SECOND AMENDMENT TO THE CREDIT AGREEMENT

EX-10.4 2 dex104.htm SECOND AMENDMENT TO THE CREDIT AGREEMENT Second Amendment to the Credit Agreement

Exhibit 10.4

SECOND AMENDMENT TO THE CREDIT AGREEMENT

THIS SECOND AMENDMENT, dated as of February 14, 2007 (the “Second Amendment”), to the Credit Agreement, dated as of September 30, 2005, as amended by the First Amendment thereto, dated as of November 1, 2006 (the “Credit Agreement”), among CONCENTRA INC., a Delaware corporation (“Holdings”), CONCENTRA OPERATING CORPORATION, a Nevada corporation (the “Borrower”), the several banks and other financial institutions from time to time parties thereto (the “Lenders”) and JPMORGAN CHASE BANK, N.A., a national banking association, as administrative agent for the Lenders thereunder (in such capacity, the “Administrative Agent”), is entered into by and among Holdings, the Borrower, the Lenders and the Administrative Agent.

W I T N E S S E T H:

WHEREAS, Holdings, the Borrower, the Lenders and the Administrative Agent are parties to the Credit Agreement;

WHEREAS, the Borrower has requested that the Lenders amend the Credit Agreement, as more fully described herein; and

WHEREAS, the Lenders are willing to agree to such amendment, but only upon the terms and subject to the conditions set forth herein.

NOW THEREFORE, in consideration of the premises and the mutual covenants hereinafter set forth, the parties hereto hereby agree as follows:

1. Defined Terms. Unless otherwise defined herein, capitalized terms which are defined in the Credit Agreement are used herein as therein defined.

2. Amendment to Section 1.1 (Definitions). Section 1.1 of the Credit Agreement is hereby amended by replacing clause (e) in the definition of “Consolidated EBITDA” with the following:

“(e) any extraordinary, unusual or non-recurring non-cash (or, in the case of clause (ii) below, cash) expenses or losses (including, whether or not otherwise includable as a separate item in the statement of such Consolidated Net Income for such period, (i) non-cash losses on sales of assets outside of the ordinary course of business and (ii) cash losses in an aggregate amount up to $12,250,000 in connection with the settlement by FOCUS Healthcare Management, Inc., a Wholly Owned Subsidiary of the Borrower, of Gunderson, et al. v. F.A. Richard & Associates, a class action lawsuit in Louisiana, in January 2007),”

3. Amendment to Section 7.5 (Disposition of Property). Section 7.5 of the Credit Agreement is hereby amended by (i) deleting the word “and” at the end of clause (f) thereof, (ii) replacing the “.” at the end of clause (g) with a “; and” and (iii) adding the following:

“(h) the Disposition of all or substantially all of the assets (including, without limitation, all or substantially all of the shares of Capital Stock) of Concentra Integrated Services, Inc., a Massachusetts corporation, MetraComp, Inc., a Connecticut corporation, First Script Network Services, Inc., a Nevada corporation and FOCUS Healthcare Management, Inc., a Tennessee corporation, each a Wholly Owned Subsidiary of the Borrower, on or before December 31, 2007 (the “Workers Compensation Care Management Divestiture”); provided that, subject to the right of the Loan Parties to retain a certain amount of such Net Cash Proceeds as set forth in Section 2.9 of this Agreement, 100% of the Net Cash Proceeds thereof are applied in accordance with Section 2.9 of this Agreement.”

4. Amendment to Section 7.6 (Restricted Payments). Section 7.6 of the Credit Agreement is hereby amended by (i) deleting the word “and” at the end of clause (d) thereof, (ii) replacing the “.” at the end of clause (e) with a “; and” and (iii) adding the following:

“(f) within six months after the Workers Compensation Care Management Divestiture, the Borrower may pay a one time dividend in an aggregate amount not to exceed $100,000,000 to permit Holdings thereafter to distribute the proceeds thereof as a dividend to its shareholders.”

5. Amendment Fee. In consideration of the agreement of the Required Lenders to the amendments contained herein, Holdings and the Borrower agree to pay to each Lender (hereinafter, an “Executing Lender”) that executes and delivers this Second Amendment to the Administrative Agent or its counsel by 12:00 noon, New York City time, on February 27, 2007, an amendment fee in an amount equal to five basis points (0.05%) of the aggregate amount of such Executing Lender’s Term Loans, Revolving Extensions of Credit and Available Revolving Commitments outstanding on the Second Amendment Effective Date. The amendment fee shall be payable by the Borrower on the Second Amendment Effective Date in immediately available funds to the Administrative Agent on behalf of the applicable Executing Lender.

6. Conditions to Effectiveness of this Second Amendment. This Second Amendment shall become effective upon the date (the “Second Amendment Effective Date”) when the following conditions are satisfied:

(i) Second Amendment to Credit Agreement. The Administrative Agent shall have received counterparts of this Second Amendment, duly executed and delivered by Holdings and the Borrower, and executed and delivered or consented to by the Required Lenders;

(ii) Fees. The Administrative Agent shall have received any applicable amendment fee pursuant to Paragraph 5 of this Second Amendment, together with any other fees and expenses required to be paid on or before the Second Amendment Effective Date for which invoices have been timely presented;

(iii) No Default. No Default or Event of Default shall have occurred and be continuing on such date or after giving effect to the transactions contemplated herein; and

(iv) Representations and Warranties. Each of the representations and warranties made by the Loan Parties in or pursuant to the Loan Documents shall be true and correct in all material respects on and as of the date hereof, before and after giving effect to the effectiveness of this Second Amendment, as if made on and as of the date hereof, except to the extent such representations and warranties expressly relate to a specific earlier date, in which case such representations and warranties were true and correct as of such earlier date.

7. Continuing Effect of the Credit Agreement. This Second Amendment shall not constitute an amendment or waiver of any provision of the Credit Agreement not expressly referred to herein and shall not be construed as an amendment, waiver or consent to any further or future action on the part of the Loan Parties that would require an amendment, waiver or consent of the Lenders or Administrative Agent. Except as expressly amended hereby, the provisions of the Credit Agreement are and shall remain in full force and effect.

8. Counterparts. This Second Amendment may be executed by one or more of the parties hereto on any number of separate counterparts (including by facsimile or electronic transmission acceptable to the Administrative Agent), and all of said counterparts taken together shall be deemed to constitute one and the same instrument.

9. Severability. Any provision of this Second Amendment which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

10. Integration. This Second Amendment and the other Loan Documents represent the agreement of the Loan Parties, the Administrative Agent and the Lenders with respect to the subject matter hereof, and there are no promises, undertakings, representations or warranties by the Administrative Agent or any Lender relative to the subject matter hereof not expressly set forth or referred to herein or in the other Loan Documents.

11. GOVERNING LAW. THIS SECOND AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS SECOND AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

[Signature Pages to Follow]

IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written.


CONCENTRA INC.

By:		/s/ Thomas E. Kiraly
Name:		Thomas E. Kiraly
Title:		Executive Vice President


CONCENTRA OPERATING CORPORATION

By:		/s/ Thomas E. Kiraly
Name:		Thomas E. Kiraly
Title:		Executive Vice President


JPMORGAN CHASE BANK, N.A., as Administrative Agent and a Lender

By:		/s/ Stephanie Parker
Name:		Stephanie Parker
Title:		Executive Director