Document:

Ex-10.1

 

Exhibit 10.1

EXECUTION COPY

	 	 	 
	BANC OF AMERICA SECURITIES LLC
	 	CITIGROUP GLOBAL MARKETS INC.
	BANC OF AMERICA BRIDGE LLC
	 	388 Greenwich Street
	BANK OF AMERICA, N.A.
	 	New York, NY 10013
	9 West 57th Street	 	 
	New York, NY 10019	 	 

CONFIDENTIAL

April 4, 2007

IASIS Healthcare LLC

IASIS Healthcare Corporation

Dover Centre

117 Seaboard Lane, Building E

Franklin, Tennessee 37067

Attention: Carl Whitmer

IASIS Healthcare

$829,000,000 Senior Secured Credit Facilities

$300,000,000 Holdings Senior PIK Loans

Commitment Letter

Ladies and Gentlemen:

     IASIS Healthcare LLC (the “Borrower”) and IASIS Healthcare Corporation
(“Holdings” and, together with the Borrower, “you”) has advised Banc of America
Securities LLC (“BAS”), Citigroup Global Markets Inc. (“CGMI”, and together with
BAS and any other joint lead arrangers and joint book managers appointed pursuant to the second
succeeding paragraph, collectively, the “Arrangers”), Bank of America, N.A. (“Bank of
America”), Banc of America Bridge LLC (“BofA Bridge”) and Citigroup (as defined below
and, together with Bank of America, BofA Bridge and any other institutions appointed pursuant to
the second succeeding paragraph, the “Initial Lenders”, and, together with the Arrangers,
“we” or “us”) that you intend to consummate the Transactions described in the
Transactions Description attached hereto as Exhibit A. Capitalized terms used but not defined
herein have the meanings assigned to them in such Exhibit A and in the other exhibits hereto (such
exhibits, collectively, the “Exhibits”, and, together with this commitment letter and any
other attachments thereto, the “Commitment Letter”). For purposes of this Commitment
Letter, “Citigroup” shall mean CGMI, Citibank, N.A., Citicorp USA, Inc., Citicorp North
America, Inc. and/or any of their affiliates as Citigroup shall determine to be appropriate to
provide the services contemplated herein.

     In connection with the Transactions, (a) each of Bank of America and CGMI, on behalf of
Citigroup, is pleased to advise you of its commitment, several and not joint, to provide 50% of the
aggregate principal amount of the Senior Secured Facilities and (b) each of BofA Bridge and CGMI,
on behalf of Citigroup, is pleased to advise you of its commitment, several and not joint, to
provide 50% of the aggregate principal amount of the Holdings Facility, in each

 

 

case upon the terms and subject only to the conditions set forth in the ninth paragraph of
this Commitment Letter, in the section entitled “Conditions Precedent to Initial Borrowing” in
Exhibit B hereto.

     You hereby appoint each of BAS and CGMI to act, and BAS and CGMI agree to act, as joint lead
arrangers and joint book managers for the Facilities, on the terms and subject to the conditions
set forth in this Commitment Letter. You also hereby appoint (a) Bank of America to act, and Bank
of America hereby agrees to act, as sole and exclusive administrative agent and sole and exclusive
collateral agent for the Senior Secured Facilities and (b) BofA Bridge to act, and BofA Bridge
hereby agrees to act, as sole and exclusive administrative agent for the Holdings Facility, in each
case on the terms and subject to the conditions set forth in this Commitment Letter. You may
appoint additional agents, co-agents, lead arrangers or book managers or confer other titles in
respect of any Facility in a manner and with economics (not to exceed 30% in the aggregate with
respect to any such Facility) determined by you in consultation with the Arrangers (it being
understood that, to the extent you appoint additional agents, co-agents, lead arrangers or book
managers or confer other titles in respect of any Facility, the commitments of the Initial Lenders
will be reduced ratably by the amount of the commitments of such appointed entities upon the
execution by such financial institution of customary joinder documentation hereto, and, thereafter,
each such financial institution shall constitute an “Initial Lender” hereunder). You agree that
BAS will have “left” placement and CGMI will appear on the immediate right of BAS in any and all
marketing materials or other documents in connection with the Facilities and that each of BAS and
CGMI will be one of the arrangers and book managers to receive league table credit in such capacity
for each of the Facilities. No compensation (other than that expressly contemplated by this
Commitment Letter and the Fee Letter referred to below and other than in connection with any
additional appointments referred to above) will be paid to any Lender in connection with the
Facilities, unless you and we shall so agree.

     The Initial Lenders reserve the right, prior to or after the execution of definitive
documentation for any of the Facilities (the “Facilities Documentation”), to syndicate all
or a portion of their commitments hereunder to one or more banks, financial institutions or other
institutional lenders reasonably acceptable to you (such acceptance not to be unreasonably withheld
or delayed) that will become parties to the Facilities Documentation pursuant to syndications to be
managed by the Arrangers (the banks, financial institutions and other institutional lenders
becoming parties to the Facilities Documentation being collectively referred to as the
“Lenders”); it is understood that we will syndicate to banks, financial institutions or
other institutional lenders identified by the Initial Lenders and reasonably acceptable to you
(such acceptance not to be unreasonably withheld or delayed), which shall not include (a) those
institutions identified to the Arrangers by you or (b) those persons that are competitors of the
Borrower and its subsidiaries and identified to us by you from time to time); provided
that, notwithstanding the Initial Lenders’ right to syndicate the Facilities and receive
commitments with respect thereto, (i) any assignment of commitments of the Initial Lenders prior to
the Closing Date (except to other Initial Lenders prior to the Closing Date) shall not reduce the
Initial Lenders’ obligations to fund their respective entire commitments in the event any assignee
of such Initial Lender shall fail to do so and (ii) each Initial Lender (together with other
Initial Lenders pursuant to the preceding paragraph) shall retain exclusive control over all rights
and obligations with respect to its commitments, including all rights with respect to consents,

2

 

modifications and amendments, until the Closing Date occurs. We intend to commence
syndication efforts promptly upon the execution of this Commitment Letter, and you agree to assist
the Arrangers in completing syndications reasonably satisfactory to the Arrangers and you. Such
assistance shall include your using commercially reasonable efforts to (1) ensure that any
syndication efforts benefit materially from your existing banking relationships and the existing
banking relationships of the Sponsor (as defined below), (2) ensure direct contact between your
senior management, representatives and advisors, on the one hand, and the proposed Lenders, on the
other hand, at times and locations mutually agreed upon, (3) assist in the preparation of a
customary Confidential Information Memorandum for the Facilities and other customary marketing
materials to be used in connection with the syndications, (4) host, with the Arrangers, one or more
conference calls with or meetings of prospective Lenders at times and locations mutually agreed
upon and (5) obtain ratings for each of the Facilities from each of Moody’s Investors Service, Inc.
(“Moody’s”) and Standard & Poor’s Ratings Group (“S&P”) prior to the Closing Date.
Notwithstanding anything to the contrary contained in this Commitment Letter or the Fee Letter,
neither (i) the commencement nor completion of the syndication of the Facilities nor (ii) obtaining
the ratings referred to above shall constitute a condition to the availability of the Facilities on
the Closing Date or any time thereafter.

     The Arrangers will manage, in consultation with you, all aspects of the syndications,
including selection of Lenders reasonably acceptable to you (such acceptance not to be unreasonably
withheld or delayed), determination of when the Arrangers will approach potential Lenders and the
time of acceptance of the Lenders’ commitments, any naming rights, the final allocations of the
commitments among the Lenders and the amount and distribution of fees among the Lenders. To assist
the Arrangers in their syndication efforts, you agree to use commercially reasonable efforts to
prepare and provide promptly to us all customary information available to you with respect to
Holdings, the Borrower and its subsidiaries and the Transactions, including all financial
information and projections (but in no event beyond 2011) (including financial estimates, forecasts
and other forward-looking information, the “Projections”), as the Arrangers may reasonably
request in connection with the syndication of the Facilities.

     You hereby represent and warrant that, to the best of your knowledge, (a) all written
information other than the Projections and information of general economic or general industry
nature (the “Information”) that has been or will be made available to us by you or any of
your representatives or affiliates in connection with the Transactions, taken as a whole, is or
will be, when furnished, correct in all material respects and does not or will not, when furnished,
contain any untrue statement of a material fact or omit to state a material fact necessary in order
to make the statements contained therein not materially misleading in light of the circumstances
under which such statements are made (after giving effect to all supplements thereto) and (b) the
Projections that have been or will be made available to us by you or any of your representatives or
affiliates, have been and will be prepared in good faith based upon assumptions believed by you to
be reasonable at the time so made available; it being recognized by the Lenders that such
Projections as to future events are not to be viewed as facts and that actual results during the
period or periods covered by any such Projections may differ significantly from the projected
results and such differences may be material. You agree to supplement the Information and the
Projections from time to time until the Closing Date such that, to the best of your knowledge, the
representations and warranties in the preceding sentence remain true in all material respects. In
arranging the Facilities, including the syndication of the Facilities, we will be entitled to use
and

3

 

rely primarily on the Information and the Projections without responsibility for independent
verification thereof.

     You hereby acknowledge that (a) the Arrangers and the Initial Lenders will make available
Information and Projections (collectively, “Borrower Materials”) to the proposed syndicate
of Lenders by posting the Borrower Materials on IntraLinks, SyndTrak Online or another similar
electronic system (the “Platform”) and (b) certain of the proposed Lenders may be
“public-side” Lenders (i.e., Lenders that do not wish to receive material non-public information
with respect to the Borrower or its securities) (each, a “Public Lender”). At the
reasonable request of the Arrangers, you agree to use commercially reasonable efforts to assist in
the preparation of a version of the Confidential Information Memorandum consisting exclusively of
information and documentation that is either publicly available or not material with respect to the
Borrower and its affiliates and any of their securities for purposes of United States federal and
state securities laws. You hereby agree that, so long as the Borrower is the issuer of any
outstanding debt or equity securities that are registered or issued pursuant to a private offering
or are actively contemplating issuing any such securities, (i) you will use commercially reasonable
efforts to identify that portion of the Borrower Materials that may be distributed to the Public
Lenders and that all Borrower Materials that are to be made available to Public Lenders shall be
clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC”
shall appear prominently on the first page thereof; (ii) by marking Borrower Materials “PUBLIC,”
you shall be deemed to have authorized the Arrangers, the Initial Lenders and the proposed Lenders
to treat such Borrower Materials as not containing any material non-public information with respect
to the Borrower or its securities for purposes of United States federal and state securities laws,
it being understood that certain of such Borrower Materials may be subject to the confidentiality
requirements of the definitive credit documentation; (iii) all Borrower Materials marked “PUBLIC”
are permitted to be made available through a portion of the Platform designated “Public Investor;”
and (iv) the Arrangers and the Initial Lenders shall be entitled to treat any Borrower Materials
that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not
designated “Public Investor.” Notwithstanding the foregoing, you shall be under no obligation to
mark any Borrower Materials “PUBLIC.”

     As consideration for each Initial Lender’s commitment hereunder and each Arranger’s agreement
to structure, arrange and syndicate the Facilities, you agree to pay (or to cause to be paid) to us
the fees as set forth in the Exhibits and in the Fee Letter dated as of the date hereof and
delivered herewith with respect to the Facilities (collectively, the “Fee Letter”).

     Each Initial Lender’s commitment hereunder and each Arranger’s agreement to perform the
services described herein are subject to (a) the satisfaction, acting reasonably, of the Arrangers
that, from the date hereof and during the syndication of the Facilities, there shall be no
competing issues of debt securities or commercial bank or other credit facilities of Holdings, the
Borrower or any of their respective subsidiaries being offered, placed or arranged (other than
ordinary course indebtedness consistent with past practices), (b) the negotiation, execution and
delivery of Facilities Documentation consistent with the Exhibits and usual for transactions of
this type for affiliates of TPG Capital, L.P. (the “Sponsor”) and (c) the other conditions
set forth in the section entitled “Conditions Precedent to Initial Borrowing” in Exhibit B hereto.
Notwithstanding anything in this Commitment Letter, the Fee Letter, the Facilities Documentation or
any other letter agreement or other undertaking concerning the financing of

4

 

the Transactions to the contrary, the terms of the Facilities Documentation shall be in a form
such that they do not impair availability of the Facilities on the Closing Date if the conditions
set forth herein and in the Exhibits are satisfied (it being understood that, to the extent any
Guarantee is not provided, or any security interest in any Collateral is not granted and/or
perfected on the Closing Date after your use of commercially reasonable efforts to do so, the
delivery of such Guarantee and/or granting or perfection of a security interest in such Collateral
shall not constitute a condition precedent to the availability of the Facilities on the Closing
Date but shall be required to be completed after the Closing Date pursuant to arrangements and
timing to be mutually agreed, and it being further understood that commercially reasonable efforts
in this context is expected to include at a minimum delivery of, or authorization to file, UCC
financing statements and delivery of Guarantees of material wholly-owned domestic restricted
subsidiaries that are to be Guarantors under the Senior Secured Facilities).

     You agree (a) to indemnify and hold harmless each Arranger and Initial Lender and their
respective affiliates and their respective officers, directors, members, employees, agents and
controlling persons (collectively, the “indemnified persons”), from and against any and all
losses, claims, damages, liabilities and expenses, joint or several, to which any such indemnified
person may become subject arising out of or in connection with this Commitment Letter (including
the Exhibits), the Fee Letter, the Transactions and the other transactions contemplated hereby, the
Facilities and the use of the proceeds thereof or any claim, litigation, investigation or
proceeding (any of the foregoing, a “Proceeding”) relating to any of the foregoing,
regardless of whether any such indemnified person is a party thereto, and to reimburse each such
indemnified person upon demand for any reasonable, documented, out-of-pocket legal or other
expenses (except the allocated costs of in-house counsel) incurred in connection with investigating
or defending any of the foregoing, provided that the foregoing indemnity will not, as to
any indemnified person, apply to (i) losses, claims, damages, liabilities or related expenses (1)
to the extent they are found by a final, non-appealable judgment of a court of competent
jurisdiction to have resulted from the willful misconduct, bad faith or gross negligence of, or
breach of this Commitment Letter or the Facilities Documentation by, such indemnified person or any
of its affiliates or any of the officers, directors, employees, agents, controlling persons or
members of any of the foregoing, or (2) arising out of any Proceeding that does not involve an act
or omission of you or any of your affiliates and that is brought by an indemnified person against
any other indemnified person, or (ii) any settlement entered into by such indemnified person
without your written consent (such consent not to be unreasonably withheld or delayed); and (b) if
the Closing Date occurs, to reimburse each of the Arrangers and Initial Lenders from time to time
for all reasonable, documented, out-of-pocket expenses, including expenses of its due diligence
investigation, consultants’ fees (to the extent any such consultant has been retained with your
prior consent), syndication expenses, travel expenses and the fees, disbursements and other charges
of counsel identified in the Exhibits and of a single local counsel in each relevant jurisdiction
(except the allocated costs of in-house counsel), in each case incurred in connection with the
Facilities and the preparation of this Commitment Letter, the Fee Letter, the Facilities
Documentation and any security arrangements in connection therewith. Notwithstanding any other
provision of this Commitment Letter, no indemnified person shall be liable for any damages arising
from the use by others of information or other materials obtained through electronic,
telecommunications or other information transmission systems, except to the extent such damages are
found by a final, non-appealable judgment of a court of competent jurisdiction to have resulted
from the willful misconduct, bad faith or gross negligence of such indemnified

5

 

person or any of its affiliates or any of the officers, directors, employees, agents,
controlling persons or members of any of the foregoing. The foregoing provisions in this paragraph
shall be superseded in each case by the applicable provisions contained in the Facilities
Documentation upon execution thereof and thereafter shall have no further force and effect.
Notwithstanding any other provisions of this letter agreement to the contrary, no indemnified
person shall be liable to you for any indirect, special, punitive or consequential damages incurred
in connection with the Transactions or the other transactions contemplated by this Commitment
Letter.

     You acknowledge that the Arrangers, the Initial Lenders and their respective affiliates may be
providing debt financing, equity capital or other services (including, without limitation,
financial advisory services) to other companies in respect of which you may have conflicting
interests regarding the transactions described herein and otherwise. None of the Arrangers, the
Initial Lenders or their respective affiliates will use confidential information obtained from you
by virtue of the transactions contemplated by this Commitment Letter or any of its or their other
relationships with you in connection with the performance by them and their affiliates of services
for other companies, and none of the Arrangers, the Initial Lenders and their respective affiliates
will furnish any such information (or any summary or analysis thereof) to other companies. You
also acknowledge that no Arranger, Initial Lender or any of their respective affiliates has any
obligation to use in connection with the transactions contemplated by this Commitment Letter, or to
furnish to you or your subsidiaries, confidential information obtained by them and their affiliates
from other companies.

     As you know, the Arrangers are full service securities firms engaged, either directly or
through their affiliates in various activities, including securities trading, investment
management, financing and brokerage activities and financial planning and benefits counseling for
both companies and individuals. In the ordinary course of these activities, the Arrangers or their
affiliates may actively trade the debt and equity securities (or related derivative securities) of
the Borrower and other companies which may be the subject of the arrangements contemplated by this
Commitment Letter for their own account and for the accounts of their customers and may at any time
hold long and short positions in such securities. The Arrangers or their affiliates may also
co-invest with, make direct investments in, and invest or co-invest client monies in or with funds
or other investment vehicles managed by other parties, and such funds or other investment vehicles
may trade or make investments in securities of you or other companies which may be the subject of
the arrangements contemplated by this Commitment Letter.

     The Arrangers and their affiliates may have economic interests that conflict with those of
Holdings and the Borrower. You agree that the Arrangers and the Initial Lenders will act under
this Commitment Letter as independent contractors and that nothing in this Commitment Letter or the
Fee Letter or otherwise will be deemed to create an advisory, fiduciary or agency relationship or
fiduciary or other implied duty between them and you and your stockholders or affiliates. You
acknowledge and agree that (a) that the transactions contemplated by this Commitment Letter and the
Fee Letter are arm’s length commercial transactions between the Arrangers and the Initial Lenders,
on the one hand, and you, on the other hand, (b) in connection therewith and with the process
leading to such transactions the Arrangers and the Initial Lenders are acting solely as principals
and not as agents or fiduciaries of you and your management, stockholders, creditors or any other
person, (c) none of the

6

 

Arrangers nor the Initial Lenders has assumed an advisory or fiduciary responsibility in favor
of you with respect to the transactions contemplated hereby or the process leading thereto
(irrespective of whether they or any of their affiliates has advised or is currently advising you
on other matters) or any other obligation to you except the obligations expressly set forth in this
Commitment Letter and the Fee Letter and (d) you have consulted its own legal and financial
advisors to the extent it deemed appropriate. You further acknowledge and agree that you are
responsible for making your own independent judgment with respect to such transactions and the
process leading thereto. You agree that you will not claim that the Arrangers or the Initial
Lenders have rendered advisory services of any nature or respect, or owe a fiduciary or similar
duty to you, in connection with such transaction or the process leading thereto.

     This Commitment Letter shall not be assignable by any party hereto without the prior written
consent (not to be unreasonably withheld or delayed) of each other party hereto, and any attempted
assignment without such consent shall be void. Any and all obligations of, and services to be
provided by, the Arrangers or Initial Lenders (including the commitments) may be performed and any
and all rights may be exercised by or through any of their respective affiliates or branches. Any
assignment of commitments of the Initial Lenders hereunder prior to the Closing Date shall not
reduce the Initial Lenders’ obligations to fund their respective entire commitments in the event
any assignee of such Initial Lender fails to do so. This Commitment Letter may not be amended or
any provision hereof waived or modified except by an instrument in writing signed by each of the
parties hereto. This Commitment Letter may be executed in any number of counterparts, each of
which shall be deemed an original and all of which, when taken together, shall constitute one
agreement. Delivery of an executed counterpart of a signature page of this Commitment Letter by
facsimile transmission or other electronic transmission (i.e., a “pdf” or “tif”) shall be effective
as delivery of a manually executed counterpart of this Commitment Letter. This Commitment Letter
and the Fee Letter are the only agreements that have been entered into among the parties hereto
with respect to the Facilities and supersedes all prior understandings, whether written or oral,
among us with respect to the Facilities and set forth the entire understanding of the parties
hereto with respect thereto. This Commitment Letter is intended to be solely for the benefit of
the parties hereto and is not intended to confer any benefits upon, or create any rights in favor
of, any person other than the parties hereto and the indemnified persons. We may perform the
duties and activities described hereunder through any of our affiliates and the provisions of the
second preceding paragraph shall apply with equal force and effect to any of such affiliates so
performing any such duties or activities.

     THIS COMMITMENT LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK.

     EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY OR ON BEHALF OF ANY PARTY RELATED TO OR ARISING OUT OF
THE TRANSACTIONS, THIS COMMITMENT LETTER OR THE FEE LETTER OR THE PERFORMANCE OF SERVICES HEREUNDER
OR THEREUNDER.

7

 

     Each of the parties hereto hereby irrevocably and unconditionally (a) submits, for itself and
its property, to the non-exclusive jurisdiction of any New York State court or Federal court of the
United States of America sitting in New York City, and any appellate court from any thereof, in any
action or proceeding arising out of or relating to the Transactions or the other transactions
contemplated hereby, this Commitment Letter or the Fee Letter or the performance of services
hereunder or thereunder, or for recognition or enforcement of any judgment, and agrees that all
claims in respect of any such action or proceeding may be heard and determined in such New York
State court or, to the extent permitted by law, in such Federal court, (b) waives, to the fullest
extent it may legally and effectively do so, any objection that it may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out of or relating to this Commitment
Letter, the Fee Letter or the transactions contemplated hereby in any such New York State or
Federal court and (c) waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such court.

     You agree that you will not disclose the Fee Letter and the contents thereof or, prior to your
acceptance hereof, this Commitment Letter, the contents hereof, or the activities of the Arrangers
pursuant hereto or thereto to any person without prior written approval of a majority of the
Arrangers, except that you may disclose (a) the Commitment Letter, the Fee Letter and the contents
hereof and thereof (i) to the Sponsor and to your and the Sponsor’s officers, directors, employees,
stockholders, partners and members, as well as your and its respective agents, attorneys,
accountants and advisors on a confidential and need-to-know basis and (ii) as required by
applicable law or compulsory legal process (in which case you agree, to the extent permitted by
law, to inform us promptly thereof), (b) the existence and contents of the Exhibits to any rating
agency in connection with the Transactions and (c) to the extent required by applicable law, the
existence and contents of this Commitment Letter and the Fee Letter in any public filing in
connection with the financing contemplated hereby (in which case you agree to inform the Arrangers
promptly thereof); provided that the foregoing restrictions shall cease to apply (except in
respect of the Fee Letter and the contents thereof) after the Facilities Documentation shall have
been executed and delivered by the parties thereto.

     Each of the Arrangers and the Initial Lenders and their respective affiliates will use all
confidential information provided to it or such affiliates by or on behalf of you hereunder solely
for the purpose of providing the services which are the subject of this Commitment Letter and shall
treat confidentially all such information; provided that nothing herein shall prevent such
person from disclosing any such information (a) as required by applicable law or compulsory legal
process (in which case we agree, to the extent permitted by law, to inform you promptly thereof),
(b) upon the request or demand of any regulatory authority having jurisdiction over such person of
any of its affiliates, (c) to the extent that such information becomes publicly available other
than by reason of improper disclosure by such person or any of its affiliates, (d) to the extent
that such information is received by such person from a third party that is not to such person’s
knowledge subject to confidentiality obligations with respect to such information, (e) to the
extent that such information is independently developed by such person, (f) to such person’s
affiliates and to its and their employees, legal counsel, independent auditors and other experts or
agents who need to know such information in connection with the Transactions and are informed of
the confidential nature of such information, (g) to potential and prospective Lenders and any
direct or indirect contractual counterparties to any swap or derivative transaction relating to you
and your obligations under the Facilities, in each case, who have been

8

 

advised of the confidential nature of the information and of the terms of this paragraph and
have agreed to keep such information confidential or (h) for purposes of establishing a “due
diligence” defense. The foregoing provisions in this paragraph shall be superseded in each case by
the applicable provisions contained in the Facilities Documentation upon execution and delivery
thereof by the parties thereto and thereafter shall have no further force and effect.

     Except as may otherwise be provided in the Facilities Documentation, the reimbursement,
indemnification, jurisdiction and confidentiality provisions contained herein and in the Fee Letter
shall remain in full force and effect regardless of whether the Facilities Documentation shall be
executed and delivered and notwithstanding the termination of this Commitment Letter or the Initial
Lenders’ commitments hereunder; provided that your obligations under this Commitment Letter
(other than your obligations with respect to syndication and with respect to confidentiality of the
Fee Letter and the contents thereof) and our confidentiality obligations hereunder shall
automatically terminate and be superseded by the provisions of the Facilities Documentation upon
the initial funding thereunder, and you and we shall automatically be released from all liability
in connection therewith at such time. You may terminate this Commitment Letter and the Initial
Lenders’ commitments hereunder at any time subject to the provisions of the preceding sentence.

     We hereby notify you that pursuant to the requirements of the USA Patriot Act, Title III of
Pub. L. 107-56 (signed into law October 26, 2001) (the “Patriot Act”), each of us and each
of the Lenders may be required to obtain, verify and record information that identifies you, which
information may include your names and addresses and other information that will allow us and the
Lenders to identify you in accordance with the Patriot Act. This notice is given in accordance
with the requirements of the Patriot Act and is effective for the Lenders and us.

     Please indicate your acceptance of the terms hereof and of the Fee Letter by signing in the
appropriate space below and in the Fee Letter and returning to the Arrangers the enclosed duplicate
originals (which delivery may be via facsimile or other electronic means) of this Commitment Letter
and the Fee Letter, in each case not later than 5:00 p.m., New York City time, on April 5, 2007,
failing which the Initial Lenders’ commitments hereunder will expire at such time. In the event
that the initial borrowing under the Facilities does not occur on or before June 30, 2007 then this
Commitment Letter and the commitments hereunder shall automatically terminate unless we shall, in
our discretion, agree to an extension.

     By signing this Commitment Letter, each of the parties hereto hereby acknowledges and agrees
that (a) Bank of America is offering to provide its commitment under the Senior Secured Facilities
separate and apart from BofA Bridge’s offer to provide its commitment under the Holdings Facility
and (b) BofA Bridge is offering to provide its commitment under the Holdings Facility separate and
apart from the offer by Bank of America to provide its commitment under the Senior Secured
Facilities. You may, at your option, elect to accept this Commitment Letter (and the applicable
provisions of the Fee Letter) with respect to either the Senior Secured Facilities or the Holdings
Facility or both.

9

 

     We are pleased to have been given the opportunity to assist you in connection with the
financing for the Transactions.

	 	 	 	 	 
	 	Very truly yours,

BANC OF AMERICA SECURITIES LLC

 	 
	 	by  	/s/ Christopher Kelly Wall
 	 
	 	 	Name:  	Christopher Kelly Wall 	 
	 	 	Title:  	Principal 	 
	 

	 	 	 	 	 
	 	BANK OF AMERICA, N.A.

 	 
	 	by  	/s/ Christopher Kelly Wall
 	 
	 	 	Name:  	Christopher Kelly Wall 	 
	 	 	Title:  	Principal 	 
	 

	 	 	 	 	 
	 	BANC OF AMERICA BRIDGE LLC

 	 
	 	by  	/s/ Christopher Kelly Wall
 	 
	 	 	Name:  	Christopher Kelly Wall 	 
	 	 	Title:  	Principal 	 
	 

Commitment Letter

 

 

     We are pleased to have been given the opportunity to assist you in connection with the
financing for the Transactions.

	 	 	 	 	 
	 	Very truly yours,

CITIGROUP GLOBAL MARKETS INC.

 	 
	 	by  	/s/ Stuart Dickson
 	 
	 	 	Name:  	Stuart Dickson 	 
	 	 	Title:  	Director 	 
	 

Commitment Letter

 

 

The provisions of this Commitment Letter with

respect to the Senior Secured Facilities are

accepted and agreed to as of the date first

written above:

	 	 	 	 	 
	IASIS HEALTHCARE LLC

 	 	 
	by              /s/ John M. Doyle
 	 	 
	Name:  	John M. Doyle 	 	 
	Title:  	VP, Chief Accounting Officer 	 	 
	 

	 	 	 	 	 
	IASIS HEALTHCARE CORPORATION

 	 	 
	by                  /s/ John M. Doyle
 	 	 
	Name:  	John M. Doyle 	 	 
	Title:  	VP, Chief Accounting Officer 	 	 
	 

The provisions of this Commitment Letter with

respect to the Holdings Facility are accepted

and agreed to as of the date first written

above:

	 	 	 	 	 
	IASIS HEALTHCARE LLC

 	 	 
	by              /s/ John M. Doyle
 	 	 
	Name:  	John M. Doyle 	 	 
	Title:  	VP, Chief Accounting Officer 	 	 
	 

	 	 	 	 	 
	IASIS HEALTHCARE CORPORATION

 	 	 
	by                  /s/ John M. Doyle
 	 	 
	Name:  	John M. Doyle 	 	 
	Title:  	VP, Chief Accounting Officer 	 	 
	 

Commitment Letter

 

 

	 	 	 
	CONFIDENTIAL

	 	EXHIBIT A

IASIS Healthcare

$829,000,000 Senior Secured Credit Facilities

$300,000,000 Holdings Senior PIK Loans

Transactions Description

     Capitalized terms used but not defined in this Exhibit A shall have the meanings set forth in
the Commitment Letter to which this Exhibit A is attached and the other Exhibits thereto (such
Commitment Letter, together the Exhibits and any attachments thereto, the “Commitment
Letter”).

     Holdings and the Borrower intend to enter into the following transactions:

     (a) The Borrower will refinance its existing senior secured credit facilities (the
“Existing Facilities”) under that certain Amended and Restated Credit Agreement, dated as
of June 22, 2004, among the Borrower, Holdings, the subsidiaries of the Borrower party thereto,
Bank of America, N.A., as administrative agent, L/C issuer and swingline lender, and the other
lenders party thereto, by obtaining up to $829,000,000 in senior secured credit facilities
described in Exhibit B to the Commitment Letter (the “Senior Secured Facilities”).

     (b) Holdings will borrow up to $300,000,000 in loans (the “Holdings Loans”) from one
or more Lenders under a new senior unsecured PIK term loan facility described in Exhibit C to the
Commitment Letter (the “Holdings Facility” and, together with the Senior Secured
Facilities, the “Facilities”).

     (c) Holdings will use the proceeds of the Holdings Loans to fund a dividend or other
distribution to its equity holders (the “Holdings Dividend”), on or about the Closing Date
(as defined in Exhibit B).

     The transactions described above and the payment of related fees and expenses are collectively
referred to herein as the “Transactions”.

A-1

 

	 	 	 
	CONFIDENTIAL

	 	EXHIBIT B

IASIS Healthcare

$829,000,000 Senior Secured Credit Facilities

Summary of Principal Terms and Conditions

	 	 	 
	Borrower:

	 	IASIS Healthcare LLC (the “Borrower”).
	 
	 	 
	Administrative Agent

and Collateral Agent:

	 	Bank of America, N.A. will act as the sole administrative
agent and sole collateral agent (in such capacities, the
"Administrative Agent”) for a syndicate of financial
institutions (the “Lenders”) acceptable to the Borrower,
and will perform the duties customarily associated with
such roles.
	 
	 	 
	Joint Lead Arrangers:

	 	Banc of America Securities LLC and Citigroup Global
Markets Inc. will act as the joint lead arrangers and
joint book managers (the “Arrangers”) for the Senior
Secured Facilities, and will perform the duties
customarily associated with such roles.
	 
	 	 
	Syndication Agent:

	 	Citigroup will act as syndication agent (the “Syndication
Agent”) for the Senior Secured Facilities.
	 
	 	 
	Documentation Agent:

	 	At the option of the Borrower, one or more financial
institutions identified by the Borrower and reasonably
acceptable to the Arrangers (each a “Documentation Agent”
and, together with the Administrative Agent and the
Syndication Agent, the “Agents”).

	 	 	 	 	 
	Senior Secured Facilities:

	 	(A)
	 	A senior secured term loan facility in an aggregate
principal amount of $439,000,000 (the “Initial Term Loan
Facility”).
	 
	 	 	 	 
	 

	 	(B)
	 	A senior secured delayed draw term loan facility in an
aggregate principal amount of $150,000,000 (the “Delayed
Draw Term Loan Facility” and, together with the Initial
Term Loan Facility, the “Term Loan Facilities”).
	 
	 	 	 	 
	 

	 	(C)
	 	A senior secured revolving credit facility in an
aggregate principal amount of $200,000,000 (the “Revolving
Facility”). Lenders with commitments under the Revolving
Facility are collectively referred to herein as the
“Revolving Lenders.”
	 
	 	 	 	 
	 

	 	(D)
	 	A senior secured synthetic letter of credit facility
in an aggregate principal amount of $40,000,000 (the “Synthetic Letter of Credit Facility” and, together with
the Revolving Facility and the Term Loan Facilities, the
“Senior Secured Facilities”).

	 	 	 
	Swingline Loans:

	 	Bank of America, N.A. (in such capacity, the “Swingline
Lender”) will make available to the Borrower a swingline
facility under which the Borrower may make short-term
borrowings (in

B-1

 

	 	 	 
	 

	 	minimum amounts and integral multiples to
be agreed upon) of up to $25,000,000. Except for purposes
of calculating the commitment fee described below, any
such swingline borrowings will reduce availability under
the Revolving Facility on a dollar-for-dollar basis. Upon
notice from the Swingline Lender, the Revolving Lenders
will be unconditionally obligated to purchase
participations in any swingline loan pro rata based upon
their commitments under the Revolving Facility.
	 
	 	 
	Operation of Synthetic

Letter of Credit Facility:

	 	On the Closing Date, each Lender under the Synthetic
Letter of Credit Facility (each a “Synthetic Letter of
Credit Facility Lender”) shall deposit with the Synthetic
Letter of Credit Issuing Bank (as defined below) an amount
equal to such Synthetic Letter of Credit Facility Lender’s
pro rata share of the Synthetic Letter of Credit Facility
(such deposit for each Synthetic Letter of Credit Facility
Lender, the “Synthetic Letter of Credit Funded Amount”).
The sole funding obligation of each Synthetic Letter of
Credit Facility Lender shall be satisfied upon funding of
its Synthetic Letter of Credit Funded Amount. The
Borrower shall have no right, title or interest in the
Synthetic Letter of Credit Funded Amount, and the
Synthetic Letter of Credit Facility Lenders shall have no
right to withdraw their Synthetic Letter of Credit Funded
Amounts so long as the Synthetic Letter of Credit Facility
is in effect, except in connection with reductions in the
amount of the Synthetic Letter of Credit Facility as
described under “Voluntary Prepayments and Reductions in
Commitments” described below or upon the termination of
the Synthetic Letter of Credit Facility.
	 
	 	 
	Issuance of Synthetic

Letters of Credit:

	 	The Synthetic Letter of Credit Facility shall be available
for the issuance of letters of credit (“Synthetic Letters
of Credit”) by Bank of America, N.A. (in such capacity,
the “Synthetic Letter of Credit Issuing Bank”). No
Synthetic Letter of Credit shall have an expiration date
after the earlier of (a) 12 months after its date of
issuance or such longer period of time as may be agreed by
the Synthetic Letter of Credit Issuing Bank and (b) the
third business day prior to the final maturity date of the
Synthetic Letter of Credit Facility, provided that any
Synthetic Letter of Credit may provide for the renewal
thereof for additional periods of up to 12 months or such
longer period of time as may be agreed by the Synthetic
Letter of Credit Issuing Bank (which in no event shall
extend beyond the date referred to in clause (b) above,
except to the extent cash collateralized or backstopped
pursuant to arrangements reasonably acceptable to the
Synthetic Letter of Credit Issuing Bank). The Synthetic
Letter of Credit Issuing Bank shall not be obligated to
issue any Synthetic Letter of Credit to the extent that
such Synthetic Letter of Credit, together with the

B-2

 

	 	 	 
	 

	 	amount
of all other issued and outstanding Synthetic Letters of
Credit, exceeds the amount of all of Synthetic Letter of
Credit Funded Amounts.
	 
	 	 
	 

	 	Drawings under any Synthetic Letter of Credit shall be
reimbursed by the Borrower (whether with its own funds or
with the proceeds of loans under the Revolving Facility)
within two business days after notice of such drawing is
received by the Borrower from the Synthetic Letter of
Credit Issuing Bank; provided that if the Borrower does
not so reimburse the Synthetic Letter of Credit Issuing
Bank within such period, the amount of such drawing shall
be automatically converted into a loan, which loan may be
repaid at any time prior to the maturity date of the
Synthetic Letter of Credit Facility and, following
repayment thereof, be considered as a part of the
Synthetic Letter of Credit Funded Amount and available to
support the issuance of Synthetic Letters of Credit. To
the extent that the Borrower does not so reimburse the
Synthetic Letter of Credit Issuing Bank within the time
period specified above, the Synthetic Letter of Credit
Issuing Bank will withdraw the amount of such overdue
reimbursement amount from the Synthetic Letter of Credit
Funded Amounts (allocated ratably among the Synthetic
Letter of Credit Funded Amounts of the Synthetic Letter of
Credit Facility Lenders) and apply such amount to satisfy
such reimbursement obligation (whereupon the amount of
such reimbursement obligation will be owing by the
Borrower as a loan to the Synthetic Letter of Credit
Facility Lenders, ratably in accordance with the amounts
of the Synthetic Letter of Credit Funded Amounts applied
by the Synthetic Letter of Credit Issuing Bank as
described above).
	 
	 	 
	Revolving Facility

Letters of Credit:

	 	Up to $100,000,000 of the Revolving Facility will be
available to the Borrower in the form of letters of
credit. Letters of credit will be issued by Bank of
America, N.A. and other Lenders approved by the
Administrative Agent and the Borrower (in such capacity,
the “Revolving Facility Issuing Banks”). Each letter of
credit will expire not later than the earlier of (a) 12
months after its date of issuance or such longer period of
time as may be agreed by the relevant Revolving Facility
Issuing Bank and (b) the third business day prior to the
final maturity of the Revolving Facility; provided,
however, that any letter of credit may provide for renewal
thereof for additional periods of up to 12 months or such
longer period of time as may be agreed by the relevant
Revolving Facility Issuing Bank (which in no event shall
extend beyond the date referred to in clause (b) above,
except to the extent cash collateralized or backstopped
pursuant to arrangements reasonably acceptable to the
relevant Revolving Facility Issuing

B-3

 

	 	 	 
	 

	 	Bank). Drawings under
any letter of credit shall be reimbursed by the Borrower
(whether with its own funds or with the proceeds of loans
under the Revolving Facility) within two business days
after notice of such drawing is received by the Borrower
from the relevant Revolving Facility Issuing Bank. The
Revolving Lenders will be irrevocably and unconditionally
obligated to acquire participations in each letter of
credit, pro rata in accordance with their commitments
under the Revolving Facility, and to fund such
participations in the event the Borrower does not
reimburse an Issuing Bank for drawings within the time
period specified above.
	 
	 	 
	Incremental Facilities:

	 	The Senior Secured Facilities Documentation will permit
the Borrower to add one or more incremental term loan
facilities to the Senior Secured Facilities (each, an
“Incremental Term Facility”), one or more incremental
synthetic letter of credit facilities to the Senior
Secured Facilities (each, an “Incremental Synthetic Letter
of Credit Facility”) and/or increase commitments under the
Revolving Facility (any such increase, an “Incremental
Revolving Facility”; the Incremental Term Facilities, the
Incremental Synthetic Letter of Credit Facilities and the
Incremental Revolving Facilities are collectively referred
to as “Incremental Facilities”) in an aggregate amount of
up to $400,000,000; provided that (i) no existing Lender
will be required to participate in any such Incremental
Facility, (ii) no event of default or default exists or
would exist after giving effect thereto, (iii) the
aggregate principal amount of all Incremental Revolving
Facilities shall not exceed $100,000,000, (iv) the
maturity date of any such Incremental Term Facility shall
be no earlier than the maturity date of the Term Loan
Facilities and the weighted average life to maturity of
any such Incremental Term Facility shall not be less than
the remaining weighted average life to maturity of the
Term Loan Facilities at the time of the closing of such
Incremental Term Facility, (v) the maturity date of any
such Incremental Synthetic Letter of Credit Facility shall
be no earlier than the maturity date of the Synthetic
Letter of Credit Facility, (vi) the interest rates and
amortization schedule applicable to any Incremental Term
Facility shall be determined by the Borrower and the
lenders thereunder, (vii) the interest rates applicable to
any Incremental Synthetic Letter of Credit Facility shall
be determined by the Borrower and the lenders thereunder
and (viii) any Incremental Revolving Facility shall be on
terms and pursuant to documentation applicable to the
Revolving Facility (including the maturity date in respect
thereof) and any Incremental Term Facility and any
Incremental Synthetic Letter of Credit Facility shall be
on terms and pursuant to documentation to be determined,
provided that, to the extent such terms and

B-4

 

	 	 	 
	 

	 	documentation
are not consistent with, in the case of an Incremental
Term Facility, the Term Loan Facilities (except to the
extent permitted by clause (iv) or (vi) above) or, in the
case of an Incremental Synthetic Letter of Credit
Facility, the Synthetic Letter of Credit Facility (except
to the extent permitted by clause (v) and (vii) above),
they shall be reasonably satisfactory to the
Administrative Agent. It is understood that the
Incremental Facilities shall not be subject to any “most
favored nation” pricing provisions.

	 	 	 	 	 
	Purpose:

	 	(A)
	 	The proceeds of the loans under the Initial Term Loan
Facility will be used to refinance the Existing Facilities
and for working capital and other general corporate
purposes of the Borrower and its subsidiaries.
	 
	 	 	 	 
	 

	 	(B)
	 	The proceeds of loans under the Delayed Draw Term Loan
Facility will be used to finance permitted acquisitions,
other permitted investments and capital expenditures of
the Borrower and its subsidiaries.
	 
	 	 	 	 
	 

	 	(C)
	 	The proceeds of loans under the Revolving Facility
will be used for working capital and other general
corporate purposes of the Borrower and its subsidiaries,
including financing of permitted acquisitions and other
permitted investments.
	 
	 	 	 	 
	 

	 	(D)
	 	Letters of credit under the Revolving Facility and the
Synthetic Letter of Credit Facility will be used by the
Borrower for general corporate purposes of the Borrower
and its subsidiaries.
	 
	 	 	 	 
	Availability:

	 	(A)
	 	The full amount of the Initial Term Loan Facility must
be drawn in a single drawing on the date of the initial
borrowing under the Senior Secured Facilities (the
“Closing Date”). Amounts repaid or prepaid under the
Initial Term Loan Facility may not be reborrowed.
	 
	 	 	 	 
	 

	 	(B)
	 	The Delayed Draw Term Loan Facility will be available
in one or more drawings in minimum amounts to be agreed at
any time until the first anniversary of the Closing Date.
Amounts borrowed under the Delayed Draw Term Loan Facility
that are repaid or prepaid may not be reborrowed.
	 
	 	 	 	 
	 

	 	(C)
	 	Loans under the Revolving Facility will be available
on and after the Closing Date and at any time prior to the
final maturity of the Revolving Facility, in minimum
principal amounts to be agreed upon. Amounts prepaid
under the

B-5

 

	 	 	 	 	 
	 

	 	 	 	Revolving Facility may be reborrowed.
	 
	 	 	 	 
	 

	 	(D)
	 	The full amount of the Synthetic Letter of Credit
Facility shall be funded on the Closing Date.
	 
	 	 	 	 
	Interest Rates and Fees

	 	 	 	As set forth on Annex I hereto.
	 
	 	 	 	 
	Final Maturity and

Amortization:

	 	(A)
	 	The Initial Term Loan Facility will mature on March
15, 2014 and will amortize 1% per annum in equal quarterly
installments until the final maturity date.
	 
	 	 	 	 
	 

	 	(B)
	 	The Revolving Facility will mature, and lending
commitments thereunder will terminate, on the sixth
anniversary of the Closing Date.
	 
	 	 	 	 
	 

	 	(C)
	 	The Delayed Draw Term Loan Facility will mature on
March 15, 2014 and will amortize in equal quarterly
installments beginning on the last day of the first full
fiscal quarter to occur after the first anniversary of the
Closing Date (the “First DD Amortization Payment Date”) in
aggregate annual amounts equal to 1% of the actual
principal outstanding under the Delayed Draw Term Loan
Facility as of the First DD Amortization Payment Date,
with the balance payable on the final maturity date.
	 
	 	 	 	 
	 

	 	(D)
	 	The Synthetic Letter of Credit Facility will terminate
on March 15, 2014.

	 	 	 
	Guarantees:

	 	All obligations of the Borrower under the Senior Secured
Facilities and any treasury management, interest rate
protection or other hedging arrangements entered into with
a Lender or any affiliate of any Lender (collectively, the
“Ancillary Arrangements”), will be unconditionally
guaranteed (the “Guarantees”) by Holdings and each
existing and each subsequently acquired or organized
wholly-owned domestic restricted subsidiary of the
Borrower (other than immaterial subsidiaries, certain
subsidiaries to be agreed upon, which will include all
subsidiaries not providing guarantees of the Existing
Facilities, and only to the extent permitted by
contractual arrangements or applicable law or regulation)
(collectively, the “Guarantors”). Each Guarantor that
becomes a non-wholly owned subsidiary of the Borrower as
permitted by the Senior Secured Facilities Documentation
will be automatically released from its guarantee.
	 
	 	 
	Security:

	 	The Senior Secured Facilities, the Guarantees and any
Ancillary Arrangements will be secured by substantially
all material, owned

B-6

 

	 	 	 
	 

	 	assets of the Borrower and each of the
Guarantors and Pledgors (as defined below) (collectively,
the “Collateral”), including: (a) a perfected
first-priority pledge of all equity interests of the
Borrower and each of its subsidiaries (excluding any
equity interests that are not pledged to secure the
Existing Facilities), to the extent permitted by
applicable law and contractual arrangements, in each case
directly held by the Borrower, any Guarantor or any
Pledgor (which pledge, in the case of a foreign
subsidiary, shall be limited to 100% of the non-voting
equity interests (if any) and 65% of the voting equity
interests of such foreign subsidiary), and (b) perfected
security interests in, and mortgages on, substantially all
tangible and intangible assets of the Borrower and each
Guarantor and Pledgor (including accounts receivable,
inventory, equipment, investment property, intellectual
property, material owned real property, intercompany notes
(including, without limitation, intercompany notes under
which the obligor is a Pledgor, a Permitted JV or an
Unrestricted Subsidiary) and drag-along rights and
proceeds of the foregoing), and excluding (i) those assets
over which the granting of a security interest in such
assets would be prohibited by contract or applicable law
or the organizational documents of any non-wholly owned
subsidiary, or to the extent that such security interests
would result in adverse tax or accounting consequences as
determined by the Borrower, (ii) vehicles and other assets
subject to certificates of title, (iii) fee interests in
real property valued at less than an amount to be agreed
(with all required mortgages being permitted to be
delivered post-closing; provided that the Borrower uses
commercially reasonable efforts to provide the required
mortgages on the Closing Date), (iv) leaseholds, (v)
letter of credit rights, (vi) commercial tort claims and
(vii) other exceptions to be mutually agreed upon or that
are usual for facilities of this type for affiliates of
the Sponsor. There shall be no lockbox arrangements nor
any control agreements relating to the Borrower’s and its
subsidiaries’ deposit or securities accounts.
	 
	 	 
	 

	 	Each Guarantor that is released from its Guarantee as
permitted by the Senior Secured Facilities Documentation
but remains a subsidiary of the Borrower shall be a
“Pledgor” so long as such Pledgor is providing security
interests in its Collateral as set forth above.
	 
	 	 
	 

	 	All the above-described pledges, security interests and
mortgages shall be created on terms, and pursuant to
documentation, reasonably satisfactory to the
Administrative Agent and subject to exceptions (including
customary permitted liens, including liens

B-7

 

	 	 	 
	 

	 	on the assets
of the Borrower and its subsidiaries permitted under the
Existing Facilities) usual for facilities of this type for
affiliates of the Sponsor and customary for borrowers in
the same industry as the Borrower permitted under the
definitive documentation for the Senior Secured Facilities
(the “Senior Secured Facilities Documentation”).
	 
	 	 
	 

	 	Notwithstanding the foregoing, assets may be excluded from
the Collateral and subsidiaries may be excluded from
guarantee requirements under the Senior Secured Facilities
in circumstances where the Borrower and the Administrative
Agent agree that the cost of obtaining a security interest
in such assets or providing such a guarantee are excessive
in relation to the value afforded thereby.
	 
	 	 
	Ranking:

	 	The Term Loan Facilities, the Revolving Facility, the
Synthetic Letter of Credit Facility and the Ancillary
Arrangements shall rank equal in right of payment with one
another as between the holders of the obligations
outstanding thereunder, on the one hand, and the Borrower
and the Guarantors, on the other hand, and the Term Loan
Facilities, the Revolving Facility, the Synthetic Letter
of Credit Facility and the Ancillary Arrangements shall
share a lien of equal priority in the Collateral,
provided, however, that, following an acceleration of the
Borrower’s obligations under the Senior Secured
Facilities, any amounts received on account of such
obligations shall be applied by the Administrative Agent,
first, ratably to the obligations of the Borrower and the
Guarantors in respect of the Revolving Facility and,
second, ratably to the obligations of the Borrower and the
Guarantors in respect of the Term Loan Facilities, the
Synthetic Letter of Credit Facility and the Ancillary
Arrangements.
	 
	 	 
	 

	 	Following an acceleration of the Borrower’s obligations
under the Senior Secured Facilities, Lenders under the
Term Loan Facilities and/or the Synthetic Letter of Credit
Facility shall have the right to purchase, at par plus
accrued but unpaid interest and fees, the outstanding
loans and commitments of the Revolving Lenders on mutually
acceptable terms to be set forth in the definitive loan
documentation for the Senior Secured Facilities.
	 
	 	 
	Senior Secured Facilities

Documentation:

	 	Except as otherwise specified herein, all Senior Secured
Facilities Documentation shall be in form usual for
facilities of this type for affiliates of the Sponsor.
Pledgors, Guarantors and Permitted JVs shall be treated in
the same manner for all purposes under the Senior Secured
Facilities Documentation (other than with respect to the
obligation of a Pledgor or Permitted JV to provide a
Guarantee or the obligation of a Permitted JV to pledge
Collateral).

B-8

 

	 	 	 
	Certain Financial

Definitions:

	 	The “Senior Secured Leverage Ratio” shall mean the ratio
of Senior Secured Net Indebtedness to Consolidated
Adjusted EBITDA (such terms to be defined in a manner
consistent with facilities of this type by affiliates of
the Sponsor, the definition of Senior Secured Net
Indebtedness to be defined as senior secured debt net of
unrestricted cash on hand and the definition of
Consolidated Adjusted EBITDA to include, without
limitation, an add-back for legal fees incurred in
conjunction with the Borrower’s response to OIG’s request
for information in an amount not to exceed $10 million per
year, with carry-over of unused amounts in any year).
Consolidated Net Income of the Borrower shall be defined
to include the consolidated net income of all Guarantors,
Pledgors and Permitted JVs, whether or not distributed to
minority equityholders, except as expressly provided in
clause (d) under “Negative Covenants” below.
	 
	 	 
	Mandatory Prepayments:

	 	Loans under the Term Loan Facilities shall be prepaid with:
	 
	 	 
	 

	 	(a) 50% of the Borrower’s annual excess cash flow (with
stepdowns to 25% and 0% if the Borrower’s Senior Secured
Leverage Ratio is less than certain thresholds to be
agreed) (“excess cash flow” to be defined in a manner
consistent with facilities of this type by affiliates of
the Sponsor, such definition to provide for, among other
things, a deduction from excess cash flow, without
duplication among periods, of operating cash used to
finance acquisitions or capital expenditures or to be used
to finance planned capital expenditures or to finance
acquisitions for which contractual commitments exist);
provided that the first mandatory prepayment hereunder
shall be made following the first full fiscal year ending
after the Closing Date; provided further that any
voluntary prepayments of loans (including loans under the
Revolving Facility to the extent commitments thereunder
are permanently reduced by the amount of such prepayments)
other than any such prepayments which are funded pursuant
to the incurrence of other debt shall be credited against
excess cash flow prepayment obligations on a
dollar-for-dollar basis;
	 
	 	 
	 

	 	(b) If the Borrower’s Senior Secured Leverage Ratio is
greater than a certain threshold to be agreed, 100% of the
net cash proceeds of all non-ordinary course asset sales
or other dispositions of property (including equity
interests in subsidiaries) by the Borrower and its
restricted subsidiaries (including

B-9

 

	 	 	 
	 

	 	insurance and
condemnation proceeds), in excess of $5,000,000 per asset
sale or other disposition (subject to a mutually
acceptable aggregate cap on all such exempted transactions
subsequent to the Closing Date) and subject to exceptions
to be agreed upon and a 100% reinvestment right if
reinvested (or committed to be reinvested) within (i) 730
days with respect to a greenfield construction project or
(ii) 365 days with respect to any other reinvestment, of
such sale or disposition (and if committed to be
reinvested with the applicable period above, actually
reinvested within 3 years of such sale or disposition);
and
	 
	 	 
	 

	 	(c) 100% of the net cash proceeds of incurrences of debt
obligations of the Borrower and its restricted
subsidiaries after the Closing Date (excluding proceeds
from any debt not prohibited under the Senior Secured
Facilities Documentation and with other exceptions, if
any, to be mutually agreed upon).
	 
	 	 
	 

	 	The above-described mandatory prepayments shall be applied
pro rata to each of the outstanding Term Loan Facilities
and to remaining amortization payments under such Term
Loan Facilities as directed by the Borrower.
	 
	 	 
	 

	 	Any Lender may elect not to accept any mandatory
prepayment (each a “Declining Lender”) of Loans under the
Term Loan Facilities. Any prepayment amount declined by a
Declining Lender shall be offered first to the
non-Declining Lenders under the Term Loan Facilities. To
the extent such prepayment amounts are not accepted by
such non-Declining Lenders, such amounts may be retained
by the Borrower.
	 
	 	 
	Voluntary Prepayments/

Reductions in

Commitments:

	 	Voluntary reductions of the unutilized portion of the
Revolving Facility commitments and, prepayments of
borrowings under the Senior Secured Facilities and
voluntary withdrawals of the Synthetic Letter of Credit
Funded Amounts that are in excess of the aggregate face
amount of all Synthetic Letters of Credit then
outstanding, will be permitted at any time, in minimum
principal amounts to be agreed upon, without premium or
penalty, subject to reimbursement of the Lenders’
redeployment costs actually incurred in the case of a
prepayment of Adjusted LIBOR borrowings other than on the
last day of the relevant interest period. All voluntary
prepayments of any of the Term Loan Facilities will be
applied to the remaining amortization payments under the
applicable Term Loan Facilities as directed by the
Borrower.

B-10

 

	 	 	 
	Representations

and Warranties:

	 	Usual for facilities and transactions of this type for
affiliates of the Sponsor and limited to: financial
statements; no material adverse change; corporate
existence; compliance with laws; corporate power and
authority; enforceability of Senior Secured Facilities
Documentation; no conflict with law or contractual
obligations; no material litigation; ownership of
property; intellectual property; taxes; Federal Reserve
regulations; ERISA; Investment Company Act; subsidiaries;
environmental matters; solvency on a consolidated basis on
the Closing Date; accuracy of disclosure; creation and
perfection of security interests; and treatment as senior
debt under all subordinated debt and as designated senior
debt thereunder, subject, in the case of each of the
foregoing representations and warranties, to
qualifications and limitations for materiality customary
for financings of this kind with affiliates of the
Sponsor.
	 
	 	 
	Conditions Precedent

to Initial Borrowing:

	 	Usual for facilities and transactions of this type for
affiliates of the Sponsor, and limited to: delivery of
customary legal opinions, delivery of customary evidence
of authority and officer’s certificates; payment of
required fees and expenses; delivery of a customary
solvency certificate (with respect to the Borrower and its
subsidiaries on a consolidated basis); delivery of
evidence of insurance; delivery of a customary borrowing
notice; delivery of customary documentation with respect
to the security arrangements contemplated herein; and
except as set forth in the Borrower’s reports on Forms
10-K, 10-Q or 8-K filed with the Securities and Exchange
Commission on or prior to the date of this Commitment
Letter, the absence since September 30, 2006 of any event
that has had or would reasonably be expected to have,
either individually or in the aggregate, a material
adverse effect on the business, assets, liabilities or
financial condition of the Borrower and its subsidiaries,
taken as a whole.
	 
	 	 
	Conditions Precedent

to Each Borrowing:

	 	The making of each extension of credit under the Senior
Secured Facilities shall be conditioned upon (a) the
accuracy of representations and warranties in all material
respects as of the date of such extension of credit, and
(b) the absence of defaults or events of default at the
time of, or after giving effect to the making of, such
extension of credit.
	 
	 	 
	Affirmative Covenants:

	 	Usual for facilities and transactions of this type for
affiliates of the Sponsor (to be applicable to the
Borrower and its restricted subsidiaries) and limited to: delivery of annual and quarterly financial statements,
annual budgets, officers’ certificates and other
information reasonably requested by the Administrative
Agent; use of proceeds; payment of taxes; continuation of
business and maintenance of existence and material rights
and privileges; compliance with laws; maintenance of
property and

B-11

 

	 	 	 
	 

	 	customary insurance provided that there shall
be no requirement to maintain insurance that is more
restrictive than industry practice; maintenance of books
and records; right of the Lenders to inspect property and
books and records under customary conditions to be agreed
upon; notices of defaults and litigation and other
material events; compliance with environmental laws;
additional Guarantors and Pledgors and collateral; and
further assurances with respect to guarantees, security
interests and related matters, subject, in the case of
each of the foregoing covenants, to exceptions and
qualifications to be agreed upon.
	 
	 	 
	Negative Covenants:

	 	Usual for facilities and transactions of this type for
affiliates of the Sponsor (to be applicable to the
Borrower and its restricted subsidiaries) and limited to: limitations on dividends or distributions on, and
redemptions and repurchases of, equity interests,
restricted investments and other restricted payments (with
exceptions to include, without limitation, (a) tax
distributions to equity owners of the Borrower, (b) at any
time after the fifth anniversary of the Closing Date and
provided that no event of default or payment default
exists, dividends by the Borrower to finance any AHYDO
“catch-up” payment related to the Holdings Loans and any
cash interest payments payable thereafter, (c) investments
in Guarantors and Pledgors, (d) investments in joint
ventures (each, a “Permitted JV”), and the purchase of any
minority interest in such Permitted JV; provided that (i)
the Borrower or any of its subsidiaries that is a
Guarantor or Pledgor shall own, directly or indirectly
(including, without limitation, through a Permitted JV),
at least 65% of the equity interests of any such Permitted
JV, (ii) the equity interests of such Permitted JV owned
by the Borrower, such Guarantor and/or such Pledgor shall
be pledged as Collateral and (iii) upon giving pro forma
effect to such investment and purchase, at the time of
such investment or purchase, no more than 30% of pro forma
Consolidated Adjusted EBITDA of the Borrower shall be
attributable to its ownership interest in all Permitted
JVs (in making this pro forma calculation, minority
interests in such joint venture and all other Permitted
JVs shall be excluded) and (e) a “basket” of $100.0
million for new investments in unrestricted subsidiaries);
limitations on prepayments, redemptions and repurchases of
subordinated debt and modification of instruments relating
thereto; limitations on liens (which shall permit pari
passu liens and subordinated liens securing debt incurred
in compliance with the below-referenced debt incurrence
test, subject to intercreditor terms customary for
financings involving affiliates of the Sponsor);
limitations on debt, guarantees and hedging arrangements
(which shall permit (1) the incurrence of debt by the
Borrower or any Guarantor, subject only to no default

B-12

 

	 	 	 
	 

	 	and compliance with a Senior Secured Leverage Ratio to be
agreed, (2) a “basket” of up to $100,000,000 in the
aggregate in respect of the incurrence of all third party
indebtedness by Pledgors and Permitted JVs, (3)
intercompany indebtedness of a Pledgor or Permitted JV, so
long as such indebtedness is owed to the Borrower, a
Guarantor or a Pledgor and documented in an intercompany
note that has been pledged to the Administrative Agent and
(4) other customary exceptions); limitations on mergers,
acquisitions (which shall be permitted on the terms set
forth in the next succeeding paragraph) and asset sales
(with exceptions to include, without limitation, (I) asset
swaps involving hospital facilities, provided that after
giving effect to any such swap, Consolidated Adjusted
EBITDA of the Borrower will be no less than 85% of
Consolidated Adjusted EBITDA of the Borrower immediately
prior to such swap and (II) subject to compliance with the
provisions hereof relating to mandatory prepayment
associated with sale of assets by the Borrower and its
subsidiaries, the syndication of up to 35% of the equity
interests in any of the Borrower’s subsidiaries that own
hospitals to physicians, administrators and other persons
in the community where such hospitals are located);
limitations on transactions with affiliates; and
limitations on restrictions on ability of restricted
subsidiaries that are not Guarantors or Pledgors to pay
dividends or make distributions, subject, in the case of
each of the foregoing covenants, to exceptions,
qualifications and, as appropriate, “baskets” to be agreed
upon (including an available basket amount consisting of
an amount equal to $98,500,000 plus the greater of
retained excess cash flow or 50% (to be increased to 75%
upon achievement of a Senior Secured Leverage Ratio to be
agreed) of cumulative consolidated net income for the
period beginning on the first day of the fiscal quarter
commencing January 1, 2007 to the end of the most recently
completed fiscal quarter for which financial statements
are available at the time of measurement of such basket,
which available basket amount may be used for, among other
things, restricted investments, restricted payments and
the prepayment of subordinated debt).
	 
	 	 
	 

	 	The Borrower or any restricted subsidiary will be
permitted to acquire Alliance Hospital, L.P. and make
other acquisitions so long as (a) there is no default, (b)
the Borrower would be in pro forma compliance with a
Senior Secured Leverage Ratio to be agreed after giving
effect thereto, (c) the acquired company or assets are in
the same or generally related line of business as the
Borrower and its subsidiaries and (d) the acquired company
and its subsidiaries (other than immaterial subsidiaries)
will become, in the case of any acquired entities
organized under the laws of the United States, Guarantors
or Pledgors and pledge their

B-13

 

	 	 	 
	 

	 	Collateral to the
Administrative Agent. Acquisitions of entities that do
not become Guarantors or Pledgors (other than Permitted
JVs) will be limited to an aggregate amount to be agreed
upon by the Administrative Agent and the Borrower. Any
restricted subsidiary shall be permitted to issue up to
35% of its outstanding equity interests as consideration
for such permitted acquisition.
	 
	 	 
	 

	 	Transactions not constituting otherwise permitted assets
sales that result in the release of Collateral by any
Guarantor or Pledgor shall be treated as investments under
the Senior Secured Facilities Documentation and may be
made to the extent permitted under the covenant relating
to limitations on restricted investments.
	 
	 	 
	Financial Covenants:

	 	None.
	 
	 	 
	Unrestricted

Subsidiaries:

	 	The Senior Secured Facilities Documentation will contain
provisions pursuant to which, subject to limitations to be
agreed (including customary limitations on investments,
loans and advances to, or other investments in,
unrestricted subsidiaries), the Borrower will be permitted
to designate any existing or subsequently acquired or
organized subsidiary as an “unrestricted subsidiary” and
subsequently re-designate any such unrestricted subsidiary
as a restricted subsidiary. Unrestricted subsidiaries
will not be subject to the affirmative or negative
covenant or event of default provisions of the Senior
Secured Facilities Documentation, and the results of
operations and debt of unrestricted subsidiaries will not
be taken into account for purposes of determining
compliance (to the extent applicable) with the negative
covenants and financial ratios contained in the Senior
Secured Facilities Documentation.
	 
	 	 
	Events of Default:

	 	Usual for facilities and transactions of this type for
affiliates of the Sponsor (subject, where appropriate, to
customary and other agreed upon grace periods and
exceptions) and limited to: nonpayment of principal,
interest or other amounts; violation of covenants;
incorrectness of representations and warranties in any
material respect; cross default and cross acceleration to
material debt of the Borrower or its subsidiaries;
bankruptcy of the Borrower or its material subsidiaries;
material monetary judgments in respect of the Borrower or
its material subsidiaries; ERISA events; actual or
asserted invalidity of material guarantees or security
documents; and Change of Control (to be defined in a
manner usual for facilities of this type for affiliates of
the Sponsor).
	 
	 	 
	Voting:

	 	Amendments and waivers of the Senior Secured Facilities
Documentation will require the approval of Lenders holding
more

B-14

 

	 	 	 
	 

	 	than 50% of the aggregate amount of loans,
commitments and synthetic letter of credit funded amounts
under the Senior Secured Facilities, except that (a) the
consent of each Lender adversely affected thereby shall be
required with respect to: (i) increases in the commitments
of such Lender, (ii) reductions of principal, interest or
fees, (iii) extensions of any amortization payment or
final maturity and (iv) releases of liens on all or
substantially all of the Collateral (other than as
permitted by the Senior Secured Facilities Documentation),
(b) the consent of 100% of the Lenders will be required
with respect to (i) modifications to any of the voting
percentages and (ii) modifications of the pro rata payment
provisions, (c) the consent of Lenders holding more than
50% of the advances under the Term Loan Facilities shall
be required with respect to any amendment or waiver that
changes the manner of application of any mandatory
prepayments, and (d) the consent of 100% of the Revolving
Lenders shall be required with respect to any amendment or
waiver that changes the manner of application of payments
in respect of the Senior Secured Facilities following
acceleration of the Borrower’s obligations thereunder.
	 
	 	 
	 

	 	The Senior Secured Facilities Documentation shall contain
customary provisions for replacing non-consenting Lenders
in connection with amendments and waivers requiring the
consent of all Lenders or of all Lenders directly affected
thereby so long as Lenders holding at least 50% of the
aggregate amount of the loans and commitments under the
Senior Secured Facilities shall have consented thereto.
	 
	 	 
	Cost and Yield

Protection:

	 	Usual for facilities and transactions of this type for
affiliates of or funds advised by the Sponsor, it being
agreed that the definitive credit documentation will
provide customary provisions protecting the Borrower from
withholding tax liabilities in form and substance
reasonably satisfactory to the Borrower and the
Administrative Agent.
	 
	 	 
	Assignments and

Participations:

	 	The Lenders will be permitted to assign loans and
commitments and Synthetic Letter of Credit Funded Amounts
with the consent of the Borrower (unless a payment or
bankruptcy (with respect to the Borrower) event of default
has occurred and is continuing or such assignment is to a
Lender or an affiliate of a Lender), the Administrative
Agent (unless such assignment is an assignment of a
commitment or loan under a Term Loan Facility or of
Synthetic Letter of Credit Funded Amounts under the
Synthetic Letter of Credit Facility to a Lender or an
affiliate of a Lender) and, in the case of assignments
under the Revolving Facility, the Swingline Lender and
each principal Revolving Facility Issuing Bank, in each
case not to be unreasonably withheld or delayed. Each

B-15

 

	 	 	 
	 

	 	assignment (except to other Lenders or their affiliates)
will be in a minimum amount of (a) $5,000,000 in respect
of loans and commitments under the Revolving Facility and
(b) $1,000,000 in respect of loans and commitments under
the Term Loan Facilities and Synthetic Letter of Credit
Funded Amounts under the Synthetic Letter of Credit
Facility. Assignments will not be required to be pro rata
among the Senior Secured Facilities.
	 
	 	 
	 

	 	The Lenders will be permitted to participate loans and
commitments without restriction in accordance with
applicable law. Voting rights of participants shall be
limited to matters set forth under “Voting” above with
respect to which the unanimous affirmative vote of all
Lenders would be required.
	 
	 	 
	Expenses and

Indemnification:

	 	The Senior Secured Facilities Documentation will provide
that the Borrower shall pay all reasonable, documented,
out-of-pocket expenses of the Administrative Agent
(including the reasonable fees, disbursements and other
charges of counsel identified herein or otherwise retained
with the Borrower’s consent) in connection with the
enforcement of the Senior Secured Facilities
Documentation.
	 
	 	 
	 

	 	The Borrower will indemnify the Agents, the Arrangers, the
Lenders and their affiliates, and the officers, directors,
employees, affiliates, agents and controlling persons of
the foregoing, and hold them harmless from and against all
costs, expenses (including reasonable fees, disbursements
and other charges of counsel) and liabilities of any such
indemnified person arising out of or relating to any claim
or any litigation or other proceedings (regardless of
whether any such indemnified person is a party thereto)
that relate to the financing contemplated hereby, provided
that no indemnified person will be indemnified for its (or
any of its related parties’) gross negligence, bad faith,
willful misconduct or breach of the Senior Secured
Facilities Documentation.
	 
	 	 
	Governing Law

and Forum:

	 	New York.
	 
	 	 
	Counsel to Agents and

Arrangers:

	 	Moore & Van Allen PLLC.

B-16

 

ANNEX I

to Exhibit B

	 	 	 
	Interest Rates:

	 	The interest rates under the Senior Secured Facilities will be as follows:
	 
	 	 
	 

	 	Term Loan Facilities:
	 
	 	 
	 

	 	At the option of the Borrower, (i) if
on the Closing Date, the Borrower
shall have received a corporate
rating of B1 or higher by Moody’s and
a corporate family rating of B+ or
higher by S&P, Adjusted LIBOR plus
1.75% or ABR plus 0.75% and (ii) in
all other cases, Adjusted LIBOR plus
2.00% or ABR plus 1.00%. The
Arrangers will use their commercially
reasonable efforts to provide for the
institution of a senior secured
leverage-based pricing grid to be
determined with a single step-down
for interest rate margins in respect
of the Term Loan Facilities. If
applicable, the pricing grid for the
Term Loan Facilities would take
effect following the first full
fiscal quarter of the Borrower after
the Closing Date.
	 
	 	 
	 

	 	Revolving Facility:
	 
	 	 
	 

	 	At the option of the Borrower,
Adjusted LIBOR plus 1.75% or ABR plus
0.75%, subject to the step-downs
described below. All swingline loans
will be ABR loans based on the same
interest rate margins as other loans
under the Revolving Facility.
	 
	 	 
	 

	 	As used herein:
	 
	 	 
	 

	 	“Adjusted LIBOR” means the London
interbank offered rate, adjusted for
statutory reserve requirements.
	 
	 	 
	 

	 	“ABR” means the higher of (a) the
Administrative Agent’s Prime Rate and
(b) the Federal Funds Effective Rate
plus 1/2 of 1%.
	 
	 	 
	 

	 	Adjusted LIBOR borrowings may be made
for interest periods of 1, 2, 3 or 6
and, if available to all relevant
Lenders, 9 or 12 months or a shorter
period, as selected by the Borrower.
	 
	 	 
	 

	 	Interest on loans and all fees will
be payable in arrears on the basis of
a 360-day year (calculated on the
basis of actual number of days
elapsed), provided that interest on
ABR loans, when based on the
Administrative Agent’s Prime Rate,
will be payable in arrears on the
basis of a 365-day year (or a 366-day

B-17

 

	 	 	 
	 

	 	year in a leap year), in each case
calculated on the basis of the actual
number of days elapsed. Interest
will be payable on Adjusted LIBOR
loans on the last day of the
applicable interest period (and at
the end of each three months, in the
case of interest periods longer than
three months) and upon prepayment,
and on ABR loans quarterly and upon
prepayment.
	 
	 	 
	Default Rate:

	 	With respect to overdue principal,
after notice from the Administrative
Agent, the applicable interest rate
plus 2.00% per annum and, with
respect to any other overdue amount,
after notice from the Administrative
Agent, the interest rate applicable
to ABR loans plus 2.00% per annum.
	 
	 	 
	Letter of Credit Fees:

	 	Revolving Letters of Credit
	 
	 	 
	 

	 	A per annum fee equal to the
applicable spread over Adjusted LIBOR
under the Revolving Facility in
effect from time to time will accrue
on the aggregate face amount of
outstanding letters of credit under
the Revolving Facility, payable in
arrears at the end of each quarter
and upon termination of the Revolving
Facility. Such fees shall be
distributed to Revolving Lenders pro
rata in accordance with their
commitments under the Revolving
Facility. In addition, the Borrower
shall pay to each Revolving Facility
Issuing Bank, for its own account,
(a) a fronting fee of 0.125% on the
aggregate face amount of outstanding
letters of credit, payable in arrears
at the end of each quarter and upon
termination of the Revolving
Facility, and (b) the Revolving
Facility Issuing Bank’s customary
issuance and administration fees.
	 
	 	 
	 

	 	Synthetic Letters of Credit
	 
	 	 
	 

	 	A per annum fee equal to the spread
over Adjusted LIBOR under the Term
Loan Facilities will accrue on all
outstanding Synthetic Letter of
Credit Funded Amounts, and will be
payable in arrears at the end of each
quarter and upon the termination of
the Synthetic Letter of Credit
Facility, in each case for the actual
number of days elapsed over a 360-day
year. An amount equal to the
Investment Fee Rate shall also be
payable in arrears at the end of each
quarter and upon the termination of
the Synthetic Letter of Credit
Facility. Such fees and amounts
shall be distributed to the Lenders
participating in the Synthetic Letter
of Credit Facility pro rata in
accordance with the amount of each
such Lender’s Synthetic Letter of
Credit Funded Amount. In addition,
the Borrower shall pay to the
Synthetic Letter of Credit Issuing
Bank, for its own account, (a) a
fronting

B-18

 

	 	 	 
	 

	 	fee equal to 0.125% of the
aggregate face amount of outstanding
Synthetic Letters of Credit, payable
in arrears at the end of each fiscal
quarter and upon the termination of
the Synthetic Letter of Credit
Facility, calculated based on the
actual number of days elapsed over a
360-day year, and (b) customary
issuance and administration fees.
	 
	 	 
	Investment of
Synthetic Letter

of Credit Funded Amounts:

	 	The Administrative Agent shall invest
the Synthetic Letter of Credit Funded
Amounts so as to earn (except during
periods when, and to the extent to
which, such Synthetic Letter of
Credit Funded Amounts are being used
to reimburse the Synthetic Letter of
Credit Issuing Bank, including if
converted into a loan) a return (the
“Return on Deposits”) equal to (i) a
rate per annum, reset daily on each
business day for the period until the
next following business day, equal to
such business day’s rate for one
month eurodollar deposits minus (ii)
0.10% per annum (the “Investment Fee
Rate”). The Administrative Agent
will pay the Return on Deposits to
the Synthetic Letter of Credit
Facility Lenders quarterly in arrears
and upon the termination of the
Synthetic Letter of Credit Facility,
in each case for the actual number of
days elapsed over a 360-day year.
	 
	 	 
	Commitment Fees:

	 	The Borrower shall pay a commitment
fee of 0.50% per annum on the average
daily unused portion of the Revolving
Facility, payable quarterly in
arrears and subject to the step-downs
described below.
	 
	 	 
	 

	 	The Borrower shall pay a commitment
fee of 1.00% per annum on the average
daily unused portion of the Delayed
Draw Term Loan Facility, payable
quarterly in arrears.
	 
	 	 
	Changes in Interest
Rate Margins and Commitment Fees:

	 	The Senior Secured Facilities
Documentation will contain provisions
under which, from and after the date
of delivery of the Borrower’s
financial statements covering a
period of at least one full fiscal
quarter after the Closing Date, (a)
interest rate margins under the
Revolving Facility will be subject to
change based upon a leverage-based
grid set forth on Schedule A to this
Annex I and (b) commitment fees under
the Revolving Facility will be
subject to change based upon a
leverage-based grid set forth on
Schedule A to this Annex I.

B-19

 

Schedule A to ANNEX I

Senior Secured Facilities Spreads and Commitment Fees

(basis points)

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Revolving Facility	 	 	 	 
	Senior Secured	 	 	 	 	 	 	 	 	 
	Leverage Ratio	 	Adjusted LIBOR+	 	 	ABR+	 	 	Commitment Fees	 
	Greater than or equal to
2.25 to 1.00
	 	 	175	 	 	 	75	 	 	 	50	 
	Less than 2.25 to 1.00 but
greater than or equal to
1.75 to 1.00
	 	 	150	 	 	 	50	 	 	 	37.5	 
	Less than 1.75 to 1.00
	 	 	125	 	 	 	25	 	 	 	37.5	 

B-20

 

	 	 	 
	CONFIDENTIAL

	 	EXHIBIT C

Iasis Healthcare

$300,000,000 Holdings Senior PIK Loans

Summary of Principal Terms and Conditions

     Capitalized terms used but not defined in this Exhibit C shall have the meanings set forth in
Exhibit A and Exhibit B.

	 	 	 
	Borrower:
	 	IASIS Healthcare Corporation (“Holdings”).

	 	 	 

	Administrative Agent:
	 	Banc of America Bridge LLC will act as the
sole administrative agent (in such capacity,
the “Administrative Agent”) for a syndicate of
financial institutions (the “Lenders”)
acceptable to Holdings, and will perform the
duties customarily associated with such role.

	 	 	 

	Joint Lead Arrangers:
	 	Banc of America Securities LLC and Citigroup
Global Markets Inc. will act as the joint
lead arrangers and joint book managers (the
“Arrangers”) for the Holdings Loans, and will
perform the duties customarily associated with
such roles.

	 	 	 

	Syndication Agent:
	 	Citigroup will act as syndication agent (the
“Syndication Agent”) for the Holdings Loans.

	 	 	 

	Documentation Agent:
	 	At the option of the Borrower, one or more
financial institutions identified by the
Borrower and reasonably acceptable to the
Arrangers (each a “Documentation Agent” and,
together with the Administrative Agent and the
Syndication Agent, the “Agents”).

	 	 	 

	Holdings Senior

PIK Loans:
	 	The Lenders will make senior unsecured PIK
loans (the “Holdings Loans”) to Holdings on
the Closing Date in an aggregate principal
amount of up to $300,000,000.

	 	 	 

	Issue Price:
	 	99%

	 	 	 

	Availability:
	 	The Lenders will make the Holdings Loans on
the Closing Date simultaneously with the
initial funding under the Senior Secured
Facilities.

	 	 	 

	Purpose:
	 	The proceeds of the Holdings Loans will be
used to finance the Holdings Dividend on or
about the Closing Date.

	 	 	 

	Maturity and

Amortization:
	 	The Holdings Loans will mature on June 15,
2014 (the “Maturity Date”) and no amortization
payments will be made prior to the final
maturity date.

	 	 	 

	Interest:
	 	The Holdings Loans will accrue interest at a
rate per annum equal to three-month Adjusted
LIBOR (as defined below) plus 5.00%.

C-1

 

	 	 	 
	 	 	Until the fifth anniversary of the Closing
Date, interest will be paid by adding such
interest to the principal amount of the
outstanding Holdings Loans, quarterly in
arrears. After the fifth anniversary of the
Closing Date, interest shall be payable in
cash only.

	 	 	 

	 	 	In addition, an AHYDO “catch-up” payment
provision will be included in the Holdings
Loan Documentation (as defined below).

	 	 	 

	 	 	With respect to overdue principal, after
notice from the Administrative Agent, the
applicable interest rate plus 2.00% per annum
and, with respect to any other overdue amount,
after notice from the Administrative Agent,
the interest rate applicable to ABR loans plus
2.00% per annum.

	 	 	 

	 	 	Interest on loans and all fees will be payable
in arrears on the basis of a 360-day year
(calculated on the basis of actual number of
days elapsed), provided that interest on loans
based on the Administrative Agent’s Prime Rate
will be payable in arrears on the basis of a
365-day year (or a 366-day year in a leap
year), in each case calculated on the basis of
the actual number of days elapsed. Interest
will be payable on Adjusted LIBOR loans on the
last day of the applicable interest period and
upon prepayment, and on ABR loans quarterly
and upon prepayment.

	 	 	 

	 	 	As used herein, “Adjusted LIBOR” means the
London interbank offered rate, adjusted for
statutory reserve requirements.

	 	 	 

	 	 	In the event that Adjusted LIBOR cannot be
determined, or any Lender is unable to
maintain Holdings Loans accruing interest at
Adjusted LIBOR, the affected Holdings Loans
will accrue interest until the Maturity Date
at ABR plus 4.00%. “ABR” means the higher of
(a) the Administrative Agent’s Prime Rate and
(b) the Federal Funds Effective Rate plus 1/2 of 1%.

	 	 	 

	Ranking:
	 	The Holdings Loans will rank pari passu with
other senior debt of Holdings.

	 	 	 

	Guarantees:
	 	None.

	 	 	 

	Security:
	 	None.

	 	 	 

	Mandatory Redemption:
	 	After any payments required to be made to
repay the Senior Secured Facilities and the
Borrower’s existing senior subordinated notes
due 2014 (the “Senior Subordinated Notes”),
Holdings will be required to offer to
repurchase the Holdings Loans upon the
occurrence of a change of control (to be
defined in a manner customary for affiliates
of the Sponsor), which offer shall be at 101%
of the principal amount thereof, plus accrued
and unpaid interest.

C-2

 

	 	 	 
	Optional Redemption:
	 	Subject to the remainder of this paragraph,
the Holdings Loans will be redeemable at the
option of Holdings, in whole or in part, at
any time at par plus accrued and unpaid
interest to the redemption date plus
applicable LIBOR breakage costs, if any. The
Holdings Loans will be callable subject to
customary make-whole provisions at T+50 basis
points prior to the first anniversary of the
Closing Date and will be callable thereafter
at par plus accrued interest plus a premium
equal to (a) 2% if prepaid on or after the
first anniversary of the Closing Date and
prior to the second anniversary of the Closing
Date, (b) 1% if prepaid on or after the second
anniversary of the Closing Date and prior to
the third anniversary of the Closing Date and
(c) zero if prepaid at any time thereafter.

	 	 	 

	Documentation:
	 	Usual for facilities and transactions of this
type for affiliates of the Sponsor and
reasonably acceptable to the Arrangers and
Holdings (such documentation, the “Holdings
Loan Documentation”).

	 	 	 

	Conditions Precedent:
	 	Substantially the same as the conditions
precedent to the initial borrowings under the
Senior Secured Facilities.

	 	 	 

	Representations and
Warranties:
	 	Substantially the same as the representations
and warranties in the Senior Secured
Facilities.

	 	 	 

	Covenants:
	 	Consistent with those in the indenture
relating to the Senior Subordinated Notes, and
as adjusted to eliminate covenants
inappropriate for Holdings. The restricted
payments covenant will permit the Holdings
Dividend and restricted payments in an amount
equal to $35,000,000 plus 50% of cumulative
consolidated net income for the period
beginning on the first day of the fiscal
quarter in which the Closing Date occurs to
the end of the most recently completed fiscal
quarter for which financial statements are
available at the time of measurement.

	 	 	 

	Financial Covenants:
	 	None.

	 	 	 

	Events of Default:
	 	Consistent with those in the indenture
governing the Senior Subordinated Notes, as
adjusted to eliminate events of default
inappropriate for Holdings, and to include a
cross-acceleration (but not cross-default) to
the Senior Secured Facilities.

	 	 	 

	 	 	In case an Event of Default shall occur and be
continuing, the holders of a majority in
aggregate principal amount of the Holdings
Loans then outstanding, by notice in writing
to Holdings, may declare the principal of, and
all accrued interest on, all Holdings Loans to
be due and payable immediately. If a
bankruptcy event of Holdings occurs, the
principal of and accrued interest on the

C-3

 

	 	 	 
	 	 	Holdings Loans will be immediately due and
payable without any notice, declaration or
other act on the part of the holders of the
Holdings Loans. An acceleration notice may be
annulled and past defaults (except for
monetary defaults not yet cured) may be waived
by the holders of a majority in aggregate
principal amount of the Holdings Loans.

	 	 	 

	Cost and Yield
Protection:
	 	Usual for facilities and transactions of this
type for affiliates of the Sponsor.

	 	 	 

	Assignment and
Participation:
	 	Subject to the prior approval of the
Administrative Agent (such approval not to be
unreasonably withheld or delayed), the Lenders
will have the right to assign Holdings Loans
after the Closing Date without the consent of
Holdings.

	 	 	 

	 	 	The Lenders will be permitted to participate
loans and commitments without restriction in
accordance with applicable law. Voting rights
of participants shall be limited to matters
set forth under “Voting” above with respect to
which the unanimous affirmative vote of all
Lenders would be required.

	 	 	 

	Voting:
	 	Amendments and waivers of the Holdings Loan
Documentation will require the approval of
Lenders holding more than 50% of the
outstanding Holdings Loans, except that (a)
the consent of each affected Lender will be
required for (i) reductions of principal or
interest rates or applicable fees or premiums
or (ii) extensions of the Maturity Date and
(b) the consent of 100% of the Lenders will be
required with respect to modifications to any
of the voting percentages or the pro rata
payment provisions.

	 	 	 

	Expenses and

Indemnification:
	 	The Holdings Loan Documentation will provide
that Holdings shall pay all reasonable,
documented out-of-pocket expenses of the
Administrative Agent (including, without
limitation, the reasonable fees, disbursements
and other charges of counsel identified herein
or otherwise retained with Holdings’ consent)
in connection with the enforcement of the
Holdings Loan Documentation.

	 	 	 

	 	 	Holdings will indemnify the Agents, the
Arrangers, the Lenders and their affiliates,
and the officers, directors, employees,
affiliates, agents and controlling persons of
the foregoing, and hold them harmless from
and against all costs, expenses (including,
without limitation, reasonable fees,
disbursements and other charges of counsel)
and liabilities of any such indemnified
person arising out of or relating to any
claim or any litigation or other proceedings
(regardless of whether any such indemnified
person is a party thereto) that relate to the
financing contemplated hereby, or any
transactions connected therewith, provided
that no indemnified person will be
indemnified for its (or any of its related
parties’) gross negligence, willful
misconduct, bad faith or breach of the
Holdings Loan Documentation.

	 	 	 

	Governing Law and

Forum:
	 	New York.

	 	 	 

	Counsel for Agents and

Arrangers:
	 	Cahill Gordon & Reindel LLP.

C-4EX-4.(B) FIRST AMENDMENT TO MANAGEMENT INCENTIVE

 

EXHIBIT 4(b)

INDUSTRIAL DISTRIBUTION GROUP, INC.

FIRST AMENDMENT TO

MANAGEMENT INCENTIVE PROGRAM

     This First Amendment to the Management Incentive Program (this “Amendment”) is made as
of the 21st day of February, 2007, by Industrial Distribution Group, Inc., a Delaware
corporation (the “Company”).

W I T N E S S E T H:

     WHEREAS, the Company established the Industrial Distribution Group, Inc. Management Incentive
Program effective March 5, 1998 (the “MIP”) and the MIP was approved by the Company’s
stockholders on May 7, 1998;

     WHEREAS, pursuant to the provisions of the MIP, the Board of Directors of the Company (the
“Board of Directors”), upon the prior approval and recommendation of the Compensation
Committee of the Board of Directors, has authorized and directed, subject to approval of the
stockholders of the Company, the increase by 200,000 shares of the total number of shares of the
Company’s common stock, $0.01 par value per share, that may be granted or awarded under the MIP.

     NOW, THEREFORE, for and in consideration of the foregoing premises, and other good and
valuable consideration, the MIP is amended as follows:

     1. Section 6(C) is hereby amended by deleting the last sentence of the second paragraph in its
entirety and replacing it with the following:

“Subject to adjustment as provided in Section 7, the maximum
number of Shares that may be issued pursuant to the Plan is
450,000.”

     2. This Amendment shall be effective as of the date set forth above. Except as hereby
amended, the MIP shall remain in full force and effect.

     IN WITNESS WHEREOF, the undersigned does hereby execute this Amendment as of the date set
forth above.

	 	 	 	 	 
	 	INDUSTRIAL DISTRIBUTION GROUP, INC.

 	 
	 	By:  	                                 /s/ Jack P. Healey
 	 
	 	 	Jack P. Healey 	 
	 	 	Secretary

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00123-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00123-of-00352.parquet"}]]