SEC Filing · Surgery Partners Inc.

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8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

March 24, 2016

Date of report (date of earliest event reported)

Surgery Partners, Inc.

(Exact name of registrant as specified in its charter)

Delaware

001-37576

47-3620923

(State or other jurisdictions of

incorporation or organization)

(Commission

File Number)

(I.R.S. Employer

Identification Nos.)

40 Burton Hills Boulevard, Suite 500

Nashville, Tennessee 37215

(Address of principal executive offices) (Zip Code)

(615) 234-5900

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrants under any of the following provisions:

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01

Entry into a Material Definitive Agreement.

On March 24, 2016, SP Holdco I, Inc. and Surgery Center Holdings, Inc. (each an indirectly wholly-owned subsidiary of Surgery Partners, Inc.) along with certain other indirectly wholly-owned entities (the “Guarantors,” and together with SP Holdco I, Inc. and Surgery Center Holdings, Inc., the “Subsidiaries”) that each guarantee the First Lien Credit Agreement (as defined herein) entered into an amendment (the “Incremental Term Loan Amendment”) to the First Lien Credit Agreement, dated as of November 3, 2014 (as amended, the “First Lien Credit Agreement”), by and among the Subsidiaries, the Incremental Lenders, Jefferies Finance LLC, as the Administrative Agent and the Collateral Agent thereunder, and Jefferies Finance LLC, as Issuing Bank (as amended, restated, amended and restated, supplemented or otherwise modified from time to time). The Incremental Term Loan Amendment amends the First Lien Credit Agreement to increase certain lenders’ commitments to Surgery Center Holdings, Inc. and enables Surgery Center Holdings, Inc. to obtain an incremental term loan in an aggregate principal amount of $80 million pursuant to the terms of the First Lien Credit Agreement and the Incremental Term Loan Amendment. Capitalized terms used in this description but not defined herein have the meanings given to them in the First Lien Credit Agreement, as amended by the Incremental Term Loan Amendment. A copy of the Incremental Term Loan Amendment is attached as Exhibit 10.1 to this Current Report on Form 8-K.

On March 28, 2016, Surgery Center Holdings, Inc. (the “Issuer”), entered into a purchase agreement with the representatives of certain initial purchasers, relating to the issuance and sale of $400 million in gross proceeds of the Issuer’s 8.875% senior unsecured notes due 2021. The net proceeds from the notes offering will be used to repay the borrowings outstanding under the Issuer’s senior secured second lien credit facility, to repay the outstanding balance on its revolving credit facility, to pay fees and expenses associated with the notes offering and for general corporate purposes. The consummation of the notes offering is subject to market and other conditions.

Item 2.03

Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth in the first paragraph of Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.

Item 8.01

Other Events.

On March 29, 2016, Surgery Partners, Inc. issued a press release announcing the pricing of the notes offering. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K.

Item 9.01

Financial Statements and Exhibits.

(d)

Exhibits


Exhibit No.		Description

10.1		First Lien Incremental Term Loan Amendment and Consent, dated as of March 24, 2016, by and among SP Holdco I, Inc., Surgery Center Holdings, Inc., Jefferies Finance LLC and the other guarantors and lenders party thereto

99.1		Press release dated March 29, 2016

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


		Surgery Partners, Inc.

By:		/s/ Michael T. Doyle
		Michael T. Doyle Chief Executive Officer

Date: March 29, 2016

EXHIBIT INDEX


Exhibit No.		Description

10.1		First Lien Incremental Term Loan Amendment and Consent, dated as of March 24, 2016, by and among SP Holdco I, Inc., Surgery Center Holdings, Inc., Jefferies Finance LLC and the other guarantors and lenders party thereto

99.1		Press release dated March 29, 2016

EX-10.1

Exhibit 10.1

FIRST LIEN INCREMENTAL TERM LOAN AMENDMENT AND CONSENT

This FIRST LIEN INCREMENTAL TERM LOAN AMENDMENT AND CONSENT (this “Amendment”), dated as of March 24, 2016, by and among Surgery Center Holdings, Inc., a Delaware corporation (the “Borrower”), SP Holdco I, Inc. (“Holdings”), the other Guarantors party hereto, the Lenders party hereto (the “Consenting Lenders”) and Jefferies Finance LLC, as administrative agent for the Lenders (in such capacity, the “Administrative Agent”) and as collateral agent for the Secured Parties (in such capacity, the “Collateral Agent” or, as Administrative Agent or Collateral Agent, “Agent”).

W I T N E S S E T H:

WHEREAS, the Borrower, Holdings, Guarantors, Lenders and Agent, among others, are parties to that certain First Lien Credit Agreement, dated as of November 3, 2014 (as the same may be amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Credit Agreement”);

WHEREAS, the Borrower has requested that the Lenders amend, and the Consenting Lenders have agreed to so amend, Section 2.19 of the Credit Agreement to provide the Borrower with the ability to incur additional Incremental Term Loans under Section 2.19 of the Credit Agreement in an additional aggregate principal amount of $50,000,000;

WHEREAS, pursuant to and in accordance with Section 2.19 of the Credit Agreement (as amended pursuant to this Amendment, the “Amended Credit Agreement”), (i) the Borrower has requested Incremental Term Loans in an aggregate principal amount of $80,000,000 and (ii) the 2016 Incremental Term Lenders and the Administrative Agent have agreed, upon the terms and subject to the conditions set forth herein, that the 2016 Incremental Term Lenders will make Incremental Term Loans in the form of 2016 Incremental Term Loans;

WHEREAS, this Amendment is an Incremental Amendment under and as defined in Section 2.19 of the Credit Agreement; and

WHEREAS, Agent and the Consenting Lenders are willing, on the terms and subject to the conditions set forth below, to enter into the amendments, modifications and agreements set forth in this Amendment.

NOW, THEREFORE, in consideration of the premises and the mutual agreements herein contained and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:

1. Defined Terms. Unless otherwise defined herein, capitalized terms used herein shall have the respective meanings ascribed thereto in the Amended Credit Agreement.

2. Amendments. Subject to the satisfaction of the conditions precedent set forth in Section 5 below, the Borrower, Holdings, the Consenting Lenders and Agent hereby agree as follows:

a) Section 1.01 of the Credit Agreement is hereby amended by adding the following defined terms in correct alphabetical order:

“Second Incremental Amendment” shall mean the First Lien Incremental Term Loan Amendment and Consent dated as of March 24, 2016, by and among the Borrower, the Guarantors, the 2016 Incremental Term Lenders, the other Lenders party thereto and the Administrative Agent.

“Second Incremental Amendment Date” shall mean the date on which all the conditions precedent set forth in Section 5 of the Second Incremental Amendment shall have been satisfied or waived in accordance with the terms thereof.

“2016 Incremental Term Lender” shall mean any Lender having a 2016 Incremental Term Loan Commitment and/or a 2016 Incremental Term Loan outstanding hereunder.

“2016 Incremental Term Loan Commitment” shall mean, with respect to each Lender, the commitment, if any, of such Lender to make a 2016 Incremental Term Loan hereunder, expressed as an amount representing the maximum principal amount of the 2016 Incremental Term Loan to be made by such Lender hereunder, as such commitment may be reduced or increased from time to time pursuant to (i) assignments by or to such Lender pursuant to an Assignment and Acceptance, (ii) an Incremental Amendment, (iii) a Refinancing Amendment or (iv) an Extension Amendment. The initial amount of each Lender’s 2016 Incremental Term Loan Commitment is set forth on Schedule 2.01(A) under the caption “2016 Incremental Term Loan Commitment” or, otherwise, in the Assignment and Acceptance, Incremental Amendment or Refinancing Amendment pursuant to which such Lender shall have assumed its 2016 Incremental Term Loan Commitment, as the case may be. The initial aggregate amount of the 2016 Incremental Term Loan Commitments as of the Second Incremental Amendment Date is $80,000,000.

“2016 Incremental Term Loans” shall mean the incremental term loans made by the 2016 Incremental Term Lenders on the Second Incremental Amendment Date to the Borrower pursuant to Section 2.01(a)(ii).

“2021 Unsecured Notes” means the senior unsecured notes due 2021 issued by the Borrower on or around March 31, 2016 in an initial aggregate principal amount not to exceed $425,000,000.

b) Section 1.01 of the Credit Agreement is hereby amended by amending and restating the following definitions as follows:

“Lead Arrangers” shall mean (i) in connection with the Closing Date and the Initial Term Loans, the Lead Arrangers (as defined in this Agreement prior to effectiveness of the Second Incremental Amendment) and (ii) in connection with the Second Incremental Amendment and the 2016 Incremental Term Loans, Jefferies Finance LLC in its capacity as lead arranger and sole bookrunner.

“Term Loan Maturity Date” shall mean (i) with respect to the Initial Term Loans borrowed on the Closing Date that have not been extended pursuant to Section 2.21, November 3, 2020 (the “Original Term Loan Maturity Date”), (ii) with respect to any tranche of Extended Term Loans, the final maturity date as specified in the applicable Extension Amendment, (iii) with respect to any Other Term Loans that have not been extended pursuant to Section 2.21, the final maturity date as specified in the applicable Refinancing Amendment, (iv) with respect to the 2016 Incremental Term Loans that have not been extended pursuant to Section 2.21, the Original Term Loan Maturity Date, and (v) with respect to any other Incremental Term Loans that have not been extended pursuant to Section 2.21, the final maturity date as specified in the applicable Incremental Amendment; provided that, if any such day is not a Business Day, the applicable Term Loan Maturity Date shall be the Business Day immediately succeeding such day.

c) Section 1.01 of the Credit Agreement is hereby amended by adding the following sentence to the end of the definition of “Permitted Refinancing”:

Notwithstanding the foregoing, the incurrence of Indebtedness under the 2021 Unsecured Notes shall be deemed to be a “Permitted Refinancing” of the Second Lien Term Loans, so long as all or any portion of the proceeds thereof shall be used to repay in full all outstanding Indebtedness under the Second Lien Term Loans.

d) Section 2.01 of the Credit Agreement is hereby amended by adding the following sentence to the definition of “Class” therein:

Notwithstanding any provision herein to the contrary, the Initial Term Loans and the 2016 Incremental Term Loans shall be deemed to be, and treated as, part of a single Class of Term Loans for all purposes hereof, including for any purposes of any determination of Required Class Lenders and the application of repayments or prepayments to the Term Loan.

e) Section 2.01 of the Credit Agreement is hereby amended by amending and restating clause (a) thereof as follows:

(a) each Term Lender agrees, severally and not jointly, to (i) make an Initial Term Loan to the Borrower on the Closing Date in a principal amount not to exceed the initial amount of such Term Lender’s Term Loan Commitment (if any) and (ii) make a 2016 Incremental Term Loan to the Borrower on the Second Incremental Amendment Date in a principal amount not to exceed its 2016 Incremental Term Loan Commitment (if any); and

f) Section 2.09 of the Credit Agreement is hereby amended by amending and restating clause (a) thereof as follows:

(a) The Term Loan Commitments for the Initial Term Loans in effect on the Closing Date shall automatically terminate upon the making of the Initial Term Loans on the Closing Date. The 2016 Incremental Term Loan Commitments for the 2016 Incremental Term Loans in effect on the Second Incremental Amendment Date shall automatically terminate upon the making of the 2016 Incremental Term Loans on the Second Incremental Amendment Date. The Revolving Commitments and the LC Commitment shall automatically terminate on the Revolving Maturity Date.

g) Section 2.11 of the Credit Agreement is hereby amended by amending and restating clause (a) thereof as follows:

(a)(i) The Borrower shall repay to the Administrative Agent for the ratable account of the applicable Term Lenders (A) on the last Business Day of each March, June, September and December, commencing with March 31, 2015, an amount equal to 0.25% of the aggregate principal amount of the Initial Term Loans outstanding on the Closing Date (which payments shall be reduced as a result of the application of prepayments in accordance with the order of priority set forth in Sections 2.12 and 2.13 or, if applicable, Section 10.04(m)(vi) and as a result of the conversion of Initial Term Loans to Extended Term Loans or the refinancing of Initial Term Loans with Credit Agreement Refinancing Indebtedness) and (B) on the Term Loan Maturity Date for the Initial Term Loans, the aggregate principal amount of all Initial Term Loans outstanding on such date, together with, in the case of each of clauses (A) and (B), accrued and unpaid interest on the principal amount to be paid to but excluding the date of such payment. Upon the conversion of Initial Term Loans to Extended Term Loans or the refinancing of Initial Term Loans with Credit Agreement Refinancing Indebtedness, all amortization payments shall be reduced ratably by the aggregate principal amount of the Initial Term Loans so converted or refinanced.

(ii) The Borrower shall repay to the Administrative Agent for the ratable account of the applicable Term Lenders (A) on the last Business Day of each March, June, September and December, commencing with June 30, 2016, an amount equal to 0.25% of the aggregate principal amount of the 2016 Incremental Term Loans outstanding on the Second Incremental Amendment Date (which payments shall be reduced as a result of the application of prepayments in accordance with the order of priority set forth in Sections 2.12 and 2.13 or, if applicable, Section 10.04(m)(vi) and as a result of the conversion of 2016 Incremental Term Loans to Extended Term Loans or the refinancing of 2016 Incremental Term Loans with Credit Agreement Refinancing Indebtedness) and (B) on the Term Loan Maturity Date for the 2016 Incremental Term Loans, the aggregate principal amount of all 2016 Incremental Term Loans outstanding on such date, together with, in the case of each of clauses (A) and (B), accrued and unpaid interest on the principal amount to be paid to but excluding the date of such payment. Upon the conversion of 2016 Incremental Term Loans to Extended Term Loans or the refinancing of 2016 Incremental Term Loans with Credit Agreement Refinancing Indebtedness, all amortization payments shall be reduced ratably by the aggregate principal amount of the 2016 Incremental Term Loans so converted or refinanced.

(iii) The Borrower shall repay Incremental Term Loans (other than the 2016 Incremental Term Loans), Extended Term Loans and Other Term Loans in such amounts and on such date or dates as shall be specified therefor in the applicable Incremental Amendment, Term Loan Extension Offer or Refinancing Amendment.

h) Section 2.12 of the Credit Agreement is hereby amended by replacing “the one-year anniversary of the Closing Date” therein with “the six-month anniversary of the Second Incremental Amendment Date”.

i) Section 2.19(a) of the Credit Agreement is hereby amended by replacing “$100,000,000” therein with “$150,000,000”.

j) Section 7.01 of the Credit Agreement is hereby amended by amending and restating clause (bb) thereof as follows:

(bb) [Reserved];

k) Section 7.03(g) of the Credit Agreement is hereby amended by restating the first parenthetical therein as follows:

(except for Liens permitted by Section 7.01(w))

l) Section 7.03 of the Credit Agreement is hereby amended by amending and restating clause (m) thereof as follows:

(m) [Reserved];

m) Section 7.03(s) of the Credit Agreement is hereby amended by replacing “$100,000,000” therein with “$150,000,000”.

n) The Credit Agreement is hereby amended by inserting thereto the Schedule 2.01(A) attached hereto.

o) For the avoidance of doubt, (i) the 2016 Incremental Term Loans shall be deemed to be “Loans”, “Incremental Term Loans” and “Term Loans”, (ii) each 2016 Incremental Term Lender shall be deemed to be a “Lender”, an “Incremental Term Lender” and a “Term Lender”, (iii) the 2016 Incremental Term Loan Commitments shall be deemed to be a “Term Loan Commitment”, and (iv) this Amendment shall be deemed to be an “Incremental Amendment” and a “Loan Document”, in each case for all purposes of the Amended Credit Agreement and the other Loan Documents.

3. Joinder. Each 2016 Incremental Term Lender acknowledges and agrees that, from and after the Effective Date, such 2016 Incremental Term Lender commits to provide its 2016 Incremental Term Loan Commitment, as set forth on Schedule 2.01(A) attached hereto on the terms and subject to the conditions set forth herein, shall be a “Term Lender” and “Lender” under, and for all purposes of, the Amended Credit Agreement and the other Loan Documents, and shall be subject to and bound by the terms thereof, and shall perform all the obligations of and shall have all the rights of a Lender thereunder.

4. Representations and Warranties. In order to induce the other parties hereto to enter into this Amendment in the manner provided herein, each of Holdings, the Borrower and each Guarantor represents and warrants to the other parties hereto that the following statements are true and correct in all material respects (provided that any representation and warranty that is qualified by “materiality,” “material adverse effect” or similar language shall be true and correct in all respects (after giving effect to any such qualification therein)):

a) each of the representations and warranties contained in Article 5 of the Credit Agreement and in each other Loan Document are true and correct in all material respects (provided that any representation and warranty that is qualified by “materiality,” “material adverse effect” or similar language is true and correct in all respects (after giving effect to any such qualification therein)) on and as of the Effective Date (as defined below) with the same effect as though made on and as of the Effective Date, except to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties are true and correct in all material respects (or if any such representation and warranty is qualified by “materiality,” “material adverse effect” or similar language, such representation and warranty is true and correct in all respects (after giving effect to any such qualification therein)) on and as of such earlier date); and

b) as of the date hereof and immediately after giving effect to this Amendment, no Default or Event of Default has occurred and is continuing.

5. Conditions to Effectiveness. The effectiveness of this Amendment is subject to the satisfaction of the following conditions (the time at which all such conditions are so satisfied is referred to herein as the “Effective Date”):

a) the Agent shall have received a certificate executed by a Responsible Officer of the Borrower, certifying that, as of the Effective Date, (i) each of the representations and warranties made by the Loan Parties set forth in this Amendment, in Article 5 of the Credit Agreement and in all other Loan Documents are true and correct in all material respects (provided that any representation and warranty that is qualified by “materiality,” “material adverse effect” or similar language shall be true and correct in all respects (after giving effect to any such qualification therein)) on and as of the Effective Date with the same effect as though made on and as of the Effective Date, 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 (or if any such representation and warranty is qualified by “materiality,” “material adverse effect” or similar language, shall be true and correct in all respects (after giving effect to any such qualification therein)) on and as of such earlier date); (ii) after giving effect to this Amendment, no Default exists or would result from the incurrence of the 2016 Incremental Term Loan Commitments and 2016 Incremental Term Loans contemplated by this Amendment or the application of the proceeds therefrom; (iii) the proceeds of the 2016 Incremental Term Loans shall be used to fund (A) the purchase

price associated with certain Permitted Acquisitions disclosed to the Lead Arrangers and the 2016 Incremental Term Lenders prior to the Effective Date and (B) fees and expenses incurred in connection therewith (including any upfront fees and original issue discount); and (iv) this Amendment is effected in accordance with the terms of Sections 2.19 and 10.08 of the Amended Credit Agreement;

b) Holdings and the Borrower shall have paid to the Agent and the Lead Arrangers (i) all applicable fees and other amounts due and payable to the Agent and the Lead Arrangers (including all upfront fees due and payable to the Lead Arrangers on behalf of the 2016 Incremental Term Lenders (or original issue discount in lieu thereof)) on or prior to the Effective Date, as separately agreed to by the Borrower, the Agent and the Lead Arrangers, and (ii) all costs and expenses due and payable under Section 10 of this Amendment;

c) the Agent shall have received, on behalf of itself, the Collateral Agent and the 2016 Incremental Term Lenders, an opinion of (i) Ropes & Gray LLP, counsel for the Loan Parties, and (ii) each local counsel for the Loan Parties listed on Schedule 4.02(d) to the Credit Agreement (or other local counsel reasonably acceptable to the Agent), in each case, dated the Effective Date and addressed to the Agent, the Collateral Agent and the 2016 Incremental Term Lenders substantially in the form previously provided to the Agent in connection with the First Lien Incremental Amendment, dated as of October 7, 2015, by and among the Borrower, Holdings, the other guarantors party thereto, the Agent, and the other agents and lenders party thereto;

d) the Agent shall have received (i) a certificate as to the good standing of each Loan Party as of a recent date; (ii) a certificate of the Secretary or Assistant Secretary of each Loan Party dated the Effective Date and certifying (A) that attached thereto is a copy of the certificate or articles of incorporation or organization or certificate of formation, including all amendments thereto, of each Loan Party, certified as of a recent date by the Secretary of State of the state of its organization, or in the alternative, certifying that such certificate or articles of incorporation or organization or certificate of formation has not been amended since the Closing Date, (B) that attached thereto is a true and complete copy of the by-laws or operating (or limited liability company) agreement of such Loan Party as in effect on the Effective Date and at all times since a date prior to the date of the resolutions described in clause (C) below (or that the by-laws or operating (or limited liability company) agreement of such Loan Party has not been amended or otherwise modified since the delivery of such documents on the Closing Date or the First Incremental Amendment Date), (C) that attached thereto is a true and complete copy of resolutions duly adopted by the board of directors (or equivalent governing body) of such Loan Party authorizing the execution, delivery and performance of the Amendment and, in the case of the Borrower, the borrowings and/or incurrence of the 2016 Incremental Term Loan Commitments and 2016 Incremental Term Loans hereunder, and that such resolutions have not been modified, rescinded or amended and are in full force and effect and (D) as to the incumbency and specimen signature of each officer executing any Loan Document or any other document delivered in connection herewith on behalf of such Loan Party; and (iii) a certificate of another officer as to the incumbency and specimen signature of the Secretary or Assistant Secretary executing the certificate pursuant to clause (ii) above;

e) the Agent shall have received counterparts of this Amendment duly executed by Holdings, the Borrower, each other Guarantor, the Administrative Agent, the Collateral Agent, Lenders constituting the Required Lenders and the 2016 Incremental Term Lenders;

f) the Agent shall have received a Note executed by the Borrower in favor of each 2016 Incremental Term Lender that has requested a Note at least three Business Days in advance of the Effective Date;

g) the Agent shall have received a solvency certificate, substantially in the form set forth in Exhibit H to the Credit Agreement, from the chief financial officer or other officer with equivalent duties of Holdings, or in lieu thereof at the option of the Borrower, an opinion of a nationally recognized valuation firm as to the solvency (on a consolidated basis) of Holdings and its respective Subsidiaries as of the Effective Date;

h) the Administrative Agent shall have received a request for a Credit Extension (which may be conditioned on the effectiveness of this Amendment) in accordance with the requirements of the Amended Credit Agreement;

i) the Agent shall have received, at least three days prior to the Effective Date, all documentation and other information about the Borrower and the Guarantors required under applicable “know your customer” and anti-money laundering rules and regulations, including the USA PATRIOT Act, that has been reasonably requested in writing at least five days prior to the Effective Date; and

j) Holdings and the Borrower shall have paid to the Agent a consent fee payable for the account of each Lender that delivers a consent to this Amendment no later than 4:00 p.m. (New York City time) on March 21, 2016 (a “Voting Lender”) equal to 0.125% of the aggregate principal amount of such Voting Lender’s outstanding Term Loans and Revolving Commitments as of the Effective Date (without giving effect to this Amendment).

6. Acknowledgement.

a) The Borrower and each Guarantor hereby confirm that each Loan Document to which it is a party or otherwise bound and all Collateral encumbered thereby will continue to guarantee or secure, as the case may be, to the fullest extent possible in accordance with the Loan Documents the payment and performance of all Obligations and Secured Obligations under each of the Loan Documents to which it is a party (in each case as such terms are defined in the applicable Loan Document).

b) The Borrower and each Guarantor acknowledge and agree that any of the Loan Documents to which it is a party or otherwise bound shall continue in full force and effect and that all of its obligations thereunder shall be valid and enforceable and shall not be impaired or limited by the execution or effectiveness of this Amendment.

c) Each of the Borrower and each Guarantor hereby acknowledges that it has reviewed the terms and provisions of this Amendment and consents to the amendment of the Credit Agreement effected pursuant to this Amendment (including the 2016 Incremental Term Loan Commitments and 2016 Incremental Term Loans made by the 2016 Incremental Term Lenders) and acknowledges and agrees that each 2016 Incremental Term Lender (and any assignee thereof) is a “Lender” and a “Secured Party” for all purposes under the Loan Documents to which the Borrower or such Guarantor is a party.

d) Each Guarantor acknowledges and agrees that (i) notwithstanding the conditions to effectiveness set forth in this Amendment, such Guarantor is not required by the terms of the Credit Agreement or any other Loan Document to consent to the amendments to the Credit Agreement effected pursuant to this Amendment and (ii) nothing in the Credit Agreement, this Amendment or any other Loan Document shall be deemed to require the consent of such Guarantor to any future amendments to the Credit Agreement.

e) The parties hereto agree and acknowledge that, for all purposes under the Credit Agreement and the other Loan Documents, this Amendment constitutes an Incremental Amendment contemplated by Section 2.19 of the Credit Agreement.

f) Each of the Borrower and each Guarantor hereby (i) acknowledges and agrees that all of its obligations under the Guarantees set out in the Amended Credit Agreement and any other guaranties in the Loan Documents to which it is a party are reaffirmed and remain in full force and effect on a continuous basis, (ii) reaffirms each Lien granted by each Loan Party to the Collateral Agent for the benefit of the Secured Parties and reaffirms the Guarantees made pursuant to the Amended Credit Agreement, (iii) acknowledges and agrees that the grants of security interests by and the Guarantees of the Loan Parties contained in the Amended Credit Agreement and the other Collateral Documents are, and shall remain, in full force and effect after giving effect to this Amendment, and (iv) agrees that the Obligations include, among other things and without limitation, the prompt and complete payment and performance by the Borrower when due and payable (whether at the stated maturity, by acceleration or otherwise) of principal and interest on, and premium (if any) on, the 2016 Incremental Term Loans under the Amended Credit Agreement. Nothing contained in this Amendment shall be construed as substitution or novation of the obligations outstanding under the Credit Agreement or the other Loan Documents, which shall remain in full force and effect, except to any extent modified hereby.

7. GOVERNING LAW AND WAIVER OF JURY TRIAL.

a) THIS AMENDMENT AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS AMENDMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW PRINCIPLES THAT WOULD APPLY THE LAWS OF ANOTHER JURISDICTION.

b) EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AMENDMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AMENDMENT, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 7(B).

8. Counterparts. This Amendment may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page to this Amendment by facsimile or other electronic imaging transmission shall be as effective as delivery of a manually executed counterpart of this Amendment.

9. Reference to and Limited Effect on the Credit Agreement and the Other Loan Documents.

a) On and after the Effective Date, (x) each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof”, “herein” or words of like import referring to the Credit Agreement, and (B) each reference in the other Loan Documents to the “Credit Agreement”, “thereunder”, “thereof”, “therein” or words of like import referring to the Credit Agreement shall mean and be a reference to the Credit Agreement after giving effect to this Amendment.

b) Except as specifically amended by this Amendment, the Credit Agreement and each of the other Loan Documents shall remain in full force and effect and are hereby ratified and confirmed.

c) The execution, delivery and performance of this Amendment shall not constitute a waiver of any provision of, or operate as a waiver of any right, power or remedy of the Agent or Lender under, the Credit Agreement or any of the other Loan Documents.

d) Each of Holdings, the Borrower and each other Guarantor hereby (i) ratifies, confirms and reaffirms its liabilities, its payment and performance obligations (contingent or otherwise) and its agreements under the Credit Agreement and the other Loan Documents and (ii) acknowledges, ratifies and confirms that such liabilities,

obligations and agreements constitute valid and existing Obligations under the Credit Agreement, in each case, to the extent Holdings, the Borrower or such Guarantor, as applicable, is a party thereto. In addition, each of Holdings, the Borrower and each Guarantor hereby ratifies, confirms and reaffirms (i) the liens and security interests granted, created and perfected under the Collateral Documents and any other Loan Documents and (ii) that each of the Collateral Documents to which it is a party remain in full force and effect notwithstanding the effectiveness of this Amendment. Without limiting the generality of the foregoing, each of Holdings, the Borrower and each other Guarantor further agrees (A) that any reference to “Obligations” contained in any Collateral Documents shall include, without limitation, the “Obligations” as such term is defined in the Credit Agreement (as amended by this Amendment) and (B) that the related guarantees and grants of security contained in such Collateral Documents shall include and extend to such Obligations. This Amendment shall not constitute a modification of the Credit Agreement, except as specified under Section 2 hereto, or a course of dealing with Agent or any Lender at variance with the Credit Agreement such as to require further notice by Agent or any Lender to require strict compliance with the terms of the Credit Agreement and the other Loan Documents in the future, except as expressly set forth herein. This Amendment contains the entire agreement among Holdings, the Borrower, the other Guarantors, the Consenting Lenders and the 2016 Incremental Term Lenders contemplated by this Amendment. Neither Holdings nor the Borrower nor any other Guarantor has any knowledge of any challenge to Agent’s or any Lender’s claims arising under the Loan Documents or the effectiveness of the Loan Documents. Agent and Lenders reserve all rights, privileges and remedies under the Loan Documents. Nothing in this Amendment is intended, or shall be construed, to constitute a novation or an accord and satisfaction of any of the Obligations or to modify, affect or impair the perfection, priority or continuation of the security interests in, security titles to or other Liens on any Collateral for the Obligations.

10. Expenses. The Borrower and Holdings agree, jointly and severally, to pay on demand all reasonable out-of-pocket costs and expenses incurred by the Agent and Lead Arrangers in connection with the preparation, negotiation and execution of this Amendment and the syndication of the 2016 Incremental Term Loans, including, without limitation, all Attorney Costs.

11. Severability. In the event any one or more of the provisions contained in this Amendment should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction). The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

12. Headings. Section headings used herein are for convenience of reference only, are not part of this Amendment and shall not affect the construction of, or to be taken into consideration in interpreting, this Amendment.

13. Conflicts. In the event of any conflict between the terms of this Amendment and the terms of the Credit Agreement or any of the other Loan Documents, the terms of this Amendment shall govern.

[SIGNATURE PAGES FOLLOW]

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


SURGERY CENTER HOLDINGS, INC., as Borrower

By:		/s/ Michael T. Doyle
Name:		Michael T. Doyle
Title:		Chief Executive Officer

SP HOLDCO I, INC., as Holdings

By:		/s/ Michael T. Doyle
Name:		Michael T. Doyle
Title:		Chief Executive Officer

[SIGNATURE PAGE TO INCREMENTAL AMENDMENT]

SUBSIDIARY GUARANTORS:

AMBULATORY RESOURCE CENTRES INVESTMENT

COMPANY, LLC

AMBULATORY RESOURCE CENTRES OF WASHINGTON, INC.

AMBULATORY RESOURCE CENTRES OF WILMINGTON, INC.

ANESTHESIOLOGY PROFESSIONAL SERVICES, INC.

APS OF BRADENTON, LLC

APS OF MERRITT ISLAND, LLC

ARC DEVELOPMENT CORPORATION

ARC FINANCIAL SERVICES CORPORATION

ASC OF NEW ALBANY, LLC

AUSTIN SURGICAL HOLDINGS, LLC

BUSINESS IT SOLUTIONS OF TAMPA, INC.

LOGAN LABORATORIES, LLC

LUBBOCK SURGICENTER, INC.

MEDICAL BILLING SOLUTIONS, LLC

MIDWEST UNCUTS, INC.

NEOSPINE SURGERY OF PUYALLUP, LLC

NEOSPINE SURGERY, LLC

NOVAMED ACQUISITION COMPANY, INC.

NOVAMED ALLIANCE, INC.

NOVAMED MANAGEMENT OF KANSAS CITY, INC.

NOVAMED MANAGEMENT SERVICES, LLC

NOVAMED OF BETHLEHEM, INC.

NOVAMED OF DALLAS, INC.

NOVAMED OF LEBANON, INC.

NOVAMED OF SAN ANTONIO, INC.

NOVAMED OF TEXAS, INC.

By: /s/ Teresa F. Sparks

Name: Teresa F. Sparks

Title: Chief Financial Officer and Executive Vice President

[SIGNATURE PAGE TO INCREMENTAL AMENDMENT]

NOVAMED OF WISCONSIN, INC.

NOVAMED, INC.

PATIENT EDUCATION CONCEPTS INC.

PHYSICIANS SURGICAL CARE, INC.

PSC DEVELOPMENT COMPANY, LLC

PSC OPERATING COMPANY, LLC

REHABILITATION MEDICAL GROUP, INC.

SAINT THOMAS COMPOUNDING LLC

SARASOTA ANESTHESIA SERVICES, LLC

SARC/ASHEVILLE, INC.

SARC/CIRCLEVILLE, INC.

SARC/FT. MYERS, INC.

SARC/GEORGIA, INC.

SARC/JACKSONVILLE, INC.

SARC/KENT, LLC

SARC/LARGO ENDOSCOPY, INC.

SARC/LARGO, INC.

SARC/PROVIDENCE, LLC

SARC/ST. CHARLES, INC.

SARC/VINCENNES, INC.

SMBI DOCS, LLC

SMBI GREAT FALLS, LLC

SMBI HAVERTOWN, LLC

SMBI IDAHO, LLC

SMBI JACKSON, LLC

SMBI LHH, LLC

SMBI PORTSMOUTH, LLC

SMBI STLWSC, LLC

SMBIMS BIRMINGHAM, INC.

SMBIMS DURANGO, LLC

SMBIMS FLORIDA I, LLC

By: /s/ Teresa F. Sparks

Name: Teresa F. Sparks

Title: Chief Financial Officer and Executive Vice President

[SIGNATURE PAGE TO INCREMENTAL AMENDMENT]

SMBIMS GREENVILLE, LLC

SMBIMS KIRKWOOD, LLC

SMBIMS ORANGE CITY, LLC

SMBIMS STEUBENVILLE, INC.

SMBIMS WICHITA, LLC

SMBISS BEVERLY HILLS, LLC

SMBISS CHESTERFIELD, LLC

SMBISS ENCINO, LLC

SMBISS IRVINE, LLC

SMBISS THOUSAND OAKS, LLC

SP GEORGIA MANAGEMENT, LLC

SP NORTH DAKOTA, LLC

SP PRACTICE MANGEMENT, LLC

SURGERY PARTNERS ACQUISITION COMPANY, INC.

SURGERY PARTNERS OF CORAL GABLES, LLC

SURGERY PARTNERS OF LAKE MARY, LLC

SURGERY PARTNERS OF LAKE WORTH, LLC

SURGERY PARTNERS OF MERRITT ISLAND, LLC

SURGERY PARTNERS OF MILLENIA, LLC

SURGERY PARTNERS OF NEW TAMPA, LLC

SURGERY PARTNERS OF PARK PLACE, LLC

SURGERY PARTNERS OF SARASOTA, LLC

SURGERY PARTNERS OF SUNCOAST, LLC

SURGERY PARTNERS OF WEST KENDALL, L.L.C.

SURGERY PARTNERS OF WESTCHASE, LLC

SURGERY PARTNERS, LLC

SYMBION AMBULATORY RESOURCE CENTRES, INC.

SYMBION ANESTHESIA SERVICES, LLC

SYMBION HOLDINGS CORPORATION

SYMBION, INC.

By: /s/ Teresa F. Sparks

Name: Teresa F. Sparks

Title: Chief Financial Officer and Executive Vice President

[SIGNATURE PAGE TO INCREMENTAL AMENDMENT]

SP MANAGEMENT SERVICES, INC.

TAMPA PAIN RELIEF CENTER, INC.

TEXARKANA SURGERY CENTER GP, INC.

UNIPHY HEALTHCARE OF JOHNSON CITY VI, LLC

UNIPHY HEALTHCARE OF MAINE I, INC.

VASC, INC.

VILLAGE SURGICENTER, INC.

By: /s/ Teresa F. Sparks

Name: Teresa F. Sparks

Title: Chief Financial Officer and Executive Vice President

[SIGNATURE PAGE TO INCREMENTAL AMENDMENT]

JEFFERIES FINANCE LLC,

as Administrative Agent, Collateral Agent, Lender

and 2016 Incremental Term Lender

By: /s/ J Paul McDonnell

Name: J Paul McDonnell

Title: Managing Director