THIRD AMENDMENT TO CREDIT AGREEMENT
Exhibit 99.1
THIRD AMENDMENT TO CREDIT AGREEMENT
This Third Amendment to Credit Agreement (this “Amendment”) dated as of October 13,
2010, is by and among U. S. PHYSICAL THERAPY, INC., a Nevada corporation (the “Borrower”),
the Lenders party hereto, and BANK OF AMERICA, N.A., as Administrative Agent, Swing Line Lender and
L/C Issuer (the “Administrative Agent”).
W I T N E S S E T H:
A. The Borrower, the Administrative Agent and the Lenders named therein entered into that
certain Credit Agreement dated as of August 27, 2007 (as has been and may be amended, restated,
supplemented and modified from time to time, the “Credit Agreement”).
B. The Borrower, the Administrative Agent and the Lenders now desire to amend the Credit
Agreement (i) to extend the Maturity Date, (ii) to amend the definition of Applicable Rate, and
(iii) as otherwise provided herein.
NOW, THEREFORE, in consideration of the premises, as well as the covenants, conditions and
agreements hereafter set forth, and for other good and valuable consideration, the receipt and
adequacy of which are all hereby acknowledged, the parties covenant and agree as follows:
Definitions
Definitions. Capitalized terms used in this Amendment, to the extent not otherwise
defined herein, shall have the same meanings as in the Credit Agreement, as amended hereby.
Amendments to Credit Agreement
Amendments to Section 1.01 of the Credit Agreement.
The following definitions set forth in Section 1.01 of the Credit Agreement are hereby
amended and restated in their entirety to read as follows:
“Applicable Rate” means, from time to time, the following percentages per
annum, based upon the Consolidated Leverage Ratio as set forth in the most recent Compliance
Certificate received by the Administrative Agent pursuant to Section 6.02(a):
Applicable
Rate
| Eurodollar | ||||||||||||||
| Rate and | ||||||||||||||
| Pricing | Consolidated | Commitment | Letters | |||||||||||
| Level | Leverage Ratio | Fee | of Credit | Base Rate | ||||||||||
1
|
<1.00 | .10 | % | 1.60 | % | .10 | % | |||||||
2
|
³1.00 but <1.50 | .15 | % | 1.90 | % | .40 | % | |||||||
3
|
³1.50 but <2.00 | .20 | % | 2.15 | % | .65 | % | |||||||
4
|
³2.00 | .25 | % | 2.50 | % | 1.00 | % | |||||||
Any increase or decrease in the Applicable Rate resulting from a change in the
Consolidated Leverage Ratio shall become effective as of the first Business Day
immediately following the date a Compliance Certificate is delivered pursuant to
Section 6.02(a); provided, however, that if a Compliance
Certificate is not delivered when due in accordance with such Section, then Pricing
Level 4 shall apply as of the first Business Day after the date on which such
Compliance Certificate was required to have been delivered.
Notwithstanding anything to the contrary contained herein, the Commitment Fee
due and payable by the Borrower with respect to any date shall be increased by an
additional .10% for each level in the event that the Total Outstandings on such date
are less than fifty percent (50%) of the Aggregate Commitments on such date.
Notwithstanding anything to the contrary contained in this definition, the
determination of the Applicable Rate for any period shall be subject to the
provisions of Section 2.10(b).
“Maturity Date” means August 31, 2015; provided, however, that, if
such date is not a Business Day, the Maturity Date shall be the next preceding Business Day.
Amendment to Section 2.01 of the Credit Agreement. Effective as of the date hereof,
Section 2.01 of the Credit Agreement is amended and restated in its entirety to read as
follows:
2.01 Committed Loans. Subject to the terms and conditions set forth herein,
each Lender severally agrees to make loans (each such loan, a “Committed Loan”) to
the Borrower from time to time, on any Business Day during the Availability Period, in an
aggregate amount not to exceed at any time outstanding the amount of such Lender’s
Commitment; provided, however, that after giving effect to any Committed
Borrowing, (a) the Total Outstandings shall not exceed the Aggregate Commitments, and (b)
the aggregate Outstanding Amount of the Committed Loans of any Lender, plus such
Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations,
plus such Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line
Loans shall not exceed such Lender’s Commitment. Within the limits of each Lender’s
Commitment, and subject to the other terms and conditions hereof, the Borrower may borrow
under this Section 2.01, prepay under Section 2.05, and reborrow under this
Section 2.01. Committed Loans may be Base Rate Loans or Eurodollar Rate Loans, as
further provided herein.
Amendment to Section 2.04(a) of the Credit Agreement. Effective as of the date
hereof, Section 2.04(a) of the Credit Agreement is amended and restated in its entirety to
read as follows:
(a) The Swing Line. Subject to the terms and conditions set forth herein, the
Swing Line Lender agrees, in reliance upon the agreements of the other Lenders set forth in
this Section 2.04, to make loans (each such loan, a “Swing Line Loan”) to
the Borrower from time to time on any Business Day during the Availability Period in an
aggregate amount not to exceed at any time outstanding the amount of the Swing Line
Sublimit, notwithstanding the fact that such Swing Line Loans, when aggregated with the
Applicable Percentage of the Outstanding Amount of Committed Loans and L/C Obligations of
the Lender acting as Swing Line Lender, may exceed the amount of such Lender’s Commitment;
provided, however, that after giving effect to any Swing Line Loan, (i) the
Total Outstandings shall not exceed the Aggregate Commitments, and (ii) the aggregate
Outstanding Amount of the Committed Loans of any Lender, plus such Lender’s
Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus such
Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall not
exceed such Lender’s Commitment, and provided, further, that the Borrower
shall not use the proceeds of any Swing Line Loan to refinance any outstanding Swing Line
Loan. Within the foregoing limits, and subject to the other terms and conditions hereof,
the Borrower may borrow under this Section 2.04, prepay under Section 2.05,
and reborrow under this Section 2.04. Each Swing Line Loan shall be a Base Rate
Loan. Immediately upon the making of a Swing Line Loan, each Lender shall be deemed to, and
hereby irrevocably and unconditionally agrees to, purchase from the Swing Line Lender a risk
participation in such Swing Line Loan in an amount equal to the product of such Lender’s
Applicable Percentage times the amount of such Swing Line Loan.
Amendment to Section 7.06 of the Credit Agreement. Effective as of the date hereof,
Section 7.06 of the Credit Agreement is amended to delete the period at the end of clause
(d) of such section and to replace it with “; and” and to add a new clause (e) at the end of such
section, as follows:
(e) the Borrower may pay cash dividends to its stockholders in an aggregate amount not
to exceed $5,000,000 in any fiscal year so long as (i) immediately before and
immediately after giving pro forma effect to any such payment, no Default shall have
occurred and be continuing and (ii) immediately after giving effect to such payment, the
Borrower and its Subsidiaries shall be in pro forma compliance with all of the
covenants set forth in Section 7.11, such compliance to be determined on the basis
of the financial information most recently delivered to the Administrative Agent and the
Lenders pursuant to Section 6.01(a) or (b) as though such payment had been
made as of the first day of the fiscal period covered thereby.
Acknowledgement
Notwithstanding anything to the contrary in the Credit Agreement or any other Loan Document,
the parties hereto acknowledge and agree that, as of the date hereof, (a) Committed Loans may be
Base Rate Loans or Eurodollar Rate Loans, as further provided in the Credit Agreement, as amended
hereby, and (b) Swing Line Loans shall accrue interest at the Base Rate.
Representations and Warranties
Representations and Warranties True; No Default. By their execution and delivery
hereof, the Borrower represents and warrants that, as of the date hereof, and after giving effect
to this Amendment:
the representations and warranties contained in the Credit Agreement and the other Loan
Documents are true and correct in all material respects on and as of the date hereof as made
on and as of such date;
no event has occurred and is continuing which constitutes a Default;
(i) the Borrower has full power and authority to execute and deliver this Amendment,
(ii) this Amendment has been duly executed and delivered by the Borrower, and (iii) this
Amendment and the Credit Agreement, as amended hereby, constitute the legal, valid and
binding obligations of the Borrower, enforceable in accordance with their respective terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors’ rights generally and subject
to general principles of equity (regardless of whether enforcement is sought in a proceeding
in equity or at law) and except as rights to indemnity may be limited by federal or state
securities laws;
neither the execution, delivery and performance of this Amendment or the Credit
Agreement, as amended hereby, nor the consummation of any transactions contemplated herein
or therein, will conflict with any law or organization documents of the Borrower, or any
indenture, agreement or other instrument to which the Borrower or any of its respective
properties are subject; and
no authorization, approval, consent, or other action by, notice to, or filing with, any
governmental authority or other Person not previously obtained is required for the
execution, delivery or performance by the Borrower of this Amendment.
Conditions Precedent
Conditions to Effectiveness. This Amendment shall be effective upon satisfaction or
completion of the following:
the Administrative Agent shall have received this Amendment executed by the Borrower;
the Administrative Agent shall have received a closing fee in the amount of $15,000.00;
the Administrative Agent shall have received all other fees and expenses called for
herein or incurred in connection with the preparation and execution of this Amendment
including, without limitation, the attorneys’ fees, costs and expenses incurred by the
Administrative Agent in connection herewith;
the representations and warranties set forth in Article IV hereof are true and correct;
and
the Administrative Agent shall have received, in form and substance satisfactory to the
Administrative Agent and its counsel, such other documents, certificates and instruments as
the Administrative Agent shall reasonably require.
Miscellaneous
Reference to the Credit Agreement.
Upon the effectiveness of this Amendment, each reference in the Credit Agreement to
“this Agreement,” “hereunder,” or words of like import shall mean and be a reference to the
Credit Agreement, as affected and amended hereby.
The Credit Agreement, as amended by the amendments referred to above, shall remain in
full force and effect and is hereby ratified and confirmed.
Costs, Expenses and Taxes. The Borrower agrees to pay on demand all costs and
expenses of the Administrative Agent in connection with the preparation, reproduction, execution
and delivery of this Amendment and the other instruments and documents to be delivered hereunder
(including the reasonable fees and out-of-pocket expenses of counsel for the Administrative Agent
with respect thereto).
Execution in Counterparts. This Amendment 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 to be an original and all of which when taken together shall
constitute but one and the same instrument. For purposes of this Amendment, a counterpart hereof
(or signature page thereto) signed and transmitted by any Person party hereto to the Administrative
Agent (or its counsel) by facsimile machine, telecopier or electronic mail is to be treated as an
original. The signature of such Person thereon, for purposes hereof, is to be considered as
an original signature, and the counterpart (or signature page thereto) so transmitted is to be
considered to have the same binding effect as an original signature on an original document.
Governing Law; Binding Effect. This Amendment shall be governed by and construed in
accordance with the laws of the State of Texas applicable to agreements made and to be performed
entirely within such state, provided that each party shall retain all rights arising under federal
law, and shall be binding upon the parties hereto and their respective successors and assigns;
provided, however, that the Borrower may not assign any of its rights arising from
this Amendment or any other Loan Document without the prior written consent of the Administrative
Agent and each Lender, and any prohibited assignment shall be null and void.
Headings. Section headings in this Amendment are included herein for convenience of
reference only and shall not constitute a part of this Amendment for any other purpose.
Entire Agreement. THE CREDIT AGREEMENT, AS AMENDED BY THIS AMENDMENT, AND THE OTHER
LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
REMAINDER OF PAGE LEFT INTENTIONALLY BLANK
IN WITNESS WHEREOF, the parties hereto have executed this Amendment to be duly executed by
their respective authorized officers as of the day and year first above written.
| BORROWER: U.S. PHYSICAL THERAPY, INC. |
||||
| By: | /s/ Xxxxxxxx X. XxXxxx | |||
| Xxxxxxxx X. XxXxxx | ||||
| Chief Financial Officer | ||||
| BANK OF AMERICA, N.A., as Administrative Agent |
||||
| By: | /s/ Xxxxxx Xxxxxx | |||
| Xxxxxx Xxxxxx | ||||
| Senior Vice President | ||||
| BANK OF AMERICA, N.A., as a Lender, L/C Issuer and Swing Line Lender |
||||
| By: | /s/ Xxxxxx Xxxxxx | |||
| Xxxxxx Xxxxxx | ||||
| Senior Vice President | ||||
