Exhibit 10.3

EXECUTION VERSION

 

 

GUARANTY

dated as of

March 17, 2015,

among

SURGICAL CARE AFFILIATES, INC.,

as the Borrower

CERTAIN SUBSIDIARIES OF

SURGICAL CARE AFFILIATES, INC.

to be identified herein,

and

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

 

 

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TABLE OF CONTENTS

 

         Page     ARTICLE I      DEFINITIONS    SECTION 1.01.   Credit Agreement
     1    SECTION 1.02.   Other Defined Terms      1      ARTICLE II     
GUARANTY    SECTION 2.01.   Guaranty      2    SECTION 2.02.   Guaranty of
Payment      2    SECTION 2.03.   No Limitations; Guaranty Absolute      3   
SECTION 2.04.   Reinstatement      4    SECTION 2.05.   Agreement To Pay;
Subrogation      4    SECTION 2.06.   Information      4    SECTION 2.07.  
Keepwell      4      ARTICLE III      INDEMNITY, SUBROGATION AND SUBORDINATION
   SECTION 3.01.   Indemnity and Subrogation      5    SECTION 3.02.  
Contribution and Subrogation      5    SECTION 3.03.   Subordination      5     
ARTICLE IV      MISCELLANEOUS    SECTION 4.01.   Notices      6    SECTION 4.02.
  Waivers; Amendment      6    SECTION 4.03.   Administrative Agent’s Fees and
Expenses, Indemnification      7    SECTION 4.04.   Successors and Assigns     
7    SECTION 4.05.   Counterparts; Several Agreement      8    SECTION 4.06.  
Severability      8    SECTION 4.07.   Right of Set-Off      8   

 

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TABLE OF CONTENTS

(continued)

 

         Page   SECTION 4.08.   Governing Law; Jurisdiction; Venue; Waiver Of
Jury Trial; Consent To Service Of Process      9    SECTION 4.09.   Headings   
  9    SECTION 4.10.   Termination or Release      9    SECTION 4.11.  
Additional Guarantors      10    SECTION 4.12.   Limitation on Guaranteed
Obligations      10    SECTION 4.13.   General Authority of the Administrative
Agent      10    SECTION 4.14.   Survival of Representations and Warranties     
11   

 

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EXHIBIT 10.3

GUARANTY dated as of March 17, 2015, among SURGICAL CARE AFFILIATES, INC., a
Delaware corporation (the “Borrower”), certain subsidiaries of the Borrower from
time to time party hereto and JPMORGAN CHASE BANK, N.A., as Administrative
Agent.

Reference is made to the Credit Agreement dated as of March 17, 2015 (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among the Borrower, JPMorgan Chase Bank, N.A., as Administrative
Agent, each Lender and L/C Issuer from time to time party thereto and other
financial institutions party thereto. The Lenders and L/C Issuers have agreed to
extend credit to the Borrower subject to the terms and conditions set forth in
the Credit Agreement. The obligations of the Lenders and L/C Issuers to extend
such credit are conditioned upon, among other things, the execution and delivery
of this Agreement. The Subsidiaries party hereto are affiliates of the Borrower,
will derive substantial benefits from the extension of credit to the Borrower
pursuant to the Credit Agreement and are willing to execute and deliver this
Agreement in order to induce (A) the Lenders and L/C Issuers to extend such
credit, (B) the Hedge Banks to enter into and/or maintain Secured Hedge
Agreements and (C) the Cash Management Banks to provide Cash Management
Services. Accordingly, the parties hereto make the following representations and
warranties to the Administrative Agent for the benefit of the Secured Parties
and hereby covenant and agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.01. Credit Agreement. (a) Capitalized terms used in this Agreement
(including in the preliminary statement hereof) and not otherwise defined herein
have the meanings specified in the Credit Agreement.

(b) The rules of construction specified in Article I of the Credit Agreement
also apply to this Agreement, mutatis mutandis.

SECTION 1.02. Other Defined Terms. As used in this Agreement, the following
terms have the meanings specified below:

“Agreement” means this Guaranty.

“Bankruptcy Code” means Title 11 of the United States Code entitled
“Bankruptcy,” as now or hereafter in effect, or any successor thereto.

“Borrower” has the meaning assigned to such term in the preliminary statement of
this Agreement.

“Claiming Party” has the meaning assigned to such term in Section SECTION 3.02.

 

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“Contributing Party” has the meaning assigned to such term in Section SECTION
3.02.

“Credit Agreement” has the meaning assigned to such term in the preliminary
statement of this Agreement.

“Guarantor” means each Guarantor, as defined in the Credit Agreement, the
Borrower (for purposes of Cash Management Obligations or Secured Hedge
Agreements entered into by a Restricted Subsidiary) and each party that becomes
a party to this Agreement after the Closing Date.

“Guaranty Parties” means, collectively, the Borrower and each Guarantor and
“Guaranty Party” means any one of them.

“Guaranty Supplement” means an instrument in the form of Exhibit I hereto.

“Qualified ECP Guarantor” means, in respect of any Swap Obligation, each
Guaranty Party that has total assets exceeding $10,000,000 at the time the
relevant Guarantee or grant of the relevant security interest becomes or would
become effective with respect to such Swap Obligation and each other Guaranty
Party that constitutes an “eligible contract participant” under the Commodity
Exchange Act and can cause another person to qualify as an “eligible contract
participant” at such time by guaranteeing or entering into a keepwell in respect
of obligations of such other person under Section la(18)(A)(v)(II) of the
Commodity Exchange Act.

ARTICLE II

GUARANTY

SECTION 2.01. Guaranty. Each Guarantor irrevocably, absolutely and
unconditionally guarantees, jointly with the other Guarantors and severally, as
a primary obligor and not merely as a surety, the due and punctual payment of
the Obligations, either at stated maturity or earlier by reason of acceleration,
mandatory prepayment or otherwise in accordance herewith or with any other Loan
Documents. Each of the Guarantors further agrees that the Obligations may be
extended, increased or renewed, in whole or in part, or amended or modified,
without notice to or further assent from it, and that it will remain bound upon
its guaranty notwithstanding any extension, increase or renewal, amendment or
modification, in whole or in part, of any Obligation. Each of the Guarantors
waives presentment to, demand of payment from and protest to any Guaranty Party
of any of the Obligations, and also waives notice of acceptance of its guaranty
and notice of protest for nonpayment.

SECTION 2.02. Guaranty of Payment. Each of the Guarantors further agrees that
its guaranty hereunder constitutes a guaranty of payment when due (whether or
not any bankruptcy, insolvency, receivership or other similar proceeding shall
have stayed the accrual or collection of any of the Obligations or operated as a
discharge thereof) and not of collection, and waives any right to require that
the Administrative Agent or any other Secured Party resort to any security held
for the payment of the Obligations, or to any balance of any deposit account or
credit on the books of the Administrative Agent or any other Secured Party in
favor of the Borrower or any other Person. Each Guarantor agrees that its
guaranty hereunder is continuing in nature and applies to all Obligations,
whether currently existing or hereafter incurred.

 

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SECTION 2.03. No Limitations; Guaranty Absolute. (a) Except for termination of a
Guarantor’s obligations hereunder as expressly provided in Section SECTION 4.10.
, to the fullest extent permitted by applicable law, the obligations of each
Guarantor hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason, including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject to any
defense or set-off, counterclaim, recoupment or termination whatsoever by reason
of the invalidity, illegality or unenforceability of the Obligations or
otherwise. Without limiting the generality of the foregoing, the obligations of
each Guarantor hereunder shall not be discharged, impaired or otherwise affected
by (i) the failure of the Administrative Agent or any other Secured Party to
assert any claim or demand or to enforce any right or remedy under the
provisions of any Loan Document or otherwise; (ii) any rescission, waiver,
amendment or modification of, or any release from any of the terms or provisions
of any Loan Document or any other agreement, including with respect to any other
Guarantor under this Agreement; (iii) the release of any security held by the
Administrative Agent or any other Secured Party for the Obligations; (iv) any
default, failure or delay, willful or otherwise, in the performance of the
Obligations; or (v) any other act or omission that may or might in any manner or
to any extent vary the risk of any Guarantor or otherwise operate as a discharge
of any Guarantor as a matter of law or equity (other than the indefeasible
payment in full in cash of all the Obligations). Each Guarantor expressly
authorizes the Secured Parties to take and hold security for the Obligations, to
exchange, waive or release any or all such security (with or without
consideration), to enforce or apply such security and direct the order and
manner of any sale thereof in their sole discretion or to release or substitute
any one or more other guarantors or obligors upon or in respect of the
Obligations, all in accordance with the Security Agreement and other Loan
Documents and all without affecting the obligations of any Guarantor hereunder.

(b) To the fullest extent permitted by applicable law, all rights of the
Administrative Agent hereunder and all obligations of each Guarantor hereunder
shall be absolute and unconditional irrespective of, and each Guarantor waives
any defense based on or arising out of, (a) any lack of validity or
enforceability of the Credit Agreement, any other Loan Document, any agreement
with respect to any of the Obligations or any other agreement or instrument
relating to any of the foregoing, (b) any change in the time, manner or place of
payment of, or in any other term of, all or any of the Obligations, or any other
amendment or waiver of or any consent to any departure from the Credit
Agreement, any other Loan Document, or any other agreement or instrument,
(c) any exchange, release or non-perfection of any Lien on other collateral, or
any release or amendment or waiver of or consent under or departure from any
guaranty securing or guaranteeing all or any of the Obligations, (d) any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, any Guarantor in respect of the Obligations or this Agreement or
(e) any defense of the Borrower or any other Guaranty Party.

(c) The Administrative Agent and the other Secured Parties may, in accordance
with the terms of the Collateral Documents and at their election, foreclose on
any security held by one or more of them by one or more judicial or nonjudicial
sales, accept an assignment of any such security in lieu of foreclosure,
compromise or adjust any part of the Obligations, make any

 

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other accommodation with any Guaranty Party or exercise any other right or
remedy available to them against any Guaranty Party, without affecting or
impairing in any way the liability of any Guarantor hereunder except to the
extent the Obligations have been fully and indefeasibly paid in full in cash. To
the fullest extent permitted by applicable law, each Guarantor waives any
defense arising out of any such election even though such election operates,
pursuant to applicable law, to impair or to extinguish any right of
reimbursement or subrogation or other right or remedy of such Guarantor against
any Guaranty Party, as the case may be, or any security.

SECTION 2.04. Reinstatement. Each of the Guarantors agrees that this Agreement
and its guaranty hereunder shall continue to be effective or be reinstated, as
the case may be, if at any time payment, or any part thereof, of any Obligation,
is rescinded, invalidated or must otherwise be restored by the Administrative
Agent or any other Secured Party upon the bankruptcy, insolvency, dissolution,
liquidation or reorganization of any Guaranty Party or otherwise.

SECTION 2.05. Agreement To Pay; Subrogation. In furtherance of the foregoing and
not in limitation of any other right that the Administrative Agent or any other
Secured Party has at law or in equity against any Guarantor by virtue hereof,
upon the failure of any Guaranty Party to pay any Obligation when and as the
same shall become due, whether at maturity, by acceleration, after notice of
prepayment or otherwise, each Guarantor hereby promises to and will forthwith
pay, or cause to be paid, to the Administrative Agent for distribution to the
applicable Secured Parties in cash the amount of such unpaid Obligation. Upon
payment by any Guarantor of any sums to the Administrative Agent as provided
above, all rights of such Guarantor against any Guaranty Party arising as a
result thereof by way of right of subrogation, contribution, reimbursement,
indemnity or otherwise shall in all respects be subject to Article III.

SECTION 2.06. Information. Each Guarantor assumes all responsibility for being
and keeping itself informed of each Guaranty Party’s financial condition and
assets, and of all other circumstances bearing upon the risk of nonpayment of
the Obligations, and the nature, scope and extent of the risks that such
Guarantor assumes and incurs hereunder, and agrees that none of the
Administrative Agent or the other Secured Parties will have any duty to advise
such Guarantor of information known to it or any of them regarding such
circumstances or risks.

SECTION 2.07. Keepwell. Each Qualified ECP Guarantor hereby jointly and
severally absolutely, unconditionally and irrevocably undertakes to provide such
funds or other support as may be needed from time to time by each other
Guarantor that would otherwise not be an “eligible contract participant” as
defined in the Commodity Exchange Act to honor all of its obligations under this
Agreement in respect of Swap Obligations (provided, however, that each Qualified
ECP Guarantor shall only be liable under this Section 2.07 for the maximum
amount of such liability that can be hereby incurred without rendering its
obligations under this Section 2.07 or otherwise under this Agreement voidable
under applicable law relating to fraudulent conveyance or fraudulent transfer,
and not for any greater amount). The obligations of each Qualified ECP Guarantor
under this Section 2.07 shall remain in full force and effect until the
indefeasible payment in full in cash of all the Obligations. Each Qualified ECP
Guarantor intends that this Section 2.07 constitute, and this Section 2.07 shall
be deemed to constitute, a “keepwell, support, or other agreement” for the
benefit of each other Guaranty Party for all purposes of Section
la(18)(A)(v)(II) of the Commodity Exchange Act.

 

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ARTICLE III

INDEMNITY, SUBROGATION AND SUBORDINATION

SECTION 3.01. Indemnity and Subrogation. In addition to all such rights of
indemnity and subrogation as the Guarantors may have under applicable law (but
subject to Section SECTION 3.03. ), the Borrower agrees that in the event a
payment of any Obligation shall be made by any Guarantor (other than the
Borrower) under this Agreement, the Borrower shall indemnify such Guarantor for
the full amount of such payment and such Guarantor shall be subrogated to the
rights of the Person to whom such payment shall have been made to the extent of
such payment.

SECTION 3.02. Contribution and Subrogation. Each Guarantor (other than the
Borrower) (a “Contributing Party”) agrees (subject to Section SECTION 3.03. )
that, in the event a payment shall be made by any other Guarantor (other than
the Borrower) hereunder in respect of any Obligation and such other Guarantor
(the “Claiming Party”) shall not have been fully indemnified by the Borrower as
provided in Section SECTION 3.01. , the Contributing Party shall indemnify the
Claiming Party in an amount equal to the amount of such payment (the
“Indemnified Amount”), in each case multiplied by a fraction of which the
numerator shall be the net worth of the Contributing Party on the date hereof
and the denominator shall be the aggregate net worth of all the Contributing
Parties together with the net worth of the Claiming Party on the date hereof
(or, in the case of any Guarantor becoming a party hereto pursuant to Section
SECTION 4.11. , the date of the Guaranty Supplement hereto executed and
delivered by such Guarantor). Any Contributing Party making any payment to a
Claiming Party pursuant to this Section SECTION 3.02. shall (subject to
Section 3.03) be subrogated to the rights of such Claiming Party under
Section 3.01 to the extent of such payment. Each Guarantor recognizes and
acknowledges that the rights to contribution arising hereunder shall constitute
an asset in favor of the party entitled to such contribution. In this
connection, each Guarantor has the right to waive, to the fullest extent
permitted by applicable law, its contribution right against any other Guarantor
to the extent that after giving effect to such waiver such Guarantor would
remain solvent, in the determination of the Required Lenders. Notwithstanding
the foregoing, to the extent that any Claiming Party’s right to indemnification
hereunder arises from a payment made to satisfy Obligations constituting Swap
Obligations, only those Contributing Parties for whom such Swap Obligations do
not constitute Excluded Swap Obligations shall indemnify such Claiming Party,
with the fraction set forth in the first sentence of this paragraph being
modified as appropriate to provide for indemnification of up to the entire
Indemnified Amount.

SECTION 3.03. Subordination. (a) Notwithstanding any provision of this Agreement
to the contrary, all rights of the Guarantors under Sections 3.01 and 3.02 and
all other rights of the Guarantors of indemnity, contribution or subrogation
under applicable law or otherwise shall be fully subordinated to the
indefeasible payment in full in cash of the Obligations; provided that if any
amount shall be paid to such Guarantor on account of such subrogation rights at
any time prior to the indefeasible payment in full in cash of the Obligations,
such amount shall be held in trust for the benefit of the Secured Parties and
shall forthwith be

 

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paid to the Administrative Agent to be credited and applied against the
Obligations, whether matured or unmatured, in connection with Section 8.03 of
the Credit Agreement and (b) upon the occurrence and during the continuance of
an Event of Default, all Indebtedness and other monetary obligations owed by any
Grantor to any other Grantor, in each case shall be fully subordinated to the
indefeasible payment in full in cash of the Obligations. No failure on the part
of the Borrower or any Guarantor to make the payments required by Sections 3.01
and 3.02 (or any other payments required under applicable law or otherwise)
shall in any respect limit the obligations and liabilities of any Guarantor with
respect to its obligations hereunder, and each Guarantor shall remain liable for
the full amount of the obligations of such Guarantor hereunder.

ARTICLE IV

MISCELLANEOUS

SECTION 4.01. Notices. All communications and notices hereunder shall (except as
otherwise expressly permitted herein) be in writing and given as provided in
Section 10.02 of the Credit Agreement. All communications and notices hereunder
to any Guarantor (other than the Borrower) shall be given to it in care of the
Borrower as provided in Section 10.02 of the Credit Agreement.

SECTION 4.02. Waivers; Amendment. (a) No failure or delay by the Administrative
Agent, any L/C Issuer or any Lender in exercising any right or power hereunder
or under any other Loan Document shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Administrative Agent, the L/C Issuers and the Lenders
hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provision of this Agreement or consent to any departure by any Guaranty
Party therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) of this Section SECTION 4.02. , and then such waiver
or consent shall be effective only in the specific instance and for the purpose
for which given. Without limiting the generality of the foregoing, the making of
a Loan or issuance of a Letter of Credit shall not be construed as a waiver of
any Default, regardless of whether the Administrative Agent, any Lender or any
L/C Issuer may have had notice or knowledge of such Default at the time. No
notice or demand on any Guaranty Party in any case shall entitle any Guaranty
Party to any other or further notice or demand in similar or other
circumstances.

(b) Neither this Agreement nor any provision hereof may be waived, amended or
modified except pursuant to an agreement or agreements in writing entered into
by the Administrative Agent and the Guaranty Party or Guaranty Parties with
respect to which such waiver, amendment or modification is to apply, subject to
any consent required in accordance with Section 10.01 of the Credit Agreement;
provided that the Administrative Agent may, without the consent of any Secured
Party, consent to a departure by any Guaranty Party from any covenant of such
Guaranty Party set forth herein or in any other Collateral Document to the
extent such departure is not inconsistent with the Collateral and Guarantee
Requirement or with any other limitation on the authority of the Administrative
Agent set forth in the Credit Agreement.

 

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SECTION 4.03. Administrative Agent’s Fees and Expenses, Indemnification. (a) The
parties hereto agree that the Administrative Agent shall be entitled to
reimbursement of its expenses incurred hereunder as provided in Section 10.04 of
the Credit Agreement.

(b) Without limitation of its indemnification obligations under the other Loan
Documents, the Borrower agrees to indemnify the Administrative Agent and the
other Indemnitees (as defined in Section 10.05 of the Credit Agreement) against,
and hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses, including the reasonable fees, charges and
disbursements of any counsel for any Indemnitee that are billed in a timely
manner, incurred by or asserted against any Indemnitee arising out of, in
connection with, or as a result of, the execution, delivery or performance of
this Agreement or any claim, litigation, investigation or proceeding relating to
any of the foregoing agreements or instruments contemplated hereby, whether or
not any Indemnitee is a party thereto; provided that such indemnity shall not,
as to any Indemnitee, be available to the extent that such losses, claims,
damages, liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from (x) the
gross negligence, bad faith or willful misconduct of such Indemnitee or of any
Affiliate, director, officer, employee, counsel, agent or attorney-in-fact of
such Indemnitee, (y) a material breach of any obligations under any Loan
Document by such Indemnitee or of any Affiliate, director, officer, employee or
agent of such Indemnitee or (z) disputes that are solely between Indemnitees
(other than, in the case of clause (z), any claims against an Indemnitee in its
capacity or in fulfilling its role as an Administrative Agent, Documentation
Agent, Syndication Agent, Arranger, Joint Bookrunner, Co-Manager or any similar
role under this Agreement and other than any claims arising out of any act or
omission by the Guaranty Parties).

(c) Any such amounts payable as provided hereunder shall be additional
Obligations guaranteed hereby and secured by the other Collateral Documents. The
provisions of this Section SECTION 4.03. shall remain operative and in full
force and effect regardless of the termination of this Agreement or any other
Loan Document, the consummation of the transactions contemplated hereby, the
repayment of any of the Obligations, the invalidity or unenforceability of any
term or provision of this Agreement or any other Loan Document, or any
investigation made by or on behalf of the Administrative Agent or any other
Secured Party. All amounts due under this Section SECTION 4.03. shall be payable
within 20 Business Days of written demand therefor.

SECTION 4.04. Successors and Assigns. The provisions of this Agreement shall be
binding upon and shall inure to the benefit of each Guaranty Party, the
Administrative Agent and the other Secured Parties and their respective
successors and assigns permitted hereby, except that no Guaranty Party shall
have the right to assign or transfer its rights or obligations hereunder or any
interest herein (and any such assignment or transfer shall be void) except as
expressly contemplated by this Agreement or the other Loan Documents. Whenever
in this Agreement any of the parties hereto is referred to, such reference shall
be deemed to include the permitted successors and assigns of such party.

 

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SECTION 4.05. Counterparts; Several Agreement. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one-and-the-same instrument. This Agreement
shall become effective as to any Guaranty Party when a counterpart hereof
executed on behalf of such Guaranty Party shall have been delivered to the
Administrative Agent and a counterpart hereof shall have been executed on behalf
of the Administrative Agent. Delivery by telecopier or electronic transmission
of an executed counterpart of a signature page to this Agreement shall be
effective as delivery of an original executed counterpart of this Agreement. The
Administrative Agent may also require that any such documents and signatures
delivered by telecopier or electronic transmission be confirmed by a manually
signed original thereof; provided that the failure to request or deliver the
same shall not limit the effectiveness of any document or signature delivered by
telecopier or electronic transmission. This Agreement shall be construed as a
separate agreement with respect to each Guaranty Party and may be amended,
modified, supplemented, waived or released with respect to any Guaranty Party
without the approval of any other Guaranty Party and without affecting the
obligations of any other Guaranty Party hereunder.

SECTION 4.06. Severability. If any provision of this Agreement is held to be
illegal, invalid or unenforceable, the legality, validity and enforceability of
the remaining provisions of this Agreement shall not be affected or impaired
thereby. The invalidity of a provision in a particular jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.

SECTION 4.07. Right of Set-Off. In addition to any rights and remedies of the
Lenders provided by Law, upon the occurrence and during the continuance of any
Event of Default, each Lender, L/C Issuer and any of their respective Affiliates
is authorized at any time and from time to time, without prior notice to any
Guaranty Party, any such notice being waived by each Guaranty Party (on its own
behalf and on behalf of each of its Subsidiaries) to the fullest extent
permitted by applicable Law, to set off and apply any and all deposits (general
or special, time or demand, provisional or final) at any time held by, and other
Indebtedness at any time owing by, such Lender, L/C Issuer or any of their
respective Affiliates to or for the credit or the account of the respective Loan
Parties and their Subsidiaries against any and all Obligations owing to such
Lender, L/C Issuer and their respective Affiliates hereunder or under any other
Loan Document, now or hereafter existing, irrespective of whether or not such
Lender, L/C Issuer or Affiliate shall have made demand under this Agreement or
any other Loan Document and although such Obligations may be (i) owed to a
branch, office or Affiliate of such Lender or such L/C Issuer different from the
branch, office or Affiliate holding such deposit or obligated on such
Indebtedness or (ii) contingent or unmatured or denominated in a currency
different from that of the applicable deposit or Indebtedness. Notwithstanding
anything to the contrary contained herein, no Lender, L/C Issuer or any of their
respective Affiliates shall have a right to set off and apply any deposits held
by, or other Indebtedness owing by, such Lender, L/C Issuer or any of their
respective Affiliates to or for the credit or the account of any Subsidiary of a
Loan Party that is not a “United States person” within the meaning of
Section 7701(a)(30) of the Code unless such Subsidiary is not a direct or
indirect subsidiary of the Borrower. Each Lender and L/C Issuer agrees promptly
to notify the Borrower and the Administrative Agent after any such set off and
application made by such Lender or L/C Issuer, as the case may be; provided that
the failure to give such notice shall not affect the validity of such setoff and
application. The rights

 

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of the Administrative Agent, each Lender, each L/C Issuer and each Affiliate of
any of the foregoing under this Section SECTION 4.07. are in addition to other
rights and remedies (including other rights of setoff) that the Administrative
Agent, such Lender, such L/C Issuer or such Affiliate may have.

SECTION 4.08. Governing Law; Jurisdiction; Venue; Waiver Of Jury Trial; Consent
To Service Of Process.

(a) The terms of Sections 10.15 and 10.16 of the Credit Agreement with respect
to governing law, submission to jurisdiction, venue and waiver of trial by jury
are incorporated herein by reference, mutatis mutandis, and the parties hereto
agree to such terms.

(b) Each party to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section SECTION 4.01. Nothing in this
Agreement will affect the right of any party to this Agreement or any other Loan
Document to serve process in any other manner permitted by law.

SECTION 4.09. Headings. Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.

SECTION 4.10. Termination or Release. (a) This Agreement and the Guarantees made
herein shall terminate with respect to all Obligations when all the outstanding
Obligations (in each case other than (x) obligations under Secured Hedge
Agreements not yet due and payable, (y) Cash Management Obligations not yet due
and payable and (z) contingent indemnification obligations not yet accrued and
payable) have been indefeasibly paid in full in cash and the Lenders have no
further commitment to lend under the Credit Agreement, the Outstanding Amount of
L/C Obligations have been either reduced to zero or Cash Collateralized and the
L/C Issuers have no further obligations to issue Letters of Credit under the
Credit Agreement.

(b) A Guarantor shall automatically be released from its obligations hereunder
as provided in Section 9.11 of the Credit Agreement.

(c) In connection with any termination or release pursuant to paragraph (a) or
(b) of this Section SECTION 4.10. , the Administrative Agent shall execute and
deliver to any Guarantor, at such Guarantor’s expense, all documents that such
Guarantor shall reasonably request to evidence such termination or release, in
each case in accordance with the terms of Section 9.11 of the Credit Agreement.
Any execution and delivery of documents pursuant to this Section SECTION 4.10.
shall be without recourse to or warranty by the Administrative Agent.

(d) At any time that the Borrower desires that the Administrative Agent take any
of the actions described in immediately preceding paragraph (c), it shall, upon
request of the Administrative Agent, deliver to the Administrative Agent a
certificate from a Responsible Officer of the Borrower certifying that the
release of the respective Guarantor is permitted pursuant to paragraph (a) or
(b). The Administrative Agent shall have no liability whatsoever to any Secured
Party as a result of any release of any Guarantor by it as permitted (or which
the Administrative Agent in good faith believes to be permitted) by this Section
SECTION 4.10.

 

9

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(e) Notwithstanding anything to the contrary set forth in this Agreement, each
Cash Management Bank and each Hedge Bank, by the acceptance of the benefits
under this Agreement, hereby acknowledges and agrees that (i) the obligations of
the Borrower or any Subsidiary under any Secured Hedge Agreement and the Cash
Management Obligations shall be guaranteed pursuant to this Agreement only to
the extent that, and for so long as, the other Obligations are so guaranteed and
(ii) any release of a Guarantor effected in the manner permitted by this
Agreement shall not require the consent of any Hedge Bank or Cash Management
Bank.

SECTION 4.11. Additional Guarantors. Each wholly-owned Domestic Material
Subsidiary of the Borrower that is required to enter in this Agreement as a
Guarantor pursuant to Section 6.11 of the Credit Agreement shall execute and
deliver a Guaranty Supplement and thereupon such wholly-owned Domestic Material
Subsidiary shall become a Guarantor hereunder with the same force and effect as
if originally named as a Guarantor herein. The execution and delivery of any
such instrument shall not require the consent of any other Guaranty Party
hereunder. The rights and obligations of each Guaranty Party hereunder shall
remain in full force and effect notwithstanding the addition of any new Guaranty
Party as a party to this Agreement.

SECTION 4.12. Limitation on Guaranteed Obligations. Each Guarantor and each
Secured Party (by its acceptance of the benefits of this Agreement) hereby
confirms that it is its intention that this Agreement not constitute a
fraudulent transfer or conveyance for purposes of any Debtor Relief Laws
(including the Bankruptcy Code, the Uniform Fraudulent Conveyance Act or any
similar Federal or state law). To effectuate the foregoing intention, each
Guarantor and each Secured Party (by its acceptance of the benefits of this
Agreement) hereby irrevocably agrees that the Obligations owing by such
Guarantor under this Agreement shall be limited to such amount as will, after
giving effect to such maximum amount and all other (contingent or otherwise)
liabilities of such Guarantor that are relevant under such Debtor Relief Laws
and after giving effect to any rights to contribution and/or subrogation
pursuant to any agreement providing for an equitable contribution and/or
subrogation among such Guarantor and the other Guarantors, result in the
obligations of such Guarantor in respect of such maximum amount not constituting
a fraudulent transfer or conveyance.

SECTION 4.13. General Authority of the Administrative Agent. By acceptance of
the benefits of this Agreement and any other Collateral Documents, each Secured
Party (whether or not a signatory hereto) shall be deemed irrevocably (a) to
consent to the appointment of the Administrative Agent as its agent hereunder
and under such other Collateral Documents, (b) to agree to be bound by the
provisions of Article IX of the Credit Agreement as fully as if they were set
forth herein, (c) to confirm that the Administrative Agent shall have the
authority to act as the exclusive agent of such Secured Party for the
enforcement of any provisions of this Agreement and such other Collateral
Documents against any Guaranty Party and the exercise of remedies hereunder or
thereunder, (d) to agree that it shall not take any action to enforce any
provisions of this Agreement or any other Collateral Document against any
Guaranty Party, to exercise any remedy hereunder or thereunder or to give any
consents or approvals hereunder or thereunder except as expressly provided in
this Agreement or any other Collateral Document and (e) to agree to be bound by
the terms of this Agreement and any other Collateral Documents.

 

10

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SECTION 4.14. Survival of Representations and Warranties. All representations
and warranties made hereunder or other document delivered pursuant hereto or in
connection herewith shall be considered to have been relied upon by the
Administrative Agent, the Lenders and the L/C Issuers and shall survive the
execution and delivery hereof, and shall continue in full force and effect as
long as any Loan or any other Obligation hereunder shall remain unpaid or
unsatisfied or any Letter of Credit shall remain outstanding, regardless of any
investigation made by or on behalf of the Administrative Agent, any Lender, any
L/C Issuer or any other Person and notwithstanding that the Administrative
Agent, any Lender, any L/C Issuer or any other Person may have had notice or
knowledge of any Default or incorrect representation or warranty at the time any
Loan Document is executed and delivered or any credit is extended under the
Credit Agreement.

[Signatures on following page]

 

11

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.

 

SURGICAL CARE AFFILIATES, INC., as

the Borrower,

        By:

 /s/Richard L. Sharff, Jr.

Name: Richard L. Sharff, Jr. Title:

Executive Vice President,

General Counsel and Corporate

Secretary

 

SURGICAL CARE AFFILIATES, LLC

SC AFFILIATES, LLC

ASC NETWORK, LLC

SURGERY CENTERS-WEST HOLDINGS, LLC NATIONAL SURGERY CENTERS, LLC SURGERY CENTER
HOLDING, LLC

SURGICAL HEALTH, LLC

SCA SURGERY HOLDINGS, LLC SUNSURGERY, LLC,

 

each as a Guarantor,

 

        By:

 /s/Richard L. Sharff, Jr.

Name: Richard L. Sharff, Jr. Title: Vice President, Secretary and
Director/Manager

[Signature Page to Guaranty]

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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day
and year first above written.

 

JPMORGAN CHASE BANK, N.A. By:

/s/ Amy M. Ukena

Name: Amy M. Ukena Title: Vice President

[Signature Page to Guaranty]

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EXHIBIT I

SUPPLEMENT NO.            dated as of [            ] (this “Supplement”), to the
Guaranty dated as of March 17, 2015, among SURGICAL CARE AFFILIATES, INC., a
Delaware corporation (the “Borrower”), certain subsidiaries of the Borrower from
time to time party hereto, and JPMORGAN CHASE BANK, N.A., as Administrative
Agent.

A. Reference is made to (i) the Credit Agreement dated as of March 17, 2015 (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among the Borrower, JPMorgan Chase Bank, N.A., as Administrative
Agent, each Lender and L/C Issuer from time to time party thereto and other
financial institutions party thereto, (ii) each Secured Hedge Agreement (as
defined in the Credit Agreement), and (iii) the Cash Management Obligations (as
defined in the Credit Agreement).

B. Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Credit Agreement.

C. The Guarantors have entered into the Guaranty in order to induce (i) the
Lenders to make Loans and the L/C Issuers to issue Letters of Credit, (ii) the
Hedge Banks to enter into and/or maintain Secured Hedge Agreements and (iii) the
Cash Management Banks to provide Cash Management Services. Section SECTION 4.11.
of the Guaranty provides that additional wholly-owned Domestic Material
Subsidiaries of the Borrower may become Guarantors under the Guaranty by
execution and delivery of an instrument in the form of this Supplement. The
undersigned wholly-owned Domestic Material Subsidiary (the “New Subsidiary”) is
executing this Supplement in accordance with the requirements of the Credit
Agreement to become a Guarantor under the Guaranty in order to induce (A) the
Lenders to make additional Loans and the L/C Issuers to issue additional Letters
of Credit, (B) the Hedge Banks to enter into and/or maintain Secured Hedge
Agreements and (C) the Cash Management Banks to provide Cash Management Services
and as consideration for (x) Loans previously made and Letters of Credit
previously issued, (y) Secured Hedge Agreements previously entered into and/or
maintained and (z) Cash Management Services previously provided.

Accordingly, the Administrative Agent and the New Subsidiary agree as follows:

SECTION 1. In accordance with Section SECTION 4.11. of the Guaranty, the New
Subsidiary by its signature below becomes a Guarantor under the Guaranty with
the same force and effect as if originally named therein as a Guarantor and the
New Subsidiary hereby (a) agrees to all the terms and provisions of the Guaranty
applicable to it as a Guarantor thereunder and (b) represents and warrants that
the representations and warranties made by it as a Guarantor thereunder are true
and correct on and as of the date hereof. In furtherance of the foregoing, the
New Subsidiary, as security for the payment and performance in full of the
Obligations does hereby, for the benefit of the Secured Parties, their
successors and assigns, irrevocably, absolutely and unconditionally guaranty,
jointly with the other Guarantors and severally, the due and punctual payment
and performance of the Obligations. Each reference to a “Guarantor” in the
Guaranty shall be deemed to include the New Subsidiary. The Guaranty is hereby
incorporated herein by reference.

 

EXH-1

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SECTION 2. The New Subsidiary represents and warrants to the Administrative
Agent and the other Secured Parties that this Supplement has been duly
authorized, executed and delivered by it and constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms, except
as such enforceability may be limited by Debtor Relief Laws and by general
principles of equity.

SECTION 3. This Supplement 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. This Supplement shall become effective when the Administrative Agent
shall have received a counterpart of this Supplement that bears the signature of
the New Subsidiary, and the Administrative Agent has executed a counterpart
hereof. Delivery of an executed signature page to this Supplement by facsimile
transmission or other electronic communication shall be as effective as delivery
of a manually signed counterpart of this Supplement.

SECTION 4. Except as expressly supplemented hereby, the Guaranty shall remain in
full force and effect.

SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.

SECTION 6. If any provision contained in this Supplement is held to be invalid,
illegal or unenforceable, the legality, validity, and enforceability of the
remaining provisions contained herein and in the Guaranty shall not be affected
or impaired thereby. The invalidity of a provision in a particular jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction.

SECTION 7. All communications and notices hereunder shall be in writing and
given as provided in Section SECTION 4.01. of the Guaranty.

SECTION 8. The New Subsidiary agrees to reimburse the Administrative Agent for
its reasonable out-of-pocket expenses in connection with the execution and
delivery of this Supplement, including the reasonable fees, other charges and
disbursements of counsel for the Administrative Agent.

[SIGNATURE ON THE FOLLOWING PAGE]

 

EXH-2

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IN WITNESS WHEREOF, the New Subsidiary and the Administrative Agent have duly
executed this Supplement to the Guaranty as of the day and year first above
written.

 

[NAME OF NEW SUBSIDIARY], By:

 

Name:

Title:

 

Jurisdiction of Formation:

Organizational Identification Number:

Address Of Chief Executive Office:

 

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

By:

 

Name: Title:

 

EXH-3