Section 2 of the Amendment:
by /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
____________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title:
by ____________________
Name:
Title: