SECOND AMENDMENT TO CREDIT AGREEMENT
Exhibit 99.1
SECOND AMENDMENT TO CREDIT AGREEMENT
This Second Amendment to Credit Agreement and Consent (this “Amendment”) dated as of
March 18, 2009, 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. Section 7.06 of the Credit Agreement prohibits the Borrower from making certain
purchases of capital stock or other Equity Interests of the Borrower. The Borrower has requested
that the Administrative Agent and the Lenders agree to permit the Borrower to make one or more
purchases of its common stock in the open market or in privately negotiated transactions, subject
to the terms and conditions of this Amendment.
C. The Borrower, the Administrative Agent and the Lenders also desire to amend the Credit
Agreement (i) to eliminate the Base Rate option for Committed Loans and Swing Line Loans, (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:
ARTICLE I
Definitions
Section 1.1 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.
ARTICLE II
Amendments to Credit Agreement
Section 2.1 Amendments to Section 1.01 of the Credit Agreement.
(a) 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):
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Applicable Rate
| Eurodollar | ||||||||||
| Rate and | ||||||||||
| Pricing | Consolidated | Commitment | Letters | |||||||
| Level | Leverage Ratio | Fee | of Credit | |||||||
1
|
<1.00 | .10 | % | 1.50 | % | |||||
2
|
>1.00 but <1.50 | .15 | % | 1.625 | % | |||||
3
|
>1.50 but <2.00 | .20 | % | 1.75 | % | |||||
4
|
>2.00 | .25 | % | 2.50 | % | |||||
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).
“Eurodollar Daily Floating Rate” means, for any day, a fluctuating rate of
interest equal to the Eurodollar Rate with an Interest Period of one month.
“Eurodollar Rate” means, for any Interest Period with respect to a Eurodollar
Rate Loan, the sum of (i) the rate per annum equal to (A) the British Bankers Association
LIBOR Rate, as published by Reuters (or other commercially available source providing
quotations of BBA LIBOR as designated by the Administrative Agent from time to time)
(“BBA LIBOR”), at approximately 11:00 a.m., London time, two Business Days prior to
the commencement of such Interest Period, for Dollar deposits (for delivery on the first day
of such Interest Period) with a term equivalent to such Interest Period or (B) if such
published rate is not available at such time for any reason, then the Eurodollar Rate for
such Interest Period shall be the rate per annum determined by the Administrative Agent to
be the rate at which deposits in Dollars for delivery on the first day of such Interest
Period in same day funds in the approximate amount of the Eurodollar Rate Loan being made,
continued or converted by Bank of America and with a term equivalent to such Interest Period
would be offered by Bank of America’s London Branch to major banks in the London interbank
Eurodollar market at their request at approximately 11:00 a.m. (London time) two Business
Days prior to the commencement of such Interest Period and (ii) the Market Disruption
Spread, if any, as of the time of determination.
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(b) The following definitions are hereby added to Section 1.01 of the Credit Agreement
to read as follows, in alphabetical order:
“Market Disruption Spread” means zero unless a notice delivered pursuant to
Section 3.08 is in effect, in which case such spread shall be a rate per annum equal
to 1.00%.
“Stock Purchase” means a purchase by Borrower of its common stock in the open
market or in privately negotiated transactions.
Section 2.2 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. Notwithstanding anything to the contrary in this Agreement or any
other Loan Document, Committed Loans shall be Eurodollar Rate Loans, and no Committed Loans
shall be made as or converted to Base Rate Loans.
Section 2.3 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
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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. Notwithstanding anything to the
contrary in this Agreement or any other Loan Document, Swing Line Loans shall accrue
interest at the Eurodollar Daily Floating Rate, and no Swing Line Loans shall be made as
Base Rate Loans. 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.
Section 2.4 Addition of Section 3.08 to the Credit Agreement. Effective as of the
date hereof, a new Section 3.08 of the Credit Agreement is added in its entirety to read as
follows:
3.08 Market Disruption. If the Required Lenders determine (which determination
shall be conclusive and binding upon the Borrower) that the Eurodollar Rate will not
adequately and fairly reflect the cost to such Lenders (as conclusively certified by such
Lenders) of making or maintaining the Loans, the Administrative Agent shall give notice
thereof to the Borrower as soon as practicable thereafter and, upon delivery of such notice
and until the Administrative Agent revokes such notice, the Market Disruption Spread shall
be included in the calculation of the Eurodollar Rate.
Section 2.5 Amendment to Section 6.11 of the Credit Agreement. Effective as of the
date hereof, Section 6.11 of the Credit Agreement is amended and restated in its entirety
to read as follows:
6.11 Use of Proceeds. Use the proceeds of the Credit Extensions for working
capital, making acquisitions permitted hereunder, and general corporate purposes not in
contravention of any Law or of any Loan Document, including without limitation Stock
Purchases permitted under Section 7.06(d).
Section 2.6 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 (c) of such section and to replace it with “; and” and to a add a new clause (d) at
the end of such section, as follows:
(d) the Borrower may make Stock Purchases subject to the conditions that (i) no Default
or Event of Default shall exist after giving effect to any Stock Purchase; (ii) after giving
effect to any Stock Purchase on a pro forma basis, the Consolidated Leverage Ratio shall be
less than 1.0 to 1.0; (iii) commencing March 15, 2009, and at all times thereafter, the
aggregate amount of all Stock Purchases shall not exceed $15,000,000.00; and (iv) any stock
acquired pursuant to a Stock Purchase shall be retired within seven days of such purchase.
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Section 2.7 Amendment to Section 7.10 of the Credit Agreement. Effective as of the
date hereof, Section 7.10 of the Credit Agreement is amended and restated in its entirety
to read as follows:
7.10 Use of Proceeds. Use the proceeds of any Credit Extension, whether
directly or indirectly, and whether immediately, incidentally or ultimately, to purchase or
carry margin stock (within the meaning of Regulation U of the FRB) or to extend credit to
others for the purpose of purchasing or carrying margin stock or to refund indebtedness
originally incurred for such purpose; provided, however, that this
Section 7.10 shall not prohibit any Stock Purchase permitted under Section
7.06(d).
ARTICLE III
Acknowledgement
Section 3.1 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
shall be Eurodollar Rate Loans, (b) Swing Line Loans shall accrue interest at the Eurodollar Daily
Floating Rate, and (c) Base Rate Loans shall no longer be available.
ARTICLE IV
Representations and Warranties
Section 4.1 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:
(a) 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;
(b) no event has occurred and is continuing which constitutes a Default;
(c) (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;
(d) 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
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the Borrower, or any indenture, agreement or other instrument to which the Borrower or
any of its respective properties are subject; and
(e) 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.
ARTICLE V
Conditions Precedent
Section 5.1 Conditions to Effectiveness. This Amendment shall be effective upon
satisfaction or completion of the following:
(a) the Administrative Agent shall have received this Amendment executed by the
Borrower;
(b) the Administrative Agent shall have received all 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;
(c) the representations and warranties set forth in Article IV hereof are true and
correct; and
(d) 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.
ARTICLE VI
Miscellaneous
Section 6.1 Reference to the Credit Agreement.
(a) 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.
(b) The Credit Agreement, as amended by the amendments referred to above, shall remain
in full force and effect and is hereby ratified and confirmed.
Section 6.2 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).
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Section 6.3 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.
Section 6.4 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.
Section 6.5 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.
Section 6.6 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
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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 | ||||
Signature Page to Second Amendment to Credit Agreement
| BANK OF AMERICA, N.A., as Administrative Agent |
||||
| By: | /s/ Xxxxxx Xxxxxx | |||
| Xxxxxx Xxxxxx | ||||
| Senior Vice President | ||||
Signature Page to Second Amendment to Credit Agreement
| BANK OF AMERICA, N.A., as a Lender, L/C Issuer and Swing Line Lender |
||||
| By: | /s/ Xxxxxx Xxxxxx | |||
| Xxxxxx Xxxxxx | ||||
| Senior Vice President | ||||
Signature Page to Second Amendment to Credit Agreement
